Introduction to Business Law - Solved Assignments

Get solved assignments on Introduction to Business Law covering topics like valid contracts, common law principles, unfair terms, exemption clauses, and more. Find answers to problems with clear explanations and relevant case laws. Suitable for students of various courses and universities.

Running head: INTRODUCTION TO BUSINESS LAW
INTRODUCTION TO BUSINESS LAW
Name of the Student
Name of the University
Author Note

1INTRODUCTION TO BUSINESS LAW
Problem 1
Issue
In the given set of circumstances the issue is to determine if the agreement between
Charlie and Ali is legally binding.
Rule
Common law principles are developed through judicial pronouncements and thus they are
not statutorily formed. The common law position about valid contracts requires an intention to
form legally binding associations (McKendrick 2016). In cases where the parties to an agreement
are family like in case of a husband and wife or siblings then there is a presumption that the
parties did not intend on forming legally enforceable contracts.
Application
Balfour v Balfour [1919] 2 KB 571 is the leading case on this issue and here it was
decided that in case of domestic or family relationships agreements are not usually construed to
have an intention to form legally enforceable contracts (Knapp, Crystal and Prince 2016).
In this case, under the existing family relationship between the two (siblings), if Ali
pursues Charlie legally for breach of contract the court would rule that following the judgment in
Balfour v Balfour such an agreement between family members would not be legally enforceable
due to the presumption that agreements between family members are not made with the intention
of forming legally binding agreements (Kötz 2017). Thus Ali would not succeed in establishing
her claim for breach of contract and would not be entitled to damages for the same.

2INTRODUCTION TO BUSINESS LAW
Conclusion
No the agreement between Ali and Charlie is not legally binding. An thus does not form
legally enforceable contractual obligations.
Problem 2
Issue
The issue here is to determine if there was a legally enforceable contract between Nick and
the Police department. Where Nick had requested the police department to station an officer
outside his party and the department agreed to provide him with the same for a consideration of
$1000.
Rule
As per common law the essentials of a valid contract are offer, acceptance and
consideration (Poole 2016). If these are present in an agreement it is presumed that it is a
lawfully valid agreement which can be enforced as a contract.
The leading case relating to offer is Clifton v Palumbo [1944] 2 All ER 497 which laid down
that a valid offer must be clear precise and definite (Hunter 2017). Swan v Miller [1919]1 IR 151
down that a counter-offer is the rejection of the original offer but a clear, unequivocal and
unconditional acceptance would be legally valid (Adriaanse 2016). Dunton v Dunton (1892) 18
VLR 114 laid down that consideration is an essential of a contract and must be present to form a
legally valid contract (Cartwright 2016).

3INTRODUCTION TO BUSINESS LAW
Application
In the given set of circumstances the Nick made a specific offer that he required an
officer stationed outside the party. The police department had informed him that the
consideration for the police rendering this service would be $1000. Nick had unequivocally
accepted this. Thus there was a valid offer from the police department to undertake this job for
$1000, Nick has clearly accepted the offer and had not stated any varying terms and thus the
acceptance was valid. The consideration for the police in the scenario would be the monetary
compensation and the consideration for Nick would be additional security for his party and thus
there was valid consideration from both sides.
Conclusion
Thus, in refusing to pay the amount Nick is in breach of his contract and thus the police
department would succeed in legally pursuing him for the amount. Hence, Nick will not win in
court.
Problem 3
Issue
The issue to be considered in this problem was if the second contract formed between
Mike and Helen was legally valid and if by virtue of this Mike’s responsibilities relating to the
first contract was extinguished.
Rule
The rules relating to this are the rules relating to formation of valid contracts that are
legally enforceable. Thus, the rules to consider the presence of the essentials of a contract which
are offer, acceptance and consideration.

4INTRODUCTION TO BUSINESS LAW
Application
The leading case relating to offer is Clifton v Palumbo [1944] 2 All ER 497 which laid
down that a valid offer must be clear precise and definite (Poole 2014). Hyde v
Wrench [1840] EWHC Ch J90 down that a counter-offer is the rejection of the original offer but
a clear, unequivocal and unconditional acceptance would be legally valid (Andrews 2015).
Dunton v Dunton (1892) 18 VLR 114 laid down that consideration is an essential of a contract
and must be present to form a legally valid contract.
Thus in this case there was a clear offer from Helen which stated that if Mike came to her
house with $1000 on 24th June and checked her BMW’s Steering (as a mechanic) she would not
sue him for the remaining debt. Mike did not offer any varying terms and thus unequivocally
accepted the offer. The consideration for Mike here was that he would not be sued for the
remaining amount of the debt and the consideration for Helen would be the receipt of $1000 and
an inspection of her BMW’s steering. Mike performed his obligations under the contract.
Conclusion
Thus, in this scenario the agreement between the parties contains all the essentials of a
contract and thus it would form a legally enforceable contract. Thus, if Helen sues Mike for
breach of contract by virtue of the second contract between the two parties she would not
succeed in Court.

5INTRODUCTION TO BUSINESS LAW
Problem 4
Issue
The issue here is to determine if the contractual term imposed by the DVD company on
Lizzie is a fair contractual term which can be lawfully enforced by the DVD company.
Rule
The common law principle for unfair terms of contracts which is also followed in
Australia is that for a term to be legally enforceable it must be fair and must not be beyond
prevailing standards in the industry. In case such a term is incorporated into a contract the extent
to which it is unfair would be void (Zamir 2014).
Application
The leading case for this issue is J.J. Richards & Sons Pty Ltd v Fair Work Australia
[2012] FCAFC 53 where the court deemed various terms in the employment contract by J.J.
Richards & Sons Pty Ltd to be void because they were unfair as they went beyond prevailing
standards in the industry (Dagan 2013). Thus in this case the term of the contract imposes a $20
per day fine for late returns on DVDs whereas the prevailing standards in the industry impose a
$5 per day fine in case of late returns.
Conclusion
Thus due to the prevailing industry standards it would not be a fair term and the court
would construe it as void. This thus means that if the DVD company sues Lizzie for breach of
contract it would not succeed in court.

6INTRODUCTION TO BUSINESS LAW
Problem 5
Issue
The issue to be determined in this situation is if the exemption clause in the contract
between Tori and dry cleaners was a valid contractual term.
Rule
The law relating to exemption clauses under common law require that the term be
incorporated into the contract, narrowly interpreted and must not be an unfair term (Cifrino
2014).
Where the tickets sold for access to a cloak room contained an exclusion the court held
that where a person purchased a ticket, and believed that the writing contained conditions he
would be bound by it. Additionally if the ticket was sold in such a way that the person buying it
would be aware that the writing contained conditions he would be bound by it. This was decided
in Parker v South Eastern Railway (1877) 2 CPD 416 (Stone & Devenney 2017). In Curtis v
Chemical Cleaning Co [1951] 1 KB 805 it was held that the dry cleaning company’s exemption
clause was not valid due to the misrepresentation made by the assistant who asked the patron to
sign a paper that was titled “receipt” which was actually an agreement (Austen-Baker 2017). But
in the absence of the misrepresentation the exemption clause would be deemed valid.
Application
Thus in this case the paper signed was titled “Agreement” and the person signing it
would reasonably be aware that an agreement would contain term. Thus the company’s
exemption clause was incorporated properly and thus as there was no misrepresentation and the
clause would be valid.

7INTRODUCTION TO BUSINESS LAW
Conclusion
Thus, Tori would not succeed in making such a claim for the damage to her dress.
Problem 6
Issue
The issue here is to determine if Sandra can bring an action against Mr. Smith for breach
of contract on the grounds of recommending a product unsuitable for her needs.
Rule
Section 19 of the Goods Act, 1958 (Vic) provides that indirect conditions regarding the
sale of the goods are not to be considered relevant unless the per purchaser specifies the purpose
for the purchase of the good and relies on the seller recommendation in that regard. This is the
relevant rule for this scenario (Bridge 2017).
Application
The case of David Jones v Willis (1934) 52 CLR 110 laid down that a seller
recommending a good after being told about the purpose of the same would be in contravention
of Section 19 of the Goods Act, 1958 (Vic) if the recommended good was not fit for the purpose
stated (Smits 2017).
Conclusion
Sandra can claim damages form Smith’s on the grounds of contravention of Section 19 of
the Goods Act, 1958 (Vic).

8INTRODUCTION TO BUSINESS LAW
Reference list:
Adriaanse, M.J., 2016. Construction contract law. Palgrave Macmillan.
Andrews, N., 2015. Contract law. Cambridge University Press.
Austen-Baker, R., 2017. Implied terms in English contract law. Edward Elgar Publishing.
Bridge, M.G., 2017. The International Sale of Goods. Oxford University Press.
Cartwright, J., 2016. Contract law: An introduction to the English law of contract for the civil
lawyer. Bloomsbury Publishing.
Cifrino, C.J., 2014. Virtual property, virtual rights: Why contract law, not property law, must be
the governing paradigm in the law of virtual worlds. BCL Rev., 55, p.235.
Dagan, H., 2013. Autonomy, pluralism, and contract law theory. Law & Contemp. Probs., 76,
p.19.
Hunter, H., 2017. Modern Law of Contracts.
Knapp, C.L., Crystal, N.M. and Prince, H.G., 2016. Problems in Contract Law: cases and
materials. Wolters Kluwer Law & Business.
Kötz, H., 2017. European contract law. Oxford University Press.
McKendrick, E., 2014. Contract law: text, cases, and materials. Oxford University Press (UK).
Poole, J., 2014. Casebook on contract law. Oxford University Press, USA.
Poole, J., 2016. Textbook on contract law. Oxford University Press.

9INTRODUCTION TO BUSINESS LAW
Smits, J.M. ed., 2017. Contract law: a comparative introduction. Edward Elgar Publishing.
Stone, R., & Devenney, J. (2017). The modern law of contract. Routledge.
Zamir, E., 2014. Contract Law and Theory: Three Views of the Cathedral. U. Chi. L. Rev., 81,
p.2077.