Contract Law: Validity of Contract and Refund Claim in Gaia v SuperNatural Case

Running head: CONTRACT LAW 0
Business Law Assignment

CONTRACT LAW 1
I: Issue
The key issue is whether there is a valid contract between Gaia and SuperNatural and
whether Gaia can ask for a refund from Alexander and Roxanne because they guaranteed that
taking their medicine can immune people from catching viral strain ‘NeuroToxicia and even
after taking their medicine, as per instruction, Gaia gets a strain of NeuroToxicia.
L: Law
A contract is referred to an agreement that legally binds its parties to the terms of the
contract. In order to create a valid legal contract, parties are required to fulfil its essential
elements which include offer and acceptance, valid consideration, mutual intention, free and
voluntary consent, capacity of parties, certainty of terms, and legality of the subject matter. A
contract cannot be formed without fulfilment of these elements. A basic contract required
agreement, intention and consideration. An agreement is referred to meeting of minds
between two or more parties which include an offer and acceptance. An agreement can be
written or spoken. An ‘invitation to treat’ is an initial approach in which a person invites
others to deal with him on certain specified terms. Most advertisements are treated as an
invitation to treat for potential customers to consider something. The doctrine of invitation to
treat was explained by the court in Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256
case. An acceptance can be given by spoken words, written words, performance or an act or
conduct.
An offer which constructs by performance creates a unilateral contract. It is formed by an
express offer that can be accepted by a party only through performance. A bilateral contract is
open for one person to accept whereas a unilateral contract is open for the world. In Carlill v
Carbolic Smoke Ball Co case, the court held that an offer can be open for the world and it can
be accepted by the performance of an act. The parties to a contract must have intention to
create legal relations. Generally, the presence of a valid consideration is the evidence of an
intention however it is not always the case. In commercial agreements, it is presumed that the
parties have an intention to enter into a legal contract. Although puffery or puff is a promise
made during a commercial which clearly intended not to be taken seriously. It is necessary
that a valid contract must be available in each contract which can include money, provision of
goods or services, onerous obligation, refraining from doing something or promise to do