Legal Principles in Enforcing Contracts
Amir Nabhan
Professor. Chen
Legal Principles in Enforcing Contract
Introduction
For any market to function effectively, contracts outlining specific procedures, outlines, and deliverables must be enforced. In cases where the procedure is bureaucratic or cumbersome, contracts play a vital role in resolving conflicts. A contract can, therefore, be defined as a relationship created orally or with a written agreement between two or more people and witness outlining the promises and enforceable by law. The legal aspect guarantees that if any of the parties signing the contract breaches any of the agreed promises, the law will be enforced. This paper will examine three legal principles that must be observed when enforcing a contract including attributes of the contractual relationship, contract standard provisions, and promises & conditions.
Legal Principles
Understanding the basic attributes of the contractual relationship
The first principle involves understanding the basic attributes of the contractual relationship. A contract is an exchange relationship with its terms and conditions irrespective of whether it is oral or written (McKendrick, 2014). As such, the parties involved must act with free will and reach an agreement on the essential terms that influence and govern their relationship. This principle asserts that for a contract to be legally accepted, the parties involved must have acted with free will. In some cases, the statute of frauds doctrine specifies that a contract must be written in order to be enforceable (Goddard, Fellner, & Ormand, 2007). This is for purposes of ensuring that there is enough evidence proving that the participants willingly agreed to enter into a contract.
A contract binds the partners with the objective of achieving the agreed purpose. Some contracts are short-term while others are long-term (Goddard, Fellner, & Ormand, 2007). However, irrespective of the duration, the contractual relationship is regulated but the provisions stipulated in the agreement. Additionally, the legal recognition of enforcing the contract ensures that specific rules and regulations binding the parties involved in the contract. Legal enforceability outlines the remedies that must be applied in case there is a breach of contract (Silberman & Yaffe, 2016). It is within the jurisdiction of the court to enforce a contract once a contract has been entered. The legal aspect of the contract ensures that the parties involved perform as expected; otherwise they will be subject to compensatory damages.
The parties involved must understand the legal capacity allowing them to sign a contract. Most states demand that an individual must be at least 18 years old to be allowed to enter into a contract. This is for purposes of ensuring that the parties involved have the mental capacity to understand the terms and conditions stipulated in the contract and non-performance consequences (McKendrick, 2014). Additionally, this provision ensures that the parties involved have not been forced intoxicated.
Overview of the contract standard provisions
The second legal principle includes stating clearly the overview of the contract standard provisions. Every contract is unique depending on the complexity of the reflected transaction. Based on this principle, every contract must have a title that reflects the subject in question and the parties involved (Silberman & Yaffe, 2016). The title of the contract should basically provide a summary of the content and participants involved in the contract. The contract must also have a preamble which correctly identifies the parties involved and the date of the transaction. In most cases, the preamble begins with a statement that reads, “Whereas” to explain the participants and facts addressed in the contract.
The contract standard provisions principle must also provide definitions depending on the nature of the agreement. The defined terms are for purposes of ensuring that the parties involved understand the information presented in the contract harmoniously (Goddard, Fellner, & Ormand, 2007). This principle also outlines the covenant memorializing the promises made by the parties involved in the contract such as delivering specific types of goods. The indemnification aspect of this principle outlines the questions and liability of the participants in the contract. The assumed facts underlying the agreement in the contract must also be outlined such as a warranty confirming that the goods were sold in working order.
Ideally, promises in a contract are not meant to be broken. However, this principle admits the possibility of the promises outlined in the contract being broken. There needs to be clear guidelines for terminating contracts (Hughes, Champion, & Murdoch, 2015). The procedures and circumstances that may result in the termination of the contract need to be clearly outlined. Further, the consequences of terminating the contract are outlined under this principle. Legally, the contract should clearly specify what each party in the contract is entitled to if there is breach or termination of the contract.
Conditions and warranties are some of the most important elements based on this principle and therefore must be correctly cited in the content. In the event that a participant in the contract breaches the conditions, the disappointed party may opt to rescind the contract. On the other hand, if one party breaches the warranties, the disappointed party can sue for damages to make up for the suffered loss (Silberman & Yaffe, 2016). As such, it is essential for the conditions and warranties of the contract to be clearly defined so that both parties are in agreement in terms of the deliverables.
Promises and Conditions
This legal principle demands that all contracts must contain a clear promise of future performance. As such, the contract must contain a condition to the performance of the obligation as part of ensuring that future performance is not compromised. In the event that these promises and conditions are not realized, there need to be clear consequences defined within the boundaries presented in law (Hughes, Champion, & Murdoch, 2015). A promise is the manifestation of intentions that need to be acted or refrained in a contract. The promise must be addressed to a specific person and in a language that both parties understand. This legal principle also admits the use of specific language to define a promise such as “will”, “must”, “shall”, and “is obligated to.” If either party fails to perform their obligation as outlined in the contract it creates the possibility of the contract being breached and compensation from the ‘promisor’.
A condition, in this case, refers to the events that trigger or discharge duties of the parties involved in a contract and performing the obligations as outlined in the promises. These conditions can only be visible in a contract that has already been formed. There are two types of conditions in this case including “condition precedent” and “condition subsequent.” Condition precedent refers to events that must occur before the due date of the performance obligation (Goddard, Fellner, & Ormand, 2007). On the other hand, condition subsequent involves an event discharging an obligation as it occurs (McKendrick, 2014). The set conditions must be fulfilled for the contract to be considered effective. If the set conditions are not met, then there is a possibility of a breach of contract.
This principle also dictates that there must be clear details of the offer. The parties involved must agree on the existing offers for the contract to be accepted. For example, in a business setup, the supply quotes a price and the number of products that can be supplied at that price to the business owner (Goddard, Fellner, & Ormand, 2007). The business owner on the other has to argue his position until they agree on pricing and other details for supplying the products. Once the parties have accepted the terms and conditions for supplying the product a contract is signed reflecting the promises and conditions cited.
This principle asserts that the participants in a contract must have the intention of creating a legal relationship for the contract to be legally accepted. If the promise is to be enforceable by law then the participants must make a legally binding commitment (Hughes, Champion, & Murdoch, 2015). However, in the absence of the legal commitment, the contract is still considered a relationship managed within the legal provision of a state or country. Legal commitment contributes to ensuring that each of the parties involved in making the contract understand promises they are expected to fulfill and the consequences of breaching the contract (Goddard, Fellner, & Ormand, 2007).
Conclusion
Contracts play a fundamental role in outline specific processes, procedures, and outlines that must be enforced, especially in a business context. Additionally, it plays a fundamental role in resolving conflicts when procedures prove to be bureaucratic and cumbersome. There are specific legal principles that are practiced when enforcing a contract. These principles are important in ensuring that all the important components of creating, executing, and managing contracts are included to avoid disappointing the participants involved. First, it is important for the parties involved to understand the basic attributes of the contractual relationship. A contract is an exchange relationship and therefore it is important for the parties involved to understand that precepts that bind them together. The parties involved must, therefore, understand the objectives of the contract and the agreed purpose. This will be instrumental in ensuring that all the parties involved do their part in the success of the contract.
The second principle asserts that the overview of the contract standard provisions must be clearly outlined. This principle recognizes that every contract is unique and therefore there must be a title to help the reader easily spot the difference. Clear definitions must also be included to ensure that the participants understand the facts outlined in the contract. The definitions must match the nature of the agreement between the participants involved in the contract. Finally, the third principle, promises, and conditions outline the promises and conditions that must be met. This principle also outlines the consequences for breaching the contract. There must be clear details of offer with the parties involved agree on the offers for the contract to be accepted. A legal relationship between the parties involved will also play a fundamental role in ensuring that the participants make a legal commitment to enforce the contract.
References
Goddard, C., Fellner, A., & Ormand, R. (2007). Basic principles of contract drafting. Retrieved from https://www.ulapland.fi/loader.aspx?id=60a15dd5-ebc6-4d06-a730-c363a4cf4327
Hughes, W., Champion, R., & Murdoch, J. (2015). Construction contracts: law and management. Routledge.
McKendrick, E. (2014). Contract law: text, cases, and materials. Oxford University Press (UK).
Silberman, L. J., & Yaffe, N. D. (2016). The Transnational Case in Conflict of Laws: Two Suggestions for the New Restatement Third of Conflict of Laws-Judicial Jurisdiction over Foreign Defendants and Party Autonomy in International Contracts. Duke J. Comp. & Int'l L., 27, 405.