Course Structure in Business Law - Contract

INTRODUCTION

This case study tackles mainly the course structure in Business Law, which are contracts. Contract as defined, is a legally binding agreement between two or more parties, with emphasis on the dual concepts of “agreement” and “ legally binding”. It is the basis of decision making when two parties do not come to an agreement. Contact, to be legally binding and enforceable, should have all its elements in it namely, offer, acceptance, consideration, Intention to create legal relations, certainty of terms and capacity to contract. Any element missing may be deemed as null and void. The case studies below are examples of contracts and how are they manifested by precedents.

FACTS

Wilson is a promoter of a stage production who entered into a contract with Baldwin under Mega Complex Pty Ltd to host his latest publication, King Kong: The Musical. After inspecting the stadium, Wilson asked Baldwin, the manager of Mega Complex Pty Ltd, who quote ‘Now be straight with me mate, this is probably the biggest show the city will see. Can you handle it?’ And Baldwin replies ‘No Worries’. Wilson, who was surprised to receive a pre-written contract, signed it half an hour after their conversation. The contract provided that Wilson will hire the multi-purpose stadium for five days at a rate of $100k per day with an advance payment of $250K due on the final day. Wilson paid $250k in advance. However, on the first night of the performance, the bar run out of alcohol before the show even began causing a lot of complaints. Baldwin reassured Wilson that the same problem would not reoccur. During the second night’s show, before the end of first act, a mechanical failure occurred causing the motor to stuck-up and clutch the giant ape which eventually destroyed the production, having the ape fall in the middle of the second act. The crane malfunction, for that reason, was a product of poor maintenance by Mega Complex management. By the end of the show, Wilson hastily went to Baldwin’s office and shouted ‘This place is a joke. You promised that you could handle our show. This joke of a contract is over.’

Wilson announced to the media that the show’s remaining performances were cancelled. But just before he left with his cast, Wilson was served with a bill for $250K under the contract with Mega Complex Pty Ltd.

ISSUE

What is the legal effect of Baldwin’s oral statement? How should it be classified? Did the contract between Wilson and Mega Complex Pty Ltd contain an implied term?

RULE OF LAW

It is very important to determine whether term or representation is present in a contact considering this is the divergence of what type of remedy will be applied. This is the basis of courts in making an interpretation