Introduction to Business Law and Ethics

Question: Discuss about theIntroduction to Business Law and Ethics. Answer: Whether it was a term of the contract for the almond flour to be gluten free Generally, what the parties agree pursuant to the contract are terms of the contract.[1] Terms of a contract could either be express or implied English.[2] Express terms are those written down by the parties while implies terms are unwritten and are construed by the court in accordance to the contract. The discussion herein is focused on the implied terms of a contract which is relevant in this instance. Terms of a contract can be implied in three different ways, this includes implication based on custom, law and facts.[3] An implication by custom means the parties to the contract are used to the practice they are engaged in and its notoriety.[4] The custom should be certain and well known to the parties and it ought to have been intended to form part of terms of the contract.[5] Moreover, an implied term must be reasonable and not contradicting an express term as stated by the court in the aforementioned case. Reasonable in this instance means the terms should coherently be in line with the terms of the contract. On the other hand, an implication by law is generally entailed in the statutes of respective states. Implied terms are meant to give efficacy to the whole contract. This principle was used by the court in the case of Williams v Gibbons.[6] For implication based on the facts, the court construes the terms in accordance to the intention of the parties.[7] The terms contained in the contract must be reasonable, giving contract efficacy, the term ought to be obvious and clear and not in contradiction with an express term. In light of the above discussion, based on the facts presented, it was an implied term in the contract for the almond flour to be gluten free. There is an implication by custom here that the almond flour which is usually supplied is gluten free as evident from their telephone conversation. Secondly, the almond flour being almond free is the substratum of the contract and the efficacy of the contract would be lost if another construction is arrived at. Lastly, in light to implication by facts, there is no express term in the contract that contradicts the implied term herein. The implied term is also reasonable and it is obvious to both parties that the almond flour ought to have been gluten free. Whether it is an implied term in Dan and Jacobs contract with Mikaela for the wedding cake to be gluten-free An implied term is construed from the usage or practices between the two contracting parties.[8] The term in question ought to be notorious, certain and intended to have formed part of the contract. Where parties to the contract might have forgotten to include some basic terms of a contract, the court would construe such contracts in light of the missing terms as was in the case of Byrne v Australian Airlines Ltd. Therefore in such a scenario, the absence of a term would not justify a parties attempt to escape from liability unless there is a contrary express term to that effect. Implication of terms of the contract by law seeks to generally guide the parties to the contract in receipt of the overall desired result. In this instance even if some terms are not included in the contract the courts would still deem such terms to be impliedly there. Additionally, the courts will look into the facts or terms agreed upon by the parties. The intention of the parties would be construed by the court as read from the contract.[9] The description of the types of goods has been discussed by the court in the case of Wallis v Pratt.[10] The court in this case stated that it has to establish first the words that were used in the contract. This is because the court would by all means try to implement what the parties agreed or intended to agree. What was therefore no reflected therein or not within the knowledge of the contracting parties would most probably not be implemented since they do not form part of the implied terms. Finally, implied terms seek to give effect to the efficacy of the contract. This is because most probably there is a key term missing that would most probably render the contract unsatisfactory to both parties. Implied terms would in this instance come in to fill the gaps and give effect to the intention of the parties to their satisfaction. The facts above do not reveal a continuous and notorious engagement between the two parties. Therefore there is no implication of terms of contract by custom. Furthermore, the agreement between the two parties does not contain express or implied terms that specifically instruct Mikaela to bake cakes that are gluten free. In fact, the two parties did not talk about the quality or ingredients of the cakes. In conclusion to the above subject matter, it is fair to state that the terms in Dan and Jacobs contract with Mikaela for the wedding cake to be gluten-free is not implied. Whether the icing colour is a condition or a warranty of the contract A condition is a term key to the formation or performance of a contract while warranty is a term subsidiary to the contract. [11] Perhaps what distinguishes the two terms is that a breach of a condition vitiates the whole contract while a breach of a warranty does not, but only gives a party a right to sue for damages.[12] The court has stated that the test of a condition or a term is dependent on the essentiality placed by the parties.[13] Therefore, where a term in the contract is precedent or key to the performance of the contract then that is a condition and not a warranty. This therefore means that the choice of a term being a condition or a warranty lies on the parties to the contract. In the case of Bettini vs. Gye, the court held that failure to attend for rehearsals before the concert started was less detrimental and was a breach of a warranty. In the above case the parties intimated on the type of the cake to be baked. This was the key to the contract formation. As stated here above in the case of Tramways Advertising Pty Ltd v Luna Park (N.S.W) Ltd, the court would usually look at the emphasizes placed on the terms. The parties in this case actually discussed on the specific type of the cake that was to be baked. The consequence of the breach here above is detrimental to Kimiko following the intended occasion that the cake was to serve. Kimiko can argue that the efficacy of the contract has been lost following the above contravention by Mikaela. However, chances of the term being a condition cannot be eliminated since Kimiko did not intimate on the purpose of the icing colour on the cake. Mikaela could argue that the cake has been baked accordingly despite the minor variance in terms of the icing colour. Whether Mikaela is responsible for the wrong icing colour on Kimikos cake A contravention of a condition would repudiate the whole contract[14] unlike in cases of warranties which would only entitle an individual damages[15] and not repudiation of the contract. The court in the case of Poussard v Spiersheld that failure to perform in a concert due to illness was a breach of condition and it entitled the producer to repudiate the contract. On the other hand the court in the case of Bettini v Gyeheld that missing 6 days of the rehearsal was breach of the a warranty. The contract could consequently be repudiated, damages given or specific performance be ordered. Specific performance entails doing specifically what the contract states[16]. The extent of responsibility of Mikaela is dependent on the finding of the court. If the court finds out that the breach is a condition then Kimiko would be entitled to repudiate the contract and be paid back all the money that he paid as highlighted in the case of Poussard v Spiershere above. Generally it is upon Kimiko to either choose to treat the icing colour as a warranty or a condition under the contract as was observed by the Supreme Court in the case of Masiye v Phiri.[17] As observed by the court herein, a party who alleges contravention would be bound to treat the contract as still valid. Kimiko in this matter would therefore be bound to the contract since he would have waived his right of repudiating the contract. Furthermore, if the court finds that the contravention is a warranty then Kimiko would be entitled to compensation or damages. This means the contract would be held not to be void despite the contravention by Mikaela. Finally depending on the facts given by Kimik o, Mikaela can be compelled by the court for specific performance in relation to the icing colour of the cake. If the court deems the circumstance herein to require specific performance, it would decide so accordingly. Bibliography Cases Bettini v Gye(1876) QBD 183. Byrne v Australian Airlines Ltd (1995) CLR 440. Majeau Carrying Co Pty Ltd v. Coastal Rutile Ltd (1973) C.L.R. 48 Masiye v Phiri (2008) Z.R. 56. Poussard v Spiers(1876) 1 QBD 410. Tramways Advertising Pty Ltd v Luna Park (N.S.W) Ltd (1938) (SR) (NSW) 632. Wallis v PrattCA [1910] 2 KB 1003 Williams v Gibbons [1994] 1 NZLR 273. Other Sources Austen-Baker, Richard, Implied terms in English contract law (Edward Elgar Publishing) 2011. BP Refinery (Westernport) Pty Ltd v. Shire of Hastings (1977) C.L.R. 266. Carolyn Heaton, Partner, Morrison Kent, The Significance Of Implied Contractual Terms https://www.morrisonkent.co.nz/uploads/PDF%20Articles/THE%20SIGNIFICANCE%20OF%20IMPLIED%20CONTRACTUAL%20TERMS.pdf [Accessed 10 Apr. 2017]. E-lawresources.co.uk. (2017).Terms of a contract. [online] Available at: https://e-lawresources.co.uk/Contents-of-a-contract.php [Accessed 10 Apr. 2017]. Emily M. Weitzenbck, (2012). English Law of Contract: Terms of contract,. https://www.uio.no/studier/emner/jus/jus/JUS5260/v12/undervisningsmateriale/Terms.pdf [Accessed 10 Apr. 2017]. Anon, (2017). [online] Available at: https://www.jacmac.com.au/uploaded/News/publications/201204_Condition_vs_Warranty_in_a_Contract.pdf [Accessed 10 Apr. 2017]. Patrick S. Ottinger, Principles of Contractual Interpretation (2000) 60 Louisiana Law Review 772. Henrik Lando Caspar Rose, On the Enforcement of Specific Performance in Civil Law Countries (2003-14). E-lawresources.co.uk. (2017).Terms of a contract. [online] Available at: https://e-lawresources.co.uk/Contents-of-a-contract.php [Accessed 10 Apr. 2017]. Emily M. Weitzenbck, English Law of Contract: Terms of contract, 2012. https://www.uio.no/studier/emner/jus/jus/JUS5260/v12/undervisningsmateriale/Terms.pdf [Accessed 10 Apr. 2017]. Introduction to Business Law and Ethics Question: Discuss about the Introduction to Business Law and Ethics. Answer: The Enforceability of Contractual Promises Introduction The law of contract oversees the management of promises that people engage each other into that when if not fulfilled; it would amount to one of the parties suffering the misconduct of the other. However, not all promises that are enforceable in law. So with that, the law of contract revolves around the elements of a contract to decided whether a contract is enforceable or not. As an illustration, this paper will look at three study cases where there were promises, and then analyze them using the elements of a contract to decide whether there was a contract or not. Chan and David The main issue here is a question whether silence is a valid acceptance of an offer. In (Mettling, Cusic and Stanfill, 2016), some of the rules of acceptance are one; a clear communication from the offeree to the offeror that it has accepted the offer. And Secondly, and the offer should be either oral or in writing. It's only under very rare situation when silence can accept an offer (Hunter, 2016). There exist some principles and procedures that govern the methods by which an acceptance should occur. For one, In (Goldman and Sigismond, 2013), the offeror can set his/her procedures for acceptance. The best illustration that outlines the seriousness following the offeror's strategy is in (Yates Building Co Ltd v R J Pulleyn Sons (York) Ltd [1975]). In this case, the offeror had stipulated that the acceptance should take a form of notice in writing, and it should be registered or through a recorded delivery. The court strengthened these terms when the plaintiff was sued following a rejection of his acceptance sent through ordinary posts. Besides, acceptance takes any other form where the offeror has not specified the form of acceptance. In support of that, the law of contract summarizes the methods of acceptance into two, and these are written acceptance and oral acceptance. Acceptance by silence was first dismissed in (Felthouse v Bindley [1862]). The claimant had been contracting to purchase his nephews horse. Felthouse wanted to buy the horse at 30 15s. Therefore, he wrote to Bindley telling him that he would consider the horse his if he doesnt hear from him. The nephew didnt reply, and later the nephews auctioneer sold the horse to another buyer by mistake. Due to that, Felthouse brought a case against Bindley but the court favored the nephew stating that an offer needed an actual acceptance, and the silence was not a valid substantial. This case set the principle of acceptance by stating that the failure of the offerees to communicate cannot establish a substantial acceptance. This principle has been very useful in governing the transactions of goods and services. In particular, it has been applied in the cases of inertia selling.' A trader cannot enforce a contract where he sends unsolicited goods to a buyer's home, designating that if the purchaser doesn't communicate, the trader will assume that he accepted the goods together with the indicated price. Other than the two modes of acceptance, the law also reserves another method whereby the conduct of one party can demonstrate acceptance. In the case of (Brogden v. Metropolitan Railway Co [1877]), the court concluded that there was a contract amounting from the conducts of Brogden. By amending the agreements, Brogden accepted the offer from the company. And on the side of the company, they counted the contract as complete when they received the first order of coal, or after the latest coal supply. Being the main issue in this case, the contract between Chan and David didnt amount to one enforceable by law. The main reason is that David failed to communicate the acceptance in writing or orally, and he also failed to demonstrate the offer through his conduct. Tina Turnaround Co (TT) and Cammy Pty Ltd The legal issue here is the revocation of an offer through a counter-offer. A counter-offer can be an attempt by the offeree to accept to some of the terms or can be a direct counter-offer where the offeree replies by quoting new terms. According to (Helewitz, 2010), a counter-offer is simply the same offer from the offeree but with some changed terms. When an offeree counters the offer with new terms, that offeree becomes the offeror, and the original offeror can choose whether to accept the offer or reject it. Consequently, when the previous offeror rejects the new offer, even the original offer is no longer available for acceptance as held in (Hyde v Wrench [1840]). The defendant was offering to sell his farm for 1,000 to the plaintiff. In his reply, the plaintiff offered to purchase it for 950. The defendant declined to take the 950. Later on, the plaintiff sought to accept, but the defendant declined. In the court, the ruling stated that the plaintiff revoked the offer with a counter-offer canceling the entire contract. Sometimes a counter-offer can be accepted by the first offeror as in the case of (Butler Machine Tool Co v Ex-cell-O Corp (England) [1979]). In this case, the plaintiff was offering to sell tools to the respondent. The quotation covered the details of the standard contractual terms. In reply, the defendant sent back the offer with their standard terms. The plaintiff accepted by returning a tear-off slip from the order form. The defendant refused to pay according to the terms of the plaintiff and then the plaintiff sued the defendant. The judge held that the defendant's order was counter-offer, and the plaintiff accepted it. Similar to the cases illustrated above, when Cammy Pty Ltd accepted some terms of the TT Co offer but changed the other terms canceling the entire contract. The contract would have only been successful if TT Co approved the new offer. Additionally, Cammy cannot rely on the silence of TT as the acceptance. The law takes silence as acceptance under rare situations as explained in (Hunter, 2016). So with the fact that Cammy refused some terms and replied with its terms, and the absent of some indication from TT that it accepted the new offer, there was no contract. Lee and Hurry In the formation sale of land contracts, the seller's duty is to transfer ownership to the purchaser and then the complete the payments the agreed date. In most the times, the contract includes a provision where time is of the essence like the clause in this case of Lee and Hurry. Under such circumstances, the specified date becomes a material term of a contract as stated in (Beatty and Samuelson, 2015). Each party will be bound to perform its duty within the specified time. Any omission will definitely constitute a breach which would entitle the innocent party to rescind the contract at once. In other words, since Lee failed to clear the payments following a time stipulation, Hurry had to repudiate the contract putting it to an end. After that, any effort for Lee to seek specific performance will be unsuccessful. The famous illustration of this is the judgment in (Tanwar Enterprises Pty Limited v Cauchi [2003]). In that case, the respondents duly rescinded the contract for a sale of land after the purchaser failed to pay on the set date, but he obtained the funds the following day. The Court denied the plaintiff the right to specific performance. Accordingly, Lee may argue that he gave a notice for late payments or he deserved a notice of repudiation from Hurry. The fact is that a notice is not necessary in the cases of repudiation. In (Galafassi v Kelly [2014]), the court held that "service of a notice to complete was not a prerequisite to a right to terminate." The main reason behind not sending a notice is that after purchaser's failure, the innocent party is no longer bound by any of the terms of the contract. With this explanation, Hurry was not bound by the contract, and hence there was no need to send a notice to complete. In short, Lee should accept that he can no benefit from that contract. Conclusion When parties form a contract, they simply accept the liabilities from each other. The process of contract formation begins with one party making an offer, and the other one accepting. The acceptance must be unconditional, and any condition or term in the acceptance will amount to a counter-offer. Furthermore, the offeree must clearly communicate the acceptance to the offeror. In sale of land contracts, a default of payments from a purchaser constitutes a breach. And as a result, the innocent party can terminate the contract without the need to notify the bleaching party. References Mettling, S., Cusic, D. and Stanfill, J. (2016). Principles of real estate practice in Georgia. 1st ed. Performance Programs Company, p.128. Goldman, A. and Sigismond, W. (2013). Business law. 9th ed. Mason, OH: South-Western Cengage Learning, p.148. Helewitz, J. (2010). Basic contract law for paralegals. 6th ed. Austin [Tex.]: Wolters Kluwer Law Business, p.84. Hunter, R. (2016). Contracts for engineers. 6th ed. Boca Raton, Fla.: CRC Press, p.8. Beatty, J. and Samuelson, S. (2015). Business law and the legal environment. 7th ed. Mason, Ohio: Cengage Learning, p.443. Cases Brogden v Metropolitan Railway Co [1877] 2 AC 666 Felthouse v Bindley [1862] EWHC CP J35 Galafassi v Kelly [2014] NSWCA 190 Hyde v Wrench[1840] EWHC Ch J90 Machine Tool Co v Ex-cell-O Corp (England) [1979] 1 All ER 965 (UK). Tanwar Enterprises Pty Limited v Cauchi [2003] HCA 57 Yates Building Co.Ltd v RJ Pulleyn Son(York)Ltd[1975] 237 EG 183