What happens when a party does not fulfil their contractual obligations? Discuss what they are and how to apply them.

This week we are focuing on what happens when a party does not fulfil their contractual obligations.  The things that you can get from a party that breaches an agreement is known as “remedies.”  Your goal is to be able to disuss what they are and how to apply them.

To that end, you are to read  Chapter 8 of the course text pages 157 – 175 in the course text (Emerson, W.R.J.D. (2015). Business Law (Barron’s Business Review). Barron’s Educational Services; Sixth edition).

ASSIGNMENT:

This week you are to apply the concepts about contracts that you were introduced to last week and this week.  You must answer each of the two questions below in essay form.  In answering the questions, you MUST use quotations from the book providing a citation for all quoted used.

There is plenty to write about so you should not want for things to write about.

Question 1:

Mary, a frail but mentally sound 87-year old woman, is in the front garden of her old weatherboard home. Duncan, a big man who was heavily tattooed and wearing leathers, parks his motorbike outside her garden and strikes up a conversation with Mary. He told Mary that: “I am a licensed painter and I could paint the exterior of your house for a good price – $8000”. Mary obviously felt intimidated by Duncan and hastily agreed. The next day Duncan arrived and over the next two days painted her house. During this time Mary discovered from her daughter’s inquiries that had Mary received competitive quotes for the painting work, the going rate for painting her house was about $4000. Her daughter also discovered that Duncan’s registration as a licensed painter had lapsed two weeks ago because he had forgotten to pay the renewal fee. The job is now complete and Duncan has asked Mary for $8000.Was there a contract formed?  Explain in detail why or why not a contract was formed.  If a contact was formed, what remedies do the parties have against each other.

Question 2:

Adam says to his work colleague Colin: ‘if you drive my pet Doberman, Brutus, to Sydney I will pay you $3000’. Colin says nothing. Three days later he drove Brutus to Sydney. Brutus became very car sick during the trip because of Colin’s erratic driving. (Brutus had never been car sick before on long drives.) On arrival in Sydney Brutus was so dehydrated from car sickness that he had to be taken to an animal hospital. This required Adam to pay $1000 in veterinary expenses. Adam refuses to pay Colin $3000.(i) Has any contract been formed here? If so how was it formed and what are its terms? If not, explain why no contract has been formed.

(ii) Assuming that a contract has been formed, has it been breached? If so, what remedies arise?

Remedies:
This topic addresses the question, “what happens when a party breaches an agreement?’ –
1. Money damages. When party breaches an agreement, most often, the party injured by the
breach will seek monetary compensation for the breach this monetary compensation is called
“damages.” There are several types of damages, examples of which are “direct”,
“consequential”, and “indirect.” It is important that you recognize that money damages can be
awarded. It is not necessary for you to know the individual types of monetary damages.
2. Contract or Specific Performance. Another form of relief is “contract performance” or “specific
performance.” Under the theory of contract/specific performance, the injured party seeks to
have the preaching party. Do what he contracted to do under the contract. So, for example, if a
party agrees to deliver a product fails to do so, the other side may sue for the delivery of the
contracted product.
3. Rescission – Under the theory of “rescission” a party may demand that the agreement with me
other party be voided and that the injured party be made whole. In other words, the injured
party may request, that the party be put in the same position that it was in prior to executing
the agreement with the preaching party.
4. Restitution – the parties can also be placed in a position that existed prior to the execution of
the agreement.
5. Injunctive relief – there are two types. Permanent and Temporary Injunctions. An injunction is
an order by a court to do, or not due something.