Commercial and Corporation Law Assignment: Questions 1, 2, 3

This assignment delves into key aspects of commercial and corporation law, beginning with an exploration of legal systems, including civil, common, and international law, and the principles of the Australian legal system. It then transitions into contract law, analyzing the essential elements of a contract such as offer, acceptance, and consideration, differentiating between offers and invitations to treat, and examining the concept of misrepresentation with relevant case studies. The assignment concludes by addressing breach of contract, outlining various remedies available to the non-breaching party, and discussing the circumstances under which a breach may occur, providing a comprehensive overview of contract law principles and their practical application.

Student details:
Word limit: Question 1 600 words
Question 2 800 words
Question 3 800 words
Running Head: Commercial and Corporation Law 1

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PART-A
Answer to Question 1(b)
An understanding of legal system will help to determine the primary sources of law and
types of legal materials. The legal system includes rules, procedures and institutions. They help
to carry out public initiatives and private endeavors by legitimate means. It can be said that legal
system is a system which helps in interpreting and enforcing the law as well as elaborates the
responsibilities and rights. Legal system mainly includes civil law, common law and religious
law. Others legal systems include jury system, tax system and electoral system.
Civil law systems and common law system are two dominant legal traditions. Civil law
system is a system in which core principles are codified as primary sources of law. Common law
system is a system in which judge made final law which stands equally with statues enacted by
legislatures and regulations adopted by administrative agencies.
Foreign legal system considers as a base for the carry out international relations. This
system regulates state actions under international law. The major subjects of international law are
states, not individuals as they cover under municipal law. In Europe and Western Hemisphere,
foreign jurisdictions have legal systems which come exclusively within either the civil law or the
common law. On the other hand, other jurisdictions have mixed legal system. Mixed legal
system includes elements of two or more than two legal traditions. This is correct in Africa and
Asia because many country which adopting civil law or common law systems also have retained
elements of customary law or religious law or both.
Hart published The Concept of Law, his most organized and exclusive essay in general
jurisprudence. Today, the concept of law has become an established classic. This essay has five
parts. In part 3, three important challenges are to hart’s doctrine of the rule of recognition. They
are: 1) Hart’s rule of recognition under and over inclusive.2) Hart cannot explain how social
parties are capable of generating rules that confer powers and impose duties and hence cannot
account for the normatively of law. 3) Hart cannot explain how disagreements about the criteria
of legal validity that occurs within actual legal system, such as in American law, as possible. The

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core of Hart’s argument is addressed to three questions: what is a legal rule. What are the
differences and similarity between law and morality? What is a legal system? Hart answered to
these three questions in The Concept of Law is more important to build up a coherent and
satisfying picture of introduction of municipal legal system. According to Hart, The Concept of
Law is a system of rules and rules are soul basis of legal system. Legal system is a combination
of primary and second rules. Rules of recognition are a type of secondary rules which validates a
legal system and which is central and essential to every legal system. The rule of recognition
requires establishing a test for valid law in an applicable legal system and conferring validity to
everything else in the applicable legal system. It is required to unify all the laws in the applicable
legal system.
Similarly, the Australian legal system is founded on the concept of the rule of law and
justice and equality before the law. Australian legal system also includes primary and secondary
rules. The three main principles of the legal system are fairness, equality before the law and
justice. Australian legal system is based on the rule of law. This means that everyone has to obey
the law. The law applies not only to citizens but also to organizations and government.
PART- B
Introduction
Contract is an agreement between two parties which creates mutual obligations
enforceable by law, where a promise is fulfilled by one party and consideration is paid by other
party. In order to form a contract, there are certain elements to a contract, which are essential to
form a contract. These are an offer, an acceptance, consideration, capacity, intention and clarity
regarding the contract terms. A contract can be written or oral. A written contract is a contract
where all the terms of the contract detailed on a paper and signed by both the parties of the
contract and an oral contract is a contract where parties are agreed upon a contract verbally.
There are many elements which can make or break a contract. Invitation of treat is
different from the offer. If an invitation to treat is made, instead of an offer then a contract cannot
be formed. In the following parts, these facts have been highlighted with case study.

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Answer to Question 2
Issue
Whether Barry may challenge validity of contract before entered into contract?
Rule
The first essential element to form a contract is an offer. In order to form any contract,
one party has to offer, which shows their willingness to enter into a contract1. An offer is
different from an invitation to treat, where the parties show a willingness to negotiate. An offer is
an expression of the offeror to contract on some specific terms, which states the intent that this
would become binding on acceptance. And the invitation to treat is invitation to enter into
negotiations to create an offer. Such invitation to treat is the intention to get offers from the other
party and they do not intend to result in any obligation, which is binding in nature2. In Fisher v
Bell, it is clearly established that where the goods are displayed in the shop and tagged with price
label, then display is considered as an invitation to treat not an offer. It can be offer when
customer takes the goods to the cash counter with the payment.
In Harvey v Facey3, the property owner’s indication that they may be interest in selling
the Bumper Hall Pen at the lowest price, was not an offer, but merely an invitation to treat. This
was because the first telegram had asked if Facey would be willing to sell the Bumper Hall Pen,
which was not answered in the second telegram. So, the price stated in the second telegram was a
response to the request for information and not an offer.
When the negotiations of contract are going on, statements are made by the parties. It could
amount to representation or term of the contract. As per the common law, a misrepresentation
refers a false and misleading statement of fact which is made by one party to another party of
1 Jill Poole, Casebook on Contract Law (Oxford University Press, 2016)
2 John W. Carter, Elisabeth Peden and Greg Tolhurst, Contract Law in Australia (LexisNexis Butterworths, 5th ed,
2007)
3 [1893] [1893] UKPC 1, AC 552

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contract at the time of negotiation. It means misrepresentation occurs when one party of the
contract made a statement to induce another party to enter into a contract.
In Bisset v Wilkinson, the plaintiff acquired a piece of farm land for sheep farming and asked the
seller about the capacity to hold the sheep. Though, the seller had not used land as sheep farm
but assessed that it can hold 2000 sheep. The claimant considers the statement true and later this
estimation found wrong. The claimant took an action for misrepresentation. But the Privy
Council does not consider it as misrepresentation because that statement of seller was of opinion
not of the facts.
Application
In order to form a contract, the basic elements of a contract, have to be present in the
contract. In absence of such elements, the contract is not formed. In this case, Berry saw the
advertisement of fruit and vegetable store and telephoned Angelo to get the information about
the store. After having satisfaction, Berry negotiated with Angelo and signed the contract. So it
was not an offer, but an invitation to treat. As a result of which a contract could not be formed.
a. As per this problem, Berry found that shopping village was busy only during weekends
not during week days. Berry cannot challenge the validity of the contract on this base
because it was an invitation to treat not an offer made to him. For a misrepresentation to
be established, it has to be shown that the person was induced into entering the contract.
But Berry visited the store before enter into contract so misrepresentation cannot be
established.
b. Berry discovered a grocery store in the shopping village after took over the store. This
fact cannot question on the validity of contract because Berry went to the shopping
village before purchase store and that grocery store was not noticed by him. This cannot
establish misrepresentation.
c. Berry did not know that loading van was leased by previous owner so lease payment was
not paid and penalty was imposed due to lease default. If Berry had paid the lease then
expenses would increase by $5000 per month. The expenses will be $8500 per month.

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Here, Berry can take action for misrepresentation because Angelo gave incomplete
statement to induce.
d. Berry came to know that loader was broken down and could not be fixed for less than the
replacement cost. Berry did not know about broken loader. Hence, this can establish
misrepresentation.
Conclusion
On the basis of above analysis, it can be concluded that a contract was not formed in this case.
As per the above discussion, Berry can claim misrepresentation.
Answer to Question 3
Issue
Whether there is possibility of breach the contract or not?
Rule
In a contract, one party promise to perform duty and other party promise to pay
consideration. Legally, when one party fails to fulfill any contractual obligation then other party
can break the contract. Thus breach of contract arises. A breach of contract may arise when a
party fails to perform duties in accordance with terms mentioned under contracts or does not
perform timely or fails to perform whatsoever. A breach of contract can be classified as material
breach or immaterial breach to determine the remedies available for breach of contract.
Whenever breach of contract occurs, one of the parties or both may enforce the contract
as per the own terms and conditions otherwise parties may try to recover the financial losses due
to breach. If both the parties failed to make resolution over breach of contract then lawsuit is
only the option.
On the breach of contract by one party, other one will be entitled to get relief. The major
remedies for breach of contract are available such as that non-breaching party can claim
compensatory damages or punitive damages or nominal damages or liquidated damages. But if
the damages are not adequate, non-breaching party may ask for specific performance in which a
court can force the non-breaching party to provide service or goods or perform accordingly.
Alternatively, option of cancellation and restitution are available to the non-breaching party.

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In startup v McDonald, according to the contract 10 tons oil to be delivered to the
defendant within last 14 days of March. The claimant made a delivery at 8.30 pm on 31st march
and the defendant refuse to accept delivery. Here the claimant had tended performance within
actual contractual time duration. The claimant was entitled to damages for rejection.
Application
In order to breach of contract, one party fails to perform obligations towards the other
party, contract can be break. In the given case, Berry noticed various things after took over the
store. Angelo failed to perform legal obligations due to which breach of contract may rise.
Angelo did not give full information about the loading van and broken loader, Berry can break
the contract. But if berry does not want to get out of this contract, then they can enforce the
contract as per their term and conditions Otherwise as a non-breaching party Berry may recover
the financial losses from Angelo.
If Berry breaches the contract due to failure of performance of legal obligations then
Berry will be entitled to get remedies. The most frequent remedy is to get the payment of
damages. There are various types of damages such as Compensatory damages, punitive damages,
liquidated damages and nominal damages. But if Berry does not get adequate damages then the
option of specific performance is available for him. It is best explained as the court ordered to
perform the duty under the contract. In addition of remedies of breach of contract, cancellation
and restitution may be also used. Berry may cancel the contract and sue for restitution if Angelo
has given the benefit to the Berry.
Conclusion
On the basis of above analysis, it can be concluded that if aggrieved party does not get out of the
contract then financial damages can be claimed from non breaching party or otherwise adequate
remedies can be claim.
Conclusion
In the preceding parts, the analysis of the scenario given with the different rules was done, to
establish the validity of contract in each case. This analysis highlighted the different aspects of a

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contract, its elements, the vitiating factors and the differentiating between the terms of the
contract and the representation. Through the various case laws quoted above, the rules were
elucidated in detail and their applicability to the present case was established. To conclude, this
analysis provided a thorough summary of the contract law.