Business Law Assignment

This assignment discusses the validity of a contract under Australian Contract Law and the doctrine of estoppel. It also covers breach of contract and the rights of both parties in case of a valid contract.

RUNNING HEAD: BUSINESS LAW ASSIGNMENT
Business Law Assignment

BUSINESS LAW ASSIGNMENT
Part A
The main issue in the given scenario is what the rights of Tommy and Buster Brady are.
Under the Australian Contract law, there are five elements, which create a valid contract
(Gooley et al., 2013). These are valid offer and acceptance among parties, consideration,
capacity to contract, intention and certainty (Carter, 2011). These elements form a lawful
contract (Sandu, 2016). An offer can be for public and for particular person (Burrows, 2018).
Invitation to treat is one of the offer given to public at large (unilateral contract) (Marie et al.,
2016). It is merely a declaration of readiness to enter into negotiations; it is not an offer and
cannot be recognised as a binding contract (Keyes & Wilson, 2016). (This material is taken
fromhttps://www.australiancontractlaw.com/law/formation-agreement.html). In the
given scenario, Buster gave an offer to public, which can be accepted by any one. Tommy
caught the fish, therefore prima facie he was entitled for the reward as he gave his acceptance
by catching fish. The reward money was the consideration as well as both the parties were
competent to contract. Thus, as per the act of Tommy, it became a valid contract between
both the parties as there are all the essential elements present of valid contract.
A contract can be characterized as a straightforward, unambiguous declaration of the
conditions of the offeror's willingness to negotiate should the proposer decide to
acknowledge it (Mckendrick & Liu, 2015). It is essential that there is an intention to be bound
by the offer itself (Gibson & Fraser , 2014). In the case of Patridge v Crittenden (1968) 1
WLR 1204, it was held by the court that generally most of the advertisement are not offers
but merely invitation to treat. (This material was taken from
https://www.lawteacher.net/cases/partridge-v-crittenden.php). Similarly, in the instant
scenario, Buster Brady placed the advertisement in the local newspaper, which is an
invitation to treat. Buster only gave advertisement in the newspaper and that was an offer not
for a particular person but for public. Thus, it was a general offer, which can be accepted by
anyone. Similarly, Tommy caught the fish and as per the advertisement, anyone who catches
fish will be entitled for the reward, Tommy fulfilled this requirement of the offer given by
Buster.
In the case of Carlil v Carbolic Smoke Ball Co (1892) 2 QB 484, In this case the company
gave the advertisement regarding that anyone who use their product as instructed and still
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gets ill then the company shall pay any individual. The plaintiff used the product as instructed
but later she had influenza attack. The court held the defendants liable. The court held that an
invitation to the world was the advertisement. It is said that it is not created especially with
anyone. The ad was an obligation to pay 100l to anyone who fulfils such conditions and the
fulfilment of the requirements is the approval of the offer. The court also stated that in
invitation to treat, an offer is given to whole world at large and those who agrees to it and acts
accordingly, provides implied acceptance to it (this material was taken from
https://www.lawteacher.net/free-law-essays/contract-law/carlill-v-carbolic-smoke-ball-
co-contract-law-essay.php). Similarly, in the given situation, the facts are similar to that of
Carlil v Carbolic Smoke Ball Co, since it was a unilateral offer, any person can accept it. As
mentioned in the advertisement given by Buster that any person can claim, reward whoever
catches Big Joanna-a 20 kg Murray cod, which was tagged and released into the lake
Kanchan. Tommy caught the fish irrespective of the fact that he was entitled for reward. As
per the case of Carlil v Carbolic Smoke Ball Co, Tommy performed his part, which gave rise
to valid acceptance followed by consideration. Tommy caught the fish as instructed in the
advertisement, provided adequate consideration. As per the Carlil rule, Buster is bound to pay
the reward to Tommy. This case applies to the present situation in its entirety.
In the case of Daulia Ltd v Four Millbank (1977) EWCA Civ 5, it was held by the court that
acceptance occurred once the offeror’s desired acts were carried on, thus the contract cannot
be revoked afterwards. It was further stated by the court that offer is accepted in the case of
offer of unilateral contracts and when an unequivocal beginning of acts has occurred then the
contract is concluded (this material is taken from
http://www.e-lawresources.co.uk/Dahlia-v-Four-Millbank-Nominees.php). Thus, as per
this case Buster desired offer was fulfilled once Tommy caught the fish and thus contract
between them cannot be revoked. Once the act is conducted by the acceptor in unilateral
contracts and when an unequivocal beginnings of the acts has occurred then the contract is
formed. Tommy performed his part so he was entitled to the reward. Buster texted tommy
that, he changed his mind and no prize money for you today. In such situation, Buster cannot
revoke his contract once the act is performed by the Tommy.
Thus, it can be concluded that Tommy has right to claim that it was a unilateral contract that
can be performed by anyone, therefore he is entitled to get the reward.
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BUSINESS LAW ASSIGNMENT
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BUSINESS LAW ASSIGNMENT
Part- B
The main issue in the given scenario is what are the rights of both the parties if the original
contract is valid as well as what were the rights of both the parties where Tommy had told
Buster to pay the balance of the debt as lump-sum payment?
When a pre-existing contract is then modified, one of the requirements of doctrine of estoppel
is fulfilled (Cartwright, 2014). In general, the term estoppel means to stopped someone from
denying their earlier statements (Latimer, 2012),(taken from
http://e-lawresources.co.uk/Promissory-estoppel.php). A doctrine of equity or justice that
is invoked by a judge to avoid or stop a party from making a claim if the previous activities
of the party are in some way inconsistent with making the claim and if the other party
depended on such previous actions to the detriment of the other party (Trukhtanov, 2017).
Similarly, in the instant case, Buster called Tommy for a new offer that if he agrees to appear
in advertisement he will pay him $ 10,000 in monthly instalments to which Tommy accepted
the offer and appeared for the same. Unfortunately, Buster business did not do well so he
only paid three instalments. Tommy was told that Buster would not be able to pay further
until December. Later on Tommy as a compromise agreed to new variation that if you make
one further payment I will be willing to forgive the remaining. Buster agreed to the same and
paid the rest of the amount. Tommy accepted the lesser payment as compromise.
There are usually four requirements, which must be proved by the claimant to establish his
case, these are, there must be a pre-existing contract or lawful duty that is later on modified,
promise that must be clear and unambiguous, transposition of parties and promisor shall not
be allowed to go back on their promise, as it must be inequitable (Hogg, 2011). Thus, As per
the elements of estoppel both parties agreed to the variation of contract and acted
accordingly, which constituted a valid contract between them. As per the first requirement
there was already a contract which was later modified by the parties. As per the second
requirement promise was clear between the parties as Tommy agreed to lesser sum. As per
the third requirement Tommy gave the offer to Buster to pay only last instalment which was
agreed by the Buster thus it resulted into the change of position of parties. As per the last
requirement, Tommy shall not be allowed to go back to his promise. Thus in the present
scenario all the elements of estoppel are present.
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In the case of D & C Builders v Rees (1966) 2 WLR 28, the defendant rely on the written
receipt given by the plaintiff and sought relief under the doctrine of estoppel ( this material
is taken from http://e-lawresources.co.uk/D--and--C-Builders-v-Rees.php). The court
held that defendant could not rely on such principle of estoppel as there was no such intention
and no true agreement to accept less due to defendant already took the benefit of the situation
of the plaintiff and mislead him with regard to their economic situation. Thus, the plaintiff
was entitled for the remaining sum. Similarly, as per this case, the claimant did not accepted
the offer of the defendant and said he would pursue for the balance. However, in the current
scenario Tommy as a compromise agreed to the contract variation, accepted $ 5000, and
would forget the remaining to which Buster agreed upon and made the payment. Thus in the
given situation Tommy can be estopped from denying the fact that he cannot claim for the
remaining amount as he agreed to lesser sum.
Thus, it can be concluded that in the first situation that Tommy can be estopped from further
payment and he cannot claim for remaining amount whereas Buster has a right to rely upon
the principle of estoppel, as there was real contract between the parties.
In cases where one parties refuses to perform their part of contract then it is known as breach
of contract (Carter, 2012). It is lawful cause of action and form of statutory public wrong in
which one or more of the sides to the obligation do not honour a conditional agreement or
bargain for return by failure to perform or intrusion with the results of other party. In case of
breach of contract the aggrieved party can claim for damages (Witzleb et al., 2015). In the
case of Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited (2007) 233 CLR
115, the court held that in two situations a contract is said to be breach of contract i.e. breach
of condition or serious breach of non-essential term (intermediate terms) (this is taken from
https://lawcasesummaries.com/knowledge-base/koompahtoo-local-aboriginal-land-
council-v-sanpine-pty-ltd-2007-hca-61/)
Breaches of medium conditions will be substantially severe to enable breach where the
breach goes to the origin of the agreement, i.e. to deny the injured party of a significant
portion of the advantage to which one is permitted under the agreement (Carter, 2011). Thus,
the situation would be different where the Tommy had told the Buster to pay the balance of
the debt. If the Tommy asked for the instalments and Buster if denied to pay then it would be
regarded as serious breach of contract. As applying the case of Koompahtoo Local Aboriginal
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Land Council v Sanpine Pty Limited, Tommy agreed to appear in television when Buster
gave him offer of $10,000 to be paid in instalments. It was essential part of the contract. Thus
if the Buster would decline to pay the instalments it will be deemed as breach of contract.
Thus, it can be concluded that Tommy can claim for damages for breach of contract.
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Bibliography
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Carter, J., 2011. Carter's Guide to Australian Contract Law. 2nd ed. New York: LexisNexis
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Carter, J.W., 2011. Cases and Materials on Contract Law in Australia. New York:
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Carter, J.W., 2012. Carter's Breach of Contract. London: Hart Publishing.
Cartwright, J., 2014. Formation and Variation of Contracts: The Agreement, Formalities,
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Chew, C.C., 2014. Business Law Guidebook. Oxford : Oxford University Press.
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Hogg, M., 2011. Promises and Contract Law: Comparative Perspectives. Cambridge:
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Trukhtanov, A., 2017. Contractual Estoppel. Abingdon-on-Thames: Taylor & Francis.
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Witzleb, N., Bant, E., Barker, K. & Degeling, S., 2015. Remedies: Commentary and
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