Business Law - Elements of a Contract - Coursework Example

BUSISNESS LAW By Question 1a Elements of a contract A contract is a legal agreement entered betweentwo or more parties (law book 2015). Each of the party in the contract bears the mutual obligation to act as per the contract. A contract should be entered to voluntarily and none compliance is a breach of the said contract (Jordan R 1992). There are four elements in a contract. One is offer and acceptance. An offer is a definite promise to bind by the contract. For there to be a contract an offer must come first. That is there are certain provisions that you have to bring on board. It has to be accepted by the other party to a contract. This should follow the condition of voluntary entering into a contract. However, one can withdraw an offer if acceptance has not been agreed upon. This should be done through proper communication to the other party that you want to withdraw from the contract with clear reasons. Acceptance occurs when the party you are entering into the contract with agrees to abide by the offer (Cheshire 2007). The second element is the consideration. It is the price of the promise and doesn’t necessarily involve money value. They can take the case of interest and the rights, for this case now this fulfillment will be satisfaction leading to contractual obligation. Thirdly, there must be intentions to create a legal relationship. The agreement must be legally abiding. Constitution is the principal legal document of a country. Therefore, each every agreement has to abide by it so as to suit the country’s law. Lack of fulfillment of this will render the contract null and void. Consent is the act of informing the other party of your intentions in a contract a particular thing (Gordon Stephenson 2007). It can either be expressed or implied. In this case, there must be proper communication between the two parties. If an offer has been brought forward, then the acceptor has communicated clearly his or her intentions. This implies that a contract has be formed or entered into in case he/she accepts to abide. Question1b. Preexisting contractual duties Pre-existing duty rule is a common law rule of a contract. It states that the performance of an act in which a party is already bound to undertake does not constitute legal consideration for a new promise (Nigel Beckmann). Party offer of a performance already required under an existing contract is an inadequate consideration for adjustment of the contract. MR Martin has an outstanding balance meaning that he is liable to explain that the said payments. There is a need for extra caution so as to avoid the possibility of making unnecessary payments. Violation of some provisions in the contract has occurred but given that the said payment has not been made. In the case of Carr v BERMANN (1953)89 CLR 327, the client was required to make some payments in which he didn’t. This resulted in the contract being repudiated. To avoid a breach of contract then Martin should make the payments required. Non-payment of fees does not necessarily terminate the contract. If a contract has lapsed then, Martin does not need to pay the amount. The moment the communication was made about the ending of a contract means that all the provisions in the said contract ended. Therefore, he will not be obligated to any form of payment meaning no payment should be a man. This was the ruling in the case involving Barry v Karl. Question 1 C : Rules relating to debt settlement. The processing of clearing of debt falls in the doctrine of promise to pay. It is postponing payments of given expenses. In case of breach of contract that is one going on the terms of the contract you will be liable and can you be sued in the court of law. The injured party will receive compensation in that regard. In martin’s case if he make the payments on $750 and the debt settlement fee of $350 then he will be very safe. The payment of the $750 will only be made if the contract in question is still in operation. If it has been terminated, then no payment is going to be made even the $350 debt settlement fee. If the credit note has been issued then, it’s a clear sign that the contract is in operation, and you will have to make the debt avoid a breach of contract. If there is a provision concerning penalties charged on late payment, then this has to be made. A total of $1100 is going to be made ($350+ $750). It is done so as to avoid the breach of contract. The payments should be made at the date stated. These will assist eliminate the risk of inconvenience that may come along due to non-payment. The complainant has a right to sue the player in case of default and any loss arising due to non-fulfillment. However, there must be in the terms of the contract (George Murphy 1970). DOCTRINE OF ESTOPEL The doctrine of estoppels allows a party in business to recover the benefits of a promise even if the contractual responsibility is not in place (Kat 2004). In this case therefore it can be seen the lack of payments of required, one can be sued under this doctrine. What happens if someone makes a promise? The obvious is that the other party will abide by it and through great convictions will wait until that date of making payments. Therefore, in case the payments have not been paid the injured party can sue the debtor. The doctrine of estoppels can, therefore, help you recover losses that may arise due to default. However, for this principle to apply certain elements have to be considered. One is that the second party relied on the promise. Taking an example of Martin it can be said that if by any chance the contractor he owed was inconvenienced by his late payment, then he/she has power to sue him as explained in MCINTOSH V MURPHY 1970 case. Secondly there must be a physical big loss associated. If the loss is relatively and didn’t affect the client directly, then under ordinary laws the judge may rule otherwise. In such an instance, Martin will be very safe The doctrine also requires that relief will only be obtained by having the injured party paid. In such case therefore it will be only fair punishing the party that has breached the contract. Question2. Characteristics of common law as a source of law Common law is a kind of law that is developed by judges during their rulings and another tribunal (law book2015). It is mostly practiced in England. It gives more powers on the common law, what society views right. Since its unwritten then this becomes the most democratic law as the society has a right to choose. Universal laws are unwritten. Many countries favor written constitution due to their ability to give a clear guideline in a single document. However, this is not the case as it does not depend on legislative acts so as to provide various postulations. Nonwritin gives it the flexibility required. In the world, we live sure thing comes along in the day to day activities hence flexibility is vital. Under the common law, all things are accepted. That is not expressly prohibited by the law (World Bank tool kit, 2006). In this case, therefore, there is an assumption that the society is always willing to cooperate on the highest level. The whole society embraces particular doctrines. Judicial decisions are binding under the common law. Meaning that the rulings the judges make are crucial. Through the various decisions that are made in the court of law, they turn up to be the laws that each should do. The judge clearly explains to the plaintiff of his or her misdoing. Legal issues on purchase of disputed documents The purchase of the store was done with utmost good faith. The purchaser had no knowledge in regard to the disputed property. In that case therefore he will not be liable for any liability arising from the purchase (Meyer R 1992). It can be seen that the seller too assumed the legal postulation of “caveat de emptor” that is buyer beware. However, it was misguided as he knew the issues surrounding the property. Question 3: Rights and duties of an agent An agent is anyone contracted to undertake a task on behalf of someone else (law book 2014). He has the responsibility to act on the shoes of the principle, get some agency fees in return for his/her services. An agent has a right to compensation. Given that the subcontractor now is acting on behalf of someone else then he/she has a right to receive some money in return. The compensation should be directly proportionate to the work done. Right, for proper indemnity in case of loss. Suppose there is an accident in the firm, the Subcontractor should be brought back to the position that he or she was before the loss occurred. This should be in accordance the principles of insurance (insurance handbook 2007). Right to retain assets before the payment is made. This is mostly referred to as a right of lien. The act of holding on assets for a short while awaiting payments is a precautionary way to avoid issues of default. On the other hand, an agent has the following duties. First he has to obey the instructions given by the principle. The fundamental reason for this argument is the fact he is representing him hence compliance is paramount (Dalton 12). In conclusion, transparency is crucial. The agent should always inform the principle about the finance usage. This will show transparency that will promote a better relationship. It brings a point of being honest and accountable. With accountability, the business will in a position of operating very well without much constraint. An agent has a responsibility of maintaining a good communication with the principle. References Oppenheim, L. and Lauterpacht, H. (1948). International law. [London]: Longmans. Cheshire, G., Fifoot, C. and Furmston, M. (1976). Cheshire and Fifoots Law of contract. London: Butterworths. Jordan, R. and Warren, W. (1992). Sales. Westbury, N.Y.: Foundation Press. Rutter, W. (1976). Sales. Gardena, Calif.: Gilbert Law Summaries. Jordan, R. and Warren, W. (1992). Sales volumes. Westbury, N.Y.: Foundation Press. Macleod, J. (1989). Consumer sales law. London: Butterworths. Meyer, L. (2010). Non-performance and remedies under international contract law principles and Indian contract law. Frankfurt Main: P. Lang. White, J. and Summers, R. Principles of sales law. Dalton, M. (1682). Officium vicecomitum. London: Printed by the assigns of Richard Atkins and Edward Atkins. Childs, F. (1914). Principles of the law of personal property, chattels and choses. Chicago: Callaghan. Read More