Business Law Assignment: Analysis of Legal Issues and Case Studies

This Business Law assignment analyzes legal issues and case studies related to contracts, promissory estoppel, restraint trade clause, and offer and acceptance. It includes relevant case laws and legal principles.

Business Law
Business Law Assignment
By
Student name
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02/24/2018
Technical Advisor: _____________________________ _____________
Dr. Date

Business Law 1
Question 1. Is Fran bound by the written agreement with Marco? (5 marks)
Issue
The question of law is whether the agreement made by brothers is binding to the parties.
Rule of Law
Sometimes during negotiations, the parties to an agreement never express their intention
to make the agreement binding. Thus, the court has to determine from a reasonable man’s
perspective whether the parties intended to create a legal bond.1 Agreements made from social
contexts are presumed to have no legal intention while those in commercial settings are
presumed to have the legal intention. Social context agreements are those made with friends and
relatives.2 The exception to this rule applies to social context agreements that are in writing or
involve money, commercial loss or gain.3
Application
The application of this rationale was once applied to a case where a husband and a wife
disputed over the transfer of a mortgage.4 In the case, the husband had signed a note accepting to
transfer the house if the wife cleared the debts charged to the house. However, the husband
refused to transfer the house even after the had cleared the charges. The court affirmed that since
the agreement was in writing, there was the intention for a legal bond. Similar, the court enforced
an agreement between a young couple and elderly parents since the elderly relatives had made
the young couple to dispose of their property.5 Therefore, the case of Fran and Mirco would be
argued as follows;
1 McKendrick, Ewan, Contract Law (Oxford University Press, 6th ed, 2014)
2 Jill Poole, Casebook On Contract Law (Oxford University Press, 13th ed, 2016).
3 Alix Adams, Law For Business Students (Pearson Longman, 6th ed, 2010).
4 [1970] EWCA Civ 6
5 [1960] 1 WLR 286. Agreement involving money, commercial loss or gain.

Business Law 2
The argument supporting a binding agreement
The agreement was in writing. There was an intention6
Marco lost a commercial gain, so there was a legal intention.7 I.e. Marco was planning to
take on a well-paying job but left it.
Argument refuting a binding agreement
Marco was Fran’s brother. Social setting agreement.
Conclusion
The agreement was binding as it was in writing, and one party (Marco) underwent a
commercial loss.
Question 2: Does the doctrine of promissory estoppel apply to Fran and Octavia? (6 marks)
Issue
The question of law is whether the equitable remedies through promissory estoppel can
be awarded to Octavia.
Rule of Law
The principles of promissory estoppel prevent promisors from declaring that their
promises were unenforceable.8 These are irrevocable offers where courts refuse to allow a party
from moving away from its promises. The grounds of promissory estoppel rely on five elements.9
There must be a promise made clearly and definitely.10 The promisor must have expected the
promisee to believe and act on the promises. The promisee must show that he/she acted relying
6 Ibid (n1)
7 Ibid (n2)
8 McKendrick, Ewan, Contract Law (Oxford University Press, 6th ed, 2014)
9 Alix Adams, Law For Business Students (Pearson Longman, 6th ed, 2010).
10 Paul Stephen Latimer, Australian Business Law (CCH Australia, 31st ed, 2012).

Business Law 3
on the promises.11 The reliance was in fact, and it caused a substantial loss.12 Lastly, if the court
would not enforce the promise, one party will suffer injustice.13
Application
The application of the promissory estoppel was applied in a case where a contract price
was agreed in Kenyan shilling when the value exchange between the pound and the Kenyan
shilling were equal.14 Later when the price of the pound fell, the buyer sought to change the price
to pounds. The court estopped the buyer from reverting to pound because it would have changed
the agreed contract price. Considering this case is similar to Fran and Octavian the court will
argue it as follows;
Facts supporting Irrevocable Offer
There was a clearly defined promise to hire the warehouse if the fans were installed.
Fran knew Octavian would install the fans because they even communicated.
Octavian reasonably installed the fans relying on Fran’s promises.
Octavian’s reliance was genuine and in fact, and he hired someone to fix the fan.
If the court does not enforce the promise, Octavian will suffer the cost of installations.
Facts against Irrevocable offer
The statement “Everything’s fine” is too vague.
The new promise was to “look at the lease tonight and bring it around to the warehouse
tomorrow.”
11 ibid
12 ibid
13 ibid
14 [1972] AC 741

Business Law 4
Conclusion
It is true everything’s fine is too vague. Therefore, it cannot change the position of the
previously accepted offer. Promissory estoppel would be enforced.
Question3: Is Dante bound by the contract with Fran? (5 marks)
Issue
The issue in question is the determination of the validity of a non-solicitation clause.
Rule of Law
The use of a restraint trade clause is a common practice in a business where employers
try to prevent their employees from undertaking some operations after leaving their
employment.15 The law does not allow unreasonable restraints which are contrary to the public
welfare. Clauses that prevent people from lawfully earning their living do not get ground in law.
Therefore, every restraint clause is illegal unless grounded on reasonable reasons. The Australian
law accepts restrains clause if they meet the following requirements; They must be between 3-12
months; must be on a specific geographical location; they are serving to restrain special business
misconduct, e.g. the solicitation of customers.16
Application
The latest application of this rationale was met in the recent case where the court affirmed
the safeguarding of the client list from their employees.17 The claimant was a mortgage broker
who hired the defendant as an independent contractor. After the termination of the agreement, the
defendant contacted the claimants’ clients using the details acquired from the claimant database.
The claimant then went to court claiming that there was a breach of a non-solicit agreement. The
15 S. A Christensen and W. D Duncan, Sale Of Businesses In Australia (Federation Press, 2nd ed,
2009). 16 G. J Anderson, Labour Law In New Zealand (Wolters Kluwer, 2011).
17 [2017] NSWSC 1077

Business Law 5
claim succeeded with the court upholding the restraint clause. The same scenario would be
applied to Dante as follows;
Facts supporting Validity of the clause
Same geographical location
Fran’s client
Protection of goodwill
Clause not centered on Dante skills
Facts refuting the validity of the clause
This clause forbids Dante from opening a competitor business
Conclusion
The clause would be sustained as it is preventing a business misconduct
4. Is Arjun entitled to the month’s supply of free chocolates? (4 marks)
Issue
The question of law is whether someone can accept offers that he is not aware of their
existence.
Rule of Law
The rules of offer and acceptance start with an offeror making the offer and
communicates it together with its terms to the offeree.18 An offeree then accepts the offeree in the
terms presented by the offeror. Therefore, offers are only communicated to the right offerors and
only the right offerors who can accept the offer. If someone does not know the existence of an
offer, that person cannot purport to have accepted something he or she did not know about it.
18 Clive Turner and John Trone, Australian Commercial Law (Lawbook Company, 29th ed, 2013).

Business Law 6
Application
The rationale of accepting offers that someone knows about was once applied in a case
where there was an offer for an award of whoever provides the information about a jewel thief.19
The claimant provided the information without knowing that there was a reward. He later
claimed for the reward afterwards but the court denied the claim. He later learned of the reward
and tried to claim it. The same rationale would be applied to Arjun as follow;
Facts in support Arjun entitlement
He provided the required performance.
Facts against Arjun entitlement
He did not know about the offer so the law should apply in the precedent rule20
Conclusion
The law will apply through precedent rule, Arjun is not worth the entitlement.
19 [1915] App D 100 SA
20 Ibid (n6)

Business Law 7
References
Cases
Merritt v Merritt [1970] EWCA Civ 6
Woodhouse A.C. Israel Cocoa Ltd v Nigerian Product Marketing Co Ltd [1972] AC 741
Parker v Clark [1960] 1 WLR 286
Bloom v American Swiss Watch Co [1915] App D 100 SA
Home Loan Experts v Nassif Isaac [2017] NSWSC 1077
Books
McKendrick, Ewan, Contract Law (Oxford University Press, 6th ed, 2014)
Adams, Alix, Law For Business Students (Pearson Longman, 6th ed, 2010)
Poole, Jill, Casebook On Contract Law (Oxford University Press, 13th ed, 2016)
Latimer, Paul Stephen, Australian Business Law (CCH Australia, 31st ed, 2012)
Turner, Clive and John Trone, Australian Commercial Law (Lawbook Company, 29th ed,
2013)
Christensen, S. A and W. D Duncan, Sale Of Businesses In Australia (Federation Press,
2nd ed, 2009)