Business and Contract Laws

Business laws, also known as corporate laws, comprise of a body of laws, which concern the rights, relations, and conducts of persons, companies, businesses, and organization. Business laws provide regulations of the ways stakeholders within the business environment operate and relate to one other. Contract laws refer to the business laws and regulate the agreements made on a voluntary basis between two or more parties, which are enforced by law as legal agreements that binds these parties (Sharma, 2014). The focus of the following paper is the proper application of business and contract laws in the context of two different cases.

Scenario One: Damage Determination

The basis for operation between Barbara and Alfred is evidently a contract. It is defined as an agreement on a bilateral basis between two or more parties with the aim of conducting business. It is usually created on a mutual basis and should be enforced by laws (Appleman, Appleman, & Holmes, 2016). For the contract to be considered as legally binding, it must contain offer, acceptance, considerations, and consent to bind. Within this agreement, an offer means a situation whereby a party makes a demand to another party. In the event of making the offer, the party that received it is obligated to either accept or reject the offer. After the offer has been made, it has to be accepted or rejected within proper timeframe, as stated by the party making the offer.

The contract relies on a significant concept known as consideration. According to Sharma, (2014), consideration is an asset or value, which is in most cases foregone by parties in the contract created with the intention of honoring an agreement. There is a need to mention another important concept known as consent to binding, where two parties need to contemplate on the terms before entering into agreement. In instances whereby conditions established for meeting an offer are not achieved by one party, it is possible to claim that the contract was breached. However, a violation of agreement can be remedied through legal means, especially through payment of damage fees.

Considering the case of Barbra and Alfred, the former is suing the latter for damage, which amounts to a total of $3,500, and a compensation of around $15,000. This estimation was made after a contract was initiated between the two parties, whereby Alfred was contracted to drill a well that would be used in the supply of clean water for drinking. In this case, Barbra is suing Alfred since he breached the contract that they had initiated. As per the arguments of Issa (2015), to remedy the situation between the two parties, Alfred will have to cater for damage fees and compensations for the loss that Barbara received on her farm. Taking into consideration the nature of the above-discussed contract, it is quite clear that Barbara has a good case against Alfred and has the right to sue the latter. Without any doubts, Alfred breached the contract as he was not able to perform his end of the bargain, which was to drill the 600ft well agreed upon within the certain time limit.

There exist several measures, which are usually applied with to understand the extent of losses and to determine the damages when a contract has been initiated. They are known as expectations, restitution, and reliance. Appleman, Appleman, and Holmes (2016), define reliance as a situation in which parties guarantee to perform the actions agreed in the contract, including the possible need of payment from compensation to another party, or any other payments that have been initiated by the victims. There can also occur a situation in a breach of contract whereby a victim does not receive compensations, but only the payments that were initially indicated in the agreement. Nonetheless, for a case to be effectively remedied, the victim needs to be paid the amount of money, which places him or her in the same position as he or she was before the contract initiation.

Considering the situation of Barbra and Alfred, the former has the right to be paid a full amount including the advance payment fee that she gave Alfred so that he could drill the well, which in the end he failed to do. In addition, Barbara has the right to receive a total sum of around $4,500, which she gave to Carl so that he can dig the borehole. All these payments need to be made by Alfred; otherwise, he will be considered to have breached the contract, and such claim might have an implication to Alfred in the future (Issa, 2015).

At the same time, it might be rather tough to convince the court to allow Barbra to receive the compensation for the damages and the loss that she accrued while harvesting her apples. The failure of the dry county dam resulted in the reduction of the amount of water for the purposes of irrigation, which in turn led to significant damage. Based on this information, the losses that Barbara faced in her apple harvest cannot be argued as Alfred’s inability to execute the agreement that they initially had. The contract was quite specific; it stated that Alfred would drill the well aimed at providing water for drinking and not the one that could be used for the purposes of irrigation. At the same time, basing on the scope of the case, it is clear that the losses Barbra incurred could have been avoided since she could have a possibility to use the water from the well if there was a shortage of water in the county.

In order to solve this case well, Barbara and other parties of this contract can agree on the specific amount of money that she receives as the compensation for the damages she incurred. This implies that Alfred and Barbra can decide what sum of money Alfred can compensate for the damages and the breach of the contract. Alongside, they can also try to define the amount that he should pay for the losses that Barbara incurred in her apple farm. If these terms are not met, there is a high possibility that Barbra will succeed in the suit that she filed against Alfred seeking compensation for the received damages and the failure to complete the initial agreement.

Scenario Two: Remedies Determination

After a critical analysis of the contract initiated between Mundo and Extra, it becomes evident that selling the presses at an extravagant price beyond the initial price of $2,4 million is a breach of terms outlined in the initial agreement. At the same time, it is necessary to point out that when the contract was submitted to the boss, it did not have the terms of acceptance specified in it (Sullivan, Grimes, & Sagers, 2015). This implies that there were no factors that could prevent the company from increasing the price of the presses. Having considered the offer, the boss reviewed the contract and declared the interest that he had in making the purchase. This implies that he accepted the terms of the purchase without paying attention to the fact that Mundo did not include the terms which both parties can use in accepting the contract. Due to these factors, Mundo will not have gone against the contract agreement by asking for an increase in the price for the presses.

When creating contracts, it is important to always read them very attentively before making an agreement. It is also equally necessary to ensure that parties provide acceptance terms of the contract. Provision of the acceptance terms while agreeing to enter a contract is essential in making sure that both parties are aware of what is expected of them (McDonnell, Coogan, Hogan, & Vagts, 2015). For example, in the case under consideration, the situation that Extra is facing would have been avoided if Mundo had provided the terms of acceptance in the initial offer. It should be mentioned that provision of acceptance includes several elements, namely various aspects of the offer, the terms that constitute the acceptance of the offer, and the circumstances under which the offer can be terminated. Based on this fact as well as on the absence of the terms of acceptance, it becomes very clear that Mundo had the right to increase the amount of money instead of the one that was initially agreed upon.

At the same time, the company has extra rights and remedies. First, Mundo must align with the uniform commercial code, which is used to analyze the acceptance case of every organization. Under the commercial code, an agreement that has been reached upon by two parties should be guided by the initial acceptance of the business contract they had initiated (Sullivan, Grimes, & Sagers, 2015). In the case of Mundo and Extra, the two parties agreed on the terms to apply the contract, in which Mundo would sell the presses. The commercial code is an important law, which provides for the necessary business operations in the business conduct within the United States of America. After the analysis of this law, it becomes very much clear that Mundo’s actions are justified regarding business operations.

The commercial code commonly known as the Uniform Commercial Code is a law that was first published in 1952. It was put into force with the intention of harmonizing the law of sales as well as other transactions done commercially within the territory of the US (McDonnell et al., 2015). The commercial code was aimed at harmonizing the state laws, because there were frequent transactions initiated from one state to another. The most important goal of the UCC is to modernize contract laws and to allow the existence of any exceptions from the common laws in line with contracts that were created between two different parties. The commercial code modernizes the contract laws and this is the main reason why the decision of Mundo to ask for an extra price for the presses is justified.

The only law that could be used by the boss and the buyer to disapprove Mundo was the antitrust law. The antitrust law prevents business transactions or operations, which are viewed as unusual ones. This type of law was initiated with the intention of protecting and promoting fair competition within the operation of any business industry. It protects people in businesses, especially those who are affected by the issues related to excessive pricing. Based on the confines of this law, Mundo is obligated to top from doing businesses in a manner that is unethical, which in the long run might have an impact on the business operations of the other party (McDonnell et al., 2015). The decision of Mundo to increase their initial price could not be justified. It is apparent that they raised the previously established price since the main competitor of the business did not have any relevance to the market. Mundo took advantage of this situation and created a platform for an unfair business practice, which could not be justified under the application of the anti-trust laws.

Based on the arguments between Mundo and Extra, it is possible to state that if they continue operating in the same manner, it might be very hard for them to come to terms as they conduct the business. It is quite apparent that Mundo could have actually taken advantage of the fact that there is a lack of competition and suggested an increased price for the presses. In this regard, under the law, Extra must make a complaint of unfair terms of operation since the price that they are being asked for might affect the outcome of their business. The wisest decision that these two parties can make to solve their differences would be to meditate and develop a compromise, where both parties would benefit from the contract (Sullivan, Grimes, & Sagers, 2015). This should be done after the terms of acceptance are drafted and accepted. If this procedure is done in a proper way, the two parties might be in a better position to remedy their terms and to suggest the new terms, which they can further use in their cooperation.

In conclusion, based on the above discussion, it becomes evident that when making contracts in a business, it is important to review all terms before acceptance. This is essential in asking for any fees in the case of damages or in the event of unfavorable terms of the contract. Creating the contract requires all parties involved in the procedure to agree to the terms so as to make it easy for them to operate and to conduct businesses together.