1.0 Introduction

Unique IT Supplies Systems Plc has been involved in several activities such as sales, rental, and telecommunication services among others. The most notable customers for this company include Bradford University and Ethanes Graduates School of India. In order to engage with such businesses with such clients, the organization must clearly understand contracts or agreements that bide each party on what is expected of them in the course of business. The contracts and agreements binding such business activities must outline the requirements of each player towards fulfilling of the agreements. In the course of this report, the essential elements of a contract and agreements will be properly outlined. The organization will also be made to understand on the validity, enforceability, voidance and unenforceable contracts and agreements (Denicola, 2002).

• essential elements of an agreement

To start with, it is important to understand that an agreement enforceable by law is a contract. This gives the most common definition of a contract which is defined as an agreement that is enforceable in a court of law. However, in order to have a proper understanding of what exactly a contract means it is important to understand what an agreement is. In essence, agreement refers to every set of promises that forms consideration for each other (Bhadbhade, 2010).

In order for the Unique IT Supplies Plc to have an effective business experience with the clients, it will be very essential for the organization to have a clear picture of the essentials of an agreement. Several statutory law and private laws have tried to put across several essentials of an agreement or a contract. However, it s important to understand that there are basic four elements associated with good agreement (Denicola, 2002).

Offer

The first and mandatory element that is associated with an agreement is the offer. This refers to a clearly stated offer to do something. For instance, Unique IT Supplies Plc may offer to facilitate Bradford University with telecommunication services. It is important to distinguish between an intent, request for proposal and expression of interest and this does not entail an offer.

Acceptance

The second step after giving an offer is the acceptance of the offer. It is important for the two parties to understand the offer before acceptance. Unique IT Supplies Plc can have an acceptance verbally agreed or inferred by actions which are clear indication of an acceptance. It is important for the accepting party to understand the method prescribed by the offerer (Frey & Frey, 2001).

Legal consequences

Another essential element of an agreement is the legal consequences of the contract. It is important for the participating parties to enter into a legally binding agreement. It is important for the two parties to entering into a contract to create legal relations and understand that the contract is enforceable by law (Tulsian, 2000).

Consideration for offer

The last essential element in agreement is a valuable consideration for the offer that makes the contract binding. For instance, Unique IT Supplies Plc will expect a valuable consideration for the supply of telecommunication services (Denicola, 2002). It refers to what the two parties offer in return of the promises made by the two parties. The consideration must be mutually agreed between the two parties and does not necessarily have to be a fair payment. It is essential to understand that courts will not intervene in cases where one party bargains hard unless in cases of duress or unconscious conduct.

It is also important for the parties involved in a contract to understand when a contract can be termed as void, valid, voidable and unenforceable.  For instance, a void contract is not a contract and is not enforceable in a court of law. In most cases, the void contract lacks one of the essential elements of a contract and is referred to as ‘void abinitio’ meaning the contract was never was from the beginning. Example of such cases involves a contract between two parties in an illegal trade. If for instance there is a contract between illegal drug dealer and an illegal supplier entails a void contract (Langdell, 2009).

Valid contract refers to a contract that has all the required elements of a good agreement. A valid contract is enforceable by law. For instance, the Unique IT Supplies Systems Plc can have an agreement with Bradford University to supply telecommunication services with all the essential elements of an agreement.

Voidable contracts: these are kind of contracts that appear to be valid and have all the essential elements to be enforceable. However, the contract has some flaw which could trigger one or both the parties to void the contract (Tulsian, 2000). It is important to understand that the contract is legally binding but could become void if one or both parties decide so. For example, if one of the parties was a minor during the signing of the contract, the minor may decide to void the contract thus rendering the contract unenforceable in a court of law.

Unenforceable contract: this refers to a form of contract that cannot be enforced in a court of law. This can be triggered by ambiguous terms of contracts, instances of voidable contacts or if the statute limitations have expired. It is important for the Unique IT Supplies Systems Plc to understand statute limitations require lawsuits to be filed within a stipulated time frame after breach.

Example of unenforceable contract

Joan bought a house from Jack using a written purchase and sale agreement. After taking possession, Mary discovers a small leak in a pipe in the crawl space of the house, but does not take any action against Pete for four years (Tulsian, 2000). The court decided that the contract was unenforceable because of Mary’s delay, even though the Statute of Limitations had not expired. The court ruling was based on the Doctrine of Laches.

• implications of different types of contracts

Unique IT Supplies Systems Plc must understand the implications of different contracts that it is likely to enter with Bradford University and Ethanes Graduates School of India. Failure to understand such implications can be very detrimental to the overall success of the contractual obligations (Tulsian, 2000). The main area of concern should be distance selling which could prove to be the most favorable contracts between the IT firm and the clients. For instance, the firm may have contracts at the business premises, away from the place of business or at a distance as part of organized distance sales or service provision scheme. For instance, the firm must be very conversant with the consumer protection (Distance Selling) regulations of 2000 and the cancellations of contracts made in a consumers home or place of work.

Distance contracts are those contracts that are concluded under an organized distance sales or service-provision scheme where the client and contractor are not physically present. An effective distance contract must have a conclusive agreement via one or more means of communication up to and including the time at which contract is concluded. It is important to understand that there are no defined regulations as to organized distance sales and service-provision scheme (Tulsian, 2000). It is therefore important to understand that there could be likely services such as mail order, online sales and telesales. Failure to understand such implications could lead to the IT supplier in intense legal battle with its clients as a result of distance sales.

For instance, Unique IT could engage in distance selling with Bradford University. The company may be contractually obligated to supply telecommunication services to the institution. The contract and its term and conditions may be discussed off the premises. Such contracts may be agreed with its other clients (Gulshan, 2009).

• effects of conditions, warranty, expressed/implied in any contract between IT and its clients

Unique IT Supplies Systems Plc should clearly understand the conditions, warranties and innominate terms as it enters in agreement with Bradford University and Ethanes Graduates School of India. These are very essential terms as far as contracts are concerned. These terms are classified differently in contractual context. It is important for this firm to understand that the different terms varies in terms of importance in contract law (Tepper, 2012). For instance, warranties are considered least important in the eyes of the law while conditions are considered very important.

To start with, conditions refer to terms that the two parties considered very important and must be performed. When a party fails to perform a condition, then the other party is entitled to void the contract. The breach of a condition may result to the aggrieved party to terminate the contract and sue for damages. On the other hand, it may decide to affirm the contract by continuing to perform its contractual obligations and sue for damages (Gulshan, 2009). These conditions could be expressly or implicitly expressed and should be very conversant with all the participating parties.

For instance, in a contract between the Unique IT Supplies Systems Plc and Bradford University to supply telecommunication services, a condition could be expressly stipulated by the parties that the gadgets that will be installed must be operational for at least two years. If the company uses gadgets that become un operational within one year, the university may regard his as a breach of essential condition and may sue for damages. This should also be the case in case of implicit contracts (Helewitz, 2007).

On the other hand, warranties are less essential in contact law. It is important to understand that in case a warranty is breached, the aggrieved party may sue for damages but is not allowed by law to terminate the contract. It will be very essential for the IT firm to understand these concepts in order to have effective agreements with its clients (Tepper, 2012).

It is always important to distinguish between the implied terms of contract and express terms. This is because the two concepts are very essential when it comes to unenforceability of the agreement. For instance, express terms refers to those terms that the two parties have articulated prior o concluding their contract. They are specifically stated terms in the contract form. On the other hand, implied terms are those terms that the two parties may not have necessarily agreed on but still form part of the contract. They are implied from a number of sources such as courts, customs and other legislations (Collins, 2003). However, it is important to understand that the express term will always override implied terms just in case of a conflict between the two.

2.0 explain rule of capacity as an essential element of a valid contract

A contract can only be termed as valid if the participants in the contract have the legal capacity to enter into a contract. Though a natural person who agrees to a transaction has a complete legal capacity to enter into contracts, it is important to understand that there are legal classifications of different class of people and their capacity to enter into contracts. For instance, insane, minors, bankrupt, corporations and prisoners have no legal capacity to enter in any contractual obligation (Collins, 2003).

Insanity: it is important to understand that people who are insane or mentally impaired either by drugs or otherwise may not be considered to have a legal capacity to enter into contracts. They are limited to contractual obligations since they lack to understand complicated details of a contract (Tepper, 2012).

Minors: they are also referred to as infants who are persons under the age of 18 years. It is important to understand that a contract is made by an infant is voidable but is valid and enforceable unless the minor disaffirms. The law assumes that the minors may not be able to negotiate very complicated contracts with other experienced people. After attaining the majority age, the party may opt to disaffirm or avoid the contract. It is important to understand that failure by the minor to disaffirm the contract after attaining the majority age implicitly ratifies and become bound to the contractual terms (Tulsian, 2000).

Bankrupts: it is important to understand that bankrupt people are not deprived their right to enter into contract. However, there is a Bankruptcy Act that gives special conditions under which bankrupt people should not enter into contractual obligations (Tepper, 2012). Others are prisoners and corporations who are not supposed to enter into contractual obligation.

2.2 advices Unique IT on legal position on any miss description, quality and after sale services with online customers

It is important for the Unique IT to understand in any sale whether online or at the premises involves getting into a contract. Failing to honor contractual obligations by the firm can lead to numerous legal battles between the company and its clients. It is for this reason that the company requires advice on how to effectively handle their clients in terms of quality and after sale services (Tepper, 2012). Unique IT must understand contracts and regulations which cover the sales and purchases within the business.

The company needs legal advice on how contracts work and this will be very essential in avoiding most common pitfalls likely to catch out on the business. The organization should learn the different terms and conditions which can be taken to the advantage of the contracts. It is also important for the IT firm to understand the different customer rights and protections. The firm requires legal advice that will help understand rules and regulations that govern the way of business within an organization (Tepper, 2012).

The issue of miss description has also been a very important factor for consideration when it comes to aw of contract. For instance, the Unique IT is a company that is involved in sales of goods and properties. If for instance the company enters into a contractual agreement to sell a motor vehicle to Bradford university, and in the terms it is stated that the year of manufacture of the vehicle is 2009 then the client has rights to reject the vehicle and claim for damages if they find out otherwise (Tepper, 2012). The same case will apply just in case of low quality since consumers are always protected against low quality products.

2.3 breach of warranty by Unique IT Supplies Systems Plc with Bradford University

It is important for the Unique IT and Bradford University to understand that conditions are very important in the eyes of the law. This means that the aggrieved party can terminate the contract and also sue for damages. However, it is also important to understand that warranties on the other hand are less important in the eyes of the law. This means that the innocent party is allowed to sue for damages but should not go to an extent of terminating the contract. In this case, the Unique IT Supplies Systems Plc has sold gadgets to Bradford University and has failed to work. This will be a case whereby the courts will have to decide on whether the selling party will pay for damages to the innocent party (Denicola, 2002).

It is important to understand that whether a term is a condition or a warranty is a question of law or the court to decide. The conditions of a contract may be taken with a lot of seriousness as it can have serious legal implications. However, it is important to understand there is the Sale of Goods Act which provides certain typical sale and purchase terms are to implied conditions, while others are merely implied warranties (Tulsian, 2000).

In this case, Mr. Smith who is the purchasing manager at Bradford university failed to clearly read the terms and conditions of the contract. The clause ‘’ any express or implied condition or warranty is hereby excluded’’ is a very weighty statement.  In a court of law, the plaintiff and the defendant will try to put across their case in order to win the case. While it may be deemed that Mr. Smith failed to carefully understand terms and conditions of the contracts, it may also be argued that the Unique IT Supplies Systems Plc failed to clearly state the conditions and terms of contracts (Tepper, 2012).

It is important to understand that the legal interpretation of such an instance may be taken to be unfair to the purchasing party. Though it is evident that the equipment sold to Bradford failed to work, it is also important to understand that the terms and conditions of the contract stipulated very clear that all implied or expressed warranties and conditions are excluded. Failure by the purchasing manager of the Bradford University to clearly understand these terms can only be termed as total ignorance (Tepper, 2012).  The court of law can only rule in the favor of Bradford University if there were any instances of duress or unconsciousness. However, it is crystal clear that Smith was in a capacity to enter into contract with Unique IT on behalf of Bradford University and was conversant with terms and conditions of the contract in question. In essence, Bradford University will not get any payment in terms of damages for breach of warranty (Tepper, 2012).

References

Bhadbhade, N. (2010). Contract law in India. Alphen aan den Rijn, The Netherlands: Kluwer Law International ;.

Binding Contracts and Legal Actions Predicated on Breach of Contract. (n.d.). Retrieved November 24, 2014, from http://stimmel-law.com/retainer/contracts.html

Collins, H. (2003). The law of contract (4th ed.). London: LexisNexis UK ;.

Denicola, R. (2002). Contracts. Lincoln, NE: Boston Legal Pub.

Difference Between Breach of Contract & Breach of Warranty. (n.d.). Retrieved November 24, 2014, from http://smallbusiness.chron.com/difference-between-breach-contract-breach-warranty-30452.htmln

Frey, M., & Frey, P. (2001). Essentials of contract law. Albany, NY: West/Thomson Learning.

Gulshan, S. (2009). Business law. New Delhi: Excel Books.

Helewitz, J. (2007). Basic contract law for paralegals (5th ed.). Austin: Wolters Kluwer Law & Business Aspen.

Langdell, C. (2009). A selection of cases on the law of contracts: With references and citations. Union, N.J.: Lawbook Exchange.

Tepper, P. (2012). The law of contracts and the Uniform commercial code (2nd ed.). Clifton Park, NY: Delmar Cengage Learning.

Tulsian, P. (2000). Business law (2nd ed.). New Delhi: Tata McGraw-Hill.

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