cl assignment 1

7/30/2019 CL Assignment 1

1/8

1. The different types of business agreement and the importance of the keyelements required for the formation of a valid contract

In term of business, a contract is an agreement reached after sufficient consideration to

do, or refrain from doing, some legal action. A contract is considered valid when two or

more parties with capacity make an agreement involving valid consideration to do or to

refrain from doing some lawful act. If these elements exist, the contract is valid. If one

or more or these necessary elements is missing, the contract is void or voidable. In other

words, it is not a true contract and therefore cannot be enforced.

A valid contract that is the agreement signed by both parties that meets the requirements

of state law and is therefore in force. Moreover, a contract is valid if it can meet therequirements to be legally enforceable. Thus, the companies need to consider all the

factors to make a valid contract in the business. There are many essential elements of a

valid contract included in proposal and acceptance, capacity of parties to contract,

consideration with a lawful objects, legal relationship and enforceable by law.

For example, Fashion shop owner promises to pay a contractor a particular amount of

money to supplier. If supplier supplied full of goods, shop own is then bound to pay for

him as promised. The supplier also accepts with the homeowners offer.Besides, there are many business contracts such as unilateral contract, bilateral contract,

partnership, sales contract, employment contract.

First of all, unilateral contract is an offer or promise by the person giving the offer or

promise without a second party accepting it. The offeror is bound to abide by the

promise even though there is no reciprocal acceptance. So in this contract only one

person is responsible to full fill the conditions set in that contract. Unilateral contacts

are made when there is no defined second party or it is offered to many at a time.

Unilateral contract is often reward. For example, A party lost his dog and promise to

give anyone who can find and return the dog 1000$. If B party can find the dog and

return to A, B will receive 1000$. If B give the dog to A but A refuses to pay B, B have

the right to sue A for breaking contract. The court therefore will enforce A to give

money to B as promised.


2/8

Next,bilateral contract is distinguishable from a unilateral contract, a promise made by

one party in exchange for the performance of some act by the other party. Both parties

to a bilateral contract make promises. With respect to the promise in issue, the party

making the promise is the promisor and the other party is the promisee. Once, promisor

and promisee do not follow the contract, the other can sue for breach of contract. For

example, A promises to buy 10 bicycles if B accept payment within 2 weeks, B decides

to allow A pay within 2 weeks if A buy 10 bicycles or more. After considering, A and B

have an agreement that A will buy 10 bicycles and B will receive payment after 2

weeks. Therefore, A and B have entered into a bilateral contract and if one party does

not follow the contract, the other can sue for breaking contract

Moreover, partnership is the relationship existing between two or more persons who

join to carry on a trade or business. Each person contributes money, property, labor or

skill, and expects to share in the profits and losses of the business. A partnership must

file an annual information return to report the income, deductions, gains, losses, etc.,

from its operations, but it does not pay income tax. Instead, it "passes through" any

profits or losses to its partners. Each partner includes his or her share of the partnership's

income or loss on his or her tax return. For example, A and B are being registered on the

business license.

Furthermore, employment contract is an agreement entered into between an employer

and an employee at the time the employee is hired that outlines the exact nature of their

business relationship, specifically what compensation the employee will receive in

exchange for specific work performed.Employment contracts typically lay out thewages, bonuses, vacations, medical leaves (including maternity/paternity), stock

options, and other benefits and compensation that the worker receives for fulfilling

his/her obligations to the employer. These obligations are also specified in the contract,

as is the duration of the worker-employee arrangement, the authority of the employee,ownership of intellectual property, and dispute resolution mechanisms.


3/8

2. Case 1Based on scenario and law book, it can be inferred to apply an invitation to treat to this

situation. Invitation to treat is an indication that someone is prepared to receive offers

with the view to forming a binding contract. In this case, Ben gives offer the supplier

after reading advertisements, the contract between Ben and Chris is valid. We can apply

certainly of the offer to solve this case, according to Calrill v Carbolic Smoke Ball Co

1893, the offer from the advertisement can be a valid offer.

By using the role of Agreement, Ben replies the advertisement about the book by Bruce

at 750. He offers the supplier to keep the book while he has a decision about

purchasing book and Chris accepts it. On the same day, Ben connects with Chris and

accepts to buy it with original price at 1000. However, Chris does not allow the

promise with Ben and sell the book for Eve because she pays the higher price at 1250.

This is a kind of oral contract. It this case, it can be considered as a valid contract. In the

contract, supplier gives price at 1000 and buyer accepts it . And then, Chris does not

follow the rule, it means that he breaks the contract between he and Ben. Therefore, Ben

can sue the supplier because of breaking the contract.

However, Ben also may be hard to sue the supplier because this is just an oral contract.

Thus, because of exchanging by phone, Ben is hard to find the evidence to prove the

promise of supplier. If the transtraction was done through Internet, it is a writing

contract. And at that time, Ben will have more evidence to sue the supplier. Since this is

an internet advertisement, it can be considered as a valid offer.

On the other hand, if the third party, Eve, purchases the book, according to the case of

Dickinson v Donalds 1876(Course Book, page 48), there would be 2 situations:

The date of the letter is posted that it was after her fax, the contract was invalid.

The date of the letter is posted that it is before her fax, the contract between Benand Eve is valid, and he can full right to buy this book.


4/8

In conclusion, I advice Ben should not sue Chris because it may lose because according

to the case of Pattridge vs Crittenden 1968, the conviction was quashed. The

prosecution could not rely on the offence of offering for sale, as the advertisement

constituted an invitation to treat. Therefore, the supplier may not make an offer.


5/8

3. Case 2According to law book, domestic arrangements can be no intention, because it was a

domestic arrangement between relatives. In addition, executed consideration is a

performed, or excuted, act in return for a promise. Therefore, it pointed to the opposite

conclusion that Alan refuses to transfer his title in the house to Cath. Besides, domestic

arrangements between Ben and Alan, Dawn and Alan, there is no intention to create

legal relation.

First of all, Ben is a father of Alan. It means that they are classified as other domestic

arrangement because their relationship is between father and son. The case that Ben

would prepare his tax return for Alan for a fee of 500, then he refuses to pay Alan.

However, there is no intention to create legal relations because they have an informal

agreement of indefinite duration. According to Simpkins and Pays 1955, there was a

mutuality in the arrangements between the parties, amounting to a joint enterprise. It

means that there is an agreement between them and it can be seen as a valid contract,

there are 2 situations:

If Alan accept the offer of Ben to did the accountancy work, there is an agreementbetween them so son cannot claim father.

If Alan and Ben do not have an agreement both sides, so Ben must pay for Alan andAlan may sue his father.

Next, before separating, Ben and Cath are the spouses, they had a written agreement

about pay 1,000 per month for Cath to pay off the mortgage on the house that Alan and

Cath jointly owned. There is no doubt that Ben must to transfer the house into her sole

name when the mortgage had been paid off. Because of written agreement, it can be

seen as a valid contract. Based on Merritt and Merritt 1970 (p.74), with this agreement,

if somebody in the group break the contract, the claim will be made. In addition,

executed consideration is a performed, or executed, act in return for a promise. With all

evident, Cath can sue Ben to protect her right.

On the other hand, domestic agreement between Ben and his daughter,Dawn so the

nature of the agreement itself may lead to the conclusion that legal relations were


6/8

intended. Father promised that he would buy her a new car if his daughter passed all of

her final examinations. It means his promise becomes binding when Dawn performs the

act to satisfy the reward. Based on Executed consideration that is performed, or

executed, act in return for a promise, the defendant can be claim.

In concluded, people have domestic arrangements need to communicate clearly and a

written arrangement to avoid intervention of the court that made the conflict between

them. The original intention of Alan did not require Ben to pay money so Ben

submitted the accounts to the tax authorities without paying for other. However, because

of written agreement, Alan must have a responsibly for Cath and do as his promise with

her. If he will not transfer his title in the house to Cath, he can be charged. Besides,

there is an oral agreement between Alan and Dawn, she does not have enough evidence

to sue Alan but her father should be perform his promise to keep blood- relationship

well.


7/8

4. Case 3When 2 parties want to have a contract, they need to understand clearly their authorities,

responsibility, and the rule to be involved in a contract. If anyone who has contract is

under 18 years old, they are not old enough to sign the contract. In this case, through the

Minors Contract Act 1987, Dawn is a minor and he doesnt have enough authority to

enter any contract not to aim to server for the living standards, needs and education.

In first situation, she borrows 500 from her older brother to tide her over until she can

find a job. It is not suitable for the above reason for contract. Obviously, this contract

between her and her brother is a voidable contract of a minor, because the contract started

when Dawn borrow $500 without stating his age. This money is not for her benefit as

food, clothing or studying. In fact, she maybe use it to spend expense. However,

according to Steinberg v. Scala (p.78), the contract between Dawn and the her brother is

voidable or invalid contract because Dawn is a minor. This rule aims to avoid her to give

any contractual obligations arising after the repudiation.

Next, in other case, she takes a two-year lease on a bed-sit. Actually, according to Nash

and Inman 1908 (p.77), the minor can requires the goods for the personal needs of

himself so when she lives independently, a bed-sit is so necessary for her. As a result, acontract between Dawn and renter is valid and it is binding contract in the usual way.

Dawn must has responsibly to pay fully three months rent in advance if she does not

breach the contract.

Moreover, by pretending to be 21, she orders a 700 suite of furniture from Palatial Pads

Ltd. The first mistake is belong to Dawn, she pretended that she is 21 years old to have a

contract. She frauds misstatement of her age that did not follow the rule in the contract.

Besides, the mistake is also belongs to renter. The responsible of Palatial Pads Ltd is to

get information or at least the identification card of customers. To conclude, according to

R Leslie Ltd and Sheill 1914, this contract is unenforceable contracts of minor. The loan

is 700 that is so huge for her. If she could not be compelled to repay it, this would

constitute enforcement of the contract. It means the contract was finished. If there are any

people damage the opportunities of the hotel, they will be paid for the damages.


8/8

cl assignment 1

Documents