Corportaion/Business Law Answer 2022

Running Head: BUSINESS AND CORPORATION LAW
0
Business Law Assignment
8/5/2019
Student’s Name

Corportaion/Business Law 1
Contents
Answer A.........................................................................................................................................2
Answer B.........................................................................................................................................6
Scenario 1 6
Scenario 2 7
Scenario 3 9
References......................................................................................................................................11

Corportaion/Business Law 2
Answer A
A contract can be understood as a legally binding agreement where parties to the same have an
obligation to fulfill their promises to each other. Many of the factors are there that collectively
makes a contract legal and binding, therefore these factors are known as essentials of a contract.
The same are required to be there in each contract. Every one of these elements has certain rules
and the factors must be according to those rules only. The very first element is an offer. An offer
is a proposal to do a particular thing or not to do in return for something. Anything can be
mentioned in an offer such as a proposal to purchase a car or proposal to sell a house. The person
who creates the offer is called as offeror and the other party who receives the offer is known as
offeree (Smallbusiness.findlaw.com, 2019).
A valid offer is the one that consists of an intention to bind the parties. In the case of Harvey v
Facey [1893] AC 552, Privy Council held that in case of missing of intention to be bound, a
communication is treated as a request for information or something else but not the offer.
Intention makes the difference between an offer and other terms similar to offer that exist in
contract law such as an invitation to treat. It is just an invitation to offer and not the offer itself as
an intention to bind the parties remains missing there. It was provided in the decision of the case
of Pharmaceutical Society of Great Britain v Boots [1953] 1 QB 40 that goods placed on display
in a shop also a type of invitation to treat (Marson, 2013). Hence, in other words, to say that
advertisement and any other communication that offer something cannot be treated as an offer
until the intention to bind rise there. Another essential element after the offer is acceptance. In
order to become a contract, every offer is required to have consented. If all the other essentials
are there then a contract is established as soon as offeree provides his/her acceptance to the offer

Corportaion/Business Law 3
made by offeror. Here this is to inform that offeror and offeree are required to communicate offer
and acceptance to each other. Secondly, it was decided in the case of Hyde v Wrench (1840) 49
ER 132 that for a valid acceptance, the terms of the same must match to the terms of offers. If
there is any variation between these two, then the acceptance provided by offeree becomes
invalid and does not give rise to any contract. Lastly, an agreement is required to be certain.
The third and one of such important element is a consideration. These factors are required to be
studied in-depth as many rules are associated with the topic of valid and legally acceptable
consideration. Firstly, the meaning of consideration is required to be understood. This is to state
that under every contract there is a certain exchange of promises between parties. These
promises are known as consideration. Only existence of consideration is not enough but the same
must be according to the rules. First of all a consideration must not be past one. It means if
anything is already been paid or if an action already been performed then the same cannot be
used as a consideration for future contracts as decided in the case of Re McArdle (1951) Ch 669.
Secondly, consideration need not be adequate all the time. The decision provided in the case of
Chappel v Nestle [1960] AC 87 House of Lords, seems to be important here. In the subjective
case, the House of Lords provided that consideration is required to be sufficient only (Charman,
2013). It means it is not required that consideration must be market value and it can be anything
that has value in the opinion of the law. For instance, if someone purchases a car in consideration
of £1 then also £1 would be considered as valid consideration under contract law. The third
condition says that consideration must be paid by promisee only. It has been provided in the
decision of the case of Tweddle v Atkinson [1861] EWHC QB J57 that if any other person pays
consideration on behalf of promisee then also promisee cannot enforce a contract, as he/she does
not become a party to contract in such a situation.