Category: Contract Law

Requirements of a Legally Valid Contract

Unilateral and Bilateral Contracts and their Formation

A contract is either unilateral or bilateral. Bilateral contracts involve making a legally binding agreement between two people or groups of persons. Under bilateral contracts, one party promises a given action on precondition of execution of a given action by the second party. For unilateral contracts, only a single party to a contract gives promises. An example of this contract involves a promise by a party A to a party B to pay a reward when party B does something for party A, for example, finding a stolen item. Under unilateral contracts, offers can be made to the world (Adams 2). This means that Party B may be known or unknown to Party A. The case of Georgette telling a police officer that she would pay a reward amounting to £ 50.00 after finding her painting amounts to unilateral contract if such a promise was made when the painting was still missing, with the consideration being provided for in the communication of the offer. This means that the finding of the painting preludes the obligation for paying the reward without the necessity of proof of offer acceptance.

Requirements for Offer, Acceptance, Consideration, and Intent

In common law, contracts arise from the creation of a legally binding agreement, evidence of contractual intention, and the existence of consideration in an agreement that is purported to constitute a contract. Not all agreements between two parties amount to a contract. For an agreement to constitute a contract, there must be evidence of existence of an offer and offer acceptance in the agreement. Offer encompasses “an expression of willingness to contract on specified terms with the intention that it is to be binding once accepted by the person to whom is addressed” (Adams 3). The 125 lots presented by Felix in the auction auditorium amount to an offer. It also implies the intent to enter contractual terms with successful bidders.

Any amounts quoted by the potential buyers are offers, which Felix, through his appointed agents, can choose to accept or not based on the price (considerations) provided for by the bidder. For instance, when Georgette promises to buy lot 69 at £85.00 and lot 70 at £45.00, such a promise amounts to a legally binding bilateral contract entered between Georgette and Felix through Felix’s appointed agent. The validity of this contract is akin to the fact that an offer was made, accepted, and sale price (consideration) agreed. However, this contract becomes fully executed when Georgette pays for the two lots as promised when Felix delivers the lots to Georgette as promised.

Although Georgette is the highest bidder for the lot 68 (£650.00), this does not mean that he has entered a contract for the sale of the lot with Felix through his appointed agent. As claimed before, this tender is merely an offer to purchase lot 68. As Marrs claims, similar to other sale agreements through action banging of the gavel on the table, this context marks the acceptance of the offer made by the bidder. Hence, now, no acceptance is made for sale of lot 68 at the price (consideration) offered by Georgette. No contract exists between the two parties. Georgette is perhaps aware of non-existence of a contract to purchase lot 68 when she approaches Felix with an offer for £800. Stating that he would think about the offer implies that Felix intends to sell the painting through a legally binding agreement. However, this condition is not sufficient to imply acceptance of the offer of £800. In fact, a letter sent to Georgette informing her that Felix could sell the painting at £950 amounts to a counter offer, which implies a rejection of the £800 offer made by Georgette.

Communication and Revocation of Offer and Acceptance

When a tender is made, the common law on contracts requires that the approval be talked about through the offeror’s selected agent. The appointed agent by Felix is poster. Hence, the appropriate legal provisions for acceptance of offers made through poster apply. Accordingly, “the general rule is that a postal acceptance takes effect when the letter of acceptance is posted (even if the letter may be lost, delayed or destroyed), but the postal rule will not apply if it is excluded by the express terms of the offer” (Adams 4). No exclusion applies in the offer made by Felix through poster.

Although Georgette communicates her approval by delivering acceptance letter to the premises of Felix, she fails to use the offeror’s appointed agent. She even forgets to indicate the postal address, which may create the intent of the offeree to communicate the acceptance of the offer through the offeror’s appointed agent. Hence, her acceptance remains not communicated. Thus, the painting cannot be legally considered hers although she finally acquires it from Felix and hides it under her bed. Indeed, even if Felix found the acceptance letter in his business premises, he could revoke the offer anytime without any legal consequences when Georgette sues him on the grounds of revocation of an offer after acceptance.

Application of Rules of Communication and Revocation of Offer and Acceptance

An offer for sale of the painting to Peter at £1,150.00 implies entering a contract without any consideration on the part of Georgette for the contract if the offer is accepted with her not communicating her acceptance through Felix’s appointed media. However, since the painting came to her possession, and on making the offer to Peter through Fax, Peter communicated the acceptance through the same phone. However, upon leaving the message on Georgettes answer phone, the acceptance is adequately communicated. The intention to enter legally binding contractual terms is clear. Considerations for both parties are also provided. In this case, Peter would incur value of £1,150.00 while Georgette would incur the value associated with owning the painting in honour of the contract.

After making an agreement upon making offer and acceptance, with consideration and intent to enter legally binding relations being provided when the form of a contract is legally acceptable in the execution process, a contract can still be terminated. This happens when items for sale are no longer available due to unavoidable circumstances such as theft or damage by calamities such as earthquakes and fire (Pearce and Halson 24). When this happens, a contract is considered frustrated and in effect terminated. Even though Georgette later found the painting, if Peter sues for damages, the case cannot be granted on the grounds of frustration of the contract since the frustrating event was beyond the control of offeror, Georgette.

Good Consideration and Requirements for Intent to create Legal Relations

The decision on whether Georgette’s failure to pay the reward promised to the police officer amounts to breach of contract relies on resolution of the legal question whether the police officer engaged in search of the villain’s house because of communication of the offer through the advertisement made by Georgette over the local newspaper. Even if this was the case, no contract exists between the two parties since no consideration was provided for in the advertisement.

No contract was entered between the police officer and Georgette. The discovery of the painting was part of the police officer’s daily obligations. It is also legally inferable that the police discovered the painting as a coincidence implying that he did not break the villain’s house purposely in search of the painting. Therefore, he was not acting in a manner implying the execution of an action of a party engaged in a contract. The agreement also fails in the subjective test of the intention of Georgette to enter a legally binding relationship with the police officer. The discovery of the painting was not a precondition for payment of the promised reward since the promise was made to the police officer after the painting was discovered.

Terms, Representation, Warranties, and Intermediate Terms in contracts

Representations and Terms

Negotiations involving purchase and sale of goods fall into the representation or the terms categories. Terms are either expressed or implied. Express terms encompass terms that are set out in an agreement by parties engaging in a contract (Adams 7). Implied terms are not set out expressly in the contract. However, law, usage, and even customs imply them. For instance, the car bought by John should serve his needs with reliability. For John to take any legal action against Cars4U Ltd, it is crucial for him to understand whether the negotiations during buying of his car amounted to contractual terms or representations as discussed in the section on incorporation of terms in contracts.

Warranties, Conditions, and Intermediates

Terms provided for in a contract are warranties, conditions, or intermediate terms. Conditions encompass all terms that are key to the contract as in the case of Poussard v. Spiers determined in 1896. In the case of John v.Cars4U Ltd, the provision to repair the car subject to identification of defects within 3 months of purchase is a condition that is central to the performance of the obligation to repair the car. If Cars4U Ltd refused to repair the car when failure of transmission system and engine occurred within 3 months, John would have sued for damages for breach of contract including claiming compensation for the costs incurred in towing the car to the garage.

Warranties encompass minor terms, which do not form part of chief necessities for the existence of contract. In case of breach of warranties, aggrieved parties sue for damages. However, they do not end the contract. Intermediate terms fall in between warranties and conditions. Such terms have their status, which qualifies them as conditions or warranties that are undefined in the manner of construction of wording of the statements or the contracting parties’ intentions. Breach of intermediate terms may amount to termination of a contract if they are serious or payments of damage without necessarily terminating a contract (Webb 52). For the case of John, his legal options are limited since the first and the second conditions of the contract for repair of the vehicle are breached. The only option available for him is to pay for the repair of the vehicle

Incorporation of Terms into Contracts

Terms are incorporated in contracts to regulate the manner in which parties conduct themselves during performance of the contracts. As claimed before, agreement statements for sale or purchase of goods are incorporated in contracts as either representations or terms (McKendrick 27). In the event that a statement encompasses a term, the plaintiff can sue for breach of contract. Another remedy available for John is to sue for misrepresentation. In the process of determining whether a statement incorporated in purchase and sale negotiation is a representation or a term, four rules apply.

In case John decides to sue for either misrepresentation or breach of contract, under English law, the court would apply time factor, statement importance, the rule on parole evidence, and relativity in parties’ expertise levels to determine whether the statements in the negotiation for purchase of the car are representations or contractual terms (Peel 18). As set out in the case of Routledge v. McKay, where large amounts of time pass between the time of making a statement and the time of entering a contract, the statement is more likely to take the form of a representation.

In the case of Bannerman v. White, the court held that in situations where the representee emphasises the significance of a given statement, the statement amounts to a contractual term. Upon applying this precedence to the case of John, the sales person, who is a representative of Cars4U Ltd emphasises the significance of the first provision of the guarantee claiming his willingness in staking his life if the car fails to be reliable. Based on the precedence of the case of Bannerman v. White, assurance of reliability is a contractual term. As spelt in the case of Dick Bentley v. Harold Smith Motors, the sales person has more knowledge in relation to John. Hence, promise of reliability of the car is more likely to amount to a contractual term. Consequently, the only legal remedy available is for John to sue for misrepresentation, but not breach of contractual terms.

Rules of Privity and Capacity to Contract

Ability of Minors to enter Contracts

English law defines parties, which can enter legally binding relations amounting to contracts. The step of Queen Burgers Head office writing to Mr. King informing him that Leroy “is too young to enter contracts” refers to the general rule that all contracts entered with minors are invalid on the grounds of lack of legal capacity to contract. However, Mr. King needs to understand that not all contracts entered with minors are invalid and void. For instance, a contract entered with a minor in the supply of necessities, which are defined as food, clothing, and commodities that are central in education furtherance and/or apprenticeship is valid (Koffman and Macdonald 85). A legal remedy exists as opposed to suggestions made by Queen Burgers.

The Doctrine of Privity

In English rulings, the principle of privity takes care of contractual dealings entered between parties involved in an agreement together with the representatives of the agreement. Mr. King’s and Queen Burgers contract, in matters of duty of care for his son, is a good example of the applicability of doctrine of privity in English law. Leroy is a third party to the contract. Since eating chicken leads to food poisoning, the breach of duty of care owed to Mr. King’s son resulted in damages on Mr. Kings, and hence the poor contract performance.

Inroads made by Courts and Statutes to the Doctrine of Privity

In case Mr. Kings sues Queen Burgers for compensation, courts can apply various inroads in settlement of the case. Chicken falls under the class of foods. Leroy is the only one who eats the chicken. When Queen Burgers delivered the chicken to him where he accepted and began to eat, already the first preconditions for a contract (offer and acceptance) were fulfilled. The second party (Mr. King) provided for the consideration in the contract. This does not imply that Queen Burgers escapes liability. It owes the person consuming the chicken duty of care whether a minor or not.

Even if the minor may not be bound by the contract, since he is less than statutory age of 18 years that are required for one to enter a contract, such a relation binds the adult, in this case the Queen Burgers, with whom the contract is entered. Mr. King should sue for breach of duty of care on part of his sick son. This advice is vital even though the doctrine of privity provides that “a contract can neither give rights to, nor impose obligations on anyone who is not a party to the original agreement-a third party” (Jacobs 315). The case of Jackson v. Horizon Holidays Ltd provides an exception to the applicability of this rule. This forms a railroad that the court can utilise as precedence. The court held in 1975 that even though Jackson had booked for a holiday in the hotel in his name, the Hotel was liable for paying damages even to Jackson’s family. Any damages to the family amount to harm on the part of Jackson.

References

Adams, Guy. Proprietary estoppels and contracts for the sale of land or: The Parliamentary Paradox, 2012. Web.

Jacobs, Edward. “Judicial reform of privity and consideration.” Journal of Business Law 3.2(1986): 312-335. Print.

Koffman, Laurence and Elizabeth Macdonald. The Law of Contract. Oxford: Oxford University Press, 2007. Print.

McKendrick, Ewan. Contract Law.London: Palgrave Macmillan, 2011. Print.

Peel, Edwin. The Law of Contract. London: Sweet and Maxwell, 2011. Print.

Webb, Charlie. “Performance And Compensation: An Analysis Of Contract Damages And Contractual Obligation.” Oxford Journal Of Legal Studies 26.1 2006): 41-71. Print.

Pearce, David and Roger Halson. “Damages for breach of contract: compensation, restitution, and vindication”. Oxford Journal of Legal Studies 9.1(2007): 1-30. Print.

History of U.S. Contract Law

• A contract is a legally binding document that is based on the agreement of the participating sides.
• Contract law governs contracts and provides remedies in case of a breach.
• Contract law in the U.S. was not developed according to a prescribed plan. Its current status is the result of legislative reactions to changing business needs throughout history.
• Important persons in the history of the U.S. contract law theory are Christopher Langdell and Oliver Holmes.

A significant role in the emergence and development of the theory of the U.S. contract law belongs to the American jurists Langdell and Holmes. In his main work, first published in 1893 (See Melvin Eisenberg, Foundational Principles of Contract Law (2018)), Holmes, from the standpoint of rapidly growing business and trade relations, conducted a historical and theoretical study of the common law. It follows from Holmes’s theory that a contractual obligation consists of a guarantee by the offeror of the occurrence of a particular event, and the offeror, therefore, bears all the risk associated with it. The offeror should consider how much he or she is able to influence the course of events in order to achieve a particular result – the higher the opportunity he or she has, the less is the risk he or she assumes. A natural consequence of such a legal obligation is only the obligation of the offeror to reimburse the offeree for losses incurred as a result of the non-occurrence of the promised event.

Sources of Contract Law

• Common Law.
• The Uniform Commercial Code (UCC).
• Federal courts, state law, and other courts.

The primary source of common law in the United States is a judicial precedent. In the U.S., the doctrine of judicial precedent, or stare decisis, is valid only within a particular state. Although courts often refer to court decisions in other states, these decisions are considered as only persuasive, but not binding. For certain aspects of the contract law, binding and enforcing laws are enacted, and they are considered to be more effective than judicial precedents. Of particular importance is the UCC, developed by the National Conference of Commissioners on Uniform State Laws (NCCUSL) in conjunction with the American Institute of Law (ALI), in order to replace uniform laws previously enacted in the U.S (See Howard Hunter, Modern Law of Contracts (2017)).

Common law

• Often referred to as “Case Law”.
• Governs contracts that involve the sale of real estate.
• Offerings of services are also governed by the common law:
  • Contract for house cleaning services.

Judicial decisions and other relevant tribunals make up the body of the common law (See Roscoe Pound, The Spirit of the Common Law (2018)). It is critical that contracts that are governed by the common law contain all the necessary elements because the common law is more strict than the UCC. These elements include offer, acceptance, and consideration. If any single item is missing from the contract, the agreement is subject to be voidable. Common law governs contracts that involve the sale of real property and services. For instance, a contract for selling a house is protected by the common law. A contract for a “sale of a mobile home from a dealer” is subject to discussion, because it depends whether the mobile home will be movable or will have a fixed place of installation. In the latter case, the contract will be subject to the common law.

UCC

• Collection of recommended laws for states.
• States may enact the UCC laws verbatim or with specific changes that reflect the views of individual states.
• The goal is to harmonize the laws enacted in states.
• Uniformity and flexibility.

UCC is the product of private organizations with a goal to ease developing contracts among companies that reside in different states. The primary motivation behind the UCC was meeting the changing demands of the contemporary business world. Prior to UCC, different states had their own set of laws that governed contracts. Therefore, developing an agreement between two firms from different states was costly and involved sophisticated processes (See Aditi Ramesh, et al., CISG v. UCC: Key Distinctions and Applications, The Business & Management Review 459-468 (2016)).

History of UCC

• A joint long-term project by ALI and NCCUSL.
• First version presented in 1952.
• Product of private organizations.
• Was drafted by leading scholars in legal area.

The authors began writing the first version of the UCC in 1942 and after a decade of work presented to the public. Therefore, it is considered to be the longest of uniform acts. Several revisions of the UCC were enacted with minimal changes by almost all of the states. In some cases, states chose to add little modifications to conform to local customs (See Howard Hunter, Modern Law of Contracts (2017)).

Organization of the UCC

• Concerns with 9 subjects.
• Each subject is dealt with an individual article.
• For instance, one of the most prominent articles, the Article 2 deals with sales of goods:
  • Purchase of 1000 plastic knight figures from a toy manufacturer.

There are nine articles in the UCC, and they deal with a specific subset of transactions. For instance, Article 1 provides general provisions, while Article 2 deals with the sale of goods. Article 6 governs bulk transfers and bulk purchases, and Article 9 provisions for secured transactions. Some of the items have extensions as with Article 2 – Article 2A provides a set of laws to govern leases.

UCC Impact on Interstate Commerce

• Eased making contracts with firms from other states.
• Before UCC, making contracts with firms from other states was expensive.
• Companies have the flexibility to search for the best partners.
• Opportunity to pass cost savings to consumer.

The primary idea of the UCC is to allow individuals and businesses to make contracts with their own requirements and govern in areas where some details are implied and not indicated explicitly. Before the UCC, this was not possible and required the development of an elaborate and extensive contract that accounted for the laws of both states. Such a circumstance increased costs, and the price was eventually by customers (See Charles Knapp, Problems in Contract Law: Cases and Materials (2019)).

Conclusion

• Contract law is provisioned by common law if the transaction involves the sale of real property or service.
• UCC provisions the contract law if any other good is sold under a contract.
• UCC has many benefits:
  • Flexibility for states;
  • Flexibility and convenience for firms;
  • Consumers pay less for goods.

Contract law in the U.S., while having some unique aspects, is similar to contract laws in other countries. The fundamental theory was laid by prominent jurists, and their idea was primarily based on the law theory of the United Kingdom. Today, the two primary sources for contract laws are common law and the UCC. The former governs the sale of real estate and services, while the latter provides for purchase and lease of other goods.

References

Aditi Ramesh, et al., CISG v. UCC: Key Distinctions and Applications, The Business & Management Review 459-468 (2016).

Charles Knapp, Problems in Contract Law: Cases and Materials (2019).

Howard Hunter, Modern Law of Contracts (2017).

Melvin Eisenberg, Foundational Principles of Contract Law (2018).

Roscoe Pound, The Spirit of the Common Law (2018).

The development of businesses and corporations worldwide has created a market that is property and rights oriented. There is a lot of scheming and fraud that governments and private companies have to develop protection for, in a form of copyrights and patents. Not only are there ownership rights for products and physical property but also, for ideas and potential goals, plans and strategies.

An idea is worth much more than the finished product because it is the basis for all production. But there is also the matter of usage of already existing material and the contracts that are drawn up by companies to make a profit. Often, these contracts come with a pricy tag and are thought to be unfair by people who want to use information available to the public.

Jason Mazzone writes on the difference between copyright and contracts, sighting the unfairness of the latter. He writes that “When contracts replace copyright law, consumers become used to having few or no rights…” He suggests that Congress could prohibit contracts that limit the use of public domain materials. I agree, as if the public has access to certain materials, they must be allowed to be used without a contract. In case the agreements are made for a purpose to treat all members equally, it is fair.

The need for agreements and laws that regulate trading and property possession are a necessary attribute of the global economy and businesses. Governments, private corporations, as well as individuals, all participate in the establishment and continuation of fair and respectable trade.

1. Who will decide the amount of rights the users of information will receive?
2. As contracts are unique to each location, what rights and conditions will a contract have in a different state or even country?

An article titled “Sam Higginbottom Institute of Agriculture, Technology & Sciences hosts Workshop on intellectual property” talks about the need for laws that protect intellectual property. One of the participants “…emphasized copyright registration and protection of traditional folklore in India”, which is a valid and needed fact. This is a rather important and interesting part of society, and it is significant that India is keeping up with the modern world. The developed countries have an established order and control of goods and intellectual property, while developing countries might have some setbacks or limitations that can be used by others to their advantage.

Previously, the world trade was not as regulated as it is today, which led to a number of unfair and unbalanced transactions. The transport and use of certain products might be regulated as well. For example, some products or technologies or even concepts, will not be allowed to be used in some parts of the world. This might be due to cultural differences or specificity of a product. Some businesses would not want to suscept the market to their ideas or product, as they might want to keep it exclusive for their own country.

The stability of the country, as well as relations between nations depend on governments, their communication and cooperation. The intricate relationship between the government, businesses and the economy directly affects the trade and the criteria which set up the framework and structure of the economy. When new countries join and become members, they are bonded by the same agreements and provisions.

When considering a work environment, either a business, a corporation or any other company, it is important to consider morals. People often find themselves in situations where they must determine what the best thing to do is. As every individual is different, their view of morality is somewhat different. There are many issues that arise when analyzing the relationship between personal gains and ethics. Social ethics and virtue often relate to one thing, which is being respectful and honest towards others and the general society.

There are universal laws, which guide people to be morally correct using rational thinking. Their reasons might be related to the reward of “a good feeling” after they commit a good deed. Or they might feel a moral obligation to help someone because they have the ability and ways to accomplish that. For some people it becomes a lifelong quality and a part of their character. For operations management of any company or business, economical sustainability is one of the key components, as they have to calculate the future matters of the company and find ways to increase their prosperity, staying as ethical as possible in the process. They have to work on the assignment of duties, distribution of roles and responsibilities, and the resource and capacity management.

Most employers have a moral standard that they go by and enforce rules that do not permit employees to abuse their authority and connections. The federal statutes forbid any illegal activity in the corporate world but morality determines personal attributions. The amounts of money that people manipulate are so great, it becomes easy to become immoral, and people forget about ethics without thinking of the consequences.

The governments take an active part in the enforcement and control of the established rules and regulations. Intellectual property must be protected but at the same time, there should be equal and just access to information and creations.

Bibliography

Mazzone, Jason. Copyfraud and Other Abuses of Intellectual Property Law. Redwood City: Stanford University Press, 2011.

“Sam Higginbottom Institute of Agriculture, Technology & Sciences hosts Workshop on intellectual property”. The Times of India, Web.

Introduction

Law is a critical element in the establishment of a stable society. There are numerous laws in existence to establish normalcy within a society. These laws fall into two main classes, which include civil and criminal laws. Through the various laws formulated, individuals can co-exist while businesses can thrive. The success of the business environment hinges on the numerous contracts that exist amongst different business entities. The law of contract plays a central role in ensuring that the involved parties execute contracts effectively. A number of elements have to be functional for the law of contract to become enforceable. Some of these elements include an agreement, consideration, intention, mutuality, and legal purpose. In the course of their operation, businesses have adopted the Internet as one of the mediums of market communication. In a bid to be effective, the adverts posted on the Internet should be comprehensive.The objective is to identify whether the element of agreement exists in the case study and whether the online advertising undertaken by Fred complies with the law.

Issue – Agreement to Sell

There are various categories of contracts. Contracts fall in different categories based on their enforceability, formation, and performance. Additionally, valid contracts can fall into three main classes, which include enforceable, voidable, and unenforceable contracts. Voidable contracts entail contracts whereby one of the parties has the option of avoiding the requirements of the contract. Some good examples of such contracts entail those that are formed by minors. Unenforceable contracts include contracts that are not legally enforceable due to the existence of certain legal issues. On the other hand, void contracts entail agreements that did not amount to the establishment of any contract.

Rule

An example of contract based on enforceability relates to contract of sale, which refers to an undertaking between two parties whereby one party (seller) is required to supply certain goods or services to another(buyer) at an agreed amount of money either on cash or credit terms. A contract of sale exists if one of the parties (seller) agrees to transfer the product in question to the purchaser at a certain price.

Contract of sale constitutes two generic terms, which include “agreement to sell” and a “sale”. For a contract to be established, a number of elements should be incorporated. One of these elements relates to agreement. For an agreement to exist, a number of issues are critical. Firstly, there must be the offeror and the offeree. The offeror entails “the party making the offer while the offeree refers to the party to whom the offer has been made and a serious and objective intention on the part of the offeror must be evident”.

Despite the element of intention and consideration being evident in the case of Francis and Alex, one can assert that a bidding agreement between the two individuals did not exist. This assertion hinges on the fact that the element of offer and an acceptance, which constitutes an agreement were compromised. In a bid to ensure the existence of “a legally binding contract, the involved parties must have accepted the terms of the contract”. Francis, the shop owner, made an offer to sell the antique comb set to Alex at $200, which is less than the marked price. On the other hand, Alex agreed to purchase the antique comb set at the offered price. However, this offer was only valid within a particular duration. Alex was required to make the payment the following day at 10 AM. Despite agreeing to the offer, he later changed his mind regarding the payment time. Consequently, he communicated to Francis regarding his change of mind through an answering machine. However, Francis did not receive the message in time; hence, he did not have an opportunity to reply. As a result, Francis did not respond regarding whether he would extend the offer to the following afternoon. Alex assumed that Francis had received the message and agreed to his terms.

Analysis

For a particular agreement to be legally binding, acceptance must be communicated effectively to the offeror. In this case, Francis and Alex were in a bilateral contract, which makes effective communication one of the critical elements. Bilateral contract underscores the promise made by the offeror and the offeree. Additionally, the acceptance must be timely. Consequently, it is paramount for the involved parties to communicate by use of an authorised mode of communication.

In spite the fact that Alex made an effort to communicate with Francis before the set time within which the contract was valid, Francis did not receive the message in time. Consequently, there was no legally binding agreement. Communication in an agreement is very critical. The mode of communication used must be subject to authorisation by the offeror. In some situations, communication challenge might occur. In this case, Francis had not told Alex on the mode of communication to use. Alex decided to communicate using an instantaneous method. Consequently, the mailbox rule, which stipulates that an acceptance is evident immediately after the mail is deposited in the post office, does not apply. This aspect arises from the fact that Alex decided to use instantaneous mode of communication due to the situation surrounding the sale contract. The failure of the offeror to reply cannot qualify as an acceptance by the offeree, for the offer did not include a clause stipulating that silence translates to acceptance.

Conclusion

From the above analysis, the element of agreement cannot be established with certainty for there is no meeting of mind or mutual assent. Consequently, Alex does not have a legally enforceable contract with Francis for he changed the original terms of the contract. Any material change on the terms of the offer results into automatic termination of the offer. The material changes made to the initial offer result into counter offer. Counter offers do not require acceptance. Additionally, Francis is not under any obligation to sell the antique comb and mirror set to Alex because the elements of offer and acceptance, which constitute the formation of an agreement, did not result in the creation of a mutual agreement.

References

Bagley, Constance, and Savage Diane. Managers and the legal environment: Strategies for the 21^st century. Mason, OH: Cengage, 2010.

Gillies, Peter. Business law. Sydney: Federation Press, 2004.

Gillies, Peter. Concise contract law. Sydney: Federation Press, 2008.

Goldman, Arnold, and Sigismond William. Business law: Principles and practices. Mason, OH: Cengage, 2011.

Meiners, Roger, and Edwards Frances. The legal environment of business. Mason, OH: Cengage Learning, 2008.

Miller, Roger, and Frank Cross. Legal environment today: Business in its ethical, regulatory, e-commerce and global setting. Mason, OH: Cengage Learning, 2010.

Miller, Roger, and Jentz Gaylord. Business law today: The essentials; text and summarised cases: e-commerce, legal, ethical, and international environment. Mason, OH: Cengage Learning, 2011.

Miller, Roger. Modern principles of business law: Contracts, the UCC and business organizations. Mason, OH: Cengage Learning, 2012.

Piotrowski, Christine. Professional practice for interior design. Hoboken: John Wiley, 2002.

Rao, Peddina. Mercantile law. London: PHI Learning, 2008.

Suspicious Directors v. Carole et al

Issue

Is Carole, Bob and other directors liable for breach of fiduciary duty to SI?

Rule of Law

The fiduciary duty is a responsibility that employees have to be loyal and act in good faith on behalf of the entities they are working for. It needs a level of loyalty as well as care that does not permit any violation without predisposing the violator to individual liability. A fiduciary duty is applicable even when the employees have not expressly agreed to be mandated by it (Beale 31). It needs full sincerity and disclosure of any significant information from the fiduciary to the individual or entity to which it is indebted. The remedies available for such a breach of fiduciary duty include lost profits as a possible result of the breach. In the case between suspicious shareholders versus Carole, Bob, and other directors, their investigation is to determine whether these staff members owed SI the fiduciary duty. The lawsuit is to determine if Carole and other joint trustees or directors breached their obligation to protect the interest of the entity, which resulted in a loss of profits. If they are found to have breached this duty, then each of them will be personally liable for the whole loss incurred.

Analysis

In the case, Carole, Bob, and other directors could not be held liable because it is not clear how they failed to exercise due care in protecting the company. Bob and all the co-accused did not breach their fiduciary duty to the extent that Carole did not disclose to the board the reason why he withdrew from the contract. If they were aware of Carole’s motivation to withdraw from the contract, they could have made informed decisions in that regard that would have profited the company. It is similar to the case of Hodgkinson v. Simms et al. (1994) in which Hodgkinson sought advice from the defendant that expressed that he knew a lot of investments (Beale 36). The advice made the plaintiff invest in many projects that made him lose after the real estate market dropped. The defendant was liable for breach of fiduciary duty as well as of the contract.

On the other hand, as far as the corporation is concerned, Carole could by law be prevented from being involved in the business transactions relating to the place of work. Any director whose business involves a transaction with an entity makes written disclosure to the board of directors. He or she also deliberately does not join or is not permitted to vote in the board meetings relating to the transaction which involves him or her. Bob should have inquired to know the reason Carole was withdrawing from the contract. Bob could also be accused of vested interest because he heard rumors concerning the planned mall development, which should have prompted him to investigate this proposal. All the seven board members were involved in the decision to back up Bob’s recommendation to release Carole from her contract with SI. Corporations could allow such specific recommendations so that it is not harder for those with fiduciary obligations to overcome circumstances that they have an interest on. The directors had the obligation to seek for legal advice since this was extremely significant before any transaction happens. The directors could have allowed both Carole as the fiduciary and the company that acquired the property and later sold it back to SI at a higher fee of $1000,000 to acquire distinct legal counsel to advise on this process.

Conclusion

Carole, Bob, and other directors are held liable for the loss of $500,000 because of their suspicious deals that did not involve a legal counsel. Bob failed to probe Carole for the reason of her withdrawal from the contract.

Patricia v. Up-scale

Issue

Will Building Trust and/or Patricia Passerby be able to recover from Jerome Fenimore personally?

Rule of Law

Accidents in a construction site are examined under the “negligence” cause of action. For the construction accident case to be categorized as one involving negligence, the plaintiff ought to verify some facts. First, he or she must determine if the defendant owed the public or plaintiff in question a duty of care (Beale 50). Secondly, the plaintiff has to prove that the defendant (in this case, Fenimore) breached the duty of care by way of being negligent. Lastly, it has to be proved that the negligence of the defendant was a significant aspect leading to injury or death. Once the plaintiff is able to demonstrate that the defendant neglected this responsibility of preventing harm and injury in a construction site, the defendant would be held accountable for the damages of the plaintiff. There is also a rule of law that relates to premise liability involving also Up-Scale Corporation. As the property owner, they are held accountable for any accident witnessed on the building being constructed. The property owner owes a duty of care to people to ensure that the property is secure from risky situations.

Analysis

The legal duty of care assigned to the defendant is one that emerges independently of contractual responsibility, and expressly, in the absence of a contract. Therefore, the major task in the case in question is to establish a scenario where a duty of care emerged. A reasonable level of care must be shown by the developer, contractor, and all those involved in the process. In Andrews et al. v. Grand and Toy (Alberta) Ltd. et al. (1978), Grand and Toy Alberta Ltd. were held partially accountable for the traffic accident that rendered the plaintiff a quadriplegic (Beale 52). Even though the plaintiff was responsible for himself, Grand and Toy Alberta Ltd. had not demonstrated due care for the safety of the residents and employees. A person who is injured through foreseeable ways is addressed in this duty of care that is catered for by the hired individuals for the construction project. Based on the rule of the contract of this nature, the general contractor and developer will be accountable for any negligence from the subcontractor (Beale 50). The rental arrangement between Fenimore and Up-Scale, Inc. also does not follow corporate procedures but the relationship was stamped by the company’s Board of Directors. Fenimore can find a defense only on the grounds of the unfollowed corporate procedures but may be liable if he agreed to the Board of Directors’ terms of him taking responsibility.

Under the legal model of vicarious liability and respondent superior, the corporation will be held accountable for the injuries within the sites and in the course of the construction. On the other hand, a corporation is able to shield the shareholders from business-related liabilities. If a construction company is a corporation, unless in very minor cases, the shareholders will always be treated independently for any eventualities. It also implies that the owners of the company or shareholders may not be sued personally for any business’s wrongful acts. Up-Scale, Inc. had the duty of care during the construction process for any residents and passersby around the site in itself. Jerome Fenimore cannot be held accountable personally either by Building Trust for its losses or Patricia Passerby for her injuries. It is Up-Scale as a corporation that ought to have ensured that they employ safety measures around the construction site so that no one is exposed to injuries.

Conclusion

Up-Scale, Inc. and not Jerome Fenimore is liable for the injury of Patricia Passerby. The corporation is also held responsible to repay Building Trust that lent them money.

Work Cited

Beale, Hugh, et al. “Cases, Materials and Text on Contract Law.” Bloomsbury Publishing, 2019.

Introduction

Nowadays, almost all business relations are based on properly developed legal contracts so that all their duties and responsibilities are defined. A contract is a significant legal agreement within the frames of which the parties are bound with a number of clearly defined obligations. There are many different forms and sizes of contracts with a variety of durations, financial aspects, employment details, etc. (McKendrick 1). There are also a number of factors that may influence the validity of a contract and its perception by the parties. Each factor plays an important role for a party.

The current paper aims at discussing the peculiarities of misrepresentation and duress as the concepts of any contract law that touch not only the legal aspects of a case but focus on significant ethical aspects. Misrepresentation and duress have their own definitions, types, judgments, etc. In spite of the necessity to be common for all parties, the essence of misrepresentation and duress in terms of the English law and the UAE law differs considerably. Contract law is the agreement that should clear identify the situation and help the parties be equal; misrepresentation and duress can influence the quality of the contract and have to be properly understood by the English and the UAE citizens.

Misrepresentation and Its Place in the Law

Misrepresentation Definition

It is easy to find a clear definition of misrepresentation in any legal dictionary and understand its importance. The researchers explain misrepresentation as one of the false statements of law that does not go in line with the facts and does make one party to being able to induce another party to a contract (McKendrick 214). It is a kind of general definition; still, the essence of misrepresentation usually depends on its type.

Types of Misrepresentation

There are three types of misrepresentation considering the intentions of a party that does it that have to be discussed. One of the most evident and influential types is a fraudulent misrepresentation (Koffman and Macdonald 318). It usually takes place when one of the parties intentionally (being aware of a false) represents some false facts in order to make another party accept the contract conditions. However, it also happens in case the party does not check if the chosen facts are true or false and make misrepresentation recklessly without considering the importance of outcomes. The outcomes of the representation of false information are negative and may cause some damage. Negligent misrepresentation is all about the false statements that are inadvertent by their nature when one party introduces false fact being not aware of them. Finally, there is also a kind of innocent misrepresentation when even the party that makes it gives several facts to prove the reasonableness of the chosen statement.

An innocent misrepresentation can provide the injured party with a chance of rescission but never damages (Abe14). Negligent misrepresentation implements the possibility of rights of rescission (only in terms of common law) and damages in tort (Abe 14). A fraudulent misrepresentation supports rescission and the right of damage under any condition in any court. Damage is a kind of compensation offered to a victim in order to cover the harm made as a result of the misrepresentation. As a rule, money is offered. Rescission is another result of misrepresentation as a result of which a contract is ended, and the parties develop the relations as if the contract was never signed. All these types of misrepresentation mentioned above have their own outcomes and the effects on the relations that can be developed between the parties to a contract.

Examples and Judgments

The examples of fraudulent misrepresentation are numerous nowadays. Many people like to make deals online. They buy goods, describe their properties, and give promises about the quality of a product. For example, a person offers iPhone, describes its characteristics, and sells it to a person informing that everything is ok with the device. As soon as a buyer starts using the phone, it is hard to define some shortages. However, it turns out that the battery is too weak, and the phone call was discontinued during a very important meeting. The seller knew about this shortage but did not mention it. The result of this disconnection was a financial fine of a buyer. If a contract is signed, fraudulent misrepresentation is evident, but it is hard to prove that the seller knew nothing about the weakness of the battery. It is better to address a good lawyer and analyze all existing laws to prove the fault of the seller.

However, if the seller knew nothing about this shortage because he did not use for a long time, and that was why he did not mention a true fact, it may be a case of negligent misrepresentation and defined as a civil offence that can be solved in civil court as a rescission. The phone is turned to the seller, and the buyer gets his money back. The same situation without any damages, unawareness of the phone problems, and inabilities to prove a false representation may be defined as innocent misrepresentation. In this situation, a seller may offer an extra battery in order not to cancel a contract.

Laws Related to Misrepresentation

Misrepresentation Act 1967 is a current English act that helps to regulate the conditions of any contract law and analyze the case when misrepresentation takes place. It defines the conditions under which a certain type of misrepresentation happens and the fines that can be used in regards to a party blamed for misrepresentation. The UAE civil law system has Federal Law No. 5 of 1985 according to which misrepresentation is defined as a situation when “one of the two contracting parties deceives the other by fraudulent means by word or act that leads the other to consent to what he would not otherwise have consented to” (Nassif par.5).

Duress and Its Place in the Law

Duress Definition

Duress is a kind of illegal coercion that is used by one party in order to induce another party to enter the contract using such methods like threats, blackmail, or other options that can cause financial harm. As a rule, duress may take place if one party of a potential contract is stronger than another party of the same contract. The power of one party can be used opposite to the weakness of another party. Duress is defined by common law as a voidable condition (Burrows 542). This unlawful pressure may be of different reasons in order to achieve different goals. Besides, duress can exist in case one party has to perform an act that can hardly be performed under different conditions. There is always a kind of wrongdoer, who has to make another figure of the contract to do something inappropriate.

Types of Duress

Duress is a type of improper pressure that can differ considering the form it may have. In regards to the options that are possible in the situation under consideration, researchers offer different types of duress. For example, duress can be done over a person, duress of goods can be defined, and economic duress may take place (Burrows 542; McKendrick 293). In dictionaries and books, it is possible to find another classification but of the same meaning:

1. Emotional or psychological duress is the situation when some portion of information is used against a person to make him/her doing something illegal or unwanted. For example, emotional duress occurs when some family members are kidnapped, and their physical condition or future health depends on the development of the events. Some people think that even this type of duress has to be a subtype of physical duress because the core of such situation is also making physical harm to people. However, if the situation touches upon two parties, and none of the parties is under a threat of physical abuse, it has to be defined as emotional kind of duress. At the same time, it is hard to define if duress can take place when a person acts under the power of hypnosis. Therefore, the court has to analyze the case thoroughly to define, compare, and analyze such factors as age, gender, health condition, family relation, personal experience, etc. to make sure emotional duress can happen.
2. Physical duress is a type of coercion directed to a person that causes pain, harm to health, or threat to life. The aim of such action is to make a person to act or not to act. Duress of this type can be in a form of gun threat, beating, use of drugs, binding, etc.
3. Economic duress is one more type of coercion. The situation when one party may threaten another party to make some kinds of financial injuries in order to sign a contract (Ashcroft and Ashcroft 95). At the same time, there are the situations when people just have poor financial circumstances and are ready to take some illegal or inappropriate actions in order to earn. In such cases, economic duress does not occur. That is why the court has to analyze each detail of the case of economic duress.

All these types of duress are more symbolic because it may happen that the situation has the characteristics of two or even three types of duress at the same time.

Examples and Judgments

There is a situation when a person, call him Bob, wants a woman named Julie sign a contract and buy a house within a short period of time. Julie does not want to do it so soon and at such cheap price. Still, Bob insists and uses a gun and threatens Julie’s daughter, who is kidnapped at the moment. Such situation may be as a physical (the presence of a gun in a story), emotional (child’s kidnapping), and even economic duress (the situation of selling a house). If there is no definite evidence to prove that the contract was signed under such threats, the court has to investigate the case, compare information, and gather different pieces of evidence.

Though, if economic duress is understood as a situation when one party has to accept a contract in order not to lose money or protect personal property, this situation cannot be regarded as such because a party that is coerced loses a lot making a deal but saves personal life and the life of a child. This contract can be justified in case the level of harm is lower than the level of harm caused by coercion and if the threat is proved and explained with the help of evidence. For example, someone may see how the daughter was kidnapped during the time when the contract was signed.

Laws Related to Duress

According to English law, duress is a kind of common law defense that may be operated in favor of the party that commits a crime or sign a contract while being forced to do so or being threatened. With the help of English contract law, many unconscionable agreements may be escaped and legally solved if they are defined as the acts done under duress. However, the doctrine of duress is relatively new in English contract law (McKendrick 293). That is why some courts face challenges while defining the nature of crimes and the conditions under which a contract is signed. In their turn, the UAE have their own Civil Code under which duress is can be forcible and non-forcible, material and moral, cause harm directly to a person or his/her family. According to the Article 182, a party that experiences duress to make a deal may not enforce a contract; still, the contract can be defined as valid if the party agrees to its terms after the threat is solved (Hall 37).

The UAE Law vs. the English Law

Every country has its own laws and rules that have to be followed by the citizens. People have to know the peculiarities of the laws in order to follow them or learn punishment details in case they break the law. The differences between the UAW law and the English law are evident indeed: different traditions, various gender roles, attention to religion, respect to the government, etc. People of these two countries have a rather different understanding of misrepresentation and duress in Contract law and should be compared in terms of these two concepts discussed above.

Misrepresentation

The UAE and English laws may seem to be similar in terms of misrepresentation’s definition and judgment because both of them have one and the same purpose – to make people follow an order and develop trustful relations. However, there are also many differences that have to be mentioned regarding the situations when the case of misrepresentation should be defined, or the cancellation of a contract should be offered.

Even the definitions of the UAE and English “misrepresentation” vary. The UAE people know misrepresentation as a situation when one party is misinformed by another party with some fraudulent acts or words and agrees with something he/she could hardly agree with in case of being informed. The English people have a simpler definition: misrepresentation is usually a false idea used as the basis for one party to make another party sing a contract.

According to the English law, there are several types of representation. In the UAE, there are no such divisions. It may mean that the Arabs do not actually care about the level of harm caused by misrepresentation but categorize the fraud as one particular reason of harm. In respect to such categorization, the English law presupposes the idea that a contract should not be always cancelled if the case of misrepresentation takes place. In the UAE law, any type of misrepresentation leads to the cancellation of a contract with the necessity to investigate the conditions under which a contract is signed.

In other words, according to the English law, misrepresentation is dangerous and may lead to unpleasant outcomes in case a deceived party suffers from any kind of harm. The UAE law seems to be severer because people take care not only about the actual harm but want to calculate the level of moral damage in addition to possible financial losses. Besides, in the UAE law, both parties have to be in good faith if they want to sign a contract. It is possible to say that, even in terms of the law, the Arabs turn out to be more spiritually dependent in comparison to the reserved and definite English people.

Duress

In fact, the UAE and English laws are rather similar in terms of duress, its definition, methods, and outcomes. It is usually a situation when some force is used to make one party sing a contract or act unlawfully under physical or psychological pressure.

The main difference between these two laws is the conditions under which duress takes place. In the UAE law, it is properly stated that if the case of duress happens between a husband and a wife is under a special condition. It is stated that “if a husband coerces his wife by beating her or forbidding her to see her family or the like, to cede to, him a right of hers or to give him property, the disposition will not be effective” (Hall 37). It proves that family relations and gender roles are important for the Arabs even if the law is taken into consideration. The English law has nothing in common: duress has its own definition, and if it is proved, a person can have a kind of additional defense (Whincup 319).

Conclusion

In general, research done in the paper helps to realize how different the laws of two countries can be even if they have one goal to be achieved. The laws make people keep order, decide properly, and choose legally approved methods. However, even the cultural background may presuppose the way of how the law can be treated by different nations and how the cases of violation or disobedience have to be identified. The UAE and English law may have a lot in common. Still, there are also many details like several additional words in definitions or an extra article in the law about “gender role” specification that may considerably change the way of how misrepresentation or duress can be treated by the Arabs or the English.

Nowadays, people like travelling and developing various international contracts for their business. As soon as the decision to make a deal with a foreigner takes place, it is very important to clarify all points of a contract and clear up how such terms like misrepresentation, duress, etc. are defined in order to know what to expect from the law and how to be protected by the law. The English and UAE laws may differ, but they will never allow people making mistakes or wrong decisions without consideration.

Works Cited

Abe, Lisa. “Representations, Warranties and Indemnities for Technology Agreements.” Information Technology Law Spring Forum (2011). Web.

Hall, Marjorie. n.d. The Civil Code. Web.

Koffman, Laurence and Elizabeth Macdonald. The Law of Contract. New York, NY: Oxford University Press, 2010. Print.

McKendrick, Ewan. Contract Law. New York, NY: Palgrave Macmillan, 2015. Print.

Nassif, Karim. United Arab Emirates: Contractual Misrepresentation under UAE Law.Mondaq (2011). Web.

Whincup, Michael, H. Contract Law and Practice: The English System with Scottish, Commonwealth, and Continental Comparisons. Frederick, MD: Kluwer Law International, 2006. Print.

A contract is an agreement between two parties, which is known as a bilateral contract. A unilateral agreement cannot be tantamount to a contract. In a contract, there can be more than two parties. In a multiplicity or plurality contract, there may be many numbers of parties entering into one contract. In such a scenario, we will have more than one creditor or debtor in respect of a single obligation.

When there are many parties, then the question arises whether a co-debtor is liable for and/or a co-creditor is to accomplish either a proportionate or the whole performance share thereof. In this regard, there are the following three possible scenarios: (Bhana, Bonthuys & Nortje 2009: 196).

Simple entitlement or joint liability

When several debtors pledge to offer a divisible performance to a creditor, they are jointly liable. In other words, each party is liable to undertake an equal part of the performance. A separate duty or commitment will henceforth be established in respect of each performance due by each debtor.

Illustration: A contract is entered between A, B, and C in terms of which A, B, and C agree to donate £ 30000 to D. In this case, it is a simple co-debtorship as each will have to pay £ 10,000 each.

Simple Joint Entitlement

When several creditors are warranted to a divisible performance, each creditor will have a right to an equal component of the performance. A separate duty or obligation will be established about each performance that each creditor is authorized to have. (Bhana, Bonthuys & Nortje 2009: 196).

Illustration: A agrees to pay B, C & D £ 30000. This is a simple co-creditorship, each creditor will be authorized to receive £ 10000 from A.

Whether a contract is a simple co-debtorship or co-creditorship, this will finally depend upon the objective of the parties. Moreover, if there is a divisible performance and the parties do not mention otherwise, the above position will prevail.

Common Joint Liability or common co-debtorship or entitlement

Under this type, the creditor cannot claim either the whole performance or any part performance from one co-debtor alone. This is mainly due to a single obligation being established regarding the whole performance.

Illustration: A contract is entered whereby A, B & C agree to give a horse by way of donation to D. If this is a case of common co-debtorship, D will have to sue A, B, and C jointly to claim the horse. In this type of contract, D cannot sue B alone for the delivery of the horse. (Bhana, Bonthuys & Nortje 2009: 197).

Common Joint Entitlement or Common Co –Creditorship

Under this type, co-creditors have to conclude the performance jointly. Thus, the co-creditors cannot claim either individually or separately. This is mainly due to single duty being created about the whole performance.

Illustration: D enters into a contract for selling his house to A, B & C. If this falls under common co-creditorship, then A, B & C have to sue D jointly for taking possession of the house. D cannot be sued by A alone for the delivery of the house.

It is to be noted that ultimately, it is the intention of the parties as set out in the contract that is going to decide whether the performance is due to common co-creditorship or co-debtorship. Moreover, if performance is physically indivisible, then the above position will happen. (Bhana, Bonthuys & Nortje 2009: 197).

Joint and Several Entitlement or Liability

• The performance is owed by the individual (separately) and co-debtors jointly:
  • The creditor could select to claim the complete performance jointly from all the co-debtors and this is known as joint liability.
  • The creditor may opt to claim performance either in full or in part from any one or more of the co-debtors as debtors are having joint liability.
  • If one of the co-debtors satisfies in whole, the commitment to a creditor is discharged and the other debtors are not answerable to a creditor.
  • A creditor can claim either from all or from one of the remaining co-debtors if one co-debtor performs in part.
  • Where the debt is to be repaid and however if the creditor releases one of the co-debtors, the other co-debtors are still liable but their liability is reduced proportionately. (Dwyer v Goldseller 1906 TS 126 & Boyce v Bloem 1960, (3) SA 855 (T).
  • The association between the several and joint co-debtors themselves will depend upon the terms of the agreement between them. (Bhana, Bonthuys & Nortje 2009: 197).
• Illustration:
  • A, B & C agree to donate £30,000 to D. If this is the case of joint and several liabilities, D, the Creditor may elect to claim the above amount from A, B & C 9 (the co-debtors) jointly, or he may select to claim the whole amount from any of the co-debtors alone. (For instance, A alone).
  • If A pays D £10,000, then D can claim the balance of £20,000 from B and or from C only. (Bhana, Bonthuys & Nortje 2009: 197).
  • If A pays D £30,000, then B and C will not be liable to D anymore.
  • Whether A can claim £20,000 from B and C will solely depend upon the terms of the agreement between them.

Joint and Several Entitlement

The co-creditors are authorized to claim the performance individually and jointly.

• The co-creditors could select to claim together from the debtor.
• The debtor may select the co-creditor to whom he prefers to make a performance. Performance to such a creditor could discharge the obligation of the debtor to the other co-creditors.
• Anyone co-creditor may on his own volition either in full or in part from the debtor. In such a case, the debtor is not able to choose the creditor to whom to execute.
• The association between the several and joint co-creditors will rest on the terms of the agreement between them. (Bhana, Bonthuys & Nortje 2009: 198).

Illustration: D concurs to contribute £30,000 as a donation to A, B, and C.

• If this falls under the joint and several entitlements, A, B, and C (the co-creditors) may elect to jointly claim from D, the debtor.
• Though, D may elect to pay the £30,000 to either A, B, or C.
• Nevertheless, if A, B, or C claims performance, D cannot select the person to whom he wishes to pay.
• If D wishes to pay £30,000 to A incomplete, the issue, whether B and C can claim from A will rest upon the terms of the agreement between A, B, and C. (Bhana, Bonthuys & Nortje 2009: 198).

Joint Liability

The practical importance of the joint liability is to be considered particularly in cases where a retailer is unwilling or unable to execute his contract with a credit cardholder or has become insolvent. Moreover, joint liability connotes that the creditor can be held accountable for claims over the actual amount of credit granted. For instance, if A purchases an expensive mobile phone from B, paying a token amount by credit card and the balance of the price in cash, the credit card provider will be held responsible to refund the whole sum if B becomes insolvent and thus B could not fulfill his obligation to deliver the mobile phone. However, it is not clear whether the credit card holder can also terminate the credit card agreement for an infringement of the contract by the retailer. Further, it is to be observed that some credit cards like Diner’s Club and American Express are not falling under “Section 75 of the Consumer Credit Act of 1974 “ as they will apply only to regulated agreements. (Banakas 2007:239).

Often in a medical negligence case, more than a person may be involved in causing a patient’s total harm or injury. Under the doctrine of joint liability, several individuals (doctors, nurses, etc) may be held accountable for contributing to the injury. In such a type of case, a plaintiff may recover damages either from one or from all. (Banakas 2007:239).

For instance, if D is assured by A, B & C that they will pay £ 5000 to D, then D may compel either A or B or C or any two of them to pay £ 5000. Under English law, the liability of joint promisors is only joint and not several, and accordingly, all the joint promisors have to be sued jointly. Further, under English law, discharge or release of any of the joint promisors shall discharge all the joint promisors. For instance, in Kirtee Chander v. Struther (1878), 4 Cal.336. , some of the partners of a firm were sued by the plaintiff for damages. However, the plaintiff made a settlement of his claim with one of them and agreed to withdraw his claim and also case filed against them. It was held by the Indian court that a suit could be carried on the rest of the partners. However, the position under English law is different. Under English law, if the promise discharges one of the several joint promisors, such discharge will be construed as a discharge of all the joint promisors. Thus, under English law, a case has to be filed against all the promisors jointly. (Gulshan 2005:1-72)

In Byers v Dobey ( 1 H. Black.236), it was held that a contract entered by two defendants to pay a definite sum of money to a third party equally, out of their private cash was a joint contract. It was fruitless claimed that the wording “private cash “and “to be paid equally “demonstrated a separate liability. The wording “each” in this contract is not more several than “equally.” (Wyka, Mathews & Clark 2001:25).

In Lee v. Nixon 9 1 Ad.& E.201;s.c. 3 Law J.Rep ( n.s) K.B.160, though the specific contract was held not to be joint, it was admitted that though the terms of a contract are several, it may be considered as a joint contract if so meant.

In Byers v Dobey, though one of the provisions of the contract was that the defendants should pay a certain sum of money of all taxes whatsoever and that demonstrated that the agreement was joint, and it was deemed notwithstanding the word “equally”. Here, the connotation was that the plaintiff should be fully reimbursed by both the defendants.

In Collins v Prosser, 1 B. & c.682; s.c 1. Law J Rep. K.B 212, a bond by various obligors in £1000 each with a stipulation that G.B.M should submit a real account, was pronounced as several bonds, but the language was more distinct and definite.

The case Pollock, C.B is clear and is unambiguous and is differentiable from Byers v Dobey since one part of the contract was mentioned clearly as a joint. The main question is what did the parties have in mind? Surely, they intended to reimburse the plaintiff as to the whole, but only by paying 200/= against each of them and there was no joint liability on their part. (Great Britain verdict 1852: 555).

In Dwyer v Goldseller (1906 TS 126), the respondent was permitted to sue both partners, jointly and severally, for the whole amount of the disputed debt. The defendant was, therefore, authorized to have judgment entered against both partners, jointly and severally –the one paying, the other to be freed, for the sum agreed or admitted or the amount proven as in the case of the plaintiff.

In the given case, Bonnie and Clyde buy a yacht from Dagobert for £100,000.it is agreed that bonnie and Clyde owe the price jointly. When no payment is being made at all, Dagobert asks Clyde to pay the £100,000. Clyde tells Dagobert “while I am unable to pay £100,000, I would like to give you £50,000 if you agree that I owe you no more than that”.Dagobert answers “That’s alright as long as there is a chance to get the second half from Bonnie”. Shortly after this, Clyde pays Dagobert £50,000. A few months later bonnie, who has no surviving relatives, dies penniless. Dagobert asks Clyde to pay the remainder of £50,000. Clyde refuses to pay.

In this case, Clyde has to pay the balance which is payable by Bonnie, who has died penniless, or else he has to return the yacht to Dagobert and receive back his money.

This given case is more analog to the following situation, if A purchases an expensive mobile phone from B, paying a token amount by credit card and the balance of the price in cash, the credit card provider will be held responsible to refund the whole sum if B becomes insolvent and thus B could not fulfill his obligation to deliver the mobile phone.

Here, Bonnie expired and Clyde has the obligation either to pay the balance amount to Dagobert for getting the ownership of Yacht, or else he has to return the yacht to Dagobert and get back his money.

For instance, in a partnership, if a partner dies, the remaining partners have to meet the firm’s debt. In a joint bank account, if one account holder dies, the other account holder is responsible for the repayment of the loan received from the bank. Applying the above principles of joint –liability, Clyde must pay £50,000 to Dagobert being the amount payable by the deceased Bonnie.

List of References

Banakas Stathis. (2007). Intruding the contracting into others-the English way.

Bhana Deeksha, Bonthuys Elsje & Nortje Minette. (2009). Student’s Guide to the Law of Contract. London: Kluver.

Court of Exchequer. (1852) English Reports in Law and Equity; Containing Reports of cases in — Volume 11. London: The Law School Gift of Rufus E. Ragland.

Gulshan, S.S. (2005) Business and Corporate Law for C.S Professionals. New Delhi: New Age International.

Wyka, Kenneth A, Mathews, Paul Joseph & Clark, William F. (2001). Foundations of Respiratory Care. London: Cengage Learning.

In regards to the case between Brian and Harry, Harry won the case in which he claims a breach of contract by Brian. Brian made a promise, which he did not honor. Brian did this while he was in his right state of mind implying that he is liable to answer for failing to sell the trains to Harry. Although it was not put down on paper, the promise was made thus Brian’s refusal to honor the promise is deemed a breach of contract for their promissory estoppel (Sharma, 1994). Promissory estoppel is possible when a promise of future conduct or intention is agreed upon by two parties. In this case, a promise was made agreed upon, which the promissory, should have fulfilled.

The promisor makes a promise that he is expected to induce action. In case he fails, a detrimental loss is caused to the promisee, which could have been avoided if the promisor had enforced his promise (Sam, 2006). In this case, Harry suffers loss because he dedicated his time and money building a 2,000-square foot room onto his house expecting that Brian would eventually sell him the trains as he had promised two years ago.

Besides that, he had also borrowed money from his aunt to buy the trains because he justifiably relies on the promise. The element of invoking promissory estoppel is that the person promised justifiably relies on the promise to act relying on the fulfillment of the promise.

Promissory estoppel transpires when there is a mutual agreement between the two parties. Indeed, there was such an agreement between Brian and Harry. The contract was made when both were on a visit. It was during that time when Brian told Harry that he would be retiring in two years from Foodmart Company, thus he would sell his trains and spend his time traveling around the world in real trains. He promised to sell the trains to Harry because he was confident that Harry would take care of them. On the other hand, Harry agrees that he would buy the trains from Brian. This is a clear indication that the two had a form of contract, thus Brian is in breach of the contract by selling the trains to James; contrary to their agreement that he would sell the trains to Harry (Sharma, 2006).

Also, Harry had already informed Brian of his ongoing plan to build a room to shelter the trains, but Brian just smiles while he knew very well that he would not sell the trains to Harry. His action of not selling the trains to Harry, and instead to James is a breach of their agreement, which Harry had relied on in good faith.

Therefore, justice must be done treating Brian’s statement as a promise that made Harry result in taking action of building a room and borrowing money from her aunt to buy the trains with the expectation that indeed Brian would honor his promise. In essence, the promise was reasonable, and that is why Harry relied on the promise.

A promissory Estoppel requires that the victim who relied on the promise to be compensated for his detriment (Sam, 2006). In this case, Harry relied on the promise to build a room for the trains and so Brian should be stopped based on the doctrine of promissory estoppel.

Works Cited

Sam K. A. (2006). Promissory Estoppel: What it is and how it can work in construction cases, Reeves Journal (2) 216-288.

Sharma, L.K. (1994). The doctrine of Promissory Estoppel. Mumbai: Deep & Deep Publications.

Introduction

The contract between the government and Chill-Out can be terminated. The Chill-Out company did not fulfill the exact expectations of the government. By law, a contract is an agreement between the employer and the employee where there is a mutual duty for each party (Carrigan, 2012). However, a contract can be terminated by either of the involved sides. The agreement between the government and the Chill-Out company can be concluded fairly by the law. For a termination to be just, it has to be performed correctly, both procedurally and substantively. The employer should have fair and valid reasons for contract dissolution.

The Commonwealth Government of Australia can terminate the contract with Chill-Out enterprise as the firm did not fulfill the requirements as per the will of its employer. The company caused significant loss to the Australian government, as the COVID-19 vaccines supplied to the Queensland hospital and other hospitals in New South Wales were damaged and could not be implemented in the future. In addition to that, a primary goal of a seller or an entrepreneur is to make a maximum profit (Cheeseman, 2012). The vaccines were of no benefit to the Commonwealth government since they could not be distributed, and no profit was to be gained. This event failed due to the employee’s mistake, which may initiate the termination of the contract.

An established contract can be concluded due to several major reasons. Such causes include poor performance, physical incapacity, misconduct, and also employer retrenchment (August et al., 2009). The law states that, even after a contract disagreement, no party can take disciplinary action against each other (August et al., 2009). A conflict may arise due to loss or a need for financial compensation, hence, coherent and justified contract termination is required regardless of the established fault. In the contract between the Commonwealth Government of Australia and Chill-Out company, dissolution can be applied because of the poor performance of the employed enterprise, as in the case of Abrams v RTO Asset Management (Court of Appeal of New Brunswick, 2020). Considering the damage to the COVID-19 vaccines in the Queensland hospital, the worker wrongly programmed the cooling system, significantly decreasing the surrounding temperature, which remained between -2 degrees Celsius to -8 degrees Celsius. On the contrary, a temperature between +2 degrees Celsius to +8 degrees Celsius is required from the manufacturer. The employer might consider this event a voluntary mistake, deciding to conclude the contract since the vaccines are damaged and cannot be used for subsequent profit.

The contract might also be terminated due to an employee’s lack of capacity. Incorporation of the exclusion clause is a clear indication that Chill-Out company was not fully willing to enter into an agreement with the Commonwealth government (August et al., 2009). The enterprise could have been aware that its workers are incapable of complying with the requirements. However, as the corporation intended to secure the profit of corroborating with the governmental structure, the clause that alleviated liability issues was included, similar to the case of Goodlife Foods v Hall Fire Protection (England and Wales Court of Appeal, 2018). After the COVID-19 vaccines were destroyed, the employer became knowledgeable of Chill-Out’s unreliability and absence of needed resources to fulfill the contractual agreements, prompting the dissolution of the engagement.

Misconduct is another reason that the termination of this contract can be based on. Misconduct is referred to as a worker’s misbehavior due to negligence or lack of capability (Cheeseman, 2012). In the discussed case, considering the vaccines transported to the Queensland hospital, the worker of Chill-Out company failed to set the cooling system as required by the manufacturer of the vaccines. The employee controlling the cooling system in the Queensland storage warehouse was highly intoxicated by alcohol, thus producing an incorrect input. Considerable temperature decrease and vaccine damage were the results of these actions. As the human body is very sensitive, any consumed substances can negatively impact its capacity.

Another instance of misconduct can be applied to Chill-Out’s decision to store the sensitive vaccination material in old cooling systems of New South Wales, which malfunctioned, originating a tremendous increase in the surrounding temperature. Any actions connected to medicine management should be handled with great concern since the results of these activities might greatly impact the body. Given that old cooling systems are inferior to newer analogs, the condition of the older machines should have been evaluated, and any possible cooling failures should have been reported and examined. Additionally, during the storage of COVID-19 vaccines, the material was exposed to high temperatures between +15 degrees Celsius to + 20 degrees Celsius, and the enzyme present in the vaccines was denatured. In this regard, the vaccines became unsafe for use, and the event constituted a loss to the Commonwealth Government of Australia. Considering that future depletion of financial and medical resources can cause adverse ramifications for the state and its citizens, the contract can be terminated.

Ignoring the Exclusion Clause, Explain Whether the Commonwealth is Entitled to Receive Some Compensation and If So, How Much

In a scenario where the exclusion clause does not exist, the Commonwealth Government of Australia is entitled to receive compensation given that the COVID-19 vaccines were damaged while handled by Chill-Out workers. The duty of the management of Chill-Out company is to monitor the work of its employees (August et al., 2009). The contract between the Commonwealth Government of Australia and Chill-Out established the collection procedures for the COVID-19 vaccines once they land in the country, as well as their future storage and distribution. The exclusion clause in the contract stated that after the damage of the vaccines by way of nature, the cost would be attributed to the Commonwealth government. Based on the characteristics of the contract, the compensation cost would be as follows if the exclusion clause was to be ignored:

• $90,000,000 – the cost of vaccines taken to Queensland.
• $180,000,000 – the cost of vaccines in New Wales South.
• $5,000,000 – cost incurred for securing convoys in transport. Since the employer said, “We cannot just throw it into Bob’s pickup truck again and drive it down the road.”
• Total calculations: $90,000,000 + $180,000,000 + $5,000,000 = $275,000,000.

The $3,000,000 should not be included in the compensation because the COVID-19 vaccines had not been transported to the hospital, hence, the freezers needed for hospital storage had not been discussed in the arrangement. The $20,000,000 should not be reimbursed as this cost accounts for additional community outreach. Considering that the COVID-19 vaccines were damaged during transport, they were not yet available for the population members.

Whether Chill-Out Would Escape the Liability by Relying upon the Exclusion Clause

Chill-Out has the right to avoid the termination of the contract and even escape the necessity of compensating the damage to the COVID-19 vaccines. A contract is a binding agreement between two parties whereby each of the two parties agrees to corroborate according to the terms and conditions laid down (Cheeseman, 2012). By incorporating the exclusion clause, Chill-Out company hoped that the management of the Commonwealth government would notice it, compelling the authorities to agree or disagree with the suggested terms. Chill-Out might evade compensation payments to the government since the contract that was signed by the state officials thoroughly indicated that under no circumstances will the carrier be responsible for the loss of the commodities.

The possibility of injury and carrier fault was also discussed in the clause. In addition to that, any delay in delivery, as well as damage or destruction of goods, “by whatever cause,” becomes the responsibility of the customer. However, the Commonwealth government representative decided to sign the contract form without reading the terms and conditions presented by Chill-Out company. Chill-Out can escape the liability by arguing that they assumed that the Commonwealth government agreed with the contractual details and the exclusion clause since the enterprise did not receive a letter declining the terms (Cheeseman, 2012). The representative of the Commonwealth possesses a mandate to act as a literate leader and read the statements in the contract form. By law, it is the mistake of the Commonwealth government representative to have signed the agreement without reading the terms and conditions, either knowingly or unknowingly, since a contract is legally binding. Chill-Out has the right to escape this liability and compensation payments to the Commonwealth Government of Australia.

References

August, R., Mayer, D., & Bixby, M. (2009). International business law: Text, Cases, and readings. Pearson.

Carrigan, M. (2012). Business law. Oxford University Press.

Cheeseman, H. R. (2012). Business law (8^th ed.). Pearson.

Court of Appeal of New Brunswick. (2020). Abrams v. RTO Asset Management [2020] NBCA 57.

England and Wales Court of Appeal. (2018). Goodlife Foods Ltd v Hall Fire Protection Ltd [2018] EWCA Civ 1371.

The hypothetical client, Becky, has been forced to sign a contract under threat by a contractor called Ed. This occurred initially since Becky attended a meeting under the influence of alcohol and was also later threatened by Ed to sign a new contract promising him more money while Ed’s acquaintance prevented her from leaving. It is the client’s goal to rescind the contract, and she can do so in correspondence to the capacity to contract and duress and undue influence.

The intoxicated state of an individual, by way of either alcohol or drugs, has the potential to deprive a person of the capacity to contract. Intoxication that affects the client in such a way that they no longer have an understanding of the business proceedings of a contract voids their capacity to contract. According to Section 16 of the Restatement (Second) of Contracts, intoxication serves as the grounds for lack of capacity in the case that the second party was aware of the individual’s state (Langvardt et al., 2019). They would also have to be aware that they were unable to understand or make reasonable decisions concerning the contract. In the case of the client, while her memory is not complete, it cannot be stated definitively that she was not aware of the business proceedings. However, due to Ed’s further actions, it is clear that he was aware of Becky’s state by claiming her to have committed fraud.

Duress occurs in the case that an individual signs a contract under threat and without having alternative options. Due to the client’s inability to dispute Ed’s claims and the physical threat of his acquaintance, the client was unable to do anything but sign the new contract. Additionally, economic duress was present as Ed had threatened that the contract would not be closed in any other way, which would alter the career and earnings of the client. Undue influence has also occurred as Becky was under unfair and false persuasion, and Ed had both economic and physical control over Becky’s wellbeing.

Reference

Langvardt, A. W., Barnes, A. J., Prenkert, J. D., McCrory, M. A. & Perry, J. E. (2019). Business Law: The Ethical, Global, And E-Commerce Environment (17th e.d.). McGraw Hill Education.