Business Law Case Study 3 1
Business Law Case Study 3
1.Suppose the court decided that there was no consideration paid to Pearson. What is the legal result if consideration is not found in the contract? In other words, what happens to the contract and the property?
Answer: Consideration is one of the four main components for a contract to be enforceable. The four components factors are: 1) Agreement- agreeing to do or not to do something, 2) Consideration- an agreement in which both parties are getting something in return, 3) Capacity- The mental capability and the age limits for getting into a contract, 4) Legality- The conditions within the contract must be legal and not violating any laws or ordinances. CITATION JEC18 l 1033 (JEC, 2018) HYPERLINK “http://jec.unm.edu/education/online-training/contract-law-tutorial/contract-fundamentals-part-2” http://jec.unm.edu/education/online-training/contract-law-tutorial/contract-fundamentals-part-2. When one of the four factors aren’t found in a contract then legal help is sought. The court steps in to declare a contract will no longer be enforceable. CITATION Law132 l 1033 (LawTeacher, 2013)
Reading the case, we realised that Mr. Pearson filled a suit alleging lack of consideration because he was asked to transfer ownership and the only evidence ofof he getting getting $75,755 as consideration from Ms. Joelson is, Ms. Joelson saying that she gave it in a shoebox, while having no proper evidence as such. Which quite prominently shows that there is lack of consideration.
As mentioned, considering the court recognizing there being no consideration in the particular contract then the contract becomes unenforceable, since the contract would collapse, the property and the money would be restorable by Mr. Pearson. See Example: Glasbrook Bros Ltd v. Glamorgan County Council (1925) where a coal mine owner promised to pay for extra police protection during a strike, and later the coal mine owner did not pay. The court declared that the contract is unenforceable as there was lack of consideration. CITATION Law25 l 1033 (LawTeacher, 1925). 2.Do you think there was a lack of consideration in this case? (Just because the court said so does not mean you have to agree.)
Answer: Consideration is the benefit that is bargained between two parties in a contract, in other words consideration is what are the parties going to get in return in a contract. CITATION Law18 l 1033 (Law.com, 2018) HYPERLINK “https://dictionary.law.com/Default.aspx?selected=305” https://dictionary.law.com/Default.aspx?selected=305To give an opinion on whether there was lack of consideration I wanted to look at both the sides of the case at hand. Ms. Joelson said she asked Mr. Peaterson to transfer the ownership of the property to her brother Larry, she made a deed with Mr. Pearson;sPearson’s name on it and mentioned a consideration of $75,755 which she said she paid to Mr. Pearson through cash sent in shoebox. Another observable trait in the case is Mr. Pearson’s age, he was 84-year-old when this deed was made, which means that there were chances of him being non coherent with what he says or claims because a lot of times people at that age start forgetting what happened or what they said this is called as Alzheimer’s i.e. age related memory loss, its normal and is mild forgetfulness which is considered normalattitude. CITATION NIH18 l 1033 (NIH, 2018). HYPERLINK “https://www.nia.nih.gov/health/do-memory-problems-always-mean-alzheimers-disease” https://www.nia.nih.gov/health/do-memory-problems-always-mean-alzheimers-disease This point does seem like a point of consideration, but we observed that Mr. Pearson allegedly claimed in the case that he never received any money, even if he was not coherent the fact still lies that only evidence of Ms. Joelson paying the money is her saying it through her mouth, there is no other evidence like withdrawal slip etc. So, there was a deed made with Mr. Pearson’s name and no evidence of consideration literally being paid, there sure there seems to be lack of consideration while ignoring his age factor because Ms. Joelson could not come up with any evidence to prove so. , Aas Mr. Pearson agreed to make a deed of ownership without getting anything in return . tThis amounts to obtaining consent through fraudulent means, which invalidates a contract.
In similar case like that of Stilk v. Myrick (1809) which spoke about a return journey of a ship from London to Baltics, during the journey two crew members abandoned the ship, so the captain offered to pay extra to the remaining crew for returning back to London. Later the captain did not pay. This case was decided about 200 years ago but it still remains the core principle in the contract law specially for consideration. The case determined that consideration is very important for a contract to be enforceable. CITATION Law13 l 1033 (LawTeacher, 2013). Another case indicating lack of consideration is a case of Williams v Roffey Bros ; Nicholls (Contractors) Ltd 1991, where the plaintiff Williams allegedly claimed that Roffey Bros contractors had offered him to pay extra for completion of a project and didn’t pay later, so the court declared that paying consideration was enforceable, which shows that consideration is a very important part of a contract. CITATION Law131 l 1033 (LawTeacher, 2013)SoSo, I would conclude saying that through analysing the case deeply with precedents I also believe that there is lack of consideration in this case.
Court makes a contract unenforceable due to lack of consideration in four 4 main scenarios:One of the parties was legally obliged to do the same anyways. This could be understood from an example of, a police officer cannot claim for price money for catching a wanted criminal because it’s his legal obligation to find criminals. Example: Glasbrook Bros Ltd v. Glamorgan County Council (1925) where a coal mine owner promised to pay for extra police protection during a strike, and later the coal mine owner did not pay. The court declared that it was the police’s obligation already, so they don’t have to be paid extra for that. HYPERLINK “https://www.lawteacher.net/free-law-essays/contract-law/a-contract-is-void-without-consideration-contract-law-essay.php” https://www.lawteacher.net/free-law-essays/contract-law/a-contract-is-void-without-consideration-contract-law-essay.phpA promise for gift- If an aunt of a person A promises to give her house to her niece i.e. person A, and she eventually ends up not giving the house then such a promise won’t be an enforceable contract because person A anyways didn’t promise to give anything in return to her aunt for the house, it was more of a one sided promise. An exchange for past consideration- when someone promises to give you something for an act you have done before. For example, if a person X promises to pay $1000 to another person Y because, person Y quit drinking alcohol last year. This case even if person X doe not pay it is acceptable and the contract won’t be enforceable because the action for what person Y was going to be paid was done a year ago already. Another example is of Re Mcardle (1951), this case is about a house where a wife with her three grown up children, and one of the children’s wife made some decorations in the house later the other children promised to pay her for this and they signed a contract, but this contract or promise was unenforceable because the work had been done before the promise was even made. HYPERLINK “http://www.e-lawresources.co.uk/Re-McArdle.php” http://www.e-lawresources.co.uk/Re-McArdle.php Misleading bargain- For example, If the state law where person X lives prohibits firing an employee for not signing a noncompete agreement, the company makes the employee X sign the agreement anyways on a threat to fire them, then this agreement won’t be enforceable because instead of giving some consideration like a compensation for employee X to sign the agreement, the company threatened him. HYPERLINK “https://www.nolo.com/legal-encyclopedia/consideration-every-contract-needs-33361.html” https://www.nolo.com/legal-encyclopedia/consideration-every-contract-needs-33361.html3. Do you think there was any actionable fraud in this case? If yes, identify the fraud (who committed the fraud and the conduct that was fraudulent). If no…keep looking!
Answer: Fraud is a civil tort that is observed in contract laws, where one party presents false statements knowing that they are not right. CITATION Min18 l 1033 (Minc, 2018) On my analysis of the case given there two prominent frauds noticed,
Making a deed with Mr. Pearson’s name on it but not signature, this clearly shows fraudulent misrepresentation as Mr. Pearson did not sign and anyone can just write somebody else’s name to manipulate the situation to gain benefits out of it. The fraud was committed by Ms. Joelson she was taking advantage of Mr. Pearson’s age, he was 84 year old84-year-old when this new deed for transfer of property was made and as mentioned earlier at this age people can suffer from dementia or Alzheimer’s, so taking advantage of this factor Ms. Joelson tried to fraud Mr. Pearson by making a deed not exactly with his consent as their was no sign, and mentioned consideration on it while not literally paying it and she thought she can get away with this because he is old and his statement wont be very coherent.The deed made as a transference from WAHC to WAHC, which means that Mr. Pearson’s property was financed by WAHC, later Ms. Joelson asks to transfer the property to her brother Larry, who goes and transfers the property back to WAHC. This isThis fraud is committed by Ms. Joelson, WAHC and Larry. First Ms. Joelson convinced Mr. Pearson to finance a property through WAHC while she was a part owner, then she wanted the property to be transferred to her brother Larry and so she made a deed with Mr. Pearson’s name and no signature ( this as already discussed is fraud), Larry goes and sells ownership to WAHC shows Larry’s involvement in his sisters fraud that he knew that wrong act i.e. fraud deed was being made, and lastly WAHC also agreeing for taking the ownership from a deed that was completely fraud makes them an involved party in the fraud.
The conduct of Ms. Joelson suggests a serious mala fide intention to fraud Mr. Pearson and execute a contract based on obtaining his consent through fraud and misrepresentation. This is proof enough to suggest a suit for actionable fraud.
References BIBLIOGRAPHY JEC, 2018. Elements of a contract. Online Available at: http://jec.unm.edu/education/online-training/contract-law-tutorial/contract-fundamentals-part-2Accessed 24 November 2018.
Law.com, 2018. Consideration. Online Available at: https://dictionary.law.com/Default.aspx?selected=305Accessed 24 November 2018.
LawTeacher, 1925. Case study 2: Glasbrook Bros Ltd v Glamorgan County Council (1925). Online Available at: https://www.lawteacher.net/free-law-essays/contract-law/a-contract-is-void-without-consideration-contract-law-essay.phpAccessed 24 November 2018.
LawTeacher, 2013. A contract is void without consideration. Online Available at: https://www.lawteacher.net/free-law-essays/contract-law/a-contract-is-void-without-consideration-contract-law-essay.phpAccessed 24 November 2018.
LawTeacher, 2013. Stilk v Myrick (1809) 170 ER 1168. Online Available at: https://www.lawteacher.net/cases/stilk-v-myrick.phpAccessed 24 November 2018.
LawTeacher, 2013. Williams v Roffey Bros ; Nicholls (Contractors) Ltd 1991 1 QB 1. Online Available at: https://www.lawteacher.net/cases/williams-v-roffey.phpAccessed 24 November 2018.
Minc, 2018. What is Fraudulent Misrepresentation?. Online Available at: https://www.minclaw.com/legal-resource-center/what-is-fraudulent-misrepresentation/Accessed 24 November 2018.
NIH, 2018. Alzheimers. Online Available at: https://www.nia.nih.gov/health/do-memory-problems-always-mean-alzheimers-diseaseAccessed 24 November 2018.