USA contract Law - Essay Example

'Reference: ' ' http academic.udayton.edu/caseslawecon/Contracts/taylor%20v%20caldwell.pdf ' ' Question The objective standard of agreement makes it impossible for a defendant to plead mistakes as an excuse for non-performance, because it would make virtually every contract invalid. While the proposer of the contract is the master of the said contract's stipulations, the party agreeing to terms by signing the contract cannot later be allowed to deny the contracts enforceability due to ignorance or naivet', because it would defeat the purpose of having a contract in the first place.

The law of contract designate an objective standard of agreement with which both parties involved must comply. Blackburn J. is recognized as articulating this in the terms of how it's most commonly understood by law practitioners today in the case Smith v Hughes. In it he notes that,If, whatever a man's real intention may be, he so, conducts himself that a reasonable man would believe that he was assenting to the terms proposed by the other party, and that the other party upon that belief enters into the contract with him, the man thus conducting himself would be equally bound as if he had intended to agree to the other party's terms.

As further noted by Pursey Heugens, Hans van Oosterhout, and Jack J. Vromen, "Though the objective theory of agreement in this way remedies the basic shortcoming of the subjective theory, by doing so it itself immediately gives rise to a problem which threatens to undermine the legitimacy of agreement as a means of allocating goods. The separation of objective sign from the signified subjective agreement creates the possibility of communication of intention3.Caldwell & Bishop owned Surrey Gardens & Music Hall, and agreed to rent it out to Taylor & Lewis for '100 a day.

Taylor had planned to use the music hall for four concerts and a day and evening fetes on Monday June 17, Monday July 15, Monday August 5, and Monday August 19, 1861. They were going to provide a variety of extravagant entertainments including a signing performance by Sims Reeves, a thrity-five to forty-piece military and quadrille band, al fresco entertainments, minstrels, fireworks and full illuminations, a ballet or divertissement, a wizard and Grecian status, tight rope performances, rifle galleries, air gun shooting, Chinese and Parisian games, boats on the lake, and aquatic sports.

According to the contract the parties had signed, the defendants were to provide most of the performers. Taylor & Lewis agreed to pay one hundred pounds sterling in the evening of the day of each concert by a crossed cheque, and also to find and provide, at their own cost, all the necessary artistes for the concerts, including Mr. Sims Reeves. Then, on June 11, 1861, a week before the first concert was to be given, the music hall burned to the ground. The plaintiffs sued the music hall owners for beach of contract for failing to rent the music hall.

There was no clause within the contract itself which allocarted the risk to the underlying facilities, except for the phrase "God's will permitting" at the end of the contract.Judge Blackburn began his opinion by stating that the agreement between the parties was a contract, despite their use of the term "lease." Under the common law of property in England at the time, under a lease the lessee would obtain legal possession of the premises during the lease period, while the contract at issue in this case specified that legal possession would remain with the defendants.

Blackburn reasoned that the rule of absolute liability set forth in Paradine v Jane only applied to positive, definite contracts, not to those in which there was an express or implied condition underlying the contract. Blackburn further reasoned that the continued existence of the Music Hall in Surrey Gardens was an implied condition essential for the fulfillment of the contract. The destruction of the music hall was the fault of neighter party, and rendered the performance of the contract by either party impossible.

Blackburn cited the civil code of France and the Roman law for the proposition that when the existence of a particular thing is essential to a contract, and the thing is destroyed by no fault of the party selling it, the parties are freed from obligation to deliver the thing. He further analogized to a situation in which a contract requiring personal performances is made, and the party to perform dies, the party's executors are not held liable under the common law of England. Blackburn thus held that both parties were excused from their obligations under their contract.I. Taylor v Caldwell has introduced enormous confusion into the understanding of the nature of contractual liability in that the judgment laid down in the case found the contract between both parties unenforceable and neither party liable to fulfill their end of the agreement.

The confusion arises in the fact that Taylor is never compensated for his expenses, and since no one is found liable and the contract is judged to be void, there is no source of compensation for Taylor. This has been in many circumstances viewed as confusing because the result of the judgment is seemingly unjust. Taylor and Caldwell would have an enforceable contract if they can establish that all the essential elements of their contract are present, which becomes impossible the second the music Hall is burnt down.

Here, if there is a valid agreement between Caldwell and Taylor it will not be one for sale of goods governed by Article 2 of the Uniform Commercial Code. Instead, the common law requirements for an enforceable contract will apply. The essential common law requirements to create an enforceable contract are offer, acceptance and consideration. "In the present case, looking at the whole contract, we find that the parties contracted on the basis of the continued existence of the Music Hall at the time when the concerts were to be given; that being essential to their performance." A. Offer.

An offer exists if a party communicates to the other party an expression of intention to be bound to the terms of the offer and inviting the other party to accept those terms. The expression of intention to be bound must contain the essential terms of the agreement. 1. Newspaper notice. When an offer is made to a number of persons, such as by a newspaper ad, that offer may be revoked by giving notice that the offer has terminated by some means of equal publicity. Here, however, the initial ad was not the offer.

The offer was made directly by Don to Peter. When an offeror is aware of who the offeree is, the offeror must directly notify the offeree of the revocation and cannot rely on a newspaper ad. A notice of revocation in the newspaper would not be sufficient unless Peter actually read the notice. Since Peter did not read the second ad, the newspaper notice is not effective to revoke Dons offer. 2. Sign in the lobby. Once the offerree received actual notice of the revocation, the revocation is effective at that time.

Peter did see the sign in the lobby, but he did not believe it applied to him. Nonetheless, it should constitute a revocation because it clearly stated that Don was accepting no more residents. Don's offer was revoked unless Don's offer was not freely revocable. B. Offer supported by detrimental reliance' Here, based on Taylors final statement during their initial meeting, Caldwell reasonably thought he had two weeks to decide to accept Caldwell's offer. While the UCC Article 2 provides for merchant's firm offers without consideration, this is not a contract for the sale of goods.

At common law, the offeree has to give consideration to the offeror bind the offeror to any promise to keep an offer open for any stated period of time. However, an offer may also become irrevocable under the doctrine of promissory estoppel. If an offer is made which the offer knows (or reasonably should know) will induce the offeree to believe that the offer is irrevocable for a period of time, then that offer will be deemed irrevocable for a reasonable period of time if necessary to prevent detrimental reliance by the offeree.

Here, Taylor did rely on Caldwells offer by paying for show expenses, and making other costly arrangements to accept Caldwell's offer. C. Acceptance - Unilateral or bilateral contract' Assuming that Caldwell's offer would be held open (irrevocable) for some reasonable period of time, then Taylor did have the power to accept it when he came to Caldwell's's facility with Dad. As a general rule, the offer-or is the "master of the offer" and may specify the precise acts or words the offeree must perform or use to properly accept the offer.

Here, Caldwell's offer which would be an offer for a unilateral contract that Taylor accepted when he brought his father to Don's facility. However, the law favors bilateral contracts (offer seeking a return promise) and will interpret ambiguous offers as seeking a return promise. D.Consideration. Assuming that a valid offer was made and accepted in a timely fashion by Taylor, the only remaining requirement is valid consideration. Consideration exists if both parties engage in a bargained for exchange of acts or promises and both parties incur new legal detriment as a result of the contract.

Here, both Caldwell and Taylor wanted the performance the other party was offering (Caldwell providing the use of his facility and Taylor providing payment. Valid consideration exists here to support a contract claim by Taylor against Caldwell. Thus the reason for all of the confusion over who is liable to cover Taylor's expenses, after the judgment basically in Caldwell's favor.