Understanding Intention in Business Law

This document discusses the traditional approach and rejection of presumptions in determining intention in business agreements. It explores relevant cases and their implications.

BUSINESS LAW
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Question 1
The traditional approach in the context as ascertaining intention for creation of legal relations has
been to rely on presumptions which have been historically highlighted. This is evident from
Jones v Padavatton [1968] EWCA Civ 4 where it was indicated that the underlying presumption
is that intention is not present in social or domestic agreement but it is present in commercial
agreements. In Ermogenous v Greek Orthodox Community case, the above approach was
rejected and instead it was indicated that more should be given to the individual circumstances
connected with the case at hand (Andrews, 2014).
The High Court clearly highlighted that taking the presumption into consideration for judging
intention leads to unnecessary distraction from the relevant case facts and the underlying
circumstances which require objective analysis. In this case, the Full Bench had ruled that
employment contract was not enforceable owing to lack of intention relying on presumptions of
the nature of relationship between employer and Bishop. However, the High Court overturned
this decision by considering the circumstances surrounding the enactment of employment
contract and deemed it enforceable (Gibson and Fraser, 2014).
Question 2
The clause (a) indicates that the document under consideration does not lead to an enforceable
contract and hence thereby does not result in any legal relationship between parties. Further, any
dispute regarding the document would not be be decided by the law courts as they do not have
jurisdiction over the document (Paterson, Robertson and Duke, 2015). In case of clause (b), the
agreement is such that any aspect related to this cannot be arbitrated or contested in any court. It
might be possible that that matters related to the agreement ought to be resolved relying on
alternative dispute mechanism only (Carter, 2015).
Question 3
Issue
Based on the given facts, the key issue is to ascertain if the outstanding debt obligations of
Donald would be successfully discharged or not.

Rule
A key question in relation to existing debt obligation settlement is whether part payment could
be considered as valid consideration. This issue was addressed by Foakes v Beer [1884] UKHL
1 case where it was outlined that the creditor would never end up being incentivized when part
payment of debt is carried out for discharging the debt (Edlin, 2015). In the recent times, a more
practical view is taken considering that partial payment of debt is an incentive against potential
bankruptcy of the client. In this context, the verdict of the Musumeci v Winadell Pty Ltd (1994)
34 NSWLR 723 case is pivotal as it highlights that part payment of debt is a valid consideration
when the practical benefit obtained by the creditor exceeds the remedy related payment obtained
from breach of contract (Taylor and Taylor, 2015).
Application & Conclusion
a) Donald is willing to discharge the complete outstanding obligation by payment of $ 2,000. It
is evident that Donald is jobless and hence is facing financial difficulties. Considering this
scenario, obtaining the complete amount of $ 2,500 would be difficult through legal means.
Thus, practical benefit by receiving $ 2,000 would serve as valid consideration and result in
enforceable contract.
b) Donald before selling his car had made it clear that the proceeds from car would be given for
the settlement of complete debt. The company agreed to that arrangement. If the company
intended to sue Donald anyways, they should have rejected his offer and pursued the legal
means. The demanding of $ 500 by the company six months later clearly amounts of breach
of earlier contract regarding discharging of debt.
c) Ivanka (daughter of Donald) is willing to pay $ 2,000 only on the condition if the company
would not be sued for the remaining $ 500. The company agrees for the same. Again valid
consideration seems to be present taking into notice that Donald’s debt is being paid by her
daughter. This represents poor financial situation of Donald. As a result, the contract with
the daughter is legally binding and the debt is discharged.
Question 4

Issue
Based on the given facts, the key legal issue is to ascertain if failure to fulfill his promise would
result in breach of contract by Bill.
Rule
There are a host of requirements in the context of execution of a legally binding contract. One of
these requirements is mutual consideration. This is defined as anything valiable that acts as an
incentive for the promisor to ensure that the promise is fulfilled. In the absence of consideration
for either of the parties, the contract would be deemed as void. The key question is whether love
and affection can form good consideration for contract enactment. The relevant case in this
regards is Tweddle v Atkinson (1861) 1 B & S 393 which indicated that love and affection cannot
serve as good consideration for the purposes of contract enactment (Carter, 2015).
Application & Conclusion
A promise has been made by Bill to her daughter Chelsea regarding gifting of Ferrari for her 21st
birthday. However, Bill failed to gift her a Ferrari on the birthday. It is true that Bill has violated
the promise but it is evident that there is no good consideration on his part to provide her
daughter with a Ferrari car. This is because love and affection does not result in requisite
consideration for contract enforcement. As a result, no contract is formed between Bill and his
daughter. Hence, no legal implications would arise for Bill even if it is assumed that intention
was present.
Question 5
a) Issue
Based on the given facts, it needs to be determined if the given exclusion clause on the receipt
back side would be enforceable or not.
Rule
Exclusion clause refers to any contractual terms which are aimed at limiting the liability of the
inserting party in case of certain events. A key requirement with regards to ensure the validity

of this clause is to provide reasonable notice to the other party before enactment of contract
(Davenport and Parker, 2014). Any failure on part of the inserting party to bring the clause to the
notice of the other contracting party would lead to clause not being held enforceable. This is
evident from the verdict in the Thornton v Shoe Lane Parking Ltd [1970] EWCA Civ 2 case law
as the customer availing the car parking services was not aware about the presence of exclusion
clause at the back of ticket. Also, before contract enactment, the presence of exclusion clause
was not notified to the customer (Taylor and Taylor, 2015).
Application & Conclusion
Bob is the customer who is using the car parking services at the Aussie stadium. A ticket has
been handed to him but there is no indication on the front of ticket which reflects of presence of
any contractual term on the ticket back side. Alsom Bob has not been notified about the same by
the parking staff. Thus, on account of failure to provide reasonable notice to Bob, the exclusion
clause would be considered invalid. Therefore, Bob would be able to sue the operator of car
parking for recovering losses.
(b) If during the last two years, there have been ten occasion when Bob got a similar parking
ticket at another stadium, then it is appropriate to conclude that the exclusion clause at the back
of the ticket would be known to Bob. In such a scenario, the exclusion clause on the ticket issued
at the Aussie stadium would be valid as there is no need on part of the car parking operator or
staff to bring the exclusion clause to Bob’s notice (Andrews, 2014).
Question 6
While there are multiple factors which are taken into cognizance to segregate terms from
representation, one of these is the importance of the seller’s specialist knowledge and buyer’s
reliance on the same to make the purchase, This can be exhibited from the Oscar Chess v
Williams [1957] 1 WLR 370 case. As per the relevant facts in this case, there was a sale of a
Morris car which was assumed to be a 1948 model based on the certificate of registration
provided by the seller. However, in actuality the car was an older model which was registered in
1939. The date of registration was a key aspect since the value of car was significantly impacted

by the same. The court also indicated that the year of registration being 1948 was a term and not
warranty owing to the key importance of this information to the contract enactment itself
(Gibson and Fraser, 2014).
Question 7
Issue
Based on the given facts, it needs to be outlined if there has been a breach of any implied
condition indicated in Goods Act (1958) Victoria.
Rule
There are some implied conditions and warranties that have been indicated in the Goods Act
(1958) Victoria which are available to the buyers of the good. One of these relates to the
underlying product being fit to use for the purpose stated which is outlined in s. 19. In
accordance with ss. 19(a), there is an implied condition where the underlying purpose of usage of
product has been stated by buyer and while purchasing the good, the buyer has relied on
judgment of the seller. If the product purchased is found to be unfit for the specified use, then
contract breach takes place owing to which the aggrieved customer can demand refund from
seller (Davenport and Parker, 2014).
Application & Conclusion
As per the stated facts, David while purchasing paper has specified the purpose of printing.
Further, he has relied on the seller’s judgment in context of recommending the appropriate item
for the stated use. However, it is evident that the paper quality is not suitable for printing despite
stating clearly the purpose as printing. Hence, there is breach of an implied condition resulting in
breach of contract. Thus, David may demand refund from the seller.

References
Andrews, N. (2014) Contract Law.3rd ed. Cambridge: Cambridge University Press, pp. 89-90
Carter, J. (2015) Contract Act in Australia. 3rd ed.Sydney: LexisNexis Publications, pp. 123-124
Davenport, S. and Parker, D. (2014) Business and Law in Australia.2nd ed..Sydney:LexisNexis
Publications, pp. 134, 178
Edlin, D. (2015) Common law theory. 4th ed. Cambridge: University Press Cambridge, pp. 79
Gibson, A. and Fraser, D. (2014) Business Law. 8th ed. Sydney: Pearson Publications, pp. 171,
190
Paterson, J. Robertson, A. and Duke, A. (2015) Principles of Contract Law. 5th ed. Sydney:
Thomson Reuters, pp. 107
Taylor, R. and Taylor, D. (2015) Contract Law. 5th ed. London: Oxford University Press, pp.
151