LAWS20061 Management Law | Assignment
Added on 2020-03-16
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Question 1Issue: the issue in this case is if the agreement signed by Susan is legally enforceable. For thispurpose, it needs to be seen if the parties had the intention of creating legal relations. Similarly, italso needs to be seen if the contract has been vitiated on the grounds of undue influence.Rule: the purpose of introducing the requirement of the parties to have the intention of enteringinto, media relations have been introduced by the contract law for the purpose of excluding thecases that are inappropriate for action by the court. The reason is that every contract does notresult in the creation of a legally enforceable contract. For example, when two friends havedecided to meet at a pub, there can be a moral duty to honor this promise but there is no legalduty to honor such a promise. The reason is that generally in case of such agreements, it is notthe intention of the parties to be legally bound and the law also follows the wishes of the parties(Jones v Padavatton, 1969). For the purpose of deciding which agreements can be enforced bythe law and have the intention of entering into legal relations, a distinction has been drawn by thelaw between social and domestic agreements on one hand and the agreements made incommercial context, in the other (Balfour v Balfour [1919).Similarly in the present case, it also needs to be seen if the contract is not vitiated by undueinfluence. It can be said that undue influence is present, in case of an agreement when thecontract has been created due to the pressure falling short of duress (CIBC Mortgages v Pitt,1994). Therefore the party that has to face such pressure, may have a cause of action in equity toset aside the contract on the basis of undue influence (Bank of Credit & CommerceInternational v Aboody, 1990). Undue influence is present when the relationship present betweenthe parties had been exploited by one party in northern to gain an unfair advantage.
Application: in the present case, Susan had reluctantly signed the agreement with provided thatin case of a divorce, she will take only $100,000. As the contract was signed, it can be concludedthat the parties had the intention of creating legal relations. However, the present contract isinitiated by undue influence. Tom had exploited the relationship with Susan in order to gain anunfair advantage. Therefore it is clear that Susan can avoid the contract on the basis of undueinfluence.Conclusion: in the present case, Susan may avoid the contract signed by her on the basis ofundue influence.
Question 2Issue: The issue in this case is if Jason can enforce the contract against Steve on the grounds ofpromissory estoppel.Rule: The doctrine of promissory estoppel provides that a promise can be enforced by the law,although the promise has been made without the presence of consideration, if the promisor hadmade the promise to the promisee and the promisee had been relied on such promise to his or herdetainment (Crabb V. Arun DC, 1976). The purpose behind the introduction of promissoryestoppel is to prevent the promisor from claiming later on that an underlying promise should notbe enforced by the law (Central London Property trust Ltd V. High Tree House Ltd., 1974).Application: in the present case, Jason issued an advertisement regarding the sale of his car.Steave inspected the car thoroughly and told Jason that he was ready to purchase the car if it hada turbo engine, leather seats and tinted windows. Relying on this statement, Jason spent $50,000on installing all these items in the car. However, later on, Steve refuses to purchase the car. Insuch a case, the doctrine of promissory estoppel can be applied and Steve can be made topurchase the car (Total Metal Manufacturing Ltd V. Tungsten Electric Co Ltd., 1955). In such acase, it can be conceded that the contract is present between the parties even if the considerationis not present (Hughes V. Metropolitan Railway, 1877).Conclusion: On the basis of the doctrine of promissory estoppel, Steve can be held legally boundto purchase the car from Jason.
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