Business Law Case Study: Contractual Disputes and Remedies

This assignment analyzes a case study involving the Lame Duck Restaurant and a wedding booking. The restaurant's sales representative, Summer, designed a new website and posted updated prices. Li booked a wedding based on the old menu, and Summer mistakenly accepted the booking. The assignment addresses whether a valid contract exists, considering offer, acceptance, and consideration. It examines the nature of the mistake and whether it invalidates the contract, differentiating between unilateral and common mistakes. Finally, it explores the consequences if the restaurant refuses to provide the premises, outlining potential remedies such as damages or specific performance, referencing relevant legal principles and cases like Fisher v. Bell and Robinson v. Harman. The analysis highlights the elements of a breach of contract and the damages that the aggrieved party may be entitled to.

Running head: INTRODUCTION TO BUSINESS LAW 1
Introduction to business Law
Name
Institution

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The Lame Duck Restaurant owned by Johnny appoints a sales and marketing
representative (Summer) to design and launch a new website. Summer is very bright and her
design looks amazing. As the website is exceptional, Johnny decides to revamp the pricing
system and put 15% mark-up on all food. Summer develops a beautiful design of the new
pricing system and posts it online.
Two weeks later, after the prices are changed, Li books the wedding using the menu he
found on one of the tables. Summer mistakenly accepts the booking, asking Abu from
accounts to accept the deposit and finalise the invoice. Li calls, accepts the quoted price, pays
the deposit and books the date for the wedding. The same day, Li sends out invitations to all
her friends studying at CDU. The day before the banquet, the error in the quotation is
discovered. Johnny gets involved, calls the customer and says that the Lame Duck Restaurant
cannot host the wedding (because the quotation was made in error). However, Li insists that
‘we have a contract’ and says that under the law the Lame Duck Restaurant must deliver.

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(a) Advise Johnny, whether the contract exists.
Issues
i) Whether the contract was valid?
ii) Whether it was an invitation to treat?
Rules/laws
The law of contract
Common law
Fisher vs. Bell
Application of rules
Under common law there are three basic elements of contract; an offer, acceptance and
consideration. The agreement between Li and Summer is considered as a valid agreement
under the common law since it meets all the requirements therefore there are contractual
obligations created for each party.
Under the law of contract an agreement is considered valid once all elements of a valid
contract can be proved. There are some factors that would render a contract invalid; when
duress is established at the time of making a contract then the contract cannot be enforced
before a court of law. If the contract is based on misrepresentation so as to mislead the other
party to be part of the contract then it would be considered invalid.
Parties are bound by the terms of a contract and an aggrieved party is entitled to remedies
for breach of contract.
There are five elements of a valid contract; this includes offer, acceptance, purpose to be
bound (intention), capacity to contract (mental capacity and capacity in terms of age) and

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consideration (Andrews, 2011). In this particular case Li booked wedding using the menu he
found on the table which can be treated as an invitation to treat. The moment Summer accepts
the booking irrespective of mistakenly doing so a contract is created and finalised by payment
of deposit which comes in as the consideration. From this case it can be concluded that there
was an offer and the offer was accepted upon which a consideration was made. The moment
the contract came into existence then subsequently legal obligations for each party in the
contract were created.
In the case of Fisher vs Bell the requirements of a valid contract were examined and just
like in this case the contract was considered valid. In the case the court examined whether an
offer was made and the terms upon which there was acceptance (Saprai, 2019). The court
ruled that the contract was valid upon finding that the contract adhered to all elements of a
valid contract.
Conclusion
The contract existed in this particular case. The moment Mr. Li pays the deposit which is
regarded as the consideration then the contract is considered valid and exists from thereon.
(b) Was there a mistake? If yes, what kind of mistake?
Issues
i) Whether the mistake rendered the contract invalid?
ii) Whether there was misrepresentation?

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Rules/laws
Common law
Law of contract
Couterier v Hastie
Application of the rules
Common law has acknowledged 3 diverse types of mistake in contracts; common mistake,
unilateral mistake and mutual mistake (McKendrick, 2012). A unilateral mistake is a case in
which a party is cognizant of the other party's mistake but goes ahead with the contract; this
type of contract is considered void as there is no connecting link between the offer and
acceptance. In this case the mistake falls under common mistakes given that Summer had not
done it on purpose and it does not render the contract invalid.
Under law of contract a contract will not be void because of a mistake unless defence of
mistake can be proven (MacMillan, 2010).
Just as expounded in the case of Couterier v Hastie, a mistake by one party does not render
the contract void. In this case the court found that a mistake made by one party would not
render the contract void therefore the contract was considered valid (Merkin & Saintier,
2019). The party that makes the mistake takes responsibility and is liable for any damages
suffered by the other party (Davies, 2018).
In contract law, a mistake is an inaccurate belief at the time of making the contract that the
facts presented by the other party are true (Macdonald, Atkins & Krebs, 2018). Mistake can
be raised as a defence and if considered then agreement rendered void or voidable or
alternatively a remedy may be provided by the courts. When one party makes a mistake in a
contract then contract is not considered void but considered valid though there are some
exceptions to this rule. A mistake in a contract lead to misrepresentation of facts in a contract

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band this can lead to fraudulence in cases where such motives are established. A mistake
made by one party intentionally can put the existence of the contract in jeopardy while a
mistake made unknowingly may be considered if a good defence is put up (Sherwin, 2016).
In this case Summer mistakenly accepted the booking by made by Li and went ahead to
accept the deposit rendering the mistake irredeemable since the contract cannot be invalidated
based on that ground unless it can be proven that the other party was aware of the mistake
and went ahead to accept the offer. The mistake made by Summer does not affect the
obligations that were to be performed by Lame Duck Restaurant. It is the restaurant who has
to bear the loss for their mistake and the loss cannot be revisited on the other party who was
part of the contract in good faith without being aware of the mistake that had taken place.
Given that Mr. Li had already invited his friends the restaurant has an obligation to perform
their contractual otherwise they will be liable for damages suffered by Mr. Li. A mistake in a
contract may be corrected by the other party but in good time as stipulated in the contract
(MARSON & Ferris, 2019).
Conclusion
The contract remains valid despite the mistake from one of the parties in the contract. A
mistake in a contract is not necessarily a ground for invalidating a contract. In cases where
the plaintiff is aware of the mistake and goes ahead to contract then the plaintiff is no entitled
to claim any form of remedy.
(c) Explain what will happen if the Lame Duck Restaurant is obliged to provide the
premises for the wedding, but refuses to do so.
Lame Duck Restaurant has a contractual obligation of providing premises for the wedding.
Once it’s established that the contract was valid then the restaurant is bound to comply with

INTRODUCTION TO BUSINESS LAW 7
terms of the contract. In the absence of express terms in a contract then implied terms can be
used so that each party in the contract carries out their contractual obligations. There are
numerous remedies under contract law in cases where a party fails to perform part of the
contract (Chen-Wishart, 2015). The contract has to be enforceable in a court of law and that
is through meeting all the requirements of a valid contract. A party is entitled to remedies in a
contract in a case where the other party fails to perform their contractual obligations. The
moment Lame Duck Restaurant entered into contract with Mr. Li they became legally
obligated to provide the premises for wedding.
Breach of a contract can occur when a party fails to perform their duties on time and also
as detailed in the terms of the contract a contract does not necessarily have to be in writing,
oral contracts are also considered in courts (Arvind, 2017). In such cases the court may
choose to award the plaintiff monetary damages. Lame Duck Restaurant has to provide the
premises for wedding to Li failure upon which Li can sue for damages or specific
performance for that matter. When one of the parties in a contract breaches the terms, the
non-breaching party can choose between seeking legal or equitable remedies (Taylor &
Taylor, 2017).
In the case of Robinson v Harman the plaintiff was awarded damages for breach of
contract. Mr Harman wrote a letter agreeing to grant Robinson a lease on house in high street.
The lessor was unable to deliver vacant possession in 21 years hence breaching the contract.
Just like in this particular case Lame Duck Restaurant breached the contract by failing to
perform its obligations.
Breach of Contract elements
For a non-breaching party in a contract to sue the breaching party successfully some
elements of breach must be established. This includes proof of whether a valid contract
exists, a proof that the terms of the contract have actually been breached and a proof of actual

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loss due to breach of contract.
The aggrieved party is entitled to the following damages; compensatory damages,
consequential damages, expectation damages, ordinary damages, liquidation damages,
nominal damages and punitive damages.
The equitable remedies include specific performance and contract rescission. All these
remedies are available to Li in the event he wishes to take a legal action against Lame Duck
Restaurant.
Conclusion
In the event Lame Duck Restaurant refuses to provide premises for wedding to Li then Li
has the right to sue them in a court of law. The court can award different remedies to the
plaintiff depending on different factors. In the event the court settles on specific performance
as a remedy then Lame Duck Restaurant will be obligated to provide premises for wedding as
per the contract.

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References
Andrews, N. (2011). Contract Law. Cambridge, England: Cambridge University Press.
Arvind, T. (2017). Contract Law. New York, NY: Oxford University Press.
Chen-Wishart, M. (2015). Contract Law. New York, NY: Oxford University Press, USA.
Davies, P. (2018). 16. Misrepresentation. JC Smith's The Law of Contract.
doi:10.1093/he/9780198807810.003.0016
Macdonald, E., Atkins, R., & Krebs, J. (2018). 13. Misrepresentation. Koffman &
Macdonald's Law of Contract. doi:10.1093/he/9780198752844.003.0013
MacMillan, C. (2010). Mistakes in Contract Law. Hart Pub.
MARSON, F., & Ferris, K. (2019). Business Law Concentrate: Law Revision and Study
Guide.
McKendrick, E. (2012). Contract Law: Text, Cases, and Materials. New York, NY: Oxford
University Press.
Merkin, R., & Saintier, S. (2019). 14. Misrepresentation. Poole's Textbook on Contract Law,
535-586. doi:10.1093/he/9780198816980.003.0014
Sherwin, L. (2016). Formal Elements of Contract and Fiduciary Law. Contract, Status, and
Fiduciary Law, 167-182. doi:10.1093/acprof:oso/9780198779193.003.0008
Taylor, B., & Taylor, D. (2017). Contract Law Directions. Law Trove.
doi:10.1093/he/9780198797739.001.0001
Taylor, R., & Taylor, D. (2017). 8. Mistake. Contract Law Directions.
doi:10.1093/he/9780198797739.003.0008
Saprai, P. (2019). Contract Law Beyond the State. Contract Law Without Foundations, 199-
230. doi:10.1093/oso/9780198779018.003.0010

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