Commercial Contract Law and Practice

This assignment delves into the complexities of commercial contract law. It examines the elements required for a valid contract, explores common types of commercial contracts, and discusses the implications of contract breaches. The analysis also touches upon legal remedies available in case of breaches and provides examples from various sources to illustrate key concepts.

Commercial contract

Table of Contents
INTRODUCTION...........................................................................................................................1
Question 1...................................................................................................................................1
Question 2...................................................................................................................................2
Question 3...................................................................................................................................2
Question 4...................................................................................................................................3
Question 5...................................................................................................................................3
Question 6...................................................................................................................................4
Question 7...................................................................................................................................4
Question 8...................................................................................................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
A contract that is made between two parties in which all the commercial issues are
described is known as commercial contract. A commercial contract is always considered to be
legally binding by the court and it will be considered as serious offence if it will be broken.
Question 1
A) when scarecrow said that he is not bound he meant that there is no obligation on his part to
complete those actions which are not written in the contract and this is because of the reason that
oral contracts are not valid in the commercial contract law.
Case : Hutton v Warren (1836)
in this case it was held that compensation for the expenses that were made in crop growing will
be implied in the tenancy as containing such clause is common for farming tenancies.
B) The subsequent promise that was made by scarecrow is not enforceable as it was not in
written form and verbal contracts are not considered to be valid and hence does not create any
obligation.
C) The key elements to satisfy an agreement are :
Parties : It states that there must be two parties to the contract and they must be willing to enter
into the contract.
Written Agreement : It is needed that the agreement should be written form and not a verbal one.
Intention : there must be the intention of the parties that are involved in order to complete the
conditions.
Promise : It is required the there is some promise that is made by one party to the other.
D) By the statement that all terms are not essential scarecrow meant that the terms that are
mentioned in the contract will be important and moreover there must be some intention of the
parties to complete that term as if it will not be present than contract cannot be completed.
E) the agreement is firstly required to be in the written manner and than it must be signed by all
the parties that are related to the contract as after that only the agreement will become
enforceable.
Case : Shanklin Pier Ltd. V Detel products Ltd. (1951)
In this case it was held that damages that were incurred due to breach of warranty can be
recovered by the plaintiff against the defendants.
1

Question 2
A) A contract is legally binding when there is consideration involved for both the parties but it
is not specified that there is any limit for that consideration to make the contract valid. So the
consideration of $100000 will be considered satisfactory to make the contract legally binding.
B) No, Disney cannot add any additional consideration once the agreement is made as after the
agreement is finalised that in that no additions can be made without the consent of both the
parties that is mutual consent is required.
C) It has been stated in the law that it is nit necessary that consideration should only be in
monetary terms, which means that it can be provided by any means. In the given case also acting
in Frozen 3 in place of loan will constitute good consideration.
D) Once an agreement has been made then it will not be possible for any party to change the
consideration that has been specified earlier or demand something additionally. So according to
it Kristoff will not be eligible to demand the Disney the additional sum for performing in frozen
3 as he is already liable to perform in accordance to the agreement that has been made earlier.
E) In Currie v Misa (1975) it was held that unless some consideration has been provided in
return of anything the full contract will not exist and will not be considered as legally binding. It
was also held that consideration can be a promise also and is not required to be in money value at
all times and that will also be enforceable. Also the payment needs to be sufficient but it has not
been specified that it should be adequate.
Question 3
a) In order to make any term enforceable it will be required that it should be expressly provided
in the agreement. It has been stated that all those conditions that have been discussed among
parties and agreed by oral means and there is no written proof in that respect then those will not
be considered to be binding. As in the given case certain terms were not written in the contract so
both the parties involved in the contract will not be liable to comply with them.
b) In every contract it is required that all the terms that both the parties want to be mentioned in
the agreement should be recorder. If there are certain circumstances due to which the terms could
not be specified in the contract although both wanted them to be incorporated than in that case
the provisions that are entered will be the only one that will be enforceable. As in the given case
both Mad Hatter and the Queens of hearts wanted some terms to be incorporated but due to their
2

own issues it could not happen and those terms were left unincorporated. So all these provisions
will not be made enforceable and they will not be liable in respect to them.
Question 4
It has been stated in the law that just by entering into negotiations will not make the
obligation to be binding. For the contract to become obligatory it will be required that both the
parties that are involved in the contract should have the intention to be bound. But in certain
situation it exists that the intention of the parties is not specified and it will give rise to a dispute.
In case there is no written agreement has been signed between the parties and afterwards one
party disassociates itself from it and refuses to abide by the negotiations than the other party has
all the rights to make a claim for the beach of the contract. In the provided case also same
situation has arisen as earlier Madonna has agreed to the negotiations with Brittany but at the
date when it was to be exercised she refused to comply with that saying that there was no written
agreement and she is not bound by anything. It has been stated that court will provide its decision
in such a manner that competing interest will be balanced and also the court will made the
agreement between the parties to be enforced for which they are intending to abide by. It will be
done even though one party has refused to comply with the terms earlier decided and the same
will apply in the given case of Madonna and Brittany.
Question 5
Consideration- It is a concept of legal value that promised in connection with enter in contract.
This is excludes promises of affection, betting and gaming. There are many rules of
consideration in governance laws like it must not be past, its sufficient but need not be adequate.
This contract move from the promisee.
Past consideration- Generally it is not a valid consideration and has no leg value of this contract
and promise. This consideration that has already flowed form the promisee to the promiser. It is a
past promise or act that based on future promise. A promise is given for moral when the promiser
motivating for make promise for past benefit he received that give rise to a moral, but not legal.
In this contract if one party perform an act and other party to make promise the consideration for
the promise in the past. It is based on which forms on the basis of make promise in future. This
act must be done at the promiser's request and the parties must have understand the act to be
remunerated either by a payment of some other benefits.
Cases : Re Mcardle (1951)
3

it was held that in this case that the promise for the consideration that is made after the contract
has been done will not be binding and past considerations that are there are not considered to be
valid.
Question 6
In a contract there are various terms that are required to be incorporated while the
agreement is made in the first hand. The terms that will be entered can be both express and
implied. It means that it is not necessary that all the provisions are needed to be in express form,
they can be in the implied manner also and they will also be given the equal importance and will
be made enforceable. It is provided in the question that not all the terms are essential or critical
but this statement is not correct as according to the commercial law it has been stated that all
those terms that are mentioned in the agreement that has been made between any two parties will
be essential. It is not possible that any of the term will be given less importance and will be left
to be taken into consideration. All the terms will be given equal wieghtage and will be made
enforceable and it is not in the hands of any party to choose between them according to their
wish.
Cases : The moor cock (1889)
In this case it was held that the river bed would be safe and this was implied by the court. It was
said that if the term was such which will not make any change and business will have the sense
even when it was not present than the term will not be implied.
Question 7
In the case of negligence it has been stated that one party is responsible towards other one
and he is liable to provide all the services that have been promised on the due care basis. It will
be considered that if that person will not be bale to fulfil his responsibility than he will be said to
be negligent in doing his work and will be liable to the other party. He will be called as the
defendant and the aggrieved party will be called as plaintiff. The plaintiff has all the rights
according to the law that he can sue the defendant and claim the damages that have been incurred
to him due to the negligence. In the given case jiminy has left is car on faith that it will be
delivered to him on time as his whole business is dependent on it. But Pinocchio who promised
that the same would be done was not able to comply with it due to the certain issues that arise
between him and his delivery department but it will not make him less responsible. He will be
4

considered to be negligent and will be defendant. So according to all these provisions it can be
said that pinocchio will be plaintiff and will have all the rights to sue him and claim the damages
that he has born due to the fault of defendant.
Question 8
In the stated law it has been mentioned that when some party makes promise to the other
party regarding provision of any service than he will be held liable to perform it and if he will
breach the contract than will have to bear the consequences of it. The aggrieved party has been
given rights that he will be able to sue the other party and recover the losses that are incurred due
to him. This provision is provided in the doctrine of promissory estoppel which will be beneficial
for the plaintiff as he will be able to recover the losses that are made to him. There are various
elements that are related to this doctrine which includes that there must be some promise that has
been made according to which promisee has acted. The other element will be that promisee must
have believed on the promiser and relied upon it. From the act that has been performed in good
faith there are certain losses that have to be born by promisee. The loss that will be incurred will
be reimbursed from the promiser in the form of fulfilment of promise. All of these elements are
required to be present so that the doctrine of promissory estoppel can be used and losses can be
recovered.
CONCLUSION
On the basis of above report it has been concluded that, in commercial law two or more
parties are comes in the contractual relationship with each other. All the parties are bound to
follow their obligation which are imposed on therm per the provision of law.
5

REFERENCES
Books and Journal
Appleman, J. A., Appleman, J and Holmes, E.M., 2015. Excuses for Nonpayment and Defenses
to Actions for Premiums (Vol. 5). Appleman on Insurance Law and Practice.
Cassar, V and Briner, R. B., 2011. The relationship between psychological contract breach and
organizational commitment: Exchange imbalance as a moderator of the mediating
role of violation. Journal of Vocational Behavior. 78(2). pp.283-289.
Chao, J. M., Cheung, F. Y and Wu, A. M., 2011. Psychological contract breach and
counterproductive workplace behaviors: testing moderating effect of attribution
style and power distance. The International Journal of Human Resource
Management. 22(04). pp.763-777.
Dalhuisen, J. H., 2013. Dalhuisen on Transnational Comparative, Commercial, Financial and
Trade Law Volume 2: Contract and Movable Property Law. Bloomsbury
Publishing.
Daozhi, Q. J. Z., 2011. Supply Chain Consignment Contract in Context of Asymmetric Risk
Preference Information [J]. Chinese Journal of Management. 2. p.021.
JIA, W. Y., LIU, Y. S and ZHANG, J., 2011. Supply Chain Contract Risk Management Based on
Asymmetric Information [J]. Commercial Research. 1. p.011.
Knapp, C.L., Crystal, N.M and Prince, H.G., 2016. Problems in Contract Law: cases and
materials. Wolters Kluwer Law & Business.
Kwock, B., James, M. X and Tsui, A. S. C., 2013. Doing business in China: what is the use of
having a contract? The rule of law and guanxi when doing business in
China. Journal of Business Studies Quarterly. 4(4). p.56.
Lewis and et. al., 2013. Accountable care organizations in the United States: market and
demographic factors associated with formation. Health services
research. 48(6pt1). pp.1840-1858.
McLeod, C and Botterell, A., 2014. A Hague Convention on contract pregnancy (or
“surrogacy”): avoiding ethical inconsistencies with the convention on
adoption. IJFAB: International Journal of Feminist Approaches to
Bioethics. 7(2). pp.219-235.
6

Moses, M. L., 2012. The principles and practice of international commercial arbitration.
Cambridge University Press.
Van Zyl, L and Walker, R., 2013. Beyond altruistic and commercial contract motherhood: The
professional model. Bioethics.27(7). pp.373-381.
Vantilborgh and et. al., 2011. A new deal for NPO governance and management: Implications for
volunteers using psychological contract theory. VOLUNTAS: International
Journal of Voluntary and Nonprofit Organizations. 22(4). p.639.
Online
Commercial contracts. 2016. [Online]. Available through:<https://www.contactlaw.co.uk/212-
nolink-uk/areas-of-law/commercial/commercial-contracts/2953-commercial-
contract.html>. [Accessed on 10th June 2017].
7