Australian Contract Law Case Studies

This assignment explores key concepts of Australian Contract Law through the lens of four detailed case studies. Students analyze scenarios involving prenuptial agreements, invitations to treat, negligence claims, and consumer rights under the Australian Consumer Law (ACL). Each case study requires application of legal principles, analysis of arguments, and formulation of conclusions based on relevant legislation and precedents.

MANAGEMENT LAW

Table of Contents
Question 1...................................................................................................................................................1
Question 3...................................................................................................................................................2
Question 4...................................................................................................................................................3
REFERENCES............................................................................................................................................5

Question 1
Issue
Tom entered into an agreement with his fiancée Susan a week before their wedding
according to which in the event of a divorce, Susan would only get $100,000. He said if Susan is
not willing to sign this agreement then he will cancel the wedding. Susan, reluctantly agreed.
However, after five years into the marriage, they got divorced and she got $100,000 as agreed.
Now the issue is to decide if the agreement signed was valid.
Rules
As per the Australian Contract Law, an agreement should have the below mentioned
necessary elements to be qualified as a valid contract:
 Offer and its acceptance which amount to agreement
 Lawful Object
 Lawful Consideration
 Intention to enter into contract
 Capacity to enter into contract1
If even one of the element is absent, then it is not a valid contract2.
Application
The first element in building a contract is an offer given by one entity and its acceptance
by the other. When an offer is accepted, it becomes an agreement. the given case, Tom offered to
marry Susan if she signs a pre-nuptial agreement. Susan accepts Tom’s offer by signing the
agreement. The object of the agreement i.e. $100,000 if they divorce is lawful. In return of
signing this agreement, Tom promises Susan to marry her, bring her to Australia, and give her a
house, car and safety. Hence, there is lawful consideration too. Both the parties mutually signed
1 Cartwright, John. Contract law: An introduction to the English
law of contract for the civil lawyer. Bloomsbury Publishing,
2016.
2 Knapp, Charles L., Nathan M. Crystal, and Harry G. Prince.
Problems in Contract Law: cases and materials. Wolters Kluwer
Law & Business, 2016.
1

the agreement and there was no coercion, misrepresentation or fraud. None of the parties was a
minor or of unsound mind and nor were they disqualified under any law to enter into a contract.
Conclusion
Given that the agreement between Tom and Susan fulfills all essentials of a valid
contract, this contract was enforceable for Susan.
Question 2
Issue
Steve came across an online advertisement by Jason who gave an invitation to offer for
sale of his car. Steve visited three times to see the car and inspected it for a total of 4 hours. He
then told Jason that he would have purchased the car if it had leather seats, tinted window and
turbo engine because he was looking for such a model. On hearing Steve’s comments, Jason
invested $50,000 on his car to make it the way Steve wanted it. However, when Jason told Steve
about this two weeks later, Steve was no longer interested. The issue is to determine if Steve is
legally bound to buy the car or not.
Rule
Invitation to offer, is just an invitation for interested parties to submit an offer. While it
shows a readiness to deal, it is different from an offer because it lacks an intention to legally
bound [Partridge v Crittenden 1968]3.
Application
In the present case, the advertisement by Jason was just an invitation to treat. It was just
the beginning point for negotiation with anyone who read his ad and responded to it. There were
no clear words between Steve and Jason which intended to bound and there was no certainty
regarding the terms of the advertisement to make it an offer.
Conclusion
Steve is not legally bound to purchase Steve’s car.
3 McKendrick, Ewan. Contract law: text, cases, and
materials. Oxford University Press (UK), 2014.
2

Question 3
Issue
Carl and Harry are best friends. Carl is a keen fishing man and a novel sushi chef. His
friend loved Japanese cuisine. One weekend the two of them were fishing together and Carl
caught a poisonous fish and made sashimi from it. Even though Harry knew that the fish was
poisonous and must be made only by a skilled chef, he ate it and fell sick because Carl had not
cleaned it properly. The issue here is whether Carl was negligent and if there is any defense
available to him.
Rule
Negligence occurs if the following conditions are met:
 A duty of care owed to the plaintiff by the defendant
 A violation of such duty
 There is evidence that the actions of defendant cause plaintiff an injury
 Proximate cause, which implies whether the damage was predictable
 Damages from the conduct4
Volenti non-fit injuria – This doctrine states that if a person knowingly places himself/herself in
a danger position knowing that harm can occur, they cannot make a claim against the other
party5.
Application
In the given case, the actions of Carl can be stated as negligent because he owed Harry a
duty of care. This is because he was the cook and was making the fish for Harry. Hence, he
should have been considerate of Harry’s health. Carl breached this duty by making the poisonous
dish without cleaning it properly. The damage from this act was foreseeable because Carl knew
4 Doepel, Mark, and Steven Canton. "Wei Fan v South Eastern
Sydney Local Health District (No 2)." Australian Civel Liability
Bulletin 12.9 (2015).
5 Hogg, Martin A. "Liability for Unknown Risks: A Common
Law Perspective." Journal of European Tort Law 7.2 (2016):
113-142.
3

the fish was poisonous. His actions resulted in Harry being admitted to the hospital. However,
there is defense available to Carl under the doctrine of Volenti non-fit injuria because Harry was
well aware of the fact that the fish was poisonous and Carl was not a skilled chef and still he ate
it.
Conclusion
While a negligence claim can be made against Carl, he can also defend himself based on
the doctrine of Volenti non-fit injuria.
Question 4
Issue
Betty placed an order for iPhone 8 after seeing the specifications on Apple website.
However, when the phone came, it did not meet the specifications mentioned on the website. The
issue is to identify the rights of Betty under ACL.
Rule
The Australian Consumer Law, when a consumer buys a product or service, it comes
with automatic guarantee that it will function and perform as per the specifications listed on it6.
The law also states that if a good or service bought by a person is unable to meet a customer
guarantee, then the customer has the right to ask for a refund, repair or replacement under this
act7.
Application
6 Hunt, Kate Mathews. "Gaming the system: Fake online reviews
v. consumer law." Computer Law & Security Review 31.1
(2015): 3-25.
7 Wallace, Jessica, Ella Pyman, and Thomas Faunce. "Medical
law reporter AUSTRALIAN COMPETITION AND
CONSUMER COMMISSION v ACN 117 372 915: SHOULD
CONSUMER LAW REGULATE DOCTOR-PATIENT
RELATIONS IN A CORPORATISED HEALTH CARE
SYSTEM?." (2015): 55-66.
4

Since, Betty purchased iPhone 8 considering the product specifications mentioned on the
website and on receiving the phone, the actual features did not match the claimed ones, Betty has
the right to ask for refund or replacement under ACL.
Conclusion
Hence, Betty can ask Apple to refund or money or replace her phone.
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REFERENCES
Cartwright, John. Contract law: An introduction to the English law of contract for the civil
lawyer. Bloomsbury Publishing, 2016.
Doepel, Mark, and Steven Canton. "Wei Fan v South Eastern Sydney Local Health District (No
2)." Australian Civel Liability Bulletin 12.9 (2015).
Hogg, Martin A. "Liability for Unknown Risks: A Common Law Perspective." Journal of
European Tort Law 7.2 (2016): 113-142.
Hunt, Kate Mathews. "Gaming the system: Fake online reviews v. consumer law." Computer
Law & Security Review 31.1 (2015): 3-25.
Knapp, Charles L., Nathan M. Crystal, and Harry G. Prince. Problems in Contract Law: cases
and materials. Wolters Kluwer Law & Business, 2016.
McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK),
2014.
Wallace, Jessica, Ella Pyman, and Thomas Faunce. "Medical law reporter AUSTRALIAN
COMPETITION AND CONSUMER COMMISSION v ACN 117 372 915: SHOULD
CONSUMER LAW REGULATE DOCTOR-PATIENT RELATIONS IN A CORPORATISED
HEALTH CARE SYSTEM?." (2015): 55-66.
6