Business Law: Contract Validity, Remedies, and Court System Analysis

This report provides a comprehensive overview of contract law within the context of business. It begins by outlining the essential elements of a valid contract, including offer, acceptance, and consideration, drawing on relevant case law to illustrate these principles. The report then delves into the UK court system, specifying the appropriate courts for handling contractual disputes. Furthermore, it analyzes several case studies to determine the existence of valid contracts between parties. Finally, the report explores the various remedies available under contract law, such as compensation, specific performance, and injunctions, providing a thorough understanding of contract law principles and their practical application.

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BUSINESS LAW AND
ETHICS

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TABLE OF CONTENTS
1. INTRODUCTION………………………………………………………03
2. EXPLAIN THE VARIOUS ESSENTIALS OF A VALID
CONTRACT……………………………………………………………..03
3. EXPLAIN COURT SYSTEM OF UK AND ADVISE PARTIES TO
WHICH COURT THEY CAN APPROACH……………………………
05
4. ADVISE HILARY WHETHER CONTRACT EXIST BETWEEN HER
AND OTHER PARTIES: ELEANOR, AMY AND OLIVIA………….05
5. EXPLAIN ALL THE AVAILABLE REMEDIES UNDER CONTRACT
LAW……………………………………………………………………….06
6. CONCLUSION……………………………………………………………06
7. REFERENCES……………………………………………………………07

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INTRODUCTION
Every business is governed by various laws and Law of Contract is one such law which
is widely used in the business transactions. Generally, the law of contracts is used for
determining the various rights and obligations of the contracting parties. All these laws are
passed by the Parliament of United Kingdom to make sure that all the activities which are related
to the business must work in a smooth and efficient manner. In this essay the researcher will try
to explain the blue print of the valid contract by describing various essentials of the contract
which are necessary to be present in a valid contract.
The researcher will also try to discuss the existing court system of United Kingdom and
will advise the parties that where they can approach if the contract they entered has been
breached.
In this essay different fact based problems will be examined and it will be seen whether
the valid contract lies between the parties or not. At last all the available remedies will be
discussed which are available to the contracting parties under this contract law.
MAIN BODY
Explain the Various Essentials of a Valid Contract
A “Legally Binding Agreement” will be known as a contract. In a valid contract all the
contracting parties will make an agreement with a free will regarding certain subject matter and
this document of contract will determine the rights and duties of the contracting parties. A single
person cannot make a contract in himself which means that for the formation of a contract
minimum 2 people are required. There is no maximum limit on the number of people while
entering into a contract. The contract law in United Kingdom has enumerated various essentials
of the contract which should be present in a valid contract (Abd Rahman, 2019).
.
When two or more parties enter into a contract they become bound by the terms of the
contract. If any of the party violates the terms mentioned in the contract, it will be considered as
the breach of contract. The party who suffers the loss due to such breach can approach the court
to claim the compensation for the breach of the contract. The court will examine the agreement

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in question by looking at it and by seeing whether all the essentials of a valid contract are present
in the agreement or not (Jones, 2019).
The first essential of a valid contract is presence of Offer. In simple term the offer can be
understood as a proposal given by one party to the another regarding something. It must not be
misunderstood with Invitation to Offer. Both these terms are different. In the landmark case of
Harvey vs Facey, the court has distinguished between these two terms. The another judgement
in which the offer and invitation to offer was distinguished was the case of Carlill vs Carbolic
Smoke Ball Co. In the another famous case of Fisher vs Bell (1961) the court has clarified the
situation of the items which are being displayed in a shop or showroom. The court has stated that
all the displayed items in the shop will be considered as the invitation to offer and the customer
who wants to purchase those displayed items will be giving the offer to the shopkeeper (Allen
and Kraakman, 2016).
The second essential or it can be considered as the second step towards the formation of a
valid contract is Acceptance. The acceptance must be properly communicated to the offeror in
the prescribed mode. The acceptance can be made either through expressly or by a conduct too.
Regarding a revocation of the acceptance by the acceptor, the general rule is that the acceptance
can be revoked before it comes into the knowledge of the proposer. Whereas there is an
exception to this rule when the acceptance will be communicated by the letter. In these cases
once the acceptor has put his acceptance in the mode of transmission which means if the letter
has been posted, the acceptor cannot revoke its acceptance and both the parties becomes bound at
the time when the letter was posted (Smith and Williams, 2018).
Consideration is the other element which must be present in a valid contract.
Consideration is a thing which the parties will exchange at the time of entering into the contract.
The court has time and again clarified that the inadequacy of the amount of consideration does
not make a contract invalid (Ashcroft, Ashcroft and Patterson, 2016).
Intention to enter into a legal relationship is the another essential of a valid contract. In
the case of Balfour vs Balfour, the Privy Council has ruled out that if while entering into an
agreement either of the parties does not have the intention to enter into the legal relationship with
each other the contract will not be considered as the valid contract. This intention of entering into
a legal relationship generally absents in the close relatives such as father-son, husband –wife etc.

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The subject matter upon which the contract has been made must be Certain. If there is
uncertainty in the subject matter while entering into the agreement, the contract will be
considered as invalid. It is also necessary that the parties who are entering into the contract must
be competent to enter into a contractual relationship. Contract with a minor or an insolvent will
not be considered as the valid piece of contract (Beatty, Samuelson and Abril, 2018).
Explain Court System of UK and Advise Parties to Which Court they can Approach
“As this project is related to the contract law which comes under the civil law, the courts
which are entitled to deal with the civil matters will be discussed under this project. The lowest
court in which the parties can approach is the County Court which was established for the
purpose to deal those matters which are less important and having small amount in question. The
Queen’s Bench of High Court has been conferred the power to deal with the contractual disputes
where a large amount is in dispute. The appeal from the Queen’s bench will go to Court of
Appeal. After that the appeal will lie to the Supreme Court of United Kingdom which is the
highest appellate court which was formed by Constitutional Reform Act 2005” (Cartwright.,
2016).
Advise Hilary Whether Contract Exist Between her and Other Parties: Eleanor, Amy and Olivia
Case 1: In the famous judgement of the Partridge vs Carttinden, the Privy Council has
held that the advertisements will be considered as an invitation to offer. In the given facts also
the advertisement was given by Hilary, which was an invitation to offer. Eleanor has given an
offer to Hilary which was countered by the latter. Further when again the offer was given by
Hilary to Eleanor, it was not accepted by Eleanor. Hence no contract was formed between both
the parties.
Case 2: As per the celebrated judgement of Entores vs Far Miles East Corporation the
revocation of the acceptance cannot be revoked once it has been put in the mode of the
transmission by the acceptor. In the given facts also the same principle which was evolved in the
above case will be applicable. Here also the Amy has posted the letter of her acceptance so by
applying the above principle she cannot revoke it now and a valid contract lies between her and
Hilary Chandrika, 2016).

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Case 3: In the given facts the notices put by the Hilary will be considered as an invitation
to offer. When the offer came from the side of Olivia regarding the purchase of the paintings, it
was rejected by Hilary, hence no contract has been formed between these two.
Explain all the Available Remedies Under Contract Law
Compensation: The most common remedy which a court awards is in the form of the
damages to the party to whom the loss has been occurred due to the breach of the contract. While
awarding the compensation the court must examine that the loss which has been occurred to the
party is resulted because of the breach of the contract and was reasonably foreseeable. The court
can only award damages for those losses which are directly connected to the breach of contract
(Fita Ortega, 2020).
Specific Performance: In case where the court considers that here the compensation
would not be the adequate remedy, the court can order regarding the specific performance of the
contract.
Injunction: If one of the party who is entering into the contract is of opinion that other
party can breach the contract in future. It can approach the court to issue injunction by restricting
all the parties to breach the contract (Hodge, 2017).
CONCLUSION
“By the above study it can be concluded that in every business the law of contract is
being widely used. For determining the validity of a contract the courts must consider various
essentials which must be present in the agreement such as offer, acceptance and consideration.
With the help of various case laws also it was understood that how court examine these essentials
in the real situations. Further the court system of UK was discussed and parties were advised to
approach which court. Various case based problems were also discussed and it was seen that
what all remedies are available to the parties”.

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REFERENCES
Books & Journals
Abd Rahman, H., 2019. Offer and Acceptance in Islamic Law of Contract. Jurnal Syariah, 8(2),
pp.15-32.
Allen, W.T. and Kraakman, R., 2016. Commentaries and cases on the law of business
organization. Wolters Kluwer law & business.
Ashcroft, J.D., Ashcroft, K. and Patterson, M., 2016. Cengage Advantage Books: Law for
Business. Cengage Learning.
Beatty, J.F., Samuelson, S.S. and Abril, P., 2018. Business law and the legal environment.
Cengage Learning.
Cartwright, J., 2016. Contract law: An introduction to the English law of contract for the civil
lawyer. Bloomsbury Publishing.
Chandrika, M.P., 2016. A Comparative Analysis of UK and Indian Provision relating to
Intention under Law of Contract. International Journal of Law and Legal Jurisprudence
Studies, 3(4).
Fita Ortega, F., 2020. Essentials of the contract of employment.
Hodge, P.S., 2017. Judicial Development of the Law of Contract in the United Kingdom. Geo.
Wash. L. Rev., 85, p.1587.
Jones, L., 2019. Introduction to business law. Oxford University Press, USA.
Smith, D.G. and Williams, C.A., 2018. Business Organizations: Cases, Problems, and Case
Studies. Aspen Publishers.