Legal Case Contract: Understanding the Essential Elements and Implications

This report provides an understanding of the essential elements of a legal contract and their implications in a legal case. It discusses the difference between express and implied terms in a contract and their legal significance. The report also analyzes a specific legal case related to a contract and provides insights into the rights and liabilities of the parties involved.

Legal Case contract law
Legal Law
[DATE]
[Company name]
[Company address]

Table of Contents
Answer given to question no-1..............................................................................................................2
a).......................................................................................................................................................2
Issues.............................................................................................................................................2
Rule...............................................................................................................................................2
Application....................................................................................................................................3
Conclusion.....................................................................................................................................3
b).......................................................................................................................................................4
Issue..............................................................................................................................................4
Rule...............................................................................................................................................4
Applicability...................................................................................................................................4
Conclusion.....................................................................................................................................5
Answer given to the question no-2........................................................................................................5
a).......................................................................................................................................................5
b).......................................................................................................................................................7
Case Laws..........................................................................................................................................8
Other.................................................................................................................................................8

Introduction
This report reflects the key understanding on the contract laws and essential elements
of the contract which needs to be complied by the parties to the contract. These essential
elements are accompanied with the legal capacity of the parties, agreement, acceptance,
consideration and term and condition of the contract. This report reveals the key
understanding of the contract.
Answer given to question no-1
a)
Issues
Is there any contract between Avinash and Café?
Rule
In the given case Avinash is a regular customer of a local café. The café provides its services
in a unique way in which the customer has the option to choose his order from the menu
displayed on a screen. Hence there is no direct order and payment transaction occurred
between the customer and café personnel. On a random day Avinash visited the café and
ordered a coffee and Danish pastry. While consuming his meal he found a piece of metal into
the pastry due to which his tooth had broken. When Avinash demanded for the compensation
against his damage the management of café has escaped from its liability by showing him the
clause mentioned on the café’s ticket. Here the query occurred that when the contract has
been formed between the café and Avinash. For this we will have to understand about the
features of contract. As in the case of Australian Woolen Mills v The commonwealth case1, it
was held that contract is considered as an agreement between two parties which creates a
legal obligation of performance on both parties. Also it has various essential elements which
convert an agreement into a contract. To properly understand the concept of contract we have
to discuss about its elements first. Initially there must be an offer to begin a contract which
includes the details of the agreement and the terms and conditions which shall be followed by
the parties. The second significant element of contract is acceptance. An agreement formed
between the parties when the offeree accepts the offer given by offerer. In the case of Carlill
1 [1954] HCA 20; 92 CLR 424]

v Carbolic Smoke Ball Co Court of Appeal 2, it was held that proposal rejected cannot form
an agreement among the parties3. The second party gives his consent on proposal after
considering all the details, terms and conditions of the agreement. Its consent must be free for
establishing a valid contract. Apart from that there should be mutual consent of parties which
must be free from undue influence, misrepresentation or any fraud. If any of the party has
given his consent into above mentioned conditions then an agreement can be voided at any
time even after entering into a contract. One more significant factor under contract is
consideration.
Application
An agreement without consideration cannot be considered as a contract. For validity of a
contract there must be a value exchanged between the parties. It can be money, product,
property or service. An important element of contract is the capacity of parties i.e. the parties
to contract must be competent. An unsound mind person, child and lunatic person cannot
enter into a valid contract. To enter into any contract the parties must have the sense to
understand the conditions and terms of the contract. The parties should also have the desire to
do a contract. A contract made with an illegal condition cannot be held as valid contract.
Contract made to perform business of any illegal product or services are also void. Also the
agreement should not contain any impossible or unnatural condition for performance of
contract; such contracts have no validity as there is uncertainty regarding the fulfilment of the
conditions of the contract4. Here in the given case the café offers its services to customers.
It’s a public offer which is open for all to accept. There is an acceptance by Avinash as he
went to enjoy the service of such café. It established an agreement between both of them.
After that he bought his meal from the café and made payment for his order which also shows
the consideration here. Both the parties are in competent position to enter into a contract and
also there is a mutual consent by both parties on their own part of performance to contract.
Conclusion
Hence all the elements of a valid contract i.e. offer, acceptance, consideration, capacity and
legality etc. are present in the discussed case law which held the management of café liable
for the damage of Avinash. All these factors made the contract valid and legal which is
2 [1893] 1 QB 256; [1892] EWCA Civ 1
3 Rod Thomas. "The Interpretation of Documents on the Register: Issues for England and Wales, Australia and
New Zealand." )(2019)17(3)Australia and New Zealand
4 Eesa Allie Fredericks. "The common-law authors on contractual capacity in private international law."
(2015) 36(3) Obiter 762-768.

binding on both the parties. Therefore, it could be inferred that Avinash has legal contract and
both the parties to the contract is liable to perform their duties as per the terms and condition
of the contract held.

b)
Issue
Whether Avinash would be considered as consumer or not as per the laws and regulation held
in competition and consumer act 2010 or under the common law?
Would café liable to pay compensation to Avinash for the mistake and issue arise as he relied
on the ticket and did not read the terms and condition given?
Rule
As per the consumer act, consumer is defined as person who is indulged in o
 Acquires goods as a consumer if:
 He has acquired particular goods not exceeding the amounting to $40000;
 The goods and services purchased for the personal purpose;
 Goods purchased for the transport of goods on road
 He paid the asked price for the goods or consideration being paid.
However the above does not apply to the goods which are acquired for:
 Bought for doing business
 Bought for commercial purpose.
There are following rights available to consumers if he has faced any issues in its
goods and services.
 Protection from all type of unfair trade practices
 Safety of the products
Applicability
Although café has mentioned in the tickets issued by its management that it will take no
responsibility of any damage of its costumer whether by held by its food or services but it is
not a legally appropriate action of café towards its customers. Avinash is a consumer under
the consumer protection legislation as he paid to get the services of café. As per the common
law any individual or a firm which causes any harm to others by its services or products are
legally responsible for the damages of such aggrieved person. As held in Reckitt Benckiser
(Australia) Pty Limited v Procter & Gamble Australia Pty Limited5 it was divulged that
5 [2018] FCA 378

aggrieved person can go to the court to sue against the person who caused him harm. Under
consumer protection legislation a consumer has the right to sue the vendor or service provider
in case of any damage caused to him. In this case the café is legally liable for all the damages
to its customers which are caused due to its services.
Conclusion
Therefore, it could be inferred that Avinash is the consumer and falls in the category
determined for the consumer. This shows that if he suffered any loss in its purchased products
then he could go to the court for the legal remedies and compensation. Avinash has the right
to claim compensation for his damages from the café. Irrelevant of the fact that what is
written on the ticket of the café, the consumer has all the rights to present claim against the
café and also get the compensation for his damages6.
Answer given to the question no-2
‘In contrast to express terms found in a contract, implied terms can arise in a variety of ways
and are beneficial to at least one of the parties to the contract. Some contracts may contain
both express and implied terms, but the ways these two types of terms operate are
significantly different from one another’.
a)
The statement shows the impact of the terms of contract on the parties. The statement stated
about the contracts which has both express and implied terms. There are two type of contracts
mentioned under this quote; one is express and the other one is implied contract. Both the
contracts are significantly different from one another. An express contract is a contract in
which the terms and conditions to the parties of contract are expressly spelled in writing or
verbally. After establishment of an express contract there are no chances to exist any implied
contract. On the other hand an implied contract is a contract where the terms and conditions
to the parties are inferred as per the actions of the parties. An express contract comes into
existence by the words whether written or verbal and an implied contract is established due to
the actions of the parties. If we will think from the legal perspective then an express contract
is legally more binding to the parties as compared to an implied contract and its convenient to
prove the existence of any condition of contract as it is expressly written in the words. There
6 Muntaha A Abdulwahid., et al. "Translating Legal Collocations in Contract Agreements by Iraqi EFL
Students-Translators." (2017) 5(1) International Journal of Education and Literacy Studies 55-68

is an intention of parties to enter into contract in case of express contracts but in implied
contract a party enters into a contract without any intention. However implied contract are
also held legally binding in some cases. They actually lack the mutual consent of the parties
due to which one party is treated unjustly sometimes and the party takes advantages of
another party7. This shows that party who fails to perform his duty under the contract would
be liable to pay compensation to other party.
We can understand the concepts of both implied and express contract through the examples.
A sale or purchase contract can be considered as an express contract as all the elements of
contract are specifically stated in words and it is also signed by both the parties. This may be
oral or written but the consent of both parties is mutual and free in this contract. On the other
hand an implied contract is the contract which occurs due to the situation or which depends
upon the behaviour of the parties. For illustration, a warranty contract which generates with
the purchase of any product. A person buying a product will automatically went into the
warranty contract with the vendor of such product. Here the consent of both parties has not
taken or given but impliedly a contract has established which is legal and binding as an
express contract8.
As held in as per the case 'Hendrickson vs. Meredith'9, it is given that a contract may have
both the terms of contract expressed as well as implied in it. An example can be a rent
contract between the landlord and tenant, which has all the terms regarding tenancy expressly
defined under the contract. The tenant used to pay the rent of premises to landlord in every
month. Even after expiry of tenancy the tenant continued to make payment of rent and the
landlord continued to accept the rent money. Here the contract is added with an implied term
to continue the tenancy where no consent has been taken from the landlord in writing.
However we can ascertain his consent by the action of receiving the rental money continue
from the tenant. Such term of contract is considered as an implied term and the party’s hall
continue the rental as an implied contract.
7 Louise Floyd, "SETTLING THE CONTRACT: ESSENTIALS OF FORMATION AND
CHARACTERISATION." (2018) 98(2)Employment, Labour and Industrial Law in Australia : 1-36
8 Eesa Allie Fredericks. "The common-law authors on contractual capacity in private international law."
(2015) 36(3) Obiter 762-768.
9 161 Va. 193 (Va. 1933)

b)
The contract situated under the case given above in question one also has the implied terms in
the contract. In such case there was no written terms under the contract and also the parties
has not given their mutual consent in writing. The café has given its consent through its
business action of offering its services and Avinash admitted for the same by his desire to get
the services. Whether it is an implied contract but it is as legal as an express contract. An
implied contract is an agreement where law obligates the parties to enter into a contract.
Same as the condition situated in the above case where café is obligated by law to perform
the liability under the contract in which he has entered without describing its will. Hence the
café is legally binding to pay the compensation to Avinash towards his damages. Therefore, it
could be inferred that these type of contract are different from each other and has their other
legal obligation.
Conclusion
These answers given reflects that there are several type of the contract which parties to the
contract could take. However, legal implication of the contract is based on the compliance of
the essential elements of contract set. It is found that in implied contract, all the terms are
obliged and in express contract the terms and condition of the contract is clearly mentioned.