Law in Business Environment - Coursework Example

Law in business environment Name Admission Unit Tutor Date Law in business environment Introduction A contract in a business setting denotes an agreement that binds parties to the terms stipulated. A contractual document speaks volumes about the details that a business deal bases its conclusion. This means that it is legally binding to both parties involved in a contract (Nicolas 2010). According to Hatzis (2009), the business environment is full of contractual obligation that leads to legally binding agreements. As a result, businesses must take care before getting involved in contractual agreements. Consideration is another aspect of contractual agreements that is clear in this case. In a situation where there is offer, acceptance, and consideration, a contract is realized. This calls for parties of a contract to honor the terms of the contractual agreement. Failure to honor the terms of the contract leads to breach of contract. Breach of contract has legal consequences that affect the parties to a contract. The breaching party is expected to compensate the non-breaching party (Nicolas 2010). This paper will highlight four legal aspects that are mentioned in this scenario. The issue, principle, application and conclusion are presented in each legal aspect. Their implications in relation to commercial law are also part of this paper. Validity of contract The first issue that is highlighted in this case speaks of the validity of the contract. According to business law, a contract becomes valid after certain legal precedents are met. The principle behind this issue is the offer and acceptance seen in the case. When an offer is made by one party, acceptance leads to a valid contract. In addition, consideration makes a contract valid and binding to both parties involved. Hatzis (2009) says that an offer is the willingness to be part of a contractual agreement. He adds that acceptance is agreeing to the terms of the contract by the parties involved. Furthermore, consideration is where something valuable is promised in the course of forming the contract (Nicolas 2010). In this case, the problem falls under consideration. This is because the manager indicates that there are no funds to pay the sales person. The manager indicates that Fred should be responsible in this situation by paying the sales man. Further, the signing of a contract means that the terms of the contract should be respected (Nicolas 2010). In this scenario, an offer was made to the company by the seller. Furthermore, acceptance took place and a contract was signed. This goes to show that the agreement is valid and should be honored by both parties. Another argument would indicate that the contract may be void because the manager in charge was not present. However, in legal terms, the manager allowed Fred to take over his duties for the period he was away. This means that the contract is valid because two parties came to an agreement. Additionally, acceptance led to the installation of cable television in the premises. Consequently, the manager is right to reject the contractual agreement. This is because Fred gets involved in a contractual agreement without involving the manager. However, this does not make the contract voidable because a wrong decision was made. Legally, going back on the terms of a valid contract may attract penalties to the party involved in breach of contract. Additionally, one of the rules of acceptance indicates that an agreement is only acceptable by the parties involved. In this case, Fred has a legal obligation to honor the terms of the contract. This is because he is the one who engaged the other party to enter into a contractual agreement. In conclusion, this is a valid contract that should be honored by the parties involved. The sales person can sue the company for breach of contract because a contract has already been signed. However, an amicable settlement can be reached where the sales person is paid substantial fees. Termination of contract Terminating a contract means bringing a contractual agreement to an end. This means that both parties to a contract decide to end their legal obligations. A contract can be terminated for various reasons depending with the parties involved (Nicolas 2010). A contract can be terminated when the reason why the contract was set up in the first place has been met. Additionally, breach of contract and fraud can cause a contract to be terminated. Fraud refers to a situation where parties to a contract enter into wrong dealings. Further, a situation where it is not possible to honor the terms of a contract may occur. For instance, a party to a contract may die or the issue that led to the contract may get destroyed. These issues are to blame for situations where contractual agreements have been terminated (Nicolas 2010). In this case, the manager tells Fred to terminate the contract because there are no funds to stand for consideration. This presents a situation where one party rejects the contract after acceptance has already taken place. This means that the sales man can sue Fred as a representative of the company for breach of contract. This goes to show that terminating the contract creates legal implications. The contract was signed by both parties willingly without force or coercion. Further, the contract has not been exhausted in order to lead to a closure. This means that Fred has entered a legally binding agreement that should be honored. Furthermore, Fred should be held responsible in a case where the contract is terminated. Consequently, the sales man should be compensated for termination of the contract. This is because such a contractual agreement will cost money. Additionally, Fred should pay the fees for involving himself in a deal that the company cannot sustain. This means that this is an agreement that was entered into without complete information. The manager feels that the company is not in a position to handle the terms of the contract. This is because of budgetary limitations facing the company. Additionally, the manager thinks that Fred was wrong in making a decision without consulting him. In conclusion, the contract can be terminated with compensation to the sales person. This is because both parties entered into this agreement willingly. Since the business cannot sustain the agreement, Fred should be held responsible for the decision. Furthermore, a contractual obligation denied by one party calls for termination of the contract. This leads to a situation where the contract is voided by both parties. In this case, the cancellation fees need to be met by Fred or the company. However, the company can meet such fees in a situation where Fred proves that the cable television installed is benefiting the organization. In fact, the company can decide to keep the product with the support from the head office. Consequently, the terms of the contract can be terminated amicably when all the options to mitigate the situation fail. Breach of contract According to Nicolas (2010), breach of contract refers to a situation where parties to a contract go against the terms stipulated. This means that the issues that were agreed upon in the contract are violated by the parties involved. The party in breach may refuse to honor the terms of the contract or force the other party out of the contract. In this context, the party that has been violated can decide to sue for payment of their dues (Hatzis 2009). This is because breach of contract inconveniences the non-breaching party to a considerable extent. The party that has been violated has a right to sue the other party for restitution. They also have the ability to cancel the contractual agreement. Additionally, the non-breaching party can decide to do this in order to be relived from any legally binding aspects that are part of the contract (Hatzis 2009). In relation to this case, Fred would be responsible for breach of contract. This is because the contractual agreement has been accepted and signed. Going back on the terms of the contract simply means that Fred is breaching the contract. This explains why the sales person is keen on getting compensation from the company. The manager insists that Fred is wrong and should be accountable for his actions. However, Fred may be of the opinion that he was doing this for the sake of the company. The fact that the company is unable to pay for breaching the contract does not make the product a failure. According to business law, breach of contract happens in a case where offer and acceptance are violated by going back on the initial agreement. As a result, the sales man may suffer a loss from the contract that has been breached. This will happen when the cabling is removed in actuality as instructed by the manager. However, in a situation where the sales person is adamant, a court of law would come in to resolve the situation. In cases of breach of contract, a settlement is reached where both parties need to come to an agreement. However, when the agreement is not reached, the parties can take the issue to a court of law. Furthermore, in this case, the aggrieved party should be compensated. This is the sales person according to the scenario presented in the case. In conclusion, Fred would be responsible for breach of contract by going back on the terms of the contract. However, Fred can seek help from the head office to help him so that he does not breach the contract. Further, he can receive help in meeting the substantial fees for early termination. Making the contract void and compensation A contract that is void does not attract any legally binding agreements. This is because it is terminated making the terms lose meaning (Nicolas 2010). A void contract does not have any implications to the organization. This happens in a situation where the terms lose meaning in relation to both parties. A void of contract does not need any party to honor the terms of a contract. This can be applied in this situation when the contract is terminated. Termination of the contract will make the terms of the contract lose meaning. This happens in situations where parties to a contract do not desire to pursue the terms of a contract (Nicolas 2010). Consequently, compensation comes in because the aggrieved party needs to be paid. This is because a contractual agreement is breached by the parties involved. The non- breaching party should be paid for a breach that inconveniences them (Hatzis 2009). Further, the aspects of offer, acceptance and consideration become invalid in this situation. The non-breaching party needs to receive compensation because breach of contract is punishable by law. In a case where they reach a reasonable conclusion, the parties to a contract will make a proper decision. However, it is not possible for the business to avoid the fees involved in relation to the contract entered. This is one of the arguments that may be presented in this scenario. They have a contractual obligation to honor the terms indicated in the agreement. Furthermore, the cable television is of benefit to the business. This may help Fred argue out his case when he presents it to the head office. The contract can be terminated with compensation to the sales person. This is because both parties entered into this agreement willingly. Since the business cannot sustain the agreement, Fred should be held responsible for the decision. Furthermore, a contractual obligation denied by one party calls for termination of the contract. This leads to a situation where the contract is voided by both parties. In this case, the cancellation fees need to be met by Fred or the company. This shows that the company can decide to maintain the system instead of voiding the contract. In conclusion, in a situation where the contract is breached the sales person should be compensated. Additionally, the company that Fred works for can make a decision to keep the cable TV and forget about doing away with the contract. Fred may end up paying in a situation where the head office refuses to help him out of his contractual obligation. Conclusion According to the case presented, Fred is responsible for entering into a contractual agreement. This is because he willingly entered into an agreement to bring in cable TV to the organization without consulting the manager. Additionally, Fred may have accepted this offer because of the special offer presented by the sales person. Despite this situation, the company does not have the funds to pay the sales person. Fred may end up paying the cancellation fees in a situation where the head office is unable to help. According to the law, Fred is the party that appended the acceptance and should be held responsible. However, the company can chip in to avoid the situation of breach of contract that it may face. Lastly, the contract may not be terminated just because the manager does not want the cable TV. This may pose a challenge to Fred as he tries to redeem himself. As a result, contractual obligations should not be violated when one of the parties to a contract is interested. This is because it may lead to legal proceedings and loss for the breaching party. Reference list Hatzis, Aristides N 2009. The Nature of the Firm: European Journal of Law and Economics 15 (3): 253–263. Nicolas James, 2010: Business Law; The University of Queensland, John Wiley & Sons Australia, Ltd Read More