Remedies for Voidable Contract

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Requirement

a. Inform Eve of any rights she may have against Adam, as well as any common-law remedies available to her.

b. Would your advice be different if Eve had asked Adam the exact same question?

a. Use case law to counsel Robert on his options.

b.Would your advice be the same if, instead of confirming Brian's order, Robert's mail informed Brian that he could only fulfil half of Brian's order and delivered it?

Solution

CASE STUDY 1

First of all the case needs to be looked at with a proper perspective in order to understand the extent to which validity and enforceability of the contract are applicable in this case. Legally saying, as we know the crucial elements of a valid contract are:

  1. •    Offer and Acceptance

  2. •    Intentions about forming a legal relationship

  3. •    Lawful Consideration

  4. •    Parties’ Capacity

  5. •    Free Consent

  6. •    Object of Law

  7. •    How possible is performance

There are three fundamental types of a contract:

  1. •    Valid 

  2. •    Void 

  3. •    Voidable

The validity of a contract is established when all of its essential elements are properly fulfilled. On the other hand, a contract is declared to be void when the essential elements have not been fulfilled along with some inherent flaws in the contract(Rubin, 1999). The example of such a condition is one party being minor, illegal consideration/object, etc. Finally, a contract becomes voidable whenever a flaw in the contractis not that much significant to deem it as void. For example, if a consent is obtained through fraud and misrepresentation, then it can be deemed valid or void solely on the basis of the choice of the aggrieved party.

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a)    Even if a contract had fulfilled all the norms regarding its essential elements, it still might not be enforceable due to some other problems, such as:

  1. •    Inability of capacity to contract on the part of one of the parties

  2. •    In case of a mistake being made with regards to the nature of the contract

  3. •    Misrepresentation of facts which lured a person to enter into a contract.

  4. •    Whenever a contract is immoral or illegal or affected by duress as well as making undue influence of one or more parties over another(Hoekman, 2008).

  5. •    If there is undue restriction on trade because of the contract.

The present case talks about the inconsistencies on the part of Adam as he did not reveal the exact figure of the turnover of the store, nor did he inform Eve as to what happens to the sale of the flowers during winters and how does the business get affected adversely. So, due to the misrepresentation of facts on Adam’s part, Eve was lured into agreeing to the terms of the contract. Which is why, the contract between the two becomes voidable, hence, Eve is completely eligible to make demands in order to get the relief or is eligible to get her issues addressed.

Remedies for Voidable Contract

The remedies or the legal aids that are available for Eve in such a scenario are as follows: 

  • Damages

  • Repudiation

  • Rescission

  • Specific Performance

  • Injunctions

  • Restitutionary awards

The Adam and Eve’s case, therefore, is the case of a false representation of the facts. The misrepresentation made on the part of Adam with regards to the annual sales turnover was done in such a manner that Eve was attracted towards it so that she developed a notion that she could make rich profit on it. As a result of that, Eve faced a heavy loss after buying the store. Moreover, the silence about the three months in which flowers are unavailable during winter absolutely amounts to Fraud on the part of Adam. The common law that is being invoked here, allows Eve the right to walk out of the contract as well as choose any of the legal remedies available for her. The law at this point in time gives her the most suitable of the remedies which is the rescission of the contract(Nadew, 2010).According to this remedy, she will be able to set aside the contract and make it so for the parties as if the contract had never been made.

b)    In an another scenario, the circumstances could have been a little bit different, had Eve asked Adam about the exact facts regarding the turnover of the business and Adam would have no other choice but to provide her the exact figure of $540,000. In that situation, the rule of Caveat emptor would definitely be invoked and Eve would not have the right to any of the remedies that were available under the common law.
It is important to note that the phrase”Caveat Emptor” essentially means “buyer beware”. The conditions under this rule impose a duty on the vendee to use proper care and skill during the time of purchase. It, however, does not impose any duty on the part of the vendor to disclose all the defects about the property.

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CASE STUDY 2

The words of Sir William Anson hold a profound relevance with regards to the case being discussed here. He observed that “an agreement which is legally binding between the parties involved in a contract, there are certain rights that are acquired by one or more to the acts of forbearance on the part of other or others”. These words form the basis of the case to be discussed ahead.

a)    The present case study demands a careful attention to be paid on the first essential element of a contract, that is, ‘Offer and Acceptance’. It is to be noted here that the rules of offer and acceptance in terms of posting rule are a little bit different than simple contracts.
As we know that, the rule of contracts by post are: 

  • Any kind of offer that has been made by the post/letter shall not be effective until it has been received by the offered party

  • An acceptance, on the other hand, shall be effective as soon as it is posted

  • In order to make revocation to be effective, it must have been received by the offered party before the act posting of their letter of acceptance on their part.

The logic of argument that has widely been accepted behind this is that the post office acts as an agent of the offering party and once the letter of acceptance has reached the post office, the contract shall be deemed to have been made. So, in this case, due to the fact that the delivery of the letter of acceptance has been delayed holds no grounds for Brian to refuge payment to Robert. Therefore, Robert is completely entitled to receive the payment because in legal terms, the fact cannot be refuted that a contract had been formed between the two.

Case Laws

The case laws that have been or could be referred to with regards to the present case are as follows:
A.    A contract was formed when the letter of acceptance was posted. (Adams v Lindsell, 1818 ).

In this case, the defendant wrote to the claimant who was offering to sell some wool and had asked to reply in the course of post. The letter was delayed and because of that the defendant assumed that the claimant was not interested and sold it to the third party. The court held that there was a valid contract which came in to existence the moment the letter of acceptance was placed in the post box.

B.    It is generally termed as irrelevant whether the letter of acceptance arrives late or gets lost. (Re Imperial Land Co of Marseilles (Harris’ case), 1872)
This case was based on the old English contract law case and it reconfirmed the postal rule of Adam v Lindell. In this case, Mr. Lewis Harris of 19 Suffolk Street, Dublin, posted a letter applying for shares in the company(Oughton, & Davis, 2000). The court, in this case, then held that a contract was complete when the secretary posted the letter accepting the application for the shares.

b)    According to the other possible scenario of the case, Robert would not be entitled to receive any kind of payment if he had sent a letter to Brian in order to confirm that he could deliver half of the quantity of the flowers that were demanded on that particular day. As a matter of fact, this would not have counted as an acceptance, but this would be counted as a request for information.

Case Laws

A.    When a reply has been sent for an offer asking about further terms, it cannot be deemed as a counter offer. However, as a request for the information on the existing offer. (Stevenson, Jacques and Co. vs. Mclean, 1880)
Facts of this case are: An iron merchant asked the defendant whether they would accept a payment of forty over 2 months, or their longest limit.
In this case, the court held that the telegram was not a counter proposal, but a mere inquiry, which should have been answered (morally or legally). It did not imply as a rejection of the offer. However, a more subjective view had been subjected by the Pothier("Contract Law Casenote: Stevenson Jaques& Co. v McLean 1880", n.d.). He further argued that if the offer changes their mind before acceptance, then at the moment of acceptance, there is no meeting of minds and therefore no contract.  

References

  • Contract Law Casenote: Stevenson Jaques& Co. v McLean 1880. Netk.net.au. Retrieved 20 April 2016, from http://netk.net.au/Contract/Stevenson.asp

  • Hoekman, B. (2008). The General Agreement on Trade in Services: Doomed to Fail? Does it Matter?. J IndCompet Trade, 8(3-4), 295-318. http://dx.doi.org/10.1007/s10842-008-0036-z

  • Nadew, L. (2010). Void agreements and voidable contracts: the need to elucidate ambiguities of their effects. Miz Law Rev, 2(1). http://dx.doi.org/10.4314/mlr.v2i1.55621

  • Oughton, D., & Davis, M. (2000). Sourcebook on Contract Law. Google Books. Retrieved 20 April 2016, from https://books.google.co.in/books?id=9DhUJKk-RjYC&pg=PA59&lpg=PA59&dq=Imperial+Land+Co+of+Marseilles+(Harris%E2%80%99+case),+1872&source=bl&ots=4zCjSNxSNC&sig=HGp8TV4dIjHvxCFWnE-dCxMtAOI&hl=en&sa=X&ved=0ahUKEwjSq9_Aop3MAhWFsJQKHYTWAq4Q6AEIIjAC#v=onepage&q=Imperial%20Land%20Co%20of%20Marseilles%20(Harris%E2%80%99%20case)%2C%201872&f=false

  • Rubin, E. (1999). types of contracts: Interventions of law. Heinonline.

    
 

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