A contract is an agreement between two or more persons that is recognized by the law as being binding on the parties. For a contract to be binding, it must possess some elements or essentials. For example, the contract must have resulted from acceptance to an offer made by the offer to the offeree. The two parties must also have the intention to create legal relations in their agreements. The parties must have the capacity to contract. That is, they must be of the age of majority and sound mind. There must also be a consideration that is exchanged between the parties. It is worth noting that, though a contract is an agreement, not all agreements are contracts. Georgia and Malcolm seem to have some agreements. This paper seeks to identify the contractual issues that arise from their case.
Contractual Issues Arising From The Situation
Several contractual issues are arising from Georgia and Malcolm case. First, the parties can be deemed to have the contractual capacity. There is no information provided that could limit the parties from contracting. According to Miller & Jentz (2010), contractual capacity is the regal ability to enter into a contractual relationship. The law usually presumes that every person has the contractual capacity except for some exceptions not present in this situation.
Offer and Acceptance
Georgia is a professional in providing home pet care services. Malcolm expresses his interest in the services. He calls Georgia and Georgia goes to his home. He expresses his desire to have Georgia provide care for both his award winning rabbit and his tropical fish. This expression amounts to an offer. According to Badman & Grimmett (1996), an offer could be defined expression of desire or willingness by one party (offeror) to enter into a contract with another party (offeree). The same way Malcolm expressed his willingness to have Georgia take care of his pets when he is away. Georgia also gave his consent to the offer given and the rates discussed. In a statement, he states that he is “a professional, an animal lover and that this should not be a problem”. This shows he accepted the terms and conditions of the offer. Acceptance is defined as the consent to the terms and conditions of the offer (Badman & Grimmett, 1996). Georgia then gives the contract to sign that he gives the other clients. Malcolm signs the contract, though without reading. This means that the two parties agreed on the terms and contract of the contract. Acceptance was also communicated to the offeror. In the first case, Georgia communicates the acceptance to Malcolm where he indicates that he is a professional and he will take the offer. In the second case, Malcolm signs the contract and takes it to Georgia. This means that acceptance has been communicated. This is a condition in the law of contract that acceptance must be communicated to the offeror. In accepting the offers, the parties did not put some conditions. This is another rule of acceptance that helps validate the contract.
The two parties agreed to the terms and conditions of the offer without mistake, misrepresentation, coercion, undue influence or duress. This means that the parties have given their consent freely usually referred to as “free consent”. This is a requirement in any contract. Badman & Grimmett states that, “for the contract to be valid, it must be entered into freely and voluntarily” (Badman & Grimmett, 1996, pg. 116).
In this agreement, the two parties are to give each other something for the contract to be completed. We are told in the case that the parties discussed about the rates and the services that will be paid for. Malcolm is to pay Georgia for the service of caring for his pets. Georgia also is to take good care of Malcolm’s pets. This means there is something exchanged between them as per the contract. This is called consideration which could either be executory or executed. According to Badman & Grimmett, (1996, pg. 112), consideration turns an agreement into a binding contract. A consideration is the price paid in exchange for the promises that the parties made to each other. Malcolm is supposed to pay some money to Georgia for providing professional care to his pets. The consideration in this agreement meets the stated rule in the law of contract. For example, the consideration is past, it has some value, it is definite, capable of being performed, it is legal, and moves from the promise. The consideration in this case is therefore valid.
Intention to create legal relations
One of the most important aspects of contract is the intention of the parties to create legal relations. In this agreement, the parties did not state their intention to create legal relations. However, the law presumes that for commercial contracts or business contracts, there is always intention to create legal relations even when the parties have not stated so expressly. This presumption is not final since it can be rebutted in the event enough evidence is provided that there was no intention to create legal relations. In the case at hand, creating legal relations means the parties can sue each other in case of breach of contract.
Since the agreement meets all the elements of a valid contract, the contract between Georgia and Malcolm is binding on them. The parties are bound to fulfil their contractual obligations. Failure to do their contractual obligations amounts to breach of contract.
Breach of contract
Another contractual issue coming up in this situation is the breach of contract. Breach of contract occurs when the parties fail to complete their contractual obligations as agreed in the contract (Adamson, 2005). In this case, the aggrieved party in the contract can sue the other party for the damages he suffers as a result. Georgia breached the contract because he did not provide the care as agreed in the contract. The statement that “Georgia attends frequently to the pets but incorrectly feeds the fish the rabbit food and the rabbit the fish food” shows a breach of contract. As a result of these breach, Malcolm suffered the following losses:
His tropical fish worth thousands of dollars have died.
Due to the rabbit food blocking the aquarium filter, extensive flooding has occurred damaging both furniture and the house Malcolm is renting.
Malcolm also finds that the rabbit has lost all its hair and could no longer be shown.
It can be proved that all these damages occurred due to Georgia incorrectly feeding the pets.
Georgia’s legal position
The statement included in the contract presented by Georgia does have any connection to the damages suffered by Malcolm. In the statement it is stated that,
“‘Georgia maintains the highest standards in animal care. However Georgia will not be liable for death or illness of tropical fish due to their specific vulnerabilities.’”
Since Georgia fed the pets incorrectly, the statement cannot be used against Malcolm. Georgia is a professional in his work and was expected to deliver quality services. He breached the contract by doing his contractual obligation incorrectly. Malcolm can therefore sue Georgia for the breach of contract. He can seek for redress for the loss suffered. Since the contract existed, Malcolm can sue Georgia.
Remedies available to Georgia
According to Mead, Sagar & Bampton (2008), a breach of contract results in the contract being terminated. In this case, the aggrieved party may seek for remedies. Malcolm has suffered loss as a result of breach of contract. Malcolm is therefore entitled to common law remedies. The only available remedy at common law for the breach of contract is monetary compensation, usually referred to as damages (Sweeney, O’Reilly and Coleman, 2010). Damages exist in several forms. That is, Actual or substantial damages, Liquidated damages and Nominal damages. For Malcolm, Actual and liquidated damages are available. Actual damages are actual compensation for the loss suffered. Liquidated damages, on the other hand, refers to those damages that were agreed in the contract. In case, in the course agreement, they agreed on the damages, then this will be applied.
A contract only arises when the agreement between the two parties are legally binding. All the elements discussed above must be present for the contract to be binding. If any party fails to do their contractual obligation, the contract may be terminated and the aggrieved party can sue for the damages.
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Badman, J & Grimmett, L. (1996). Legal Frameworks for the Built Environment. UK: Taylor & Francis.
Mead, L., Sagar, D & Bampton, K. (2008).CIMA Official Learning System Fundamentals of Ethics, Corporate Governance. London: Elsevier.
Miller, R. L & Jentz G. A. (2010). Business Law Today: The Essentials. Florence: Cengage Learning.
Sweeney, B., O’Reilly, J. and Coleman, A. (2010). Law in Commerce, 4th Ed. Chatswood, NSW: LexisNexis Butterworths.