Unit 2 Business Law Case

1477 Words 6 Pages
Q1. ‘Acceptance and contract’
The issue here is whether there has an acceptance between Blair & Chuck and Jack, which is the key factor to prove that there exists a valid contract between them. Obviously, the rest of the elements of the contract is satisfied. According to the postal acceptance rules which can only be utilised on the premise of ‘send’, acceptance by post would be complete when the letter is posted and meanwhile there is a valid contract even if the letter never arrives . The deadline of accepting Jack’s contract is Friday 22nd, and Blair & Chuck signed the contract and successfully posted it on Thursday 21st, which means there has a valid acceptance and a binding contract. Jack said if Blair and Chuck agreed the terms in the
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Generally, a conditional acceptance is not binding, because a valid acceptance should be final and unqualified , but ‘subject to finance’ is an expectance which has a truly ‘conditional’ acceptance. According to the judges, subject to finance imposes obligations on the purchasers : Firstly, the purchaser has an obligation to try the best to seek finance. Secondly, the purchaser must decide whether the finance is suitable and satisfactory. Blair and Chuck planned to purchase a ‘CumulusCloud 1901’ server from Dan to speed up information processing, but they did not have enough funds to finance at the moment and inserted a subject to finance clause in their contract, which means that Blair and Chuck will purchase the server until they find suitable finance. The effect of the ‘subject to’ clause depends on both parities’ intention . From the perspective of a reasonable person, obtaining finance by Blair and Chuck is a significant condition of the contract and a top serer is essential for them to operate successfully, so Blair and Chuck have legally intention to purchase equipment from Dan. Therefore, subject to finance is reliable and the contract is valid as …show more content…
Heads of agreement is merely a preliminary agreement to a complex commercial contract , which is ordinarily not binding until replaced by a formal contract but needs to consider the intention of the heads of agreement . Some elements should be considered for deciding whether the heads of agreement is legally binding : Firstly, the size, importance and complexity of the subject matter. Secondly, language used in important terms and conditions. Thirdly, level of formality. Fourthly, subsequent conduct and performance of parties. During an informal discussion without details, Blair wrote down their business arrangement and profit split on the back of a menu, which is not enforceable because the agreement might not cover all essential terms and they need a detailed formal contract to regulate uncertainty issue. An enforceable heads of agreement should clearly indicate the parties’ intention to create legal relations . Blair also told Chuck take it or leave it, not giving Chuck fair and enough rights to express his intention and Chuck reluctantly signed the heads of agreement on the back of the menu, which shows they have no intention to create legal

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