Advise Marcus of Any Issues Arising from the Contracts - Essay Example

Business Law Name: Institution: Subject: Date: In this essay, business laws will be discussed extensively considering the case example given. It will explain the existence of a contract and the procedure of entering into a legal contract and advice the clients who are on the verge of being sued or suing another person or an organization. It will show clearly the steps that are taken in acquiring compensation and payment for damages caused by breach of contract by the defendant. It will also provide the procedures undergone while forming a legally binding contract between two parties who are involved in a business1. Markus is an individual who wants to sell two ships that he inherited from his father as part of the shipping company that he also owns. The reason for disposing of these ships the Moskva and the Leningrad are to raise capital for the company. The international shipping company that Markus inherited from his father is almost running bankrupt, and this prompts Markus to sell the two ships. The type of expenditure displayed by Markus resulted in the bankruptcy of the company. Markus can find two parties that were willing to buy each of the two ships. The first one is Luiggi’s shipping company. This company is in apposition to enter into a legal contract2. The two parties are in a position to form a legally accepted contract since each of the parties has a legal capacity to sue or be sued. According to Schaffer (2014), a contract is a form of agreement between two or more parties transacting business or participating in any activity that requires obligation from both parties. At this point, the two parties can enter into a legally binding contract since they each have the capacity to do so. Furthermore, they have a legal object and a genuine consent. In this case, Markus can sell the ship to the Luiggi’s shipping company. They both signed the contract, and the Luiggi’s shipping company representative makes the deposit of $ 15 million on October 1 as agreed in the contract. At this point, the contract under any tribunal will be recognized as valid with the capacity required by the business law of contract3. However, an occurrence of a breach of contract will lead to either of the parties involved to be sued. In this case, Markus will fall a victim of such since the ship, which he was supposed to sell to the Luiggi's shipping company, got fire and had suffered irreplaceable damages before sinking. This will mean that the ship will not be delivered to the Luiggi’s shipping company. This can prompt Luiggi’s shipping company to move to a business Tribunal to seek compensation for the inconvenience caused by the non-performance from Markus. The company can seek compensation for the following ground; the fact that the defendant did not deliver as per the contract requires. According to Goldberg et al (2015), the client can sue the defendant for breaching of contract by either failing to deliver the agreed property or service or providing a different property or service. This will make Markus liable for not delivering the ship to the Luiggi’s shipping company as required by the contract. Markus can turn this case around by claiming that he was not aware of the situation that the ship was during the transaction and contract initiation with Luiggi’s shipping company. In accordance with the law of contract, the client is required to have ascertained that the property he/she is acquiring is in the condition agreed by both parties. This does not happen with Luiggi’s shipping company as there is no evidence of the representatives requesting the presence of the property in question for them to access and determine if it was the right property. This will provide a leeway for Markus. In the second case, Markus sells the other ship to Imelda Chow, a wealthy Asian industrialist, for $ 20 million on October 2. They both signed the agreement for the delivery of the property to the new owner who is Imelda Chow. It is later discovered that the Leningrad was of much lower value from which Chow expected. The assessors provided a report that the Leningrad was worth $ 10 million. This may also prompt Chow to take a step in order to claim for damages and compensation from Markus. The client which, in this case, is Imelda Chow can claim that the defendant committed an offense as far as the business law of contract under the conduct of client is concerned4. According to Coops, C & Huett, L, (2012), a defendant will be found guilty of an offence linked directly to the provision of misleading conduct. In this case, Markus was silent about the condition of the ship during initiation of the contract. Silence will be taken as misleading conduct if it results in a loss on the side of the other party. The silence of Markus about the state of the ship results to a loss of the value of the ship dropped from $ 20 million to $ 10 million within a range of one week. This is an offence will highly penalized in the business tribunal in Australia. Although the purchase of the Leningrad by Chow was because she saw a red-hulled vessel in Perth, and she thought, it was the one that Markus was going to offer her. She later realizes that the Leningrad is a blue-hulled vessel in a poor condition. This makes her realize that she had made a wrong purchase of a property that was no in the condition she had expected. This will give Markus sufficient ground on which he can claim that the client’s intention in buying the ship was ill-fated because Chow was thinking that she had got a better part of the deal. On the contrary, the defendant will not be held guilty of the accusation that might arise from the clients5. Markus is in a position to deny any accusation from his clients when they try to seek compensation for damages and refunding of their money due to the result of the contract not favoring their side. He will be able to point out that the contracts he had entered were fulfilled as per the agreement between the two parties as mentioned in Poole, Jill, (2012). Markus will be able to defend himself from any accusation whatsoever raised by the client concerning the sale of the two ships. The first client will not be able to put forward a case with sufficient grounds to the sue Markus due to the failure to deliver the sip that agreed in the contract. The second client will also not be able to raise any case against Markus since she was not able to determine if the ship she was purchasing was the one that it had impressed her earlier. In conclusion, Markus who is the owner of the shipping company that he inherited from his father is involved in two cases of a business transaction. The first case is with Luiggi’s shipping company on which he sold Moskva to them but the ship caught fire few days earlier and this made him an the company not to take into consideration the assessment of the ship before transacting any business. This gives ground on which Markus evades being victimized for not delivering the property as required by the law. He also escapes the accusation for misconduct under silence of a defendant resulting in a loss to the Luiggi’s shipping company Finally, the defendant is also accused of delivering a property that is of lower value as per the agreement. Markus will also evade this by claiming that the property he had offered to the client was not what the client expected since the client’s thought were not considered by Markus when he was signing the contract. It is evident that the second client wanted to take advantage of the deal when she thought that the ship was a good deal for her since she thought had paid a lower value. Bibliography Burton, Steven J. "Principles of contract law." (2012). Gibson, A & Fraser, D, 2010, Business Law, 6th Edition, Pearson Prentice Hall p.607 Goldberg, Victor P. Rethinking Contract Law and Contract Design. Edward Elgar Publishing, 2015. Mann, Richard, and Barry Roberts. Essentials of business law and the legal environment. Cengage Learning, 2012. McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press, 2014. Poole, Jill. Casebook on contract law. Oxford University Press, 2012. Schaffer, R., Agusti, F., & Dhooge, L. (2014). International business law and its environment. Cengage Learning. Sneddon, N. C., Rick Bigwood, and M. P. Ellinghaus. "Cheshire & Fifoot: Law of Contract." (2012). Stone, Richard, and James Devenney. The modern law of contract. Routledge, 2013. Read More