Law of Contract - Bruce and Tonys Marina Pty Ltd - Assignment Example

Commercial Law 1: Law of Contract Name Institution Introduction The Law of Contract is indeed one of the most pertinent laws that must be effectively comprehended for absolute knowledge in practice. Its minor composition and definite practice is more often than not varied depending on a jurisdiction. Nevertheless, the elements that constitute it are usually common in most of all the jurisdictions, thereby guaranteeing some better uniform practices and principles involved1. The elements are always a pointer to ensure the existence of a contract. Thus; there are certain elements whose presence is mandatory for the existence of a legally binding contract. They include: 1) offer, 2) acceptance, 3) counter-offer, 4) request for information, 5) consideration, and 6) the intention to create legal relations. All the above must be fulfilled for a contract to exist in totality2. Q1 a) In the case of Andrew and Nicole, there is no existence of a binding contract between them. This is evident by the fact that the contract had not yet gone through all the stages to warrant its declaration as a complete binding contract, so Nicole does not need to worry much. Moreover, the elements of the contract that was to be between them faced a series of setbacks, which can be attributed to the following: First, the acceptance of the offer was incomplete in that the offer or to the contract did not get her precise feedback in the case. Andrew delivered his acceptance to Nicole, but she never looked at it to get the contents within the feedback of the acceptance mail. Thus; it is apparent that Nicole did not have knowledge about whatever information (acceptance) borne within the mail. Secondly, the counter offer that Nicole made was not responded to by Andrew. In a binding contract, any sort of counter offer made by one of the parties, must be ironed out between them before further continuation of the process of entering into the contract3.This was evidenced by Nicole making a counter offer of raising the price of the Uptown office suite to one million dollars as compared to the earlier sum of four hundred and fifty thousand dollars for the same office suite that she had offered to sell to Andrew. The dominant part in this case was the fact that Andrew never reacted to the counter offer that Nicole made in that evening. He ought to have rejected or accepted the counter offer for his precise position to be known, and see whether the contract would be continued with. Third, consideration as a key factor was completely undone in the case of Nicole and Andrew. This was because communication between the parties concerning both the counter offer by Nicole and the acceptance mail by Andrew were completely ignored in the case. Therefore; the deadlock created by the communication barrier greatly hampered consideration of the vital issues to be entailed in the process of the contract4. Fourth, the case of Nicole and Andrew did not reach the level of legal binding phase to warrant it more legal. Had it reached that point, there would have been some consequences in case of its breach, which was not the case here. Accordingly; the contract was further not binding between the parties and therefore, can be said to be inexistent5. Furthermore, it is ostensible that personal emotions got wind of the process of the entry into the contract and in turn affected some elements of the process of entering the contract thus, it could not be completed and therefore, there was no binding contract between Nicole and Andrew. b) The paragraph, “This offer and any agreement reached between us is on the basis of it being subject to a formal contract drawn up by my solicitor” would indeed bring on board some changes to the advice given above to Nicole. This is a direct pointer to an intention of making the agreement legally binding. (MacMillan & Stone, 2012) Thus, it will definitely be accompanied by so some consequences, in case any need arise more so with any form of breach. In the case of Nicole and Andrew, this would have attracted some penalties in one way or the other since Nicole would have most likely been charged to pay some damages to Andrew as stipulated by the offer and acceptance phases of the contract process. c) Inclusion of this paragraph, “I require verbal confirmation of your acceptance of this offer in person and will not accept anything less” would not have culminated into some changes in the advice to Nicole. This is with regard to the point that the adjustment in the medium of communicating the acceptance phase of the contract process does not enforce a major impact to the whole process of contracting, and it is to the discretion of the concerned parties6. Question 2 The second case, which was the Bruce and Tony’s Marina Pty Ltd, was rather different based on the mere fact that it reached to the final stages of the contract process hence; it was complete. Additionally, the contract had another core element which is worth noting in this instance. This was the invitation to treat. More often than not, it is defined as the definite indication of a willingness to partake in any business functions, which are mostly contractual in nature7. Further, it is an invite to begin negotiations or present an offer thus mostly considered to in a wide variety of circumstances. In this case, it was evidenced by the allowable act of Bruce taking the boat, “boomer” for a ‘test drive’ around the Gleaning marina. So; it was just a way of additional information on placing an offer for the contract. This was met resoundingly by the agreement occasioned by acceptance of the offer between the two parties. Moreover, it must be noted that this formed the core basis upon which the agreement or rather, the contract had been made. This can be explained and explored by the fact that Bruce had the opportunity to use the boat during the “test drive” which was meant to convince him that the boat was in the indispensable condition that he had expected it to be. Therefore; if he never had the opportunity of confirming the various functionalities of the aspects in the boat, it was by his own due negligence. This takes into account the fact that he also had the opportunity to inspect the boat’s marine radio functionality as he had expressed his desire to ensure it was in the right condition for use8. Besides all these, he also had the opportunity to request for a recently computes inspection report of the boat at that stage. Suppose it was not available, he ought to have requested for the boat to be inspected prior to his final acceptance of the offer to purchase it, and subsequent completion of the contracting process. This makes him the bearer of the biggest burden in respect to this prevalent situation as he overlooked the pertinent details he should have taken into more serious thought. Nevertheless, Tony’s Marina Pty Ltd cannot be absolved from liability9. It is because they had decided to engage in an outright sale of faulty machinery since they had knowledge to the effect that the boat, “boomer” was an old boat without recent active maintenance procedures being done on it that may have rectified its situation. All these had to be discovered by the inspection report made by the Bob’s Boatshed barely a month later after their sale of the boat to Bruce. Thus, the consequences of the contract must be borne also by the Tony’s Marina Pty Ltd in respect to this condition that was affecting the contract they had arrived at just a month ago for the sale of the boat to Bruce. The consideration element of the contract was grounded on the acute acceptance that had consented to the invitation to treat. It can be argued that these had been made by the parties since the contract was finalized10. Though, it appears some aspects in the consideration phase were not well taken into account. Such aspects may have entailed a condition such as the period of warranty. It would have effectively stood in the case of eventualities that may have faced the boat within the period that had been stated. This would have effectively come into action more so considering that the glitches in using the boat were experienced immediately a month had elapsed from its date of purchase by Bruce. In addition to the above, the intention to enter into a legal relation was done. This was achieved through the exchanged of money from one entity (party) to the other and it resulted to the sale of the boat to Bruce. Likewise; this adds more effect to the fact that the contract was complete and legally binding hence, the consequences must take obligatory influence they have in respect to the untimely impairment of the boat that Bruce had not anticipated11. This also deliberates the point that the parties to which the contract had been made between were all of the mandatory requirements, and it must be believed that the persons who engaged in the contract did not fall in any of the following groups: people who have a mental impairment; corporations (agents acting on behalf of the company); bankrupts; young persons (minors); and finally, the prisoners12. This is often to boost the legality aspect for ease in putting into effect situations of due obligations. Likewise, the sum of money that Bruce had incurred in his onus to determine the cause of the problems affecting the boat, paid for the inspection report to the Bob’s Boatshed must be brought to focus as appropriate. In any way, it must be included in the process of restoration between the two parties as a consequence, which in my view must be compensated by the Tony’s Marina Pty Ltd as much as the greatest liability will be held by Bruce. References Law Teacher.net Law Case File: Contract Law. Retrieved on 2014, August 21: http://www.lawteacher.net/contract-law/cases/contract-law-cases.php MacMillan, C. & Stone, R. (2012)Elements of the Law of ContractLondon: University of London. Retrieved on 2014, August 21: http://www.londoninternational.ac.uk/sites/default/files/programme_resources/laws/ug_subject_guides/elements_law_contract-subjectguide4chapters.pdf Riley, J. (2012) Contract- Elements of a Contract. Retrieved on 2014, August 21: http://tutor2u.net/law/notes/contract-elements.html Small Business Development Cooperation. Four Essential Elements of a Contract. Retrieved on 2014, August 21: http://www.smallbusiness.wa.gov.au/four-essential-elements-of-a-contract/ The Law HandbookElements of a contract. Retrieved on 2014, August 21: http://www.lawhandbook.org.au/handbook/ch12s01s02.php Read More