BLO 1105

BLO 1105: Business Law

Name: Evan Tan Min Hong (4593479)
Tutorial: 2 (Wednesday 1430-1530)
Lecturer: Ms Alison Wong

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Question 1
The legal issue is whether there is a binding contract between Josie and Sam.

RULE An invitation to treat is only an indication of a person that is ready to listen to an offer. An example of an invitation to treat is found in Pharmaceutical Society of Great Britain v Boots Cash Chemist (Southern) Ltd. In that case the, it was held that the goods that was displayed on the shelves were an invitation to treat and offer was made when a person offers cash to the counter which when the offer will be accepted or rejected by the discretion of the cashier. However, the prosecution failed as the court holds that the display of goods is only an invitation to treat.

Next would be Counter offer. Counter offer is made in response by the other party due to a previous offer during a negotiation for a final contract. An example would be shown in the case of Hyde v Wrench in which they both came into a negotiation to lower down the price of a property before selling it. Once the first offer is rejected, it could not be revived by the offeree, but only the offeror.
Besides that, would be the postal rule of acceptance. In the postal rule, it would only work if and only if the postal service is an acceptable method of communication between the offeror and offeree. The acceptance is taken place once the offeree posts the letter. An example of this would be shown in the case of Adams v Lindsell.
Lastly would be consideration. Consideration is something of value that has been agreed upon to exchange with another person or refrain from doing something which includes making a promise to do something in the future. This can be shown in the case of Thomas v Thomas where the seller agrees to accept a smaller sum of money than the actual value of his car to be sold.

Key facts
This is a relationship between a buyer and a seller.

The seller came into conclusion of selling her painting to the buyer for a lower price if he accepts the offer by a given timeline.

They had a written form as a reservation for the painting.

There is no acceptance by the postal service allowed.

On the facts from above, Josie is an artist that would sell a painting of sunflowers to Sam. Sam on the other hand would not pay the full price hence negotiating with Josie for a lower price and they end up with a conclusion. Before the agreement was made, Sam had to ask his wife to see if she would allow him to buy the painting therefore making Josie write a form that reads that Josie would sell the painting to Sam at $800 if he responds by the given timeline and Josie included a signature.
Based on the case above, there was in invitation to treat as Josie the artist would like to sell her sunflowers painting to Sam which was a buyer that is interested in her artwork. Sam wanted to buy the painting that was displayed with a price tag. He could only buy the painting once he has approval from his wife. Sam then made an agreement with Josie to reserve the painting for him till he asks his wife.
The sunflowers painting that was on sale by Josie had a price tag of $900. Sam was not willing to buy the painting at that price hence making a counter offer to Josie asking her if she would then sell it to him at $700. Josie then rejected his counter offer and offered Sam the painting for $800. Sam then agrees to that offer, but he could only accept it after getting approval from his wife.

Josie and Sam did not have any agreement on making the postal service acceptable as a method of communication between them for an acceptance. Therefor, any acceptance made by post will not be accepted. The offeror might not be aware of the acceptance by postal service hence selling the painting to another buyer and then might find herself in a breach of contract for that action.

Josie wanted to sell her painting of sunflowers for a price of $900 but Sam would only want to buy it for $750. Josie then rejected Sam’s counter offer and agrees to sell her painting to Sam for a price of $800. They both negotiated to get an agreement on the price of the painting. Lastly, Josie agreed to sell her painting to Sam for a price lower than the initial selling price of her painting.

In conclusion, it is most likely that there is no binding contract between Josie and Sam.

For this part only, assume a contract had been formed between parties. Explain briefly whether a breach of contract has occurred and identify the remedies that might be available.

Breach of contract
For a contract to be form, there must first have the following criteria which is to have an offer and acceptance. Both parties must have mutual consent that they had made an agreement with one another. Next would be consideration. That would mean that there must be something of value that is involved or even money. Furthermore, would be competent party. The other party that a contract is made with must not be a minor or mentally ill. The last part of making a contract is that there must be a legal purpose. The contract made must not violate any laws or bring harm to any parties. Therefore, a breach of contract has been made.
The remedies for this case would be
96 Words left (about 6 lines)Question 2
The Pinnel’s case expresses the requirements for consideration in simple contracts. Generally, the rule works sensibly and fairly, but there are some situations when it does not.

Discuss this statement and explain the circumstances in which the court see it as unfair to apply this rule. (1500 Words)
Rule on Pinnel’s case – 5 marks
Unfairness when applying Pinnel’s rule – 6 marks
Referencing – 2 marks
Payment by a method other than cash
Fraud on a third party
Composition with creditors and settlement of claim
Promissory Estoppel