(Solved) Business Law Assignment

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Business Law AssignmentSemester TRI 3, 2017Victoria University(Student Details: )
Business Law AssignmentQuestion 1: Part (a)I: IssueThe main issue of this case revolves around the formation of contract between the local caféand Avinash.R: RuleContract law is covered under the common law. A contract denotes the legally binding contractmade by the parties of contract to carry out the promise on which the contract is made. It canbe formed merely by speaking the terms of contract, resulting in oral/ verbal contact1.Otherwise, it can be formed by putting the terms in a document and getting the same signed byparties of contract. In order to form a contract, some elements have to be present, whichinclude offer, acceptance, consideration, intention, capacity, and legality. When all theseelements come together, a contract having legal validity is created2.In order to begin with the formation of a contact, the first step which has to be taken is theoffer to be made by the party. This offer has to provide the terms which are being offered bythem to the other party. An offer is quite different from an invitation to treat and there is aneed to make a difference between whether the communication which has been made isinvitation to treat and an offer3. The difference in legal terms between the two is that offerresults in contract being formed, whilst an invitation to treat does not, as the former has intent1John W. Carter,Contract Law in Australia(LexisNexis Butterworths, 2013)2Catherine Elliott and Frances Quinn,Contract Law(Pearson Education Limited, 9th ed, 2013)3James Marson and Katy Ferris,Business Law Concentrate: Law Revision and Study Guide(Oxford University Press,3rded, 2016)Page2
Business Law Assignmentof being bound legally, whilst the latter has the intent of negotiation on the possible terms ofcontract4.Pharmaceutical Society of Great Britain v Boots5provides clarity in this matter. This case sawBoots introducing a new system of self service in the shop which they owned whereby thecustomers had the option of picking the goods kept on the shop’s shelf, putting them in theirbasket and taking them to the cashier for paying for the chosen product through cash. Theclaimant initiated a claim whereby they asked the court to determine the legality of the selfservice system. This was due to the fact that a pharmacist had to be present whenpharmaceutical products were sold in public. The point of contract being formed wasquestioned here. The court analysed the case and stated that the goods on shelf of shop areinvitation to treat. These convert into an offer when the consumer picks the goods and takesthem to the assistant of shop for paying in cash. The shop assistant then gets the opportunity ofgiving acceptance to this offer or not. This is when the pharmacist had to be present6.The next step in formation of contract is acceptance whereby the party to which the offer ismade has to be accepted in a time based manner. Also,Hyde v. Wrench7puts forth therequirement of accepting the exact terms of offer, otherwise a counter offer is resulted. Thenext step required in creating a binding contract is the presence of consideration. The contractneeds to have valid consideration, which is mutually decided between the parties, and whichwould be valid as long as it holds economic value8. The next element is intention of the parties4Ewan McKendrick and Qiao Liu,Contract Law: Australian Edition(Palgrave Macmillan, 2015)5[1953] 1 QB 4016Jill Poole,Casebook on Contract Law(Oxford University Press, 2016)7(1840) 3 Beav 3348Andy Gibson and Douglas Fraser,Business Law(Pearson Higher Education AU, 2013)Page3
Business Law Assignmentto be bound in a legal manner, due to getting in the contract, which gives them contractualrights and even possible contractual liabilities9. The contracting parties need to have thecontractual capacity to get in a contract, which is usually in terms of their legal age, amongstthe other factors. The terms of the contract also have to be legal, and cannot be unfair oragainst any statute10.A: ApplicationThere is a stark similarity between the scenario given in the case study and the established caseofPharmaceutical Society of Great Britain v Boots. This is the reason why the ruling given in thiscase is applied in the present context. Here, a contract had been created between the local cafeand Avinash when he put his order by touching the screen. His offer had been accepted uponthe ticket being generated. To put it in detail, during the time when Avinash was scrolling themenu of the local cafe, it was an invitation to treat. When he selected a product to be ordered,and selected the same on the machine, an offer was made by him, which the local cafe had theoption of accepting or rejecting. The consideration value here is of $7.50 and the contractualterm includes food products. The acceptance was in form of ticket generation. The intent andcapacity are assumed to be present as nothing shows otherwise.C: ConclusionTo conclude, a contract had been created based on the facts given, between the local cafe andAvinash.9Neil Andrews,Contract Law(Cambridge University Press, 2nded, 2015)10Michael Furmston and G.J. Tolhurst,Contract Formation: Law and Practice(Oxford University Press, 2010)Page4
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