Contract Fact Pattern
Entering into a contract especially when purchasing or selling goods and services is highly recommended in the business world. In this regard, the contracts act as a legally binding tool to two or more parties that wish to transact any business of interest and thus should any issue arrive in the agreement, then the settlement can be done in the courts of law. Nonetheless, there have been many problems surrounding agreements in business or any other field, and massive attention has been shifted when entering into a contract. In the recent decades, there have been numerous legal battles arising from the sale of goods and services in circumstances where the contract has been violated (Saleh, 2009). Therefore, this paper seeks to analyze the given case study and come up with a detailed assessment of the case in the bid to augment the understanding of the contract fact pattern.
This section talks about the agreement between the two parties. However, the first question that may surface here is whether the agreement between Sir Christian and Buddy King was the truly valid contract. Briefly, this case states that an agreement was made between Buddy King and Sir Christian on the sale of a motor vehicle. Precisely, Sir Christian parked his 2013 Jeep Wrangler on the sideways of Sheikh Zayed Road in Dubai and a man who later identified himself as Buddy King got attracted on the and wanted to purchase it. Upon the arrival of Sir Christine to his car, Mr. King made an offer to purchase the vehicle at an initial value of 60, 000 Arab Emirates Dirham (AED). Subsequently Sir Christian got eager to sell the car, and after a couple of negotiation, the duo reached a selling value of 75, 000 AED and an agreed down payment of 30, 000 AED. After that, Mr. King inspected the car, ascertained the conditioned of the car, and scheduled to meet later on the day to strike a deal on the sale of this vehicle. Later, the two met and drafted the contract on some napkin after realizing that both have nothing to write and Mr. King paid that agreed deposit of 30, 000 AED and the delivery of the good scheduled some few days to come.
From the above case, it is vivid that the two parties entered into some form of contract from the moment they drafted the agreement in the piece of napkin. Therefore, based on the above terms, a contract can be drafted as shown below.
Contract on the Sale of 2013 Jeep Wrangler,
An agreement is hereby entered into and between Sir Christian (seller) and Mr. Buddy King (purchaser).
Parties: the parties involved in the sale of 2013 Jeep Wrangler are Sir Christian as being the seller and with the identification number of (insert here) as well as Mr. Buddy King of the identification number (insert here) as being the buyer.
Sale of Car: the seller trades to the buyer, who purchases a car namely a 2013 Jeep Wrangler with the Chassis number (insert here), Engine number (insert here), and presently documented under the registration number (insert here). All particulars of all the accessories of this car have also been encompassed in the sale such as the spare wheel, service book, and radio.
Recorded: it is hereby recorded that the entire licensing and registration fee payable in relations to this vehicle until the signing date of this contract has been fully paid. It is recorded that this vehicle is not a stolen one and the buyer shall be accountable to obtaining, at his own expense, the essential required clearance certificate issued by the Dubai police. It is also hereby recorded that the car is in good condition and roadworthy on the date that this particular agreement was signed and the concerned authorities have provided the roadworthy certificate. Should the roadworthy certificate described above have subscribed based on any issue whatsoever, the buyer of this vehicle shall be obliged to get another copy of the roadworthy certificate so that he can transfer as well as register the car in his name and own expense.
Buying Price and Payment: the buying price payable by the purchaser to the seller for this car is the sum of seventy-five thousand AED payable as a down payment of thirty thousand AED upon the final date of the signature hereof (in the signature date). The balance of forty-five thousand AED to be fully paid at an agreed date (insert the date). Again, all the payments on the sale of this vehicle regarding this agreement to be made by the buyer to the seller shall happen free of any exchange, unconditionally, as well as without some deductions or even set-off to the seller into the trader’s bank account with the following details bank, branch, branch code, account name, account number, and reference. Finally, it is also recorded that the buying price of this car does not encompass the value added tax (VAT). Therefore, it VAT is deemed payable concerning this sale then the buyer shall incur the cost and pay the VAT concurrently with the payment of remaining amount as earlier stated.
Possession and Risk: it is hereby recorded that from the date of the sale of this car, the risk has been passed forthwith to the buyer who shall stay liable to paying the entire purchase value of the vehicle despite paying the damages or destruction from whatever cause. It is also noted that the buyer of this vehicle shall not cede, sell, pledge, or transfer the car or even permit the car to become subject to any form of an alien of whatever nature or deliver the ownership of this car before the fully amount has been paid to the seller.
Voetstoots: here the buyer acknowledges that he has thoroughly inspected the vehicle and hereby by signed that the car is in good condition. The purchaser has also acknowledged that the seller has not issued any form of guarantee or even placed no representation of any nature on the car being sold. The purchaser also renounces any nature of action that the buyer can have against the seller for any defect of whatsoever kind in the car.
Constitution: the buyer hereby asserts that he is legally knowledgeable to come into this contract and he has conformed to every legal and procedural need to enter into this contract.
Elements of a contract
Offer and acceptance
This forms one of the key aspects of a contract and an agreement usually becomes valid when the two or even more parties become engaged, and these must be offeree and offeror. The offer often stays efficient when there is a serious intent from the offeror with well-structured communications to the offeree through oral as well as written communications (Alustath, 2016). Therefore, in the Sir Christian vs. Mr. King Case, the duo meet at a Starbucks Dubai and held formal discussions about the offer where they both agreed, and Sir Christian accepted the offer.
A mutual agreement refers to the situation where there is common consent that the parties involved accept the obligations of the agreement. Nonetheless, a voidable contract can be stated as the one with the use of force, fraud, mistake, misrepresentation, adhesion, duress, undue influence, or unconscionable circumstances (Alustath, 2016). In the case under study, Sir Christian gets a small accident and still sells the car without disclosing the fault. However, this can be seen, as a fraudulent manner since the faulty brakes were not communicated to Mr. King when he sold the car. Primarily, Mr. King could not reach an agreement when knowing condition of the car.
Consideration is another key aspect of a contract, and it can be described as an exchange of something that possesses some value in return for the service or promise of the other involved party. Therefore, there are three valid considerations namely promise of forbearance, an exchange of promise, and a subscription or pledge. An exchange of promise may refer to a pledge of an action by a particular party in exchange for the interchange from a promise of an act by a given party (Saleh, 2009). In addition, the promise of forbearance refers to the promise to make some payments for a promise of indecision from another party. For consideration to be valid, there must be some form of legality, the possibility of performance, and adequacy. Therefore, in the Sir Christian and Mr. King Case, there exist an exchange value and that Mr. King agreed to pay 75,000 AED for the car. Furthermore, the three characteristics of a valid contract exist. The legality, adequacy, and performance possibility exist in this contract.
For an agreement to be termed valid, a competent party must possess the contractual capability to make a legal contract. A responsible party is attained when the people involved in the contract has 18 years of age and above and possess no mental ineptness. A minor therefore has not reached a competent age to carry out any contract (Saleh, 2009). Use of intoxicated drugs and other abusive substances may make a person have a different state of mind and thus cannot understand the terms of the contract. In the Sir Christian and Mr. King contract, both the parties can be said to be competent and both individuals had attained 18 years of age and above.
To have a proper form, contracts need to be in an appropriate format especially expressed through writings. Long-term contracts are often recommended to be in writing so that there is easy referral when later disagreement occurs from the contract. Precisely, a contract needs to be written on a piece of paper using ink unless it is in a precise document. The Sir Christian and Mr. King Contract encompassed colossal sums of money thus it would be prudent when written on a piece of paper.
The legality purpose here refers to the aim of the agreement that must be of legal reason, and it should not be for the purpose that intends to harm the general interest. Therefore, if the aim of the deal is illegal, perverts justice, usurious, fraud, as well as conflicts with general service or even possesses expletory sentence thus the agreement is regarded to be invalid and the agreement is never enforceable (Alustath, 2016). This is a key element of a contract though in the Sir Christian and Mr. King Contract, it missing and not applicable. This was just as a bilateral agreement between two people with no interest of the public.
From a typical stand, it has been agreed that both parties entered into some form of valid agreement. Mr. King got attracted to Sir. Christian car and immediately presented an offer to him which after a series of negotiations, he accepted to sell the car at an agreed price. However, nasty event unfolds after the agreements. Sir Christian involves in some small accidents, which then causes the engine to have some problems as well as the front brakes also get damaged. Nonetheless, he quickly repairs the car to some unlicensed dealers with no genuine spares to fix the above problems since Sir Christian do not want to incur further expense on the vehicle. Alternatively, Mr. King is faced with the dilemma to fund the entire amount of the agreed value but then gets a new idea and call the seller to accept the original offer of 60,000 AED. Due to the earlier accident that had happened to Sir Christian, he feels bad about the way the whole scenario is unfolding but then agree to accept the original value. After that, Mr. King makes the full payment of the remaining amount that he owed the seller and then drives off. With little chance to count that amount at that particular moment, Sir Christian later realizes that the amount was less by 15, 000 AED. Mr. King crashed the car in front of him and claimed that Sir Christian did not reveal the actual condition of the vehicle when he delivered it and this causes huge concerns.
Mr. King’s Argument: King claims that Sir Christian kept quiet about the latest condition of the vehicle. The period he inspected the car, it was in a fine state according to him and that he feels that Sir Christian hide some facts or damaged the car and did not disclose the information to him. This angers Mr. King and he begins to feel that the money might not receive its true worth. He feels that this has been deliberately done and all this compels him to seek a legal action against the seller of the car. Furthermore, in his view, the actions committed by Sir Christian do not to represent the letter and spirit of the contract a lawful action is the best to receive justice.
Sir Christian Arguments: He acknowledges that a contact was signed between them. However, to his opinion, Mr. King showed no commitment to honoring the contract especially that pertains to the price of the vehicle. The original value of the car was agreed at 75,000 AED, but that later did not manifest. He feels he is right not to spend extra money on fixing the damages that resulted from the small accident he got involved in and that made him seek an authorized mechanic to fix the problem and not using spares of the car. After signing the agreement, he sees little need to fix the problem fully and that the buyer should incur all these expenses especially after signing the contract with Mr. King. This is the reason he is of the opinion that Mr. King received what he deserved particularly after failing to meet the full price they had initially agreed. He feels that since he was in a hurry and later counted the money, Mr. King deliberately paid less money with the prior intention to breach the contract.
In essence, the dispute that exists between these parties is that resulting from the sale of good. In this given scenario, the good is the vehicle being sold. However, there is a mixed transaction from the event that unfolded after the small accident that Sir Christian was involved and Mr. King paying less money. Therefore, each party feels they are right based on their arguments on the case. Each party feels wronged by the action of the opponent.
Regarding remedy, Mr. King could seek punitive damages. This can apply to this situation since he feels Sir Christian deliberately sold the car with the fact that he knew there was a problem in the vehicle. Sir Christian could not reveal the faulty problems in the break and engine, and this was very deliberate according to him (Weinrib, 2003). Therefore, punitive damages could be one of the remedies that the courts could award him. Alternatively, Sir Christian could seek restitution damages as the remedy from the court. This is applicable since he may want to disgorge the profits that Mr. King would receive as a result of breaching the contract (Katz, 2005). Paying 15,000, AED less than the agreed value would profit him in some manner in buying that car.
Article 136- this articles talk about the offer, where until the closure of the meeting, the parties coming into agreement have the choice reject or accept the offer and the offer becomes void when withdrawn by the offeror.
Example: the offer stayed valid and both the parties did not retract the offer whatsoever and therefore, the contract can be termed valid based on the UAE Federal laws. Mr. King and Sir Christian contract are therefore valid based on article 136.
Article 185- this article discusses dishonesty as the act where the agreeing parties cheat the other by means of fraudulent or even inducing him to assent to something he would not have acceded to in the absence of such ways.
Example: Sir Christian agrees to lower the price of the car from the original agreed price of 75,000 AED to 60, 000 AED. This happens following the small crash he got involved. However, this can be seen as a dishonest way since he knows very well that the car has faulty engine and brake system yet he sells the vehicle to Mr. King without disclosing this. In the real sense, Mr. King could not get into a binding agreement when he had known the real fault in the car.
Article 272(1) – this article explains bilateral agreements, where it states that if one of the involved parties fails to perform the contractual duties, the other party may particularly after serving an official notice to the debtor; require the performance of the agreement or its rescission.
Example: In the Sir Christian vs. Mr. King Case, Buddy King, may seek performance of the contract after serving a formal notice and require that it be followed. He feels that Sir Christian breached the agreement by selling a faulty vehicle using fraudulent ways.
Weinrib, E. J. (2003). Punishment and Disgorgement as Contract Remedies. Chicago-Kent Law Review, 78(1).
Katz, A. W. (2005). Remedies for breach of contract under the CISG. International Review of Law and Economics, 25(3), 378-396.
Saleh, N. (2009). Remedies for Breach of Contract under Islamic and Arab Laws. Arab Law Quarterly, 269-290.
Alustath, H. (2016). Choice of Law in respect of contracts in the United Arab Emirates and the European Union; and related aspects of Private International Law in relation to the Dubai International Financial Centre (Doctoral dissertation, University of Essex).