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HI6027 Business and Corporations Law Paper Editing Services
Issue: According to the case study provided the issue to be decided is the existence of a contract to be claimed for by the affected party.
Law: A contract is said to be a set of terms agreed to the parties entering into the contract. Such terms should be common between the parties and share the purpose of achieving the completion of contract by performance of the duties set out. A contract is said to be initiated by the offeror towards the offeree. The offeror while making the offer includes the terms of the contract that defines the purpose and nature of the contract being offered. The content of the contract shall be clearly stated and fully disclosed at the time of making the offer. The offeror should ensure that all the terms are expressed and easy to understand. The offeree may then either accept or reject the contract. The contract s accepted if the offeree agrees to all the terms so set out by the offeror. If the offeree is not satisfied with the offer completely, the same may be altered which in turn would be considered to be a counter offer. A contract is not said to be formed unless the final offer so made in the negotiation is accepted. Such acceptance shall be clear and express between the parties. It should be noted that the acceptance should be made through a communication mode that is acceptable under the contract. The offer may be concluded in different ways such as acceptance, rejection, and lapse of time, death and withdrawal. (Paterson, 2011)
A contract when being offered should also contain the amount of consideration it will be entered into for. A consideration is said to be the amount that is being paid by both the parties in order to restore each other for the amount of loss suffered for performing acts so set out in the contract. It is essential that ta contract is bound by a consideration as otherwise it would only be a promise and not a contract. The consideration defines the validity of a contract under the law. While the parties are entering into the contract it is important that the intent of entering into the contract is defined by the parties. This is so because it identifies the enforceability of the contract under the law. If the contract is of social nature then the contract is said to be of nature not enforceable under the law by default. (Gibson and Fraser, 2007)
However, under commercial contracts it is assumed that these are to be enforced under the law as the parties only come together for the contractual purposes. The parties so entering into the contract should be of capacity. This would mean that the parties should be of legal age, sound mind and stable financial nature. If the parties are found to be under duress while entering into the contract then the contract would be void ab initio. This would mean that the parties should be aware of the contract terms when the contract is being signed.
Application:Richard is said to be the son who was offered with a contract to maintain the gardens at home, by his millionaire father. The father stated that he would have to mow the property for maintain it that spread across 1 hectare of land. Previously, the father had employed a contractor for the rate of $350 and the offer made to the son was of $200. The son accepted the offer. The amount of time that was usually spent on the maintenance of the land was for half a day per week. After four weeks of working to mow the land, when the son claimed for the contracted amount, the father denied to pay the same stating that he should be doing this work for free. He also stated that since he already lives at the home rent free, he should not be demanding the payment for the same to mow the gardens. It may be sated that the amount so claimed for by the son is the consideration amount so discussed by the two of them before entering into the contract. (Harris, 2013)
Conclusion:It may be stated that in the given case the parties to the contract are socially related for being a family. Thereby, the contract would be said to be a social contract. Furthermore, the intent of the law enforceability was not clearly stated while entering into the contract. The refusal to pay the amount for the contract is a breach of contract however the same may not be claimed for under the law. The contract may be said to be unenforceable under the law. Richard however may sue the father by applying the promissory estoppel as he would not have undertaken the said actions unless the father would have specifically offered him to. It may be concluded that the parties to the contract had no intent to make the contract enforceable under the law. The contract would not be claimed for as one in the court. However, as Richard had specifically did the contracted actions on agreement to the offer so made by the father, the father is now bond by promissory estoppel. He may not be able to not pay the son as the same would be illegal and unfair under the law. Therefore, even if Richard cannot claim for a contractual breach he may claim damages under the doctrine of promissory estoppel. (Monahan and Carr-Gregg, 2007)
Issue:According to the case scenario the issue to address is what constitutes a breach of contract.
Law: Under a standard contract the parties while entering into the contract enter into several terms. A condition is the primary term that is to be referred to when entering into the contract. It defines the purpose of the contract. The contract is said to be breached if a condition is breached. The affected party may claim for the damages as well as void the contract. A condition may be performed at several stages of the contract as determined by the parties to the contract. Such conditions are precedent, subsequent or concurrent. The warranty is regarded as the second important aspect of the contract. The warranty helps in achieving the condition of the contract. When it is breached the affected party may claim for the damages, specific performance or injunction until the claim is resolved. The warranty may be of several types such as the lifetime warranty, specific warranty, limited warranty and such other.
Sometimes it is difficult to define the nature of the term when put in two different aspects. The breach of the term then helps in determining the nature of the term. If the breach affects the nature of the contract then it is a condition and if not then it is a warranty. An innominate term may have different affect on different situations therefore; only the breach of the term may be able to define the nature of the breach and its affect on the contract. (Paterson, 2011)
Some terms are clearly mentioned under the contract. Such terms are called express terms. The express terms may either be determined orally or in writing. Express terms are clearly stated and are considered to be all the terms that are present in writing under a contract. However, certain terms are not mentioned or discussed between the parties such terms are regarded as the implied terms. Implied terms are included for its presence in customs, law or previous dealings. Express and implied terms may be express terms or implied terms. (Gibson and Fraser, 2007)
The contract sometimes includes a clause that vouches for the liability that may occur from the non-performance of the contract. Such clauses are regarded as exclusion clauses because they ask specifically to not do a certain thing in case of breach. The exclusion clause is said to be so because it focuses on the possibility of non-performance and provides for the limitation on the liability to be claimed by the affected party. The parties may enter into these clauses only through signatures, notice or previous course of dealings. The exclusion clause under a contract shall be agreed to between the party and duly demonstrated in order for it to be enforced at the time of the breach. Such terms are only valid if they not involve an exclusion of liability for injuries or death.
Application:In the give case study it may be stated that the contract so formed between the parties was a commercial contract. The contract is said to be an employment contract whereby the production company Frere Bros had offered a five year contract to the actor named Joe. Joe had agreed to the contract after reading it and signed the same. Thereby, Joe was now bound by the terms of the contract. The contract so entered into by the parties was for the provision of acting services by Joe. The contract also stated that if Joe is involved with any other production house for providing the acting services the contract will be considered as breached. It may be observed that the concerning term is regarded as the exclusion clause that would be a condition as it is an important term of the contract. (Monahan and Carr-Gregg, 2007)
The term may also be considered to be an express tem as it has been clearly stated under the contract. It is observed that one year later, after signing the contract, Joe had entered into the contract with another production company named Pretty Pictures. However, it was mentioned in the contract so signed previously that Joe is not allowed to render the acting services to any other production company unless the five year term concludes. It may be said that Joe is considered to be in the breach of the contract for breaching the exclusion clause that was also the condition under the provided agreement. The exclusion clause so presented is said to be valid as the same only involves the exclusion of provision of services to other company other than the signed party, which is a valid request under such contracts and the parties agreed. The same clause did not exclude the liability in case of injury or liability. The exclusion clause was purely professional and related to the performance of the contract. (Harris, 2013)
Conclusion:It may be concluded that the contract so entered into by Joe and Frere Bros. was a valid contract that was duly signed by the parties. However, Joe breached the exclusion clause of not being involved with any other company for five years, a year later, when he signed a contract for a movie with Pretty Pictures. It may be determined that the breach so committed was for the condition under the contract thereby allowing Frere Bros to void the contract and claim for damages for the loss on the contract so suffered for the non-performance of the remaining four years.
Gibson, A. and Fraser, D. (2007). Business law. Frenchs Forest, N.S.W.: Pearson/Prentice Hall.
Harris, J. (2013). Australian corporate law. Chatswood: Butterworths.
Monahan, G. and Carr-Gregg, S. (2007). Essential contract law. New York, NY: Routledge-Cavendish.
Paterson, J. (2011). Unfair contract terms law in Australia. Pyrmont, N.S.W.: Thomson Reuters (Professional) Australia.