LAW6501: Sam Recently Started a Small Business Case Study - Law Assignment Help

Assignment Task:

Task:

Sam recently started a small business selling natural health products in Perth. Having witnessed the start of the popular obsession with organic and natural products, he decided to tap into this market. He had convinced his father to lend him $10,000 to start up his business.

Knowing that his business idea was sure to be a success, Sam looked into possible suppliers for his natural health products. He contacted Mike who is a salesman for “NaturalWays”, a specialist supplier of all things natural and organic, including food and health products. Sam asked Mike whether he would be able to fill an order for a regular supply of PP22, a highly sought after brand of tea. Sam emphasized to Mike that this brand of tea needed to be 100% organic and individually packaged and suggested that $400 for 200 cartons would be something he would accept. He also noted that shipment must be sent out every Monday unless otherwise indicated by Sam. Mike, interested in Sam’s endeavour, told Sam that he had to do some inventory checks and so forth and would get back to him as soon as possible.

Three weeks passed without a word from Mike. Eager to get his business up and running, Sam gave Mike a call to inquire into whether Mike could supply him with the requested goods. “Oh ya...silly me...it completely slipped my mind” said Mike, responding to Sam’s inquiry. “Sure no problem, I can supply what you need” said Mike. “However, we are closed on Mondays so the goods would have to be shipped out on Tuesdays. How does $500 per 100 cartons of PP22 sound?” asked Mike. “Ummm....geee.....I don’t know. That might throw off my entire business scheme...I guess it could work,” answered Sam. Mike then suggested to Sam that they both agree to do this but decide on the exact terms when Sam had worked out the precise details of his business plan, since he had sounded a bit confused, uncertain and overwhelmed on the phone. Sam agreed.

Sam asks for your advice regarding the issues noted above. Specifically, he is looking to determine:

(1) Whether he will be required by law to re-pay, to his father’s estate, the $10,000 his father loaned him but subsequently forgave?
(2) Whether he will be required by law to enter into a contract with Mike in regards to supplies of PP22 for his business?

GUIDED SOLUTION
1591 words
Issues
It is very important that the first thing to do in responding to an exam question is to spot the issues and organize the information accordingly. Below is a list of issues that should be dealt with in this fact pattern:
(1) Sam vs. his father’s estate
(i) Is there a valid contract?
• Whether the requirements of agreement including offer & acceptance has been fulfilled.
• Whether the requirements of consideration have been fulfilled.

(2) Sam vs. Mike
(i) Is there a valid contract in regard to the terms of the agreement?
• Has there been offer & acceptance?
• Did the parties have intention to be legally bound
• Whether the offer has been lapsed?
• Was there a meeting of the minds on material terms between the parties.
• Whether there has been acceptance of counter-offer
• Whether the agreement can be enforced?

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