LAW504 Business and Corporations Law


Added on  2019-10-30

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Running head: BUSINESS LAW ASSIGNMENTBusiness law assignmentName of the StudentName of the UniversityAuthor Note

1BUSINESS LAW ASSIGNMENTQuestion 1Issue Can Qantas Airlines Ltd (Qantas) claim compensation from Airbus Corporation Ltd (Airbus)Rule A contract must have an offer and a valid acceptance to be enforceable in the court oflaw. In Harvey v Facey [1893], the court observed that the parties to the contract must haveintention to become legally bound by the contract. The offeree must accept the terms of the offermade by the offeror and after the contract is formed, the parties become legally bound by thecontract whether or not the parties have read the terms of the contract as was observed in Richesv Hogben[1986]. The offeree must accept the terms of the contract as it was offered by theofferor without incorporating any additional terms (McKendrick, 2014). In Hyde v Wrench [1840], the court ruled that the terms accepted by the offeree mustmatch with the terms made by the offeror. In case, any additional terms is incorporated in thecontract, the original contract shall cease to be in effect as the inclusion of the new term wouldmake the offer as counter offer, invalidating the original offer. The contractual liability of eitherparties to the contract may be restricted by incorporating an exclusion clause and for a contract tobe valid, it does not have to be expressly signed. An acceptance of an offer in any form wouldamount to a valid offer provided the acceptance is made in relation to the terms proposed by theofferor as was observed in Chapelton v Barry Urban District Council [1940] KB 532.If an additional term is being included in a contract, which is otherwise not, expected tobe included in a contract, the party incorporating the additional term is obligated to notify the

2BUSINESS LAW ASSIGNMENTother party about the inclusion of the term in the contract as was ruled in Causer v Browne[1952]. In case, the party incorporating a new term in the contract does not inform the other partyabout such inclusion and the inclusion of the term affects the other party adversely, the termcannot be considered as a valid contractual term as held in Thornton v Shoe Lane Parking Ltd[1971].A warranty may be defined as a term in a contract that disallows the aggrieved party tosevere from the contract or exempt from the contractual liability. A warranty does not form anessential contractual term because a warranty does not form the subject matter of the contract. Inthe event, either party fails to comply with the warranty stipulated in the contract, the aggrievedparty shall become entitled to claim compensation for the damages suffered by the aggrievedp[arty due to the loss arising from such contractual breach (Poole, 2016). A conduct may be defined as a contractual term which if breached by either parties, theaggrieved party is entitled to repudiate the contract immediately and claim compensation fromthe breaching party for the losses sustained due to such breach of the condition. In the event ofinfringement of a contract, the aggrieved person is entitled to claim damages from the breachingparty and the court grants such damages in the form of compensation (Andrews, 2015). Thecourt determines the amount of compensation with a view to restore the position of the parties asit was before the contract was violated. ApplicationIn the given scenario, both Qantas and Airbus airlines have agreed on 545 terms that hasbeen incorporated in the contract, which denotes formation of a contract between the parties asthe agreement between them implies the presence of a valid offer and acceptance. Therefore, the

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