Concept Business Contracts Assignment

Introduction

 Concept Business Contracts Assignment discuss case deals with the concept of contract. Contract is basically an agreement between two or more people where they agree to be bound by it. There are many elements that are required for a contract to be legally valid; they are offer, acceptance, consideration and intention to be legally bound by the contract.There are four legal issues that we need to discuss, and they have been discussed in the report, also we have discussed whether there was a legally binding contract between the parties to the contract in the present case.

Concept Business contracts Assignment

There are four issues in this case and we will discuss it below.

  1. Whether there is an offer.
  2. Whether there is an acceptance.
  3. What is the consideration?
  4. Whether a legally binding contract was formed.

1.The first issue is whether there is a proper offer from one party to another.

An offer is actually a communication from one person who is known as the offeror to another person who is known as the offeree to do a specific thing or abstain from doing it. An offer can be made to an individual, a group of people or to the world at large also the offer should be clear and the intention of the offeror should be enter into an agreement of some specific terms.

 (A)What is the law on offer?

There are many cases related to offer but here we are going to discuss one Contract case law related to offer.

The leading case on offer was the landmark case of Carlill v. Carbolic Smoke Balls, (1893).

The main facts of the case are that carbolic smoke balls company placed an ad stating that anyone who uses there smoke balls three times per day as prescribed and still gets influenza, colds or any other disease will be awarded with 100 pounds. After seeing the ad Carlill bought the smoke balls used it as prescribed but still contracted influenza and made a claim for the 100 pounds reward.

The issue of the case was whether an offer has been made?

The court held that there was an offer by the Carbolic smoke ball company and they have a made a unilateral offer for the sales of goods and Carlill should be given the reward amount.

(B) Apply the law to the facts of the case.

Now we need to see whether there has been an offer made in the present case. In the present case Alco Wines in France receives a fax from We Guzzle Winery in Australia where they offered to sell 500 cases of white wine at a discount of 40% off from the usual price of £20 per case.

In this case the fax from We Guzzle Winery is an offer where they have promised to sell the white wine for 40% off the usual price of £20 to Alco Wines so we see that here We Guzzle is the offeror and Alco wines is the offeree.

(C) Conclusion

So in conclusion we can say that the fax from We Guzzle is the offer, just like the ad by Carbolic Smoke Balls Company was also an offer. In the present case the promise was to give a discount of £20 on 500 cases of white wines and in the case law discussed above the promise was to give a reward of 100 pounds to anyone who contracts influenza even after using the Carbolic Smoke Balls as prescribed. There we see that there was a proper offer from We Guzzle to Alco wines in the form of the fax.

2.Whether there is an acceptance.

An acceptance is an unequivocal consent to the terms of the contract and it can be in a written, oral, form or it can also be in the form of an act. An acceptance happens when the offeree agrees to all the terms of the offer the acceptance must also be communicated to the offeror except in case of a unilateral contract where the communication of the acceptance of the offer is not required.{Grab Business and Corporations Law Assignment }

(A) What is the law on acceptance?

There are a lot of cases on acceptance but here we are going to discuss one leading case law on acceptance. This is the case of Entores Ltd v Miles Far East Corp (1995).

The facts of the case are that there was a contract between the defendants and the plaintiff where the defendant agreed to supply 100 tons of cathodes at a price of 239 pounds, the offer was sent by telex from England and the acceptance of the offer was also done by Telex from Holland.

The issue was that where was the contract made?

The court held that the contract was made in England because the acceptance happened in England only through telex and postal rule does not apply to instant messages.

(B) Apply the law to the facts of the case.

Now in the present case the acceptance of the offer by fax was given by fax immediately and the acceptance was complete when the Alco Wines sends the fax immediately to We Guzzle in Australia, so in the present case the acceptance happens in Australia.

(C) Conclusion

We see that there is similarity between the present case and the case discussed above, in both case there is an offer through telex and fax respectively and in both the cases there are two different countries involve so as the acceptance was sent to England in the Entores case therefore the acceptance was held to be made in England similarly in the present case the acceptance was sent to Australia so the acceptance was made in Australia.

3.What is a consideration?

Consideration is the bargain one does in the exchange of the promise. It can be anything which has some value in the eyes of law. In common it is necessary that a consideration should be present to make a contract legally binding on the parties also the consideration must not be past in nature and the consideration needs to sufficient and not adequate in the eyes of the law also a consideration can be a promise, an act, anything which can be a benefit to the one person and a detriment to another person.

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(A) What is the law on consideration?

Here we are going to discuss the case law related to the law on consideration, where it was held that a consideration is something which has some value in the eyes of law and it should be sufficient and not adequate, the leading case was the case of Thomas v. Thomas (1842), where in the agreement it was mentioned that the plaintiff will take possession of the house and will pay one pound per year as ground rent. Plaintiff stayed in the house for sometime but later on the co-executer refused to complete the agreement on the claim that the consideration was not adequate.

Issue was whether the consideration was adequate.

The court held that the consideration needed to be something of some value and it should be sufficient and need not be adequate therefore the court held that the consideration was sufficient and a legally valid consideration even when it is not adequate in nature.

(B) Apply the law to the facts of the case.

Now in the present case the We Guzzle Winery asked for an amount of 40% off for each case worth £20 which means £12 per case was the consideration for 500 cases of white wine.

(C) Conclusion

To conclude we can say that there is a valid consideration in the Thomas case and also in the present case where in the Thomas case the consideration was one pound for yearly rent and here £12 for each case after the discount of 40% for white wine is also a valid consideration and the consideration in the present case is also an adequate consideration.

4.Whether a legally binding contract was formed.

In the present case all the essential elements of a contract are present where there was an offer by We Guzzle where they offered to sell the white wine at a discount of 40% from the usual £20 per case for 500 cases. Then there was an acceptance by Alco wines where they communicated their acceptance through the fax immediately to We Guzzle in Australia, and also there was a valid consideration where the We Guzzle winery asked for £12 for each case of the 500 case of white wine.

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(A) What is the law on a legally binding contract?

When all the elements of a contract are present then a contract is a legally valid contract and in the present case all the essential elements of a contract are present but there is a unilateral mistake by one party that is the We Guzzle winery where they threw away the fax and when the mistake was discovered they had already sold the wines to other buyers but according to the case law given in Entores Ltd v Miles Far East Corp (1995) a contract is made when the acceptance is sent to the country from which the offer came in case of an instant message like telex or fax, so similarly in the present case there was an acceptance sent to Australia and that acceptance was also received there in the morning.

(B) Apply the law to the facts of the case.

So we see that in the present case all the elements of a contract are present and there was a valid contract between Alco wines and We Guzzle and Alco wines is not responsible for the mistake committed by We Guzzle wines where they threw away the fax from Alco wines therefore the contract is a valid contract.

(C) Conclusion

In conclusion we can say that in the present case all the elements of a valid contract is present, therefore this contract is legally binding on both the parties therefore Alco wines can sue We Guzzle for the breach of the contract and any damage which they have suffered due to the breach by We Guzzle.

Conclusion

So to conclude we can say that in the present case we have discussed all the essential elements of a contract and we have seen the importance of each element that is present in the contract. We have also discussed all the case laws related to the concept of offer, acceptance and consideration and the after discussing all the elements we have applied these elements to the present case and seen that which elements are present and which elements are not present. We have also tried to explain the implications of a legally valid contract and what importance it has in the present business Structure, where most of the business is based on a contract. The purpose of a contract is to maintain the clarity between the parties to a contract and to decide that what are the rules and regulations related to the law of contract and also a contract helps in describes the responsibilities that each party to a contract have towards the other party and what are the remedies that are available for the breach of the contract.

References

  •  http://www.australiancontractlaw.com/law/formation-agreement.html
  •  Carlill v. Carbolic Smoke Ball Co. [1893] Q.B. 256 (C.A.)
  • http://www.australiancontractlaw.com/law/formation-agreement.html
  •  Entores Ltd v Miles Far East Corp [1955] 2 Q.B. 327
  •  http://www.e-lawresources.co.uk/Consideration.php
  •  Thomas v. Thomas (1842) 2 Q.B. 851, 114 E.R. 330