Business Law 100
Question (a)
Identify the principle of law
The principles of law relevant to this question are the doctrines of intention and consideration.
Explain the rules of law
The doctrine of intention is an undertaking by both sides of an agreement to be legally bound either by an informal agreement such as verbal intention to purchase or act, or a written document stating intention to purchase or act, which could be in the form of a letter or a written statement as compared to a formal agreement where a deed is prepared stating the intention of the contract which is signed and witnessed by independent third parties and, although not necessary, sealed with a company or personal seal. In a commercial agreement the intention to be legally bound is generally accepted, and it is the responsibility of any party in disagreement to prove otherwise. This can be seen in the case Esso petroleum Co. Ltd. V Commissioner of Customs and Excise(1976) 1 ALL ER 117.where Esso made a promise to give motorists a “free” coin with every four gallons of Esso petrol purchased. The Commissioner of Customs and Excise argued that the coins were produced in large enough quantities for general sales and and were therefore the subject of a purchase tax. The ratio decidendi, or the reason for the decision, in this case is the intent to be legally bound, as Esso made a promise in a commercial context for the purpose of profit, which was binding according to quantities of petrol sold. When this case was argued in the House of Lords, it was found by a majority decision to be a legally binding promise and therefore the intent to be legally bound was real.
The ratio decidendi of this case, where both parties where acting in a commercial context in their independance does not extend to all cases, such as in domestic agreements where a promise or inferred promise can be made without any intent to be legally bound, as in the case Cohen V Cohen(1929) 42 CLR 91, where Mr Cohen promised to give Mrs Cohen a
Identify the principle of law
The principles of law relevant to this question are the doctrines of intention and consideration.
Explain the rules of law
The doctrine of intention is an undertaking by both sides of an agreement to be legally bound either by an informal agreement such as verbal intention to purchase or act, or a written document stating intention to purchase or act, which could be in the form of a letter or a written statement as compared to a formal agreement where a deed is prepared stating the intention of the contract which is signed and witnessed by independent third parties and, although not necessary, sealed with a company or personal seal. In a commercial agreement the intention to be legally bound is generally accepted, and it is the responsibility of any party in disagreement to prove otherwise. This can be seen in the case Esso petroleum Co. Ltd. V Commissioner of Customs and Excise(1976) 1 ALL ER 117.where Esso made a promise to give motorists a “free” coin with every four gallons of Esso petrol purchased. The Commissioner of Customs and Excise argued that the coins were produced in large enough quantities for general sales and and were therefore the subject of a purchase tax. The ratio decidendi, or the reason for the decision, in this case is the intent to be legally bound, as Esso made a promise in a commercial context for the purpose of profit, which was binding according to quantities of petrol sold. When this case was argued in the House of Lords, it was found by a majority decision to be a legally binding promise and therefore the intent to be legally bound was real.
The ratio decidendi of this case, where both parties where acting in a commercial context in their independance does not extend to all cases, such as in domestic agreements where a promise or inferred promise can be made without any intent to be legally bound, as in the case Cohen V Cohen(1929) 42 CLR 91, where Mr Cohen promised to give Mrs Cohen a
References: .(Wikipedia .org accessed 28-8-2010)also (anonomous court of appeal accessed 28 -8-2010)