Introduction to enter into legal relations. Firstly, legal

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Contract Law is the most important aspect of commercial law as it is
the main point through most of the business-related transaction, for example,
hiring workers to work for the organization, purchases of goods from supplier
and offer products and services to the market. Legal dispute occurred when one
party in the contract is unable to deliver what he/she agreed on or when
contract is not well stated between the parties which result in
misunderstanding between the parties. (FindLaw, 2017)


There are a few types of contract which each individual has specific
terms and conditions that will bind two or more parties to complete the tasks
they have agreed on which will be enforceable through law towards one side of
the party that refuse to commit to it. However, a legally binding contract must
consist of the four elements which is legal capacity, agreement, consideration
and intention to enter into legal relations.

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Firstly, legal capacity indicates the age and mental state of all
contracting parties such as only the age of 18 and above are deemed to be qualifying
to enter into contract with other parties as well as having a clear start of mind
that is capable to understand the purpose of a contract and not be intoxication
during the time of making a contract. Secondly, in any situation of making a
contract, there should be an offeror that make a clear offer and another party
which is an offeree that has make an acceptance that will match the offer.
Thirdly, in consideration there should be a promise made toward the other party
as each party has to obtain a benefit and suffer a loss. However, this does not
include one-sided promise or promise due to love and affection. Lastly, during
the agreement there should be an intention of creating legal rations between
all parties which will bind the parties into legal consequences if there`s a
breach of contract. Hence, when there`s a complete of these four element it
will then be deemed as a legally binding contract.




There was no contract formed between Alan and Bernard due to Bernard
counter offer of $150 on 2nd Nov 2015, however the offer was dropped
by Alan through a reply on his facebook wall. Which also result in an invalid
acceptance of $200 from Bernard on 5th Nov 2015, as the counter
offer by Bernard have reject the original offer which cannot be accepted again.
Similarly, for the case of Charleen, there will be no contract between them
since Charleen is a minor which is not at an age of 18 and above as well as it
is a social and domestic agreement between the brother and sister. (Lee Pey Woan,


Lastly, there is a contract made between Damien and Alan, as the four
elements are present to make it a legally binding contract. From the first
element of legal capacity, Damien is a student that is taking diploma which
means that he is above 18 years old which is a legal age to make contract,
secondly, there`s a clear offer made from Alan which Damien has also made a
positive acceptance by passing $200 to Alan on 4th Nov 2015.
Thirdly, there`s consideration as both parties promise to provide each other
with something and suffer a loss for something. Lastly, they have an intention
to enter legal relation. Hence the contract was made on 4th Nov 2015
when Damien passed $200 to Alan in Kaplan Higher Education.


Bernard V Alan


In the case of Bernard and Alan, Bernard make a counter offer but was
rejected by Alan however Bernard went for the original offer and proceed to
make the payment to Alan when Alan did not reply to his acceptance as well as
knowing that there is no contract formed between them.


Similarly, if we assume that Bernard is a minor as he will be enrolled
into Kaplan Higher Education which turn out he supposedly not qualify to make a
contract however, the contract is benefit to Bernard as the textbook will be
able to help him with the course he will be enroll in, which stated in the case
study of Doyle v White City Stadium
(1935). Hence this will make the contract binding between them.


However, as Bernard made a counter offer to Alan on 2nd Nov
2015 of $150 for the textbook, however when a counter offer was made, the
offeree will not be able to accept the initial offer again. As stated in the
case study of hyde v. Wrench (1840)
after the counter offer was rejected as Alan purpose that ‘there is an offer
already’. Bernard will not be able to go for the initial offer anymore. Which
result in no offer and acceptance was present in the agreement which makes the
contract invalid.


Next, under the rule of consideration, both parties will be obtaining a
benefit and suffered a loss through the transaction of the textbook and $200
between Alan and Bernard.


Lastly, the intention of creating a legal relation between Bernard and
Alan may be social and domestic agreement. In this case from the establish of
case study from Balfour v Balfour

Because Bernard and Alan are friend on facebook which the court will
presume that they have no intention to make a legally binding contract between
them. Hence, they will not sue each other if one party refuse to commit to the


Through these 4 elements to make a contract it only consists of legal
capacity and consideration which result in no legally binding contract between
both Bernard and Alan. Therefore, Bernard will not be able to sue Alan for as
it is not enforceable. Hence the only solution for Bernard will be making a
mediation with Alan to resolve the dispute.


Charleen v Alan


For the case of Charleen and Alan, Charleen who do not have the legal
capacity to make a contract with her brother, moreover Alan which can be assume
that he just wakes up in the morning in addition that he didn’t not accept
Charleen offer but gave her a smile. And provide the payment on the table
without the offeror knowledge.


As stated in the case study of Nash
v Inman (1908), Charleen is a minor as she still taking her o level
which proved that she is under the age of 18 years old. Moreover, a minor is
only legal obligation to pay for the things she need for their maintenance,
which the textbook of Alan is not a necessity for Charleen. Therefore, Charleen
has no legal capacity to make a contract with Alan.



Additionally, in the morning of 2nd Nov 2015, Charleen went
to talk to Alan about her offer to pay Alan for the textbook at a later date
which is on 6th Nov 2015, however Alan didn`t said anything to
accept her offer but just gave a smile. In establish in the case study of Felthouse v Bindley (1862), Alan
cannot be deemed to accept the offer from charleen from doing nothing as being
silence does not mean acceptance. As well as in the case study of Neale v Merrett (1930), Charleen
wanted to make the payment to Alan at a later date which mean that it is a
revocation of the offer as she offered a new term to the original offer from
Alan. Moreover, Alan who was still thinking about his favourite football team
performance last weekend shows that there`s no meeting of minds between
Charleen and Alan. Therefore, in the stated case study of Carlill v Carbolic Smoke Ball Company (1893), the acceptance
of the offeree must be known by the offeror so that the two minds can come
together. Hence, there is no mutual agreement between Charleen and Alan when
they met to make agreement for the purchase of textbook from Charleen and the
payment of $200 to Alan.


Next, consideration is consisting of both a promisor and promise. Both
parties must receive a benefit and suffer a loss. However, if there is a
one-sided promise which does not support by consideration will be deem as a
gift. In the case of Charleen putting the $200 on the table without the Alan
knowledge as well as Alan did not accept Charleen acceptance to his offer, this
will be deemed as a one-sided promise from Charleen instead. Therefore, the
$200 that was placed on the table will be consider as a gift.


Lastly, due to Charleen and Alan are brother and sister relationship
which can be seen as a social and domestic agreement, the court will assume
that both Charleen and Alan do not have the intention to create a legal


With that being said, Charleen will not be able to sue Alan on the
court as there is no enforceable contract between both parties which in result,
Charleen will lose the legal action against Alan on the court and the only
solution left for Charleen is to have mediation with Alan.


Damien v Alan


In the case for Damien and Alan, Alan lied about scoring a higher
distinction on that unit with his notes written in the textbook to sell for
some money by posting on facebook on 1st Nov 2015 and Damien that
saw the post 2nd Nov 2015 is keen to purchase the textbook from Alan
by making an agreement to pay him on 4th Nov 2015.


As we assume that Damien is Bernard`s friend and is also keen on the
same text as he shows that they both enroll into Kaplan Higher Education at the
same time which can presume that Damien is a minor. Moreover, it is a necessary
for Damien as it is needed items for his academic life. Therefore, Damien have
the legal capacity to create a contract with Alan.


Subsequently, Alan announced on his facebook wall that he selling his
textbook is an offer and Damien message him that he is keen on buying his
textbook and will be passing the money on 4th Nov 2015 as an
acceptance to Alan offer. Alan also replied to Bernard`s post stating that
‘there is an offer already’ shows that there is a meeting of minds between Alan
and Damien on having a mutual agreement already. On 4th Nov 2015,
Damien pass the $200 to Alan, which Alan told him that he will give everything
to him on 7th Nov 2015. Hence, Alan did pass his textbook and
hand-written notes to Damien.


Next, under consideration both Alan and Damien have exchange promises
to each other and they did by Alan provide the textbook and handwritten notes
to Damien for $200, as well as Damien provide $200 to Alan for the textbook and
notes. In this case we can say that they have met the condition for
consideration which is the third necessary element to from a contract.


Lastly, as Damien is just Bernard friend`s which he manages to obtain
Alan phone number from Bernard, we can assume that they are not friends which
the agreement they have is a commercial agreement. As establish in the case
study of Edwards v Skyways Ltd (1964),
both parties are intending to create a legal relation by the promise they made
to each other.


With the four elements to establish the contract, Damien will be able
to sue Alan on court for fraud. Due to Alan stating that he was able to score
higher distinction instead of credit as well as the fact that Alan know that
Kaplan Higher Education will issue free textbook to the new enroll student but
still insist of using this advantage for himself by selling it for the money to
people that didn’t know about this. Therefore, Damien will be able to sue Alan
for fraud and get compensation from Alan for the money he gave and other


Dispute Resolution


There are 2 types of alternate dispute resolution such as mediation and
arbitration. Firstly, mediation is a method to settle dispute between parties
by hiring an intermediary or neutral party to indicate the issues and helping
both parties with different opinion to communicate. (AllBusiness
Editors, 2017)
The mediator does not give opinion on what`s right or wrong between the parties
as well as not giving a solution at the end of the mediation. Hence, the
mediation is to help both parties to sort out a mutual solution for their
disputes. The pros of mediation are to save the time and money of both parties
as the time taken is much shorter than litigation as well as the process and
result are private between them. However, the cons are one of the parties may
not be willingly to cooperate or compromise to the solution of the mediation or
one may want the process and result to be publish to public. (AllBusiness
Editors, 2017)


Another alternate dispute is arbitration, which is to submit the
dispute case to the arbitrator for solution. The arbitrator will listen and
understand both sides through documents and testimony and control the process
as well as provide a solution for both parties like a trial. The pros are the
cost as it is cheaper than litigation and the time taken will be fast as well
due to the arbitrator does not have huge workload which result in quicker final
disclosure of the solution. However, the cons is that it won`t be easy to
appeal of arbitration rulings as in not much cases, the arbitrator made a
mistake which will lead to unfair decision to one of the party and it may not
be change as the court may not take over the case. (Find Law ,

Categories: Case Study


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