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Dissertation : Business law.. Recherche parmi 240 000+ dissertations

Par   •  12 Novembre 2016  •  Dissertation  •  3 921 Mots (16 Pages)  •  173 Vues

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In business law, contract law is a domain of the law that deals almost entirely with business translations. Products are purchased, sold and conveyed by way of contracts; staffs are hired based on contract, buildings and lands are bought, developed, leased or financed, or sold under a specific contract. Consequently, contracts stand as the basis of most business activities, and obviously represent one of the most vital aspects of business law. A contract under the section 2 (b) could be defined as an arrangement made between at least two persons or corporations that the courts will implement. However, the creation of a tie contract that will be enforced by the courts demands the contracting entities to abide to a number of elements that are encapsulated by the law of contract; these requirements are labelled to as the elements that makes a contract unenforceable or enforceable, void or valid, and they will be discussed in the lines below.

  1. The concept

The notion of a contract as an agreement or bargain struck by two entities is founded upon the evidence that the outcomes will be a satisfaction of the entities’ minds on the conditions and terms that will shape their arrangement with each other (MacQueen et al., 2000). Consequently, each will eventually agree to do, or not do, certain things in exchange of the promise of the other to do few things of a specific nature. Thus one of the vital elements of an arrangement is a promise. It is obvious that not all promises could be considered as linking on the entity making them. The prime requirement of element of a valid contract is then the intention on the part of the entity making a promise to the bound by eventually the promise that has been made. The intention to create a legal relationship is a vital element of a valid contract; it is usually supposed to exist at law in any business transaction where the parties are dealing with each other at arm’s length.

Furthermore, the intention to create a legal relationship is a presumption at law due to the creation of the intention might otherwise be hard to demonstrate. If the intention is denied, in this case the court will normally utilize the conduct of the entity at the point of time where the agreements were made as a test and verify the conduct and agreements from the viewpoint of the reasonable party or person (Harris and Tallon, 1989).

  1. The case law

With notice of one year, Aliant ended a contract it had with Rogers Communications. In its side, Rogers believed that it should get the profit of a full five years locked-term, prior anything could be ended or terminated. The arrangement stated: “it shall continue in force for a time period of five years from the date it is written, and subsequently for consecutive five years terms, except and until terminated by one year prior notice in writing by either party.” Consequently, Rogers felt the deal had to span at least for five years; Aliant felt they could get out within a period of one year.

The verdict of the court: The court gave reason to Aliant, stipulating that the second coma enables the notice period to modify the entire sentence. Additional fees of over US$ 2 million will apply for the deal to be revived.

  1. OFFER
  1. The concept

The second significant element of a valid contract deals with an offer, which is a promise subject to a condition, under the section 5. 2a of the Contract Acts. Only an offer made with the purpose of creating a legal bound could be enforced. Nevertheless in the actual course of bargains, an individual (the promisor) occasionally makes such a promise except some conditions are linked to it, demanding the other entity (the promise) to do some act or provide a promise in exchange (Gordley et al., 2006). Accordingly, such a promise is solely uncertain until the other side demonstrates readiness to comply with the terms and conditions. The tentative promise, the offer, made under some condition is not binding on the offering side, the offeror, until the proposal is then accepted. Therefore, it is solely when a valid acceptance is made that the entities could be linked by the contract or arrangement.

  1. The case law: Rudder vs. Microsoft Corporation (1999)

A company dealing in the internet access offered its services to potential clients by way if a membership arrangement. Potential clients were instructed to scroll down through the arrangement and, if satisfied with the conditions and terms (comprising the monthly fee applied), were instructed to click on a box. By the clicking on the “I agree” box, members would be granted membership and online access. A client of the service desired to terminate his membership under the claim that the company was in breach of the contract by not providing relevant information regarding the accounts imposed to his credit card. As no arrangement could be reached, the client and other entered in a court trial against the company providing the service for breach of contract.

The verdict of the court: At trial, the judge in charge examined meticulously the sign-up process and found that scrolling down through the agreement and then deciding to click on the “I agree” box on the screen was equal to reading the pages of a written agreement and then signing at the bottom of the last page. The court then concluded that the users or clients were bound by the agreement and the case was dismissed.

  1. Invitation to threat

This represents an invitation for clients or customers to submit an offer, and it differs from an offer in that there is an absence of intention to be bound.

  • Example: when a shopkeeper puts a very low price tag on a shoe for instance in his shop window. If a customer takes the shoe to the cashier, the cashier does not have to sell it to the customer. In firm legal terms, it is the customer that makes the offer by proposing to purchase the shoe with his money. The cashier or shopkeeper who put a wrong price to the shoe is not compelled to sell at that price.
  1. Termination of proposal

Under the section 6, this represents all the causes that could lead to the termination or to the revocation of an offer or a proposal. In Contract Law there are several reasons that could lead at the termination of proposal, which are rejection, lapse of time, failure to fulfill condition precedent to contract, mental disorder of party or death, and revocation.

  • Example: John owned a land to sale. Jones mailed an offer to buy the land to John. John agreed to this offer and mailed back to Jones a contract to be signed, which he did. In the meantime, Jones died; consequently this death constitutes the termination of proposal made by Jones, rendering his offer void and the contract unenforceable.

  1. The concept

There could not exist any valid contract unless and until the offer is accepted by the party to whom the offer is addressed often called as the offeree, under the section 5. 2(b). Acceptance is usually made in writing or orally, but if the contract enables that the acceptance and performance of contractual responsibilities are to be simultaneously carried out, then acceptance by conduct can also be made. For instance, when a supplier gets your cheque, he might directly deliver the products to you without writing or saying anything (Craswell and Schwartz, 1994).


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