Terms of the Contract - Term Paper Example

Introduction To a greater extent, terms can be implied into both a contract for sale of goods and contract for employment as required by the law. In order to gain a clear understanding of the factors surrounding the concept of contract, it is imperative to define the term first. Koffman & McDonald (2007:1) define a contract as, “a legally enforceable agreement giving rise to obligations for parties involved.” Whenever two different parties enter into an agreement which becomes the contract, there would be binding terms of the contract that would make them keep their obligation to meet the agreed terms and conditions. Simply put, if you promise that you will do something for another person and in return, that person agrees to pay you something, then you and that person have made a contract. Analytical framework of contracts A contract can be in verbal or written form but the most important thing is that there would be an agreement especially between two parties. Likewise, according to the labour laws of many countries, both the worker and the employee are bound by certain statutory regulations that would ensure that no party will breach the agreed contract. Indeed, when a person has decided to enter into an agreement with someone, both parties should have a common ground of understanding of the nature of the contract they would be agreeing upon so as to avoid conflict and misunderstanding in the future. There different factors that are taken into consideration when forming a valid contract between two parties. The most important thing in the formation of a valid contract is that there must be an agreement between the parties involved. There should be mutual understanding between the two parties involved so as to avoid unnecessary conflict in the future. Each party is expected to be very clear about the terms and conditions of the contract otherwise it may be invalid if the other party involved is not aware of the contents of the agreement. Forming an agreement is based on the notion that each party is aware of the contractual obligations to fulfil which are legally binding. Another key element for the formation of a valid contract is its legality. A valid contract ought to conform to the norms and values of the society. For instance, if a person promises to steal something in order to get payment in return, then this contract is unacceptable since it is against the societal norms and values. The parties entering into a contract should have the legal power to do so. In any given scenario, minors may not enter into a valid contract with adults since it would be against the law. The legality of a contract is meant to prevent the other party from frustrating or breaching the agreed contract. According to the European labour laws, both the worker and the employee are bound by certain statutory regulations that would ensure that no party will breach the agreed contract. With regards to employment contracts, there ought to be written agreement which binds the two parties to honour their contractual obligations which can be enforceable in the court of law should one party defaults. An employer offers a job where payment would be made when the job is done and this agreement is legally binding always until there is another agreement reached to terminate that contract. For instance, in Louise Caroline Nursing Home, Inc. v. Dix Constr. Corp. (1972), a construction company that did not finish construction on time is only liable for the amount it would cost to finish construction minus amount not paid. Nothing is owed to the plaintiff in this case since the amount not paid is more than finishing the work (http://www.garretwilson.com/education/institutions/usf/law/contracts/cases.html). In a contract, there is an agreement of offer and acceptance between two parties concerned and should any party defaults, then it is called breach of contract as highlighted above. It is against this background that the court of law intervenes to ensure that justice prevails so as to avoid unfavorable gain by another party on behalf of the other. If one party fails to live up to his/her part of the bargain, then there's a "breach" of the contract and certain measures in place for solving the differences are available. Whether verbally agreed or written, the terms of a contract apply and are enforceable unless otherwise agreed by all parties involved for any change. It is undoubtedly true that the court is the highest arbiter of disputes in the society. A good example can be drawn from Freund v. Washington Square Press, Inc. (1974) where the Plaintiff sued because publisher did not publish his book as promised. Trial court wanted to give plaintiff $10,000 so that he could publish the books himself, but the Court of Appeals gave him nominal damages. Thus, it can be noted that contracts are especially concerned with the enforcement of agreements as originally agreed by the parties involved. This is aptly shown in the case of Williams v Roffey Bros & Nicholls Contractors Ltd [1990] 1 All ER 512. Whilst Williams has been subcontracted and a payment of 20 000 pounds promised to be paid in installments, the contract was however silent on the period and size of the payment to be made. Against this background, the terms and conditions of a contract ought to be explicit where no one party would clandestinely seek to gain advantage over the other party where the terms would not be very clear. Therefore, both parties which agree to enter into a contract have duties owed to each other and these form the basis of contracts. These duties are designed and imposed by the parties themselves and operational for a period in which the contract would be expected to run. The court can only enforce a duty agreed upon by the parties involved should there be a breach of contract. Besides the employment contracts, there are also different types of business agreements where two or more parties agree to enter into a business contract. For instance, when a seller and buyer agree to exchange goods or services for something, then they have entered into a contract which would be legally binding. A good example can be drawn in a scenario where the seller agrees to sell a motor bike to the buyer who also agrees to buy. By virtue of reaching an agreement to proceed with the transaction, it can be noted that a contract has been formed. Another form of business contract involves exchange of services for something. In some cases, one part fails to live up to the expectations of the agreement which can be described as a breach of contract. In such a situation, there are civil laws that are specifically designed to solve such disputes of such kind of magnitude. Where it can be proved by the court of law that another party has been disadvantaged, the plaintiff will be entitled to be compensated for the loss. The law is mainly there to protect the interests of both parties who have agreed on something particularly the consumers who are often found on the receiving end of the deal. The idea behind the law is to protect unwanted losses as well as conflicts among the people in the society (Mason 1990). The consumers in this particular case should be well informed about their rights and the statutory regulations protecting their rights and interests against dishonest product or service providers. The laws in different countries are particularly designed to protect the citizens from loosing their money when they enter into agreements with organisations which may not truthful. In the UK for examples, there are carefully designed pieces of legislation that is meant to ensure that consumers can understand the nature of the goods and services being provided as well as the terms and conditions of the binding agreement. The Office of Fair Trading (OFT) is particularly aimed at ensuring fair business practices between the consumers and the business operators offering various goods and services. In the same vein, the Consumer Protection Act of 1987 is another legal framework that has been designed in such a manner that is meant to ensure that fairness prevails particularly on contracts involving organisations and individual consumers with regards to consumer safety, fairness and liability on behalf of the service providers (http://www.berr.gov.uk/files/file22866.pdf). For instance, in Acme Mills & Elevator Co. v. Johnson, 141 Ky. 718, 133 S.W. 784 (1911) Plaintiff contracted with defendant on 29 April 1909 for 2,000 bushels of wheat at $1.03 per bushel "to be delivered from [the] thresher", and supplied sacks for use in delivering the wheat. However, defendant sold wheat to the other party which is a breach of contract (http://www.garretwilson.com/education/institutions/usf/law/contracts/cases.html). The court has to prove beyond reasonable doubt that the plaintiff has been disadvantaged hence the contract has been unfair from the beginning. If there has been unfair bargaining of powers, the court has to prove that before deciding to have the plaintiff compensated and it also has to establish whether the company has behaved properly in agreeing for the contract (http://www.berr.gov.uk/files/file22866.pdf). The Unfair Terms in Consumer Contracts Regulations is also comprised of the department of the Office of Fair Trading (OFT) in the United Kingdom and is specifically meant to deal with issues related to unfair trading with the aim of protecting both parties engaged in an agreement of sale of something. Should there be evidence suggesting that there has been no fairness in the creation of a contract, the court can decide that the contract be reversed or the other disadvantaged partner be compensated if a deadlock has been reached between the parties involved. The main aim is to encourage fair trade which also contributes to the growth of the economy as a whole. Legally, the rights of all the individual people who may decide to enter into a contract are protected by the law where there is no one who can be simply forgiven for deliberately entering into agreements that are meant to swindle other unsuspecting consumers. It is the duty of the court which is the highest arbiter to solve any disputes that may arise between different parties contracting. The courts can decided on their behalf if there has been unfair treatment of the other party. Besides the statutory regulations meant to protect the individuals in various countries, Universal Declaration of Human Rights has got the provisions that are meant to cement the positions created by the law. Defrauding or misrepresenting facts to other people is seen as fraud and it is an offence since it amounts to violation of individual rights where compensation can be paid if proven by the court of law. For example, in Snipes Mountain Co. v. Benz Bros. & Co., 162 Wash. 334, 298 P. 714 (1931), Plaintiff grower contracted to sell 100 tons of potatoes, it being understood that they were being grown by the grower. However, natural causes caused a small yield and the plaintiff only managed to deliver 64 tons. As a result of the fact that there is mutual understanding between both parties, the contract can be modified to meet the requirements agreed (http://www.garretwilson.com/education/institutions/usf/law/contracts/cases.htm ). Conclusion Over and above it can be noted that a contract is an agreement for employment or to exchange goods and services especially between two parties involved or more in return for payment. Terms and conditions in a contract apply if there is mutual agreement with intention to exchange goods or services between parties involved for something in return. There ought to be clarity and understanding by both parties in the terms of a contract so as to avoid conflicts and misunderstanding in the future. This follows from the argument that no one is coerced to enter into a contract but it is something that is voluntarily done. These terms are legally binding hence enforceable should any party breach them. There are statutory regulations that have been designed with the purpose of protecting the rights of the consumers as well as the employees as far as contracts pertaining to the exchange of services between organisations and individuals are concerned. References Chapter 8-Labour Law, Contract of employment(N.D.). Available at: http://www.paralegaladvice.org.za/docs/chap08/02.html Accessed on 8 May 2010. Consumer law: What is a contract? Available at: http://www.paralegaladvice.org.za/docs/chap11/02.html Accessed on 8 May 2010. Contract cases (N.D). Available at: http://www.garretwilson.com/education/institutions/usf/law/contracts/cases.html: Accessed on 10 May 2010. Contract-frustration (N.D.). Available at: http://tutor2u.net/law/notes/contract-frustration.html Accessed on 8 May 2010. Consumer law review: Call for evidence (N.D.). Available from: http://www.berr.gov.uk/files/file45196.pdf Accessed on 8 May 2010. David McQuoid-Mason (1990), Street Law: Consumer Law. Pearson Education. G.T. Treitel (1990), Some Landmarks of Twentieth Century contract law, volume 73. Available at: http://books.google.co.za/books?id=0u8sGuhuKs8C&pg=PA18&dq=Williams+v+Roffey+Bros+%26+Nicholls&ei=FS6eSsP-MpmSywTf2qDYDg#v=onepage&q=Williams%20v%20Roffey%20Bros%20%26%20Nicholls&f=false Accessed on 08 May 8, 2010. Guide to consumer protection Act of 1987, Available at: http://www.berr.gov.uk/files/file22866.pdf Accessed on 8 May 2010. Koffman L & McDonald E. (2007), The Law of Contract, 6th Edition, Oxford University Press. Available at: http://books.google.co.za/books?id=8JtwkQrAC_kC Accessed on 8 May 2010. Unfair contracts (N.D). Available at: http://www.compactlaw.co.uk/free_legal_information/consumer_law/consumf5.html Accessed on 8 May 2010. Universal Declaration of Human Rights, 10 December 1948 Read More