Commercial Law Formation of Contract

Question: Discuss about theCommercial Lawfor Formation of Contract. Answer: Formation of Contract As per the rules of commercial law of Singapore, chapter 08 on the law of contract, a contract is an agreement legally binding on the parties involved in the agreement. In order to bind a contract in the legal manner, there are various requirements to be satisfied, which include the following: Parties involved in the contract are required to be competent having the capacity to contract. There must be the clauses of offer and acceptance in the contract i.e. one party must offer and other party must accept along with the flow of consideration between them. The terms of the agreement or contract must be clearly mentioned including certain necessary information on the length or duration of the agreement, amount of consideration, mode of payment of consideration and description of the products or services (Wilkinson?Ryan Hoffman 2015). In the present case, Alan offered sale of textbooks on Introduction to Business Law in Singapore together with the class notes, details of which was posted on the social networking site on 1 Nov 2014. The information on the sale of products included the description of books and notes contents, amount of consideration and the payment details. Since, the terms of sale of Alans products contain all the relevant requirements of commercial law, which included offer and acceptance between the parties, it can be said that there was formation of contract. Alan posted the details of sale of books on 1 November 2014 while the payment date mentioned was 5 November 2014. Accordingly, the formation of the contract is said to be formed when the terms of the contract is accepted by the parties (Saunders Rymsza 2015). Alan, the first party to the contract who offered the sale accepted by Bernard with the payment made on 4 November therefore the contract was said to be formed on 4th November 2014 and the contracting parties were Alan and Bernard. Further, the contract was entered between Alan and Damien as well as Charleen who accepted the offer and the contract was formed on 4 November 2014. Bernards Legal Position As per the rules on discharge of contract, if the terms and conditions of the agreement are performed completely, by maintaining the legal requirements then the contract shall be brought to an end (Enshassi Mosa 2015). In the present case, contract between Alan and Bernard entered on 4 Nov 2014 in exchange of books and notes for $200.00. Bernard duly made the payment within the due time but came to know that the same book was available at the education center for free. The legal contract between the parties requires creation of agreement with the clear and conditional intention to create the contract. Further, the information on the content of the contract should be clearly mentioned by the offering party to the contract. In the present case, Alan mentioned the details on the content of the book as well as the contents of class notes while offering the contract via social site. However, it was not disclosed by him that the book is available at the education center for free (Harmon, Kim Mayer 2015). Considering the facts and regulations of business and commercial law, disclosure of all the information related to contract is essential to make a valid contract but at the same time, disclosure of facts related to other party is not the responsibility of the offering party. Therefore, Alan is not required to disclose the fact on distribution of books on Commercial Law for free of cost. On the contrary, Bernard himself is responsible to enquire about the sale price or distribution details of the books from other sources for the purpose of comparison. In addition to this, breach of contract occurs when there is misstatement present in the contract, erroneous details or any statement by means of fraud (Calliess von Harder 2015). In case of Alans contract there was no such misstatement observed which was accepted by Bernard. Moreover, if it can be established that the intention of Alan to create the contract was to deceive the contracting parties, then Bernard should prove the same. Hence, the aggrieved party, Bernard can make application against the contract and on being proved; the same shall be declared void. Charleens Legal Position In the given case, Charleen entered in the contract with Alan since she made the payment to buy the book on 7th November 2014. Charleen was a student of GCE at O level therefore, she is considered to be a minor. According to the contract law regulations, the provisions of common law under Minors Contracts Act govern contracts entered with the minors. It states that an agreement against the minors is not enforceable if it has been entered for their benefit either wholly or partly. Section 2 of Minors Contract Act states that the contract entered with minors on the acquisition of land or shares or partnership business contracts are legally bounded on the minors (Lu, Zhang Pan 2015). Accordingly, the present case with respect to the contract entered by Alan with Charleen on the sale of Commercial Law books does not fall in the category of contracts specified under section 2. On the contrary, if the contract entered with minors covers a guarantee with respect to the minors then it will not be binding against the minor. At the same time, the legal matters of the contract may bind the guarantor if it is just and equitable to do the same (Feldman, 2015). Accordingly, the contract entered between Alan and Charleen for the sale of books is not a valid contract as per Minors Contract Act. Damiens Legal Position Damien is one of the parties to the contract who was a friend of another party i.e. Bernard entered into the contract with Alan on 4 November 2014. Damien was a student of Kaplan Higher Education, agreed to pay the consideration for purchasing the book and notes from Alan. However, Damien found that the same book was distributed by the education center on 23 Nov 2014 for free of cost. Considering the regulations of Contract Act under Business and Commercial Law, offering party is responsible to disclose all the relevant facts of the contracting subject to the accepting party. In case the contract is formed with the intention of fraud or misleading the accepting parties then the agreement would form breach of contract and the offering party would be liable to compensate the loss (Lee, Yiu Cheung 2016). In case of contract between Alan and Damien, it is difficult to prove that the intention of Alan to sell the books at $200 was to deceive the parties. However, if the same is been proved then Damien has the right to make application against the contract entered with Alan as well as the compensation of los might be available for the same. Various Alternative Dispute Resolutions Alternative Dispute Resolution is a process to settle the arguments or disputes arising in the contract in consideration with the laws and regulations. Different types of alternative dispute resolution that are available with the variations known as mediation, arbitration and neutral evaluation. Mediation is a type of resolution where a third party neutral to both the disputing parties who considers the situation to negotiate and settle the disputes. In this type of resolution, mediator focuses on determining the solution to resolve the conflict situation without influencing the decision on any of the parties (Phillips McKeown 2016). On the other hand, arbitration procedure through which the disputed matter is resolved with the help of a third party known as arbitrator who takes the decision to solve the issues. In this process, both the disputed parties present along with the respective lawyers attend the case in front of the arbitrator. Similarly, neutral evaluation is a process c onducted by a third party who could be fair to both the parties in resolving the conflict situation and disputes. In case of neutral evaluation, also the disputed parties attend the case with their lawyers to consider the key evidence and the best estimates. The evaluator is required to consider the case by following the evidence and level of disputes arising between the parties (Calliess von Harder 2015). Different dispute resolutions come with several advantages and disadvantages to resolve the disputes between the parties. In case of mediation, one of the primary benefits is that it maintains privacy and safeguard the relationships while the resolution can be faster and fair with the communication among the parties. However, the disadvantage of this alternative is that it may create a problem for the parties if later on the opinion is diverted. Another disadvantage is the necessity and willingness to discuss and communicate the conflicts and disputes. However, the arbitration resolution comes with the benefit of accuracy as it is conducted by following the legal procedures that are cheap and faster. On the contrary, its disadvantage is that it is binding on the parties on the communication basis, which may not be acceptable by either party (Wilkinson?Ryan Hoffman 2015). Reference List: Atkinson, A.R. Wright, C., (2016). 11 Dispute resolution.BIM and Quantity Surveying, p.217. 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