The Principles and Rules of Business Law - Essay Example

? BUSINESS LAW QUESTION ONE Identify the principle or issue of law The principle or issue of law is that for a valid contract to be formed, the parties must agree to be legally bound by the law. Explain the rule(s) of law relevant to the principle/area/issue of law identified in step one with reference to authority The three main requirements for a legally enforceable contract to be formed include agreement, consideration and intention. The main element that requires discussion here is whether there was any intention of the parties to enter in to legally binding agreement and contract. An agreement becomes legally binding and enforceable if the parties involved in the case intend to be legally bound at the time they are making the agreement. The intention of the parties is judged objectively by the judges. The court has to ask whether, in any given circumstances, a logical person would regard the agreement between the parties as whether it intended to bid them. The test is usually an objective one and the judges in the court mainly rely on assumptions in order to assist them in ascertaining whether the parties intended to be legally bound by the agreement. Where the agreement is made between the buyer and the seller, the court automatically presumes that the parties intended to be legally bound by the law by the agreement that they make. In the case Balfour v Balfour [1919] 2 KB 571, Mr. Balfour worked with the government as civil engineer. At that time, he was living with his wife. During Mr. Balfour’s leave in 1915, his wife got rheumatic arthritis when they were still in England. Her doctor insisted that she had to be left behind since she would be affected by the change of climate. As her husband was leaving, he promised to send to her 30 pounds a month until she joined him. Later, the husband said that they better live apart the way they were when she was sick. The wife sued him so that she can still be getting the 30 pounds. The court ruled that in this case, there was no enforceable agreement between the two parties. This was though even if the depth of reasoning of the two parties differed. In the case Henthorn v Fraser [1892] 2 Ch 27, the claimant had received a note from the defendant, where the defendant had offered to purchase a certain property within 14 days. The claimant responded promptly where he sent the defendant an acceptance through the email the day that followed in order to accept the offer. Before the defendant had received the acceptance from the claimant, he withdrew the offer. This was after the claimant had posted the acceptance. When the claimant sued the defendant, the court of appeal ruled that the claimant was entitled to specific performance from the defendant. This was so because a contract becomes bidding when the acceptance is posted within the given duration of time. When an agreement is reached in a business or commercial context, the court automatically assumes that the parties to the case intended to be legally bound at the time they were making the agreement. Apply the law to the facts of the question in a detailed and logical manner As an agreement only becomes legally enforceable when the parties in the case intend to be legally bound at the time they were making the agreement, a judge has to conduct an objective assessment of the circumstances in which Sally, Peter and Burt made the agreement. The question in this case is whether under any circumstances, a logical person would regard the sale agreement as intended to be binding. The parties in this case are no friends but business people that is, a buyer and a seller. There are sufficient facts in this case to indicate that the sale agreement was in a commercial or business context. Given that the parties are not friends but business partners, the court will assume that the parties involved, Peter, Sally and Burt intend to be legally bound by the time they were making the agreement. In order to enforce the sale agreement, Sally has to prove with additional facts to the presumption of the court. One fact that suggests that Peter can argue that at the time they were making the agreement they intended to be legally bound is because he stated very well that he needed an immediate response from Sally. Given the above circumstance, a logical person would regard the agreement as intended to bid the three parties. Draw possible conclusions In conclusion, it is likely that the sale agreement is legally enforceable. This is because, Sally, Peter and Burt intended to be legally bound by the law at the time they were making the agreement. There was no contract between Sally and Peter and Sally cannot enforce to receive payment from Peter. QUESTION TWO Identify the principle or issue of law The principle or issue of law is that for a valid contract to be formed there must be an agreement in writing, and the two parties to be legally bound. Explain the rule(s) of law relevant to the principle/area/ issue of law identified in step one with reference to the authority There are three main requirements for the formation of a contract which is legally enforceable. The requirements are intention, agreement and consideration. The element that requires discussion in this case is the existence of an agreement between the two parties. An agreement becomes legally enforceable only when the parties in the case agree to be legally bound by the agreement. An agreement is judged objectively and the judges have to ask whether a logical person would regard the agreement as intended to be binding. The test is usually an objective one and the judges mainly rely on the assumption that in order to assist them to ascertain whether the parties in the case were intended to be legally bound by the case. Where the arrangements are made between a seller and a buyer, the court presumes that the parties to those agreements intended to be legally bound. In the case L’Estrange v F Graucob Ltd, the buyer agreed to buy a vending machine which was being sold by the seller. The buyer went ahead and signed the sales agreement without reading it. The sales agreement excluded implied warranties. When the buyer went with the machine, he discovered that the vending machine was not satisfactory as he wanted. The judges ruled that he could not return the machine since he was bound to no having read the sales agreement. The sales agreement was contained in the terms of sale of the vending machine. So the buyer had to accept the machine as he was no allowed to return it. In the case Bettini v Gye [1876], the singer had contracted to sing. The term of contract indicated that the singer would appear in 6 days beforehand for rehearsals. The singer missed for a total of four days. There was a warranty which was to offer a long term contract with the industry. The court ruled that there was no vital to performance, so the singer was not entitled to terminate the contract. In the case Causer v Browner [1952] VLR 1, the customer took a dress to the cleaning industry. The customer was given a cleaning docket, and the docket clearly indicated that the company was not liable for any loss of damage. The customer did not read what was written in the docket. When the customer came back, the dress was damaged as it had a stain. Since the docket contained the terms and the assistant did not mention to the customer, the court ruled that the terms were not a contract. This was so because the assistant would have mentioned to the client that the company was not liable for any damage or loss to item left. When an agreement is reached in a commercial or hat the business context, the court presumes that the parties to the agreement intended that the agreement would be legally binding. Apply the law to the facts of the question in a detailed and logical manner An agreement becomes legally enforceable only when the parties intend to be legally bound at the time they are making the agreement. An objective assessment of the circumstances in which Sally and Peter made the agreement and entered in to a contract needs to be undertaken by the judge before a ruling can be given. The main question in this case is whether a logical person would regard the sales agreement as a contract between the two parties. The parties in this case are not friends; they are a business partner that is a buyer and a seller. There are sufficient facts to indicate that the sales agreement was made in a commercial or a business context. Given that the parties are business partners and the sale agreement seems to have been made in a commercial context, the courts will rely on the context that in these circumstances, Sally and Peter intended to be legally bound at the time they were making the agreement. To enforce the sale agreement, Peter has to prove beyond facts to the court to rebut the assumption. One fact in this case is that when the parties made the agreement, they made the agreement to be legally binding. The other fact is that the sale agreement was on commercial rate. The sales agreement also had a reasonable time of 30 days. Since the agreement was in writing, this would assist Sally in establishing the facts for her case and show that the agreement intended to be legally binding. Sally relied on the money to meet her needs and she had incurred costs in delivering the bicycle. This fact would strengthen Sally’s argument that there was a contract between the two. In the above circumstances, a logical person would regard the agreement as a contract between Sally and Peter. Draw possible conclusions In conclusion, it is likely that the agreement between Sally and Peter was a contract so it was legally enforceable. This is because Peter agreed to sign the agreement for sale and he did read the terms of sale. In this case, a contract was formed and Peter cannot return the bicycle. The 30 days were over and he would have read the agreement. SECTION TWO Judges are allowed to look outside an Act of Parliament for assistance in interpreting legislation. This can happen if there has no decided case of that nature. The judges can consult the other judges in the rank above them for guidance. Intrinsic evidence refers to evidence which is in writing. This may include a will or a contract. Extrinsic evidence refers to evidence which is not admissible. It is evidence which is not properly presented in the court of law or in a jury. References Richard Stone. The modern Law of Contract. New York: Taylor & Francis, 2009. Roger Brownsword. The Law of Contract. London: LexisNexis, 2003 H. R. Hahlo, Ellison Kahn. The South African Law of husband and Wife. Johannesburg: Juta, 1975 Michael G. Bridge. The Sale of Goods. New York: Oxford University Press, 1997 M.P. Furmston, Geoffrey Chevaileir. Cheshire, Fifoot And Furmston’s Law of Contract. New York: Oxford University Press, 2006 John Proffatt. The American decisions: Cases of general value and authority decided in the courts of several states. California: Bancroft-Whitney Co., 1910 Eugene Allen Giilmore. Handbook on the law of partnerships: including limited partnerships. New York: West Pub. Co., 1911 William Mark, Howard Pervear Nash. Cyclopedia of Law and Procedure. New York: American Law Book Company, 1911 Read More