TLAW 401 Semester 3: Contract Law Case Study - Rita's Business

This case study assignment analyzes a contract law dispute between Rita and her uncle, Mr. Chorwala. Rita, a business student, seeks to rent her uncle's vacant store to start a consulting business. The assignment explores the formation of an oral contract, focusing on the elements of offer, acceptance, and consideration. The core issue revolves around Mr. Chorwala's denial of the agreement after Rita began renovations, and his subsequent decision to lease the property to another party. The assignment delves into the legal implications of breach of contract, the validity of oral agreements, and Rita's potential rights and remedies, including claims for damages. The solution references relevant case law and the IRAC method to present a comprehensive legal analysis and conclusion, addressing the validity of the contract, the uncle's breach, and Rita's entitlements.

CONTRACT LAW

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
Case Scenario..............................................................................................................................1
Issue.............................................................................................................................................2
Rule.............................................................................................................................................2
Application..................................................................................................................................4
Conclusion...................................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Contract law are the most important law where legally enforceable agreements are to be
formed between two parties in which it is necessary to understand that obligations must be
completed. The main purpose of forming the contract to ensure that work will be completed on
time. There are no one who has the right to breach the terms and condition because that can start
the civil litigation. Here, in this project, the case study has been given which is required to be
solved with the help of contract law. The case will be resolved with the help of IRAC formate
where it major focus will be given on finding the issues so that further discussion can be done
easily.
MAIN BODY
Case Scenario
The present case scenario is between Rita and her uncle Mr. Chorwala. Here, Rita was
willing to start her own business related to professional consultant but it was found that she
didn't had enough amount of money. The main behind not able to start her business of own is just
because of the city, as Sydney is one of the expensive city due to which it is not that easy to
commence the business in that respective area. But, her uncle had a vacant place which he is
willing to give on rent just for the purpose of generating additional source of income.
The condition of store was not so good at all because the previously it had been given on
lease to one of the restaurant. The overall cost of starting the renovation work was near around
$55000. By looking at that particular situation, Rita told her uncle to provide the documents
related to lease of the property which is for upcoming 3 years (Cartwright, J., 2016). Here, Mr.
Chorwala said that he will give the documents afterwords as it is rush hour and also told she can
further proceed for the renovation work for starting the business. By looking at the statement
given by the Mr. Chorwala, Rita had started the work of renovation. Once the work was
completed, Rita again informed her uncle to provide the legal documents. But, as soon as he
came to know that renovation work has been completed, he informed Rita to vacant the place as
he has found another party who will pay around three times of which Rita will pay him.
The main facts in this respective case was that Mr. Chorwala denied of performing his
part of work (Fleming and Mondon, 2018). Secondly, it will be important to find that which type
of contract has been formed between the party. The third and the most important fact about the
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case is that whether Mr. Chorwala has the right to give his rental property to any of the other
party or not as it has been already given to another party.
Issue
There were number of issues in this respective case which is needed to be solved. It was
found that involved parties (Rita and Mr. Chorwala) didn't signed the written agreement which
having the conversation regarding the contract (Klee, 2015). On the other hand of side, Mr.
Chorwala is willing to give the lease documents to another Mr Lotto who is willing to pay three
times of Rita. Here, it will be necessary to find out with the help of contract law that whether
company has the right to enter into the contract or not as once they had already agreed to enter
into the contract with another party.
As renovation work has been completed where investment has been done by the side of
Rita and just after knowing that work has been ended, Mr. Chorwala decided to give rental
property to another party. Now, it will be interesting to find that whether contract between Mr/.
Chorwala will be valid or void ab inition. Can Riya sue to Mr. Chorwala and what are her rights
in that respective rental property. Finally, if she had to leave the rental property then can she go
for claiming the damages. This case is quite similar with the case between Cary v. Mr. Whitaker,
where Mr. Whitaker had decided to enter into the oral contract to give him the contract to repair
all of his 5 vehicles which are not bring used since last five years. By looking at the requirement
for repairing the vehicles, Cary had purchased the materials. But, after material had been
purchased by Cary, Mr. Whitaker had denied to give his contract to Cary by giving the
clarification that Mr. Jones will do the same work in cheaper price. Also, he mentioned that there
was no contract because any of the legal paper were not signed. And in return the judgement was
given by the court where judges explains that contract can be oral as well and if Mr. Whitaker
want to give his contract to any of the other party then he or she must give the damages amount
from which Cary has to suffer (Giancaspro, 2017).
Rule
The given case is related with the formation and breach of contract where party didn't
perform their part of work which had created lots of problem for involved party. Here, it was
needed to understand that contract law will play the crucial role to understand that case in detail.
Contract law: The form of agreement where two parties agrees to work in return of
consideration is known as contract law. In any of the contract, consideration should be there
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with legal binding terms and condition. It is allow to parties that they are being given the option
to alter the terms and condition if all of the involve party agrees on it. If contract is being formed
then it becomes important that work should be done accordingly and if it will be done then it will
fall under the category of breach of contract. Contract can be formed in the way of oral as well as
written form.
Written Contract: This are those contract where party has to sign the contract in written
and all of the documents should be legally binding in it (Cheng, Smyth and Guo, 2015). If in any
of the situation, breach of contract occurs then, this types of contract really helpful because
written documents will allow the court to decide that who is defaulter in the case.
Oral Contract: This are those types of contract where two party enters into the contract
on the basis of promise made by each party. But, consideration should there in this types of
contract as well. The main issues in this types of contract is that burden of proof will be in the
hands of the person who has filed the case i.e., plaintiff. If in any of the condition, party fails to
proof in the court then losses may have to bear by innocent party only.
There are mainly five elements which are to be fulfilled for making any of the contract
legal and those elements are Offer: In any of the contract, offer plays the crucial role where it becomes important to
understand that offer must be given by one of the party. It is the primary stage of entering
into any of the contract. If offer is not being made the it will be never easy to form the
contact. Acceptance: The second most important stage is acceptance where offerer party has to
give his or her reply that regarding the offer made to them (Andrews, 2015). But, if offer
party gives the counter offer then this stage will not be counted as a acceptance. Consideration: Although, offer and acceptance has been made by the party but, it will be
necessary to include consideration in it because if in any of the situation consideration
will not be included then terms and condition of the contract will not be completed. It can
be anything such as monetary compensation for the work or agreeing to give any of the
useful resources. Capacity: The contract can become valid in that respective situation where entered party
has the capacity to enter in the contract. It is required to understand that contract can
never become valid if any of the unsound person has tried to enter into the contract and
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secondly, if person is below 18 years. It is said that contract is never valid in that
respective situation because minimum criteria for the contract is 18 years.
 Legal Purpose: In any of the contract, legal purpose of should be there to make contract
valid. If there will not be any of the legal intention within the contract then contract will
not be valid (Tushnet, 2017).
If in any of the situation terms and conditions are not completed then it is counted as
breach of contract and in that respective situation case can be filed. Breach of Contract allows
the plaintiff to file the case where they will be able to recover the damages. The recovery of
damages will be based on the losses which has to be faced by innocent party. For example: A
had entered into the contract with B where A will buy all of the fruits of B in the evening while
coming back from office. But, in evening he denied to buy by explaining the points that he
doesn't have any of the requirement to buy any of the fruits at the moment. It is one of the
situation where breach of contract occurs. This will give the option to B that he can file the case
against A where he can easily recover the damages but burden of proof will be in the hands of B.
Similar case
Addis v Gramophone [1909], is one of the case where it was found that Addis was the
manager of the company who has been removed by the company by replacing the new one. Here,
it was found that notice was not given by the company due to which Addis filed the case.
Looking at the situation of the case, the judges decided that it was the duty of organisation to
give prior notice that they are willing to replace the manger. So, in this case Addis was rewarded
the money as compensation (Addis v Gramophone, 2018).
Case between Mr. Smith v Mr. Drake is one of the case where contract has be made
verbally. It was decided in the contract that Mr Drake and his company will give commission
amount on the sale of companies product (Smits, 2017). But, it was found that after reaching the
target, Mr. Drake denied to give the commission amount by saying that there was not legal
agreement signed in it. But, Mr. Smith was able to prove in the court regarding the court due to
which damages was paid off to Mr Smith by Mr Drake. The damage amount was paid $500 for
the breach of contract.
Application
After having the detail analysis on the given scenario and rules and regulation of the case,
it can be said that their was the legal agreement which was formed between Rita and Mr
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Chorwala. The contract which has been formed between both the parties where related with oral
contact and those contract are also valid. Even from the mentioned cases, it can be understood
that oral or verbal contract are also valid and work must performed as per the requirement. In the
above given case scenario, the decision which had been taken by Mr. Chorwala to enter into the
contract with third party will be void as it is not allow for any of the person to enter into the
contract with two different person for similar terms and condition.
In order to prove that there was the contact between the party, it can be understood that
parties has firstly made offer where another had shown their acceptance. The consideration
within this respective contract is rent for the shop which is being given to Rita (Liu, Wang and
Wilkinson, 2016). Thirdly, it has been found that there was the intention of both party to enter
into the contract in the beginning but later on Mr. Chorwala shifted his mind. Then, they both
were had the capacity to enter into the contract. This all points allow to understand that they both
had entered into the contract.
As, Mr Chorwala had given the information to Rita that she must leave the lease
property as soon as possible which is a breach of contact. The statement given by Mr. Chorwala
saying the contract must be formed on the basis of writing and it must legally binding in nature.
But, that has been not done but he must understand that verbal contract are also equally
important where work must be performed by the party.
Conclusion
In this respective case, it was the default performed by the Mr Chorwala. It was his
responsibility to understand that in any of the situation he is not allowed to enter in the contract
within another party where terms and condition are for common object (Nottage, 2013).
Secondly, Rita had already invested lots of capital in it. If in any of the circumstance he is
willing to make place vacant then it will be important to understand that all of the expenses
should be paid off to Rita. If in case, Mr. Chorwala is not willing to pay of the damage amount
then in that respective situation. Rita can sue him for the purpose of overcoming from the
problem. In short, there was the legal contact between Mr Chorwala and Rita where situation of
breach has been created by the side of Mr. Chorwala. In addition, the main thing to be
understood is that all of the legal requirement is to be fulfilled by Rita such as case is to be filed
by her. Secondly, burden of problem also depends upon her.
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CONCLUSION
After having the detail analysis on the case, it can be understood that contract law is quite
important where work must be perform as per accordance or requirement. Breaching the terms
and condition of the contract will create legal issue where damages are needed to be paid off.
Those contract will always be counted as void where party had already entered into the contract
and tried to enter with another party in similar contract. Contract law can easily help to
understand that what are the obligation of any of the individuals.
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REFERENCES
Books & Journals
Cartwright, J., 2016. Contract law: An introduction to the English law of contract for the civil
lawyer. Bloomsbury Publishing.
Klee, L., 2015. International construction contract law (No. s 1). Wiley-Blackwell.
Giancaspro, M., 2017. Is a ‘smart contract’really a smart idea? Insights from a legal perspective.
Computer law & security review. 33(6). pp.825-835.
Cheng, Z., Smyth, R. and Guo, F., 2015. The impact of China’s new Labour Contract Law on
socioeconomic outcomes for migrant and urban workers. human relations. 68(3).
pp.329-352.
Andrews, N., 2015. Contract law. Cambridge University Press.
Tushnet, M., 2017. Comparative constitutional law. In The Oxford handbook of comparative law.
Smits, J. M. ed., 2017. Contract law: a comparative introduction. Edward Elgar Publishing.
Liu, T., Wang, Y. and Wilkinson, S., 2016. Identifying critical factors affecting the effectiveness
and efficiency of tendering processes in Public–Private Partnerships (PPPs): A
comparative analysis of Australia and China. International Journal of Project
Management. 34(4). pp.701-716.
Nottage, L., 2013. Tracing Trajectories in Contract Law Theory: Form in Anglo-New Zealand
Law, Substance in Japan and the United States. Yonsei LJ. 4. p.175.
Fleming, A. and Mondon, A., 2018. The radical right in Australia. In The Oxford Handbook of
the Radical Right.
Online
Addis v Gramophone. 2018. [Online]. Available Through:
<http://e-lawresources.co.uk/cases/Addis-v-Gramophone.php>
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