Contract Law Australia Case Study 2022

RUNNING HEAD: CONTRACT LAW
Contract Law
Name of the student
Name of the university
Author Note

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The answer to case study 1:
(a)
Issue:
The basic issue regarding the case of SOO burger is whether Mickey can recover Mazda
from the main office of restaurant SOO burger.
Rule of the Law:
The contractual terms rely on the agreement that provides the terms and conditions that is
required to be fulfilled by the parties of the contract. A agreement is developed when an offer is
provided to any of the parties involved in a contract. There should be presence of intention to
enter the contract. This statement can be supported by the case study of Carlill vs Carbolic
Smoke Ball Co1. While acceptance of an offer is observed to be done with the absence of the
situation by the parties involved in a contract to the parties of the opposite side where the
agreement is developed it aids in developing a valid contract. Similarly the difference between
proposal and invitation to proposal. Invitation to a proposal can be said as a type of offer that is
made for receiving a public response where negotiation is involved. Accepting an offer changed
the made offer into an agreement; similarly when an offer of invitation is accepted it turns into
an proposal.
Revocation of produced offer is said to be considering when it will be taken back by the
parties of the contract giving the proposal. This situation takes place when the parties cancel the
made offer. A legal revocation takes place when few conditions are fulfilled, firstly the made
1 Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1

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offer must be withdrawn back before the offer acceptance takes place and the offeree must be
informed about the revocation, but it is not essential for the offeree to obtain the information that
will be communicated.
The case study of Mobil Oil Australia Ltd v Lyndel Nominees Pty Ltd (1998) 205
FCA2 can be consulted for supporting the following statement. There is a presence of different
types of offer, among which one type of proposal can be stated as when the proposal or an offer
is being accepted the way of performing a task is stated as unilateral contract. This type of
agreement or contract is generally observed when an offeror receives any open request in term of
payment from the offeror if the said act is observed to be performed.
Application:
The given case portrays the scene of SOO Burgers; the restaurant chain started a
competition of sale in order to accelerate their industry. In this situation they started the
competition with a token attached to the packaging of their item of burger. The condition and the
terms of the chain of restaurant were that if any individual can accumulate fifty tokens will be
able to gain a scratch pass which can reveal a Mazda car; the vehicle will be awarded to the
winner that will be given by the SOO Burger’s head office. The case study of Carlill vs Carbolic
Smoke Ball Co3 can be easily related to this case. A consumer named as Michael was interested
in order to win the Mazda car. In relation to that he willingly bought 50m burgers and consumed
all of them at once. As a result of consuming the SOO burgers at once he was admitted to a
medical clinic as he was exhausted. All of sudden when he was going to pass out he scratched all
the fifty tokens for getting the scratch card.
2 Mobil Oil Australia Ltd v Lyndel Nominees Pty Ltd (1998) 205 FCA
3 Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1

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The organization of the restaurant invented that there was a mistake in printing that has
resulted in the offer revocation and the organization broadcasted the offer to be void. The
pronouncement was not made about the Mazda car directly, but he overheard it as the nurses in
the clinic was discussing the revocation of the offer. Post-hearing of the discussion Mickey got a
scratch pass where he won a car. As a result of the consequences the news of the offer revocation
took place where he heard about the announcement before accepting the offer. Therefore due to
the consequences Mickey cannot claim the car.
Conclusion:
The above stated provisions made it clear, that the facts explained about the given case is
that Mickey cannot claim the Mazda car form the from the organization of SOO burgers.

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(b)
Issue:
The main concern regarding the given case is whether Brett can claim the Mazda car
from the organization of restaurant of SOO Burgers.
The Rules of the Law:
The contractual terms rely on the agreement that provides the terms and conditions that is
required to be fulfilled by the parties of the contract. A agreement is developed when an offer is
provided to any of the parties involved in a contract. There should be presence of intention to
enter the contract. This statement can be supported by the case study of Carlill vs Carbolic
Smoke Ball Co4. While acceptance of an offer is observed to be done with the absence of the
situation by the parties involved in a contract to the parties of the opposite side where the
agreement is developed it aids in developing a valid contract.
Similarly there is a difference between proposal and invitation to proposal. Invitation to a
proposal can be said as a type of offer that is made for receiving a public response where
negotiation is involved. Accepting an offer changed the made offer into an agreement; similarly
when an offer of invitation is accepted it turns into an offer. Another case study of Harvey V
Facey [1893]5 can be taken into consideration for supporting the statements of the given case.
Revocation of produced offer is said to be considering when it will be taken back by the
parties of the contract giving the proposal. This situation takes place when the parties cancel the
made offer. A legal revocation takes place when few conditions are fulfilled, firstly the made
4 Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1
5 Harvey V Facey [1893] A.C 552

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offer must be withdrawn back before the offer acceptance takes place and the offeree must be
informed about the revocation, but it is not essential for the offeree to obtain the information that
will be communicated.
The case study of Mobil Oil Australia Ltd v Lyndel Nominees Pty Ltd (1998) 205
FCA6 can be consulted for supporting the following statement. There is a presence of different
types of offer, among which one type of proposal can be stated as when the proposal or an offer
is being accepted the way of performing a task is stated as unilateral contract. This type of
agreement or contract is generally observed when an offeror receives any open request in term of
payment from the offeror if the said act is observed to be performed.
Application:
In the given case it is seen that the unit of the chain of restaurant of the SOO Burgers
enhanced the transaction of every unit by the way of promotion in which a burger along with a
token attached will be given to the consumers, where the burger wrapper was attached with fifty
tokens. The terms and condition were broadcasted as the consumers who will collect fifty tokens
will be given a scratch card which on scratching get win the Mazda car. It was stated that the
winning Mazda car would be distributed from the head office of the company. The case study of
Carlill vs Carbolic Smoke Ball Company (1892)7 can be studied that explains the idea of
unilateral contract.
In the given scenario, Brett has scratched every token accumulated from the waste bins
the restaurant of SOO Burgers without purchasing any stuff from the chain of a restaurant. The
resultant of his act helped him to collect hundred tokens. Post scratching every token he won two
6 Mobil Oil Australia Ltd v Lyndel Nominees Pty Ltd (1998) 205 FCA
7 Carlill v Carbolic Smoke Ball Company (1892) 1 Civ EWCA.

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cars. This method of winning is not lawful because of the approval of the produced offer as he
did not comply with every expressions and condition of the offer said. As a result no contract
was developed between Brett and SOO Burgers. Therefore he will not be allowed for claiming
the Mazda car.
Conclusion:
The above stated statements make it clear that Brett cannot claim the Mazda car from the
organization of SOO Burgers.

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Answer to Case study (ii):
Issue:
The primary concern in the case study of the company Sparkling Pty Ltd is regarding the
outcome of the act of Sarah and the resultant of the provided case.
The secondary issue regarding the provided case is about the outcome of the given case if
the loan department officer would have been more careful regarding Sarah’s expired
appointment.
The third concern is about the result of the given case if the loan amount would have
provided in the other two outlets.
The Rule of the Law:
Liability of moral faith:
Directors should utilize their power and control and should carry out to perform their duties and
responsibilities with the best interest and good faith of the whole organization. The actual target
of the duty of the director is to carry out their task along with an honest manner for company’s
well being according to the belief of the directors.
Duty of diligence and care:
The important behavior that is required to conduct a duty depends on the company’s
circumstances and with the responsibility and position of the director. Directors should utilize
their control and power, and they should also carry out their performance, role, and
responsibilities with sufficient diligence and care that a decent individual should target if they are

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in the position of the company’s director. Similarly they should carry out their performance as
the director of a particular organization occupying the similar company.
Duty of the Director:
The main target of the board or the panel is to reward and appoint the company’s CEO and also
to formulate and approve the plan and strategies that will enhance the company’s goal for
running the business successfully. The annual budget is being planned by the directors of the
company as they decide for running the company in a most honest manner. They also judge the
performance of the management and looks after the outcome of the specific business.
Application:
(i) The outcome of this provided case depicts a suggestion that Sarah’s performance in
the position of the director is not lawful. Sarah has not performed any duties and
responsibilities with enough diligence and care. She can be held liable under section
180 and section 181 of the CA 2001.
She can be punished up to $200,000 and can be held in prison for five long years. She
can also be debarred from managing any organization in the future. She has paid all
the debts of the organization as her personal liability.
(ii) The outcome of the given case can be suggested as Sarah has not been provided with
borrowing limit beyond the limit of the transaction provided by the company in her
contractual terms amounting to $30,000. As the director of the particular company
she has been found in breaching the duty by doing a transaction above the limit
without consulting the panel or board of the organization.
(iii)

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(a) The outcome would be same as the company has set the transaction limit of
$30,000 for the transacting as a director for the organization even if the loan
amount would have been given to the other two units of the clothing shop of
Sparkling.
(b) The outcome of the given case would not stand same even if the loan department
officer would be careful about the expired appointment of Sarah and also about
the limit of transaction given to Sarah provided by the company. The officer of
the loan department was not careful about the expired appointment of Sarah as
she was looking for a new job because of her expiration from the director’s
position. The Bank of Costello would not provide $30,000 to Sarah if they noted
about the transaction limit provided to Sarah in the contract as the company’s
director.
Conclusion:
The mentioned facts clearly stated above; it is clear that Sarah was not lawfully carried out her
task of the director. She has neglected to perform as a director with sufficient diligence and care
along with duties and liabilities. It can never be said that Sarah was good and decent director of
the company.

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Reference:
Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1
Mobil Oil Australia Ltd v Lyndel Nominees Pty Ltd (1998) 205 FCA
Harvey V Facey [1893] A.C 552

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