Law 105 Assignment 2
1
Clarie May Millan s319073
To begin with, contracts has a significant role in the everyday lives of people. It can cause
both positive and negative impact to individuals, but it helps them to increase their intelligence
and experience in life. Contracts define as a set of promises by promisor and promisee through
oral or written agreement that is enforceable by law. It creates rights and duties between two
parties; however, it can be voided if one party deals with a mistake. According to Koffman &
Macdonald (2010) contract is an agreement, which is valid and that means it is enforceable
because two parties have agreed or signed an agreement to commit the obligation. They also
added that contract is very important to individuals in dealing the society because there are
different types of contract and areas of law. In some cases, before having a contract offer has
been done. Offer is a proposal from one party to make a contract to another group of people or
individual. This can be done either in a way of writing or verbal. After the offer, an offeror will
expect acceptance or rejection from the offeree. When an offer is rejected there will be no
contract happened but, when an offeree accepts the offer contract will be made. In accordance
to Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256, catalogues, brochures and menu are
examples of invitation but there is no offer yet. Offers happen when the customer pays certain
amount for goods or services and the person in charge in cash register received the money. In
this case study, the writer will discuss about contracts, mistakes and what will happen if one
party will not perform the contract to another party.
With regards to advise to Johnny, in the law of business it shows that the contract is existing
between Johnny the owner of Lame Duck Restaurant and Li the client who did bookings in the
restaurant for her wedding event with the price she had seen in table of the restaurant through
Summer. Contract start existing when Summer accepted the Li bookings for the wedding event,
and it strengthen the deals when Li deposited initial amount to Abu. Although Summer the
sales and marketing representative of Johnny is the one who deals the contract to Li, however,
Johnny as an owner of the restaurant it can be considered that he has a contract to the client,
and he has a responsibility or ongoing obligation to perform the deals to their clients. In the
case of Tinn v Hoffman & Co (1873) it explains that when two parties exchange a promise by
one another a contract has been made already. Johnny cannot let Summer to face the contract
alone because he is the owner of the restaurant and he gave Summer a power to decide without
confronting him first. Johnny will be the one who could benefit the most from Li’s money that
she deposited in the account of his restaurant under his name. In time when the client transfer
money to his account, Johnny has already a liability of service to Li.
Law 105 Assignment 2
In addition, conducting a contract have an element to be considered, these are agreement,
intention and consideration. When there is a contract it is expected that agreement has been
made between two parties. Next, two parties expected to act with the contract, which is
important arrangement for the success of the deals. Then, both parties must make an exchange
by paying the price of their agreement or making a promise. In accordance to Gibson v
Manchester City Council (1979) it tackles the importance of considering all aspects or
circumstances before coming up with a negotiation of price between two parties. Giving correct
or reasonable price to another party is very crucial because stating the wrong price to them
could result a big mistake, which is not easy to resolve. In addition, good decision making in
giving a price for goods or services is very important to both parties to avoid mistake in the
future when entering a contract. Written contract is the strongest evidence in dealing an
agreement to another party. Therefore, Johnny is responsible to perform his contract by serving
the menu for the wedding event of their client Li. He should cooperate the contract to avoid
any legal actions from Li because it can be considered that Johnny has already debt of service
to Li when Li deposited a money to Abu the in charge of Johnny’s finances. In business law
owners or management of the business must take procedure in dealing the contract to make
sure mistake will not happen in the future. There are many measures to be done in indulging a
