Business Law Short Essay
A contract is said to be valid if it meets all the requirements of law relating to contracts. Such a contract is recognized and protected by the law. This means that a valid contract is enforceable in law. Enforceability means that the law can be used to make good the obligations, rights and duties of the parties to the contract. As such, should a party go back on their promise, they may be compelled by law to make good the promise. A valid contract may be written or oral depending on the parties to it. It is however not worth that where the law requires a contract be in writing, failure to do so may render an otherwise valid contract invalid. An example of a valid contract entered into is a contract for supply of stationery. One party, the buyer, ordered 200 pens, 65 pencils, 22 erasers and 6000 files. The buyer undertook to pay the agreed sum if the goods were delivered two weeks from the date of agreement. The contract was not written but the supplier was given a purchase order.
There are contracts which though they meet all the legal requirements of a contract, the law cannot be used to assert the rights and obligations accruing under it. These are referred to as unenforceable contracts. The nature of these contracts is that the law assumes that the parties did not intend to form legal relations (Treitel 149). Accordingly, the law infers that parties did not intend to be legally bound by the promise. The form does not matter whether written or oral, courts cannot enforce them. Enforceability means that even if one party performs their part, and the other party does not, the latter cannot be compelled by law to perform. An instance of unenforceable contract entered is an agreement to clean the family garage. The father being fed up with jumping over stuff in the morning while in the garage promises to pay 10 dollars if the garage is cleaned by afternoon.
A contract is considered voidable if even though valid, a party to the contract may invalidate it. In other words, the party may avoid the transaction in its entirety or choose to continue with it. This aspect arises where an event or circumstances occur which entitle a party or both of them to annul the contract. If the contract is not annulled in light of the event or circumstances, it is no longer voidable. It is assumed that the parties have affirmed it. Time is also important when it comes to voidable contracts. If a party entitled to void a contract delays in so doing, the law assumes they have affirmed the contract (Furmston 513). Examples of events or circumstances that would entitle a party to invalidate a contract include, mistake or where the subject matter is destroyed. An example of a voidable contract entered into is a contract for the resale of stationery. The initial sale did not materialize as the buyer had closed shop. The neighbor, also a stationery dealer, offered to purchase the goods. It later turned out that the goods had been destroyed by fire inside the initial buyer’s premises.
A contract is regarded as void if it cannot be enforced in law. Such a contract is deprived of enforceability due to the fact that void contracts are based on illegal act. The law treats a void contract as void from the beginning, that is, from the onset of the agreement. It matters not whether it is written or oral, so long as a contract is void it is enforceable. Similarly, it is of little concern that all the other requirements of a valid contract are met. So long as it is based on an illegal act, the contract would be void in law. An example of a void contract entered into is a contract with a party who turned out to be below the age of majority. From a general outlook the other party looked like an adult, he even had a business card. He ordered 50 fountain pens, 26 bottles of ink and 15 blackboard rulers. The goods were delivered but he delayed on his payment. In the process of following up the payment, it turned out that he was a minor.
Furmston, M. Chesire, Fifoot & Furmston’s Law of Contract, Fifteenth Edition. New
York: Oxford University Press Inc., 2007
Treitel, H. The Law of Contract, 10th Edition. London: Sweet & Maxwell, 1999.