Law of Obligation Learning Outcome - Case Study Example

Introduction: Even though that today’s English term of obligation focuses on the person who is going to perform the obligation, it was not so in past. The fundamentals of obligation are directed towards the debtor and the creditor. The Roman terminology “obligatio” refers both to (1) the right of the creditor and (2) the duty of the debtor. This means that the creditor who has put his confidence on the capacity of the debtor to perform his obligation has certain rights that should be respected, and as to the debtor; it is expected of him to perform what he has promised to the debtor (Zimmermann R. 1996). Brief History of the Roman law of Obligation The law of obligation under the Roman law was expressed in the form of contracts. There were different forms of contract which were all incorporated with religious elements due to the fact that Roman law evolved through and under the college of pontiffs and priestly caste. Jus jurandnm was the most solemn of all oaths, and should the one who made the promise fail to perform his duty, he will be then in danger of receiving penalty in the form of excommunication. The less harsh of these oaths was the sponsio on which the promisor would pour out the libation of wine while calling upon gods to witness upon his promise. Over time the religious elements have gone and the power of the State prevailed, this has become the formal stipulatio which was done in formal question and answer. The earliest Roman contract now was formed called the nexum. It was done by means of money and scale, in the presence of five witnesses and librepens who held the official scale. The transaction will take place by means of symbolic sale, on which during this moment there will be a dialogue between the promisor and the promisee. Without these symbolisms the contract will be regarded as void. This was a loan and the debtor was in serious consequences should he fail to follow through his debt (Page W.H. 1919). A formal contract then became part of Roman law where one party would perform a specific action and the other party would be expected to fulfill an obligation. These actions should well up from the mutual intention of both parties to enter into an agreement. There were four forms of these contracts: (1) the mutuum which means a transfer of property to the debtor to be repaid by the debtor in kind to the creditor (2) the commodatum which was a gratuitous loan, (3) the depositum which was the transfer of property for the purpose of gratuitous safekeeping and last (4) the pignus or pledge, this was done by transferring a property by the debtor to the creditor as security or guarantee that the debtor would pay his debt. In the turn of time the Roman law acknowledged consentual agreements between two parties. There were again four classes of these contracts which are: (1) the sale, (2) location conduction devided into three classifications; rei, operarum and opeis – these are contracts for the hire of thing in certain time, compensation, contracts for services and or specific job, (3) the societas or partnership, and (4) the mandatum – a contact for gratuitous agency (Page W.H. 1919). Modern civil law, which is Roman law equivalent to modern life in Europe tried very hard in vain to make the Roman classes of contract fit modern conditions; and in the end it was made to take the position that all who are going to enter into a contract should deliberately declare the intention of creating an obligation or should come up to that effect (Page W.H. 1919). In The Common Law There are Three Elements of Contract 1. Concensus Ad Idem or meeting of minds – this also means to be an offer together with the acceptance of the offer. This simply means that both parties understand the contract they are entering into. They both understand all the stipulations in the agreement and to make this clear there should be an acceptance of the offer. The meeting of the minds should be evident in the contract and this would prevent any of the parties to withdraw from the agreement. However, sometimes under specific circumstance where it is evident that there was no meeting of the minds in both parties due to the mistake or misunderstanding on basic elements of their agreement in the first place, the contract can be considered void. “When both parties are mistaken on a basic and fundamental element of the contract: the contract is void from the start if the mistake is of such significance that, in the words of English case law, it is a "false and fundamental assumption" of the contract (R. v. Ontario Flue-cured Tobacco Growers', 1965). Duhaime Lloyd in Mistake, Rectification & Misrepresentation explains that when something went wrong with the agreement or the contract due to the misapprehension of one party in the contract, the contract is liable to equity. The one party who is not the one who made the mistake can ask for the contract to be set aside. If both of the parties made mistake in the basic element of their agreement the contract can be considered null and void. “Non Est Factum” is the Latin term being used that means “not this deed”, this is a defense used when one party does not want to respect the contract because of the misapprehension or mistake made in the contract. The very basic element of a contract is the meeting of the minds of both parties. The example of this is when Bob signed a contract with the understanding that Alan is buying his copy of the original Picasso painting yet Alan thought to be buying the original Picasso painting; there is a fundamental mistake here that warrants the contract to be considered null and void. 2. Consideration – this means that in order for both parties to arrive at the conclusion of a contract, something must flow from both parties. Consideration is “Some right, interest, profit or benefit accruing to the one party of a contract, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other” (Terrafund Financial Inc. v 569244 BC Ltd.). It means that something of value must be received by the promisee from the promisor (Duhaime L 2010). 3. The Contract must comply with the legal requirements of the Common law – this means that the subject of the contract is legal and both parties are legible to enter into a contract, not mentally incapacitated (Duhaime L. 2010) "A contract is an agreement by which one or several persons bind themselves, towards one or several others, to transfer, to do or not to do something (French Civil Code 2009)." Undue Influence and its Effect in the Contract Anyone who was pressured or forced into a contract, or even lured into an agreement by undue influence has the right to set aside the contract. It could be an actual undue influence or presumed undue influence. If a person is going to claim actual undue influence, that person must show beyond any unreasonable doubt that the contract was drawn under undue influence inflicted by the wrongdoer. In the case of presumed undue influence, the complainant must only show that there was an element of trust between the two parties, so that it could be proven that there was an abuse to that relationship to cause to presume undue influence. It needs to be proven that there was a confidential relationship between the wrongdoer and the complainant. Relationship on that nature can be shown in either ways (1) the complainant has a confidential relationship with the wrongdoer because he is a patient of this particular doctor, and any relationship of this nature. Also one good example of this is a parent that is taking advantage of the trust of a child (2) Or even if there is no relationship that would fall on that kind, if it can be proven that the complainant has come to the point or in the situation wherein he or she has fallen into trust with the wrongdoer, it can therefore be presumed that there is undue influence in the contract that has been made between them. With regards to wills, a will can be effectively set aside if it can be proven that the person who made the will was pressured or coerced to so (Royal Trust v Ritchie 2005). Specific Performance: A critical understanding of the ways in which different obligations can overlap, and knowledge of the rules governing such overlaps. The following are samples cases that would show principle of elements in specific performance. Here is the case of infringement or breach of contract; the case of Landry v. Edwards. Landry is demanding a specific performance from Edwards from whom he contracted to buy, and from which agreed to sell a storage shed that is at the moment is still in the backyard of Edwards. The storage shed was hand crafted by Edwards and fits just right at Landry’s hilly backyard. Edwards in their contract agreed to move the storage shed to Landry’s property and also agreed to attach it as it should be to the ground in Landry’s backyard. To perform the moving and installation of the storage shed, it will take about a day. To make further comment on the matter, Landry could not find any comparable storage shed available and was unable to find anyone willing to do the hauling and installation of the specific storage shed. As Edwards now maintains, he is no longer in the business of building storage shed and installing because his business went bankrupt, and now he is in law school; he refused to carry out what was agreed upon in the contract which he has made with Landry. Although Edwards is admitting that there was a breach, he stands on the ground that damages is sufficient. Specific Performance and Restatement Issue of Supervision: While Edwards do not deny that there was a breach, he maintains that “damages” is sufficient. Specific performance is required by the court to be done if the breached contract involves real state or any unique property. It means that all the terms that the violator of the contract refused to fulfil will be met or fulfilled accordingly. A specific performance is required when the asset involved is unique, like a parcel of land (as there are no two parcels of land can be found completely alike) or a unique personal property (personal effect that cannot be found or is not readily available in the market). The court will decree a specific performance in the event that pecuniary damages are not sufficient or inadequate to remedy the situation (http://definitions.uslegal.com/c/civil-causes-of-action-specific-performance/). However, if there is difficulty of enforcement of the law, the court may decide that “monetary damages” is adequate. When does this kind of decree happen? This decree may happen if the granting of specific performance will impose on the court heavy burdens of extended supervision (The American Law Institute, 1981). “A court will not, however, shrink from assuming these burdens at the expense of the petitioner’s need or if there is a substantial public interest involved. In such cases, for example, structures may be ordered to be built and facilities may be required to be maintained” (The American Law Institute, 1981). SEVERSON v. ELBERON ELEVATOR, INC. The case of Landry V. Edwards can be compared and can be said to have relevance to the case of infringement or breach made by Elebron Elevator Inc. against Severson. Eugene Severson of Froning Grain Company entered into an oral contract of purchasing the physical assets of Elebron Elevator Inc. owned by Robert C. Blythe and Larry F. Mosebach for $50,000. Even though Elebron Elevator Inc. contends that they only made preliminary agreement with Severson and did not arrived at the actual conclusion of the agreement, the court had reasons to believe, because the records showed that both parties actually entered into an oral contract. In both cases of Landry V. Edwards and Severson V. Elebron Elevator Inc. the elements of contract can be clearly seen. There was an offer made and there was acceptance of the offer made. In which both of the dependents of the two different and separate cases, at the moment that they accepted the offer willingly bound themselves in contract. The trial court was right by issuing Specific Performance in the case of Severson V. Elebron Elevator Inc. for what was involved in the case was assets that posses unique characteristics which can only meet the specific needs of the plaintiff. In the case of Landry V. Edwards, monetary damages would not be sufficient and specific performance is the best remedy available for the reasons that the said storage shed possesses the quality that is unique and it is perfectly right for the need of the plaintiff. YONAN v. OAK PARK FEDERAL SAVINGS The Yonan v. Oak Park Federal Savings in connection to our case, Landry v. Edwards. The two parties, Yonan and Oak Park Federal Savings agreed in the terms of the contract that they were to exchange properties. Yonan, the plaintiff were to exchange two pieces of real estate one with improved two-storey building to a parcel of land owned by Oak Park; in their agreement the Oak Park was to improve the property they were exchanging with 6,000 square foot store building. In its decree the trial court ordered for specific performance from Oak Park by ordering issuance of the amount of money equivalent to the present day construction of the building on the property the Oak Park agreed to exchange with plaintiff. While the plaintiff did not find court’s decision to be right, the court was absolutely right for ordering so, because a specific performance would impose heavy burdens of supervision on the court. The actual construction of the building would take extended amount of time and the issue of supervision is now present. On the other hand the case of Landry v. Edwards does not involved so much amount of time as the actual moving and installation of the storage shed would only take a day to be done. Specific performance is appropriate for the case of Landry v. Edwards. Conclusion: The law of obligation has many aspects; it entails a lot of legal obligations which parties that would intend to enter into agreement should seriously consider. References Duhaime L. Contract Law 2010. Accessed August 15, 2010 at http://www.duhaime.org/LegalDictionary/C/Contract.aspx Royal Trust v Ritchie 2005 SKQB 420, published at canlii.org/en/sk/skqb/doc/2005 Page William Herbert, The Law of Contracts Vol.I(1919)Sec.4, The W. H. Anderson Company Zimmermann R., The law of obligations: Roman foundations of the civilian tradition (1990 and 1996) Oxford University Press, p.1 Other Internet Sources: The American law Institute, 1981. http://tutor2u.net/law/notes/contract-elements.html http://definitions.uslegal.com/c/civil-causes-of-action-specific-performance/ http://library.findlaw.com/1999/Jan/1/241463.html http://duhaime.org/LegalDictionary/S/SpecificPerformance.aspx http://www.e-law.bc.ca/art_essential.html Read More