Business Law

Running head: BUSINESS LAW
Business Law
Name of the Student
Name of the University
Author Note

1BUSINESS LAW
Question 1
Issue
Whether Alex could bring a legal action against Brendan
Rule
The most essential requisites to form a valid and legally binding contract are
exchange of a proper offer and acceptance, deciding upon a consideration amount, intention
of the parties to form a legal relationship, capacity of the parties to form a legal relation, and
lastly the contract must have a certainty which decides whether the agreement is complete,
clear and binding1.
The existence of a contract between the parties majorly depends upon the exchange of
a proper offer and acceptance where it is the offeror who offers and an offeree accepts such
offer. It is to be seen that an offer should not be an invitation to treat that calls for others too
to make an offer to the person inviting2. An offer can be withdrawn by the offeror before it is
accepted by the person to whom it is made3. Similarly an acceptance could be withdrawn by
the offeree until it is communicated to and acknowledged by the offeror. Once an offer and
acceptance has been properly exchanged without ambiguity, the parties have no other option
but to execute or perform the contract4.
However, apart from an exchange offer and acceptance, a consideration amount is
also required to be decided while forming the agreement. A consideration is what symbolises
that the parties are well compensated; birthday party gains something out of the agreement5.
As held in the case of Woolworths Ltd v Kelly, a consideration may not be adequate as the
1 Beale, Hugh, et al. Cases, materials and text on contract law. (Bloomsbury Publishing, 2019)
2 Stone, Richard, and James Devenney. The modern law of contract. (Routledge, 2017)
3 Pharmaceutical Society of GB v Boots Cash Chemists (Southern) Ltd [1956] EWCA 6
4 Ibid.
5 Australian Woollen Mills Pty Ltd v The Commonwealth [1954] HCA 20

2BUSINESS LAW
court does not determine the value for the sufficiency of the consideration, as different units
have different values to each party to an agreement; sufficient consideration also include
intangible goods like love and affection6. However it is important that a valid consideration
amount is to be a great by both the parties before they confirm the agreement.
Apart from the elements of offer, acceptance and consideration, the parties should
have the capacity to enter into a contract with each other which includes that they should not
be a) minor, b) unsound mind, c) bankrupt, d) intoxicated. Parties are refraining from entering
into a contract in case they lack capacity7. In addition, the parties must have an intention to
form a legal relationship knowing the legal consequences. In this regard it was held in the
case of Masters v Cameron that the parties interested to form a legal relationship among them
immediately bound themselves by the terms of the bargain and shall act accordingly8.
When a party to the contract is not willing to perform his obligations he may
repudiate the contract. However such repudiation of one's obligation leads to the deprivation
of the other party9.
Under common law or a party who has sustained a loss due to a breach of contract is
eligible to receive damages which are the compensation for suffering from the breach.
Damages are like a substitute for the performance of the agreement which has been breached.
Application
In the given case Alex hired Brendan for taking photographs on the wedding and
reception of Alex and Chris. On receiving the offer from Alex, Brendan send a detailed email
where he mentions all the intricate details of the program along with the specifications of the
photos and the discount percentage that he could offer for the project, where he asks Alex as
6 Woolworths Ltd v Kelly (1991) 22 NSWLR 189.
7 Stone, Richard, and James Devenney. The modern law of contract. (Routledge, 2017)
8 Masters v Cameron (1954) 91 CLR
9 Beale, Hugh, et al. Cases, materials and text on contract law. (Bloomsbury Publishing, 2019)