Business Law Essay

1909 Words Oct 30th, 2014 8 Pages
Assignment Question Part A
Issue
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.
Principle
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,
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Argument
However, one might also argue that a contract will not be frustrated merely because it becomes more difficult or more expensive to perform. The principle of law was established in the case of;
Tsakiroglou & Co Lt v Noblee Thorl GmbH (1962) AC 93, (1961) 2 All ER 179
The case concerned a sale of groundnuts, from Port Sudan to Hamburg. The parties envisaged shipping through the Suez Canal, but the canal was closed after the contract was concluded. The court ruled that the contract was not frustrated.
The fact that it was more difficult or more costly to perform is not sufficient to amount to frustration. The principle of this case is that a contract will not be frustrated merely because it becomes more difficult or expensive to perform. This is further illustrated in the book of;
Force Majeure and Frustration of Contract, Second Edition by Ewan McKendrick (1995)
Conclusion and Recommendation
Following this line of argument, it is not possible that Jason Miao go back on his promise of paying the extra $5,000 to Damien. Jason Miao is still legally bounded by the contract to pay the additional amount as the contract is not discharged by frustration.

Assignment Question Part B
Issue
The legal issue in this question is whether Damien’s decision having accepted the sum of $20,000 in full settlement f his account, out of the original contractual agreement of $35,000, is legally binding. In other words, can Damien take legal actions against

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