Business Law Assignment: Contract Breach and Frustration

Business law
assignment

1. Issue:
The issue involved in the case study is
whether Ted can sue Ann for the contract
breach.

Rules:
Contract can be regarded as an agreement which can be enforced and
executed in a legal manner among at least two or more than two
persons who can be considered as the parties to it. For resulting into
valid contract, some essential elements are required to be present which
are as follows; intention of the parties to be legally bound, presence of
consideration, legal capacity of the parties and an agreement.
The concept of consideration has been explained in the case of
Currie v
Misa (1876) 1 AC 554 by Lush J where he said that consideration can
consist of rights, benefits, profits or interest which is accruing to one
party given, undertaken by other. it was held in
Thomas v Thomas
(1842) 114 ER 330, it was held that consideration may not be of equal
valuation but it would be held sufficient if it is of some value even if such
value is very small . Hence it can be said that the consideration given in
an agreement by one party to other need not to be adequate but it can
be just a token amount. But it was not be an illusory it is to be real.

Rules (Contd.):
It is not necessary that consideration must be always of some pecuniary
amount. It can consist of providing any particular thing for performing
something which is of some importance some value and importance to the other
party. anything which has been already given cannot be provided later on again
as a consideration. as held in the
Stilk v Myrick (1809) 170 ER 1168.
However instead of providing anything, if any act is performed in exchange of
any service or anything such performance of the act can be considered as a
valid consideration. This principle is followed when an individual asks another
to cause the performance of any act and mention that binding agreement will be
made in exchange for such performance of the act at a later date as observed inPao On v Lau Yiu Long [1980] AC 614 where it was held that performing any act
can amount to a valid consideration. In the same manner in
Musumeci v
Winadell Pty Ltd (1994) 34 NSWLR 723, it was discussed that any practical
benefit that has been incurred by one party due to the act of the other party can
be considered as a valid consideration.
However it has to be noted that an agreement will result into void agreement if
the consideration is absent or found illusory as observed in
Placer Development
Ltd v Commonwealth (1969) 121 CLR 353.