Discuss about the Business and Corporation Law for Implied Terms.
1:
According to thecase scenario, there is an agreement between Jane and Jack. Jane decides to sell her Lotus Super 7 sports car in $25000to Jack. Jane is going overseas, so he is facing some financial problem so he wants to sell the car to Jack. The agreement was made between Jane and Jack for personal purpose of Jane. An invitation of treat was given by Jane by describing the good condition of the car. Jack accepted the offer. There are four basic legal elements in a contract: offer, acceptance, consideration and invitation of treat (Burrows, et al. 2011). Any law becomes enforceable when the agreement is void and all the factors of the contract are present in the agreement. In this contract four elements are present; the agreement has taken place between Jack and Jane. Jane gave the offer and Jane accepted.As per IRAC methodthe cases are describes below.
The agreement took place between two parties but as per section 9 of contract act, it is very important to state the terms of a contract and in any offer, it is necessary to state the price which is not clear here. The offer is open ended and it can also be stated as implied terms because the offeror (Jane) did not mention the amount to the offeree (Jack) (Austen-Baker, 2011). Even it is unclear that whether the contract is oral or written or online.This is the main issue in the agreement. The market value of Lotus Super 7 sports car is $25000, which is mentioned here but the rate which Jane has made has not been mention but the offer is accepted by Jack without knowing the price, so invitation of treat has taken place here. In any offer, it is very important that advertisement should be given properly but as the good condition of the contract is not described properly, so problem arises here.The contract has taken place in unexpressed way. The amount description is unclear which the main problem is in this case.
In this case, the market value of the Lotus Super 7 sports car is $25000. Jane has offered the product to Jack in the same rate of $25000. The product is in good condition but as Jane has used the product, so he has to sell the product in a second hand rate. As per article2 of Uniform Commercial Code (UCC) seller’s obligation has taken place in this deal (Litowitz, et al. 2001). As per that law, seller’s obligation takes place because, there is a rule in business law that if any second hand material is sold in market, then the rate of the product will be less than the market value of the product.Here, Jack has accepted the offer but Jane has not made valid rate of the product. This is the main issue here. Invitation of treat has formed but proper advertisement has not given by Jane, describing the condition of the sports car. So, obligation or problem arises in this case because Jane has not followed the Uniform Commercial Code here.
In this case Jane has offered $2500 to sell the sports car. The product is in good condition and the market value of the product is $25000. The problem arises here because he had fixed a very less price of the sports car at $2500. In this type of agreement he runs loss. As per contract law, all the elements of the contract should be void and the agreement becomes enforceable when proper consideration is done and profit is received from both the side but here Jane is running loss and it is the main issue of the contract (Law Of Contract, et al. 2007)
There are various cases described in the 1st, 2nd and 3rd case scenario. Various rules of the contract law have not been used in the cases and the agreement is made. The breach of rules of contract law of UK has taken place in these cases. Remedies for the breach of the rules of the contract should be organized legally to solve the cases (Andrews, 2011). An offer, acceptance and consideration has taken place in this contract, all the rules are properly mentioned above and those are needed to applied the contract to make a valid agreement between both the parties, so that consideration takes place properly.
2:
In the second case scenario, a contract has taken place between the ship builder and North Ocean Tankers. The contract is enforceable and void but as promisor is doing delay to fulfil the demand of the promisee, so obligation arises in this contract. The contract was made here following the rules of US (Andrews, 2011). Aster the contract formed, the ship builder started construction of building tanker after the agreement made with North Ocean Tankers. The conflict arises when the currency of US devalues 10%. Here, the ship builder starts running loss, so he decided to charge extra US$3 million for the work he is doing. The delivery was important so the promisor agreed but after the delivery of 9 months, they start delay to pay the money of the promisee. By seeing the above problem IRAC method is used for describing the cases problems and solving it.
A valid agreement took place between North Ocean Tankers but problem arises because the government of United States has devalues 10 of currency rate in US. This is the reason the economist are running loss and they are not able to pay their debt. In this case North Ocean Tankers become the victim of problem because they are not able to pay the extra money of the ship builder. The ship builder also runs loss because he made the tankers in a low price which is not sufficient for him. The contract took place but, it is not expressed clearly that, at which date the buyer has to pay the debt of the seller. The buyer promised to give the extra charge to the seller and because of his delay the seller can sue him to court for breaching the rules of the contract, as per Contract law (Andrews, 2011). Problem may arise in this scenario.
As per Federal arbitration act in US, the contract took place between two parties but in the contract, the previous rate was stated and the extra charge was not stated (Shimabukuro, 2002). Here, if the promisor (North Ocean Tankers) is not able to pay the debt of the promisee (Ship builder), then for violating the rules of the promise the seller can sue him to court and the English court will consider the behaviour as Unconscionability. Here, Breach of negotiation takes place in this case. Punitivedamageoccurred here, as per US law because;the promisee is the innocent party who is the victim of damage and the promisor is delaying in paying the money to the promisee. Negotiation takes place between the ship builder and the North Ocean Tankers and both were consent about the agreement, but the promisor or North Ocean Tankers breached the rules of the contract by delaying to pay the money of the promisee or the ship builder. So breach of terms in contract has taken place here, for whichthe plaintiff or promisee can sue thedefendant or promisor under English law for breach of federal rules of contract (Kennedy, 2010). North Ocean Tankers has done false statement that they will increase the money of the ship builder in time but they has breached the rules of the contract and done false promise. As per misinterpretation act 1967, the shipbuilder is misguided and on that perspective, the ship builder can ask recession and damage from the North Ocean Tankers for doing the false statement (Branch III, 2002).
There are some relief or remedies of breach of contract which should be applied in this scenario. They are:
It is very important that legal and professional help is needed to be taken. Among all the remedies of breach,Reinstitution and cancellation takes place. In this case the reinstitution or the North Ocean Tankers company can be sued. Because dispute has taken place in the contract and no review has done. So for getting relieved from the obligation the company should take the help of government of US in taking loan from national bank to pay the debt of the Ship builder, so that the builder does not sue the company and claim for the damages.
As the North Ocean Tankers in financial loss and cannot pay the debt of the ship builder, so through the help of law they can use the Bankruptcy act 1966. As per bankruptcy act, they can prove that they need some extra time to pay the debt. If the company proves that they are in bankrupt condition, then English court will give 6 months time to pay the debt of the promisee and the promisee has to wait for 6months for the money (Nichols, 2012). Obligation also takes place because the buyer has promised to pay the money to the seller in time. Conflict arises in this way and if the court is unable to solve the case then the court will name it innominate term where justification will take long time and answer of the judgment will take time.
Conclusion
As per case, the terms of the contract has been breached because the promisor delayed in paying the money of the promisee. The remedies has also been described above where different review and remedies are given through which the case can be solved. Mainly remedies of breach of contract and bankruptcy act can be applied in his case.
References:
Andrews, N. (2011). Contract law. Cambridge: Cambridge University Press.
Austen-Baker, Richard. Implied Terms In English Contract Law. Cheltenham, UK: Edward Elgar, 2011. Print.
Branch III, J. E. (2002). Statutory Misinterpretation: The Foreign Intelligence Court of Review’s Interpretation of the Significant Purpose Requirement of the Foreign Intelligence Surveillance Act.
Burrows, A. S. A Casebook On Contract. Oxford: Hart Pub., 2011. Print.
Federal and District of Columbia Government Real Property Act of 2005.(2005). [Washington, D.C.].
Keenan, D. and Riches, S. (2007). Business law. Harlow: Pearson Longman.
Kennedy, G. (2010). Negotiation. London: Profile.
Law Of Contract. (2007) Implied Terms In Contracts For The Supply Of Goods. London: H.M.S.O., Print.
Litowitz, Douglas E. Perspectives On The Uniform Commercial Code. Durham, N.C, (2001) Carolina Academic Press, Print.
McLean, Janet. (2009) Property And The Constitution. Oxford: Hart, Print.
Nichols, P. (2012). Bankruptcy Act 1966.Chatswood, N.S.W.: LexisNexis Butterworths.
Shimabukuro, J. (2002). The Federal Arbitration Act. [Washington, D.C.]: Congressional Research Service, Library of Congress.
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