Agreements and contracts are fundamentally
different. While agreements may not be enforceable by law, contracts are
enforceable upon the satisfaction of the elements of a valid contract as
defined by common law and various written laws (Binder, 2011). Jarred and Susan
are both offered incentives to perform various tasks where Jarred is required
to ensure the cleanness of his employer’s shop while Susan was supposed to help
eradicate the incidences of illegal parking behind the shop. The two would get
£30 and £20 a week respectively. The shop owner, Duncan later failed to pay the
sums agreed upon. When determining the course of action available to Jared and
Susan, it is imperative that the elements of a valid contract be evaluated at
length with the aim of determining whether the contract between Duncan and the
two aggrieved persons could constitute a valid contract enforceable by law.
An offer is made by an offeror to an offeree. It is
a tentative promise made to an offeree subject to a condition or containing a
request to the offeree. According to Mckendrick (2005), an offer must be
communicated to the offeree before acceptance can happen and is specific to the
offeree. This implies that if a person accepts an offer made to a different
person, there can be no valid contract. The offer must be distinguished from an
invitation to treat which entails making an invitation by another party to make
an offer as is common with advertisements. An offer must be accepted within the
time frame specified by the offeror. Any failure to accept an offer within the
time specified leads to a lapse of the offer, meaning that subsequent
acceptance cannot be construed to lead to the formation of a valid contract
(Koffman, Lawrence, Macdonald, Elizabeth, 2007). The offer can be revoked by
the offeror at any time provided that the offer is yet to be accepted by the
offeree. The right to revoke an offer is valid even before the lapse of the
period the offer is supposed to be kept open. This is as illustrated in the
case of Payne v Cave as shown below:
Payne v Cave (1789)
Fact: The defendant made the highest bid for the plaintiff's
goods at an auction sale, but he withdrew his bid before the fall of the
auctioneer's hammer. Held: It was
held that the defendant was not bound to purchase the goods. His bid amounted
to an offer which he was entitled to withdraw at any time before the auctioneer
signified acceptance by knocking down the hammer (Cases on Formation of a
Contract, 2011)
In this case,
the offer was made by Duncan to Jarred and Susan. The offer was to pay the
specified sums of money to the offerees upon delivery of the specified
benefits.
Acceptance of the contract produces the obligation
to the contract on the part of the offeror. Acceptance is only valid where it
is presented in the manner specified by the offeror. This acceptance may either
be verbal, written or in any other form specified by the offeror. Acceptance is
unconditional as it signifies the acceptance of the terms set out by the
offeror. Any demands for new conditions constitute a counter-offer and can
therefore not be considered as an acceptance. In this case, both Susan and
Jarred accepted the offer constituting a contract that could be enforceable if
the contract would be found valid. The validity of a contract entails the
existence of all elements of a valid contract as specified by law.
A consideration is a valuable thing that is offered
to an offerer by the offeree in exchange of the offer specified in the
contract. The adequacy of the consideration is often not questioned provided
the two parties enter into the contract with full knowledge of the offer and
consideration involved. The offer is £30 for Jarred and £20 for Susan. The
consideration in the case of Jarred was the perfect cleanness of the shop while
in Susan’s case; it was the emptiness of the parking lot behind the shop which
Susan was supposed to enforce by ticketing drivers who parked at the specified
spot on behalf of Duncan. However, consideration is valid only where there is
no pre-existing obligation to perform the tasks outlined in the contract. The
legality and morality of the consideration is also crucial in ensuring the
validity of a contract. In this instance, the consideration is invalid in both
cases (Chen-Wishart, 2007). Jarred is already employed as cleaner. One of his
duties is to ensure that the shop is spotlessly clean at all times. Entering
into a contract requiring him to clean the shop constitutes forming a
consideration involving a pre-existing obligation. In the case of Susan, she as
a traffic officer is a public servant who is mandated to among other things,
prevent illegal parking. This means that Susan was already obligated to ensure
the area behind the shop remains empty prior to the contract. This contract
therefore delves into an area where obligation pre-existed. Moreover, there
were moral implications of the consideration. Offering incentives to public
servants to perform their duties is considered immoral on the part of both the offeror
and the public servant (Chen-Wishart, 2007). The consideration also involved
ticketing drivers on behalf of Duncan hence implying that she would be
performing private duties while working as a public servant. This certainly
constituted an illegality. Where a consideration is opposed to public policy,
it is considered invalid.
The intention to create legal relations is an
important component of any valid contract. This requirement draws a clear line
between domestic agreements and commercial agreements where the latter are
mainly considered to be intended to create legal relations. The intention to
create legal relations can be evaluated by the original intentions of the
parties involved (Stone, 2009). Where the parties intended to be bound by the
terms of the contract, it constitutes the intention to create a legal relation.
It has not been explicitly stated whether Jarred is fully employed by his
father or has been offering services as a result of some domestic arrangement
with the father. However, it is clear that a father son relationship existed
between Duncan and Jarred where Jarred worked at the shop with the obligation
to ensure the cleanness of the shop. It would appear that the contract could be
lean more towards being a domestic agreement. Moreover, given that the
incentive to ensure the shop is spotless covered an already existing
obligation, it would seem that there was no intention to create a legal
relation ab initio. However, where
the offeree can prove that they heavily relied on the promise in the execution
of a task, the courts may after due considerations opt to waive the requirement
for the intention to create legal relations. In the case of Susan, the
existence of legal relations was already made impossible by the fact that the
consideration was against morality and public policy. A legal relation cannot
be created through a contract agreement where the consideration constitutes an
illegality.
A contract is valid when it is formed between
parties that are legally mandated to enter into binding agreements. This
includes persons that have already attained majority age and persons of sound
mind. The contract must also be consented to freely. This implies the absence
of coercion, misrepresentation, fraud, mistake, and undue influence. In both
Susan’s and Jarred’s case, the contract can be said to have been consented to
freely by the parties involved.
The certainty
of a contract refers to the level of clarity of the terms and conditions of the
contract. The importance of certainty was further enhanced by the Case of Schweppe v Harper where the court ruled
that uncertainty could render a contract unenforceable (LLB recent
developments, 2009). In the case of Jarred v Duncan, it was impossible to
define the relationship between the tow. It was not clear whether Jarred was
fully employed at the shop or was simply offering voluntary service. This would
have made it impossible a court of law to make a determination on whether or
not the contract was enforceable.
Conclusion
Whether or not Susan and Jarred can seek redress for
the enforcement of their contract with Duncan is highly dependent on whether
the contract was valid or not. Several elements of a valid contract have been
satisfied. Such elements include the existence of an offer and its acceptance
as well as their free consent. However, for a contract to be valid, all
elements have to be satisfied. In this case, the element of consideration lacks
the requisite legality. So is the absence of the intention to create a legal
relationship. In view of the fact that the contracts were not valid, it must be
concluded that Susan and Jarred have no legal recourse and should therefore
forfeit the incentives promised.
For more theory and case studies on: http://expertresearchers.blogspot.com/
Binder,
P.Z., 2011. Binder on Contracts. (Online)
Available at: http://www2.gsu.edu/~rmipzb/contracts.htm
(Accessed 12 April 2011)
Cases
on Formation of a Contract, 2011. Cases
on Formation of a Contract. (Online) Available at: http://a-level-law.com/contract/agreement/cases.htm
(Accessed 13 April 2011)
Chen-Wishart,
M 2007, Contract Law, Oxford: Oxford
University Press
Koffman,
Lawrence, Macdonald, Elizabeth, 2007. The
law of contract. Oxford: Oxford University Press
LLB
Recent Developments, 2009. Recent
Developments 2009: 2650040 Elements of the law of contract. (Online)
Available at: http://www.londoninternational.ac.uk/current_students/programme_resources/laws/llb_diplaw/recent_dev/elements_law.pdf
(Accessed 12 April 2011)
McKendrick,
E., 2005. Contract Law - Text, Cases and Materials. Oxford: Oxford
University Press
Stone,
R 2009, The Modern Law of Contract, New
York: Routledge- Cavendish
No comments:
Post a Comment