Hurry Up! Get 15% Please upload the order before 31st january 2019. T&C applied Order now !
review
Back to Samples

Business Law Assignment | Terms Of Contract

Answer 1

I would answer the question by using the IRAC method.

Relevant Facts

  • In the event of losing gold chain and locket Leila had placed an advertisement in the newspaper.
  • The advertisement stated that gold chain has been lost and it also announced a reward of $50 for the one who finds the same and returns at the mentioned address.

Issues

The issues which arise from the given facts are as follows:

  • Whether there is a binding contract between Leila and Julie?
  • What would be the situation if Julie had not read the advertisement herself and was informed about the reward later on after she had returned the chain to Leila?

Relevant Legal Provisions

A contract may be defined to be an agreement between two parties or two groups of individuals which contains a promise or set of promises. The parties ought to have intention to be legally bound by such promise or promises. Such an agreement when is enforceable at law is termed to be a contract.

A contract must contain certain essential elements. These include;

  • OFFER

Offer has to be made by a party to the contract. Such offer may be in writing or oral or may also be inferred from the terms of the contract. The person who makes the offer is bound by the offer when the said offer has been accepted by the other party. In order to make an offer binding the terms of the offer must be communicated unambiguously to the other party.

An offer may also be made to the public at largein case a means of accepting the offer has been provided within the terms of the offer. An advertisement brochure which comes through mail is not an offer as there is no means of acceptance of the same provided in the terms of the offer. It is just an i ........

0 for the one who finds the same and returns at the mentioned address.

Issues

The issues which arise from the given facts are as follows:

  • Whether there is a binding contract between Leila and Julie?
  • What would be the situation if Julie had not read the advertisement herself and was informed about the reward later on after she had returned the chain to Leila?

Relevant Legal Provisions

A contract may be defined to be an agreement between two parties or two groups of individuals which contains a promise or set of promises. The parties ought to have intention to be legally bound by such promise or promises. Such an agreement when is enforceable at law is termed to be a contract.

A contract must contain certain essential elements. These include;

  • OFFER

Offer has to be made by a party to the contract. Such offer may be in writing or oral or may also be inferred from the terms of the contract. The person who makes the offer is bound by the offer when the said offer has been accepted by the other party. In order to make an offer binding the terms of the offer must be communicated unambiguously to the other party.

An offer may also be made to the public at largein case a means of accepting the offer has been provided within the terms of the offer. An advertisement brochure which comes through mail is not an offer as there is no means of acceptance of the same provided in the terms of the offer. It is just an invitation to treat. In case we go to the shop or call them up we are making an offer(Cheshire et al., 2002).

In order to constitute an offer at large it must include a means by which the same may be accepted. For instance in case a company has undertaken to pay $100 to a consumer in case they contract flu as a consequence of consumption of the preventive medicine manufactured by the company. This is a proper offer to the public at large. Acceptance would result when a consumer consumes the medicine as per the given instructions. An offer to the public at large has to revoked in the same way as the offer has been made(Graw, 2008).

In this regard the case of Carlill v. Carbolic Smoke Ball Co.(Carlill v. Carbolic Smoke Ball Co., [1892])may be cited. Carlill Smoke Ball Co. had put an advertisement in the newspaper regarding a carbolic smoke ball and promised that in case the same is used as per instructions then people would not get influenza. The advertisement announced a reward of 100 pounds to anybody who had used the said smoke ball as per instructions and contracted influenza. A woman who got influenza claimed the reward but the company refused stating that it is not an offer. In a case against the company the court decided in favour of the woman stating that it is a case of offer to the public at large and the woman had accepted the offer by consuming the smoke balls as per given instructions.

  • ACCEPTANCE

Acceptance may be n written form or oral or may be inferred from the action of the parties concerned. The acceptance must be unconditional i.e. it must be in the exact terms as the offer. Silence is not presumed to be acceptance.

In case of offer of reward the offer may be said to be binding only if the person who finds the product or item for which the reward has been provided is aware of the said reward. For instance; a person lost a dog and posted an advertisement in the newspaper stating that the person who finds the dog would be rewarded. A person finds a dog but is not aware of the said reward and returns the same to the owner. I this case the owner is not bound to give the reward. In case the person was aware of the reward then his action of bringing the dog back home would have amounted to acceptance of the offer. But as in this case he was not aware his action cannot be deemed to be acceptance of the reward(Llewellyn, 1938).

 

 

 

 

  • CONSIDERATION

Consideration is essential to form a bonding contract. The courts are not concerned about the value of the consideration; they are only concerned about the existence of consideration.

  • CERTAINITY OF TERMS

The terms of the contract must be clear and certain. The offerer and the offeree must be clear about the terms of the contract.

  • Capacity to Contract, Consent and Legality are other essential elements required in a valid contract.

Application

  1. In view of the above legal principles and precedents we may say that the offer made in the newspaper by Leila was an offer to the public at large. It contained a reward and had also provided the manner in which the offer has to be accepted. Julie by returning the lost items to Leila by reading the advertisement had accepted the offer and her claim for the reward is completely valid. Leila cannot say that Julie must have called her as it was not mentioned in the offer that the one who finds the lost item has to first make a call. Thus there is a binding contract between Leila and Julie and Leila has to pay the reward as promised or else it would result in breach of contract.
  2. In case Julie had not read the advertisement and had come to know about it after returning the lost item then she would not have been entitled to claim the reward. In this case the returning of the lost item would not be considered to be acceptance of the offer of reward as Julie was not aware of the offer.

Conclusion

In the given case Julie is entitled to claim the reward but she would not have been entitled to do so if she did not have the knowledge about the reward before returning the lost item.

 

 

 

Answer 2

I would answer the question using the IRAC method

Relevant Facts

  • Edwin entered into a contract with Adam for sale of a 1925 model of Rolls Royce. Edwin is a dealer of vintage cars.
  • The consideration for the contract was $500,00
  • Edwin later heard that a Sheikh was in search of the same model and was ready to pay $700,000 for the said car.
  • Edwin refused to go ahead with the contract with Adam.

Issues

The issues which arise from the given factual framework are as follows:

  • What remedies are available to Adam for the said breach of contract?
  • What would be the case if the car in question was a late model of Mercedes Benz?

Relevant Legal Principles

A contract is deemed to have been breached if the promisor;

  • Neglects to perform the obligation enshrined under the contract within the specified time period or
  • Commits an anticipatory breach of contract

Law provides remedies in order to redress the breach which has been committed and also to uphold the right of the innocent party to the contract.

Damages are the general remedy which the courts provide in cases of breach of contract.

The award of damages varies from case to case depending upon the circumstance of each case.

Damages are an inevitable consequence for breach of contract. This right accrues to the innocent party at the time when the other party commits the breach O’Connor v. SP Bray Ltd.(O’Connor v. SP Bray Ltd., [1936]).

In the case of Luna Park NSW Ltd. v. Tramways Advertising Pty. Ltd.(Luna Park NSW Ltd. v. Tramways Advertising Pty. Ltd., [1938])it was held that the right to claim damages is not dependent on proof of damage suffered but in case such proof is not preset then the award of damages would be limited to nominal damages(Cheshire et al., 2002).

The order to assess the amount of damages to be awarded the courts generally relies on the following principles;

  • Damages are warded as compensation and not as punishment to the party committing breach
  • The purpose of awarding damages is not restitutionary

There exist two categories of loss for which damages may be awarded;

  • Loss which arises naturally
  • Loss which the parties could have foreseen as a consequence of breach(Pearce and Halson, 2008).

In the case of Jarvis v. Swan Tours it was held by the court that damages are not awarded for losses which are not pecuniary, like loss of enjoyment or mental distress. But if the purpose of the contract is to promote happiness then damages may be awarded(M. H., 1930).

Liquidated damages are awarded when actual loss has accrued to the innocent party or provision regarding the extent of damage has been made in the contract.

Another equitable remedy which may be granted by the courts in case of breach of contract is specific performance of the contract(Carter, Peden and Tolhurst, 2007).

Specific performance of contract is an exceptional remedy awarded by the Australian courts. Such remedy is awarded only in cases when pecuniary remedy would be inadequate.

Injunction is another remedy which may be awarded by the courts. Injunctions may be prohibitory or mandatory.

This is also an equitable remedy and this type of remedy is granted by the courts depending on similar principles as that of specific performance. The cases of Page One Records Ltd. v. Britan and Warner Bros. v. Nelson may be cited in this regard(Coloma, 2008).

In the case of Baltic v. Shipping Dilon(Baltic v. Shipping Dilon, [1993]) the High Court of Australia had granted damages to the innocent party for distress suffered and also upheld that damages for distress may be granted only in case when distress is the result of physical inconvenience and the purpose of the contract was to provide relaxation or enjoyment(Contract: Breach: Damages, 1905), (Zhang, n.d.).

Exemplary damages may as well be awarded

Application

  1. Applying the above legal principles and precedents to the given factual framework we may say that Adam has many remedies available to him in the instant case.

The remedy of damages may not be awarded by the courts in this case as Adam did not suffer any pecuniary loss. But he may be awarded pecuniary damages for the loss of expectation.Since the car was a rare one, the courts may award high damages in case Adam elects for damages.

As far as specific performance is concerned the courts may ask Edwin to perform the contract specifically. In this case it was not fair on the part of Edwin to repudiate the contract after signing the contract of purchase. Adam had placed reliance and made expectation accordingly to purchase the car. Moreover since it is a 1925 model it is rare and not easy to find another easily.

This is not a case for award of exemplary damages thus the courts in this case would not award exemplary damages.

Since the contract has already been repudiated the question of repudiation of contract does not arise.

  1. Yes my answer would be different even if the car in question is a late model of Mercedes Benz because a late model of Mercedes Benz because it is not as much difficult to find another. Adam could have easily purchased another. In such a case the courts would have awarded only nominal damages.

Conclusion

We may conclude our discussion by saying that Adam has many remedies available to him under the Australian law as well as Common Law. These basically include damages and specific performance of the contract depending upon the nature of the subject of the contract. But if the car in question was a late model of Mercedes Benz then the scenario would not be the same.