Business Law Assignment - Contract Formation, Consumer Law and Implied Terms

Running head: BUSINESS LAW ASSIGNMENT
Business Law Assignment
Name of the Student
Name of the University
Author note

1BUSINESS LAW ASSIGNMENT
Answer 1(a):
Issue: The issue in this situation narrates whether there was an agreement existing between
the parties who had formed the contract and if they had agreed on the terms and conditions of
the contract.
Rule: A contract can only be formed when there is involvement of an offer and acceptance.
The party making the offer is known as the offeror and the party receiving the offer is called
the offeree. Therefore, an offer can be constituted when a party makes an offer to the other
party. Hence, a contract can be made enforceable in law when it includes all the elements.
The elements therefore, consists of the parties forming the contract, making the offer and
acceptance, consideration and capacity. Therefore, the parties creating the contract must
agree on the conditions and terms of the contract jointly. Legal intention must be present
when the parties creating the contract. If these essential elements are not present in the
contract then a contract will be treated to be invalid. There must be involvement of
communication when the contract is formed. Thus, for the development of the contract, there
must be a legal relationship between the parties forming the contract. Hence, there was a
communication. Such kind of a situation was observed in the matter of Balfour v Balfour
[1919] 2 KB 571. In this scenario, a valid contract was created when offer and acceptance
were involved. Due to this, the contract had commenced legally. It also involves legal
intention in this situation.
Thereafter, it was observed in the Air Great Lakes Pty Ltd v KS Easter (Holdings)
Pty Ltd [1989] 2 NSWLR 309 states that a person who is making the offer must communicate
properly for the offeree. This concept generally refers to an invitation to treat. Hence, this
kind of a contract will not be treated to be a valid contract. In the case of AGC (Advances)
Ltd v McWhirter (1977) 1 BLR 9454, the Court had held that no valid contract was formed

2BUSINESS LAW ASSIGNMENT
between the parties. Therefore, the Court had held that the contract, which was formed was
invalid. Hence, the offer that was made was in the form of an advertisement that was
considered to be an unilateral offer. For establishing the validation of the offer, it must be
accepted based on the specifications that have been made in the offer. No modifications must
be made in the contract after both the parties have agreed to the terms and conditions. If
either of the party makes any kind of alteration then it will be considered to be a counter-
offer. It was observed in the case of Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd
[1989] 2 NSWLR 309. The offer that was formed must not have an outcome in the counter-
offer between the parties. Such kind of a contract cannot be formed.
Application
The case states the Magda had put up the painting in her own website for sale.
Thereafter, the case of Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd [1989] 2
NSWLR 309 is the almost of the same scenario where the advertisement was not considered
to be an invitation to treat. However, the painting was supposed to be purchased by Avinash
for an amount of $1600 on February 19. In this scenario, the above mentioned case of
Balfour v Balfour [1919] 2 KB 571 was applied. This is because Avinash had made a valid
offer since it had the legal intention for binding the parties in the contractual terms. On
February 20 a counter-offer was constituted by Avinash. In the counter offer it was stated that
it needed a certificate of authenticity. However, the authenticity of the certificate did not clear
the amount of paying it as per the request of the necessary information and neither any sort of
inquiry. It can thereafter be said that the offer was however made and existed between the
parties forming the contract. Therefore, Magda made an offer of $1800 for the painting.
Depending on the case of Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd [1989] 2
NSWLR 309, there was an extra condition of the consultation that was offered for purchasing
the painting. Therefore, in this situation a valid and legal contract was formed but it will only