Why is contract law fundamental to a market economy

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Question 1. Why is contract law fundamental to a market economy?

Question 2. Which of the following do not amount to consideration under contract law? a. $0.05 (i.e. 5 cents)
b. A promise to think about an offer
c. A expensive painting given to the Tina the week before she makes an offer to sell a valuable vase to you

Question 3. Xavier is starting an online business called ‘footbook' that is a social networking website where people post pictures of their feet. Xavier has a lunch meeting with his sister to discuss whether she would like to invest in the business. He tells her "if I don't hear from you by

Friday I will assume you agree to my offer." Friday passes and Sally has not contacted Xavier. Can Xavier legally claim the investment money from Sally?

Question 4. Sven Ericson is an entrepreneur in the Sydney Area. He has set up a business where he gives mobile Swedish massages. He has 16 people working for him and turns over a million dollars a year.

One of his employees was accused of misconduct with a client. A news report relating to the incident has gone ‘viral' on Facebook. Sven's business is suffering from the bad publicity. Sven decides he needs to rebrand his business as a health and beauty therapy service and drop any mention of Swedish massage.

In order to fund this project Sven needs to borrow money from the bank. The bank needs guarantees against the loan and the bank suggests that Sven convince his brother Tomas and Tomas' wife Inga to use their Rose Bay house as collateral to support the loan. Tomas and Inga do not speak English but they do have business degrees from Stockholm University. Tomas and Inga sign the documents for Sven.

Sven's business does not improve as someone figured out that it was the same business just under a different name and again social media was used to warn the public to avoid Sven's business. Owing $240,000 to the bank and having no way to pay back the money Sven realises that Tomas and Inga will lose their house. Sven disappears and the bank wants to enforce their security against Tomas and Inga's house. Will the bank succeed?

Reference no: EM133062973

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