Part-1
Case background- Important point of the case
- Dragontree Ltd is an UK business based in North Wales which presently runs restaurants, bistros and cafes throughout the British Isles.
- The friendly Fryers Ltd are producers and suppliers of kitchen equipment the company is based in London.
Offer-The Friendly Friars place offer on the front of Dragontree Ltd to offer to supply Specialized Fat Free Fryers' for £200 each through fax.
Order placement (Acceptance of offer with condition)- Dragontree Ltd place an order of twenty fryers, if place within the next month.
Condition- To will deliver the order in the next month.
Acceptance of order- The Friendly Fryers responded back 'We acknowledge receipt of your
Fax, which is now receiving attention'. Thus proper documentation and all orders and acceptance are in writing forms.
The legal position of both companies- In this case Friendly Fryers are in position of loss due to cancellation of order from because that it wastes the time of Friendly Fryers and economic setback by not receiving the amount they are expecting when the order is completed. So a company can seek the legal discourse by filing a case against the Drangontree Ltd by saying the claim of breach of agreed terms.
The first elements of the contract are that it is an agreement. For any agreement to become a contract it must contain some essential element such as it occurs between competent parties, it is based on the genuine assent of the party, it is supported by the consideration, it has lawful objective and it must based on the form required by the law.
Validity of the contract
The contracts to be proved legally in the courts it must have the following things
- Presence of lawful offer and lawful acceptance which result the formation of the agreement.
- The intention of the agreement is to create legal relation and obligation between the parties involved.
- It should have lawful object
- The terms involved should have certain meaning not the vague or void term used in writing the contract.
- The contract contains such terms which have the possibility of performances.
- Not expressly declared void under certain laws of the countries.
- There should be the presence of lawful consideration which is basically the price paid by one party for the promise of another.
- Parties involved in the contract should be competent to follow the term, rules and regulation.
- The acceptance obtained through consent to all the term of the contract by all the concerned parties.
In this case
As per this case is present it has lawful offer and lawful acceptance and mutual consent between the party without any external analysis. All the term such as delivery within the next month is maintained by Friendly Fryers, the company is in the process of packing and delivering the items. All the term is included in the term clearly of delivering the said items on said time. Before the said time Dragontree Ltd cancel the order without giving the genuine reason to another party so the case arise of the breach of contract.
Types of breach
Breach of contract is said when one party has not honored the term of contract and other parties challenge the action to seek his legal remedies. Breaches are of also many types such as minor breaches which settle with price of actual damage, another is material breach which is failure to perform it includes economic waste due to failure of performance. The serious breach of the contract involves fundamental breaches in which other parties start thinking to terminate the whole contract. Sometime anticipatory breach is observed in which one party assumes that future non performance is inevitable.
In this case
Friendly Flyers seek remedy under cumulative remedies clause in which there is provision the innocent party may claim for the loss of actual prices or cancellation of the order. The Friendly Flyers charge the Dragontree Ltd by saying that it invested much amount in completting the order and lot of time is wasted in doing all activites involving packing and arrangement for distrubiton of the order. If such order is not present it may utilise it resources in other work through which Friendly Flyers may earn revenue. Thus opportunity loss is also present along with direct financial loss of preparing the order, man power loss and other loss of time and resources. The friendly Flyers ask the court to direct the Drangontree to completely compensate the loss or direct the company to complete the order. Specific performance is an equitable remedy granted at the court's discretion in which court to compel a party to perform his contractual obligations. For example Chinese vases in Falcke v Gray ([1859] 4 Drew 651). They also want a third party observer this time so that no further breach of contract is possible because the Drangontree ltd has loss its value by breaching the earlier contract. The example in which court order to fulfil all loss are many such as Hadley v Baxendale ([1854] 9 Exch. 341).
Part-2
In modern times every business activity involves contract whether the activity involves to purchasing, renting or buying of the items. The contracts define the relationships, the rights and obligations of the involving parties. If we focus on the definition of contract, a contract is in simple sense can be understood as binding agreement in which there is the promise or set of promises for the breach of which there is the remedy provided by the law in the form of legal recourse. The performance or execution of the mutually agreed terms in term of law becomes the duty of the concerned or involved party. The origin of contracts can be understood from the agreement which creates an obligation for the concerned parties. The substances of the definition stress on the mutual agreement or assent of the parties to create enforceable duties or obligation that is covered under legal terms.
Elements of the contract
If we see the elements of the contract then we find six important aspects of the contracts.
- The first elements of the contract are that it is an agreement
- It occurs between competent parties.
- It is based on the genuine assent of the party.
- It is supported by the consideration.
- It is lawful objective.
- It is based on the form required by the law.