Major Issues in Contract Law - Essay Example

Contract Law: Case Study Number Department Rose v Saba In common law, a contract is an agreement for thetransfer of lawful object involving two or more voluntary parties bound by their individual intent to create legal duties between them. A valid contract must have an "offer" by the offeror and "acceptance" by the offeree (Mann, & Roberts, 2012). The parties must have the legal ability to make "consideration" in respect of the offer and establish mutuality of responsibility. Although, Rose may not provide proof of these elements of a contract in writing because she communicated her intent to create a contract via telephone call, common law considers unwritten contracts as valid and enforceable. Nonetheless, the relationship between Rose and Saba concerning a graphic design desktop computer worth 1,500 did not constitute a valid contract. Despite the seller’s “offer” of the item for sale, MacIntyre (2013) would argue that Rose’s response did not meet the “acceptance” test. Her counter-offer of 1,000 for the same item was not readily accepted by the seller, thus stripping the agreement of any validity. This case is almost similar to Hyde v Wrench (1840) 49 ER 132 in which the respondent offered a piece of land valued at £1,000 for sale (Elliott, & Quinn, 2014). The plaintiff gave a counter offer of £950 which the seller refused. The plaintiff then communicated his acceptance of the initial offer of £1,000, but the seller refused to sell the property to him, prompting the litigation for performance. The court is likely to follow the precedent set in Hyde where a counter-offer invalidated the contract and stripped the claimant of the rights to specific performance. (Word Count 270) Rose v TW The status of contract between Rose and TW depends on whether each party acted reasonably to see its creation. Whereas the two weeks that Rose took to communicate her acceptance of the TW offer was reasonable, it may have been the cause of the subsequent delay, leading TW to revoke the contract. The main legal issue in this case is whether TW made a valid revocation of the offer. The validity of a revocation of an offer principally lies in its communication to the offeree. Rose has grounds against the validity of TW’s letter of revocation. Rose’s claims are backed by the ruling in Byrne & Co v Leon Van Tien Hoven & Co [1880] 5 CPD 344 where the court imposed a ban on revocation of an offer by the postal rule, but allowed acceptance under similar circumstances. As Justice Lindley held in the case, TW would only be deemed as having validly revoked the offer through a direct communication to Rose, which it did not do. As Cooke (2007) said, the verdict in Byrne overruled Shuey v U.S. (1875) 92 US 73, where it was held that a revocation should be communicated through the same means as the offer, because unlike acceptance, cancelling a contract is an adverse action with negative impacts. (Word Count 217) Rose v The Police The contract between Rose and Police for security services at the function is valid and enforceable. As Keenan and Smith (2007) said, the contact met all of the conditions required such as: a) an offer by Rose seeking protection at the function; b) acceptance by the police agency to send in some officers; c) consideration in the service fee amounting to 95; and the intent of either party to create a legal relationship where Rose would pay the money for the security service. Rose’s refusal to pay for the services is therefore actionable under the law. A court is likely to order specific performance in addition to compensation for any reasonable losses incurred by the agency following Rose’s breach of the contract. Rose’s situation resembles the situation in which the defendant in Sunrock Aircraft Corp v Sandinavian Airlines Systems [2007] EWCA Civ 882 was in. In the latter case, the court may have ordered the payment of nominal damages to the claimant for a breach of the contract if he had not sold the aircraft at a cost which technically covered the repair expenditures (Elliott, & Quinn, 2013). In the case, the claimant had lent the defendant two aircraft under an agreement requiring him to repair the planes before taking them back, but he did not. By contrast, the court is most likely to order Rose to pay the 95 as per their agreement. (Word count 238) Rose v the Band Rose entered into a contract with the Band concerning the use of her songs by the latter party at a fee. Other members of the band say that according to the contract, Rose would be entitled to her song-writing royalties only. In light of this, Marson (2013) noted that a court of law is likely to uphold the letter and spirit of the contract, and thus deny Rose of any additional payments, particularly if Rose’s claims are not substantial. However, if Rose has proper documentation of the earnings and has made appropriate steps to inform the rest of the band members about the amount of money she expects from them, then her claims are likely to be granted, provided there is proof of the consideration. Williams v Roffey Bros & Nicholls (Contractors) Ltd [1990] 2 WLR 1153 is a landmark case, in which the court held that changing an agreement after formalizing a contract can be legal, provided there is consideration in the form of "factual benefits" to the defendant (Riches, & Allen, 2011). In the case, the claimant was a carpentry company awarded a sub-contract to complete wooden fittings on 27 flats. In the course of the work, the claimant realized that it had under-quoted the cost of the services. It ran into financial difficulty and notified the contractor who then contracted another party and refused to pay Williams’ his dues (Jones, 2013). Unlike in Rose’s case, the court found consideration in Williams in the defendant’s expectation of a timely completion of the job in order to avoid penalty obligations upon the defendant (Word Count 264) References Cooke, J. 2007. Law of Tort. London: Longman. Elliott, C., & Quinn, F., 2013. Contract Law. Upper Saddle River: Pearson Education, Limited. Elliott, C., & Quinn, F., 2014. English Legal System. Upper Saddle River: Pearson Education, Limited. Jones, L., 2013. Introduction to Business Law. Oxford: Oxford University Press. Keenan, D.J., & Smith, K., 2007. Smith & Keenans English Law: Text and Cases. London: Longman. MacIntyre, E., 2013. Business Law. Upper Saddle River, NJ: Pearson Education, Limited. Mann, R. & Roberts, B., 2012. Essentials of Business Law and the Legal Environment. New York: Cengage Learning. Marson, J., 2013. Business Law. Oxford: Oxford University Press. Riches, S., & Allen, V., 2011. Keenan and Riches Business Law. Upper Saddle River: Pearson Longman. Read More