Business Law - The Four Step Process Essay Example | Topics and Well Written Essays - 1750 words

Business Law - The Four Step Process - Essay Example Consideration is anything that is given in exchange for the promise that is received. STEP TWO There are three main requirements for the formation of a legally enforceable contract including intention to enter into a legally binding agreement, agreement (offer and acceptance) and consideration (without giving note to the value of consideration). Firstly, regarding communication, as a general rule, the acceptance would take effect only after it has received by the offeror in this case Peter. Here since the system of sending and receiving messages is instantaneous, as soon as the message is received by the offeror, acceptance takes place. However, it should be received by Peter in his email system. This was a rule proposed by the case Brinkibon Ltd v Sthalwharenhandelsgesellschaft [1983] 2 AC 34; [1982] 1 All ER 293 (Beatrix 2005). The acceptance cannot be considered to be accepted unless it is properly communicated and in this case, once the message is in the inbox of the offeror†™s email, the acceptance would be activated. Further in this case, the acceptance had to ensure by the conduct of Sally, mainly by posting the bike immediately, as requested by Peter. The acceptance was received before the proposed due time suggested by Peter. Regarding the intention to enter into the contract, the same is usually decided objectively by the courts. Here it would be important to see if a reasonable person placed in Peter’s shoes would regard the agreement as binding. Two factors that would ensure that the contract is legally binding is that since it should occur between non-related persons where greater importance is given to ensuring a formal nature of the agreement, and secondly since all the discussions are in writing, there are better chances of getting the contract legally enforced. Another legal issue is regarding consideration, which is also an important factor after offer/agreement and intention. Only if there is an offer, which is agreed and intenti on of the parties to enter into a legally binding agreement along with a consideration, would it be considered a valid contract. Consideration is anything that has value and is given as an exchange for fulfilling the promise and courts would not look at the value of the consideration. To ensure that the contract is legally binding, a valid consideration should be present. This was demonstrated in the case Thomas v Thomas (1842) QB 851 (Lawnix 2012), where the court decided not to go into looking at the adequacy of the consideration. STEP THREE As proposed in the case Brinkibon Ltd v Sthalwharenhandelsgesellschaft [1983] 2 AC 34; [1982] 1 All ER 293 (Beatrix 2005), once the message of acceptance has been communicated to Peter and the message reaches Peter’s system within the time the offer would be available, the same is considered as accepted. Hence, since the message reaches Peter’s system by 4:45 pm before the close of business day, the contract is active and is lega lly binding on Peter, who has to accept it. He has certain liabilities and has to pay the consideration. According to the legal systems, email communication is considered as an instantaneous mean of communication and the rules are not clear, but would be similar to the laws that exist for fax communication, since both are sending and received instantaneously. However, the message has to be received