Comprehensive Analysis of Contract Law: Elements and Case Studies

This report provides a comprehensive overview of contract law, beginning with a definition and exploring the essential elements required for a valid contract, including offer, acceptance, consideration, legal capacity, and intention to create legal relations. The report delves into these elements, offering examples and explanations to clarify their significance. Furthermore, the report analyzes key case laws, such as Williams v Roffery Bros. and Nicholls (Contractors) Ltd and MWB Business Exchange Centres Ltd. V Rock Advertising Ltd, to illustrate the practical application of contract law principles. The analysis includes the facts of each case, the issues presented, and the court's rationale and judgment. The report also discusses the concept of varying contracts, providing insights into how changes to existing contracts are handled. The inclusion of remedies for breach of contract, such as compensatory damages and specific performance, further enhances the report's depth, making it a valuable resource for understanding the intricacies of contract law.

Contract Law

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
CONCLSUION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
In modern era, law is essential for organisation as well as individuals. Laws are rules,
regulations and restrictions which is applying to all members who is leaving in society. It defines
that how people should behave and it also provides sanctions against improper behaviour. It also
helps in organising societies, ensure about safety and prevent infringement of their rights. In this
there is one term i.e. contract law (Ayres and Schwartz, 2014). It means that agreement is some
between two or more parties and which is enforceable by court. In this report, different case law
is explained in regard to contract law. ‘Contract’ includes many terms and conditions which bind
parties to perform their duties in appropriate manner.
TASK
Contract law is defined in legal system. The meaning of this contract is same for all
person or organisation. “A contract is an agreement which has been created between two parties
and rising their obligation which are recognised by law” (Strang and Fix, 2011). In common law,
it considered basic three essentials at the time of creation of contract i.e. contractual intention,
consideration and agreement. Contract can be written or in oral. It also considered as promise
made between parties which allows court to make decree (Bar-Gill, 2012). In addition to this,
contract is a term which is written agreement. It cannot be considered as a valid contract if it
does not consist of all essential elements of a valid agreement. Furthermore, it can be said that
parties should consider all elements of valid and legal agreement before entering into any
contractual relationship. It consists six important elements to make contract valid i.e. proposal,
agree, capacity, intention to generate lawful relation, consideration., certainty. These elements
should be included in bond, if not then it would be considered as unacceptable contract. These
explanations are as below;
Offer – This is first element which includes in contract i.e. offer. A contract is created
when one person has established the proposal which has been given by other person. There offer
are distinguish from willingness to deal or negotiate. It is not essential that offer should be need
to make to specific person only. An offer can be made to class of people, to whole world or
single person. For example, bike dealer deals with “C”, to sell his bike for $11,500 without
giving any suitable licence. A person is also having right to reject offer before accept to it.
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Acceptance – After having an offer, then acceptance will take place. While forming of
any contract then there should be approval of offer by another person. Party should be clear with
agreement and with rules and regulations then they will accept offer (Beckert, Bormer and
Klebanov, 2011). The contract will not take place if both parties are still negotiating. For
example, if car is offering to sale his van to B, and B accept his offer then this is called
acceptance.
Consideration – It is considered as price paid for promises between two parties. Price
must include for value, although it is not essential that there is need to not be currency. While
forming any contract, then there should be consideration so that contract would be considered as
valid (Chaffee and Rapp, 2012). But there is expectation of this rule: documents which are under
seal or deed, then it does not require any consideration for accept the contract as their obligatory.
However, some are contracts their which are create in this manner.
Legal capacity – All human beings are not capable to do contract with each other.
Following are some people who were not allowed to form any contract or dealt with separately:
 People who are insane or unsound mind;
 Juveniles;
 Insolvents;
 Organisations (person who are performing on the behalf of enterprises); and
 Convicts.
Intention to create legal relation – It is considered as important component in
agreement. It is significant for parties to create legal relations between them. For example, there
is agreement among family and children. After a point of time, parents of children are passes
away, then children will receive all assets and possessions which has been left by their family.
Certainty – At the time of forming of any contract, it is essential terms and conditions
should be clearly mentioned and understood by both persons. If contract is uncertain, then it will
be held as invalid for a particular point of time (Cheng, Smyth and Guo, 2015). For example, if
any person wants to stay in hotel, then they need to inform for how many days will be stay in
hotel, type of room, date etc.
Case Law – Williams v Roffery Bros. and Nicholls (Contractors) Ltd [1991] 1 QB 1,
fact of this case was; P was the carpenter which hired by D. Throughout project P faces from
monetary pitfalls. For this, D decided to pay a surplus amount as apartment finished. But amount
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was not received by P. Issue has been arising that was variation of contract will be accompanied
by consideration?
Ratio in this case was: Contract between both parties are constituting for good
consideration in which parties are promising to pay increase amount which is offered and will
not be cause any economic duress to other person. The judgement of court held that, promise of
Ds, consideration should be supported.
Another case, William v Roffery bros & Nicholls (contractors) Ltd [1989], this case
was held in Contract law of English. In this case, it has been decided that varying contract is
come in existence. A person has to be perform their promises which pre-existing predetermined
obligation which will constitute better consideration for the benefit which is conferred upon
promise.
The facts of this case was that, Shepherds Bush Housing Association Ltd was contracted
with Roffey Bros, for refurbishing approximately 28 flats in London. For this they have done
subcontracted, which has been done with woodworking to Mr Lester Williams for paying
20000 £ in instalments. In this contact, some work was done and paid 16,200£. But some point
of time, Williams ran into monetary difficulties due to price of contract was very low. For this
Roffey was going to held responsible for paying fine for the late completion of work. So he had
conducted a conference with them on 9 April and guaranteed to pay additional amount 575£ per
flat, when work of flats will be completed. After some period, Williams stop the works after
eight flats because he was getting only 1500£. Williams claimed for that new carpenters were
brought by Roffey.
The duty of Roffey was that, if they were appointing new person then they should
intimate to Williams. If Williams is not conveyed about this, then he is having right to claim for
their compensation amount.
The contract between two parties should clearly state out rights and responsibilities (Cui,
Ge and Jing, 2013). It should include activities, time-frames for implementation of terms and
conditions. The parties are requiring to carry out their obligations so that they can perform their
task in appropriate manner. in contract, there are two types of term i.e. express and implied.
Express means, both parties have to clearly state out what is exactly required in contract and
these are binding on parties. Further it also includes; two term i.e. condition and warranties.
Condition are essential part for contract in which breach can be result into recession, damages or
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repudiation. Other side warranty, it contains minor terms which is used when damages take
place. Another term is implied; it is deemed on both parties while forming any contract. The
responsibilities of both parties is that, they should clearly describe what terms and conditions are
their which are bound on both persons. A proper remedy should be available if breach of contract
had taken place to injured party. These remedy are;
Compensatory damages – Defendant person have to reimburse money to plaintiff and
compensate any cost if any.
Specific performance – In this judgement of court is given to fulfil specific performance
which are specified in contract.
Punitive damages – Defendant got punishment for performing any anti-social action and
which is harming to plaintiff.
Recession – In this, contract is cancelled by both parties and money will returned which
is paid in advance (Mithen, Dali gault and Gregori, 2011).
Reformation – Terms and conditions of contract are changed which reflect what parties
are intended to do actually.
At the time of contract, it is compulsory that there should be valid contract that there is a
presence of two parties. They both have some responsibilities which they have to perform. In this
context, they have to get aware about duties and essential of valid context and fulfil that in an
appropriate manner. For a valid contract they both have to obey the rules and regulations which
are incorporate at the time of its framing. It is a duty of them in complying with them so that a
lawful act gets done in an appropriate manner. Also, they have to take care about each other
interest in which their rights get protected and not harming them. Also, a lawful consideration
has to be take place otherwise it considers as void agreement. There is a free consent of each
other. Valid contract is once in which all essentials of agreement have been fulfilled. Parties
which are involved in that have aware about their rights which are associated with contract
otherwise it leads to affect that. Either of the party will disobey their responsibility then it leads
to void the agreement and come under criminal offense. Such things are not acceptable at all and
can get sue by another party.
Case law - Per Piter Gibson L.J., Selectmove Ltd, Re, [1995]. The facts of this case
was that Crown demanded 25000 pound in tax from Selectmove Ltd because they had paid less
amount. This firm has agreed with tax collector that payment could be paid 1000 pound on
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monthly instalment which had been occurred. After accepting 7 monthly instalments, Crown for
winding up order to Selectmove which were they owned i.e. 18000 pound in way of tax. The
issue was arising that consideration in agreement has to pay monthly instalment which has to be
obtained by Crown for their benefit. On the basis of facts and issues, judgement of court held
that there was not consideration so claim also failed. The reason behind that, although there is
practical benefit which is found in consideration where they had promised to pay extra money
which is arising from duties, as per case in Williams v Roffey [1990]. Such benefits cannot
found in part of paying the debt amount.
Varying contract means existing contract of employment which is varied only when there
is an agreement between both parties (Serrat, 2011). The changes which has been done can be
agreed on individual basis or with collective agreement. The employers are wishes to vary from
their contract due to change in economic circumstances (Preston and McCann, 2011). If there is
any change in areas then it may include duties, relationships, place of work, pay rates etc.
Sometimes these contract are done to improve working condition. These contracts are agreed on
verbally or writing.
Case law – MWB Business Exchange Centres Ltd. V Rock Advertising Ltd. [2016]
EWCA Civ 553, this case was deals with number of disputes which is relating with variation of
contract. In this case MWB will be called as former party and Rock will be referred as letter
party. In this case, Rock occupied a license premises which is managed and controlled by former
party. In August 2011, Letter party decided to expend their enterprises and written contract is
done with MWB for 12 months which is beginning from 1 November 2011. In starting of first
three months’ subscription fee was agree to pay 3,500 pound per month and then from 1
February 2012, 4,400 pound will be paid. But unluckily, business of Rock was unsuccessful and
incurred some arrears of 12,000 pound. On this, MWB terminate agreement and sue against
Rock for compensation arrears amount. On the basis of these bond, Rock paid 3,500 pound to
MWB, which was paid according to revised payment schedule. On these circumstances, former
party present two quarrels that why oral variation would not be applied on Rock. Firstly,
applicant was pointed out that there is a written contract of anti-oral variation. Secondly, MWB
was depend on Foakes v Beer (1884) 9 App. Cas 605 for that consideration was not based on
variations. But both arguments are failed. As per clause 7.6 of contract, it is stated that; “... All
variation of license must be decided, should be in written and contracted by both persons before
taking any effect to contract.” the appeal was made by MWB and this was satisfied that there is
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legal binding which is intended to variation and assist by consideration. The conclusion of court
of appeal was little unexpected. MWB was owned above 12,000 pound and for this Rock paid &
3500 pound.
In this case, law court avoided on the origin of principle that first person will not receive
debt amount which is partly paid, but also they are also entitling for “practical benefit”. This
term used due to MWB had to recover more amount from Rock and most importantly they have
to avoid property which located empty for a period of time and causing losses (VARYING
CONTRACTS, 2017). In framework of part-payment of liability, practical benefit is unusual
which would not be entirely unexpected.
As in case of Williams v Roffey Bros, court of appeal was held that if promiser “obtains
benefits or obviates a disbenefits” and have to pay more because it is supported by consideration.
Unfortunately, Foakes (judgement of house of lords were given) case was not cited by Roffey
and decision of court become unclear for them.
From above all cases, consideration support variation and there is no need to considered
argument of Rock' s that MWB was estoppel which is not promising their promise. So, court of
appeal initiate that statement which has been made by MWB was not succeed, even when they
had received a practical benefit. On other side it also forms promissory estoppel. From this it
concluded that debtors did not have to pay entire amount of debt. These above cases need further
clarification for receiving practical benefit from courts. There are some people who did not clear
about that on what basis practical benefits are given to suffered party.
Promissory of estoppel means when promises has done between two parties and they are
enforceable by law, even if it is made without any formal consideration (Qi and Chau, 2012).
There are elements which are required in promissory estoppel i.e. it should clearly specify
unambiguous promises, modified of pre-existing contract or legal obligation which is made by
parties. Along with this; there must be an inequitable which allow promiser to go back with their
promise.
CONCLSUION
It has been concluded from above report that, while forming any contract law, it is
essential that it must covered all those elements makes validity of contract. In above different
case laws are explained which is based on paying debt amount. In this, damaged parties are
getting practical benefits on the appeal of court. Further, with the help of contract law defendant
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will entitle to pay compensation amount to plaintiff. Along with this, they have also performed
their all duties which are specified at the time forming any contract. Through both parties will be
able to execute their contract in appropriate manner.
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REFERENCES
Books and journals
Ayres, I. and Schwartz, A., 2014. The no-reading problem in consumer contract law. Stan. L.
Rev. 66. p.545.
Bar-Gill, O., 2012. Seduction by contract: Law, economics, and psychology in consumer
markets. Oxford University Press.
Beckert, B., Bormer, T. and Klebanov, V., 2011. Improving the usability of specification
languages and methods for annotation-based verification. In Formal Methods for
Components and Objects (pp. 61-79). Springer Berlin Heidelberg.
Chaffee, E. C. and Rapp, G. C., 2012. Regulating online peer-to-peer lending in the aftermath of
Dodd-Frank: In search of an evolving regulatory regime for an evolving industry. Wash.
& Lee L. Rev.. 69. p.485.
Cheng, Z., Smyth, R. and Guo, F., 2015. The impact of China’s new Labour Contract Law on
socioeconomic outcomes for migrant and urban workers. human relations. 68(3). pp.329-
352.
Cui, F., Ge, Y. and Jing, F., 2013. The effects of the Labor Contract Law on the Chinese labor
market. Journal of Empirical Legal Studies. 10(3). pp.462-483.
Mithen, J. P., Daligault, J. and Gregori, G., 2011. Extent of validity of the hydrodynamic
description of ions in dense plasmas. Physical Review E. 83(1). p.015401.
Preston, C. B. and McCann, E. W., 2011. Unwrapping Shrinkwraps, Clickwraps, and
Browsewraps: How the Law Went Wrong from Horse Traders to the Law of the
Horse. BYU J. Pub. L.. 26. p.1.
Qi, C. and Chau, P. Y., 2012. Relationship, contract and IT outsourcing success: Evidence from
two descriptive case studies. Decision Support Systems. 53(4). pp.859-869.
Serrat, J. M. B., 2011. Quality of hotel service and consumer protection: A European contract
law approach. Tourism Management. 32(2). pp.277-287.
Strang, G. and Fix, G., 2011. A Fourier analysis of the finite element variational
method. Constructive aspects of functional analysis. pp.793-840.
Tomprou, M., Nikolaou, I. and Vakola, M., 2012. Experiencing organizational change in Greece:
the framework of psychological contract. The International Journal of Human Resource
Management. 23(2). pp.385-405.
Vogenauer, S., 2013. Regulatory competition through choice of contract law and choice of forum
in Europe: Theory and evidence. Eur. Rev. Private L.. 21. p.13.
Online
Re Selectmove Ltd [1995]. 2017. [Online]. Available through:
<https://webstroke.co.uk/law/cases/re-selectmove-ltd-1995>. [Accessed on 11th July
2017].
VARYING CONTRACTS. 2017. [PPD]. Available through:
<file:///C:/Users/user006/Downloads/Paul%20Davies,%20Varying%20contracts.pdf>.
[Accessed on 11th July 2017].
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