Assignment on Australian Business Law
15 Pages3384 Words77 Views
Added on 2020-05-01
Assignment on Australian Business Law
Added on 2020-05-01
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CONTRACT IntroductionA promise, which results in creation of legal rights and liabilities, covering certain specific elements, and is drawn in particular manner, results in the creation of contract. This promise takes place between a number of parties, which has to be more than one, in which one set offers some terms to be undertaken and the other pays the consideration for upholding such terms. It can be created in a verbal manner, in which this promise is made verbally; or by writing on a document and getting the same signed by the parties, resulting in written contracts. It is important that the promise made in the contract is upheld, or it would result in the contract being breached1. In order to create a contract, there is a need to have the components of offer, which is accepted, and there is presence of consideration, intent, capacity and clarity. All these have to be present together to create a legally binding contract2. The given case study revolves around the different aspects of contract law. Part (a)Issue:The key issue of this case revolves around the presence of a contract between Ashley and Adam.1 Benny S. Tabalujan, Valerie Du Toit-Low and Julie L.Y. Huan, Singapore Business Law (BusinessLaw Asia, 7th ed, 2015)2Linda Mulcahy, Contract Law in Perspective (Routledge, 5th ed, 2008)
CONTRACT Rule:The contract formation is started when a party makes an offer to another party with some specific terms. There is a need to make differentiation between an offer and an invitation to treat, as the former shows the intention of getting into legal relations and the latter denotes the intention of negotiating upon a possible contract. Hence, invitation to treat comes before the offer3. The adverts which can be found in the newspapers or magazines are given the status of invitation to treat as per Partridge v Crittenden4. However, where such adverts covers such terms, which can be accepted through performance, it is deemed as unilateral offer as was seenin Carlill v Carbolic Smoke Ball Company5. It is also important to differentiate between offer and request for information. Harvey v Facey6was a case in which Harvey showed his interest in the Bumper Hall Pen which was being sold and he wanted to purchase the same at the lowest cash price. To this, Facey had replied that helowest price for the pen was £900. To this, Harvey replied that they agreed to purchase the pen for 900 pounds, as this was the amount asked by Facey. And he asked Facey to send the title deed for getting early possession. It was held by the Privy Council that no contract had been formed as the stating of lowest price was mere a request for information, instead of an offer. Hence, the lack of intention led to the lack of offer in this case7.3 Brian A. Blum, Contracts: Examples & Explanations (Aspen Publishers Online, 4th ed, 2007)4 [1968] 1 WLR 12045 [1892] EWCA Civ 16 [1893] UKPC 1, AC 5527 Jill Poole, Casebook on Contract Law (Oxford University Press, 13th ed, 2016)
CONTRACT After offer has been made, it has to be accepted by the party to which the offer had been made. The acceptance has to be obtained on the exact offer as had been made. Where there is any change in the original offer, the case of Hyde v Wrench8provides that a counter offer is made. And this counter offer extinguishes the earlier offer. Gibson v Manchester City Council9provided that for an agreement to be present, the acceptance has to be reflected in a proper manner upon the comprehensible offer. In this case, the House of Lords analysed the wordings ‘may be prepared to sell’ as the notification of price, which was not a distinctive offer, thus denying the requirement of acceptance. Once an offer and acceptance has been established, there is a need to show the presence of consideration element. The consideration needs to be a value or such a thing, which has an economic value and can be decided upon by the contracting parties10. Chappell & Co Ltd v Nestle Co Ltd11 is a leading case in this matter where the court accepted the three wrappers as a valid consideration, due to the context of the case. There is also a need for the consideration to be present and if the same is past, it would not be valid. The consideration needs to only be sufficient and not adequate12. Application:Applying the rules to the facts of this case, a discussion with regards to the intent of the two parties, i.e., Ashley and Adam was carried on. It was show that Ashley was interested in 8 [1840] 49 ER 1329 [1979] UKHL 610 Jeffrey A. Helewitz, Basic Contract Law for Paralegals (Aspen Publishers Online, 5th ed, 2007)11 [1960] AC 8712 Paul Latimer, Australian Business Law 2012 (CCH Australia Limited, 31st ed, 2012)
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