Introduction: Contracts are legally enforceable promises. There are two requirements for contract formation: agreement and consideration. An agreement involves a valid offer being made by an offeror to an offeree and said offer being validly accepted by the offeree and communicated to the offeror. The second requirement is consideration, meaning the two parties exchange something of legal value. Contracts serve the purpose of ensuring stability, predictability, and certainty, as well as deterring defection, in business dealings. The objective theory of contract law states that only the language of the contract should be considered in contract interpretation. This theory ignores entirely the intent of the parties. However, contract law is largely …show more content…
In Clifton Jones, v. Star Credit Corp., 59 Misc.2d 189 (1969), for example, the plaintiffs, welfare recipients, agreed to purchase a freezer on credit from a salesman. Overall the purchase totaled $1,234.80, however, the freezer had a maximum retail value of $300. The court found the aforementioned contract to be unconscionable as the salesman took advantage of the poor, less educated plaintiff. Unconscionability, as a means to end a contract, was created under the Uniform Commercial Code, a statutory law intending to protect vulnerable consumers from predatory contracts. In Jones, the court ordered Star Credit Corp to revise and amend the contract so as to make the payments equivalent to those already made by the plaintiff, approximately $600. The Uniform Commercial Code and the associate use of unconscionability “tells not only the buyer but also the seller to beware. ” Flexibility in contract enforcement stemming from unconscionability has the self-evident benefit of protecting the ‘underdog’ from predatory business practices. Nevertheless, it comes with some risks. The principle of unconscionability undermines the precept that contracts are mutually agreed upon and as such considered fair. The court thus puts its self in a role of determining the fairness of contracts and undermines free market principles. Furthermore, it hampers businesses’ …show more content…
If one party meets the threshold of substantial performance, meaning he completes the most significant aspects of the contract, but fails to fulfil some minor terms, the court will not necessarily enforce the contract exactly as written. Further, the court may not release the non-breaching party from his duties. Rather, the non-breaching party will be granted compensatory damages equivalent to the difference between the fair market value of what was to be performed under the contract and what was actually delivered. In Jacob & Youngs, Incorporated, v. George E. Kent, 230 N.Y. 239, the plaintiff, a construction company, built the defendant’s house mistakenly using a type of pipe that differed from the type specified in the contract. The defendant, upon discovery, refused to make his final payment and the plaintiff is suing for the remaining balance, demanding that the plaintiff make the costly renovations required to replace the pipes. The court ordered the defendant pay the remaining balance, reasoning that “an omission, both trivial and innocent, will sometimes be atoned for by allowance of the resulting damage, and will not always be the breach of a condition to be followed by a forfeiture. ” The court determined that the relevant measure of allowance for damages should be the difference in market value, rather than the cost of replacing, as the pipes,
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"A contract is a legally enforceable promise or set of promises. In other words, when promises have the status of contract, the contracting party harmed by a breach of the contract is entitled to obtain legal remedies against the breaching party" (Mallor et al., 2015, p. 320)
Contracts are legal binding agreements whether verbally or written between two or more competent people. They also can be contractual agreements between businesses for services or goods, employment, trade, or lease. Regardless of what type of contract the parties are entering there are six elements they need to follow in order to come to a successful legal understanding. Contracts are built on the fundamentals of offer and acceptance, intention to create legal relations, consideration, legal capacity, consent, and illegal and void contracts. Any contract which represents false statements, unwarranted
Hadley v. Baxendale is the classic case of contract law, which gave the rule that considerable harm, could be recuperated just if; at the time the agreement was made . The facts of the case are the petitioners, Mr Hadley and an alternate, were mill operators and mealmen and cooperated in an association as proprietors of the City Steam-Mills in Gloucester. They cleaned grain, ground it into dinner and dressed it into flour, sharps, and wheat. A crankshaft of a steam motor at the factory had broken and Hadley organized to have another one made by W. Joyce & Co. in Greenwich. When the new crankshaft could be made, W. Joyce & Co. obliged that the broken crankshaft be sent to them keeping in mind the end goal to guarantee that the new crankshaft might fit together legitimately with alternate parts of the steam motor. Hadley contracted with litigants Baxendale and Ors, who were working together as normal bearers under the name Pickford & Co., to convey the crankshaft to designers for repair by a certain date at an expense of £2 sterling and 4 shillings (current quality of about £240.00). Baxendale neglected to convey on the date being referred to, bringing about Hadley to lose business. Hadley sued for the benefits he lost because of Baxendale's late conveyance, and the jury recompensed Hadley harms of £25 (present esteem about £2500). Baxendale claimed, battling that he didn't realize that Hadley might endure any specific harm by reason of the late conveyance.
A contract is an agreement between two parties in which one party agrees to perform some actions in return of some consideration. These promises are legally binding. The contract can be for exchange of goods, services, property and so on. A contract can be oral as well as written and also it can be part oral and part written but it is useful to have written contract otherwise issues can be created in future. But both the written as well as oral contract is legally enforceable. Also if there is a breach of contract, there are certain remedies for that which are discussed later in the assignment. There are certain elements which need to be present in a contract. These elements are discussed in the detail in the assignment. (Clarke,
A contract is a written or expressed agreement between two or more parties to perform a service, provide a product or commit an act for a valuable benefit known as consideration and is enforceable by law. The agreement will create rights and obligations that may be enforced in the court. There are several types of contracts, and each have specific terms and conditions. We perform contracts every time and everywhere without knowing we are into it for example buying and selling of goods from a supermarket, taking a bus etc. For a contract to be made there must be an offer, offeree and offeror. An offer is a proposal to contract which is accepted completes a contract. An Offeror is the maker of an offer while an offeree receives the offers made by an offeror.
Damages can fall under several different categories. Compensatory damage is directed to put the non-breaching party in the position that they had been if the breach had not occurred. Punitive damages are payments that the breaching party must submit for above and beyond the point that would fully compensate the non-breaching party. Punitive damages are meant to punish a wrongful party for particularly wrongful acts, and are rarely awarded in the business contracts environment. Nominal damages are token damages awarded when a breach occurred, but no money loss to the non-breaching party was proven. Liquidated damages are specific damages that were previously identified by the parties in the contract itself, in the event that the contract is breached. Liquidated damages should be a reasonable estimate of actual damages that might result from a
Contractual agreement has always been viewed in terms of offer and acceptance. The universal principle to contract law has always been parties may get into an agreement in whichever way they deem fit and they are subject to certain terms as they choose. As far as legal requirements vital to their formation are binding contracts may be formed. Moreover a binding agreement may be manifested in terms of writing or in verbal form.
A contract is an exchange of promises or the exchange of a promise for an item or act in return, which is enforceable by law (Kubasek et al, 2014). There are many different types of contracts such as express, implied, void, voidable, and quasi. It is important for contracts to be enforced in order to foster trust in the market place. Although, there is a substantial monetary reason for the Scuppernong grape product manufacturer to end its relationship with Don Willetts, Don’s request for continued relationship due to good faith and fair dealing and an implied contract must be honored.
The contract is a voluntary, deliberate, and legally binding agreement between two or more competent parties. One party makes an offer that is accepted by the other party. If without mutual assent, there is no contract. Every contract must involve at least two parties that are the person who proposes
The basic law of a contract is an agreement between two parties or more, to deliver a service or a product. And reach a consensus about the terms and conditions that is enforced by law and a contract can be only valid if it is lawful other than that there can’t be a contract. For a contract to exist the parties must have serious intentions, agreement, contractual capacity meaning a party must be able to carry a responsibility, lawful, possibility of performance and formalities. Any duress, false statements, undue influence or unconscionable dealings could make a contract unlawful and voidable.
A contract is generally considered to be an exchange of promises or an agreement between parties which in due course legally binds the parties; this can be enforced by the English Law. A contract is always, referred to the basic foundations of Contract Law, which refers to promises being kept amongst two parties. It is clear that all people make contracts nowadays and do not even consider for a moment that they are forming contracts; these can be formal or informal, oral or written.
There is no contract unless and until the offer is accepted by the person to whom the offer is addressed. It can be made orally as in writing or by conduct. For acceptance to be valid in law the rules on acceptance must be satisfied. Acceptance must be unconditional and final.