INTRODUCTION TO BUSINESS LAW DISCUSSION 2022

INTRODUCTION TO
BUSINESS LAW

LAW105 1
Issue 1
The issue is whether a contract exists between Li and the Lame Duck Restaurant.
Rules 1
A contract signifies an agreement between the parties that are validated by the Australian
Contract Law and is enforceable by the law of the land. The rules prescribed in the Australian
Contract Law regarding the validity of the contracts are presented as follows. There have
been prescribed certain conditions that must be adhered to by the parties while forming the
contracts. Thus, in order for the contracts to be binding, a certain criteria must be met. The
first criteria that must be met is that of a valid agreement that is comprised of the offer and
acceptance. An offer is termed as the promise of something to be done or not to be done by a
party. The communication must be made of the offer for it is called as valid. When the offer
is made by the parties with an intention of further negotiation, the same is regarded as
invitation to deal as held in the case law of Pharmaceutical Society of Great Britain v Boots
Cash Chemists (Southern) Ltd [1953] EWCA Civ 6. The acceptance made by an offeree to
the offeror communicating the agreeing on terms of the offer. The communication of a valid
acceptance results in the formation of an agreement between the parties. The second chief
requirement is that of the consideration. An agreement must be supported by a consideration,
which is stated to be the price paid in exchange of promise. The price may be in monetary or
non-monetary terms, as was held in the case law of Carlill v Carbolic Smoke Ball Co [1892]
EWCA Civ 1. The yet another major requirement is that there must be legal intention among
the parties for the creation of contracts. Thus, there must be intention of the parties to enforce
the agreement at the courts as stated in the case of Air Great Lakes Pty Ltd v KS Easter
(Holdings) Pty Ltd [1989] 2 NSWLR 309. In addition to the above, the parties must have a
legal capacity necessitated to enter into contracts. For instance, the parties with mental
disorder, under intoxication effect, minors, bankrupts and certain others are not allowed to
enter into contracts. The few of yet another conditions for a valid contract are the general
compliances such as the object of the contract must not be illegal and other laws of land must
be adhered to. Hence, if all the above stated conditions are fulfilled a valid contract is stated
to be created.
Application 1
On application of the legal guidelines on the present case scenario leads to the following
points to note. The menu in the given case scenario is the invitation to deal and Li offers to

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book the premises for the wedding by quoting the prices therein. The offer was accepted by
Summer a and the accounts department of the Lame Duck Restaurant, in exchange of price
being paid and the invoice is additionally raised. Hence, a valid offer is extended and
accepted, supported by consideration. The agreement being in nature of commercial contract
has the intention of the parties to be legally bounding. In addition, there is no legal restriction
on the parties banning them for entering into contracts. Hence, there is fulfilment of basic
conditions to contract formation.
Conclusion 1
The conclusion from the above discussion is that there is a valid contract being formed
between Li and the Lame Duck Restaurant.