Commercial Law Assignment: Contractual Issues and Dispute Resolution

This commercial law assignment addresses five key questions related to contract law. The first four questions present case studies focusing on contract formation, examining elements like offer, acceptance, consideration, and capacity. The analysis explores the legal positions of different parties involved, determining whether contracts were formed and identifying potential breaches. The final question shifts to dispute resolution, exploring alternative methods like mediation and arbitration, outlining their advantages and disadvantages. The assignment provides a comprehensive overview of contract law principles, emphasizing the importance of each element and the consequences of breaches, while also offering insights into resolving contractual disputes outside of court.

Running Head: COMMERCIAL LAW 0
Commercial Law
Student’s Name
9/18/2019

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Contents
Overview..........................................................................................................................................2
Question 1........................................................................................................................................2
Issue 2
Rules 2
Application 4
Conclusion 5
Question 2........................................................................................................................................5
Issue 5
Rules 5
Application 5
Conclusion 6
Question 3........................................................................................................................................6
Issue 6
Rules 6
Application 6
Conclusion 6
Question 4........................................................................................................................................7
Issue 7
Rules 7
Application 7
Conclusion 7
Question 5........................................................................................................................................7
Introduction 7
Discussion 8
Conclusion 9
References......................................................................................................................................10

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Overview
A contract is a binding agreement on all the parties of the same and gives them the right
to held each other liable in a legal manner. The common law of contract outlines many
factors/elements without which an agreement cannot be turned to a contract. It means these
factors are mandatory elements of a contract. The presented report answers five different
questions based on different issues. First four questions will be case study based question
whereas 5th Question will be related to a different topic. In the answer to the 5th question, the
report will check different dispute resolution methods and advantages and disadvantages
associated with them.
Question 1
Issue
The issue is to check the presence or absence of a contract in the given case. If a contract
was formed then who are the parties to the same and at what time the subjective contract was
formed.
Rules
Csertain elements need to be there in each contract hence to say that these are essentials
of a contract and mandate to exist. Starting the discussion of these factors, this is to state that the
same are mentioned below-
Offer: - As the name of the element implies it is a proposal where one party propose
others to do certain things or not to do so. Firstly, a valid offer is the one, which is legal and
properly communicated to the offeree. It means an offer must be addressed to the specific and
identified person. If a proposal is open to all then it is treated as an invitation to treat and not an

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offer. The lead difference between these two terms are that invitation to treat cannot be accepted
as on offer. Nevertheless, there is an exception of this rule which has been given in the decision
of the case of Carlill v Carbolic Smoke Ball co [1893] 1 QB 256. In this case, it was provided
that where terms of an invitation to treat remain clear and by doing a particular task, a contract
can be developed then, an invitation to treat can be considered as an offer. Secondly, it was
provided in the case of Harvey v Facey [1893] UKPC 1 that every offer must be intended to bind
the offeree.
Consent: - Another mandatory element of a contract is consent. On the receipt of an offer,
the offeree has to provide his/her consent to the offer. Similar to an offer, consent is also required
to be communicated. Where parties adopt a postal mode of communication then consent is
treated as validly communicated when offeree drops the acceptance letter to the mailbox
regardless of the fact whether offers receive it or not. In the decision of the case titled Felthouse
v Bindley [1862] EWHC CP J35, the court provided that if the offeree remains silent then it is to
assume that he/she did not provide the consent (Wishart, 2012). Further, If consent comes with
the modification in terms of offer then such consent cannot be treated as valid consent and such
communication is called a counteroffer. In the decision of the case named Hyde v Wrench (1840)
49 ER 132, the court decided that as soon as a counteroffer arises in a contract no earlier offers
remain open to accept. Acceptance can also be provided through actions.
Capacity: - Under contract law, not every person is eligible to enter into a contract and
therefore the same must have the legal capacity to fulfill the promises set out under a contract
(Corporateguide.sg, 2019). Contract law considers mentally disable, minor, insolvent and
intoxicated people as incapable to make a contract.

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Intention to develop legal relations:- For a contract, it is required that all the parties must
have their intention to create a legal relationship with one another and must not develop a
contract domestically or socially. In general, commercial agreements are assumed to be "carrying
the intention to create legal relations"
Consideration:- Consideration can be considered as a motivation for both the parties.
Behind the formation of a contract, each party has some purpose and this purpose seems to be a
consideration for them. Consideration is not required to be in monetary form.
Application
There are different parties in this case. Firstly Alan made a post on his Facebook whereas
he showed his intention to sell his textbook and handwritten notes. Applying the provisions of
Carlill v Carbolic Smoke Ball co, the post seems to be an offer and not the invitations to treats as
anyone was able to form a contract by paying money written in the post i.e. $200. While replying
the offer made by Alan, Bernard changed some of its terms as he asked to purchase the subject
matter for the consideration of $150. It was a counteroffer from Bernard and not the consent. As
to apply the decision of Hyde v. Wrench, the original offer remained no more existed for
Bernard's acceptance. Alan rejected this counteroffer and again stated terms of the original offer
made by him. This was again an offer from Alan that has been accepted by Bernard by sending
money to Alan on 04th November via post. Applying provisions of the postal mode of
communication, a valid acceptance has taken place at the very moment where Bernard dropped
envelop of money to post. This was the moment where a contract of Alan was formed with
Bernard. If to discuss the position of other parties this is to state that as Charleen was not a

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student of Kaplan higher education hence the offer was not made to him. If to consider
communication made by him as an offer, this is to state that no contract has been formed with
Alan as no acceptance was there. Further, one another party named Damien was there who
accepted the offer made by Alan by paying $200 to him and in this manner, he also accepted the
offer in the evening of 04th November and a contract was formed between them.
Conclusion
Conclusively to say that two contracts have been developed in the entire scenario one
between Alan and Bernard and another one is between Alan and Damien.
Question 2
Issue
What is the position of Bernard and what remedies are available to him under the law?
Rules
As mentioned above, an acceptance needs to come for the terms mentioned under offer,
otherwise the situation lead to counter offer. Parties cannot rely on original offer once a counter
offer arise as given in Hyde v Wrench. It was held in the case of Adams v Lindsell (1818) 106
ER 250, that in those cases where parties use mode of post for communication, postal rules
applies. In such cases, consent seems to be validly complete at the moment when offeree
dropped a consent letter to mailbox regardless of the time when offeror receive such letter. When
a contract becomes develop, parties have to act according to the terms mentioned under the
same. If any of the party denies from doing so then the condition leads the issue of breach of

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contract. In these cases, claimant may repudiate the contract and can claim damages
(Singaporelegaladvice.com, 2019a). Further, injunction, specific performance, and repudiation
are other remedies.
Application
In the case presented hereby, Bernard made a counter offer, which has been accepted by
Alan as he accepted the money. Alan promised Bernard to provide his book as well as
handwritten notes but did not fulfill his promise. In this manner, Alan breached the contract
developed with Bernard.
Conclusion
As Alan breached the contract, hence Bernard can rescind the contract in addition to
demand damages.
Question 3
Issue
What is the position of Charleen and what remedies are available to him under the law?
Rules
Definition of the contract makes it clear that it is a legally binding agreement that
provides entitlements to the parties. It means if a contract is not there then no rights and
liabilities arises on the part of any of the party to the transaction. All the elements of the contract
are required to be presented to get the rights against another party. As discussed above minor
cannot form contracts but they can do so for buying things of necessity for instance clothes,
education, food and so on as provided in the Chapple v Cooper (1844) 153 ER 105.

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Application
In the case of Charleen, even being a minor she had the capability to buy book from Alan
as it was related to necessity. Nevertheless, no contract was ever developed because of lack of
consent by Alan. The question of rights, responsibilities, and breach of contract arise when there
is a contract between the parties but here the same was missing between Charleen and Alan.
Conclusion
Since no contract has been developed between Alan and Charleen hence no remedies
seem to be available to Charleen.
Question 4
Issue
What is the position of Damien and what remedies are available to him under the law?
Rules
For the development of a contract, some factors are require to be there. Firstly, the basic
element is offer from which a contract starts. Secondly, an acceptance to such offer is another
essential factor. Parties must be capable to develop contractual relationship. Lastly a valid
consideration and intention to create legal relationship are requires to be there.
Application
In this case, offer was not available to accept for Damien as he was not a student of
university. He texted Alan regarding sending money for books, which was accepted by Alan.

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Alan breached this contract as all the subject matter have not been provided as per terms of
contract because Alan given a new book instead his own textbook.
Conclusion
Damien can cancel the contract and has the right to demand damages.
Question 5
Introduction
Parties to a contract have the option to resolve the dispute going outside of the case as
different alternative dispute resolution (ADR) methods are there. These methods have their pros
and cons which are given in the below discussion. The focus will be made on some of the
methods, which are commonly used by parties.
Discussion
The very first type of ADR is Mediation. In this method, an independent trained mediator
is there who arrange communication between the disputed parties. The main motive of such
communication is to attain a settlement and resolution. This is a structured and dynamic process.
The lead advantage of this method is that parties of dispute keep some control negotiating the
results. Secondly, in comparison to traditional litigation, it is less stressful. As process remain
faster hence less cost is involved in the process, which proves beneficial for the parties
(Singaporelawwatch.sg, 2019). However, mediation also has a certain disadvantage. The very
first disadvantage is that many times parties do not adhere with the terms of settlement and such
cases further lead to wastage of resources and time (Singaporelegaladvice.com, 2019b). The

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further decision of a mediator cannot be forced on the parties and therefore parties, later on, have
to move court, which cost more (Smith, 2017).
Moving towards another type of ADR, which is arbitration this is to mention that is a
more formal structure in comparison to others. Generally, parties to the case select an arbitrator
with the mutual discussion who hears them and provides a final decision. This method seems to
be similar to mediation but there is the difference between two that can be understood by having
looked upon to advantage and disadvantage. The very significant advantage of this method is
that the decision of the arbitrator is binding to the parties. Further similar to mediation,
arbitration is also cost-effective and resolves the dispute faster and confidential mode
(Siac.org.sg, 2019). If to discuss the disadvantage of this method this is to mention that many of
the time parties do not remain satisfied with the decision. In such a situation they need to
approach to courts which takes times and cost and choosing arbitration does not remain
beneficial for the parties (Yeo and Lee, 2018). Secondly, different arbitrators use different
standards, which create confusion and it also lacks confidentiality.
Conciliation is another method of ADR where parties can suggest their desired outcomes
and in this manner, it provides foremost control over control. A third part named conciliator
helps parties to understand their issues, identifies different options to them and try to provide a
final decision . The advantages that this method provides include confidentiality, control of
parties over the decision, cost and time efficiency. Nevertheless, it also consists of chances of
miscommunication and disclosure of information that are lead disadvantages.

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Conclusion
Conclusively, this is to state that no method is perfect and these consist of disadvantages.
Depending on the situation of dispute and other factors such as the seriousness of dispute and
relationship of parties, they can select most appropriated ADR.

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References
Carlill v Carbolic Smoke Ball co [1893] 1 QB 256
Chapple v Cooper (1844) 153 ER 105
Corporateguide.sg. (2019). Key Points of Singapore’s Contract Law. Retrieved from:
https://www.corporateguide.sg/key-points-singapores-contract-laws/
Felthouse v] EWHC CP J35
Harvey Bindley [1862v Facey [1893] UKPC 1
Hyde v Wrench (1840) 49 ER 132
Siac.org.sg. (2019) Our Rules. Retrieved from:
http://siac.org.sg/our-rules/71-resources/frequently-asked-questions/175-what-are-the-
advantages-of-resolving-disputes-by-arbitration
Singaporelawwatch.sg. (2019). Ch. 03 Mediation. Retrieved from:
https://www.singaporelawwatch.sg/About-Singapore-Law/Overview/ch-03-mediation
Singaporelegaladvice.com . (2019a). Breach of Contract in Singapore. Retrieved from:
https://singaporelegaladvice.com/law-articles/breach-of-contract-in-singapore/
Singaporelegaladvice.com . (2019b). Mediation in Singapore. Retrieved from:
https://singaporelegaladvice.com/law-articles/mediation-in-singapore/
Smith, M., W. (2017). Mediation – Advantages And Disadvantages. Retrieved from:
https://www.systech-int.com/mediation/

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Wishart, M., C. (2012). Contract Law. UK: OUP Oxford.
Yeo, A. and Lee, L., W. (2018). Arbitration Guide IBA Arbitration Committee. Retrieved from:
file:///C:/Users/System04113/Downloads/Singapore-IBAArbitrationGuide.pdf