Issue 1: Enforceability of Gold Sale Contract

1. Whether the contract for the sale of the gold is enforceable; and Whether Kevin would be successful in his claim for negligence.

2. whether Florence would be successful in any claims against Renzo;whether Florence has any obligations to pay GLO.

3. In both cases, whether Florence would have access to any remedies under contract law.

The main issue of the case is to determine the fact whether the contract for sale of Gold is enforceable or not.

According to Sudbrook Trading Estate v. Eggleton [1983] AC 444, an offer is a willingness expressed by a person regarding a subject. When the person to whom the offer has been made accepts the offer, the same could be regarded as acceptance. Both the parties should have the intention to be binding them legally. Further, it has been observed in Harvey v Facey [1893] AC 552 that an offer should be complete in nature. It is a general rule of contract that an acceptance can only be made through direct communication. A contract can be fulfilled once the offer has been accepted. However, there are certain exceptions to this rule such as postal rule. In Henthorn v Fraser (1892), it has been held that an offer will be treated as accepted when the person to whom the contract had been made post his consent letter. According to the case, it is not necessary whether the person who made the offer has received the letter or not. This rule has been supported in Byrne v Van Tienhoven (1880) 5 CPD 344. The postal rule has been introduced in the case of Adam v Lindsell [1818] B & Ald 681.

The subject matter of the case is based on the postal rules of contract. Contract is a legally enforceable agreement that exists in between two parties. There are certain rules mentioned for making a contract valid in nature. The most important element of contract is offer and acceptance. In the present case, it has been observed that Susan has made an offer regarding selling the gold to Terry on 27 January and the same offer has been accepted by Terry and he had posted the acceptance letter on that day. Therefore, according to the case of Adam’s case, it can be stated that the offer has been accepted successfully. However, it has been observed that Susan had cancelled the offer on 30 January. According to the general provision of postal rule, it can be stated that offer could be revoked only when the same made before the acceptance letter has been posted. In this case, it has been observed that Susan had revoked the offer after the consent letter has been posted. It has been observed in this case that an offer can be treated as validly accepted when consent letter has been posted by the person. Therefore, three elements can be observed in case of postal rule such as:

• Until the offer letter has not been received by the person to whom the offer has been made could not be effective in nature (Jacques & Co v McLean[1880] 5 QBD 346);
• Acceptance will be effective as soon the consent of the person has been posted;
• Under the postal rule, the offer could be revoked before the acceptance letter regarding the previous offer has been posted.

Issue 2: Negligence Claim

Conclusion:

Therefore, it can be stated that the contract for sale of Gold is enforceable.

The main issue of the case is to decide whether Kevin can bring a claim for negligence against Terry or not.

The present subject matter of the case is based on the capacity of the parties for making valid form of contract and the provision of negligence. The elements of the negligence has been pointed out in Donoghue v Stevenson’s case [1932] UKHL 100. According to this case, in case of negligence, the parties have to prove whether the acts of the other party violated the duty of care and damage has been caused due to the violation. According to the essential elements of contract, capacity of the parties is one of them. A contract could not be regarded as valid if the parties to the contracts have legal capacity and are mentally sound. Therefore, it can be stated that if any party has made any statement in intoxicated condition, it could not be treated as valid.

In this case, it has been observed that Kevin wanted suggestion from Terry knowing the fact that Terry is very intoxicated. Kevin had invested certain money in Ziro Ltd. as Terry had stated him that the company is very profitable and it has been observed that Kevin had suffered damage due to financial downturn. According to general principle, it can state that Kevin can claim for compensation from Terry under negligence. If a person makes an investment based on the statement of an intoxicated person and suffered loss, he can make a claim for negligence but in such case, the defendant can defend his position to certain extent. This provision is based on the doctrine of comparative negligence. In this case, the compensation made by the affected party could be reduced because of contributory negligence. Contributory negligence reflects the liability of the claimant in case of negligence. When a person assumes certain possibility of risks regarding a matter and continues the same and suffered loss, it can be stated that he has certain liabilities over the sufferings. However, in this case, the defendant has to prove the burden of proof lies on the claimant. In Australia, the terms contributory negligence falls under the provision of Civil Liabilities Act 2002 (NSW). In case of intoxication, the mental state of a person was not sound and therefore, if he makes any statement at that time could be voidable in nature. If the other person did anything based on that statement, it can be stated that he is doing it on his own risk and in case of any loss, he could not make the intoxicated person entirely liable for that damage. However, in this case, it can be observed that Kevin knew the fact that Terry is in intoxicated condition and there are certain risks. However, he had invested the money still then. Therefore, Kevin can be held liable for contributory negligence. Terry can defend his position under the provision of comparative negligence.  

Issue 3: Contract Remedies

Conclusion:

Kevin can claim for negligence but he could not held Terry liable entirely, as he is jointly liable for the damage.

There are three issues present in the case:

1. Whether Florence can successfully make any claim against Renzo or not
2. Whether GLO is responsible for violating the terms of the contract or not
3. Whether Florence can get any remedies under contract law or not

Considering the case study, it can be stated that there are three different rules will apply in this case, as there are three different issues. The first issue is based on general rules for formation of contract. There are two principles medium for the formation of contract such as oral and written form. According to the law, where in a case, there are certain written terms present; it is worthless to depend on the oral statement. This principle is a well-known principle and it has been established in the case of Goss v Lord Nugent (1833) 5 B & Ad 58.  According to the case, the terms that are written in the contract will be a part of the contract and nothing extra could be treated as the part of the contract. It has been mentioned in Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 that each party of the contract has certain duties of care against them and no one is required to misrepresent others. It has further been stated in the case that no party to the contract should suffer from economic losses due to the negligent misstatement of other party. It has been decided in Van den Henderson v Arthur [1907] KB 10 that when the terms of the business will be in written condition, the further application will be prevailed over the written conditions. However, any of the parties can present all the oral evidences to strengthen their case and make claim over the same.     

In the given case study, it has been observed that a verbal interaction has been made in between Renzo and Florence and it has been stated by Renzo that the position of his shop is quite profitable and it makes huge turn over on monthly basis. Further, it has been mentioned that the weekly transaction rate of the shop is $30,000. Based on those statements, Florence had bought the shop. After the purchasing process, it has been observed that Renzo had made false statements and not all the verbal statements have been mentioned in the written documents. According to Goss v Lord Nugent’s case, it can be stated that Florence could not claim anything. However, from the citation of Henderson v Arthur’s case, it can be stated that Florence can provide verbal evidence before the court and claim for damage suffered by Renzo. According to the Contract Law, no contract could be regarded as valid if it has been made through coercion or undue influence or misrepresentation. According to the contract Act, if any of the parties to the contract has obtained the consent of the other party through misrepresentation, the nature and effectiveness of the contract will be voidable.  

Conclusion:

Therefore, it can be stated that Florence can make contractual claim from Renzo.

The subject matter of the second issue is based on the rules of misrepresentation. It has been held in Attwood v Small (1838) 6 CI & F 232 that a party should have to show that he was entirely depended on the statements and working capacity of the other party to the contract and he suffered damage due to the misrepresentation caused by them. Further, it has been mentioned in Edgington v Fitzmaurice (1885) 29 Ch D 459 that in case laxity on the grounds of the defendant proved, the affected parties can claim damage for breach of contract. Similar principle has been maintained in Ritchie v Atkinson (1808) 10 East 295, where the court has observed that a contract will be said to be violated if any party to the contract made any breach regarding the terms.

According to the Contract Act, if any of the party to the contract has been held for making misrepresentation or commit any deceptive conduct, the effectiveness of the contract will be voidable in nature. In the case study, it has been observed that a contract has been signed in between Florence and GLO regarding the renovation of the shop. There are certain terms in the contract and Florence was worriless to get a good job from the renovation company. However, it has been observed that the entire work has been completed after almost one month from the specified time and much recklessness found in the works of the GLO Company and it was clear that the company had filed to perform their duties as per the terms of the contract. Loopholes found regarding the installation and completion of the work and according to the case of Ritchie v Atkinson, the company is guilty for violate the provision of the contract.

Conclusion:

GLO has failed to perform according to the contract.

There are certain rules given to the affected parties if a contract has been violated. According to the general rule of contract, the affected party has a right to claim compensation from the defendant and bringing back the contract in its previous stage. Further rules have been made under the provision of misrepresentation. It has been held in Howard Marine v Ogden [1978] QB 57 that the affected parties to the contract could make action against the defendant for whom he has suffered losses. In Carlill v Carbolic Smoke Ball, it has been held by the court that when a party mention about certain thing and other party relies on the fact, the person making the statement should have to maintain all the statements. Otherwise, the another party could face losses from the same and in this matter, the first party should have to make compensation to the affected party.   

According to the current case, it has been observed that Ranzo and GLO had failed to perform their duties perfectly and Florence has to face problems due to the same. The GLO Company has failed to act as per the contract signed in between them. Further, Renzo had failed to comply with all his statements made by him to Florence regarding the quality of the shop. He had failed to mention about the terms in the contract and after the purchasing process, it has been observed that there are yawning gap in between the word stated and word written. Florence is suffered due to the misrepresented facts and therefore, she could claim compensation from the parties. further, it can be stated that the alleged company and Renzo had failed to act in good faith. They should have to Act prudently but they have failed to do it and that causes great dilemma to Florence. According to contract law, the terms and condition of the contract are mandatorily imposed on the parties and they are bind by those terms. Therefore, it is required to meet all the provision. In case of any failure, the act will be treated as breach to the terms and the defendant has to compensate the affected parties. Therefore, it can be stated that the parties have failed to act in accordance with the provision of the contract law and therefore held guilty and should have to give compensation to Florence.  

Conclusion:

Florence can claim damage under the principle of misrepresentation and breach of contractual terms and conditions.

To

The client  

Subject: Advice for structured the business

Respected Sir/Madam

There are certain kinds of business structure that are required to be discussed for the well understanding of the facts. The structures are sole trader, corporation and partnership. It is up to the individuals to choose any of the medium and the nature of the company can be divided into two parts such as public company and proprietary company. Certain issues are here to be discussed for providing effective advice regarding the same. The issues are as follows:

• All the available business structures are to be discussed here;
• It is required to structure the business with an intention to minimize the tax.
• The process to make additional funds should be discussed here.
• Further process regarding the poor work done by the management staffs should have to be discussed and the amount the company could suffer losses for the same should be discussed here;
• Advice should be given regarding the decision-making process for the company.

Available business structure has been mentioned. However, regarding the proprietary company, any person can profess their business in their own name. in this case, the separate nature of the company will not attract and both the director and company could face similar legal dilemmas. There is certain positive scenario in this process. The cost is affordable in this case and much effort is not required under this system. However, the rate of tax is quire higher in this system and process of securing personal assets is also limited in nature.

Another business structure is partnership where several persons can profess the business by forming partnership. In this process, the management of the business are dealt by more than one person and there is a possibility to handle all the works systematically. However, problems can be cropped up regarding the decision-making process, as there is more than one director. Further, conflict of interest could be observed to this effect. There are certain other loopholes to this effect. Under the Partnership Act, all the partners are liable for the acts of each other and therefore, if any wrong thing happens by one partner, the liability will be imposed on the other partners. According to the issues mentioned in this advice letter, it could be stated that partnership business is not appropriate in this case.

The last option is the corporation. It has a different business structure. The first thing is there are different options available for the business commenced through corporation. In case of proprietary company, the rate of tax and personal liabilities could be mitigated. Further, further, this process could resolve no dispute while making the decision process could happen like the partnership and therefore, the matter regarding effective business process. Further, the share holding capacity of the directors and shareholders are also liberal in this process. In addition to this, it can be stated that the problem regarding the limited liabilities is not applied on the public companies. Therefore the liabilities of the directors could be unlimited and they can exercise their powers in wider sense. Therefore, in this case, the directors of the company could get more rights and approaches. In addition to this, the law regarding the corporations is quite strict and it is tough for the directors and other official to work for their own interest, as they have to work for the benefit of the company and the shareholders. In this process, the directors will be compelled to take liberal and justified decisions. Proper legal actions can be taken if any loopholes can be observed in the management malfunction. Similar principle could be taken for fraud and all the effective guidelines are mentioned under the Corporation Act to this effect. Further, under this business structure, the company takes all the effective measures for earning additional income; however, the acts should be done prudently.

It could be stated that corporation is the best selected business structure for the client. In this process, the client can make all the issues and related requirements could be met. Therefore, it is advices to the client to go for the corporation structure.

Regards

Reference:

Adam v Lindsell [1818] B & Ald 681

Attwood v Small (1838) 6 CI & F 232

Byrne v Van Tienhoven (1880) 5 CPD 344

Carlill v Carbolic Smoke Ball

Donoghue v Stevenson’s case [1932] UKHL 100

Edgington v Fitzmaurice (1885) 29 Ch D 459

Goss V Lord Nugent (1833) 5 B & Ad 58

Harvey v Facey [1893] AC 552

Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465

Henthorn v Fraser (1892)

Howard Marine v Ogden [1978] QB 57

Jacques & Co v McLean [1880] 5 QBD 346

Ritchie v Atkinson (1808) 10 East 295

Sudbrook Trading Estate v. Eggleton [1983] AC 444

Van den Henderson v Arthur [1907] KB 10