Business Law for critical pre-requisites

1. Issue

The core issue related with determination of the prize money to be extended to Ben in view of the offer by Mojo Beverages.

Law

There are various conditions that need to be complied with for the enactment of a legal contract. In this regard, one of the critical pre-requisites is to have a legal agreement in place. The two critical sub-components of an agreement is offer and acceptance. The party which floats an offer is termed as the offeror and the offer is directed towards offeree. The offer in order to assume legal validity must be communicated to the offeree as stated in the arguments related to Carlill v Carbolic Smoke Ball Co (1893) case (Harvey, 2009). Also, the terms related to the offer have to be definite in nature and must not be ambiguous. In order to enact a legally acceptable agreement, the offeree needs to extend acceptance to the extended offer as apparent from the Brogden v Metropolitan Railway Co. (1877) case. Any acceptance subject of conditions would be considered as counter offer and thus would require acceptance on the part of the original offeror so that an agreement could be put in place (Pathinayake, 2014).

If the original offer is offered on an unilateral basis, it is imperative that the change must be given acceptance by the other party so that there is change in the original agreement. Thus, any amendments that are proceeded in a unilateral manner are not valid and thus not enforceable. In case of unilateral offers, the explicit acceptance is not desired and thus if the offeree acts in a particular manner, it automatically implies that the offer has been accepted. This understanding is derived from the verdict obtained in the Great Northern Railway Company v Witham (1873) case (Gibson & Fraser, 2014).

Application

The given information about the case suggests that Mojo Beverage has engaged in the making of a unilateral offer whereby anyone who catches Lord Harry would receive a total sum of $ 100,000 in the form of prize. However, it was announced later that the prize has been decreased to $ 1,000 only. As this is unilateral offer, hence the indulgence in finding Lord Harry automatically amounted to acceptance being granted.

As per the information provided,  Ben had come to know about the information that prize money if $ 1,000 minutes before catching Lord Harry.  While the source may not have been reliable, but ideally he should have enquired further before catching Lord Harry. However, Ben did not bother to obtain any clarification from the company personnel present at the venue and continued his pursuit to catch Lord Harry which in itself implies that Ben was agreeable to the prize money of $ 1,000 also. If the $ 1,000 prize was insufficient, he would have stopped his pursuit and first clarified the rumour.

Conclusion

It is apparent that Mojo beverage is liable to pay a sum of $ 1,000 to Ben.

2. Issue

To ascertain if there is an enforceable contract between Livestock Brokers and Dorper Sheep Sellers Pty Ltd.

Law

There are various conditions that need to be complied with for the enactment of a legal contract. In this regard, one of the critical pre-requisites is to have a legal agreement in place. The two critical sub-components of an agreement is offer and acceptance. The party which floats an offer is termed as the offeror and the offer is directed towards offeree. The offer in order to assume legal validity must be communicated to the offeree as stated in the arguments related to Carlill v Carbolic Smoke Ball Co (1893) case (Latimer, 2005). Also, the terms related to the offer have to be definite in nature and must not be ambiguous. In order to enact a legally acceptable agreement, the offeree needs to extend acceptance to the extended offer as apparent from the Brogden v Metropolitan Railway Co. (1877) case. Any acceptance subject of conditions would be considered as counter offer and thus would require acceptance on the part of the original offeror so that an agreement could be put in place. It is noteworthy that if the offeree asks some queries in order to gain incremental information, it is not termed as counter offer as is clear from the decision reached in the Stevenson v. McLean (1880) case. Thus, in such cases the offer continues to be valid till the time the offeror withdraws it (Pathinayake, 2014).

For acceptance to be valid, the same is to be communicated to the offeror using an appropriate communication means. One particular means that at times may be used for communication of acceptance is the postal medium. Contract enacted using this medium have to confirm to postal rules. In accordance with these rules, the acceptance is deemed to be valid at the same instant that the offeree posts the acceptance letter to the offeror. This is immaterial of the actual delivery date of this letter by the offeror or the date when the contents of the letter are actually read (Paterson, Robertson & Duke, 2015).  However, if instantaneous modes of communication such as fax are used, then the rules stated above do not apply and thus for an acceptance to become valid, it needs to be received by the offeror. This understanding is as per the court verdict reached in the  Entores Ltd v Miles Far East Corporation (1955) case (Taylor & Taylor, 2015).

Application

The given situation involves the offeror (Dorper Sheep Sellers Pty Ltd) which has extended offer regarding sale of sheep flock to the offeree (Livestock Brokers). On June 1, the offer details such as quantity and price were communicated through a letter to Livestock Brokers. The offer was valid for 14 days during which period, the acceptance to the offer may be communicated.

On June 6, a letter was sent to the offeror seeking more information which in line with the spirit of the verdict in the Stevenson v. McLean (1880) case cannot be constitutes as a counter offer. Thus, the offer stands valid despite this letter.  On the last day of the offer i.e. June 14, the offeree communication acceptance by deploying fax at the medium and the same was received by Dorper Sheep Sellers in a prompt manner on the same day.  Thus, this fax results in formation of an enforceable agreement between the two parties. Thus, the offeror now cannot deny with regards to fulfilling contractual obligations as it would amount to breach of contract and therefore the offeree can initiate legal resource to ensure that contract is not breached.

If the offeree’s fax communicating the acceptance is not received by Dorper Sheep Sellers, thus there would not be any legal contract between the two parties since the acceptance is held valid only when the message is received by the other party. Thus, in this case, the offeror has no obligation to sell the sheep flock.

Conclusion

If the fax is received by Dorper Sheep Sellers, then there would be an enforceable contract else not.

3. Issue

To ascertain whether Stuart is liable to pay the lease payment shortfall demanded by Westphalia Marts.

Law

If the parties have entered into legal contract, then there are certain contractual obligations that they need to comply with. In this regard, there are certain terms that are implied or understood while others are express that are intentionally put in the contract on the request of the parties entering into the contract. Failure to comply with a particular contract term amounts to breach of contract (Richard, 2003).

The contracting parties should observe caution that they should avoid acting in bad faith and must not violate the terms of the contract (Latimer, 2005). However, with the mutual consent of both parties involved, these contractual terms may be modified either through the means of an oral agreement or written agreement. In case of written contracts, the signature of the parties is a mandatory requirement. However, oral agreements in this regard are also upheld in court of law as an enforceable amendment (Lindgren, 2011).

Application

As per the information provided, there is a lease agreement enacted between Stuart and Westphalia Marts Pty Ltd for a shop in a mall.  The lease agreement required that Stuart should make a lease payment of $ 1000 per week. During the initial half of the five year lease, his business does well and he makes lease payments promptly. But, then the sales of the business plummeted and hence Stuart requested the company to lower the lease obligation to $ 700 per month `till the time business improves. The company accepted this request and thus this understanding achieved through oral agreement superseded the written lease agreement. Despite the fact, that the agreements are oral, the amendments are still legally enforceable and therefore both parties need to act in accordance with the revised agreement.

Conclusion

The company cannot demand the shortfall in lease payment for 2014 and also cannot increase the lease payment to $ 1,000 till Stuart’s business improves.

Reference List

Gibson, A & Fraser, D 2014, Business Law, 8th eds., Pearson Publications, Sydney

Harvey, C. 2009, Foundations of Australian law. 3^rd eds., Tilde University Press, Prahran, Victoria

Latimer, P 2005, Australian business law, 24th eds., CCH Australia Ltd. Sydney

Lindgren, KE 2011, Vermeesch and Lindgren's Business Law of Australia, 12th eds., LexisNexis Publications, Sydney

Pathinayake, A 2014, Commercial and Corporations Law, 2nd eds., Thomson-Reuters, Sydney

Paterson, J, Robertson, A & Duke, A 2015, Principles of Contract Law, 5^th eds., Thomson Reuters, Sydney

Richard S 2003, The Modern Law of Contract, 5th eds., Cavendish, London

Taylor, R & Taylor, D 2015, Contract Law, 5^th eds., Oxford University Press, London

Cases List:

Brogden v Metropolitan Railway Co. (1877).

Carlill v Carbolic Smoke Ball Co (1893).

Entores Ltd v Miles Far East Corporation (1955).

Great Northern Railway Company v Witham (1873).

Stevenson v. McLean (1880)

 

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