Lean Operation

Topics: Common law, Contract, Law Pages: 8 (2155 words) Published: October 4, 2011

Legal Issue
Discussion of the legal principles
“… agreement can be resolved into an offer by one party (the offeror and an acceptance of that offer by the other the offeree. Contract is an agreement between two or more people.
Discussion of the legal principles
One of the parties must have made an offer
The offer must have been communicated to the offeree
The offer must not have been revoked/ have lapsed
The offer must have been accepted in the manner (if any) prescribed by the offeror The person who accepted the offer must be someone whom the offeror intended to accept The offeree must have communicated the acceptance to the offeror in the manner, within the time, and at the place prescribed by offeror

Application of the legal principle to the facts
Refer to the Bloom v American Swiss Watch where the court held that Mr Bloom claiming the award had only heard of the offer after he had given the information to the police. Mr Bloom was unaware that American Swiss had place an add in the newspaper. American Swiss therefore did not have to pay Mr Bloom the award because the offer was not communication. The question does not state whether Bob knew the advert prior giving the information to the police or not. If Bob was aware of the reward prior giving the information to the police, Mr. Diamond is liable to pay him the reward of R1000. However if Bob only knew about the reward after he gave the information to the police, Mr. Diamond is not forced to pay the award to Bod. Since the offer is not communicated, therefore there is no contract existence.

Question 1B
Identify the legal issue
Discussion of the legal principles
Duress is a voidable contract. Duress is the situation where the/or one of the parties it either (offeror or offeree is persuaded to conclude a contract through the following was: * Threat
* Violence
* Fear

Requirements for duress

* The fear must be reasonable
* The fear must be caused by a threat of “considerable evil” and directed at the contracting party or his/her family or property * It must be a threat of immediate danger which cannot be averted * The threat or intimidation must be contra bonos mores

* The moral pressure which is exerted, must cause damage

Application of the legal principle to the facts.
Since John is threatening Margret to tell her husband about their relationship. The threat that John is promising to perform by telling Margret’s husband is not unlawful. However the threat became unlawfull when John is claiming or forcing or pressurizing Margret to sell him, her car at low or cheaper price of R50 000 instead of R350 000. John is using a threat to extort something which he is no entitled to. The duress will pass if Margret has a proof that the threat was inevitable.

Question 2
The contract of sale is Negligent Misrepresentation.
Discussion Of The Legal Principles
Misrepresentation is a false statement of fact that the effect of encouraging someone into a contract. Misrepresentation consists of three different types. Misrepresentation does not only need to made verbally but it can also be made of no articulated behavior. The first one is Intentional (Fraudulent) misrepresentation which is made with the meaning of influence the other party to conclude the contract (voidable contract). The second one is Innocent misrepresentation. This is a misrepresentation of truths that are really untrue made by person honestly believing that they are true (voidable contract). The last one is Negligent misrepresentation. This is the untrue representation of truths while the person making the illustration thinks that he is being truthful, but without first having discovered the truth, as the law assumes the reasonable person to do (voidable contract)

The requirements of misrepresentation as follows:
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