Contract and Its Discharge
A contract is always defined as an act of bringing an agreement between two or more people who intend to come up with a legally binding obligation. In most cases, the word binding is always used to ensure that the contract is valid and enforceable. In the case of Julie and Spencer, we find that there existed a contract that was for three years between the Complete Garbage and the City of Cambridge. The law provides that for a contract to be valid the parties in the contract should ensure that there is an offer and acceptance, there must a contractual capacity between the parties and also the object of the contract must be lawful.
Performance
A contract may be discharged by a performance where both parties fulfill their obligations under the contract and nothing remains to be completed. It is important for the discharge of the contract that performance must be strictly by the terms of the contract. In this case of Complete Garbage, we find that they are not in a position to discharge the contract based on performance, since it has not performed its duties fully that it had two years remaining to complete its performance (Jertz and Miller, 2004).
Frustration
The law provides that the parties to a contract must perform the respective duties or pay the damages that incur. The parties in a contract are always free to provide in the contract that it was to terminate the contract on its becoming impossible or on the happening of a specified event. But in the case where the parties have not made any specific provision against the contingency in their contract, the doctrine of frustration might be brought in as a defense by a party proving that a supervening event has occurred beyond the contemplation of the parties destroying the very foundation of the contract.
The effect of frustration on the parties under an agreement is that according to the rule of law the subsequent impossibility discharged the contract, the loss lay where it fell this means that money not due at the time of frustration could not be claimed but any sum due or payable could be recovered.
But in many cases when a contract is discharged as a result of frustration then the common law provides that all money paid before the discharge is recoverable, money which became payable before frustration ceases to be payable, the court will allow the parties to recover sums of money paid out on expenses incurred in connection with the contract, or to retain such sums from money already received under the contract and also where one party has received any benefit, other than the money payment, the court may permit the other party to recover a reasonable sum as compensation for such benefit on a quantum merit.
In this case of complete Garbage, we find that the business was being frustrated by the growing population in the city with such a situation they are more likely able to terminate (Emanuel, 2009).
Novation
By novation an existing contract may be discharged when a new contract is substituted in its place either between the same parties or between different parties, the consideration mutually being the discharge of the old contract. This type of arrangement between the parties is known as novation. In this case between the Complete Garbage and the City of Cambridge, the law provides for them room to create a new contract on the same subject but with different rules.
Damages
This is regarded as the normal remedy for the breach of contract, the aim of this is to put the injured party as far as possible in the position he would have been if the contract had been performed. The law provides that the damages for the breach of a contract should be such as may be fairly and reasonably be considered either arising naturally.
In the case of Complete Garbage and the City of Cambridge, no party is liable for any damages because the initial contract was made on assumption that in the stated years the population would have grown to a particular number and that never happened thus making the CG more likely face losses while carrying out its duties (Jertz and Miller, 2004).
Breach of contract
This is one way of discharging a contract meaning the failure of one of the parties to perform his obligation under the contract. It must be noticed that at this stage that although every breach of contract provides remedies to the innocent party, this does not necessarily discharge the contract. Thus, if a party breaks a term of the contract going to its condition, the other party will be released from his obligations under the contract.
But if the term broken is collateral to the main term of the contract, known as a warranty, the innocent party will not be released from performance and can only claim damages. In this case, we find that the Complete Garbage can breach the contract as a result of self-disablement whereby when the defendant disables himself from performing his contractual obligation or does some act that makes the performance of the contract impossible.
For the Case of CG, we find that at the end of the first year of the contract it broke even which eventually could have led it to breach the contract (Jertz and Miller, 2004). The option that the complete Garbage has is to discharge the contract given to him by the City Of Cambridge since they had already gone broke in the first year.
They can only do this By Waiver whereby the law provides that in case the contract is still executory a mutual agreement between the parties can release each other from their respective obligations and rights. The waiver can take part in any form not considering how the original contract was done. But in a contract where one of the parties has performed his obligation and agrees to release the other party from his obligation, he is not bound by his promise, and can still demand the performance of the contract unless his promise of waiver is under seal.
CG could have tried to manage this risk by ensuring that they receive the evidence of the in-writing agreement with the City of Cambridge. By filling the uniform commercial code
Uniform Commercial Code is applied to seal the gaps in the agreement that have been created between two people, under a situation where a specific provision does not exist. For this reason, the Uniform Commercial Code ensures that terms for the agreement are adhered to, by checking on the existing commercial papers daily, which allows most people to carry out contracts without involving lawyers or without following the legislative rules that exist in the specified country thus giving the people a humble time in carrying out various businesses without following the legal complications (Jertz and Miller, 2004).
The Importance of the Uniform Commercial Code
The Uniform Commercial Code plays a major role in filling the gap between such disputes where specific provisions are not provided even though there exists an implied condition, the code ensures that disputes are settled between these people by checking on the commercial papers that are used in the agreement between the parties, where it allows the parties to solve the issues without involving lawyers and following the legal instructions. The formation of contracts in this Uniform Commercial Code specifies that the parties should come up with an acceptance where written confirmation is made at a reasonable time with specified terms.
The Concepts of the Law of Tort
A tort is defined as an infringement of the civil rights belonging to individuals considered as individuals, in this case, the law states the wrong-doer has to compensate the injured party, also action is brought by the aggrieved party to obtain compensation. Under this law of tort, the law provides that three things must occur which are: some wrongful act or omission by the defendant, legal damage to the plaintiff for example some of his legal right is violated and finally the wrongful act must be of such a nature as to give rise to a legal remedy in the form of an action for damages.
Damages
In this law, legal damage is not the same as actual damage. Every infringement of the plaintiffs’ private right or unauthorized interference with his property gives rise to legal damage. The law provides that in all cases of tort, there must be a violation of a legal right and this is always expressed by saying that injuria sine damnum is actionable while damnum sine injuria is not.
By damnum, it means damages in the sense of money or loss of comfort or health. Damages and liability go together but not always. Sometimes an act done by the defendant has caused substantial damages to the plaintiff, but he is provided with no remedy for none of his legal rights has been infringed. The plaintiff must prove “injuria” i.e. some unauthorized interference with some general private right given to him by law (Jertz and Miller, 2004).
Negligence
The tort of negligence has been defined as a breach of a duty caused by the omission to do something which a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do or doing things which a prudent person and reasonable man would not do.
To maintain an action for negligence the plaintiff must prove that the defendant owed him a duty of care, there has been a breach of that legal; duty, and that the plaintiff has suffered an injury to his person or property. It appears that the tort of negligence embraces the above three ingredients, and unless all of them are present, the plaintiff is not entitled to succeed in his action. Thus the three words must be remembered that is duty, breach, and damages.
It follows that the actionable negligence consists in the neglect of the ordinary use of ordinary care and skill towards a person to whom the defendant owes such legal duty of care. This duty may arise from a legal relationship based on a contract or make under some statutes.
Occupiers Liability
The common law provides that an occupier of any premises owes to all the visitors the duty to take such care as, in all circumstances of the case, is necessary to see that the visitor will be reasonably safe in using the premises for the purpose for which he has been invited or permitted to be there. The occupier however may restrict or exclude his liability by giving adequate warnings such as about slippery floor. The law states that the occupier is not liable where the accident has occurred through the defective work of an independent contractor provided he can establish that the contractor was competent and so far as he was able he had inspected the work done (Emanuel,2009).
The Message on the Ticket
“The Metro Centre is not responsible for injuries or lost or damaged property during this event”.
Under the common law, this message is always referred to as an exemption clause whose purpose is to limit or extinguish the liability of one of the parties to which he would otherwise be liable in law. Such a clause will be enforced by the court if the document containing it was an integral part of the contract and reasonable care was taken to bring it to the attention of the other party before the contract was made. But where a person has failed to carry out the basic obligation of the contract, the court will not allow him to rely on the exemption clause to escape liability.
The common law provides that an exemption clause printed on a reverse side of the receipt is not valid unless some special care was taken to bring it to the notice of the party. In this case of Jack and Jill we find that the Panhandle Production find that the Panhandle productions signed the concert on behalf of the Metro Centre so the exemption clause protects the Metro Centre since the law provides that where a person puts his signature on a contractual document, he is bound by any exempting clauses contained in it.
He cannot rely on his ignorance of the contents of the document unless he was induced to sign by fraud or misrepresentation. So the Panhandle Productions ignored to read the contents on the tickets although the clause was written on the reverse side of the tickets the productions can not be protected from the damages caused (Penrose, 2005).
Risk Management
This case indicates how many organizations take risks of involving agencies in the operations without considering their capacities to engage in a contract. Therefore to manage such risks both parties in the contract must pose contractual capacity, but it is immaterial whether the agent himself has contractual capacity.
Law of Agency
According to the common law, an agent is a person employed expressly or implicitly to do any act for another or to represent dealing with a third person. The person on whose behalf he acts is called the principal. When a person employs another to contract on his behalf, the relationship between them is known as agency.
In this case of Jack and Jill that there existed the act of agency whereby Panhandle production signed the concert on behalf of the Metro Centre, they also Hired Total Security LTD to provide security at the concert but there was little evidence of security at the concert, in this case, the principle was the Metro Centre and the agent was the Panhandle productions who were the promoters of the concert and the third party was Total Security LTD (Emanuel, 2009).
There existed agency by ratification where the law states that an agent has no authority to contract on behalf of a principle or exceeds such authority as he had; the contract is not binding on the principal. For example, if A without prior authority of R, purports to make a contract on P’s behalf it is possible for P subsequently to ratify the contract. The effect of ratification is to render the contract as binding on the principal as if the agent had been properly authorized at the time of entering into the contract.
The ratification has a retrospective effect; that is, the agency is taken to have come into existence from the moment the agent first acted and not from the date of the principals’ ratification.
The law provides that for a person to ratify a contract made on his behalf but without his authority, the following conditions must be fulfilled: in this case of Jack and Jill, this condition was not applied where the Security Ltd was hired without the knowledge of the principle who is the Metro Centre. The contract must be purported to be made on behalf of an undisclosed principal can not be ratified. The agent’s intention of acting on behalf of the other party must have been expressed
Duties of the Agent
In this case, we find that the Secure ltd who was hired to provide security during the concert did not ensure that the place was safe and secure for the people attending the concert, thus was there arose cases of arguments and fighting. The law provides the agent must carry out the work undertaken according to his principal’s instructions.
Where he fails to act by the instructions, he will become liable for breach, and will also entitle the principal to terminate his agency without paying him any remuneration for the work done. Also, the agent must carry out the work with reasonable care, skill, and diligence, and if he fails in this duty, he becomes liable to the principal for any loss suffered by him. So in this case the Panhandle Productions should pay for the damages caused for the breach of the contract (Penrose, 2005).
The rules of the contract law
Sometimes contracts are defined in terms of their enforceability or validity under this, there is a valid contract which is an agreement that is binding and enforceable having all essentials of a contract while a voidable contract is an agreement that is binding and enforceable but lacks one or more essentials of a valid contract it may be set aside at the option of the injured party while a void contract is an agreement which is completely destitute of any legal effect such as an agreement of which the consideration or objective is lawful. Generally, for a contract to exist and to be valid more weight is directed to the intention of creating a legal relationship by all parties involved (Emanuel, 2009).
Offer
To be an enforceable contract, certain basic requirements must be present. There must be an agreement upon genuine consent of the parties, supported by consideration and made for a lawful object between competent parties.
The importance of offer as a rule of the law of contract
Offer- according to the common law an offer has its own rules which are; an offer may be made to a specific person or any member of a group of persons but it can not form the basis of a contract until it has been accepted by an ascertained person or group of persons, that is if A makes an offer to B, it is a specific offer and B is the only person to who can accept it. But in many cases, it is immaterial to whom the offer is made. Offers made by advertisements are the commonest form of offers made to the world at large and can be accepted by anyone just by acting on them(Jertz and Miller, 2004).
This is well explained in the case of Carlill v Carbolic Smoke Ball Co, 1893. The defendants offered a reward of £100 to anyone who contracted influenza after using their smoke ball for a fortnight. The plaintiff relies on the advertisement bought the smoke ball and used it as prescribed, but still contracted influenza. She sued for the advertised reward. Held that the advertisement was a true offer and not a mere advertising puff, and the defendants were held liable to pay the reward.
How the offer works in practice
The other rule is that an offer must contemplate giving rise to legal consequences if accepted, we also find that the terms of the offer must be certain and free from vagueness in expression. This is well explained in the case of Gushing v Lynn, 1831 L bought a horse from G and offered to pay another £5 for the horse if proved lucky to him. Held the term “lucky” was too vague to form the basis of a legally enforceable agreement.
The law also provides that every offer must be communicated; for a contract to arise, two parties must agree, and so it cannot be accepted by a person who does not know that it has been made. This rule applies to both specific and general offers. This is well explained in the case of R v Clarke, 1927 a reward was advertised for information leading to the arrest of the murderers of two police officers, and a free pardon if the person giving the information was an accomplice. C gave the information. Held C was not entitled to a government reward because at the time the information was given by him he had forgotten all about the reward.
The Challenges in the implementation of the offer
An offer can only be made to a specific person or any member of a group but it can not form the basis of a contract until it has been accepted by an ascertained person or group of persons. the terms of an offer must be certain and free from vagueness in expression and lastly, every offer must be communicated for a contract to exist. Finally, an offer cannot bind the other party without his consent
Acceptance
An offer can only be accepted by the person to whom it is made, but an offer made to the world at large may be accepted by anyone. According to contemporary law, an offer can be accepted orally, in writing, or by conduct, therefore we find that to make a contract binding, the acceptance must be communicated, and mere mental intention to accept it is not sufficient.
The importance of acceptance as a rule of a contract to businesses
The acceptance of an offer can only be made by the following means; acceptance by post. This is where the parties choose to post as a medium of entering into a contract, and the following rules apply: An offer becomes effective when it reaches the offeree, not when the letter of offer is posted. The acceptance is considered complete immediately after the letter of acceptance is posted, even if it is lost or destroyed in the post so that it never arrived. As long as the offeree can prove that he posted the letter of acceptance, the court will enforce the contract (Emanuel, 2009).
How acceptance works in practice
The contemporary law provides that acceptance of an offer must be absolute and unqualified. Where the acceptor varies the terms of the offer, it amounts to a counter offer which destroys the original offer. This is well indicated in the case of Nfl v Merret, 1980. M, offered his land for sale to N, at £280.N replied, accepting, and enclosing £80 with a promise to pay the balance by installments of £50 each. Held that the defendant was not liable for refusing to sell his land as there was no unqualified acceptance the acceptance must be communicated to the offeror in the manner prescribed by him otherwise the acceptance is ineffective.
There are various types of acceptance such as acceptance by post, acceptance subject to contract The English law also provides that acceptance must also be made within the time prescribed by the offeror, and if no such time is specified, then within such time as is reasonable having regard to the nature of the transaction, therefore this indicates that an acceptance must be made before the offer lapses or is terminated (Emanuel,2009).
Challenges of acceptance
The acceptance must always be communicated to the offeror in the manner prescribed by him otherwise the acceptance is ineffective. The acceptance must also be made within the time prescribed by the offeror, and if no such time is specified, then within such time as is reasonable having regard to the nature of the transaction. The Transaction must be made before the offer lapses or is terminated. And finally, acceptance once made cannot be revoked.
Consideration
Consideration is an agreement between two parties, which provides that an agreement must have some value in the eyes of the law, whereby a bare promise is not binding unless it is in the form of a specialty contract, therefore consideration is an act of promising of one party, whereby the promise brought by the other party and is enforceable by law. For a contract to be binding legally it must be supported by consideration whereby there is the following benefit to both parties. (Penrose, 2005)
The importance of consideration
Consideration is therefore classified into two:-Executed consideration where there is an already given part of the value by the promise to the promiser for example A is a casual worker and is employed by B to work on his farm for a day and is promised by B to be given his wages at the end of the day, A clears his work performing his side of the obligation of digging the farm this explains an executed consideration.
Executory recommendation-this is where an individual promise to do something in the future like in the above illustration the consideration for the employer B is executory until A is issued with his wages at the end of that particular day from B.
How consideration works in practice
A simple contract is not legally binding unless it is supported by consideration so that if A promises to give his watch to B, he cannot enforce A’s promise if A changes his mind. But if A agrees to sell his watch to B for ten pounds, the contract is binding on both parties, thus there is the following benefit to each of the parties i.e. A gets ten pounds and B receives a watch. Though consideration is required in every simple contract it need not be adequate as long as it has some economic value. Even an act or omission of some value can be a consideration, but a mere sentimental motive for making the promise will not make it binding.
Challenges of consideration
Consideration has also its own rules which are: it must be real meaning that it must have some values in the eyes of the law. It must not be in past this means that it should not include some past acts which took place before the promise is made. Consideration must move from the promise this means that no one can enforce another’s promise unless he has been a party to contact and provided a promise to the promisor; this tells us that no stranger is allowed to enforce another person’s promise. (Jertz and Miller, 2004)
Consideration must be more than an existing obligation. A person who is under a contractual or legal duty to perform a certain act does not consider a promise to pay for the performance of that contract. It must be legal, that is it should not be a consideration that is prohibited by law or against the public policy I do not find it necessary to improve these rules.
Works cited page
Emanuel Nelson,. Fundamental of Business Law, 4th Edition, New York, Educational Publishers, Print (2009).
Jertz Randy,. and Miller Longdon,. Fundamentals of Business Law, 3rd Edition, New York, Macmillan Publisher, Print (2004).
Penrose Roger, Road to Reality. A Complete Guide to the Laws of the Universe, New York ,Longman Publisher, Print(2005).