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This legal report is prepared to transmit to Mr. Winslow, a legal client. He has asked the legal executive to seek on several claim and legal issues that have recently arisen. Firstly, this report explained the different types of business agreement and the important of key elements required for the formation of a valid contract. There are five claims was given to involved in this report for the following
The first claim is about issue between M5 Company, a hand phones-trading company, and Mr. Winslow and Charlene. This report analyzed from the perspective of the law of contract. This report applied rules of the offer and acceptance, also considered any impact of new technology.
For the second claim is about Mr. Winslow and Mrs. Winslow, his wife. It also contented the issue between Mrs. Winslow (landlord) and CoCo (tenant). My task is to assess the importance of the rules of intention and consideration of the parties to the agreement.
The third claim is about son of Mr. Winslow, Benny. This report explained the importance of the contracting parties having the appropriate legal capacity to enter into a binding agreement and gave advice for them
The next claim is Mr. Winslow, a restaurant owner entered into a contract with Cindy. This report gave some advised for Mr. Winslow and analyzed specific contract terms with reference to their importance and impact if these terms are broken.
In the next part, this report applied and analyzed the law on standard form contracts based on the “Labor Contract”
Finally, this report discussed the effect of exemption clause in attempting to exclude contractual liability based on the fifth claim. Mr. Winslow brought his car to Newport garage but his car was not fixed as he wants and he was injured when leaving the Newport management’s office. The manager drew Winslow’s attention to terms of dealing stated on a large notice prominently displayed in the foyer of the reception area stating.Newport Service can accept no responsibility for any damage caused as a consequence of repairs carried out on these premises. The Newport’s manager also drew Winslow’s attention to the fact that the same condition was contained on the back of the receipt. Moreover, when he drove the car into the Newport Service, Mr. Winslow noticed a sign which proclaims in large letters: “Clients enter their premises at their own risk and Newport Service accepts no responsibility for any damage of injury sustained”.
Aims/ Purpose, Scope
This report will explain the different types of business agreement and the importance of the key elements required for the information of a valid contract as well as resolving the cases given. The main purpose of this assignment help learner can get more knowledge and information about the law and the act. Common law is the system of deciding cases that originated in England and which was later adopted in the U.S. Common law is based on precedent (legal principles developed in earlier case law) instead of statutory laws. It is the traditional law of an area or region created by judges when deciding individual disputes or cases.
In this report, the following issue will be discussed:
Different types of business agreement and the importance of key elements
Rules of offer and acceptance
The importance of contracting parties having appropriate legal capacity to enter into a binding agreement
Specific contract terms with reference to their importance and impact
The Law on standard form of contracts
The effect of exemption clauses in attempting to exclude contractual liability
Along with discussing on the theories, the report has also applied the theories, law of contract, and other rules to suggest and advice Mr. Winslow on his legal position.
Sources of Information
All the information, which helps me to complete this report, is taken from various resources such as internet, books, and lectures of Ms Doti Chee.
Limitation of Report
The theories of Law are deep and wide therefore, there is still limitation in this report because some information is insufficient and the words limit. The report cannot cover the whole of Laws. Thus, the report is not perfect.
1a. The different types of business agreement and the importance of the key elements required for the formation of a valid contract.
1a.1 Explanation of contract
1a.1.1 Definition of contract
According to the course book of Common Law (BPP, 2004, p.36), a contract may be defined as an agreement which legally binds the parties. A party to a contract is bound because he has agree to be bound. Parties are judged by what they have said, written and done, not what is in their minds.
1a.1.2 Examples for Different types of contracts
Contracts are sorted into nine different types which are shown in the below table with their case example.
Types of Contract
Bilateral contract is a promise made by one party in exchange for the performance of some act by the other party; both parties are bound by their exchange of promises (Jrank, nd).
Howe Vs. O’Mally 1893 (Appendix 1a.1,p.)
Unilateral contract is where a promise only on one side, the consideration on the other side having already been executed. (Chestofbook, nd).
Carlill v Carbolic Smoke Ball Co 1893 (Appendix 1a.2,p.)
Express contract is in which both parties have explicitly stated the terms of their bargain, either orally or in writing, at the time that the contract was created (Doti chee, 2010).
Fibrosa Spolka Akcyjna v. Fairbairn Lawson Combe Barbour, Ltd., 1943 (Appendix 1a.3,p.)
Implied contract is resulted from surrounding facts and circumstances that suggest an agreement (Doti chee, 2010).
Hertzog v. Hertzog 1857 (Appendix 1a.4, p.).
Promissory estoppel applies where there may not otherwise be an enforceable contract, because one party has relied on the promise of the other, it would be unfair not to enforce the agreement. (US Legal, nd).
Hughes v Metropolitan Railway 1877 (Appendix 1a.5,p.)
Quasi contract is a binding obligation that is imposed by the courts to avoid injustice or unjust enrichment. (US Legal, nd).
Cotnam v. Wisdom 1907 (Appendix 1a.6,p.)
A simple contract can be written or implied or both. It consist of a promise to do or refrain from doing something, in exchange for doing something given or promise in return (Docstoc, 2009)
Shaughnessy v. Eidsmo 1946 (Appendix 1a.7,p.)
A specialty contract is a formal contract, it does not require any consideration and has the seal of the signer attached. A contract under seal must be in writing or printed on paper (US Legal, nd).
John v Colin 1998 (Appendix 1a.8,p.)
A standard-form contract is a standard document prepared by many large organization and setting out the terms on which they contract with their customers (BPP, 2004, p.37)
BMW Company v Lim –customer 2000 (Appendix 1a.9,p.)
1a.1.3 When do you enter into a contract with someone
People enter into a contract when they buy a house (ensuring to legally take ownership of the house from the ex-host), buy something from a shop (buying the product which is undertaken of quality, quantity, price and compensation by the shop owner) or when they start working in a company (making a deal with their employer about their rights and responsibilities in the company) .
1a.2 Explanation of different types of Business Agreement
1a.2.1 Agreement as an essential element in formation of a contract
Agreement is mutual understanding between two or more legally competent individuals or entities about their rights and duties regarding their past or future performances and consideration. If the agreement is not properly executed, it can be enforced only by order of the court. The agreement becomes fully executed when signed for and on behalf of both parties (Owen Keith, 2001, p532).
Agreement is important that protects the rights of both parties. They have obligation to perform their activities under the legal. Agreement also includes the rule and regulation that two parties need to follow. If one party does not achieve their obligation, agreement will be the proof for the court.
Offer and acceptance of offer: two requirements for a contract to be formed are that one party must have made an offer and the other must have accepted it (Elliott, C. & Quinn, F, 2007, pg 11). An offer is “an expression of willingness to contract on certain terms, made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed” (Treitel, G.H, The Law of Contract, 10th edn, p.8). Once an offer is accepted, the contract will usually form as a contract biding in both parties.
Apply agreement to an example of contract: employment contract
Offer: the employer makes an offer of a job with the specific term of salary, working-hours and position.
Acceptant: the employee accepts the term of the offer and takes responsibility to complete their work as required.
1a.2.2 Give examples of different types of business agreement
There are many different types of business agreement. Some examples are showed below.
Employment contracts: This is the agreement between employee and employer for the term of employment. Terms usually include position, contract period, working hours, overtime, probationary period, accommodation, food, annual leave, medical/insurance and transportation.
Buying a property contract: This is an agreement between the renter and the owner for terms of hire. Terms usually include the date of purchasing, amount, payment method and the deposit.
Lease agreement: this is an agreement between the lessee and the lesser for the term of leasing. Terms usually include the purpose, lease term, day of begging and ending, delivering method and transportation cost.
1a.3 Explain the importance for the key elements required for the formation for a valid contract
1a.3.1 The essential key elements to form a contract
The essential elements to forms a contract:
Agreement: is formed when one party accepts the offer of another. Agreement must have been entered into freely and involve a ‘meeting of minds’. Validity of contract may be affected if a person has been misled into a contract (Doti Chee, 2011)
Consideration: the parties must show that their agreement is a part of bargain and each side must promise to give or do something for the other side (Doti Chee, 2011)
Intention to create legal relations: ‘legal relations’ can be defined as the willingness to be bound by the terms of the contract, where there is no express statement as to whether or not legal relation are intended.
Form: a contract may be in any form (written or oral). However, a minority of contracts have to be made in a particular form (BPP, 2004, pg 38).
Legal capacity: The parties must be legally capable of entering into a contract (for example, a person who has mental problem does not have capacity to enter into a contract) (Doti Chee, 2011)
Legality of Object: The purpose of the agreement must not be illegal or contrary to public policy (for example, gambling purpose is not legal object) (Doti Chee, 2011)
Content: A contract must be complete and precise in its terms (BPP, 2004, pg 38).
1a.3.2 Effect of contract if key elements are absent and effect on affected parties
When a key elements missing, the contract will be invalid (BPP, 2004, p.38). Case example: Felt house v Bindley (1862) (Appendix 1a.10, p.).
An invalid contract may be a void contract, a voidable contract or unenforceable contract. Void contracts are those that fail to meet basic criteria, and are therefore not contracts at all. Meanwhile, a voidable contract is a contract that one party may avoid, can terminate at his option; so the contract is valid unless and until it is avoided. Unenforceable contract are those that meet the basic requirements but fail to fulfill some other law. (BPP, 2004, p.39)
In conclusion, without essential elements, the contract will become invalid contract that consists of three types: void contract, voidable contract and unenforceable contract. An invalid contract makes different effects on the parties involve.
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