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Business Law Foundation: Analyzing a Scenario Using the Business Law ILAC Method

Question

Utilizing The Business Law Ilac Method, Read And Analyze The Following Scenario.

Ming owned a boat that was highly admired by Lee. On the 20th of April, she wrote a letter to Lee offering to sell the boat to her for a price of $10,000. Ming received the letter the very next day, on receipt of which she immediately contacted Ming over the phone to disclose her admiration for the boat and asked to ask her to hold the boat for her for a week, considering she needed time to think about it, to which Ming agreed. Before the expiration of the week, Lee contacted Ming again expressing her acceptance to Ming’s offer and told her that she would bring her payment for the boat the very next day. Ming however explained that she had sold the boat to Cheery, earlier that day. This news got Lee infuriated. She demanded for Ming to procure the boat from Cherry and subsequently sell it to her.

Does there exist between Ming and Lee, any enforceable contract? Please shed light on the scenario utilizing the principles of Contract Law, Business Law Ilac Method, and relevant case studies.

Answer

Issue: Keeping in mind the principles of Business Law Ilac Method, the issue that needs clarification here is whether there exists between Ming and Lee, an enforceable contract, arising out of her promise to hold the boat for Lee. The material facts that need to be considered in this situation are as follows.

  • Ming made an offer to Lee by proposing to sell her boat to Lee for a price of $10,000, via a letter which Lee received the next day.
  • Ming responded to the letter quite instantly by reaching out to Ming, seeking for a week’s duration in order to consider Ming’s offer, to which Ming agreed.
  • Before the expiration of the set time period, Lee contacted Ming with an intention to accept her offer, however she was met with the news that the object in question had already been sold to a third party; Cherry.
  • Lee, considering she had already asked Ming to hold the boat for her and had gotten an acknowledgement for the same from Ming, demanded for Ming to sell the boat to her after recovering it from Cherry.

Law: The Business Law Ilac Method is very clear in such scenarios. As per contract law, any promise to keep an offer open for a particular amount of time needs to be countered by a consideration, distinct from the consideration for the offer. Essentially there would be two separate contracts; the first contract for the object in question and the second contract to keep the offer for the first contract available and open for a specific time frame. These types of contracts are purposed at allowing an individual to make necessary investigations pertaining to the object being offered in the primary contract, before the person to whom the offer has been made, gets into this major contract. This is a way of guaranteeing that, if there are certain expenses involved with the investigation into the object in question and, in case the person conducting the investigation stands to benefit arising out of such investigations.

Application: There are various legal cases as well as our understanding of the Business Law Ilac Method that enhance our understanding of the judicial viewpoint in this matter. Dickinson v Dodds (1876) is a fine example of such a scenario where the defendant Dodds makes an offer to sell his house to the plaintiff Dickinson and agrees to keep the offer open for a specified time duration. Before the expiration of the specified time duration however, the plaintiff learns that the defendant had sold the house to a third party. Upon confronting the defendant, the plaintiff expresses his willingness to accept the offer. The defendant however explains to the plaintiff that the property had already been sold and that his acceptance is immaterial. What must be remembered in this scenario is that, an important element for a valid contract is not only offer and acceptance, but the presence of a consideration as well. In this scenario, there was no consideration to begin with, thereby making this a void contract. The same was held by the court in case of Dickinson v Dodds. Considering the similarities between the case Dickinson v Dodds and the scenario discussed as well as the principles discussed in Business Law Ilac Method, even though Ming accepted Lee’s offer to wait for a week, in the absence of consideration, it wasn’t a binding contract. Therefore, there is no Liability on Ming.

Conclusion
Business Law Ilac Method tells us that the essentials of a valid contract require every valid contract to posses certain features. An important element present in every contract is Consideration. Due to the promise made between Ming and Lee, where Ming was supposed to hold the boat was devoid of any consideration, therefore the promise made by Ming is void and is not legally binding. Consequently, Ming had all the right to sell the boat to Cherry before the expiration of the time frame as agreed upon by Ming and Lee. Business Law Ilac assignments are being prepared by our business law assignment help experts from top universities which let us to provide you a reliable online assignment help service.

References
Turner, Chris (2007). Unlocking contract law (2nd ed. ed.). London

Case Law
Dickinson v Dodds (1876) 2 Ch D 46





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