Business and Corporations Law Common Law Jurisdictions

Question: Describe about the Business and Corporations Law for Common Law Jurisdictions. Answer: The concept of past consideration being not good consideration is no longer valid since the High Trees case. Analysis Issue: In common law of jurisdiction, a contract is a piece of legal document to enforce a promise to be contained in a deed or supported by a consideration. Considerations are one of the building blocks of a contract. In Australia, the law of contract in Common Law Jurisdictions concerned with bargain. The consideration for a promise is a situation where some profit, interest or benefits accrues to one party who is making a promise as a result of some loss, detriment or responsibility that has been undertaken by the promise. The common statement pertaining to a consideration is often expressed as consideration should be executor or executes and not past. As an illustration, an example of past consideration can be cited where an owner of an office arranges to make additional woodwork at the outside of adjacent office as a voluntary act while the adjacent is on closed. When the owner of adjacent office returned, he was happy with other companys kindness and promises to share the cost. Later if the owner of the adjacent office would refuse to pay, the owner of the office who performed extra woodworks cant take any action as past consideration is no consideration. This principle has a link with Oak Tree Housing Property way back in mid twentieth century during World War II. Before the World War 2 broke out, the owner of this housing property had lease agreement on a certain rate. However, during the World War II, many of the flats got vacant the owner had to settle new lease agreement with a lower rate where no time limit was specified. Once the war was over, the demand for housing went up and the owner wanted to go back to earlier higher lease rate. But it was considered as the case of past consideration (Valente, 2010). Consideration stands for value of something which is promised for the purpose of entering into a contract. Consideration may be of any type including money, goods, services or some actions which is agreed upon. Each contract contains a consideration which binds the agreement legally and this forms a critical part of formation of contract. Hence the benefit is enjoyed through past consideration while making a contract. Otherwise, every party signing the contract promised to do something for the exchange of some consideration. The absence of proper consideration in tangible form cannot force anyone to enter into a contract. Hence if there is no consideration specified in a contract, the same is going to be void and not enforceable. The contracts can be of different types with the nature of participants. It may be bilateral or unilateral contracts. Bilateral contract are being made between two parties who enter into an agreement for some consideration with the action of making mutual pr omises to one another for some considerable purpose. For unilateral contract, there are two parties who have entered into an agreement for some monetary consideration for some job promise by other party. Normally parties of bilateral contract are bounded with their promises during the time when the promise was made. But unilateral contract normal used to bind a person who had initiated the process making promise. So the other party to the unilateral contract is not considered as making provision of for consideration till the time he had ensured the action as promised under the contract. Normally the courts do not involve them in the debate of amount of consideration to be exchanged as per the agreement of the contract. At times it is observed that the minimal or nominal value can be initiated as the constituent of the contract to be endorsed as consideration. In case of reviewing past consideration, the court concentrates in the main issue of the value of consideration to be proved as sufficient. The mandatory implication of consideration is to make compliance of the promise for the current contract(ASX, 2016). Rule: The conventional rule related to agreement is a promise which is based upon the foundation of moral or past consideration is to be treated as a promise to donate with no force as such from any party. There are three main situations which are treated as exception to traditional rule. They are: Promise to repay a debt which is proved to be barred by statute of limitations enforceable although if there is some new consideration is implemented. The second exception to this act states that a promise which is based upon morality with consideration of the past is not enforceable is a promise which binds to perform an obligation which can be voidable in nature. This promise can be enforceable even with the absence of fresh consideration till the time the new promise is made which is not subject to the prevailing defence which made the main obligation as voidable. The third exception applicable to the act which says that the promises which are based on moral or past consideration are not liable to be enforced while repayment of debts is void due to the occurrence of bankruptcy(Legislation, 2001). Case study- Research: During the hearing of the case the judge, Denning J decided that the mount of full rent is to be paid since the period when the flats got fully occupied in mid 1945. Again he added that without any precedence created the statement that in case of the Central London tried to recover the full rent from 1940 onwards, they would not be allowed to do so, as per the case judgment of Hughes Vs. Metropolitan Railway Co. Basic reason for this was that in case of any party makes other party trust that there will be no enforcement of his legal rights, then the court will restrict him to do so at a post-stage. Hence decision, without creating any precedence is created the doctrine of promissory estoppel. There were attempts made to make the utilisation of the doctrine promissory estoppels after High Trees for creating new effort in the application of the contractual law through Pinnels case which says that an agreement of accepting part payment against any debt as full consideration is with full satisfaction. The judge of the High Trees case, Lord Denning told without creating any precedence that the enforceable agreement like this will be treated as within the periphery of doctrine of promissory estoppel. Although the court is not willing to accept the case of Pinnel and Foakes V Beer due to the reason that it had formed part of common law by neglecting the full law at their wish. There is other verdict from Lady Justice Arden in case of Collier V P MJ Wright, it had been accepted on principle that the judgement of High Trees should be used for the purpose of extinguishing right of the creditor to tense full payment of any debt in such phenomenon. In the case of Amalgamated Investm ent Co. V Texas Bank, the judgment was that the doctrine of promissory estoppels could be treated as a sword and not like a shield which means that estoppels can be used as the cause of action and not for the purpose of defending any action(Abc, 2012). References: Abc, 2012. James Hardie directors breached duties: court. [Online] Available at: https://www.abc.net.au/news/2012-05-03/high-court-rules-in-favour-of-asic-in-hardie-case/3987196 [Accessed 16 September 2016]. ASX, 2016. Annual General Meeting. [Online] Available at: https://www.asx.com.au/asxpdf/20160418/pdf/436kwng9dkn2sf.pdf [Accessed 13 September 2016]. Austlii, 2001. CORPORATIONS ACT 2001 - SECT 45A. [Online] Available at: https://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s45a.html [Accessed 09 September 2016]. Cunningham, W.M., 2012. The JOBS Act: Crowdfunding for Small Businesses and Startups; https://books.google.co.in/books?id=_ki98dpPksECprintsec=frontcoverdq=crowdfundinghl=ensa=Xsqi=2ved=0ahUKEwjQxN7z8ujOAhXGp48KHcpoCGAQ6AEIJjAC#v=onepageq=crowdfundingf=false. In Cunningham, W.M. The JOBS Act. Apress. pp.1-52. Legislation, 2001. Corporations Act 2001. [Online] Available at: https://www.legislation.gov.au/Details/C2013C00003 [Accessed 09 September 2016]. Valente, D., 2010. Consideration and Intention in the Law of Contract; https://www.otago.ac.nz/law/research/journals/otago036314.pdf. Enforcing Promises, pp.1-55.