Contract Law Report: Types, Validity, and Real Contract Analysis

This report provides a comprehensive overview of contract law, defining a contract as a legally enforceable promise and outlining the essential elements required for a valid agreement. It explores three main types of contracts: oral, written, and e-contracts, detailing their definitions, advantages, and disadvantages. The report then delves into the validity of contracts, distinguishing between valid, invalid (void, voidable, and unenforceable) contracts, and their legal implications. Furthermore, it includes a real contract analysis of an electronic equipment warranty contract, dissecting its clauses (condition, warranty, penalty, exclusion, and force majeure) and assessing its validity in terms of form and consideration. The report concludes by providing a detailed breakdown of each clause within the chosen contract, offering valuable insights into contract law principles.

CONTRACT LAW
2.1. DEFINITION OF CONTRACT:
A contract, in its simplest definition, is a legally enforceable promise. A promise can be to do something
or refuse to do something. The making of a contract requires the consent of two or more people, one
of whom usually makes an offer and the other accepts it. In addition, contracts are often associated
with projects, in which one party negotiates with other parties to implement a project or part of a
project. The basic elements required for the agreement to be a legally enforceable contract are: mutual
assent, expressed by a valid offer and acceptance; adequate consideration; capacity; and legality.
2.2. THREE TYPES OF CONTRACTS:
2.2.1. Oral Contract
a. Definition:
Oral contracts are verbal agreements between two parties. An oral contract occurs when spoken
words are rendered valid and legally enforceable in a court of law.
However, an oral contract is difficult to be legally enforceable unless it is provable in court, and it must
meet various requirements of contract formation. Further, it must not be in violation of statutes
prohibiting oral contracts.
 For example, state statutes may require sales involving real property, and the agreements may have
to be in writing, or the performance must take over a year.
ADVANTAGES DISADVANTAGES
Easy to use Oral contracts do not have any
evidences to support its agreements
Create comfort and flexibility. More difficult to prove the existence
of the contract
It is easier for one or both sides to
forget certain parts of it, or disagree
on what certain details were.
b. Pros and cons:
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2.2.2. Written Contract
a. Definition:
A written contract is a written document that outlines an agreement between two parties. Individuals,
businesses, or organizations may be involved. To be regarded valid, the agreement must include all
components or components of the agreement, and each person involved must agree to each other
conditions and sign the document.
b. Pros and cons:
ADVANTAGES DISADVANTAGES
Provides proof of what you and the other party
agreed on. Inconvenient
By making the agreement clear from the start, it
helps to avoid future misunderstandings or problems. Time-consuming
Gives you security and peace of mind because the
conditions of the agreement are written down and
cannot be changed.
Reduce the likelihood of a disagreement about
payments, duties, and timelines for the service to be
done under the contract.
Describes how any party might terminate the
contract before the work is finished.
2.2.3. E- contract
a. Definition:
An E-Contract, or electronic contract, is a legal document made and signed online which is basically a
digital adaptation of a traditional paper contract. Likewise with paper contracts, E-Contracts are
agreements endorsed by two parties. They are enforceable and legally restricting archives that are
ordinarily utilized in regards to online merchandise, employment, deals, service, or tenancy... With a
run of the mill paper contract, one parties drafts an "offer" and the other party peruses it (IRMI.com,
2021).
In the event that the two parties agree to the terms and conditions recorded in this initial offer, they
will each sign the archive and it turns into a legitimate agreement. Each parties must hold up to their
finish of the understanding although a paper copy is not presented, a digital signature actually enters
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both parties into a legal agreement.
ADVANTAGES DISADVANTAGES
Easier to get the information right:
E-contracts minimize the risk of people
making mistakes or leaving sections blank.
Because they can make the important
sections of the contract mandatory to
complete, the signee won’t be able to
send it back to them until they’ve done it
right.
Risk of publicing the individual information
and people quite to reliant on service:
Some location may not be able to access
the E- contract.
Speed and ease of transfer:
Within minutes, the recipient can have the
contract and return it to another party as
simply as they got it.
Risk of a system crash:
Belongs to the online storage system or the
internal computer system crashes, might
lose data, including contracts.
Easier to storage:
A huge plus of using digital contracts can
storage in space and cost on the computer
or internet.
Unreliable:
Some people is not be able to believe in the
contract that not face to face, or another
think the e-contract is so complex with a lot
of step must be done and might not like
them
Easier to access and online merchandise:
Can deal the contract at everywhere
b. Pros and cons:
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2.3. VALIDITY OF CONTRACT:
2.3.1. Valid contract:
A valid contract is a written or expressed agreement between two parties for the supply of a product or
service. Basically, there are six elements of a contract that make it a legal and binding document. For a
contract to be valid, it must contain:
 The offer spells out the specifics of exactly what will be provided.
 Acceptance or consent of the other party to the offer presented.
 Consider, or money or something of interest is exchanged between the parties.
 Competence of the parties in terms of age and intelligence.
 Intent to fulfill the promise of both parties.
 The subject matter of the contract is lawful and is not against public policy or violates the law.
In other words, a contract is enforceable when both parties agree to something, fulfill their promise with
money or something of value to comply with the law (Study.com,2021)
2.3.2. Invalid contract:
a. Void contract:
The contract is void when it violates the prohibition of the law, contrary to social morality. The word
void means something invalid and it is not legally binding. When we say a contract is void, that means it
is not supported by the force of law. That makes it unenforceable, and if anyone breaches an
unenforceable contract, the other party to the contract has no legal recourse against them. (UpCounsel,
2021)
Contracts can be effective when formed and then become void. This happens when a contract fulfills all
the necessary conditions for a contract to be in effect when it was formed, but the law changes later or
something changes make the performance of the contract untenable. impossible and beyond the
imagination or beyond the control of the parties involved. Then at that point it becomes void.
(UpCounsel, 2021)
The contract is void due to deception, threat or coercion. Deception in a contract is an
intentional act of one party or a third party to mislead the other party about the subject, nature
of the object or the content of a civil transaction, so that contract has been established. Threat
or coercion in a contract is an intentional act by one party or a third person to force the other
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party to perform a contract in order to avoid damage to life, health, honor, reputation, dignity,
property of his or her relatives. (Casetext, 2020)
b. Voidable contract:
A type of voidable contract works in a similar way like void contract, but has an option for the parties to
enforce the terms even if an element is missing or some other problem exists with the terms. The
decision to enforce the contract is between the parties. In a voidable contract, one of the parties is
legally bound to honor the contract. Thus, a voidable contract can be performed, albeit lacking an
element, if the non-legally bound party agrees to continue.
In addition, a contract is voidable when one or both parties do not have the legal capacity to enter into
the agreement, such as when one party is a minor. In contrast, a void contract is inherently
unenforceable. A contract can be considered void if the terms require one or both parties to engage in
an illegal act or if one party is unable to meet the terms as set forth, such as in the event of the death of
one party. (Casetext, 2020)
c. Unenforceable contract:
An unenforceable contract is a valid contract that cannot be fully enforced due to some technical error.
An unenforceable contract has a number of legal consequences that may not be enforceable in a
particular act of damages or performance in the face of certain defenses including the Statute of Frauds.
(USlegal, 2021)
If a contract is found unenforceable, the court will not force one party to act or compensate the other
for failure to perform the terms of the contract. Although the elements of an enforceable contract
(offer, accept, review) may seem simple, there are strict standards of enforceability. A contract may be
deemed unenforceable for a variety of reasons related to the circumstances of its conclusion, the terms
of the agreement itself, or events occurring after the contract has been concluded. (Kirasystems, 2021)
A contract that is invalid due to failure to comply with the regulations on form.
A contract that violates the provisions of the conditions for formal validity shall be invalid, except for the
following cases: The contract has been established by text but the text is not correct by the rules that
either one side or the other has executed at least three points in the contract, according to the request
of one side or the other.
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2.4. REAL CONTRACT ANALYSIS:
The conplete chosen contract can be found in Appendix 1. (Click here)
2.4.1. Clauses in the contract:
Electronic equipment warranty contract between Mr. Luu Hoang Van and XTMobile electronics store at
50 Tran Quang Khai Street inluding four main clauses, which are condition clause, warranty, exclusion
and force majeure clauses. Each clause will be shown and analyzed in more depth below.
a. Condition clause:
Article 1: Content of the contract:
Party B - the XTMobile store side receives service security and technical support for all electronic
equipment at the residence of Party A - Mr. Luu Hoang Van, specifically as follows:
 Check operating system, applications, detect and remove viruses.
 Support update to the latest version.
 Check the connection network usage status.
 Notice of safety results and instructions for use.
 Support phone charger cord, ensure no damage and error.
b. Warranty clause:
The store will provide a warranty for Mr. Van for 12 months from the date Mr. Van buys the electronics
from XTMobile electronics store.
Since Mr. Van bought the VIP warranty package, the condition of this package is the warranty for the
first 180 days (6 months):
- In the first 30 days, if there is a manufacturer defect, the device will be exchanged according to the
condition at the time of original purchase.
- From the 31st to the 180th, if it is damaged or faulty, it will be changed to another device equivalent to
the one in use.
 A detail warranty list is provided in Appendix 1.
c. Penalty clause:
Damage caused directly or further by chemical or physical effects such as chemical reactions from the
environment, mechanical impact, distorting, or damage to the device.
Data loss, related to icloud account, samsung cloud, as well as external aesthetic problems.
The device is subject to hardware interference without XTMobile's designation.
 A detail penalty list is provided in Appendix 1.
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d. Exclusion clause:
Because Mr. Van purchased the VIP warranty package at XTMobile's store, that warranty package
included all necessary warranty conditions when Mr. Van's device was damaged, so there is no exclusion
clause in this contract.
e. Force majeure clause:
In case of force majeure such as falling, breaking, entering water that cannot be repaired, XTMobile will
collect the device at the price of the remaining usable components.
The product is faulty due to the user, will lose the warranty, instead will be supported by 30% repair fee.
 A detail force majeure list is provided in Appendix 1.
2.4.2. Validity of the contract:
a. Form: The contract is in written form.
b. Consideration: The contract clearly states the rights and obligations of the two parties, including
the sale of electronic devices by XTMobile stores, including Samsung Galaxy S10 phones (which include
the charging cord and VIP warranty package) at 50 Tran Quang Khai street, Tan Binh District, Ho Chi
Minh City, in exchange for a payment of 10,790,000 VND on November 19, 2020. Based on the listed
price of Samsung phones from the Mobileworld and Fabo website with the average price range is from
10,300,000 VND to 10,600,000 VND, the specific price for the device this device in the contract is
considered reasonable.
c. Legality: Due to the subject of the contract is an electronic device, a mobile phone, it is legal and
allowed to transact in Vietnam. Besides, the purchase and sale of electronic equipment is in line with
social ethics.
d. Capacity: the contract was signed by two parties, Mr. Van & Sales staff with cashier of XTMobile
store.
 According to the information from the contract, Mr. Van signed a contract with XTMobile, it proves
that Mr. Van is over 18 years old and has full legal responsibility as well as full awareness to buy
products.
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 The legal owner of the XTMobile chain of stores has authorized sales staff and cashier of the branch
store Tran Quang Khai to sign a contract. The hotline of this store is: 0867.002.022 or 1800.6229, which
is valid and listed publicity on their website.
 The two people who signed the contract is the the store’s official employees who are legally authorized
to sign contracts for each product sold on behalf of the company according to the company's policy.
2.5. LEGAL TROUBLE ARISEN:
2.5.1. Legal trouble description:
On May 25th, 2021, Minh Chau Banana Export Company signed a contract with the Walmart Grocery
store chain in the US on the condition that they deliver 70 tons of bananas to the port of Long Beach,
California on June 27th, 2021. Unfortunately, on June 2nd, 2021, 10 employees of Minh Chau banana
export company were infected with Covid-19 the cause of sharing the same elevator with F0 (Minh Chau
company's salesperson). Therefore, the Vietnamese government has forced all employees of the
company to stop all business activities and quarantine them for 21 days to monitor their health status.
Minh Chau Banana Export Company had to postpone all export activities and was unable to ship 70 tons
of bananas to Walmart stores on June 27th, 2021 according to the previously signed contract. Therefore,
Walmart sued Minh Chau banana export company because the above issue did not comply with the
terms signed in the contract.
Sources:
Google
2.5.2. Legal
solution suggestion:
In this case, Minh Chau banana export company must prove 3 factors to be exempt from liability and not
be sued by the Walmart chain:
 Minh Chau banana export company must provide clear evidence proving that their employees
have been infected with Covid and the reason why.
 Minh Chau banana export company cannot avoid this problem because this is a force majeure
case, both companies do not want this problem to happen.
 Due to the fact that 70 tons of bananas are transported by ship, it will take a lot of time (about 3
weeks), Minh Chau company has tried to deliver the goods 3 days earlier than expected, but
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because of the Covid epidemic, Minh Chau company had to postpone the transportation because
they do not want to cause bad effects to the partner’s company.
In summary, these are force majeure events included in the contract that both companies do not want,
so Minh Chau company still wants to continue to perform the contract if the Walmart chain agrees to
extend the contract.
2.5.3. Suggest dispute resolution:
In this case, negotiation will be used to resolve this legal issue. Advantages and disadvantages of
negotiation method are:
Advantages:
o Procedurally, negotiation is perhaps the most flexible form of dispute resolution as it involves only
parties with an interest in the matter of both companies (Minh Chau and Walmart) and both
companies. Everyone is free to tailor the negotiations to suit their needs, e.g. setting the agenda,
choosing the forum (public or private) and defining the participants.
o By focusing on their common needs and interests and using mechanisms such as objective
standards, there is a greater chance of reaching an agreement that meets the needs of the parties.
This is sometimes referred to as a "win-win" approach.
o Negotiation is a voluntary and private process, so no one is obligated to participate in the
negotiations if both companies do not wish to do so. No need to resort to a neutral third party. This
is important when neither party wants to involve outside parties in the process.
o Negotiation can maintain and in some cases even strengthen the relationship between parties when
an agreement has been reached between them.
o The option to negotiate a lawsuit can be less expensive for the parties and can reduce delays.
Disadvantages:
o A specific negotiation can have a successful outcome. However, Walmart is a big company and may
put Minh Chau exporter at a unfavorable situation.
o For example, if Minh Chau banana exporter has an interest in the disputed matter excluded or
inadequately represented in the negotiations, the value of the agreement will be reduced, thereby
making it may be challenged in the future.
o A successful negotiation requires each party to have a clear understanding of its negotiating task. If
there is uncertainty about the limits of a party's negotiating authority, then that party will not be
able to participate effectively in the negotiation process.
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o The absence of a neutral third party may result in the parties being unable to reach an agreement as
both companies may not be able to identify the issues being negotiated.
o Neither party may be forced to continue negotiations. So if Walmart chooses to end the
negotiations, time, effort and money may cause great damage to Minh Chau banana exporter and
vice versa.
o The negotiation process cannot guarantee the honesty or reliability of any party.
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APPENDIX 1:
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REFERENCES:
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