CLAW1001 CLAW1001 Foun Foundation dationss of o f Busi B usiness ness Law L aw – Semester Semester One, 201 20155 Problem-Based Assignment Feedback Overview: This semester’s problem based assignment asked students to formulate a response to a legal problem question containing a number of different issues. Whilst there were a number of different ways to break down the question, the allocation of marks for the assignment was based on the three contracts that were entered into by the parties, and roughly reflect the importance of each of the issues. 1. 2. 3.
Candy Candy v Blair: Contract for th e supply of coffee beans beans (8 marks) Candy Candy v Blair: Contract for the lease of the coff ee machine machine (5 marks) Candy v Ariel: Contract for the sale of business (7 marks)
Ad Additio ition nally lly, the there were 5 marks allocated marks allocated towards structure, referencing, spelling/grammar, expression, adherence to word count and other such general matters.
Candy Candy v Blair: supply of coffee beans beans It was clear in this case that an agreement had been formed between the parties. A clear offer was made by Blair which was accepted by Candy, and there was valid consideration in the form of regular payments from Candy in return for deliveries of beans from Blair. Although this was an oral contract, writing is not a necessary element for contracts of this kind and therefore writing was not an issue. Because these issues were not really in dispute, no marks were allocated for discussing offer, acceptance and consideration, and it was not necessary to discuss them. To achieve full marks in this section students needed to thoroughly discuss the following live issues: •
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Blair’s pre-contractual statement that sales would “go through the roof” The key question here was whether or not the statement was contractual. Based on the wording and o nature of the statement it was likely not stated with the intent to be part of the contract, and in any case was made prior to contract formation. The statement could have been merely a puff, or, if it was a representation made with intent to induce a o contract, the issue of misrepresentation could have been argued, though this would have been unlikely to have succeeded. Negligence or negligent misstatement on Blair’s behalf was not really an issue in this question as such o issues go beyond the scope of contract law. Intention to create legal relations It was important to realise that there may be an issue on intention to create legal relations – this was not o simply a commercial agreement due to the nature of the friendship between Candy and Blair and the fact that the agreement took place over lunch. The social setting and the relationship between the parties needed to be discussed to determine whether there was indeed true intention to form legal relations. A lot lot of stud tudents miss issed out on this this iss issue or did not engage with ith reb rebuttin tting g the the rele relev vant pres resumptio tions in o enough detail. Some students discussed the issue of intoxication, which was a creative approach, but was not the key issue here as, on the facts, the parties were not intoxicated. Blair’s post-contractual statement that he would let Candy out of the contract early Is this statement binding upon Blair? There were two approaches to this: the first was to say that the o term formed some sort of collateral contract, however it was hard to establish formation as any consideration provided by Candy would have been past. The other approach was to discuss promissory estoppel, which was spotted by most students and o generally dealt with quite well.
Overall students dealt with most of the issues in this question relatively well but few students were able to spot all of the issues.
Candy v Blair: lease of coffee machine Once again, it was clear that a contract had been formed between the parties as in this case there was a written lease agreement. Most students correctly pointed out that the signature rule applies to this contract and that Candy will be bound by it even though she had not read the contract. The main issue here was whether or not Candy could get out of the contract given that Blair left the end date of the lease blank. A large number of students argued that this was a unilateral mistake on Blair’s behalf. This was an incorrect approach, however, as for mistake to apply Blair would need to have been mistaken as to what the terms of the lease were. Clearly on the facts he was not, as he consciously made the decision to leave the end date of the lease blank. The correct approach here was to consider whether the lack of an ending date rendered the contract incomplete. It is possible that the lack of an end date for the lease would have resulted in the contract becoming void for incompleteness. Another consideration was whether, instead of ruling that the contract was void for incompleteness, a court could imply a term into the contract that allowed either termination with reasonable notice by the parties (for which there was a considerable amount of case law which could be found by researching) or whether Blair’s standard five year terms could be “imported” into the contract as an implied term. To do well in this section, students needed to discuss both the issue of incompleteness and the possibility of implied terms. Research was a key element in both of these issues.
Candy v Ariel: sale of business subject to finance The key question arising in this issue was that of the ‘subject to finance’ clause in the contract. Many students argued that this ‘subject to finance’ clause was somehow related to conditional acceptance due to its similarity to the term ‘subject to contract’, however this was an incorrect approach to take as the contract had clearly already been formed. The main issue, which could have been determined by conducting research into ‘subject to finance’ clauses, was one of whether Clause 37 operated as a ‘condition precedent’ to the contract or not, and if it did, whether or not it applied to the extent of at least compelling Candy to make reasonable efforts to obtain finance. Many students considered the precedent in the case of Meehan v Jones (1982) 149 CLR 571 in discussing this issue, but evidence of research over a variety of cases was required in order to maximise marks in this section.
Structure, referencing, etc Generally speaking the structure of the vast majority of assignments was excellent, with most students receiving 4 or 5 marks for this section. The IPAAC/IRAC methods of legal problem solving were appropriately applied by the vast majority of students and the issues were clearly split up into separate paragraphs. It is important, however, to note that there was no need to have separate sub-headings for each of the IPAAC/IRAC elements – e.g. there is no need to have a heading for “Authority” and then another heading for “Analysis” under each issue. More care needed to be taken with referencing, however, with students commonly forgetting either to italicise case names or to put full stops at the end of citations. Citing appropriate sources was also a major concern, with weaker students rarely straying beyond the textbook. Demonstrating knowledge of a variety of cases was an important aspect of this assignment. There were also a number of students whose responses suffered from poor spelling or grammar, and it is recommended that students proofread their work thoroughly prior to submitting.
