Offer, Considerations and Acceptance of Agreement - Assignment Example

Legal Case Name Date Course Negotiations Offer A contract is a legal binding that gives the parties involved to carry out a certain activity or refrain from carrying it out in the course of discharging duties. Michael should consider offering a joint venture to his two friends. This is because their services will only be required on Tuesdays and Thursdays. On the other hand, their operations will be home based. Through the use of the joint venture, Michael will still be the owner of his café. However it is important for Michael to come up with proper agreement with his friends concerning the sharing of the profits. According to section 4J of the Competition and consumer Act 2010 (Cth), the contract should be made depending on the understandings between the members. Considerations It is also important to note that considerations are important aspects in terms of binding the agreement made between the parties. Michael should therefore consider some of the issues. The contributions that each of the friends will make in terms of profiting the business is one of the aspect. This is because each of the members will have to invest certain amount for the purposes of operations. On the other hand, the terms of payments should also be considered and the obligations of each of the friend. On the other hand, Michael should clearly determine whether the agreement is made between the business and the friends or him and the friends. In the case of Coulls V Bagots, the court ruled that the royalties are only payable to the estates. This is after the death of Mr. Coulls and his executioner had sough on whether to pay the royalties to the estate or Mrs. Coulls. Mr. Coulls and his wife were joint tenants and had entered into a contract with O’Neil construction allowing it to quarry part of his land. Acceptance of agreement The acceptance of the offer made by Michael should be done in writing. The two friends have to sign an acceptance form which also contains the agreements that they have arrived at. This is for the purposes of ensuring that they are legally bonded to the agreement and have fully accepted the terms and conditions of the joint venture. Michael should ensure that the acceptance has been communicated for it to be legally binding. In the case of Maxitherm Boilers Pty Ltd v Pacific Dunlop Ltd, the court ruled that an acceptance agreement has to be conclusive. This is after Pacific Dunlop which had entered an agreement with Maxitherm Boilers had its properties damaged by the products of Maxitherm Boilers. Maxitherm Boilers however won the case on the basis that the acceptance of the contract had not been completed by Pacific Dunlop. The acceptance of the agreement should be started once the agreement is complete and the friends are ready to begin their operations. Expression of intentions Michael wants the agreement to be legally binding and hence the need for ensuring that the use of appropriate laws. In terms of showing his intentions, Michael should come up with presumptions so as to ensure that ensure that his intentions can be proved in a court of laws incase of a court case. On the other hand, Michael should also consider that he is dealing with his friends and hence the need for honor clauses. These clauses are not legally binding but will have to be respected by all the parties involved. The intentions are also for the p0urposes of enhancing the operations of the company as the new activities will impact on its operation. According to section 134 of the corporations act 2001 (Cth), the internal management of a company should be based on its own rules as well as the provisions of the corporations act 2001. Heads of agreement The heads of agreement will be composed of non binding documents that concern the partnership and the operations of the joint venture. In the joint venture, the heads of agreement should contain the details of all the parties. The address of the café should also be contained in the heads of agreement. The date when the transactions were completed should also be featured in the heads of agreement. Since the joint venture will be composed of special conditions relating to the operations, it should also be contained in the heads of agreement. However, it is important to note that the issues in the heads of agreement becomes binding when they are adopted in the parent agreement. The main purpose of ensuring that the head of agreement is used is to minimize conflicts as creates a full understanding of the contract. Analysis Although agreements may be reached during the negotiations, it is still important for Michael to ensure that a contract is written. This is because the joint venture may experience challenges in future which may require legal interventions. On the other hand, the new ideas being incorporated in the business may not work and hence the need for a contract. The termination of the joint venture may occur due to unforeseen circumstances that have not been anticipated during the agreement and hence the need of a contract so as to deal with such incidences. On the other hand, a contract is also important in terms of ensuring that each of the party acts responsibly during their operations. This is due to the clear understanding that is brought about by a contract as opposed to the verbal terms. Michael will have powers to regulate the business in the presence of a contract. This is because the ordinary agreements may not be powerful enough in terms of the implementation of business issues. It is also important to note that the compliance to the business laws an only be achieved in the presence of a contract as the conduct of each party will be regulated. The feeling of ownership of the business will not be developed without a contract. This is because the friends will always feel like they are just employees of the company. However, with the presence of a contract, they will develop a sense of ownership which is important in terms of improving their performance. According to section 51AD of the competition and consumer act 2010 (Cth), it is a crime to violet the industry codes. The liability is usually placed on the company that carries out the violation. This means that any violation that is carried out by the friends may hold Michael liable. This might occur in terms of the food that has been served to the customers. The customers may not be aware of who cooks the food and hence suing Michael. However with a presence of a contract, Michael can absolve himself incase of a trial. A contract therefore plays an important role in terms of dealing with the legal issues that may arise incase of a breach by any of the parties. It is also important to note that the contract will play an important role in terms of ensuring that the profits are shared according to the agreement. The decision making process is also made easy in the presence of a contract which guides the joint venture and the conduct of the partners. Read More