Lw2903 Business and Law Assignment Case

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CITY UNIVERSITY OF HONG KONG SCHOOL OF LAW LW2903 Business and Law Semester A 2013/2014 Assignment Case Number of words: 995 Date: October 19, 2013 The case analysis should be separated into two parts. The first part is about the implementation of agreement between Ada and Tommy to adjust the fence. The second part is about the unredeemed money payment between Ada and Mickey. Part I. Advice to Tommy i. Facts: Ada ignored Tommy’s complaint so Tommy threatened to sue. Ada promised to reduce the size of the fence if Tommy agreed not to sue. However, Ada violated her words and refused to cut fence. ii. Major issue: The key point is whether there exists a valid contract between Tommy and Ada. iii. Explanation “Three elements: (1) an agreement (offer and acceptance), (2) consideration and (3) intention to create legal relations, are essential to bring a contract into existence.” 1. Offer and Acceptance “An offer is a definite promise made by the offeror to the offeree with the intention to be bound by such promise without further negotiation.” a) The threat made by Tommy was not an offer. It was “invitation to treat”, because his purpose was to incent Ada to do further negotiation. He did not intend to be bound by his words. b) Ada’s promise was an offer, which could be bound in specific terms and was not vague. When Ada told Tommy this offer, they communicated with each other. Tommy was aware of the offer at the time he accepted. The offer and acceptance in this case were valid. 2. Consideration “Consideration is necessary for a contract. A person who does not give consideration for a contract cannot enforce it.” a) Ada’s promise to reduce the height of fence was a valuable consideration. In “Currie v Misa (1875)”, the court deemed consideration can be a burden suffered by the offeror, including forbearance and detriment.
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