Law in Business - 1870 Words

On 15th October 2010 East Midlands Airways (EMA) advertise a second-hand Airbus 321 for sale in an aviation industry trade journal for  £12.5m. Later that same day, Colvin, the Chief Executive Officer of Houston Aviation Ltd, phones EMA’s Managing Director Patricia. Colvin says that his firm would very much like to view the Airbus 321 but that he is off on a 5 day business trip to Dallas, Texas and will not be able to view the aircraft until he returns. Patricia says that if another buyer comes forward she will have to sell the Airbus 321 to that buyer. Colvin then says he will pay  £100,000 if EMA promises not to sell the Airbus 321 to another buyer for the next 5 days. Patricia agrees to this. Analyse whether any contract has been made†¦show more content†¦The view the courts take is that they don’t look into whether the parties actually intended to create a legal agreement but whether they appeared to the reasonable person to have that intention.[5] In Parker v Clark Lord Devlin said ‘ the question (whether or not there is a binding contract) must, of course, depend upon the intention of the parties, to be inferred from the language they use and from the circumstances in which they use it’ In this situation Patricia isn’t legally bound to sell the plane to Colvin however she is legally bound not to sell the plane for five days, as Colvin is to pay EMA. An agreement can also not amount to a contract unless each party gives some ‘consideration’ to the other. In bilateral contracts the consideration of both parties takes the form of a promise to do something in the future.[6] In Currie vs Misa the definition of consideration was made ‘ A valuable consideration, in the sense of the law, may consist either in some right, interest, profit or benefit accruing to on party, or some forbearance, detriment, loss or responsibility, given, suffered or undertaken by the other.’ Colvin is offering to give  £100,000 in the future and Patricia is offering to not sell the plane for five days. This also fits Sir Frederick Pollocks definition of consideration as being ‘the price of promise.’[7] Consideration must be sufficient but need not be adequate, it must have some economicShow MoreRelatedBusiness Law3143 Words   |  13 Pages2012 – OCTOBER SEMESTER 2012 STUDENT NAME: CHU THI HONG TUYEN ID No.: 2448481 BMLW5103 – BUSINESS LAW ASSIGNMENT Question 1 Discuss the enforceability of an agreement which lacks consideration. 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