Business Law Los Angeles Issue 2022

Running head: BUSINESS LAW
Business Law
Name of the Student
Name of the University
Author Note

BUSINESS LAW1
Question 1
Issue
Whether it can be concluded from the given scenario that there has been legally enforceable
contract formed between Rick and Cliff as per the elements of agreement are concerned.
Rule
The foundation of a legally enforceable contract lies in the formation of a valid agreement
consisting of an offer extended by one party to another and duly accepted by the other party. This
can be illustrated with the case of Appleson v. Littlewood Ltd. [1939] 1 All ER 4641.
Offer can be construed as the expression of the intention of a person to bind the other with
respect to certain terms. The validity of an offer is required to be determined under the objective
test as per the principles established in the case of Smith v Hughes [1960] 1 WLR 8302. This test
would not only consider the subjective intentions of the parties involved but also will consider
the view of an individual of reasonable prudence placed under similar situation. Again, as has
been established in the case of Jones v. Vernon’s Pools Ltd., (1938) 2 All ER 6283, the terms of
the contract needs to be certain and should not have any ambiguity and is required to be
communicated to the person to whom it has been made.
Acceptance on the other hand is required to be construed as the consent of the person to whom
the offer has been made towards the terms of the offer. This can be illustrated with the case of
Robophone Facilities Ltd v Blank [1966] 1 WLR 14284. Once an offer has been accepted it
results into the formation of a valid contract that creates rights and obligations for the parties
1 Appleson v. Littlewood Ltd. [1939] 1 All ER 464
2 Smith v Hughes [1960] 1 WLR 830
3 Jones v. Vernon’s Pools Ltd., (1938) 2 All ER 628
4 Robophone Facilities Ltd v Blank [1966] 1 WLR 1428

BUSINESS LAW2
involved and is binding up in them. This can be illustrated with the case of Powell v Lee [1908]
99 LT 2845. Acceptance needs to be communicated as for the method mentioned in the terms of
the offer for the purpose of gaining validity. This can be last created with the case of Felthouse v
Bindley (1862) EWHC CP J 356.
As per the rule of communication in case of instantaneous form of communication, the
acceptance is said to have done communicated to the offeror when the same has been received
and acknowledged by the offer. This can be illustrated with the case of Entores Ltd v Miles Far
East Corporation [1955] EWCA Civ 37.
The time during which the electronic communication is said to have need effectively and
construed to be received by the person to whom it has been made is the time when the
communication has entered the system of the person to whom it has been made so that it has
become retrievable by that person irrespective of the knowledge of the person to whom it has
been made with respect to the same. This principle has been enumerated in s 14A, the Electronic
Transactions Act 1999 (Cth)8. This can also be explained with the case of Pharmaceutical
Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] EWCA Civ 69 in which
has been contended that the acceptance is said to have communicated when it reaches the system
of the person to whom it has been made irrespective of his knowledge about the same.
Application
In the instant scenario, Rick has been planning a trip to visit significant Landmark of Hollywood
and undertake studio tours and purchase more memorabilia from the money he has saved while
5 Powell v Lee [1908] 99 LT 284
6 Felthouse v Bindley (1862) EWHC CP J 35
7 Entores Ltd v Miles Far East Corporation [1955] EWCA Civ 3
8 The Electronic Transactions Act 1999 (Cth), s 14A
9 Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] EWCA Civ 6