Law Case Study regarding Elements of Contracts
Added on 2020-04-07
14 Pages2956 Words2140 Views
Running Head: Law 1Law
Law2Answer 1Part AIssue: whether Mary and Lianne enter into any contract through E-mail and is there valid offer and acceptance present in the contract?Law: in last few years, Court recognized the concept of entering into contract through e-mails and validity of the E-mail contracts. There are number of cases related to E-mail contracts which are decided by the Court such as Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd1and Stellard Pty Ltd v North Queensland Fuel Pty Ltd. Both the cases involve the situations in which Court considers the validity of exchanged E-mails between the parties and also whether there is any binding contract or not2. In general contracts it is necessary that essential elements of the contract must be present, and some of these essential elements are stated below:Offer- offer can be considered as definite promise which is made by one person to another person. There is no particular form of offer and it can be made either orally or in writing. However, offer can be constituted through the conduct of the parties also. It is not necessary that offer can be made to specific person only it can be made to the world at large. Acceptance- another important element of contract is acceptance. Acceptance is the statement through which person to whom offer is directed agreeing to the offer. It is necessary that offer is accepted by that person only to whom it is directed. However, aftergiving acceptance parties are bound by these acceptances and it is not possible for parties to cancel the contract. Acceptance must be given by offeree only in context of offer made1 VANTAGE SYSTEMS PTY LTD -v- PRIOLO CORPORATION PTY LTD, [2015] WASCA 21; 47 WAR 547. 2 Ready, K. (2015). Email contracts – Who, What, When and Where – The formation of binding agreements throughemail exchanges, < http://www.mondaq.com/australia/x/431732/Contract+Law/Email+contracts+Who+What+When+and+Where+The+formation+of+binding+agreements+through+email+exchanges>, Accessed on 23rd September 2017.
Law3by offeror. This can be understood through case law Crown v Clarke, (1927) 40 CLR 2273. For effective acceptance, it is necessary that acceptance must be communicated to the offeror. If acceptance is given through E-mail then provisions of Electronic Transaction Act 1999 are applied. Section 14 of the Act states, time of receipt of acceptance is considered as that time when mail related to acceptance send by offeree reach the information system of offeror. It means that offer is accepted by the offeree at the time when mail of acceptance send by offeree enters in the mail box of offeror4. Intention to create legal relations5: it is necessary for valid contract that parties intend to create legal relatiosn at the time of formation of the contract. in other words, parties must intend to bound themselves under the terms of the contract. this can be understood through case law Air Great Lakes Pty Ltd v KS Easter, (Holdings) Pty Ltd, Supreme Court of New South Wales [1989] 2 NSWLR 3096. Consideration7: consideration can be considered as price paid for promise made by one party to the other party. In other words, it is the price which is asked by the promisor in exchange of promise. It is necessary that consideration must be moved from one party to another party who made the promise. This can be understood through case law Coulls v Bagots Executor & Trustee Co Ltd, (1967) 119 CLR 4608. 3 Crown v Clarke, (1927) 40 CLR 227. 4 Electronic Transaction Act 1999- Section 14. 5 ACL, Intention, < https://www.australiancontractlaw.com/law/formation-intention.html>, Accessed on 23rdSeptember 2017. 6 Air Great Lakes Pty Ltd v KS Easter, (Holdings) Pty Ltd, Supreme Court of New South Wales [1989] 2 NSWLR 3097 ACL, Consideration, < https://www.australiancontractlaw.com/law/formation-consideration.html>, Accessed on 23rd September 2017. 8 Coulls v Bagots Executor & Trustee Co Ltd, (1967) 119 CLR 460.
Law4It must be noted that, E-mail contract also include these essential elements that are offer, acceptance, consideration, and intention to create legal relations. However, if valid offer and acceptance is present in the E-mail negotiations then it can be considered as valid contract. This can be understood through case law McHugh JA in GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd.9 In this case, McHugh stated even though e-mail negotiations specifically stated that formal contract must be executed then also parties immediately bound with the contract if valid offer and acceptance are present in the contract10. Application: in the present case, both Mary and Lianne negotiated through E-mail and all the essential elements of valid contract are present in this case such as offer is given by Mary through advertisement to the world at large. Later, Lianne accept the offer given by Mary through E-mail send by Lianne to Marry.It must be noted that acceptance is considered as valid acceptance because section 14 of Electronic Transactions Act 1999 states offer is accepted by the offeree at the time when mail of acceptance send by offeree enters in the mail box of offeror. In this case, Mary reads the acceptance mail after 5 hours because of the electricity fault. Therefore, time of receipt of acceptance is the time when E-mail enters in the mailbox of Mary. It must be noted that consideration of $10000 is present in the case, which can be considered as prima facie evidence of intention of parties to create legal relations. In Case law Stellard Pty Ltd & Anor v North Queensland Fuel Pty Ltd11, court held that parties are bound by the contract related to sale of land which was entered between the parties 9 Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622. 10 Mcleod, I. Email correspondence a valid and binding contract, court confirms, < http://www.findlaw.com.au/articles/5751/email-correspondence-a-valid-and-binding-contract-.aspx>, Accessed on 23rd September 2017. 11 Stellard Pty Ltd & Anor v North Queensland Fuel Pty Ltd Stellard Pty Ltd & Anor v North Queensland Fuel Pty Ltd [2015] QSC 119 (14/11998).
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