>> Business Law and Ethics
HI6027: BUSINESS AND CORPORATIONS LAW
Question No 1:
Consider the following situations and indicate whether consideration is present and whether Jack has an enforceable agreement:
a) Jane is going overseas and she offers to give her Lotus Super 7 sports car to Jack. The market value for this type of vehicle in good condition is around $25 000. Jack accepts.
b) Jane offers to sell Jack her Lotus Super 7 sports car for $25 000. The market value for this type of vehicle in good condition is around $25 000. Jack accepts.
c) Jane offers to sell Jack her Lotus Super 7 sports car for $2500. The market value for this type of vehicle in good condition is around $25 000. Jack accepts.
Question No 2:
A shipbuilder had contracted to build a tanker for North Ocean Tankers. The contract was in US dollars and didn't contain any provisions for currency fluctuations. Approximately halfway through construction of the ship, the United States devalued its currency by 10 per cent. As the shipbuilder stood to make a loss on the contract, it demanded that an extra US$3 million be paid or it would stop work. The buyer reluctantly agreed under protest to pay, as he already had a charter for the tanker and it was essential that it be delivered on time. The buyer didn't commence action to recover the excess payment until some nine months after delivery. Will the buyer succeed in recovering the excess?
The crux of all the questions present is whether the consideration is present or not and whether a contract exists or not.First of all Consideration is a part of contract to be valid .Contracts has four components that is an offer from the other party,the acceptance which is followed by the offer ,the promise and a consideration.Common law was present and contract is formulated by them. A contract can be defined as an agreement, which binds both the parties and supports them with what to do and what not.It is enforceable by law.In short words we can say contract is the agreement made and the agreement, which is enforceable. It can be written in oral as well as in written form.