Validity of Contract and Consumer Protection Laws

1
Contents
Scenario one.....................................................................................................................................2
Issue.............................................................................................................................................2
Law...............................................................................................................................................2
Application...................................................................................................................................2
Conclusion...................................................................................................................................3
Scenario two....................................................................................................................................4
Issue.............................................................................................................................................4
Law...............................................................................................................................................4
Application...................................................................................................................................4
Conclusion...................................................................................................................................5
Reference List..................................................................................................................................6

2
Scenario one
Issue
Whether there is a valid contract that is made amid David and Michelle?
Law
The contract law is the legal structure that governs the relationship amid two private persons.
The main elements that are needed to form any kind of contract are agreement, consideration,
legal intention and party’s capacity. 1
An offer is the transfer of the intention of the offeror to the offeree which he requires to be
comply with by the offeree. The intention of the offeror states the acts and the omissions which
must be comply with by the offeree. As per Carlill v Carbolic Smoke Ball Co2 it is only when the
offeree comes in the notion of the offer results in completion of the offer.
When an offer is made and later the offeror wishes to cancel the offer, then, the same can be
done only before the acceptance is completed and is held in Dickinson v. Dodds3.
The offeree must then accept the terms of the offer in order to consider the same as an
acceptance in law. As per Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (NSW)4
the acceptance so made by the offeree should reach the offeror to make it binding on the parties.
However, any acceptance made by post is complete and binding immediately when the letter of
acceptance is posted and is held in Adams v Lindsell5. There is no requirement that the letter
must reach the offeror.
At times the offer is made and an option is given to the offeree to accept the offer within some
time frame, then, the offeror has the power to sell the articles to some other person unless the
offeree has provided some consideration to hold the offer by such times and is called options.
Now, when no acceptance is made and the terms of the offer is changed while giving acceptance,
then, it is not an acceptance and is called counter offer and is held in Hyde v Wrench6. However,
seeking information or making query is neither a counter offer nor an acceptance and is held in
Stevenson, Jaques, & Co v McLean [1880]. It does not alter the status of the offer.
1 Paul Latimer, Australian Business Law 2012, (CCH Australia Limited, 2000).
2 Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256.
3 Dickinson v. Dodds [1876] 2 CHD 463.
4 Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (NSW) (1988) 14 NSWLR 527.
5 Adams v Lindsell (1818) 1 B & Ald 681.
6 Hyde v Wrench [1840] EWHC Ch J90.

3
Further, when the offer and acceptance are made, then, an agreement is made. This agreement
must be combined with some gain called consideration. A consideration must be sufficient if not
absolute and is held in Chappell & Co Ltd v Nestle Co Ltd7. The parties must also have legal
intention as per Balfour v Balfour8 and must also have capacity as per Nash v Inman9.
Application
As per the facts, Michelle is studying veterinary surgeon. A close family friend, David, is also a
veterinary surgeon.
On 1st April, David sends a letter to Michelle and submitted that he is interested in selling his
veterinary equipments to Michelle for $5000. It was also submitted in the letter that if Michelle
is interested in buying the equipment, then, he must communicate his acceptance by 15th April as
Peter was also interested in buying the same equipment.
Now, David has sent an offer wherein he expressed his desire of selling his equipment to
Michele. As per Carlill v Carbolic Smoke Ball Co the offer letter has reached Michelle thus the
offer is complete. Now, the offer has been kept open till 15th April and Michelle has the choice to
accept the offer by that time.
But, David is not obligated to not to sell the equipment to someone else as there was no
consideration that has been moved from the side of Michelle to hold the offer till 15th April.
Now, when Michelle received the letter of David, then he was keen in buying the equipment
from David. On 2nd April he wrote a letter to David wherein he submitted his desire to buy the
equipment but also asked whether David would be interested in accepting the money in
installments. Now, at this point the acceptance that was sent by Michelle was valid as per Adams
v Lindsell. The acceptance was sent by post and it makes no difference that the letter got lost in
transit.
Also, the query of seeking that the payment can be made in installments is only an information
that s sought by Michelle and thus it did not alter any of the terms of the offer as per
Stevenson, Jaques, & Co v McLean.
Later when on 9th April, Michelle sent a letter along with the cheque $5000, then it will not alter
the position of Michelle or David as the contract was already formed when the acceptance letter
was send on 2nd April. On 9th April only the cheque was sent which was received by David on
17th April.
7 Chappell & Co Ltd v Nestle Co Ltd [1960] AC 87.
8 Balfour v Balfour [1919] 2 KB 571.
9 Nash v Inman [1908] 2 KB 1