Contract Law and Part Payment
Added on 2020-05-16
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Running head: CONTRACT LAW Contract LawName of the studentName of the universityAuthor note
1CONTRACT LAW Answer 1IssueThe issue which needs to be determined in relation to the transactions between Timboand Samule is whether the activities between them have resulted in formation of a valid contract.RuleTo establish before the court that a valid contract have been found between the parties ithas to be shown that there was a valid offer and acceptance and there was intention on the part ofthe parties to legally binding other to the terms of the contract. The element of offer is an expression made by a person to another person in relation tothe terms on which the contract is to be made. An offer is only valid in legal way if it is completeand is not an invitation to offer. Distinction between an offer and invitation to an offer has beenin the case of Blackpool & Flyde Aero Club v Blackpool Borough Council [1990] 3 All ER 25.The element of acceptance is the willingness of the party to whom the offer has beenmade to abide by the terms of the offer in the exact sense which it has been made by the otherperson. This means that an acceptance must be comprehensively in compliance towards theprovision stated in the offer. These provisions have been discussed in the case of Bressan vSquires [1974] 2 NSWLR 460 . The element of acceptance is only constituted when it has beenadequately communicated to the person who has made the offer. Unless this communication iscompleted a contract cannot be formed. Another very important element this needs to be established before the court in relation toa contract is the intention of the party to bind each other to its terms in a legal manner. In any
2CONTRACT LAW commercial agreement it is deemed at the parties have intention to create a legal obligation asstated in the case of Merritt v Merritt [1970] EWCA Civ 6. However there is a deemedpresumption that there is no intention of creating a legal obligation in domestic relationshipalthough this resumption can be rebutted as provided in the case of Balfour v Balfour [1919] 2KB 571. In the case of Carlill v Carbolic Smoke Ball Company (1893) 1 QB 256 it had been ruledby the court that whether the intention of creating a legal obligation is present or not is to bederived by the court in an objective way. Thus, derivation is done through the application of atest popularly known as the objective test. In this test a reasonable person in casse induced by theterms of the offer to get into a contract it is established that the person making the offer hadintention to create a legal obligation.ApplicationThe case study provides us that Timbo operates a successful graphic design businessbased in Camperdown and in order to expand his business is looking for an employee who wouldhave experience in graphic designing. He had received notification from his nephew Samuelsthat he would like to move to Sydney and being delighted with this news he told him about theemployment opportunity in his graphic design business. There were several agreements whichtook between them in relation to moving cost and salary. However it was stated by Timbo that asthey have a relationship of nephew and uncle there was no need to involve Legal procedures.According to the above discussed cases although there is no intention of creating a legalobligation in a domestic agreement the presumption can be rebutted. Therefore in order toestablished that there was a contract between Timbu and Samuel the rebuttal has to be
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