Contract Law and Australian Trust Law Case Study

CASE STUDY
CONTRACT LAW AND AUSTRALIAN TRUST LAW
5/4/2019
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Case Study 1-
Issue- Here in this case Sally is a diamond jewellery designer who met Harry, a rich
diamond buyer from London. They were in contact from last five months when Harry
shows his interest in specific diamond ring designed by Sally. Also Sally offered by
mail to supply that ring to Harryand asked for a acceptance from Harry within a
specified time of three days. Harry responded his acceptance the next day by post. But
Sally ends up selling that ring to other buyer as the letter was delayed . Harry has also
sent a reply by email due to his apprehension regarding delays in postal services.
Law- Offer and acceptance will be treated as a contract if there is a presence of party
who made offer( Sally in present context), a party who has accepted the offer( Here
Harry has shown his will to buy that ring) and a mutual interest. InEntores Ltd v
Miles Far East Corp(1955), it was held that whileusing instantaneous mode of
communication in contract negotiations, the contract will be assumed to be concluded
if acceptance letter has been sent by buyer within limit prescribed by seller
irrespective of the fact whether it has been read or not by seller. And denied
application of regular postal rules in case of instantaneous mode of communication.
Also it was mentioned that there is no universal rule and resolution of each case
requires intention of parties Also Electronic Transactions Act 1999 facilitates the
use of electronic transactions as a mode of concluding contracts. Section 14 and
Section 14(a) of Electronics Transactions Act 1999states that an email will be
assumed to be accepted by a person if it enters the email or electronic system of that
person within prescribed time limit irrespective of the fact whether or not they had
seen or read, fulfilling the condition that email has been sent by the email account
specified by the person.
Application- Therefore as it is clear that both the parties were intent to make a deal .
And as above mentioned that intention of parties has major role in such cases. Sally
offered Harry by mail to supply and Harry responded his acceptance by post and mail
as well as he was worried about delay in postal services. Here Sally offered by email
so postal acceptance rule is not going to apply as held by court. And Harry sent email

within given time limit as given by Sally so as per the provisions of Section 14 and
Section 14(a) of Electronics Transactions Act 1999 , email will be deemed to accept
by Sally if it has entered her email account within three days of her offer provided the
email has been sent from Harry's account as given in case. Also applying the
judgement made above by courtPostal acceptance rule will not be applicable here
because Sally opted for instantaneous mode of communication.
Conclusion- Therefore, in the case given above an offer has been made by Sally from
London to Harry who is also from London. Harry's apprehension regarding delay in
postal service is worthless because offer has been made by Sally by email. So
acceptance is also needed to be communicated by email as Harry did within specified
time using his own email account so it can be concluded that Sally has received
acceptance from Harry within given time limit of three days by email so conclusion of
contract is deemed to be practiced by both parties.
Case study 2-
Issue- In this case Tanya, a wealthy businesswoman has setup a company to save on
taxes along with the tax on her salary that she draws out of the company. She wants to
preserve some money for her children. So she wants to setup a trust that she has heard
about. Here she wants to discuss implications of setting up trusts.
Law- As per Australian Trust Law, A Trust is a private legal system in which
ownership of someone's asset is held or managed by individual or group of
individuals for others benefits. A trustee is a person whose assets has been used in
trust and beneficiaries are those who accepts property, funds and other benefits from
trust1.
Some common reasons to create trusts includes-
 To get tax benefits
 To protect personal/family assets.
 Helpful if someone is too young to handle own financial affairs.
1 H. P Lee and Enid Mona Campbell, The Australian Judiciary (Cambridge University Press, 2013).