Analysis of Business Law Case Study: Four-Step Process of Contract Law

This case study examines a business law scenario involving a potential breach of contract between Rick and Cliff, who are family members. The legal issue revolves around the formation of a valid contract, considering elements of agreement, intention, and consideration. The case details Rick's email offer for a tour package, Cliff's initial acceptance, and subsequent issues with access to his office and a change in the agreed-upon price. The analysis follows a four-step process: identifying the legal issue (breach of contract), reviewing relevant rules of law (contract formation principles), applying the rules to the facts, and drawing a logical conclusion. The study concludes that no legal agreement was formed due to the absence of a written contract and the lack of satisfaction of intention and consideration elements. The assignment references legal concepts and provides a detailed analysis of the situation.

CASE STUDY BUSINESS
LAW ON FOUR STEP
PROCESS

Table of Contents
1 4 step process: Element of agreement......................................................................................3
2 Whether remaining formation elements of intention and consideration satisfied....................4

1 4 step process: Element of agreement
STEP 1: Identification of legal issue
It can be identified from case that there is no legal contract made between Rick and cliff.
They both are doing business as family member. The legal issue identified here is formation of a
valid contract between both rick and cliff considering all elements of legal agreement so that a
valid agreement can be formed (Pisacane, Murphy and Zhang, 2016). From case study it can be
said the main issue in this case is Rick has sent e mail to cliff regarding buying of tour package
to Los Angeles. Cliff has also agreed on price negotiated by Rick and asked him to revert back
till Wednesday noon. But due to some issue with his landlord Cliff is not able to have access to
his office. Due to this cliff is not able to see e mail of Rick. So, after few days cliff sees mail but
now he does not agree to offer package on quoted price of $10700 for original dates. But Rick
has already paid amount with credit card and can not reschedule tour. Now cliff has offered
another package for next year to for price of $11800.
Thus, the legal issue in this case is breach of contract between Rick and cliff. So, there is
breach of contract between two parties. Cliff is offering new package at discounted rate but Rick
can not reschedule his tour. Thus, an issue is raised regarding providing of package at price
offered earlier. Also, Rick has payed tour money in advance. Hence, whether Cliff is liable to
offer tour services at described schedule or not. Additionally, is it right for cliff to offer new tour
package to Rick.
STEP 2: Rules of law relevant to issues or principles of law with reference to relevant
authority
There are many principles of rules of law that plays a vital role in formation of legal
contract considering all the conditions, liabilities, agreement, considerations and many more.
Agreement is a legal contract that binds both the parties in a legal bound which helps them to
fulfil their liabilities and responsibilities towards each other (Kaplow, 2016). A written contract
is important as it helps in fulfilment of legal liabilities for both the parties involved in the
process.
There are three most important elements based on which a contract is bind i.e. intention,
consideration and agreement. Intention refers to offering of services and binding to enter in
contract. Consideration is made after intention means to create legal relations with other party. It
is a promise made by parties. It may include things such as termination of offers, contract in

writing, performance, etc. At last comes agreement which means to enter into contract by
binding all things. It was important for rick to first of all form and sign a contract and do his
further booking. In order to build legal relation between parties it is important to know the
intention on the basis of which the contract is to be built. Based on this few considerations are
required to be taken that are legal, lawful with attached lawful objects. The contract should be
built with free will and should not be forced on anyone or any party. In contract there must be
terms defined between parties. It will oblige them to work according to those terms.
In similar way, Rick and cliff must have entered into legal contact. However entering into
contract will define terms and conditions of both parties in case of contract breach. Furthermore,
the contract law will be implied to both parties (Wójtowicz, 2018)
Thus, if there is breach of contract then Rick might have taken legal action against cliff.
This will enable in claiming for expenses incurred by Rick.
STEP 3: Rules of laws applied to facts in order to find the solution
A contract is legally enforceable only when two parties are bound to enter into sign an
agreement. There are some obligations which are followed by both parties. Any violation of law
by either party results in breach of contract. In present case Rick and cliff did not enter into
contract. They were just friends and no agreement was made between them. Here, Cliff just
offered tour package to Rick which he accepted and reverted on e mail. In this case court will
only rely on assumption made by them. Moreover, the mail sent by cliff to Rick is also not a
proof of any contract or agreement made between them. In addition no date is prescribed on
agreement. Also, there is nothing in written about agreement made, so if it is in written parties
are legally binding to follow terms and conditions (Suominen, 2017).
Therefore, in such circumstances where Cliff was not able to access mail and provide
services, it requires a written agreement which state what legal action can be taken. This might
have involved both parties to bind their duties and rights in case of any breach of contract.
Usually, there are same elements included in business contract. So, in case of any loss incurred
by Rick he can claim for it in court. But without any written proof or valid contract no legal
action can be taken.
STEP 4: Logical conclusion
It can be concluded that there is no legal agreement between Rick and Cliff. They both
have only agreed to personal terms and not legally bounded (Spieth and Schneider, 2016).

Furthermore, cliff is not liable to pay any expenses or loss of Rick. There is no legal contract
which is been formed between them and only e mail is there as a proof that cliff has offered
services to Rick at specific price.
2 Whether remaining formation elements of intention and consideration satisfied
A contract requires certain essential elements to be satisfied in it. Without any one element
contract is not liable to be enforced. Each element describes specific things which is mentioned
in contract. So, the integration of all element satisfies contract law. It can be stated that in
contract there are basically three elements which are intention, consideration and agreement. The
formation of contract depends on all these. In above case it can be analyzed that element of both
intention and consideration are not satisfied. Here, both Rick and cliff did not have intention to
create binding relations. The parties were serious to exchange services but not with intentions to
bind into legal agreement. Generally, it was a promise made by parties. Initially, no agreement
was made in parties, but when Cliff was stuck in situation where he was not allowed to access
office he was not able to see mail of Rick. This resulted in not providing of package by cliff.
Similarly, intention of consideration was also not satisfied in case of Rick and cliff. Here,
only promise was made by them to offer a service. There was no consideration made by Cliff
regarding offering of service (Kolinko, Rezvorovych and Yunina, 2019). However, he also did
not make promise to fulfil demand of Rick in any circumstance. Thus, both mutually agreed on
personal terms to accept offer. Alongside it, no legal agreement was signed which made contract
forceful to be implement. So, there is no intention of consideration satisfied.

REFERENCES
Books and journals
Kaplow, L., 2016. The meaning of vertical agreement and the structure of competition
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Kolinko, T., Rezvorovych, K. and Yunina, M., 2019. Legal Characteristic Of The Franchise
Agreement In Germany. Baltic Journal of Economic Studies, 5(1), pp.96-100.
Pisacane, G., Murphy, L. and Zhang, C., 2016. The Arbitration Agreement. In Arbitration in
China (pp. 7-17). Springer, Singapore.
Spieth, P. and Schneider, S., 2016. Business model innovativeness: designing a formative
measure for business model innovation. Journal of business Economics, 86(6), pp.671-
696.
Suominen, K., 2017. Silver Bullet to Fire up Small Business Exports: Plurilateral Agreement on
De Minimis. Globalization, 4.
Wójtowicz, E., 2018. Law applicable to Distribution Contracts and Contracts of Sale–
Relationship between Framework Agreement and Application Contracts. European
Review of Contract Law, 14(2), pp.138-156.