Attached Contract Law Problem - Case Study Example

Advise Gina on the attached contract law problem question Can Gina claim the 15,000 promised by her Aunt Irene. In a valid contract, the promise made by one must be accepted by another and it must be legally binding to both parties. A promise is an offer made by one to do or not to do something to another. When the offer made by the former (promissor) is accepted by the latter (acceptor), it becomes a contract. The acceptance is made for the fulfilment of the promise made by the promissor for a lawful consideration to be paid by the acceptor. But, that does not mean that both parties will do their part. Both parties may fail to keep their word and ultimately result in breach of contract. However, a point to be noticed in this context is that to be legally binding, the promise made by the party and its acceptance must be aimed at forming a legal relationship. Anything made out of natural relationship (or domestic arrangements) are assumed not to create any legally binding obligations. Nevertheless, the case -Parker Vs Clark [1960] NLR 286- demonstrates that although domestic arrangements are assumed not to create legally-binding obligations, in some cases this assumption may be overruled by the facts . In the case given, the offer made by Irene to Gina to pay 15000 is just a domestic arrangement out of natural relationship and there is no intention of creating any legal obligations. Moreover, Irene made the offer without having any intention to avail consideration from Gina. The offer is made just out of natural relationship. Therefore, it is not possible for Gina to approach the court for justice and get the promised money from Irene. Though, Gina has made some promises after the promise by Irene, this does not amount to a promise, which is legally enforceable. In this context, the case Balfour v Balfour [1919] 2 KB 571 is worth notable as "it demonstrates the strong presumption that domestic agreements, even if framed in contractual terms, are not intended to create legal obligations" (Law Glossary, 2006). Is Gina liable to Kolumbie for the 500 balance on her debt Usually, when an order is made by one party to another for the supply of certain goods for a consideration, it becomes a contract. Both parties are legally binding to the terms of the contract are obliged to perform their part. If any of them makes a default, the aggrieved party can claim compensation from the defaulted party as the transaction is legally enforceable. When one is making an offer to another on the strength of the offer made by a third party, and if the third party makes a default and it subsequently results in the non performance of the offer, the third party is no way affected by the default of the promissor. In the given case, though Irene has made a promise to pay Gina a sum of 15000 and subsequently defaulted to pay the sum, the offer (s) business or personal made by Gina will in no way affect Irene as the first offer itself is not a legally binding one. Therefore, it is not legally obligatory for Irene to pay the remaining amount to Kolumbie, the aromatherapy oil supplier. Is Gina liable to Jaymark Fitness for the 4,000 balance on her debt When an offer is made out of the strength of the offer of another and the subsequent default of the original offer, the second offer cannot be performed and will result in breach of contract. But, it is to be noticed that whether the original offer is legally binding or not. In the given case, the original offer is a domestic arrangement and it is out of the natural relationship between Irene and Gina. However, when Gina has placed an order for 10,000 worth goods and after the default by Irene, Gina could not keep the promise that the payment shall be paid later. Gina informed Jaymark that she could not pay the 10,000 owed but could manage 6,000 and that if Jaymark tried to sue her for more, she would declare herself bankrupt and Jaymark would get nothing at all. Jaymark reluctantly agreed to accept the 6,000 in full and final satisfaction of the debt. Therefore, Gina is not under any obligation to pay the remaining 6000 as Jaymark has been satisfied with what is given by Gina. The above situation is beautifully cited in the widely-cited case "Foakes v Beer [1884] 9 App CAS 605, the House of Lords supported the view that that part-payment of debt could not be used as consideration to support a contract. This principle was already known from Pinnel's case, but this House of Lords decision gave it additional strength" (Law Glossary, 2006) Whether Gina is liable to pay Longshots the 5,000 "bonus" It is clear from the case given that Longshots has promised to complete the work by 25 June and it is only in accordance with the promise made by them that Gina has made some other arrangements. But, Longshots failed to perform their part as such Gina need not pay any commission. In this context, a well known is worth quoted, "the highly contentious case (Williams v Roffey Bros. and Nicholls (Contractors) Ltd [1991] 1 QB 1) is taken to demonstrate that, in some cases, the performance of an existing contractual obligation can be taken as consideration (see: Consideration) in a new agreement. The traditional view has always been that it does not represent a benefit to the party whose duties are already fulfilled to have the other party offer to do something he has to do anyway. This principle is similar in effect to that in Collins v Godefroy (1831), where a statutory duty could not be seen as consideration" (Law Glossary, 2008). Whether she is liable to Harcourt Investments for the full rent, and if so, from what date Since, Harcourt Investments has offered to reduce the amount of rent on account of Gina's low business, Gina is not obliged to pay as fixed earlier as long as it stats making profit. But, when Gina starts making profit on its business, it is under obligation to pay rent as decided earlier and the date on which Gina has to pay rent as agreed is July 1st. References Law Glossary, 2006, Law case, Balfour V Balfour (1919), The K-Zone, kevinboon.com, viewed 10 Jan. 09, from Law Glossary, 2008, Law case, Williams's v Roffey, the K-Zone, kevinboon.com, viewed 10 January 2009, from Law Glossary, 2006, Law Case, Foakes v Beer (1884), The K-Zone, kevinboon.com, viewed 10 Jan. 09, from Read More