Sample Paper on Business Law Exam

Question One

George has a right to sue Diana for violating the contract between the two parties. There are two types of contracts that exist. These are oral and written contracts. The statute of Fraud limits written contracts to the sale or lease of lands, when a contract involves paying debts, bilateral contracts, or execution of a will of an individual. Essentially, all the above aspects outlined in the case of George and Diana do not fall under the Statute of Frauds. Therefore, it means that the oral contract formed between the two parties is legally binding. All three elements of a contract were present. An offer was made from Diana to George. The offer was accepted by George. The value of $ 2000 which represents the consideration was also provided. George fulfilled the contract to the latter and did not at any time breach the contract.  Therefore, George has the option of settling the matter in court since the contract has been violated with one party. The claim by Diana that there was never a contract between the two of them is wrong since oral contracts are enforceable the same way as written contracts. George has a high chance of being paid for the damages.

Question Two

Athina and Barry have fulfilled all elements of a valid contract. Generally, all contracts have three important elements. These include an offer, acceptance, and consideration. An offer refers to an invitation to treat a given individual. The offeree makes the offer which can either be rejected or accepted. Once it has been accepted a given value representing the consideration aspect is then provided. Once all three of the above elements have been fulfilled, and then a contract is considered to be legally binding and complete. In this case, Athina makes an offer to Barry with the intent of selling a car. Barry agrees or accepts the offer and pays a value of $ 5000. On the day of the payment, Athina comes with the contract that is signed by both parties. This contract is a written contract since it involves the transfer of a deed. Initially, before the payment of the money, there was an oral contract in place which by the way also qualifies. Since all elements present in the contract have been fulfilled the contract is considered valid. This case illustrates that contracts can both be written or oral.

Question Three

In this case, Avery had decided to sell the house to Kyle which means that an offer had been placed on the table. However, before Kyle could accept the offer the house burned. Any contract whether oral or written has three important elements. These are an offer, acceptance, and consideration. In the above case, an offer was made. However, the other two aspects which are consideration and acceptance were not present. Since the house that was being sold was brought down in flames, Avery has the right to inform Kyle that the house can no longer be sold since it exists no more. Avery would not be in violation of any contract since Kyle had not accepted the house. Since no contract exists between the two parties, Avery will not have violated any law that relates to contract formation and cannot be used by Avery. The case would have been different if Kyle had accepted the house and had paid a given amount of money. In such a scenario, Kyle could have all the rights to sue Avery for failing to honor the contract that existed between the two. Even then Avery could still argue that the contract was not fulfilled due to unforeseeable events

Question Four

A contract does not exist between Stephanie and Daniel. In any contract, time plays an important role in determining the acceptance of a contract. When Stephanie makes and offers to sell the house at $150,000, it is rejected by David who makes a counteroffer. Any counteroffer that is made directly means that the initial offer in place expires and that the earlier contract does not exist.  The counter-offer was made on May 3rd and reached Stephanie on May 6th. Immediately the counteroffer was made, Stephanie had the right to sell the house at a different price since the initial contract that was in place was ruled out. Later on, David goes back to the original offer of $ 150,000. It should be understood that the contract between the two parties ceased to exist immediately after a counteroffer was made by another party.  This means that the counteroffer being made by David does not exist under the law. If Stephanie had made another counter offer then it would have been feasible. The counter-offer being made by David arrives two days later after the initial offer had been rejected. Thus the new counteroffer is not valid under the law. Stephanie has the right to sell the house to any other party.

Question Five

            Ryan could opt to send a mail to Holly. This is acceptable under the communication of different parties. However, in the above scenario, Ryan is required to call Holly and inform them that the offer has been made via phone. If the two parties accepted to communicate via phone, it means that this is an oral contract that is still enforceable under law. Communication via electronic mail is another common way that has been utilized to pass information. This method is also viable similarly to communication through the phone. Any method of communication that is deemed to pass the message effectively to the other parties within the required time is acceptable during the formation of contracts under the law. Since Ryan required Holby to call before five, any mail sent before that time would also serve the purpose. In fact, the mail could contain more details relating to the sale of the boat as compared to oral communication. To fulfill the entire requirement asked by Ryan, Holby would be required to first make a call before sending the contract via mail.

Question Six

When a contract is signed by two parties, it is expected that the contract will follow the clauses that specify their exact role. Going outside these clauses is in fact a violation of the contract. In this case, Lisa Accounting was hired to update Phillip’s Construction accounting’s past records as well as their current financial statements. This was the specified role that was to be conducted by the company. All information to be utilized was provided by Phillip’s Construction Company. Lisa Accounting followed all aspects that were to be accounted for but also realized huge pieces of information were missing. In the contract, it was not their role to provide information that was to be accounted for. This solely lied in the hands of the company. Failure to provide all information still was the fault of the company. Lisa’s Accounting firm could not in one way or another be able to search for information that was never provided by the company. Lisa’s Accounting firm should be paid all the dues owed to them since they fulfilled part of their obligation in the contract. If the other party had done so, and Lisa Accounting failed to use all provided information, then they would be liable for failing to fulfill their contract.

Question Seven

Misrepresentation refers to false representation or impersonation of material facts. It is based on justifiable reliance on facts that do not exist. There exists a causal connection between the parties victimize to enter a contract and misrepresentation of the said parties. Misrepresentation causes harm to parties under a contract.  The knowledge of facts can either be knowingly or unknowingly made. Fraud consists of all elements that have been mentioned above in misrepresentation. In addition to the above information, it also involves knowingly have an intention to deceive parties in a contract by failing to disclose all material facts to other parties present in the contract. The motivation of engaging in such acts is usually considered as irrelevant. The only remedy when it comes to fraud cases in any contract is to ensure that the contract is rescinded and suing the individual for tort in damages for presenting wrong material or information. The major difference between fraud and misrepresentation involves the knowledge of certain pieces of information. In misrepresentation, facts are either knowingly or unknowingly made while in fraud facts are knowingly falsified.

Question Nine

Illegal contracts are those which do not conform to the required laws and principles required in the formation of any contract. Their formation, as well as performance, is illegal and they are prohibited by the different statutes that control contract formation. In illegal contracts, no one can recover for any damages that have been caused by a breach of the agreement. Additionally, no consideration will be provided to parties that in one way or another are found to have breached the contract. Prominent examples of contracts that are considered as illegal include agreements to commit torts, crimes, selling drugs, gambling, and usury activities. Another good example revolves around agreements that have been outlawed by the state as well as those that involve bribing a public official to ensure that there is influence or unequal trading or bargaining power in different contracts.

Question Ten

The Statute of Fraud governs all contracts that are enforceable through writing. Normally contracts exist in two forms. They can either be written or they can be orally mad. All these forms of contracts are enforceable under law. However, written contracts are guided by the Statute of Frauds. It outlines the different contracts that are supposed to be enforced via writing. Such types of contracts include those that involve on person answering for the debts of another person or those involving one person answering for default payment for a different party. It also involves contracts in which a deceased person asks an executor or administrator to be personally liable for all the debts of a deceased individual.  Written contracts under the Statute of Frauds require written contracts o be written when land is being transferred from one party to another. Another example of where the Frauds Statute becomes important is when dealing with bilateral contracts that have not been performed to their conclusion by certain parties in their first year of formation.

Question Eleven

There are several equitable remedies that can be provided by a court of law in relation to the violation of a given contract by different parties. The first remedy involves compensation for damages. This requires the party that has violated any aspect of the contract to be fully payable for their nonperformance. The second remedy is known as consequential damages. This occurs when losses those were never foreseeable as suffered by one of the party due to a breach in the contract.  In this case, the damages are only recoverable if the party involved was able to foresee the damages and did nothing to remedy the above scenario. Punitive damages are another example of damages that have to be paid. They involve using one of the parties in the contract due to bad faith and breach of the contract. Some two equitable remedies that solve the above situations in each case require an injunction to be filed whenever there is a breach of contract that causes irreparable injury. It also advocates for specific performance if the subject matter was not awarded money to fully compensate for damages incurred.

Extra Credit Question

Michael Shippers is more likely to win the case against Mohammed Receivers. The cost as originally put in the contract was $ 40,000. However, due to unforeseeable circumstances, the company has been forced to go through a different channel that will cost them close to $ 80,000. Michael Shippers has shown intent to ship the products to the country if it were under the required circumstances. However, due to the commercial impracticality or frustration, they would not be able to ship the products using the given amount