Contract Law: Validity of Contract and Promissory Estoppel

Running head: CONTRACT LAW
CONTRACT LAW
Name of Student
Name of University
Author Note

CONTRACT LAW1
Question 1
Can Jumping Jack Darcy claim for the winner’s prize
In the given scenario the primary issue is whether Jumping Jack Darcy can successfully
claim the winner’s prize under the law of contract.
Under the common law of contracts a contract can be defined as the agreement between
two parties that is recognized and enforced by law that establishes a relationship between the
parties. A contract would only become legally binding if there is a voluntary agreement by the
two parties existing. In Australia three elements are needed to be existing for the creation of a
valid contract. The three elements of a valid contract are: offer and acceptance, intention of the
parties to be creating relationship that is legally binding and paying for the consideration for the
promise made.
Under the common law of contract an offer has been described as the proposal of any
particular arrangement made by one party to the other. Under the common law of contract
acceptance of an offer is the communication to the offeror with a declaration of accepting and
willingness to be bound by the terms of the offeror either verbally or in written terms. The
provisions of a valid offer was seen as being discussed in the landmark case Carlill v Carbolic
Smoke Ball Company [1893]. In this case it was held by the Court of Appeal that an
advertisement that contained terms for reward would be considered as a binding offer for anyone
to accept. Further in the case Storer v Manchester City Council [1974] it was held by the court
that an offer, when made with an intention to create legal relationship would be legally binding
once the person to whom it has been addressed accepts the offer. In furtherance, as seen in the

CONTRACT LAW2
case Moran v University College Salford (No 2) [1993] an offeror is bound by the offer if his
conducts or words would induce any reasonable person to believe in the existence of the
intention for creating a contract. It has been further discussed in the case Dickinson v Dodds
(1876) that unless terminated by way of revocation by the offeror the offer would still be
effective.
Under the common law one of the essential elements to a contract is the intention of the
parties to be creating relationship that is legally binding. In the case Helmos Enterprises Pty Ltd
v Jaylor Pty Ltd it was held by the court that parties of the commercial agreements are presumed
as to be intending to legal consequences depending on the fact that who bears the onus of proof.
In the case Master v Cameron [1954] the legality of the contract was decided by the High Court.
This landmark case was seen to be establishing key principles for the determination of the
certainty and the determination of the fact that whether an intention could be considered as to be
legally bound in relation to the preliminary agreements. These principles of possibilities are-
although the parties are bound for bargain, they intend to be restating the deal in a formalized
way; parties are intended to be bound however the intention is suspended till the formalization of
their legal documentation; and the parties do not want to be bound unless there is a proper drawn
contract.
The third essential element in a valid contract is the payment of consideration against the
promise. As discussed by the court in the case Australian Woollen Mills Pty Ltd v The
Commonwealth [1954] a promise would only be enforceable if it had been supported by
consideration. This statement was further supported in the judgment of the case Beaton v
McDivitt [1987]. As per the judgment of the case Woolsworth Ltd v Kelly [1991] the