Business and Corporation Law

Running Head: BUSINESS AND CORPORATION LAW
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Business Law
Business and Corporation Law
Student’s Name
3/31/2019

Business Law 1
Issue (a)
Does any contract exist between the parties? Can Jack held Mary Liable?
Law (a)
Mutual mistake is one of the important concepts of Contract law. It is a situation where
both the parties of a transaction misunderstand each other regarding the identity of subject matter
or any other fact. Raffles v Wichelhaus (1864) 2 Hurl & C 906 is a significant case where it has
been given that in cases of mutual mistakes of parties, courts are required to apply an objective
test (Stone, 2009). This test says that a contract will be held void if a reasonable person after
looking facts and circumstances of the transactions cannot be sure about the identity of subject
matter.
Application (a)
Here, Mary and Jack were talking about different cars. In the opinion of Jack, Mary was
ready to buy Honda Jazz of red color whereas in actual, Mary got ready to purchase Honda jazz
of white color. This is a case of mutual mistake. Applying the provisions of Raffles v
Wichelhaus, an objective test is required to check. A reasonable person cannot decide that
whether the dealing was about a red car or white car and hence objective test will not be helpful.
Conclusion (a)
The contract developed between Jack and Mary will be held void as it was a case of
mutual mistake and parties were not aware of the intention of each other. In addition to this, a
reasonable person cannot say with certainty about which car the transaction was about.

Business Law 2
Issue (b)
Did Michael and Dan enter into a valid contract? Can Dan sue Michael for breach of
contract?
Law (b)
In general, offer and acceptance treated as complete when the same come into notice of
respective parties i.e. offeree and offeror. However, there is an exception of this rule, which is
known as postal acceptance rule. Where parties of the case use postal mode of communication,
postal rules are applicable in such a situation. It was held in the case of Adams v Lindsell (1818)
106 ER 250 that whenever postal rules are applicable, acceptance is treated effective when
offeree takes place the same into the mailbox (Furmston & Tolhurst, 2010).
Application (b)
In the provided case, Michael made an offer to Dan in reply to the advertisement placed
by Dan in the newspaper. Michael posted this offer letter as on 02nd January and asked for the
acceptance of Dan. Dan received this offer letter on 05th January. This is the date when the offer
has been effective. In reply to this offer, Dan placed his acceptance by signing the same on 07th
January. Applying the decision of the case of Adams v Lindsell and postal acceptance rules, this
will be treated as the date when acceptance has been effective. Later on 8th January, Michael
informed his confusion to Dan. Michael received acceptance made by Dan on 10th January.
Conclusion (b)
As acceptance been effective on 07th January, a contract was developed between Dan and
Michael on the same day. Later on, Michael cannot cancel the contract and Dan has all the legal
contractual rights against him.