Cases - Materials and Text on Contract Law

Question: Discuss about the Cases, Materials and Text on Contract Law. Answer: 1. The issue that has to be decided is related with the fact if the parties, Richard and his father had the intention of being legally bound by the promise according to which, the father had agreed to pay a weekly allowance of $200 if Richard mowed the backyards of the family property. In this way, in this question, the issue is related with the intention to create legal relations, which is one of the essential elements, vital for creating a lawful contract. There are certain features that have to be present in an agreement and due to these elements, it can be said that the agreement between the parties can be enforced by the law. These elements include offer, acceptance, consideration, capacity and the intention to create legal relations. The elements of the intention one part of the parties to the agreement to enter into legal relations has been introduced under the contract law with the purpose of sifting out the cases in which, court action will not be appropriate (Burrows, Finn and Todd, 2002). Not every agreement that has been concluded between the parties results in a lawful contract. For example in some cases, two friends may have decided to meet each other at the pub. In this case, although they may be a moral duty on the part of the French to honor such an agreement but in this case, there is no legal duty to do so. Therefore, such agreements are not enforceable under the law. The reason is that generally in such cases, the par ties do not have the intention of being legally bound and at the same time, the law tries to reflect the wishes of the parties (Beale, (ed) 2002). Therefore in order to decide which agreements can be imposed by the law and in case of which agreement, the parties have intention of entering into regulations, a difference is present between domestic/social agreements and the agreements made in context of trade. Such an issue came before the court in Jones v Padavatton (1969). In this case, it has been established like in Belfour v Belfour (1919) that howsoever complex the domestic arrangements may be but there is a presumption that they does not result in the creation of a legally binding contract, unless a clear intention is present which indicates to the contrary. Therefore in this case, an offer was made by Mrs. Jones to pay her daughter, Mrs Padavatton and amount of $200 per month if she left her job in the United States and went to London to study for the bar. Although, at first, the daughter was not willing because she had a good job with the Indian Embassy in Washington, but she was persuaded by her mother to do so. A mother believed that by doing so, the daughter may join her as a lawyer in Trinidad. However this initial agreement between the mother and daughter did not work because while the daughter was under the impression that the $200 will be US dollars but the mother intended them to be Trinidad dollars which were nearly half of what the doctor was expecting. As a result, the data can only afford to rent one room in which she had to live with her son. Therefore the mother agreed that she will purchase a house for her to live in. Accordingly a large house was purchased by the mother so that the other rooms could be given on rent by the daughter and the sink and can be used for maintenance. Later on the daughter married and could not complete her studies. Under these circumstances, the mother wanted the possession of the house. Therefore the issue that had to be decided by the court was if a legally enforceable contract has been created between the mother and her daughter or if the agreement created between them was only a family arrangement that was not intended to be legally binding. In this case, it was the decision of the court that the agreement between the parties was only a domestic agreement and a presumption has been raised that it was not the intention of the parties to be legally bound by the agreement. There was no evidence that could rebut this presumption. In the present case, Richard's father had promised to pay him a weekly allowance of $200 if he mowed the front and back yards of the family property and kept the gardens looking tidy. Earlier, the father was paying $350 to a garden contractor for doing the same job. Later on, the father told Richard that he cannot afford to pay the weekly allowance of $200. He also stated that this work should be done by Richard for free because it was the responsibility of the whole family to keep the property tidy and apart from it, Richard was also getting free boarding and lodging. As this arrangement has been made between father and son, it can be supposed that they lacked the intention of entering into a legal relationship. Moreover, there is nothing to rebut this presumption. As a result, in this case, the promise made by the father of paying a weekly allowance of $200 to Richard is not legally enforceable. Therefore, Richard cannot enforce the promise made by his father to pay $200 per week in a court of law. 2. The issue in this case is related with the remedies that may be available to Frere Bros for the breach of contract that has been committed by Joe. According to the law contract, when a party to the contract has failed to keep the promise under the agreement or failed to fulfill its responsibilities imposed by the contract, it is said that a breach of contract has taken place. The breach of contract can be whole or in part. In case of a breach of contract by a party to the contract, the other party gets certain remedies (Benson, (ed) 2001). The major remedies that are available to the innocent party for a breach of contract are damages, specific performance and injunction. The remedy of damages is generally used in contract law. Under the contract law, damages are the losses or the costs that have to be incurred due to the wrongful act of the other party. Therefore damages are a payment that has to be made under the common law (Addis v Gramophone, 1909). The intention of providing the remedy of damages is to provide financial compensation for the loss that has been suffered by the other party because of the breach. In this way, the main purpose of providing the remedy of damages is the need to protect the expectation interests of the promisee and also the performance of the promisor. Contractual damages are also able in case of a breach of contract. Therefore when a breach of contract has taken place, either party may suffer from a loss. The purpose behind contractual damages is not to provide punishment to the party that has failed to perform its part of the agreement. In this regard, the court also does not consider the ability of the defendant to pa y while determining the amount of damages (Atiyah, 1990). For example, the amount of damages can be the difference that is present between the contract price and the cost of performing the contract by another party. The other remedy that can be available in case of a breach of contract is that of specific performance. It is also significant remedy available in such cases. Specific performance is the order of the court according to which the defendant has to perform the act regarding which, it has already made a promise under the contract (Nutbrown v Thornton, 1805). Generally this remedy is in the form of judicial order according to which the person to go with this directive, has to do something or restrained from doing something. Generally the remedy of specific performance is used for the purpose of establishing a previously established transaction. The remedy of specific performance has proved to be most effective when it comes to protecting the expectation interests of an innocent party in case of a breach of contract. Before granting the remedy of specific performance, the court has to see if adequate relief can be provided to the innocent party by using the remedy of damages. Therefore whe n adequate remedies provided by damages, generally specific performance is not granted. Similarly, the court will refuse the remedy of specific performance if the terms of the contract are not clear. In this regard, a discretion has been provided to the court to refuse the award of the remedy of specific performance where granting this remedy may result in annual hardships to the defendant. However, in many cases, the remedy of damages cannot adequately compensate a person, particularly in cases where the subject matter is unique, in order to deal with such cases, the court of equity had developed the remedy of specific performance. Consequently, as a remedy for the breach of contract, commonly specific performance is granted where a suitable remedy is not provided by award of damages. Apart from the remedies of damages and specific performance, there is another remedy that can be granted by the court. Therefore, the court may award an injunction for a breach. An injunction can be described as an order of the court according to which the other party to the contract has to stop doing something and at the same time, such an order also prevents the happening of a particular thing in the future (Lumley v Wagner, 1852). Different types of intentions are present, including the mandatory injunction and the interlocutory injunction. The interlocutory injunction can be used for the purpose of maintaining the subject matter during the pendency of the litigation between the parties. On the other hand, when mandatory injunction has been granted by the court, the other party is required to do something. In the present case, Joe is a famous film actor and he had contracted with Frere Bros. The contract is for five years and according to the contract, Joe had agreed to provide the services exclusively to Frere Bros. therefore it has been provided in the contract that Joe will not act in the films of any other company during the period of the contract. However in the first year of the contract, Joe breached the contract and agreed to work in a film that was being made by another company. Under the circumstances, it has to be seen which remedies are available to Frere Bros for the breach of contract by Joe. As mentioned above, generally the courts provide the remedy of damages in case of a breach of contract. But in cases where the remedy of damages will not be sufficient to compensate the innocent party, the court may grant the remedy of specific performance or injunction. As mentioned above, when the remedy of injunction has been granted, the court may ask the party to do or not to do something. For example in the present case also the remedy of injunction will be most suitable for Frere Bros. therefore in this case, Frere Bros can seek the remedy of injunction from the court and ask the court to prevent Joe from it being in the film that is being made by Pretty Pictures. At the same time, the court may also grant an injunction according to which, Joe will not act in the film of any other company during the period of the contract. Therefore in this case, the remedy of injunction will be most suitable. References Atiyah, P.S. 1990, Essays on Contract, Oxford University Press, New York Beale, H. (ed) 2002, Cases, Materials and Text on Contract Law Hart Publishing, Oxford Benson, P. (ed) 2001, The Theory of Contract Law: New Essays Cambridge University Press, Cambridge Burrows, JF, Finn, J. and Todd, S. M.D. 2002, The Law of Contract in New Zealand (2nd ed, LexisNexis NZ, Wellington Case Law Addis v Gramophone[1909] AC 488 Balfour v Balfour [1919] 2 KB 571 Jones v Padavatton [1969] 1 WLR 328 Lumley v Wagner (1852) 42 ER 687 Nutbrown v Thornton (1805) 10 Ves 159