A CONTRACT LAW CASE STUDY
Amanda owed 0 dollars for goods she has bought from a retail outlet attached to a factory. After receiving several reminders about the overdue debt, she contacted the firm and advised the manager she could only afford to pay only dollars. As a firm was experiencing cash flow problems, the manager told Amanda he would accept the in full payment of the debt and was issued a receipt. Does Amanda still legally owe on the account under contract law, if so why?
Upon consideration and manifestation of rights given in the paragraph above it seems that the contract is over and Amanda is free from her debt and the manager have given word that her payment have been accepted for her full obligation and not just a part of her debt, Amanda is resting assure that she knows she has no debt. The manager was forced to take the money because of their cash flow problem but Amanda thought that she was not a part of it and so she simply take advantage and enjoy her privilege knowing that it is not her but the circumstance that given her the advantage to be free from debt. Usually a person in this situation may jump for joy.
Amanda knows the United States Contract Law that “ACCEPTANCE is an agreement, by express act or implied from conduct to the term of an offer including the prescribed manner of acceptance so that the enforceable contract is formed”. (United States Contract Law). She may think that she has gained the full rights and claims that she has paid all her debt. She can also claim that both parties have agreed upon such conditions and terms, goods have been received and payment has been made and accepted and therefore the transaction is complete and it required no legal writing, remedy has been made and the verbal acceptance of the manager is a binding settlement. The receipt that she has is her evidence and most of all she thought that both parties have benefited with the result.
If we are going to analyze a deeper study of the law and contract we can say that technically Amanda still owe dollars to the company because there have been no receipt that stated that she has paid 0 dollars but it shows that she has only paid dollars the receipt is in fact a proof of it that she has only given the receipt amounted for she has paid for and not the exact amount that she needs to pay. The verbal agreement between her and the manager can be revoke upon consideration through which the contract has not been made clear and the reason for acceptance which is the economic variable or cash flow problem may invalidate her claim knowing that she has taken advantage of the situation. The company can also show evidence that she has been given several reminder to pay her overdue debt verbally or through written notice is a strong claims that she was informed decently about her obligation to pay the full amount that she needs to fulfill.
The company can still have the rights to claim the complete amount if they would like to pursue such claims in consideration to the United States contract law that stated that there is a pre-existing legal duties that Amanda may need to perform clearly stated that “PAY LESS” does not constitute consideration unless that duty is unclear or honestly disputed. That is one party agrees to do something under a contract, that party cannot change the terms without consideration and expect the new terms to be enforceable” (United States Contract Law). Paying less in a contract is obviously degrading and demoralizing the stature of a business especially during recession and this is the not the right practice in performance of such obligation but there are people who simply like to take advantage of the situation on their full advantage.
Personally there should be no argument that both of the claims have their own rights and a little amount of 0 dollar should not need to go to a dispute and legal settlement but a certain company should not be involved in such a bad deal that can ruin their part, what if they have at least 10 customers in the situation of Amanda? Imagine what happened if all business will accept such proposition and the law will tolerate such claims? This is going to be disastrous failure in a country and most business and economy will definitely go bankrupt. The manager has made a bad deal which is self devastating. They should have acceptance the dollars as a partial fulfillment of Amanda’s obligation so that they will still have a claim of Amanda’s debt in the future and this would have been a better proposition that is both advantageous on their part and morally righteous in the eyes of the law and to the public.
Credit:ivythesis.typepad.com
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