Terry Tyler Contract Formation
The issue here is to identify whether or not there is a valid contract formed among Susan and Terry
A contract is said to be an agreement which is enforceable by the law, if all the necessary components which are needed to set it up are recognized by the parties. In this issue, components which need to be recognized are within the discussion of the parties and it is regarding the offer and the acceptance. The particular issue we need to talk about here is if an offer is cancelled then it will not be suitable for approval, and if the acceptance is considered to be created by post[1].
According to the case of Adams v Lindsell [1818] EWHC KB J59[2], in which the court had to make a determination of when can an acceptance made by post can be deemed. A Precedent was given by the court which said that when a acceptance letter is posted then at that point of time the party which posted it is said to be making the acceptance. But, such rules are only appropriate when parties present in the contract do not purposely send a post for the medium of the acceptance, the acceptance letter requires to be properly forwarded in order to make this rule appropriate.
It is also stated that the postal rule of the acceptance is not appropriate in case the revocation of the offer is seen, this judgement was made in the case of Byrne v Leon Van Tienhoven (1880) 5 CPD 344[3]. This means that only when the revocation letter is truly received, the offer will still be accessible to be approved. In this scenario the accuser was seen to accept the post even before the revocation letter reached him. The defendant sent this letter of revocation earlier than the acceptance letter was posted. The accuser had the judgement made in his favor.
In this case, an offer was made by Susan to Terry which stated that he wanted to sell hundred gold bars amounting to $450,000. This offer was sent on 27th January by Susan to Terry. However, Terry received the letter on the 3rd February and replied by posting the letter of acceptance on the same day. But, on 30th January the offer which Susan made was tried to be revoked by a post she sent. The principles of Byrne case were discussed which stated that revocation can only be applicable when Terry would truly receive. However, if the letter of revocation was received after the acceptance letter was sent, then it is said to be valid acceptance.
Florence Nightingale Contract Law
On 4th February the letter of revocation was received by Terry. However, he made the acceptance on the 3rd February. The applications of those principles which were stated through postal rule in which the acceptance takes place when the parties comply to communicate by post as the letter is been posted. Thus, the revocation was delayed and the acceptance was made before it, hence there was a formation of a valid contract among Susan and Terry which would be enforceable by the law.
Conclusion
On February 3rd, when the acceptance letter was posted there was a formation of a valid contract made between Terry And Susan.
Whether Terry had been negligent in regards to Kevin.
The failure of a party to abide by their responsibilities towards others, and resulting in sensible predictable damages towards others is said to be negligence. The components present in negligence were introduced to the lawful system in England, and then was accepted by different countries like Australia, as per the case of Donoghue v Stevenson [1932] UKHL 100[4]. Three components were recognized by the court which was as follows:
- Violation of duty of damages and care.
- Duty of care.
- Damages caused by this violation.
An individual has a duty of care towards the other individual if the activities performed by him may certainly damage or harm the other person. Such a harm does not necessarily require to be of physical injury it may be or mental or financial injury as well, this was stated in the case of Spartan Steel & Alloys Ltd v Martin [1972] 3 WLR 502[5]. As per Paris v Stepney [1951] AC 367[6] impartial analysis is done where the duty is observed or not. The objective or the sensible person test is used. Meanwhile, it was stated by the court that the situation in which the defendant of the negligent claim stated to be a professional and thus his actions are going to be examined in the presence of another sensible person who is professional. This was stated in the case of Esso Petroleum Co. Ltd. v. Mardon [1976] 2 All ER 5[7]
According to the case of Barnett v Chelsea & Kensington Hospital [1969] 1 QB 428[8], the test of ‘but for’ was put for the use of analysis of whether or not the injury is said to be the only conclusion of this violation. Meanwhile, contributory negligence is a special defence which was defended by the individual. According to Revill v Newbery [1996] 2 WLR 239 5[9], such a defence was put in to test to examine that whether or not the injured party was found to be acting sensibly it was examined as similar to that of negligence.
Florence Nightingale Business Structure
The interaction between Terry and Kevin occurred in the pub. As Kevin came to know that Terry was an investment expert, then he asked for Terry’s advice for the purpose of investment. In this scenario Terry agreed to to Kevin’s statement that investing in Ziro looked like a great idea. But, later it was found out that Ziro was involved in scandals and therefore Kevin lost all of his investment. Therefore, Terry was found to have owed the duty of care towards Kevin because his advice turned out to be causing his financial injury. This duty was violated as Terry did not have any evidence in providing the advice or neither did he act as a sensible professional, as Terry gave Kevin the advice of investing in Ziro, Kevin had to face the losses. Terry was said to be responsible for this negligence caused. Meanwhile, Kevin was aware of the fact that he did not meet Terry in a normal condition but in a drunken state. No sensible person will ever have confidence in the advice given by a drunken person. Thus, Kevin’s claim for negligence will be defended in accordance to contributory negligence.
Conclusion
Kevin is found to be making a claim for the negligence but will not be successful, because he was responsible for his own loss.
The issue here is to identify whether or not Florence will be successful in his contractual claim he made against Renzo.
A contract is said to be oral or written. It is dependent on the few particular provisions of contract whether or not a statement which is made by the party represents the terms mentioned in the contract[10]. Parol evidence rule discusses about one such provisions. It is stated by the court that in a situation where the contractual negotiations are been written on the paper, then there will be no value of the unwritten documents, as per the case of Goss V Lord Nugent (1833) 5 B & Ad 58[11]. The terms which are not recorded while the contract was written then they are not treated as the terms of contract.
If misrepresentation is present, then the contract will be said to be voidable. Misrepresentation occurs when a party encourages another party to get involved in a contract on the basis of wrong statements. As per Edgington v Fitzmaurice (1885) 29 Ch D 459[12], such a misrepresentation was seen.
The parole evidence rule will not be said to be applicable in case the contract which is written but is not complete and the parties present in it can provide the verbal evidence, as per Van den Henderson v Arthur [1907] KB 10[13]. In this scenario the accuser was guaranteed that no white ants were present in the house she purchased. But, the term was not included in the contract as well as white ants were present, however the judgement was made in support of the accuser.
Sam Bennington Business Structure
It was mentioned by Renzo in his contract with Florence that this cafe which was listed had a turnover amounting to $30,000 weekly and holds seventy person at any point of time as well as owns the liquor licence. But, after the contract was successfully made it came to Florence’s notice that none of the mentioned statements in the contract were legit. Florence claimed misrepresentation as Renzo gave her incorrect and false information which she believed and hence accepted the contract. As per parole evidence rule its principles discussed that those terms which are not included in the written contract then they are not said to be the terms of contract. When Florence has a close look at the contract he saw that no such term was mentioned in it. But, for making a successful claim Florence will be able to provide a verbal evidence to the court, as per the case of Henderson v Arthur. Thus, this claim is said to be valid as she was guaranteed of the terms and such terms were not mentioned in the contract and the contract was not complete.
Conclusion
In this case, Contractual claim is made by Florence in regards to Renzo.
Issue 2
The issue here is to analyze the obligation of Florence to pay GLO
Misrepresentation occurs when a party is seen to give false statements regarding the matter and encourage them to form the contract. This was stated in the case of Horsfall v Thomas [1862] 1 H&C 90
In the case of Ritchie v Atkinson (1808) 10 East 295, the court declared that if the parties do not abide by the terms of the contract then the contract is said to be violated.
It was stated in this scenario that Florence and Tim were in a contract in regards to the cafe’s renovation. It was also stated that Tim that they will be using colors of the best quality. It was mentioned in the schedule 2 that only the colors the company determines sensibly, are going to be used. Twenty six pendant lights were installed as well as installation of modern art was done, the cafe flooring was made up of bamboo timber floating. But, the company did not add any such features in the contract hence it was violated. When the written contract was signed, it was verbally decided by the parties that the work would be completed by 1st September. As the verbal discussion took place after the contract was signed hence it does not comply with the Parol evidence rule. The company is responsible for the violation of the contract as the work was not been done on time.
Conclusion
GLO was responsible for the violation of the contract, therefore there was no responsibility of Florence to pay the complete sum to them.
What remedies does Florence have in relation to both the cases?
It was stated by the court that if the contractual right are seen to be violated then the purpose of the giving the damages is for bringing back the original position of party which they had before the contract was formed. This was stated in the case of Hadley v Baxendale (1854) 9 Ex Ch 341[14]
According to the case of Howard Marine v Ogden [1978] QB 574[15], if misrepresentation was made by only one of the party present in the contract then the other party who is innocent has the right to cancel the contract and claim the damages.
In this scenario, it was mentioned that the misrepresentation was made towards Florence as he was stated by them that they give the pain of the best quality but in this case they did not do so. The contract was violated by the company as they were unable to set up various fixtures in the cafe, which they mentioned in the contract. Florence even face consequential damages as the work done by the company was not finished in the promised time. The objective of the court was to put Florence in its initial position, that is where she was before this contract was made, as per the case of Hadley v Baxendale. Therefore, Florence has the right to claim the loss which she faced in this contract and can also cancel the contract which she had with this company.
As there was misrepresentation and the contract was not violated. Therefore, Florence might have a contractual claim towards Renzo. She has the right to claim all the losses she had to face in this contract.
The damages which have been conConclusionsidered above are appropriate.
3. To Client,
Subject: Discussion of advice in regards to the business structures.
This note discusses about the advices in regards to area as follows:
- Available business structure.
- For minimizing tax, which structure is suitable.
- How can additional funds be acquired which are necessary for the business.
- How to make sure that no harm is faced if there the management is poorly done by the partners Sandra and Gary.
- How to make sure of proper control on daily decision making.
There are three types of business structures sole trader, a company and a partnership, which any individual can select that suits the best for him. The company is divided into two parts that is public and proprietary[16].
The person who carries out the business in his own name is said to be a proprietor. In this scenario the person and the business do not have outstanding identities and therefore is looked as the same by the law. The basic advantage of choosing this type of business is that the setup is very easy and the cost is negligible[17]. However, this structure is not suitable at times because as the income of the business is said to be your own income therefore the amount of tax which is paid is said to be higher, and for the process of securing the personal assets the provisions of the limited liability needs to be provided but it is not given by this business structure[18].
In case of partnership structure, it is said to be a type of sole trader which can be done by more that one individual. All the important features which are mentioned in the sole trader are included in this business structure as well and also an option of carrying out the business with the partner is included. But, the problem in this type of business structure is that the power of the decision making will be significantly reduced as there is another partner who is responsible for poor management. In the structure of sole trader the tax liabilities are same. Other disadvantages which are mentioned in this type of business structure is that the person would be liable for all the wrong things which are done by the other partner. This type of business structure is not recommended.
The best suited business structure is a company. however, there are different forms among which the best suited one requires to be selected. In case of proprietary taxes and the personal liabilities are decreased in regards to the business mentioned above. In this structure it is easy to be a director and manage decision making daily, as well as make sure that the other partner holds the minimum share and do not get involved in business management. Therefore, in regards to the above discussion a public company is perfect for business as all the specialties of proprietary company are also present in the public company. Meanwhile, in public company there is an advantage by which the funds could be raised in regards to the business. But, the decision of the company functioning requires to be taken by him as well as he needs to make sure that all the imposed legal regulations are followed properly. As compared other business structure the public company has the most number of imposed legal regulations. In this scenario, the imposed regulations are good as they help the company in certain ways, no individual will be capable of doing any fraud and if they are seen doing any such fraud then they will be charged under the CA. Therefore, it is better to go for a public company for the purpose of business. Even if there is extra cost and burden, this type of structure would help to fulfill all the requirements. Wishing you good luck, and do not hesitate to ask any further questions in regards to your business[19].
Adams v Lindsell [1818] EWHC KB J59
Barnett v Chelsea & Kensington Hospital [1969] 1 QB 428
Beatty, Jeffrey F., Susan S. Samuelson, and Patricia Sanchez Abril. Business law and the legal environment. Cengage Learning, 2018.
Byrne v Leon Van Tienhoven (1880) 5 CPD 344
Clarkson, Kenneth, Roger Miller, and Frank Cross. Business Law: Texts and Cases. Nelson Education, 2014.
Donoghue v Stevenson [1932] UKHL 100
Edgington v Fitzmaurice (1885) 29 Ch D 459
Esso Petroleum Co. Ltd. v. Mardon [1976] 2 All ER 5
Goss V Lord Nugent (1833) 5 B & Ad 58
Hadley v Baxendale (1854) 9 Ex Ch 341
Howard Marine v Ogden [1978] QB 574
Knapp, Charles L., Nathan M. Crystal, and Harry G. Prince. Problems in Contract Law: cases and materials. Wolters Kluwer Law & Business, 2016.
Kubasek, Nancy, et al. Dynamic business law. McGraw-Hill Education, 2015.
McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK), 2014.
Paris v Stepney [1951] AC 367
Revill v Newbery [1996] 2 WLR 239 5
Spartan Steel & Alloys Ltd v Martin [1972] 3 WLR 502
Twomey, David P., Marianne M. Jennings, and Stephanie M. Greene. Anderson’s Business Law and the Legal Environment, Comprehensive Volume. Nelson Education, 2016.
Van den Henderson v Arthur [1907] KB 10
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