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ZinMinLwin, Business Law A-1 Tr: Wai Wai Mar

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Contents
Introduction ............................................................................................................................................. 2
Task1 ....................................................................................................................................................... 2
Elements required to form a valid Contract ............................................................................................ 2
Offer and acceptance ....................................................................................................................... 3
Counter-offer ................................................................................................................................... 3
Withdrawal ...................................................................................................................................... 3
Intention to create legal relations .................................................................................................... 3
Consideration .................................................................................................................................. 4
Impact of different types of contract ....................................................................................................... 4
Written contracts ............................................................................................................................. 4
Verbal agreements ( face to face) ................................................................................................... 5
Distance selling (important) ............................................................................................................ 5
Analyzing terms in contracts .................................................................................................................. 7
Task 2, Case 1 ......................................................................................................................................... 8
Applying elements of contract on the dressmaker 1
st
case...................................................................... 8
Analyzing the law on terms in two different cases ................................................................................. 9
Case 1(The dress maker) ................................................................................................................. 9
Case 2(The Software company) ...................................................................................................... 9
The effect of different terms in the two contracts ................................................................................... 9
Case (1)s unfair contract term ...................................................................................................... 10










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Introduction
It is very exciting that the British law firm has requested me to assist and give suggestion in
dealing with the legal affairs in running the Brit Ltd, selling dresses and ladies apparels both
in UK and through distant selling( through website). It is really thoughtful of May to expand
its market largely on the Internet. The main focus I am going to put is on constructing a valid
contract , distant selling( condition, warranty and exclusion clauses). The important part is to
prevent from any legal matters affecting the flow of the business and have a definite
disclaimer to let the customers know the conditions of distant selling.
Task1
Elements required to form a valid Contract
There are three main elements to be constructed in a valid contract. They are of course sub-
divided into many parts. The three main elements are:
1. Agreement
2. Intension
3. Consideration
Agreement Intension Consideration Valid Contract
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Offer and acceptance
In order to form an agreement, there must be an offer and acceptance. There must be
an offer to do something; it must be clearly stated, and definite in its intention. However, an
offer' can be withdrawn by the other party at any time before it is accepted' or if it is a
standing offer fixed for a period of time. An offer can also lapse when the time for acceptance
expires or after a reasonable time in the circumstances.
Only what is offered can be accepted and if any new terms are suggested, this is regarded
under contract law as removing the original offer made (or counter offer). Where acceptance
is given with conditions, the acceptance is not complete until the conditions are fulfilled.
Counter-offer
If any new terms are suggested in a contract by either party, it is considered a counter-offer.
Making a bargain is considered to be a counter-offer, usually replied by the customer. An
offer is a definite promise to be bound, provided the terms of the offer are accepted. This
means that there must be acceptance of precisely what has been offered. For example, a used
car dealer offers to sell B a Holden panel van for $1,000, without a roadworthy certificate. If
B decides to buy the Holden panel van, but insists on a roadworthy certificate being provided,
then B is not accepting the used car dealers offer. Rather, B is making a counter offer. It is
then up to the used car dealer to accept or reject the counter offer.
Withdrawal
A person can withdraw the offer that has been proposed before that offer is accepted. For
withdrawal to be effective, the person who has proposed the offer must communicate to the
other party that the offer has been withdrawn.
Intention to create legal relations
A contract does not exist simply because there is an agreement between people. The parties to
the agreement must intend to enter into a legally binding agreement. This will rarely be stated
explicitly but will usually be able to be inferred from the circumstances in which the
Offer Acceptance
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agreement was made. For example, offering a friend a ride in your car is not usually intended
to create a legally binding relation. You may, however, have agreed with your friend to share
the costs of travelling to work on a regular basis and agree that each Friday your friend will
pay you $20 for the running costs of the car. Here, the law is more likely to recognise that a
contract was entered into.
Consideration
Consideration is the price paid for the promise of the other party. The price must be
something of value, although it need not be money. Consideration may be some right, interest
or benefit going to one party or some forbearance, detriment, loss or responsibility given,
suffered or undertaken by the other party. So long as consideration exists, the court will not
question its adequacy, provided that it is of some value

Impact of different types of contract

Written contracts
If the contract has been formally written and signed by the parties, there is an assumption that
all the terms of the agreement are contained in the written document regardless of what may
have been verbally agreed. Additionally, contracts can be a combination of written and verbal
agreements if the written agreement lacks detail and only covers very few terms. Prior to
signing, a written contract must:
Be presented to and understood by all parties to be valid; and
Be recognized by all parties as a contract, that is, it must look like a contract and not simply
a receipt or docket
Also, once a contract is signed, it is assumed that all the terms have been read and agreed to.

Impact: If contract is put down in writing, any statement appearing in that written agreement
will usually be regarded as a term, and any prior oral statement that is not repeated in the
written agreement will usually be regarded as a representation, due to the assumption that if a
statement is left out of a written agreement, the parties did not view the statement as
important.
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Verbal agreements ( face to face)
Verbal agreements rely on the good faith of all the parties involved and can be difficult to
prove as opposed to written contracts. The following are some ways in which verbal
agreements can be supported:
The conduct of the other party both before and after the agreement
Specific actions of the other party
Past dealings with the other party
The presentation of a substantial document, possibly with many provisions, may raise more
questions and uncertainty in the minds of the parties involved than it resolves, often ending
in the transaction not proceeding.
Impact: If statement made by party with special knowledge and expertise on matter, courts
more likely to deem statement a term than if statement made by someone without such
expertise. Sometimes depending on the importance of the fact, Terms can simply become
mere representations.
Distance selling (important)
There are contracts where the supplier and the consumer are not dealing face to face which
have exclusive use of distance communication. Therefore, this sort of contracts is called
distance selling. Distance communication would include web pages; unaddressed or
addressed printed matter (this could include leaflets dropped through letter boxes); letters;
press advertising with order forms; catalogues; telephone with or without human
intervention; email; fax; and television (teleshopping). Having many types of distance
methods encourage consumers to do shopping easy and quickly.
As a British owned company the distance selling methods have to obey the EU policy on
carrying out the distance selling. The contracts, applies to any consumer distance
contract made under the law of an EUcountry. It provides a number of fundamental legal
rights for consumers in order to ensure a high level of consumer protection throughout the
EU.
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The Directive applies to most contracts where a consumer and a supplier running an
organized distance-selling scheme do not meet face-to-face, at any stage until after the
contract has been concluded.
According to the Directive the following consumer rights, among others, need to be
respected:
provision of comprehensive information before the purchase;
confirmation of that information in a durable medium (such as written confirmation);
consumer's right to cancel the contract within a minimum of 7 working days without
giving any reason and without penalty, except the cost of returning the goods (right of
withdrawal);
where the consumer has cancelled the contract, the right to a refund within 30 days of
cancellation;
delivery of the goods or performance of the service within 30 days of the day after the
consumer placed his/her order;
protection from unsolicited selling;
protection from fraudulent use of payment cards.

Impact: Any acceptance by mail is complete at the time of posting and sometimes, a letter
must be received e.g. insurance acceptance. Any acceptance by electronic means, such as
email or fax, is completed at the time of receipt.
Acceptance is not valid if:
It is presumed through inaction or lack of response
You say "I will assume you have accepted if I do not hear from you within three days".
Acceptance requires a positive action, that is, one of the three forms noted above.




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Analyzing terms in contracts

Types
Condition In this case, the condition would be following the customers
specification.
Using the correct material and color. If it is distant selling, the
quality of the garments should be according to the design shown
in the Web page.
Timeliness is very important here. We have to send the garments
in time. E.g. we cannot send the wedding dress late since the
consequences are of a great deal to somebody else.

Warranty Of lesser importance than conditions, and can be breached
without such serious consequences. Innocent party can sue for
damages but is not able to terminate the contract.
innorminate Can be either conditions or warranties. Breach of them can be
serious or trivial depending on particular fact situation. If effects
serious, they are conditions and vice versa.
Express It is a term expressly agreed by the parties to a contract to be a term of
that contract.
Implied There are terms which are not vividly expressed but however it is
considered to be in the contract. Like consumer right protection act.
Specialist Terms Well, there are always special terms in acontract.
Exclusion Any clause that limits the liabilities of somebody. Like if there is an
catastrophic event occurred, the company will not be liable for the delay
of the shipment.




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Task 2, Case 1

Case
(the dressmaker)
May called for a tender for dress making for the year 2011. May got into
making contract Jim (the dress maker).
Agreement Jim asked for no other dress maker to be hired other than him for the
year 2011.
Jim also stated that he will not be responsible for the quality and no
compensation shall be payable in respect of the suitability.
Problem May ordered four batches. On the third batch, dresses are not up to Mays
expectations and the quality is very poor. May stopped to order the fourth
batch.

Applying elements of contract on the dressmaker 1
st
case
The very first stage is to analyze the case and break it down.
Invitation to treat: May calling for a tender is considered to be An Invitation to treat.
Offer: Jim taking the tender and joining is considered to be an Offer.
Agreement: When May accept the Jims offer, the agreement has been occurred. There has
been an Offer-Acceptance relation between the two parties. Thus, an agreement is formed.
Intension: There is a strong intension to create a business between the two parties.
Consideration: Consideration is the price paid for the promise of the other party. Obviously,
there has been a reasonable consideration to both of the parties.






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Analyzing the law on terms in two different cases
Case 1(The dress maker)
Condition The condition of this contract will be: May not having the permission to
hire another dress maker until the end of year 2011.
Warranty The specification by May in making dresses are to be met.
Exclusion clause Jim also stated that he will not be responsible for the quality and no
compensation shall be payable in respect of the suitability.

Case 2(The Software company)
Condition The condition of this contract will be: May having a well functioning
computer software to smoothen its supply chain line and administration
purposes.
Warranty The software has to support and collect the business transaction.
Exclusion clause The soft ware company will not compensate no further than 1million if
something goes wrong with the software.



The effect of different terms in the two contracts
Unfair contract terms
The unfair contract terms. A term is unfair when it:
causes a significant imbalance in the parties rights and obligations arising under the
contract; and
it is not reasonably necessary to protect the legitimate interests of the supplier; and
it causes disadvantage to another party.
In determining whether a contract term is unfair, a court must consider the transparency
of the term as well as the operation of the contract as a whole. For example, certain highly
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advantageous terms might need to be counterbalanced against other disadvantageous
terms.
Case (1)s unfair contract term
The very strange thing would be the exclusion clause, saying Jim also stated that he will not
be responsible for the quality and no compensation shall be payable in respect of the
suitability. That is very biased and unfair for Mary. May can definitely sue Jim as this is an
unfair contract.
Case 2s unfair contract term
The exclusion clause saying The soft ware company will not compensate no further than
1million if something goes wrong with the software. The software company is known for
having a worldwide liability software insurance of 50 million. May can sue this software
company to compensate at its full price again.

Reference list

Unfair Contract Terms Act and Consumer Regulations. 2014. Unfair Contract Terms Act and
Consumer Regulations. [ONLINE] Available at: http://www.e-lawresources.co.uk/Unfair-Terms---
Regulation-by-statute.php.

warranty legal definition of warranty. warranty synonyms by the Free Online Law Dictionary..
2014. warranty legal definition of warranty. warranty synonyms by the Free Online Law Dictionary..
[ONLINE] Available at: http://legal-dictionary.thefreedictionary.com/warranty.

types of Contracts. 2014. Types of Contracts. [ONLINE] Available
at:http://toolkit.smallbiz.nsw.gov.au/part/5/35/165.

Elements of a contract. 2014. Elements of a contract. [ONLINE] Available
at:http://www.lawhandbook.org.au/handbook/ch12s01s02.php.
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