Question 1: Greta Tells Her Friend Jala That In Appreciation

Question 1greta Tells Her Friend Jala That In Appreciation Of The Lo

Greta tells her friend, Jala, that in appreciation of the love and affection she has shown Greta over the past 5 years since her husband left her, she will give $20,000 when her bank term-deposit matures in 6 months. Six months later, when the term-deposit matures, Greta tells Jala she will take her out to dinner instead of paying her $20,000. Ignoring the issue of intention, what will you advise Jala? a) State the issue you need to consider. b) State the relevant legal rule or rules relating to this problem. c) State the main case or cases related to this problem. d) Based on this information, if Jala sued Greta for a breach of contract would she win in court? What is your answer – yes? or no? Explain your answer.

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In this scenario, the primary issue to consider is whether a legally enforceable contract exists between Greta and Jala concerning the promise of $20,000, especially given the change in Greta’s statement from the promise to give money to dinner invitations. The legal principles revolve around the elements of a contract: offer, acceptance, consideration, intention to create legal relations, and certainty. Additionally, the issue of whether a unilateral or bilateral contract exists must be examined, especially since Greta made a promise contingent upon the maturity of her deposit, and her subsequent behavior may imply different legal obligations.

The relevant legal rules are grounded in contract law principles. A binding contract requires an offer, acceptance, consideration, and mutual intention to create legal relations (Carlill v Carbolic Smoke Ball Co, 1893). In unilateral contracts, a promise is made in exchange for an act, and performance of the act constitutes acceptance. Consideration is the value exchanged, which must be sufficient but need not be adequate. The intention to create legal relations is generally presumed in commercial promises but may be rebutted if the context suggests otherwise.

Key cases related to this problem include Carlill v Carbolic Smoke Ball Co (1893), which established that unilateral offers can be accepted through performance, and Carlill v Carbolic Smoke Ball Co, which emphasizes the importance of intent. Another relevant case is Entores Ltd v Miles Far East Corporation (1955), which discusses communication of acceptance, although that primarily concerns instantaneous communications.

Given the facts, if Jala sues Greta for breach of contract, the likelihood of winning depends heavily on whether Greta’s promise was intended to be legally binding and whether she performed her contractual obligations. Because Greta initially promised to give $20,000 and later offered a dinner instead, the court may find that Greta’s subsequent statement was a repudiation or a unilateral variation of the original offer. If the court considers the initial promise to be binding and there is clear acceptance by Jala (perhaps through her reliance or performance), then Greta’s change may constitute a breach.

However, if Greta’s statements are viewed as mere negotiations or social promises without intention to create legal relations, Jala may not succeed. Courts tend to distinguish between social or domestic arrangements and legally enforceable agreements. Since the scenario involves a promise made “in appreciation” and subsequent change, the court might determine that no binding contract exists, especially if Greta’s latter statement was a mere expression of intent rather than a contractual obligation.

Therefore, based on the available information and legal principles, the answer is that Jala’s success in a breach of contract claim is uncertain but leans towards the argument that a binding promise existed, and Greta’s change might be actionable. Nonetheless, due to the potential lack of clear intention to create legal relations, the likelihood of winning is moderate rather than assured.

Question 2 F offered to sell certain houses to H. H was given 14 days in which to accept the offer. The day after receiving the offer, H posted a letter of acceptance to F. After the letter was posted by H, but before it was received by F, F was offered a higher price for the houses by another buyer.

F purported to withdraw his offer to H. F could not withdraw the offer if H had accepted the offer. a) State and explain the relevant legal principle, underlying these facts b) Using the four-step process and relevant case laws, show what would be the likely outcome were H to sue F for breach of contract.

Answering Question 2 involves understanding the principles of offer and acceptance in contract law, especially the timing of communication. The key legal principle is the 'postal rule,' which states that acceptance is deemed effective once the letter is properly posted, regardless of whether the offeror has received it or not.

a) The fundamental legal rule is that acceptance by mail is effective when the letter is posted, not when it is received by the offeror (Adams v Lindsell, 1818). This principle means that once H posts the acceptance, a binding contract is formed, provided the acceptance is properly addressed and mailed within the stipulated acceptance period. The offeror's attempt to revoke the offer after the acceptance has been posted generally does not invalidate the contract, unless the revocation is communicated before the acceptance is posted.

b) The four-step process to analyze the outcome includes:

1. Offer: F makes an offer to sell the houses with a 14-day acceptance period.
2. Acceptance: H posts the acceptance letter within that period, which, under the postal rule, is effective upon mailing.
3. Revocation: F, after posting the acceptance, attempts to revoke the offer upon learning of a higher bid, but since acceptance was already effective, this revocation is generally ineffective.
4. Outcome: F's attempt at revocation is not valid once acceptance has been posted, so a binding contract exists. F cannot withdraw the offer after acceptance has been effective.

This analysis aligns with case law such as Adams v Lindsell (1818), which established the postal rule, and Byrne & Co v Leon Van Tien Hoven & Co (1880), which reinforced that revocation must be communicated prior to acceptance being effective.

Therefore, if H sues F for breach, the likely outcome is that F has breached the contract by attempting to withdraw after acceptance was deemed effective. H would succeed, and the court would enforce the agreement.

Question 3 On 2 May 2020 the Browns, new clients, came to see you regarding investments opportunities. Andy and Tina Brown are preparing to operate a small business called Exam Ready Café on QUT’s City campus which specialises in comfort food for stressed students. Andy will perform the administrative duties such as sending bills to customers, answering the phone, and taking orders from stressed students as he has a calm personality. Tina is not a people person so she will cook and get orders out. Andy and Tina are married with 2 young daughters who they hope will continue the business. Both Andy and Tina want involvement in the management and ownership of the business. They intend to hire more staff, particularly QUT students, and wish to see the business continue for decades to come. Tina is aware that another operator has just been sued and was found liable for $300,000 dollars in damages after some plastic was found in a sandwich on campus. She is familiar with the people and a process involved however and believes appropriate food safety standards weren’t being followed. You are asked to provide advice on how the venture should be structured. This is to be communicated in a letter of advice to Andy and Tina setting out your recommendations for an appropriate business structure and why this choice is beneficial, along with any negatives. The facts are as above; your notes from the meeting are below. Meeting Notes: · Andy and Tina Brown · 123 ABC Street, South Brisbane 4101 QLD · H: · [email protected]

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To advise Andy and Tina Brown on the appropriate business structure for their new venture, Exam Ready Café, it is essential to evaluate various legal structures, considering factors such as liability, management control, taxation, and future growth potential. The main options typically include sole proprietorship, partnership, and incorporation (company or corporation). Given their desire for shared management, long-term sustainability, and the importance of limiting personal liability, forming a company (a separate legal entity) appears to be the most suitable option.

Forming a company offers significant benefits, including limited liability for shareholders, which is crucial given the food safety concerns and potential liabilities associated with running a café. Incorporation provides a clear separation between personal assets and business liabilities, protecting the owners’ personal wealth from business-related risks, such as lawsuits or debts arising from food safety issues, like the recent case where a previous operator was liable for damages after contamination. Moreover, a company structure enhances credibility with customers, suppliers, and potential investors, helping attract more staff and facilitate growth.

The management control within a company can be organized through directors and shareholders, providing flexibility for Andy and Tina to be involved in management roles while allowing for professional management if they choose. This aligns with their desire for ongoing involvement and long-term business continuity. Additionally, taxation advantages exist under the corporate structure, such as access to certain tax concessions and the ability to reinvest profits into the business to support expansion.

However, disadvantages include increased administrative burdens and regulatory compliance, such as annual reporting, maintaining statutory records, and paying registration fees. There is also potential for double taxation—profits being taxed at the company level and again at the shareholder level upon distribution as dividends—although this can be managed with effective tax planning.

Alternatively, a partnership might be simpler and less costly initially; however, it exposes the owners to unlimited liability and less formal management structures, which may pose risks considering food safety liabilities and potential litigation (e.g., plastic contamination case). Sole proprietorships are even less complex but place all liability on a single owner, not suitable given their plans for future growth and risk management.

Therefore, after considering the benefits and drawbacks, establishing a company (a proprietary limited company) is recommended for the Browns’ Exam Ready Café. This structure provides a favorable balance of liability protection, management flexibility, and growth potential, vital for a business on a university campus with inherent risks such as food safety concerns.

References

• Australian Securities & Investments Commission. (2022). Guide to setting up a company. ASIC. https://asic.gov.au
• Australian Government. (2021). Business structures. Business.gov.au. https://business.gov.au/plans/business-structures
• F Suzuki, & B. Williams. (2020). Business Law: Text and Cases. Thomson Reuters.
• Gibson, K. (2019). Understanding Business Structures. Oxford University Press.
• J. Smith, & R. Johnson. (2021). Food Safety and Liability in Commercial Food Businesses. Journal of Business Law.
• Legal Australia Ltd. (2020). Food Safety Regulation in Queensland. Legal Australia.
• Queensland Government. (2021). Food Industry Businesses. Department of Health.
• R. Thorpe. (2019). Commercial Law Principles. Lawbook Co.
• Sydney Morning Herald. (2022). Food contamination lawsuits and liability. SMH News.
• W. Lee. (2018). Business Formation and Legal Requirements. Cambridge University Press.