Contract Law Case Study with Rules and Application

Running Head: CONTRACT LAW
CASE STUDY
Name Of the Student
Name Of the University
Author’s Note

CONTRACT LAW
1
Issue:
The first issue in the case is whether the parties entered into the contract and when.
The second issue in the case is whether clause 5 has been set out on attachment 6 as a
term of the contract.
The third issue in the case is whether a term of the contract that the Gazette is obliged to
pay interest on the late payment.
Rules:
Offer has been explained as the willingness by one party to enter into the conytract with
another party along with the definite set of terms and conditions along with the intention that the
contract shall be legally binding once it is accepted by the other party. The object test for the
determination of the intention of a party whether or not to enter into the contract making it
legally enforceable once it is accepted by the other party1. The test enabled the court to interpret
the intention of the party as a means of reasonableness of any person and not the subjective
analysis of the intention.
Unilateral Contract means the type of contract which is offered to act or refrain to act in return of
a favour as expressed in the contract. Therefore, in this type of contract, it has been explained
that the acceptance need not be expressly made to the offeror. The performance of the contract
shall bear the interpretation of acceptance by the other party2.
1Smith vs. Hughes (1871) LR 6 QB 597 applied in Ermogenous v Greek Orthodox Community of SA Inc [2002]
HCA 8
2 Carlill v Carbolic Smoke Ball Company [1892] EWCA 1, [1893] 1 QB 256

CONTRACT LAW
2
The terms of a contract may be express or implied. It means that the terms of a contract
may be explicitly laid down in the formal form of contract or the same can be interpreted by the
means of implications of the statutory rights and obligations of the parties in their capacity. The
express terms of contract may be written or verbally delivered to the acceptor. The terms once
known to the accepteor, such terms shall be binding to the contract once agreed and entered by
the parties. The express terms of the contract shall be explicitly binding upon the parties.
However such terms are not absolute in nature. The terms expressed in the contract should be in
accordance with law and the legal provisions, customary laws, and the legal precedents. Like
warranty clause shall be binding upon the parties if such provision for the warranty has been
expressly intimated to the other party by means of written or oral contracts3.
Acceptance has been explained as a mode of accepting to the terms and conditions of the
contract as offered by the party. Acceptance should be clear and intimated to the offeror and
most essentially unconditional. Any condition proposed by the acceptor at the time of acceptance
would amount to the revocation of the offer. Silence is not considered to be an effective form of
acceptance4 because silence does not ensure that the contract has been effectively accepted by the
party. Acceptance of a contract is based on the theory of meeting of the minds. In other words
the theory has been identified as the consensus as idem meaning agreeing to the same things5.
The basic essence of acceptance is communication meaning that the offer has been accepted
should be clearly communicated to the other party failing which, the legal enforcement of the
3 SS Ardennes (Cargo Owners) v Ardennes (Owners) [1950] 2 All ER 517
4 Felthouse v Bindley [1862] EWHC J35, [1862] 142 ER 1037
5 R. Austen-Baker, "Gilmore and the Strange Case of the Failure of Contract to Die After All" (2000) 18 Journal of
Contract Law 1