Explain the different legal aspects of a contract applicable in family and social matter-illustrate & explain
Contracts are promises that the law will enforce. The law provides remedies if a promise is breached or recognizes the performance of a promise as a duty. Contracts arise when a duty does or may come into existence, because of a promise made by one of the parties. To be legally binding as a contract, a promise must be exchanged for adequate consideration. Adequate consideration is a benefit or detriment which a party receives which reasonably and fairly induces them to make the promise/contract. For example, promises that are purely gifts are not considered enforceable because the personal satisfaction the grantor of the promise may receive from the act of giving is normally not considered adequate consideration. Certain promises that are not considered contracts may, in limited circumstances, be enforced if one party has relied to his detriment on the assurances of the other party.
Definition of the key terms:
Contract: an agreement with specific terms between two or more persons or entities in which there is a promise to do something in return for a valuable benefit known as consideration. Since the law of contracts is at the heart of most business dealings, it is one of the three or four most significant areas of legal concern and can involve variations on circumstances and complexities. The existence of a contract requires finding the following factual elements: a) an offer; b) an acceptance of that offer which results in a meeting of the minds; c) a promise to perform; d) a valuable consideration (which can be a promise or payment in some form); e) a time or event when performance must be made (meet commitments); f) terms and conditions for performance, including fulfilling promises; g) performance.
Offer: A promise that, according to its terms, is contingent upon a particular act, forbearance, or promise given in exchange for the original promise or the performance thereof; a demonstration of the willingness of a party to enter into a bargain, made in such a way that another individual is justified in understanding that his or her assent to the bargain is invited and that such assent will conclude the bargain.
Acceptance: receiving something from another with the intent to keep it, and showing that this was based on a previous agreement.
Discussion with example:
As we can see that, any legally binding contract needs an offer which has an intention to create a lawful agreement, a counter offer and finally acceptance of the offer between the “offeror” and the “offeree”. In this way, most of the contracts are created. These contracts can be bring upon the court if they are voided as the intention to create legal relation can be identified either through the written form of the contract or the actions that took place between the parties while the offer was being made. In contrast, If the above mentioned components are missing in any contractual process it will not be considered as legally force able contract.
Generally, these above mentioned characteristics are missing in a family or social affairs. As a general rule, agreements made in a personal or social context are not considered to be legally enforceable contracts as it is thought that in such situations people do not foresee or contemplate entering into such a legal arrangement whereby any deviation could end them up in court.
For example –
Lens v Devonshire Club (1914): It was held that the winner of a competition held by a golf club could not sue for his prize where “no one concerned with that competition ever intended that there should be any legal results flowing from the conditions posted and the acceptance by the competitor of those conditions”.
Balfour v Balfour (1919): The defendant, who worked in Ceylon, came to England with his wife on holiday. He later returned to Ceylon alone, the wife remaining in England for health reasons. The defendant promised to pay the plaintiff £30 per month as maintenance, but failed to keep up the payments when the marriage broke up. The wife sued. It was held that the wife could not succeed because: (1) she had provided no consideration for the promise to pay £30; and (2) agreements between husbands and wives are not contracts because the parties do not intend them to be legally binding.
Merrit v Merrit (1970): The husband left his wife. They met to make arrangements for the future. The husband agreed to pay £40 per month maintenance, out of which the wife would pay the mortgage. When the mortgage was paid off he would transfer the house from joint names to the wife’s name. He wrote this down and signed the paper, but later refused to transfer the house.
It was held that when the agreement was made, the husband and wife were no longer living together; therefore they must have intended the agreement to be binding, as they would base their future actions on it. This intention was evidenced by the writing. The husband had to transfer the house to the wife.
Parker v Clarke (1960): Mrs Parker was the niece of Mrs Clarke, an agreement was made that the Parkers would sell their house and live with the Clarkes. They would share the bills and the Clarkes would then leave the house to the Parkers. Mrs Clarke wrote to the Parkers giving them the details of expenses and confirming the agreement. The Parkers sold their house and moved in. Mr Clarke changed his will leaving the house to the Parkers. Later the couples fell out and the Parkers were asked to leave. They claimed damages for breach of contract.
It was held that the exchange of letters showed the two couples were serious and the agreement was intended to be legally binding because (1) the Parkers had sold their own home, and (2) Mr Clarke changed his will. Therefore the Parkers were entitled to damages.
Tanner v Tanner (1975):
A man promised a woman that the house in which they had lived together (without being married) should be available for her and the couple’s children. It was held that the promise had contractual force because, in reliance on it, the woman had moved out of her rent-controlled-flat.
Jones v Padavatton (1969): In 1962, Mrs Jones offered a monthly allowance to her daughter if she would give up her job in America and come to England and study to become a barrister. Because of accommodation problems Mrs Jones bought a house in London where the daughter lived and received rents from other tenants. In 1967 they fell out and Mrs Jones claimed the house even though the daughter had not even passed half of her exams.
It was held that the first agreement to study was a family arrangement and not intended to be binding. Even if it was, it could only be deemed to be for a reasonable time, in this case five years. The second agreement was only a family agreement and there was no intention to create legal relations. Therefore, the mother was not liable on the maintenance agreement and could also claim the house.
Simpkins v Pays (1955): The defendant, her granddaughter, and the plaintiff, a paying lodger shared a house. They all contributed one-third of the stake in entering a competition in the defendant’s name. One week a prize of £750 was won but on the defendant’s refusal to share the prize, the plaintiff sued for a third.
It was held that the presence of the outsider rebutted the presumption that it was a family agreement and not intended to be binding. The mutual arrangement was a joint enterprise to which cash was contributed in the expectation of sharing any prize.
In all of the above cases we can see that there were offer and acceptance but there were no intention to create legal relation; as a result the court found no ground for taking action for accusing the defendant as charged. Hence all of the cases were abandoned from the court.
Counter arguments: in some cases even if there were no dealings the involved parties enters under the law. For example in family issues when a couple gets divorced the father is bound to give sufficient money for rearing the children. Sometimes they husband must give plenty amount of money to the wife for the livelihood of the wife. These are considered to be lawful in the eyes of the court of law because marriage and afterwards actions are seen as the intention to create legal relationship both in the eyes of law and society.
For example: John vs Jane (2010)
John and Jane were married 7 years ago. They have a 5-year-old son named James. In November 2010, the parties separated informally (without court involvement). When they separated, they moved out of the marital home located in Manchester. They each now rent their own apartment in the Manchester area and they had an informal parenting agreement since November 2010. John works for a home security company and has historically made about $50,000/year. Jane has worked part-time and is about a year away from becoming a registered nurse. John has a 401(k) through work with a current value of about $80,000. He also has a pension through a previous employer which he earned before the marriage. Jane has a 403(b) that’s worth about $50,000. Jane’s mother died in February 2011, and Jane inherited about $30,000.
Because the parties have agreed to a shared parenting arrangement, and because they are on relatively equal financial footing, this case was resolved by agreement, taking no more than 60 days from start to finish and costing as little as $1500, including the filing fee. If the parties did not agree on parenting, had disparate incomes, and/or assets, etc., the case may have been contested, taking years and costing thousands and thousands of dollars to resolve.
From the discussion above it is clear that the fundamental difference between a social contract and business contract is enforceability by the rule of law. If it is possible to prove that there was an intention to create legal relation than there is a contract for which legal actions can be taken. If there is no ground for legal intention then the parties involved cannot be forced under the rule of law.
· Calamari, John D., and Joseph M. Perillo. 1998. The Law of Contracts. 4th ed. Pp-112-117, St. Paul, Minn.: West Group.
· Chirelstein, Marvin A. 2001. Concepts and Case Analysis in the Law of Contracts. 4th ed. pp: 87-96, New York: Foundation.
· Definition of Contract law. Retrieved from http://www.law.cornell.edu/wex/contract on 4th February, 2013.
· Definition of Contract; retrieved from http://legal-dictionary.thefreedictionary.com/contract on 4th February, 2013.
· Definition of offer, retrieved from http://legal-dictionary.thefreedictionary.com/offer on 4th February, 2013.
· Definition of ‘Acceptance’; Retrieved from http://legal-dictionary.thefreedictionary.com/acceptance on 4th February, 2013.
· Intention cases; Retrieved from http://www.lawteacher.net/contract-law/cases/ on 7th February, 2013.
· Legal Assent, Retrieved from http://www.law.cornell.edu/wex/mutual_assent on 14th February.
· Sample Divorce cases, Retrieved from http://nhattorney.com/legal-services/family-law-divorce/case-eval/ on 14th February, 2013.