Business Law Assignment: Validity of Contract and Negligence Law

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Contents
BUSINESS LAW ASSIGNMENT............................................................................................2
PART A......................................................................................................................................2
Issue........................................................................................................................................2
Relevant Law..........................................................................................................................2
Application of law..................................................................................................................2
Conclusion..............................................................................................................................3
PART B......................................................................................................................................3
Issue........................................................................................................................................3
Relevant Law..........................................................................................................................3
Application of law..................................................................................................................4
Conclusion..............................................................................................................................5
Reference List............................................................................................................................6

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BUSINESS LAW ASSIGNMENT
PART A
Issue
i. Whether there exists a suitable bond amid George and Anita?
ii. Whether George can sue Anita for infringement of bond?
Relevant Law
Every agreement can be made by two parties provided all the elements of agreement are
present.
To start the formation of any contract, there must be an offer which must be initiated by an
offeror. An offer is the act or error which is conveyed by an offeror to an offeree with the
hope of confirmation (Carlill v Carbolic Smoke Ball Co (1893). The bid must reach the
offeree to make it bidding in law and is held in Smith v Hughes (1857). (Latimer, 2016)
As per Brambles Holdings Ltd v Bathurst City Council (2001) when the offeree gave her
sanction then it is a receipt in law. Also, as per RA Brierley Investments Ltd v Landmark
Corp Ltd (1966), the acceptance so made must reach the offeror to make it binding.
(Andrews, 2011)
However, when an offer and acceptances are made, then, it is necessary that the assurance
must be made with legal intention to be abide by the promises. Thus, any contract can only be
enforceable in law when the promises are made with lawful purpose (Balfour v
Balfour [1919].
Mainly as per Murphy v Simpson [1957] the parties share cordial relationship or friendly
relationship, then, it is assumed that the parties do not wish to abide by the contract legally.
Also, as per Rose and Frank & Co v Crompton [1923] when the parties are sharing the
relationship which is business or commercial in nature, then, they have legal to abide by the
terms of the contract.
But, these general presumptions are rebuttable and it is held in Simpkins v Pays [1955]) that
when evidence can be laid then even though the parties are sharing family or friendly
relationship, still the parties are holding out legal intention making the contract enforceable in
law.
In Masters v Cameron (1954), the court has held that whether the parties wish to abide by the
contract legally must be judged by the acts and circumsttbces of the situation. If there is
nothing which is left to be done by the parties and only to comply with the terms of the deed,
then, there is a compulsory bond that is made and the parties and the contract is held to be
legally enforceable in law.
Thus, when a valid bond is made then contract must be comply with. Any non compliance of
the contract terms results in contractual breach and the non breaching party has the option to
sue the other party for breach. (Andrews, 2011)
Application of law
Anita and George are friends. They wish to start a fast food business together. Both of them
have instructed their lawyers that a deed of partnership must be prepared wherein the rights
and obligations of both the parties must be mentioned. Both the parties sign the deed.
However, after the success of the business and with passage of time, both George and Anita
started to have conflicting arguments as who will run the business.

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After an year there is a huge fight amid Anita and George and Anita left the shop and tells
George that she is not coming back and that she will lease a nearby shop and set a
competitive business with George. A new business was established by Anita who was
successful, whereas the previous business was suffering from losses.
i. There is a valid contract that is made amid George and Anita.
It is submitted that a partnership deed was established by the solicitors of both the
parties. The deed that was prepared was also signed by both the parties. Generally
if the parties do or does not wish to abide by any documents then the same can be
categorised from the surrounding situations and circumstances. George and Anita
were friends and have cordial relationship amid themselves, thus, as per Balfour v
Balfour [1919]. It can be submitted that there is no contractual association among
them.
But, as per Simpkins v Pays [1955]) the general presumption that the parties in
cordial relationship cannot have legal intention can be rebutted. Thus, it can be
stated that by signing the deed of partnership by both George and Anita, they have
untended that they wish to abide by the deed of partnership legally.
As per Master v Cameron, the signatures of both the parties on the deed of
partnership emphasis that they wish to abide by the terms of the deed and must
comply with them.
Thus, there is a clear offer and acceptances that are shared by Anita and George
and that there also is a presence of lawful purpose.
Hence, there is a binding contract that s made amid Anita and George.
ii. Since there is a valid contract between Anita and George, thus, Anita has an
obligation to comply with the terms of the deed of partnership. Anita by leaving
the business without any due notice and opening a rival business has resulted in
the violation of the terms of the deed of partnership and thus there is a clear
breach of contract on the part of Anita.
Conclusion
It is thus concluded that there is a binding contract that is made amid anta and George and
thus by leaving the business and opening rival business by Anita has resulted in breach of
contract on her part.
PART B
Issue
i. Can Anna sue Michael for negligence?
ii. What basics must be proved by Anna t hold Michael liable under the law of
negligence?
iii. Whether there are any defences that can be raised by Michael?
Relevant Law
One of the most profound civil law that is generally availed by the plaintiffs in order to seek
justice in negligence. The concept of negligence was rightly established in Donoghue v
Stevenson (1932) by Lord Atkin who submitted that every defendant must carry out his
actions in such manner so that no harm of any kind should, be caused to the plaintiff.: (Khan
and Robson, 2012)