The contract is between a farmer and the processing company. The two parties came to a solemn agreement on the terms and condition that builds the contract. The contract states that the after the farmer makes his or her harvest, he should supply the factory with the produce for processing. The terms of payment for the supplies are; the farmer would supply half of the farm produces and in turn the factory would promptly pay for the supply. The company would evaluate the quality of the products by processing the entire supply. If the products are up to the standards, the organization would request for the supply of the remaining half which would be settle immediately on delivery.
In addition there is an alternative the farmer may decide to supply all his farm produce to the company and after the processing process is done the factory would settle all the money owed to the farmer. The formation of the contracts requires the following elements; both parties have offered to dedicate themselves or promise to obey the terms and conditions in the act. Also the in the contract the concern parties have to accept the offer for the contract to become complete. The final step in this contract is that there has to be a seal to show that both parties come into an agreement.
After sometime the contract between the farmer and the company was terminated due to the frustration of the farmer. The company was not performing all its duties as required by the contract. In other terms, the payment to the farmer was being delayed and most of his products were being rejected after delivery. The termination of the contract is highly contributed by the impossible performance. It simply implies that the one of the parties is not in a good position to perform its duties adequately.
The contract was facing the challenge of termination due to the breach of the agreement by the factory. The factory did not honor the terms and conditions stated in the contract. Presence of a prior solemn agreement results to the current agreement due to specific reasons. Dissolution of the contract took place due to the fact the there was fraud in the entire operation. The factory did a misrepresentation of the farmer’s product thus breaching the terms of the contract. The company developed a lot of complication in terms of how it conducted it transaction with farmer and how the entire processing process was being conducted.
The misconduct between both parties raised the query of the efficiency and effectiveness of the terms binding the two parties. According to the perception of the local authority towards any form of illegal business any alteration of mode of activities taking place, would lead to the termination of the contract through a court order. The court or attorney has the power to terminate the contract. The argument on the products supplied for process being harmful for the consumption of the public makes the business illegal. It therefore qualifies or grants the attorney the full authority to declare the business illegal and calls for a shut down. Closure of the processing factory would definitely imply that the contract is void and as a result dissolution of the contract is the only option left for both parties.
Lasprogata, G. A., & Cotten, M. N. (2003). Contemplating “enterprise”: The business and legal challenges of social entrepreneurship. American Business Law Journal, 41(1), 67-114.