Can P sue N for asking the full rent of the factory along with the arrears?
- Contracts (Applicable Law) Act 1990.
- The basic requirements in the contract are-
- A consideration in the law of contract will have to be such that the law considers being a valid one.
- An oral contract is a contract in which the terms of the contract have been agreed orally.
- The contingent contract refers to that contract where the uncertainty of the event.
- A contingent contract can be said as the protection against future change in the plan
- Time taken by the parties for the completion of any work is important clause in the contract
- When in any of the case the time is not given then the time will not be referred to as the essence of the contract.
The contract law in the UK is governed under Contracts (Applicable Law) Act 1990. In the given case scenario there was a contract between P and N, where N was the owner of the factory and P had taken the factory on lease from N. In the factory P used to make car parts but suddenly there was a closure of the car manufacturing country in Adelaide, which affected P’s factory badly, and P was not being able to pay the rent of the factory. P decided to ask N for the reduction of the rent. N agreed to the condition, but he also added that the new rent is payable only until the business condition of P improves. P and N entered into the Oral Contract.
This was the contingent contract made by P and N as the contract was based on the future occurrence of the event. When N agreed to the reduction of the rent, he has accepted the oral offer, and there was a valid contract formed between both the parties. An oral contract is also a valid contract if the parties to the contract agree to the term of the contract and if the consideration that has been offered is a legal consideration. Here the contract made by P and N was a valid contract, and they both are bound by the contract the moment both of them gave their consent for the contract.
P can argue that he gave a year time for the improvement of the N’s business but his business did not improve and now P is also suffering some loss and he needs the money. After one year when N’s business was not going well, he asked P to pay the full rent along with the arrears. P did not agree to the new terms of the contract as he said there was a contract formed between them a year before and according to that contract the rent has been reduced. The oral contract between P and N was based on the contingent event.
The contract made by P and N is not a valid contract as the contract had a clause that if the business of P will increase. The event referred to here is a contingent event, which may or may not occur in the coming future. Therefore, in the given case scenario N cannot ask P for the payment of the full rent from the next year.
By considering the above facts, it is most likely considered that P can sue N for asking the payment as there was no time is given in the contract and when the matter is related to the immovable property then the time is not an important essence.