Assignment 1: Contract Law Analysis - Bentley & Miri, Semester 1 2019

This assignment analyzes a contract law scenario involving La Manna Engineering and Vitro, focusing on the formation and potential breach of a contract for the sale of a vehicle. The assignment begins by outlining key legal principles of Australian contract law, including offer, acceptance, the postal rule, and anticipatory breach, referencing relevant case law such as Ermogenous v Greek Orthodox Community of SA, Australian Woollen Mills v The Commonwealth, and White and Carter (Councils) Ltd. v. McGregor. It then applies these principles to the given facts, examining whether a valid contract was formed despite delays caused by an industrial strike and whether La Manna Engineering's subsequent offer to another party constituted a breach. The analysis considers the intention of the parties, the validity of the acceptance via mail, and the implications of the postal rule. The assignment concludes that Vitro could potentially claim for anticipatory breach based on La Manna Engineering's actions. The student demonstrates an understanding of contract law principles and their practical application.

Assignment 1- Bentley & Miri
Name of the student-
Student’s ID-
0

Table of Contents
Introduction......................................................................................................................................2
Question 1........................................................................................................................................2
Law..................................................................................................................................................2
Application of Law..........................................................................................................................3
Question 2........................................................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10
1

Introduction
La Manna Engineering wrote to Vitro about the offering to sell him his imported German honing
own vehicle for $23,000.00. In his offer, he asked to reply the perspective via mail. Vitro
received the letter after two days. Vitro immediately posted his acceptance, but due to the
industrial strike action in Australia, the post reached La Manna Engineering after ten days. In the
meantime, La Manna Engineering offered the own vehicle to another engineering firm. Will
Vitro be able to enforce the contract with La Manna Engineering?
Question 1
Law
The legal system in Australia is inherited from the law in England. They might have the
difference in the procedures, principles and the methodology but they are all called common
countries are called the common law1. The Australian Common Law of Negligence is concerned
about the enforcement of the promise legally2. Australia's common law is based upon the English
Law of Negligence.
Law of negligence under the law of torts alludes to that demonstration or the oversight of the
demonstration which the sensible man isn't relied upon to do. For the law of negligence, to
happen there should be a connection between the gatherings to tie them lawfully under the
obligation of consideration. The specialists are bound by the expert obligation of consideration
towards their patients, and it is the obligation of the specialists to give appropriate consideration
to their patient.
The law of torts is the most ordinarily utilized law in the UK. The, for the most part, utilized law
of tort is the law of Negligence. The experts are bound by the obligation of consideration
1 Foster, N.J., 2019. High Court of Australia decision on WHS law.
2 Stickley, A.P., 2016. Australian torts law. LexisNexis Butterworths.
2

towards their customer like for the situation circumstance there is a connection between
Venkateswarlu Thota and Ronnie, they are bound by the obligation of consideration.
In Ermogenous v Greek Orthodox Community of SA is case law where the intention
concerning the intention of the parties to the contract3. Terms are a clause in the contract.
Generally, concerning the contracts, two main issues can be derived they are- what is the term of
the contract, and what is the legal effect of that term. The terms can be implied in fact in the
contract4. There are cases where the terms of the contract are clearly stated. Every contract must
come to an end in a way. An offer is an expression to the other party of the eagerness to be
bound by the stated terms as stated in Australian Woollen Mills v The Commonwealth(1954)
92 CLR 424. The Anticipatory Breach of the contract is a situation where one of the parties to
the contract does not fulfill the terms of the contract. Actual Breach is also one of the common
ways where the party breached the contract at the time when the other party came for the
performance of the contract. The postal rule is a rule that has been adopted in the Australian
Contract law by the England contract law5.
Application of Law
When La Manna Engineering offered Vitro to sell his imported German Honing own vehicle for
$ 23500, then he made an offer. An offer is the intention of the party to enter into the contract
3 Cockburn, T. and Butler, D.A., 2018. Medical negligence. In Health Law in Australia [3rd Ed.]. Thomson
Reuters Australia.
4 Latimer, P. 2011. Australian business law. Sydney: CCH Australia Limited
5 Sekendiz, B., Ammon, R. and Connaughton, D.P., 2016. An examination of waiver usage and
injury-related liability claims in health/fitness facilities in Australia. J. Legal Aspects Sport, 26,
p.144.
3

with the other party. When the offeror makes an offer to the other party, then he should have the
intention of doing or abstain from doing that work. If the offeror did not intend to enter into the
contract, then the contract is not a valid one. When the offer was made to Vitro La Manna
Engineering wanted to enter into the contract with Vitro for the sale of that good. The contract
had the constructed term where it was written that he wanted the reply via ‘return mail’ if Vitro
was interested in buying the own vehicle. The party to whom the offer is being made is known as
the offeree. Here Vitro wanted to buy their own vehicle, so he immediately wrote La Manna
Engineering his acceptance. The other party (here Vitro) accepted the offer. In this case, La
Manna Engineering hired another employee, which is against law of negligence and Vitro can
easily claim for damages.
Vitro did as stated in the contract. Vitro gave his acceptance via mail, but due to the
unpredictable reasons, the letter took ten days to reach La Manna Engineering. When La Manna
Engineering posted his offer, then he was made bound by the offer, as under the contract law the
operator must be ready to make the contract. Intention forms an essential part of the contract law.
When Vitro posted his letter, then the contract also became binding on Vitro and La Manna
Engineering. Vitro accepted the consideration amount that was fixed by La Manna Engineering
in the contract. The contract here became binding on La Manna Engineering the moment he gave
the offer to Vitro and Vitro was bounded by the contract when he posted his letter of acceptance.
Here the valid contract was formed between La Manna Engineering and Vitro. La Manna
Engineering did not communicate his revocation of the offer. When one of the parties to the
contract wants to revoke the contract, then the revocation should be communicated to the other
party6. The posting rule that has been derived in Australians law from the English law states that
it is an omission to the general rule in contract low where it has been stated that the approval of
the offer takes place when it is communicated to the offeror. Under this posting rule, the
reception takes place when the letter is posted.
In the contract law, it has been stated that the meeting of the minds is essential for the formation
of the contract. When the ferry posts his or her mail, then there is a meeting of the contract, and
6 School of Business Law. 2009. Legal Framework 100: Study Guide. Bentley: Curtin University
of Technology.
4

the acceptance becomes a suitable contract. In the posting of the recognition, the contract
becomes binding on the parties to the contract when the recognition is posted rather than when
the acceptance is communicated to the offeror. In the Tallerman & Co Pty Ltd v Nathan's
Merchandise (1957) 98 CLR 93, 111-112 case Fullagar J and Dixon CJ took a restrictive view
on this law7. It has been stated in the general rule of the contract that the contract is not complete
until the offer is communicated to the offeror. However, under this rule, the contract is
completed on the postal of the letter8. In this case law, it was stated that the acceptance of the
offer could not be termed as justified unless the term is inferred in the contract that the offeror
contemplated that his offer can be established by the other party. In the given case scenario La
Manna Engineering intended to sell their own vehicle to Vitro, and he also wrote in his offer that
he wants the acceptance to be in the return mail only. Vitro wanted to buy their own vehicle, and
when the offer related to the selling of the own vehicle was communicated to him, he
immediately posted his acceptance of the offer. There was a meeting of the mind when Vitro
posted his acceptance. With the help of the postal rule, it can be stated that the letter of
acceptance becomes binding on La Manna Engineering the moment Vitro posted the letter.
La Manna Engineering was bound under the Australian’s Contract law to sell his vehicle to
Vitro. When La Manna Engineering made the offer to Vitro, he intended to sell that own vehicle
to Vitro. When the offer is made with the intention of that, the other party should accept the offer
then the offer is binding upon the offeror when the offeree accepts the offer. If after the
acceptance of the offer the offeror tries to backcourt from the contract then it is a breach of the
contract. In this case, La Manna Engineering did not communicate revocation of the offer to
Vitro. However, Vitro was unaware that La Manna Engineering had changed his mind about
selling his own vehicle to him; instead, La Manna Engineering wanted to sell his vehicle to Bill.
In this case, La Manna Engineering was legally bounded by the contract when Vitro posted his
acceptance. In this case, Vitro can charge La Manna Engineering for the Anticipatory breach of
7 Standards Australia FAQ www.standards.org.au retrieved from the World Wide Web
13/08/2012
8 Hough, Tracey, and Kathrin Kuhnel-Fitchen. Optimise Contract Law. Routledge, 2017.
5

the contract. La Manna Engineering making the offer about the selling of the own vehicle to
another engineering firm is not a valid contract. The Australian or the England law has not
subjected the anticipatory breach of the law to any analysis yet.
White and Carter (Councils) Ltd. v. McGregor is case law in the Australian contract law
related to the anticipatory contravene of the contract law9. In this case law, it was stated the right
of terminating the contract and the "duty to mitigate." In 1958 White & Carter Ltd made a three-
year contract of displaying the advertisement of Mc Gregor’s garage on the litter bins for three
years10. The sales manager of Mc Gregor’s renewed their contract with the company, but later
on, they informed the company that they cannot enter into the contract. It was then held by the
court that the claimants are liable to recover the price of the contract. Under the anticipatory
breach of the law, it has been stated that the plaintiff cannot recover for the loss that cannot be
avoided. In the case of Horchester v, De La Tours states the judicial origin of the anticipatory
breach. The anticipatory breach consists of the two elements they are- one of the parties to the
contract either by word or by deed repudiating the contract11. The second element is that the
innocent party to the convention elects to accept the repudiation and then terminate the contrac6t
immediately. The unacceptable repudiation is not a legal acceptance.
In Byrne v Van Tienhoven it was held by the court that the revocation of the offer needs to be
communicated to the other party12. The court under this case stated that the revocation is not said
9 Beale, Hugh, Bénédicte Fauvarque-Cosson, Jacobien Rutgers, and Stefan Vogenauer,
eds. Cases, materials and text on contract law. Bloomsbury Publishing, 2018.
10 Puoti, C., M. G. Elmo, D. Ceccarelli, M. Ditrinco, M. Proietti, A. Recchia, E. Riva, et al.
"Narrative Reviews." (2017).
11 Morgan, Jonathan. "Repudiatory Breach: Inability, Election And Discharge." The Cambridge
Law Journal76, no. 1 (2017): 11-14.
12 Liu, Qiao. "Anticipatory Breach." In International Sales Law, pp. 499-528. Nomos
Verlagsgesellschaft mbH & Co. KG, 2016.
6

to be effective if the communication is not done to the other party. The court also held via this
case that is merely posting of the letter of revocation does not repudiate the contract. It was
assumed that the state of mind could not be notified unless the revocation is communicated. Any
offer cannot be withdrawn by just posting the revocation. The postal rule cannot be applied to
this case. In the given case when the offer was, revoked Vitro was not informed about the
revocation. When the revocation is not communicated to the other party, then it cannot be said to
be a valid revocation. La Manna Engineering did not communicate with Vitro his revocation of
the offer. The contract between La Manna Engineering and Vitro formed the valid contract as the
offer that Braine made to Vitro consisted of the intention of selling his vehicle to Vitro.
Moreover, when the offer is made with an intention that the other person to whom the offer is
being made will accept or reject the offer, then the offeror is bound by the contract on his side
and when the other party to the contract accepts then the offer becomes a contract. When Vitro
posted his letter of acceptance to Braine, then there was a valid contract formed between the two
of them.
Braine did not even communicate his revocation to Vitro. Any revocation becomes binding upon
the other party when the revocation is communicated to the other party. Braine in the given case
did not communicate his revocation and then decided to sell the own vehicle to Bill instead of
selling it to Vitro. Here a valid contract was formed between La Manna Engineering and Vitro
when Vitro posted the letter of acceptance. Braine is bound by the contract by the postal rule.
When Braine made the offer of selling the own same vehicle to Bill, then he has committed the
anticipatory breach of the contract as when he should be delivering the own vehicle to Vitro, he
said that he is no more interested in selling the own vehicle to him. An offer can be revoked
within the period when the other party to whom the offer is made has not given his consent to
accept the offer. In Dickinson v Dodds it was stated by the court that offer that has been
presented to the other party could be withdrawn within the time limit. In the given case one of
the party "agreed to sell" the property to the other party, the offer was held open for a long time.
The other party gave his offer of acceptance to the party who was selling his property. When the
offer is withdrawn within the stipulated time than the revocation is said to be a valid one. In the
given case scenario the contract was formed between them, and the revocation of the offer was
done after Vitro has accepted the offer. The fact that the offeror did not receive the acceptance
7

within the stipulated time does not change the fact that the offer here was said to be accepted the
day Vitro posted his letter.
Question 2
Here La Manna Engineering has repudiated the contract without giving notice to Vitro this
repudiation was not even communicated to Vitro. The contract is not repudiated, as both of them
are liable by the contract law. Under the postal rule, the valid contract was formed between La
Manna Engineering and Vitro and the repudiation is not a legal one, as the repudiation here in
this contract was not even communicated to them. Under the contract law, it has been stated that
the contract becomes binding upon the parties to the contract when the acceptance of the contract
has been done by the other party. Here the acceptance of the contract by Vitro is said to be a
binding contract. When La Manna Engineering offered Bill the own same vehicle, then that offer
is not a legal offer as the consideration in the offer is not a valid one because the consideration
which La Manna Engineering is offering to Vitro has already been the part of the contract with
Vitro and the contract has been created between them. The consideration between La Manna
Engineering and Bill is not a legal consideration, and therefore there is no valid contract between
the two.
In the given case circumstances there was an offer that was made by La Manna Engineering to
Vitro. Vitro accepted the offer via post. The term of the contract, it said that the communication
of the acceptance of the offer should be done by post. Vitro then immediately conveyed her
acceptance to Brain by posting the acceptance to him, but the acceptance letter reached La
Manna Engineering 10 days later. However, in the meantime, La Manna Engineering changed
his mind and decided to sell his own vehicle to Bill instead of selling it to Vitro. By applying the
Postal rule, it can be said that the acceptance of the letter is said to be binding upon both the
parties to the contract at the moment when Vitro posted the acceptance letter.
Conclusion
There was a valid contract between Vitro, and La Manna Engineering and Vitro can enforce the
contract with La Manna Engineering.
8

References
Foster, N.J., 2019. High Court of Australia decision on WHS law.
Stickley, A.P., 2016. Australian torts law. LexisNexis Butterworths.
Cockburn, T. and Butler, D.A., 2018. Medical negligence. In Health Law in Australia [3rd Ed.].
Thomson Reuters Australia.
Latimer, P. 2011. Australian business law. Sydney: CCH Australia Limited
Sekendiz, B., Ammon, R. and Connaughton, D.P., 2016. An examination of waiver usage and
injury-related liability claims in health/fitness facilities in Australia. J. Legal Aspects Sport, 26,
p.144.
School of Business Law. 2009. Legal Framework 100: Study Guide. Bentley: Curtin University
of Technology.
Standards Australia FAQ www.standards.org.au retrieved from the World Wide Web 13/08/2012
Hough, Tracey, and Kathrin Kuhnel-Fitchen. Optimise Contract Law. Routledge, 2017.
Beale, Hugh, Bénédicte Fauvarque-Cosson, Jacobien Rutgers, and Stefan Vogenauer, eds. Cases,
materials and text on contract law. Bloomsbury Publishing, 2018.
Puoti, C., M. G. Elmo, D. Ceccarelli, M. Ditrinco, M. Proietti, A. Recchia, E. Riva et al.
"Narrative Reviews." (2017).
Morgan, Jonathan. "REPUDIATORY BREACH: INABILITY, ELECTION AND
DISCHARGE." The Cambridge Law Journal76, no. 1 (2017): 11-14.
Andrews, Neil H. "Breach of Contract: A Plea for Clarity and Discipline." (2018).
Liu, Qiao. "Anticipatory Breach." In International Sales Law, pp. 499-528. Nomos
Verlagsgesellschaft mbH & Co. KG, 2016.
9