BUSINESS LAW Assignment - Desklib

Running head: BUSINESS LAW
Business Law
Name of the Student
Name of the University
Author Note

BUSINESS LAW2
Part A
Option 2:
Issues:
The issues arising out of the current case are:
 Whether Fredrick Forthryrt is liable to any contract,
 In case, any contract is binding on him, then when such contract is enforced.
Rules applicable:
A valid contract is formed when all the essential elements of the contract, the
agreement, consideration, legal object and intention of the parties are present. An agreement
of a contract is the basis on which the foundation of any contract stands. An agreement is
formed when an offer made by one party is given assent by other party as laid down in
Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 92 CLR 424 (High Court).
When an offer is accepted, the acceptance has to be without any condition and it must
adhere to the offer such that it is unqualified as in Australian Woollen Mills Pty Ltd v The
Commonwealth (1954) 92 CLR 424 (High Court). However, in cases of auction, bidding is
not considered as an offer but it amounts to invitation to offer as in AGC (Advances) Ltd v
McWhirter (1977) 1 BLR 9454 (Supreme Court of NSW).
In case the acceptance is given by the other party by imposing some additional terms
or modification of the terms of the offer, then it cannot be considered as an acceptance
instead a counter offer is formed as in Hyde v. Wrench (1840) 3 Beav 334. The main
characteristic of a counter offer is that it kills the original offer and states a fresh offer.

BUSINESS LAW3
Another important quality of a valid acceptance is that such acceptance has to be
communicated to the offeror. Unless and until, the offeror comes to know about the
acceptance, it has no effect as in Bressan v Squires [1974] 2 NSWLR 460. However there lies
a difference of the form of acceptance in case of postal service where an acceptance is said to
be done in a valid way when the letter containing the acceptance statement is posted as in
Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelsgessellschaft mbH [1983] 2 AC 34
(House of Lords). Here it is not taken into account whether the acceptance is being
communicated or whether such letter gets lost or delayed after its posting. This can be
construed to the decision of Adams v Lindsell [1818] 1B & Ald 681.
Apart from agreement, the intention of the parties to the contract also plays a
signification role in contract creation as laid down in Ermogenous v Greek Orthodox
Community of SA Inc [2002] 209 CLR 95. If the contract involves any commercial
transaction, then it is assumed that the parties have lawful intention to effect it. However, the
scenario changes where an agreement is formed out of a social or domestic relation. In such
case, the parties lack lawful intention as laid in Todd v Nicol [1957] SASR 72.
Other two aspects of a valid contract are consideration and lawful object behind the
creation of the contract which if not present, will lead to the formation of void contract as laid
in Popiw v Popiw [1959] VR 197 which deals with presence of consideration. Similarly if
object is illegal then the contract is void as in South Australian Cold Stores Ltd v Electricity
Trues of South Australia (1965) 115 CLR 247 (High Court).
Application:
Here in the current case scenario, it is observed that Frederick is an author who wants
a good publisher for his new book to be published. He is not happy with the first publisher
due to his ill treatment.