HYPOTHETICAL PROBLEM — ASSIGNMENT Essay Example

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PRINCIPLES OF BUSINESS LAW 12

(Gates, 2011)PRINCIPLES OF BUSINESS LAW

Part 1: Principles of Business Law

Law can be defined as a body of principles, rules, and regulations that govern the activities of a community and enforced by the political authorities in that particular community. Law is said to have been in existent long time ago. Such law is considered to have come from God and it dictates the behavior of humankind. Law can be classified into imperative law, scientific law, moral law, conventional law, international law, and civil law. For a better understanding of law, this paper discusses business law in a broader context.

Sources and types of law

Unwritten law is one of the sources of natural law. In this category, there are various types of law. Common law is a type of law under this category and they are as a result of merging of the customary laws due to the decisions made by the royal judges. This law is unwritten and is dependent on the interpretations of a judge presiding over a case on the customs of the people from a particular community. Equity law is another type of law under the unwritten sources of law. This type of law does not depend on the written rules and as a result, have their bases standing on the judicial decisions. Under this type of law, the judge makes jurisdiction according to what he/she considers fair from his/her conscience point of view.1

The other source of law is the written laws that are presented in a form of writing rather than spoken rules. Under this source of law, there are various types of law. One of them is the statute, which requires approval of a national assembly before it is passed into law. This type of law supersedes the common and equity law because its enactment is from a sovereign power. The most preferable type of law would be the written sources of law because the unwritten ones may be subject to bias and distortion, which negatively affects the administration of justice. 2

Classes of law

There are various classes of law. One of them is the public international law whose main concern is the relationship between states. They usually arise from the treaties of the nations in the arena of law. Their formations are usually by the international organizations concerned with the relationships between countries such as the United Nations, the European Union, just to mention but a few.3. They are usually built on fair grounds to avoid favoritism and bias based on the regional differences and religious views.

The administrative and constitutional law falls on the second class of law. Constitutional law mainly addresses matters related to the legislative, executive, and the judiciary relationships. It also addresses on the rights of the citizens of a particular state. Administrative law on the other hand addresses the roles of the various government agencies. The larger government units are the ones that govern administrative laws; their decisions are usually governed by the courts of law.4

The other classes of law include the criminal and contract law. Criminal law governs the criminal acts of a particular country. They dictate the penalties that should be administered to people for committing particular offenses and the relative paroles. Contract law on the other hand entails the rules and regulations governing the signing of agreements and the making of promises. They operate on the doctrine of pacta sunt servanda, which means that a promise must be kept. It usually has a consideration, which implies that the contracting parties have exchanged items at a fair agreement. Property and tort law also fall in the category of the classes of law. Tort law addresses the wrongs that result from infringement of another person’s rights hence the wrongdoer is considered to have done a civil wrong. Property law on the other hand entails the governance of the assets and other forms of wealth owned by an individual. It operates in two doctrines, the right in rem, which means the right to own a property and the right in personam, which is the right for every property owner to be compensated for the property loss.5

Elements of a contract

There are six major elements of contract law. It is under these elements that courts make jurisdictions pertaining the signing of agreements. The elements are; offer, acceptance, legal objective, obligations, considerations, and competent parties. To begin with, an offer is the willingness to enter into a contract with another party to pursue a particular objective or acquire a particular item. Offers must leave room for bargain as this justifies the other person on how his approbations of bargain are welcome and it concludes the contract.6

The element of acceptance exists in many ways. Accepting an offer implies that the offered, has knowledge on all the provisions, terms and regulations of the contract. Upon acceptance to enter into a contract, the terms of agreement cannot be altered because doing so implies breach of contract that would otherwise call for the termination of the contract. On the other hand, if acceptance changes the original conditions, the offer should be rejected. This is because an alteration in any of the conditions deems the offer a counter offer.

The element of legal purpose implies that the contract should be on subject that is admissible in a court of law. Contracting on illegal deals may sometimes be complex especially when the two parties disagree and the matter has to be taken to a court of law. In such situations, the court may face some complexities as the court may be caught up in situations on whether to rule over the case or punish the two parties for having engaged in illegal activities.7

Mutuality of obligation implies to the understanding of the parties on the importance of their agreement. The parties must be in the same level of agreement with relation to time, sense and the subject being agreed on. This should base on the standards upon what the parties did and talked about when on sober minds. Communication is the key important thing to consider in this case but not the circumstances that make the two parties reach that particular agreement. Questions of fact will arise on the stage where the reasoning of the two minds met. Should the understandings about the contract differ from the original one, it is subject to a legal challenge and there should be no negotiations on any form of agreement. The only thing that can be done in case the agreements change is the entrance into a new form of contract.8

Certainty on the subject matter of the contract implies that the terms of the contract should be clearly defined to allow easy understanding by any court of law. The rules that govern contracts state that it is compulsory to state clearly all the terms of the contract. Leaving a room for negotiation in the later stages of a contract implies that the contract is voidable. Should there be an omission of a non-important term; the courts may provide a term that preserves the contract even if it is subjected to challenge.9

Consideration as an element of contract law implies that there should be a room for beneficial terms to either the party making a promise or the one the promise is being made. It is comparable to a present that arises because of returning a promise. Usually, a consideration may be in the form of a specific right, profit and it can alternatively be a loss, forbearance or a duty vested to the other party.10 A consideration must not always be monetary but it may take any form of encouragement that pleases either of the contracting parties.

The final element of contract is competency, which implies that all the parties entering in a contract must be competent. Entering into contract with non-competent parties increases the chances of the contract being nullified by legal actions. Some parties cannot be trusted due to past records. As a result, it is important to analyze a party in terms of competency to have adequate information about it as this prevents frustrations brought about by a party making a default on a contract.11

Law on discharge of contract

The law on discharge of a contract states that a contract may be discharged in four different occasions. The occasions are performance, agreement, breach, and frustrations. Based on performance, a contract is discharged after all the parties in the contract perform all the duties that they agreed to perform when signing the contract. Usually, performance of contracts follows the rule of Re Moore and Landauer. However, some complications may arise as was presented in the case of Powell v Cutter. The general rules may be modified under some provisions. One of the provisions is the divisibility, which states that one party’s consideration may be set off against the partial performance of the other. This is as illustrated in the case of Roberts v Havelock. Partial performance may also be considered. In this case, the party that was promised a particular item can either accept or reject the performance. Should the performance be accepted by a promise, he/she must pay relatively for the benefits received. The promise may also prevent the promisor form completing the performance but the promise must pay for what has already been performed. There may also be substantial performance in a contract brought about by minor faults as noticed in the case of Lee v Dakin. Some occasions may call for assistance. In such situations, a tender performance occurs.12 All these considerations are applicable to the performance of a contract. However, the performance should be in due time as agreed in the contract terms.

Agreement is also a factor that leads to the discharge of a contract. Based on this, the two parties come to an agreement that the contract should be brought to an end. This usually arises in situations where one party cannot deliver its services within the stipulated time and thus the second party can decide to look for another party that can get the services delivered on time. Discharge in this case can be either bilateral or unilateral. Bilateral is in the sense that the two parties surrender the contract. Unilateral on the other hand occurs when only one of the parties is permitted by law to surrender.13

Breach of a contract may also lead to its discharge. This usually arises when one party defies the rules of the contract with no justifiable reason. This may arise when one of the parties breaks the rules of the contract. Breach can be anticipatory in the sense that one party may show inform of actions that it does not want to perform its obligations in the contract. The party may end up breaking the conditions of the contract. When such occurs, the innocent party does not have to wait until the date of the contract reaches to end the contract but rather has the power to terminate the contract. Such are noticeable in various cases such as Hochster v De La Tour (1853). However, failure of one party to comply with the rules of the contract may not lead to a breach of contract if one party does not express its displeasure with other party’s actions. Such a case is clearly indicated by Avery v Bowden case.14

Frustrations also make a contract null. This occurs when changes in circumstances make it impossible to further performance of the contract. Some situations deprive a contract a commercial standing ground especially when one party defaults a contract. In the case of Taylor v Caldwell (1863), it was argued that the alterations of the conditions of the contract between the two men could end their contract. Frustrations arises from personal incapacities, destruction of the objects necessary for the conduct of the contract, government interventions, the contract being signed illegally, and delays in the performance of the contract.15

The legal rules in relation to agency

Agency implies one person acting on behalf of another person. Agency comes from contracts, ratification, estoppel, and necessity. The person acting on behalf of another person is the agent while the person being represented is the agent. The laws imposed to the agent are duties to act with skill, loyalty, obey instructions, protection of the confidential information and the responsibility of accounting for all the expenses. It is important to understand that agency problems vary from state to state due to the variations in religious beliefs and practices. As a result, engaging into an agency contract with a person from a different state may make the contract complex. The actual authority on agency can be either express or implied. The chapter by law provisions authorizes the express authority while implied authority naturally arises from the express agency. This is because, in case there is an issuance of a letterhead, there access to it will require authority to take the relevant actions.16

The legal rules in relation to areas of employment

There are several rules guiding the employment contracts. These are normally for the purposes of ensuring that the employers do not discriminate against their employees or do not subject the minors to child labor. Under the laws, there are some clearly defined terms. They include compensation that states that an employee should be compensated for injuries faced while at the work of environment. Employee relations are clearly stated in the employment law that states that there should be good relations within the working environment. The relations are the employee-employer relationship and the employee-employee relationship.17 This is because, without good relations, the business cannot operate smoothly and there may be occurrences of some forms of discrimination within the environment.

The other laws include the ethics and labor relations law. The main aim of ethics in business contract law is to ensure that all employees are subject to fair and equal treatment with no forms of discrimination. On the other hand, labor relations foster good relations within a working environment in terms of how the employees are managed.18
The labor relations ensure a secure and safe working environment that enables all the employees to deliver their services in an efficient way.

How to preside over cases?

At a court of law, judges should establish the relationships between the offence and the offender. Should the offender be found guilty, he/she should be subjected to judgment. Decisions made by judges mainly follow the grounds of breaking the established acts and laws or past court decisions. Thus, judges should be fair enough when presiding over a case because their decisions might act as points of reference for future cases that may be similar to the ones they are handling. Legal issues should be handled with high competency levels because of the vast complexity of law.19

Part 2: Hypothetical Questions

The tort of negligence states that the provider of a service should stop the consumer from doing certain activities likely to cause harm to the consumer. This is usually under the duty of care. In the case of Donoghue v Stevenson (1932), it was argued that the producer should compensate the consumer because he could have been in a position to know that a snail may enter in a bottle.20 With a view on this, Tamara can sue Van-Dame because Van-Dame knew that the glue used in the manufacture of the French Flyer was not effective at low temperatures but still allowed Tamara to use the fliers. He therefore should compensate Tamara for the injuries from the incident.

The Australian consumer law states that producers should ensure safety in their products and provide cautions on the conditions and states in which the products could not be effective. Based on this, Tamara can still sue Van-Dame because he did not clearly state to Tamara that at low temperatures, the glue used in assembling the French Flyer. It cannot be stated that the accident was as a result of Tamara having low levels of experience on the use of the flyers because she had done four successful flights and did not get any form of injury.

The principle of vicarious liability states that a producer is answerable to all the damage caused by the products. Thus, in a court of law, the jury should clearly establish the relationship between the product and the harm before ruling over the case. Market Investigations Ltd v Minister of Social Security is a clear indication of the importance of establishing the relationship between the producer and the product. In the case of Tamara and Van-Dame, Van-Dame is a commencer in the supply and manufacture of the French Flyers hence there is a relationship between him and the products. He is therefore aware of all the harms of the French Flyers under the law temperatures; thus, Van-Dame is answerable for the injuries experienced by Tamara.

1 Gates, B. (2011). What is Law. Introduction to Law, North Carolinians, 1-26.

2 Gates, B. (2011). What is Law. Introduction to Law, North Carolinians, 1-26.

3 Masons, P. (2011, June). Contracts of employment — the rules. Retrieved October 10, 2013, from Outlaw.Com.

4 Gates, B. (2011). What is Law. Introduction to Law, North Carolinians, 1-26.

5 MacMillan, C. (2009). Elements of the Law of Contract. University of London International Programmes, 1-47.

6 Masons, P. (2011, June). Contracts of employment — the rules. Retrieved October 10, 2013, from Outlaw.Com.

7 McDuffy, A. S. (2001). Introduction to Law. A Discussion of Legal Issues Affecting Big Chapters, 1-13.

8 Gates, B. (2011). What is Law. Introduction to Law, North Carolinians, 1-26.

9 Gates, B. (2011). What is Law. Introduction to Law, North Carolinians, 1-26.

10 McDuffy, A. S. (2001). Introduction to Law. A Discussion of Legal Issues Affecting Big Chapters, 1-13.

11 Hussein, D. (2009). Notes on Tort of Negligence. Retrieved October 10, 2013, from A Level Law Revision: http://home.loxfordlaw.co.uk/unit2/notes-on-tort-of-negligence

12 lawteacher.net. (2013). Discharge Of Contract Lecture Notes. Retrieved October 10, 2013, from Law Teacher: http://www.lawteacher.net/contract-law/lecture-notes/discharge-lecture.php

13 Hussein, D. (2009). Notes on Tort of Negligence. Retrieved October 10, 2013, from A Level Law Revision: http://home.loxfordlaw.co.uk/unit2/notes-on-tort-of-negligence

14 lawteacher.net. (2013). Discharge Of Contract Lecture Notes. Retrieved October 10, 2013, from Law Teacher: http://www.lawteacher.net/contract-law/lecture-notes/discharge-lecture.php

15 lawteacher.net. (2013). Discharge Of Contract Lecture Notes. Retrieved October 10, 2013, from Law Teacher: http://www.lawteacher.net/contract-law/lecture-notes/discharge-lecture.php

16 McDuffy, A. S. (2001). Introduction to Law. A Discussion of Legal Issues Affecting Big Chapters, 1-13.

17 McDuffy, A. S. (2001). Introduction to Law. A Discussion of Legal Issues Affecting Big Chapters, 1-13.

18 Masons, P. (2011, June). Contracts of employment — the rules. Retrieved October 10, 2013, from Outlaw.Com.

19 McDuffy, A. S. (2001). Introduction to Law. A Discussion of Legal Issues Affecting Big Chapters, 1-13.

20 Hussein, D. (2009). Notes on Tort of Negligence. Retrieved October 10, 2013, from A Level Law Revision: http://home.loxfordlaw.co.uk/unit2/notes-on-tort-of-negligence