Summary
Every contract has terms, which are agreed upon by the parties to the contract, and the violation of which is followed by remedies awarded by the court to the offended party. A contract is an enforceable agreement made by two persons or entities in which there is a promise to do something in return for a consideration defined in terms of the contract.
Differences between express and implied contract
An express contract refers to the agreement between parties in which the terms (offer, acceptance, and consideration) are expressed in words, either orally or in writing, or a combination of both. An implied contract, on the other hand, refers to the agreement between parties, in which duties and obligations of both parties are not expressed, but they are implied by the conduct of the parties in contact (Varul 2-13). This implies that the acts of the parties indicate that the parties have a mutual agreement, and there is no need to agree in words. However, an express contract should be proved by an actual agreement while the circumstances and the conduct of the parties are the key determinants of the implied contract (Pozgar 86-105).
Elements of a contract
Elements of a contract are the factors that prove the existence of an enforceable agreement between parties. They include the following:
Offer and acceptance
Offer refers to an unequivocal demonstration by one individual or entity of its intention to contract with another party. Acceptance, on the other hand, occurs when the offeree manifests assent to the term as made by the offerer without altering them. The note of acceptance should not change the terms of a contract, otherwise, it would result in a counteroffer.
Legal purpose
The parties to the contract must show the intent of entering into an agreement that is within the confines of the law. This implies that an agreement to perform an act that is legally unacceptable (such as the distribution of prohibited drugs) is not a legally binding agreement.
Consideration
It is the act or promises offered by one of the parties to contact and accepted by the other party as the value or price for the promise made by the party’s promise (Pozgar 86-105).
Legal capacity
The parties to the contract should have the legal capacity to agree with the exclusion of people with mental impairment, minors, and prisoners whose competence is considered separately.
Mutuality of obligation
The parties or individuals to a contract should agree to the same thing (terms), in the same sense (same understanding of the terms), and at the same time.
Certainty of the subject matter
This is derived from the concept that a party to a contract cannot accept an offer intending to form a contract unless all the terms of the contract are reasonably certain (Pozgar 86-105).
Remedies available for non-performance of a contract
Damage is the only remedy available under the common law while equitable remedies include several other remedies apart from the damage.
Damage is a monetary award given to compensate the party whose rights have been violated and have suffered a loss following the non-performance of a contract. Nominal damages represent the amount awarded to show that the rights of a party were violated even though there was no loss occasioned. Substantial damage is the amount awarded to compensate the party for the actual loss suffered following non-performance of a contract (Pozgar 86-105).
The court may order the specific performance of the initially agreed terms of the contract without the option of payment of damage. This may occur when monetary compensation is inadequate, or the subject matter is unique.
The court may order an induction by restraining the party from continuing with a given activity or undoing that which has been wrongfully done. The injunction is ordered when monetary compensation is inadequate, or it is necessary to maintain the status quo.
Rescission may be ordered to take the parties to the contract back to the position they were in before the agreement was made. It is the common remedy awarded when a contract is vitiated by misrepresentation.
Quantum meruit is a discretionary remedy that is awarded to compensate the plaintiff for the work done. This remedy is awarded if the contract is divisible, partial performance is acceptable, substantially performed, the amount is not specified, and the party is prevented from completing the contact (Varul 2-13).
Works Cited
Pozgar, George. Legal Aspects of Healthcare Administration. Sudbury: Jones & Bartlett Learning Publishers, 2012. Print.
Varul, Paul. Performance and remedies for non-performance: Comparative analysis of the PECL and DCFR. Estonia: University of Tartu, 2012. Print.