Business Law Assignment: Contract and Corporation Law Analysis Report

This Business Law assignment delves into two key areas: Contract Law and Corporations Law. The first part examines contract law, defining contracts, essential elements like offer, acceptance, and consideration, and the concept of frustration, using case examples to illustrate how unforeseen events like war can render a contract void. The second part focuses on Corporations Law, differentiating between liabilities in contract and tort, with an emphasis on negligence. It explores the tort of negligence, detailing the necessary elements for a claimant to establish a case, including duty of care, breach of duty, and foreseeable damage, illustrated through case studies. The assignment concludes with a discussion of defenses against negligence claims, such as voluntary assumption of risk and the absence of a pre-existing duty of care, providing a comprehensive overview of legal principles and their practical application in business contexts.

Business Law

Table of Contents
INTRODUCTION...........................................................................................................................1
Part-A: Contract law’.......................................................................................................................1
REFERENCES................................................................................................................................4
Part-B: Corporations Law................................................................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business law is a law that governs business and commerce and is considered to be a
branch of civil law that deals with issues of private law and public law. Contract law is a legal
structure that comprises of a legal principles governing the exchange of goods or services
between individuals or businesses. It is a governing source that explains the law applicable to
sale or exchange of goods or services. This lays out the component necessary to form a contract
so that it becomes legally binding on the parties to the contract. This assignment contains two
parts of which first part discusses about the contract law and part second discusses about
corporation laws.
Part-A: Contract law
Issue
A contract is a legal binding agreement between the parties who are entered into it. For
formation of a contract, it is necessary for one party to make an offer and other party to accept
that offer. Also for offer and acceptance to be made, it must show that there is a legal biding and
a relationship has been made by the parties to the contract. It should show that two contracting
parties must give some benefit to each other which is known as consideration. So for a contract
to be made it should consider that there is a an offer, that offer has been accepted, there is an
intention to create a legal binding and lastly a consideration has been fixed which is in the
maximum interest of parties (Mann and Roberts, 2011). Once a contract has been established,
parties to the contract are bounded by the terms and conditions as decided by them mutually. The
party that does not stick to the agreed terms and conditions of a contract is said to have breached
the terms of contract and is legally liable.
Rule
There are various rules about frustration which should be noticed while performing the
contract:
 Performance required in a particular way: If contract has to be performed in a certain
way then it will be frustrated if it becomes impossible to perform in that way. As for
instance if contract states that a vessel should be carried on a specific ship then it will be
frustrated if that ship sinks.
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 Contract becomes difficult to perform: Contract can be frustrated if it becomes
difficult to perform for both the parties. Like in case of Davis Contractors Ltd. VS
Fareham urban district council the house of lords declared that a contract to build 78
houses in eight months when it got to know that shortage of labour and materials was the
key through which it took 22 months to perform. Frustrating event is foreseen: In case if the party knows that frustrating event might
occur then the party who knows it cannot frustrate the contract. As decided in the case of
Walton Harvey Ltd. VS Walker & Homfrays Ltd. where a hotel owner agreed to put
the advertisement on his hotel and he could not claim after the hotel is demolished. It was
founded that hotel owner is in the breach of agreement as he already knows about the
abolition of hotel.
Analysis
As in the given case, there are two people named as Kowaiski and Smith who entered
into a 'charter party contract' where Smith has to load wheat in a Russian port. After the contract
was enforced, both the countries Russia and United Kingdom declared War before the liability
arise regarding performance of contract. This means that if this contract continues then Smith
would be involved in trading with an enemy nation.
A charter party contract is a contract that is entered between a shipowner and a charterer
for hire of entire ship for a carriage of passengers or cargo or a yacht for pleasure purposes.
A contract is a valid form of performing a duty between the parties to the contract so that
each party gets something in return of performing their obligations. The nature of law of contract
is any agreement that is made by the parties. In a contract if an unforeseen event occurred which
is beyond the control of the parties to perform the contract makes the contract voidable. It is also
known as impossibility of performance which prevents contracts to be fulfilled. This is also
known as the contract where doctrine of frustration comes to existence (DAILY, KIEFF, and
WILMARTH JR, 2014). It is different form void-ab-initio contracts where the parties to the
contract are not liable for any discharge and termination because the contract is invalid from the
beginning. A contract is discharged by frustration only under a special case when there exist an
impossibility of performance after the contract has been formulated. Upon the outbreak of war, a
continued performance of contracts among the enemy become unlawful and illegal. If a contract
becomes impossible to perform then it will be frustrated. For example; in the Fibrosa case the
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house of lords held that a contract to supply machinery to Poland was frustrated when Germany
has occupied Poland. Great Britain was at war at that time and its illegal to supply an enemy
country.
Conclusion
Hence, it is analysed from the above case that Kowaiski and Smith has entered into a
contract before the declaration of war and prior to the performance of contract, the war was
declared. Hence it was given that any contract that is entered between the parties of the alien or
enemy nation would be considered as illegal and void. Hence both the parties cannot force each
other to perform the contract and to make it legal as any contract that is entered between the
enemy countries if it has been declared illegal would not have any legal binding.
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REFERENCES
Books and Journals
Nichols, P. M., 2012. The business case for complying with bribery laws. American Business
Law Journal. 49(2). pp.325-368.
Macaulay, S., 2018. Non-contractual relations in business: A preliminary study. In The Law and
Society Canon (pp. 155-167). Routledge.
Frank, J. and Bix, B. H., 2017. Law and the modern mind. Routledge.
Johnson, L., 2013. Unsettledness Delaware Corporate Law: Business Judgment Rule, Corporate
Purpose. Del. J. Corp. L.. 38. p.405.
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Part-B: Corporations Law
Issue
A law of tort can be defined as a civil wrong that has been done by the party to the contract
but it does not include a breach of contract. A civil liability can be broadly divided into two
types: Liabilities arising in the contract and the liabilities that are arising in torts. As in other
case, it is considered that liability under a contract is liability undertaken voluntarily. Where as in
the case of torts liability is not undertaken voluntarily (Abril, 2011). It is decided by the courts
in which they declare that certain types of behaviour would give rise to tortious liability. If a
person get injured by a someone else by his behaviour then it will give rise to tortious liability.
Another difference is that liability in tort is always based on fault. The tort of annoyance is an
exception.
Rule:
Breaching of a contract and commissioning of a tort gives rise to a liability in damages.
The purpose of tort damages is not as same as the purpose of contract damages. This gives the
injured party to be in a position where it should not have been if the tort had never happened. A
tort of negligence is a most important tort to perform. The jurisdiction of other torts are narrower
while applying to the circumstances as compared to the tort of negligence. For the claimant to
establish the tort of negligence they have to prove three things which are:
 Defendant has a duty to care for claimant.
 Defendant breached that duty of caring.
 Foreseeable type of damage was caused by the breach.
Each of these requirements should be proved by the claimant, so it should be considered
while deciding the case. While if the consent of the claimant has been taken for performing the
task then it is considered as Volenti non fit injuria. Then, it is considered as a complete defence
to show that injured person voluntarily assumed the risk which caused the injury. It has been
decided in the following case as ICI ltd VS Shatwell in which a experienced shot firers were
badly injures when the tested detonators without taking the proper safety precautions. The
employees of the company sued their employer as they he did not take any safety precautions. It
was held in the case that employer had complete defence. As the employees had voluntarily
assumed the risk which injured them. In case where a damage of personal injury has been arrived
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the law makes a distinction between special damages and general damages. It is made where a
personal injury is caused to the party by the breach of contract of tort. When a claim of general
damage is made the amount of damage claimed in respect of loss cannot be listed but will be
assessed by the judge who hears the case (Nichols, 2012). As it is considered the general
damages cannot be claimed exactly. This could be claimed in following matters: Pain and
suffering, whether it was endured before the trial or likely to arise in the future. Loss of
amenities which means loss of ability to do things due to physical or mental disability and loss
the future earnings.
As in the case, Anna wants to sue Michael because of the negligence done by him
because the previous night both met with an accident. Reason behind this was that Michael was
drunk and he was driving the car as well. This brings the condition of negligence in the tort.
Michael was responsible to care for Anna and to drop her to home. Anna has a belief that she is
getting late and Michael is the best option with whom she can go. So as it is the case of
negligence and Michael was driving the vehicle while he was drunk gives rise to the liability of
civil wrong.
For Anna, in order to succeed in this action, she has to prove that the defendant owned a
duty to care as it was decided in a famous case of Donoghue Vs Stevenson and it was held that
Manufacturers owe a duty of care to see that their customers are not injured by the products that
are manufactured by them (Macaulay, 2018). She also had to prove that Michael had breached a
that duty explicitly and that foreseeable damage was caused due to the breach. By giving this
evidence Anna can establish order to succeed in such an action.
Analysis
As in the case, it was given that Anna was late from her office and wanted to book the
taxi to her residence. But as she was getting late so she took a lift from Michael. She smelt that
Michael was drunk heavily and was not able to drive the vehicle correctly. Due to that, they met
with an accident and hit a tree leaving both of them seriously injured.
Conclusion
In this case Michael can raise defences under the civil liability in relation to Anna's
negligence claim as he can give that as there was no contract that was entered between the
Michael and Anna and it was not the duty of Michael to provide care for her. After knowing that
Michael was drunk, she had decided to go with her and Michael did not forced her. As the
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negligence is the civil action the burden to proof for the negligence is on the claimant. So here
Michael should appeal to the court that if it is negligence it should be proofed as their was no
contract entered between them and the claimant decided herself to go with defendant on her own
consensus.
CONCLUSION
As per the given assignment it is considered that business law is one of the main aspect of
the civil law that helps the society to do the work ethically. As it involves the contract law that is
made to help the parties to the contract to perform the terms and conditions more legally. For
parties to make the contract legal binding they should make a agreement legally binding. Also
Torts are the civil wrong that helps the parties to avoid the negligence that are caused in society.
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REFERENCES
Books and Authors
Mann, R. A. and Roberts, B. S., 2011. Smith and Roberson’s business law. Cengage Learning.
Beatty, J. F., Samuelson, S. S. and Abril, P. S., 2018. Business law and the legal environment.
Cengage Learning.
DAILY, J. E., KIEFF, F. S. and WILMARTH JR, A. E., 2014. Introduction. In Perspectives on
Financing Innovation (pp. 13-16). Routledge.
Abril, P. S., 2011. The evolution of business celebrity in American law and society. American
Business Law Journal. 48(2). pp.177-225.
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