US Contract Law: The Compensation and Non-Performance - Assignment Example

Name : xxxxxxxxxxx Institution : xxxxxxxxxxx Course : xxxxxxxxxxx Title : U.S Contract Law Tutor : xxxxxxxxxxx @2009 Q 1- The objective standard of agreement makes it impossible for a defendant to plead mistake as an excuse for non-performance. Discuss. A contract is an agreement between two between two or more parties regarding the exchange of physical good or service. Some vital elements of the contract law consist of: the offer between the contract parties and the approval of both parties, the age of the parties getting into the contract should be sensible and sound potential; each and every risk in the contract’s transaction and lastly terms and conditions that will be involved in the delivery of goods and services provided. Because the contract involves some legal conditions, it is not similar to informal agreement since the law makes certain that the contract is delivered on the stipulated time. According to the law, the contracts that are authentic are in written form while verbal contracts are agreed to in varying circumstances. That is the reason why a verbal contract can go on despite the absence of some terms and conditions within the contract’s terms. The first time frauds came in England was in 1677 and these frauds were adopted in varying manner in about 50 nations. To avoid fraud from contract parties, an authentic contract in written form is needed by the law for, foremost, the statement of other party’s responsibility, for instance the jointly contracted and the cosigning of a credit contract, second, all transactions that are likely to take place, thirdly, the trade of individual property worth more than $5, 000 and lastly a transaction which will end in more than one financial year. The regulatory organization involved with law enforcement in transactions dealing with exchange of physical goods is known as Uniform Commercial Code (UCC) and it was established by the National Conference of Commissioners on Uniform State Laws and the American Law Institute, which is a nonprofit legal research organization. After the body was set up in 1952, it has been adopted by the 50 states apart from Louisiana which never adopted all the laws that the body established. The body chiefly depends on common law and it has come up with nearly all the principles necessary in the courts of law. Uniform Commercial Code has been pressured in several circumstances to adopt guidelines that differ with the normal legal actions to get efficiency and competence of commerce practices. The validation of the code is to set up laws that are uniform allover the nation as this will ensure easiness and precision of rules involved in business transactions during exchange. In the U.S, the Uniform Commercial Code is responsible for administering the transactions involving physical goods, changeable commodities, hiring of plants and appliances needed by businesses, and fiscal transactions like, bank loans, bank deposits, bank guarantees and disbursement guarantees for import reasons. However, is not involved in the transaction of real estates and services while the United Nations International Sale of Goods Convention regulates worldwide transactions. In 1988 the United States took control of this organization; confer on in the corporation of the foreign country concerned in that agreement, Being the other party of the contract. Objective standards of contracts prevents a defendant from claiming a mistake incase there is non performance in the contract and that’s why the courts prefer adopting objective standards to replace subjective standards as it enables clear understanding of the good faith requirement in indemnifying a contract to allow both the actions of the indemnified to be within subjective good faith and also to ensure that the actions are rational under the considerable circumstance of dealings. There are courts that have taken up objective standard and have been noted to be more practical in regard to having the indemnified make an assent illustrating that the activities were carried out in good faith. The court took up an objective standard marooned within the UCC’s necessity of commercial prudence, getting to know if the claimant’s of the contract terms were in greater faith depending on the claimant’s validation of the judiciousness of its actions under the circumstance. In this case we take into consideration the case of Embry v Hargardine, McKittrick Dry Goods Co. the specifics of the case are that the claimant is the worker while the defendant is the employer. The contract of the claimant is nearly expiring and he visits the employer and threatens to quit the job if the contract will not be renewed. The employee listens to the employer and fathoms that the contract will be renewed and extended the subsequent year but contrary the claimant was forced to quit the employment then the verbal lengthened time and consequently sued against the boss who is the defendant. Eventually, the court’s judgment favored the boss and the claimant appealed in the honorable court. Here, the matter being considered in the case is that the employee said some words from the agreement. The law that can be applied in this case is “The indenture will be enforceable in its full capacity, if a levelheaded individual would have taken a party’s words to comprise consent for the formulization of terms and conditions of legal indenture”. After appeal, the honorable court considered each and every validation presented by the claimant and notes the justifications are genuine. The claimant being a logical and rational individual took the employee’s word to be legitimate and genuine in regard to renewing the contract. For there to have an authentic agreement, there ought to be correspondence of the minds and the contract’s parties, who should agree to the contract contents in an equal logic. If a sensible individual is brought into this matter, one ought to believe that he was refereeing to the terms and state recommended by a party of the contract and that the other contract party gets into the agreement with solid trust; without any authentic subjective purpose, the party would be similarly restricted to the terms and circumstances of the agreement. Therefore, no matter what McKittrick said, it was taken by a sensible being as the component of the agreement and the claimant fathomed it as such, and hence this would be taken as authentic contract of employment for the next year. Subjective purpose of McKittrick was irrelevant and hence the judgment was revived and remanded. Let’s also consider another case; here a practical explanation of the state of affairs separates into two disjoining explanations. Zehmer asserts that he and Lucy were jointly drunk and at the time of the agreement he had taken a few drinks and hence he was toying with Lucy regarding sale of the farm. He was referring the matter as Lucy’s trap that he possessed $50,000 in cash. In the restraint, Zehmer wrote down a tender and even persuaded his wife to sign it a joke still and gave Lucy back. Consequently, Lucy $5 as first pay of the contractual value and hence Zehmer discovered that Lucy never made out the joke and thus informed Lucy the he was inebriated and joking and thus he was not going to sell the farm. . From Lucy, the agreement between the two had been agreed for more tan forty minutes. This contract illustrates that an informal agreement is also a real contract since after examining the agreement we find that all three components of the contract were there. An offer was made to Zehmer by Lucy and hence both agreed regarding the terms and therefore Lucy offered $50,000. The actual disparity regarding the opinion is to if both parties had a gathering of minds and agreed to a similar subject. In the case, Zehmer claimed that the offer was a joke and he was in a position to make form a contract because he was drunk. After the analysis of the certification of both parties, the courts came with two judgments. Foremost, the assessed the broad accounts of the situations offered by Zehmer. He was in a position to hold information accurately regarding what he claimed and was receptive on what happened after the time of offer ended. Because his drunkenness never emended his perception of the situation, the court concluded that his drunkenness did not affect Zehmer’s ability to form a contract. Again, the court established that it was not apparent to both parties that the agreement was actually made in joking. Before Zehmer signed the contract, he did not make it clear that the contract was a joke. Actually, Lucy was very serious regarding the contract and suggested to Zehmer rewrite the contract in order for his wife to be included and this removes the doubts that both parties were not serious since the contract being a joke is only mentioned between Zehmer and the wife. The Zehmer flat gave evidence that they fathomed these comments since they did not want Lucy to listen in. given that there was no explicable proposal to Lucy that this offer was general in banter, the court supported the contract. Eventually, the court concluded that contractual ability can be nullified repeatedly. When signing and writing a contract, it is always wise to ensure that both parties fully understand the terms and conditions of the contract and no party has been affected by something that might affect his/her ability to form a contract. Let’s now put into consideration Sherwood v. Walker case. The case facts are that Sherwood made an agreement to buy a cow from Walker and Walker showed him a cow which he thought could not sure and hence Sherwood agreed to buy the cow at $80. Incase the cow was not barren, it would have cost between $750 and $1,000. Walker later discovered that the cow sired a calf but declined to complete the other payment and hence Sherwood sued him and took the cow back. During the trial, Walker illustrated that during the period of transaction both parties thought that the cow was barren and both were aware that a fertile cow would have been more costly. The judge concluded that it was not relevant if the cow was barren and the jury made a verdict in favor of Sherwood and consequently Walker appealed. The key matter in this case is that “Presence of a mutual mistake relating to the main issue of the agreement can make the agreement unenforceable”. The appropriate law in this circumstance “Definitely, A common mistake relating to the main subject of the agreement can make this agreement unenforceable”. A general mistake in regard the key issue of the contract can render the agreement unenforceable, if there is variation to both terms and conditions for the subject transacted under the contract, if the real delivery of the contracted subject varies from which it has been jointly agreed in the contract, and the key intent is ti sell the subject, the there will no contract that will be legitimate. However, variation in quality ought to be considered even if the buyer or seller can be aggravated to take action on the subject or both parties can take an action in their abilities, the agreement will say enforceable. The sole dilemma is to verify the difficulty with the key subject of the contract in consideration. Considering the former law, it has been comprehended that when a subject is being traded with a belief that its quality is satisfactory then both contract parties ought to have such a believe. The party of the contract as buyer should accomplish their pledge through paying complete price of the commodity until any guarantee is not drawn in. The court considered that in the case, the fault concerned the complete terms of the agreement. The mistake in this case does not include the quality of the subject but it is mainly on the nature of the subject. Eventually, the court concluded that the previous court’s verdict was incorrect and thus reversed the decision and remanded with other guidance for more direction. Sherwood did not pay the entire cost of the cow and used it for breeding. After the evaluation of the facts, it seems that Sherwood was more right in regard to the cow’s quality whereas Walker made a mistake concerning the quality and except if Sherwood was aware of the mistake and cannot be said to have taken advantage of Walker’s ignorance. Therefore, the contract is legitimate and ought to be enforced. Considering the above case in regard to mistake, in Uniform Commercial Code a mistake is a blunder in contract forming process, that some facts tare genuine. However, the mistakes can render a contract unenforceable. Uniform Commercial Code has tackled the mistakes and classified them into varying forms. The first mistake is unilateral one and the second on is mutual mistake also known as common mistake. If a mistake occurs, the defendant should bear the risk if below circumstances are met; the defendant risk is evidently stated in the contract, second, the mistake of the agreement so being treated by restricted understanding of the defendant and his supposition that the knowledge is not sufficient or finally keeping in mid that the facts of the agreement the court gets and concludes that the risk ought to be on the defendant. Within the contract law, non performance of the responsibilities in a contract can be exempted by the unfeasibility, normally based on negative circumstances or the happening of the facts that were there when the contract was being formed but were ignored then; the ignorance of the facts was the supposition these negative conditions would not affect the contract, which leads into non performance of the terms and circumstances of the agreed contract. Essentially, the performance is not hard and expensive antagonist any party of the agreement; there ought to be guideline for it to have occurred in reality. As a result, the Uniform Commercial Code forbids the defendant to argue the mistake as the justification for non performance as we have identified in the case of mistakes defendant have to bear the loss in respect to the contractual agreement. In nearly all cases, the verdicts are normally invalidated in regard to contract law and remanded with fresh guidelines. Bibliography http://law.jrank.org/pages/12504/Contract-Law.html http://duhaime.org/LegalResources/Contracts/LawArticle-90/Part-5-Mistake-Rectification-Misrepresentation.aspx http://faculty.law.pitt.edu/madison/contracts/supplement/sherwood_v_walker.htm Q 4. It is highly misleading to say that the compensation of the plaintiff is the goal of contractual remedies. Discuss. When individuals think that the logical remedy of a contract is through compensating the plaintiff it is totally a fallacy. When the party that violates the law commits a thing that does not agar with the contract between the claimant and the defendant, the claimant’s right is still within the circumstance and in fact there in the corrective form and this ensures that the defendant gets back the claimant’s right to recompense the loss of the claimant without becoming cruel to the defendant. The claimant has the responsibility of meeting necessities of the defendants as per agreement and hence he/she owns the right of pushing the defendant into re-establishing the lost rights under infringement of the contracted terms. Conversely, the defendant has the right of pushing the claimant into meeting the agreed duties and hence he/she similarly bound by the agreement to offer the remedy to the claimant when he/she suffering because the defendant infringed the contractual terms. Availing the justice to the condition is the sole remedy whereby legal rights of both parties are concerned. Usually, courts awards remedies after accurate ruling of the trial regarding the contract between the parties that violate the law and who have borne loss from such infringement and by the common act of the law to attain the truth by fair and just trial. In fact, some remedies entail the payment against the incurred loss arising from the law infringement, while other remedies forbid and prop up the definite action under the law and also entail the elucidation of the party’s right by the court and conforming of the given guidelines. Furthermore, the unusual remedy entails engaging a third party by the court to fulfill the conditions of the particular circumstance. The purpose of the provisional remedy is to hold the condition pending to the final time through stern supervision of the remedy incase it genuinely functions. The purpose of the remedies is to compensate the lost expectations, lost dimensions and significant malfunction. In a way, it is not misconception to conclude that the contractual law compensates claimant’s right since in nearly all situations the claimant is the party undergoing the loss or the anguish after the law has been infringed. However, the defendants can also be the suffering party although this is uncommon and there should be no conclusions that the contract laws favor the claimant. These laws are there to assist the party on the loose and it can be the claimant or the defendant. The fundamental function of the contract law is not to reprove the defendant or support the claimant but to assist the defendant in comprehending the mistakes he/she commits within the contract and reinstate the claimant’s right through making decisions that are just on fair assessment of the facts of the condition or the terms and conditions of the contract infringed under specific conditions. Therefore, contract law offers remedies to the claimant when the facts and figures of the contracted are in support of the claimant devoid of any injustice and if defendant is founded in infringement of the claimant’s right. The key objective of the contract law is to offer the claimant an opportunity of having appropriate instructions and services needed for the suitable solution of his/her predicament the basis being authentic terms and conditions of the established contract between the claimant and the defendant. Therefore, the contract law aims at safeguarding the rights of the claimant; this is not though hurting the defendant but through analyzing the facts to confirm if they are within the contractual terms. In reality, contract laws are not governed for the function of punishing the party violating the contract’s terms but to forbid individuals from benefiting from the involved party trough law infringement since the loss to one party because of infringement does not always illustrate benefits to the law violating party. This makes sure that the variation in the cost of the claimant and the benefits gained by the defendant. Therefore, for justification of the loss bearing because of the defendant’s infringement of the contractual terms, the court without any prejudice determines contract between both parties. Even if there is developing corpse of belief to justify indemnity through having infringement of the contract should obtain explanation of the Claimant’s performance interest. Currently, there has been a very small approach towards the assessment regarding what usual awareness ought to be. In most cases the idea is to formulate frontward identical as plainly a re-conceptualization of the expectation curiosity; here we can say that it is contractual interests. Therefore, it is not correct to think in this manner because whereas stringent assessment of the contractual law demonstrates involvement of two interests within the contract whereby one is the reward of the performance while the other one is the compensation for the suffering arising from non-performance of the contracted act. Being compensated because of non-performance damages is different from being rewarded for the performance. In this case, let’s consider Hadley vs. Baxendale whereby Hadley is the claimant and Baxendale the defendant. A duct severed at Hadley’s plant damaging the mill. Hadley called Baxendale and informed him of the situation and leased him to move the faulty part to an engineer at Greenwich so as to get the spare of the broken part. An employee at Hadley agreed with Baxendale’s accountant that the broken part was supposed to be conveyed to the engineer instantly and the dependant pledged to convey the faulty part to the engineer at Greenwich the following day. Baxendale was not aware that the factory was impatiently waiting to duplicate components of indoors. Unknowingly, the defendant never transferred the broken part to the engineer which led into a five days holdup before the factory started the operations. Hadley had made a payment of 214s for the movement of broken part and alleged that the defendant was supposed to pay him 300 pounds to compensate the operational loss and earnings paid to the employee when the plant was not running because of the slackness of the defendant. Consequently, the jury awarded Hadley 251 extra sum of the previous quantity compensated by the honorable court and what Baxendale demanded. The key matter of this case is to identify the sum that the party that incurred the loss should be awarded because of the contract infringement and the damages that affected the suffering party because of the contract law infringement. The law that can be applied in such a circumstance is that the party that incurred the loss has the right of recovering the rational damages from the contract that took place because of agreement violation. The jury seized that the rule that ought to be applied was that the scope of compensation or the total loss the party would incur if the contract genuinely illustrates the damages that occurred as a result of the jointly agreed contract being infringed. In this case, the court concluded that particularly the rules should be that if the losses arose from the violation of the contract or the damages happened in a sensible consideration when the contract was being formed, the claimant party should be compensated. This is the reason why the court ruled that in case there are particular conditions in the agreement when it was being formed and these particular conditions are known by the two parties of the contract and then apprehended for incase infringement occurred as a result of the particular conditions. Damages took place because these conditions were included and are thus assesses in relation to one party when they were essentially in the deliberation of jointly contracted parties as a realistic worthiness of the contract infringement. Consequently, the jury decided that in this case, the defendant did not know the loss the factory was incurring because of the broken part since it was not availed within the given time frame. Hence the loss incurred by the factory is not rationally tackled in contract infringed by the defendant since Hadley never communicated this particular condition to Baxendale and he was entirely not aware of the loss the claimant was incurring. Therefore, the facts favored the defendant in relation to the consideration of the profit loss and the court decided that the profit was not to be compensated by the defendant since the defendant never knew about claimant’s loss coming from non-running profit. Eventually, the case was relinquished and remanded for the judgment with amended guidelines. In such instances, major losses are merely associated with deficiency of information and incorrect future forecast when the agreement was being finalized and perceptive of the losses came by logically ahead of the capacity of the contract and thus were not considered when the agreement was being formalized. Thus for compensation to occur because of the damages, the law should assess the widespread of the damage with care to ascertain if the contract was effectively fulfilled by the two parties. Therefore, the proofs of al conditions are logically needed when the contract is being formulized and the scope of the information of the both parties concerning the exceptional conditions. The necessary information concerning the unique conditions can be attributed to both parties of the contract via a normal business practice and extra dependable foundations. Here, consider the case of Catts as the defendant and tomato canning company Curtice Brothers Co as the plaintiff. The case’s facts are that Catts founded and entered in a contract to develop the sale of entire tomato yield of a given piece of land, in the contract to the tomato canning company Curtice Brothers Co. Plaintiff’s factory has the ability generate one million tomato cans and the tomato dealing was to remain for other six months from the time the contract was formed. The claimant has planned that over the six week packing season, the tomato canning business would be carried out and the claimant was to bear from big loss the time that the defendant declined to sell the tomato crop to the claimant. The court makes a judgment in favor of the claimant and hence the defendant made an appeal against the jury’s judgment. The matter in the case was to assess if the conditions in the supply contract permitted the remedy of the precise action to be applied. The judgment that can be applied in this case was that the claimant is under considerations case has put sufficient strive to make sure that the tomatoes supply which is the raw material of tomato canning operations. To fulfill the contracted terms for supply of tomatoes was an ideal remedy in this case. Consequently, the court examined the facts of the circumstance and eventually decided that the judgment that had been granted earlier ought to reign. Still, let’s analyze Locks and Wade’s case. The case’s facts include; the claimant got into a lease contract of jukebox with the defendant for s period of two years. According to the contract, the claimant agreed to avail the record for agreed to restore the flawed components. The gains that were to be gotten from the business were agreed to be shared according to the terms specified on the contract. The agreed least payment was to be 20$ weekly by the defendant to the claimant in the contract. The defendant annulled the contract before fixing the leased equipment. The claimant got into lease contract of identical equipments with another party after the defendant declined to follow the terms of the agreed contract. However, the claimant indicted the defendant for the damages that happened after he declined and sued him. The lower court made the judgment in favor of claimant and requested the defendant to give $ 836 to the claimant. The key matter involving the case is that the claimant is permitted to the reimbursement of the damages arising from the defendant’s declination to fulfill the agreement even when the claimant got into a new agreement with other party. The law that can be applied on this case is that damages on the claimant resulted when the defendant declined the contract, which he regained through getting into another contract and thus ought not to be accused to the defendant with exemption of infringing the initial contract which helped the claimant to pick up from the damages. Here nevertheless, the claimant could not suitably hire it to the other party save for the initial agreement which was infringed by other party whereby the defendant broke the agreement. In a case like this, the claimant must not be offered two profits solely because the initial lessee declined to go on with the contract. Conclusion After analyzing the above cases, it is right to conclude that the contractual remedies are not present for simply compensation of the claimant but they are present offer a solution to the party that has been wronged. Many people think that the contractual remedies are meant to compensate the claimant but after the analyzing of the above cases it is clear nearly all the parties that are suffering are the plaintiff and are seeking courts verdict to have their rights reinstated. Therefore, it is correct to conclude that contractual remedies are present to assists the suffering party where in most cases the suffering parties are the claimants. This is aimed for the court to assist the plaintiff/claimant into acquiring compensation of their losses because their agreed terms have been infringed. Bibliography Mark P. Gergen, "The Goals of Contract Remedies" (April 16, 2004). Bepress Legal Series. Working Paper 250. Weinrib, Ernest J., Punishment and Disgorgement as Contract Remedies. Chicago-Kent Law Review, Vol. 78, No. 1, 2003. Available at SSRN: http://ssrn.com/abstract=1138431 Read More