Contract law Essay Example | Topics and Well Written Essays - 1000 words

Contract law - Essay Example Churton and Silver were able to inform Risk It of the situation, who agreed to amending the loan agreement by postponing the payment of the principal due for 1 year, and waived all interest payables. However, due to financial problems of its own, risk It now wishes to enforce the original loan agreement against Churton and Silver, and the latter refuses citing the limitations on what they may pay and the ill effects full payment would do in damaging their business enterprise. Prior to formulating the legal advice, I would present to Risk It, it is important to first outline the various legal concepts. In the case at bar, there is clearly a contractual obligation, voluntarily undertaken by both parties. Commonly this is considered a bilateral contract, which imposes upon both parties certain obligations that they agreed upon. Here, Risk It agreed to loan the money to Churton and Silver, who in turn agreed to pay the loan based on the agreed terms. Although the facts make no mention as to the manner in which Risk It agreed to amending the terms of payment of the loan as per the difficulty in financial situation of Churton and Silver, there is really no difference as to whether or not the agreement to amend the terms is in writing or not. Despite common sense, contracts can be legally binding even if not reduced into writing, and have the same effect as if it were on paper. Thus, the acts of Risk It in agreeing to change the terms of the loan is binding upon them, and they can no longer renounce that change or deny it otherwise. This is a key concept of contract law, that contracts are formed through an agreement consisting of an offer and acceptance, a valuable consideration, and the intention of the parties to create a contract. Further assuming that all the necessary requisites of a valid contract are also present in the case at bar, there is no need to delve into the complexities of the form, parties' capacity to contract, consent freely given, and legality of the subject matter or purpose of the contract. Seeing as this is a clear contract of loan, all things should be in order. With all that said, it is clear that the only advice I can make to Risk It is for them to follow the amended loan agreement that they had made with Churton and Silver. The changed terms, and waived interest became binding on them from the moment it was made, offered and accepted by the parties. They can no longer renounce or go against that agreement, or they put themselves at risk of legal suit for the remedies due to breach of contractual obligations by Churton and Silver. It is necessary to state that the remedies for breach of contractual obligations include the award of monetary damages by the courts and a petition for specific performance. The former is the assessment of monetary sum to be given by the offending party to compensate for the injury that would be suffered by the breach of contract. This could be a relief sought against Risk It if they try to enforce the original loan agreement instead of the amended one that would inevitably cause great damage and injury to the business enterprise of Churton and Silver.