Business Law Essay
The legal issue in this question is whether Jason Miao can go back on his promise of paying the extra $5,000 to Damien, for covering the additional cost of materials and additional work needed to construct the swimming pool.
The underline legal principle applicable to this situation is that ‘once an offer is complete, or in this case accepted, the offer cannot be revoked’. Doing so would constitute to a breach of contract.
The offer shows a clear intention (to pay additional $5,000 on top of the original agreed amount of $30,000) of the offeror (Damien) that he intends to enter into a legal relationship with the offeree (Jason Miao). There was no further bargaining expected or mentioned, …show more content…
Part payment of a debt on or after the date the debt is due is not good consideration for the creditors promise not to claim the balance, which means that the debtor (Jason Miao) will have to pay back the creditor (Damien) whatever he balance he owes.
The authority for this principle was established in the case of ;
John Weston Foakes v Julia Beer (1884) UKHL 1, (1881-85) All ER Rep 106, (1884) 9 App Cas 605; 54 LJQB 130; 51 LT 833; 33 WR 233
In that case it was said that ‘payment of a lesser sum on the day or after the due date of a money debt cannot be any satisfaction of the whole.’ The reason for this rule is to protect parties, companies or anyone who have completed their contractual work agreement or contractual services but was not given full payment as stated in their legally binding contractual agreement.
The counter-argument here is that Damien can claim that the promise to accept $20,000 instead of $35,000 from Jason Miao was made under the commercial pressure called ‘economic duress’. In this case, the threat was made in respect of Jason Miao’s financial difficulties and that all his investments had become worthless. If duress was