CASE STUDY ON BUSINESS LAW

1. Margaret owned an antique store that specialized in rare porcelain dolls. When she
opened the business in 1989, it was at a shop in an eastern suburb of Melbourne. In 1999
she started to advertise on the Internet and by 2006 the business had grown to the point
where she needed help to keep the business going. After a family discussion one night at
the kitchen table in July 2006, it was agreed that Margaret would probably keep the
business going for another couple of years and then retire. Emily, her youngest daughter
and aged 16, would work in the shop as long as was needed and in return, she would
receive any unsold dolls. When Margaret retired at the end of 2009, she decided that she
would give the unsold stock to charity and they could auction it and keep the proceeds.
Advise Emily.
2. Richard, an impoverished university student, and his millionaire father enter into an
arrangement where Richard agrees that he will keep the front- and backyards of the
family property mowed, and he will ‘do a bit’ to keep the gardens looking tidy. In return,
his father agrees to pay him a weekly allowance of $200. His father had previously used a
garden contractor to do the job and paid him $350. They live on a one-hectare property,
and the mowing alone takes half a day a week. After four weeks, Richard’s father tells him
that he can’t afford to pay $200 a week. He says that Richard should be doing the work
for nothing, as it is the responsibility of the whole family to look after the property;
besides, he says, Richard is getting free board and lodging. Advise Richard.
3. Jenny received a circular from Beauty and the Beast Hair Salon advertising massages and
manicures for $10. Realizing that this was an exceptionally good deal, but not surprised
because she knew that they had only just opened and were running a number of good
opening specials, she rang and made a booking. When Jenny arrived at the salon she was
told that there had been a mistake on the circular and it should have said $100. The
manager of the salon explained that this was still a good price because normally a
massage and manicure would have cost $150. Jenny was furious, as it had taken her 30
minutes to get to the shop by car and if she had known it would cost $100, she would
never have made the booking. Advise Jenny. Would your advice have been any different if
Jenny had the massage and manicure before being told that the cost was $100? Would
she have to pay the full price?
4. Bruce, while he was so drunk that he didn’t know what he was doing, bid successfully at
an auction for the purchase of a house. It was clear to the auctioneer that Bruce didn’t
know what he was doing. However, after Bruce sobered up he confirmed the contract
with the auctioneer. He then subsequently refused to complete the contract. Is Bruce be bound your assignment

SOLUTION

  1. Issues: There was an oral agreement between Margret and Emily but at the time of entering into agreement Emily was a minor i.e. under the age of 18 years. Basically there are two issues involved in it, first whether Emily can confirm the agreement between them as a contract after attaining majority? Second whether Emily has the right to bind Margret under the agreement between them.

Law: A contract with a Minor can be valid, void or voidable at the option of the minor. [Business Law, 2009] The contract entered by the minor for the benefits of service paid by him is a valid contract. A minor has a right to repudiate contract after attaining the age of majority and escape from the liability or can reaffirm that.

Application: Here, Margaret agreed to give Emily the unsold stocks against the service provided by her but at the time of retirement she announces to give the unsold stocks in charity.  Emily can make Margret to comply with the terms of agreement as it was a legally enforceable agreement. It is only Emily who can make the contract void after attaining the age of majority.  But this option can be exercised by her only during her minority once she attained the age of majority. Once she does nothing during her minority to repudiate the contract, she can not make it void after that. [Mance, 2011]

Conclusion: Therefore in this situation, in 2009 the agreement became legally enforceable and Emily has all the rights as a party to the contract, so she can bring a suit in the court of Law against Margret to take all the benefits.

  1. Issues: The agreement between Richard and his father comes under the category of social or domestic contracts. Issue involved here is about the validity of contract between Richard and his Father and Richard claim his money from him?

Law: For any agreement to be legally binding the parties must have the intention to create a legal relationship. This is the third essential ingredient of a valid contract. But the Law presumes that the domestic or social agreements do not have this intent to legal bind it. However it can be presented before the court that there exists the intention of legally binding each other but it is very difficult to reverse the presumption of law. [ Asif, 2009] It is also presumed that the domestic contract between parent and child is not intended to be legally binding and it was held in the case of Jones v Padvattan.

But the situation will be different when parties express their clear intention of making the contract legally binding enter into the contract.

Application: Richard agreed to mow the front land and garden of his house and in return his father will give him $ 200. This amount may be treated as the consideration of the contract between them. The work needed much time and labor. Richard relying on the statement of his father started doing the work. In contractual terms he was performing his part of contract and after four weeks of his labor his father refused to pay the agreed amount of $200. As held by many the honorable courts in many contractual cases related to performance of the contract that the person who proceeded with his part of performance must not be deprived from getting his reward. Such as, in Hoeing v Issac and Bolton v Mahadeva, where the court ordered the defendants to pay the amount for their substantial performance. [Wallis, 2008]

Conclusion: Therefore Richard is entitled for the payment for his labor of four weeks, he can move to the court of law to enforce his right against his father.

 

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