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A contract is a form of economic ordering and is common throughout the world. Different rules apply in jurisdiction applying Islamic law, civil law, socialist legal systems and local or customary law (Randy 2003).
A contract refers to an agreement between two parties that is legally binding. Law of contract imposes an obligation on the two parties to honor the legally enforceable promises (Larson 2003). Failure to honor the promises by one party renders the party liable to compensate the injured party.
This essay will focus on providing advice to Tim and Eva, who take part in the law of contract. The Principles of law, vitiating factors and contents of contract have been applied to provide answers to the questions.
ANSWERS TO QUESTION 1
Question 1 states: Andy advertised a block of land for sale, stating that it was zoned for light industrial. Tim, who wanted to build a workshop from which to run his mechanical repair business, inspected the property and agreed to buy it. After negotiations and before Andy and Tim signed the contract of sale, the council changed the zoning of the land to residential, a fact known to Andy, but not Tim. Tim signed the contract and has now discovered that he cannot build his workshop. In this question I will focus on advising Tim. This problem that arises between Tim and Andy relates to vitiating factors in the law of contract.
According to the law of contract, vitiating factors are the ones that tend to affect the validity of the contract (Scott 2009). Once the vitiating factors exist like in the case of Tim and Andy, then the contract can be rendered null and void or voidable. The law recognizes situations in which the agreement between the parties has been interfered with in a sense that is fundamental, so as a result of this Tim has been provided with a base in which he can claim that there is no reached agreement between him and Andy. The vitiating factors which include misrepresentation, undue influence and certain forms of mistake render a contract voidable and therefore the contact may be terminated (Ewan 2005).
The vitiating factors include misrepresentation, mistake and undue influence. Misrepresentation refers to a false statement of fact which is made by one of the party to another party (Ewan 2005). In this case, a false statement of fact has been made by Andy to Tim. Since Tim has found misrepresentation in the signed contract; he is therefore allowed to recede. According to rescission, when one party breaches the contract, the other party is set free and can rescind the contract. Therefore, if Tim wants to sue for any remedy, he then must first file a suit for rescission of the contract with the courts, when courts issue him with a rescission order then he is free from contractual obligations (Randy 2003).
ANSWERS TO QUESTION 2
Questions 2 states: Eva takes her expensive fur coat to Ace Dry Cleaners, an establishment that Eva and her family have always used for dry-cleaning. As in the past, Eva was handed a docket and, as usual, she placed it in her purse without reading it. When she called to collect the coat it was missing. Ace’s employee remembers handing the coat to a customer who had apparently lost her docket but who was able to identify the coat when allowed to sort through the rack. When Eva demanded compensation, Ace referred her to the docket which stated: “For conditions-see back. The reverse side of the docket included the statement: “We will not be liable for any loss or damage to clothing left for cleaning howsoever such loss or damage may be caused”. In this question I will focus on providing advice to Eva.
The agreement between Eva and Ace Dry Cleaners is a unilateral contract. Unilateral contracts are ones where only one party is bound by the contract (Ewan 2005). It is a one sided agreement, and this case, Ace Dry Cleaners have promised to do the cleaning but have refrained from providing compensation in case any clothing is lost. The terms and conditions of the agreement between Eva and Ace Dry Cleaners are written in the docket which Eva had previously been given, Eva made a mistake of not reading the terms and conditions. In the case of Eva and Ace Dry Cleaners, in which it is a one sided contract, both are offerors and offerees. Eva may decide to sue Ace Dry Cleaners for her lost coat but she has made a mistake of not reading the terms and conditions.
For any contract to be enforceable in court, it must possess the following essential elements of a valid contact: offer and acceptance, lawful object, capacity of the parties, consideration, possibility of performance and intention to create a legal relationship (Larson 2003). When an offer is made, it may either be accepted or rejected. Before acceptance or rejection, an offer terminates by any of the following events: revocation, lapse of time, death, rejection, failure of condition and counter-offer (Ewan 2005).
Eva can however sue the coat basing her fact that the staffs at Ace were negligent because they gave Eva’s coat to a client without the client providing docket. At law, the remedy for breach of contract is monetary compensation or damages. Ace Dry Cleaners have breached a contract that is implied in fact. Regardless of the terms and conditions of Ace Dry Cleaners, they had a responsibility of taking care of Eva’s coat. The agreement between Eva and Ace Dry Cleaners is not so much of a contract because both parties did not discuss the terms and conditions of the offer. Though Eva may sue Ace Dry Cleaners I can advice her not to because it was her mistake because before leaving her coat with Ace she should have first read the terms and conditions, then decide whether to leave the coat or not.
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