Principles of Contract Law in Australia

Assessment Event 1
BSBLEG415: Apply the principles of contract law
Short answer questions - Research
Respond to the questions below.
Complete and save this document and submit according to your assessment event submission instructions.
Questions
1.1
Explain the following:
1. The main features of the Australian Legal System of trial relevant to a contract law matter.
2. The specific institutions (courts) that deal with contract law matters in New South Wales.
Your answer
1. the contract law in Australia is based on the English contract law with some statutory modifications as
well as the development of the law considering the decisions given Australian courts. The law of equity
also played an important role in the contract law of Australia.
2.
1.2
Define and explain the four (4) types of invalid contracts
1. Void contracts
2. Voidable contracts
3. Unenforceable contracts
4. Illegal contracts.
Your answer
1. Void contracts: void contract is an agreement which is illegitimate and unenforceable effectively from
the moment it is created. It cannot be enforced by law.
2. Voidable contract: a contract which is valid but can be declared invalid at the option of one of the parties
due to a defect or illegality in it.
3. Unenforceable contract: this type of contract though valid, cannot be enforced in the court of justice.
4. Illegal contract: the contract which was created for an illegal reason and which violates the law, is called
illegal contract.
1.3
Assessment Event 1 BSBLEG415 R1 Page 1 of 4
Created: 02 Feb 2016 | Revised: 22 Nov 2017 |

Assessment Event 1
Explain the following terms:
1. Privity of contract
2. Assignment of contract
Your answer
1. Privity of contract: This doctrine denotes that a contract will not be able to confer rights or grant
duties on any person who is not regarded as a party to the contract. It does not allow any 3rd party
to enforce it.
2. Assignment of contract: It means the transferring the rights, duties and benefits in a contract from one
party to another.
1.4
Provide a brief explanation of:
1. Two (2) types of consideration in contracts
2. The nature of the intention to create legal relations that is required to form a contract
3. The capacity to contract in relation to minors and persons who suffer mental disabilities.
Your answer
1. The two types of contract are executor consideration where the consideration type is formed out of
exchange of promises between the parties in a bilateral contract whereas the other type is called as the
executed consideration where one party creates a promise in return of an act or conduct to be done by
other party.
2. The parties entering into the contract shall possess the intention of entering into a legal relation and not
a social or domestic relation with one another.
3. Capacity of the parties in a contract means the capability of the parties to create it. Drunks, minors and
the mentally impaired persons do not have the capacity of entering into a contract and any agreement
entered by them is void.
1.5
Provide a brief explanation of four (4) ways discharge of a contract may occur.
Your answer
A contract is usually discharged by 4 ways which are discharge by frustration, discharge by agreement,
discharge by performance of the contract and discharge by contract breach.
Discharge by performance of the contract:
A contract is discharged by performance when the parties in the contract have already performed their
duties as per the agreement.
Discharge by agreement:
Discharge by agreement is generally two types; unilateral discharge and bilateral
Assessment Event 1 BSBLEG415 R1 Page 2 of 4
Created: 02 Feb 2016 | Revised: 22 Nov 2017