Contract law – problem question example Martina entered into a contract with Stars & Extras (S & E) providing that she would, in a period of five years, obtain all of her singing work through S & E and would not sing for any other agency other than S & E until the contract expired. Secondly, the analysis seeks to evaluate whether there was sufficient basis for either party to rescind the contract, or by the party rescinding the contract, a violation of the legal provisions under the contract law were violated. The purpose of this chapter is to examine good and bad techniques in writing law essays using two essay titles – one on contract law and the other on the legal system and constitutional law. For each title, the chapter first provides a poor and flawed answer to the question and then a much improved and acceptable answer to the question. Question: 1st YEAR - CONTRACT LAW - CASE STUDY Bigstore Furniture Ltd (“Bigstore”) is a retailer of household furniture. The company announced its summer sale on 1 July by placing the following advertisement in several national daily newspapers in the UK. Database of example Law essays - these essays are examples of the work produced by our professional essay writers. Database of example Law essays - these essays are examples of the work produced by our professional essay writers. word essays on the subject of commercial property law in the UK. Published: Wed, 09 May
For example, where there is a contract for the sale of a car that both parties assume to exist, although in reality it has been destroyed by fire, this contract is non-binding on the parties.
By contrast, where the parties are only mistaken about the model of the car, then this contract would be binding. Another example is when a person signs a written document mistakenly believing that it relates to something entirely different from what in fact it does relate to, in this case the person will not be bound by it.
This means that if X is told to sign a document which X reasonably believes to be something like a character reference to assist Z to obtain a loan from a finance company, and the document is later discovered to have been a guarantee of the loan contract, then the guarantee will not be binding on X. A third example is when Y cannot read, due to blindness or illiteracy or other disability. Someone else tells Y what is in the document and Y signs it.
The document Y signed is not what Y was told it was. The document Y signed would not be binding on Y. By contrast, if a person who signs a document believing it to be a contract does not read the terms and conditions that person will be bound by the contract and will not be entitled to plead mistake. Other factors may also be relevant to a successful plea of mistake. For instance, whether or not the defence of mistake will be allowed often depends on whether an innocent third party will be adversely affected by a decision that the contract is non-binding.
Again, if the signer was careless and failed to take reasonable precautions, the defence will not be allowed to succeed. For these reasons, it is wise to seek legal advice about whether or not a court would hold the contract binding on these grounds.
Different consequences flow, depending on the seriousness of the false statement made. False statements might be made where either: The parties come to agree and contract because one of them has been motivated to agree by a statement of fact something said or written that is not true.
Commonly, these types of statements have not actually been included in the contract itself but were an encouragement to enter into the contract. False statements affect the question of whether or not a contract exists.
Very serious false statements mean a court would view the contract as void see: The consequence is that monetary damages sufficient to place the wronged party back to their original position must be paid. In other less serious instances, the court will find the contract valid but the wronged party will be entitled to reject the contract or to treat it as at an end. Here, monetary damages sufficient to place the wronged party in the position they would have been in, had the contract been properly completed, must be paid.
Where a false statement has put the wronged party at a disadvantage or caused some loss, but not enough damage has been done to justify ending the contract, then the contract will be valid and the wronged party will be bound to the contract, but entitled to sufficient monetary damages to make up for the loss suffered as a consequence of the false statement.
The two most important factors considered to determine the level of seriousness at which a false statement will be viewed are as follows. If a false statement amounts to a condition of the contract, the wronged party is entitled to rescind see: A court may view the condition so seriously that without it the contract is void; that is, with the false statement taken out of the contract, there is no contract.
Less important statements are called "warranties". Where the false statement amounts to a warranty, the wronged party will only be permitted to receive sufficient monetary damages to make up for any loss suffered; the contract will continue to exist and the parties will continue to be bound by it.
What type of false statement was made? There are three types of false statements: It is very difficult to prove fraud. Once proved, however, the innocent party can rescind the contract; sue for damages for deceit, or both. An innocent misrepresentation could nevertheless be a serious false statement being a condition of the contract , or a breach of warranty.
The level of seriousness will be determined by an appraisal of all the circumstances of the contract. If innocent and without negligence, the only available remedy is rescission ' Negligent misrepresentation A negligent misrepresentation will arise where a party to the contract is under a special duty of care to the other party.
This special relationship will be held to exist where the person making the false statement claimed to have some special skill not generally possessed by an ordinary member of the community, and where that person was prepared to exercise this special skill on behalf of the person to whom the false statement was made. The wronged party must be able to show that: Once again, the level of seriousness of a false statement made in these circumstances can vary. Where there is a serious breach, the innocent party can rescind the contract and recover damages for negligence.
Duress is held to have occurred where there has been actual or threatened violence either to the other contracting party directly or to their immediate family, near relatives or close associates.
The duress may be made by someone acting under the instructions of the party to the contract. The net effect, though, will have been that a party has been forced into the contract by being deprived of their free will to act.
Duress now extends to contracts entered into as a result of threats to a party's economic well being, that is, a threat to a person's business or trade. This form of duress is called economic duress. The consequence of establishing duress is often that the contract is voidable at the election of the wronged party. Where the wronged party elects to have the contract declared void, monetary damages sufficient to place the wronged party in their original position must be paid.
Where the wronged party elects to continue with the contract, monetary damages to cover any loss suffered because of the duress must be paid. Undue influence is exercised by taking unfair and improper advantage of the weakness of the other party, to the extent that it cannot be said that that party intended voluntarily to enter into the contract.
The main reason for the rule against the use of undue influence is to correct abuses of trust and confidence. It is applied where the parties are in a relationship where one party may be able to exercise considerable influence over the other party. There are two categories of undue influence. The first is where no special relationship exists, but the stronger party will have used some fraud or wrongful act expressly to gain an advantage from the weaker party. The weaker party will have to prove that undue influence was actually exerted.
The second is where the parties are in a confidential relationship; most cases of undue influence fall into this category. A confidential relationship exists when one party's position towards the others involves a dependency or trust, in the form of authority or an expectation to give fair and independent advice to the weaker party. Where a confidential relationship is found to exist, a presumption of undue influence will arise.
It is then necessary for the stronger party to show that the contract was not the result of any undue influence. A confidential relationship and the presumption of undue influence can be established in either of two ways.
First, the parties may be in a well recognised special relationship, for example, solicitor and client, doctor and patient, religious or spiritual adviser and devotee.
Second, the confidential relationship, although not falling within any well recognised relationship, is such that the complaining party is able to show that the other party was in a position of influence. For example, it could be the relationship between a bank and its customer, because of a special position of trust that the bank had come to occupy in connection with the conduct of this customer's affairs.
It has been stressed, however, that in ordinary circumstances no presumption of undue influence arises out of a banker-customer relationship. Contracts can be illegal or void at both statute and common law. Categories of contracts Figure 1 category of contracts An agreement rendered void by statute is void and will not be enforced by the courts. Any money paid or property transferred under such an agreement may be irrecoverable.
A 'contract' deemed illegal when it is formed is totally void. Illegality may arise either because the contract is of a kind prohibited by statute, or because it is of a class regarded as contrary to public policy. Neither party has any rights or remedies.
Consequences of statutory illegality depend upon when the contract becomes illegal Consequences of statutory illegality depend upon when the contract becomes illegal. If it is illegal as formed, the contract is void ab initio and property is only recoverable if disclosure of illegality is not essential to the cause of action.
If the contract is illegal as performed, the contract is void, but not void ab initio.
Free Law essays
The guilty party has no rights, but the innocent party is little affected. Contracts which would violate the social or moral attitudes of the community and are void ab initio include: Three types of contract are void at common law: Contracts which attempt to oust the jurisdiction of the courts. Explain different types of contracts and explains their impact. Any special rules need to be considered.
The law recognizes that legally binding contracts can be written, verbal, or a mixture of both.
However, for business purposes, written contracts are usually preferred due to the following reasons: Here are various types of contracts in business law depending upon various legal transactions like transfer of property, sale of goods, etc. A formal legal advice is always recommended prior to making or accepting a business contract. Let us take a look at the different types of contracts in the words of business law. Additionally, contracts can be a combination of written and verbal agreements if the written agreement lacks detail and only covers very few terms.
Prior to signing, a written contract must: A definite written or oral proposal of the contract is accepted by an offeree in a way that plainly defines legal consent to the terms of the contract.
Other than a real implied contract consists of firm obligations that arise from a mutual agreement and goal of promise, which is not expressed orally. An implied contract cannot be labeled as implied in law because such a contract lacks the requirements of a true contract. The term 'Quasi Contract', is however, a more specific recognition of contracts implied in law.
Implied contracts depend on the reason behind their existence. Thus, for an implied contract to expand there must be some transaction, act or conduct of a party in order for them to be legally bound. A contract will not be implied if there are any chances of harm or inequity.
If there is no clarity of message, implication and understanding between the two parties, the court will not conclude any contractual relationship between the two parties. If the parties continue to follow their contractual terms, even after the contract has ceased to exist, an assumption arises that the two parties have mutually agreed to a new contract that has same provisions as the old contract and a new implied contract is formed.
This explanation could be incorrect to a certain point, since completion of occupation will mean that the contract has ended. But in case of executed contracts, there exists some act or transaction or an obligation that has to be performed at various point of time in the future according to the contractual conditions. It is also called a two-sided contract for the reason that of the two-way promises made by parties concerned in the contract. An independent contract is agree made by only one party.
The offeror promises to execute a definite act or an obligation if the offeree agrees on performing a requested act that is understood as a legally enforceable contract.
It just requires an acceptance from the other party to get the contract executed.