Sara and Mala are two close sisters who have recently entered
into a contract, whereby they jointly own LT Limited, a new tech
firm in Melbourne,Australia. Over the years they have had no major
arguments or disputes, however this new business venture has put
their relationship to the limit. Multiple employees are concerned
about their yelling and the hostile environment that is being
caused by Sara and Mala’s relentless arguing.
After a number of complaints, Mala decides that she is fed up with Sara and decides she wants to walk out of the business. Sara and Mala sit down for another meeting so Mala can discuss his exit plan. The meeting goes poorly, and Mala leaves yelling “I own 50% of this company, if you want this company to continue, you must buy me out!”
Sara is left angry and confused. Reluctant to buy out her sister, she decides to consult her lawyer on whether she has to pay Mala. The lawyer suggests that there may not be a valid contract at all.
Question Using principles of Contract Law advise Sara whether a valid contract between Sara and Mala has been properly formed. Justify answer using case law.
After a number of complaints, Mala decides that she is fed up with Sara and decides she wants to walk out of the business. Sara and Mala sit down for another meeting so Mala can discuss his exit plan. The meeting goes poorly, and Mala leaves yelling “I own 50% of this company, if you want this company to continue, you must buy me out!”
Sara is left angry and confused. Reluctant to buy out her sister, she decides to consult her lawyer on whether she has to pay Mala. The lawyer suggests that there may not be a valid contract at all.
Question Using principles of Contract Law advise Sara whether a valid contract between Sara and Mala has been properly formed. Justify answer using case law.
