Foundations of Business Law - Case Study Example

Foundations of Business Law By + Question Are you and your sister in a contract? Issue- is thereany legal binding agreement. Law; for a valid contract there must be an intention or willingness to be bound, a firm promise; and communication of the offer. Being the owner of Cozinha Do Pilao, a restaurant in Adelaide, my sisters Bethany and Princesa had just opened a fishmonger next to my business. To boost their initiative, out of brotherhood, l ordered some of their fish. Although, after delivery, the fish did not meet my quality standards that led to me questioning the edibility of the fish. A contract is an agreement between two or more individuals comprising of promises from either party to the other. Unlike torts, contracts involve taking obligations voluntarily. They are formed based on the consideration of elements like; an agreement, capacity, intention to create legal relations and consideration. Based on the promise to be made between the parties, contracts can be divided into bilateral and unilateral contracts. Bilateral contracts revolve around both parties ensuring that they fulfill their promises while in unilateral contracts the offeror still has to perform their part of the agreement (it is a promise for and act) (Barker 2005). For a contract to be valid, it needs the parties to have legal capacity, the existence of a purpose of legality, and the parties should have consent and any form of requirements satisfied. The intentions ascribed to any contract intention is very important. The parties to the agreement must intend for the agreement to be legally enforceable. If there is no intention, such an agreement automatically results into no contract (Barker 2005). To decide whether an intention to create legal relations was present, the courts will apply objective tests. The court looks at the conduct of both parties from the perspective of an objective observer and asks whether the parties were behaving in a way that indicates their intention that the agreement be legally enforceable. Traditionally, social, family, and voluntary associations were presumed to have no contractual intentions while commercial or business intentions were presumed to have valid and lawful contractual intentions. Contracts are linked with agreements. An agreement is a meeting of intellectuals and exists when two or several people share an intention or an understanding. Negotiations precede agreements for a given time. Sometimes the conduct of the entities in an agreement can help to deduce the existence of a finalized agreement. With the aforementioned in mind, I and my sisters are not in a contract. Ordering some fish from them was as an act of brotherhood. To add to that, there was no meeting between us and therefore no agreement was reached between us. A contract cannot exist without a meeting in which the terms of a business or an arrangement are discussed and out rightly cited. A contractual agreement should meet the elements ascribed to contract’s formation. From the above it is clear that there existed no form of agreement between me and my sisters. QUESTION TWO Can Fundi require the payment of $150? Law; All other contracts, called ‘simple contracts’ must have valuable consideration for such contracts to be valid. Issue; to what extend are the rights and obligations of the parties in agreement. Fundi and his employer have entered into a verbal agreement and the validity of the contract is hard to establish in such a cases. For instance, it is hard to establish the extent of the rights and obligations that the parties have entered into. In such scenarios, the terms of the agreement come in to play. The terms of a contract are the precise specifics ascribed to the contract including each entity’s obligations and rights. The representations of the agreement between Fundi and his employer are important to consider in validating the agreement. To determine whether a statement is a term or a representation, the courts consider: the time elapsed between the making of the statement and final agreement, whether the innocent victim was asked to verify the statement and the importance attached to the statement (Barker 2005). For example, to decide whether a statement is a representation or a term the courts make use of objective tests and various subsidiary tests like short intervals, more likely to be a term When contracts are in writing, the patrol rule excludes oral evidences that vary, add to, or contradict the written document. According to the patrol evidence rule, in case of any inconsistencies between a written contract and verbal agreement, the courts will favor the written term and disregard the verbal representation. The agreement between fundi and his employer can be classified under collateral agreements. A collateral contract is a secondary contract that influences the existence of the main contract. For example, in return of your promise the offeree has entered into the main contract. In case the representation of the offeror turns out to be untrue, the offeree has the right to sue the offeror. There are three preconditions to collateral contracts: a statement must be intended to have contractual effect, the statement must be intended to take effect as a collateral and not a term of the main contract and collateral contract must not be inconsistent with the main contract (Barker 2005). Based on the discussion above, Fundi and his employer were in contract and therefore Fundi has the right to be demand for his money. At first, Fundi was disappointed by his employer suggestion he stays at work till 12 mid night. To entice him, his employer offered him an extra $ 150 which prompts Fundi to agree to the offer. This automatically qualifies the agreement as a collateral agreement. The statement had a contractual effect and the representation was consistent with the main contract. This also qualifies the agreement between Fundi and his employer have a collateral agreement and when his employer breaks the promise Fundi is justified to sue or demand for his money from his employer on a contractual agreement’s basis. Verbal agreements by the two entities that are not deemed as terms prior to entering the main contract may have a contractual effect as a preliminary contract upon which the main contracts is based. Question 3. Consider whether Lua has an action against you and whether you can defend yourself? Issue; is negligence a crime? In this case Lua is instructed to store the fish properly and in the process he falls on the ground and injures his jaws after sliding over some spilled water. The issue of liability for his injury arises. A defendant can be considered to breach a tort of negligence if: the defendant owes the accuser an obligation of care, the defendant breaches their duty of care, and if the breach caused by the defendant caused the plaintiff suffering, damage, injury or harm (Barker 2005). The accuser must be in a position to prove beyond doubt that first, at the time of the incident it was sensibly predictable that the defendant’s actions could cause harm to someone in the accuser’s position. Secondly, the accuser must prove that he was in a defenceless situation and that the defendant was in control of the situation. Thirdly, whether there are any policy contemplations such as prospect of unspecified responsibility, possible financial consequences, impact on social and moral values, and whether it is fair and equitable (Barker 2005). In most scenarios the establishment of the existence of a duty of care will be direct, provided that the affiliation between the entities falls within the well-known categories of duty of care: manufacturers are responsible for their products’ end users, motorists owe a duty of care to pedestrians and patients deserve a duty of care from their doctors. Employers owe a duty of care to their employees (Barker 2005). Property owners have a duty of care to all people entering their property. To establish liability, the plaintiff must prove the employer’s awareness of the associated risk of the work. Even if the accuser has established all three elements of the tort of negligence, a defendant can still avoid responsibility, either partially or completely, if a defendant can establish the existence of one or more defences. If it can be established that the accuser was fully aware of the risk at the time the harm was caused and they voluntarily assumed that risk, you are relieved of all liability. However, there are changes in the law on obvious risks and inherent risks. Bearing in mind the above argument, it is true that Lua was unaware of the imminent risk at the time of the incidence but he was also drunk and this makes him liable to a breach of duty by not exercising the required standard of duty. His drunkenness can help me avoid conviction partially. The court will put into consideration the probability of harm, the likely seriousness of the harm, the burden of taking precautions, the social utility of the activity and causation of fact. The accuser must establish that the defendant’s careless act caused, either directly or indirectly, the damage suffered by the accuser. Bibliography Barker, D. (2005). Essential Australian law (2nd ed.). Sydney, N.S.W.: Cavendish. Read More