Introduction to Business Law and Ethics

Running head: INTRODUCTION TO BUSINESS LAW AND ETHICS
Introduction to Business Law and Ethics
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1INTRODUCTION TO BUSINESS LAW AND ETHICS
Question 1
Issue
The issue of this scenario is whether Fran will be able to hire Marco instead of Jane.
Rule
As per the Contract Law, it can be stated that when a contract is formed by the parties,
it must have a legal intention for creating legal obligations. The parties must bind upon the
control with such an intention. Therefore, to create legal relations between the parties is
implied as per the concept of Consideration. This consideration thereafter produces evidence
of the factual situation that the promissor had agreed to clear the remuneration for completing
the promise. Therefore, it can be implied that the intention of the parties are bound legally. It
can be observed that the intention to create legal relations is treated to be an essential
constituent to ensure whether the contract entered into is valid or invalid. The case of
Chappell v Nestle examined that the consideration of the contract assessed whether the
contract formed has a legal intention or not. Depending on the intention, the contract will
either be valid or invalid. Accordingly, the decision that was held in the matter of Tweddle v
Atkinson is that generally there are few kinds of presumptions to contracts and it must consist
of the legal intention to create valid legal relations between the parties. According to the High
Court of Australia, consideration should not include presumption while establishing the
purpose of creating legal relations. The courts usually assume and state that the parties
involved in the parties are not intended to be legally bound in the social contracts. However,
there have been a replacement in the concept of applying presumptions.
Application
As observed from the facts of the scenario, an agreement was formed between Fran
and Marco. Both Marco and Fran signed such an agreement or contract. If the law of
Chappell v Nestle is applied in the facts of this case, it can be stated that both Fran and Marco
had valid intention to create legal relations. Thus, Fran somehow could not ignore the
contract since Marco, the other party of the contract was her brother. It can be observed from
the law that any kind of assumptions and presumptions are usually not considered by the
court while establishing the intent to create legal relations.

2INTRODUCTION TO BUSINESS LAW AND ETHICS
Conclusion
Marco and Fran can conclude it from the facts of the case that a valid contract was
entered into. Thus, this contract cannot be avoided by Fran.
Question 2
Issue
From this scenario, the recognized issue is that whether the concept of promissory
estoppels is applicable in the case of Fran and Ocavia.
Rule
The concept of promissory estoppel is to prevent one party from withdrawing a
promise that was made to the other party especially if the concluding one had relied on that
promise. If a promise is created without consideration, it will not treated to be enforceable.
As per the Common Law, promissory estoppels is different from the estoppels of Common
Law. When a contractual relationship arises between the promisor and the promisee, it has
strict requests that occurs from the intention of the parties1. Revenue Commissioners v
Moroney, held that when the parties who are negotiating the contract the theory of
promissory estoppel make the promise will occur. Generally, promissory estoppel is
applicable in such cases where the promisors have provided unambiguous statement that he
does not intend to enforce his legal right. Promissory estoppel usually occurs in situations
where the promissee suffer a disadvantage by relying on the promise of the promisor. In the
law of contracts, the concept of promissory estoppel provides a situation that if one of the
parties alters his or her position by acting upon the gratuitous promise2.
Application
This scenario provides a situation where Octavia was promised to put the warehouse
on rent by Fran. Fran also informed Octavia that she needs to install a fan in the kitchen. He
wanted a proper tenant before moving interstate. The concern of Fran was not fulfilled as it
was promised earlier. However, somehow Octavia got the fan installed in the kitchen and
thereafter Fran wanted to return back on her promise. Hence, it can be observed fro this
1 Wen, Dr Wei. "Contractual Damages and Post-Sidhu Proprietary Estoppel: A Further Blow to the Statute of
Frauds?." (2015).
2 Martin, Paul. "Estoppel: Binding promise without a contract: Court of appeal considers proprietary
estoppel." LSJ: Law Society of NSW Journal 23 (2016): 93.