Contract between Mojo Beverages and Ben-Free-Samples for Students

Questions: 1.Advise Mojo Beverage, explaining applicable legal principles and citing relevant authorities. 2.Advise Livestock Brokers as to the rights and liabilities of the parties in the light of the commercial interactions taken place between them. 3.Advise Stuart, with reference to the relevant principles. Answers: 1.Issue Whether a contract was created between Mojo Beverages (MB) and Ben based on the things which transpired? Rule Andrews (2015) has defined contract in terms of a legally binding document which covers promise between the parties to such contract, and where each party has certain obligations, be it in terms of fulfilling the promised task, or paying the consideration value. The formation of any contract requires the presence of some key elements or the requisite elements, without which the contract does not hold legal validity in the eyes of law. These elements include offer, acceptance, consideration, intention, capacity and legality (Gibson Fraser, 2014). The first requisite in the creation of the contract is an offer to be made by one party to another party. The offer shows the terms which are offered and on which the contract is to be based. There is a need to point out at this stage that an offer is very different from an invitation to treat, which is not a part of contract formation. The reason for this is that invitation to treat just shows the negotiation phase of contract, which does not result in any binding or legal effect (Abbott, Pendlebury Wardman, 2007). To bring clarity to this issue, example of advertisements need to be cited. These in general, be it in newspaper or magazines, do not get the status of an offer, and instead are treated as invitation to treat and an example of this is Partridge v Crittenden [1968] 1 WLR 1204 (Swarb, 2016). However, when a unilateral offer is covered in the advertisement, the scenario is different and legal liabilities can be raised, as can be seen through Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256. In this case, the terms of the advertisements were such that they created a binding effect on the parties (Bailii, 2018). The second step for creating a contract is to give acceptance to the offer which has been made. In order to accept the unilateral offer, simply the terms of the offer have to be performed. There is the requirement of showing reliance being made on the offer (Elliot, 2011). The next element is consideration, which needs to have an economic value, to be valid and it can be anything which is mutually decided between the parties (Trietel Peel, 2015). Three wrappers were deemed as valid consideration in Chappell and Co Ltd v Nestle Co Ltd [1960] AC 87 due to condition precedent (E-Law Resources, 2018). Application There is a similarity between the facts of the case study and the precent of Carlill v Carbolic Smoke Ball Company. There was uniformity in the advertisement being placed in the newspaper which resulted in a unilateral offer, due to the mentioned terms. The consideration held in the newspaper advertisement had validity due to it holding economic value. By the performance of the promise, an acceptance was given by Ben. Irrespective of the rumours he heard, he relied upon the advertisement and caught the fish. The other elements of contract formation are assumed to be present here. Conclusion Thus, due to the presence of unilateral offer, its performance resulting in acceptance and valid consideration, a contract was formed between MB and Ben 2.Issue Whether a contract was formed between Dorper Sheep Sellers Pty Ltd (DSSP) and Livestock Brokers (LB)? Rule The previous segment touched upon the requirement of essential elements for forming a contract. The offer is the first step in this regard, which needs to be accepted by the party to which the offer had been made. Where the terms of the offer are changed, the result is a counter offer instead of an acceptance. When this happens, the original offer is no longer valid as per Hyde v. Wrench (1840) 3 Beav 334 and is not open to be accepted afterwards (Marson Ferris, 2015). The date of acceptance, as per the instantaneous rules, is the date on which the communication is attained by the offering party. However, postal rules act as an exception of the instantaneous rules (Paterson, Robertson Duke, 2012). When the letter is posted to give the acceptance, the date of posting this letter is considered as the date on which the offer was acceptance. It does not matter on which date the letter actually reaches the offering party (Latimer, 2012). This is due to the precedent that the postal office is the agent of offeror and agency law determines the acceptance of agent as acceptance of principal. These rules apply over the fax and emails too (Gibson Fraser, 2013). Byrne v Van Tienhoven (1880) LR 5 CPD 344 was the precedent giving the status as agent to the postal office (Swarb, 2015). Where the offer made, has to be revoked, it can be done till the time the offer is not accepted by the other party and before the posting of the acceptance letter. Another important point was given in Tallerman Co Pty Ltd v Nathan's Merchandise (1957) 98 CLR 93, whereby the judges provided that the acceptance cannot be given through the postal rules till the time it is justified to the offering party that post is a valid manner of giving acceptance (Jade, 2018). In Harvey v Facey [1893] AC 552, it was provided that an acceptance is different from request for information (Poole, 2016). Amongst the other elements of contract formation is the intention of creating legal relations. The next requirement is for the terms of the contract to have legal validity and is not basically against any legislation or the common law. The last requirement in formation of a contract is for the parties to hold the legal capacity to get into a contract, which is usually in terms of the parties holding the legal age (Mulachy, 2008). When such happens that the terms or stipulations covered under the contract are not fulfilled by one of the parties, the contract is deemed to be ended through breach. Upon the termination of contract owing to its breach, the aggrieved party can seek remedies from the court of law, for instance monetary compensation (Latimer, 2012). Application The facts given in the case study highlight the presence of intent between the parties, owing to the different offers and counter offers being made to create a contract. The capacity and legality is deemed to be present. The communication dated June 01 by DSSP would be considered here as an offer as some terms were offered here to LB. On this, a request for information was made by LB where it was asked to finance the sale on general terms. With this, the original offer ended. Here, with no acceptance been given on this communication by DSSP, a contract was not created as an inquiry was made instead of acceptance. As a result of non-acceptance, the offer expired due to the time frame for which it was open ended. Where the June 06 communication is taken to be a counter offer, the same was again not accepted. In either the scenarios, where the June 06 communication is taken as counter offer or request for information, an acceptance was never given. This is because the fax had never been stated as a valid manner of giving the acceptance and based on Tallerman Co Pty Ltd v Nathan's Merchandise, fax would not be deemed as a valid mode of acceptance. DSSP had no reason to expect acceptance through fax. Till the contract was formed, a breach could not be claimed. The receipt or non-receipt of fax is not related to this due, due to the same not being a valid acceptance manner. Conclusion Hence, a contract was not formed between DSSP and LB, due to lack of acceptance. 3.Issue Whether Stuart has any rights in the given scenario? Rule Upon the creation of a contract, it becomes binding, and where any changes have to be brought afterwards, the contract needs to be drafted again to include the changed terms. This allows the amendments to be given a conclusive effect to and in applying these. Where the amendments are not made, the original contract continues to apply and the amendments have no legal validity. Under the contract law, estoppel helps in restricting a person from making assertions which are converse to the earlier position on the same issue (Waddams, 2011). A leading defensive principle is equitable estoppel which prohibits the parties from taking any unfair benefit of other party due to the false conduct or language. Through this concept, the individuals are restricted from inducing the other party which could harm the other party. Hence, the individual is precluded or stopped from taking such position which is varied from the earlier position, particularly where such variation would harm the other party (Blum, 2007). Promissory estoppel is a principle through which the person is stopped from acting so where the party promises not to do something, particularly when the other party has made reliance on such promise, and the first party attempts to defy such promise (Blum, 2007). To bring clarity to this concept, reference needs to be made to Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130. In the quoted scenario, two parties had gotten into an agreement for lowering the rent for the war period. Though, this promise did not have a consideration to support it. Upon the ending of war, the claimant asked for the rent to be brought back to the original rent in place of the reduced rent. The court ruled in the favour of the claimant. Though, the thing which makes this case interesting is the obiter given by Justice Denning. He stated that in such a scenario where the claimant would have asked for the reduced rent of the war period, when the promise had been made, the principle of p romissory estoppel would have to be put in play, and the claimant would have to be stopped from asking the reduced rent for the promised war period, despite the fact that the promise was not supported by consideration. The reason for the same was the reliance placed on the promise by defendant and this promise being accepted by claimant of the case (Stone Devenney, 2014). The other important concepts of contract law are unconscionable conduct, which refers to the conduct which is no reasonable and is against the good conduct (Vout, 2009). Misrepresentation is a vitiating factor in the contract, which renders the contract voidable. It refers to the false statement of fact or law (McKendrick, 2014). Application There is a stark similarity between the stated facts here and the quoted case of Central London Property Trust Ltd v High Trees House Ltd. As a result, here it can be stated that Stuart would be required to make payment of the entire rent from the period of December 2014 to Westphalia Marts. However, when it comes to the period for which the promise was made, i.e., from December 2013 till his business improved (which is assumed here to be December 2014), Westphalia Marts cannot ask for the reduced rent. This is due to the applicability of promissory estoppel and the quoted case. There would be no impact of absence of consideration due to promissory estoppel and Westphalia Marts cannot rely on this. This is due to the reliance placed by Stuart on the undertaken promise. Apart from this, the reasons of unconscionable conduct can also be cited in terms of Westphalia Marts doing against good conduct. Further, the presence of unconscionable conduct can be stated as Westphalia Marts breaching the promise in terms of their attempts to show the income of the mall being healthy. As a result of this being a false statement of fact, application of misrepresentation principle can be undertaken. Conclusion Hence, the application of promissory estoppel gives Stuart the right to restrict Westphalia Marts from claiming reduced rent. Along with this, claims of unconscionable conduct and misrepresentation can also be undertaken against Westphalia Marts References Abbott, K., Pendlebury, N., Wardman, K. (2007). Business law (8th ed.). London: Thompson Learning. Andrews, N. 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