What Distinguishes a Valid Contract from an Invalid One - Term Paper Example

Breach of Contract Abstract: This report basically explains to any layman what contract are made. It would explain the requirements that make up a contract, without which a contract cannot exist. The main focus of this report is to explain about the breach of contract. Analyze that how a breach occurs and what effects it has on both the involved parties. Lastly, this report will explain some of the remedies of this breach. Introduction What is a contract? Contracts are guarantees that the law will be implemented and enforced. The law gives gives solution if a guarantee on that contract is broken, breached. Also, the law oversees the execution of a guarantee as an obligation that has to be met. Contracts emerge when an obligation occur or start to exist, which is as a result of a guarantee or promise made by one of the group or party. For a contract to be binding and legitimate, that promise or guarantee must be traded for sufficient consideration. This consideration is a profit or benefit which a group gets which sensibly, logically and reasonably motivates them to make the contract. (Law.cornell.edu, n.d.) Contract law figures out what makes a specific contract enforceable, and gives remedies and solutions after a contract is breached. On the off chance that a party is not very careful, when the party needs it the contract may not be enforceable and when it is not required the contract may be enforceable. So, working with a qualified lawyer on every critical issue is the main logical approach to verify the party's contract works how the party proposes. Making a contract A contract is a legally compulsory and binding pact or agreement. For a contract to be made, one of the group should make an offer to the next group and that the group must acknowledge as well as accept this offer. Also, the conditions in which these offers and acknowledgements were made must demonstrate that the two groups are expected to enter into and accommodate a legal relation. A last prerequisite, which differentiates a contracts from gifts and also completes all the requirement for agreement to become a legally binding contract, is that the both contracting groups or parties must provide with some profit or benefit, commonly known as consideration, to the opposite party. So, to sum up, there are basically four requirements or prerequisites of a contract. These include, an offer that is made by a party, the acceptance and acknowledgement by the other party, both parties or groups genuine intention for creating a legal relationship with each other, and lastly, the consideration or the exchange of benefits. These are further discussed in detail. Offer An offer is a correspondence that allows the recipient ability to make a contract through his or her acknowledgement. Offers must hold sufficient terms, for example, quantity, price, time, quality and point or place of delivery, with an end goal to focus on, which is the particular commitments that are to be made. When an offer is made, it may be acknowledged and accepted whenever until it lapses by its terms or is explicitly renounced. (Mack, 2011. Slide 9) Acceptance Once substantial acceptance happens a legitimate contract is framed. It is subsequently important to recognize what constitutes a substantial and valid acceptance, so as to confirm if the groups are bound by the contract. There are three principle rules linked with acceptance. These incorporate, that the acknowledgement must be communicated or conveyed to the offeree, the terms of the acknowledgement or acceptance should precisely be in consistent with the terms of the offer and the acceptance must be certain.  (MacIntyre, 2007. Pg. 41) Intention to create legal relations A binding and legitimate contract obliges that both group expect to be bound to the same contractual terms. Offers plainly made jokingly or with dissatisfaction likely to be substantial offers. Correspondingly, general explanations or statements, for example, commercials, are not clear enough to be offers. Acceptance of an offer must be unambiguous and clear. An offer can't be partially accepted, or acknowledged with an admonition. An incomplete acceptance is really a dismissal and is viewed as a counter-offer on the new terms. So, there must be a genuine intention from both parties for creating a legal relation Consideration Consideration means something of quality given by both groups to a contract that actuates them to enter into the consent or agreement to trade. For instance, a guarantee to give a gift is not enforceable on the grounds that it is uneven and one-sided. Consideration is a fundamental component for the shaping of a contract. It may comprise of a guarantee to perform an act or a guarantee to cease from doing an act that one is legally qualified for do. Breach of a Contract A contract is breached where one of the group to a contract fails or neglects to perform, absolutely and precisely, his commitments specified in the contract. This can be of different types for instance, the failure or inability to supply products or services as already agreed under the contract. Breach of contract can be of two types, anticipatory or actual. Actual breach happens where one group declines to uphold his side of the deal on the due date or performs inadequately. Anticipatory breach happens where one group affirms, ahead of time of the due date of the contract, that he expects not to perform his side of the deal. The other party or group may sue quickly for harms or damages after the breach is confessed. A contract can be breached and broken through many ways but those ways are categorized into four types. These Include: Misrepresentation At the point of the forming of the contract, if a false explanation or statement is made this could basically be an unimportant articulation with no contractual impact or it can turn into a term of the contract. Where a statement or fact made during the contractual communication is not true it will be said or called as a misrepresentation. A misrepresentation is an announcement of fact made by one group to the opposite group, which affects the other group to accept the contract which is less worthwhile to them. So as to figure out if the announcement or statements made adds up to misrepresentation, there must be an announcement of statements or facts, not of assumption, plan or law, the announcement should be tended to the honest party, and that it should make the other group to enter into the contract which is less helpful to him. Mistake A mistake made in a contract is a misunderstanding carried out in one or both of the parties or groups involved. These contractual mistakes are categorized in three different categories. Starting with common mistake, in this the groups are in concurrence with one another however, they have entered into the contract upon the same misunderstanding, implying that they have both depended on that mistake while entering or agreeing to the contract. On account of a common mistake which starts with the base of the contract will make the contract void as the mistake was essential part of the contract. Second is unilateral mistake, a unilateral mistake is when one group is mistaken while the opposite group is mindful of this mistake and exploits it when shaping the contract. A unilateral mistake of this way will take out the assent needed for the correct shaping of a contract implying that there is no contract in presence. Last is the mutual mistake, a mutual mistake is a false impression between the groups entering into a contract as to the aims of the opposite group. A mutual mistake will take out the assent needed for the correct shaping of a contract implying that there is no contract in presence. (Inbrief.co.uk, n.d.) Duress Duress happens when an individual is influenced or pressured to sign a contract. Duress could be used while a contract is being made or when a contract was adjusted or changed. Ordinary cases of duress incorporate dangers to an individual’s freedom, physical violence, and also includes economic duress. Duress is set not by the way the pressure is imposed but, in fact by the mental state victimized person. On the off chance that you sign a contract under duress, the whole contract might be deemed invalid.  (LaMance) Illegality A contract will be viewed as legally wrong or illegal at its inception when it cannot be fulfilled without an unlawful act. Contracts which fall into this class can't be upheld and are not enforceable. Where a contract is unlawful when structured, none, of the groups will gain any rights under the contract, whether there was any aim to transgress against the law or not. So, this contract would be fully void and would be as if no contract existed.  (Palmer, 2013) Remedies Breach of a contract cannot be left unsolved. That is why the innocent group requires some remedies presented by the law. Here only a few of the remedies of breaching of contract will be discussed. Suit for Damages The expression 'damages' implies money related remuneration for the misfortune and loss endured. At whatever point a breach of contract happens, the solution of the particular case that strikes a chord instantly as the result of breach is damages. The innocent group may look for payment from the group who breaches the contract. At the point when the oppressed group demands damages as a result of breach, the court considers the procedures of law in that respect and the circumstances attached with that contract. The measure of damages would rely on the sort of misfortune brought on to the distressed group by the breach. First, the court would recognize the misfortunes brought about and afterward the breach than evaluate their money value.  (Associates, 2014) Suit for Specific Performance In some specific situations of breach, damages may not be a sufficient solution. At that point the court may administer the group in breach to complete his obligation in accordance with the contract. This is a direct order of the court obliging work of a contractual commitment. At the same time, courts don't wish to force a group to do that which he has effectively declined to do. Suit for Rescission The contractual breach most likely voids the contract, yet the innocent party might once in a while need to approach the court to give him a formal rescission, meaning finishing or dropping of the contract. This will empower the Plaintiff to get free from commitments under the contract. (Associates, 2014) Other remedies include, suit for injunction and punitive damages. Conclusion In conclusion, the whole purpose of this report was not to give a detailed insight into all the laws required to make a contract, keep a contract functional etc. the point of this report is to inform layman individuals about how they enter into a contract every day without knowing. And how they are unaware of their rights as one of the party involved in that contract. References Law.cornell.edu,. 'Contract | Wex Legal Dictionary / Encyclopedia | LII / Legal Information Institute'. Web. Mack, David. 'Basics Of US Contract Law'. Dorsey & Whitney LLP. 2011. Presentation. MacIntyre, Ewan. Essentials Of Business Law. 1st ed. Harlow: Pearson Longman, 2007. Print. Inbrief.co.uk,. 'Common Law Errors In Contracts'. Web. LaMance, Ken. 'Duress Lawyers | Legalmatch Law Library'. Legalmatch.com. Web. Palmer, Edwards. 'Illegality In Contracts | The In-House Lawyer'. Inhouselawyer.co.uk. N. p., 2013. Web. Associates, Hemanth. 'Remedies Against Breach Of Contract - HG.Org'. Hg.org. N. p., 2014. Web. Read More