Contract Law: Validity of Contract and Remedies for Breach

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Contents
Question 1.............................................................................................................................................2
PART A.............................................................................................................................................2
Issue A...............................................................................................................................................2
Relevant Law.................................................................................................................................2
Application of law.........................................................................................................................3
Conclusion.....................................................................................................................................4
Issue B...............................................................................................................................................4
Relevant Law.................................................................................................................................4
Application of law.........................................................................................................................4
Conclusion.....................................................................................................................................4
Part B.................................................................................................................................................5
Issue...............................................................................................................................................5
Relevant Law.................................................................................................................................5
Application of law.........................................................................................................................6
Conclusion.....................................................................................................................................6
Question 2.............................................................................................................................................6
Reference List.......................................................................................................................................9

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Question 1
PART A
Issue A
Can Vincenzo Franco for the violation of the contractual term that was established amid the
two. If yes, then on what basis the contract can be rescinded by Vincenzo Franco?
Relevant Law
An agreement is the combination of a valid legal offer complied with valid acceptable. This
agreement is combined with other contract components makes a valid contract. Thus, to form
any contract which is enforceable in law the main requirements include:1
An offer is a communication of the intention of the offeror which he expects to be fulfilled by
an offeree. An offer is required to reach the offeree to make it complete and binding and is
held in Carlill v. Carbolic Smoke Ball Co2. 3
When the offeree have given his conformation to the offer communicated to him, then, it is
an acceptance in law. In RA Brierley Investments Ltd v Landmark Corp Ltd4 ̧an offer must
reciprocate to the terms of the offer.
An offer and acceptance results in agreement formation. But, it is held in Rose and Frank Co
v JR Crompton & Bros Ltd5, that the ignition must be legal and not gratuitous promises.
The promises should also be supported with consideration which is something of value in the
eyes of law6 .
The parties must also be of sound mind and should not be barred by any law7.8
Now, when the parties gave their legal consent to the terms of the contract then the same
must be given with free will and the consent must be genuine. But, at times the consent is not
1 John Cartwright, Formation and Variation of Contracts: The Agreement, Formalities, Consideration and Promissory
Estoppel, Sweet & Maxwell, 2014.
2 Carlill v. Carbolic Smoke Ball Co (1891).
3 Julie Clarke. Australian Contract law, 2010, < <http://www.australiancontractlaw.com/law/formation.html>.
4 RA Brierley Investments Ltd v Landmark Corp Ltd (1966)
5 Rose and Frank Co v JR Crompton & Bros Ltd (1924)
6 Currie v Misa (1975).
7 Clements v London and North Western Rly Co [1894] 2 QB 482
8 Peter MacDonald Eggers, Vitiation of Contractual Consent, CRC Press, 13-Sep-2016.

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free and the contract that is made without valid consent makes the contract invalid. The
various elements that make a contract deprive from valid consent are:
i. When one party to the contract makes a factual statement which is untrue
knowingly in order to induce and lure the other party so that a contract can be
formed which the other party would have not formed if is aware of the truth of the
statement, then, a misrepresentation is incurred by the party who is making the
statement and is held in Museprime Properties v Adhill Properties9.10
ii. When the parties are sharing a fiduciary relationship wherein one party (relying)
party is making his decision on the sense of judgment of the other (stronger). But,
the stronger party misuses his position to his own gain and betrays the trust of the
relying party and this act of the stronger party is called undue influence. Any
consent under undue influence is not free and thus the contract is not valid and is
analyzed in of Johnson v Buttress11. 12
iii. When the actions of the dominate party is against the good conscious of a person
and thus results in bringing gain to himself at the cost of the weaker party, then,
the transaction suffers from unconscionable conduct and is held in Louth v
Diprose13. 14
Application of law
Now, it is first important to understand whether there is a contract that is made amid
Vincenzo and George.
Vincenzo Franco along with his family went to Australia. They want to book their rooms at
Scenic Views and thus Vincenzo Franco meet the marketing manager of Scenic Views, Mr
George Smith. During the conversation of Vincenzo and George, George quotes $350 for one
night inclusive other things.
So, George has made an offer to Vincenzo. Vincenzo without bringing ant variation confirm
the offer of George and thus an acceptance is made resulting in an agreement amid the two.
9 Museprime Properties v Adhill Properties [1990] 36 EG 114.
10 Richard Stone and James Devenney, The Modern Law of Contract, Routledge, 14-Jul-2017.
11 of Johnson v Buttress (1936).
12 Hall M, Equitable fraud: Material exploitation in domestic settings’ in Elder Law Review, 2006.
<http://www.austlii.edu.au/au/journals/ElderLawRw/2006/7.html>.
13 Louth v Diprose (1992).
14 Hall M, n 12.

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The offer and acceptance is made with a consideration that $350 per night is paid by
Vincenzo to George in exchange of the room provided by George to Vincenzo. Both George
and Vincenzo are capable and have legal intention, thus, there is a valid contract amid the
two.
But, Vincenzo has the power to cancel the contract made with George because the consent
that is given by Vincenzo to George is not free because:
i. George declares before the contract formation that guest suits with open fire space
are provided. Most importantly, panoramic views are provided from the balcony.
But, these representations that are provided by George are not true as there were
no private balconies that were provided with any views. Thus, a false
representation is made to lure Vincenzo so that a contract can be made. So there is
clear misrepresentation on the part of George;
ii. Also, Vincenzo trusted the sense of judgment of George as Vincenzo hardly
understand English. George is aware that Vincenzo is not able to understand the
terms properly but has made no attempt to clarify the doubts of Vincenzo. Thus,
George took advantage of the situation and acted not in good conscious as he even
did not tell Vincenzo that if any cancellation is done then it will include
accommodation of three nights. Thus, George is indulged in unconscionable
conduct;
iii. Further, George is at dominant part as Vincenzo is trusted his knowledge before
making any decision. This trust is breached by George and influenced Vincenzo to
enter into a contract. Thus, there is clear undue influence on the part of George.
Conclusion
So, thus a valid contract is made between George and Vincenzo but such contract is suffering
from misrepresentation, unconscionable conduct and undue influence. So, Vincenzo can state
that the contract suffers from the element of free consent.
Issue B
Whether Vincenzo has any remedies available because the consent of Vincenzo is not free
and independent?