Contract Law: Analysis of Statements, Exclusion Clause, and Promissory Estoppel

This document provides an analysis of statements, exclusion clause, and promissory estoppel in contract law. It discusses the rules and applications of each issue and provides a conclusion. The document also includes references to relevant cases and books.

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

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1.
Issue:
The issue to be analyzed in the present case scenario is that whether the statement by
Jimmy will be the part of the sale contract.
Rules:
Statements made by the parties during making of a contract are to be considered whether
they are terms of the contract or the representations as this helps in determining the cause of
action as well as remedy available as laid in Handbury v Nolan (1977) 13 ALR 33912. Mainly
four elements are checked to differentiate between the term and misrepresentation.
Firstly, the relative knowledge of the parties are checked such that the one with better
knowledge when makes the statement, then it amounts to the term of the contract as observed
in the case of Oscar Chess Ltd v Williams [1957] 1 All ER 3253.
Secondly, it is checked whether one party has relied on the statement made by the other
party. The statement will amount to a term when the party to whom the statement is made has
relied on it and entered into the contract on the basis of it as observed.
Thirdly, it is checked that whether the statement is written in the contract, in such case, it
amounts to the term as observed in Causer v Browne [1952] VLR 14.
Finally, the timing of the statement is checked. When much time has gone after the
statement is made, then it is more likely to be the representation.
1 Handbury v Nolan (1977) 13 ALR 339.
2 Lambiris, Michael A., and Laura Griffin. First Principles of Business Law: Textbook and EStudy Modules. (Oxford
University Press, 2017).
3 Oscar Chess Ltd v Williams [1957] 1 All ER 325.
4 Causer v Browne [1952] VLR 1.

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Application:
From the facts given, it is seen that when Joanna went to purchase the lawnmower, she
was assisted by Jimmy who stated that the mowmaster 500 was perfect for it. She checks it and
finally relying on her statements planned to buy it. A quick perusal of the four elements
mentioned in the rules, it is seen that Jimmy has better knowledge about the mower, the
statements were unwritten, the statement was relied upon by Joanna and relying on it, she
planned to buy it immediately. All these reveal that the statements amount to contract term.
Conclusion:
A perusal of the facts of the case and by referring to the rules discussed above it can be
concluded that statement by Jimmy will be term of contrac.
2.
Issue:
The issue to be analyzed in the present case scenario is that whether the sign can be
construed to the contract with Lawnmower city.
Rules:
Exclusion clause can be considered as an unfair term which is used by a party to a
contract to exclude his liability or limit his liability to some conditions against another5. Such
exclusion clause can be regarded as the part of the contract and binding on the parties when it is
incorporated in the contract and whether the rule of contra proferentem is applied as in Handbury
v Nolan (1977) 13 ALR 3396. Incorporation is done by signature as in L'Estrange v F Graucob
5 Lambiris, Michael A., and Laura Griffin. First Principles of Business Law: Textbook and EStudy Modules. (Oxford
University Press, 2017).
6 Handbury v Nolan (1977) 13 ALR 339.

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Ltd [1934] 2 KB 3947, or by notice or by referring to any previous transaction. Secondly, as per
the rule of contra proferenten , the words must be clear and unambiguous else the court will
consider it against the party asking relief by using it as in Hope v RCA Photophone of Australia
Pty Ltd (1937) 59 CLR 3488.
Application:
From the facts of the case, it is seen that though it was written and signed by Joanna, but
it was not brought into her notice instead the sign was covered partly by plant pots. Hence
though the words can be clearly understood, it cannot be applied to the Joanna’s contract with
the Lawnmower city.
Conclusion:
A perusal of the facts of the case and by referring to the rules discussed above it can be
concluded that the sign cannot be construed to the contract with Lawnmower city.
3.
Issue:
The issue to be analyzed in the present case scenario is that whether promissory estoppel
can be alleged to exist by Joanna against Ronald.
Rules:
Promissory estoppel refers to doctrine of equity which prevents a person from denying
his words or admissions made before as in Waltons Stores (Interstate) Ltd v Maher (1988) 164
7 L'Estrange v F Graucob Ltd [1934] 2 KB 394.
8 Hope v RCA Photophone of Australia Pty Ltd (1937) 59 CLR 348.

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CLR 3879. This equitable doctrine was incorporated in the Australian law in from common law10.
In order to claim relief certain criteria are to be fulfilled which are as follows. Firstly, a prior
legal obligation or contract must be present and such contract or obligation must be modified,
secondly the words used must be clear, thirdly, the situation or position changes and from the
equitable point of view and finally, the promisor if allowed to deviate from his promise it will
result into inequity as in Sidhu v Van Dyke (2014) 251 CLR 50511.
Application:
In this case, it is seen that Joanna was asked by Ronald to look after his orchid plants for
which she prepared an agreement which shed emailed to him telling him to sign and return. This
can act as an offer in the agreement. But he did not reply her. She again called and asked her
whether she could go ahead with the contract, he said yes. This result into the formation of the
contract and thus legal rights and duties accrue to the parties. Thus the first condition is fulfilled.
Secondly, on his reply, Ronald very clearly told him yes very clearly and there was no
uncertainty or ambiguity which satisfies the second criterion. Thirdly, there occurs a change of
situation also as Ronald is now denying to carry on with the contract as his nephew has agreed to
look after his plants. This fulfilled the 3rd condition. Finally it is seen that depending on the
contract, she has spent 1000$ as a preparation for caring the plants. Thus it will be inequitable if
Ronald is allowed to deviate from his promise which shows that the 4th criterion is also satisfied.
Thus since all the conditions are fulfilled Joanna can successfully claim promissory
estoppel against Ronald.
9 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387.
10 Lambiris, Michael A., and Laura Griffin. First Principles of Business Law: Textbook and EStudy Modules.
(Oxford University Press, 2017).
11 Sidhu v Van Dyke (2014) 251 CLR 505.

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Conclusion:
A perusal of the facts of the case and by referring to the rules discussed above it can be
concluded that that promissory estoppel can be alleged to exist by Joanna against Ronald.
4.
Issue:
The issue to be analyzed in the present case scenario is that whether the sticker statement
can bind the potential future clients.
Rules:
Exclusion clause can be considered as an unfair term which is used by a party to a
contract to exclude his liability or limit his liability to some conditions against another12. Such
exclusion clause can be regarded as the part of the contract and binding on the parties when it is
incorporated in the contract and whether the rule of contra proferentem is applied as in Handbury
v Nolan (1977) 13 ALR 33913. Incorporation is done by signature as in L'Estrange v F Graucob
Ltd [1934] 2 KB 39414, or by notice or by referring to any previous transaction. Secondly, as per
the rule of contra proferenten , the words must be clear and unambiguous else the court will
consider it against the party asking relief by using it as found in Hope v RCA Photophone of
Australia Pty Ltd (1937) 59 CLR 34815.
12 Lambiris, Michael A., and Laura Griffin. First Principles of Business Law: Textbook and EStudy Modules.
(Oxford University Press, 2017).
13 Handbury v Nolan (1977) 13 ALR 339.
14 L'Estrange v F Graucob Ltd [1934] 2 KB 394.
15 Hope v RCA Photophone of Australia Pty Ltd (1937) 59 CLR 348.

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Application:
In the above facts, it is seen that Joanna has planned to print stickers to provide the clients
such that if they want to cancel any appointment, they must inform it atleast one week before
else they will be liable to pay full fee. This amounts to an exclusion clause. She placed it at the
receipt’s backside. The wordings are very clear and certain understood by everyone. The
exclusion clause on the sticker must be incorporated else it will not be held enforceable.
Incorporation can be done by either making the future customers to sign it or by informing them
by notice. Since there is no scope of previous dealing, the incorporation is to be done either by
signature or notice.
Conclusion:
A perusal of the facts of the case and by referring to the rules discussed above it can be
concluded that the sticker statement can bind the potential future clients when it is being
incorporated properly.

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References:
Books:
Lambiris, Michael A., and Laura Griffin. First Principles of Business Law: Textbook and EStudy
Modules. (Oxford University Press, 2017).
Cases:
Causer v Browne [1952] VLR 1.
Handbury v Nolan (1977) 13 ALR 339.
Handbury v Nolan (1977) 13 ALR 339.
Hope v RCA Photophone of Australia Pty Ltd (1937) 59 CLR 348.
L'Estrange v F Graucob Ltd [1934] 2 KB 394.
Oscar Chess Ltd v Williams [1957] 1 All ER 325.
Sidhu v Van Dyke (2014) 251 CLR 505.
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387.