Business Law Contracts
Introduction
The law of business contracts is based in the assessment of courts regarding the common misinterpretations, dilemmas, and other consequences that bounds two opposite parties with their associated responsibilities. Every businessman know how to deal in terms of entering contract and if one party, considered to be at fault in the delay or did not receive the appropriate requirement as discoursed in the contract, the innocent party is protected by the business law.
The Obligation
Obligation is a personal feeling that a person is bound legally or ethically in one certain matter. For such, obligations may arise in terms of bond or contracts. However, the failure to fulfill such obligation is punishable by law as if it is written in the contract. Part of the civil obligation is to be responsible in committing himself in meeting the demands and must pay for all the damages caused by e.g. negligence.
The most common type of written agreement between the two parties, especially in corporate world, is the use of contract. A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service. The characteristics of a contract should have a binding force, has autonomy, has mutuality, has relativity, and has consensuality. The obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. This means that the will of the contracting parties are the driving force of the contract and can be the object of consideration in creating obligation, which will be the binding force or law on the parties themselves. As long as the contract which gives rise to the obligation is valid and not contrary to law, public morals, public policy, public order or good customs, the contracting parties are legally bond to comply with their respective obligations in good faith.
The Breach of Contract
“The order of specific performance is granted to an innocent party”
In the breach or violation of contract, the effects can be serious on one or both parties. The innocent party is entitled to receive the “thing” (e.g. goods or products) or “performance” (services) specified in the contract even if it terminated. On the other hand, the wronged party may allow the contract to stand and sue for damages. In contract law, the award of damages is intended to place of the innocent party based on their agreement in the contract. In some cases, the performance may include compensation related to the income which should been generated if the contract had been performed properly. The wronged party will cover the obligation to pay the other damages such as the further financial losses. The court will appear to have the supreme powers over the contract and can order for the performance or fulfillment of the obligation. In general, the “order of specific performance” is granted for the innocent party to provide relief, while the other party might suffer serious hardship not unless the required performance is delivered. The order of the court to grant the specific performance is based on the examination of the case, avoiding the circumstances that may include and is equitable to do so.
The Damages
The terms “damages” are the basic remedy provided for a breach of contract. Commonly, this is provided by the law and placed to be the right for the innocent party. In some rare cases, the damages are insufficient remedy nevertheless, the specific performance is received and injunction can be awarded. In the order of court regarding the specific performance, the requirement should be on the positive contractual obligations. In some circumstances, the specific performance are not allowed or limited to the following:
1. Damages that are provided as an adequate remedy
2. Where the order could cause undue hardship
3. Where the contract is of such a nature that constant supervision by the court would be required
4. Where an order of specific performance would be possible against one party to the contract, but not the other
5. Where the party seeking the order has acted unfairly or unconscionably; for he is barred by the maxim ‘He who comes to Equity must come with clean hands’.
6. Where the order is not sought promptly the claimant will be barred by the maxims ‘Delay defeats the Equities’ and ‘Equity assists the vigilant but not the indolent’
Conclusion
The protection provided by law is a sign that the parties should be “faithful” before and while on contract in order for them not to suffer from inconveniences.
Sources:
Beauchamps Solicitors (2008) GMS Contracts Contract Law Issues [Online] Available at: http://www.beauchamps.ie/downloads/GMS%20Contracts.pdf [Accessed 02 September 2010]
Law of Contract [Online] Available at: http://law.jrank.org/pages/12504/Contract-Law.html [Accessed 02 September 2010].
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