Australian Contract Law

Added on -2020-02-19

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IntroductionAustralian contract Law is governed by Australian common law. There are five categories evolvearound a contract law1.The formation of a contractContents of contractAvoidance of contractPerformances of a contract (including terminations)Remedies for the breach of contractIssueIn the give case, Mechille and Tim run a Motor bike company. They sell and buy motor cycles andalso undertake repair works. Tim and Mechile signs a contract to b cycle from John for $5000. Lateron when they realized that the amount paid to John is higher, they want to get out the contract2.LawAs per the Australian Contract Law (ACL), the promises which are legally enforced by law are madeto form a legal relationship for the purpose of doing legal business is termed as a Contract. Thecontract should be supported by a consideration3. Generally a contract starts with an agreement between the parties who get into the contract. Thecontent of Agreement will be about the terms and conditions that need to followed and agreed byboth the parties before enter into transactions. The Agreement is well documented and signed byboth the parties which are legally enforced by law. A contract with unsigned Agreed document isvoid under ACL4.The effect of the Signature in the documented agreement is a vital factor in any contract. In otherwords the signature in the agreed document implies that the “offer” and the “acceptance” related tothe contract (or the main objective of a contract) are mutually agreed by the parties who sign suchagreements5.ApplicationThe case Toll (FGCT) v Alphapharm Pty Ltd can be referred to the given case. Finemores which wastaken over by Toll, entered into a contract with Richard Thomson (acting on behalf of Alphapharm)to store and transport goods which were being imported for Alphapharm. The contract document1 Poole, Jill. Textbook on contract law. Oxford University Press, 2016.2 McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK), 2014.3 Cartwright, John. Contract law: An introduction to the English law of contract for the civil lawyer. Bloomsbury Publishing, 2016.4 Poole, Jill. Textbook on contract law. Oxford University Press, 2016.5 Cartwright, John. Contract law: An introduction to the English law of contract for the civil lawyer. Bloomsbury Publishing, 2016.
was signed by both the parties. During the process of contract, Finemores caused damages toAlphapharm due its negligence. Alphapharm sued Finemores for damages6.Finemores wanted to escape the liability by relying upon an exclusion clause in its contract withRichard Thomson7.The High court of Australia held this case in favour of Alphapharm stating that once the agreementdocument is signed, the related parties should perform as per the agreed terms. The court of Lawwill not consider the excuse saying that the document is signed without reading or understandingthe contents therein subject to the absent of fraud at any point during the performance of thecontract.The court also referred the case Wilton Vs Farnworth and held the case citing the reason that “a mancannot escape from the consequences of signing the document by saying that he did not understandthe content of such document”. If he signs the document, it is implied that he has agreed to theterms and condition of the contract and need to fulfil the performance as agreed in the document.In the given case, Tim and Mechile sign a contract with John saying that they will buy a motor cyclefrom him for $ 5000. At this point of signature, it is implied by the law that Tim and Mechile need toperform the contract as per the agreed terms.ConclusionOnce Tim and Mechile signs the agreement with John, it implies that the following conditions areagreed by them with full understanding of those terms.To buy the Motor cycle from JohnThe condition of the Motor cycle at the time of buyingThe price of the Motor cycle (very vital in this case)The period of completion of such contractUnder such circumstances, Tim and Mechile cannot get out of the contract for reason saying that therate paid to John is too high. The reasonability of the rate should have been analysed by Tim andMechile before signing the contract with John. Moreover the contract was already performed as perthe terms and conditions of the agreement8.If this case goes to the court, the court of law may dismiss this case under the following grounds.The contract is agreed and signed by both Tim and Mechile for performing the contract.The price of the motorcycle is completely agreed before signing the contract by Tim andMechile.Since no fraud is found in this case, the claim of Tim and Mechile will not at considered bythe court of Law.6 Cartwright, John. Contract law: An introduction to the English law of contract for the civil lawyer. Bloomsbury Publishing, 2016.7 Poole, Jill. Textbook on contract law. Oxford University Press, 2016.8McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK), 2014
“Acceptance” will be considered as “Willingness” to perform a contract. Once accepted, the furtherwithdrawal from such acceptance will not be entertained by the court of Law subject to thecondition that the fraudulent is not involved in the context of such acceptance9.IntroductionThe given case will be covered under Australian Contract Law. The case relates to the withdrawal ofcontracts after the completion of contract as per the terms and conditions agreed. The contract isdocumented in the form of Agreement deed10.IssueGerard and Sylvia have registered a company under Australian Securities and Investmentscommission under the name “Cakes Pty Ltd”. Gerard and Sylvia purchased a cake shop from George.On the day of purchase Gerard stamps the contract with the Cakes Pty Ltd company seal and signs aswitness. Sylvia also signs the contract as witness. After performance of the contract, George feelsbad about selling the cake shop and wishes to get it back.11LawAs per the Australian Contract Law and Companies act 2001, Section 127 states that a contractdocument can be executed with or without using a company’s common seal. But the followingconditions are inevitable for executing an agreement document in order to perform a contract12.Signing by two directors of the company Signing by one director and a company secretary of the company Affixing the common seal of the company to the document and the fixing of such seal iswitnessed by two directors of the company or a director and a company secretary of thecompany. If the document is not prepared as per the above said norms, the agreement becomes void and theagreement deed cannot be enforced by Law. The document will not have any value.Application9 McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK), 2014.10 Cartwright, John. Contract law: An introduction to the English law of contract for the civil lawyer. Bloomsbury Publishing, 2016.11 Cartwright, John. Contract law: An introduction to the English law of contract for the civil lawyer. Bloomsbury Publishing, 2016.12 Poole, Jill. Textbook on contract law. Oxford University Press, 2016.

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