The Law of Contract - Joseph and Phoebe - Essay Example

Law of Contract: Case Studies Student’s Name: Institutional Affiliation: Law of Contract: Case Studies In law, there is a significance difference between a contract and an agreement. Although all contracts are said to constitute agreements, not all agreements are contract. For an agreement to become a contract, it must possess all the essentials of a contract that would make it enforceable in law. A contract is, therefore, an agreement between two parties that are enforceable in law while an agreement is made immediately one party signifies its interest and willingness to either do or refrain from doing an act with a view of gaining the other parties favor. Agreements are only enforceable in law at the option of one party making them voidable contract (Furmston, Cheshire & Fifoot, 2006). For an agreement to become fully enforceable in law, the following need to happen to make them contracts: There should be an agreement between two parties there should be clear responsibilities between the two parties and they must possess the enforceability in law. For a contract to be enforceable, the following elements must be present: Offer - This refers to the willingness to do or abstain from doing anything with a view of obtaining an assent from the other. Offer must be made in the modes prescribed by law observing all the requirements of a valid offer and differentiated from an invitation to treat and declaration of intention (Simpson, 1987). Acceptance - Acceptance is made when the person to whom the offer is made signifies his interest. After acceptance is made, the offer becomes a promise. Like an offer, acceptance should be impliedly or expressly made in the manner prescribed by law to make it enforceable in law. If the mode of acceptance is stipulated in the offer, acceptance should be made exactly in the manner prescribed. Consideration - Consideration signifies commitment of parties to make their agreement legally binding. If there is no flow of consideration between the parties to the contract, law does not recognize that contract. Other elements necessary to a contract to make it enforceable are; the intention of the parties to create a legally binding relation, parties to the contract having the capacity to enter into a binding contract, along with free and lawful consent by the parties (Simpson, 1987). Case 1 In search for a house to buy, Joseph spent weeks looking for a house that could meet his needs. He met Phoebe and inspected a house he owned located at Bexley. The property was large enough to meet his needs, but was not well maintained. To him he had inspected better houses and could result to them. Phoebe informed Joseph that the house was previously occupied a renowned novelist John Marsden and it from the house that he did all his writing while he was living in the house. Owing to his writing career, Joseph was interested in the news and made the decision to purchase the house. He urged that, by living in former novelist, John Marsden house would be a big boost to his writing career and would have a significant impact on his profession. Before signing the contract, Joseph enquired from Phoebe whether there is any termite in the wall of the house. She conformed to Joseph that she has never seen any evidence of termites in the housing making them conclude that there are no termites in the house. Joseph was convinced and signed the contract concluding the transfer of the house. In his later research, in the internet, Joseph realized that John Marsden was the former tenant of the house, but he rarely lived in the house. Contrarily to the information given to Joseph by the Phoebe before signing the contract, John Marsden had neither lived in the house nor done writing in the house instead the used the house to store his old furniture. On further inspection of the house, Joseph traces of termites living in the wood on the side wall of the shed. Joseph felt cheated and refused to conclude the contract, but Phoebe informed him that he was bound by the contract. Facts There exist an agreement on the sale of a house between Joseph and Phoebe. The agreement is not enforceable in law since there was no clarity of the facts that were crucial in the formation of a contract. Although Joseph initiated the deal, this did not amount to an offer as he only expressed his declaration of the intention to purchase the house as he had done to other that he had inspected. He only made his offer after getting further information about John Marsden living in the house and a clarification that, there were no termites in the house. Although the information was untrue and Phoebe ought to have the right information about the house, Joseph relied on it and signed the contract buying the house. This amounted to misrepresentation of facts from a superior party who ought to have put the facts straight to the other party resulted to a voidable contract. This means the contract between the two parties on the sale of the house in voidable at the discretion of the buyer (Joseph). Joseph, therefore, has the capacity to either dismiss the contract or execute it fully without breaking any term of the contract. Case 2 Jeremy owner of a retail shopping mall in Sydney agreed to lease the Nathan one of his shop for do his florist business for a period of five years. Jeremy went ahead and prepared a comprehensive contract document that would be signed to conclude the transfer of the shop to Nathan. Prior to signing the contract, Nathan sought further verbal assurance from Jeremy that we would nod during their contract period lease any other shop in his shopping centre for the purpose of the opening a florist business. Upon getting a clear clarification from Jeremy, Nathan signed the contract document concluding the contract between them. However, they did not put the clarification sought by Nathan in written thus there was no clause in the contract document limiting Jeremy from leasing the other shops in his shopping centre. A. Two years later, regardless of the assurance he gave Nathan, Jeremy leased one of the shop to in the shopping centre to Charlie who opened a florist shop. By Jeremy leasing, another ship to Charlie to open a florist business amounted to breach of the contract between him and the Nathan. Although the condition was not included in the contract document, it constituted an integral part of the contract that made Nathan sign the contract. The condition ought to be met for the contract to remain in force in law. The contract is, therefore, voidable at the hands of Nathan who can choose to let the contract remain in force or sue Jeremy for breach of contract. The court would award him damages as compensation of the damages causes to him by Jeremy. B. If the written lease document included a clause that indicated that the lease agreement between the two parties was final, and there was no influence to sign the contract induced to any of the two by a statement or assurance given by either of them before the contract was signed. The presence of the exemption clause would release Jeremy from the ties created by the oral assurance in the made before signing of the contract. Although the oral clarification forms part of the contract, the presence of the exception clause limits any party seeking damages from the other for the action mentioned. This means by Jeremy leasing another shop to Charlie would not have amounted to breach of the contract, and any attempt by Nathan to seek legal redress would not succeed. The contract would still remains remain enforceable with Jeremy having the full right to lease the other shop to anybody without interfering with the earlier contract. Case 3 Derek usually purchases papers for his conveyancing business from Gary stationery. On Monday morning, he rang to the stationery to place an order, but nobody responded to the call. He, therefore, left a message to Gary’s answering machine offering to buy paper, he also enquired the price on which they were trading their paper in that week and insisted that he required the papers as soon as possible. Gary later faxed Derek the business price list that indicated that the Monday’s price for papers was $20 per ream, and they only had two reams left although they expected more supplies during the week. On receiving the fax, Derek faxed back and ordered two reams to be delivered on Wednesday and another two on Friday at the same price. 1. In the situation where Gary was out of office such that he did not receive the fax until Tuesday morning meant that the contract was concluded that morning on acceptance of Gary’s offer. When Gary made a call to the stationary enquiring on the prices it amounted to a declaration of interest. The offer to the contract was concluded immediately when Gary sends his send his fax regardless of when it was received. What remained was only the acceptance that was to be made Tuesday morning on receiving the message. This means that the contract was concluded on Tuesday morning and throughout the whole of Monday there existed no contract between the two parties. 2. By Gary entering into a contract with another businessman to sell all his papers in the next three weeks for a price of $25 per ream on Monday afternoon was a binding contract. This was because the relationship that existed between Gary and Derek before Tuesday morning did not constitute a contract thus nobody was tied by the terms. There only existed an offer by Derek requesting for the supply of two reams on Wednesday and another two reams on Friday which cannot be termed as a contract. Therefore, the contract with the other business man was enforced long before the acceptance of the Derek’s contract making in unenforceable. Gary is bound to the contract to supply the other businessman all his paper for the next three weeks without failure to avoid being sued. Any attempt by Derek to sue for damages from Gary would not succeed as the court would argue that there was no contract that existed between the two parties as the offer made on Monday by Derek was not accepted by the time they concluded the other contract thus not binding contract. References Bondzi-Simpson, P. E. (2002). Law of contract: With special reference to the law of Ghana. Accra: Excellent Pub. & Printing. Furmston, M. P., Cheshire, G. C., & Fifoot, C. H. S. (2006). Cheshire, Fifoot and Furmston's law of contract. Oxford, N.Y: Oxford University Press. Huyssteen, L. F., Merwe, S. W. J. & Maxwell, C. J. (2010). Contract law in South Africa. Alphen aan den Rijn: Kluwer Law International. Koffman, L., & Macdonald, E. J. (2007). The law of contract. Oxford: Oxford university press. Sagay, I. E. (1985). Nigerian law of contract. London: Sweet & Maxwell. Simpson, A. W. B. (1987). A history of the common law of contract: The rise of the action of assumpsit. Oxford: Clarendon Press. 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