Entering into a Binding Contract - Essay Example

Contract Name Institution Introduction A contract can be termed as an accord reached between two or more parties where each party involved is obliged to fulfil his or her duty. In a contract, there are rules and regulations, which each party must follow. A contract is reached at when there is purchase of goods, house, in construction work, or lending money. There are many types of contracts and they happen in our day-to-day lives. A person can enter a contract and be bound by it after reaching the age of eighteen years. However, there are circumstances under which a younger person may be bound by the contract if he understood the terms of the agreement by the time he entered the contract. A contract involves an offer and an acceptance (Glanville, 1982). One party called the offeror will make an offer, which if accepted by the other party called the offeree, ends up in a binding contract. For a contract to be valid, it must have some elements. A valid contract should have a legal consideration. The agreement should have facts, which can be used in a court of law to make a judgment in relation to the contract. A valid contract should involve parties who have the ability and capacity to contract. When entering into a binding contract, one should consider whether there is possibility of performance. It should be clear that the promise, which each party is meant to fulfil are within reasonable and implementable (Hugh, 2003). The parties concerned honour the promises of the contract. Failure to honour a contract’s promises by either party leads to a breach. For a contract to be considered binding, the parties concerned must enter the contract out of free will. Two or more willing parties enter into a contract, and they do it out of self-consent (Ewan, 2005). For a contract to be considered valid there must be something in return. This means that something of value must be involved, and this indicates commitment of the parties to enter into a legal agreement. The price each party in a contract promises each other is the consideration. “Are there any grounds on which he could seek a remedy? If so, what, are those grounds, what is the likely remedy, and who should provide it?” In the case of Matt and Keri, there is the offeror and the offeree. Matt is the offeree because he volunteers to buy the car at the price, which Kari advertises. However, the advertisement, which Kari makes, is not an offer, but an invitation to treat. Invitations to treat are meant to influence other people to make offers. A contract constitutes a promise, which both parties in the contract must honour. If either of the parties fails to honour the promise, it leads to breach of contract, which is punishable by law. In a contract, each party must get a reciprocal value of what he exchanges. In this case, Matt must receive a reciprocal value for his money. In other words, the value of the car must be commensurate to the value of his money. Matt may have wrongly interpreted Kari’s invitation to offer as an offer. The court must therefore consider the issue at hand and consider the facts before analyzing, and making a judgment. Considering the fact that Keri made the invitation to offer before consideration, and Matt accepted to purchase the car at the indicated price, he is entitled to a remedy. The issue at hand is to consider the details, which led to Matt purchasing the car. Matt consulted Keri, who was attending to another customer, whether the details about the car were true. Keri went ahead and confirmed verbally that the details were correct and no mistake was made. When Matt accepted the offer, it was based on the fulfilment of the promise. Once he purchased the car, then Keri enters into a binding contract that the car must be of the condition described in the advertisement. The main objective of entering into a contract is to enable its performance (Randy, 2003). The acceptance, which Matt made, was at a time when the offer was still viable and therefore it qualifies as a contract. A breach of contract attracts a remedy or compensation from the party that breached the contract. In this case, a consideration existed in that Matt bought the car in the promise that it was in a new condition and was only owned by one person before. The case here indicates that there was possibility of performance on both parties. Furthermore, contract of sale of products do not necessarily require the agreement to be in writing (Paul, 2007). An agreement reached orally, qualifies to be a legally binding agreement. It is therefore clear that in this case that Matt had legal grounds to seek for remedy. The agreement was reached to purchase the car at free will. Both parties agreed, and had the capacity to contract. In this case, there is precedence, which can be followed to make a sound judgment. In the landmark case of Carlil Vs Carbolic Smoke ball Co. (Laurence, 2007), the company advertised carbolic smoke ball drug, which the company believed was the best drug to cure fever, influenza, and colds. The company advertised there would be a reward of 1000 pounds for any person who will contract the disease after using the carbolic smoke ball as prescribed. The company also advertised that the company had deposited the money with one of the local banks. Mrs. Carlill used the drug as prescribed, but still contracted the disease. She demanded the money from the company but her demand was declined. The company argued that the information in the advertisement was meant to increase sales, and the company did not intend to enter into any legal agreement with any person. The court held that a contract existed between Mrs. Carlill and the company. The court argued that when an offer for sale of goods is made through advertisement, it implies acceptance of a contract. The court argued that no notice of acceptance was needed by the offeror. The court also argued that by the company advertising that it had deposited the money in the bank; it was a sign of sincerity in honouring the reward. In the case between Matt and Keri, it is evident that Keri confirmed that the car was surely in the condition advertised. This showed commitment from the Keri’s Kar sales of honouring the promise that the car was indeed in the condition prescribed in the advertisement. The statement made by Keri confirming the condition of the car can only be taken as a term of the contract, and not a representation. The statement was a strong statement and therefore, it can be used in a court of law to decide this case. In addition, it was evident that Keri had expert knowledge in the automobile industry. This indicates that his statement should be taken seriously, and as a term. Matt depended on what was advertised and what he was told from an automobile expert point of view. This, therefore, indicates that the statement from Keri should be taken as terms in the contract. However, these statements act just like a guideline to this case, and other facts must be considered before concluding the case (Law Comm., 1999). It is therefore, advisable for Matt to refuse to bear any liability. He should move forward and demand for remedy, failure to which he should proceed to court. It is clear that Keri’s Kar sales have breached a contract by failing to honour their promise. The facts in this case are that the company selling the car renews the condition of the car, yet they sold it. It is therefore, binding them to compensate the customer whom they intentionally gave wrong information. Matt bought the car at the price it was offered because of the information that he was given relating to the car. He solely depended on Keri to inform him of the condition of the car. It is therefore necessary for Matt to take the relevant legal steps against Keri Kar sales and recover his money. The issues in this case and the facts about the contract guarantee Matt compensation for his money. He acted in good faith and both parties entered into the contract in out of consent. Keri’s Kar sales breached the contract and therefore have the duty to cater for the damages incurred. If Matt had signed the Agreement below “I the purchaser agree that I have examined the car and am satisfied as to its price and condition. I have not depended in any way or to any extent on any information or opinion given by Keri’s Kar Sales nor that of any individual working on those premises.” Considering this statement, the court in determining the above case, would consider it a term in the contract. It would have meant that Matt did not depend in any way on the information in the advertisement, and the statement he got from Keri. The court would therefore consider Matt as a person well informed about automobiles and decided to buy after examining the condition of the car himself. The agreement he could have signed does not put the other party at the task of describing the condition of the car. The court would therefore, consider that Matt was satisfied with the condition of the car during the time of the contract. This would mean that Matt could not change the terms of the agreement in future. Signing an agreement with such words would deny Matt the legal basis of claiming for compensation. The facts before court would be clear that he was satisfied by the time he bought the car. Therefore, any legal proceedings he would raise against Keri’s Kar sale would yield him nothing. References Ewan, K. (2005). Contract Law - Text, Cases, and Materials. Oxford University Press. Glanville, W. (1982). Learning the Law. Eleventh Edition. Stevens. p. 9 Hugh, C. (2003). The Law of Contract .Cambridge University Press. Law Commission. (1999). Illegal Transactions: The Effect of Illegality on Contracts and Trusts. Retrieved from http://lawcommission.justice.gov.uk/docs/cp154_Illegal_Transactions_Consultation.pdf Laurence, K. (2007). The Law of Contract. Oxford University Press. Paul, R. (2007) Law of Contract. Pearson Longman. Randy, E. (2003). Contracts. Aspen Publishers Read More