Between Manuel and a Computer Games Supplier - Case Study Example

Name Lecturer’s name Course 27 March 2009 Contract law Introduction The paper is an analysis of a case between Manuel and a computer games supplier. The former individual is the husband to the supplier’s client. He was required to guarantee lease payments in case his wife defaulted. This latter situation has arisen but the client’s husband is unable to meet his obligations. With reference to Irish and English law, the paper shall look at whether his defence (he did not understand the guarantee) will be valid enough. Situations in which the law was applicable According to Irish law, individuals may be excused for failing to meet their contractual obligations if one of the parties has inadequate mental capacity to enter into the agreement. Usually, this is determined by one’s age or their mental illnesses. In Manuel’s case, neither of these two scenarios applies to him as he is not too old and his mental state is not in doubt. His line of defence will therefore not work for him because he does not qualify as a disadvantaged member. (Stone 203) One may also be exempted from carrying out their duties in the event that either party has a ‘free way.’ This means that if a contract was created in such a way that no consideration was made for the other side then it is plausible to default. In Manuel’s case, his defence would have been solid if the supplier was allowed payment without supplying the goods or if he supplied them in an inferior state. Since none of these scenarios occurred, then it can be asserted that the latter case does not apply to this respective individual. The agreement would not be binding to the parties under consideration if one of them was under some sort of external influence while signing that agreement. For example, if Manuel indicated that he was pressured or was under duress while signing the guarantee, then it can be declared that it was not binding to the parties under consideration. Claiming not to understand the agreement because one did it haphazardly is just not applicable in this scenario. In close to the latter argument is a claim of fraud. An individual may be exempted from meeting the terms of an agreement if h/ she can show that h/she was coerced into signing the agreement. Since the supplier did not do this to Manuel; in that he stated all the terms of the agreement in writing and explained them to Manuel’s wife, then chances are that the law would favour the supplier over the defendant. Manuel would also be having an upper hand in this situation if he had been prevented from meeting his contractual obligations by the supplier. In other words, if the supplier had engaged in an act that would prevent Manuel from getting the lease payments, then the agreement would not have been enforceable. In close relation to the latter fact is the event that a certain element of the contract was changed after both parties agreed on this. However, no such thing happened in the Manuel versus the supplier’s case. (Chairman 34) In certain cases, when the contract is based on a mistake of law or a mistake of fact, then chances are that the consumer would be exempted from meeting his contractual obligations. In other words, this is often the case when the parties had assumed that certain external factors would occur in a certain way and that the very core of that contract depended on that agreement. In this particular scenario, the supplier stated that if Sienna defaulted on payments, then her husband would pay up. These statements were not false or based on ‘a mistake of law’. In fact, al the assumptions in the transaction are true; for instance, it was assumed that Manuel was Sienna’s close relation. Additionally, it was assumed that Sienna would pay up and if she would not, then her closest acquaintance would then deal with those payments. Consequently, the transaction was enforceable under the law. If the transaction has been made in order to sell illegal goods, then chances are that Manuel’s defence would be more solid. This is because such an agreement is not recognised under the law. However, the goods under consideration are quite legitimate i.e. computer games and they can therefore be enforced. (Poole 59) If the party claiming breach of contract accepts the performance of the other side then subsequently launches its claim, then it would not be in a bargaining position. For this scenario, the supplier had written down specific details on what would occur in the case of default payments. Consequently, it did not settle for less and it can therefore be said that this term does not apply to them. Overly, it can be said that the supplier disclosed all the information affecting the enactment of this agreement. Manuel did not talk to anybody while signing the contract and he cannot support the assertion that he might have been under duress. Also, other conditions to make the agreement invalid do not exist and it can therefore be argued that the supplier has met his end of the bargain. The very purpose of the agreement was to ensure that the lease payments were duly met. This means that it is enforceable and valid. Relevant law The 1994 Sales and supply of goods Act is the most applicable law in this case. The latter piece of legislation was passed in order to include provisions that would cover the implied agreements in business transactions and some implied remedies that need to be included. Section 2 (1) of the Act defines a sale of goods as a contract that transfers property from a seller to a buyer for money. (Beckwith & Giliker 12) The latter term is the consideration that validates a sale. Additionally, this sum must be reached after a discussion between the seller and the buyer. In a number of circumstances, the agreement may not be placed in writing but it wiser for a respective supplier to do so. This is mostly because when the agreement is in writing, then particulars about this case can be identified. Some of them include; Price of the commodity Time of delivery Terms of the sale Standards of the goods Conditions for returning goods Etc The Sales of goods Act is therefore in a position to bring out the rights and obligations of both the buyer and the seller. For instance, through this act, it can be seen that a supplier possesses a right to sell goods, the products to be considered must be devoid of any security risk, the purchaser must be in a position to enjoy the products quietly, also, goods supplied to the consumer must comply with those ones that had been offered as a free sample. In this regard, products must also be in a condition that makes them fit to meet a certain buyer’s statements. The supplier has a very strong case in this regard because he did not violate any other terms of the Sales of good Act. He tried his best to meet the needs of the consumers as there were no complaints made by Sienna that the goods were not up to standard. Additionally, the buyer did not report issues of late delivery of products. Examination of validity of the defence Manuel signed a lease guarantee. This document possesses all the elements of a contract and should therefore be treated as such., First of all, it should be noted that the major rule behind any contract is that the parties involved in it are bound by the terms of the contract unless these two parties agree (without coercion) to alter those rules. It can therefore be said that the lease payments to be made by Sienna’s husband are legal and enforceable according to English law. Additionally, the latter contract would not hold if either the supplier or Manuel accepted deviation from the terms of the contract without posing to alter these assertions. However, in this scenario, neither party is happy with deviation from the contract thus making it legally enforceable. Once the deviation from a contract is big enough to affect the intended outcome of the contract, then it can be asserted that the party under consideration has breached the contract. Manuel falls in the latter category because he has substantially deviated from the terms of the contract. In fact, one of the simplest cases in contract law is one in which one party is unable to perform a large portion or the entire part of the contract. In this regard, Manuel fits the description of the latter individual quite candidly. His major obligation in the contract was to meet the lease payment in the event that his wife would not be able to do so. Since he is not able to do this, then the balances are tilted towards the supplier’s favour. (Richards 203) A non performing party is vulnerable to a claim for damages by the party that had been responsible for the wrongs. In this case, the suppler is right in demanding for payment in form of damages because it did not do anything to exempt itself from such a claim i.e. it did not default any of its obligations. No information is forthcoming as to whether the supplier had breached its contract in any way. It can therefore be said that Manuel’s defence may not be as strong as it needs to be. The law also expects non performing parties to offer valid excuses for failure to perform their obligation within the contract. In such a situation, the party that engaged in non performance needs to show that the other party was not perfect either or that there were other conditions that came in the way of implementation of one’s obligations. Manuel is still in a tricky position because the supplier seems to have an impeccable record thus making it extremely hard to meet these contractual agreements. A good contract needs to always specify possible occurrences in the future. This means that specifications ought to be made about unintentional or intentional non performances and the amount of money that needs to be paid as damages by the offending party. The latter supplier made a contract with Sienna about provision of their goods. They agreed that in case Sienna would default her payments, then her husband would step in to compensate the losses faced by the supplier. The guarantee signed by Sienna’s husband is therefore another contract that was made between the supplier and this individual. There were no specifications made about the repercussions for failing to meet one’s obligations in this second contract. Consequently, Manuel may have some leverage in this regard. It should be noted that the very essence of claiming damages is to place one in a position where h/ she can go back to the same financial position that h/ she was in prior to enactment of the contract. Consequently, the supplier has lost a substantial amount of money because Sienna’s husband has failed to honour his part of the agreement. Therefore, he will be liable to punishment from the court of law. (Turner & Martin 79) The excuse that Manuel is using to defend himself is not satisfactory enough. This is mostly because he lacked witnesses to show that he did not understand terms of the contract. Additionally, many individuals have been warned about signing contracts quickly without reading though them. Such an approach could require one to deal with the legal repercussion of one’s actions. Conclusion Overly, it can be said that Manuel’s defence is not strong enough. This is mostly because he did not meet any of the conditions that may exempt an individual from a breach of contract. The supplier specified everything in writing and it did not coerce him to sign the agreement. On top of this, the guarantee is valid and enforceable. Consequently, the contractor possesses an upper hand in this case. Works Cited Chairman, M. Contract Law. London: Willan Publishing. 2002. Turner, C. & Martin J. Contract law. London: Hodder and Stoughton. 2001. Beckwith, S. & Giliker, P. Tort. London: Sweet and Maxwell. 2004 Richards, P. Law of Contract. London: Longman. 2002. Poole, J. Casebook on Contracts. London: Blackwells. 2001. Stone, R. Principles of contract law. London: Willan Publishers. 2003. Read More