Contract Law and Tort and Property Law in Europe, Research Paper Example

Business law

A contract is an agreement reached by two or more parties, which creates reciprocal obligations that the law can enforce[1]. This paper provides a case analysis to show whether a contract exists and whether there is a breach of contract.

Cause of actions

Based on the facts of the case, Melvin can pursue Cause of actions for breach of contract, fraud, tort, and negligent performance. However, as demonstrated in the case of Clark-Fitzpatrick, Inc. v. Long Island R. Co[2], when the causes of action for fraud, negligent performance, and cause of action for breach of contract are based on the same facts, then a breach of action will be seen as duplicative, and one may be pursued. Again, the breach of contract should not be regarded as a tort unless a legal duty independent of the contract is breached. In the present case, therefore, a cause of action for breach of contract will be pursued. Melvin should pursue a cause of action for breach of contract.

Issues

Two underlying issues come up:

• Does a binding contract exist between Melvin and Peggy?
• Was there a breach of contract?

Applicable law

The applicable laws are contract law and tort law[3]. Two types of legislations apply; Federal Arbitration Act and Uniform Commercial Code.

Issues

Does a binding contract exist between Melvin and Peggy?

In order for Melvin to succeed, he must prove the existence of all the elements of a valid contract: namely offer and acceptance, mutuality, legality of purpose, consideration, capacity of parties and proper form[4].

A contract has to have an offer. In return, the offer has to be accepted. The offer has to be communicated to the other party before it is finally accepted[5]. Melvin made an offer to Peggy to take care of him for the rest of his life. Peggy agreed, which means there were an offer and acceptance.

In respect to the legality of the offer, there has to exist an unqualified expression of assent on the part of both Melvin and Peggy to the terms of the offer[6]. There was unconditional assent to the contract since both Melvin and Peggy did not act under duress or undue influence. Rather, they acted out of a will.

An element of consideration also has to exist. Consideration denotes the exchange the parties to a contract bargained while anticipating the fulfilment of a promise made. There was also a consideration, as Melvin conveyed his house to Peggy, as well as other valuable considerations. In return, Melvin expected Peggy’s service.

The element of a legality of purpose and an intention to form legal relations must also exist. When it comes to the legality of purpose, the purpose of the contract should not breach the law. The purpose of the contract is legal, as Melvin only wanted Peggy to take care of him for the rest of his life.

When it comes to intention to create legal relations, the parties must have showed an intention to create legal relations. Since the relationship between Melvin and Peggy is commercial in nature, it can be assumed that they have an intention to create legal relations. Here, the courts will assume that Melvin and Peggy are aware of the legally binding nature of their agreement.

The legal capacities of the parties to enter into a contract are also crucial. The contract law requires that, the parties to contract have to be authorised and competent to make the contract valid: Robinson v. Magee (1858)[7]. For this reason, the parties are considered incompetent when they are minors, have the mental disorder, as well as are disqualified by the law. In the case study, both Melvin and Peggy are competent and authorised.

A mutual agreement should also exist to make the contract valid. The mutual agreement refers to the common consent and understanding of the terms of the agreement. In particular, Melvin and Peggy must consent to the same understanding, at the same time and in a similar sense. Here, determining mutuality of agreement is contingent to the objective standards of what Melvin and Peggy stated in the contract, as well as what they did. In the case, the offer and acceptance are clear and explicit. They also mutually agreed on the critical terms of the contract[8].

Proper form and certainty of the subject matter should also exist. In the case, the contract has been made in writing, as there existed a ‘deed,’ outlining the terms and consideration of the contract[9]. Besides, Melvin had executed a power of attorney to execute the contract. Additionally, it is legally binding since the terms and conditions are adequately defined to enable understanding of the obligations of the parties.

To conclude, since all the six elements of a valid contract exists, it is clear that a valid contract existed between Melvin and Peggy.

Was there a breach of contract?

There is a fundamental breach of contract by Peggy. From the facts of the case, Peggy did not pay Melvin the $10 as agreed in the deed. She also locked Melvin out of the house. Her actions are, therefore, contrary to the terms of the contract. In fact, while Peggy is trying to argue that she did not make such promise to Melvin, she is clearly not telling the truth as the court will determine the case based on the written deed and witnesses to the contract. In particular, Melvin had executed the power of an attorney to oversee how Peggy handles the financial affairs. The attorney is a witness and can attest to an agreement that Peggy agreed to give Melvin $10 as agreed in the terms of the contract. The written deed will also provide evidence that Melvin had conveyed his house to Peggy.

Cleary, therefore, Peggy is in breach of the contract for failure to perform. She is, therefore, in fundamental breach of the contract.

On the other hand, Peggy must prove that she performed all conditions, or even prove that she was excused from her performance. Since her failure to perform is clearly a material breach of the contract, she may be discharged from her duty to perform. This is, however, an issue of fact. However, since facts indicate that she failed to perform and that Melvin failed to get substantial performance, she will be viewed to have failed to perform. In the case of Brown v. Grimes (2011)[10], the court held that a partial breach constitutes a breach of the whole contract.

What the court should conclude

The court should conclude that binding contract exist between Melvin and Peggy. This is since all the six elements of a valid contract exist to show that a valid contract existed between Melvin and Peggy. The court should also conclude that Peggy is in breach of the contract for failing to perform as agreed in the terms of the contract.

Remedies

Melvin can make a suit for specific performance. This is applied in breach of contract actions where monetary damages are inadequate: Willard v. Tayloe (1869)[11]. This remedy will compel Peggy to perform her duties exactly as she agreed while creating the contract. This means she will have to pay Melvin the $10, and to take care of Melvin.

Melvin can also seek for liquidated damages to incur compensations for the losses he incurred from Peggy’s failure to fulfil the contract. This may include the financial expenses incurred while pursuing the case and for being locked out of his house by Peggy. The tort and contract law damages are both calculated by the court to determine what it would return the plaintiff back to the position he or she would have been in before the fraud[12].

Conclusion

A binding contract exists between Melvin and Peggy. However, Peggy is in breach of the contract for failing to perform her duties as agreed in the terms of the contract. Two remedies are available for Melvin: specific performance and damages.

Works Cited

Bar, Christian. & Drobnig, Ulrich. The Interaction of Contract Law and Tort and Property Law in Europe: A Comparative Study. European Law Publishers, 2004, pp.46-48

MacMillan, Catharine, & Stone, Richard. Elements of the Law of Contract. University of London: London, 2012 pp.15-19

O’Gorman, Daniel. “Redefining Offer in Contract Law,” Mississippi Law Journal 82.6 (2013): 1050-1096

Owen, Keith. Law for Non-law Students. Cavendish Publishing, Sydney, 2001, pp.53-92

[1] Owen, Keith. Law for Non-law Students. Cavendish Publishing, Sydney, 2001, pp.53-92

[2] Clark-Fitzpatrick, Inc. v. Long Island R. Co., 70 N.Y.2d 382, at 389, 521 N.Y.S.2d 653

[3] Bar, Christian. & Drobnig, Ulrich. The Interaction of Contract Law and Tort and Property Law in Europe: A Comparative Study. European Law Publishers, 2004, pp.46-48

[4] O’Gorman, Daniel. “Redefining Offer in Contract Law,” Mississippi Law Journal 82.6 (2013): 1050-1096

[5] MacMillan, Catharine, & Stone, Richard. Elements of the Law of Contract. University of London: London, 2012 pp.15-19

[6] O’Gorman, Daniel. “Redefining Offer in Contract Law,” Mississippi Law Journal 82.6 (2013): 1050-1096

[7] Robinson v. Magee (1858) 9 Cal. 81, 83.

[8] MacMillan, Catharine, & Stone, Richard. Elements of the Law of Contract. University of London: London, 2012 pp.15-19

[9] Owen, Keith. Law for Non-law Students. Cavendish Publishing, Sydney, 2001, pp.53-92

[10] Brown v. Grimes (2011) 192 Cal.App.4th 265, 277–278 [120 Cal.Rptr.3d 893],

[11] Willard v. Tayloe (1869) 75 U.S. 557

[12] Owen, Keith. Law for Non-law Students. Cavendish Publishing, Sydney, 2001, pp.53-92