Status of Contracts
Status of Contracts
Order Instructions:
Assignment requested deadline May 7 by 8am. Please read below for information concerning assignment. Support responses with examples and use APA formatting in the paper. You may access the school’s website by logging into https://mycampus.southuniversity.edu/portal/server.pt
Part 1 Status of Contracts
Select two of the scenarios below and explain the contractual issues and possible outcomes.
• Wally contracted to sell his home to Wendy for $295,000. Before the deal closed, Wilson offered to purchase the house for $315,000. Wally accepted Wilson’s offer and refused to sell the property to Wendy.
• Nathan agrees to paint Ned’s single story home for $2,000. Ned realizes that he will not enough funds to pay Nathan, so he transfers his rights under the agreement to his neighbor, Nancy, who has a three story home. Nancy calls Nathan to let him know that Ned assigned the contract to her and requests that Nathan pain her house for $2,000.
Part II
Select two of the following topics, explain them, and provide a relevant example that does not appear in the textbook:
•Compensatory damages
•Consequential damages
SAMPLE ANSWER
Status of Contracts
Part I
The law of contract postulates that an offer becomes a binding agreement once the seller and buyer reach a consensus. In this respect, the Wally is bound by the law of contract to sell the house to Wendy. However, given that the deal had not be finalized, it means that there is no written contract and as provided by Cross and Miller (2014), a verbal contract could easily be easily escaped; with Wally providing that he had not entered into the contract yet.
The transfer of burden and obligations stipulated in a contract is not allowed and Ned therefore has no right to transfer the painting contract to Nancy (Miller, 2011). In order for a transfer to be done, the parties in the contract must both be involved and provide consent, in which case Nathan did not consent on the change. Furthermore, the initial contract involved a single storey and transfer of the contract insinuates that the terms of contract have changed from one to three storey, increasing Nathan’s obligation without increasing the compensation.
Part II
Compensatory damages refer to charges that a court issues through a civil action to compensate the plaintiff for loss, injury or detriment resulting from another individual’s unlawful conduct (Miller, 2011). An example is where the parties enter into a contract to provide goods and upon delivery the buyer cancels the order. The buyer should then be required to pay for compensatory damages in terms of time and transport costs incurred, as well as lost opportunity to sell to another willing buyer.
Consequential damages are used to demonstrate damages resulting from a contractual party’s failure to meet their part of the obligation. This may also include actions outside the contract that result from failure to accomplish (Cross and Miller, 2011). An example is where an individual gets into a contract to purchase a house within a given time but fails to fulfill the promise. If the seller was relying on the money to pay off the mortgage but fails due to unavailability of money and the house is auctioned, consequential damages are experienced.
References
Cross, F. B. & Miller, R. L. (2014). The Legal Environment of Business: Text and Cases.
London: Cengage Learning, 2014
Miller, R. L. (2011). Business Law Today: Comprehensive: Text and Cases. London: Cengage
Learning.
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