Business law Coursework Example | Topics and Well Written Essays - 2250 words

Business law - Coursework Example Most contracts generally pose no major problems as they address the simple interchange of goods from the seller and cash from the buyer. However, there are contracts that could get complicated and pose serious consequences. The chances of this happening are therefore minimized if the parties contracting understand the concept of what they are agreeing to, the rights, the obligations and the how to foresee potential problems. Under law, a contract is a legally binding promise or set of promises between two parties (Young, 2010), in this case Simon and Lady Gaga. However, there are certain contracts that must, by law be in writing. Examples include insurance contracts or contracts that involve the sale of land. Verbal contracts have one main shortcoming. Whenever there is a dispute over the terms of the contract, it may be very difficult to prove the terms and conditions on which the contract was founded. Parties may deliberately or accidentally forget what they had agreed to. In such a situation, it would be Simon’s word against Lady Gaga’s in the case of a breach. It would therefore be advisable for Simon to enter into a written contract. The foundation of the law of contract is based on a wide body of equity and common law. In order for a contract to be legally binding, there are several requirements that must be met. These were developed under the principles of the common law (Fray & Frey (2001). They are: agreement, consideration, intention, capacity, and legality. These are the requirements on which my advice to Simon is based. Agreement The law considers the distinct aspects of an agreement in a contract. These aspects are two and they must be present for any contract to be considered binding at law. They are offer and acceptance (Richards, 2007). Simon must make an offer that Lady Gaga will clearly and unmistakably accept. The offer would be an indication by Simon that he intends to be bound in a contract with Lady Gaga if she does accept it . In this case Simon is the offeror. a) Invitation to Treat The offer must however be clear and not just an invitation to treat. An invitation to treat would just an indication that he would be wiling to negotiate an offer on the terms of a contract for Lady Gaga to perform in the show. Simon would thus be the one to accept the offer for it to be legally binding. Similar views were held in the case of Pharmaceutical Society of Great Britain V. Boots Cash Chemist (Southern) Ltd (1953) 1 QB 401. In this case, the legislation required that there must be a pharmacist present whenever there is a sale of a drug at a self-service store. The question that rose was whether the sale took place when the customer took the drugs from the shelves or at the counter on checkout. It was ruled that the sale actually occurred at the counter when the customer offered to buy the drug at the stated price and the owner accepted the money. This meant that the display was just an invitation to treat and not an offer to sell. b) Counter offer The contract is established when the acceptance has been made. It is therefore important that one is able to identify when the acceptance has actually been made. This is because when Simon makes an offer to Lady Gaga, she may choose to accept it, reject it or try to negotiate for a better deal. For the acceptance to be effective it has to be clearly