Four Step Process in Business Law - Essay Example

?Business Law Table of Contents Table of Contents 2 Part A 3 Part B 10 References 12 Part A Question Four Step Process Identification of the Legal Issue The prime legal issue observed in this case study is related to law of contract1. Explanation of the Principles of Law Relevant To This Issue With Reference To Relevant Authority According to Australian legislature, a contract can be referred as an agreement which is executed within two or more parties with the objective of crafting legal obligation either in written or verbal context. The laws are prepared by Parliament of Australia2 A contract includes mainly six vital elements namely an agreement, capacity, purpose of the parties, formalities, offer and acceptance and consideration. Agreement is one of the crucial elements of a contract and is referred to a legally enforceable conversation within two capable parties for a particular issue. This also helps to provide a clear indication about the intention or willingness of acceptance of certain rules and regulations by both the parties through a mutual understanding. If any misinterpretation occurs within the agreement then it might hamper both the parties resulting in uncertainty and misinterpretation of the law3. In addition to agreement, capacity is also the other significant element of a contract. It is referred as the capability of both the parties to come into a legally requisite contract. Other than this, intention of both the parties also offers a considerable role in the contract. This part mainly describes the key purposes of both the parties present within the contract5. Formalities are another considerable component of a contract which mainly describes that a contract may be created either in written or in oral form. Besides, the written form is more efficient as it helps to reduce the activities of frauds5. This can be reduced only when both the parties within a contract are mutually in accord with one–another leading to concurrence of will. Moreover, the other significant constituent of a contract is consideration, which signifies that anything which consists of a worth is assured to other party while creating a contract. It may be anything such as money, services or promised actions in order to make the contract valid and legal in between the promisor and the promisee4. All the above constituents are equally important for making a contract legitimate and breach of one of these factors may result in a void agreement5. Application of the Law to the Case The case study presented in the assignment does not follow all the elements of a contract in an effective way. The case study mainly highlights a contract of selling a refurbished bicycle within Australia and so it needs to conform to various rules and regulations of Australian Contract Law. It was a transpiring business understanding between a university student named Peter and owner of ‘tourbikes’, Sally. Both the parties were well capable to enter into a mutual agreement. Besides, the intention of both the parties was entirely different from one another. The purpose of Peter was to purchase a bicycle in order to retain the part-time job as a courier, which might prove highly beneficial for him to pay for the fees of his university. In addition, the main consideration of Peter was that he wished to purchase a bicycle within an amount of AU$5000. He desired to purchase a bicycle model named as Cadel Evans ‘GF’ only to fulfill his inclinations whereas Sally’s key perception was to sell off the bicycle at any cost. On the other hand, the intention of Sally was to sell the bike in order to pay off the amount taken as a credit. In the provided scenario, a proper offer as well as acceptance was not made from either of the interested parties i.e. Peter or Burt. Moreover, there was no proper agreement reached between the interested parties and the seller Sally. Sally also did not make a proper communication to Peter before delivering the bike to his house, which depicts certain lack of consideration on behalf of Sally as Peter did not promise to purchase the bike. Conclusion Therefore, it can be observed that there was no proper agreement reached between the intended parties in the provided scenario. The certain requisite factors for a contract were also not present to a large extent. It can be recommended that Sally should have waited for the approval of Peter prior to sending the bicycle to his house. Therefore, it can be affirmed that the contract prepared among Sally and Peter or Burt was not enforceable in nature as it does not include any certain legal elements. It was formed among Sally and Peter or Burt only on the basis of electronic communication with no involvement of legislation of Australia. For this reason, it may not be described as an enforceable contract. Question 2 Four Step Process Identification of the Legal Issue The main issue in the case study is entirely associated with bad quality and condition of the bicycle which shows that it is a repudiatory breach of contract6. Explanation of the Principles of Law Relevant To This Issue With Reference To Relevant Authority According to Australian Law of Contract, an agreement can be valid only when it is lawfully binding or valid in between the two parties. A contract of sale of goods is a contract where a seller transmits or agrees to reassign the possession of a particular material to a buyer for monetary consideration. The prime elements of sale of goods act are the condition, quality of the product and the warranty. These are the basic ideologies of caveat emptor, which means that the buyer should be well aware about these principles, while purchasing a product. Condition is referred to the set of privileges and responsibilities of the contracting parties, when a contract is formed8. It includes certain specific terms such as payment terms, price disparities and penalties in case of any differences. These principles help a buyer from getting cheated by a seller. If the quality of the material delivered to the buyer is not in a good condition as specified by the seller then he/she possesses the full right to alter the product within a specified date, which is known as warranty7. Within that particular time-frame, the seller is bound to replace the material. Warranty is also an agreement which is associated with the sale of goods. Thus, breach of which may result in a claim of compensation from the seller or rejection of the product. Hence, along with breach of contract, repudiatory breach of contract also occurs as Peter in this case was entirely innocent and reliant on the words of Sally. Application of the Law to the Case The case study presented in the assignment does not obey the rules and the regulations of a sale of goods act. In this part the main issue was associated with the condition of the bicycle delivered to Peter. It was said that the bicycle was entirely in a refurbished state as stated by Sally prior to purchase of the product. However, after purchasing, it was observed by Peter that he has been deceived by Sally. In this case, Sally offered the bicycle to Peter, which became unusable only after six weeks, as it was in a scratchy and unmanageable status. This is mainly because the gears and the seat of the bicycle were not in a suitable condition. For this reason, after certain period of time, Peter could not perform his job as a courier or return home conveniently from the late classes of the university, which were his prime motive for purchasing the bicycle. There was certain false representation on behalf of Sally as even though the bike possessed refurbished tyres and new chain, the seat of the bike was not in a good condition. The color of the bike also did not match with the provided description. However, since Peter reported the incident to Sally after six weeks, it cannot be reported as a breach of warranty according to the contract. Thus, it can be stated that Sally failed to keep all of her words described at the time of formation of the contract with Peter, which can be termed as breach of trust of the buyer8. Thus, it shows that, Sally can be fined for performing repudiatory breach of contract. Conclusion Thus, it can be stated that in terms of warranty, Sally cannot be deemed to be liable to be questioned for the present scenario that is being faced by Peter. However, in terms of misrepresentation aspect there was certain variation from the actual fact of bicycle and the represented fact. This aspect can be termed to be a break of trust rather than a break of agreement as the document signed by Peter made him to be responsible in case of any defect in the offered product i.e. bicycle. Part B The judges can look beyond the Act of Parliament. This type of Act is known as judge– made law. According to this law, the judges possess the responsibility of offering an independent decision for any particular case. If a judge desires to compare the situations prior to providing any decision then he/she is liable for this conduct. With the help of this law, the judges can provide new opinions as well. The judges utilize such powers both in case of intrinsic and extrinsic evidences. Intrinsic evidences are those which are present within a particular written document, and so it is also known as internal evidence8. On the other hand, extrinsic evidences are also known as external evidences that are not properly presented before the jury of the court. It is a type of interpretation that is entirely vague in nature9. Thus, in order to offer a clear decision for a particular case, purposive approach is utilized. For example, the case which occurred in between Oscar Chess Ltd v Williams was an instance of intrinsic evidence. This is because in this case information was written in a contract document that Williams wished to sell his Morris car to Oscar Chess at ?29010. Besides, in return, Williams purchased a Hillman Minx car from the dealer of the car, Oscar Chess for ?650. On the other hand, Van den Esschert v Chappell case was an example of extrinsic evidence, in which all the essential facts were not presented before the court. This was because a number of information was not documented at the time of preparation of the contract. Thus, it can be highlighted that extrinsic factors should also be considered along with intrinsic ones. References Ashurst, 2005. “Repudiatory Breach of Contract: Traps For The Unwary”. “Litigation Update”. https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCUQFjAA&url=http%3A%2F%2Fwww.ashurst.com%2Fdoc.aspx%3Fid_Content%3D1654&ei=td-WT5KHBIL3rQev_szQDQ&usg=AFQjCNElXeIvuMiHgQF66ecPNU6c153XgQ&sig2=-rlE9or8IMZOn4IJau5TRA Commonwealth of Australia, 2012. “Improving Australia’s Law and Justice Framework”. “Attorney- General’s Department.”http://www.ag.gov.au/Consultationsreformsandreviews/Documents/Improving%20Australia%20s%20Law%20and%20Justice%20Framework%20-%20Contract%20Law%20Discussion%20Paper.Pdf Fitzroy Legal Service, 2012. “The Law Handbook”. “Elements of a Contract”. http://www.lawhandbook.org.au/handbook/ch12s01s02.php# Goldsmith International Business School, No Date. “Breach of Contract & Remedies”. “Breach of Contract”. http://www.goldsmithibs.com/resources/free/Breach-of-Contract/notes/Breach-of-Contract-Remedies.pdf Julie Clarke, 2010. “The Law”. “Overview of Australian Contract Law”. http://www.australiancontractlaw.com/law.html Legalmax, No Date. “Oscar Chess Ltd v Williams”. “[1957] 1 All ER 325”. http://www.legalmax.info/members2/conbook/oscar_ch.htm Macmillian, C. & Stone, R., 2009. “Elements of the Law of Contract”. “University Of London External System”. http://www.londoninternational.ac.uk/current_students/programme_resources/laws/subject_guides/law_contract/contract_chs1-4.pdf Peter Drahos and Stephen Parker. “Critical Contract Law in Australia”. Journal of Contract Law (No Date): 31-48. Schane, S., No Date. “Ambiguity and Misunderstanding in the Law”. “Law”. http://idiom.ucsd.edu/~schane/law/ambiguity.pdf Twyford, J. W., 2002. “The Doctrine of Consideration”. “Contract”. http://epress.lib.uts.edu.au/dspace/bitstream/handle/2100/286/02Wholethesis.pdf?sequence=2 Read More