Contract Law – Consideration “Fails”

Contract Law – Consideration “Fails”

As a business owner or stakeholder, how can you ensure that your contracts are enforceable?

One of the things that I can do to ensure that my contracts are enforceable is to create an intention to establish a legal relationship. This is done by determining whether a reasonable individual in the circumstances would have intended to establish a legal relationship (Eisenberg, 2018; Burton, 2008). The second thing that I would do is create capacity, which, according to Sherwin (2016), includes establishing that all parties in the contract have the ability to understand the obligations and terms of the contract. I would also ensure that all parties freely give consent to the contract. The third thing is ensuring that all parties exchange value. The fourth thing is ensuring that there is unconditional acceptance of the offer and that the acceptance is communicated to all parties. I would also ensure that there are no false statements, threats, coercion, or inopportune persuasion by one party to enter into a contract. I would also avoid misinterpretation, which, according to FindLaw (2020), arises from false statements or withholding information that the parties in the contract have a duty to disclose or an action requiring concealing facts.

Think back to the Lambert case that we discussed in the Unit 5 Discussion. What should Lambert have done differently?

Lambert should have ensured that he got acceptance from Barron to work on his project because silence does not imply that the other party has accepted the offer. Lambert should have also ensured that Barron orally accepted the offer for consulting services under the agreement intended to last one year and monthly charges of $3,100. Lambert should have also ensured that the agreement was in writing to reflect that Barron had consented. He should also have provided a clear agreement from Barron before boarding the plane to go back to New Orleans. He should also have confirmed whether Barron’s provision of documentation implied that his review of the documents would be compensated.

References

Burton, S. J. (2008). Elements of contract interpretation. https://doi.org/10.1093/acprof:oso/9780195337495.001.0001

Eisenberg, M. A. (2018). The elements of a contract. Oxford Scholarship Online. https://doi.org/10.1093/oso/9780199731404.003.0027

FindLaw. (2020, March 27). Will your contract be enforced under the law? Findlaw. https://www.findlaw.com/smallbusiness/business-contracts-forms/will-your-contract-be-enforced-under-the-law.html

Sherwin, E. L. (2016). Formal elements of contract and fiduciary law. Contract, Status, and Fiduciary Law, 167-182. https://doi.org/10.1093/acprof:oso/9780198779193.003.0008

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There are certain promises that are not considered consideration.
As a business owner or stakeholder, how can you ensure that your contracts are enforceable?
Think back to the Lambert case that we discussed in the Unit 5 Discussion. What should Lambert have done differently?