Essay about business LAW

Submitted By wokankan
Words: 1818
Pages: 8

Introduction
This essay relevant breach of contract. Huang owns a home in a suburb of Melbourne. He decides to construct a factory and workshop for his contract which supply of the components. Thus, he employ Bill who is a registered builder to build a factory and workshop. However, Huang lose many money because Bill delays.

This legal issues in this case include Huang just has an oral contract with Bill which is building the factory and workshop for Huang. Huang lose a contract for supply of the components and $150,000 because Bill was unable to finish his work which is building the factory and workshop for Huang and to complete the construction by 1st November. Other issues include negligence, Bill think that the factory and workshop are not important for Huang, and Huang not tell Bill those are important as well. Finally, Huang sue Bill for breach of the contract, and court agree that Huang will gain damages from Bill?

Effective contract
If a contract want to become an effective contract, it has three necessary elements which are offer, acceptance and consideration. According to David & Gerry (2013), the primary element is offer. It is a promise to do or limit from doing something in exchange for something from another party. Second, acceptance is important thing. Acceptance has many rules, firstly, acceptance must be clear, unambiguous and unequivocal. Secondly, the offeror’s requirements must be met. Third, consideration is final element, it is a necessary component in all simple contracts. However, it has five rule and they are:
1. Consideration must exist if a simple contract is to be enforceable.
2. It can be present or future, but past consideration is not acceptable.
3. It must come from the promise, but it cannot need move to the promisor.
4. It need not be adequate.
5. It must be sufficient in the eyes of the law.
Consequently, the consideration is a significant element, if a contract lack of consideration, the contract cannot call “contract”. In a sense, if no consideration, the promise just like a gift.

According to the case, Huang explains his requirements that he needs the buildings to be completed by 1st November. In addition, Bill agreed to build the factory and workshop, and complete the construction by 1st November. Although factory and workshop are delayed by Bill, Bill finished this contract unit February. Therefore, those are able to evidence the contract is an effective contract, so they have rights and obligations.

Discharge of contract
In general, a contract is able to be discharge by six ways. According to David & Gerald (2013) they are:
1. By performance.
2. By express agreement.
3. By reason of a term in the contract.
4. By operation of law.
5. By breach.
6. By the operation of the doctrine of frustration.
According to David & Gerry (2013), when a party to a contract refuses or fails to perform one or more of his obligation under the contract, he commits a breach of the contract, and the usual consequence is that other party is able to cancel this contract.
The prior obligations still have to be performed by both parties and the innocent party is able to claim damages for offeree, when a contract is discharged by breach.

According to the case, Bill agreed that he is able to finish his obligations which is building factory and workshop for Huang, and to complete the buildings by 1st November. However, Bill did not finish his obligations by 1st November, and he still work until February. Thus Bill fails to perform his promise, Huang has a power to cancel this contract and claim damages from Bill. In addition, Bill should still perform his future obligations. Consequently, Huang should sum Bill.

Damages
For remedies for breach of contract, damage is a primary method. If court wants to consider damages, two fundamental problem must be treated. First, this problem is remoteness of damage, because it must consider whether the loss result from the activity complained of by the plaintiff.