Understanding Law And Contract In Business Environment

Explain what the law is and the role that the law plays in wider society and in the business environment

The issue in this case is whether there is a valid contract between Jennifer and her grand mother. To determine if there is valid contract another issue that will be important is whether there was an intention to be legally bound bearing in mind that the two are in a domestic relationship.

An intention to be legally bound is an essential element that is required for a contract to be valid.According to common law the predominant rule is that intention top be legally bound in a contract is determined by the rebuttable presumption test. In the case of Balfour v Balfour the court established the general rule that in domestic or family relationships there is an overriding presumption that there is no intention to be legally bound and hence contracts formed by people in such relationships are not enforceable. It bears noting that the court in Jones v Padavatton affirmed that the presumption in social relationship may only be rebutted if the party seeking to enforce the agreement in a court of law adduces a considerable and convincing amount of evidence to show that there was an intention. In fact in the case of Wakeling v Ripley the court ruled that the presumption in social and domestic relationships is rebuttable if one party when to a great extent such as a serious expense, significant loss of income and great effort to ensure that he fulfills his end of the bargain. The test applied in Wakeling is an objective one and this was given judicial support by the court in the recent case of Ashton v Pratt where the court affirmed that to establish an intention in social relationships the reason of the agreement and other surrounding events must be put into scrutiny.

It is apparent that the relationship between Jennifer and her grandmother Betty is a domestic relationship and the rebuttable presumption is that they did not have an intention to be legally bound. However of the objective test is applied it takes away the effect of the rebuttable presumption test because Jennifer went to a great extent to leave a job matching here career she had already secure and her family. The agreement by its nature involved a lot of sacrifice on the party of one party.

Conclusion

It can be concluded that Jennifer and Betty had an intention to be legally bound by the term of the agreement and therefore Jennifer can enforce the agreement in a court of law. The legal principles provided favor Jennifer case and Betty is incumbent upon Betty to fulfill her contractual obligations. Conversely, it seems that the presumption test is losing relevance in Australia and the objective test is taking root.

The issue in this case is whether there is a valid agreement in law between Sanche and Richard and whether there was valid offer and acceptance between the parties.

In Australian Woollen Mills Pty Ltd v The Commonwealth the court pronounced that an offer in contract is law is an intention to get into a legal agreement that is expressed to another party. However in a case when the other party responds with a new offer it invalidates the earlier one. In the leading case of Hyde v Wrench decided that when a new offer is made in response to an initial offer it is defined as a counter offer and it cannot be taken to be a counter offer. It is important to note that the traditional postal rule in acceptance that was set in the case of Adams v Lindsell does not apply with respect to offer made by way of post. However, with respect to instantaneous mode of communication such as emails the rule that applies is that acceptance of the offer is valid if the email has been received. This rule was set in the case of Entores Ltd v Miles Far East Corporation in which the court decided that acceptance through instantaneous modes of communication is valid upon receipt and the contract is entered into at the place of receipt. But it is instructive to note that the rule varies according to the agreement of the parties i.e. if the parties agree in the terms that acceptance will be made a specific mode of communication.

Identify the role of contract law in business activity and explain the elements needed to create and enforce a valid contract

Sanche made an offer through post but according to the stated above the traditional postal rule of acceptance will not apply. However, the offer made by Sanche was valid until Richard sent a message to with new terms. It can thus be argued that the message that was sent by Richard was setting new terms into the contract and was therefore counter offer. The counter offer was therefore invalidated the offer sent by Sanche. It seems that the rule in Entrorres will apply with respect to the email sent by Richard accepting the earlier offer but it must be borne in mind that the initial offer made by Sanche was invalidated and therefore Richard email amounted to a new offer.

Conclusion

It can be concluded that the Sanche is not bound to sell to Richard the car because the agreement did not have a valid offer and acceptance in law. It is advised to Richard that he cannot enforce the agreement because there is no any contract recognized by law. The facts did not meet the requirements of the essential elements needed for a valid contract. However, it is advised to Sanche that he has a valid agreement with Bradely.

The issue in this case arises from law and whether the principal can be liable for the mistakes of the agent.

In the law of agency an agent must act according to the authority that he has been given by the Principal. According to the case of Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd an agent may have express authority from the principal to act in a certain way on behalf of him. It is imperative to note that the express authority of an agent flows from the express consent given by the principal. However, a principal will only be liable for wrong that committed by an agent while he was acting with the authority given. If the agent exceeds the authority that he has been given by the principal he will be personally liable for his own mistakes.

It is apparent that Kevin who is the principal has given Ravi a clear express authority to sell the furniture at a certain price. However, Ravi defies the actual authority that has been given to him. Kevin being the principal will not be liable for the fraud that he has committed by lying to the client. Ravi was not acting on behalf of the principal at the time that he entered into agreement with the client. He was acting in his own individual capacity and therefore he will be personally liable.

Conclusion

It can be concluded that Ravi will be personally liable to compensate Theresa because though being an agent he exceeded the express authority that he been given by Kevin the principal.

The issue in this case is whether Trevor can claim an infringement of any intellectual property rights.

There is a significant distinction between copyright and property rights. It is instructive to note that property rights are rights that are vested in a physical object. A copyright are thus a rights that has been vested in an expression or property that is originally made by a person. In the case of Telstra Corporation Limited v Phone Directories Company Pty Ltd it was agreed that work is original if it is not copied but it is made form ones own innovativeness. According to the copyrights laws in Australia literary work such as music is protected by the Copyright Act 1968 section 10(1). For a person to be able to claim an infringement in intellectual property rights he must been the author of the work and a qualified person residing in Australia or is a citizen. According to section 36(1) a copyright is infringed by a person who has no exclusive rights in the literary work or music workand who used the work without leave from the owner. According to section 21(1) musical work is held to be infringed if it has been reproduced in different recording. In the case of EMI Songs Australia Pty Limited v Larrikin Music Publishing Pty Limited the court held that the musical work that has been copied or taken must form a essential part of the original work.

Define an agency relationship and explain the legal implications of such a relationship

From the legal position above it is submitted that Trevor is the original author of the work since he put an independent and innovative effort to create it. Declan can be said to have infringed the copyright laws because he used the musical work of Trevor without his consent. The evidence showing the infringement is the fact that he reproduced the work in a different recording and presented it as his own. In any music the chorus is an essential part of the work and it is repetitive therefore plays an important role in the work. Declan took the chorus part of the song and has therefore breached the copyright laws.

Conclusion

It can be concluded that the Declan has breached copyrights provisions which is covered by the intellectual property laws. He will be liable to compensate Trevor from the income he has made out of the sales of the music.

The issue in this case is whether Clare has breached the contract by setting up a café contrary to the exclusion clause that stated that she should not set up any business within Adelaide for the next 10 years.

It is a general rule in that the loss that has been suffered by a party to a contract must not necessarily be direct but consequential to the exclusion term in the contract. In the recent case of Regional Power Corporation v Pacific Hydro Group Two Pty Ltd[19] the court rule that an objective test should be adopted when deciding whether a breach is indirect or consequential to the exclusion term. In Darlington Futures Ltd v Delco Australia Pty Ltd the court held that the wording of the exclusion term must be given an ordinary and plain meaning. In addition the clause in the clause in a contract must be reasonable.

The exclusion clause in the contract between Clare and Maddie only envisaged that Clare will not set up another business similar to the one that is the subject of transaction. Clare set up a fundamentally different business from the one she sold to Maddie.

Conclusion

It can be concluded that the term will not apply laterally because if he does so it will be unreasonable, unfair and unjust. Clare did not breach the contract because the her act was not consequential to the loss suffered.

Books

Benson, P, 2001, The Theory of Contract Law: New Essays Cambridge University Press, Cambridge

Carter J, W.and Harland, D. (1998). Cases and materials on contract law in Australia ,Butterworths

Legislation

Cases

Adams v Lindsell (1818) 106 ER 250

Ashton v Pratt [2012] NSWSC 3

Australian Woollen Mills Pty. Ltd. v. The Commonwealth [1954] HCA 20

Balfour v Balfour [1919] 2 KB 571

Darlington Futures Ltd v Delco Australia Pty Ltd [1986] HCA 82,

EMI Songs Australia Pty Limited v Larrikin Music Publishing Pty Limited [2011] FCAFC 47

Entorres v Miles Far East [1955] 2 QB 327