Understanding Contract Law - Essay Example

Introduction on Contract Law It is no easy task to embark on a comparative study of the law of contract. Despite its apparent uniformity the law of contract varies from one country to another, and even within the same system. Those difficulties are compounded in dealing with systems based on Roman law and those based on the Common Law. Plainly, much of this may be accounted for by history. In the Continent, there has been the major influence of Roman law disseminated above all by the universities, even in those countries which scarcely used Roman law as positive law. This influence was carried in by the canon lawyers and then by the school of natural law leading to voluntarism, the leading lights of which were Domat and Pothier and which carried all before it under the French Civil Code during the whole of the nineteenth century. Conversely, in England, though not in Scotland, Roman law has not had the same influence. It took longer for the notion of contract to be worked out and voluntarism went into an almost immediate decline. The decline was hastened by the analyses of American writers, particularly following the famous article by Fuller and Perdue these went as far as proclaiming the death of the contract. Yet contract is alive, and it continues to constitute the basic legal instrument used to regulate the economic relations between natural and legal persons. It is, however, a concept which has undergone a certain evolution and which, from a comparative point of view, does not take the form of a uniform model. A contract under common law is not exactly the same as under the German or French legal systems. For that reason, it is necessary to begin with a study of the basic notion of a contract as it exists in the main legal systems with which we are concerned, in order to work out what it is that the various concepts with which we are concerned, in order to work out what it is that the various concepts found in those systems have in common. Once that has been done, it will be possible to determine the relationship between the notion of a contract, as thus defined, and the other sources of law giving rise to obligations, such as torts and quasi-contract/restitution. After that, it will then be necessary to move onto a higher plane, by considering what it is that gives binding force to a contract (Beale, 2002, Kötz and Flessner, 1997). A contract is a voluntary agreement or promise between legally competent parties, supported by legal consideration, to perform or refrain from performing) some legal act. That definition may be easier to understand if we consider its various parts separately. Essentially, a contract is an enforceable promise – a promise that someone may be compelled by a court to keep. Brokers and salespersons use many types of contracts and agreements to carry out their responsibilities to sellers, buyers, and the general public. The general body of law that governs such agreements is known as contract law (Hillman, 1998). A contract may be express or implied, depending on how it is created. An express contract exists when the parties state the terms and shoe their intentions in words. An express contract may be either oral or written. The majority of real estate contract are express contracts; they have been reduced to writing. Under the statute of frauds, certain types of contracts must be in writing to be enforceable in a court of law (Galaty et al., 2002). Consumer ProtectionLaw Consumer protection law is an expanding, rapidly developing, and highly visible field. All of us are consumers who can readily detect both consumer protection transgressions and the effects of consumer protection law and regulation in our daily lives. Legal practitioners must be aware that consumer protection problems, besides the direct pecuniary risks they present to firms, are among the most likely forms of misconduct to be reported in the media and potentially harm a firm’s reputation with its customers. Especially with the advent of the Internet, previously local or regional businesses are expanding to new markets, often where they have no physical presence, but where they may be subject to new state and local regulatory regimes. For many commercial attorneys, these factors have given consumer protection law new relevance (2004). Unfair Terms In the theoretical caricature of the perfect market, there can be no such thing as a contract term that is unfair. Freely negotiated terms represent the parties’ wishes. A term is a term – it cannot be unfair. Both parties have gained from the deal; why else would they have concluded it? To impose legal control over ‘unfair’ terms involves some value-judgment about the content of a bargain that is divorced from the parties’ own perceptions at the time of contracting. Such legal intervention finds its rationale in the imperfections of the market. Realistically, negotiation over terms is not simply a matter of contractual freedom. Many factors obscure the ‘purity’ of the individual bargain and contribute to the parties’ inability to make informed choices (Care, 2001). This suggests that the principal rationale for controlling terms that are “unfair” lies in the imbalance between supplier and consumer. The capacity of the consumer to bargain over terms which he or she perceives as not being in his or her interest attenuated in modern economic conditions. Some situations offer the consumer the choice of ‘take it or leave it’. More fundamentally still, the consumer may not even know of some conditions. The use of the standard form contract, in particular, may obscure from the consumer the nature of the bargain, especially where terms are buried in small print. In some circumstances, the consumer may be referred for further information about contractual terms to a separate document which is not readily available. This is common practice in the case of tickets (Howells, 2005). Case Analysis The case started when Bianca Bijoux was attracted to engage in a buy and sell business of shoes where she finally decided to occupy a commercial space for her to market her shoe collection. Here comes Donnie Jonnie the Manager of the Darling Waters Centre came in the picture, when she was the one who deals with Bianca for the lease of a shopping space for business purposes. And due to accessibility of the said space, Bianca decided that she will install her shop at the chosen space. And after which Bianca and Donnie negotiated and talked about everything regarding on the space, its payment terms and Bianca’s privileges as the lease of the said shopping space which Donnie even confirmed their agreement through a letter. When all of a sudden during the Bianca’s preparation, she saw another occupant on her prospective space making her question the legality of its installation. “Essentially, a contract is an agreement which the courts will enforce. A moments reflection will indicate that there are many agreements entered into which are not to be enforceable. A parent’s promise to pay a child a weekly allowance is an obvious example. An agreement becomes a contract only if the ff prerequisites exist: • There must be complete consensus between the parties as to the terms of the agreement. • The parties must intend to be legally bound by their agreement. • The promises which constitute the agreement must be supported by the consideration unless the agreement is in the form of a deed (Khoury and Yamouni, 2007). Through this premise of the stated book, we could finally say that all what happened to them was a plain agreement. Meaning, Bianca doesn’t have a legally forcible contract to lease Donnie’s shop to rent on for business purposes. What had happened is that, Bianca assumes full ownership of that space as she thinks that Donnie and she has already agreed upon as she expressed her interest in renting Donnie’s shop. She forgot that full implementation of such agreement will be more effective if it is signed under a contract. It is maybe because the two had already made a consensus in the terms of agreement as even Donnie sent a letter to Bianca stating the existence of the agreement and its terms of condition. But still, we see that their agreement was not legally bounded and it is not even in a form of a deed. At this scenario, Bianca has nothing to deal against Donnie or The Darling Waters Shopping Centre in allowing the Traveling Agency to occupy her prospected shopping space. It is because according to the cited book, an agreement per se does not create a contract. In addition, without such intention to create legal relation, the parties to an agreement can only rely on social and moral pressure to encourage compliance with its term. Meaning, in some cases the tradition of so called a word of honor may be applied only if in the first place, Bianca was able to force Donnie to give her the shop because of Donnie’s promise and as they have already agreed upon on the terms for the lease of the shop, which may eventually in the long run, a contract will soon be made after such agreement. But on the other hand, Donnie had just practiced his right as a legal owner of the shop of which he may think that the full right of a lease should only be empowered through the promulgation of such business contract. After the incident in the shopping spaces of Donnie, Bianca was again involved in another conflict regarding agreements. This was during Bianca’s preparation for the installation of her shop, which is apparently beside Janus Jewelers and after several talks she was able to know that the said jewelry shop also fixes jewelry items which make her to entrust her broken bracelet which was given by her grand mother. But unfortunately the jewelers weren’t able to give it back to Bianca because of the robbing incident which happened in the said mall. And now the Janus Jewelers were not taking any responsibility as far of her lost bracelet is concerned due to the existing agreement which was noted behind the job order receipt of the bracelet. For her lost bracelet by the Janus Jewelers, what she had entered there is just an agreement which binds her and the company. In this case, the receipt may appear as sort of a contract which binds the agreement between the Janus Jewelers and Bianca Bijoux. However, according to Khoury and Yamouni (2007), there are other factors which may deprive the contract of its efficacy or validity. These factors may be of the following: • Lack of Required Form • Lack of Capacity to Contract • Lack of Genuine Consent • Illegality of the Object In the state provisions above, we say that the provision for having Lack of Genuine Consent is visible. Because of the risk that has been applied by Bianca in entrusting them her jewelry, making the effectiveness of the contract which was bound by the receipt is deprived. As we can say that also in the same way that Janus Jewelers also entered into a contract which is to fix Bianca’s bracelet and give it to her after it is fixed, so in one way or another the jewelry shop failed to comply on its contract due to the robbing incident that happened inside the mall. What comes here now to mediate the case is the Consumer Act which will eventually give protection to every consumer which on the case is played by Bianca. What the jewelers fail to comply in the case is the Product and Service Liability which was promulgated by the Consumer Act according then to the book of Geriant Howells. Which according to him that some of the clauses in some terms that the suppliers or the establishments excluding themselves to the liability over their offered services when things go wrong which is a practice of commonly called as an unfair terms in the part of those who are in business sector. What I am trying to emphasize is that the jewelers should carry its responsibility over the bracelet. Well, may be in a virtue of giving insurance in a certain amount to be covered over item. Because in the first place, the bracelet was entrusted to them and they should extend a full responsibility over it for the compliance of their contract with Bianca to fix it up and return it back after. Given that the robbery has happened during the mall’s night operation, but it doesn’t mean that they have lost their responsibility over each and every item they have. Even more if the incident happened during the non operational hours of the mall at night, because it is their responsibility not leave any of their valuables on their counter since they are dealing on highly precious items. References: (2004) Consumer Protection Handbook, Chicago, Illinois, American Bar Association and American Bar Association Section of Antitrust Law Web Store. BEALE, H. G. (2002) Contract Law, Oxford and Portland, Oregon, Hart Publishing. CARE, J. C. (2001) Contract Law in the South Pacific, London and Sydney, Cavendish Publishing. GALATY, F. W., KYLE, R. C. & ALLAWAY, W. J. (2002) Modern Real Estate Practice, Chicago, Illinois, Dearborn Real Estate Education. HILLMAN, R. A. (1998) The Richness of Contract Law: An Analysis and Critique of Contemporary Theories of Contract Law, Dordrecht - Boston - London, Springer. HOWELLS, G. G. (2005) Consumer Protection Law, Oxford, UK, Ashgate Publishing, Ltd. KHOURY, D. & YAMOUNI, Y. (2007) Understanding Contract Law, London, Butterworths. KÖTZ, H. & FLESSNER, A. (1997) European Contract Law, Oxford, UK, Oxford University Press.  Read More