Letter of Advice on the Acquisition Case of Rigby Corporate

This letter of advice discusses the legal aspects of the acquisition case of Rigby Corporate. It uses the ILAC method to highlight the key elements of a valid contract and explains how Rigby Corporate breached the contract. The letter also discusses the importance of negotiation in good faith and how it can lead to the development of a valid contract. The subject is business law and the course code and college/university are not mentioned.

Business law assignment

Business Letter
To
Samantha
Departmental Manager
Events Management Pty Ltd
Subject: Letter of Advice on the Acquisition Case of Rigby Corporate
Dear
Samantha,
Hope this letter finds you in good health. I have come to know about the issues regarding the
acquisition case of Rigby Corporate. I heard they want to back out of the sale and hence felt the
sense of urgency to quickly inform certain key legal aspects about the case which might help the
company to get upper hand in case law is the option. I shall use the ILAC method to describe the
case and highlight these aspects properly.
Issue 1
To sue Rigby Corporate for breaching the contract it is extremely important to establish that the
organisation got into a contract with Event Management Pty Ltd.
Law 1
In order to establish the aspect of contract with Rigby Corporate it is extremely important to
understand whether there was a contract established between the two company or not. According
to the Australian contract law a contract is considered established when there is the presence of
all the key elements of contract is there. In this case the availability of the clauses could be seen
available that makes the contract partial. For instance the presence of offer and acceptance is
there as both the company agreed upon a price to make the transaction. In this case the Event
Management Pty Ltd put forward an offer to the organisation Rigby Corporate and they accepted
it based on the consideration of a purchase price of $750,000. It is important to note that for a
contract to get established it is important to make sure the offer is clear. The case of Smith v
Hughes Court of Queen’s Bench [1871] LR 6 QB 597 showed that offer and acceptance are two

elements to establish a valid contract1. This is considered a cult case because it showed that even
though subjective intention of parties could differ but the sole intention was to get involved in
the transaction. Pretty similar to this case the parties in the present case agreed to get involved in
the contract which clearly shows that they had clear intention of getting into a contract. Another
major aspect is acceptance in this case which actually shows the intention and interest of other
parties to get involved in the transaction. Pretty unlike the case of Crown v Clarke (1927) 40
CLR 227 showed that silence is not considered as acceptance to the offer and hence it is
extremely important to note that in the present case the acceptance came pretty clearly which
shows that the elements of the contract is clear2. The consideration is also pretty clear in this case
because Rigby Corporate agreed to sell the property along with assets for the amount of
$750,000. Hence it is clear that consideration was also there which means that both the
organisations were interested in making sure the sell process is smooth as no one had any
objections regarding the transaction. There was a condition that Rigby Corporate’s managing
director will be playing role of a consultant for a period of 12 months which have been agreed by
the purchasing organisation. This acted as a condition for the selling organisation and it was
agreed to which also seals the deal for the other organisation. Condition is considered to be an
extremely important aspect in a contract as discussed in the case of Tramways Advertising Pty
Ltd v Luna Park (N.S.W) the role of condition have been clearly discussed which showed that it
is extremely important to make sure that condition is effectively managed and implemented to
successfully establish a contract. In this case it is clear that offer, acceptance, condition and
consideration are there3. There was even intention to develop a legal contract as the Events
Management Pty Ltd has already developed a rough contract to continue with the process of
operation and enforce the acquisition effectively.
1 Carter, John W., David J. Harland, and Kevin E. Lindgren. Contract law in Australia. (MICHIE, 1996).
2 Schwenzer, Ingeborg, Pascal Hachem, and Christopher Kee. Global sales and contract law. (Oxford University
Press, 2012).
3 McKendrick, Ewan. Contract law: text, cases, and materials. (Oxford University Press UK, 2014).

Application 1
From the present case it is clear that there are certain elements of a valid contract present in the
case. Offer, acceptance, consideration, intention and condition are there which makes it a clear
case of breach of contract. Rescission is only possible when there is misrepresentation from any
party in an agreement but apparently it could be said that there is no issue which could actually
breach the contract. The breach of contract would mean that a party has not gone with the
process of establishing the contract in a transparent manner which is not true in this case. From
the above presented rules considered suitable under the common law of Australia the contract
could be considered valid. To conclude the present issue it could be said that there is no way it
could be argued that the contract did not exist4. The negotiations which took place during the
initial period of business talk in this case involves the discussion of business worth, payment,
transference of power, discussion on condition, offer and acceptance which clearly makes the
negotiation enough to state that there was a valid contract developing between two companies.
Conclusion 1
Since Event Management Pty Ltd has a lot at stake in this case it could be said that it is clearly
pretty unprofessional and illegal for the organisation Rigby Corporate to deny from the promises
they made to sell the company to the formerly mentioned organisation as the elements of a valid
contract are present in it. Hence it could be said that Rigby Corporate breached the contract as
after all the negotiations they did not want to move ahead with the acquisition which is clearly a
breach of contract and hence they should be legally penalised and the contract should be
continued without further delay. A contract could only be rescinded when there is a
misrepresentation from the offeree but in this case Event Management Pty Ltd did not
misrepresent any information or scenario which is likely to make things worse for the
organisation Rigby Corporate and are likely to face legal implications.
Issue 2
4 Paterson, Jeannie Marie, Andrew Robertson, and Arlen Duke. Principles of contract law. (Thomson Reuters
Professional Australia, 2012).

To establish that Rigby Corporate breached the contract it is important to establish that the
business negotiations took place were serious enough to establish a contract existed.
Law 2
Business negotiation is one complex aspect and it is extremely important to note that business
involve in many layers of discussion before sealing a deal. The very first aspect of negotiation is
good faith. Negotiations are always needed to be done in good faith. In this case it is clear that
the offering party did not hold anything back which is important for a negotiation to establish a
contract. Since there was offer, acceptance and even consideration it could be said that the
negotiation was successful. Hence it is clearly illegal to not go ahead with the deal once the
negotiation is done in good faith. It remains questionable that whether negotiation in good faith
is enforceable or not because it is most of the time not considered as an obligation. As stated by
an English court that negotiations might not end up being successful contracts which is clearly
shown in the case of Coal Cliff Collieries Pty Ltd v Sijehama Pty Ltd where long negotiations
failed even after discussions5. It is important to note that the present case is slightly different
because in this case negotiation process carried out involved offer, acceptance and consideration
and in fact conditions have been effectively agreed upon by both the parties which clearly show
that negotiation in this case has enough content to transform into a valid contract. In a case of
Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service the
Supreme Court of NSW stated that it is important to have a framework so that it is easier to
ascertain the ability of negotiation to transform into a valid contract as the elements of
negotiation are uncertain. This case also showed that it is important to act in an honest manner in
a negotiation which is the primary obligation of the parties. In this case there is no evidence put
forward which shows dishonesty in negotiation6.
5 Cartwright, John. Contract law: An introduction to the English law of contract for the civil lawyer. (Bloomsbury
Publishing, 2016).
6 Ayres, Ian, and Ian Ayres. Studies in Contract Law. (Foundation Press, 2012).

Application 2
From the above discussion it is clear that negotiation not often form a contract as the elements in
a negotiation process are not ascertainable which makes it complicated to understand whether a
contract could be established or not. In the present case the negotiation that took place between
the two companies contained all the key elements of contract where one party offered and the
other accepted which clearly shows that the first stage of contract has been passed to validate it
legally7.
Conclusion 2
To conclude it could be said that a simple undertaking to negotiate in good faith is not likely to
be held enforceable by the court of law until and unless there is an identifiable process through
which the negotiation could be considered as a movement toward successful development of
contract. In this case it is clear that the negotiation had key elements of contract which clearly
makes the present negotiation different and provides a platform to understand that Rigby
Corporate were wrong to rescind such a negotiation and hence it could be said that negotiation in
this case led to existence of a contract8.
7 Pultrone, Caterina. "An overview of contract farming: legal issues and challenges." Unif. L. Rev. 17 (2012): 263.
8 Marsnik, Susan J., and Dale B. Thompson. "Using contract negotiation exercises to develop higher order thinking
and strategic business skills." (Journal of Legal Studies Education30, no. 2 2013): 201-248.

Bibliography
Ayres, Ian, and Ian Ayres. Studies in Contract Law. Foundation Press, 2012.
Carter, John W., David J. Harland, and Kevin E. Lindgren. Contract law in Australia. MICHIE,
1996.
Cartwright, John. Contract law: An introduction to the English law of contract for the civil
lawyer. Bloomsbury Publishing, 2016.
Marsnik, Susan J., and Dale B. Thompson. "Using contract negotiation exercises to develop
higher order thinking and strategic business skills." Journal of Legal Studies Education30, no. 2
(2013): 201-248.
McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK),
2014.
Paterson, Jeannie Marie, Andrew Robertson, and Arlen Duke. Principles of contract law.
Thomson Reuters (Professional) Australia, 2012.
Pultrone, Caterina. "An overview of contract farming: legal issues and challenges." Unif. L.
Rev. 17 (2012): 263.
Schwenzer, Ingeborg, Pascal Hachem, and Christopher Kee. Global sales and contract law.
Oxford University Press, 2012.