The of Blake and Racket Plc - Case Study Example

Contract Law - the case of Blake and Racket Plc ID 19714 Order No. 267924 15 January 2009 Table of Contents: Introduction: Every individual that is involved in a business or support function would need to sign a contract at some stage. It is a very common phenomenon in the business world. However, not many realise what should be the true form of a contract that can make them enforceable legally. A contract is a legal binding between two parties (individuals or companies at either side) which is signed by both parties at their full consent after having a "clear" understanding of the terms set forth. The primary attributes of a contract are: (a) An offer made by one party that is accepted by the other party (sometimes, both parties make an offer to each other that includes the proposed terms and appropriate acceptance are exchanged) (b) Consideration - that is, what is being exchanged between the parties (c) Sound Mind - both parties should have signed the contract under sound mind (i.e., not under influence of alcohol, drugs or an implied pressure) (d) Legal Purpose - the purpose of the contract shouldn't be something illegal from the perspective of the law of land where the contract is being executed. This case study is about a possible contract execution/breach. A literature review of execution of contracts is presented in the next section. [Murray, Jean. 2008] Literature Review: Contracts should always be written with all the terms clearly legible, numbered and referenced (if any reference to supporting documents are required - example, offer letter or technical specifications). Verbal contracts cannot be proved in the courts of law unless recorded on a valid machine and experts prove that the voices are of the representatives of the two parties (some call telemarketing companies use this mechanism when selling goods/services over phone). Both parties should sign on every page of the contract and on the last page which also needs to include more details (like designation, full address, etc.). Contracts can be executed on plain papers, stamp papers, E-mails and approved contracting applications. Normally, every contract should have the following content: Date of contract: The date should be provided very clearly on the contract that is agreed between the two parties. Names of Parties involved: The names as well as their implied expressions should be mentioned very clearly in the contract. Details of Services: The exchange of services should be very clearly documented - under within scope. For more clarity, an out of scope section should be mentioned. Payment amounts & terms: The payment amounts (including mode of payment, taxes and interest/penalties if any) should be clearly mentioned. Deadlines: All deadlines should be clearly mentioned in the contract. Expiration Date: The expiration date of the contract should be very clearly mentioned which shall be treated as an automatic end of contract even if written exchanges have not occurred. Damages against breach: The damages against breaches as per the provisions of law within the jurisdiction where the contract is signed should be included if agreed. Termination conditions: The conditions against which the contract is terminated should be clearly mentioned and should again be as per the provisions of the law. Signatures: Both parties should sign on all pages and the end of the contract. It is mandatory to include signatures of number of witnesses as required by the law of the land. A typical contract is presented in the following sample: This Agreement (hereafter referred to as "Agreement") is made on the ___________ day of _________, by and between: , a company registered under Companies Act , having its registered office at , through its authorised signatory, Mr./Ms. (hereinafter called "Company" which expression shall where the context so admits include its successors and assigns), of the First Part; AND , a company registered under Companies Act , having its registered office at , through its authorised signatory, Mr./Ms. (hereinafter called ">" which expression shall where the context so admits include its successors and permitted assigns), of the Second Part. The and > are hereinafter also referred to individually as "Party" and collectively as "Parties". Whereas: In witness whereof the Parties hereto have signed on the date and year above written. Accepted and Agreed Sign: Accepted and Agreed Sign: Name and Designation: Name and Designation: 1. Witness: 2. Witness: ___________________ ___________________ Name: _____________ Name: _____________ Address:____________ Address:____________ Occupation:_________ Occupation:_________ [Rath, Tiare. 2008] The courts shall look into all the terms and the tangible signatures if the contract is taken to the courts of law amidst conflicts/breaches. The terms should be very clear and specific without any legal jargons unless mandatory (say provisions of labour laws - ). The fine print should be read carefully and all doubts clarified. If the terms are not clear, consult an attorney. Small businesses often make this mistake and consult an Attorney only after the conflicts have surfaced. Electronic Signatures are accepted if the system in which the signatures are stored and secured is able to present them tangibly. Such signatures are verified by independent computer experts who may include forensics. Electronic signatures are allowed under the provisions of the Global and International Commerce Act, 2000. However, such signatures can be subject to some serious challenges that are out of the control of the signatories due to lack of knowledge of the system that recorded their signatures. Hence, a system for electronic signatures should be chosen if it is maintained by a third party and recognised by local judiciary as valid for contract signing purposes. It is advisable to take help of an Attorney having experience in executing electronic contracts. E-Mail signatures are treated as valid in US courts. The validity of E-mails can be verified in many ways - they have originated from the private E-Mail Server of the said organization (Internet registrars keep records of the E-mail domains and their valid electronic relay addresses), the person signing the E-Mail is an employee of the company (and is authorised by the board to sign contracts), the E-mail as a disclaimer & signature, etc. In this context, the attorney shall need the entire chain of communications and verify each content very carefully to evaluate that they collectively can form a contract if executed on paper - this means all the aspects of a valid contract detailed above should be included. [Arias, Martha L. 2008; O' Connell, Kelly. 2008] Conclusion: If the above analysis is presented to Blake, he would know clearly his standing as well as the standing of Racket Plc. After analysing the details above, we are now in a position to help Blake. He is in a tough position but one should not loose hope before applying for legal proceedings. He received the offer from Racket Plc in writing through a hard copy (probably, because the circular talks about a faint print) but the services of Racket Plc were engaged telephonically (verbal contract). The order confirmation is sent by a circular (not clear if it is in the form of E-mail or paper) that gives reference to the terms of the offer. We hereby examine the perspectives of both the parties: (a) Racket Plc has not executed any contract because they do not have any acknowledgement from Blake in writing. The order was booked verbally over phone (the case study talks about an engagement over phone). The only proof that they might have is a voice recording of the conversation between Blake and Racket Plc which again is very difficult to be proved in the courts of law. Sending the terms and a follow up order acceptance circular does not qualify as a contract. (b) Blake again doesn't have any proof that the contract is executed because he has not signed on any paper or sent an E-Mail as per the description of this case study. However, he has allowed the computers to go out of his company where we suspect that some paperwork must have happened (like a gate pass, a material receipt slip by the transport if hired, etc.). If a lawyer establishes the sequence, the existence of the contract may be established in the courts of law as the circulars must have been received by physical mail (first evidence) and the computers have been allowed to be taken by Racket (second evidence) which shows the intent of Blake to have accepted the terms of Racket Plc. However, this should be noted that it is a very difficult task especially if Racket Plc denies existence of any contract. (c) If somehow it is established that a contract exists with the terms sent in the circular, Blake can raise a point that the term was hidden (last page) and the reference to the page was not legible. This again depends upon what the court decides about the legibility. Overall, it was a serious laxity from Blake's perspective as well as from the perspective of Racket Plc to have started the work without executing the contract as per the contract execution guidelines (detailed in Literature Review). Reference List: Arias, Martha L. (2008). INTERNET LAW - Is an E-mail Agreement to Arbitrate Enforceable under the Federal Arbitration Act IBLS Internet Law - News Portal. Internet Business Law Services, Inc. USA. Arias, Martha L. (2008). INTERNET LAW - The Law of Electronic Contracts in the United States. IBLS Internet Law - News Portal. Internet Business Law Services, Inc. USA. Murray, Jean. (2008). Essentials of Business Contract. US Business Law/Taxes. About.com. Retrieved on 15 January 2009. Available at http://biztaxlaw.about.com/od/resolvingbusinessdisputes/a/bizcontracts.htm. O' Connell, Kelly. (2008). INTERNET LAW - U.S. Court Decides Emails Equal a Signature for Contracts. IBLS Internet Law - News Portal. Internet Business Law Services, Inc. USA. Rath, Tiare. (2008). Essentials of making a Business Contract - The Legal Ties that bind. US Business Law/Taxes. About.com. Retrieved on 15 January 2009. Available at http://sbinformation.about.com/od/bizlettersamples/a/bizcontracts.htm. Read More