Deal With Different Types of Contracts - Essay Example

CONTRACT LAW al Affiliation Contract law All businesses fundamentally deal with different types of contracts. These contracts may either be written or unwritten, this is due to the several transactions that involve goods or services. Based on the fact that a contract is a lawfully binding agreement, even an authentic contractual fault can lead to serious complications. Thus, it is critical that both small and big organizations as well as business owners ought to have at least a simple understanding about though contract law. Formation of a contract law A contract is a piece of agreement that gives rise to all the obligations that are enforced or identified by the law. The common law has 3 basic fundamentals in making of a contract namely agreement, contractual intention and consideration. Agreement as an essential of the basic law means that the parties ought to come to a legal agreement. Basically, an agreement can only be met when one party presents an offer, when this offer gets accepted by the other party, it becomes an agreement. The courts apply an objective test to determine whether the parties have arrived at an agreement. In the case study, when Brian decides to purchase the phone at EverEager, he and the company come to an agreement that he would pay a once-a-month payment direct deduction of £35 for a period of one year1. An offer In contract law, an offer is the willingness of a party on a contact on the specific terms. The offer is made with the objective that it should serve as the binding role once it gets accepted by the individual to whom it’s addressed. An offer can be directed to a single person or to a specific group of individuals. The Brian vs. EverEager is based on a single person. An offer is usually made by either words or by conduct. In the case study, Brian is handed the document by the assistant of the mobile phone company EverEager, he goes through it and signs. This offer is done by written words. Acceptance An acceptance refers to the final and absolute expression of agreement to the terms and conditions of the offer. In this case there ought to be an objective expression, by the receiver of the offer, of a will to be bound by the terms. Acceptance of an offer has no lawful effect unless it gets communicated to the offerer. The general rule of contract law is that a postal appearance is effective only when the letter of acceptance gets accepted. If acceptance takes place through an immediate medium such as email, it will effective at the period and place of receipt. It is also vital to note that an offerer cannot instruct that the offerers silence aggregates to the acceptance of the offer. Communication becomes unsuccessful in an acceptance where it tries to diverge the terms of the main offer. In such circumstances, it becomes a counter-offer, whereby the original offeror may either take or reject the offer. It is essential to differentiate a counter-offer from a meager appeal for further information concerning the original offer. In the case study, the document clearly stated that the terms and conditions of the company were in heir website, Brian did not check them to see what they clearly stated, and he went ahead and accepted the offer. It is evident that the website contained extra information that was important for any potential customer and that would assist them in cases of any dispute. Finally, an offer may be canceled at any time in advance of its acceptance; however the cancellation must be conversed to the offeree. Even though revocation need not be conversed by the offeror in person, it can be done on the basis of a reliable third party. If it is not conversed, the cancellation is unsuccessful. As soon as an offer has been accepted, the involved parties have an agreement. That is the basic foundation of a contract, but is not adequate in it to generate legal obligations1. The objective principle The courts identify the objective principle of agreement in the contract law. In such a case, it is not the role of the judiciary to find out the real intentions of each party; its main role is making the decision on the entitlements of each party. The objective principle necessitates an interpretation of each party’s conduct in a way that is reasonable in an objective manner to be well comprehended by the other party. The objective principle determines the following factors in any case in contract law; if the relevant words can be termed as an offer or as an invitation, if the offer has been accepted, if a specific term is being projected, if an individual is rejecting the agreement and is the other party is agreeing to this rejection. The basis of the objective principle is to protect the recipient from the surprise and unfair that would result in cases where the communicating side real but non-apparent intents or personal meanings were as a substitute to rule. Lord Diplock states on the “Hannah Blumenthal” in 1983 that “the objective principle should not be understood to require actual detrimental reliance upon the language used in order to activate this principle.”1 CONSIDERATION In common law, a promise cannot be termed as a general law, binding as an agreement except if it is held by thought. Consideration is “an aspect of value" which is set for a promise and is compulsory to make the promise enforceable as an agreement. This is conventionally either some disadvantage to the promisee and/or particular advantage to the promisor (whereby he might get the value). For instance, payment by a consumer is consideration for the suppliers promise to supply goods, and distribution of goods or services is consideration for the consumers promise to pay2. In the case study, the promise by Brian was to pay an agreed amount of money to the mobile phone company every month. The company also promised to give Brian the mobile phone on the agreed terms of monthly payments of one year. Consideration must be sufficient, but need not be adequate Even though a promise has no pledged force if not some value has been provided for it, consideration require not be sufficient. Generally, Courts do not ask if an adequate value has been provided, this is in the logic of the existence of any economic similarity among the value of the consideration provided and the value of every goods or services that are received. This is for the reason that they do not generally impede with the bargain between the parties. As a result, nominal consideration is adequate1. Consideration must not be from the past The consideration for a promise ought to be given in exchange for the promise Consideration must move from the promisee The promisee ought to offer the consideration. Customarily, in contact law, an individual to whom a promise was directed can implement it only if they personally offer the consideration for it. They have no right if the consideration stimulated from a third party. For instance, in the case study, if Brian promises EverEager to pay £35 every month for one year if they deliver the smart phone, its is the promise of the company to deliver the product even of they have to get it from a third party, in this situation Brian is not involved and cannot be as he was promised by the EverEager company. However, in cases whereby the circumstances of the Contracts and the Rights of Third Parties Act 1999 are met, a third party may well have the right to enforce rights made in his favor by either a contract that he was not a part of in the first place. Currently, the courts are also tolerant a more flexible situation under the common law. Despite the fact consideration needs to move from the promisee, it is not necessary to move to the promisor. First, consideration can be content where the promisee undergoes some loss at the promisors appeal but confers no consistent profit on the promisor2. CONTENTS OF A CONTRACT The are two basic terms of a contract, they are express terms and implied terms a. EXPRESS TERMS Express terms refer to contracts whereby the parties have agreed out in their agreement, these parties might record their agreement, and later the terms of their agreement, this is done in more than one document. These terms might be combined by reference into the agreement; for instance, whereby a contract is made to focus on average terms drawn up by an applicable dealing association. Or, a contract can be confined in more than one document despite the fact that one does not specifically refer to the other, a good instance is, dealings that are carried out under a ‘master contract with a distinct document being implemented every time a personal contract gets created. In this case, the master contract put down most of the original terms that the parties are carrying out, whereas definite specific terms such as price, times for delivery to name but a few are enclosed in individual contracts for every precise trade. Incorporation short of express reference varies on the purpose of the parties, resolute in agreement with the independent test of agreement2. b. IMPLIED TERMS A contract can have terms that are not particularly specified but which are implied, either since the parties planned this, or by action of law, or by tradition or procedure. Terms implied are ones that are not specifically clear in the contract, but which the parties ought to have projected to contain. THE END OF A CONTRACT – EXPIRATION, TERMINATION, VITIATION, FRUSTRATION There are basically four ways whereby a contract can be ended. They are by expiration, termination, vitiation, and frustration 1. EXPIRATION Expiration refers to an agreement that is ended in accord with its terms; this is because it has a static expiry date or since there is a right to dismiss that is contained in the contract, a contractual right to dismiss is different from the common law right to dismiss for breach of terms as argued below. B TERMINATION A contact can be terminated in case of the following events by the parties (i) Breach 3. A breach of contract is devoted when a party, deprived of lawful reason, fails or rejects to carry out what is outstanding from them as stipulated under the contract, or acts in a defective manner, or debilitates himself from accomplishing the terms in the contract1. (a) Failure or rejection to perform – a failure or rejection to carry out a pledged promise when performance has dropped due is a breach of contract. (b) Substandard performance – this happens when an individual promises to do a specific action thing but does a different, for instance, in time, size or quality, this sums to a breach. The consequences of such a breach frequently vary from those of a whole failure or rejection to perform. There are situations whereby a "defect" in performance is for the most part serious; this is mainly because the breach can amount to non-performance instead of defective performance. The Brian and the mobile phone company is a good instance of a substandard performance. After acquiring the smartphone, it works well without any technical problem for three weeks, on the forth week, Brian is not capable of acquiring a signal on his phone for two full days, with the importance that he misses an essential phone call from a customer. The customer is annoyed and changes to a different law firm. This makes Brian’s law firm to loose a total of £10,000 from this client. When network service start again, Brian gets an email to his personal email account from EverEager, this email contains a virus. When he opens the email, the virus corrupts his email account facilitating fraudsters to take the passwords to his personal bank account. With the help of the passwords, the fraudsters are able to withdraw £5,000 from Brian’s bank account; a total that includes his normal monthly salary of £2000. (c) Incapacitating oneself – for instance, a supplier pledges a breach of contract for the transaction of a precise good when he sells it to a third party. (ii) Anticipatory Breach 4. An anticipatory breach happens when, before performance is unpaid, a party decides to either reject the contract or restricts himself from executing it. (a) Repudiation – this refers to the clear and total refusal to perform, this entails conduct presenting the party is not willing, even though they have the capacity to perform1. (b) Disablement – for instance, a situation whereby a party orders in a different place of the specific god or service which forms the question matter of the contract. VITIATION There are circumstances whereby the parties have come to agreement but the inquiry arises on the presence or non-existence of particular fact, or the incident or non-occurrence of certain occasions has ruined the foundation on which the agreement was extended, in this case the agreement is liquidated or in another manner vitiated. FRUSTRATION Under the policy of frustration, an agreement may be quitted if, afterward its development, and an unexpected event takes place which makes enactment of the contract unmanageable, unlawful or basically diverse from what was expected. A good instance is Avery vs. Bowden18 case, whereby a ship was expected to pick up some load at Odessa. Resulting from the rise of the Crimean War, the government declared it unlawful to load any consignment at an opponent port; as a result, the ship was unable carry out its contract without violating the law. The agreement was thus frustrated. Frustration does not occur where the frustrating occurrence was instigated by the liability of one party. Correspondingly, frustration does not take place where the parties have formulated express delivery for the event in their agreement. The principle cannot be appealed lightly, and cannot permit a party to run away from a bad bargain1. DAMAGES AND REMEDIES 1. Damages are projected to recompense the damaged party for the harm that that they have suffered as an outcome of the breach of contract. To institute a claim to considerable damages for breach of contract, the incapacitated party requisite to display that: (i) Authentic loss has been initiated by the breach; (ii) The type of loss is acknowledged as giving a right to recompense; and (iii) The loss is not too out-of-the-way. A breach of contract can be proven even if there exists no definite loss but in this situation case, the only entitlement is to insignificant damages. The essential principle is to place the part at loss financially, as close as probable; damages are intended to recompense for a proven loss and not to offer a free advantage to the angry party. 2. Damages can at times be an insufficient remedy. There are several justifiable remedies that are flexible and focused at making sure that the party at a loss is not unfairly treated by being limited to the common law remedy of loss. For instance: in the case study, Brian informs the mobile phone company that he would no longer be paying the monthly payments, EverEager tell Brian that he is as per the contract indebted to continue with the monthly payment strategy, and as he is refusing to pay, they will implement their rights under the contract to recover 3 months rental payments, in addition to a cancellation charge of £250. EverEager refute they bear any accountability for the difficulties with Brian’s bank account or the harm of the business he incurred. (i) Specific Performance In cases damages are considered inadequate, the court can make an order for precise enactment that will induce the party in breach to accomplish the terms of an agreement. It is vital to note that the court can only grant definite performance if, under all the conditions, it is fair and justifiable to do so. In the case study, EverEager refers Brian to their terms and conditions on their website which state. There is a high probability that Brian even never revisited the terms and conditions of the contract in the website, if he did, he would not be making these complains and accusation.so in this case the company is not liable to the loss incurred by Brian at any cost. Contract Law Cases Coward v. Motor Insurers’ Bureau (1963) 1 QB 259 (CA) In this situation, Mr. Coward and Mr. Cole were workmates who had made a contract shared lifts to work. Cole used to ride his motorbike and Coward could ride pillion in exchange for a weekly amount of cash, unfortunately they both met their death via a road traffic accident, the wife of Mr. Coward filed for a claim for the harms against the land of Mr. Cole. Though, Cole’s insurance strategy did not take care of pillion commuters and as his land had no properties or cash to gratify the decision, Mrs. Coward went ahead and followed the Motor Insurance Bureau. Olley v. Marlborough Court Ltd (1949) In this case, Mr. Olley visited the hotel that belonged to the defendant. Mr. Olley did not check in with the management to state that he was arriving; when he arrived he booked for a room. He signed in at the register at the entrance and there he did not state at that point of any other agreements or circumstances that would have an impact on Mr. Olley’s stay at the hotel. An unknown person broke into his room and made away with valuables, it consequently became identified that the defendant was negligent in relative to the safety measures in the hotel. Nonetheless, the defendant pursued to depend on upon a segregation clause that was located in the bedroom the Mr. Olley was staying in. This indicated that the hotel management was not willing to accept obligation for lost or stolen properties that belonged to clients. Bibliography McKendrick, Ewan. 2007. Contract law. Basingstoke: Palgrave Macmillan. McKendrick, Ewan. 2005. Contract law: text, cases, and materials. Oxford [England]: Oxford University Press. Read More