LAW00150 Introduction to Business Law: Analysis of Legal Problems

This document provides solutions to several legal problems related to business law, specifically focusing on contract law principles. The problems cover various aspects of contract formation, including the intention to create legal relations in domestic agreements, the validity of consideration based on existing public duties, the legality of part payments of debt, the incorporation of unusual terms in contracts, the enforceability of exclusion clauses, and the presence of implied terms regarding the fitness of goods for a specific purpose. Each problem identifies the relevant legal issues, applies the appropriate legal rules and statutes, cites relevant case laws, and provides a reasoned conclusion based on the legal analysis. The document references cases such as Todd v Nicol, Balfour v Balfour, Collins v Godefrey, Foakes v Beer, and others to support its arguments.

Running Head: BUSINESS LAW
Business Law
Name of the Student:
Name of the University:
Author Note

1BUSINESS LAW
Answer 1
Issue
Charlie and Ali who are brothers and sisters have entered into a contract. It is required to find out
that whether Charlie would be legally bound the contract which have been formed with Ali under
rules relating to intention of creating legal relationship
Rule
Intention of creating legal relationship is an essential element of contract formation. In domestic
agreement intention is not deemed to present but this assumption is entitled to be rebutted by the
parties by showing that they had the intention to be legal bound.
Cases
Todd v Nicol [1957] SASR 72
Balfour v Balfour [1919] 2 KB 571
Wining chances
Yes, Ali will be wining this case against Charlie. The contract between Ali and Charlie was in
writing. A contract being in writing depicts that there is an intention on the part of the parties to
be legally binding in relation to the contract. The existing presumption of no ICLR which is
present in a domestic contract would be rebutted in the situation.
Answer 2

2BUSINESS LAW
Issue
Nick has promised to pay an amount to the police for providing protection services. However
after the services have been provided Nick has refused to pay the police. Whether he has the
liability to the promised sum to the police is the issue
Rule
The rule which would be applicable in the given situation is that a consideration which is
provided in form of an existing public duty or duty at law than it would not been regarded as a
lawful consideration unless the parties have acted beyond their conventional duties.
Cases
Collins v Godefrey (1831) 1 B & Ad 950
Glasbrook Bros v Glamorgan County Council [1925] AC 270
Ward v Byham [1956] 1 WLR 496
Chances of wining
No, if Nick is challenged in the court he would not be able to win the case in the given situation
against the police. As per the principles of the case of Collins v Godefrey the police will not by
able to make a claim against Nick. However as per Glasbrook Bros v Glamorgan County Council
as the police went beyond traditional duty a claim can be made by them.
Answer 3
Issue

3BUSINESS LAW
In this case Helen has made a promise to Mike that she would accept lesser payment for a loan
provided by her if Mike comes and checks her car steering. Is the part payment valid
Rule
A part payment of debt will not be valid at law unless the party making a lesser payments
provides an additional chattel, pays before time or pays at a different place.
Cases
Pinnel’s case (1602) 77 ER 237
Foakes v Beer [1881–5] All ER Rep 106
Chances of winning
No, if a claim is filed by Helen for the additional money than she will not succeed. This is
because even as per Foakes v Beer it is not a valid consideration as per the Pinnel’s case an
additional chattel has been provided in form of checking the BMW steering by Mike
Answer 4
Issue
Lizzie has purchased a few DVDs from the DVD store and the contract had an unusual term in it.
Whether such term would be a part of the contract is the issue in the situation
Rule

4BUSINESS LAW
Any unusual terms in a contract of a standard from have to be reasonably notified by the party
who has incorporated such terms to the other party to the contract. These terms can be regarded
as unfair terms if the terms are a part of a standard form of contract
Case
Interfoto Picture Library v Stiletto Visual Programmes ([1988] 1 All ER 348
Chances of winning
No, in this situation if the DVD shop owner will file a case against Lizzie they would not be able
to succeed in the situation as the term that she needs to pay a penalty of $20 is an unusual term as
in the industry the penalty is only $5 a day. The DVD store did not provide her with reasonable
notice about such terms and thus it would be binding in her.
Answer 5
Tori has taken her dress to a dry cleaner and the dress have been damned beyond repairs. There
was an exclusion clause which was provided to her. The issue is whether the clause has been
validly incorporated into the contract.
Rules
Any person who signs a contract is bound to the terms of the contract. The terms of the contract
will be binding on person even if the terms of the contract have not been read by the person.
The exclusion clause is valid if it is notified to the other party at the time when the contract s
formed and not after formation of the contract.
Cases

5BUSINESS LAW
Curtis v Chemical Cleaning Co [1951] 1 KB 805
L'Estrange V Graucob [1934] 2 KB 394
Wining chances
No, in this situation Tori would not be able to win the case against the dry cleaners. This is
because the clause had been signed by her at the time of contract formation and thus it can be
stated that the clause has been incorporated into the contract in valid manner without any fraud
or misrepresentation.
Answer 6
Issue
Hear Sandra has notified Smith that she wants to purchase the copier for a specific purpose but
the product did not meet the purpose. Is there an implied term in the contract that the product
will meet the specific purpose?
Rule
Under section 19 of the Goods Act 1958, when for a specific purpose a goods are purchases and
the seller is notified about such purpose than it is an implied term that the goods will be fit for
the purpose
Cases
David Jones v Willis (1934) 52 CLR 110
Chances of winning

6BUSINESS LAW
Yes, Sandra has a strong case in the situation against Mr Smith. This is because she had notified
about such purpose she is purchasing the copier for to the seller Mr Smith and the copier did not
comply with the purpose as it was no fast, section 19 is breached.

7BUSINESS LAW
References
Balfour v Balfour [1919] 2 KB 571
Curtis v Chemical Cleaning Co [1951] 1 KB 805
David Jones v Willis (1934) 52 CLR 110
Foakes v Beer [1881–5] All ER Rep 106
Interfoto Picture Library v Stiletto Visual Programmes ([1988] 1 All ER 348
L'Estrange V Graucob [1934] 2 KB 394
Pinnel’s case (1602) 77 ER 237
Stilk v Myrick [1809] EWHC KB J58
Todd v Nicol [1957] SASR 72
Ward v Byham [1956]