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Contracts and Corporations Essay


Business contracts should be legalized to enhance their materialization. Since they provide legal instruments for protection, contracts enhance smooth execution of business activities. There are two types of contracts. These include formal and informal agreements that aid business operations. Formal contracts are the agreements written on paper. The involved parties must assent to it. Conversely, the informal contracts entail verbal agreements, which are prone to breach.

In business, operation contracts exist amidst customers, suppliers, and business owners. The contracts are guided by the well-established procedures, and may be influenced by the participating parties. This is a considerable provision in the context of contracts and their enforceability. Businesses that seek to gain competitive advantages should develop strong and favorable contract terms to ensure that its activities are well executed.

The business owners must know the parties they engage in contracts, their terms, conditions, and ability to deliver. This will avoid possible complaints and unwarranted damages that may be incurred due to impractical agreements and breach of contracts. This paper discusses the law of contract that guides business operations in various settings.

Forming a contractual relationship

Notably, contracts are binding agreements that provide legal terms of agreement between the parties involved (Steingold, 2010). When buying products, contracts should be signed to act as a binding provision between the concerned parties. Contractual relationship is the responsibility and obligations of all parties entering into contracts and agreements.

It is a guiding principle that indicates the instruments of business agreement. This forms the point of reference when controversy occurs between the parties. They are formulated under voluntary and express settings with the acceptance of the parties. In review of Mr. William’s case, one cannot provide a clear contract in lieu of the facts.

Legally, the display of valuables or commodities amount to an existence of a contract. However, it cannot be claimed entirely that the contract existed between the salesman and Mr. William. The display of goods does not among to contractual agreements. This is a considerable provision in this context. It is vital to unveil the provisions of legal contracts and how they can be formalized to validate claims.

In this regard, the contract was evident between salesman and Mr. William although it was not formalized. Hence, no legal claims can be made in this context. Both parties were not bound legally. Their dealings were informal hence exhibited no legal grounds. It was important for the involved parties to formalize their agreement to enhance the legal provisions in this context. Evidently, both parties had interest since the sales person was to attract buyers.

Concurrently, the customer had immense interest in the product, a provision that is normal in the current market trends. (Steingold, 2010). The issue is that the equipment was put on display that signifies a partial form of business contract. That is, if the sales company was not interested in forming any business contract, then there was no business putting the item on display. In this case, Mr. William should receive compensation for his time that he wasted in the premises sampling the items in guidance by the sales personnel.

The ultimate claim by the salesman that the concerned equipment was not on sale was inappropriate. In the business context, the organization could have not displayed the product if it was not for sale. This is a considerable claim amongst the concerned parties. The legal provisions established, ratified, and embraced in the business context are evident. Precisely, formalization of contracts is a credible provision for future claims. An organization can easily establish a particular legal provision to serve a given case with lucidity.

Capacity to Contract

The law requires that parties entering into any form of a contract should meet certain standards for the agreement to be legally binding and enforceable (Cassidy, 2006). This is a critical provision when considered critically in the context of contracts. For instance, the provided case exhibits credible legal provisions that should have been considered early enough in order to legalize the concerned contract.

The fundamental issues that requires establishment before formalizing contractual agreements include age group, mind capacity, soundness and willingness to accept the terms. In review of the Case involving Drive Yourself Company and the minor, it is evident that the company acted on negligence when making the recruitment of the new driver.

Indeed, the lawsuit against the company would succeed since it omitted the major provision of contract procedures. The organization could have considered practicable legal provisions before recruiting the new employee. The fact that the new driver was young in the industry could have been considered credibly before hiring him. The company never performed its investigations adequately to ascertain the age group of the driver who later turned to be 17 years.

Legally, employing minors is forbidden in numerous states. The exact age of an employee should be established before signing legal contracts with him or her. This is a considerable provision when scrutinized legally in the context of contracts. Precisely, Drive Yourself Company is legally on the wrong side of the law. Initially, the company violated the law by recruiting a minor to work for it as a driver.

This exposed the company as a prominent violator of the contract act; thus Drive Yourself Company was liable for its actions. Precisely, the lawsuit against the company would succeed since it omitted the major object of contract procedures (Cassidy, 2006). This is a considerable provision in the legal contexts. Numerous institutions have strived to obey the provisions of the law when making contracts with other independent parties. These are done to avert future convictions due to breach of contracts.

The most important thing to do is to establish credible and practicable legal provisions that all organizations engaged I contracts with employees are allowed to do so within the provisions of the law. It is vital to enhance the credibility of contractual provisions as in the case of this company its employee. Despite the fact that the company was on the wrong, the employee equally serves some responsibility in this context.

Enforceability of a contract

A contract’s enforceability is dependent on the terms and guiding principles that are spelt out in the agreement deed. This is meant to avert future convictions on the breach of the contract. Once the agreement is sealed the contract terms become legalized between the parties.

In fact, their cooperation becomes paramount so as to meet the entire provisions of the contract. Ordinarily, failure by any party to fulfill its contract promises can instigate prosecution for damages. Contextually, in the case of Galt who entered into a formal contract to take dancing lessons in a local studio, the company had an obligation to meet her expectation. This is what Galt expected to attain after the end of the contract. In fact, the company had no otherwise but to deliver their obligations.

The enforceability of a contract is a prominent provision in numerous contexts. The company was under obligation to ensure that the contract was accomplished as coordinated by the instructor. Indeed, the contract became binding on the company since employee’s actions are deemed to be the company’s actions.

They acted on behalf of the company and any agreement with clients require fulfillment irrespective of the employee’s existence. Galt sued the company for damages after the emergence that the company was reneging on its promise through the new instructor. The case would be in favor of Galt who had an expectation that the company would fulfill his promise.

This fact might help in the ruling of the case. It is prudential to obey contracts in the legal contexts. Additionally, the owner of the dance studio should establish contractual policies that can streamline the contract made by customers. Additionally, the contract should ensure that the company obeys its agreements with customers to avoid the rampant breach of contracts. Such policies should be put in place to avoid this kind of incident in the future.

Discharge by means other than performance part A & B

There are diverse ways that a contract can be discharged. These are spelt out under the law. The discharge clauses provide amicable provisions for the contractual parties to end their engagement in a systematic manner (Rowan, 2012). As noted, discharge of contracts is always preceded by various activities and factors. These include lack of capacity for execution, environmental challenges, and economic complications.

These complications may result to severe frustration that can create the need for the contractual parties to seek for termination or discharge. Contracting parties can terminate business agreement due to frustration, incapacitation, and breach of the terms by a party. In review of case A that involves Dryden contraction company and the contract holder, various challenges were evident that stalled the execution of the project.

The company despite its commitment into execution of the project faced severe frustration that emanated due to poor weather conditions. The frustrations caused by snow cover on the construction site and low temperatures prompted the mentioned discharge. This was in accordance with law as indicated earlier. Concurrently, the termination bid in respect to frustration is valid (Rowan, 2012).

Since Rigoletto communicated his absence in advance, suing him will not grant any success. He discharged his engagement due to commitments but preferred an artist who was fairly known to take his part. According to the earlier agreement, he was to appear in the concert and his Halifax sponsors made adequate preparation for his arrival.

They were frustrated on getting the massage of disclaimer from the artist that made them to contemplate suing the artist for the damages. However, this may not favor the sponsors since the artist discharged the engagement before the date of the concert that is allowed due to commitments that he cited.

Remedies for breach of contracts

Remedies for breach of contracts are equitable measures that seek to ensure that both parties in an agreement receive fair treatment. In particular, once an agreement is signed, the parties involved are bound to comply with its terms (Meiners, Ringleb & Edwards, 2008).

This is critical since any act of incompliance may attract severe damages to the reneging party as stated in the law. In lieu of the contracting circumstances between Jones and the tiles company, it is right for Jones to demand fairness. The parties are involved in a battle citing infringement on their contract rights. Jones stated that the company reneged on their working promise that they affirmed before commencement of the work. That is they undertook not to leave before finishing their work (Meiners, Ringleb & Edwards, 2008).

However, the company workers left for 10 days that was not in consonance with the agreement. Jones warned them not to engage in the contract if they could not deliver. Nonetheless, the company sued him for breach of the contract hoping to receive their money. According to the facts, the company officials were warned in prior and committed to maintain their services and leave upon completion.

Therefore, they were the first individuals to breach the contract. They should have apologized for the inconvenience caused and seek modalities to compensate Jones for the damages instead of suing him. The remedies that the two parties sought were well in line with their quest for justice since they both violated the terms of engagement.

That is the company failed to deliver on its promise of ensuring that thee Jones floor was complete before leaving and payment. Their departure resulted to severe inconveniences to Jones family since they could not utilize the kitchen optimally for satisfying their cooking needs. Although Jones may have been right in demanding for compensation due to the breach of terms of engagement terms by the company officials, he failed to follow due process (Kern & Willcocks, 2001).

His action of denying the company the agreed remuneration was tantamount to executing legal instruments invalidly. He should have launched the compliant through a credible system to ensure that the company suffers damages instead of denying them the payment. This explains why both parties went against the law whose remedy was only achievable through the approach they undertook.

Enforceability of contract rights

Duress refers to a situation where an individual executes an act or performs an activity due to pressure or threat. Duress may not occur in online transactions. This is a critical observation in diverse contexts and the modern technological provisions. No one is under duress to make online transactions or is being coerced in making online transactions in most cases (Kern & Willcocks, 2001). This explains why duress is the only practice that is not common in comparison to ‘mistake’ and ‘misrepresentation’.

Indeed, effective enforceability of contracts rights should be under minimal pressure but on legal principles. The enforceability nature should not deprive the participating parties the right to fair engagement that is paramount in any business setting as evident under duress (Helewitz, 2010).

Internet or e-transactions requires absolute accuracy and should be undertaken with minimal pressure to facilitate their credibility. Such transactions, for example, electronic payment or product ordering should be executed under voluntary terms with at most accuracy. The transactions should be done with the client’s acceptance that disqualifies the practice of duress.

As noted, mistakes or misrepresentation of information and figures are eminent in executing electronic transactions but not duress. Therefore, duress that involves performance under pressure remains an eminent element to consider. This is a considerable provision hen scrutinized critically in the legal contexts. In this case, it might affect individuals when performing electronic transactions.

Sole proprietorship, agency and partnership and corporate law

Partnership is an agreement that gives each party a substantive right of operation. Partners work to achieve common goals and growth levels. The case of Kuli and Magory depicts an employment partnership. The partnership is based on clear terms of employment agreements that are recommended to upscale the employee’s welfare. In the agreement, Magory has express duties and responsibilities that are delegated by the farm owner. This depicts him as an employee (Kern & Willcocks, 2001).

Consequently, companies operate as legal and independent entities according to the law. There operations are not pegged on the existence of the directors (Helewitz, 2010). There are legal provisions that coordinates operations of institutions incase of emergencies like the one that resulted to the death of the Driftwood company directors.

The defense point of view of the debtor even though may be valid cannot receive full credit in light of the circumstances before the law. This is evident since the debt is to the company that remains a legal entity and not the directors. The debtor should get acquitted that any money owed to the company is recorded in the institutions name and that the directors only act as coordinators of activities (Kern & Willcocks, 2001).

Although their existence is vital as required by the companies act, the company will execute its operations as a separate entity. This explains why the debtor has mno0 right to object or renege on paying the money owed to the company that is now under headship of the manager.

Indeed, the manager in this case is diligently discharging his duty that is to coordinate and maintain the institutions resources. He has a duty to ensure that the debts owed by clients are received whether the directors are alive or not. His action of requesting that money is in line with his core mandate and the debtor has reason to renege.

Real estate

Development or erection of infrastructural setups requires the consent of the parties involved especially when it involves the use of land. This is critical since some projects, for example, petroleum pipeline presents severe risks to the people. Janus has aright to protect his land and express his concerns regarding the erection of the pipeline through his farm (Helewitz, 2010).

He should analyze the justification of the pipeline and its impact in various sectors of operations. If the project is of economic nature then he should accept but request for more compensation. Indeed, the pipeline that is to be erected is of great economic nature and he should not refuse.

This is due to the projects fundamental objects that are to facilitate flow and supply of petroleum to the citizens (Tomasic, Bottomley & McQueen, 2002). It is set to ensure that the locals acquire petroleum product effectively, efficiently and in a timely manner. Janus should also realize that the product is an economic good whose availability is significant for economic growth. As such he should consider accepting the ideals of the project and allow the erection of the pipeline infrastructure.

However, he should claim for increased compensation and enhancement of safety due to the risks that such a project will expose him. This is to guarantee his life and social safety since petroleum product is highly dangerous due to its inflammable nature. It exposes individuals to severe risk of burn and acquisition of certain degreases since it holds hazardous content. Its hazardous nature affects health status of individuals (Helewitz, 2010).

Corporate law- purchase and sales of businesses

In the current business environment, investors are making varied considerations before engaging into purchasing of shares (Tomasic, Bottomley & McQueen, 2002). This is staged to avert probable risks vulnerable in the entire scenario. Corporate law is established to ensure that the purchases and sales’ provisions are executed legally and considerably within the law. It is vital to understand the provisions fronted by this pact so as to remain relevant in the market.

The factors under consideration are to enable the investors to establish the performing power and operating strength of the company that signifies the potential rate of return. Everything should be done within the legal quarters in regard to the purchases and sales of businesses. The factors include future operating or expansion plans, asset based provisions and profit portfolio (Kern & Willcocks, 2001).

The concerned organization should strategize on how to execute the required business dealings within the legal framework. In review of the three corporations that are listed for consideration by the investor. The first company is a private corporation within strong asset base, the second is publicly owned corporation with weak asset base and the third one hold strong asset portfolio and excellent performance.

In particular, the risks involved in purchasing shares in the first company that is a private company is that there is no guarantee for compensation incase the company wind up its operation.

There is risk that the company may prematurely collapse incase of misunderstanding in its management circles (Tomasic, Bottomley & McQueen, 2002). This may affect the performance of its shares in the market. The risk in the second appertains to the possibility of low returns due to its instability in performance. The company has low asset base and performance levels that hold the capacity of stalling its performance.

Its low asset base also gives a clear risk since when it collapses the shareholders may not have any source to acquire their investments. The risk in the third company majorly focuses on policy issues that influences share performance in the market. Investors keen to making asset purchasing should consider the ownership of the asset, its operating limits, the warranty period and its effectiveness and efficiency.


Indeed, institutions that seek to gain competitive advantages should develop strong and favorable contract terms to ensure that their activities are well executed. This is to avert possible complaints and losses due to immature agreement. Agreeably, this is a considerable provision when considered critically in the context of contracts.

It is vital to understand the fact that the law requires that parties entering into any form of contract should meet certain standards. This will allow the agreement to be legally binding and enforceable. Precisely, formalization of contracts is a credible provision for a legal protection on future claims. An organization can easily establish a particular legal provision to serve a given case with lucidity.


Cassidy, J. (2006). Concise corporations law. Annandale: Federation Press

Helewitz, J. A. (2010). Basic contract law for paralegals. Austin, TX: Wolters Kluwer Law & Business

Kern, T. & Willcocks, L. (2001). The relationship advantage: Information technologies, sourcing, and management. Oxford: Oxford Univ. Press

Meiners, R., Ringleb, A. & Edwards, F. (2008). The legal environment of business. Mason, OH: South-Western Cengage Learning

Rowan, S. (2012). Remedies for Breach of Contract: A Comparative Analysis of the Protection of Performance. Oxford: OUP Oxford

Steingold, F. (2010). Legal forms for starting & running a small business. Berkeley, CA: Nolo

Tomasic, R., Bottomley, S., & McQueen, R. (2002). Corporations law in Australia. Sydney: Federation Press

This Essay on Contracts and Corporations was written and submitted by user Khloe Moody to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly.

Khloe Moody studied at The University of Alabama, USA, with average GPA 3.17 out of 4.0.

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Moody, Khloe. "Contracts and Corporations." IvyPanda, 20 Nov. 2018,

1. Khloe Moody. "Contracts and Corporations." IvyPanda (blog), November 20, 2018.


Moody, Khloe. "Contracts and Corporations." IvyPanda (blog), November 20, 2018.


Moody, Khloe. 2018. "Contracts and Corporations." IvyPanda (blog), November 20, 2018.


Moody, K. (2018) 'Contracts and Corporations'. IvyPanda, 20 November.

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