Contract between Bob and Mr Spokes - Case Study Example

Assignment: Case study in Business Law Name Course Tutor Institution Date of submission Introduction Legally binding forms contracts usually consider a series of factors. Some of the most considered factors include the aspect of the offer and an alternative aspect of acceptance. Further, a contract is considered fit if the parties involved are of a stable state of mind (Collins 2003). That means that they do not enter into agreements under influence or coercion. Most of these factors are recognized from a global perspective. Thus, there are chances that nationality or cultural diversity could affect or influence the judgment of any contractual agreement in case there are cases of frauds. Usually, the contractual agreements are governed by a set of provisions and elements. These elements play a substantial role if there arise a series of discrepancies associated with any contract any individual or party may have ventured (Elements of a Contract 2015). A series of cases have been ruled vis-à-vis cases of fraud or irresponsible acts en route signing contractual agreements. The paper is a case study concerned with providing a legally fit argument of a case that could be filled regarding a perceived wrong committed during the process of entering a contract. Precisely, Bob is the party into a contract that feels cheated in the process of entering into a contract with one Mr Spoke, s Bike Shop Owner. The decision to seek justice is influenced by the sense of frustration expressed by Bob after committing himself financially into the contract. The case study incorporates an analysis of the facts in the case that could call for legal action. Further, it incorporates an analysis of these facts integrated with the possible application of the law to help Bob perceive the outcomes of the case he is about to file. Facts of the Case Two parties, Bob, and Mr Spoke enter a contract in which Bob is willing to buy a Bicycle Store. Alternatively, Mr Spoke who is the owner of the store is willing to sell the shop alleging to have intentions of retiring. However, Bob makes a decision to make inquiries of how the business is run considering his professional incapacity just to assume how it is run. Specifically, Bob questions about the sales made to be sure of what he was venturing. Accordingly, Mr Spokes responds by making a representation of the profit record in the store with regards to the past and future predictions. The information provided seems satisfactory since Bob purchases the store upon the representation. However, Bob comes across some hand evidence comprised of old cash receipts, tax documents, and register tapes. The information incorporated in these data and data storage devices imply that the representations of profits had been inflated by approximately 55 percent of the normal rates. In fact, the records imply that Bob has to invest more resource to ensure that the store operates successfully. That implies that the venture outcomes are contrary to what was perceived and agreed upon by the two parties during the contractual agreement (Collins 2003). Legal analysis of the case facts There are several things that Bob needs to understand before seeking justice concerning the contract that he has just entered. First, his case oscillates within the Law of Contract. Therefore, any judgments made have to be associated with the provisions of the Australian Law of Contract as stipulated in the constitution. First, the law demands that aspect of the formation such as the agreement should have reliable evidence (Julie Clarke 2012). That is; there should be reliable evidence that Mr Spoke and Bob entered a contract. Therefore, there has to be an offer and acceptance for the contract to have become legal. From an analysis point of understanding, the contractual agreement between Spoke and Bob was legal. There were terms and conditions upon which Bob agreed to purchase the bicycle store. Further, Bob needs to understand that there is a series of allegations that one could make within the context of seeking a remedy. The remedy is only possible if the conditions leading to the damage are legally recognized. Thus, Bob is entitled to damages as a matter of right if he or she proves the case using sound proof. However, failure to prove relevant evidence could lead to a reversal of the case. That implies that the Mr Spoke may file a case seeking the remedy for the collateral damage caused by the process of filing a case. In this case, Bob has a series of background from which he can seek the remedy. First, he could seek the remedy on the basis of receiving breached or false information during the representation of the financial performance of the bicycle shop by Mr Spoke. From a legal perspective, there are two particular scenarios from which Bob’s case can be analysed in court with regards to his complaints. These scenarios include misrepresentation or false statements and undue influence. These are violations that are legally recognized and are likely to get resolved using legal means. Misrepresentation or false statements The constitution protects cases of misleading or even deceptive conduct perpetrated during a contractual agreement (Carter Harland & Lindgren 1996). From a legal approach, the pre-contractual cases of misrepresentation are likely to provide contractual remedies within the common law or even the statutory remedies. These statutory remedies are pursuant to the Competition and Consumer Act of 2010 (Turner 2013). The statutory prohibition of this act is well stipulated in section 18 of the Australian consumer law. However, it is paramount to note that much protection and remedy provided under this section does not focus on the purely private sales. It is also paramount to articulate that there are several categories of false statements. These include the fraudulent misrepresentations, the negligent misrepresentations, and the innocent misrepresentations (Thampapillai 2015). The fraudulent misrepresentation is diagnosed in the case where statements made during the contract are determined to be false. However, it is essential for Bob to note that sound proof is required to substantiate claims vis-à-vis fraudulent misrepresentation. It is assumed that if the discussions were not recorded, the information communicated was still relevant to the finalization of the deal. Alternatively, the negligent misrepresentation may arise if a party is under a special duty to ensure that the care of the other party is ensured (Turner 2013). However, a party makes false statement considering that the recipient of the information relies on that particular information. The case becomes fatal especially if the person making the false statements is aware that information provided is going to be relied upon during the process of making decisions. Finally, cases of innocent misrepresentation are likely to feature if the false statements are made in absentia of intentions to deceive (Turner 2013). However, it is paramount to ascertain that this misrepresentation could be fatal enough to cause damage. Unfortunately, the only available is rescission (Paterson 2009). Undue influence Proper consent, to enter an agreement may be affected by undue influence by the stronger party between the two parties. There are two categories of undue influence. That includes the express or actual influence. There is a statutory pursuant under section 52 under which there could be a remedy of rescission (Finlay2004). The undue influence element is considered in cases where one party is weaker than the other. The case study features Bob to be the weak party and Mr Spokes the Strong party. Arguably, the rationale behind the establishment of rules against the undue influence focuses on correcting abuses or confidence and trust (Tipples Krivokapic-Skoko & O'Neill 2007). The law is applied in case there are parties in a relationship, but one party has the ultimate capacity to influence the decision of the other party. It is essential for Bob to understand that the law may apply if such a scenario is certified in the case. However, the issue lies within the statutory definition of the unconscionable conduct within the consumer protection laws of Australia. In the case of Bob, he could be protected by the law, especially if he provides proof if he provides substantial proof regarding the allegations (Montes & Irving 2008). Analyses of Possible remedy outcomes From an analytical point of understanding, Bob can file the case against Mr Spoke. There are a series of wrongs that Mr Spokes could answer charges. First, Bob is free from being biased because there was a willing seller-willing buyer basis. First, Bob can file charges against Bob on the basis of misrepresentation of false statements provided in the course of entering the contract. Note, Mr Spokes, according to the law, has full knowledge of the financial situation of the bicycle store. Alternatively, Bob does not have an idea of the business and the financial issues affiliated with it. Bob stands a better position to file a safe charge against Mr Spokes since he has the hand evidence stipulated in the tax records, the receipts, and the registers. These documents prove that the information provided by Mr Spokes was over posted by 50 percent. Further, there is an elaborate statutory pursuant approach where Mr Spokes can be judged and remedy provided on the basis of the law. The law provides that the two scenarios of undue influence and misrepresentations are subject to remedy under the protection of the constitution. From a presumption point, Bob could receive a reimbursement of the funds used to purchase the store. The condition underway is that the evidence provided in correspondence to the case is justified. Conclusion The sale and purchase of items or premises are considered to contract. The basis of this consideration is that there are two parties taking part in the transactions. The first party is willing to offer a product. Alternatively, the other party is willing to purchase or possess the product (Collins 2003). However, there are protective statutes that prevent actions of fraud and irresponsible transactions from taking place. A perfect example would be in the case of Bob and Mr Spokes. It is clear that Bob trusts Mr Spokes with regards to the information he will provide. Unfortunately, Mr Spokes fails to consider that he is under the legal obligation to provide accurate information prior to tricking Bob into a sale agreement. Thus, it is legally appropriate that Bob will sue Mr Spikes for remedy or possible refund of the invested amount in the contract. Bibliography Australian Contract Law | Julie Clarke. (2012). Retrieved September 11, 2015, from http://www.australiancontractlaw.com/law/avoidance-misleading.html Elements of a Contract. (2015). Retrieved September 11, 2015, from http://www.lawhandbook.org.au/07_01_02_elements_of_a_contract/ Finlay, A. (2004). Unconscionable Conduct in Commercial Dealings (Doctoral dissertation, University of New South Wales). Collins, H. (2003). The law of contract. Cambridge University Press. Paterson, J. M. (2009). The Australian unfair contract terms law: The rise of substantive unfairness as a ground for review of standard form consumer contracts. Melbourne University Law Review, 33(3). Turner, C. (2013). Misrepresentation, Agency, and Contracts for the Sale of Goods in South Australia-More Effective Remedies or Increasing Confusion.Adel. L. Rev., 5, 221. Tipples, R., Krivokapic-Skoko, B., & O'Neill, G. (2007). University academics' psychological contracts in Australia and New Zealand. Montes, S. D., & Irving, P. G. (2008). Disentangling the effects of promised and delivered inducements: relational and transactional contract elements and the mediating role of trust. Journal of Applied Psychology, 93(6), 1367. Thampapillai, D. (2015). Misleading and Deceptive Conduct.Australian Commercial Law, 462. Carter, J. W., Harland, D. J., & Lindgren, K. E. (1996). Contract law in Australia. MICHIE. Read More