Business Law: Contract, Agency, Property and Intellectual Property

BUSINESS LAW
Contract Law, Agency Law, Property Law
Student Name
[Pick the date]

BUSINESS LAW
Question 1
Area of law is Contract Law
Legal Issue
The issue is to determine whether Jennifer and Betty have entered into a legal enforceable
contract or not. Further, the set of remedies needs to be extended to Jennifer about her legal
rights.
Applicable law
Two parties can enter into contractual legal relation when the following essentials exist between
them1.
 Presence of lawful offer and acceptance
 Valid consideration
 Capacity of the parties to enter into legal relation
 Intention on the part of parties to form contractual relationship
If any of the above essential is not present then the parties cannot enact a legal enforceable
contract. However, the absence of intention of the parties to form the legal relation is a key issue
when the contractual parties are bound with the domestic relationships such as mother-daughter/
son, husband-wife, and grandmother/father- grandson/daughter and so forth. It means, when the
parties are in domestic relationship and clearly indicate the intention to enter into contractual
relation then only the contract is said to be enforceable between the parties2.
Further, when any of the party does not have intention to form legal contract with the other party
then no enforceable contract would be formed between the parties. Therefore, the parties cannot
demand to satisfy the contractual obligations arising from such arrangements. The evidence of
this aspect is highlighted in Jones v Padavatton3 case, where no contract was formed between
the parties. It was highlighted in this case that the court in contracts between parties having
social relationships would have the default assumption that intention to create legal relations
does not exist and the same would need to be proved to the court through evidence.
Application
It is apparent from the case facts that Jennifer and Betty (grandmother of Jennifer) have entered
into a contract. According to the contract, Betty promised to Jennifer that if she will come to
Mount Gambier and start living there with her, then she will transfer the ownership of her house
to Jennifer. Jennifer decided to live in Mount Gambier with Betty. Later on, Betty refused to
transfer the ownership to Jennifer. It is apparent that both the parties are in domestic relation and
1 Andy Gibson, Douglas Fraser, Business Law (Pearson Publications., 8th e, 2014)
2 Shayne Davenport, Business and Law in Australia (Thomson Reuters, 4th ed, 2012)
3 Jones v Padavatton [1968] EWCA Civ 4
1

BUSINESS LAW
hence it would be assumed they did not have any intention to make any legal relationship at the
time of contract. Also, there is no circumstantial evidence in this case which could potentially
reflect on the existence of intention to forge legal relationship. Hence, it can be said that no
enforceable contract is enacted between Jennifer and Betty because of the absence of intention of
parties to enter into contractual relation.
Conclusion
Jennifer and Betty have not enacted a valid enforceable contract because of the absence of
intention to create legal contract. Hence, Jennifer would not be able to sue Betty for not
transferring the ownership of house in her name.
Question 2
Area of Law is Contract Law
Legal Issue
The issue is to determine whether any enforceable contract has been formed between Sanche and
Richard or not.
Applicable law
When the offeree has sent the acceptance with additional conditions against the initial offer than
this conditional acceptance would be termed as counter offer. In this regards, the counter offer
would result in termination of the initial offer and hence, initial offer would not be available for
acceptance. Moreover, according to the judgement given in Entores Ltd v Miles Far East
Corporation4 case, when the acceptance has been sent through electronic mode of
communication such as mail and fax, then the acceptance becomes enforceable only when the
mail, fax has received by the respective offer within the given time frame5.
Application
It can be seen from the given case information that Sanche (offeror) has sent offer to Richard
(offeree) to sell 1974 Holden Monaro for the consideration of $60,000. He has clearly mentioned
that the offer would remain open for the acceptance till 5 pm of 3 February 2015. Richard has
received the offer on 3 February and has made a conditional acceptance which has been
communicated through a phone message. He has made the condition to buy the Holden Monaro
for $55,000. It can be seen that additional condition has resulted the counter offer against the
original offer and hence, the initial offer would not be available for acceptance.
4 Entores Ltd v Miles Far East Corporation [11] in 1955 case
5 Robert Bryan Vermeesch, Kevin Edmund Lindgren, Business Law of Australia (Butterworths, 12th ed. 2011)
2