CONTRACT LAW. Contract Law [Author Name(s), First M. La

Running head: CONTRACT LAW
Contract Law
[Author Name(s), First M. Last, Omit Titles and Degrees]
[Institutional Affiliation(s)]
Author Note

CONTRACT LAW 1
Contract Law
Lyn buys camping goods from Kathmandu Adventures Ltd. Delivery for the goods is to
be made on 1 May 2016, the day before Lyn is due to leave for her backpacking holiday.
Kathmandu Adventures Ltd fails to deliver the goods on the agreed date and says that it will take
a further 2 weeks. What rights does Lyn have against Kathmandu Adventures Ltd?
Issue
Termination of a contract by the breach. Whether Lyn can recover damages from a
breaching seller.
Rule of Law
A contract is created when parties exchange obligations. The offeror promises to
surrender the offer, and the offeree promises to surrender the consideration for that offer. Once
parties have made their contract, the law expects that each party will carry out its obligations.
Where one party fails to carry out its obligations, that party is said to be in breach (McKendrick,
2014, p. 751). The innocent party can then raise a claim of the breach for which it can ask for
specific performance or seek compensation for damages. Therefore, a breach of contract lies in
the other party’s failure to perform its obligation without a legally justifiable excuse
(McKendrick, 2014, p. 751).

CONTRACT LAW 2
Under the Australian Consumer law, the (Sale of Goods Act, 1923, sec. 53) states that (i)
Where a seller unlawfully refuse to accomplish the delivery the agreed goods to his or her buyer,
the buyer may bring an action for the breach against that seller and seek damages for non-
delivery. Further, part (ii) provides for estimation of damages. Here the section states that the
measure of damages to be awarded to the buyer would be an estimate of the loss that the seller
suffers which naturally flows from that breach of contract. Under subsection (iii), the ACL states
that if it happens that the damages resulting from the breach by the seller can be estimated by
calculating the cost incurred in getting the goods from the market, the measure of damages
would be the difference between the two prices. An important point made by this section is that
breach would be calculated while making a reference to the time the buyer expected the goods.
In some circumstances, common law provides reliance damages. The most significant
case on reliance damages was the ruling of (Commonwealth v. Amann Aviation Pty Ltd, 1991). At
para 13 and 26, The High Court of Australia stated that where it is impossible for the plaintiff’s
performance to have resulted in a quantifiable profit, the plaintiff can recover reliance damages.
This rationale was further elaborated in (Baltic Shipping Co v. Dillon, 1993) by Mason CJ. At
para 44, The judge said that the Court does not award damages for distress and disappointment
unless those damages flow from claimant’s physical inconvenience resulting from the breach, or
where the contract itself was meant for plaintiff’s relaxation, enjoyment, relaxation, or protection
from molestation.
Application
Whenever one-party refuses to perform as agreed, there are two instances that occur. The
first one is the establishment of the breach, and the second one is the measure of damages. For
the case of Lyn, we are told that she bought camping goods from Kathmandu Adventures Ltd