law case study

Topics: Contract, Breach of contract, Law Pages: 7 (2210 words) Published: May 24, 2014

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Khan

QUESTION
On 1 October, Buyer saw a courier van with a FOR SALE sign that included a telephone number and a price of "$25,000 cash." That night, Buyer called Seller. Buyer explained that he would have to borrow the money but could get it next week. Seller provided his address to Buyer and told Buyer, "If you want the van, mail me a cheque for $5000. Pay the balance by1 November." Later that day, Buyer mailed Seller a $5000 cheque. The next night, at Buyer's 18th birthday party, Buyer discussed the deal with Investor. After buying the van, Buyer planned to start a document courier service, and he had spent $1200 on business cards, flyers and a cellular phone. Buyer projected a profit of $50,000 in the first year. Investor was impressed with Buyer's plans and agreed to loan Buyer $20,000 to buy the van. On 25 October, Buyer called Seller to pick up the van. Seller refused and said someone had offered him $35,000 for the van. Seller had not cashed Buyer's cheque as yet. Seller offered to deposit the cheque and give him the van if Buyer would pay Seller $20,000 now plus $400 a month for 25 months. Buyer laughed and said, "Yeah, right." But without a van, Buyer would not be able to start his courier service. Investor wants to hire you to give Buyer legal advice. Prepare a memorandum addressing the following matters in detail, and including relevant case law to support your arguments: What are Buyer's potential claims against Seller? What are Seller's potential defences? Who is likely to prevail in the event this case goes to court? Assume Buyer prevails in his lawsuit against Seller.  What damages is Buyer likely to receive from the court? SUMMARY AND RELEVANT FACTS

In this case Buyer is plaintiff whereas Seller is defendant. October 1:
Buyer saw courier van FOR SALE with a telephone number at the price of $25000. Buyer called seller later at night and told him that he could borrow money by next week. Seller demanded $5000 by cheque and to pay remaining by November 1. Buyer mailed the cheque. October 2:

Buyer became a major. Buyer spent $1200 on courier service advertisement. Investor loaned buyer $20,000. October 25:
Seller refused as he had gotten a better offer of $35,000.Seller offered to deposit the buyer’s un-cashed cheque on conditions for the buyer to pay $20,000 for van + $400 for the next 25 months. Buyer refused his new offer.

ISSUE(S)
The main issue is this scenario is whether it is a valid contract or not. If yes, then what are the rights and damages available to buyer on breach of contract by seller? The following sections of Australian contract law should be satisfied in order to make this contract valid. (see below) These elements need to be explored to determine whether it is applicable.

RULE/ RELEVANT LAWS
All the agreements are contracts if they are made by the free consent of the parties competent to contract, for a lawful consideration and with a lawful object and are not expressly declared to be void. The person making the offer is known as the offerer, proposer, or promisor and the person to whom it is made is called the offeree or proposee. When the offeree accepts the offer, he is called the acceptor or promise. When at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing , or promise to do or to abstain from doing something, such act or abstinence or promise is called a consideration for the promise. Every person is competent to contract if he

is an age of majority,
Is a sound mind,
And is not disqualified from contracting by any law to which he is subject. APPLICATION
A contract is formed valid if there is an offer, acceptance and consideration. FORMATION OF THE VALID CONTRACT
OFFER VS. INVITATION TO OFFER
There are some kinds of activities which appear to be making offer but legally...

References: (Gillies, P. (2004). Business law. (12th Ed.) Chapter 8, page 325)
Gibson, A
[Routledge v. Grant, (1828) 4 Bing. 653] [2]
Defendant (D) offered to buy plaintiff 's (P) house for a specific price with a definite answer to be given within six weeks
[Lesile V. Shiell, (1914) 3 K. B. 607][4].
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