Administration of Contracts in Business Law

Two parties may decide to form an agreement in concern for their business. And for that reason, each of them will leave saying that they have a deal. However, the law differentiates between enforceable agreements from mere promises. When parties present themselves to the court alleging that one of them refused to perform according to their agreements, the court looks at their promises and check whether all the elements of agreement exist. If they exist, then the court will enforce such agreement.   Keywords:   Enforceability, Offer, Acceptance, Consideration Contract law supervises people in the administration of their promises. It is necessary to recognize that not all agreements that people form are enforceable in the eyes of the law. For a court to enforce a deal, it must look for the presence the elements of an agreement. If all of them exist, then the court will proceed to force the parties to perform their obligations. As an illustration, this paper will analyze a case between Peter and Brett (Nephew) and decide whether there is an enforceable agreements of not. The explanation whether the uncle/nephew relationship has any effect on whether or not there is a binding agreement is a matter of presumption applied to cases of social and domestic agreements. When looking at these agreements, their enforceability dwells on their subject matter as opposed to the parties’ relationship. In most cases, agreements originating from a business setting have a presumption that the parties intended to create a legal relationship (Koffman, & Atkins, 2014). The rule doesn’t even apply to domestic relationship, but also to any commercial context where free gifts are offered as in (Esso Petroleum Ltd v Commissioners of Customs and Excise, 1976) Concerning family cases, a good example of the application of a binding agreement between relatives is in (Parker v Clarke, 1960). This case involved elderly relatives convincing a young couple to dispose their house and relocate with them. The elderly relatives promised them that they would give the young couple a share in their house in return. However, their relationship fell out, and the elderly couple dismissed the young couple. When the matter went to the court, the court rebutted the presumption given to the domestic agreements and held that the agreement was enforceable. Similarly, in the case of (Merritt v Merritt, 1970) the court rebutted the presumption both the husband and wife in had no intention to form a legal relationship in their agreement. So like this case, Brett should not assume that the court will be blinded by the fact that he was contracting with his uncle. The court will look at the subject matter of the agreement which is the ‘sale of a car.' The law of contract dismisses any thought that the acceptance can occur by the silence from the offeree. On the other side, it also explains to what extent a silence can indicate a sign of acceptance. However, it's not a silence as such. It's a situation where the offeree's conduct demonstrates an acceptance of an offer. For instance, in (Brogden v. Metropolitan Railway Co, 1877), the court held that the plaintiff accepted the offer the moment he made the amendments and sent the draft to the defendant. Also, the court traced a sign of acceptance by indicating that the actions of the parties demonstrated acceptance. That is, the plaintiff sent the coal after the agreement, and the defendant accepted the coal.   Additionally, in (RTS Flexible Systems Ltd v Molkerei Alois Muller GmbH & Co KG, 2010), the Supreme Court ruled that as far as the parties had carried out their obligations, it meant that they had accepted the terms of their agreement even though they had not signed it. The court went on clarifying that the parties’ conduct had shown that they had performed as if the contract draft applied, and they treated it as if it was already a contract. The same principles were applied to (Limited v Amphenol Limited, 2009) Tekdata bought some from Amphenol and indicated that it would be its and condition that would guide their contract. On the other side, Amphenol disputed those sentiments and said that Amphenol's terms and conditions would administer the agreement. Nevertheless, the parties continued with their normal trade until when the dispute emerged. In solving the dispute, the court of appeal held that Amphenol was the last to issue its terms, so its declarations would apply. These kind of judgments are more popular in cases where one party commences work before they agree to the terms of the contract. So like the mentioned cases, Peter’s terms would prevail. Consideration is a fundamental constituent of any enforceable contract. In English law, any contract without a consideration is   treated as voidable. In other words, if one party promises another something without getting something in return, the law cannot enforce such a promise.   A valuable explanation to consideration is in (Currie v Misa, 1875). The judge said consideration is, "some right, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss, or responsibility, given, suffered or undertaken by the other" Also, the House of Lords described consideration as the "price that one to a contract pays for the promise or the performance of the other party," (Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd, 1915). Like offer, and acceptance, even consideration has some rules that attached to its validity. In (Turner, 2013), the book summarizes the rules of consideration into three principles; these are that "the consideration must be sufficient but need not be adequate. The second rule is that past consideration would not be a useful consideration, and the third one is that consideration must come from the promise." In the concerned question, this paper will concentrate with the first principle. By stating that consideration must be sufficient but that it need not be adequate, this means that it requires that there should be an exchange of something of value but not something equivalent to whatever you received. In other words, there should be an existence of a bargain, though it doesn't have to be a good one. The same explanation was given in (Korunich v Holliday, 2013) where the court stated that a "good consideration does not need to have a value comparable to the promise." So considering t he explanations above, $500 is a valid ‘consideration’ for a contract to sell the diesel motor car if the parties accept it. If Brett tells Peter that he would challenge the validity of the contract due the fact that he entered into the contract thinking he was buying a diesel car, but Peter gave him a diesel car, then it would be a question of unilateral mistake. In (Emanuel, 2010), Emanuel explain that â€Å"a unilateral mistake happens where one party to a contract is mistaken but and the other party is aware of the mistake.† This mistake may happen to the concern of a fundamental term, or it can be the identification of one of the contracting parties. Notably, if a unilateral mistake happens due an error in the quality, such error would not invalidate the contract. For instance, in (Smith v Hughes, 1871) the court held that the contract was enforceable even though the plaintiff had made a mistake to the oats. On the other hand, if the mistake touches the requisite part of the contract, i.e a fundamental term of a contract, and the other party knows the mistake, this can render the contract voidable. For example, in (Hartog v Colin & Shields, 1939) the judge ruled that the plaintiff was aware of the clerical mistake with the offer. As a result, the court dismissed the claim as it could not let the plaintiff benefit from of such a fundamental error. To clarify, the court ruled on behalf of the defendant stating that the plaintiff was supposed to consider that the defendant's intention wasn't to sell at such a low price. As for the case of Peter and Bett, the contract can be voidable due to a fundamental mistake. The procedure for contract arrangement starts with one party presenting an offer, and the other one accepting. The acceptance can be in writing, oral or in conduct. Apart from offer and acceptance, a valid agreement must have consideration. There is no rule to what consideration should be. For example, $1 for a car would be an adequate consideration. Koffman, L., & Atkins, R. (2014). Koffman & Macdonald's law of contract (8th ed., p. 79). Oxford: Oxford University Press. Miller, R. (2012). Fundamentals of business law (3rd ed., p. 154). Mason, Oh: South-Weston. Turner, C. (2013). Key facts and key cases (1st ed., p. 31). Routledge. Emanuel, S. (2010). Contracts (9th ed., p. 164). New York: Aspen Publishers. Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd (1915) Esso Petroleum Ltd v Commissioners of Customs and Excise (House of Lords 1976). RTS Flexible Systems Ltd v Molkerei Alois Mà ¼ller GmbH & Co KG (2010) Tekdata Interconnections Limited v Amphenol Limited (2009)