Introduction to Business Law and Ethics
Introduction
Business contracts legally bind two or more persons through a mutually accepted agreement.[1] They tend to have an element of complexity if not well understood. Consequently, before entering into a contract, a person should fully understand the terms of the agreement. At times a person may enter into a contract unknowingly. It is thus essential for a party to understand the entire scope of contract formation and commitment. Where necessary as a party should involve legal and professional advice before going into a contract. A general understanding that a deal may be formed through writing or verbally is necessary to avoid falling into a breach of a contract.
Question One
In the case of Jennifer and Albert, there is no enforceable contract. The contract is partially valid but unenforceable. Firstly, Timmy and Jenifer’s sending emails to each other makes it a written agreement. For a legitimate deal, the parties must show an intention for legal relationship formation. In this case, Timmy and Jenifer intent to relate legally when Jenifer enquires about Timmy’s DJ services, and Timmy gives an availability response. However, most of the elements that make a contract enforceable are not present in the case. An executory contract should have a consideration provided by both of the parties. In this case, Timmy gave a price for his prices, but Jenifer did not respond. For the contract to be valid and enforceable, Jenifer ought to have given her response to Timmy’s price quotation, which she did not.
An enforceable contract is influenced mainly by the exchange of minds. The exchange should be focused on coming up to one mind through negotiation. There are no negotiations in the case of Timmy and Jenifer. Jenifer only makes an inquiry and Timmy gives a response. The conversation does not go beyond that point. The most important element that disqualifies the dealing between the two in becoming an enforceable contract is the lack of acceptance in the contract. Acceptance is one of the important elements of an enforceable contract. However, there was much conversation through email between Timmy and Jenifer, the important elements of the acceptance of Timmy’s offer by Jenifer are absent. When Timmy made an offer of his DJ services, there is no evidence of Jenifer’s acceptance of the offer. Entirely there are no grounds of enforceability of the contract in the dealing between Timmy and Jenifer. In this case, Jenifer can freely change her mind about hiring Timmy without facing any consequences of any breach of contract.
Question Two
Promissory estoppel is a doctrine that prevents a person from going back on the promise even when it lacks a legal contract. It creates legal enforceability in a promise when it lacks legality when one of the parties was making the consideration to the promise. The principle purposes to bar the promising party from tabling an argument against upholding the promise.[2] Promissory estoppel is limited to the occasions when the court establishes that the promisee would undergo an economic loss in case the promisor failed to deliver the promise. However, the promise will only be given where it is determined to be the only means left for the rectification of the injustice to the promise.
The principle of promissory estoppel relevantly suits the dispute between Jennifer and Stevie. Among the elements of the principle of estoppel is a promise by one of the parties. In this case, Jennifer promises to return the order form to Stevie in a few days but fail. It is during these days that she could have made any changes in her cake baking plan not when Stevie was through with the cake preparation process. In this case, according to the extension of promissory estoppel Steve is justified in making an assumption that Jennifer will definitely come and going ahead with the cake preparation process. Detriment is suffered by Stevie in reliance on the promise. At first, Steve has spent a couple of hours making the cake and thus he has faced economic loss in terms of time. He would otherwise have to use the time he spent baking the cake for his other beneficial activities. Moreover, according to him, such cakes are unusual and are not used for any other orders by other customers. It is evident that if Jennifer’s promise of picking the cake is not delivered, he will not only lose in terms of time but also in terms of resources he used to prepare the cake. The cake has no other usual customers and thus the resources he used to make the cake will definitely go into waste. The change of plans by Jennifer shows unconscionability as an element in the principle of estoppel. It is usually unfair and inequitable for Jennifer to change her mind on picking the Latin cake from Stevie. Moreover, Stevie entirely relies on Jennifer to pick the occasionally suited cake since he has no other market for the cake.
Question Three
Initially, while Jennifer was helping her cousin Albert, She did not put it clear that the help was for return. As an element of an enforceable contract, there should be a mutual agreement between the parties on the terms of the contract.[3] In this case, Jennifer shows an ill motive, an element of an illegal contract. If she knew she was helping Albert for a returned favor then she should have initially came out to tell the matter straight to Albert’s face. Jennifer uses a deceptive and undue influence to lure Albert into helping her in the setting up of the venue for their grandparent’s party. Such a motive is an illegal practice of dragging a person into the following of certain contractual rules that they never at first agreed.
The dealing between Jennifer and Albert disqualifies its existence to a contract by lacking the element of the offer. In the formation of a contract, an offer must be differentiated from the invitation to treat, or even friendly assistance. Helping Albert by Jennifer is more of friendly assistance than a contractual offer. It thus has no legal contractual enforceability by Jennifer telling Albert to return a favor the working counterparts are paid. Legal justice, in this case, dictates that if Albert’s cousins receive $50 amount, then he should also go with the same. Moreover, the case between Albert and Jennifer is deprived of its contractual enforceability by the contractual element that consideration should not arise from the past. A clearer definition of consideration in the forming of contracts explains that consideration must not be given in return of a promise. It should arise from the promisee and not the promiser. Jennifer lacks justification in compelling Albert to work to pay a fair they initially had no agreement. Importantly, social arrangements, as well as domestic arrangements, do not stand to be legally binding contracts.[4] The facts are seen from the fact that the parties had no intention of forming arrangements that legally bind them. It is important that any party in any dealing does not assume all dealings to contract.
Question Four
Jennifer’s text message was clearly dedicated to her cousins. In this case, her $50 would only be given to any of her cousins who attended the Saturday preparation. Bobby, by seeing the text from his daughter’s phone and attending the party preparation, Bobby has no entitlement for the money. If a contract was to be formed by Jennifer and her cousins then Bobby would not be part of it. A contract is bound by terms that all parties should understand before going into the contract. Consideration as an element of a contract dictates that certain conditions must be met before a third party is able to enforce the creation of rights to their favor, especially in a contract that he did not form part of. However, such terms are not applicable as the terms were initially clearly on who would be considered on when the issue of $50 consideration arose. Moreover, Bobby is not eligible for the pay as he targeted the wrong offer. In a contract on must understand and act appropriately on who an offer targets. Embracing the wrong target offer creates an element of legal unenforceability. It will be noticed that acceptance only contains legal effect when communicated to the right offeree. Bobby showed acceptance, however to the wrong contract. If Bobby files a suit for payment the court of law will definitely reject his claims on the basis that he was not among the targeted group for the consideration. His case will be term as more of willful assistance that a contract necessitating consideration.
In conclusion, parties should sufficiently understand contracts as well as their terms before engaging in them. Evidence should be guiding principles in the formation of contracts while largely disregarding assumptions. Parties should evaluate the enforceability of a contract before engaging in them.
Bibliography
Carlill v Carbolic Smoke Ball Company [1893] 2 QB 256
In Balfour v Balfour [1919] 2 KB 571,
Law of Property Act 1925, ss 52, 54(2);
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
[1] Law of Property Act 1925, ss 52, 54(2);
[2]Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
[3] Carlill v Carbolic Smoke Ball Company [1893] 2 QB 256
[4] In Balfour v Balfour [1919] 2 KB 571,