Business Law Case Study

However, the most relevant contractual element in regards to the friendship relation between Tommy and Johnson is the intention to create legally binding relation. To achieve this, the court looks at the circumstances of the agreement from a reasonable man’s point of view whereby they conclude from the observation made on the case circumstances (Stone 115). The courts apply the “objective test” in deciding whether there was an intention to create a legal relation by parties to a contract (Hu &Cheong 37). There are two rebuttable presumptions with the most relevant being family and social agreements. As a general rule, domestic agreements among others friend and friend are said to lack the intention to create a legal relation. (ii) Legal principles The legal principle, consideration (consideration rule of sufficiency rather that adequacy) Apply The definition of consideration was provided by the court in the case of Dunlop v.

Selfridge (1915) whereby the court indicated that one party’s act is considered to be the price which the other party to the contract has been bought thus giving rise to the enforceability of the promise made (Salzedy & Brunner 47). Therefore, in a contract, each party must promise that they will give “something of value” in exchange for goods or services from the other party (Hu & Cheong 39). One of the rules which govern consideration and is that “consideration must be sufficient but need not be adequate” (Hu & Cheong 41). This is important in establishing the difference in fees of $1,000 paid to Tommy compared to what was paid to Terry Juggler. In common law which Singapore laws is subject, damages is one of the remedies awarded to the injured party with the aim of placing the innocent party to the position they would be if the contract were performed.

Mitigation is vital to consider in this case and was provided in Brace v. Calder (1895). The court held that the plaintiff could not recover the full loss since for the reason of failing to mitigate the loss by accepting the re-employment. A breach can be either actual or anticipatory In an anticipatory breach, one of the parties wishes to no longer perform their part of the contract before the due date. Graucob (1934). The contract between Tommy and SIN was written, and Tommy signed it thus bound to every term of the contract including the exemption of SIN from any loss or damages arising out of the contract breach. The court, in this case, indicated that where a party to a contract signed a written document containing the terms and conditions of the contract, the signing of such documents by party bounds them to the terms therein save in cases where there is a fraud.