Business Law Case Studies
Problem 1
a) Can Tim sue his father Jack on the basis that the parties intended to contract, and that sufficient consideration was applied?
b) The relevant rules are every simple contract must be supported by consideration, a promise to fulfil the terms of a contract is not always good consideration, and the rule that an agreement that is commercial in character can amount to a binding contract
c) Todd v Nicol [1957] SASR 72 (Supreme Court of Australia)
d) Yes, Tim might be successful in court if it can be proven that Jack provided sufficient consideration in the form of a promise to lend Tim the $50,000, and if clear evidence of intent to contract can be determined, as was determined in Todd v Nicol. Both parties provided consideration in that Jack promised to lend Tim the money, and Tim promised to buy his father a new computer. This could lead to Tim being successful in court. However, if the court were to determine that the arrangement was domestic in nature and that the parties did not in fact intend to contract, then Tim would not be successful.
Problem 2
a) The issue is whether Bonnie can sue Bryan for breach of contract, when the original contract was made in the past, without any discussion of iTunes.
b) The relevant rules are the rule that any warranties must be sought and given prior to the making of the contract, and the rule that once the contract is made, it’s too late to change the terms unless new consideration is provided.
c) Roscorla v Thomas (1842 114 ER 496; 3 QB 234 (Queen’s Bench Division)
d) No, Bonnie would not be successful in court, as the original contract was agreed upon without discussing iTunes. Bryan merely saying that the computer had iTunes installed after the original contract was agreed upon does not equate to fresh consideration. As addressed in Roscorla v Thomas, assurance was given after the contract was agreed upon and therefore, the plaintiff was unsuccessful in court. The same would apply to Bonnie’s case.
a) Can Tim sue his father Jack on the basis that the parties intended to contract, and that sufficient consideration was applied?
b) The relevant rules are every simple contract must be supported by consideration, a promise to fulfil the terms of a contract is not always good consideration, and the rule that an agreement that is commercial in character can amount to a binding contract
c) Todd v Nicol [1957] SASR 72 (Supreme Court of Australia)
d) Yes, Tim might be successful in court if it can be proven that Jack provided sufficient consideration in the form of a promise to lend Tim the $50,000, and if clear evidence of intent to contract can be determined, as was determined in Todd v Nicol. Both parties provided consideration in that Jack promised to lend Tim the money, and Tim promised to buy his father a new computer. This could lead to Tim being successful in court. However, if the court were to determine that the arrangement was domestic in nature and that the parties did not in fact intend to contract, then Tim would not be successful.
Problem 2
a) The issue is whether Bonnie can sue Bryan for breach of contract, when the original contract was made in the past, without any discussion of iTunes.
b) The relevant rules are the rule that any warranties must be sought and given prior to the making of the contract, and the rule that once the contract is made, it’s too late to change the terms unless new consideration is provided.
c) Roscorla v Thomas (1842 114 ER 496; 3 QB 234 (Queen’s Bench Division)
d) No, Bonnie would not be successful in court, as the original contract was agreed upon without discussing iTunes. Bryan merely saying that the computer had iTunes installed after the original contract was agreed upon does not equate to fresh consideration. As addressed in Roscorla v Thomas, assurance was given after the contract was agreed upon and therefore, the plaintiff was unsuccessful in court. The same would apply to Bonnie’s case.