Business law Apply the law of contract to a given fact situatioin.

In New Zealand Unit- 11633 National Diploma in Business Level-5 Student Assessment Student nameSubmitted toDue DateSiddharth Laetitia Olivier 13/November/2013 Course Name- Diploma in Business level-5

Business law
National Diploma in Business (Level-5) Task-1 Ques-1- Provide a detailed definition for a contract. Ans-1- A voluntary, deliberate and legally binding agreement between two or more competent parties. Contract comes in all shapes and sizes. Some are verbal, some written. Some are formal and some are informal. They all have three features in common: You make someone an offer They accept it And you promise to give something- usually money- in return for what you are getting. The legal term for this promise is consideration

Ques-2- Outline the 6 essential ingredients for the making of a legal contract and discuss how these make it different from any other forms of agreement. Ans-2 Before a contract can be made these essential elements must be existing:Intention to create legal relations Offer and Acceptance Formation of the contract Consideration Contractual capacity Legality of object validity of the contract Reality of consent

a). Intention to create legal relation Intention to create legal relation means that intention of selling anything should not be wrong in simple words we can say that the person selling anything to anyone, the person selling should not give wrong description about what the person is selling. b). Offer and Acceptance- Offer and acceptance means that what we give the offer to person whom we are selling anything and acceptance means that the person who is buying anything that we are selling should accept the offer we have made to him. c). Consideration consideration means that the person who is selling the object should get something in return of what he/she is selling that can be money or any other object instead of what he/she is selling.

d). Contractual capacity Contractual capacity means that the person who is signing the contract should be mature enough to sign the contract. The person who is signing the contract should not be under age the person should 18+ and the person should not be mentally upset. E). Legality of object Legality of object means that what we are selling should be legal that object should not be illegal like drugs or anything. f). Reality of consent Reality of consent means that the person who is signing the contract should be in full concentration or he/she should know what he/she is signing. The person who is signing should not be drunk or have not taken any type of drugs. Intention to create legal relations.

Offer and Acceptance

Consideration

Formation of the contract

Validity of the contract

Contractual capacity

Legality of object

Reality of consent

Ques-3- What is the difference between a simple contract and deed? Ans-3Deed A deed is legal instrument used to convey title to real estate. It is a special type of binding promise or commitment to do something. Contract A contract is an agreement.

- A voluntary, deliberate and legally binding agreement between two or more competent parties. Both parties to a contract are aware of the terms and conditions. An agreement can be any mutual understanding between parties that sets their rights and duties regarding any issue they wish to memorialize.

The other parties to the deed may not even know anything about the deed. A deed is legally instrument that is used to convey interest in real property and that at common law must be signed, sealed and delivered.

The promise must be put into waiting ina formal document called a deed in order for it to be enforced.

A contract may be enforceable it is made in writing, verbally or implied by action.

Ques-4- Jass and Neil want to employ someone to manage their dairy farm. Discuss what legal guidelines all parties to this contract will need to follow regarding their intention to enter into a legally binding relationship. Ans-4 at this stage, a contract has not been made. Because Jass and Neil does not yet know all the details of the contract. This is just an intention to create legal relation. This is just an intention because jass and Neil both has shown an interest in employing someone for their dairy farm and they dont have an idea about what terms and conditions are. In this situation there is no contract. If they both were happy with terms and condition of that employ then they may offer employ to enter into contract. So there is no contract in this because its only an intention to create legal relations. Ques-5 Your brother offer to pay you pocket money if you do his laundry. You agreed to do this. Is this is a proper contract? Ans-5 Contract- a voluntary, deliberate and legally binding agreement between two or more competent parties. Contract comes in all shapes and sizes. Some are verbal, some written. Some are formal and some are informal.

No according to my opinion there is no proper contract because offeree doesnt informed about the acceptance and agreement of the term. He/she only accept the offer given by his brother but not must aware about terms and conditions. So a proper contract is not made. Proper contract must be made only when Offerer gives offer to his client. Client accepts his offer. Once the client is informed about the acceptance and agreements. A contract is made.

Ques-6- Ivan has applied for the job of managing Jass and Neils dairy farm and has been offered the terms and conditions of the job. Discuss what rights Danny has before accepting, as well as what it will mean for Ivan if he accepts these terms and conditions. Ans-6 In this Jass and Neil wants to employ someone for managing his dairy farm and they both offer an job to people and after that Ivan has applied for the job because the terms and conditions that Jass and Neil offered for the people its related to Ivan Qualification and Experienced. But still Jass and Neil didnt accept his offer of job because they dont much aware about his qualification and skill firstly Jass and Neil has to read all the information given by Ivan is related to terms and condition of the job or not. If they accept his offer so it will mean for Ivan that now he is in a contract because Ivan has informed about terms and agreement of the job. This is known as proper contract. 1. Ques-7 Facts a) Monica offered to sell her house to Tom for $ 100,000. b) Two days later Tom made an offer to buy the house for $95,000 c) Monica told Tom she wanted 2 days to think about his price. d) The following day Tom agreed to buy the house for $ 100,000 ISSUE Ans-7 (i) consider the above facts and advise whether there is a contract based on offer and acceptance. Offer and Acceptance- Offer and acceptance means that what we give the offer to person whom we are selling anything and acceptance means that the person who is buying anything that we are selling should accept the offer we have made to him. So in this there is no contract based on offer and acceptance because firstly tom is not likely to pay the original amount but after 2 days he like to pay that amount. Tom accepts the offer but not informed about terms and agrees. (ii) Explain what is the legal significance, if any, of each sentence in the fact situation above.

In this situation firstly Monica offered to sell his house to Tom but tom made an counter offer because he doesnt like to pay original amount and after heard this Monica create intention about this contract but on same time Tom agreed to pay that amount because Tom like that house. So in this all the formation of contract was present. (iii) If is your answer in (i) above is that there is no contract which of the 6 elements are missing? In this all the three element related to validity of contract were missing. Because Monica doesnt tell the validity of his contract that she made with Tom. Ques-8. Consider the following facts and whether Maggie can claim the reward Ady loses her handbag which has $10,000 in it. She immediately offers a reward of $ 500 to the person finding her handbag. Maggie finds the handbag but does not know about the reward. She returns the handbag to Ady. Two days later she finds out the reward and demands the $500 from Ady. a. Does Ady have a contractual obligation to pay $500 reward? Ans-8 No Ady doesnt have to pay reward of 50$ to Maggie .He made an offer for finder of the hand bag because in his hand bag there is too much money which is so important for her. Most important thing is that Ady knows about reward but Maggie doesnt so but after 2 days Maggie ask Ady to give her Reward so its not liable to pay reward at that time because he got his bag and the talk is about 2 days later. How does past consideration apply in this case? Past consideration is not valid form of consideration. There is no need to pay consideration. If they received the benefit before request for consideration from other party. So past consideration is applying in this case when Maggie knows about reward she calls Ady after 2 days so its not valid form of consideration. c. What is the consideration? Finding of Ady handbag. Consideration is the concept of legal value in connection with contracts. It is anything of value promised to another when making a contract. It can take the form of money, physical objects services, promised actions.

Ques-9. William smelled of alcohol and was clearly very drunk when he entered Yutas Mobile phone shop. However, the sales person at the shop still signed William up who was very keen to opt for the most expensive package that they have available. Discuss the term capacity and whether the contract is legal, based on Williams condition at the time he entered into the contract.

Ans-9 According to Protection of Personal and Property Rights Act 1988 its not be a contract its illegal because William is mentally infirm because he enters Yutas Mobile Phone shop while he was clearly drunk and smelled of alcohol. If a person is not subject to Property order then the common law will apply under common law a person of unsound mind may avoid any contract entered into during a period of in capacity if: The person was not incapable of understanding the general nature of what he or she was agreeing to at the time of the contract. The other party must have known or had reason to believe that the person was of unsound mind.

So under contractual capacity such a contract must be invalid. Ques-10 - A boy aged 15 opens an account with a shareholder for buying and selling shares. By 17 he has a debit balance of $ 30,000. The approved overdraft limit is $ 10,000. The share brokers want repayment and sue him in court. ISSUES (i) Can the share brokers succeed under the Minors contract Act 1969 as he is only 17?

Ans-10 Only when share brokers succeed in this type of contract when someone of minor aged wants to open an account for buying shares or then the share brokers take some proof from them of paying that amount because in this age nobody can afford high amount so according to me in this case share brokers doesnt succeed because he dont take any proof or responsibility of his belongings. (ii) What they have to show in order to succeed in court?

Share broker has to shown some written proof which was given by a boy at the time of opening of account if he has some proof so definitely he will get succeed in court. Ques-11- A gang leader decides he would like a new car so he forces his girlfriend to hand over her a. Discuss how duress may be established? Ans-11- Duress means force/pressure/threat/coercion. If somebody force another to pay his rent or to buy that car for him otherwise I will hit you punch or kill your son so in this case duress will be made. Duress can include:

Duress to the person- in this physical violence or the threat of physical violence or threat of imprisonment consists. Duress to goods- this formed is occurred when the victims goods are unlawfully seized, damaged or destroyed.

Economic duress- consists of threats affecting the victims economic interests or wellbeing.

In this a same thing happened liked a gang leader decides to force his girlfriend to hand over a new car without any money paid and ask him if you dont do that I will beat you by weapon so in this type of cases duress must be present. Ques-12- A ski instructor wanted to sell his skis and talked to one of his clients about how good and skis were. The client believed him and paid him $ 800 for the skis. The skis turned out to be for expert skiers only and the client could not use them very well at all. The client brought them back and said that the ski instructor had used undue influence to get him to buy them. a. Discuss how undue influence may be established. Ans-12- Undue influence means unwarranted, unnecessary or unjustified. Undue influence occurs when one party uses the influence that they have over the other party to obtain an undue benefit. For succeed of undue influence, the victim must show that the contract resulted from the undue influence of the other party. This may be uprise in two ways: Through a relationship of trust and confidence Actual undue influence

In this question a ski instructor use trick to convince one client by questioning related to our ski products. After that client believes in him that its good for us or not so much expensive so directly client pay $800 to an instructor for skis. When he use ski he fell that its only made for expert users so he brought them back because the product of ski he buy from an instructor is for expert level users only. So on that basis client believes that he was influenced by instructor to buy this ski product. Ques-13- PJ is selling a part of his ski board manufacturing business to Allen. In return, PJ wants to restrain Allens ability to trade as a professional ski board maker anywhere in New Zealand for up to ten years. Discuss what parameters must be met for this to be a legal restraint of trade agreement. Ans-13- Restraint of trade is a term in contracts that stops someone from conducting some sort of business activity, profe+

ssion or employment. Section 8 of the Illegal Contracts Act 1970 covers provisions in contracts which constitute unreasonable restraint of trade In this question PJ is selling his ski board manufacturing business to Allen and in return he wants from Allen to do work as a professional ski board maker in any big company of New Zealand for 10 years. So it means PJ were bounding Allen in a contract for 10 Years so Allen doesnt have chance to do any business except making ski products. So this is known as restraint of trade. Ques-14 Bill is an American tourist who loves to go skiing. He arranges with Jason, a NZ ski instructor, to be guided up a mountain in Arthurs pass National park for $ 400. Jason knows that he is not allowed to charge money for guiding people in the National park but has never been caught before. While skiing down, they meet a park Ranger, who Bill tells that Jason is guiding him in the park for $ 400. The park Ranger tells Jason off, but lets him go with only a warning. Bill is upset with Jason and says he will not pay Jason. Jason wants his money. Required: (i) Name the legal issue raised and

Illegality, it is the main component of legal issue. (ii) Describe how it should be applied to the situation In this situation law states that its an illegality because Jason is charging $400 as an extra as a part of his pocket money not as his salary. His job is to give instruction to people who came in Arthurs Pass national Park for skiing. Jason knows that its illegal to take money from customers as a pocket money. When Bill knows about that Jason his trying to playing game with him by charging $400 as a double tipping

he is upset with Jason so Bill decides not to pay amount $400 to Jason because its illegal to take money from people for her benefit as a tipping. Ques-15- Mia has entered into a credit agreement with TOTO cars. Discuss the eight rules necessary under CCCF Act that that all consumers credit contract arrangement must take. Ans-15-The eight rules that must be necessary under CCCF Act are-

Disclosure
Independent legal advice

Interests
charges

cancellation

CCCF

Fees

Credit
Fully

Payments

payment

Disclosure- The action of making new or secret information is known as disclosure. Interests charges- An amount of money paid by borrower as interest on a loan. Fees- Money paid as part of a special transaction. Payment- An amount paid or payable. Fully Payment-The paid of a money that is owned on a single account that, if paid will reduce the account to a zero balance. Credit- Ability to obtain goods or services before payment that based on trust in which payment should be paying in future. Cancellation- The action of cancelling something that has been arranged or planning Independent Legal Advice- Legal advice is that which is proposed by lawyer for contract.

Ques-16- Monica rents storage container for a term of 2years. One night after six months the storage got flooded and Monica loses everything. Her Landlord insists she pays the rest of the rent for the remaining term and commences court proceeding asking for specific performances on the contract. ISSUES:

1. What is a specific performance? Is it an appropriate remedy in this situation? No, its not an appropriate remedy because specific performance is order of the court requiring performance of a positive contractual obligation. 2. Describe the legal concept of frustration and whether it applies in this situation. Where a contract governed by the law of New Zealand has become impossible of performance or been otherwise frustrated, and the partys reason has been discharged from the further performance of the contract. 3. What does the Frustrated Contract Act 1944 say about this situation?

This Act shall apply to contracts to which the Crown is a party in like manner as to contracts between subjects. This Act shall not apply any charter party

any contract of insurance Any contract related to Sale of Goods Act 1908

Ques-17- Read the following situation and answer the two issues that are identified from the given facts. FACTS 1) Yuta agreed to decorate Yvonnes flat for $750. 2) Work was not completed but defects amounted to only $55. 3) Yvonne refused to pay anything to Yuta. ISSUES a) Was there substantial performance in this case? No there is not a specific performance. In this case specific performance is that where court orders a party to do something under the terms of contract. This is not proper contract because discussion is between them and court doesnt know about that. Yuta agreed to decorate Yvonnes flat on his own opinion she didnt receive any offer from Yvonnes or from Court. So no substantial performance in this case. b) Describe the rules applied by courts in substantial performance proceedings. In this type of substantial cases firstly court offers a party to do something under the terms of contract. This remedy is not use very often. It is restricted to areas of breach of contract such as contract for sale and purchase of land and unique goods. So at this time court can make an order for sales. Mostly court gives order for injunctions and specific performance in that type of cases. Ques-19- Describe the difference between specific performance, injunction and relief under the contractual Remedies Act 1979.

Ans-19 - Specific performance- This is an order of the court requiring performance of a positive contractual obligation. Specific performance is not available in the following circumstances: Damages provide an adequate remedy. Where the order could cause undue hardship. In general the court will only grant specific performance where it would be just And equitable to do so. Injunction-An injunction is an order of the court requiring a person to perform a negative Obligation. Injunctions fall into one broad categories: Prohibitory injunction, which is an order that something, must not be done. Relief- A felling of reassurance and relaxation following release from distress. In other words its a cause or occasion for such a felling. Ques20- Evan purchased an apple orchard which had 1000 apple tree for $300,000. Mia told Ivan that although the plants were only 2 years old they would be able to harvest apple fruit in 4 years. Before the sale Mia had sprayed the tree with the wrong fertilizer and the tree died. ISSUES 1) Is there a misrepresentation in this case? Ans- Yes, there is an misrepresentation in this case because Evan purchased an orchard from his friend Mia and he pay $300,000 bucks to Mia for purchasing of apple. But before sale what Mia did she have sprayed the tree with the wrong fertilizer which results in damage of tree. Its related to Damages for misrepresentation. Damages for misrepresentation (1)If a party to a contract has been induced to enter into it by a misrepresentation, whether innocent or fraudulent, made to him by or on behalf of another party to that contract he shall be entitled to damages from that other party in the same manner and to the same extent as if the representation were a term of the contract that has been broken; and 2) Describe the remedies that may be available to the Plaintiffs pursuant to the Contractual Remedies act 1979. Ans-If a contract expressly provides for a remedy in respect of misrepresentation or repudiation or breach of contract or makes express provision for any of the other matters. Remedies are;-

Damages for represena tion

Recovery of damages

Remedies

cancellation of contract

Rules applying to cancellation

3) What damages might the Ivan be awarded and what steps do they have to take to mitigate their loss? Ans- Mia has to pay back an amount of 300,000$ bucks to Ivan as a recovery of damages that Ivan paid to him while purchasing apple orchard. To mitigate his loss Ivan has to ask Mia that she should pay back his whole amount if Mia refused to do this so Ivan has authority to go to court to mitigate his loss from Mia. Ques-21 Paramjit works as a legal assistant for a law company that files immigration related matters. He signed an employment contract that on termination he would not complete with in preparing immigration files for 2 years within 5 kilometers premises. Paramjit had an argument with the director of the company and left his employment. He opened an office within 3 kilometers of his old office. ISSUE: a) Describe the rules applied by the courts in restraint of trade proceedings. Court should apply injunction regard to Paramjit because Paramjit was restraint by director of the company. b) What is an injunction and is it an appropriate remedy in this situation. Injunction- An injunction is an order of the court requiring a person to perform a negative obligation. Yes its an appropriate remedy in this situation like Paramjit breaks contracts with his company and after that he opens his own old office. So this is known as injunction.