Business Law

Topics: Contract, Meeting of the minds, Contract law Pages: 4 (1916 words) Published: October 22, 2014

Assignment Question Part A
The legal issue in this question is whether Jason Miao can go back on his promise of paying the extra $5,000 to Damien, for covering the additional cost of materials and additional work needed to construct the swimming pool. Principle

The underline legal principle applicable to this situation is that ‘once an offer is complete, or in this case accepted, the offer cannot be revoked’. Doing so would constitute to a breach of contract. The offer shows a clear intention (to pay additional $5,000 on top of the original agreed amount of $30,000) of the offeror (Damien) that he intends to enter into a legal relationship with the offeree (Jason Miao). There was no further bargaining expected or mentioned, and the offeree was deemed to accept the terms and conditions stated by the offeror. Thus Damien had offered Jason Miao a bilateral offer. The acceptance of the offer was communicated effectively between both parties, and the acceptance of the offer was made while the offer was still in force (before the completion of the construction of swimming pool). Furthermore, pertaining to this case, it was clear that it is an express acceptance, in which Jason Miao clearly communicates to Damien of his acceptance vocally. Once acceptance is made, there is an agreement. Therefore, with the elements of a bilateral offer given by Damien, the express acceptance by Jason Miao, the intention to create legal relations with both parties, and the presence of ‘Consensus Ad Idem’ (meeting of minds), both parties enter into a legally binding contract. One may argue about the existing original offer of $30,000 for the construction work of building a swimming pool in Jason’s house and that constitutes to the 1st and binding legal contract. However when Damien communicated with Jason Miao in August with regards to the additional cost of materials and additional work needed to construct the swimming pool, and therefore raising the price form $30,000 to...

References: Ltd v. Miles Far East Corporation (1955) EWCA Civ 3, (1955) 2 QB 327 v Union Marine Insurance (1874) 10 Common Pleas 125
Tsakiroglou & Co Lt v Noblee Thorl GmbH (1962) AC 93, (1961) 2 All ER 179 Majeure and Frustration of Contract, Second Edition by Ewan McKendrick
First published (1991) by Lloyd’s of London Press Ltd
Assignment Question Part B
John Weston Foakes v Julia Beer (1884) UKHL 1, (1881-85) All ER Rep 106, (1884) 9 App Cas 605; 54 LJQB 130; 51 LT 833; 33 WR 233 Express v Kafco (Importers & Distributors ) Ltd (1989) QB 833 Investment Co v Texas Bank (1982) Q.B Law, by Robert W. EmersonPublished by Barron 's Educational Series (2004)
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