Introduction
Contract laws form the major part of business laws in the UK. There are certain major constituents governing contract laws, in terms of a valid offer by one party, and its acceptance by the other, legality of object of contract, consideration, capacity of the parties to enter into contracts (not being minors, mentally retarded, or in any other way incapable of understanding and entering into contracts), legality of the objective of contract and the bona fide intentions of parties to enter into contractual obligations to one another. However, contracts may be void, ab initio, whether with or without the knowledge of parties, be a subject of supervening impossibility or may be rendered void or voidable, at the option of either parties.
It is now proposed to consider all the three variants of the present case study in order to form a cogent and succinct legal opinion of what transpired in the contractual obligations between the parties and what remedies could be sought.
Scenario 1
In this case, the contract formally induced between X and Y stands valid. The contract was formalized on January 1, 2000 and needed to be completed by July 31, 2000. The fact that the contractor X had not taken into account the cost of materials and labour while presenting the estimates is not a valid defence for rescinding the contract. Y can demand specific performance by due date. “Specific performance is ordered only on equitable grounds in view of all the conditions surrounding the particular case. The determining factor is whether, in equity and good conscience, the court should specifically enforce the contract because the legal remedy of monetary damages would inadequately compensate the plaintiff for the loss.” (Specific Performance, Right to Specific Performance, para.1).
Alternatively, he may rescind the contract in the event of X’s non –performance and demand damages. X’s transaction with Z has no bearing whatsoever on this case, except that Y may prevent Z’s contract until his contract is completed.
Scenario 2
This contract has been vitiated by supervening impossibility, due to the takeover of the land on a date prior to the signing of the contract, i.e. 21st December 1999. “If, after a contract is formed, circumstances arise which make a party’s performance impossible or impracticable, his duty to render that performance is discharged.” (Impracticability and Frustration of Purpose, Supervening Impossibility and Impracticability of Performance, para.1). The contract is voidable at the option of the parties, or they could get a stay order disallowing the road construction and X, on his part could go ahead with his part of the contractual obligation. It is a matter of courts to decide whether the work need to continue or could be abandoned at the volition of the parties.
Scenario 3
Mr. X claims that lack of equipment could be the reason for his inability to perform his part of the contract, i.e. extending the house of Y. While it prima facie appears in violation of his contractual agreement with Y, it is for the respective parties to reach an amicable settlement on this issue. On his part, Y could either rescind the contract or claim damages, or he could give more time to X to complete his contractual obligation, with or without a reduction in the final settlement price contracted with X.
Conclusion
It is evidenced that the law of contract depends heavily upon the terms of the contractual obligation between parties and their implications. While the aspects of utmost good faith and commitment to contractual obligations are important considerations, it also needs to be seen that each party to the contract is in a position, as far as possible, to take cognizance of facts before entering into contracts with third parties.
Works Cited
Impracticability and Frustration of Purpose: Supervening Impossibility and Impracticability of Performance. 2009. Web.
Specific Performance: Right to Specific Performance. The Free Dictionary. 2009. Web.