Business Law and Regulation Issues 2022
Added on 2022-10-09
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BUSINESS LAW
Issue
The issue presented in the case study is to conclude on the consequence of refusal by the
Lame Duck Restaurant to provide the premises for wedding, when there is an obligation to do
so.
Rule
It must be significantly noted that being mistaken about a certain part of the contract does not
does not provide the rights to the parties to get away with the contractual obligations. Hence,
even if there is a fundamental mistake, the contractual commitments must be performed as
earlier was decided. It must be noted that if one of the parties to the contract do not perform
their respective commitments, than the other party can treat the said refusal as breach of the
contract. A renowned case of Associated Newspapers Ltd v Bancks1 must be essentially noted
in this regard. According to the judgement in the case law, when a refusal to perform an
obligation of a contract is such that the key objective or basic substance of the contract
becomes invalid, the breach arises. Additionally the above principle was accorded in the case
of DTR Nominees v Mona Homes2 as well. Thus, it must be noted that the aggrieved party can
end the contract altogether only when the breach is major. In such a case, the damages can be
claimed by the innocent party for the violation of the contract.
However, an innocent party may choose to continue the contract and the other party cannot
force the former to terminate the contract on his instance. However, there is a condition to
such an option to continue the contract. The condition is that if the nature of performance of
obligation on the part of the innocent party is such that it requires acts from the other party
too, and other party refuses, the contract cannot be continued for the said portion.
Application
The application of the above stated legal rules to the presented scenario renders following
insights. It would be regarded as a breach of contract if one of the parties in the presented
scenario that is Lame Duck Restaurant refuses to allow the premises being used for the
wedding, as it is the fundamental term of the contract. Further, the breach is regarded as
serious because the invitations are already being sent out to the friends of Li stating the said
premises as venue for the wedding. On application of the principles of the Associated
1 Associated Newspapers Ltd v Bancks (1951) 83 CLR 322; [1951] HCA 24
2 DTR Nominees v Mona Homes (1978) 19 ALR 223
The issue presented in the case study is to conclude on the consequence of refusal by the
Lame Duck Restaurant to provide the premises for wedding, when there is an obligation to do
so.
Rule
It must be significantly noted that being mistaken about a certain part of the contract does not
does not provide the rights to the parties to get away with the contractual obligations. Hence,
even if there is a fundamental mistake, the contractual commitments must be performed as
earlier was decided. It must be noted that if one of the parties to the contract do not perform
their respective commitments, than the other party can treat the said refusal as breach of the
contract. A renowned case of Associated Newspapers Ltd v Bancks1 must be essentially noted
in this regard. According to the judgement in the case law, when a refusal to perform an
obligation of a contract is such that the key objective or basic substance of the contract
becomes invalid, the breach arises. Additionally the above principle was accorded in the case
of DTR Nominees v Mona Homes2 as well. Thus, it must be noted that the aggrieved party can
end the contract altogether only when the breach is major. In such a case, the damages can be
claimed by the innocent party for the violation of the contract.
However, an innocent party may choose to continue the contract and the other party cannot
force the former to terminate the contract on his instance. However, there is a condition to
such an option to continue the contract. The condition is that if the nature of performance of
obligation on the part of the innocent party is such that it requires acts from the other party
too, and other party refuses, the contract cannot be continued for the said portion.
Application
The application of the above stated legal rules to the presented scenario renders following
insights. It would be regarded as a breach of contract if one of the parties in the presented
scenario that is Lame Duck Restaurant refuses to allow the premises being used for the
wedding, as it is the fundamental term of the contract. Further, the breach is regarded as
serious because the invitations are already being sent out to the friends of Li stating the said
premises as venue for the wedding. On application of the principles of the Associated
1 Associated Newspapers Ltd v Bancks (1951) 83 CLR 322; [1951] HCA 24
2 DTR Nominees v Mona Homes (1978) 19 ALR 223
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