Contract Law - Effect of Additions and Modifications on Contract - Essay Example

? Introduction to Law MSc in Construction Law and Dispute Resolution work Assignment 2 Table of Contents Introduction (please modify it, make it from you own wards and don’t need to have laws from UAE and Common) Rules and regulations form part of legal system within nations. There are many branches of legal system, contract law being one such branch. Contract law is one of the oldest branches of legal system. A contract is coming together of an offer made by one contracting parties to the other who accepts the same on the basis of subject matter. Contacts may be valid or invalid. Valid contracts have essential elements that include legal intentions to create the agreement, at least two parties, offer and acceptance, and consideration. In additions, essential terms determine validity of a contract. These elements are consideration, subject matter, and time of performance. While making an offer, an offeree may reply to offer made positively with some additions or modifications. Such additions or modifications affect the formation, time, and place of contract under both English and UAE laws. In respect to English and UAE laws, the following is a discussion on effects of additions or modifications made by offeree in response to an offer. Theories for Validity of Contracts Apart from the essential elements and terms of a contract determining validity of a contract, four other theories attempt to explain when, where, and how validity is attainable. The first theory proposes that a contract becomes valid when and where the negotiations begin that is, when and/or where declarations are made. For instance, in the case of Applegate v Moss [1971] 1 QB 406 the court held that the contract was valid when the negotiations started between the two parties. From the UAE Civil Code, a contract becomes valid upon receipt and realization of the offeree’s acceptance1. The other theory explaining validity of a contract majors on when and where the offer and acceptance is received. Receiving of the offer and acceptance determines that both parties are comfortable with terms and conditions of the contract. Moreover, whenever a contract arises then it becomes valid. Lastly, the other theory that confirms validity of a contract is when and where the offeree becomes aware of existence of the offer. Additions and Modifications by Offeree Any change made by an offeree in the context of responding to an offer amounts to additions and modifications of a contract. Modifications and/or additions may be material or immaterial but they all affect formation, time, and place of the contract in all laws but in this case, special interest is on English and UAE laws. In a contract, an offer refers to a manifestation of an intention by once of the contracting parties, which leads to a binding agreement in the event that it is accepted. In the case of Moran v University College Salford (No. 2) [1994] ELR 1872 where the court held that, the University had made an offer, which was accepted by the plaintiff. Another case was OT Africa Line Ltd v Vickers Plc [1996] 1 All ER 325 3where there was a mistake in making of the offer. For instance, in the case of Barry and Davies [1962]1 2000[HC]4 the court held that there was a collateral contract between auctioneer and highest bidder since upon the offer made by the auctioneer, the highest bidder accepted the bid. Nonetheless, many offerees in some cases accept offer upon making some modifications or adding other aspects of the contract. From the UAE laws, an offer makes a contract to be valid through three basic ways. First, when an acceptance follows the offer made5. The other way is when an offer of specific goods and services has along with it indication of remission of consideration as required in order to validate contract6. Lastly, the last offer is valid especially when there is a repetition of the offer prior to acceptance of previously made offer7. Additions and/or modifications may be valid or invalid depending on various factors. It is important to note that before addition and/or modification becomes valid or invalid, the parties concerned must look at the validity of a contract. In essence, additions and/or modifications may not be valid if the contract is invalid. For instance, in the case of Barry and Davies [1962]1 2000[HC]8 the court held that there was a collateral contract between auctioneer and highest bidder since upon the offer made by the auctioneer, the highest bidder accepted the bid hence all the modifications that did not interfere with previously set terms and conditions were valid. Hence, contract has to be valid for additions and/or modifications proposed by offeree are valid. In any case, additions and modifications on a previous and original offer lead to a counter-offer9. Moreover, time of making a valid contract is essential regarding making of additions and/or modifications. Time and place when and where an offeror learns of the acceptance of an offer made makes the contract valid unless special agreements and arrangements were reached contrary to this position. Under the UAE Civil Code, the offeror has the responsibility of learning the time and place when and where acceptance from the offeree reaches him or her hence validating the contract10. Therefore, an addition or modification is only valid when contract is valid. Effect of Additions and/or Modifications on Contract Effects on Formation In the event that one of the parties in a contract is non-merchant, then any additions or modifications unambiguously made by the offeree even after accepting the offer become more proposals hence do not affect the previous contract. In such a case, the formation of a contract remains unaffected by such additions and/or modifications. Therefore, terms and conditions of the contract remain as agreed by the parties earlier as provided for under UAE Civil Code11. On a different perspective, when both parties in the contract are merchants, then additions and/or modifications to an offer becomes valid unless acceptance of the offer is limited to specific terms and conditions, such additions or modifications materially alter the whole contract, and when offeror rejects the additions and/or modifications or sends the rejection notice within reasonable time. In this case, additions and/or modifications have significant effect on the formation of a contract. In the case of Magnus v. Lutheran General Health Care System, [1992] 235 Ill. App12, the court held that when additions and modifications lead to ambiguity of previously formed contract then they are better avoided. From the ongoing discussions, it is therefore convincible that additions and/or modifications may affect formation of contracts. Contracts can be invalid or favourable to both parties depending on the additions and/or modifications. Whichever the case, it is upon the contracting parties to ensure that the contract is valid as well as any addition or modifications each of the party would wish to make after the signing of the agreement. Effects on Time Time of a contract is vital as it determines validity of an agreement between two or more persons. Identifying the time under which a contract is made is essentially important in establishing not only the validity of a contract but also validity of the additions and modifications that offeree would wish to make thereafter. For instance, contracts are made by persons who are lawfully allowed to enter into contract such as persons of sound mind and those who have attained minimum age of engaging in contractual agreements despite the fact that such age differs from one region to another. Within the UAE and English law, the minimum age for a person to enter into contract as outlined in the UAE Civil Code is 18 years13. The UAE Civil Code furthers provides that any minor has no contractual capacity hence restricted from making a contract by law unless under special circumstances allowing for discretion. Additions and/or modifications of a terms and/or conditions of a contract by offeree offer significant challenge to validity of the same. Age for instance, is an important element in making agreements. Making modifications or additions to an offer previously established is likely to affect the timing of the contract. Consequently, this will affect when the offer becomes valid. In a case where the offeree proposes admissible additions and modifications, then the new contract will be influenced by new terms as outlined in the additions and modifications hence the timing of validity of the contract significantly changes. Effects on Place/Jurisdiction The place where a contract is signed is vital since it determines the responsible court to act in any case disputes arise. For instance, if a contract is signed in Jordan then the courts within the same region will definitely intervene in the event that disputes arise. Making additions and/or modifications to an offer by offeree significantly affects the jurisdiction of the contract. UAE Civil Code provides that any rule relating to jurisdiction as well as all matters that are procedural shall be governed by law of the state in which action is brought or where the very procedures are carried out14. In this case, additions and/or modifications may affect the jurisdiction under which the contract is admissible. For instance, if an offeree accepts an offer with conditions that the destination be changed then the jurisdiction of the contract is likely to be interfered with. This is evident in the case of Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1997] 2 WLR 898 (HL)15 where the court held that, despite the fact that the plaintiff changed the jurisdiction, the terms and conditions of the contract were only effective in former area. Consequently, whenever the offeree proposes additions or modifications there is need to create a balance in order to avoid interfering with the validity of the contract. Emerging Trends in Law of Contract With development of technology, there are emerging issues in the legal system where many parties find it not only convenient but also cheap to reach agreements via technological devices such as emails, interactive websites, and telephone communications. In the case of Brinkibon v Stahag Stahl [1983] 2 AC 3416, the court held that the contract was valid at the time when acceptance was sent by telex out of the office hours. This was the same case with Entore v Milles Far East Corporation [1952] 2 QB 32717 where the court held that the acceptance in making contracts via technological devices takes place when and where the acceptance is received. UAE Civil Code provides that any contract made by telephone or any other related means is regarded, with respect to the place, as if both parties were present and made the contract out of good will and faith18. Thus, any contract made through telephone or any other means is valid and enforceable by law. Other than jurisdiction, UAE provides for the time of making the contract19. In this case, when communication happens between two parties then at that time a valid and enforceable contract is made. This follows that contracts made through emails and interactive websites are valid and enforceable by law. Consequently, additions and/or modifications within the technology device amount to alterations of the terms and conditions of the previously developed contract. Since contracts made through telephone and other related means are valid, additions and/or modifications are likely to affect not only their formation but also their validity. Conclusion Modifications and/or additions are new terms and/or conditions that offeree may wish to add in while accepting an offer made by offeror. Additions and/or modifications in contracts have significant implications on formation, time, or place of formation of a contract agreement hence affecting its validity. With validity at stake, most contracts end up experiencing serious turbulence causing so many disharmonies in the community or society. Other contracts made through developed technologies such as telephone, emails, and website interactions. Such contracts are as valid as those that are done one-on-one hence experience the effects of additions and/or modifications. Offeree’s additions and/or modifications therefore affect contracts significantly. While making additions and/or modifications to some aspects of contract, there is need for parties involved to understand the effect of modifications and/or additions on the originally set terms and conditions of the contract. References Article 21: The Civil Code of the United Arab Emirates from “The Law of Civil Transactions of the State of the United Arab Emirates”, Translated from Arabic into English by Ja1v1es Whelanma and & Marjorie, Jhall. Article 125: The Civil Code of the United Arab Emirates from “The Law of Civil Transactions of the State of the United Arab Emirates”, Translated from Arabic into English by Ja1v1es Whelanma and & Marjorie, Jhall. Article 129: The Civil Code of the United Arab Emirates from “The Law of Civil Transactions of the State of the United Arab Emirates”, Translated from Arabic into English by Ja1v1es Whelanma and & Marjorie, Jhall. Article 130: The Civil Code of the United Arab Emirates from “The Law of Civil Transactions of the State of the United Arab Emirates”, Translated from Arabic into English by Ja1v1es Whelanma and & Marjorie, Jhall. Article 131: The Civil Code of the United Arab Emirates from “The Law of Civil Transactions of the State of the United Arab Emirates”, Translated from Arabic into English by Ja1v1es Whelanma and & Marjorie, Jhall. Article 134(1): The Civil Code of the United Arab Emirates from “The Law of Civil Transactions of the State of the United Arab Emirates”, Translated from Arabic into English by Ja1v1es Whelanma and & Marjorie, Jhall. Article 138: The Civil Code of the United Arab Emirates from “The Law of Civil Transactions of the State of the United Arab Emirates”, Translated from Arabic into English by Ja1v1es Whelanma and & Marjorie, Jhall. Article 140(2): The Civil Code of the United Arab Emirates from “The Law of Civil Transactions of the State of the United Arab Emirates”, Translated from Arabic into English by Ja1v1es Whelanma and & Marjorie, Jhall. Article 142(1): The Civil Code of the United Arab Emirates from “The Law of Civil Transactions of the State of the United Arab Emirates”, Translated from Arabic into English by Ja1v1es Whelanma and & Marjorie, Jhall. Article 142(2): The Civil Code of the United Arab Emirates from “The Law of Civil Transactions of the State of the United Arab Emirates”, Translated from Arabic into English by Ja1v1es Whelanma and & Marjorie, Jhall. Article 143: The Civil Code of the United Arab Emirates from “The Law of Civil Transactions of the State of the United Arab Emirates”, Translated from Arabic into English by Ja1v1es Whelanma and & Marjorie, Jhall. Article 143: The Civil Code of the United Arab Emirates from “The Law of Civil Transactions of the State of the United Arab Emirates”, Translated from Arabic into English by Ja1v1es Whelanma and & Marjorie, Jhall. Article 160: The Civil Code of the United Arab Emirates from “The Law of Civil Transactions of the State of the United Arab Emirates”, Translated from Arabic into English by Ja1v1es Whelanma and & Marjorie, Jhall. Barry and Davies [1962]1 2000[HC] Brinkibon v Stahag Stahl [1983] 2 AC 34 Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1997] 2 WLR 898 (HL) Entore v Milles Far East Corporation [1952] 2 QB 327 Magnus v. Lutheran General Health Care System, [1992] 235 Ill.App Moran v University College Salford (No. 2) [1994] ELR 187 OT Africa Line Ltd v Vickers Plc [1996] 1 All ER 325 Read More