The Existence of a Contract and the Common Law Rights under the Contract Law - Assignment Example

Common Law Name Institution Course Lecturer Date Contract law entails any regulations or laws that are concerned with the enforcing of particular promises. In Australia, the common law is the one which is concerned with regulation of the contract law.1 This essay discusses the existence of a contract and the common law rights under the contract law. This is done by consideration of Elena and Chen as parties who are involved in a contract relating to a hire vehicle. The conclusion is that although the common law right can assist unfairly treated parties in a contract, there are many difficulties that are associated with trying to avoid an already agreed upon contract, whether it was clear on the signing time or not. This, therefore, calls for advice or expert intervention at the contract formation stage. Various categories exist that relates to the contract law. They are: formation of the contract; scope and content of the contracts; avoidance of contractual obligations; performance and termination of contracts; and remedies for breach of contract.2 If promises that are legally binding are formed between parties, a contract is said to exist. The promise here involves an offer and acceptance in the agreement, consideration, intention to create relations that are legal, compliance with any legal formalities and the parte having the legal capacity to contract.3 The parties involved in a contract are the only ones in which the contract is enforceable. The associated terms in the contract, therefore becomes fundamental in this consideration. Special attention is therefore accorded to the exclusion clause. Elena and Chen are the parties that are involved in the promises that they make. A contract that is legally binding can be said to be formed as a result of the agreement to the particular terms of the contract. There is a mutual agreement to fulfil the contract terms as they are in the clause 2.1 and clause 2.2. This dictates that Chen need to return the car in the same condition as it was at a specified date and with full tank. Another term is that Chen will compensate for the damages however caused. The fact that Chen signs the contract reveals that he accepts the terms and that he is ready to perform them as the situation dictate. There are factors that may arise in as contract that may necessitate the avoidance/ vitiating of a contract. These factors may include illegality, unfair terms, unconscionable conduct, undue influence, duress, mistake and deceptive or misleading conduct.4 If the parties that are involved perform their respective obligations, the contract will come into a natural end. There may be an end that a contract achieves on the basis of breach of the contract by one of the parties or the agreement of both of the parties. In addition, events that are frustrating may happen which hinders the parties involved from carrying out their obligations in the contract as the plan was initially. This may call for termination of the contract. Remedies are entitled to the non-breaching parties in case of breach of contract occurring. The damages that are associated with lack of full commitment to a particular contract by one party are therefore supposed to be accorded to the party that suffers as a matter of right. The contract my sometimes consist of commitment by the parties to compensate upon breach in certain ways like payment of a liquidated sum. Having explicit procedures that are concerned with the determination of the extent of the damages helps a great deal in case breaching of a contract is identified. At the discretion of the court, in case of threatened or actual breach, equitable remedies of specific injunctions or performance may be sought by the parties.5 There are particular faults that are identified in the contract between Chen and Elena. The website that is operated by Elena did not reveal full information to Chen and Lin concerning the condition of the vehicle. She should have stated the fact that the vehicle was a 2009 model and that it had not been serviced regularly. The fact that she concealed this information may be a ground to consider the contract as faulty. She claimed that the model was of 2012 which was clearly posted in her ad. In their conversation, Elena assures Chen that it is a ‘dream to drive’. Illegality, unfair terms, unconscionable conduct, undue influence, duress, mistake and deceptive or misleading conduct are some of the factors that are considered in the validity of a contract. In this case, the information that was given to Chen and Lin was misleading and deceptive. The terms of the contracts are tailored in an unfair effort to fix the customer into paying for the damages. Elena pause as the one who should be compensated for the damages that have been realise. She claims that it was the fault of Chen that the engine of the car was destroyed. However, Chen and Lin have a legal ground into disputing these claims. The fact that the car had not been serviced for long and that it was a 2009 model are convincing reasons as to why they should breach the contract. The discretion of the court should be trusted in putting forth the matter clear that the $200.00 that Chen paid to Elena should be refunded. In addition, the attempts by Elena to have Chen compensate for the losses should be invalidated. This is consideration that the damages did not result from the mishandling of the vehicle by Chen. The poor condition of the vehicle was the reason for the damages. Chen and Lin should argue out on this ground since they had committed themselves on the basis of the convenience that had been earlier promised. Contract law is largely a product of common law. The fact that a contract is a bargain that is made freely between equal parties forms the basis of the contract law. Due to this freedom of contract, only in very limited circumstances will the court alter or set aside the contracts. It proves hard to tamper with the contract even where sharp practice or unfairness exists in a contract due to the principle of sanctity of a contract.6 The common law right to terminate a contract arises where there have been a serious breach of intermediate term, breaching of an essential term or the other party has repudiated the contract.7 The breaching of an essential term consideration will always grant the innocent party the right to terminate the contract and sue for the damages.8 It is on this legal ground that Elena seeks to victimise Chen and Lin as liable and make them compensate for the damages caused. The hire contract clause 2.2 is set to push the customer to payments. The common intention of the parties as they set out into formation of a contract is, however, considered. This will help out in determination of reasons for failing to comply with the terms. This help in bringing about a balance as per the parties involved. The test of essentiality considers the strict or substantial performance of the promise. If the innocent party wouldn’t have entered the contract unless assured of the literal or strict performance of the promise, there may be consideration of discharge upon any breach of the contract. The second consideration is whether there have been a sufficient breach of an intermediate term. In this case, the innocent party is entitled to termination of the contract if the breach deprives them of the whole benefit that they were to gain by performance of the contract. At common law, the right to terminate will exist if the non-terminating party has: committed a sufficiently serious breach of an intermediate term; breached an essential term; or repudiated its obligations under the contract. There may be times where the common law is outset where the contract contains a complete statement of the circumstances in which the contract can be terminated.9 Chen and Lin should advance with their claims on termination of the contract. Termination of the contract should always be done very carefully. The claims of Elena should be handled in such a way as to reveal that she is actually the one who facilitated the termination of the contract due to the fact that she did not reveal all the information as it was. She should, therefore, give out a total refund to Lin and Chen and organise on the repair of the damages that were caused. Chen and Lin should avoid these problems that relates to contracts by being more careful. Parties that are involved in a contract should seek advice or have an expert check on the particulars of any document (whether described as authorisations, order forms, offer forms, contracts or whatever). This help in foreseeing any difficulty that may arise later. Although the common law right can assist unfairly treated parties in a contract, there are many difficulties that are associated with trying to avoid an already agreed upon contract, whether it was clear on the signing time or not. Bibliography Chen-Wishart, M 2012 Contract law Oxford University Press. Goldberger, J 2012 Australian contract law: A case law update Commercial Law Quarterly: The Journal of the Commercial Law Association of Australia,264, 8. Keen, J 2012 Case note: The high court and restitution Bulletin Law Society of South Australia, 345, 18. Kelson, A 2014 Best practice when engaging an independent contractor: 32. Latimer, P 2012 Australian Business Law 2012 CCH Australia Limited. McKendrick, E 2014 Contract law: text, cases, and materials Oxford University Press. Read More