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LAW416 Business Law

Universiti Teknologi MARA

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LAW416 Business Law
  • Subject Code :  

    LAW416

  • Country :  

    MY

  • University :  

    Universiti Teknologi MARA

Question:

The case study which students are required to resolve using the four step process is set out below on pages 6 and 7. Students are required to apply the relevant legal concepts and principles to analyse and solve the legal issues arising in the case study by explaining and applying their knowledge of the legal principles and rules arising in the Australian legal system.

You will have to listen to the four step process vodcast in the assessment folder on blackboard prior to attempting this assignment. Please note also that the information contained in the course materials (the text book, lecture and E-learning materials) are sufficient when completing your assignment. It is not necessary to research beyond these materials for the purpose of completing this assignment

Note:

  • The fact scenario used in this assignment is fictitious.
  • Students are to focus on answering the assignment questions with reference to the materials covered in topic 3. Students do not need to (and should not) undertake any additional research. The level of detail and information contained in the course materials is sufficient to answer the assignment.
  • Note the four step process requires students to refer to legislation or case law as authority for the rules of law explained in step two. Where appropriate you will need to refer to any applicable legislation or case authorities contained in the material for topic 3. You may also want to review the materials on referencing that were provided for the first assignment.

Marking rubric

The case study is made up of two (2) four step process questions. Each is worth fifteen (15) marks. The four step process marking rubric for each question is as follows:

In relation to the marks allocated for the overall use of the four step process, structure of the answer and referencing, regard will be had to not just whether the answer is “set out” in the four steps. Consideration will be given to the clarity of the explanation of the law with regard to applicable authority where relevant. Students will be rewarded here for a detailed application of the facts to the law explained. For example, a very good use of the four step process would be the application of the facts specifically to every principle of law explained.

Consideration will also be given to the logical presentation, coherency and consistency of the explanation of the law, application of facts and subsequent conclusion. Consequently this will include a consideration of matters such as presentation, formatting, expression, sentence structure, grammar and the like.

As a general guide, a student who has used the four step process correctly for each question (has identified the relevant principle(s) of law, explained the rule(s), applied the facts and come to a logical conclusion), but where the explanation of the law or application of the facts is not as detailed as it could be, or the conclusion is not a logical progression of what has gone before, the student would be awarded a pass mark for this part of the assignment, i.e. 0.5 marks.

Referencing and appropriate acknowledgement of sources

Most often errors in referencing are incidental or clearly inadvertent. In the event of a level one incident of plagiarism occurring, a student may be contacted by the University and required to undertake further training or remedial work in relation to referencing. Where the lack of correct referencing appears to contravene the University policy on plagiarism, the student’s paper will be referred to the Unit Coordinator and dealt with according to University policy. This may amount to academic misconduct.

An important aspect of the University Plagiarism Policy is recognition that not all plagiarism incidents are intentional or involves cheating. If students are not learning as expected, they will be made aware of their difficulties and helped to improve. Those who deliberately choose to cheat by way of plagiarism, however, will be identified and dealt with accordingly.

Students are strongly advised to understand their responsibilities in relation to correct  referencing and should consult the unit outline and powerpoint slides on referencing located on the Business Law Blackboard site for more information.

Format of assignments

Assignments cannot be handwritten and must comply with the following format requirements. Those assignments, which do not conform to these requirements without prior agreement of the unit coordinator, will either be returned to the student unmarked or will have marks deducted:

  • Document type: Word or pdf (pdf preferred)
  • Font: Arial or similar font - no smaller than 12 point in size
  • Pages: Numbered in top or bottom margin
  • Spacing: Appropriate line spacing and paragraph spacing
  • Margins: At least 2.5 cm top, left, right & bottom

Presentation

  • Cover sheet (located on Blackboard under the 'Assessment' tab) must be attached to the assignment
  • Appropriate sentence structure
  • Correct grammar, spelling and punctuation
  • Paragraph size and breaks appropriate
  • Consistent format
  • Appropriate use of headings and sub-headings
  • Within acceptable word limit
  • Appropriate referencing and acknowledgment of sources

Word Limit

The total assignment (meaning questions one and two) should be a minimum of 500 words and not exceed 3,000 words.

Please provide a word count on your cover sheet. A penalty of 10% will be imposed on assignments that exceed the word limit. Markers have discretion as to whether to apply the penalty for an additional 100 words, provided the discussion remains relevant. The assignment will not be assessed if it exceeds 3,500 words and will result in a ZERO mark.

The word count does not include the following:

  • cover sheet;
  • in-text referencing;
  • referencing list; and
  • headings.

Submission

Please read the submission process carefully. Students should understand that compliance with instructions in relation to an assessment task is critical. Students MUST be aware that non-compliance with submission instructions can result in a mark of ZERO.

All assignments must be submitted by 1PM (WST) on the Monday of the week the assignment is due, i.e. Assignment two is due Monday, 7 May 2018 by 1PM (WST).

Students are required to submit the final version of their assignment to Blackboard through a link provided in the ‘Assignment Two: Case Study Analysis’ folder titled ‘Assignment Two Submission Link’. The assignment will automatically be submitted to the plagiarism detection program, Turnitin.

Prior to submitting the final version of their assignment, students are given the option to submit a draft version/s of their assignment through this ‘Assignment Two Submission Link’ to retrieve an originality report of their assignment (which will tell them how much of their assignment was flagged as similar to other assignments submitted through the system). If multiple versions of an assignment are submitted through this link, then the version of the assignment that was last submitted before the due date/time will be taken to be the final version of the assignment and marked for assessment.

As it concerns the similarity percentage for draft assignments submitted through the system, we understand that there is a reasonable amount of content that may be reflected across multiple assignments, so plagiarism will not be assumed in these cases. Where however the similarity percentage is particularly high (60% or above), steps should be taken by the student to rework the content of their assignment to ensure the originality of the content.

The Unit co-coordinator may post additional information concerning this assignment as announcements on blackboard, so it is the responsibility of the student to check the announcements for the unit on a regular basis.

Feedback on assignments

All of the teaching staff are available to assist you with your learning in this unit. You should contact your lecturer or tutor if you need help understanding the course material or issues arising in the assignment. There is also a staffed discussion board available for students. It is often helpful to share ideas and problems with other students using this forum. You can also contact the unit coordinator if you are still unable to get the answer you are seeking. Please allow 48 hours (two working days) for a response to your query.

Unfortunately it is just not possible for the teaching staff to review draft assignments for comment before submission as it is in effect double marking. If you require help with your assignment, either narrow the question or section of work to specific questions.

This assignment will be marked using a rubric. In providing feedback to students using this rubric, markers will detail an answer guide and individual comments on what a student had done well and suggestions for improvement in the future. This will include specific feedback on the use of the four step process.

Assessments submitted early will not be marked before the due date.

Please refer to the unit outline for the full procedure in relation to penalties for late submission and requests for an extension.Damien runs a sports tourism agency in Perth. His business provides clients with unique opportunities to attend high profile American sporting events, and meet professional athletes in a private setting. His business also organises the flight, hotel and restaurant reservations for these tours, so that clients can better enjoy the overall experience.

In March 2018, Damien’s cousin Bryce, phones Damien and asks him to book Bryce a place on the NBA (National Basketball Association) finals tour to take place in June 2018. For the cost of $30,000, participants of this tour are secured tickets to every finals game, and get to attend pre-game functions with past greats of the game such as Michael Jordan and Larry Bird. Damien needs to check the availability of places left on that tour, so he says to Bryce that he will email him back once he has figured out what he can offer him. Later on that day Damien emails Bryce the following:

“Hey Cuz. Good to hear from you today. I have one available spot left on the NBA finals tour running in June 2018. The package includes premium travel and accommodation in each city, so the best I can do pricewise is $25,000. I can’t wait around with this for long, so if you are in, you need to let me know by close of business tomorrow. An email or text will be fine. Cheers Damien.”

The next morning Bryce reads the email and is happy with everything that Damien has stated except the price. A qualified accountant who tries to help out his family whenever he can, Bryce has done Damien’s personal and business tax returns for the past 10 years for a nominal fee, which has saved Damien a lot of money over the years. Two hours before the close of business, Bryce sends Damien an email that reads:

“Thanks for letting me know that Damien. I am in on the tour, but I am only willing to pay $20,000, as times are a bit tough with the accounting business. The rest you can cover for all of that work that I have done for you over the years.” Upon receiving Bryce’s email, Damien immediately responds by writing, “Fair enough and all good. You have my bank details so deposit the $20,000 by the end of the month. You are going to enjoy this trip Cuz!”

In late May 2018, a week before the tour is to start, Damien goes over the tour documentation, and realises that because he had dealt informally with Bryce concerning his participation on the tour, he had not booked flights and accommodation for him. Because of the popularity of this impending finals series, only the cheapest flights and accommodation are able to be secured for Bryce at this late stage. When Damien notifies Bryce of this, Bryce is upset, and insists that Damien take the cheap flights and accommodation, and give to him Damien’s premium travel and accommodation for the tour. Damien refuses to do this, citing the need to stay with the rest of the touring party at all times. After hearing this, Bryce notifies Damien that he will be seeking legal advice on the matter.

Question (a) 15 marks

Using the four-step process, discuss the elements of intention and consideration required for the formation of a contract. In particular, consider whether these elements have been met in order for there to be an enforceable contract between Bryce and Damien.

Question (b) 15 Marks

Assume that the elements of intention and consideration required for the formation of a contract exist. Using the four-step process, discuss whether the element of agreement required for the formation of an enforceable contract can be established. Can Bryce require Damien to provide him with the premium travel and accommodation for the tour?

Answer:

Answer 1

Issue

The issue identified by going through the situation of Damien and Bryce is that of whether the elements of consideration and intention to create legal obligation are present or not

The relevant Rule

Out of four elements required to form a contract consideration and intention to create legal obligation are two elements.

Intention to create legal obligation

It has been stated by the court in the case of Esso Petroleum Ltd v Commissioners of Customs and Excise [1976] 1 All ER 117 that there is a requirement of intention when the parties are entering a contract to be bound legally to each other towards the terms of the contract. It has to be provided by the parties that there was an intention as discussed above in the contract. The intention is analyzed in an objective way. The court applies that test to find out whether a prudent person would hold at the agreement has been intended to be legally binding. For this analysis the court takes into consideration the surrounding circumstances.

In the case of Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8 it was stated by the court that where the parties have a commercial relationship, there is a presumption that there is an intention on the part of the parties to form a contract which is legally binding.

On the other hand in the case of Todd v Nicol [1957] SASR 72 the court ruled that where the parties have a purely domestic or social relationship there is a presumption that they do not have the intention to form a contract which is legally binding.

Consideration is another important element of a contract. There are few specific rules in relation to consideration which needs to be adhered to in relation to it being valid. Consideration is an exchange of promise. It is the price which has been paid against the promise of the other person. The consideration has to move from the promisee. The person has to show that a consideration was provided in order to execute the contract. Anything which the promisor considers to be of a value will be held as a consideration. The test of consideration is value and not adequacy. In the case of Thomas v Thomas (1842) QB 851 the court ruled that the consideration is not required to be adequate, rather it requires sufficiency in the eyes of law. This means that even a small mount can be considered as a valid consideration.  In this case the house was to be provided at 1 pound every year. The court had the question that whether sufficient consideration has been provided by Mrs Thomas in relation to making the agreement with other party enforceable legally.

From the case of Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 it can be analyzed that “past consideration is not good consideration”.  Thus the consideration will only be held at law to be valid if it has been given in response to the promise of the promisor for the performance of their obligation in relation to the current contract. It cannot be in relation to a pre-existing obligation which will again become a past consideration.

Application of the rule to the facts

Damien has a business through which he provides transport and accommodation services to people who want to get associated with sporting and other considerable events.  He has been contacted with his brother who wants to book a sent for a package which includes luxury transport and accommodation. In this situation are Bryce is the cousin of Damien and thus the relationship between them may e domestic. It has been stated by the court in the case of Todd v Nicol that where the parties have a purely domestic or social relationship there is a presumption that they do not have the intention to form a contract which is legally binding. However in the case of Ermogenous v Greek Orthodox Community of SA Inc it was stated by the court that where the parties have a commercial relationship, there is a presumption that there is an intention on the part of the parties to form a contract which is legally binding. Here it can be stated that the contract between Bryce and Damien was in commercial capacity. In addition as per the case of Esso Petroleum Ltd v Commissioners of Customs and Excise the intention is to be analyzed in an objective manner which means that a reasonable person has to be find intention present. Any reasonable person in the position of Bryce will assume that there was intention to be binding legally. Thus it can be stated that there is intention to be legally binding on the part of Damien and Bryce.

The other element which needs to be analyzed is that of consideration. It has been stated by the case of Carlill v Carbolic Smoke Ball Co that past consideration is not valid consideration. Here Bryce has attempted to reduce the price of $25000 to $20000 based on the accounting services which he had provided to Damien in the past.  This would be regarded as a past consideration which is not a good consideration. However it has been stated by the court in the case of Thomas v Thomas that consideration has to be sufficiently present and not adequate.  Here the consideration of $20000 will also be considered as sufficient for the formation of contract. This it can be stated that it was a valid consideration.

Conclusion

The elements of consideration and intention to be legally bound are present in the contract between Damien and Bryce.

The Issue

Whether the elements of a valid agreement is present between the correspondences between Damian and Bryce

The relevant Rule

The parties to the contract have to be in a complete agreement with each other as contracts are consensual transactions.  The agreement needs a meeting of minds where the essential terms of the agreement are comprehended by both the parties to contract. There are two components of agreement which are that of an offer and of an acceptance as per Sudbrook Trading Estate v. Eggleton [1983] AC 444.  An offer is a statement which depicts the willingness of a party to get into a contract. An acceptance is a action or statement which provides assents to the offer terms. The offeror is a person who makes the offer and the offeree is the person who has been made the offer as stated in the case of Scammell & Nephew v. Ouston [1941] AC 251

In the case of Harvey v Facey [1893] AC 552 the court stated that offer has to be promissory in nature and also has to be sufficiently complete. This means that the basic nature of an offer has to outlines such as price, quality and quantity. The offer must also have words which depicts the intention of the offeror.

Advertisements are not offer as per the ruling in the case of Partridge v Crittenden [1968] 2 All ER 421.  The offer can be made to the whole world as provided in the case of Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256.  The offer can be withdrawn before acceptance is made. Where there is no time for validity the offer is valid for a reasonable time. The offer is destroyed by a rejection as per the case of Hyde v Wrench (1840) 49 ER 132 and is held to be a counter offer.

In the case of Hyde v Wrench the court stated that the acceptance has to be in terms with the offer and must not have any conditions attached to it.

The acceptance can only be made by a person who has been directed with an offer.  A person not having the offer knowledge cannot accept the offer as per R v Clarke (1927), 40 CLR 227 case. 

There has to be communication of the acceptance in generally and once communication is completed it cannot be undone as a valid contract is formed between the parties as stated in the case of Felthouse v Bindley [1862] EWHC CP J35.

The postal rule of acceptance makes an acceptance valid when the post has been made by the offeree. The rule applies when the post is addressed correctly. The rules were stated in Adams v Lindsell (1818) 106 ER 250 case.

The communication in case of email is effective when the email has reached the computer system of the offeror as given by the case of Entores Ltd v Miles Far Eastern Corp [1955]

Application of the rule to the facts

It has been provided in the scenario that Damien has a business through which he provides transport and accommodation services to people who want to get associated with sporting and other considerable events.  He has been contacted with his brother who wants to book a sent for a package which includes luxury transport and accommodation. In these situations it can be stated that an invitation to offer had been made by Bryce to Damien when he inquired about the package as it was not complete and promissory in nature as required under Harvey v Facey.  Where Damien sent a mail to Bryce that he wants to provide the package at the rate of $25000 which included luxury travel and accommodation a valid offer had been made by Damien. This is a valid offer as it was stated in Harvey v Facey that an offer has to be promissory in nature and also has to be sufficiently complete. This means that the basic nature of an offer has to outlines such as price, quality and quantity. The offer must also have words which depicts the intention of the offeror.  The offer made by Damien is has a price and nature of services to be provided and thus it is complete and has promissory wordings.

The offeree in this case is Bryce. He has made a counter offer of Damien as he has not agreed to the price offered by him. This has rejected the offer which has been made by Damien as a counter offer rejects the former offer. This means that the original offer of Damien cannot be accepted any longer. The terms of the counter offer has a price of $20000 which has been accepted by Damien thus an agreement has been formed between the parties. The agreement was formed when the email of Damien has been received in the computer system of Bryce. Thus in this case both the elements of an agreement offer and acceptance have been met.

Conclusion

Thus it can be concluded form the above discussion that there is a valid agreement between Daniel and Bryce as the elements of offer and acceptance between the parties have been validly established.

References

Adams v Lindsell (1818) 106 ER 250

Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256

Entores Ltd v Miles Far Eastern Corp [1955]

Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8

Esso Petroleum Ltd v Commissioners of Customs and Excise [1976] 1 All ER 117

Felthouse v Bindley [1862] EWHC CP J35

Hyde v Wrench (1840) 49 ER 132

Partridge v Crittenden [1968] 2 All ER 421

R v Clarke (1927), 40 CLR 227

Scammell & Nephew v. Ouston [1941] AC 251

Sudbrook Trading Estate v. Eggleton [1983] AC 444

Thomas v Thomas (1842) QB 851

Todd v Nicol [1957] SASR 72

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