Law Contract: Study of Case - Essay Example

 STUDY OF CASE Introduction Interactions among members of a society are governed by sets of rules and regulations in the form of law. Law defines what is legally wrong or right and provides for penalties for offences. Law of contract is a branch of law that regulates legal agreements between parties. This paper seeks to determine legal position of a party to a case. The paper will explore relevant legal principles involved in the case with the aim of advising a party on her legal position based on a contract. Facts of the case Freda agreed to act in an opera that was to be performed for duration of six weeks. Terms of the agreement provided that Freda would be paid a sum of £ 500 for every performance and she was supposed to attend six rehearsals before commencement of the performance. She however failed to attend the first three rehearsal sessions and the management has denied her the chance to perform. Legal principles The case is based on the law of contract. Mead, Sagar and Bampton defines a contract as an agreement, between parties, that is enforceable in law. An agreement must however fulfil certain requirements for it to be considered as a valid contract. One of the essential elements of a valid contract is an agreement between the parties to the agreement. This is brought about by an offer by one party or parties that is then accepted by another party or parties. In making an offer, a party undertake to be bound by his or her terms if the other party, to whom the offer is made, accepts the offer in a legally prescribed manner. Acceptance of the offer completes the agreement of the parties over the subject matter. Another essential element of a contract is existence of consideration. This is defined as the sacrifice made by the party to whom a promise is made for the benefits derived from the offeror. With exemption of “a promise made under deed”, a contract is only enforceable if it is supported by consideration (Mead, Sagar and Bampton, 2009, p. 44). Further, a contract is legally enforceable on its parties only if there existed an intention, by the parties, to create a “legal relationship” (Mead, Sagar and Bampton, 2009, p. 44). This element distinguishes contracts from social agreements in which parties make informal commitments. Official arrangements are however generally regarded to create legal relations between parties. The parties must have also entered into the agreement with free consent, an element that protects parties from imposed agreements. Free consent in a contract is evaluated with respect to vitiating factors that include “mistake, misrepresentation, duress, undue influence, and restraint of trade” (Gil, 2005, p. 127, 128). The presence of any of these factors, depending on the aggrieved party, makes an agreement into a contract either void or voidable. While a void contract is not enforceable ‘ab initio’, a voidable contract is enforceable at the discretion of the offended party (Goldman and Sigismond, 2010, p. 123). Capacity of the contracting parties and legality of the subject matter of the contract are also essential in determining enforceability of a contract (Mead, Sagar and Bampton, 2009, p. 44). Another principle that arises in the case is breach of contract that is induced by a party’s failure to perform according to the terms of the contract. Conditions, as terms to contracts, go to the root of the contact and can form grounds for termination of a contract by an aggrieved party. A warranty is on the other hand a term that is not very essential to a contract and breaches can only institute damages and not termination of a contract. In the case of Hochster v De La Tour, 118 Eng. Rep. 922 (Q.B. 1853), it was held that an aggrieved party can repudiate a contract even before commencement of the subject matter if one of the parties has breached a condition to the contract (Emanuel, 2006, p. 250; Goldman and Sigismond, 2010, p. 123). Another applicable legal concept to the case is termination of a contract. A party to a contract can chose to terminate the contract in the event of a substantial actual breach of the contract or in the event of an anticipated breach. Anticipated breach arises when one party is expected not to perform his or her part of the contact. The aggrieved party can then treat the the contract as breached even if the actual breach has not yet taken place (Gillies, 2004, p. 327). Similarly, an employment can be dismissed on grounds of gross misconduct subject to terms of a contract (Kulakowski and Chronister, 2006, 376). Freda’s legal position There existed a contract which Freda is liable of breaching. The breach led to the decision by the management to terminated the contract, a move that was legally justified. This relieves both parties of all their rights and obligations as defined by the contract. Based on the definition of a contract and the essential elements of a valid contract; offer, acceptance, consideration, intention to create a legal relation as well as legality of the subject, a contract existed between Freda and the management. Even though capacity of Freda to contract is not explicitly discussed, the circumstances around the case indicate that contractual capacity was not a controversy. A contract therefore existed between Freda and the management and both parties were bound by the terms. Being a contract of personal service and having laid down a term for ensuring efficiency of delivery of service, attendance of rehearsal sessions formed a condition to the contract. As a result, Freda’s failure to attend the first half of the predetermined sessions undermined the terms of the contract as well as the ultimate performance. Freda’s failure to honour the term of the contract forms a legal ground for the management to terminate the contract on grounds of breach of a significant term to a contract. Under this form of termination of a contract, all rights and obligations of the parties to the contract are relinquished. Freda can therefore not claim the promised consideration because the contract has been terminated. Similarly, the management cannot enforce any right that the contract created against her. Reference list Emanuel, Steven. (2006). Contracts. New York, NY: Aspen Publishers Online Gil, Jon. (2005). Business Law for the Entrepreneur. London, UK: arima Publishing Gillies, Peter. (2004). Business law. Australia: Federation Press Goldman, Arnold, and Sigismond, William. (2010). Business Law: Principles and Practices. Mason, OH: Cengage Learning Kulakowski, Elliot, and Chronister, Lynn. (2006). Research administration and management. Sudbury, MA: Jones & Bartlett Learning Mead, Larry, Sagar, David, and Bampton, Kevin. (2009). CIMA Official Learning System Fundamentals of Ethics, Corporate Governance and Business Law. Burlington, MA: Butterworth-Heinemann Read More