Business Law: Contracts, Offer and Acceptance, Intention, Consideration, Capacity, Consent, Legality, Contents and Interpretation

This article covers various topics related to Business Law including Contracts, Offer and Acceptance, Intention, Consideration, Capacity, Consent, Legality, Contents and Interpretation. It discusses the rules and applications of each topic with relevant case laws.

Running Head: BUSINESS LAW
Business Law
Name of the Student:
Name of the University:
Author Note

1BUSINESS LAW
Set one
Answer 1
Issue
Whether Romy can make a claim for the promised $500.00 wages that week
Rule
Part consideration cannot be considered as a valid consideration as no promise is made in
relation to the contract before it has been formed. Thus an act done in the past cannot constitute
valid consideration. Re McArdle (1951) Ch 669
However of the act has been done due to the request of the promisor than such act will be
considered as a valid promise as held by the case of Lampleigh v Braithwaite [1615] EWHC KB
J17
Application
As Romy has attended the game to sell and claim coffee at the request of Julie he can claim the
money
Conclusion
Romy can claim the money
Answer 2
Issue
The issue in this case is that Does Meredith has to sell the horse to Mandy

2BUSINESS LAW
Rule
The postal rule of acceptance states that the letter of acceptance which has been addressed
correctly will constitute a valid acceptance as soon as the acceptance letter is posted. Adams v
Lindsell (1818) 1 B & Ald 681
The offer can be revoked only before acceptance is made. It has to reach the offeree Byrne & Co
v Leon Van Tien Hoven & Co [1880] 5 CPD 344
Application
In the given situation the acceptance has been made by Mandy on 15th as the letter of revocation
has not reached her before she made the acceptance.
Conclusion
Meredith has to sell the horse to Mandy
Answer 3
Issue
Is the contract voidable due to Sunshine Panels actions
Rule
There are certain contract vitiating factors and one of such factors is duress. When a party
applied duress to make a person get to the contract then the contract is voidable at the option of
the weaker party.
Application

3BUSINESS LAW
In this case undue force and duress gas been applied by Sunshine Panels actions on Jimmy to
accept the contract and thus as per the above discussed rules jimmy will have the option of
making the contract voidable.
Conclusion
Contract is voidable due to Sunshine Panels actions
Answer 4
Issue
Has the lease contract been frustrated and Olivia can therefore terminate the lease
Rule
Contract is held to be frustrated in situation where it is impossible to carry out the rights and
obligations under the contract due to circumstances which arise after the formation and are not
within the control of the parties to the contract.
Application
In this situation the circumstances which have arisen have come after the contractual obligation
have been discharged and not prior to it and thus the contract is not frustrated.
Conclusion
The lease contract has not been frustrated and Olivia cannot therefore terminate the lease
Answer 5
Issue

4BUSINESS LAW
Whether Jenney can claim the property totally
Rule
The court generally presumes that there is no intention in a agreement involving domestic
relationships as stated in Balfour v Balfour [1919] 2 KB 571
On the other hand as stated in Merritt v Merritt [1970] EWCA Civ 6 the presumption can be
rebutted and intention will exists where parties have separated from each other.
Application
As this is domestic agreement between Jenny and dean the court will generally presumes that
there is no intention in the agreement. However here the parties have separated from each other
and thus the presumption can be rebutted and intention will be present.
Conclusion
Jenney can claim the property totally
Answer 6
Whether Hotlap can rely on the term excluding their liability
Rule
An exclusion clause can be used for the purpose of evading a liability. However there are certain
rules which need to be met to validly incorporate the clause. One of such rule is that the clause
has to be presented before the contract is formed. Olley v Marlborough Court [1949] 1KB 532
Application

5BUSINESS LAW
In the given situation it can be stated that the liability clause has been presented to Paul after the
contract was formed as the contract was formed when the ticket has been purchased and not
when Paul was going into the car. Thus the clause is not valid
Conclusion
The clause is not added in a valid way
Answer 7
Whether Marcus can claim breach of collateral contract
Rule
The parole evidence rules limits the terms of the contract to what has been written
A collateral contract is the result of the consideration being provided by the party to get into the
main contract.
Application
Here Marcus has only entered into the main contract to purchase the house because Taylor
promised him two jet skis and surfboards. Here the consideration for two jet skis and surfboards
is the main contract.
Conclusion
Marcus can claim breach of collateral contract

6BUSINESS LAW
Set two
Answer 1
Issue
Whether sally has the obligation of paying Ripper Renovations Pty Ltd (RR)
Rule
Where the party has carried out substantial performance in relation to a contract they are entitled
to receive compensation for the part of contract they have completed if they have not breached a
condition of the contract
Application
In the given situation it can be stated that Ripper Renovations Pty Ltd (RR) has carried out their
major obligations under the contract. Here the cost of repair is only $250. Thus the remaining
$9750 needs to be paid.
Conclusion
The remaining $9750 needs to be paid.
Answer 2
Issue
What remedies, if any can Channel 7 seek for Janie’s breach of contract
Rule

7BUSINESS LAW
There are various remedies in relation to a breach of contract. The mist relevant remedies to
address the issue are of Injunction, specific performance and damages. Injunction means
preventing a party to do an act, specific performance means asking a party to do an act and
damages to compensate the party for losses.
Application
In the given situation Channel 7 can seek Injunction from preventing Janie to breach the contract
and damages for compensation for the breach of contract
Conclusion
The above damages will be applicable
Answer 3
Issue
Whether Sally is liable to Mr Jones for Enid’s conduct
Rule
In the case of Chan v Zacharia (1984) 154 CLR 178 it has been stated by the court that the
partners are jointly and severally liable for the acts and omissions of the other partners. They are
the principal and the agent of the business
Application

8BUSINESS LAW
In the given situation it has been provided that Enid and Sally are partners in a firm called Future
Wealth. Enid has provided negligent advice to Mr Jones. As per the above discussed rules Sally
will be liable for the actions of Enid.
Conclusion
Sally will be liable for the actions of Enid.
Answer 4
Issue
Has Cindy breached any duties under the Corporations Act 2001
Rule
Under section 191 of the CA it is the duty of the directors of the company that they have to
disclose any personal interest they may have in the subject matter of a transaction to other
directors
Application
Cindy has failed to disclose the info about her husband to the directors and thus he she has
breached section 191
Conclusion
Section 191 is breached by Cindy
Answer 5
Issue

9BUSINESS LAW
What remedies, if any can Channel 7 seek for Janie’s breach of contract
Rule
There are various remedies in relation to a breach of contract. The mist relevant remedies to
address the issue are of Injunction, specific performance and damages. Injunction means
preventing a party to do an act, specific performance means asking a party to do an act and
damages to compensate the party for losses.
Application
In the given situation Channel 7 can seek Injunction from preventing Janie to breach the contract
and damages for compensation for the breach of contract
Conclusion
The above damages will be applicable
Answer 6
Issue
Has The Age breached a condition that justified Deakin College’s termination of further
performance of the contract?
Rule
The condition is the term of a contract upon when the parties to the contract rely on to get into
the contract. They would not have formed the contract of the term was not there.
Application

10BUSINESS LAW
In the given situation the college would not have got into the contract with the Age Newspaper
if the term that the advertisement will be present in page 3 was not there. As the term has been
breached it is a condition.
Conclusion
The Age breached a condition that justified Deakin College’s termination of further performance
of the contract
Answer 7
Issue
Whether Jayden can sue Pest Crop Sprayers for the loss
Rule
Duty of care is present when a person can be harmed due to the actions of another person
foreseeably or the person has sufficient proximity to the injured person.
Application
Any reasonable person in the position of Pest Crop Sprayers can foresee where they had been
warned to spray the pesticide carefully that if they do not do so than injury may be cased to
other. Thus they have a duty of care to Jayden
Conclusion
Pest Crop Sprayers has as duty of care to Jayden

11BUSINESS LAW
Part 2
CHAPTER 2 & 3 –CONTRACT and OFFER and ACCEPTANCE
An invitation of an offer is an statement having no legal significance and cannot be accepted.
The invitation can only ask a person to make an offer a few examples of invitation to offer are
advertisements and tenders. The provisions had been discussed in the case of Pharmaceutical
Society of Great Britain v Boots Cash Chemists [1953] 1 QB 401
An offer is an expression or statement which is made to specific people , group or the world at
large and have the intention of forming legal relationship once it has been accepted.
The general rule of acceptance is that the acceptance has to be communicated to the person who
has made the offer. Without communication there is no acceptance.
Postal rule is an exemption to the general rule where it has been stated that as soon as a post for
acceptance is posted it accounts to acceptance irrespective of actually reaching the offeror as
stated in the case of Adams v Lindsell (1818) 1 B & Ald 681.
CHAPTER 4 - INTENTION
In relation to presumption regarding social, domestic and family agreements there is a
presumption that there is no Intention of forming a legal obligation as per the case of Balfour v
Balfour [1919] 2 KB 571
In relation to presumption regarding business agreements there is a presumption that there is
Intention of forming a legal obligation as per the case of Esso Petroleum v Commissioners of
Customs & Excise [1976] 1 WLR 1

12BUSINESS LAW
CHAPTER 5 – CONSIDERATION
Consideration is a promise on which a contract is based. Without a consideration there is no
contract. Past consideration rule states that a past consideration is not a valid consideration as per
the case of Anderson v Glass (1868) 5WWB & AB (L) 152
The exception to the past consideration rule is that when the act or omission has been made as
per the request of the promisor then the consideration is valid as per Pao On v Lau Yiu Long
[1980] AC 614
No, performing an existing obligation is not a good consideration as per the case of Collins v
Godefroy (1831) 1 B & Ad 950
The practical benefit test states that when a person has been able to avoid a loss or conferred a
benefit because of the act or omission it would be a valid consideration even if it is an existing
obligation as per Hartley v Ponsonby (1857) 7 E & B 872
CHAPTER 6 – CAPACITY
A minion is bound by contracts when the he has entered into a contract for ‘necessaries or
beneficial contract of service.
Contract for necessaries is a contract which minor entrees into for purchase of necessaries like
clothing and fooding as per Bojczuk v Gregorcewicz [1961] SASR 128

13BUSINESS LAW
Beneficial contract of service is a contract which minor entres into for taking beneficial services
such as coaching as per the case of - Mercantile Union Guarantee Corp Ltd v Ball [1937] 2 KB
498
A mentally incapacitated person can get into a contract when he is mentally sound but not when
he is mentally incapacitated.
CHAPTER 7 – CONSENT
A common mistake is a mistake which is made by both parties as per McRae v Commonwealth
Disposals Commission (1951) 84 CLR 377
Duress is a process which is used to obtain consent by force as per Scolio PL v Cote (1992) 6
WAR 475. Economic duress is a process where economic pressure is provided to get consent as
per ndo Management PL v Westpac Banking Corp (1988) 19 NSWLR 40
Undue influence takes place when a person is in a special relation and get into a contract
religious adviser and devotee – Allcard v Skinner (1887) 36 Ch D 145;
CHAPTER 8 - LEGALITY
Restraint of trade clause is a clause which is used to prevent an ex employee to carry out similar
trade. It is used to prevent a person who leaves employment from opening similar business as per
Petrofina (Great Britain) Ltd v Martin [1966] 1 CH 146 & Nordenfelt v Maxim Nordenfelt Guns
& Ammunition Co Ltd [1894] AC 535
CHAPTER 9 – CONTENTS & INTERPRETATION OF THE CONTRACT

14BUSINESS LAW
Parole evidence rules provides that as soon as a written contract is made any term not discussed
is not a part of the contract. Collateral contract is a contract which is the consideration for the
manin contract . The rule is that it is binding legally as per- Van Den Esschert v Chappell [1960]
WAR 114
A condition is a term which is relied to get into a contract by the parties and is very important as
per Associated Newspapers Ltd v Bancks (1951) 83 CLR 322
A warranty is a term which is not as important as warranty and is not relied to get into the
contract as per Bettni v Gye (1876) 1 QBD 183
Exclusion clause is a clause which is used to exclude the liability of a party
It can be incorporate by signature, notice or customs as per Alameddine v Glenworth Valley
Horse Riding Pty Ltd [2015] NSWCA 219
No it is not differ t from online contract as per er v Kalanick No 15 Civ. 9796, 2016.
CHAPTER 10 – OPERATION OF THE CONTRACT
Privity of contract means only parties to the contract have rights to enforce it. The exception is
that when a third party is beneficiary of the contract as per Tweedle v Atkinson (1861) 1 B & S
393
CHAPTER 11 – TERMINATION AND BREACH OF CONTRACT
Anticipatory breach means a breach which can be anticipated. The innocent party can discharge
the contract.

15BUSINESS LAW
Yes contract can be terminated for breach of condition. No contract cannot be terminated for
warranties.
Frustration takes place when the contract is not possible to be carried out because of situation
beyond the parties control. Elements are that the situation has to be beyond parties control as per
Taylor v Caldwell (1863) 3 B & S 826; 122 ER 309. No it is not frustrated merely because it is
more expensive, harder or inconvenient to perform as per Meriton Apartments PL v McLaurin &
Tait (Developments) PL (1976) 133 CLR 671.
CHAPTER 12 – REMEDIES
Remedies are provided to compensate the innocent party as per Tabcorp Holdings Ltd v Bowen
Investments PL(2009) 236 CLR 272
The test are that the damages has to be foreseeable and damages must be contemplated
Specific performance asks a person to do a specific work as per JC Williamson Ltd v Lukey &
Mulholland (1931) 45 CLR 282. Injunction ask a person to do a specific work as per - Page One
Records Ltd v Britton [1968] 1 WLR 157
CHAPTER 14 – LAW OF TORT
In case of a pure economic loss there is no duty of care as per Perre v Apand Pty Ltd (1999) 198
CLR 180

16BUSINESS LAW
The defence takes place when the party is himself or herself negligent as per Alzawy v Coptic
Orthodox Church Diocese of Sydney, St Mary and St Merkorious Church(No 2) [2016] NSWSC
1123
Vicarious liability means the liability of the principal for actions of the agent as per Hollis v
Vabu PL (2001) 207 CLR 21
CHAPTER 16 - PARTNERSHIPS
A partnership is a business which is carried out in common for motive of profit earning as per
The retiring partner has the liability to clear all debts as serve notice as per Hamerhaven Pty Ltd
v Ogge [1996]2 VR 488 and section 30.
Yes, the partner is liable as per Chan v Zacharia (1984) 154 CLR 178.
CHAPTER 17 – CORPORATIONS LAW
Section 180 duty of diligence and care
Section 181 duty of good faith and proper purpose and best interest
Section 182 duty of not misusing position
Section 183 duty of not misusing information
Section 184 reckless breach of above sections
Examples ASIC v Sino Oil and Gas Limited