Contract Law

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

CONTRACT LAW1
ANSWER 1:
ISSUE:
The issue that has to be discussed in the present assignment is:
Whether 1000 $ can be claimed by Nick from his uncle. The issue will be discussed in the light
of contract law.
Relevant law:
The important elements to be considered to analyze the validity of any contract are the
agreement, capacity of the parties, consideration involved and the intention of the parties
(O'Sullivan 2018). An agreement can result into a valid contract if the parties to such agreement
have a valid intention for creating it. This was entrenched in the case of Air Great Lakes Pty Ltd
v KS Easter (Holdings) Pty Ltd [1989] 2 NSWLR 309 by the Supreme Court of New South
Wales. Presence of a legal intention is crucial in case of commercial dealings. But cases
involving social or domestic transaction do not put much emphasis on the intention of the parties.
In these transactions, the parties usually do not have any legal intention instead they rely on love,
affection and trust for creating such agreement. This was construed in the case of Jones v
Padavatton [1969] 2 All ER 616. However this type of presumption that the parties are deprived
of legal intention can be overlooked provided contradicting evidences are produced. Social o
domestic agreement will be legally enforceable if three conditions are fulfilled such that the
contract is in the form of a written agreement as seen in the case of Errington v Errington Woods
[1952] 1 KB 290 or the parties have separated from each other as seen in Merritt v Merritt
[1970] 1 WLR 1211 or when the contract has liability towards any 3rd party as construed in the

CONTRACT LAW2
case of Simpkins v Pays [1955] 1 WLR 975. Again in the case of Coward v M.I.B. [1962] 1 All
ER 531 CA, it is observed that the parties have no legal intention to affect the agreement.
Application
From the facts of the case it appears that Uncle Frank is concerned about his nephew
Nick regarding his heavy alcohol addiction. To prevent him from getting into this addiction more
Frank offers him that he will pay him $1,000 if Nick can keep himself away from alcohol for a
period of 30 days starting from July first. From the facts stated above it is clear that both of them
has executed a social contract instead of a commercial one because Frank has no legal intention
behind the creation of the contract. This can be supported by the case law Jones v Padavatton
[1969] 1 WLR 328. In another scenario it is seen that Nick was himself very disturbed and
concerned about his ill health because of the alcohol addiction and before he came to know about
the proposal made by Frank he availed a membership of a group known as Alcoholics
Anonymous. To get the membership he is required to sign a document stating that he will do his
best to prevent himself getting into addiction more. This reveals that a contract is executed
between the group and Nick. For the month of July, Nick himself away from alcohol totally.
Thus, from the above discussion it is clear that the nature of the contract between uncle and
nephew was more like a social agreement as enumerated in the case law Balfour v Balfour
[1919] 2 KB 571. Moreover such agreement between both of them does not fall within the
exceptions of social contract as discussed in the rules part. Frank offered $1,000 to his nephew
just to make him away from his addiction habit and this was because of his concern towards him
out of love and affection. Thus because of the absence of any legal intention $1,000 cannot be
claimed by Nick as his right.