Major Issues on the Law of Contract - Essay Example

Lecturer Law of Contract Introduction A contract is a legally binding agreement between two parties, which is enforceable by law. People enter into an agreement when they show their willingness to undertake or abstain from taking part with the purpose of getting something from the other part. In every contract, there is an offeror and an offeree. A contract is an agreement in writing or verbally between two or more people. For a contact to exist it should be between two parties the parties must have the duties to perform and it should be enforceable by law (Twomey and Jennings, 285). Enrick wanted to buy a car. He found out that Mr. Edmund a mechanic who works with General live stores wanted to sell his car. On contacting him, Mr. Edmund agreed to sell his car and hence was the offeror while, Mr. Enrick became the offeree (Twomey and Jennings, 291). An offeror is the person intending to sell their goods. An offeree is the one intending to buy the car. Therefore, Mr.Edmund gave the offer to Mr. Enrick. An offer is the unequivocal manifestation by one of the parties about their intentions to enter into a contact with the other party. An offer may take various forms. It may be written, verbal or merely implied (Twomey and Jennings, 368, 369). A written offer is put into writing while a verbal offer is made when the two parties communicate their intentions through the word of mouth. The two parties to the contract were adults had the capacity to contract (Twomey and Jennings, 308). They had the capacity to contract because they had the legal rights to enter into a legally binding agreement. During one evening, through a phone call, Mr. Enrick declared his interest to buy the car. The declaration to buy the car demonstrated his interest to get into the contract. However, the contract was a void contract. This is because the contract was not enforceable by law. This is because he had only made the declaration of his intentions of buying the car. Declaration of interest refers to an offer made or any statement made regarding the actual thing that is supposed to be done (Twomey and Jennings, 168). The acceptance must be in accordance with the original offer that was made. It also showed his acceptance of the offer made to him by the offeror. Acceptance of a contract is the expression of complete or unconditional agreement to all the terms set out in the offer (Twomey and Jennings, 294). For the contract between Mr. Enrick and Mr. Edmund to be regarded legal and binding, it has to have express or implied terms. Express terms refer to the terms the parties adverted to during negotiation and agreed. In this case, written terms prevail over the unwritten terms of a contact. Implied terms are terms did not expressly incorporate into the contract, but were only implied. They can also be implied by the acts of parliament (Twomey and Jennings, 384). One evening Mr. Edmund invited Mr. Enrick to a dinner party in which they discussed the mode of payment that would be used to pay for the car, and other formalities that would be essential for the performance of the contract. Performance of contract occurs when the individuals within the contract ensure that they carry out their duties as stipulated in the contract (Twomey and Jennings, 411). The formalities that the two parties could have entered into must be in line with the law governing the country. It was agreed that the payment would be made through cash whereby a down payment would be made first, and the rest would be paid later when Mr. Enrick gets the car under his care and in good condition. Mr. Edmund promised to exercise due diligence to ensure that the car was in good order and was delivered at the appropriate time. Mr. Edmund was supposed to exercise due diligence since he has knowledge on the repair of vehicles and hence had a duty of ensuring that the car met all the needs of Mr. Enrick and was properly functioning. During negotiations, Mr. Enrick sought to know the details and any information regarding the offer. The request for information did not make a counter offer. That is it did not eliminate the original offer. He only needed to get clarifications regarding the vehicle and its ownership upon which Edmund replied that the vehicle was his and was intending to sell it so that he would buy a plot upon which he intended to build a house for his family. This would allow the offeree to know if the details the offeror had provided regarding the car were correct and suited his needs. After studying the details, he found out that the car had some defects that would require an additional cost to rectify. He requested the offeror to make the repairs on the vehicle and made the down payment. The offeror, Mr. Edmund agreed to make changes within a period of one week upon which Mr. Enrick would deposit the full amount into his bank account. This was written, and the agreement was signed by the two parties and hence the contract became a voidable contract. A voidable contract is a contract that is enforceable by law (Twomey and Jennings, 270). The terms of the contract were exceedingly certain that the car will only be bought if the repairs were made. Terms of a contract refer to the promises that the parties of a contact make to each other. The repairs were to be made on the offeror's cost and hence there were considerations that were to be put in place. They agreed that he should repair the car so that he could sell it to get more money. A consideration refers to the rights, interest or profits that an individual party will accrue from the contract and the loss or forbearance the other party may suffer (Twomey and Jennings, 332). After the two weeks, Mr. Enrick went to the store to collect the vehicle, but found the repairs had not yet been made. He left the store amid anger and said that he no longer wanted the car since he had intended to use it during his visit to another town. Mr. Enrick felt that Mr. Edmund had filed to honor the terms of the contract which constituted a breach of contract and should pay him the damages. Breaching a contract is the failure by one party to the contract to perform the contract as had been strictly agreed (Twomey and Jennings, 434). Two days later, Mr. Enrick wrote to Mr. Edmund and requested him to repay the down payment. He received a reply letter after two days in which Mr. Edmund added exemptions stating that the remaining amount of money had to be made before the repairs could be made. An exemption refers to addition of one or more paragraphs into the contract by one party so as to avoid the legal consequences of breaching a term of the contract (Twomey and Jennings, 385). Upon reading the letter, Mr. Enrick visited the store to talk to the manager. After talking to the manager, he realized that Mr. Edmund did not own the car, but the car he wished to sell belonged to the company (Twomey and Jennings, 171). This constituted a unilateral mistake. Unilateral mistake occurs when one of the parties to a contract is mistaken while the other party is extremely much aware of the mistake since they are the ones that have induced it (Twomey and Jennings, 314). This rendered the contract void. The contract was void since it was nonexistent according to the law (Twomey and Jennings 270). Mr. Edmund had made a misrepresentation during the formation of the contract. This is because Mr. Edmund had given false statement regarding the facts of the car before they entered into the contract and this had made Mr. Enrick sign the contract (Twomey and Jennings, 317). That is why he gave his consent of agreement by putting down his signature. Mr. Enrick requested the company to give him the vehicle since he had made a down payment or get his down payment so that he would go ahead and buy another car. However, the manager advised him to seek legal redress since Mr. Edmund had cheated him and was neither acting as their agent. He was not the company's agent because he was not acting on behalf of the company neither had he entered on the contract on behalf of the company. The manager advised Mr. Enrick that they were not liable for the loss he had incurred. Contract liability means being responsible for the performance of the contract terms (Twomey and Jennings, 473). It also dawned to Mr. Enrick that Edmund did not have valid documents for the car; the documents he had shown him were fake and did not have the company seal. This had made him believe that Edmund had owned the car. He further advised him the contract they had entered in was illegal. It was illegal because Mr. Edmund wanted to sell the company’s property and hence should sue him for damages. Damages are the costs an individual receive as compensation from the other party for failure of the other party to honor the contract (Twomey and Jennings, 440). The contract was also illegal since it was fraudulent which is against the laws of the country. Mr. Enrick told Mr. Edmund that he would go to court and sue him if he failed to refund him the down payment he had paid. Later during the day, Mr. Edmund threatened to kill Mr. Enrick’s wife if he went to court. Using force or threat to make the other party of the contract stick to the contract terms is referred to as duress (Twomey and Jennings, 323). He asked Mr. Enrick to consider the contract discharged. This meant Mr. Enrick agreeing that the obligations that the contract had created, and that were binding the two parties had already been performed, and the two parties were free from the contract. However, Mr. Enrick filled a case against Mr. Edmund and sought for damages upon the full compensation of his down payment. When Mr. Edmund was summoned in court, the court issued an injunction (Twomey and Jennings, 443). He was supposed to do as he had agreed in the contract. Since he had his own car, he was to give the car to Mr. Edmund within the agreed time, and at the agreed cost. After leaving the court, Mr. Edmund gave his car to Mr. Edmund who settled down the remaining amount of money. This led the termination of the contract. The contract was terminated because the process of buying the car had come to an end (Twomey and Jennings, 291). Conclusion Every party to a contract should ensure they perform their duty to avoid pay damages to the other party. Works Cited. Twomey, David P. and Jennings Moody M. Anderson’s Business Law and the Legal Environment, Comprehensive Volume, 21st Edition. South-Western, Cengage Learning, 2011, p. 1-548 Read More