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Contract Law 2017 | Assignment

   

Added on  2020-03-28

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Contract Law 2017 | Assignment_1
LAW2Question 1IssueWhether Sophie can stop Coronet Casino from legally refusing the renewal of lease basedon the statement made while the original lease was being negotiated, or not?RuleA collateral contract can be defined as a separate contract which runs parallel to the original contract. In general, it is a single term contract in which the agreement terms are based on contract1. Lord Moulton, in Heilbut Symons & Co v Buckleton2 provided that collateral contract is such promise which fails to be a part of the main contract and is enforceable through acollateral contract being drawn. This contract is evidenced on the basis of principle and authorityand the consideration is made in the main contract or in some other contract. So, the collateral contract is a complement to the main contract and at the same time, has independent existence and its status or character is not doubted for its legal validity3. Promissory estoppel is another key concept under the contract law which stops a person from going back on the promise which had been made by the promisor and where the promisee relies upon such promise in such a manner that a subsequent withdrawal of this promise would be in detriment to the person relying upon such promise. In such cases, the promise is applied even when a formal consideration is absent4. This concept was revived through the obiter 1 Jill Poole, Casebook on Contract Law (Oxford University Press, 12th ed, 2014)2[1913] AC 303 Richard Stone and James Devenney, Text, Cases and Materials on Contract Law (Routledge, 3rd ed, 2014)4 Paul S Davies, JC Smith's the Law of Contract (Oxford University Press, 2016)
Contract Law 2017 | Assignment_2
LAW3statement made in Central London Property Trust Ltd v High Trees Ltd5by Denning J, where thedefendant would be made liable had they claimed the reduced rent for the promised period6. A key case which revolves around these two concepts is the recent case of Crown Melbourne Limited v Cosmopolitan Hotel (Vic) Pty Ltd7. This case covers a crucial decision regarding the promissory estoppel and collateral contracts based on pre-contractual negotiations and a possible defence which can be cited using these two concepts. In this case also, a statementwas made regarding the tenant being “looked after at renewal time” by the Crown when the initial five year period lease was being offered. The High Court in this case stated that the statement which was made by the Crown did not give rise to a collateral statement, in addition tothe estoppel claim being invalid. The reason for this was the requirement for the representation made to be clear, precise and unambiguous. This statement was deemed as nothing more than “vaguely encouraging” which led to the tenant not being entitled to claim damages from the Crown8.ApplicationIn this case, Sophie can claim that a collateral contract had been formed as the promise was made during the pre-negotiations of the original lease, where she was promised to be looked after when the renewal period fell due. This was a term incidental to the main contract but not covered under the main contract, thus making it a collateral contract as per Heilbut Symons & Cov Buckleton. Applying the promissory estoppel, if Coronet Casino is not stopped from going 5[1947] KB 1306 Catherine Elliott and Frances Quinn, Contract Law (Pearson Education Limited, 9th ed, 2013)7 [2016] HCA 268 Roger Cohen, Looked after at renewal time - did the disappointed tenant have a claim? (22 August 2016) <https://www.lexology.com/library/detail.aspx?g=996643f6-c48d-4fcd-a9c0-723e263b8ddb>
Contract Law 2017 | Assignment_3

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