Formation Of Contract Under Business Law: An Analysis

Answer i: Did a Contract Form and Who are the Contracting Parties?

The principal obligation of an appropriate contract is an agreement that normally comprise of a “proposal” and “acceptance”. It includes collection of same brains together, or it can be said that it is an agreement between parties of like minds. There are many multiple rules that determine “proposal” and “acceptance” in a contract. As per case of Carill v. Carbolic Smoke Ball Co, it was decided by the court that invitation to deal is different from proposal. In order to make the differentiation between invitation to deal and proposal, one needs to know the intention of the party who is making the statement. Test of determination is difficult to identify. Thus, according to Ayres & Schwartz, 2014 the purpose of the contract is depends on the declaration, whether it was a positive sentence or simply the result of further negotiation.

In this case, the contract law is the vital division of commandment. It does not include accurate rules and regulations but instead it lays the position of values that limit the rights and commitments of the contracted parties to the agreement. Parties of the agreement should follow the lawful commitments. Hence, the business law states that every type of declarations forms the consideration for the supplementary party. Any “proposal” when agreed by the additional party is called as guarantee. The definition of formation of agreement will evaluate the given situation. Hence, proposal and acceptance of the proposal is vital to make a valid contract (Chen, 2012).

In the above case, there is a “proposal” and “multiple acceptances”. Here, Alan made the proposal and decides to promote the book named “Introduction to business law in Singapore”, which was included in commercial law as a mandatory part. Here, Alan made the proposal on 1^st November, 2014 and posted the proposal on social networking sites. Further, the advertising expense of the book was $ 200.00. Alan also mentioned the cut-off date was 5^th November, 2014. Bernard is another person who replied on Alan’s post accepting his proposal. Although, Alan has not replied further on the comment of Bernard. After that, Bernard sent the amount through courier on 7^th November, 2014. Then Alan gave his book and mentioned that his comments are printed in the back.

Charleen is the younger sister of Alan. Charleen has also seen the post of his brother and wanted to buy his book for $ 200.00. Alan did not found his sister’s receipt seriously. He thought that his sister was too young to use that book. But however, he agreed his sister’s acceptance while thinking about other thing. Now the agreement was executed between Alan and Charleen. Now on 6^th November, 2014 after receiving her pouch money, Charleen put $ 200.00 for his brother on the table.

Answer ii: Bernard’s Legal Position

Damien is also interested in purchasing the book and was ready to accept the proposal of Alan. On 4^th November, 2014 he met Alan in college and gave $ 200.00 to him. Alan kept the money and said to Damien that he will provide all the matter on 7^th November, 2014. On the same day, he bought an analogue book from the market and gave the same to Damien.

The agreement that was created between Alan and Bernard was no contract. Here the Alan has accepted the money which the Bernard has sent and he has sent the book to him on 7^th November, 2014. Hence, Alan has acted wrongly here because it was recognized that the book was freely available at Kaplan Higher Education. Therefore, Alan is lawfully liable for the false proposal made by him. Bernard can legally file a suit against Alan and can asked for damages and compensation from him.

Bernard replied to the proposal of Alan and the price of the book posted was $ 200.00. But the Bernard made the counter proposal and the offered the price of the book was $ 150.00.

The proposal which is made against the first proposal is known as counter proposal. The counter proposal can be accepted or rejected. A counter proposal is the modification of the first proposal. This will make the proposal viable and logical. Acceptance and rejection of the counter proposal is always up to the proposalee. When a person makes the counter proposal then the person is free to either accept it or reject it (Williams, 2014).

In this situation also, Bernard has made a counter proposal to Alan. But Alan neither accepted the counter proposal nor declined it. Further, on 3^rd November Bernard paid the amount to Alan and Alan has accepted that amount and send the book to Bernard. Hence, if we apply the postal rule here then it is said that contract is said to be executed. However, it is also seen that Alan never gave confirmation to Bernard’s counter proposal. Alan accepted the sum and delivered the book to Bernard.

Therefore, there is no position of Bernard because there is no agreement between Alan and Bernard. Alan has never accepted the counter proposal made by Bernard. Therefore, it can be said that there is no valid contract between Bernard and Alan.

Charleen is the younger sister of Alan. She is interested in the proposal made by his brother and wanted to buy the commercial law book from Alan. Further she has also decided to make the payment to his brother for the book. However, Alan only nodded his head when his sister came for the proposal because he is thinking about football. Therefore, it can be said that Alan is not in proper state of mind when he listened to his sister’s acceptance of proposal.

Answer iii: Charleen’s Legal Position

Therefore in this case, the doubt which has arisen here is whether there is any valid agreement between brother and sister or not. It is known that Charleen is an O- level student that means her age is not more than 16-17 years. Thus, by law it is stated that any agreement which is entered with a minor is void-ab-initio. Since, in this case Alan and Charleen are relatives and so the court thinks that it is simply a social understanding. Law does not consider mutual understanding and so one party cannot file case against another party for any violation. Thus, there is no agreement between Charleen and Alan because Alan has only nodded his head and it is not the decent perspective of proposal. Thus, it can be said that agreement between Charleen and Alan was only local and there is no valid contract between them.

Damien is a friend of Bernard. By means of messages, Damien made a counter proposal with Alan. In this case, on 4^Th November, 2014 he made payment to Alan and on 7^th November, 2014 Alan delivered book to Damien together with notes. Hence, it is a legal agreement between Alan and Damien because it is fulfilled every requirement of the agreement. The additional requirements for any agreement are very important to get fulfilled such as ‘proposal’, ‘acceptance’, ‘purpose’ and ‘legal connection’ between agreed parties. Hence, in this case, Only Damien has fulfilled the required conditions of a valid agreement. Therefore, a considerable contract has executed between Alan and Damien. However, Counter proposal is made by Bernard with Alan but Alan has not accepted the proposal and according to postal rule, agreement is invalid.

Further, Charleen is a minor and does not have authority to enter into a valid contract with his brother, Alan.

Further, on 23^rd November, 2014 it was found by Bernard and Damien that commercial law book was freely available at Kaplan higher Education. Further, Alan has made additional changes in the original proposal. In those changes he stated that important improvement score was protected by him and found how to get ‘credit’ in that score. Also he has said that he would further provide additional notes along with the book. However, he has not provided any extra notes with the law book to Bernard. Subsequently, there is no valid agreement between Bernard and Alan and hence Bernard can ask for compensation from Alan. Thus, according to the law of agreement, if either agreed party smash the agreement, then in that case another agreed party can file a suit against defaulter and ask for compensation charges.

Answer iv: Damien’s Legal Position

There are many options for dispute resolution such as ‘litigation’, ‘arbitration’ and ‘mediation’. Any method for settling dispute privately is called as conciliation method. It helps in identifying the conflicts whether between in individuals or in business. Any outside unbiased party who helps the disputed parties to attain a willful choice in a satisfied way is called as a mediator and this process is known as mediation (Puil & Weele, 2014).

However, arbitration is a most certified method for the dispute resolution. Any person who controlled the arguments of the disputed parties is known as an arbitrator. An arbitrator uses supple rules for the evidences. Thus the decision made by the arbitrated authority has to be accepted by both the disputed parties. But where, the decision of authority is not binding on the parties then in that case parties can file a appeal before the court for the resolution (Deakin & Morris, 2012).

Litigation is one of the best methods for solving the disputes. It takes place in the court of law. In the proceedings the applicant files a suit against defendant. Both have a right to hire legal advisors who thereby present their matter in the court of law who continue their proceedings. The decision of the court of law is binding on both the disputed parties. If either disputed party is not satisfied with the conclusion or decision of the court of law then that party can file an appeal against that decision to higher court. This process of settlement of disputes is very expensive and time consuming. However, the decision of the court is mostly concluded in a fair manner (Knapp, 2013).

References

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Hillman, R. A. (2012). The richness of contract law: An analysis and critique of contemporary theories of contract law (Vol. 28). Springer Science & Business Media.

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Williams, S. H. (2014).Survey Of South Carolina Law: Contract Law: Consumers And Remedies: Do Limitation Of Liability Clauses Domore Harm Than Good?. SCL Rev., 65, 663-963.