Business Law

Prologue

According to Webster’s definition, an obligation is a condition or feeling being bound legally or ethically, such as bond, with which a penalty is annexed on failure of due performance. Therefore, a civil obligation refers to that condition of being bound legally, so that failure of a person to perform what he has bound himself to do will make him liable to the other party according to law.

The obligation has many extensions and arises from Law, Contracts, Quasi-contracts, Acts or Omissions punishable by law, and Quasi-delicts or torts.

Discussion

A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service. The characteristics of a contract should have a binding force, has autonomy, has mutuality, has relativity, and has consensuality.

The obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.

The meeting of minds or the conformity of the wills of the contracting parties as to the object and consideration creates the obligation which will be binding on the parties themselves. As long as the contract which gives rise to the obligation is valid and not contrary to law, public morals, public policy, public order or good customs. the contracting parties are legally bond to comply with their respective obligations in good faith.

Case 1: Ringwood Furniture vs. Frank Advertising

Ringwood Furniture did not accept the materials delivered by Frank Advertising due for not compliance on the specific instructions. Now, the Frank Advertising is threatening to sue the Furniture Company.

The contracts are voidable or annullable, even though there may have been no damage to the contracting parties:

1. Those where one of the parties is incapable of giving consent to the contract;
2. Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud. The contracts are binding, unless they are annulled by a proper action in court.

The above case is subject to the court decision. In natural obligation, the ethics or the performance of an obligation such as service should be payable as if it is a sale. But since the Frank Advertising wasn’t able to comply therefore, it is the right of the Furniture Company to demand for the specific order they made.

Now, if the Furniture Company refused to pay the Frank Advertising and eventually used the delivered materials in the company’s marketing, then another law is cited; Obligations derived from quasi-contracts is generally promised on the maxim “No one shall enrich himself at the expense of another”. There is no consent of either party to the quasi-contract actually exists, but is merely supplied by fiction of law. The act which gives rise to the quasi-contract must be voluntary and lawful, and beneficial to the other party, so that the party who performs the act is justly entitled to compensation or reimbursement. Therefore, the Ringwood Furniture Company should pay the expense of Frank Advertising since the other had used the supplied materials.

Case 2: Mr. R. Tan vs. Linga Nursing Home

Mr. Tan sued the Nursing Home and accused the negligence made by the latter that caused the death of Mr. Tan’s mother. Mr. Tan’s accusation made the Nursing Home paid fines because of poor hygiene. Since it has been proved through the inspection, the Nursing Home will face the consequences of Quasi-Delicts.

Quasi-Delict or Tort or Culpa Aquiliana, states about a person who by an act or omission causes injury or damage to another reason of his fault or negligence, and therefore shall be liable to pay damages to the injured party. This constitutes the following:

1. The fault or negligence must spring from the spontaneous act or omission of the offender, and not from a pre-existing contractual relationship between the offender and the offended or injured party; and
2. There was no intent to commit injury or damage by the offender.

The Nursing Home must face the consequences or condition according to the Law.

Case 3:

The Nursing Home may find difficulty in demanding for the service of the Ringwood Furniture since the advertisement is not specific on its term of service. But in case the Furniture company included the said collaterals in their advertisement, then nursing home has a right to demand to experience the guarantees promised by the furniture company, if and only if, it is within the scope of the promised time. But if the time lapsed, the nursing home cannot get any service coming from the furniture company, because of the existence of the contract.

Case 4:

When the patient’s son knew that the furniture company has a part of it, he also filed sue against the furniture company. But in the courts study, the suit will be forfeited because they have no attachments to each other. The furniture company and the patient’s son doesn’t have any written contract to make the case run. The only thing that the patient’s son can do is to demand for the responsibility of the nursing but not on the furniture company.

Epilogue:

A contract is a promise between two or more persons involving the exchange of some good or service. The element that distinguishes a contract from informal agreements is that it is legally binding: the law provides a remedy in the event that the promise is not fulfilled. By law, certain types of contracts must be in writing, but oral contracts are valid in many situations. An oral contract may be held to exist even in the absence of agreement as to all its terms. But it is still advisable to have a written contract than the oral.

Source:

Law of Contract [Online] Available at: http://law.jrank.org/pages/12504/Contract-Law.html [Accessed 25 Aug 2009].