Contract Research Papers Example

Introduction

A contract is guided by contract law that sets obligations voluntarily undertaken by contracting parties. It lies at the heart of many everyday transactions. When you purchase an item from a shop, even if it is only a magazine issue for $2, you are creating a contract with the vendor. In case you find that some of the pages are misplaced, you are obligated to return it to the vendor and get a substitute or your cash back. Such a scenario is based on the laws of contract considering that two parties are involved in the commercial transaction (Burrow, 2009).
Many contracts are more complicated than this and require experts in the field to be involved for their proper drafting and performance. Some of them include consumer transactions, to buy a computer system or a car on hire purchase terms - and business deals which may be worth thousands or even millions of pounds. If you are intending to get a job, you will be working under a contract of employment, governed by many of the general rules of law; if you buy or rent a house, a contract will control most of these transactions. Contracts also vary in the manner in which they are created among persons to ensure that the proper regulations surrounding them are adhered to by all parties in the transaction.
Every aspect of a contract will also be determined by other factors that will render it important to the parties. The types of contract involved from void, voidable, simple, complex and invalid contracts will also be determined by an intention of parties to form the contracts, a contract that is legally binding and consideration must be passed from the offeree to the offeror (Edwin & Trietel, 2007). Case laws have also been established in this area of contracts to guide parties on some basic principles that protect and guide parties in the manner of improving the legal obligations. In this area, case laws have set precedents on definition of terms and how the principles are set. An example can be seen in the case of Pharmaceutical Society of Great Britain v Boots Cash Chemists Ltd (1952) where the definition of an offer and invitation to treat were differentiated. A contract can be defined as "a legally binding agreement made between two or more persons, by which rights are acquired by one or more to acts or forbearances on the part of the other or others” (Burrow, 2009).

Types of Contracts

Contracts are classified based in their form and complexity. The formal part of a contract is determined by the manner of performance and the time of its binding. In the complexity part, we have contracts that vary in the types of persons involved extending to the third party involvement. Contracts will also get their characteristic names by their manner of validity. In this class, we have the void, invalid and voidable contracts.

Simple contract is an agreement that gives rise to obligations which are recognised by the law or enforced

An express contract is a contract whose terms of agreement are opened and declared during time of the formation. This class has the contract by parole or in writing, contracts under seal, and contracts of record.
A void contract- This is a contract that was illegal from certain conditions upon making it by the parties involved and therefore it has been executed illegally by one or all the parties to it. This kind of contract is not valid.
A voidable contract is a contract that had void characteristics but can be made legal upon changes to some of the features in doubt. Unlike a void contract, a voidable contract can be made to be executable and valid upon changing certain terms that made it voidable.

Characteristics of contracts

The different types of contracts have different types of characteristics but the general aspects of every contract must be established to make is a contract with obligations. Some of the properties of a contract are discussed below.

Offer and acceptance

These two elements must be present for a contract to exist. The offer is the part conducted by those interested in entering into an agreement with another party who needs to accept the offer. The offer has its own rules that must be adhered to by the offeror whether in writing, by word of mouth (orally) or through conduct. The offer must be communicated to the offeree to accept it, must have a specific duration of time as no offer can exist forever, the offer must be directed to a specific group of persons that will accept it and also stipulates the conditions to be fulfilled before accepting (Edwin & Trietel, 2007).
The acceptance bit has also some conditions that must be followed for the offeror to consider the acceptance valid by the offeree. It must be unqualified and absolute; it must be communicated to the offeror alone and no one else; it must be according to prescribed form of the offer; it must be with the specified time of the offeror; it must show an intention on the part of the acceptor to fulfil terms of the acceptance; it must be given before the offer lapses or before the offer is withdrawn; and an acceptance once made cannot, under whatever circumstances, be revoked in that a contract is concluded once the acceptance is made, that is why it cannot be retracted.
The two aspects can be seen in the cases of Butler Machine Tool Co Ltd v Ex-Cell-O Corporation Ltd (1979) and Gibson v Manchester City Council (1979) where the learned judge, Lord Denning, suggested that “a laissez-faire approach should be adopted so that, the courts would consider anything that indicated an agreement. This tends to be unpredictable and uncertain and, whilst there are occasions when such an approach is justifiable, the courts have rejected it as forming the basis of a general rule. Instead, the courts tend to find the intention of the parties to form an agreement by considering the existence of the constituent parts of the agreement: that is, an offer by one side matched by an acceptance from the other (though the process of reaching this point may also involve, for example, the rejection or revocation of an offer, or the making of a counter-offer). The effect is to produce a more predictable and certain analysis of the intentions of the parties, albeit one that is somewhat artificial. Virtually all contractual agreements can be analysed in this way. There are a few exceptional situations where there is clearly an agreement, even though it is difficult to pinpoint the offer and acceptance. The courts have from time to time recognised that such situations may legitimately be categorised as contractual agreements"(Burrow, 2009).

Intention to create legal relations

Under this property of a contract, the court considers whether it was a social or commercial transaction. In commercial matters the courts presume that the parties intend to create a legal relationship, whilst in social and domestic relationships there is the opposite presumption. In either case, the presumption may be rebutted by actual evidence to the contrary. For the domestic scenario, the court observed the same in the case of Balfour v Balfour (1919) where a husband who was working abroad promised to pay an allowance of £30 per month to his wife, who was to stay in England for medical reasons. When the husband failed to pay the woman the allowance, she sued. Her action before the court failed on two grounds: she had not provided any consideration and the parties had no intention of creating a legally binding agreement. A commercial transaction for the same property of a contract was seen in the case of Rose & Frank Co v JR Crompton & Bros Ltd where an agreement between two business entities was not enforced by the court because it contained an 'honour clause' that stated the parties in the business wish the agreement not be reviewed or enforced by a court. The legal part of a contract is very essential to ensure that all the parties to the signed contract respect their obligations and are bound to any consequences that may arise (Burrow, 2009).

Consideration

This is considered as the price at which the promissor buys a condition precedent from the promisee. There are conditions that it must fulfil for it to hold water in any agreement that might lead to a contract. The general rule is that consideration should be sufficient and not adequate. Another guiding principle is that consideration should be given prior to the formation of a contract as past consideration is invalid.
A contract that lacks the three general properties will be considered void from the onset. The characteristics of a void contract entail the following
It is illegal from the onset in that the parties involved lacked the capacity to make or enter into a contract, the contract made was of illegal nature or the contract was containing a few elements that will frustrate its intentions to create legal intentions.
It is legal from the time it was formed but declared null by the courts because it will violate fundamental principles of the law such as fairness to the affected parties like the third party or it is going to be contrary to public policies.
It becomes void due to the changes in laws of a given jurisdiction or in government policies after the formation of the given contract.
In conclusion, a contract takes different properties that must be adhered to by all parties interested in making one. The requirements from offer, acceptance, intention to create legal relations and consideration must be set to ensure a contractual agreement binds the parties and the contract is not frustrated. The pressure related to the different types of contracts also varies depending on the magnitude and expectation of each party to the contract. A simple contract will vary in terms as compared to an implied contract due to the demands of each party to the contract. At the end of the day, the rules to contracting must be respected.

References

Burrow, A. (2009). A Casebook on Contract. 5th ed. Oxford University Press.
Edwin, P & Trietel, G. H. (2007). Trietel: The Law of Contract. 12th ed. Sweet &
Maxwell.