Contract Modification and Oral Agreements

This assignment delves into a contractual dispute between Stuart and Westphalia Marts Pty Ltd regarding a lease agreement. The central issue revolves around the enforceability of oral variations to the initial written contract. The analysis examines legal principles pertaining to contract modification, particularly considering the Australian common law perspective. It draws upon relevant case law and legal doctrines to determine whether the oral agreements supersede the original written terms and ultimately impact the financial obligations between the parties.

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Cover Sheet
Name of the student
Student ID
Word count

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Contents
Solution 1....................................................................................................................................................3
Issue........................................................................................................................................................3
Applicable Law.......................................................................................................................................3
Application of Law..................................................................................................................................4
Conclusion...............................................................................................................................................4
Solution 2....................................................................................................................................................4
Issues.......................................................................................................................................................4
Applicable law.........................................................................................................................................5
Application of law...................................................................................................................................5
Conclusion...............................................................................................................................................6
Solution 3....................................................................................................................................................6
Issue........................................................................................................................................................6
Applicable law.........................................................................................................................................6
Application of Law..................................................................................................................................7
Conclusion...............................................................................................................................................8
Bibliography................................................................................................................................................9

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Solution 1
Issue
Can Mojo Beverage is bound to pay $100,000 to Ben?
Applicable Law
A contract is a legal document which is established amid two parties, offeror and offeree along
with legal intention (Merritt v Merritt , 1970), consideration (Thomas v Thomas , 1842)
and capacity. (Moles, 1998)
An offeror is the person who makes an offer to the offeree wherein he communicates his
intention to an offeree with an expectation of approval (Smith v Hughes, 1871). When an
offer is made then it is necessary that it must come within the knowledge of the offeree to
make it valid in law (Carlill v Carbolic Smoke Ball Co , 1893). (HandBook, 2016)
When an offeree receives the offer and gave his approval to the said offer then it is an acceptance
in law (Crown v Clarke , 1927). An acceptance should be made by the person to whom
the offer is made. An acceptance by some other person is no acceptance in law. When the
acceptance is made then it must reach the offeror in order to be binding (Powell v Lee ,
1908). (Clarke, 2012)
However, when unilateral offers are made then in such cases if the offeree comply with the mode
of acceptance that is provided in the offer then such compliance results in deem
acceptance and there is binding agreement amid the parties (Carlill v Carbolic Smoke
Ball Co , 1893) & (Great Northern Railway Company v Witham , 1873). (Fraser, 2013)
However, when no offer is made but offers are invited with the help of advertisements, tenders,
etc, then, it is an invitation to treat and the desired person must make offers to inviter
which when accepted results in agreement (Partridge v Crittenden , 1968).
Many a times, when changes are brought in the offer/proposal by the offeror, then, it is essential
that the confirmation must be done to the new offer/proposal in order to make a binding
contract amid the parties.

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Application of Law
An advertisement is issue by Mojo as per which it declare prize of $100,000 and is given to such
a person who will catch Lord Harry which is tagged by them. However, the pries of
$100,000 was a misprinting and the actual pries which is declared by Mojo was $1,000.
Normally, the advertisement as per (Partridge v Crittenden , 1968) is an invitation to treat. But,
the advertisement that is issued by Moo falls in the category of the unilateral offer as
defined under (Carlill v Carbolic Smoke Ball Co , 1893). This is mainly because Mojo
has laid down the mode of acceptance’ that is to catch the tagged Lord Harry’ and that
was construed as a mode of acceptance. Thus, it is a unilateral offer that is declared by
Mojo.
Ben who was one of the intended person, by relying on the advertisement catches the tagged
Lord Harry.
It is submitted that an offer was made by Mojo @ $ 1,000 which was within the knowledge of
Ben (he is aware that the pries is $ 1,000 and not the greater amount). Thus, the
communication of offer is complete.
Also, by catching Lord Harry, Ben, has complied with the mode of acceptance as declared by
Mojo. Thus, there is an acceptance by conduct on the part of Ben.
Both the parties are capable to enter into a contract, had legal intent and the offer and acceptance
is supported by consideration of $ 1,000
Conclusion
Thus, all the elements of contract are present. There is a contract amid Ben and Mojo, but, Ben
can only claim $ 1,000 from Mojo.
Solution 2
Issues
I. Is there a valid contract between Livestock Brokers and Dorper Sheep Sellers Pty Ltd,
when the fax is sent by Livestock Brokers on 14th June?
II. Whether the contract is considered to be complete if Livestock Brokers would have sent
fax but is not received by Dorper Sheep Sellers because of transmission error?

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Applicable law
To make any contract, it is necessary that there must be presence of agreement (which is made
with the presence of valid offer and acceptance), lawful aim of the parties, supporting
consideration and the capacity of the parties. (Moles, 1998)
To initiate any contract, there is should be an offer. An offer is the proposal which is made by the
offeror to an offeree wherein he dictates his terms and condition which he desires to be
comply with by the offeree with an expectation of approval. An offer must be made by an
offeror and should reach and offeree to make it valid (Gibson v Manchester City Council
- CA , 1978).
Once the offer comes within the knowledge of the offeree and once the offeree gave his assent to
the terms and conditions of the offer then it is an acceptance in law. An acceptance must
also come in the knowledge of the offeror to make valid. Now, if the offeree does not
make an acceptance as per the terms of the offer but brings variation to the offer terms
when giving his consent then it is not an acceptance and is counter offer which has the
capacity to cancel the offer and is held in (Hyde v Wrench , 1840). (S, 2001)
But, if statements of enquiry or suggestions are exchanged amid the parties then it is not counter
offer in law and the offer should be considered to valid which when accepted result in
binding contract amid the parties and is held in (Stevenson v. McLean , 1880).
In contract law, an acceptance when made with the help of post then such an acceptance is
complete there and then (Mendelson-Zeller Co Inc v T & C Providores Pty Ltd, 1981).
But, when the acceptance is made with the help of fax, email etc, then, it is held in
(Express Airways v Port Augusta Air Service , 1980), that the acceptance is complete
when it comes in the knowledge of the offeror. If the offeror is not aware of the
acceptance then such an acceptance is incomplete in law. (Teacher, 2016)
Application of law
a)
On 1st June, Dorper Sheep Sellers Pty Ltd sent a letter to Livestock Brokers where it made an
offer to sell sheep flock for sale and quoted price for the same. Dorper Sheep Sellers Pty
Ltd has kept the offer open till 14 days.
Now, the offer made Dorper Sheep Sellers Pty Ltd reaches the knowledge of Livestock Brokers
and is thus a valid offer. Now, Livestock Brokers must accept the offer within 14 days in
order to make it a binding acceptance in law.
Also, it is held in (Stevenson v. McLean , 1880)that the inquiry that is made by Livestock
Brokers on 6th June is not a counter offer as there is no variation in the offer terms. Thus,

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there is no counter offer that is made by Livestock Brokers to Dorper Sheep Sellers Pty
Ltd.
So, when Livestock Brokers has made an acceptance on 14th June, then at that time the offer that
is made by Dorper Sheep Sellers Pty Ltd is still valid. Thus, the acceptance by Livestock
Brokers is valid.
So, there is a contract amid Livestock Brokers and Dorper Sheep Sellers Pty Ltd
b)
It is submitted that if the fax of acceptance that is made by Livestock Brokers sent on 14 June if
not reached by Dorper Sheep Sellers because of a transmission error, then it is submitted
that as per (Mendelson-Zeller Co Inc v T & C Providores Pty Ltd, 1981) such an
acceptance is invalid in law.
The acceptance should have reached to Dorper Sheep Sellers to make a binding contract amid
the parties.
Conclusion
It is thus submitted that there is a concluded contract that is established amid Dorper Sheep
Sellers Pty Ltd and Livestock Brokers when the fax is sent by Livestock Brokers on 14th
June to Dorper Sheep Sellers Pty Ltd.
However, the acceptance that is made by fax on 14th June by Livestock Brokers which is not
received by Dorper Sheep Sellers Pty Ltd is not a valid acceptance as it does not come
within the awareness of Dorper Sheep Sellers Pty Ltd because of transmission error.
Solution 3
Issue
Is Stuart should pay the entire amount since January 2015 and the deficit of $300 per week for
2014 to Westphalia Marts Pty Ltd?
Applicable law
When any document which as sanctity in law then it is a contract. A valid contract in law is the
combination of offer, an acceptance, the lawful purpose, the capacity of the parties and
the supporting consideration. (Clarke, 2012)
Every valid contract contains terms which must be fulfilled by the parties to the contract. The
conditions which are equally decided by the parties before the formation of the contract
are called express terms. Whereas the terms which must be comply with by the parties
under law, custom, usage, etc are implied terms. Both the terms must be fulfilled in law
in order to avoid any kind of breach of contract. (Sainsbury, 2009)

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Once the terms are decided then the parties must comply with them. Now, in any written contract
the law does not allow any kind of variations unless and until the same variation is
brought in by the parties by written mode. The law does not permit any kind or oral
variations in law. But, if the parties orally decide to carry the written terms of the contract
then such variation is permissible provided it is mutually decided by the parties (Globe
Motors Inc v TRW Lucasvarity Electric Steering Ltd , 2016). (M, 2016)
Application of Law
That the lease contract is established amid Stuart and Westphalia Marts Pty Ltd where Stuart has to
pay $1000 per week at the end of 2010. He ran the business successfully for some years.
That a written contract that is established amid Stuart and Westphalia Marts Pty Ltd and both the
parties must comply with its terms. If changes are required then the same must be made
in written form but of oral variations are needed then the can be oral if decided mutually
by the parties (Globe Motors Inc v TRW Lucasvarity Electric Steering Ltd , 2016)
Now, in 2013 he faced a decrease in sales. Thus, Stuart seek the help of Westphalia Marts Pty
Ltd and asked the reduction in the rent from $ 1000 to $700 per week. He asked the
reduction in rent till the time the business is not improved. Now, an oral agreement is
reached amid Stuart and Westphalia Marts Pty Ltd where in Westphalia Marts agreed to
allow Stuart to pay the reduced rent and in January 2014 Stuart began to pay the new
agreed rent of $700.
Now, this oral variation has changed the written terms that are agreed amid Stuart and
Westphalia Marts Pty Ltd.
It is submitted that as per (Globe Motors Inc v TRW Lucasvarity Electric Steering Ltd , 2016)
these oral variations are valid in law as the same are mutually decided by both the parties,
that is, Stuart and Westphalia Marts Pty Ltd. these oral variations will supersede the
written lease contract that is made amid the parties as they same is incorporated by the
parties mutually.
So, Westphalia Marts Pty Ltd cannot ask Stuart to disburse the complete amount of $1000 per
week rental beginning in January 2015 and cannot demand the shortfall of $300 per week
for each week of the year 2014.
Conclusion
It is thus concluded that there is a valid written contract amid Stuart and Westphalia Marts Pty Ltd
which is also validly modified by both the parties with the help of oral communications
and is imposed by the parties.
Thus, Westphalia Marts Pty Ltd cannot force Stuart to pay any kind of increased rent.

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Bibliography
Carlill v Carbolic Smoke Ball Co (1893).
Clarke, J. (2012). Australian Contract law . Retrieved October 12, 2017, from
http://www.australiancontractlaw.com/law/formation-agreement.html
Crown v Clarke (1927).
Express Airways v Port Augusta Air Service (1980).
Fraser, G. &. (2013). Business Law 2014. Pearson Higher Education AU.
Gibson v Manchester City Council - CA (1978).
Globe Motors Inc v TRW Lucasvarity Electric Steering Ltd (2016).
Great Northern Railway Company v Witham (1873).
HandBook, T. L. (2016). The Law HandBook. Retrieved October 12, 2017, from Elements of a contract :
http://www.lawhandbook.org.au/07_01_02_elements_of_a_contract/
Hyde v Wrench (1840).
M, H. (2016). Contract Modification. Retrieved October 12, 2017, from
http://contracts.lawyers.com/contracts-basics/contract-modification.html
Mendelson-Zeller Co Inc v T & C Providores Pty Ltd (1981).
Merritt v Merritt (1970).
Moles, R. (1998). Offer and Acceptance . Retrieved October 12, 2017, from Contract Law Lecture -
Formation of Contract : http://netk.net.au/Contract/02Formation.asp
Partridge v Crittenden (1968).
Powell v Lee (1908).
S, H. (2001). Email Contracts - When is the Contract Formed?" . Retrieved October 12, 2017, from
http://www.austlii.edu.au/au/journals/JlLawInfoSci/2001/4.html#fn8
Sainsbury, M. (2009). Moral Rights and Their Application in Australia.
Smith v Hughes (1871).
Stevenson v. McLean (1880).

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Teacher, T. L. (2016). Cases On formation a Contract Offer . Retrieved October 12, 2017, from
http://www.lawteacher.net/cases/contract-law/agreement-cases.php
Thomas v Thomas (1842).