Business Law Case Study Analysis

This Business Law case study analysis discusses the essential elements of a valid contract and the doctrine of promissory estoppel. It analyzes three different scenarios and applies relevant case laws to arrive at conclusions. The subjects covered include offer, acceptance, intention to create legal relations, consideration, and the essentials of promissory estoppel. The course code, course name, and college/university are not mentioned.

Running head: BUSINESS LAW
BUSINESS LAW
Name of the Student:
Name of the University:
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Answer One
Issue:
In this given case study the issue that can be identified is whether Fran can avoid the contract of
employment signed between her and Marco and hire Jane instead of Marco.
Law:
For a contract to be legally binding upon the parties, the same has to fulfill some important
criteria. The essential elements of a valid contract thus include:
Offer- Terms proposed by the offeror to the offeree. An offer can be made to a single person
and to the world at large as held in the case Carlill v Carbolic Smoke Ball Co1.
Acceptance- Acceptance of the offer is a must for valid contract formation. However an offer
has to be accepted on the terms exactly as proposed in the offer. An change in the terms of the
offer will not amount to acceptance but a mere counter offer as held in the case Hyde v Wrench2.
Intention to create legal relations- It is important to assess whether the parties entering into the
contract intended to e legally bound by the terms of the contract. In case of domestic or family
agreements the courts generally presumed that the parties to the contract did not intend to e
legally bound as held in the case Jones v Padavatton3. However this approach of the court of
taking into considerations the elements of presumption was later discarded in the case
Ermogenous v Greek Orthodox Community of SA Inc4. In this case the High court of
1 [1893] 1 QB 256; [1892] EWCA Civ 1
2 (1840) Beav 334
3 [1969] 2 All ER 616
4 (2002) 209 CLR 95

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Australia had held that presumptions should not be taken into consideration by the courts while
assessing the intention of the parties to the contract.
Consideration- Consideration can be defined as the price stipulated by the promissor to pay to
the promissee for the fulfillment of the promise Consideration is an important element of the
contract as it implies the intention of the parties to be bound. Consideration can be anything
stipulated by the promissr as held in the case Chappell & Co Ltd v Nestle Co Ltd5
Application
Thus by analyzing the facts of the case it ca ne be said that Fran had offered to give employment
to Marco. Marco relied on such offer and accepted the offer proposed by Fran. They further
signed a written agreement in which the remuneration for the deliveries, insurance of the vehicle
and other specific terms were present. Thus it can be said that a valid contract had been formed
between the two. Fran cannot avoid the contract with Marco even, though Marco is Fran’s
brother. This can be said in accordance with the decision if the case Ermogenous v Greek
Orthodox Community of SA Inc, in which the court stated that the no presumptions would be
taken into consideration by the courts while determining the intention of the parties.
Conclusion
Thus to conclude, it can be said that Fran cannot avoid Marco’s contract of employment.
Answer two:
Issue:
5 [1960] AC 87

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In this given case study, the issue that has been identified is whether the doctrine of promissory
estoppel would apply to Octavia’s defense
Rule
The doctrine of promissory estoppel can be defined as a doctrine in which any party who
promises not use his legal right on another person is prevented from doing so if the other person
had relied on such promise6. This doctrine had first been established in the case Property trust
Ltd V. High Tree House Ltd.7. Promissory estoppels is however different from estoppels at
common law. The following are important essentials of establishing proissory estoppel as ground
of defense:
Firstly the claimant must prove the contractual relationship between the parties held in the case
Combe v Combe 8
The promise made by the promisor must be clear and unambiguous as held in the case
Woodhouse A.C. Israel Cocoa Ltd. v. Nigerian Product Marketing Co. Ltd.9. An promise
which is ambiguous and unclear would not constitute promissory estoppels.
The next requirement is to prove that there had been a change in position of the claimant by
relying on the promise. The same has been illustrated in the case Alan v El Nasr10
6 Lambiris ML Griffin, First Principles Of Business Law (10th edn, Oxford University Press 2018)
7 (1974)1 KB 130
8 [1951] 2 KB 215
9 [1972] AC 741
10 [1972] 2 WLR 800

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The next important essential for establishing promissory estoppels is to prove that it is
inequitable for the promisor to go back on his promise as held in the case D & C Builders v
Rees11
In the notable case Brinkom Investments Ltd V. Carr12 it had been held by the Lord Denning
that promissory estoppels may also arise in instances when the parties are negotiating a contract.
In another case Durham Fancy Goods V. Michael Jackson13 it had been held y the court that
the contractual relationship between the parties would be irrelevant in there existed a pre
contractual relationship between the parties.
Application
Thus by analyzing the facts of the case it can be stated that Fran had shown interest in renting
Octavia’s storehouse. However Fran had proposed that she required Octavia to install a fan in the
kitchen in the ware house. Octavia had sent the documents of the lease agreement for Fran to
inspect and before Fran signed such documents, Octavia had installed the fan in the Kitchen.
However later Fran changed her mind about renting the warehouse of Octavia. She had decided
to open her own shop and therefore she no longer needed to rent the warehouse from Octavia.
Thus in this given case study it is clearly evident that no contract had been formed between the
aforementioned parties. Thus by the application of the decision of Combe v Combe, it can be
stated that the doctrine of promissory estoppels would not arise in this situation. There was no
pre contractual relationship between the parties. Thus by the application of the Durham Fancy
Goods V. Michael Jackson case it can be stated that the claim of promissory estoppel would not
be valid.
11 [1966] 2 WLR 28.
12 (1979)CA
13 (1969) 2 QB 839

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Conclusion
Thus, to conclude, it can be said that Octavia in this case cannot rely on the doctrine of
promissory estoppels as a valid ground of defense.
Answer 4
Issue:
In the given circumstances, the issue that can be identified is whether Fran is liable to supply
Arjun chocolates for one month free of cost.
Law:
For a contractual right to be enforced by either of the parties, it is primarily important to establish
that the contract entered into between the parties was a valid one. For a contract to be formed, the
first important essential is the offer. An offer can be defined as the promise by the promisor to
the promisee to pay remuneration upon fulfillment of the pomise. Acceptance of such offer on its
original terms gives birth to the contractual relationship between the parties. As held in the case
Pharmaceutical Society of Great Britain v Boots14 an offer should be differentiated from an
invitation to treat. The test of intent is applied by the courts to assess whether the promise
constituted a valid offer or was merely an invitation. The test of intent assesses whether the
affirmative response by the promisee to the promise proposed by the promissor would give rise
to a contract or simply further the process of negotiation. However an exception to the
aforementioned rule is the case of Carlill v Carbolic Smoke Ball Co15. In this case it had been
14 [1953] 1 QB 401; [1953] EWCA Civ 6; [1953] 1 All ER 482, [1953] 2 WLR 427
15 [1893] 1 QB 256; [1892] EWCA Civ 1

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held by the court that a offer can be made to single person and to the world at large. Such offers
which are made to the world would be treated as Unilateral offers. Such do not need to be
accepted and communicated to the offeror. A mere performance of the terms of the offer would
constitute valid acceptance. The person who performs the terms of the unilateral offer would be
entitled o the consideration as mentioned in such unilateral offer. However, as held in the case R
v Clarke, it is essential to act in reliance of the offer in order to claim a reward.
Application
Thus by analyzing the facts of the given case study it can be said that the advertisement which
had been up by Fran on the window of her shop constituted a valid offer. This can be said in
regards to the decision of the case Carlill v Carbolic Smoke Ball Co. It had been clearly specified
in the advertisement that any person who recommends an apprentice to Fran would be entitled to
receive free supply of chocolates for one month. It has provided in the case study that Arjun had
recommend his neighbor as the apprentice Fran had been looking for. He gave the details of his
neighbor to Fran. Thus it can be stated that he had performed the terms of the Unilateral offer.
However, Arjun did not hae prior knowledge of the offer and thus by the application of the Rv
Clarke16 case it can be stated that he is not entitled to the reward, Thus Arjun is not entitled to
receive free supply of chocolates from Fran for a month.
Conclusion
Thus to conclude, it can be said that Fran would not be liable to provide Arjun with free
chocolates for one month.
16 [1927] HCA 47, (1927) 40 CLR 227

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Reference List:
Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256; [1892] EWCA Civ 1
Hyde v Wrench (1840) Beav 334
Jones v Padavatton [1969] 2 All ER 616
Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95
Chappell & Co Ltd v Nestle Co Ltd [1960] AC 87
Property trust Ltd V. High Tree House Ltd (1974)1 KB 130
Combe v Combe [1951] 2 KB 215
Woodhouse A.C. Israel Cocoa Ltd. v. Nigerian Product Marketing Co. Ltd [1972] AC 741
Alan v El Nasr[1972] 2 WLR 800
D & C Builders v Rees [1966] 2 WLR 28.
Brinkom Investments Ltd V. Carr (1979)CA
Durham Fancy Goods V. Michael Jackson (1969) 2 QB 839
Pharmaceutical Society of Great Britain v Boots [1953] 1 QB 401; [1953] EWCA Civ 6; [1953]
1 All ER 482, [1953] 2 WLR 427
R v Clarke
Lambiris ML Griffin, First Principles Of Business Law (10th edn, Oxford University Press
2018)

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