Introduction Contract Law is the most important aspect of commercial law as it isthe main point through most of the business-related transaction, for example,hiring workers to work for the organization, purchases of goods from supplierand offer products and services to the market. Legal dispute occurred when oneparty in the contract is unable to deliver what he/she agreed on or whencontract is not well stated between the parties which result inmisunderstanding between the parties. (FindLaw, 2017) There are a few types of contract which each individual has specificterms and conditions that will bind two or more parties to complete the tasksthey have agreed on which will be enforceable through law towards one side ofthe party that refuse to commit to it. However, a legally binding contract mustconsist of the four elements which is legal capacity, agreement, considerationand intention to enter into legal relations.
Firstly, legal capacity indicates the age and mental state of allcontracting parties such as only the age of 18 and above are deemed to be qualifyingto enter into contract with other parties as well as having a clear start of mindthat is capable to understand the purpose of a contract and not be intoxicationduring the time of making a contract. Secondly, in any situation of making acontract, there should be an offeror that make a clear offer and another partywhich is an offeree that has make an acceptance that will match the offer.Thirdly, in consideration there should be a promise made toward the other partyas each party has to obtain a benefit and suffer a loss. However, this does notinclude one-sided promise or promise due to love and affection. Lastly, duringthe agreement there should be an intention of creating legal rations betweenall parties which will bind the parties into legal consequences if there`s abreach of contract. Hence, when there`s a complete of these four element itwill then be deemed as a legally binding contract. Contract There was no contract formed between Alan and Bernard due to Bernardcounter offer of $150 on 2nd Nov 2015, however the offer was droppedby Alan through a reply on his facebook wall. Which also result in an invalidacceptance of $200 from Bernard on 5th Nov 2015, as the counteroffer by Bernard have reject the original offer which cannot be accepted again.
Similarly, for the case of Charleen, there will be no contract between themsince Charleen is a minor which is not at an age of 18 and above as well as itis a social and domestic agreement between the brother and sister. (Lee Pey Woan, 2015) Lastly, there is a contract made between Damien and Alan, as the fourelements are present to make it a legally binding contract. From the firstelement of legal capacity, Damien is a student that is taking diploma whichmeans that he is above 18 years old which is a legal age to make contract,secondly, there`s a clear offer made from Alan which Damien has also made apositive acceptance by passing $200 to Alan on 4th Nov 2015.Thirdly, there`s consideration as both parties promise to provide each otherwith something and suffer a loss for something. Lastly, they have an intentionto enter legal relation. Hence the contract was made on 4th Nov 2015when Damien passed $200 to Alan in Kaplan Higher Education. Bernard V Alan In the case of Bernard and Alan, Bernard make a counter offer but wasrejected by Alan however Bernard went for the original offer and proceed tomake the payment to Alan when Alan did not reply to his acceptance as well asknowing that there is no contract formed between them.
Similarly, if we assume that Bernard is a minor as he will be enrolledinto Kaplan Higher Education which turn out he supposedly not qualify to make acontract however, the contract is benefit to Bernard as the textbook will beable to help him with the course he will be enroll in, which stated in the casestudy of Doyle v White City Stadium(1935). Hence this will make the contract binding between them. However, as Bernard made a counter offer to Alan on 2nd Nov2015 of $150 for the textbook, however when a counter offer was made, theofferee will not be able to accept the initial offer again. As stated in thecase study of hyde v.
Wrench (1840)after the counter offer was rejected as Alan purpose that ‘there is an offeralready’. Bernard will not be able to go for the initial offer anymore. Whichresult in no offer and acceptance was present in the agreement which makes thecontract invalid. Next, under the rule of consideration, both parties will be obtaining abenefit and suffered a loss through the transaction of the textbook and $200between Alan and Bernard. Lastly, the intention of creating a legal relation between Bernard andAlan may be social and domestic agreement. In this case from the establish ofcase study from Balfour v Balfour(1919).Because Bernard and Alan are friend on facebook which the court willpresume that they have no intention to make a legally binding contract betweenthem.
Hence, they will not sue each other if one party refuse to commit to theagreement. Through these 4 elements to make a contract it only consists of legalcapacity and consideration which result in no legally binding contract betweenboth Bernard and Alan. Therefore, Bernard will not be able to sue Alan for asit is not enforceable.
Hence the only solution for Bernard will be making amediation with Alan to resolve the dispute. Charleen v Alan For the case of Charleen and Alan, Charleen who do not have the legalcapacity to make a contract with her brother, moreover Alan which can be assumethat he just wakes up in the morning in addition that he didn’t not acceptCharleen offer but gave her a smile. And provide the payment on the tablewithout the offeror knowledge.
As stated in the case study of Nashv Inman (1908), Charleen is a minor as she still taking her o levelwhich proved that she is under the age of 18 years old. Moreover, a minor isonly legal obligation to pay for the things she need for their maintenance,which the textbook of Alan is not a necessity for Charleen. Therefore, Charleenhas no legal capacity to make a contract with Alan.
Additionally, in the morning of 2nd Nov 2015, Charleen wentto talk to Alan about her offer to pay Alan for the textbook at a later datewhich is on 6th Nov 2015, however Alan didn`t said anything toaccept her offer but just gave a smile. In establish in the case study of Felthouse v Bindley (1862), Alancannot be deemed to accept the offer from charleen from doing nothing as beingsilence does not mean acceptance. As well as in the case study of Neale v Merrett (1930), Charleenwanted to make the payment to Alan at a later date which mean that it is arevocation of the offer as she offered a new term to the original offer fromAlan.
Moreover, Alan who was still thinking about his favourite football teamperformance last weekend shows that there`s no meeting of minds betweenCharleen and Alan. Therefore, in the stated case study of Carlill v Carbolic Smoke Ball Company (1893), the acceptanceof the offeree must be known by the offeror so that the two minds can cometogether. Hence, there is no mutual agreement between Charleen and Alan whenthey met to make agreement for the purchase of textbook from Charleen and thepayment of $200 to Alan. Next, consideration is consisting of both a promisor and promise.
Bothparties must receive a benefit and suffer a loss. However, if there is aone-sided promise which does not support by consideration will be deem as agift. In the case of Charleen putting the $200 on the table without the Alanknowledge as well as Alan did not accept Charleen acceptance to his offer, thiswill be deemed as a one-sided promise from Charleen instead. Therefore, the$200 that was placed on the table will be consider as a gift.
Lastly, due to Charleen and Alan are brother and sister relationshipwhich can be seen as a social and domestic agreement, the court will assumethat both Charleen and Alan do not have the intention to create a legalrelation. With that being said, Charleen will not be able to sue Alan on thecourt as there is no enforceable contract between both parties which in result,Charleen will lose the legal action against Alan on the court and the onlysolution left for Charleen is to have mediation with Alan. Damien v Alan In the case for Damien and Alan, Alan lied about scoring a higherdistinction on that unit with his notes written in the textbook to sell forsome money by posting on facebook on 1st Nov 2015 and Damien thatsaw the post 2nd Nov 2015 is keen to purchase the textbook from Alanby making an agreement to pay him on 4th Nov 2015. As we assume that Damien is Bernard`s friend and is also keen on thesame text as he shows that they both enroll into Kaplan Higher Education at thesame time which can presume that Damien is a minor. Moreover, it is a necessaryfor Damien as it is needed items for his academic life. Therefore, Damien havethe legal capacity to create a contract with Alan.
Subsequently, Alan announced on his facebook wall that he selling histextbook is an offer and Damien message him that he is keen on buying histextbook and will be passing the money on 4th Nov 2015 as anacceptance to Alan offer. Alan also replied to Bernard`s post stating that’there is an offer already’ shows that there is a meeting of minds between Alanand Damien on having a mutual agreement already. On 4th Nov 2015,Damien pass the $200 to Alan, which Alan told him that he will give everythingto him on 7th Nov 2015. Hence, Alan did pass his textbook andhand-written notes to Damien. Next, under consideration both Alan and Damien have exchange promisesto each other and they did by Alan provide the textbook and handwritten notesto Damien for $200, as well as Damien provide $200 to Alan for the textbook andnotes.
In this case we can say that they have met the condition forconsideration which is the third necessary element to from a contract. Lastly, as Damien is just Bernard friend`s which he manages to obtainAlan phone number from Bernard, we can assume that they are not friends whichthe agreement they have is a commercial agreement. As establish in the casestudy of Edwards v Skyways Ltd (1964),both parties are intending to create a legal relation by the promise they madeto each other. With the four elements to establish the contract, Damien will be ableto sue Alan on court for fraud. Due to Alan stating that he was able to scorehigher distinction instead of credit as well as the fact that Alan know thatKaplan Higher Education will issue free textbook to the new enroll student butstill insist of using this advantage for himself by selling it for the money topeople that didn’t know about this.
Therefore, Damien will be able to sue Alanfor fraud and get compensation from Alan for the money he gave and otherconsequences. AlternateDispute Resolution There are 2 types of alternate dispute resolution such as mediation andarbitration. Firstly, mediation is a method to settle dispute between partiesby hiring an intermediary or neutral party to indicate the issues and helpingboth parties with different opinion to communicate.
(AllBusiness Editors, 2017)The mediator does not give opinion on what`s right or wrong between the partiesas well as not giving a solution at the end of the mediation. Hence, themediation is to help both parties to sort out a mutual solution for theirdisputes. The pros of mediation are to save the time and money of both partiesas the time taken is much shorter than litigation as well as the process andresult are private between them. However, the cons are one of the parties maynot be willingly to cooperate or compromise to the solution of the mediation orone may want the process and result to be publish to public.
(AllBusiness Editors, 2017) Another alternate dispute is arbitration, which is to submit thedispute case to the arbitrator for solution. The arbitrator will listen andunderstand both sides through documents and testimony and control the processas well as provide a solution for both parties like a trial. The pros are thecost as it is cheaper than litigation and the time taken will be fast as welldue to the arbitrator does not have huge workload which result in quicker finaldisclosure of the solution. However, the cons is that it won`t be easy toappeal of arbitration rulings as in not much cases, the arbitrator made amistake which will lead to unfair decision to one of the party and it may notbe change as the court may not take over the case. (Find Law , 2017)