Launching a new website for the Lame Duck Restaurant

Running head: INTRODUCTION TO BUSINESS LAW
1
Introduction to business Law
Name
Institution

INTRODUCTION TO BUSINESS LAW 2
The Lame Duck Restaurant owned by Johnny appoints a sales and marketing
representative (Summer) to design and launch a new website. Summer is very bright and her
design looks amazing. As the website is exceptional, Johnny decides to revamp the pricing
system and put 15% mark-up on all food. Summer develops a beautiful design of the new
pricing system and posts it online.
Two weeks later, after the prices are changed, Li books the wedding using the menu he
found on one of the tables. Summer mistakenly accepts the booking, asking Abu from
accounts to accept the deposit and finalise the invoice. Li calls, accepts the quoted price, pays
the deposit and books the date for the wedding. The same day, Li sends out invitations to all
her friends studying at CDU. The day before the banquet, the error in the quotation is
discovered. Johnny gets involved, calls the customer and says that the Lame Duck Restaurant
cannot host the wedding (because the quotation was made in error). However, Li insists that
‘we have a contract’ and says that under the law the Lame Duck Restaurant must deliver.

INTRODUCTION TO BUSINESS LAW 3
(a) Advise Johnny, whether the contract exists.
Issues
i) Whether the contract was valid?
ii) Whether it was an invitation to treat?
Rules/laws
The law of contract
Common law
Fisher vs. Bell
Application of rules
Under common law there are three basic elements of contract; an offer, acceptance and
consideration. The agreement between Li and Summer is considered as a valid agreement
under the common law since it meets all the requirements therefore there are contractual
obligations created for each party.
Under the law of contract an agreement is considered valid once all elements of a valid
contract can be proved. There are some factors that would render a contract invalid; when
duress is established at the time of making a contract then the contract cannot be enforced
before a court of law. If the contract is based on misrepresentation so as to mislead the other
party to be part of the contract then it would be considered invalid.
Parties are bound by the terms of a contract and an aggrieved party is entitled to remedies
for breach of contract.
There are five elements of a valid contract; this includes offer, acceptance, purpose to be
bound (intention), capacity to contract (mental capacity and capacity in terms of age) and