COMMERCIAL LAW

  • Category:
    Business
  • Document type:
    Essay
  • Level:
    Undergraduate
  • Page:
    3
  • Words:
    1942

COMMERCIAL LAW3

COMMERCIAL LAW

COMMERCIAL LAW

Question 1

The issue, in this case, is whether Pat’s words that Cassie would be in Theo’s premises to inspect them with the promise of committing to a lease agreement was actually an invitation to offer. A contract is made through invitation of another party to a contract while the party invited into the contract make an offer which is acceptable by the party that sent the offer. A contract is therefore drafted after an agreement between two parties where one party invites the other into a contract, and the other makes an offer which is later accepted by the other party. The same can be argued in this case study Pats words that Cassie would be visiting Theo’s premises with the view of committing to a lease agreement, this was just a heads up to show that the company was still interested in leasing the premises. For any contract to be enforced by law there has to be a mutual agreement between two parties, though not binding as such. In the case study, Cassie was acting upon Pat’s orders, unfortunately pat did not consent to the proposal. For this case study, it can further be argued that there was a misunderstanding where Theo had the perception that by sending Cassie, Pat was ready to enter into an agreement once Cassie approved. However, this was Pat’s action to assure a potential client that the company was still interested in his premises and not an invitation to treat (Forray 2013).

Principle

In the process of making a contract, one party has to invite another party into the contract. Before enforcement, one party will have to review the others party’s terms of contract agreement before committing to an agreement. Invitation to one party to the other into a contract, in this case, is called invitation to a treaty. In vitiation to a treaty, in this case, should be direct and clear to the other party for them to understand. In the case study, it can be argued that Pat was clear in his communication with Theo where he informed him that Cassie an employee from his company would be making contact with him to with the aim of viewing the apartment for lease. Thus, Pats did not commit to an agreement with Theo neither did he invite him into an agreement. This was merely an expression of interest. Theo on the other hand, misinterpreted Pats information by mistaking it to an invitation of a contract. However Pat is not at fault since the information he presented to Theo was clear and plausible, but Theo assumed that this was an invitation to a contract, but there was not contract existing at that time (Lieberherr n.d.).

Application

In this case, Pat has a prior communication with Theo as a formality in business in order to show interest in leasing his premises. This was not an invitation into a contract rather Pat was just following his company’s formalities. For a contract to be bidding there has to be essential elements of a contract which are bases under capacity and legal purpose. A contract, therefore, is determined by an offer, the acceptance of the offer and agreement of the terms. This case lacks one of this issue that are crucial in any contract thus contract is therefore not bidding. In this case study, the contract was actually not bidding since there was no offer, Cassie never used a company’s letterhead leave alone a stamp. Theo’s claim on the offer was not an offer presented to him rather Pat was making a follow-up on the availability and suitability of his his premises. In fact, Theo was the one supposed to invite Pat into the contract considering that the premises to be leased belonged to him (Cherednychenko 2006). Since this contract is evidently not bidding Theo cannot take any legal action against Pat since there was no contract between him and Pat at first place since the contract he which he claims Pat invited him into was not bidding. This case study can, therefore, be related to the Fisher vs. Bell [1961] 1QB 394,case regarding an invitation to treaty which is an essential element for any contract to be bidding.

Conclusion

This means that there was no contract between Theo and Pat’s company thus the contract was non-binding. In this case, there is no offer which is an essential requirement for the existence of a contract. Theo misinterpreted Pats communication confusing it with an invitation to treat in an offer despite of it being clear and understandable. I would have, therefore, advice Theo against taking legal action since there is not contract biding the two due to the contact not being binding (Pannebakker 2013). Theo should pursue this matter in a more amicable other than legal means; the contract cannot be enforced by a judge if it never existed in the first place. On the other hand, in case Pat’s communication with Theo is an invitation to a treaty as claimed by Theo, Pat is also at liberty by law to accept the terms or deny (Bayern n.d.). Therefore, an invitation to treaty is only a declaration of intention to enter into a contract negotiation but this is not necessarily an acceptance of contract. This, therefore, means that Pat is at liberty to agree with Theo’s terms or to refute them and seize from entering into the contract with him. On the other hand in case judging by Theo’s claims that Pats communication with him was an invitation to treat it is a requirement for such information to be direct, clear and unequivocal to the other party. Cassie was at liberty but being an employee of Pat, doesn’t mean he was mandated to make the final decisions. Land law depicts that leases must be signed in presence of legal officers who will act as witnesses in case anything went astray. However, Pat’s communication seems to have met all these expectations only that the information was not actually an invitation to treat but merely pat’s follow-up on a property which his business was interested in (Oliveira 2009).

Agency Law entails the representation of an individual; the principle by a particular party; agents. However in most cases the actions of the agents are dependent upon the principles who dictated what the agents should do in line with their representation. On the other hand, agency law forms a central part of the business industry due to the multiple dealing in this sector principles have to seek the services of agents in Law order to less these multiple activities which might prove to be a burden to them. Thus Agency law also spread in the partnership which was a common issue in business. Partners, in this case, acted as agent for each other also in corporation shareholders delegate their power to directors who act on their behalf. This shows that the Agency Law has spread into the corporate sector. However despite the spread of Agency Law, it still lags behind when it comes to legal research. Agency Law is incorporated in the contract legal research course despite its increasing importance which might suggest that is has qualified to be taught in a separate course. On the other hand, the law of agency can be argued to further relate the contract law through getting into a contract with the third party which means that the law is built around the formation of three contracts involving three parties the principle agent and third party.

Question 2

Relationship between contract law and agency law

Agency and contract law also relate since the Agency law is dependent on the capacity of the principle while on the other hand Contract Law is depended on the capacity to contract. Despite the similarities between the Agency Law and Contract, there are also some distinct differences which relate to these two laws. While there is the consideration of the contract law, there is not present in Agency law. This gives Agency law the reference term gratuitous agency contract. Similar to contract law where a contract can be revoked agency contracts, on the other hand, can also be cancelled. Revocation of a contract in the agency law and contract law might share some causes with the main one being one party not meeting its requirement in the formation of this contract (Zhou n.d.). In line with this both the agency and contractual law have particular elements which are crucial in the contract formation process. On the other hand, the contract in both agency law and contract law can also be written or oral.

The other relation between the contract law and agency law is the fact both laws require some equal dignity rule in their formation process. This means that when one party agrees to a contract in writing the other party should also agree to the contract in writing. Both the Agency law and contract law are governed by either implied authority or apparent authority. Implied authority is power or responsibility that a particular party is accustomed to and is usually not necessarily written down. This is mostly common in agency laws where the responsibilities and roles of the agents and principle are not necessarily revealed. Applied authorities, on the other hand, are the responsibilities of either party in a contract that are either written down or revealed through actions (Rasmusen 2001).

Agency and contract law also relate since they both cover third parties in their contractual formation. For the contract law, a contract can cover two main parties and the third party while as in agency law third parties are also covered in the contract agreement. On the other hand, both these laws the roles of the individuals entering into the contract are way similar expect to form the contracts involving third parties in agency law which might be quite complex (Clu-in.org 2016).

Since both laws relate they both have remedies which result when there is a breach of contract in any of the two cases. On the other hand, both laws give directive on the action to be taken in the breach of a contract where the contract laws offer details on the procedure to follow while suing for breach of contract. Agency laws also offered details on how the principle or third party can sue the agent for breach of contract(Anson and Huffcut 1906).

Since the contract law and agency, law involves a contractual agreement between two or more parties these is termination of the contract in case there is a breach of the contract agreement. In both these laws, legal measures can be taken.

Reference

Anson, W. and Huffcut, E. 1906. Principles of the English law of contract. New York: Banks Law Pub. Co.

Bayern, S. n.d.. Offer and Acceptance in Modern Contract Law: A Needless Concept. SSRN Electronic Journal.

Cherednychenko, O. 2006. Fundamental Rights and Contract Law. European Review of Contract Law, 24.

Clu-in.org. 2016. CLU-IN | Technologies > Characterization and Monitoring > About Characterization and Monitoring Technologies > Laser-Induced Fluorescence. [online] Available at: https://clu-in.org/characterization/technologies/lif.cfm [Accessed 28 Apr. 2016].

Forray, V. 2013. Property Structures Underlying Contract. European Review of Contract Law, 94.

Lieberherr, M. n.d.. Laser induced fluorescence and scattering near interfaces.

Oliveira, N. 2009. The Private Law Society and Contract Law Application. European Review of Contract Law, 51.

Pannebakker, E. 2013. Offer and Acceptance and the Dynamics of Negotiations: Arguments for Contract Theory from Negotiation Studies. Erasmus Law Review.

Rasmusen, E. 2001. Agency law and contract formation. Cambridge, MA: Harvard Law School.

Zhou, Q. n.d.. Limits of Mandatory Rules in Contract Law: An Example in Agency Law. SSRN Electronic Journal.