BUSINESS PRACTICE VIGNETTES

Business Practice Vignettes

Business Practice Vignettes

Question 1

There are several specific types of equitable estoppel. Promissory estoppel is a contract law doctrine. It occurs when a party reasonably relies on the promise of another party, and because of the reliance is injured or damaged. For example, suppose a restaurant agrees to pay a bakery to make 50 pies. The bakery has only two employees. It takes them two days to make the pies, and they are unable to bake or sell anything else during that time. Then, the restaurant decides not to buy the pies, leaving the bakery with many more pies than it can sell and a loss of profit from the time spent baking them. A court will likely apply the Promissory Estoppel doctrine and require the restaurant to fulfill its promise and pay for the pies.

Gigi does have any contract with Mr Zen as Mr Zen deal this with her through a personal letter from Zen explaining his “committed intention” to lease 400 square metres from Gigi for a Park N Shop outlet in the shopping complex that Gigi “has under development at Holden Hill” (Lundquist, 2009). An estoppel certificate is a written declaration signed by a party who attests, for the benefit of another party, to the accuracy of certain facts described in the declaration. The estoppel certificate prevents the party who signs it from later challenging the validity of those facts. This type of document is perhaps most common in the context of mortgages, or home loans. If one bank seeks to purchase mortgages owned by another bank, the purchasing bank may request the borrowers, or homeowners, to sign an estoppel certificate establishing (1) that the mortgage is valid, (2) the amount of principal and interest due as of the date of the certificate, and (3) that no defenses exist that would affect the value of the mortgage. After signing this certificate, the borrower cannot dispute those facts.

Question 2

Contract law has been more formally defined as a promise or set of promises which the law will enforce. Another definition and a somewhat competing view, is that a contract is an agreement giving rise to obligations which are enforced or recognized by law. Either definition confirms the involvement of the law by way of enforcement, suggesting that should there be an infraction or breach of the terms of the agreement then the aggrieved party may seek recourse via the Courts(Cooke, 2000). As is noted above, a contract can arise is a plethora of scenarios; from buying a loaf of bread in the corner shop, to the sale of a house. It is unsurprising therefore that certainty is needed before the Courts will intervene to enforce any agreement. The law of contract has confirmed the basic foundations of any contract, regardless of its complexity and substance, that it must contain to make the agreement enforceable in law.

There must be an offer and this must be accepted to make an ...