Legal Issues and Solutions in Contract Law for Fran's Fine Treats

This article discusses legal issues and solutions in contract law for Fran's Fine Treats, covering topics such as enforceable contracts, promissory estoppel, restraint of trade clauses, and unilateral offers. It includes case law examples and relevant legal principles.

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Contents
Assignment..................................................................................................................................................2
Solution 1....................................................................................................................................................2
Issue........................................................................................................................................................2
Law..........................................................................................................................................................2
Application and Conclusion....................................................................................................................2
Solution 2....................................................................................................................................................3
Issue........................................................................................................................................................3
Law..........................................................................................................................................................3
Application and Conclusion....................................................................................................................3
Solution 3....................................................................................................................................................4
Issue........................................................................................................................................................4
Law..........................................................................................................................................................4
Application and Conclusion...................................................................................................................4
Solution 4....................................................................................................................................................5
Issue........................................................................................................................................................5
Law..........................................................................................................................................................5
Application and Conclusion....................................................................................................................5
Bibliography................................................................................................................................................6

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Assignment
Solution 1
Issue
Is Fran bound by the written agreement with Marco?
Law
Any agreement which has the enforceability of law is contracts To make an enforceable contract
the main elements are:1
i. Offer – It is a proposal made by offeror to offeree specifying his intention and made
with the expectation of approval2.
ii. Acceptance – The offer when confirmed without bringing any changes is an
acceptance.
iii. Legal intention – That both the parties are legally intent to abide by the contract.
Intention is normally present in commercial contact and absent in social3. But in
Masters v Cameron4 the contract was binding in social arrangements as there was
legal intention.
iv. Capacity – The parties must be major and of sound mind5.
v. Consideration – The price which is exchanged amid the parties to support the
promises made6
Application and Conclusion
Fran runs ‘Fran’s Fine Treats’. For business expansion he requires an assistant. She approaches
Marco. Now, an offer is made by Fran which is duly accepted by Marco. So there is presence of
offer and acceptance. Both Fran and Marco are major and are of sound mind, thus there is
presence of capacity of the parties.
Further, Marco agrees to help Fran but left his job in near town on the pretext that if Fran agrees
to insure his van against traffic accident while making deliveries, then he is ready to help him.
Thus, there is a condition attached before finalizing the contract. As per Masters v Cameron , a
formal contract was established wherein hours/pay/reimbursement for fuel and maintenance
costs, responsibility for vehicle insurance and other details are mentioned. The document is
signed by both the parties. Thus, there is presence of legal intention that is supporting the
contract.
1 Latimer. 2012. Australian Business Law 2012. CCH Australia Limited.
2 Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1.
3 Wakeling v Ripley (1951)
4 Masters v Cameron (1954) 91 CLR 353.
5 Hamilton v Lethbridge - [1912] HCA 20.
6 Ballantyne v Phillott [1961] HCA 17.

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The compliance of insurance against the help of Marco is a valid consideration.
Thus, all elements are present and there is a valid contract amid the parties.
Solution 2
Issue
Does the doctrine of promissory estoppel apply to Fran and Octavia?
Law
A valid contract requires an agreement which is made with legal intention by capable parties
along with consideration. A consideration is something of value which is exchanged amid the
parties in order to support the promises. A consideration can be anything, that is:
i. It can be a Promise to do/not do something;
ii. An Act or performance of obligation
iii. A practical benefit , regardless of the facts whether it is adequate or not. A
consideration must be sufficient7.
However, promissory estoppel is an exception to the rule of consideration. The rule submits
that a contract was considered to be formulated even if the basic contractual rules are not
comply with. The main elements of promissory estoppel are:8
i. There is some form of legal relationship that exist amid the parties or is expected by
the parties;
ii. One party has made a representation to another party9;
iii. The other party has relied on the promise made by the first party;
iv. The party who is relying must have faced some sort of detriment because of the
reliance;
v. No reasonable notice was brought to the relying party that the promise might not be
comply with.
Application and Conclusion
Fran looking for a warehouse approached Octavia. Fran wants to take the warehouse on rent.
Octavia submitted that she is in dealing with estate agent and if Fran is interested in the
warehouse then she will not proceed. Fran likes the warehouse but requires a extractor fan.
It is submitted that there is valid contract amid Fran and Octavia because of promissory estoppel:
i. Both the parties are in anticipation of establishing a legal relationship as landlord and
tenant. Fran intend to take the warehouse on rent;
7 Ballantyne v Phillott - [1961] HCA 17.
8 Brown. 2014. 5 Elements of Promissory Estoppel in Contract Law and Legal Agreements. https://etiennelawyers.com/5-
elements-of-promissory-estoppel-in-contract-law-and-legal-agreements/ retrieved on 18th April 2018.
9 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387

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ii. Fran has made a representation that if Octavia will arrange for an extractor fan then
he is willing to take the warehouse on rent. Octavia confirms the intention of Fran via
email which was acknowledge by Fran;
iii. Based on the representation made by Fran Octavia has arranged for an electrician and
prior any denial from the side of Fran, the fan was installed;
iv. Thus, Octavia will face detriment of Fran does not take the lease as the fan was
already installed prior cancellation of the promise made by Fran;
v. Fran has not brought any reasonable notice in the knowledge of Octavia that he might
not comply with the promise.
Thus, all the elements are met and there is valid contract amid Octavia and Fran.
Solution 3
Issue
Is Dante bound by the contract with Fran?
Law
When any person intends to take services of another person then the contractual relationship
amid them can be established with the help of an employment contract. There are several
contract terms that are made part of the contract. One such term is called Restrain of trade clause.
Restraint of trade clause is a clause that restrains an employee from undertaking the same busies
activities with that of the employer for particular time duration or to certain geographical region.
Such kinds of restrain clause are valid provided the same are incorporated with the consent of
both the parties and are justifiable. It was held that the restrain for one –two years was held to be
valid10. Whereas, a restrain clause with more than two years was held to non valid11.12
Application and Conclusion
Fran requires an assistant and thus hires Dante. As per the employment agreement, Dante is
bound by a restraint clause according to which he is not allowed to open a competitor business in
the same area or supplying to the same clients, for one year after leaving the apprenticeship.
As per Seven Network (Operations) Limited since the restrain is only for one year thus the clause
is valid.
Thus, Dante is in violation when he has approached other clients. Hence, Fran can enforce the
restraint of trade clause.
10 Seven Network (Operations) Limited v Warburton (No 2) (2011).
11 Pearson v HRX Holdings Pty Ltd (2012).
12 Brown. 2016. A global guide to ‘restrictive covenants.

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Solution 4
Issue
Is Arjun entitled to the month’s supply of free chocolates?
Law
A valid contract requires presence of offer, acceptance, consideration, legal intention and
capacity of the Parties. An offer is a proposal which is made by the offeror to an offeree with an
expectation of approval. An offer must reach the offeree in order to be complete13. An offer is
different from invitation to treat. An invitation requires people to make offer to the inviter. An
invitation can be made through advertisement, tenders auctions, etc14.15
Likewise, an acceptance is the confirmation to the terms of the offer without bringing any
variations. It is necessary that an acceptance must correspond to the offer. Further, an acceptance
must be made only when the offeree is area of the offer. An acceptance without knowledge of the
offer is no acceptance in law and thus there cannot be a binding contract amid the parties. But,
unilateral offer can be made wherein an offer is made and the same can be accepted by
complying with the terms of the offer, there is no need for the communication of acceptance16.
Application and Conclusion
Fran made an advertisement wherein he offers a ‘a month’s supply of free chocolates to anyone
who can recommend a suitable, trustworthy assistant or apprentice’. Thus, a unilateral offer is
made and whosoever provides an assistant as per Frans requirement results in establishing
contract with Fran.
Arjun provides details of an assistant without knowledge of the offer. Thus, an acceptance is
provided without knowledge of offer is no acceptance.
It make no difference if Arjun areas of the offer after the performance. So, there is no binding
contract amid the parties.
13 Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1.
14 Partridge v Crittenden (1968) 2 All ER 421
15 Latimer, n1.
16 R v Clarke [1927].

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Bibliography
Books/Articles/Journals
Brown , M. 2016. A global guide to ‘restrictive covenants.
Brown. S. 2014. 5 Elements of Promissory Estoppel in Contract Law and Legal Agreements.
https://etiennelawyers.com/5-elements-of-promissory-estoppel-in-contract-law-and-legal-
agreements/ retrieved on 18th April 2018.
Latimer, P. 2012. Australian Business Law 2012. CCH Australia Limited.
Case laws
Ballantyne v Phillott [1961] HCA 17
Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1.
Hamilton v Lethbridge - [1912] HCA 20
Masters v Cameron (1954) 91 CLR 353.
Partridge v Crittenden (1968) 2 All ER 421.
Pearson v HRX Holdings Pty Ltd (2012).
R v Clarke [1927].
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387.
Wakeling v Ripley (1951).
Seven Network (Operations) Limited v Warburton (No 2) (2011).