Business Law Los Angeles Issue 2022

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

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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

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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

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working as an associate at the Subiaco marketing firm. In the furtherance of this planning he
telephoned his cousin Cliff, who has been running a travel agency. Cliff sends an email to Rick
offering him to supply airline tickets for travelling to Los Angeles and accommodation while his
stay there for experiencing Hollywood landmarks, attending studio tours and purchasing
memorabilia. The officer has also mention his arrival in Los Angeles to be conducted on Friday
prior to the first studio tour and his stay there for 3 weeks. The consideration price for the trip
has also been mentioned. This can be treated as a valid offer as it has been made in compliance
with all the elements of a valid offer. The offer has been validly communicated to the offeree. It
has been containing certain terms which are unambiguous. All these points towards the validity
of the offer made by Cliff. This can be supported with the case of Smith v Hughes [1960] 1 WLR
83010.
As to the acceptance is concerned, it has been mentioned in the offer that the offer is required to
be accepted before 12 noon on Wednesday by email. In pursuance to the offer Rick has accepted
the offer for tickets and accommodation by sending an email to Cliff at 11:30 a.m. of
Wednesday. However, for a dispute between Cliff and his landlord the acceptance has not been
retrieved by cliff and has never came to the knowledge of Cliff. But it can be stated that as per
the provisions contained in s 14A, the Electronic Transactions Act 1999 (Cth)11, 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.
Hence it can be stated that the contract has been formed validly between Rick and Cliff.
10 Smith v Hughes [1960] 1 WLR 830
11 The Electronic Transactions Act 1999 (Cth), s 14A

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Conclusion
There has been legally enforceable contract formed between Rick and Cliff as per the elements
of agreement are concerned.
Question 2
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 intention and consideration are
concerned.
Rule
Any agreement that has been created between two parties is required to be supported by the
intentions of each of the parties to create a legal bonding for the purpose of being escalated to the
status of a contract. This can be illustrated with the case of Simpkins v Pays [1955] 1 WLR
97512.
The agreements of commercial nature which includes business agreements are required to be
presumed to have in a valid contract. Commercial agreements are always assumed to have the
intention between the parties to the same with respect to creation of a legally enforceable
relationship. This can be illustrated with the case of Rose & Frank Co v JR Crompton & Bros
Ltd [1924] UKHL 213.
On the other hand, agreements created within social arrangements are generally assumed to have
created in absence of any intention of being legally bound by the terms of the same. Hence, the
agreements of social nature are generally treated as not to be regarded as enforceable and being
12 Simpkins v Pays [1955] 1 WLR 975
13 Rose & Frank Co v JR Crompton & Bros Ltd [1924] UKHL 2

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rendered as a valid contract. This can be illustrated with the case of Balfour v Balfour [1919] 2
KB 57114.
However, the recent development has rendered the contention of treating social agreements to be
invalid contract and commercial agreement to be valid as a contract to be rejected. The courts in
the present developments has agreed to the objective test to be applied instead of the subjective
test. This requires the arrangement of the agreement as existing between the parties to be
considered for deciding upon the presence of the intention of the parties to create legal
relationship. This can be illustrated with the case of Ermogenous v Greek Orthodox Community
of SA Inc [2002] HCA 815.
Another mandatory requisite for the purpose of creating valid contract is the presence of
consideration forming the subject matter of the contract. This can be illustrated with the case of
Currie v Misa [1875] LR 10 Ex 15316. As per the definition provided in the case of Dunlop
Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] UKHL 117, consideration as a requisite of a
valid contract is the benefit that both the parties has been accrued with under the contract.
However, a valid consideration is construed if it has been agreed upon by the parties to the
contract. This can be illustrated with the case of Wade v Simeon [1846] 2 CB 54818. For this
purpose, it can be stated that consideration is required to be present and sufficient and is not
necessarily be mandatory to be adequate. This can be illustrated with the case of White v Bluett
[1853] 23 LJ Ex 3619. However, past consideration would not be construed as a valid
14 Balfour v Balfour [1919] 2 KB 571
15 Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8
16 Currie v Misa [1875] LR 10 Ex 153
17 Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] UKHL 1
18 Wade v Simeon [1846] 2 CB 548
19 White v Bluett [1853] 23 LJ Ex 36

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consideration for the purpose of renting a contract to be valid as has been established in the
Eastwood v Kenyon [1840] 11 Ad & E 43820.
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
working as an associate at the Subiaco marketing firm. In the furtherance of this planning he
telephoned his cousin Cliff, who has been running a travel agency. Cliff sends an email to Rick
offering him to supply airline tickets for travelling to Los Angeles and accommodation while his
stay there for experiencing Hollywood landmarks, attending studio tours and purchasing
memorabilia. The officer has also mention his arrival in Los Angeles to be conducted on Friday
prior to the first studio tour and his stay there for 3 weeks. The consideration price for the trip
has also been mentioned.
Under this discussion, the first thing that needs to be considered is whether there is an intention
between Rick and Cliff to create a legal binding between themselves. As they have been cousins
in relation, applying the principles established in the case of Balfour v Balfour [1919] 2 KB 57121
can be stated that the agreement is more of a social agreement and has no validity under the eyes
of law. However, this contention cannot be treated as conclusive while determining the
agreement between Rick and Cliff as it has been contended in the case of Ermogenous v Greek
Orthodox Community of SA Inc [2002] HCA 822, the arrangement of the agreement as existing
between the parties to be considered for deciding upon the presence of the intention of the parties
to create legal relationship. Hence, owing to the commercial nature of the agreement between
20 Eastwood v Kenyon [1840] 11 Ad & E 438
21 Balfour v Balfour [1919] 2 KB 571
22 Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8

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Rick and Cliff and the arrangement between them to be bound by legal relationship would render
the situation to point towards the existence of the intentions of the party name lyric and cliff to
have the objective of creating legal relationship.
Again, on the other hand, as to the element of consideration is concerned, there has been an offer
made by Cliff towards Rick to provide him with supply of airline tickets for travelling to Los
Angeles and accommodation while his stay there for experiencing Hollywood landmarks,
attending studio tours and purchasing memorabilia. Moreover, the offer has also contained a
price of $10700 to be paid by Rick against the services that has been promise to be delivered by
Cliff. And this arrangement, supply of airline tickets for travelling to Los Angeles and
accommodation while his stay there for experiencing Hollywood landmarks, attending studio
tours and purchasing memorabilia is required to be treated as a consideration for Rick under the
contract between him and Cliff. On the other hand, the price of $10700 to be paid by Rick
against the services that has been promised to be delivered by Cliff is the consideration from the
contract which will be accrued to Cliff.
Hence, 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 intention and consideration are
concerned.
Conclusion
There has been legally enforceable contract formed between Rick and Cliff as per the elements
of intention and consideration are concerned.

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Bibliography
Appleson v. Littlewood Ltd. [1939] 1 All ER 464
Balfour v Balfour [1919] 2 KB 571
Currie v Misa [1875] LR 10 Ex 153
Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] UKHL 1
Eastwood v Kenyon [1840] 11 Ad & E 438
Entores Ltd v Miles Far East Corporation [1955] EWCA Civ 3
Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8
Felthouse v Bindley (1862) EWHC CP J 35
Jones v. Vernon’s Pools Ltd., (1938) 2 All ER 628
Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] EWCA
Civ 6
Powell v Lee [1908] 99 LT 284
Robophone Facilities Ltd v Blank [1966] 1 WLR 1428
Rose & Frank Co v JR Crompton & Bros Ltd [1924] UKHL 2
Simpkins v Pays [1955] 1 WLR 975
Smith v Hughes [1960] 1 WLR 830
The Electronic Transactions Act 1999 (Cth)

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Wade v Simeon [1846] 2 CB 548
White v Bluett [1853] 23 LJ Ex 36