Law of business obligations Assignment PDF
Added on 2021-06-14
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Law of Business Obligations1Law of Business obligations
Law of business obligations2Answer 1Issue:Whether there is any valid contract between the Jane and Sarah?Law:The most important element of the offer is that, its terms are clear and allow the party to enter into a contract only by accepting the offer, and it is necessary that offeror had intention to be bound by the contract terms. If any statement made by offeror lack any of these elements then it is considered as the invitation to treat and not an offer. An invitation to treat is not converted intothe binding contract with mere acceptance (Harvey v Facey [1893] AC 552). However, advertised goods related to sale make an offer if adequate details for the goods are given (Carlill v Carbolic Smoke Ball Co. Ltd [1893] 1 QB 256) (NZ law commission, n.d.). Application:In the present case, both the parties negotiated on the price of the lounge suit and Jane stated to Sarah that she can purchase the lounge suit for $3000. In this, it is an invitation to treat and not an offer because two important elements of the offer are not presented in this case. This can be understood through case law Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 410, in this case court stated that in a normal shop goods were displayed and customers can choose whatever they want, but there was no contract till the time article required by the customer was indicated and the same was accepted by the shopkeeper. In this case, Jane holds the power to accept the offer which is indicated by the Sarah. Therefore, there is an invitation to treat and not an offer because off which no contract exists between the parties. Conclusion:There is no valid contract between the Sarah and Jane.
Law of business obligations3Answer 2Issue:Whether QB is liable to make payment of $10000 to the Jason in context of bonus promised by QB?Law:In case promisee holds any obligation towards the promisor under the contract, then there is a general rule that performance of the existing obligation under the contract will not considered as the good consideration unless some additional advantage is stated. In some cases, it is complex to consider whether any additional benefit is provided or not. Existing duty performance clearly avoids the issues that are related with the non-performance. This rule was established in case lawStilk v Myrick, 1809 2 Camp 317; [1809] EWHC KB J58, 170 ER 1168. Exception related to thisrule were stated in case law Pao On v Lau Yiu Long, [1979] 3 WLR 435. Application:In the present case, Jason is under obligation in context of original contract to provide 12 carpets to the QB till early November, but later Jason supply only four carpets in the August and stated that because of the problem in equipment he is not able to supply remaining 8 carpets before the due date. Because of this QB promised that he paid bonus of $10000 if carpets are delivered on time. In this existing duty rule is applied and the facts of the case are similar to the case law Williams v Roffey Bros and Nicholls (Contractors) Ltd, (1990) 1 All ER 512. As per the provisions of this case, QB is liable to pay $10000 bonus because in this case QB owns liability towards the third party and performance of action of time would provide him benefit of more than $40000 and QB does not made this promise because of any fraud on part of Jason. Therefore, performance of Jason can be considered as the good consideration.Conclusion:QB is liable to pay $10000 as bonus to the Jason.
Law of business obligations4Answer 3.1In this case the central issue is whether Jacob is liable to make the payments of the loan taken by City car sales. Section 6 of the Minors Act 1969 states that, maximum contracts are not enforceable against the minors and contract is enforceable only in situation when court believes that contract is fair and reasonable. For deciding whether contract is fair or not, Court consider following points:Situations under which contract is formed.Type of contract, which means in loan contract responsibility of the minor is comparatively less.Nature and value, which means an expensive car, can cause more consequences for minor. Age of the minor and means.This can be understood through case law Morrow & Benjamin Ltd v Whittington (1989) 3 NZLR 122, court held that it was the complete discretion of the Court to consider the contract fair and reasonable. In the present case, Jacob is 17 years old while entering into the contract and as per section 6, Jacob is the minor and any contract against the minor is not enforceable, unless such contract is fair and reasonable. In the present case, contract is not fair because City car sales know about theminority of the Jacob and still enters into contract with him. In case, Wine Country Credit Unionv Rayner [2008] 2 NZLR 698 Court stated that contract was not enforceable because contract was not fair. Therefore, Jacob is not liable to make the payments of the loan taken by City car sales (Gilbert, n.d.). Answer 3.2The main issue in this case is whether father of the Jacob is liable to make payment of the city car sales in context of guarantor of loan. Section 10 of the Act states the provisions related to the guarantees and indemnities. As per this section, every contract related to the guarantee and indemnity by the person other than a minor need to accept the liability in case minor fails to fulfill his obligations.
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