Contract Law Case Study

CONTRACT LAW
CASE STUDY

REPORT
“Based on Question-2 Related to Contract Law Theme”
Introduction
A contract is valid legalized document or an agreement that is enforceable by law and is
defined in a legalised manner upon the parties who are said to be in the contract. In such a
contract the promise is made between two or more parties. In a contract one party initiates the
consideration amount and the other party carries out the work stated (Mindy Chen-Wishart,
2016). To form a legal contract it has some basic key elements to be fulfilled by the parties
that include offer and acceptance, consideration, capacity to contract, intention of parties to
enter into legal relations, certainty and consent.
The oral form of contract is the one in which it is discussed and initiated orally while on the
other hand in the written form which is done by writing or signing on a paper so both forms
of contracts are considered valid in nature. Also, out of any such contract the rights and
obligations of the parties are determined (Philip Clarke, 2016).
Issues
The key issues of this case study are based on the facts mentioned:-
1. Whether a contract has been formed between Troy and Helen?
2. In case the contract has been formed whether the same was breached?
Rule
In any kind of formation of a legal contract an offer is to be made. According to the
Australian contract law it is stated that an offer is a mode of communication that amounts to a
promise to do something or not to do, if that offer is given to the person either does it or
refuses to do the same or returns it in a form of promise (Andrews, 2011). In this, it also
stated that an offer must show that the promise would be fulfilled, when it is duly accepted by
the other party to the contract (Croese, 2015).
The initial requirement to form a contract is when one party gives an offer to the opposite
party, which has fixed terms and obligations mentioned to make it a valid contract. In this
case law Carlill v. Carbolic Smoke Ball Company (1893) 1QB 256, however, when it comes
to such terms in the adverts which can be acted upon for giving the acceptance further, then
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same is considered as a unilateral offer. This case is a main example of an offer which can be
made to any individual, group or even to the public at large (Latimer, 2012).
Secondly, the rule of counter offer is a reaction given to an initial offer. In this condition the
original offer gets rejected and replaces with another one. It gives the original offerer three
options: accept it, reject it and make another offer with negotiations between the two parties
(McKendrick, 2018). The offer once made and which has also been accepted by the other
party, in such condition if prevails any kind of changes in the original offer the
communication is not accepted and instead it is termed as counter offer (Poole, 2016).
In the case of Hyde v. Wrench (1840) 3 Beav 334 it was determined that when an original
offer become invalid then it cannot be accepted latter on and the original offer is completely
ended or no more found.
Thirdly, acceptance is a clear statement which is either in oral, written or by the conduct. It is
initiated by the offeree who is agreeing to the offer. When the person to whom the proposal
has been made gives his ascent the offer is said to be accepted (Davis J. , 2012). So, it can be
said that silence cannot be considered as acceptance in the case of Felthouse v. Bindley
(1862) EWHC CPJ35. In this case law an acceptance to any offer in mere silence will not be
amount to any kind of acceptance and no such obligation can be imposed by the other party.
An acceptance for an offer must be clearly stated; as silence cannot be treated as acceptance
for an offer (Stone, 2017).
Lastly, in the postal rule of acceptance, the offer is said to be accepted at the very moment it
is posted by the acting party. It is the postal office which is considered as the implied agent to
the accepting party. The date of receipts is irrelevant in such case where the postal rules of
acceptance are applied. In the case of Adams v. Lindsell (1818) 106 ER 250, the court held
that postal rules of acceptance was applied by the court of law and further it was held that the
contract was enforceable (Carter J. W., 2018).
Application
In the given situation of the case the facts emphasize firstly on an offer that was made by
Troy on 1st April 2018 to sell his canary yellow Toyota Corolla car to Helen for an offered
price of $6,000 as there was an absence of unilateral offer because the amount mentioned is
paid by the other party, then it would be deemed as performance of the term of the contract
and hence, acceptance in this case like Carlill v. Carbon Smoke Ball company. The offer and
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