Corporation and Contract Law Case Study 2022

CORPORATION AND
CONTRACT LAW
Essential Elements of a Valid Contract and
Director’s Duties

CONTRACT LAW ISSUE
 Whether any legally valid and enforceable contract has been
created by Forthryt.
 If any such contract has been created exactly at what point of
time it has been created and with whom.

CONTRACT LAW RULE
 The need for the essential requisites to be present in a valid contract to render it enforceable can be explained in
lines with the case of
Appleson v Littlewoods 1939.
 The institution of a valid contract that has been compliant with all the requisites of a contract binds the parties to
be legally responsible and any contravention of their responsibilities of the contract would land them in legal
consequences. This can be explained with the case of
Rose & Frank Co. v JR Crompton & Bros Ltd. [1923] 2
K.B. 261.
 Agreement also requires to be accompanied with and objective of the formation of legal connection between the
parties and created upon terms that are clear and certain as can be supported by the case of
George Hudson
Holdings Ltd v Rudder (1973) 128 CLR 387.
 The acceptance of an offer needs to be made with respect to every term of the offer and no disagreements should
be presented with respect to any of the offers as has been seen in the case of
Smith v Hughes (1871) LR 6 QB
597.
 As per the principles established in the case of
Hyde v. Wrench (1840) 3 Beav 334 an offeree is required to
accept the terms pertaining to the offer in this entirety and without any alteration in the terms. Such acceptance
which has been qualified by some alteration in the terms would result in counter offer which is required to be
accepted by the other party the same can be treated as the rejection of the prior offer.
 However, according to the principles that has been established in the case of
Adams v Lindsell (1818) B & Ald
681, in case of postal rule, the time of communication of an acceptance creating a valid contract is the time at
which the letter has been posted containing the communication.
 As the per principles that has been established in the case of
Ermogenous v Greek Orthodox Community of SA
Inc [2002] HCA 8, social agreements should not be given the status of a valid contract.

APPLICATION
 At a party held in February he met another publisher named Boswold and expressed his desire to sell his book to Boswold
for a price more than 40 grand.
 This has been agreed to be a reasonable price by Boswold. This is required to be considered as an agreement as the same
has not been made with a wish to engage in a legal relations and is more of a social agreement.
 On being approached by Metro Publishers, he has expressed his desire to sell his book to the highest bidder, which is more
of an invitation to make an offer and not an offer itself. However, in response to the same, Metro made an offer of $50,000
which Forthryt has avoided by claiming that he will consider the same which cannot be treated as an acceptance .
 Another offer has been received by Forthryt by Havoc films who wanted to make a film on his book for $45,000, which has
been accepted by Forthryt with altered terms to have the discretion of selecting the lead cast of the film. This makes the
acceptance to be considered as a counter offer rejecting the prior offer.
 On the other hand, Forthryt has been approached by Boswold for an offer to buy the book for $40,000, which on being
asked by Forthryt has been increased to $45,000 effecting which a form has been sent to Forthryt. Forthryt put his
signature on the same and went to the post office to post the same and handed over the envelop to a postal clerk for the
purpose of posting. By that time he got an offer from Pickwick who made another offer to purchase the book for $45,000
which Forthryt agreed owing to the reputation of Pickwick in treating the authors good. He would be entitled to form the
contract has the form to Boswold has not been posted yet and no contract has been formed and he has recovered the
envelop before it court have been posted as can be concluded from the case of
Adams v Lindsell (1818) B & Ald 681.
The time at which both Boswold and Pickwick has effected the offer and acceptance to sell the book, the contract has
been concluded.