CONTRACT LAW

Contract Law



Contract Law

Introduction

In this case there are number of verbal agreements that are being violated. The contracts which the parties have made are not written contracts but they are verbal conversations. These verbal conversions are made over phone calls, text messages and face to face contact. This paper will discuss the contract laws and will also discuss the violations committed by the parties.

The law of contract which we are going to analyze here is actually the enforcement of promises. Every contract is not enforced by court. For the enforcement of promises, or an agreement court observe some elements. After having a check on these elements, court will prove that agreement as a contract. The contract actually involves a process of certain elements. The process starts from an offer. For the formation of the contract the offer must be accepted, unconditionally. There are certain more requirements for the offer and acceptance. After the communication of acceptance, law needs two other elements as well. One is consideration another is terms of the contract (Brownsword, 2009).

Case Study Analysis (Remedies for Rusty)

Suppose that a contract between two parties, Rusty and Gonzo, provides for three distinct alternative modes of performance. More specifically, Rusty promises to perform transactions in return for some quantum of pre-specified consideration. The choice of product selection is entirely at the election of A. Now suppose that Gonzo repudiates the contract and refuses to perform any of Transaction. Rusty is entitled to a remedy. The question this article addresses is, “To what remedy should Rusty be entitled?”

The question is both important and timely. It is important because contracts with alternative modes of performance are common, arising in circumstances as various as indefinite term employment contracts, rent-to-own contracts, contracts for the sale of goods, contracts containing liquidated damages clauses, take-or-pay contracts, and requirements contracts. It is timely because, as demonstrated by the Supreme Court of Canada's recent judgment in Hamilton v. Open Window Bakery, the common law in the Anglo-American tradition continues to experience uncharacteristic difficulty in articulating consistent principles governing remedies in the case of breach of alternative contracts. In the United States the predominant rule is that the mode of performance which would result in the lowest recovery for the plaintiff is selected. This rule works to systematically disadvantage promisees and, as will be demonstrated herein, is inconsistent with the compensation principle, which is, of course, the conventional remedial approach of Anglo-American law.

Under the compensation principle, courts award money damages in an amount sufficient to compensate disappointed promisees, in this case Rusty, for the loss of the promisor's performance. A court operating on this basis faced with assessing damages for Gonzo breach will attempt to determine the amount of damages which will adequately compensate Rusty.

In determining this amount of damages, the natural focus will be on the value Rusty assigned to Gonzo's promise. But how should we assess this value? Should this principal promise be valued by making reference to Rusty valuation of one of transaction? It ...