Legal Case Studies
Law of contract
A contract refers to an agreement between two or more parties and which is enforceable before a court of law[1]. More often, an agreement is ensured when an individual makes his willingness to abstain form doing something or doing it with the other party’s assent. The agreement must have a consideration on the part of the promisor and the promisee for it to form an agreement.
The issues
The issue here is whether Alphonse’s claim of having boat the speed boat before Bert could communicate with James is justified.
Rules
The laws governing contracts are very clear. There are elements that have to be present, for a contract to be termed as valid and enforceable before a court of law. These include: offer, acceptance, capacity to contract, legal consideration, free consent and legal relationship. Bert made an invitation to tender when he told his friend of the intention to sale the speed boat. James, in turn, made an offer to buy the speed boat which was legally accepted by Bert thus making the sale a binding agreement that is enforceable before a court of law. The contract had a consideration in the form of money worth $50000 and all the parties consented to it knowing the legal relationship they were creating. Furthermore the two parties to the contract had legal capacity to contract. This contract could therefore be terminated through performance, death of other parties, mutual agreement or lapse of time. The court when listening to such a case could determine it based on these modes of indemnifying the contract.
Since an offer does not last for an infinite and could lapse with time, it was proper for Bert to inquire from James[2]. This implies that James acceptance to contract with Bert in the sale of the speed boat, was not going to last forever, but had a time limit. On his part Bert played his part as he notified James about the progress of the performance of the contract. The fact that James was not sure about his part of performing the contract, makes the contract to be terminated on the grounds of time. A contract cannot stay unperformed indefinitely.
Bert decides to have an advertisement of the speedboat at the club after talking and agreeing with James. This amounts to a mere invitation to trade or tender of $60,000 and was open to the public to make offers. Alphonse made an offer to contract with Bert on the buying of the speed boat. Before Bert accepted the offer he told Alphonse that James had a right of first refusal. This implies that before the sale is made James had a right and not obligation to accept or refuse the offer made by Alphonse. Alphonse insisted on Bert and Bert finally invited Alphonse to trade. Through inspection Alphonse made an offer of $50,000 which was legal since Bert wanted an offer of $60000 or near. James had the right of first refusal and Alphonse being the third party, was supposed to pay some premium to James and a contract could not be validly made between Alphonse and Bert.
Bert was working within the terms of the contract he had with James by calling him first before accepting to contract with Alphonse. This is because Alphonse had been told earlier prior to his invitation to trade, that there was a person who held the right of first refusal to the speed boat being advertised.
Application and analysis
Bert had entered into a contract with James for sale the speed boat. The contract fulfilled the requirement of a valid contract enforceable before a court of law. After some time, Bert advertised the same boat to the public inviting them to trade, but informed James prior to advertising. Alphonse expressed intention to trade when he called Bert. Bert told Alphonse the terms of the trade.
A court examining such a case would apply the laws of contract and right to first refusal. The first case is the elements of a contract[3]. The claim by Alphonse that he had bought the boat is invalid. Alphonse made an offer to contract with Bert for a fee of $50000 which had not been accepted by Bert since James had to be involved before the sale was made. Therefore no contract was entered into and cannot be claimed. The fact that Alphonse decided to pay $60000 when Bert wanted to call James amounts to a counter offer and the other offer he had placed earlier becomes void. Another cause will be that Bert played within the law of contract by involving James first before the sale since James held the right of first refusal, which implies that he had a right to buy the boat over an agreed period of time.
Conclusion
Bert had a right to sale the speed boat to James since James held the right of first refusal. The claim by Alphonse cannot be enforceable before a court of law due to the fact that no offer by him had been accepted by Bert.
Case two: Sol v. Jean
The issue
The issue in this case is whether Sol is justified in suing Jean for a breach of contract of the leased shop and the balance for October to March.
The rules
Most court systems and jurisdiction in the USA permit litigation to breach of contract[4]. The judicial system, in the determination of breach of contract, examines some factors which include the cause and the law. The court will determine the cause of the breach of contract and the circumstances that prevailed for breach of contract. If Sol n suspects and believes that Jean had breached the contract for the rented shop on legal grounds and he is in a position to validate the sin a court of law then he has a reasonable claim for seeing Jean. The court would in many cases determine the environment relating to the breach of contract as claimed by Sol. Some circumstances are reasonable for people to be unable to perform a contract under the impossibility, thus being protected by law. There are many cases in which the performance of the contract is impossible, but the party given a liability to the contract. Case like Jean, it was not possible to perform the remaining part of her contract and she expressed this to the other part , Sol, who consented. This was due to the hard economic environment that was prevailing at the time.
In examining the other factor which is the cause to breach, the judicial system is lenient on the party that experienced difficulty in the performance of the contract like Jean. Previous instances have seen the court favoring the tenants in such contract involving tenants and premise owners. Sol had entered into a contract with Jean for a specified period of time and a consideration of $6000 per month. Here, the implication of the rule of contract is that Jean was to perform his part of the contract as reasonably agreed by paying the consideration for the next five years. The contract was terminated when Sol agreed to change the terms of the contract thus creating a counter contract that renders the first one null and void. Here the reasonable consideration for breach will be the extend of performance impossibility and the counter contract.
Application
Jean had entered into a contract with Sol to rent a shop for a period of five years and pay a consideration of $6000 monthly. Jean performed her part of the contract for a few months and faced the impossibility of performing the contract due to poor trading conditions. Sol agreed to reduce the rent and later gave jean a notice to pay the amount accrued. Jean left the shop and Dol rented it out to Daisy. Sol then sues Jean for contract breach.
A judge looking at this instance would determine using two ways. The first is the counter contract and two performances. The fact that Jean was not able to perform her part of the contract implies that she be held liable for breach. On the other hand, the performance was not realizable due to impossibility. The prevailing trading circumstance could not allow the performance of the contract within the period of time of the contract. The fact that Jean had expressed this to the other part, Sol, who in turn accepted and changed the terms of the contract, absolve her from any wrong doing. The change of contract terms terminated the previous contract and led to a new counter offer. This implies that the previous contract is not valid and cannot be enforceable by a court.
On the other hand Sol breached the new contract by renting the shop to another tenant. The contract stated that she was to stay there for five years, and jean did no wrong as she closed the shop when the terms of the contract changed. In reference to the arrears, a judge would find no ground to hold Jean responsible the money accrued from October to March since the owner of the sop, Sol had agreed to let jean operate at a reduced rent. Furthermore, it is Sol who expressively changed the terms of the agreement between him and Jean.
Conclusion
Sol would not prevail upon Jean, before a judge of the court system. This is because Sol does not justify neither the breach of contract nor the demand of accrued arrears of October to March. Additionally, the change in terms of contract solidifies the illegality of his claim. Sol, thereby, has no claim under the law.
[1] Ian, Fletcher. Financial Problem in a Development Contract. Journal of Property Finance. 1991, p.21
[2] Stamp, J. TORQUAY HOTEL COMPANY LTD v. COUSINS AND OTHERS. Managerial Law. 1968, p.45
[3] Scott, Masten. Transction-cost economics and the organization of agriculture tral transaction. Advances in Applied Microeconomics, 2000,p.174
[4] Carby-Hall, J. Health, Safety and Welfare at Work. Managerial Law, 1989, p.34
