Business And Corporation Law Of Contract Essay

Question:

Discuss about the Business and Corporation Law of Contract.

Answer:

Introduction:

An agreement has been made between Jane and Jack in the Case Study where Jane has decided to sell her Lotus Super 7 Sports Car to Jack. Jane requires money to go overseas and this is the reason why she wants to sell her Sports Car. The car was in good condition although it is used by Jane. The offer has been accepted by Jack who has been made by Jane. Offer, acceptance, consideration and contractual invitation are the four basic elements of an English Contract Law. These elements have to be present when a contract is made in order to make the contract valid. Jane has made an offer to Jack and Jack has accepted the offer (McKendrick, 2014). The cases are described below according to the IRAC method.

Issues

According to section 9 of the contract law, an agreement has been made between two parties but although the market value of the Lotus Super 7 Sports Car is mentioned but the price of the sports car is not mentioned. The amount has not been stated by the offeror to the offeree. It is also not stated if the contract between Jane and Jack is in online, oral or in written form. Jack has accepted the offer without the knowledge of the price of the car. When each party in a contract receives something of value, is known as consideration. Consideration is applicable if it movers to the offeror and consideration which is made is sufficient. It is stated that the market value of the Lotus Super 7 Sports Car is $25000 but the price at which Jane sells her sports car to Jack has not been stated. Giving an advertisement properly is essential in an offer but it is not defined whether the contract is in good condition (Beale et al., 2010). Therefore there is a restricted method in which the contract took place. The issue is that the amount at which Jane has offered to sell her sports car to Jack has not been stated in this case.

Jane offered to sell her sports car at the same rate as the market price which is $25000. The sports car has been used by Jane and therefore it is sold at a second hand rate. There has been an obligation of Jane according to the article 2 of the Uniform Commercial Code (UCC) (Hunter, 2015). According to this law, the price of a second hand object should be lesser than the market price. Acceptance has been made by Jack but the rate of the sports car is not lesser than the market price although it is a second hand product. There is a contractual invitation but the advertisement given by Jane is inappropriate. So there is an issue or obligation in this case as the Uniform Commercial Case is not followed in this case (Graw, 2012).

Jane sells the Lotus Super 7 Sports Car to Jack for $2500. The market value of the Lotus Super 7 Sports car is $25000. So Jane is selling the Sports car at a very less price. Therefore she runs a loss. The contract is enforced when consideration is appropriate and there is profit on the part of the offeror according to the contract law. All the elements of the contract must be applied in order to enforce the contractual agreement. The main issue in this case is that Jane who is the offeror is running a loss.

Rules

The terms of the contract requires to be expressed clearly according to section 9 of the Contract Law but the price of the Lotus Super 7 Sports Car has not been stated by Jane in the agreement. There is contractual invitation but there is no consideration from the offeror to the offeree. Therefore there is a breach in selling the goods according to section 7 of the Contract Law. Jack has accepted the offer without the knowledge about the price of the sports car (Anson et al., 2010). The question may arise on expressive terms and Jack may ask about the price of the sports car according to consumer rights.

According to article 2 of the Uniform Commercial Code (UCC), Jane cannot keep the same price of a second hand sports car to that of the market value. The sales of goods are not proper and obligation on the part Jane who is the seller has taken place in this case. Therefore there is a breach in the article 2 of the Uniform Commercial Code.

Jane runs a loss because she sells the sports car at a very less price. This is because she does not know the estimation of the market value and the method of Sales of goods. Jane has not followed section 52 and section 54 of the property act 1925. (Furmston, Cheshire, & Fifoot, 2012) There is also a breach in the section 12 and section 15 of the Sales of Goods Act in this contract and the seller has suffered a loss as she fixed the price of the sports car at a very less price which is $2500 when she bought it at $25000 as this is the market value of the sports car.

Application

The rules of section 7 and section 9 of the sales of goods act should not be breached in order to solve the problem in this case. Jane requires stating the value of the sports car clearly in order to make a valid agreement to Jack. There is a contractual invitation as the offer is accepted by Jack. But there is no consideration because the method of agreement and the value of the sports car are not stated by Jane and Jack has accepted the offer without the knowledge of the price of the sports car.

The issue could be solved by following the sales of goods act and the commercial code rules and Jane requires studying the market value of the Lotus Super 7 Sports Car before she fixes the price of the sports car in order to solve the issue (Koffman, & Macdonald, 2010). She should fix the price of the sports car at a lower price than the market value of the sports car then the issue would be solved.

This issue in this case could be solved by the solution to the sales of goods act and the property act. Jane requires studying the market value of the Lotus Super 7 Sports Car to make the contract properly and should increase the price of the sports car so that she does not run a loss and should fix the price of the sports car according to the Property Act 1925. The Property Act 1925 has the rules which are stated about fixing the price of second hand property or material (O'Sullivan & Hilliard, 2016).

Conclusion

Rules of the contract law have not been followed in the cases while making an agreement. There is a breach of the rules of the UK contract law in these cases. A solution to the breach of the rules of contract law should be organised legally for solving the cases. There are all the elements of a contract including offer, acceptance, consideration and contractual invitation (Burrows, Todd, & Finn, 2012). All the rules of the contract is clearly described above which are required in applying the contract for making a valid agreement between the parties and consideration should take place in these cases.

A contract took place between the Ship builder (manufacturer) and a tanker company “North Ocean Tankers”. Here a deal took place between the manufacturer and the customer. The negotiation or contract took place as per regulations of United States (Anson, et al. 2008). The contract formation was void and all the elements of the contract were present in this agreement but conflict occurred when US government devalued 10% currency of US. Whenever currency rises, it becomes problematic for the economist or business man of the country. So, the North Ocean Tankers also became the victim of this problem, when the Ship builder demands extra US$3 million from the North Ocean Tankers for constructing tankers. The seller or manufacturer demanded more money because he was running loss economically and as per his concept he was losing his time. The North Ocean Tankers had to agree because the delivery of tanker was very essential in time. After delivery of 9 months of the product, the North Ocean Tankers did not pay the money of the Ship builder which is misrepresentation. The North Ocean tankers was making astray to the ship builder by falsification and stretching more time. This scenario have some problems which solved by applying several legal rules and regulation following the IRAC method in the consequences described below.

Issues

As per US law, the agreement was void and proper at first but issue aroused when the government of United States devalued 10% currency of the country. The devaluation gave negative effect to the industrialization where the industries like North Ocean tankers started running economic loss and the manufacturer like Ship builder also started suffering manually and running loss economically. On that perspective, the manufacturer demanded extra charge of US$3 million. As a promisor, the North Ocean Tankers accepted the demand because of the urgent requirement of the delivery. To pay the money, the company needs financial strength but North Ocean Tankers was running economical loss because of the devaluation of currency. In this context the buyer is the promisor and the seller is the promisee. The promisor promised that they will pay extra charge to the promisee in time but the time extended after delivery but the promisor fail to pay the money to the promisee (Elliott, et al. 2007). But as they has made false promise and misrepresentation, so in this case the promisee (Ship builder) can sue the North Ocean Tankers (Promisor) for breaching the terms of the contract and for taking the delivery by straying him on false promise of providing money in time.

Rules

A contract as per negotiation between two parties took place in terms of US regulation that follows the rules of Federal arbitration act. At first a contract took place between the company and the manufacturer for constructing a tank, and then when the currency devalued, again a new agreement took place but problem aroused because that agreement clause was not stated in the contract (Federal Arbitration Act at 80, 2004). It is necessary that when anything is reviewed or added in a contract the rules of Contract review act should be followed in that case. As per that act new contract papers should be made where the rules and regulations and new clauses of the agreement should be added. As second agreement was made between the Ship builder and the North Ocean tankers, so as per English law the clause of increment of extra charge delivery to the ship builder should be mentioned in the new contract paper. All these are the loopholes of the contract. The promisor (North Ocean Tankers) violated the rules of negotiation by extending time for paying money to the promisee. Breach of negotiation took place in this case. The promisee can file case against the promisor for breaching the promise and if he takes the case to English court then the behaviour will be termed as Unconscionability (Kennedy, 2010). The ship builder can sue the North Ocean Tankers in perspective of Misrepresentation act 1967. As the promisor has did false promise to the promisee that he will pay the money to him after delivery but after 9 months of the product delivery the money is not paid to the promisee (Misrepresentation [H.L.], 2007). Even breach of Federal arbitration act has also taken place here. So the Ship builder has right to sue him to the court.

Application

In this case the manufacturer (Ship builder) runs loss and punitive dispute occurred in this case. Here the extra wages has not been delivered to the ship builder in time. So remedy should be applied in this case. The ship builder can whether sue the company under misrepresentation act or use remedy like reinstitution and cancellation to solve the case and claim the money from the North Ocean Tankers (Misrepresentation [H.L.], 2007).

It is necessary that some remedies should be applied through which the company can rescue themselves. The company is going through financial loss because of the fall of the currency of United States (Emerson, 2004). Their economic condition is not stable, so they are unable to deliver the extra charge to the Ship builder in time. This is the main reason that they are taking more time to pay their debt. In this case as per rules of US government, the company can take help of the English law and apply Bankruptcy act 1966 (Nichols, P, 2012). As per this act, the company has to give proof of their bankruptcy and if the appeal of the company is granted then, the court will give 6 months time to pay the debt to the promisee and till that time the promisee (ship builders) has to wait for the money. This is the only remedy which can help the North Ocean Tankers company to rescue from these severe problems from the Ship builder in perspective of US law.

Conclusion

A negotiable contract took place between the manufacturer and the customer. The contract is negatively affected in this case. This affected both the promisor and promisee and both are in false position enhancing wrong result of the agreement formation. When external clause was added in the contract, it changed the contract and both promisor and promisee has lost financially (Anson, et al. 2008). In this case the contract took place under Federal arbitration act of US, but when extra clauses were added, contract review does not take place. Breach of negotiation occurred and falsification of promise occurred which can be punishable under misinterpretation act but as the promisor is running economic loss, so he can take the help of US government for remedy and through bankruptcy act he can be rescued from court under US law. This assignment can be concluded by showing these remedy which can solve the problem.

References:

Anson, W. & Huffcut, E. (2008). Principles of the English law of contract (3rd ed.). New York: Banks Law Pub. Co.

Anson, W. R., Beatson, J., Burrows, A. S., & Cartwright, J. (2010). Anson's law of contract. Oxford University Press.

Beale, H., Tallon, D., Vogenauer, S., Rutgers, J. W., & Fauvarque-Cosson, B. (2010). Cases, materials and text on contract law. Hart.

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Elliott, C. & Quinn, F. (2007). Contract law. Harlow: Pearson Longman.

Emerson, R. (2004). Business law. Hauppauge, N.Y.: Barron's.

Federal Arbitration Act at 80. (2004). New YorK?.

Furmston, M. P., Cheshire, G. C., & Fifoot, C. H. S. (2012). Cheshire, Fifoot and Furmston's law of contract. Oxford University Press.

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Hunter, H. (2015). Modern Law of Contracts.

Kennedy, G. (2010). Negotiation. London: Profile.

Koffman, L., & Macdonald, E. (2010). The law of contract. Oxford University Press.

McKendrick, E. (2014). Contract law: text, cases, and materials. Oxford University Press (UK).

Misrepresentation [H.L.] A bill intituled an act to amend the law relating to innocent misrepresentations and to amend sections 11 and 35 of the Sale of Goods Act 1893. (2007). Cambridge [England].

Nichols, P. (2012). Bankruptcy Act 1966. Chatswood, N.S.W.: LexisNexis Butterworths.

O'Sullivan, J., & Hilliard, J. (2016). The law of contract. Oxford University Press.

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