1. The contract refers to the agreement made between the parties lead to the obligation which is enforceable by law. For the valid contract, in the common law three essential element are defined which are agreement, consideration and the intention of the parties (Cotterrell, 2018). Offer is referred as the willingness to contract on the specified terms and conditions and the offer; if accepted by the other person to whom the offer is made then it must be binding to both the parties. Further for the validity of the contract, consideration must be present. In the common law, the promise is not considered as the consideration until the promise represents the something in value and it is essential to make the promise enforceable as a contract. The intention of the parties to enter into the contract must be clear and definite (Stone, and Devenney, 2017).
In the legal case of Harvey v Facey, there was no specific contract concluded between the parties. In this, Harvey asked the price by the telegram and Facey make the reply by the telegram for the price. After this, Harvey ordered to buy the item. However, it is not considered as the valid offer, because there is no intention of the parties to make a legal agreement.
In the current study, the offer is made by the Iris, but the Diana did not accept the offer because the words of Diana are that only if money available then she would purchase Piano. There is no clear contract concluded between the parties. Therefore the contract is not the valid contract due to the absence of the intention of the parties.
2. For a valid contract, the agreement made between the parties must be in binding nature. A breach of contract takes place when any condition specified in the contract is not fulfilled by the parties. If the performance of the party is due, however, the person fails to perform the contractual obligation then it is prima facie considered as the breach of contract (Ayres, and Schwartz, 2014). Along with this, deficiency in the performance also leads to the breach of the contract if the non-performance amounts to a breach of contract then the other party released from their obligation. The breach of contract enables the blameless party to make the contract at an end along with the claiming damages (Shaukat, Qiu, and Trojanowski, 2016).
In the given study, after some time of implementation of the fuel pump, an explosion occurred. Therefore the business of the company get the effect for three days and also the injuries occurred to the person named Jeremy, who lives in the next door to the factory. The Jeremy can make a claim the damages from the Crankit for the injuries. However, the condition in the contract stated that the Widget would indemnify Crankit against any claim raised by the other party who may suffer from damages due to any failure properly to perform this service agreement. Therefore the Widget has to indemnify the Crankit for the loss suffered by the Jeremy.
Further, on the basis of the agreement made between the parties, the Crankit will provide the service within the 24 hours on any call –out a request by the Widgets. With his regards, Widgets called to Crankit about the failure of the machine, but Crankit reply that due to the lack of staff the service will provide after the 3 days. It leads to the breach of contract between the parties due to the condition specified in the contract is not fulfilled by the parties. Further, the Widgets make a claim for the damages from the Crankit regarding the loss suffered by the company.
3. According to the Company’s Act 2006, the company can pay the dividend out of the profits which are available for the distribution. The accumulated realised profits after the deduction of the accumulated realised loss are the distributable profits of the company (Webley, 2014). In the given study, Silver complains that he has never received a dividend. It is not the obligation of the Metal Plc. to pay the dividend. It may be possible that the company suffered from losses and not declare any dividend for the shareholders but even if the company is earning profits, they do not have an obligation to pay a dividend.
The preference shareholders of the company have the preferential right only at the time of receiving a dividend or the capital. The preference shareholder has not any right to vote in the meeting of the company (Haldane, 2015). Therefore the Gold has not any right to vote in the meeting of the company.
At the time of the winding up of the company, the preference shareholders receive their capital in priority as compared with the ordinary shareholders of the company. However, the preference shareholders receive the payment only after the payment made to the secured, unsecured and preferential creditor of the company.
Companies Act 2006, make the provision for secured as well as unsecured debenture holder of the company. The unsecured debenture holder can sue the company if the company makes any default for the payment. If the floating charges are attached with the debenture then at the time of repayment the debenture holder get the priority in payment as compare with the unsecured creditor.
At the time of the financial crisis, the company may by issuing equity from the existing shareholders, and new shareholder supports the activities of the business. However, the success of the issue of equity depends on the trustworthiness of the business. Further renegotiation with leaders about the payment of borrowing can also support to face the financial difficulty of the company.
References
Ayres, I. and Schwartz, A., 2014. The no-reading problem in consumer contract law. Stan. L. Rev., 66, p.545.
Cotterrell, R., 2018. The development of capitalism and the formalisation of contract law. In Law, state and society (pp. 54-69). Routledge.
Haldane, A., 2015, May. Who owns a company?. In Speech, University of Edinburgh Corporate Finance Conference, May 22nd.
Shaukat, A., Qiu, Y. and Trojanowski, G., 2016. Board attributes, corporate social responsibility strategy, and corporate environmental and social performance. Journal of Business Ethics, 135(3), pp.569-585.
Stone, R. and Devenney, J., 2017. The modern law of contract. Routledge.
Webley, L., 2014. Legal professional de (re) regulation, equality, and inclusion, and the contested space of professionalism within the legal market in England and Wales. Fordham L. Rev., 83, p.2349.
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