Different Types of Contracts in Law

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Table of Contents

Introduction
Voluntary consent
Contract by Minors
Impossibility of performance
Breach of Contract
Merchant’s firm offer
Shipment and Destination Contracts
Works Cited

Introduction

A contract is an agreement entered into by two or more persons with a view of creating legal obligations (Saleemi 2002:135). A contract differs from an agreement in that while an agreement does not contemplate to create legal obligations, a contract intends to create obligations that are legally enforceable (134-5). Generally, agreements relate to domestic relationships while contracts relate to commercial relationships.

Voluntary consent implies an agreement based on free will. Voluntary consent is a salient feature of contracts. It therefore follows that where there is no free consent, there is no contract unless the person for whom the contract is entered into is incompetent to contract (Abott 2007:408). In the case of Jerome and Philip, the contract is not valid. This is because Philip relies on the fact that Jerome is completely dependent upon him for upkeep to coerce him into consenting to transfer his rights to the land to Philip at a cheaper price. Philip had a social and moral responsibility to care and provide for the ageing Jerome especially that he was a kin to the elderly Jerome.

It is to be found that Philip exerts undue influence on Jerome to have Jerome consent to this transfer. Arising from the threat of losing Philip’s support, Jerome had no otherwise but to consent to transfer his rights in the property to Philip in order to continue surviving. To this extent, it is pretty obvious that had it not been for Philip’s coercion and undue influence, Jerome would not have consented to. As a vitiating factor, Philip’s undue influence on Jerome awards Jerome the chance to set aside the contract (119-120).

Contract by Minors

Minors are such persons who have not attained the legal age to contract/consent (Abott et al. 2005:214). In many countries, agreements that contemplate legal obligations are considered voidable to the extent that one of the parties is incompetent by virtue of being a minor. The minor in such situations is the one to annul it. In terms of liability, it is upon the court to determine whether the value ($500 per month) of the apartment is up to the prevailing standard of living and not exaggerated in value. If it does not fall within the range of standard living, then the contract was in deed void ab initio.

According to the British Columbia Infants Act (Miller and Jentz 2005:404), all agreements contemplating legal obligations and which involves infants cannot be enforced against the infant. This is in disregard of whether the subject matter of such contracts is necessities or beneficial services. Here, infants can avoid the obligations at their choice but the adult party is entirely bound. In this regard, Kalen was right in terminating the contract and handing over the key given the fact that he had not even reached the majority age, while in the contract, to ratify the contract (Abott et al. 2005: 214-216).

Impossibility of performance

This is a legal excuse or defense for setting aside of that which the contract anticipated (Adams 2010:122). It is a defense in the sense that the two parties had agreed to perform the contract but had not factored in such other contingencies that could render the whole or part of the contract unfeasible. Impossibility of performance therefore excuses performance of the duty imposed on the basis that had the parties foreseen the occurrence of the condition, they would have altered the terms (p121-123). In the case of Millie and Frank, Millie is bound to succeed in her defense by relying on the doctrine of objective impossibility.

This is because while contracting, the two had not anticipated the occurrence of drought, which is beyond human control. The drought had rendered the contractual duty impossible to perform both physically and commercially. The nonoccurrence of drought was the basic assumption in their contract (Miller and Jentz 2005:406).

Given that there is bound to be an increase in production cost on the part of Millie if she can agree to pay in the next season, Millie is bound to succeed in her defense especially that the additional cost is to be occasioned by an unanticipated contingency. According to UCC (2-702(3)), failure in crops occasioned by contingent forces relieves the farmer of the contractual duty relating to such crops not to deliver full amount provided such farmer fulfils a reasonable and fair performance. Under this situation, the other party is at liberty to accept the reasonable share or set aside the contract altogether.

Breach of Contract

In the case of Bannister and Bemis Company, it is a question of non-compete covenants (otherwise referred to as Covenants Not to Compete -CNCs) and how reasonable such a covenant was. Such covenants are generally enforceable so long as they are reasonable and time bound (Gifis 1996:134). While contending that such a covenant was valid during the course of work, obligations imposed by such a contract after the termination could be treated as not binding if no sufficient consideration is furnished. In the case of Bannister and Bemis Co., the covenant was reasonable to the extent that the company had to protect its trade secrets (p136).

The company breached the contract by failing to compensate Bannister after the termination of work as it was expressly agreed in the covenant. As a result of which, the plaintiff had incurred economic problems for the nine months he was out of employment (p134-135).

Merchant’s firm offer

In the case of Jennings and Wheeler, there was a binding contract since the offer made by Jennings was accepted by Wheeler, the intended offeree, within the intended period (Saleemi 2002:132). In accepting the offer Wheeler in fact furnished consideration thereby binding Jennings to it. And therefore, Wheeler has rights to enforce the contract. By going ahead to sell the same car, which was an object of Jennings and Wheeler contract, to another party was in breach of the contract. Jennings was in fact transferring a defective title (Abott et al. 2005:217).

Wheeler accepted the offer when he signed the letter and sending it to Jennings accompanying it with consideration of a value that was proposed by the offeror. Wheeler is therefore bound to succeed in seeking for damages because the injury or loss sustained is in the ordinary/normal course of things (Saleemi 2002: 133). This is on top of taking possession of the car as it was legally his.

Shipment and Destination Contracts

The Uniform Commercial Code provides that a sale is said to have occurred upon the analysis of all the forms material to the contract.

In the case of Carlsons vs Monaco Coach Corp., there was an initial offer which was offered by the seller and accepted by the buyers by appending their signature. Here, according to UCC, a sale has occurred. Since the acceptance was not expressly conditional on its part, it is not a counteroffer but simply terms complementary to the offer and there do not alter the contract (UCC 2007:2-207(3)). Given that the buyers did not object to the fact that the seller had in deed delivered the vehicle when the offer was signed, the contract binds.

But given that the two parties were dissimilar in the sense that the buyers were not merchants, they therefore relied on the seller’s expertise in determining the state of the vehicle before accepting. Now that this was not the case, the buyers are bound to rely on implied warranties of fitness and of merchantability and they can sue for damages (2-713).

Works Cited

Abott, K., Pendlebury N., Wardman K. (2005) Business Law. 8^th ed. Paperback.

Adams, A. (2010) Law for Business Students. 6^th ed. New York. Paperback.

Gifis, S.H. (1996) Law Dictionary. 5^th ed. New York. Barron’s Educational Series, Inc.

Miller R.L. and Zentz G.A. (2005) Business Law Today: The Essentials. 7^th ed. Paperback.

Saleemi, N.A. (2002) General Principles of Law Simplified. Nairobi: N.A.Saleemi Publishers.

UCC (2007) Official Text with Comments. California. The American Law Institute.

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