First Message on Contract Law Legal Issues faced by Business
Discussion Question
View more » [removed]Contract Law Legal Issues
3. You read about the elements of a valid contract which are:
(i) offer +(ii) acceptance = agreement
(iii) consideration
(iv) capacity
(v) lawful purpose or lawful object.
The foregoing elements are necessary for a valid contract to be formed, whether the contract is written or verbal and whether the contract is governed by the common law of contracts or is mainly governed by Article 2 of the Uniform Commercial Code.
Describe two contract law legal issues that may arise in business based on one or more elements of a valid contract. Explain how each of the problems can be addressed and remedied under the law. Fully explain your answer. Your answer may involve a contract that is mainly governed by Article 2 of the UCC and/or a contract that is governed by the common law of contracts.
Here is an example which responds to the discussion question. A contract is induced by fraud and so there really was no mutuality of assent. In this situation, the seller of a product makes an intentional fraudulent misrepresentation to the prospective buyer about the product the buyer is seeking to purchase and the buyer relies on the misrepresentation and enters into the contract. The remedy here where a contract is induced by fraud is the buyer can seek rescission which puts the parties in the place they would have enjoyed had the contract not been entered into. So, with rescission, each party gives back to the other what that party received under the terms of the contract. A second remedy available when a contract is induced by fraud is to seek monetary damages. You frequently see fraud as a legal issue in contracts when a business is selling something.
