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Business Law Assignment - Contracts - Desklib

   

Added on  2020-03-23

8 Pages1679 Words177 Views
Running head: BUSINESS LAWBusiness lawName of the StudentName of the UniversityAuthor Note

1BUSINESS LAWIssue 1The issue in this case is to evaluate the chances of Coronet Casino with respect torefusing the lease provided to Loire. Rule As per the parole evidence rule when a written contract has been made and all the terms of thenegotiation has been documented a party cannot rely on the terms which were discussed duringthe negotiation and have not been added to the written contract as per the case of Collateral contract are contracts which act as a defense to the parole evidence rule. A collateralcontract is a subsidiary contract which is made in relation to entering into the primary contract.however as provided by JJ Savage & Sons Pty Ltd v Blakney1the terms of the collateral contractcannot be inconsistent with the primary contract. In the case of Van den Esschert v Chappell2it was held by the court that as the statementmade by the defendant was promissory in nature and not inconsistent with the main contract acollateral contract is formed. In the case of Crown Melbourne Limited v Cosmopolitan Hotel (VIC) Pty Ltd & Anor3 decidedby the high court the issue which the court had to identify was in relation to the when a term issaid to be incorporated into a contract. In this landmark case the court provided the importanceof documenting a provision in relation to the renewal of a lease and the consequences of notdoing so. The facts of the case provide that the defendant had made a statement to the plaintiffwhich stated that he would be taken care upon at the time of renewal but the contract did not1(1970) 119 CLR 4352 [1960] WAR 114 text 1273 [2016] HCA 26

2BUSINESS LAWcontain a term related to renewal. The two question which the court had to analyze in the casewas whether there was a collateral contract between the parties in relation to the statement ofrenewal and whether promissory estoppel would intervene in this case and make the defendant torenew the lease. The court provided that there was no collateral contract as a reasonable personwould not be induced by such terms was is vague encouragement to get into a contract. Inaddition the court provided that promissory estoppel would not intervene as the statement cannotbe regarded as a promise. In the case of Austotel v FranklinsSelfserve Pty Ltd4 Kirby P, ruled that where a party hasexpressly refused to provide its commitment in relation to a term of the contract in a deliberatemanner, it would not account to unconscious ability on the part of one of the parties to thecontract to repudiate the contract. in addition it was provided by Rogers AJA that it is not correctfor the court to determine the settlement of a term which the parties to the contract left openintentionally. Application In the given scenario it has been provided that Coronet Casino have leased one of itspremises to the hotel named Loire for a period of two years. According to the lease the hotel hadto undertake refurbishment in relation to the building which has been leased. The lease did notprovide any right to other party to renew the lease. However it had been provided by Sophia whowas an agent of Coronet that “You don’t need to worry, it is in our interest for you to beoperating this hotel. We are in this for the long haul. You will be looked after at renewaltime.”4(1989) 16 NSWLR 582

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