Faculty of Business Environment and Society Essay

Faculty of Business Environment and Society - Essay Example I began by explaining to the producer what the requirements and contents of a legally binding agreement actually are, and how they apply specifically to this case. I also gave a general summary of what the show could expect, as per liabilities and legal redress, if the hostess backed out or tried to renege on the deal. The conversation was long and extensive, covering the main points of the legal issues as outlined herein. The first issue I advised Simon on was the need to be careful in what he might assume to be small talk or simple, informal negotiations, because one needed to consider that oral and written contracts are considered to be on the same standing when it comes to law. In order to take this into account, I advised, the director should be explicitly clear with Davina when they were negotiating informally, and in the best case scenario, to have a legal advisor present at all formal negotiations. This is not to say that if the two had drinks together and Simon promised the moon to Davina while under the influence all would be binding, but simply the need to be clear and careful in all communications. At this point, I decided it was a good time to explain that the common law accepted both objective and subjective proofs of legal contract agreements. As Mindy Chen-Wishart explains in Contract Law: â€Å"The subjective approach, which favors what a party's actual intention is, regardless of appearances; and The objective approach, which refers to how a reasonable person would interpret a party's intention from his conduct in all the circumstances.† (Chen-Wishart, 2007) Chen-Wishart also quotes Smith vs. Hughes (1871) as the main case law precedent related to the objectivity test, which posits a test of â€Å"reasonability† to determine how the average person would interpret a party’s intention in negotiation in forming a contract as decisive. (Chen-Wishart, 2007) When Simon asked how he could make sure he was not bound by informal ag reements or understandings when talking with business clients, I reiterated this was the overriding need for keeping legal representation present at all times when officially discussing business terms. While the handshake agreement remains popular in some circles, it is a dangerous way to conduct business in modern times, I concluded, precisely because of the lack of witnesses and clarity of situation involved in private, two-party negotiations. After this, Simon asked exactly what requirements were considered most important to make a contract legally binding for all parties following the initial negotiation. While there is a broad corpus of case law referencing contracts, I replied, the main factors could be considered: 1. â€Å"Agreement - where one party makes an offer and the other accepts it; 2. Consideration - where one party gives something in exchange for something from the other party; 3. Intention - where both parties intend to abide by the contract; 4. Capacity - where b oth parties are mentally capable of understanding a contract; 5. Genuine consent - where both parties agree to the contract of their own free will; and 6. Legality - where all of the parts of the contract are legal.† (Victorian Law Foundation, 2011) The principle of agreement, I said, could be applied to either the verbal or written contract and was based on mutual