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Business Law Essay


At the course of Business Law, we got the knowledge about the contract. In addition we have an assignment that provides a contract analysis. This evaluation of the contract will be reviewed in accordance with the following requirements:

1. What specifically makes this contract enforceable?
2. What are the responsibilities of both parties?
3. What are the possible damages and liabilities?
4. What impact does a potential breach of contract have on the business?
5. Summarize, by reflecting in general on the impact legal issues can have in both small and large businesses. So, a contract is any voluntary legally binding agreement between two or more people or businesses. In our case the two parties will be represented by The State of Oregon, and by Pro DX, who will provide services and goods to the first one.

1. What specifically makes this contract enforceable?

Based on the English Statute of Frauds, not every contract has to be in writing to be valid and enforceable, but some contracts should be. This agreement between State of Oregon and Pro DX, should be in writing because this contract involving the providing of services (repairs, replacements, maintenances, and others) exceeding a big amount of money. To avoid misunderstandings and disagreements and to reduce the possibility of perjury by one party or the other, this contract should be in writing. Furthermore, because it can be performed in less than one year, this kind of contract can be in oral form, and it requires involving the third party (a witness) who in case of the trial will bring a reasonable and effective evidences, otherwise one of the party might deny that the contract ever existed or might disagree on the terms of the contract. Besides that this contract is a service contract, it is also a good contract because it requires implementation of goods components in modernization of the software. (Article 2 of the UCC)

This contract, like all contracts become enforceable if all the elements of the contract have been fulfilled without fail. First that prove that the contract is enforceable is the offer. * The offer is a proposal made by one person to another person for the sale and purchase of goods, to engage in a job, action participation, and provision of services. So this contract offers software system design and programming services, in the future is valued at $ 52,800.00 for the state of Oregon. * Another element mentioned in the contract is acceptance. In general acceptance of an offer is a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer. Acceptance in this case is described that contractor, herein Pro DX, agrees to perform the work in accordance with the terms and conditions of this contract. * Another important element found in this agreement is the legal consideration; this means that each party must provide something of value.

In our contract this means that one party (Pro DX) will provide a service (such as maintenance, programming services, software), or a product, in exchange for money (from the State of Oregon, therein represented by the DHS). * If talking about a Professional Data Exchange Company and State of Oregon, we automatically can say that another element of contract is automatically respected. This is capacity to create a contract such means that each party must have the legal capacity to enter a contract. In most jurisdictions that means that they must be at least a certain age and of sound mind. For this mentioned companies it may mean that the individual is given express authority to enter a contract in the company’s bylaws or other formal documents, such is State of Oregon that is acting by and trough its Department of Human Services, Office of Information Services, hereinafter referred to as DHS.

* An element with the biggest importance is that this contract has a legal purpose. And it is, because this agreement refers just to providing of services and not illegal things. * The last element that should make enforceable this contract is that both parties should be mentally competent. In special this contract, has all this requirements but it is still unenforceable because it doesn’t have so little elements that also make a contract enforceable. These are: the commencement date of the contract, party’s rights written in and not only the responsibilities, and party’s signatures and stamps.

2. What are the responsibilities of both parties?

The important responsibilities of the contractor (therein as Pro DX) are: * To provide system design and programming services, including COBOL II, Easytrieve Plus, CICS, CA Intertest and VSAM and DB2 file structures, and make corrections approved by DHS Project Manager. * To construct or modify and implement programs/ files that will control the processing of rates on the JD/CBC system, based on DHS supplied Project Design document and criteria. * To perform design changes, programming, acceptance testing or implementation to address unforeseen error(s), newly discovered bugs and/or interfacing issues. * To demonstrate successful implementation of the production system content with the requirements of Statement of Work to DHS Project Manager. * All these services should be provided in specific limit of time and cost. While the DHS Project Manager responsibilities are:

* To provide the necessary methodologies and standards that conforms to documentation standards. * To promote the rules for completing each task within time frame and approval of every task. * To define and document what testing data is needed for the CBC/512 rate structure project. * To pay for services provided by contractor herein as Professional Data Exchange (ProDX).

3. What are the possible damages and liabilities?

If Pro DX breaches the contract, the possible damages can be: * The DHS might sue the party for a remedies under the law; * The Pro DX will be enforced to pay the caused damages, that can be compensatory, liquidated, nominal, and/or punitive damages. * The Pro DX can be enforced to a specific performance. Basically a decree requiring the breaching party to perform their part of the bargain in the contract. * Pro DX might meet with the terms such -Cancellation and Restitution. A non-breaching party may cancel the contract and sue for restitution if the non-breaching party has given a benefit to the breaching party. The former contract which is the subject of dispute is “rescinded” (cancelled), and a new one may be formed to meet the parties’ needs. * Pro DX will have to pay the attorney’s fees and cost. (in case of litigation). If we will look from the DHS’s side, the possible damages that can appear are:

* To waste time waiting for the performance; * To lose the work that should be provided after the implementation; * Damage also includes the costs of hiring another company to finish the job. The liabilities that can be provided by Pro DX are:

* To provide the programs and software that will satisfy the State of Oregon;
* To complete all maintenance work within time frame;
* To not to exceed the cost and work hours.

The liabilities that should be provided by DHS are:

* To establish the criteria and methodologies necessaries to accept the new right implemented programs and software; * To make corrections (if needed) in the supplied services; * To pay money for successful implemented system.

4. What impact does a potential breach of contract have on the business? So in the case of non-fulfillment of a contract by one party (for example by Pro DX), as a result the other party (DHS) suffers losses. Breach of a contract has negative effects, and has wide ranging consequences both legal and practical to the parties to the contract: * Loss of money – (if, for example, Pro DX refuses to form his side of the bargain on the due date or performs incompletely, in result the second party, DHS, will lose their money for this implementation and also will lose their time spend on waiting for, and somehow will lose the profit that can be made further). * Loss of time – (if, for example, Pro DX’s programs and software will not be accepted by the DHS’s side, the first will result that lost their time, and some files or programs, for doing this job). * Loss of a financial partner- it can be lose a potential investor or/and the business with who you are dealing.

* Loss of trust- it is bad for any business, because no one will have pleasure to make business with an entity that lost trust in the market. * Loss of markets- insufficiently active or successful business means a loss of competitiveness and loss of market. * Injury to reputation – It is not good for a business’ reputation if word gets out that they have not honored their part of the contract. Other companies will be reluctant to do business with an entity which has previously defaulted on other contracts. 5. Summarize, by reflecting in general on the impact legal issues can have in both small and large businesses. Although some recent studies have looked at the impact of regulations on the relationship between government and private business in general, the attention has been directed toward understanding precisely how government regulations have affected small businesses. There is good reason to believe that size matters.

Precisely because of their smaller size, small businesses are likely to be less diversified and less able to leverage economies of scale or to access capital markets. As a result, small businesses might be more risk-averse and less able to react to unexpected events compared to larger businesses. Large firms with deep pockets might be more frequent targets of employee discrimination, wrongful discharge and other suits. Large firms might also have a stronger incentive to spend substantial resources aggressively defending any one suit so as to deter future suits. On the other hand, small firms may be more vulnerable to breach of a non-compete agreement or violation of trade secrets rules as the entire business may depend on that trade secret. As a result, they may be more likely to prosecute, in spite of the costs and the risks of bankruptcy. (, Source: U.S. Census Bureau.)

Also as an owner of a small business or a large business, the common danger of crippling litigation should also be at the top of your priorities. Disgruntled Employees, Discrimination/Harassment Cases, Immigration Audits – any business should make sure that all its company’s employees can legally work in the United States. Unsatisfied Customers – Customers who are unsatisfied can file class action lawsuits against the company, in which they gather in large consumer groups and attack the company over faulty products, services or promises. With enough unsatisfied customers, class action lawsuits can do more damage than any individual or corporation and irreparably tarnish your brand’s image. Other Legal Issues – These are only some of the most common legal issues facing small and large businesses today. Good communication in the workplace and a hands-on approach to management is the best deterrent to legal issues.

Of course the big companies that are facing with these issues, the damage (financial risks, or company image) are higher and have a more sever reflection, than a small company could have. 6. What are the implications this project has for your chosen career? At the end of this evaluation of the contract, as a future accountant, I understood that the contract is the safer way to make an exchange of goods and/or services. I got the knowledge what is a valid contract, what it makes enforceable, what are the elements of the contract, what are the risks and liabilities. This big source of information will help me to be more capable and to feel free while signing a contract. Those skills will help me to manage my business or my job as accountant without breaking the law.

Everyone in his life has deals with the contracts, even if this is unwritten or is written one. Even in the supermarket, or when we are buying clothes, we are doing the exchange of money and a product. So the rules of the contract is that one party is offering something, when another party is considering your offer and decides to have a relationship with you or not. Also, as an accountant or a business woman, an important thing is to know how, to behave in unexpected situation. In activity of businesses can appear the situations called Force Majeure- this is an emergency, do not depend on the participation of the parties. (For example: fire, earthquakes, hurricanes, and others.). In this case, none of the parties is legally responsible for its obligations. Further, to that contract, is made an additional agreement, which specifies other conditions. So knowing what is legal and what are the criteria that make a contract valid and enforceable will help me to succeed in my accountant career.


Business law courses were often overlooked in high school, or college. It’s not an education required strictly for attorneys that represent and defend businesses, in fact it’s pretty much for almost anyone. Contracts are written or oral agreement between two or more parties. The parties can be individuals, companies, non-profits or government agencies. With a contract, two or more parties agree to exchange services or promises. Many parts of our daily lives involve contracts. When we buy an insurance policy for the home or the car, for example, we are entering into an agreement. Many people have employment contracts.

Even when we go to a doctor these days we have to sign a contract agreeing to receive medical treatment. If speaking in special about this analysis of a contract, about knowing how and when we enter into a contract to be safer, more convenient and profitable. So business law through information and specific examples will help us to get more information sought. In analysis of such a contract, we are able to focus on the elements and requirements so, that we do not overlook anything. This practice will develop in the future to have a professional behavior in the process of concluding a contract.

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