Is There a Valid Enforceable Contract between Pat and Big Industry - Assignment Example

CONTRACT Name Institution Date Question A: Is there a valid enforceable contract between Pat and Big Industry? If so, what are the terms of the contract? What effect did the April 15 phone call between Pat and Hillary have on the contract terms? A contract can be describe as a legitimately enforceable settlement between two or more parties that compels each party to fulfillment of certain activities. According to Bernard, (1987), the term party may be intended to mean an individual, a company or a corporation. The terms of the contract are binding and therefore no alterations can be made without the consent of each involved party or parties. There are two types of contract; an oral contract and a written contract. As opposed to the oral contract whereby the agreement is done verbally, a written contract is duly written and signed by the parties involved. Thus to be enforceable the agreement should be done in writing. In regards to the case study, a written agreement was entered between Pat an individual and Big Industry Ltd a company. The termination period of the contract was regarded as May 1. The contract was enforceable in the sense that the agreement was made and written with the consent of the parties involved. Both parties had agreed to discharge their obligations respectively. Pat was required to complete the work by May 1 while Big Industry Ltd was to pay pat upon the completion of the work. Hence each party was obligated to fulfill their part of the contract (Markovits, 2012). The terms of the contract between Pat and Big Industry Ltd was that; Pat would be paid $ 25,000 after the completion of the work and the deadline was set as May 1. Another condition for the contract was that no alteration of the contract was considered as valid unless it is done in writing, consented and signed by both parties involved. Hence the terms of the contract were clearly spelt out in the written document between Pat and Big Industry Ltd. Thus the terms of the contract were legally binding to both the parties involved. The effect of the phone call Pat made on April 15 to Hillary, the president of the Big Industry Ltd, amounted to the breach of the contract. This is regarded as a breach of the contract since the contract had clearly stated that no alterations shall be valid unless it is done in writing and signed by the parties involved. Pat breached the terms of the contract as the modification was done through the phone which is considered as a verbal form of communication instead of a written and duly signed alteration by both parties involved. In regards to the common law as at 15th April there was no contract since there were no fresh considerations. For instance Pat did not offer additional consideration like reduction of price to $20, 0000. Also the gift of extension of time required the contract between the two parties to be in writing thus alterations made verbally were not valid. However, under equity Promissory which is a contract law doctrine and occurs when a party relies on a promise of the other party. As a result of the reliance the party is injured or damages occur. Thus Hillary wants to renege at the detriment of Pat which is considered unfair. The court as a matter of fairness and justice comes into play since the contract is considered valid. Question B: Can Pat prevail in a legal action against Big Industry for breach of contract? What defences could Big Industry rely on in contract? In regards to Pat prevailing a legal action against Big Industry for the breach of contract, pat will not be able to. This is due to the fact that the Big Industry Ltd did not breach the order but Pat himself breached the order. Pat was to be paid upon completion of the work which was set at May 1 but he called Hillary the company president on April 15, on phone stating that he will not be able to complete the work until a latter date of May 15. Thus this was regarded as a breach of the terms and conditions of the contract since the alteration was done verbally instead of written and also the change of the completion date. Pat was to be paid upon completion of the work in May 1 and not May 15 as he had requested through the phone call he made to Hillary. Big Industry could rely on the defense that the contract was a written contract and not a verbal one. This can be done through the company producing the written contract document as evidence since the terms and conditions of the contract were clearly spelt out (Berendt, 2007). In its defences the Big Industry would argue that the terms of the contract was that no modifications were valid unless written, consented and signed by both parties. Thus under the common law, Big Industry would argue that Pat breached the order through the phone call that he made to Hillary the company president since it was not in written form, not consented and not duly signed by the parties involve although Hillary Accepted to the extension thus the contract was valid except no additional consideration (Beesley,2013). Thus according to the Big Industry the initial contract stands and therefore should be followed by both parties involved. The contract between the two parties was mutually consented by both the parties involved and therefore the terms and conditions that were stipulated were binding to both the parties. Thus in its defense the Big Industry would argue that the terms and conditions were clearly stipulated and therefore binding to both the parties involved (Cassidy, 2001). Question C: What remedies might the parties be able to rely on in contract law? Pat can sue Big Industry for direct reasonably foreseeable damages since he had already begun work. Hence he can sue Big Industry for compensation of the work he had already done. This is regarded as Quantum Meruit that describes a method employed to establish the accurate quantity owed to a person (Atkinson, 2006). Thus a court may measure this amount by either determining how much the defendant has benefited from the transaction or by determining how much the plaintiff has expended in services. The system is based on the basic principles of fairness hence known as equity. Thus Pat through this principle can receive compensation for the work he had already done through a court order (Hadley v. Baxendale). On the other hand Pat cannot sue Big Industry for compensation since no order for definite performance to get Big Industry to provide him the additional two (2) weeks extension of the deadline as the parties had discussed. This was due to the fact that it was a contract for service. Pat had to deliver the service in exchange for the pay from Big Industry. The payment was to be made after the completion of the service rendered by Pat after the set deadline by both parties involved. Thus it may be argued that legally Pat is not entitled to any form of compensation due to the absence of order for specific performance. According to Knapp & Prince (2012), a contract law entails an agreement that creates obligations that is enforceable by law. Thus both parties perform in dependence that the other party will accomplish its corresponding commitments. Interference of the contract by one party is regarded as repudiation. Repudiation may present itself in the form of failure to meet deadline or limitation period. Every contract as a staring and end point; no contract lasts forever. In regards to the case study Pat failed to meet the set deadline in the contract. He was to complete the work for Big Industry not later than May 1 but he requested through the phone that he made on April 15 to complete the work by May 15. Pat was to be paid after the completion of the work by May 1 but Big Industry cannot pay him due to limitation period. When faced with a breach of contract situation there are several remedies that can be applied an. It is vital to examine a clause in the contract that states what happens if a breach of the contract the law clearly provides remedies for the breach of contract by either party. In regards to Pat and Big Industry Ltd, there is no clause in the contract that clearly stipulates what happens in case of breach of contract by either party involved (Knapp & Prince 2012). Bibliography Texts/Books Knapp, C. L., Crystal, N. M., & Prince, H. G. (2012). Problems in contract law: Cases and materials. New York: Wolters Kluwer Law & Business. Berendt, G. E. (2007). Contract law and practice. Newark, NJ: LexisNexis Matthew Bender. Markovits, D. (2012). Contract law and legal methods. New York, NY: Foundation Press, Thomson/West. Cassidy, J. (2001).Concise Corporations Law, 3rd ed, Australia: The Federation Press Franks, R. (1986). Corporate Law, New York: Little, Brown & Co. Websites Beesley,C. (2013). Contract Law – How to Create a Legally Binding Contract. Retrieved May 16, 2013 from http://www.sba.gov/community/blogs/contract-law-%E2%80%93-how-create-legally-binding-contract. Larson A. (2003). Contract Law - An Introduction. Retrieved May 16, 2013 from http://www.expertlaw.com/library/business/contract_law.html Atkinson D. (2006). Quantum Meruit. Retrieved May 16, 2013 from http://www.atkinson-law.com/library/article.php?id=51 Cases Hadley v. Baxendale, 9 Exch. 341, 156 Eng. Rep. 145 (1854). Encyclopedias Halsbury's Laws of Australia 4th ed Statutes/Legislation Insurance Contracts Act (1 Dictionaries and Thesaurus Bernard J, The Macquarie Thesaurus, (Australia: The Macquarie Library Pty Ltd, 1987) Read More