Download Contracts and Negligence in Business: Offer, Acceptance, and Liability and more Lecture notes Contract Law in PDF only on Docsity! ASPECTS OF CONTRACT AND NEGLIGENCE FOR BUSINESS Lecturer: Judith Robb-Walters Lesson 4 • ASPECTS OF CONTRACT AND NEGLIGENCE FOR BUSINESS • LO 2: Be able to apply the elements of a contract in business situations • September – November 2014 OVERVIEW Individuals and businesses form contracts all the time. Despite what many people believe, contracts do not all need to be written and signed documents. Many valid contracts involve no written or spoken communication at all, for example where a person buys something from a shop. The first requirement for a valid contract – agreement, which consists of an offer and acceptance of the offer. The rules concerning when offers can be terminated and how acceptance should be communicated are vital knowledge as to whether or not a valid contract exits. ACCA F4 Corporate and Business Law OFFER AND ACCEPTANCE • At 9:00 am on Monday September 8,2014 Maurice, a car dealer, sends a telex to Austin offering to sell him a rare vintage car for $50,000.00. Austin receives the telex at 9:15 am and telexes his acceptance at 1:00pm. Austin is aware that Maurice’s office is closed for lunch between 1:00 and 2:00 pm. On his return to the office, Maurice does not bother to check whether he has received a telex from Austin and at 2:30pm receives an offer for the car from Ford, which she accepts. At 4:00pm Austin hears from another car dealer that Maurice has sold the car to Ford. He is advised that it will cost him an additional $2,000.00 to but a similar car and he immediately sends Maurice another telex demanding that the original car be sold to him. Maurice receives this telex at 5:00pm, at the same time as he reads the acceptance telex. • Advise Austin of his legal position and what remedies, if any are open to him. INTENTION TO CREATE LEGAL RELATIONS • Michelle and Mark are planning to divorce. They have spent their married life in an apartment which they bought in their joint names, with the help of a mortgage which has six years still to run. Michelle and Mark agree that Mark will move out of the house, and if Michelle meets the mortgage payments repayments for the next six years, Mark will , at the end of the time, transfer sole ownership of the house to her. Michelle pays the mortgage for a year, at which point Mark says he has changed his mind, and does not intend to transfer his share of the house to her. • Advise Michelle. How, if it all, would your advice differ if Mark had changed his mind before Michelle had started paying the mortgage. PRIVITY OF CONTRACT • In relation to the law of contract explain the meaning and effect of:- • (a) The doctrine of privity • (b) The intention to create legal relations Further readings - The law of obligations 4: Formation of contracts I ACCA BPP F4 - Contract Law - Catherine Elliott and Frances Quinn
