Theory of Contracts with Limited Enforcement †MyAssignmenthelp

Question: Discuss about the Theory of Contracts with Limited Enforcement. Answer: Introduction: The issue of this scenario is that whether Emma will be liable for the damage caused to Richard. The issue of this scenario is that whether Richard will be liable to pay 10% extra rent each year to George. The issue of this scenario is that whether Tom will be liable to buy the car from Richard as he had promised. The issue of this scenario is that whether Richard will be liable to for breaching the agreement, which was made with Martin. According to the Law of Torts, negligence refers to a situation where an individual fails to take care over something. Negligence is a tort that is treated as a breach of legal duty to take care of which, it results in damage that is undesired by the defendant to the plaintiff. As observed in the case study of Donoghue v Stevenson, it was established that an individual owe a duty of care to people who are to get affected closely by the actions of that individual (Burke, 2016). Four essentials of negligence, which includes duty to take care, breach of duty, cause of the damage and harm (Ryan, Callaghan Large, 2015). According to law, a promise or agreement is formed under the Contract Act, an agreement is made between two parties when there is an involvement of promise. An agreement is said to be revoked or breached when one party backs out or denies with the elements of the agreement. As per the Contract Act, there can also be a stance of misrepresentation when one person fails to understand the other in a certain case as observed in the case of Paye v Cave. The agreement was based on a promise made between two individuals (Hunter, 2017). However, it was not a contract since there was no offer and acceptance in the promise. As per the Law of Contract, an offer and acceptance are the basic foundations of the formation of a contract. One party makes the offer and the other person accepts based on a consideration, contract is formed. Without the involvement of offer and acceptance, a contract will be considered to be invalid. Consideration and capacity are the two most significant essentials of a contract. This has been observed and analyzed in the matter of Gibson v Manchester City Council. An offer should be unambiguous and clear of the terms upon which the offeror is willing to form the contract and the person to whom the offer is directed to decide to accept (McKendrick, 2014). According to Contract of Law, an agreement or a valid contract is formed based on the offer and acceptance, free consent, legal relationship, lawful objects, lawful consideration, certainty and registration. Therefore, while the contract or agreement is created, these essentials should be present as without these an agreement or a contract will be considered to be invalid. The offer must be stated in clear terms so that the other person can comprehend it (Martimort, Semenov Stole, 2017). Therefore, without the requisites elements, a contract cannot be constituted as observed in the case of Clifton v Palumbo. The scenario in the given case study states that Emma, being negligent provided the wrong brochure and information to Richard on buying shock absorber for off-road driving. Due to the wrong information the jeep of Richard had crashed down by causing a damage of worth $2000 to his body. Emma had conveyed Richard the information over the phone and was looking at the wrong page of the brochure. Therefore, due to negligence of breach of duty to care, Emma will be liable to pay for the damages caused to Richard (Gordon MacKay, 2018). In this scenario, the case study states that George was the leased a premises to Richard for his business for $5000 per month since 2016. The lease made between the parties claimed that the rent will be paid every six months and by every year it will increase by 10%. Richard failed to do so and requested George if he could pay him back later. George agreed but later asked for the extra additional amount of 10% the original rent amount (Solinger et al., 2016). However, there was an agreement of lease between them Richard and George and if Richard fails to pay the amount there would be a breach of contract. In this scenario, Law of Contract can be applied as a contract was formed between Tom and Richard. Tom wanted to purchase a car from Richard and therefore he that was finally agreed and accepted by Richard made an offer. Both of them agreed on the terms and conditions and proceeded with the contract. Thereafter, when Richard arrived with the car and for the money on the decided date, Tom refused to take it. It can be observed that Tom had breached a valid contract and will be liable. In this given case scenario, the study states that Law of Contracts will be applicable as an agreement or contract was formed between Richard and Martin. Role of consideration existed as well which was money and the car. Martin was a well wisher and looked after the car of Richard. He took his permission for borrowing it over a price of $50 per day but was granted for free as he had looked after the car before. Thereafter, when the original day arrives of Martin taking the car, he found out that Richard had already hired it to a customer. Therefore, there was a breach of contract in this scenario. It can be concluded by stating that Emma will be liable for committing negligence due to which Richard had a massive damage and loss. In this scenario, the conclusion states that Richard will be liable to pay the extra amount as it was agreed upon in the lease. It can be concluded saying that Tom will be liable to pay for the damages to Richard as he had breached the contract.Lastly, it can be stated that Richard backed out from the contract and hence will be liable although there was no form of consideration. References: Burke, A. (2016). Risk: Duty of care to prospective beneficiary under a will?: Bedenach v Calvert.LSJ: Law Society of NSW Journal, (27), 74. Gordon, A., MacKay, K. (2018). The element of wrongfulness.Without Prejudice,18(1), 32-33. Hunter, H. (2017). Modern Law of Contracts. Markovits, D. (2015). Theories of the Common Law of Contracts. Martimort, D., Semenov, A., Stole, L. (2017). A theory of contracts with limited enforcement.The Review of Economic Studies,84(2), 816-852. McKendrick, E. (2014).Contract law: text, cases, and materials. Oxford University Press (UK). Ryan, C. J., Callaghan, S., Large, M. (2015). The importance of least restrictive care: the clinical implications of a recent High Court decision on negligence.Australasian Psychiatry,23(4), 415-417. Solinger, O. N., Hofmans, J., Bal, P. M., Jansen, P. G. (2016). Bouncing back from psychological contract breach: How commitment recovers over time.Journal of Organizational Behavior,37(4), 494-514.