Business Law Assignment: Contract Formation and Breach Analysis

This business law assignment provides a comprehensive analysis of several key legal concepts within contract law. The assignment addresses four primary issues: the potential for a negligent misstatement claim, the applicability of promissory estoppel, the formation of a valid contract, and the possibility of a breach of contract claim. The analysis draws upon relevant legal principles and case law, including Hedley Byrne & Co v Heller and Central London Property Trust Ltd v High Trees House Ltd. The assignment examines the specific scenarios presented, applying the legal frameworks to determine the outcomes of each issue. The document also includes a list of references to relevant cases, books, and articles supporting the analysis. The assignment explores the intricacies of contract law, providing a clear understanding of the legal principles involved.

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Business Law
Task
24-Mar-18
(Student Details: )

Business Law
Issue 1
Whether a case of negligent misstatement can be made by Richard against Emma, or
not?
Law
There are certain vitiating factors in a contract, which have the capacity of voiding the
contract. One of such factors is misrepresentations which denote false statement of fact being
made. One of the types of misrepresentation is negligent misrepresentation, also known as
negligent misrepresentation. It denotes the information being provided honestly, but which is
inaccurate (Gibson and Fraser, 2013, p. 443). Where negligent misrepresentation is established,
the innocent party can apply for damages. In Hedley Byrne & Co v Heller [1963] 3 WLR 101, the
judges stated that for making a claim of negligent misstatement, there was a need to show
presence of relation of confidence and trust, where the information providing party voluntary
assumed the risk, and the other party had reasonably relied on this information.
Application
This case had Richard asking for information from Emma where Emma provided the
information regarding shock absorber. However, even when she was honestly providing the
information, she negligently looked at the wrong page, resulting in inaccurate information
being provided. Richard had reasonably relied on this information of Emma, where Emma had
assumed the risk voluntarily by providing the information, fulfilling the conditions laid down by
Hedley Byrne & Co v Heller.
Conclusion
Hence, a case of negligent misstatement can be made by Richard against Emma giving
him opportunity of claiming damages from her.
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Business Law
Issue 2
Whether a case of promissory estoppel can be made against George by Richard, or not?
Law
Under the contract law, there are certain cases where a contract can be established
even without consideration. These relate to the one made under promissory estoppel.
Promissory estoppel basically stops a person from making a u-turn on their promise, where
reliance by another had been placed on such promise, even when it is without consideration
(Latimer, 2012, p. 352). In Central London Property Trust Ltd v High Trees House Ltd [1947] KB
130, Dennis J gave the obiter statement where it was provided that an individual cannot go
back on promise of reduced rent for the hardship period based on this principle.
Application
Here, a promise without consideration was undertaken between Richard and George as
per which the rent at previous year rates had to be paid. Where George claims for the
incremental rent, the concept of promissory estoppel would stop him from doing so, as a result
of Central London Property Trust Ltd v High Trees House Ltd, and the reliance placed by Richard
on this promise.
Conclusion
Hence, a case of promissory estoppel cannot be made against George by Richard.
Issue 3
Whether a contract had been formed in this case, or not?
Law
In order to create a contract, there is a need for certain elements, which includes offer
and acceptance (Kirst-Ashman and Hull 2008, p. 205). An offer shows some terms being offered.
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Business Law
This offer has to be accepted by the accepting party in the way it is made (Helewitz, 2010, p.
28). In case of change in acceptance in terms of offer, Hyde v Wrench (1840) 49 ER 132 dictates
that a counter offer is made and the original offer ends.
Application
Here, an offer had been made to Richard by Tom for the car at a price. Reply was given
to this offer in terms of changed consideration resulting in a counter offer being made and as
per Hyde v Wrench the original offer ended.
Conclusion
Hence, no contract was formed due to lack of acceptance and due to presence of
counter offer.
Issue 4
Whether a case of breach of contract can be made against Richard by Martin, or not?
Law
For a breach of contract to be claimed, there is a need for presence of a contract.
Consideration is another element which is required in formation of contracts. Consideration
needs to have economic value, and in absence of consideration, a contract cannot be deemed
as valid. Also, the consideration has to be present and cannot be past (McKendrick and Liu,
2015, p. 113).
Application
Here, Richard offered to give Martin his car on hire without consideration. However, the
lack of consideration would make this contract invalid. Furthermore, where the past
consideration of Martin looking after Richard’s car in August is considered, it would be deemed
as invalid as past considerations are not deemed as valid considerations.
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Business Law
Conclusion
Hence, due to lack of valid consideration, a contract was not formed and thus a claim of
breach of contract cannot be claimed successfully by Martin.
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Business Law
References
Cases
Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130
Hedley Byrne & Co v Heller [1963] 3 WLR 101
Hyde v Wrench (1840) 49 ER 132
Books / articles / on-line Modules
Gibson, A, and Fraser, D (2014). Business Law 2014, 8th ed, Melbourne: Pearson Education
Australia.
Helewitz, J A (2010). Basic Contract Law for Paralegals, 6th ed, New York: Aspen Publishers.
Kirst-Ashman, K and Hull, G (2013). Understanding Generalist Practice, 5th ed, USA: Cengage
Learning.
Latimer, P (2012). Australian Business Law 2012, 31st ed, Sydney, NSW: CCH Australia Limited.
McKendrick, E, and Liu, Q (2015). Contract Law: Australian Edition. London: Palgrave.
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