Business Law: Contracts and Remedies - Coursework Example

s Business Law: Contracts and Remedies A contract is a legally binding agreement entered into by two parties with intentions of fulfilling or excising certain rights or privileges. For a contract to be valid, it must have an offer, acceptance of the offer, consideration and intention to create a legal binding. Parties entering into a contract must fulfill the required part of the bargain to enhance successful business operation. It should be noted that failure to execute the contract as agreed amounts to breach of contract for which upon deliberation by the judges or jury, remedies will be applicable. Some of the remedies include specific performance, damages and rescission. Opinion The topic of contract in business or commercial law has a wide coverage which entails understanding the various types of contracts and remedies that amounts to the breach of contracts. This topic is important for both business people and the general public to help them understand when they can sue for remedies in case one party fails to execute their part of the contractual agreement. This ensures equitable justice for all parties to a contract and successful cohabitation of people Further Research Further research needs to be conducted to ensure that some clauses which appear oppressive for many be rectified to enhance fair justice. In particular, the different levels of contract formation and their implication. Introduction Business law is a branch of law that attempts to address the topics which entail the overall running of business. It encompasses law of contracts, intellectual property, immigration law, tax law, law of corporation among others (Fruehwald 488). It also consists of rights, conduct of individuals and relations of persons who are involved in commercial activities of trade or sales. A contract is a covenant entered into by two or more people on a voluntary basis with the objective of establishing a legal accord which may comprise of elements done in written or oral form. The remedy for infringement of the contract is normally compensation in monetary terms or damages. At times, remedies can be in terms of a particular performance of the agreement or at times injunction. Under common law there are certain elements which a contract must have for it to be complete and legally binding. These include; offer, acceptance, intention to establish a legal connection and consideration (Christensen, Butler and Dixon 59). For a contract to be legally binding, the parties should have capacity to contract and the intentions of the agreement must be such that it legal relations are created. This implies that the form of the accord must be lawful. Moreover, the parties to the contract must have intentions to establish a legal connection to the contract and the parties must consent to terms and conditions of the contract. For a contract to be binding there must be an offer. An offer An offer refers to the purpose of stating the terms on which you are prepared to be bound (McKendrick 21). The courts have a duty to pay their attention on the elements that constitute a valid offer in different conditions or situations. For instance, in Carlill v Carbolic Smoke Ball Company [1893] EWCA Civ 1 the court of appeal held that an advertisement that had information about a reward comprised of a legally binding unilateral offer that was likely to be accepted by anybody who acted in its terms. This is evident that is not necessary for an offer and acceptance to be done writing or orally. There are contracts which might be implied in nature. These types of contracts are those which are not expressed in words. This normally comes into two forms. An implied in fact contract is that which the situations provide an implication that the parties have already gotten into an agreement. For example, the contract between the doctor and the patient, the fact that the patient goes to the doctor for medical checkup is enough to be an implied in fact contract hence the patient must perform by paying a certain price for the services (Christensen, Butler and Dixon 59). Acceptance of an Offer For a contract to be legally obligatory, it must be accepted by the other party. It is stipulated that acceptance of an offer must be communicated. The judge overcomes this difficulty by stating that the individual who creates the offer may by implied form or in expression dispense with the requirement for notification of acceptance (Christensen, Butler and Dixon 61). Consideration of an Offer A valid consideration may comprise of some privileges of interest or profits or benefits that may accrue to one party or some notification of losses as a result of responsibility provided by one or suffering subjected to another party. Consideration comes in two forms with every party experiencing both a gain and a loss providing or receiving and establishing the contract. Majority of consideration starts with a promise for a promise (Fruehwald 486). At this level the consideration is termed as implementable as each individual acts his or her part of the bargain of the consideration it is termed as implemented or executed. There are times when a significant time might exist between the performance and the promise like in the sale of land while other times there is instant acceptance of an offer such as goods or products in a supermarket. Intention to Create Legal Intentions A contract may be business, social, domestic or commercial in nature. The intentions to create legal obligation may not arise in domestic and social agreements such as a contract between a wife and a husband. For instance, in the case of Balfour v Balfour (1919) where there was a promise from the husband to the wife for a monthly allowance of £30 while he was not available at home. When the husband failed to honor this promise, it was held that the claim by the wife was not successful as the agreement was not intended to create legal relation. Similarly, in Jones v Padavattan (1969), a daughter was permitted by her mother to stay in the mother’s owned house. Upon a dispute between her and the mother, she was ejected from the house. It was held that there was no legally binding relation when the mother allowed her to stay in the house and so she could not claim breach of contract. Nevertheless, there are exclusions in such circumstances which actually demonstrate intentions to create a legally binding contract. For example in Merritt v Merritt (1970) where a husband went away from his matrimonial home for another lady and made a promise to pay his wife £40 per month from which mortgage would be paid by the wife and have the house’ ownership transferred to the wife upon paying off the mortgage. Upon the repayment of the entire mortgage the husband did not fulfill his promise claiming the contract was not legally binding. It was held that this was a valid contractual agreement due to its commercial nature. Remedies for Breach of Contract Various remedies accrue to breach of contract among the contracting parties. These include Damages The main intentions of damages are to reimburse the individual or party who has experienced loss. It aims to place the party into the financial position he or she would have been in had the contract been performed properly (McKendrick 37). A claim for damages is only possible where losses suffered by the aggrieved persons can be ascertained at the time of making the contract. For example in Victoria Laundry v Newman (1949), Victoria made an agreement to purchase a boiler from Newman. Upon the delivery of the boiler, it was damaged and hence Victoria had to wait for another from which he suffered loss due to the resultant delays. The complainant filed a claim for the damages claiming loss of profits and exceptionally valuable and lucrative accord. It was held that the loss as a result of profit loss on the exceptionally lucrative contract could be established but the loss from the extraordinary agreement was not foreseeable since the defendant was not aware of the contract. Rescission Rescission is an equitable remedy which gives room for an innocent person to terminate the contract if there is any sign of serious infringement of the contract or infringement of a provisional term in the contract. The main objective of recession is to reinstate the party to a position they would have been in if the contract was not breached. There should be a claim for the recession by the innocent party since this does not happen on its own. There may be an order by the court or the parties might consent to rescind. The impact of recession are restitution of the goods bought or purchased, indemnity of the lost cash or any reimbursement of the loss which is paid by the breaching party to the innocent party in case restitution and indemnity fail to place the innocent party back to his or her previous financial position before breach. Specific Performance A court of order may compel a party who has breached the contract to act on the contract in case the damages fail to be adequate for the loss. It is usually executed in circumstances where the bone of contention is extraordinary such that the party fails to complete an agreement like in sale of land. Land is an exceptional property hence the breaching party will be ordered to fulfill the sale of land. Specific performance cannot be used to force an individual to perform a personal agreement like employment accord. Damages are the only remedies in such a case. The court might not order specific performance when an agreement requires frequent monitoring such as in Ryan v Mutual Tontine Association where an agreement to ascertain the home of a concierge in obstruct of flats was denied as it necessitated frequent monitoring. Works Cited McKendrick, Ewan. Contract Law - Text, Cases and Materials. Oxford, Oxford University Press, 2005. Print. Fruehwald, Scott. "Reciprocal Altruism as the Basis for Contract," 47 University of Louisville Law Review 489 (2009). Willmott, L, Christensen, S, Butler, D, & Dixon, B., Contract Law, 3 Ed. Oxford: Oxford University Press, 2009. Print. Read More