Contract Law

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

1CONTRACT LAW
Question 1
Issue
The issue is to decide whether the element of intention and consideration have been
met in the given case to make it an enforceable contract between Jasmine and Curtis.
Rule
An agreement to be valid and binding must meet all the essential requisites of a
contract. Out of many, two such essential requisites comprise of Intention of the parties to
form a legal relation and Consideration. The parties to the contract must have the similar
intention to form a legal relation and for the same they must agree on the same thing, at the
same time. There must be ‘consensus ad idem’ between the parties, which refers to the
principle of meeting of minds of the parties to the contract. As per the general rule of
intention, the presence of Consideration proves the presence of intention and meeting of
minds of the parties in a legally binding contract. For example, in case the parties have
discussed about the exchange of a value (in terms of money or otherwise), it gives a clear
picture of a promise or an agreement between the parties to do or not to do something based
on such consideration. Although the intention to be bound legally is an independent essential
element and it must be illustrated separately, yet there are cases where it could be found
along with the element of consideration; however they do not form a valid contract due to the
absence of other essentials elements to form a binding agreement. In the case of Ermogenous
v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95, the Archbishop
claimed for his payment that he thought was outstanding for his long service and annual leave
from the Greek Orthodox community. The community contented that it did not mean to form
a legally binding contract while the Ermogenous, the Archbishop argued that the way he was
appointed by the community gives a clear intention of an employment for contract. The High
Court held a similar contention as the Archbishop stating that the way of appointment of the

2CONTRACT LAW
bishop meeting all the requisite of a valid and binding agreement connotes that there is a
presence of a contract of employment.
Consideration is a price or value that the promisor asks for in exchange of his promise
to the promisee. It can be an executed or an executory consideration where the consideration
is either paid to the promisor or it is kept as outstanding till the agreement is executed. It is to
be noted that consideration cannot be something that was promised in the past, as past
consideration is no consideration as held in Stilk v Myrick 1809 2 Camp 317. Under common
law, Consideration is another essential that forms a valid contract and there cannot be any
legally binding contract in absence of a consideration that has some value in the eyes of law
as held in Thomas v Thomas (1842) 2 QB 851 114 ER 330. In this case it was held that
consideration need to be legally adequate and not economically sufficient; it must have some
value. An agreement without a consideration is no agreement at all; it is a gift. Presence of
consideration in an agreement indicates that the agreement was made by the parties with an
intention to be bound legally.
Application
In this case, Jasmine had initially intended to help Curtis boost his business in the
capacity of a friend. There was no essence or essential element of a legally binding contract
between them. After she gave her advice, Curtis felt that her assistance would benefit his
business and therefore he approached Jasmine to carry out the marketing work professionally
in exchange of $600 for every fortnightly session. Here, a clear picture of offer can be traced
from Curtis’s side along with the presence of a consideration. Subsequently, Jasmine agreed
to the proposal and helped Curtis for a month and received $1200 for her service. This
provides for Jasmine’s acceptance of Curtis’s offer and an exchange of consideration for the
time frame for which she gave her service. This shows that there was consensus between the
two parties to form an enforceable contract between them. Their intentions were clear to