Corporation and Enterprise Law | Question and Application

Running head: CORPORATION AND ENTERPRISE LAW
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CORPORATION AND ENTERPRISE LAW
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1CORPORATION AND ENTERPRISE LAW
Question 1
Issue
The issue involves in this given scenario, whether there is any contract between Fran and
Elaine or not.
Rule
The rules relating to the formation of any agreement or contract will apply to decide the
existence of a contract. In the case of Smith vs Huges 1871, the Bench has decided there should
be an offer, as well as its acceptance and an intention to make such an agreement of the parties.
In the case of Hyde vs Wrench 1840, the court of law has dealt with the concept of counter-offer.
If an offer has been rejected, then it can not be accepted again by the offeree unless any contrary
arises. An offeror can offer or propose to do an act with specific consideration to the offeree.The
offeree may accept, as well as reject that. If the offeree makes another offer or bargain with the
offeror, then the main offer terminates. Therefore, counter-offer has terminated the primary offer.
In the case of Felthouse vs Bindley 1862, the court has ruled that the acceptance should be
communicated with the offerer and a mere mental acceptance will not be bound as a part of the
formation of a contract.
Application
In the given scenario, Elaine has offered to Fran to clean her house with a specific
amount. Fran has counter-offered to her by increasing the amount of the wage. After several
conversations regarding a bargain on wages, Elaine has told Farn that if she did not hear
anything from him before the stipulated time, then she would presume that Fran has accepted the
offer and would join on work from the next day.

2CORPORATION AND ENTERPRISE LAW
Applying the case of Smith vs Huges 1871 in this given situation, Fran and Elaine should
have to fulfil the terms of the formation of the contract such as offer, acceptance, as well as
intention and consideration from both parties. There is no such acceptance of that offer on the
part of Fran. Therefore, there is no acceptance to form an agreement.
Applying the concept of the judgment of the case of Hyde vs Wrench 1840 in this
scenario, there is a counter-offer on the part of Fran, which has terminated the primary offer that
has been made by Elaine. Therefore, there is no such offer, as well as acceptance to form a
contract between the parties, that is between Elaine and Fran.
Applying the case of Felthouse vs Bindley 1862 in this given situation, a presume of
acceptance will not consist an actual acceptance of an offer. In this scenario, Elanie has told Farn
that if she does not hear any response from Fran, then she will presume that Fran has accepted
his offer. However, by applying the judgment of the above case, Elaine can not assume any
acceptance of her offer without any proper communication of that acceptance. Therefore, any
assumption of acceptance will not be regarded as adequate acceptance, and hence, there is no
such form of contract.
Conclusion
Therefore, it can be concluded in this scenario that there is no contract between Elaine
and Fran.
Question 2
Issue
The issue has arisen in this scenario, whether Stevenson has to pay the reducted rents of
scallop boat for the previous three years or not.

3CORPORATION AND ENTERPRISE LAW
Rule
The rules relating to consideration in the contract law in the Common Law of Australia
will apply in this context to decide the liability of Stevenson to pay such rents. In the case of
Currie vs Misa 1875, the court has referred to the consideration as a fundamental element to
form a contract between the parties. Such term ‘consideration’ means any price or payment made
by a party to another party for any for doing any act, as well as for any omission of any action.
The judgment of the case of Roscorla vs Thomas 1842 has concerned on the past consideration
of a contract and its validity on the contract law. Such consideration for making any contract
between the parties should be present, as well as future, but should not be past consideration.
There is no validity of past consideration on the eye of the Common Law. It other words, any
party of a contract can not be able to enforce such a concept of past consideration to claim any
compensation. In the case of Foakes vs Beer 1884, the court rules that if any party has asserted
for lesser payment of any contract, then he can not be able to show as due in the satisfaction of
any greater sum.
Application
In this given scenario, Sam has leased his boat to Stevenson for a rent of $10,000
annually. Stevenson is unable to pay that amount of rent for fishing, as well as financial
difficulties. However, Sam has halved the rental amount until he has improved his business.
After three years, he has developed his business; then Sam told him to pay extra $10,000, which
he has remitted in the previous three years.
Applying the case of Currie vs Misa 1875 in this scenario, there is a consideration from
both the parties. Therefore, there is a contract between the parties, that is, Sam and Stevenson.

4CORPORATION AND ENTERPRISE LAW
Relating the case of Roscorla vs Thomas 1842 with this given situation, there is a past
consideration on the part of Sam, which is not legally enforceable. In this context, the past
consideration is the half of rent in the previous three years, that is, $ 15,000, which Sam has
discounted for the bad condition of the business of Stevenson. This amount of $ 15,000 will be
considered as a past consideration in this scenario. Therefore, as the past consideration is not
enforceable, then Stevenson is not bound to pay that amount.
Applying the concept of the rules in the case of Foakes vs Beer 1884 in this scenario,
Sam can not claim that amount from Stevenson to satisfy the previous rental dues as he has
wilfully remitted that amount for the poor condition of Stevenson’s business.
Conclusion
Therefore, it can be concluded in this context that Stevenson may not pay responsible for
paying $ 15,000 to Sam.

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References
Currie v Misa (1875) LR 10 Ex 153
Felthouse v Bindley (1862) EWHC CP J 35
Foakes v Beer [1884] UKHL 1
Hyde v Wrench [1840] EWHC Ch J90
Roscorla v Thomas [1842] EWHC J74
Smith v Hughes (1871) LR 6 QB 597