Case Study on Event Management and Rigby Corporate Functions Ltd.

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Course Title
Student Name
Course Instructor

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ISSUES
1. Whether there exists a binding contract between Event Management and Rigby Corporate
Functions Limited? If so, is the contract legally enforceable in a court of law?
2. Whether Rigby Corporate Functions Limited acted in breach of the contract with Event
Management?
3. Whether Event Management can sue Rigby Corporate Functions Limited for the breach
of the contract?
4. Whether preliminary negotiations amount to the intention of the parties to enter into a
legally binding and enforceable contract?
5. Whether additional terms that have not been agreed to by parties render a contract
unenforceable?
6. Whether the parties intended to enter into a legally binding relationship?
RULES
For one to claim for the existence of a contract, then the following factors must be proven to
have existed.
a. An agreement
b. Consideration
c. Intention
Agreement
An agreement is the existence of proof a valid offer and a valid acceptance. It encompasses the
principle of consensus ad idem; that is, the parties contracted as a result of free will.
An offer arises where one expresses his desire to enter into an agreement usually enforced by law
with one whom the offer is made. In Pharmaceutical Society of GB v Boots Cash Chemists Ltd
[1953], an offer was distinguished from an “invitation to treat”. The learned judge averred that
an offer requires acceptance from the other contracting party while an “invitation to treat” is a
request posed to the offeror to make an offer like instances where goods are displayed at a self-
service shop.
An offer must be communicated sufficiently to the one you wish to contract with as was held in
the case of Taylor V Laird (1856).

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Any offer must first be accepted for there to be a legally binding contract. In R v Clarke (1927),
it was held that for an acceptance to be deemed to have taken place, the parties must satisfy the
fact that there was knowledge of the offer and the intention of the acceptance of the offer.
Besides, in Hyde v Wrench (1840, a rule on acceptance was founded terming acceptance as
unconditional.
According to Yates V Pulleyn (1975), acceptance shall presume no style unless directed.
Consideration
According to “Australian Woollen Mills Pty Ltd v The Commonwealth” (1954), a contract can
only be enforceable is there is a consideration. In Bunn V Guy (1803), the learned judge
described consideration as "loss or inconvenience suffered by one party at the request of the
other.”
Consideration may take many forms from monetary to the promise that one will undertake a
particular act (Executory consideration). Under Australian law, consideration is not about
adequacy but sufficiency (real, tangible, of actual value) for it is not the role of the judge to
evaluate the costs. This was the rationale in Woolswoth Ltd v Kelly (1991).
Intention
The parties must exude the desire to form a legally binding relationship as a general rule
commercial dealings are presumed to be legally binding relationships. This is owed to the fact
that businesses generally are a creation of the law like the Company's Act; thus, its activities are
legally bound. This was the rationale in the matter between Helmos Enterprises Pty Ltd v Jaylor
Pty Ltd (2005).
The Masters v Cameron case of 1954, outlined guiding principles when a court is faced with
determining whether there was the “intention to create a legally binding” relationship owing to
preliminary negotiations. These include;
The parties will be bound to the bargain if a duly executed contract will not alter the effect on the
terms agreed to during the agreement.
The parties should be bound to the initial agreement if their performance was suspended until the
formalization of the transaction into a contract.