Critical Analysis

Critical Analysis

Contractual agreements are common ways through which two or more parties agree towards a common course. Such agreements must also be legally binding with both parties enjoying specific rights and duties approved under the law. The main purpose of the contract is for it to act like a tool that structure the relationship between the two parties as well as outlining what each party has agreed to do within a predefined time period (Rogers, 2012). This task will describe an example of a contract between two parties and then depict the essential elements of an enforceable contract and how each element relates to the example. The circumstances under which a breach of contract occurs and the subsequent remedies will be explored as well.

The Contract

The contract that I have witnessed is the rent agreement between the landlord herein described as the owner of the property and tenant who was a friend that sought to stay away from parents. There are notable details that had to be captured in the contractual agreement. The first detail was the names of the two parties were well captured (Kim, 2017). Secondly, the property details had to be documented as it is the subject of the agreement. The details included the physical location and address of the property, official records such as the number of floors and the exact unit the potential tenant would occupy. These details are critical in ensuring that agreement between the parties is binding.

The third aspect to be captured in the contract was the date and time of the agreement as well as the validity proven by witnesses signing the agreement. Other key details that were included in the contract were the rent to be paid, the frequency and mode of payment, the provision of the need to pay with a deposit and if the deposit is mandatory, what percentage of the rent it would be (Kim, 2017). The rules governing any tenant were also stipulated and the tenant read through and signed in readiness for compliance. The last aspect was renewal and terms of terminating the contract and instances when rental charges will be revised. Having a clause on renewal is particularly important as it helps to set rules on possible breaches and how to remedy them.

Elements of the Contract

There are five notable elements that have to be followed for a contract to be fully enforced. All the contracts are often put in writing and then signed to prove that all the elements are present. The elements are discussed as below.

The Offer

The offer is described as the foundation of any binding agreement since it helps to establish the subject matter between parties. The offer is also important in specifying the subject of the transaction and the conditions that need to be there for the contract to continue. For the example, the two parties; the property owner and the client/ tenant must both be present before the contractual agreement proceeds (Savelyev, 2017). Furthermore, the contract can only proceed after the offeror commits to a legal obligation and both the landlord and the potential tenant must demonstrate willingness to enter into the contract.

Acceptance

The second step in the contractual agreement is accepting the offer. This is an indication and willingness to abide by the terms and conditions that are set out especially by the offeror. For the order acceptance to be valid, it has to be made by the offeree or the person to whom the offer is made. The acceptance can be made in writing by signing the agreement/ contractual documents or verbally. In the contract I witnessed, the tenant accepted the terms and conditions by signing the document.

Consideration

In an enforceable contract, consideration is key as it means something significant is being exchanged between the two parties. Simply put, this element contends that in order to get something, one is compelled to give something in return. This was manifested when the potential tenant requested for slight renovation of the premises before he could officially occupy the residence as a tenant. In return, the property owner asked for a fixed deposit charge before the deal was sealed (Chalkidis, Androutsopoulos & Michos 2017). My friend understood that he had to first pay a deposit charge before demanding how the rental unit was to be. The deposit fee was however interpreted as being part of the rental charge.

Legality

Legality is an important element when signing contracts. The contractual agreement has to be legally binding such that both parties understand what the implications of any possible breach are. The legality also contends that the contract must not cause any harm to either party. Legality also argues that the two parties in the contract must demonstrate that they went into the agreement in freewill without being compelled to do so. Furthermore, the two parties are not supposed to be minors but rather adults who understand the implication of what they are getting into (Barroso, 2018). For the case example, both the property owner and the tenant were of sound mind and of age to make critical independent decisions. The two parties understood the legal implications of their decisions especially in the event one forfeits the agreement.

Capacity

In regards to law, capacity is defined as the ability to comprehend the contractual terms of agreement. At the time of signing the contract, the two parties must be of sound mind to understand the nature as well as the circumstances under which the agreement is made. In general, lack of proper mental abilities would have compromised the tenets of the law. The two parties were of sound mind, knowledgeable and hence ready to respond to the specific concerns about the agreement.

Circumstances of a Breach of Contract

There are notable circumstances under which a contract can be breached. The first circumstance arises when either the tenant or landlord violates the terms of agreement. For instance, when the occupant doesn’t pay the agreed amount as rental charge within the agreed terms. When the property owner feels that the tenant is no longer able to pay due to failure to respond to the many reminders, the landlord can opt to send a legal notice to have all the payment dues made (Leka, 2020). If there is no positive response despite the many reminders, the landlord has the powers to file for a legal suit.

The second circumstance that can result in the breach of contract is when the tenant proves to be a security risk. Threatening other occupants or misusing the property are all possible reasons as to why the landlord can opt to terminate the contract. The best remedy is for the landlord to use the deposit and fixed charges to fix the repairs and install security systems. However, in the event the deposit policy isn’t available, a negotiated arrangement can help establish ways on how losses can be recovered.

The landlord can as well result in a possible breach of contract after possibly leasing the property to more than one tenant. When such a scenario occurs, the rentee can opt to sue the landlord for not fulfilling the contractual terms. 

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