BUS2010 Business Law Case Assignment: Analysis of Charlie and Nell

This case study analyzes a Business Law scenario involving Charlie Martin and PHOOCI, focusing on contract formation, breach of contract, and misrepresentation. The analysis addresses whether a valid contract existed, considering elements like offer, acceptance, and consent, and evaluates potential breaches, particularly concerning payment obligations. It also examines the role of standard form contracts, entire agreement clauses, and the consequences of misrepresentation. The study further explores a secondary agreement between Charlie and his sibling, assessing its validity, and considers potential remedies and defenses, including contributory negligence and the possibility of extending payment deadlines. The document references relevant legal precedents to support its arguments and conclusions.

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

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Answer to Question No 1
Contract is an agreement which binds the parties with some contractual obligations in
order to create a legal relations between the parties (Stone & Devenney, 2017). It is one of
the essential requirements of the contract that the parties agree to the terms of the contract. In
this case, it was required that Charlie Martin, prior to enter into the franchise agreement, have
understood all the terms of the contract. He should not have entered into the agreement
without having the proper knowledge about the terms of the contract that he is signing. In
Bannerman V White it was observed that if a term is of importance that a party would not
have otherwise entered into the contract, the term is an essential one and should be agreed by
all the parties. It must be incorporated in the contract.
Answer to Question No 2
A standard form of contract is referred to a contract where the terms are decided by
one party and the other party has no or little capability to negotiate more terms to place them
in a favourable position (McKendrick, 2017). This is often referred as a take it or leave it
contract. A standard form of contract might be used in such a scenario, to avoid any conflict
of interest. If there were a standard form of contract between Charlie Martin and PHOOCI,
the chances of negotiations with the terms were less, which would not lead to the occurrence
of such situations. A clear explanation of terms is provided in the standard form of contract,
which helps in avoiding any confusion about the terms after entering into a contract.
Answer to Question No 3
In this case, there were no valid contract between Charlie Martin and PHOOCI. Apart
from offer and acceptance, the elements to constitute a valid contract are the mutual and free
consent of parties, intention to create legal relations and a certain meaning of the agreement.
In this case the requisites for a valid contract was not satisfied. In this case, prior to entering

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into the contract, the terms which PHOOCI explained to Charlie was essential as he would
not have entered into the contract if had a knowledge about the actual terms that were stated
in the contract. The entire terms were stated to him in a deceptive way to impress him and
made him enter into the contract.
Answer to Question No 4
If it is assumed that there was a valid contract between the parties, it can be observed
from the facts of the case that there was a breach of contract by Charlie Martin. In this case
Charlie failed to make his service fund payment which was a material breach. In a situation
where material breach occurs, the party who has committed the breach is either compelled
with specific performance or to pay damages for any such loss suffered for the non-
performance. It was held in Fletcher-Harlee Corp. v. Pote Concrete Contractors, Inc., 482
F.3d 247 (3d Cir 2007) that a breach of an essential terms of the contract should be
considered as a material breach, for which the default party may be liable for specific
performance or damages.
Answer to Question No 5
In order to succeed in an action for breach, in this context, the plaintiff must
prove it in the Court that the term which the defendant has breached was an essential term of
the contract. The plaintiff must demonstrate it that the term was of such a nature that the
breach of it would vitiate the purpose of the contract. PHOOCI has to show that otherwise the
term to make the payment under this franchise agreement by Charlie, they would not have
entered into the contract.

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Answer to Question No 6
There was a valid contract between Charlie Martin and his younger sibling. Charlie
convinced his sibling to pay $50000 in the consideration of 10% of ownership in his business.
This agreement was understood and accepted by both the parties and they had the intention to
enter into the contract which can be observed from the intention to exchange consideration.
Answer to Question No 7
Court may grant extension of time in case of inability to make payment for overdue
accounts. When a party has caused a material breach and asked for specific performance, the
party may consider and allow an extra time to the party to make payment before taking a
legal action.
Answer to Question No 8
Entire agreement clause is featured in contract. The Court while analysing the entire
agreement clause would apply usual rule of interpretation. The main objective of this clause
is to have a clear understanding about the document that it shall constitute the whole
agreement between parties to ensure the contractual obligations. In the case of AXA Sun Life
Services Plc v Campbell Martin Ltd and Others, it was held that it is required for a party
make a clear statement as to the entire agreement to effectively exclude the liability of a
party. Herein the case, the entire agreement clause would effectively supersede the terms
which was stated to Charlie prior to enter into the contract.
Answer to Question No 9
In this case, Nell Madison misrepresented the facts or terms of the contract to a
Charlie Martin, in a deceptive way. The terms which were written in the contract were
different than that of the terms which were made understood by Charlie at the time of

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explaining the terms. Additionally there were a fault in the part of Charlie that he did not go
through the terms which were mentioned in the written contract. There was a contributory
negligence on the part of Charlie in the misrepresentation made by PHOOCI. The situation
could have been avoided if the parties had acted in a responsible way. Hence, it would be
suggested to them to avoid litigation, they should fix the terms of the contract and come to a
mutual decision for the situation. Nell should consider the fund payment clause he
misrepresented the terms to Charlie before entering into the contract.

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References:
AXA Sun Life Services plc v Campbell Martin Ltd [2011] EWCA Civ 133
Bannerman v White (1861) 10 CB NS 844
Fletcher-Harlee Corp. v. Pote Concrete Contractors, Inc., 482 F.3d 247 (3d Cir 2007)
McKendrick, E. (2014). Contract law: text, cases, and materials. Oxford University Press
(UK).
Stone, R., & Devenney, J. (2017). The modern law of contract. Routledge.