Business law Essay Example | Topics and Well Written Essays - 2250 words - 1

Business law - Essay Example bligation under a contract arises when two or more parties enter into an agreement with each or among each other and that agreement is entered into with a consideration or by Deed and no mistake, misrepresentation or frustration is attendant before, during or after the agreement. Under such kind of agreement the promisee is obliged to deliver and the promissor is entitled to receive in accordance with the terms of the contract and in the event of failure of the promisee to deliver what is expected of him, then the promissor is entitled to recover damages for breach of contract. 2 In the present case, Bajool freely entered into a contract with BSP with the terms of the contract clearly set forth in the agreement. The time of deliveries is specific as well as the manner and amount of payments in installment. Although there is always a probability that prices of any commodity may from time to time fluctuate, as in this case, Bajool did not negotiate for a provision at the time of the ag reement that would stipulate that in the event of a fluctuation, particularly a rise in the price of industrial salt, the agreed contract price shall forthwith also increase under a ‘rise and fall’ clause. Absent such a clause and considering that the contract is not long-term, Bajool is not justified in forcing BSP to agree to a different contract price and ultimately terminated the contract when the same failed. Therefore, Bajool’s termination of the contract is unwarranted and unjustified. This is especially true if the agreement of the parties had been put into writing considering that the Australian legal jurisdiction strictly adhere to the ‘parol evidence’ rule. This rule states to the effect that when the terms of an agreement are put into writing, then no other evidence of the intention and the terms that the parties agreed in the contract can be admitted to prove the terms agreed upon by them. This is the same doctrine held in the case of Me rcantile Bank of Sydney v