Business Law Assignment - Validity of Contract

This Business Law Assignment discusses the validity of a contract between Margot and Theo based on the essential elements of a contract such as offer, acceptance, consideration, and intention to bind each other.

Business law
Assignment
Running Head: BUSINESS LAW ASSIGNMENT 0
F o u n d a ti o n S t u d i e s
9 / 1 9 / 2 0 1 8
Student’s Name

Business Law Assignment 1
Contents
Issue………………………………………………………………………………………2
Principle……………………………………………………………………………….…2
Application……………………………………………………………………………….3
Conclusion……………………………………………………………………..……..….4

Business Law Assignment 2
Issue
The issue is to check the fact that whether Margot and Theo entered into a valid contract?
Principle
According to the provisions of Contract Law, for a valid contract, there must be essential
elements. These elements are offer, acceptance, consideration, and intention of the parties to the
case to bind each other. Further, an offer can only be accepted by a person to whom it is made.
Further, when the offeror makes an offer stating the name of a person, then only that specific
person has eligibility to accept that offer. However, in those cases where no name is mention in
an offer, then any person, who receives the same, can give his/her acceptance thereon.
Apart from the offer, acceptance also must be validly communicated to the offeror.
Request for information is another aspect under Contract Law and one should not mislead
the same with an offer. Request for information is merely a query, which one of the parties to a
transaction makes to another party. As the request for information is not an offer, the same
cannot be accepted.
Mode of an offer and acceptance: - A contract can be developed in oral or written
format. Parties to the case can choose any of the methods to communicate with each other.
Whatever the method they choose will be treated as a valid mode for the contract if both the
parties are doing the communication via that mode only.
Consideration: - According to the decision provided by the court in the case of Chappell
v Nestle [1960] AC 87 consideration must be sufficient and the same need not to be adequate. It
means no party can reject a contract based on non-adequacy of consideration.
Counter Offer:- An offer must be accepted by offeree in it is original form without any
modification. However, at many times, an offeree does not accept the offer in it is original form
and insert some additional condition in the same. It is treated as a counteroffer. In reply to a
counteroffer, another party in the case requires to provide acceptance in order to develop a valid

Business Law Assignment 3
contract. The decision was given in the case of Hyde v Wrench (1840) 49 ER 132 is a significant
to know as the same is very much relevant to counter offer. It was given in the decision of this
case that a counteroffer cancels all the previous offers in a contract and the offeree requires to
accept the latest offer as none of the previous offers remain open to accept any longer.
Application
In the given case, a person named Vincent requested an information to other person
named Theo. In reply to this request to information, Theo made an offer stating that he is ready
to sell his “Zinnias” Painting for a consideration of $40000. The offer made via e-mail and was
addressed to Vincent. However, by mistake, Theo sent this letter to Vincent’s sister Margot
instead of Vincent. As mentioned in the principle area above, that a person cannot accept that
offer in which name of another person is mention, therefore here sister of Vincent could not
accept the offer made by Theo as the name of Vincent was mentioned in the same.
Later on, in reply to the mail sent by Theo, Margot sent another e-mail to Theo stating
that she is ready to purchase painting offered by Theo but for she will only buy the painting if,
Theo would also provide preliminary sketches of painting. It was neither an acceptance nor the
counteroffer. It was not an acceptance because Vincent could only accept the original offer made
by Theo. Further, it was not a counter offer because a counter offer comes at the place of an
acceptance with some modification in the original offer. The mail sent by Margot was actually
another offer of the case which was required to accept by Theo in order to develop a valid
contract. Later on, Theo did not give his acceptance but made a counteroffer stating that he will
only sell the painting for $40000 but not the preliminary sketches. Further, Margot replied to
Theo’s counteroffer by making another counteroffer. In this mail, she stated that she is ready to
purchase “Zinnias” Painting in consideration of $39000. It was the final offer of this case. Theo
accepted the same stating, “It’s a deal.” He further added that he would deliver the painting once
the payment would be complete at the end of Margot.
Later on, Theo wrote to Margot that consideration decided between him and Margot is
low according to the value of painting and he cannot sell the same for such a low consideration.

Business Law Assignment 4
Applying the provisions of the decision given in the case of Chappell v Nestle, on the basis of
inadequate consideration, a contract cannot be canceled.
Conclusion
To conclude the issue this can be stated that, as soon as Theo replied the last offer made
by Margot by stating “It’s a deal”, a contract has been developed between both of them because
all the essential elements of a contract was there such as offer, acceptance, consideration, and
intention to bind each other.