Contract Law Legal Issue - Assignment

BUSINESS LAW
ASSIGNMENT
Student Name
[Pick the date]

Question 1
Contract law
Legal Issue
The issue is to ascertain whether an enforceable contract exists between Jennifer and her
grandmother Betty and whether Jennifer can sue Batty for not fulfilling the promise of
transferring the house to Jennifer.
Applicable Law
Presence of valid offer, acceptance, and consideration are the key aspects that must present in
any contract. Further, the capacity of the parties and intention of the parties to enact a contract is
also imperative. The intention of the contractual parties will be a pivotal essential when the
parties are connected in a domestic/social relationship. This is because in the lack or absence of
intention on the part of the parties, no contractual liabilities would arise1. In this regards, the
breach of the contract would not provide any rights to the party to claim for the damages. Hence,
In domestic/social contracts, it is essential that parties must conduct in a manner which
highlights the intention to enter into legal relationship or else it would be assumed that the
intention to enter into legal relationship is not present. The judgement of Jones v Padavatton2
case is the testimony of this aspect3.
Application
It can be seen that Jennifer and Betty are connected parties and have enacted a contract. As per
the contract, Betty has made a promise to Jennifer that she will provide the ownership of her
house if Jennifer leaves Adelaide and moves to Mount Gambier. Jennifer has left the place, her
family and job and started living in Mount Gambier with her grandmother Betty. It can be said
that there is no evidence present in the case that reflects that parties have intention to enact a
legal relationship. Hence, no enforceable contract has been formed between the parties due to the
lack of intention to create legal relationship.
1 Andy Gibson, Douglas Fraser, Business Law (Pearson Publications., 8th e, 2014)
2 Jones v Padavatton [1968] EWCA Civ 4
3 Shayne Davenport, Business and Law in Australia (Thomson Reuters, 4th ed, 2012)
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Conclusion
Jennifer and Betty do not have the intention to create legal relationship and therefore, no
enforceable contract has been formed between the parties. Hence, Jennifer cannot sue Betty for
the act of non-transferring the ownership of house.
Question 2
Contract law
Legal Issue
The central issue is to comment whether the parties Sanche and Richard are bound in an
enforceable contract or not.
Applicable Law
A conditional acceptance is referred to as counter-offer. When the offeree has sent a counteroffer
against the original offer to the offeror, then the original offer would no longer be available for
the acceptance for offeree. The verdict of Entores Ltd v Miles Far East Corporation4 case is the
evidence of the above fact. It is noteworthy that when the offeree has used electronic mode for
communicating (fax, mail) the acceptance, then acceptance would be enforceable only when the
respective mail or fax would have received by the offeror in the specified time period that the
offer is still valid5.
Application
Offeror Sanche has made an offer to offeree Richard in regards to sell Holden Monaro car. He
has also stated that the consideration amount is $60,000 and this offer will be valid for
acceptance until 5 pm on February 3, 2015. The very same day, Richard has got the offer and has
sent a counter offer through message by saying that he can purchase the Holden Monaro car for
the consideration of $55,000. It is apparent that due to counter offer, the original offer gets
revoked and hence, will not be available for acceptance for Richard. Hence, Richard cannot
enact a contract with Sanche on the account of original offer.
4 Entores Ltd v Miles Far East Corporation [11] in 1955
5 Robert Bryan Vermeesch, Kevin Edmund Lindgren, Business Law of Australia (Butterworths, 12th ed. 2011)
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