Business Law Assignment On Contract Cases
Task: Discuss law cases examining six contract elements addressed within Australian business law and assess binding term elements considered during the hearing of a business law case.
Contract: It is mentioned in this business law assignment that a contract is generally known as an agreement between two parties. It is the legally enforceable agreement that exists between two parties. It is important to focus on the elements of the contract that occur in the court process. The major form of a contract is in the form of acceptance and offer that is provided to the party. It altogether refers to an agreement. Courts are enforced to measure the legal binding contract that exists between the two parties. The contract is based on agreement, consideration, and intention. In the contract system, it is observed that one party makes an offer to the other and accepts the offer with mutual agreement. At times, the contracts may be verbal or in a written format. It is important that real estate contracts, purchase and sale of land and other important work is worked on the basis of contract in the organization (Angwin & Meadows 2015). Verbal contracts are different and may be difficult to be accepted at certain circumstances. There are unilateral and bilateral contracts that can be agreed between the parties. There are bilateral contracts in the business.
In the case of Events Management Ltd, the phase of acquisition is observed. On the potential acquisition phase of a company named Rigby corporate function planners, there were emails that are exchanged between Events Management and Rigby Corporate Function Planners. The key points that are mentioned and agreed upon are the purchase price that is $750,000, consultative role to be played by Rigby for 12 months, transfer of equipment on the transition date that is 1st July 2018. There is no such contract that is signed till date thereby there is no contract that exists. There is a format that is prepared by the company about the contract but is not provided to Rigby Corporate. This indicates that there is no contract between the parties. Again there is an email about the withdrawal of sale by Rigby.
Elements of contract
There are six elements of a contract that are addressed by the law. These elements of contract include offer, capacity, acceptance, intention, legality, and consideration. Intentions are known as the legal aspect to be considered in contracts. It is assumed that all the agreements are not contracted as such it is noticed that some contracts are not enforced. The parties in some situations do not intend to be legally bound.
Offer: There is a proposal that is offered and accepted by the parties. An offeror is one person that makes the offer while the other party is offeree. If this offer is accepted, there is an agreement between two parties. Offer is generally expressed verbally or in writing which is implied as per the behavior of two parties. The offer provided should be promissory which can lead to acceptance of the agreement with the binding obligation (Jormanainen & Koveshnikov 2012). In the case of Events Management, the offer is presented via email which is clear by the other party. The requirements of the offer are largely clear and unambiguous. Offer largely differs from invitation to treat. Events Management has made an offer but there is no acceptance by the company.
Acceptance: Acceptance is an assent that is expressed in the written or verbal form with an implied condition in a formal language. It is a clear acceptance that is made by the parties. In this case, no acceptance is observed as the rules of acceptance are not clear. Acceptance must be ensured with a correct method, clear, communicated and knowledge of acceptance. A counteroffer can be made when an offeree wants to change the terms of the offer. In this case, the first offer is extinguished while the second offer is counted. In this case of business law assignment, even the communication of email was observed but the offeree is not ready to accept the offer nor is he interested in the sale of the business (Gomes 2013). Acceptance method of an offer depends on offeree which is not binding. These rules are not followed by the parties as discussed on email thereby there is no such contract that exists between the two parties. Acceptance by letter, email or any other method is advisable and as efficient as it benefits both the parties. The instantaneous method is acceptable that includes fax, telephone, and email. In this case, the discussion of several key points was observed but there is no acceptance via email that the offer is accepted thereby there is no contract that exists in the business sale.
Capacity: The parties have an understanding of the contract but the process formation is not viewed. Legal incapacity cannot accept the offeror is not abided by the law. Both the parties mentioned in this case of business law assignment, are capable of understanding the terms and offer condition. The contract is enforceable and is protected with rules and regulations mentioned in the contract.
Legality: The contract is of lawful purpose and if there are any conflicts, a legal power is imposed in terms of police power for the public interest. Certain laws are addressed in each field that is applicable and can lead to the statutory condition (Janssen & Durovic 2019). It is thereby termed as public policy that ensures the conscience statement and common sense of working on a contract with legal process.
Consideration: There is consideration that in the contract if agreed by the parties, but it is noticed that adequate information is not exchanged or bargained in terms of value for each party. Thereby the missing element of consideration need to be highlighted in legal relation and tend to construct into a bilateral contract. A promise is exchanged with a promise in terms of accepting the offer. A contract is complete if consideration is highlighted and accomplished (Bilgili, Calderon, Allen & Kedia 2016).
Intention: Intentions are legally bound agreements that evolve in the contract. This element is missing while observing the case of Rigby, thereby there is an intention of sale business by Rigby but these were the presumptions that are not applicable in real. Looking at the situation, the two parties are involved but the intention of the contract is not made as there is no legal formality that is carried on. The intention of the sale of the business was clear by one party but the other party refuses to form a contract. In this way, there is no reasonable intention that is heard with facts and addressed in writing.
Tests identified in Masters v Cameron (1954) 91 CLR 353 within this business law assignment Rules:
- Exclusive method to be used
- Nominated method to be used
- Same method can be used if there is not method
- Communication should be instantaneous
- Postal rule of Acceptance
Facts: Certain elements of the contract are not addressed and are not obliged. There is no information regarding the negotiation of the contract as the other party is not interested in an agreement. There was discussion regarding several points such as price, ownership, business transition date and transfer procedures
Held: Sale note was agreed and not a contract. There was no binding contract that was signed by both the parties. No contract exists between the parties named Event Management, and Rigby Corporate. Interest is shown by Rigby Corporate Function but there is no acceptance in written form or verbal form. Masters v Cameron (1954) 91 CLR 353. There are such issues that can be highlighted if there is a violation made by one party. The penalty is imposed as per the legal process if the contract is not addressed as per the legislation after accepting the contract (Madhok & Keyhani 2012). The rule of contract as per Masters v Cameron 1954 is to work on the acceptance by both parties to form a contract.
The case is an agreement that is acceptable in written in the form of email but is not binding as no document expresses the sale of land between the parties. Merely the binding contract was not signed but the agreement was negotiated as per the contract. This was made to prepare formal contract which can be acceptable shortly. The terms and conditions are discussed but the contract was not currently accepted. The parties have discussed several key points that need to be added in the contract such as purchase price which is agreed to $750,000, the owner will stay for 12 months and help in consultation, business transition date and transfer of equipment. These are the discussions that were completely agreed upon by both the parties (Pargendler 2018). Several items need to be discussed such as the transition of staff, a mechanism for informing Rigby Corporate Function and transfer of intellectual property.
A discussion about the purchase price in this business law assignment does not mean that there is a purchase. A contract did exist until it was made an offer, capacity, intentions, and consideration. Acceptance of the agreement and legality were not discussed in the email. Thereby no contract exists between the parties but there was an informal agreement between the parties.
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