Understanding Valid Contracts And Their Constituents In Singapore Business Law Essay.

Discuss about the Singapore Business Law Ashley and Adam.

A contract has been defined as an agreement made among two or more individuals which was lawfully enforceable when it would be executed as per the particular necessities.[1] As agreements were stated to project and reflect the contract among the individuals. Agreements were so evidently stated to be major part in all the trade dealings as they have been fundamental in nature. Because these contracts think that all the individuals who were party to an agreement have understood the conditions which were set out in an agreement and the privileges and the duties which were imposed upon them under the contract.[2]

But in order to make a valid contract there have been certain constituents such as:

• An offer must be made by an individual to another individual;
• The offer must be accepted by the person to whom such offer was made;
• There must be consideration in a contract i.e. something of value or price paid for the promise;
• There must also be an intention of parties to create lawful relationships with each other.

When these four elements would be there in an agreement then it would amount to a valid contract which was enforceable under law.

Although a contract could be written as well as in an oral form. So, all the constituents which were defined to be there in a written contract in order to form a valid contract such as offer, acceptance, intention and consideration; the same would be there in a verbal contract. But once a complete oral agreement has been made and initiated among two  or more individuals then the agreement would be regarded as a lawfully  binding and valid one as a written agreement.

Also, in order to be regarded as a lawfully binding and valid agreement under the Law and to be upheld in the tribunal all the oral contracts must be complete. In other terms it could be stated that the individual who were parties top the contract must have to be recognized and considered with approval to all the conditions with respect to the service in a contract.

As the intention of the parties must be clear and understood by each other for the same thing in the same sense in which it was offered by an individual to another.

It was in Texaco v Pennzoil[3] case wherein it was concluded that a verbal contract was as good as the paper on which it was written.

So, even the oral contract would be regarded as binding upon the parties to the contract.

It was opined by (Ryan, 2006)[4] that Law of Contract has been designed to relate to the privileges and the obligations that may occur from an agreement. (Horwitz, 1974)[5] was of the view  that the growth of the modern contract law includes a promise in a promise which would maintain an action upon the matter. Though (Kronman, 1985)[6] stated that an agreement has been regarded lawfully enforceable contract, one that the state would enforce by placing its coercive powers at the disposal of the other person of the other party fails to perform. (Burton, 2008)[7] was of the opinion that though an agreement has been regarded as enforceable but it would be regarded as valid if it consists of certain elements such as offer, acceptance, consideration, intention to create legal relation, etc. On which it was opined by (Eisenberg, 1994)[8] that a major objective of the law of contract was to facilitate that the power of self-governing parties to further their shared aims was by doing contracts. (Williston, 1921)[9] affirmed that there has been a freedom to contract which was granted to the people in the context of contract Law. (Farnsworth, 1967) was of the view that all the disputes of the contract were seen to be often tur in the interpretation of th[10]e language of the contract. As (Corbin, 1993)[11] stated that there has been a modern version of the distention which has been made as he restricted the procedure of interpretation to the language of the agreement. And stated that it was the procedure whereby an individual grants a meaning to the symbols of the expression which was utilized by the other individual. (Waddams, 1991)[12] have defined in his work that there has been no general duty to disclose material facts to another individual to a proposed agreement although the law was more complex than this statement as it includes a number of techniques. (Barnett, 2003)[13] have specifically stated that there must be consent of the parties in order to forma a contract. (Summers, 1968)[14] specifies that individual should behave in good faith which was a minimal standard rather than having a high ideal. (Powell, 1790)[15] was of the view that a major constituent of the agreement in writing has been its denunciation of the equitable conceptions of the substantive justice as undermining the equitable concepts of substantial justice. (Fuller, 1941)[16] stated that there must be a consideration or a price paid for the promise under the law of contract. (Burton, 2008)[17] opined that there has been certain basic elements which have been kept in mind in order to constitute a valid contract whether a expressed or implied contract. Although (Goodhue et. Al., 2003)[18] it was stated that the written contract have been regarded as the high quality grapes which were more likely to be included as a section in a contract.

Issue

Whether there was a binding contract between Ashley and Adam or not?

An agreement has been regarded as a lawfully binding or valid contract which could be initiated among two or more individuals. In matters of any quarrels when the individuals who were arguing whether an agreement or the fundamentals have been broken then it may be considered to take the matter in the tribunal. As the law would consider an agreement in order to be valid of the contract which comprises of certain elements such as:

Offer;

Acceptance;

Intention to create legal relations;

Consideration.[19]

In Smith v Hughes [1871] [20]it was affirmed that where a proposal states a particular mode of acceptance then only an acceptance which was communicated would be considered as valid.

In another case of Tweddle V Atkinson in year 1861[21]  it was stated that an individual who has not give consideration for promise which could not be enforced on promise and it was only the individual who has “paid” for promise as he could only enforce it.

So, it could be stated that a contract which lacks in including one or more of the constituents which have been mentioned above would not be a valid agreement. In a number of individuals were seen to be unaware of the numerous manners that lawfully binding agreements. As in certain matters, the use of terms in the agreement may not be recognized as a condition of the agreement as it may rely on the intent if the individuals who were parties to the contract.

Application

Referring to the first situation it could be stated that there was no binding contract between Ashley and Adam as there was a offer and acceptance with a intend to create relationships but there was no consideration. So, it has been observed that there was not a binding and lawful contract between them.

Conclusion

So, it has been concluded that no, there was no binding agreement between Ashley and Adam in this scenario. As there was no consideration provided in this case.

Whether there was a binding contract between Ashley and Adam or not?

Rule

In order to constitute a valid contract and make it binding upon two individuals there must be different constituents which must be there such as offer and acceptance; intention to create lawful relationships, price paid for the promise. When these elements would be present in an agreement then it would be regarded as a valid contract which would be binding upon the individuals.[22]

Rule

As, the statements which have been made during the course of a negotiation could conclude in a contractual term or a representation. So, if the statement has amounted to a condition of the agreement which was not fulfilled then the innocent individual may sue the person for the violation of the agreement. But if the statement was merely a representation which was presented to be untrue then the innocent individual may bring an action of misrepresentation.[23]

In Oscar Chess Ltd v Williams [1957] 1 WLR 370[24] it was clearly stated that the statement in relation to the age of the car was not a condition but a representation. The representee, was a dealer of car who had the greater skill and would be in a better place to know the age of the manufacture than the defendant.

Similarly, in Ecay v Godfrey [1947] 80 Lloyds Rep 286[25] it was concluded that the statement that the ship was echo was merely a representation of fact. The declaration was not adequately emphatic to amount to a condition and the recommendation to have the ship surveyed which established that the respondent did not desire the applicant to depend on the statement.

Application

In this scenario also, there would not be a binding contract as there was no intention and they did not agree to the same conditions as they did not agree on the same thing in the same sense. As it has been clearly mentioned that Ashley did not state what he wants and Adam did not state what he offered. Rather there was a counter offer. So, as the above mentioned constituents which forms a part of a valid binding contract were not there. There was only offer, acceptance, intention but no consideration. As consideration has been regarded as one of the constituents which must be present in order to constitute a valid contract which would be binding on both the parties.

Also the fact stated was merely a representation and was not a term of the contract to which the individual was the party.

Conclusion

So, it has been concluded that no, there was no binding agreement between Ashley and Adam in this scenario. As there was no term and there was only a representation which was made in this scenario by way of Ashley and Adam.

Issue

Whether the agreement signed was binding or not and if it was then what were the options available to Ashley and Adam.
Rule

An agreement which was enforceable by law has been regarded as a contract. But its validity and binding nature could then be established when there were elements which were present like offer and acceptance, price, intention of the parties.

Similarly, misrepresentation of age could take place in some contracts when an individual lies or otherwise deceives another individual in regard to their age in order to attain a advantage or privileges that would otherwise be denied to them. It specifically includes the term of misrepresentation in a lawful contract as minor individuals were not granted right to enter into a contract.[26]

In Steinberg v Scala (Leeds) Ltd (1923)[27],it was stated that  the agreement was voided as the minor was unable to keep up with costs. However, in the matter of Edwards v Carter (1892)[28] the court mentioned that the agreement could not be rejected and the contract was enforceable.

Though in Reynolds v Garber Buick Co. 149 N.W. 985[29] that the applicant would be allowed to recover his price paid as a minor or child may disaffirm an agreement which was made during his minority.

Application

In this scenario, the contract would not be regarded as binding as the contracts which were entered with minors are not binding. And at the same time there was a misrepresentation of age as Ashley did not told Adam that she was not 18 when she entered into a contract.

So, Ashley would get back her price which she paid at the same time there have been certain penalties for misrepresenting the age of other individuals could result in certain serious lawful penalties. These may include:

Charges;

Denial of privileges that the individual was applying for, etc.

Conclusion

So, it could be concluded that the contract which was signed was not binding and there have been certain options which have been mentioned to Ashley and Adam as mentioned above. The other reason was that Ashley misrepresented her age which she did intentionally as she stated that she would be turning 18 in some time so it could be stated that she was known of the fact which was negligent statement.

Conclusion

So, after observing and going through all the literatures and the books it could be concluded that there has been certain basic necessities which must be present in a contract in order to make it a valid and  a binding one. But at the same time the people who were parties to the contract must be more than 18 years of age or they must have attained the age of majority. And if the age is not attained then the person must tell the other person with whom the contract was made in order to observe that the person did not act negligently. But such an act would be considered as misrepresentation or hiding of the facts by one person towards another.

Though statement stated by one person would be merely a representation of fact and would not be regarded as term of the contract. So, on the basis of the study in the present case it was stated clearly that there was no consideration so there would not be any binding contract which was formed.

Also, in order to be a binding and valid contract under law it must be understood by an individual in the same manner in which he or she has offered the proposal to the other person. But in this case the offer was made for certain goods but the offeree interpreted and asked the offeror to provide certain other goods by misrepresenting his or age. So, the person who has been found to be in breach of contract would have to compensate to the other person for the losses.

As a result, it could also be stated that it could be challenging to uphold an oral agreement in tribunal because of the lack of written evidence. So, it was as a result concluded and strongly recommended that an oral agreement be instantaneously set in a written form in order to unambiguously set out the express terms or conditions of the contract, thus the same would diminish the risk and danger of misunderstandings and wrongful acts.

Therefore, all the oral contracts whether written or oral would be equally enforceable under law as all the constituents have been the same in order to be valid and binding on both the individual who wants to be a part of the contract or buy or sell the products which were provided in the present  case by Adam to Ashley under law.

Cases 

Ecay v Godfrey [1947] 80 Lloyds Rep 286 Edwards v Carter (1892 Oscar Chess Ltd v Williams [1957] 1 WLR 370

Reynolds v Garber Buick Co. 149 N.W. 985

Smith v Hughes [1871] Steinberg v Scala (Leeds) Ltd (1923

Texaco v Pennzoil Tweddle V Atkinson in year 1861 

Journals

Kronman ,Anthony T, Contract Law and the State of Nature (1985), Journal of Law, Economic & Organization 1(1), 5.

Corbin,  Arthur L., and Williston, Samuel, "The Law of Contracts." (1921), 256-256. Clafornia Law Review, 82(5).

Hensher, David., Gwilliam ,Ken., Burton , Mark., Smith, Neil., Didier Van de Velde, and Lasse Fridstrom. "The ideal contract roundtable." (2008) Research in Transportation Economics 22( 1): 188-194.

Farnsworth, E Allan, Meaning in the Lawn of Contract (1967), The Yale Law Journal 76(5), 939.

Goodhue, R.E., Heien, D.M., Lee, H. et al. Contracts and Quality in the California Winegrape (2003), Review of Industrial Organization 23 (3), 267.

Fuller, Lon L., Consideration and Form (1941), Columbia Law Review 41(5), 799.

Louise Ryan and Anne Golden, ‘Tick the Box Please’: A Reflexive Approach to Doing Quantitative Social Research (2006).

Morton J. Horwitz, The historical Foundations of Modern Contract Law (1974), Harvard Law Review 87(5), 917.

Robert S. Summers, "Good Faith" in General Contract Law and the Sales Provisions of the Uniform Commercial Code (1968), Virginia Law Review 54(2), 195.

Books

Arthur Linton Corbin, Corbin on Contracts, A Comprehensive Treatise on the Rules of Contract Law 6A.

John Joseph Powell, Essay Upon the Law of Contracts and Agreements (1790), (Dublin: Chamberlaine and Rice) 1-2.

Melvin Aron Eisenberg, Expression rules in Contract Law and Problems of Offer and acceptance (1994).

Randy E Barnett. Contracts: Cases and Doctrine (2003), (Aspen Law & Business).

Steven J. Burton, Burton, Steven J., Elements of Contract Interpretation. U Iowa Legal Studies Research Paper No. 08-45, (2008), Oxford University Press.

Websites

E-Lawresources, Contract Law (2017) < e-lawresources.co.uk/Contract.php>

In Brief, Contracts, (2017) < https://www.inbrief.co.uk/contract-law/contracts/>

In Brief, Fraud & Fraudulent Misrepresentation – The Tort of Deceit, (2017) < https://www.inbrief.co.uk/offences/fraud/>

Jose Rivera, Misrepresentation of Age Lawyers, Legal Match (2017) < https://www.legalmatch.com/law-library/article/misrepresentation-of-age-lawyers.html>

Conference Papers

S M Waddams, Precontractual Duties of Disclosure, (20th Annual Workshop on Commercial and Consumer Law at University of Toronto) 12 and 13 October’ 1990.