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LACC LAW 2 - Enterprise Law_Assessment

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Enterprise Law AssessmentSimon Al-ekhtiyar 18951152Question 1Contract law is formed on the basis of an agreement between two parties, with the intention of it being legally enforceable. In the provided case of Frank and his nephew, Nick, Nick seeks to find out the actuality of a binding contract with Frank. In order to interpret the contracts validity, it is necessary to take a look at all three elements of a contract in order to find an answer. In order for a contract to exist, three elements are required. They are agreement, intention and consideration. However, in order for this contract to become enforceable, four further elements of capacity, consent, legality of purpose and form of contract are required. Upon investigation of the elements in which a contract is created, the initial approach was made by the offeror Frank, to the offeree, Nick. The terms of agreement weren’t clearly made on Nick’s behalf. To recall, Nick had signed contracts with the Alcoholics Anonymous group prior to his uncles offer, opening up the possibility that agreement was made on the grounds of implied acceptance by the basis of Conduct. These grounds of implied agreement were demonstrated in the case of Clarke v Earl of Dunraven and Mount-Earl (The Satanita) [1897] AC 59. Nick had explained his concern on his own personal health led him to join AA but his inquisition on whether he has a binding contract with Frank on the basis of an agreement is explained by (Rajaretnam, T. & Devery, P, Pearson 2019) stating “knowledge of the offer is paramount. If shown a person has acted in ignorance, or the act wasn’t undertaken with the intentions of accepting the offer, there is no acceptance, therefore no contract”. This is further evidenced in R vClarke [1927] HCA 47 because like Clarke, Nick had no intention of claiming the reward from Frank when accepting the proposed terms of AA. In terms of intention, both parties are required to state whether the intention is to make the agreement legally enforceable. Before the case of Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8, agreements were classified to either be of business or commercial nature or social or domestic nature, stating those of social and domestic nature, had no common presumption with no legal relations were intended. The case of Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8 was a shifting point as the High Court stated that parties intend on their agreements on being legally enforceable and having consequences. No intention equalled no contract. The case of Nick and Frank is of a social and domestic nature where neither intended on legal relations, rather both solely focusedon the outcome to prove beneficial to Nicks’ health. Simple contract requires valuable consideration. Consideration looks at what each party exchanges in return of the others, making it the price paid on a promise. Here, Frank offers Nick money to quit drinking in exchange for Franks’ happiness and Nicks’ health benefit and monetary gain. Past Consideration looks at consideration coming in with or after the initial promise which was the case here as the monetary promise to Nick came after his decision to sign AA’s Contractual papers as was the case in Roscorla v Thomas [1842] 3 QB 234. Consideration must not be past as it will not be enforceable in the end (Australiancontractlaw.com 2019)To synopsise, neither of the three elements which make up a contract were applicable in Nicks’ case, this can be solely due to the decision made by Nick to Join up with Alcoholics Anonymous, which had led to making his case with his UncleFrank to NOT be legally binding, resulting in the surfacing of contradictions when faced with the choice of accepting his uncles monetary offer. The offer was made for Nicks’ health benefit and not in order to create conflict, without any intention on making the matter legally enforceable. Question 2A contract is entered when three elements are ever-present between two or more parties. These elements are agreement, intention and consideration. Donald and Hugh both shared interests in Gemstones. The two entered their contract when Donald purchased the stone from Hugh where Donald realised the purchase he made was actually a topaz. (Rajaretnam, T. & Devery, P, Pearson 2019) states that ‘if a party involved enters as a result of misrepresentation, mistake, undue influence or duress or unconscionable conduct, there is no genuine consent’. A)This scenario looks at the buyer Donald and the seller Hugh, not getting into discussion about the gem and its properties as they were both convinced that it was a rough diamond. This nonetheless, is a mistake due to both parties misunderstanding the situation. Courts of law do not accept mistake in avoiding a contract. With that being said, the mistake which is seen here is a common mistake. Common mistakes will note a ‘genuine agreement between the separate parties as they have agreed on the same matters’ as offers and agreement have taken place which makes up an element of a contract law’ (Rajaretnam, T. & Devery, P, Pearson 2019).This case draws similarities to that of Leaf v International Galleries [1950] 2 KB 86 where both parties also believed a painting was painted by Constable, when really it wasn’t. All elements of a contract had been satisfied by this stage meaning Donald had agreed to purchase with clear intention and consideration of the matter, despite the fact a mistake was made by both parties, the criteria of a simple contract is satisfied. B)This scenario looks at Hugh, concealing the truth of the properties of the Topaz from Donald, who wholeheartedly believed the item he was looking at was a diamond. This is referred to as a unilateral mistake which states “A lack of agreement exists and the other party (in this case Hugh) knows of the mistake and takes no action in correcting it. It is stated Hugh did not discuss this and since Taylor v Johnson [1983]HCA 5, views have been expressed whether issues as such should warrant court intervention to set contract aside on the basis of unconscionability (Rajaretnam, T. &Devery, P, Pearson 2019). Similar to Taylor v Johnson, Donald was acting within ‘sharp business practice’ whereas Hugh made the mistake of misleading Donald, taking advantage of the situation. C)Misrepresentation occurs when one party has misrepresented facts to the other. In cases of misrepresentation, a plaintiff (Donald)


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