Case Study Analysis

Running head: CASE STUDY ANALYSIS
CASE STUDY ANALYSIS
Name of the Student:
Name of the University:
Author Note:

1
CASE STUDY ANALYSIS
Part A:
Issue:
The issue involved in this case study is that whether there lies any contract between John
and dry cleaning company Spic and Span.
Laws:
Under the common law, in order to constitute a valid contract, all its necessary
ingredients must be present (Stone and Devenney 2017 ). As per the common law, a contract is
validated by a legally enforceable agreement between the parties to the contract and such
agreement provides the rights and obligations of the parties depending upon the terms and
condition of the contract (McKendrick and Liu 2015). This has been put forwarded in the leading
case of Commonwealth Bank of Australia v Barker [2014] HCA 32.
The first essential of a valid contract is the agreement between the parties. An agreement
consists of an offer and its acceptance. Offer denotes the willingness of a party to bind himself in
a contract and it must be communicated to the other party. It was observed in the case of
Australian Woollen Mills Pty Ltd v The Commonwealth [1954] HCA 20. However, to create
an agreement, such offer must be accepted by the other party. The acceptance must corresponds
with the Offer as observed in the case of Tonitto v Bassal [1992] 28 NSWLR 564 and it must
be unequivocal and must be communicated to the offeror as seen in Spencer’s Pictures Ltd v
Cosens [1918] NSWStRp 1 case. However, an offer must be differentiated from an invitation of
offer where the latter invites people in general to respond to such invitation and make offer as
found in the case of Westminster Estates Pty Ltd v Calleja [1970] 1 NSWR 526.

2
CASE STUDY ANALYSIS
The second essential criterion of a valid contract is the presence of consideration. It can
be of any amount but it must be present. The case of Beaton v McDivitt [1987] 13 NSWLR 162
states that the consideration must not be money always but it can be anything from promise to do
something or not to do anything.
The third condition is the capacity of the parties to enter into a contract. Certain persons
like minors, drunken persons and the mentally challenged people are barred from entering into a
contract. It is shown in the case of Gibbons v Wright [1954] HCA 17. When the party to a
contract does not have the required capacity, as per the decision of High Court of Australia in the
case of Blomley v Ryan [1956] HCA 81, such contract is void.
The fourth criterion of a valid contract is the intention of the parties to create legal
relations. The conduct of the parties or their behavior can be used by the court to determine the
presence of intention of the parties as given in the case of Ermogenous v Greek Orthodox
Community of SA Inc [2002] HCA 8.
The final condition of the contract is the certainty such that the contract must be certain,
clear, complete as well as binding on the parties. It is provided in the case of Upper Hunter
County District Council v Australian Chilling and Freezing Co Ltd [1968] HCA 8. When all
the five conditions are fulfilled, then the contract is said to be valid and legally enforceable
(McKendrick and Liu 2015).
Application:
\ In the given case, John is a business graduate and is working in a prestigious firm. It
shows that he is not a minor and has required capacity to enter into a contract. When John has
entered into the Spic and Span shop for dry cleaning his suit, he saw the notice board displaying