Fundamental of Business Law

Consideration has also its own rules which are: it must be real meaning that it must have some values in the eyes of the law. It must not be in past this means that it should not include some past acts which took place before the promise is made. Consideration must move from the promise this means that no one can enforce another’s promise unless he has been a party to a contact and provided a promise to the promisor; this tells us that no stranger is allowed to enforce another person’s promise.

Consideration must be in excess of an existing obligation . a person who is under a contractual or legal duty to perform a certain act gives no consideration for a promise to pay for the performance of that contract. It must be legal, that is it should not be a consideration that is prohibited by law or against the public policy. In this case Daniel Lanois, and Robbie Roberts we find that there was the practice of transfer of liabilities whereby an obligation under a contract cannot be assigned without the consent of the other contracting party.

The law provides that the liabilities of a contract cannot be shifted off the shoulders of the contractor on to those of another without the consent of the contractee. This transfer of liabilities can be done in the following two ways; that is through novation which is stated as the rescission of the original contract and the substitution of a new one in which the obligation under the original contract are undertaken by new parties voluntarily.

An example of this is; suppose A owes one thousand dollars to B and A transfers his liability to C, this would not bind B to claim the money from C. but if B consents to accept performance from C, and C also agrees to do so, then there is a substitution of a new contract, and the old contract is discharged. The second way through which this may be done is by vicarious performance whereby the law says that it is open for parties to have their contract performed vicariously by another person, provided the contract does not expressly or implicitly insist on the performance of the contract by the promisor himself.

In the absence of any such condition in the contract the promisee must accept the work done by a third party if it has been carried out in accordance with the terms of the contract. But even in such cases, the promiser remains liable under the contract because vicarious performance in its application is similar to the law of agency. This rule states that the vicarious performance is not permissible where the contract is to render personal services or personal performance by the promisor is the essence of the contract.

This is well explained in the case of Robson and Sharpe v Drummond, 1831: Sharpe contracted to maintain and repaint a coach hired out to D for five years at a yearly payment of €75. After three years, Sharpe retired and informed D that thereafter Robson would be responsible for repairing and repainting of the coach. D refused to accept the performance by Robson who sued him. Held that D was entitled to refuse the arrangement, and Sharpe could not assign his liabilities under the contract without D’s consent.

Therefore for both Daniel Lanois and Robbie Roberts they both agreed to contract a third party and none of them will be able to fail holding him liable for the breach of contract. The contemporary law provides a number of remedies for the breach of any contract, thus the innocent party is always entitled to the following remedies, refusal of further performance whereby a party who suffers by a breach of contract is entitled to treat the contract as ended and may refuse any further performance on his own part.

But in case the victim of the breach does not take the initiative to bring an action for rescission of contract and the other party sues for any sums due to him, he may set up the breach of defense. Actions for damages, damages are regarded as the normal remedy for breach of a contract. The aim of law is to place the injured party as far as possible in the position he would have been if the contract had been performed. It is not for every kind of damages that the plaintiff is entitled to recover compensation. In some cases the law considers that the loss sustained from breach of contract is too remote to merit any compensation.

In the case where the profits have been lost to the plaintiff by the fault of the defendant in delaying delivery, and if the other party knew at the time of forming the contract that the special loss was likely to result from the breach of contract he will be liable for such loss, action for specific performance and action for an injunction. The act states that a contract may be discharged by performance where both parties fulfill their obligations under the contract and nothing remains to be completed. It is important for the discharge of the contract that performance must be strictly in accordance with the terms of the contract.