Introduction
The corporate world requires adherence to the Uniform Commercial Code (UCC) in making business contracts. The contracts involve covenants or agreements between the parties signing them; there is a format for drafting any corporate contract. A contract is considered enforceable if it meets the thresholds of consideration, legality, capacity, and formal writing. Standard corporate law addresses the contempt or breach of law through remedies. The remedies include expectation, restitution, specific performance, and contract reformation.
Expectation damages are a result of a breach of contract; a non-breaching party recovers them. The remedy of expectation protects the interest of the offended party regarding the attainment of the expected value created by the promise ascertained in the contract (Davis, 2018). The restitution award is the remedy given for the defendant’s harm to the plaintiff by breach of contract (McCamus, 2020). It is calculated by evaluating the gains of both the plaintiff and the defendant. It is usually a result of the profits of the defendant vis-à-vis the loss incurred on the plaintiff (Beatty et al., 2017). The court can award it only after the affected party proves that they produced some substantial benefit to the defendant, usually requiring that their other party’s profit is paid. In unique cases, the courts decide to award recission, whereby both parties are put in positions before the agreement’s signing.
Courts award the damage of specific performance to compensate the offended party when no other remedy, not even monetary compensation, is enough to compensate wholly. The court would opt to use a legal remedy that places the plaintiff in a position to benefit if the contract was entirely performed. The remedy falls under equitable interests, and it could involve the transfer of property to the injured party. Contract reformation is necessary when disputes arise concerning contracts; the court permits the parties of the agreement to rewrite their contract to take it closer to the desired intentions of the parties.
The remedy Morris should seek
Morris should seek the remedy of expectation since the Madariagas failed to fully sell their restaurant to him. Essentially, Morris expected the agreement to be honored when getting into the contract, therefore, receiving ownership of the restaurant. In addition, Morris expected complete transfer of property, including the “Albert’s Famous Mexican Hot Sauce.” However, the Madariagas breached the agreement, although Morris had fulfilled their part of the covenant by paying the agreed price in full; the Madariagas fulfilled their covenant partially, only selling the restaurant but withholding the recipe.
The two types of awards relevant in this case are the awards of expectation and restitution. The $1,000 for the tractor repairs is the expected award because they catered to the delayed parts’ delivery. Ted had anticipated that the tractor would immediately start functioning on their farm upon purchase; however, it could not occur due to delays by the seller. The $60,000 for the dead crops is both expectation and restitution. They are restitution awards since they restore the farmer’s initial position; his crops’ worth was $60,000 when signing the agreement.
Problem with the drafted Provision
The drafting of the provision is erratic, for it is ambiguous, vague, and lacks a title, formal language of covenants, and an introductory paragraph, all of which are required for a contract to be enforceable. Vagueness implies drafting the writing with uncertainty of what is needed by both parties; ambiguity refers to unintentional vagueness- not considering the implications of the language used. It does not have a covenant; only one party’s terms have been included; only the terms of the bank are mentioned.
The provision also does not have signing by both parties; there is no proof of covenant between the bank and Blair Company. It does not fully describe the core subject of the agreement and all the real deals. The UCC requires that all written contracts sign a contract, which is not the case for this provision (Beatty et al., 2017). The cancellation clause, indicating the requirement for the company to pay the bank its full fee in case of default, does not formally bind any party. To improve the language of the provision, the drafter should include the full details of the parties of the contract, the covenant, and the obligations of each party; all to minimize ambiguity.
Advantages and disadvantages of hiring a lawyer to draft or review a contract
Lawyers are essential in matters regarding contracts, from drafting them to representation in the judicial processes. Hiring a lawyer or an attorney for the perfection of contracts comes with its benefits and disadvantages. Ideally, lawyers will offer expertise and a critical understanding of the contracts at hand. Consequently, the contracts will be drafted effectively and accurately; thus, preventing future problems that may arise out of unclarity or gaps within the contracts that allow breaching. On the other hand, the use of lawyers in contracts is quite demanding. For instance, they are relatively costly and might take a lot of time trying to understand the fundamental aspects of the contract. In addition, they are usually busy handling a lot of unresolved disputes and cases in court. Furthermore, hiring a lawyer might be a sign of professional incompetence in some corporate world. Nevertheless, employing a lawyer in making a contract is necessary because it guarantees a valid, legally satisfactory, and enforceable contract.
The advantages of hiring a lawyer in the drafting and reviewing of contracts are numerous. The lawyers are legal experts; therefore, they know the requirements that are to be fulfilled for the contract to be legitimate and enforceable. Moreover, they understand how the judicial systems, especially courts, interpret and implement the various terms of contracts. Thus, they are able to provide a legally correct contract that will meet all the laws and requirements of the state. Ideally, involving lawyers in contract-making ensures that the courts view the contract as the contract parties view it.
Involving lawyers in contract drafting prevents future trouble that the parties might experience. Corporate lawyers are legal experts in the writing of contracts. They know how to ensure the contracts explain the obligations of the parties involved and solve any possible problems. As a result, the contracts are designed in a way that minimizes any prospective lawsuits or risks. Moreover, lawyers can also review contracts for bargaining; thus, ensuring better terms and conditions of the contract. They also ensure that the contracts are fair and adequately legal. Where the parties have already signed, the lawyers can help with the amending or the renegotiation of the contract. In cases where the second party does not accept changes, or they are not necessary, the lawyer ensures the party identifies terms that they might have to be cautious about- in the future. In addition, the lawyers could guide the parties in altering their expectations where necessary.
The use of lawyers in contracts minimizes any unforeseen legal risk that could follow the agreement’s enforcement. For instance, an individual entering a contract with a group of companies or a freelancing contract with a client may not initially discover any risk in downloading a template online. However, they may find later that their employer is legally allowed to cancel their contract. The client, too, might not permit the downloaded material’s copyrighting, thus making the freelancer breach intellectual property terms. Essentially, contracts bind the parties who sign them, and it is crucial for them to know what the contracts entail and any implications; lawyers offer the expertise needed for that. Corporations entering business deals or trading their brand names or products seek contract lawyers to analyze possible risks and eventually customize the terms of the contract in favor of the organization.
Many legal challenges come with hiring lawyers in making contracts or corporate deals. The lawyers involved might need some time before concluding the agreements. They are third parties; thus, they need more time to learn the exact case they handle and understand the nature of the business the parties are transacting. In unique circumstances, they might not understand the deal elaborately, but they opt not to admit that. As a result, the advice they offer might be basic, obvious, inappropriate, or impractical based on the given context. In most cases, they are not businesspeople; and can therefore not ascertain whether a contract is lucrative, worth signing, or prospectively functional. They can also be critical; they find mistakes within contracts, and in many cases, they propose changes that complicate contracts instead of discovering opportunities for them. Finally, employing lawyers in contracts might portray the parties as incapable of handling contracts and deny them some opportunities in various scopes of the corporate world.
Lawyers are pretty demanding in terms of cost and time; this is disadvantageous to the parties involved in the contracts. Paying for the legal services that lawyers offer might be financially straining. In addition, lawyers have many cases to handle; they are busy, and therefore the parties might have to wait longer before signing the contracts. In addition, lawyers take longer to finalize negotiations; individuals usually find that very unnecessary since, without a lawyer, the process would have been more straightforward. A lawyer quickly identifies possible problems or risks evident in the contract. In most cases, resolving the potential issues causes differences between the parties and leads to disagreements. It is only beneficial assuming the problem came into being; however, it is a demerit since it might not practically occur. Consequently, the parties might cancel their deal out of failing to find common ground.
Conclusion
The Uniform Commercial Code (UCC) governs corporate businesses; it dictates how contracts are to be formulated, their extents, and how breaches should be addressed. Ideally, adherence to agreements would imply a harmonious business environment. Courts handle breach of contracts through remedies such as expectation, restitution, special performance, and contract reformation. It is necessary to hire a lawyer when drafting or reviewing contracts, for they offer legal expertise and prospective advice on the future implications of contracts. On the other hand, using lawyers has disadvantages such as time and expenses. Nevertheless, lawyers are fundamental in the process of contract formulation, for their benefits outweigh their demerits.
References
Beatty, J. F., & Samuelson, S. S. (2017). Cengage advantage books: Introduction to Business Law (6th Ed.). Cengage Learning. Web.
Davis, W. (2018). Employee raiding: A Teaching Case on Claims and Remedies. Rocky Mountain Law Journal, 7. Web.
McCamus, J. D. (2020). The law of restitution. Thomson Reuters Canada.