Introduction
In today business, it is important to
understand business law because law is indispensable part of success of any
business. By understanding law, business can create valid contract, have a
clear view about their right as well as their obligation to generate contract
well. In this study, essential elements and terms of contract will be
discussed, effect of different types and factors of contract will be analyzed
and finally, apply these element into business situation through two contracts:
Contract 1:
Duc Nhan Electrical Mechanical Refrigeration Co., LTD and Ovi Cable Co., LTD
Mr Nguyen Phuoc Dinh and Mr Tang
Cheng Leong are authorized representative of Minh Nhan electrical and OVI
respectively. Both parties agreed to enter into contract on conditions and terms
which include specification, quality, payment, warranty, delivery, penalty and
responsibilities of parties. In term of responsibility, it is stated that Minh
Nhan must receive goods on time. If receiving goods later 30 days, Minh Nhan
will suffer interest rate 7%/week. However, Minh Nhan was late 31 days to
receive goods and refuse to pay interest. Ovi cable submitted the dispute to
economic court.
Contract 2: Saint
Gobain Vietnam Limited and The He Moi trading and construction
Mr. Craig Stephen Chamber and Ms.
Nguyen Thi Hang Nga are authorized representatives of Saint Gobain and The He
Moi limited respectively. They negotiated and agreed to enter into contract on
conditions and term which include specification, quality, warranty, payment and
delivery. At the day of delivery, both sides did not check the quantity of
goods at delivery location. The He Moi then notice Saint Gobain that quantity
of good was not as ordered. However, Saint Gobain argued that was not their
fault. The He Moi submitted dispute to court.
1.1
Explain the importance of the essential elements
required for the formation of a valid contract.
A contract is described as an
agreement that is used to bind the two or more parties. A legal contract should
include these essential elements: offer, acceptance, consideration, intention
to create a legal relationship, capacity, privity of contract.
1.1.1 Offer and
acceptance
Offer and acceptance are two basic
factors of agreement. Once a party gives an offer and another party accept to
make a contract. Offer and acceptance are prerequisites to have a valid
contract. The elements are used to define whether acceptance exist or not. It
is necessary to understand the offer in the appropriate logic so it has to be precise
to avoid a mistake. If an offer is vague, the acceptance will be worthless and
no contract is made. For example, an offer to buy hare skin from Colin and
Shields – merchants in London was given to Mr. Hartog – Dutch furrier with the
price 10d per piece for 30,000 skins, and Mr. Hartog agreed. Finally, when Collin
and Shield write next offer in writing, they mistakenly stated that the amount
of hare skin would be sold at the price 10d per pound for 30,000 skins, and Mr.
Hartog agreed. However, Colin and Shields disagreed to create contract. The
judge decided that there was no contract because there were a mistake in form
of offer. (Hartog v Colin and Shields, 1939)
When it come to the term of offer,
acceptance is an unqualified agreement (Business Law, 2013). Acceptance can be stated
by action, words or inferred from conduct. It is required to be clear and
certain. The acceptance must fit the term of offer. If there are two offers in
term, the contract is not valid (Tinn v Hoffman & Co, 1873). In addition, acceptance
must be made by person who was offered. It mean the offeree must show the
acceptance to offeror. The silence does not mean that offer is accepted.
Therefore, to accept the offer, offeree must show by words, actions; the
example for this is the case of Carlill v Carbolic Smoke Ball co 1893.
(Source: Contractual agreement-offer and acceptance
http://www.elawresources.co.uk/Offer-and-acceptance.php)
1.1.2. Intention
to create legal relation
It is defined that agreement can only
be a legal contract when the all parties intend this to be so. It will be
consider as strongly supposed in case of business agreement but it supposed
otherwise if agreement is made among friend, social or domestic. (Business Law,
2013)
a).Domestic arrangement
Domestic arrangement can be an agreement
between husband and wife, relatives and other domestic arrangement and assumed
that there is no aim to make legal relations. However, husband and wife can
make a binding contract in case they intend to be bound by law. In case Merritt
v Merritt, when the husband left his wife he decided to pay £40/month and his
wife agreed to cover the loan. She would have right to own the house when she paid
the entire loan. (Merritt v Merritt, 1970). In addition, agreement among
relative could be considered by court. Furthermore, with other domestic
arrangement, parties who are not related but have close relationship can create
agreement, and it’s considered that was intended to create legal relation.
b).Commercial agreement
Agreement between businessmen is
called commercial agreement if they aim to be bound. For instance, coin of
World Cup collection would be gave to person who bought four gallons of petro
from Esso. However, Esso had to pay tax because of producing coin in quantity
for general resale. It claimed that coins were just free gift for promotion.
(Esso Petroleum v Customs & Excise, 1976)
(Source: Intention to Create Legal
Relations: When is there a contractual intention?:
http://www.insitelawmagazine.com/ch2intention.htm )
1.1.3. Consideration
Consideration stand for some right, interest,
profit or benefits accumulating to one party of the contract, or damage, loss
and responsibilities given by the other of the contract (Business Law,
2013). Basically, consideration is a trading
of promisor and promisee. Each of them will have a benefit and suffer a loss. There
is no contract can be made without consideration.
For example, Kim Huynh Co LTD and Ms. Huynh Thi Ngan has contract to buy
and sell material rubber type SVR 10 with market price for every day and payment
will be made for every ten days of month. In this case, Ms. Huynh Thi Ngan has
obligation to deliver rubber type SVR 10 to Kim Huynh’s manufacture and Kim
Huynh has to make payment for every 10 days of months with market price. In
addition, consideration should be sufficiency but no need to be adequacy. It
means consideration need to offer benefit and suffer loss although it is low
value (Thomas v Thomas, 1842).
(Source: The Doctrine of
Consideration: http://www.insitelawmagazine.com/ch5consideration.htm)
1.1.4. Privity
of contract
Relationship among parties who take
part in performance of contract is called privity of contract. If a person who
are not privy to the contract, they have no right of action on it. For example,
the case of Dunlop v Selfridge, Dew and Co is subsidizer of Dunlop, Selfridge
had contract with Dunlop through Dew and Co.
Finally, Dunlop sued Selfridge because of selling tires with different
price. Nevertheless, the content in terms of contract was made by Selfridge and
Dew & Co therefore Dunlop had no right of action on contract. (Dunlop v
Selfridge, 1915). There are two cases of privity of contract can be considered:
effect on third parties and exception to the third party rule.
a)
Effect on third parties: The contract signed
between two parties cannot enforce contract’s conditions and term on the third
parties and vice versa.
b)
Exception to the third party rule: In case of contract provides enjoyment for
party who directly involve in contract and third parties. Family holiday is
perfect example for this, loss of benefit of contracting party and third party
can be rehabilitated.
(Sources:
BPP learning media, Business Essentials, Course book Business Law, 2013:113)
1.1.5. Capacity
Capacity of contract stand for the
competence of some groups of people to form a legal contract. Capacity
of contract typically is aptitude to enter into a legal agreement and
competence to generate performance of contract. Nevertheless, minor is one of the group that they
cannot enter a binding contract because the limited understanding and awareness
about the contract law. However, there are some kinds of contract that minor
can enter to create a valid contract. For example, they can pay for the things
that provide them basic living standard such as foods, clothes …(BPP learning
media, Business Essentials, Course book Business Law, 2013:106)
1.2
Discuss the impact of different types of contract
In
general, there are three types of contract, they are: face to face, written and
distance selling contract which bring many different effect on parties. These
effects do not only bring many advantages but also bring disadvantages
therefore parties should consider carefully which type of contract is
appropriate.
1.2.1 Face to
face contract
Face to face contract is agreed by
face to face or it can even be done through telephone and it is not always to
have record of face to face contract. In this style of contract, there are not
any evidence between two parties. It is not required to sign any paper to enter
into a contract therefore it is difficult to prove the evidence. In face to
face contract, parties can create a contract by words thus it need to be clear
to avoid mistake among parties. For instance, a company discussed with a
customer about the terms of the condition of services for the contract. In the
temporary documents transferred among parties, there was an article that allow
customer stop the agreement throughout several months’ effect. However, before
written contract was created, company had provided service to customer. When
customer cancel the contract, company refuse to cancel. The judge decided that
company cannot sue because written evidence supported for face to face contract
(BVM Manager V Roger Yeoman, 2011).
Advantages
- · It is easy to adjust and easy to change in a short time
Disadvantages
- · There is no any copy of contract to look back on, it can be very hard to define what terms are stated.
- · Other situations could occur when one party does not perform in good faith and trieś to modify the contract for their benefit because there is no evidence recorded.
(Source: The law and oral agreement: www.contractsandagreements.co.uk/law-and-verbal-agreements.html)
1.2.2 Written
contract
Among types of contract, written is
the most trusted one. Written contract is contract that gather signs of both
parties. In written contract, all terms and condition are stated clearly and
agreed by both sides through signature. These contracts can be used as evidence
of parties to prevent contract violation.
The Parol evidence rule
When writing contract, all essential
term are stated and only be mentioned to written document. Written contract can
only be changed by writing and other oral evidence cannot be added, mixed or disputed
to the term that had been written out on the contract. It is named Parol
evidence rule. For example, in case of Hawrisk v Bank of Montreal in 1969, a
guarantee with bank was signed by solicitor that he can have benefits of buying
the asset of other company. The solicitor was ensured to release the guarantee after
receiving joint guarantee from company by bank’s assistant manager. Finally,
the company was broke, the solicitor’s guarantee was not unrestricted, and so
solicitor sued and gave proof when guarantee was released. However, the court
rejected his evidence because there was no collateral agreement and it oppose
the term of guarantee bond.
Advantages
·
Written
contract can give clearness to parties about their liabilities and give an
outline of each party expectation.
·
In
addition, contract can also help each party to keep watchful on what they
contracted therefore parties can reduce misunderstanding and growing focus.
Disadvantages
·
Take
time and money
·
Although
contracts are made to reduce company risk, it also rise some doubt on one site
of party.
(Sources:
BPP learning media, Business Essentials, Course book Business Law, 2013:114)
1.2.3 Distance
selling contract
Distance selling contract stand for
agreement where there is no face to face contact. Distance selling contract
would include internet, web pages, phone, mail or letter.
Advantages
- · The main advantages distance selling contract is that it bring global opportunities for business, and geographical barriers are broken.
- · Customer can have more options and comparison about product features, price and place.
Disadvantages
- · Lack of human communication
- · Delay in delivery time can partially affect goods quality like food items
- · It is more trouble to return unsatisfied product or get refund.
- · Take charge fees and can be dishonestly price.
(Source: The UK’s distance selling
regulation: http://www.out-law.com/page-430)
Briefly, with these types of contract
each person can choose for their own an appropriate type in different
situations. Typically, face to face contract is used for low value contract and
written contract is for high value contract. However, living in a technology
era, people are gradually familiar with distance selling because of appearance
of internet, webpages, mail and phone. Therefore, it will have more chance to
develop in near future.
1.3
Analyze terms in contracts with reference to their
meaning and effect
In contract, it is important to
state all necessary terms because it play an essential role in performance of
contract after signing. These terms could include condition, warranty, implied
term, express term, innominate term and exclusion clauses.
1.3.1 Condition
Conditions terms are considered as
the essential elements of a contract. Its aim to protect the right of both
parties and help them to fulfill their obligation. Condition is completed by
both parties when they sign the contract. If one party violate the condition,
the contract could not be continue and the other can title compensations or
terminate contract. (Business Law, 2013).
1.3.2 Warranty
Warranty is considered as an
inessential term of contract in comparison to condition terms. It is a minor
factors to the main content of contract. Violation of warranty terms enable one
party can claim damages but it cannot be a reason to cancel contract.
1.3.3 Implied
term and express term
Implied terms are terms that
considered as a part of contract even though they are not stated in the
contract. Term could be implied by statute or the court.
Express
terms are terms that stated clearly in the contract and they are used to bind
parties when they sign contract. In case of arising dispute, express terms are
used as source for court to give a final award.
1.3.4 Innominate
term
Innominate terms which are also
called intermediate term could not be distinct as a condition or warranty term.
In case of arising dispute, innominate term can be considered as condition or
warranty.
1.3.5 Exclusion
Clauses
Exclusion clauses are terms created
to ignore or limit some liability of one or both parties by limiting compensations
or enforcing other difficult conditions. They are sometimes mentioned as
exemption clauses.
(Sources:
BPP learning media, Business Essentials, Course book Business Law, 2013:111)
1.3.6 Analyze
two given contracts
Case 1:
Party A:
Duc Nhan Electrical Mechanical Refrigeration Co., Ltd
Party B:
Ovi Cable Co., Ltd
- · Condition: This contract is valid only when both parties agree to enter into the contract on terms and conditions.
- · Item – Quantity – Price: - CU/XLPE/PVC (0.6/1KV) IC x 240 mm2, 1232 m with price of 377,000 vnd/m
-
CU/PVC (Y/G) IC x 120 mm2, 150m with price of
54,781 vnd/m
- · Specification – Quality: Goods are 100% brand new products with specification, technical features, quality standard in accordance with the manufacturer OLYMLIC.
Party B provides Party A the below:
-
Red invoice
-
Quality certificate of Manufacturer
-
Test report of Manufacturer
- · Payment method and Payment guarantee: Contract value is valid in Vietnamese currency. Party A must deposit 20% contract value within 2 days after contract signed and must provide bank guarantee.
- · Time and location delivery: April 24th, 2014 (after receiving deposit and bank guarantee of payment) at Dong Nai province.
- · Responsibilities for parties: both parties have responsibilities to checks goods at delivery location. In addition, party A has responsibilities on making payment on time.
- · Warranties: OLYMPIC wire and cable provided by party B are warranted in 12 months from the date of delivery.
- · Force majeure and penalties: in case of failure or delay performance of contract due flood, fire, earthquake, or unforeseeable event; no party have to take responsibilities. If one side cancel the contract, they will get 12% of penalty of contract value.
- · Liquidation of contract: The contract is liquidated when both have correct and full implementation of the terms of the contract.
Case 2:
Party A:
Saint Gobain Vietnam Limited
Party B:
The He Moi trading and
construction
- · Condition: This contract is valid only when both parties agree to buy and sell goods on terms and conditions.
- · Specification: The order including tile adhesive, tile grout, water proofing mortar and accessories
- · Pricing and quantity: Price is agreed at the day of delivery. Unit price, quantity, details of price will be stated in each purchase order.
- · Bank guarantee and payment terms: Party B must provide bank guarantee, and early payment will have discount.
- · Schedule of delivery: Daily delivery with quantity subject to production capacity of party A and purchase order.
- · Delivery term: party A have responsibility to transport good to party B
- · Warranty term: Warranty term 12 months from manufacturing date as per plant standard
- · Contract cancelation: in case of cancelation, party B must pay 30% of order value.
2.1
Apply the elements of contract in given business
scenarios
In this section, all essential
elements of two chosen contracts will be identified
Elements
|
Case 1
|
Case 2
|
Offer and
acceptance
|
Duc Nhan
Electrical Mechanical Refrigeration Co offer to buy electric wires and cable
of OLYMPIC cable trade name by manufactured by OVI Cable
|
Saint Gobain
Vietnam Limited offer The He Moi Trading and Construction to purchase tile
adhesive, tile grout, waterproofing mortar and accessories.
|
Intention to
create legal relations
|
Both parties agree
to buy and sell electric wires and cable on 9 terms and condition.
|
Both parties agree
to enter into the sale contract that The He Moi order to buy tile adhesive,
tile grout, waterproofing mortar and accessories on each of purchase order
from The He Moi which is confirmed by Saint Gobain on 8 terms and condition.
|
Consideration
|
OVI have responsibility
to deliver goods as follow quantity:
- CU/XLPE/PVC
(0.6/1KV)
IC x 240 mm2, 1232 m
- CU/PVC ( Y/G)
IC x 120 mm2, 150m
Duc Nhan also have
responsibility to made payment in accordance to term stated in contract
|
Saint Gobain have responsibility
to deliver tile adhesive, tile grout, waterproofing mortar and accessories of
all types.
The He Moi also
have obligation to made payment in accordance to term stated in contract.
|
Capacity
|
Mr Nguyen Phuoc
Dinh and Mr Tang Cheng Leong are authorized representative of Minh Nhan
electrical and OVI cable who have enough legal capability to create valid
contract.
|
Mr. Craig Stephen
Chamber and Ms. Nguyen Thi Hang Nga are authorized representative of Saint
Gobain and The He Moi limited therefore they have enough legal capability to
create valid contract.
|
Privities
|
There is no presence of the third party in this contract. Mr. Nguyen
Phuoc Dinh and Mr. Tang Cheng Leong are only two person who directly create
contract as well as have responsibility on any dispute of contract.
|
There is no
presence of third party in the contract. Mr. Craig Stephen Chamber and Ms.
Nguyen Thi Hang Nga are only two person who directly create contract as well as have
responsibility on any dispute of contract.
|
2.2
Apply the law on terms in different contracts
Typically,
a contract may include many term such as: condition, warranty, innominate
terms, express terms, implied term and exclusion clauses. However, it is not
required to apply all these term into a contract. Depending on what type of
contract, different terms are used. But there are always similar terms that are
applied to enter into a contract such as condition and express term. In a
contract, condition is used as factor that help each party know their
responsibility and finish them. A valid contract is available when all terms
are established by signature of each party. In case of arising dispute among
parties, conditions, terms and signature are used as evidence to solve the
dispute.
For
example, both given contracts stated that after negotiation both parties agree
to enter into the contract on the terms and conditions. Their signatures are
considered as evidence in case of arising any dispute. In addition, although
both contracts have different content, they still have similar terms that are
considered as basic factors such as item, quantity, price, specification,
quality, payment method, payment guarantee, time and location delivery, and
warranty.
However,
there are some terms that Duc Nhan Co. v Ovi cable contract have while the
other does not such as responsibilities of parties terms, force majeure and
penalties and liquidation of contract terms. These terms help contract more
specific therefore it can reduce misunderstanding. However it also bring some
disadvantages in case of arising dispute among parties because of terms
mentioned above are used as evidence to solve problem.
2.3
Evaluate the effect of different terms in given
contracts.
Different
terms establish different impacts on a contract as well as each type of
contract will have different terms. In this section, two contracts are
evaluated in order to have a clear understanding of effect of different term on
selected contract.
2.3.1 Duc Nhan
Electrical Mechanical Refrigeration Co., LTD and Ovi Cable Co., LTD
This
contract is valid because there are signatures of Mr. Nguyen Phuoc Dinh and Mr.
Tang Cheng Leong who is authorized representative of Duc Nhan Co. and Ovi Cable
respectively.
Both
parties agree to enter into the contract on terms and conditions as below:
Article 1: Item – Quantity – Price
- CU/XLPE/PVC (0.6/1KV) IC x 240 mm2,
1232 m with price of 377,000 vnd/m
- CU/PVC (Y/G) IC x 120 mm2, 150m
with price of 54,781 vnd/m
Article 2: Specification – Quality
Party B
must provide 100% brand new products with specification, technical features,
quality standard in accordance with the manufacturer OLYMLIC. If the goods do
not satisfy the quality or technical standard the Party A will notify and
return the goods to B. Then B should be responsible for changing the right
quality and technical standards for A as soon as possible.
Party B
provides Party A the below:
-
Red invoice
-
Quality certificate of Manufacturer
-
Test report of Manufacturer
Article 3: Payment method and Payment
guarantee
Contract
value is valid in Vietnamese currency in Article 1 at the time of signing the
contract and cannot change during the duration of contract.
Currency
payment: Vietnam dong ( VND)
Forms of
payment: A deposit 20% of total contract value within 2 days after contract
signed. After 02 days, if party A has not deposited, party B has right to
change the price or cancel the con contract. 80% balance of contract value
party A pay for party B within 45 days from day of delivery.
Guarantee:
2 days before delivery, Party A must provide the Unconditional Bank Guarantee
at the value equivalent 80% of contract value with the duration of 50 days for
guarantee payment purpose. Party B will request the bank to pay unconditionally
for debt if Party A could not make payment exceeding 45 days of payment term
for purchase purpose.
Article 4: Time and location delivery
Delivery
time is April 24th, 2014 after receiving deposit and bank guarantee
of payment at Dong Nai province.
Article 5: Responsibilities for parties
Party B
must check the quality of goods before delivery to A and announce 1 days before
delivery to A.
Party A
check quantity, quality of goods before receiving, make payment in full and on
time for party B. Party A should be responsible for receiving goods in time
like stated in the contract. If party A receives goods 30 days later than
regulation, party A will bear interest rates at 0.5%/week. If late more than 60
day, party B has the right to cancel the contract, collect the deposit.
Article 6: Warranties
OLYMPIC
wire and cable provided by party B are warranted in 12 months from the date of
delivery. Wire and cable provided by party B are warranted errors of components
in the production process of manufacturer from the date of delivery and during
the warranty period.
During
the warranty period , party B will replace free of defective product which is
proven fault of the manufacturer and defective product must be returned to
party B, all expenses related to repairs is party B’s responsibility.
After
delivery, besides certificates mentioned in Article 2, party B will not bear
any extra cost including further test requirement.
Article 7: Force majeure and penalties
None of
party will be responsible for failure or delay to performance of contract due
to flood, fire, earthquake, hailstorm, hurricane, war, government prohibition
or any events that are unexpected at the period of performance of contract and
could not be controlled, or overcome by such party.
Nevertheless,
the party whose performance is affected by the event of force majeure should
sent a notice to the other party as soon as possible and not later than 7 days
after its occurrence.
From the
date of contract takes effect, if one party unilaterally terminates the
contract, it will get penalty equivalent to 12% of contract.
Article 8: Liquidation of contract
The
contract is liquidated when both have correct and full implementation of the
terms of the contract.
Article 9: Other conditions
All
dispute arising from performance of this contract will be settled through
friendly negotiation. If settlement cannot be reach through negotiation, the
case will be submitted to the economic court in Ho Chi Minh City. The award of
court will be final and binding both parties. The court fee will be paid by
losing party.
Any
supplement to contract would be valid only after the authorized representatives
of both parties have signed written document as well as forming integral parts
of this contract.
The
contract is made in four originals, two copies for each side and take effect
after the authorized representatives of both parties have signed.
To sum
up, from the contract, we can see that all terms are stated specifically and
clearly. Both parties can know clearly about their abilities therefore both
companies can reduce the risk of breaching one of the terms in contract. All disputes
occur during performance of contract will be negotiated friendly or can be
submitted to Ho Chi Minh economic court to solve in accordance to Vietnamese
law.
2.3.2 Saint
Gobain Vietnam Limited and The He Moi trading and construction
This
contract is valid because there are signatures of Mr. Craig Stephen Chambers
and Ms. Nguyen Thi Minh who is authorized representative of Saint Gobain
Vietnam and The He Moi trading and construction respectively.
Both
parties agree to buy and sell goods on terms and condition as below:
Article 1: Specification
Order
including tile adhesive, tile grout, water proofing mortar and accessories and
details of goods will be stated on each purchase order ( PO) sent from party B
to party A.
Article 2: Pricing and quantity
Price is understood to be delivered within Ho
Chi Minh City unless otherwise stated in each P.O
Unit
price is estimated as agreed by both sides at the date of delivery
Unit
price, quantity, details of price will be stated in each purchase order.
Article 3: Bank guarantee and payment terms
After
this contract is signed within 7 working days, party B must have a Bank guarantee
to ensure that the bank will pay the party A in case party B cannot make
payment. The value of Bank guarantee must be equal or over value of the
estimated purchased goods for 5 months.
Payment
5 days from invoice date, a special discount 1.7& of goods value will be
provided. In case P.O is cancelled by party B, party B must be pay 30% value of
P.O within 30 days from the date of cancelled. Payment is telegraphic transfer.
Payment date is considered day party A receive money on account. Late payment
penalty is at 1.7%/ month.
Article 4: Schedule of delivery
Daily
delivery with quantity subject to production capacity of plant of party A and
purchase order.
Article 5: Delivery term
Party A
is in charge of transport the goods from the warehouse to Party A’s premise.
Fee of loading goods to Party B’s delivery point will be on party B account.
The
parties will negotiate to reach agreement on delivery in case of goods not
delivered at Ho Chi Minh City.
Article 6: Warranty term
Warranty
term 12 months from manufacturing date as per plant standard
Article 7: Order, receiving and contract
cancelation
All
order from party B are accepted by party A will not be canceled without the
written consent of party A. In case party B insisted to cancel the order, party
B must pay 30% of the order value
which in
cancelled for party A. in addition, party A have right to stop to delivery or
terminate contract before effect day, if party B late to pay amount that is
over value of Bank Guarantee.
Article 8: Other conditions
The
parties agree to comply with the provision of “Customer Charter” of party A, on
time schedule and order and delivery processing at the plant.
If there
is any terms arising during performance, both sides will discuss and sign
annexes which will become integral part of this contract.
In case
of arising dispute, it wil be settled in court with relative rights.
Effective
date of contract is 01/12/2012
Term of
contract: 12 months from effective date
This
contract is made into 4 copies, each party keep 2 copies with equal value
This
contract also have stated clearly all terms. However there is no term about
force majeure. In my opinion, both sides should have discuss about terms of
things that cannot be unforeseeable, cannot be controlled or overcome such as
flood, fire, hurricane…In addition, the contracts should include
responsibilities for both sides such as Saint Gobain should check goods before
delivery as well as The He Moi should check good before receiving in order to
avoid unfortunate incidents.
Conclusion
To sum
up, a legal contract could be form only if there are enough essential elements
such as offer, acceptance, consideration, capacity and intention to create
relation. In addition, in different situation there are different type of
contract that could be used such as face to face, written and distance selling
contract. Moreover, there are various term as well as their impact on business
that need to be understand. They are condition, warranty, implied, express,
innominate term and exclusion clause. With knowledge about business law,
organization can protect themselves as well as fulfill their responsibilities.
References:
BPP Learning Media – Business Essentials- Course book Business Law,
Third edition July 2013, publish ISBN 9781445368207)
Contractual agreement-offer and acceptance [Online]
[Available at:] <http://www.elawresources.co.uk/Offer-and-acceptance.php>
Intention to Create Legal Relations: When is there a
contractual intention? [Online] [Available at:] <http://www.insitelawmagazine.com/ch2intention.htm>
The Doctrine of Consideration [Online] [Available at:]
<http://www.insitelawmagazine.com/ch5consideration.htm>
The law and oral agreement [Online] [Available at:]
<www.contractsandagreements.co.uk/law-and-verbal-agreements.html>
The UK's Distance Selling Regulations
[Online] [Available at:] <http://www.out-law.com/page-430>
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