Corporation and Business Law

Running head: CORPORATION AND BUSINESS LAW
Corporation and Business Law
Name of the Student
Name of the University
Author Note

1CORPORATION AND BUSINESS LAW
1. A valid contract entered into by parties must create a legal relationship and the same
must be initiated by an offer followed by an acceptance of such offer. The contract
must be based on the terms that have been provided in the offer (Cartwright, 2016). It
must not include or exclude any terms that have been provided in the offer and upon
which the offeree has based his consent upon. However, in case there is a written
contract the offeree must read the terms of the contract carefully before signing it.
This is because after signing the same, the offeree cannot claim a repudiation under
misrepresentation. The signing the contract would be construed as if he has read the
documents carefully before signing the contract. Therefore, Charlie Martin should
have read the documents of the contract carefully before signing it and have checked
whether the terms written in the contract document matches with the original offer
that has been made to him and upon which he has based his consent.
2. A standard form of contract implies a contract, the terms and conditions of which are
fixed by the offeror and the offeree does not have an option to negotiate the same. The
offeree may either accept the offer or reject it without any chance of negotiating the
same (Cartwright, 2016). These kind of contracts are mainly used in situations where
a same kind of contract is entered into by an organisation with different clients of
theirs. This will reduce the time spent behind each contract and reduce the price of the
formalities relating to the contract. In this present situation, PHOCCI is an company
which franchises many businesses, the franchisee agreement of PHOCCI has been
created to be for the purpose of entering into contracts with all the businesses it is
going to franchise. Therefore, in Franchisee agreement of PHOCCI, a standard form
of contract has been used.
3. A valid contract must always be instituted by an offer made by one party, which must
have been accepted by the other party forming an agreement (Waddams, 2017). In
this case, there was an offer made by PHOCCI to enter into a contract with Charlie
Martin to franchise the business of Charlie Martin, which implies a proper offer. The
offer has been accepted by Charlie Martin by signing a contract agreement having the
effect of a proper acceptance forming an agreement. The consideration relating to the
contract in this case is $75,000 and a five percent royalty of gross weekly sales to be
paid by Charlie Martin to PHOCCI in return of availing their franchise services. The
free consent of the parties in entering into the contract is needed to be analysed. The
consent of Charlie Martin was based on the report presented by the representative of
PHOCCI named Nell. The report have been found to be misleading and untrue. This
would render the contract to be voidable giving Charlie Martin an option of either
repudiating the contract or ratify it. In this case after realising the same, Charlie
Martin failed to rescind the contract. This would have the effect of ratification of the
contract creating legal obligations to both the parties to the contract. This makes the
contract valid and requires its performance to be effected.
4. The contract being a valid one requires the performance of the terms contained in the
contract (Waddams, 2017). In this case, the franchise agreement contained a term for
the payment of a weekly royalty and marketing fund, which Charlie Martin failed to
make. This failure to make such payments is owing to the severe financial distress
that the company have been facing. This is a breach of an essential part of the contract
as these terms forms the part of the consideration of the contract. This type of breach
has the effect of creation of rights to the aggrieved party and an obligation towards the