What Arguments Could Chen Use to Support His Claim for Compensation - Assignment Example

Student’s Name Your Instructor’s name The Course Date Introduction In the world today, people enter a variety of contracts every day. In business, a contract is form of an agreement that is formalized between two or more parties, and it relates to a specific subject. Such agreements could involve sale or real property or goods; independent contractor relations; dispute settlement; or terms of employment. The paper attempts to address some of the arguments that individuals could use to make claims in a situation where the contractual terms are not met. It does this by examining some of the contractual elements. What arguments could Chen use to support his refusal to pay John more than the original agreed price? In this case, Chen refuses to pay John an extra amount from what was agreed earlier. One of the arguments that he could use is that he reluctantly agreed to the increase of price because of the situation at that moment. This is because his main aim was to get the house extended since the arrival of the visitors was approaching fast. Clearly, Chen’s anxiety forced him to agree to the change in the prices of materials. In business law, one of the elements of a contract is an absolute acceptance by both parties to the contractual terms and conditions (Block 56). This also means that the parties ought to stick to the original terms of the contract; and that any changes made are unenforceable. In this case, Chen could argue that he will only pay John the original price of materials and labor. Moreover, Chen can support his refusal to pay John an extra amount from the originally agreed terms because John failed to complete the work at an agreed date. Performance and delivery form another important element of a contract (Benson 13). In this particular contract between Chen and John, the terms stated that the Chen would pay John the money for the work and labor as at the date of completion. Impliedly, Chen would only pay John the money on condition that he performs or deliver his services by the end of the agreed time. Explicitly, John did not keep to the contractual terms by delaying to complete the extension on Chen’s house. Consequently, Chen was forced to rent a hotel room for his family, an arrangement that cost him $1, 500. Therefore, this contract is considered unenforceable since the contractual terms are not met adequately. What is more, Chen would argue against paying John an extra amount of money after the completion of the work in terms of a mutual consideration. In business law, a consideration is highly indispensable for any contract to be legally binding (Block 57). A consideration is something of value that each of the contracting parties should receive in order for the contract to be enforceable (Schwartz and Scott 14). In the case of Chen versus John, the consideration involved the extension of the Chen’s house by John at agreed date; and payment of the materials and labor by Chen as a date of completion of the work. Nonetheless, this exchange of consideration did not hold in this case because John failed to honor his part of the bargain. Therefore, Chen is justified to refuse to pay the extra amount demanded by John because he did not receive a consideration from him. Additionally, there is an issue of a counter-offer by John to Chen. This is illustrated by the fact that John increases the amount of labor after the original price had been stated and agreed upon. This shows that the contract is unenforceable because John did not fully agree to the contractual terms. In business law, a counter-offer does not imply an acceptance by any contractual party (Schwartz and Scott 15). Therefore, Chen’s refusal to pay John the additional money for labor is justified by the fact that it was a counter-offer (Koffman and Elizabeth 3). John had breached the contract by not sticking to the original terms of the contract for it to be legally binding. Furthermore, Chen would refuse to pay extra charges because he had agreed to pay John “the purchase price of materials as at the date of completion plus $6000 for labor.” What arguments could Chen use to support his claim for compensation? Chen could use a number of arguments in support of his claim for compensation by John. In the contract between him and John, there is a clear breach of contract by John because he did not act according to the terms and conditions of the agreement (Ringleb and Frances 265). This means that Chen is justified to demand for compensation because John failed to deliver his services, or perform his duty in the contract as per the agreements. The fact John completed the extension of Chen’s house in mid-July indicates that he failed to keep his part of the bargain. Consequently, he ought to pay Chen the amount used in hiring a hotel room for his family because the house was not ready. Compensation is the amount of money or anything that is used to restore the complainant to the original position before the damages or injury occurred (Stone 40). In this case, Chen incurred damages by making other arrangements for the family’s accommodation in a hotel, which cost him $1,500. Therefore, he could employ this argument in seeking for compensation from John. Moreover, apart from the damages, Chen‘s search for compensation from John could be based on the argument that John did not perform the work as per the contractual terms. According to their contract, John had made an offer to build an extension to Chen’s house with an agreed amount of money for the building materials and labor. An offer is one of the most basic elements of a contract, and makes a contract legally binding (Jaeger and Hok 5). Therefore, Chen’s acceptance to the offer showed that he had committed himself to the agreement, and believed that the work would be completed in time for his family’s arrival. Upon failure to complete the work, John puts Chen in a tight situation of looking for an alternative, costly accommodation for the family. It is for this reason that Chen demands for compensation. Subsequently, his claim is based on the fact that John breached the contractual terms by failing to complete the work as agreed in the contract (Jenkins 199). What arguments could John use to support his claim to the $10,000 he wants Chen to pay? In a situation where John needs to be paid $10, 000 by Chen after the completion of the work, John can use certain arguments in order to support his claim for the money. Firstly, John could argue that Chen had agreed to the price before the work was started following the rise in the labor costs. He could further argue that he had informed Chen before commencing the work, and that he had agreed, though, reluctantly. John could use this fact to demonstrate that Chen had made acceptance to the offer, and agreed to that mutual consideration. In fact, John had made it clear to Chen he would build the extension on condition that he would agree to increase his payment to $10, 000, and Chen had agreed to that condition. Secondly, John could argue for payment of the $10, 000 by Chen for labor in the construction of Chen’s house. He could support his claim by the fact that he entered into the contract with Chen by considering the contractual element of mutual consideration (Jaeger and Hok 7). The consideration in this case was: John was to build an extension to Chen’s house by June, and Chen was to pay John the agreed amount of money for labor and materials. Therefore, his claim for the payment of the $10,000 could be based on the fact that the amount was a consideration in the contract. Besides, the amount is form of consideration that Chen ought to give him as per the terms and conditions of the agreement. Chen’s failure to pay the amount could imply a breach of contract from Chen. Thirdly, John could claim for payment of $10,000 by Chen with an argument that the contractual terms were affected by unforeseeable circumstances (Benson 15). John could not have foreseen the increase in labor costs because it was steady at the time of the agreement. He could also argue that the only clear thing at the time of making the contract was the unstable prices of the building materials. Despite the changes in the prices of materials and cost of labor, Chen should pay John the amount as at the time of completion because the situation was unforeseeable. Impliedly, John could argue that the increase in labor costs was unfortunate because it was beyond his control. Consequently, the other party (Chen) should consider the possibility of such circumstances in the agreement, and exercise flexibility since there was no way the work could have been completed without him consenting to the labor cost adjustment. Therefore, John could argue that Chen should pay him the $10,000 because he had could not have completed the task by sticking to the original terms. Conclusion In business law, a contract comprises of certain elements that include an offer, performance or delivery, acceptance, consideration, and an intention of legal consequences. In the case of Chen versus John, the arguments made by each party are related to the aforementioned elements. Explicitly, contractual parties ought to stick to the contractual terms and conditions in order for the contract to be valid. These terms and elements are vital in the process of settling contract disputes. Works cited: Benson, Peter. “Contract as a Transfer of Ownership.” William and Mary Law Review, 48.4 (2007): 11-17. Block, Peter. Flawless Consulting. San Diego: Pfeiffer, 2011. 50-56. Jaeger, Axel, Volkmar and Hök, Götz-Sebastian. Fidic - a Guide for Practitioners. Berlin: Springer, 2009. 4-10 Jenkins, Jeffrey. The American Courts. Sudbury: Jones & Bartlett Publishers, 2009.198-203 Koffman, Laurence and Elizabeth, Macdonald. The Law of Contract. Oxford Oxfordshire: Oxford University Press, 2007. 1-5. Ringleb, Al H and Frances, Edwards. The Legal Environment of Business. Cincinnati: South- Western College/West, 2011. 264-268 Schwartz, Alan and Scott, Robert E. “Contract Interpretation Redux.” Yale Law Journal, 119.3 (2010): 13-18. Stone, Richard. The Modern Law of Contract. London: Routledge-Cavendish, 2009. 35-40 Read More