Business And Corporation Law | Assessment 1

Running Head: BUSINESS AND CORPORATION LAW
0
BUSINESS LAW BLO1105

Trimester 2, 2019 1
Contents
Part A...............................................................................................................1
Issue.............................................................................................................1
Rules.............................................................................................................1
Application....................................................................................................4
Conclusion....................................................................................................5
Part B...............................................................................................................5
Issue 1..........................................................................................................5
Rules 2..........................................................................................................5
Application 1.................................................................................................6
Conclusion 1.................................................................................................7
Issue 2..........................................................................................................7
Rules 2..........................................................................................................7
Application 2.................................................................................................7
Conclusion 2.................................................................................................8
References.......................................................................................................9

Trimester 2, 2019 2
Part A
Issue
In what manner the contract has been developed between the parties (Stan
and MacBig restaurant).
Rules
Every party to the contract gets certain entitlement as well as an obligation
under a contract. Many factors are mentioned under the common law of
contract that is mandatory to exist in each contract. It means in the lack of
one or more factors a contract cannot come into existence. The agreement is
another term that seems to be interchangeable with the contract but this is
not true. The agreement is a result of acceptance to an offer. Parties cannot
enforce an agreement whereas they can do so in a contract. Therefore, this
is to state that a contract is a legally binding and enforceable agreement
between the parties. An agreement becomes a contract when it receives the
essential factors mentioned in the below discussion.
To start a discussion over mandatory elements of a contract, the offer comes
in the first place. As the name implies, under an offer a party offer something
to another party that can be anything like paying money or performing a
task or anything else. It is a proposal where one party promise to others to
do something in exchange for other things. An offer is addressed to a
particular person who is offeree of the transaction and only that person has
the right to do anything with such an offer. It means a third party cannot
accept or reject an offer made to the offeree. Another important point to
mention is that the offer must be communicated and comes into the
knowledge of offeree. Unless an offer would not be known to offereee, there
will be no question of acceptance or rejection of the same. In general, a
contract starts with making an offer by offeror but an exception is there. This
exception present in those cases where before an offer a party makes an

Trimester 2, 2019 3
invitation to treat. Such an invitation makes the call for offers and generally
address to many people. People who come across to such invitation, make
an offer against the same then the other party (generally the one who makes
the invitation) is required to accept or reject. Hence, such an invitation does
not present in each case and offeror can directly make an offer. In many of
the cases, the court determines different communications as an invitation to
treat. One of such decision has been given in the decision of the case ofFisher v Bell [1961] 1 QB 394 where it was given that if articles are exhibited
in a shop along with the rate then it is not an offer but an invitation to treat
where visitors have to make an offer. Shop owners can accept or reject such
offer (Taylor and Taylor, 2017).
Parties who make offer decide the terms of the same such as subject matter,
consideration, duration, and other. When an offer is done under a
transaction, offeree needs to take a decision regarding acceptance or
rejection of the same. If offeree rejects the offer then an agreement fails by
coming into existence whereas, in opposite in those situations where offeree
provides consent, the agreement seems to be developed between the
parties. In this manner, acceptance is another mandatory element of an
agreement as well as of a contract. Same as an offer, communication of
consent is also necessary. Sometimes, the nature of an offer allows offeree
to accept the same by conducting some activities as given in the decision ofButler Machine Tool v Ex-cell-o Corporation [1979] 1 WLR 401. In these
situations, there is no requirement to communicate the acceptance as the
conduct itself reflects acceptance. Another condition related to a valid
consent is that the terms of the same must match with the terms mentioned
under contract.
The third mandatory factor of the contract is the capability of parties. This
factor demands that parties to the contract must be capable to understand
the rights and liabilities under a contract and to perform a contract in the
decided manner. Under contract law, minor, insolvent, mentally unstable