Business Law - Contract Formation, Remedies, and ADR Analysis

This business law assignment delves into contract law principles, examining the formation of contracts between Alan and Charleen, Bernard, and Damien. It analyzes the elements required for a valid contract, including offer, acceptance, and consideration, and applies these principles to the provided scenarios. The assignment also explores the legal positions and remedies available to each party, considering issues such as capacity, counteroffers, and breach of contract. Furthermore, it addresses alternative dispute resolution (ADR) methods, specifically mediation and arbitration, offering insights into their advantages and disadvantages. The analysis incorporates relevant case law to support the legal arguments and conclusions regarding the validity of the contracts and the potential remedies available to the parties involved.

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

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i.
Issue
The issue in this case is to determine that whether a valid contract has been formed between Alan
with Charleen, Bernard and Damien so that the strength of their legal claims can be analyzed.
Rule
a. According to McKendrick (2014) a contract is a agreement which has legal effects on the
parties entering into it and the beach of which can result in compensation to be provided
to the aggrieved party by the wrong doer.
b. There are seven elements which are required to form a legal agreement include an offer,
acceptance, consideration, Intention to create legal relationships, Vitiating Factors,
capacity and illegality.
c. According to prof. Trecitel an offer is an expression which signifies the willingness of a
party to get into a contract based on specific terms, the expression has to have the
intension off being bound by law as soon as it would be accepted by a person or group to
whom it had been made.
An offer is different from an invitation of offer. Invitation of offer are made to invite
another person to make an offer and do not carry any legal obligations. They are an
incomplete version of an offer. A offer for selling goods can be stated as complete if it
consists of terms like price, mode of delivery, date of delivery, mode of payment and
description of goods. A offer is considered to be complete if a reasonable person finds it
complete and gets induced by it into a contract.
d. As stated by Atiyah (2006) an acceptance is the unequivocal and final expression of
providing assent to an offer made by another person in relation to a contract. An

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acceptance is the process through which the offeree provides his signification with
respect to his will of getting into a contract with the person making the offer on the same
terms which have been offered by the person. A contract cannot come to an existence
without a legal acceptance.
An acceptance cannot contain any term which was not present into the offer. Neither can
the acceptance contain a term which has the effect of omitting any of the terms present in
the offer. The acceptance cannot be completed unless it has been communicated to the
person who has made the offer. It can be communicated in any reasonable form unless a
specific from is specified by the offer.
e. Intention of Creating Legal responsibility- Chen-wishart (2016) defines ICLR as the wish
of the parties to a contract to bind each other to the terms of the contract in a legal
manner. If the parties do not intend to be bound legally a contract does not exists.
f. Capacity – person below 18 years, those having an unsound mind and those who are
forbidden by law cannot enter into a contract.
Application
Only the person who has been provided with the offer can accept the offer. According to the
facts of the case as Damien is not on Alan’s friend list he is not capable of accepting the offer as
it has been made only to Alan’s facebook friends. However, Alan was sent an SMS by Damien
which accounted to an invitation to treat. The invitation had been accepted by Alan who made an
official offer to Damien to sell the book at $200. The offer was accepted by Damien on 4th
November by paying him the money. Thus there is a valid contract between Damien and Alan.

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As Charleen is a student of “0” grade she does not have the ability of getting into a contract
with Alan. There was in addition, no ICLR by Alan as he was not thinking about the contract
while making his assent. Thus there is no contract between the parties
Bernard wanted to purchase the book with the notes at $150. However the offer price was
$200. The offer made by Bernard was a counter offer and a rejection of the offer made by Alan.
A fresh offer was again made by Alan where the price of the book and notes were $200. As per
the principles of postal rule the offer was accepted by Bernard of 4th November. Thus a valid
contract exists between them.
Conclusion
There was a valid contract of Alan with Damien and Bernard but not with Charleen.
ii.
Issue
Analyzing the legal position as well as remedies available to Charleen
Rule
Minors do not have the capacity to enter into a contract
In the case of Nash v Inmam the court had the issue of determining the validity of a contract with
a minor. The plaintiff had sold $145 worth of clothing to the minor defendant. It was held by the
court in this case that as the defendant had adequate clothing at the time the contract was made
the contract cannot be considered as a contract of necessity and therefore is not valid.

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In the case of Merritt v Merritt it was ruled that domestic relationships do not comprise a
contract
Application
According to the facts of the scenario Charleen is 16 years old and therefore is a minor. The
book is not necessarily required by Charleen and thus it is not a contract if necessity. As the
decision of the Nash case Charleen does not have a contract with Alan and thus there is no
question of remedy.
Conclusion
No contract is formed therefore no remedy is available
iii.
issue
Analyzing the legal position as well as remedies available to Bernard
Rule
In the case of Hyde v Wrench the plaintiff had made an offer to sell his farm for 1200, however
the offer was declined. A fresh offer was made to sell the farm for 1000 but the plaintiff made a
counter offer to purchase the farm at $950. However the offer was rejected by the defendant. The
plaintiff again made an offer to purchase the farm at $1000 but the defendant refused to sell. The
count held that there was no contract between the parties as the counter offer revoked the original
offer (Poole, 2016).

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The damages which can be taken in case of a contractual breach include restitutionary awards,
injunctions , compensation, repudiation and specific performance. In the case of Addis v
Gramophone the court ruled that damages are to be provided to restore the pre-contractual
position of the aggrieved party
According to the case of Adam v Lindsay the contract through a post is accepted when the letter
of acceptance is posted by the offeree.
Application
As per the facts of the scenario through the offer a promise was made by Alan which included
providing the book as well as hand written notes for $200. As discussed above a contract was
formed between Alan and Bernard on 4th November when the fresh offer made by Alan had been
accepted after the counter offer made by Bernard rejected the original offer. Bernard found out
that the book was available for free at the university. However as per the provisions in relation to
valid consideration, a contract requires sufficient consideration and not what is fair. Therefore
the free book can be treated as a sufficient consideration. Bernard had been provided with the
notes as well as the books which were actually promised by the offer made by Alan. Thus there
had been fulfillment of promise made by Alan in relation to the contract. Therefore there are no
legal remedies which can be claimed by Bernard in relation to the contract
Conclusion
There was a contract between Alan and Bernard the terms of which have been duly fulfilled thus
no contractual remedies are available for Bernard.
iv.

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issue
Analyzing the legal position as well as remedies available to Bernard
Rule
In the case of Harvey v Facey the plaintiff had sent a telegram to the defendant asking for
whether the hall pen was available and would be the lowest price. The defendant only provided
the lowest price and not whether the pen was available for sale. Thus the court held that there
was no contract between the parties.
Application
In the given situation it has been agreed and analyzed in the 1st issue that there is a Valid contract
formed between Alan and Damien as all the elements of a valid contract has been satisfied by the
correspondences between them. However through the terms of the contract a promise had been
made by Alan to provide the buyer with his hand written notes. In this case the notes have
already been provided to Bernard and Alan has incorporated the notes in the new book itself. this
would be regarded as a major breach of the contract which would entitle Damien to claim
compensation or repudiate the contract with Alan.
Conclusion
A valid contract had been formed between the parties which have been breached by Alan and
thus Damien is entitled to remedies as per contract law.
V.

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Alternative dispute resolution is used by the parties to settle a claim without indulging into legal
proceedings. There are mainly two types of ADR namely Mediation and Arbitration.
Mediation- A third party who is neutral is provided the responsibility of assisting the parties to
the dispute for reaching a decision
Advantages – the process is cost effective and time saving , it does not require compliance of
complex procedures
Disadvantages- the decision is not binding legally, no process of discovery is established
Arbitration- in this process the parties to the dispute appoint an arbitrator to take over the
process. The result of the conflict is decided by the arbitrator upon the analysis of the facts
(Feliciano, 2017)
Advantages- Money and time is saved because the process is fast and requires no hefty fees to be
paid for legal proceedings and lawyers’ fees. In arbitration the fees charged by the arbitrator is a
lot less compared to lawyers fee. In addition the arbitration process solves the dispute in one or
two sittings unlike litigation.
Disadvantages- the decision made by arbitrator may not be agreed upon as it is in the case of
litigation where the decisions are binding on the parties.
Venue – small claims tribunals in state courts- Singapore mediation center

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References
Adam v Lindsay (1818) 106 ER 250
Chen-Wishart, M., Loke, A., & Ong, B. (Eds.). (2016). Studies in the Contract Laws of Asia:
Remedies for Breach of Contract. Oxford University Press.
Feliciano Jr, S. (2017). Alternative Dispute Resolution. The Catholic Lawyer, 33(1), 10.
Harvey v Facey [1893] UKPC 1
Knapp, C. L., Crystal, N. M., & Prince, H. G. (2016). Problems in Contract Law: cases and
materials. Wolters Kluwer Law & Business.
McKendrick, E. (2014). Contract law: text, cases, and materials. Oxford University Press (UK).
Merritt v Merritt [1970] EWCA Civ 6
Nash v Inmam (1908) 2 KB 1
Poole, J. (2016). Textbook on contract law. Oxford University Press.
Smith, S. A., & Atiyah, P. S. (2006). Atiyah's Introduction to the Law of Contract. OUP Oxford.