Contract Law in Business: Case Studies on Formation and Remedies

This case study explores contract law principles through two scenarios, focusing on contract formation, rights, and responsibilities. The first scenario analyzes the interaction between Avril and Belinda, determining whether a contract was formed for building a shed, considering offer, acceptance, and revocation. It concludes that no contract exists due to the revocation of the initial offer. The second scenario examines the relationship between Darwash, Charlie, and Eddie, identifying a valid contract between Darwash and Charlie, with Eddie acting as Charlie's agent. Darwash is entitled to claim remedies for non-performance of contractual obligations against Charlie. The study references key legal concepts such as offer, acceptance, consideration, intention to create legal relations, and various remedies like damages, specific performance, and injunctions, highlighting the importance of understanding contractual obligations and rights within a business context. Desklib provides access to similar solved assignments.

Contract in Business

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Case Scenario 1...........................................................................................................................3
Case scenario 2............................................................................................................................5
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business ethics are the guidelines which are responsible to regulate the behaviour of the
individuals so that the their conduct is governed and on other side, business law is mainly
originated from legal system which mainly ensures strict compliance of it so that there is law and
order maintained in the society(Mitchell, 2019). These are the norms, practices and values that
may be ethical or unethical which guides the individual in order function the business
appropriately. These laws and ethics protect the rights of the people that are associated with the
business which includes investors, workforce, etc. This essay will cover the contract law in
which its concepts, remedies, rights and responsibilities are dealt in two scenarios.
MAIN BODY
Case Scenario 1
A contract is the legal document which may be made either orally or in written form
between two or more parties. It is basically an agreement wherein mutual obligations are stated
and parties have to abide it. In case, any party breaches the contract and its terms, it may be held
liable under the law and the aggrieved party may claim the remedies which are enumerated under
the legislation of English contract law.
In order to form the contract between the parties, there are four essentials to it which
includes firstly the offer which is made by one of the party to other. It is the promise or
willingness to do or abstain one party to do something. Another essential requirement includes
acceptance to the offer wherein the other accepts the offer on same terms in which it was
made(Turner, 2021). Third is the consideration which is the value of something. It is one of the
most requisite condition as it helps in distinguishing between commercial and domestic contract.
Fourth is the intention of the parties to create the legal relations. This condition of the contract
is derived from the common law and is not stated in statutory legislation of English contract law.
The main aim of this condition is to sift the cases that are not appropriate for the action of court
as not each of the agreement can be binding on parties which requires enforcement from court. In
the case of Balfour v. Balfour, the court ruled that the contracts which are domestic or social in
nature have absence of any intention to create legal relationship while in case the contract is
commercial in nature, the presumption is raised that the parties have intended to create legal
relation.

When discussing regarding the case scenario, there has been no contract established
between Avril and Belinda as Avril has offered the term that she will built the shed for the price
of £750 with the stipulation that the offer will remain open for seven days only. Belinda have
responded that she will not accept the quotation. After few time when the stipulated time period
was over, she accepted the offer but now Avril have made fresh offer of £900 for building the
shed. Now the fresh contract is to be made between the parties due to revocation being
communicates before and that there is a novel offer of £900. in the case of Dickson v. Dodds, the
defendant have made offer to sell the house to claimant and kept the offer open till Friday. On
Thursday, defendant accepted the offer from other third party and tells a friend to communicate
to the claimant that offer is withdrawn. Upon hearing this, claimant went to accept the offer on
Friday morning. The court held that the offer is being revoked effectively as there was no
exchange of the promise by consideration so there is no contract(Chatterjee, 2020). However,
this case, now no contract is being formed between Avril and Belinda as the revocation was
communicated within stipulated time and the acceptance to this was communication after
revocation as well as after the stipulated time period. So there is no contract between them and if
Belinda accepts the new offer, the fresh contract can be framed.
The rights are those which are guaranteed by the legal binding valid contract between the
parties. Both Avril and Belinda have certain rights under the law, if there is contract being
framed between them which includes right to claim the remedies in case there is breach of
contract. The aggrieved party can file the suit for breach of contract and claim the remedies
which are enumerated under the legislation so that it can be put in same position as if contract
was formed. Another right is for specific performance of contract in which the the agreement
which satisfies all the essential ingredients of the contract must fulfil their contractual obligation
within the time stated or reasonable time so that there is breach of such contract(de Graaf, 2019).
(Blemus, 2017).
Now apart from certain rights, there are responsibilities of parties that includes firstly to
deal with other party in an truthful and fair manner so that there is legal consequences being
faced by any. Another is to fulfil the promise or obligation of contract which is specified in it.
In case any of the obligation is put in question, reasonable capacity of an individual to perform or
refrain the performance must be taken into the consideration. Another is to not use any force or
coercion while obtaining the free consent from parties for the contract.

Case scenario 2
The agreement which is formed between two or more parties and satisfies the essential
ingredients In this scenario, the contract formed between Darwash and Charlie is a valid one and
Eddie is the independent contractor who acts as mere agent to Darwash. The relationship
between Charlie and Eddie in this case is of the principle and agent that is the rule of common
law. When Darwash have contacted via email to Charlie for the wire replacement, Charlie
responded to create the eventual contract and send Eddie for assessing the work on its behalf.
Also when Eddie have quoted the price of £3500, Darwash have communicated to Charlie for its
acceptance to which the reply came from the side of Eddie that it will begin the work from
Monday. This implies that there is a presence of principle and agent relationship. Although the
contract has been made between Charlie and Darwash and Eddie is a mere agent of Charlie so
Darwash will b entitled to pay the sum of £3500 to Charlie and not Eddie and will not pay extra
£500 as the offer and acceptance was made only for £3500 and not for £500.
Now that the work has not been completed properly by Eddie so Charlie will be
responsible for it as it is the principle to Eddie. The principle is held liable generally for the
action of agent as it has made it authorised. Darwash is now entitled to claim the remedies which
are enumerated under the law of contract for the non performance of the contractual obligation as
the contract is framed betweeb Charlie and Darwash and not between Eddie and Darwash.
The remedies includes firstly the damages which is one of the legal remedy that is
available for the breach of contract as it is the award of money in order to compensate an
innocent party. It is subject to application of rules on remoteness, causation and the duty to
mitigate the loss. Second is repudiation which is aimed top end the contract and is available only
for the breach of condition as contrary to the breach of warranty. Third is specific performance
of the contract which is the order by the court to require one of the party to perform its
contractual obligation(O’Malley, 2018). Then is rescission which seeks to put the party back to
their pre-contractual position and represents the unravelling of contract. Last is injunction which
is also the equitable remedy which is of three types of which first is interim injunction which is
on temporary basis till the hearing of court, then is prohibitory which is the order to not require
the party to do something and lastly the mandatory one which requires party to do something.
For the given case scenario, Darwash can claim specific performance of the contract so
that it make its wire replacement in a proper manner.

` There are many rights under the English law which involves firstly the right to timely
consideration in which the party is required to pay the consideration amount on time and without
any delay. Next is full disclosure of the information in which the party must make disclosure of
all material facts so that a transparency is maintained.

CONCLUSION
It is concluded from this that the contract law is the branch of civil law which deals with
contractual obligation of the parties who have entered into the valid contract. It has four
ingredients which includes offer, consideration, intent to create relations and acceptance. The
remedies which the English law provides include damages, rescission, repudiation, specific
performance of contract and injunction orders.

REFERENCES
Books and Journals
Blemus, S., 2017. Law and blockchain: A legal perspective on current regulatory trends
worldwide. Revue Trimestrielle de Droit Financier (Corporate Finance and Capital
Markets Law Review) RTDF, (4-2017).
Chatterjee, C., 2020. Negotiating techniques in international commercial contracts. Routledge.
de Graaf, T.J., 2019. From old to new: From internet to smart contracts and from people to smart
contracts. Computer Law & Security Review, 35(5), p.105322.
Mitchell, L.E., 2019. Trust. Contract. Process. In Progressive corporate law (pp. 185-217).
Routledge.'
O’Malley, P., 2018. 9. Moral Uncertainties: Contract Law and Distinctions between Speculation,
Gambling, and Insurance. In Risk and morality (pp. 231-257). University of Toronto
Press.
Turner, B.S., 2021. 2 Vulnerability and Suffering. In Vulnerability and human rights (pp. 25-44).
Penn State University Press.