(Solved) Business Law Assignment
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Added on 2020-05-28
(Solved) Business Law Assignment
Added on 2020-05-28
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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 café and Avinash. R: RuleContract law is covered under the common law. A contract denotes the legally binding contract made by the parties of contract to carry out the promise on which the contract is made. It can be 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, which include offer, acceptance, consideration, intention, capacity, and legality. When all these elements 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 the offer to be made by the party. This offer has to provide the terms which are being offered by them to the other party. An offer is quite different from an invitation to treat and there is a need to make a difference between whether the communication which has been made is invitation to treat and an offer3. The difference in legal terms between the two is that offer results in contract being formed, whilst an invitation to treat does not, as the former has intent 1 John W. Carter, Contract Law in Australia (LexisNexis Butterworths, 2013)2 Catherine Elliott and Frances Quinn, Contract Law (Pearson Education Limited, 9th ed, 2013)3 James Marson and Katy Ferris, Business Law Concentrate: Law Revision and Study Guide (Oxford University Press, 3rd ed, 2016)Page 2
Business Law Assignmentof being bound legally, whilst the latter has the intent of negotiation on the possible terms of contract4. Pharmaceutical Society of Great Britain v Boots5 provides clarity in this matter. This case saw Boots introducing a new system of self service in the shop which they owned whereby the customers had the option of picking the goods kept on the shop’s shelf, putting them in their basket and taking them to the cashier for paying for the chosen product through cash. The claimant initiated a claim whereby they asked the court to determine the legality of the self service system. This was due to the fact that a pharmacist had to be present when pharmaceutical products were sold in public. The point of contract being formed was questioned here. The court analysed the case and stated that the goods on shelf of shop are invitation to treat. These convert into an offer when the consumer picks the goods and takes them 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 is made has to be accepted in a time based manner. Also, Hyde v. Wrench7 puts forth the requirement of accepting the exact terms of offer, otherwise a counter offer is resulted. The next step required in creating a binding contract is the presence of consideration. The contract needs to have valid consideration, which is mutually decided between the parties, and which would be valid as long as it holds economic value8. The next element is intention of the parties 4 Ewan McKendrick and Qiao Liu, Contract Law: Australian Edition (Palgrave Macmillan, 2015)5 [1953] 1 QB 4016 Jill Poole, Casebook on Contract Law (Oxford University Press, 2016)7 (1840) 3 Beav 3348 Andy Gibson and Douglas Fraser, Business Law (Pearson Higher Education AU, 2013)Page 3
Business Law Assignmentto be bound in a legal manner, due to getting in the contract, which gives them contractual rights and even possible contractual liabilities9. The contracting parties need to have the contractual capacity to get in a contract, which is usually in terms of their legal age, amongst the other factors. The terms of the contract also have to be legal, and cannot be unfair or against any statute10. A: ApplicationThere is a stark similarity between the scenario given in the case study and the established caseof Pharmaceutical 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 upon the ticket being generated. To put it in detail, during the time when Avinash was scrolling the menu 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 the option of accepting or rejecting. The consideration value here is of $7.50 and the contractual term includes food products. The acceptance was in form of ticket generation. The intent and capacity are assumed to be present as nothing shows otherwise. C: Conclusion To conclude, a contract had been created based on the facts given, between the local cafe and Avinash.9 Neil Andrews, Contract Law (Cambridge University Press, 2nd ed, 2015)10 Michael Furmston and G.J. Tolhurst, Contract Formation: Law and Practice (Oxford University Press, 2010)Page 4
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