Corporate Law Unconditional Communication Term

Question: Discuss about the Corporate Law for Unconditional Communication Term. Answer: 1. Issue Whether there is any valid contract between Jane and Sarah? Laws For a contract to be established there has to be valid offer and acceptance. Unless the offer and acceptance of the offer on unconditional terms are communicated by each party in the contract to the other party, communication of the same cannot be said to be valid and thus no contract is established between the parties in these circumstances (Air Nelson Limited v EPMU, [2010]). Application In the given situation, invitation to treat was given by Jane for the sale of the lounge suite for $3,500.00. Offer was given by Sarah to buy the suite for $2,800.00. Counter offer was given by Jane that she could sell the lounge suite for $3,000.00 and not less. This counter offer was not accepted by Sarah there. Instead she communicated to Jane that she would let her know by the midday of the subsequent date if she wished to buy the lounge suite for the said amount of money. However, Jane in the given time found another better offer for her suite and hence sold the product. There was no valid contract between Sarah and Jane in the matter because acceptance of the offer was not communicated on absolute terms by Sarah to Jane and hence Sarah was at will to sell the product for a better offer. Conclusion It can be said in conclusion in this matter that because of non communication of acceptance, there is no valid contract between Sarah and Jane. 2. Issue Whether Jason will succeed in a claim for the $10,000 bonus from QB? Laws It has been held that a general rule to perform an existing duty is no consideration. A qualification to this rule is said to have arisen when a promise is done when a bonafide compromise is made to this and thereon a disputed claim arises and makes the promisor believe that those circumstances actually have come into existence (Gustav Co Ltd v Macfield Limited, [2008]). The essence is the presence of an honest belief and there should not be any frivolous or vexatious claim. Application CFH was supposed to deliver the 12 rolls of carpet to QB but noted that they would fail to do so. To make them deliver on time, Mark promised them a bonus and out of this promise, CFH in fact delivered the products on time. However, Mark later denied the bonus to them. CFH had certain problems with their machinery and hence they were late. But for acquiring the benefits, they did faster delivery of the product. Their innocence is proved beyond doubt in this matter. Frivolous claim was raised by Mark in the matter. He could have incurred losses but he had other options in those circumstances like sing for breach of contract or acquiring damages for his losses. However, he chose this method. Hence, Jason is entitled to receive the amount in the given matter. Conclusion It can be said in conclusion that Jason will succeed in a claim for the $10,000 bonus from Mark. Issue Whether Jacob is entitled to continue making the loan payments? Explanation Mortgages, rents, taxes, utility bills and loan repayments are considered to be priority debts and these are payable either by the person concerned or the guarantor thereon. No payment of priority debts can result in home eviction or electricity cut off or even bar on essential items (Anderson v R CIV 2011-485-1232, [2011]). Jacob had purchased his Mini Cooper on credit from City Car Sales Ltd. he was sure that once he makes the down payment, he would be able to repay off his debts because of his monthly wages earned. Hence, even if he ends up losing his job, he is entitled to maintain his payments for the loan. This is because the loan was independent of his job and was not in proximity with the work he was doing. It can be concluded saying that Jacob is entitled to continue making his payments for repaying his loan. Issue Whether Jacobs father has to pay now or not? Explanation Once the borrower fails to repay his loan, the guarantor steps into the shoes of the borrower and the lender has rights to extract the payment from the guarantor when default is made by the borrower in repayment (Boisen v Taranaki Insulation Services Limited, [1987]). In the given situation, Jacobs father had agreed to be the guarantor for his sons loan in repayment for the car that he had bought. Though he was initially resistant, yet he agreed to be the guarantor and communicated his willingness. Thus, now if Jacob fails in making the necessary payments, his father is liable to pay for the loan because he is the guarantor. Issue Whether the contract between Fred and James is binding? Explanation Insanity or mental incapacity to take decisions is a valid ground that makes a person not eligible to enter into contract. However, if at the time of making the contract, the person was of sound mind and no coercion or undue influence is being cast on the person when he is making the contract, then the contract stands out to be binding under ordinary circumstances (Marlborough District Council v Altimarloch Joint Venture Limited and others, [2010]). Fred is elderly and James only knew that he was sleep walking one night. However, his house was valued at $400,000.00 and he agreed to pay him $420,000.00 for the house. Thus, it is clear that he is not using any coercion and is not making any undue advantage of his position. There is also no proof indicating that Fred was not in sound mental health when he was signing the contract. Thus, the contract is valid. The contract between James and Fred is binding. Part 5.1 Issue Whether David has a right to cancel the contract and claim his deposit back? Laws Every contract has certain terms and conditions. Terms are those which form a part of the contract and if they are breached, the party can sue the defaulter. However, conditions are those terms in a contract are integral for the existence of the contract and their violation can render the contract void (Elders New Zealand Limited v PGG Wrightson Limited, [2008]). Beach of conditions result in recession of the contract and the defaulter becomes liable to make good the losses. Application David had made it clear before Hugh that if the consent with regard to the garage has not been taken by him, then he was not interested in buying the house. To this, Hugh has clearly told him that he had obtained all the necessary permissions from the council. To take benefit under the caveat emptor rule, David enquired and found that the consent was not obtained and thus, the garage could be pulled down. Thus, there is breach of condition and the contract becomes void. Conclusion David has a right to cancel the contract and get his deposit back. Issue Whether David could claim damages if he wanted to keep the house? Laws The law states that for breach of condition, the defaulting party becomes liable to indemnify the innocent party for the losses incurred thereon. Application In the given situation, David has performed his part of the obligations under the contract. He also paid the consideration amount and was eager to buy the house after making all terms and conditions clear. However, he realized that there were breach of conditions but those could be satisfied. If because of his medical condition, he wished to retain the house, he could claim for damages from Hugh for breach of conditions. Conclusion Yes, David can claim for damages if he retains the house. All employees are agents of their employers and under the shoes of the agent, they have a fiduciary duty to act loyally for their employers benefit in all matters that are connected with the relationship of the agency between them (Rabson v Shepherd, [2016]). This duty implies that Harry Hanks should not have acted in any way that could amount to competition with Kiwi Tours or could result in economic losses to Kiwi Tours. If the employers interest is harmed in some way or other because of the acts of the employee, that amounts to a breach of fiduciary duties. The fiduciary duties that have been breached are as follows: Hanks has placed himself in a position of conflict of duties that are related to Kiwi Tours and the fiduciary interests because he is deriving the profits personally which would otherwise have been accountable to Kiwi Tours (Siemer v Fardell, [2008]); Kiwi Tours is the principal here and Hanks is carrying on his business under the name of the principal though he is not accounting the accrued profits to them. Thus, he is misusing the trust of the principal and breaching his fiduciary duties (Siloata v R, [2004]); He has been acting for his own benefits without the consent of Kiwi Tours in the matter. The remedies that are available to Kiwi Blast Tours Ltd are as follows: The employment with Hanks can be terminated at the will of Kiwi Tours (Prakash Mani v The Queen [2010] NZSC 6, [2010]); Damages may be recovered from Hanks for all the profits that he has earned under the name of Kiwi Tours; Damages may also be recovered from Hanks for the loss of profits caused to Kiwi Tours; Hanks may be made accountable to Kiwi Tours for all gains acquired by him so that oter remedies may be identified. References Air Nelson Limited v EPMU[2010]NZSC p.53. Anderson v R CIV 2011-485-1232[2011]NZCMAC p.1. Boisen v Taranaki Insulation Services Limited[1987]NZArbC p.9. Elders New Zealand Limited v PGG Wrightson Limited[2008]NZSC p.30. Gustav Co Ltd v Macfield Limited[2008]NZSC p.47. Marlborough District Council v Altimarloch Joint Venture Limited and others[2010]NZSC p.82. Prakash Mani v The Queen [2010] NZSC 6[2010]NZSC p.6. Rabson v Shepherd[2016]NZCA p.446. Siemer v Fardell[2008]NZSC p.9. Siloata v R[2004]NZSC p.11.