Legal Rights and Remedies in Commercial Contracts and Unconscionable Conduct

law
1
Law

Law 2
Part 1
Issue
Whether AFS Grocery Wholesalers Pty Ltd holds any legal right to recover the payment of
$45000 from John’s Supermarket for the goods they delivered to them-
Whether these rights are also available if John informed AFS Grocery that Linda is expressly
restricted to Place order of any goods without informing John-
Law
The most important element of the valid contract is considered as an agreement of the contract,
which generally includes offer and acceptance. It also involves the meeting of mind or consensus
between the two parties. In other words, for agreement being legally enforceable it is necessary
that agreement must contain three important factors-
 Offer and also an acceptance related to that offer.
 Consideration in terms of that contract, which means, something related to the value
given by each arty of the contract in context of exchanging their promises.
 Intention of the parties for creating the legal relations with each other (ACL, n.d.}.
In case any of these factors are not resent in the contract then such contract is deemed as the void
contract. In other words, such contract is not enforceable under the law.
The intention of the parties to create legal relations with each other is deemed as most important
factor, and arties can create the legal relations with other arty either in express or implied form.
Intention is considered as implied intention if all the surrounding situations support such
intention, which means, if all the surrounded situations clarified the intention of the parties then
such intention can be considered as the implied intention. Usually, classification is done in
context whether agreement is commercial in nature or domestic in nature. In terms of
determining this, an objective test is introduced by the Court (ACL, n.d.}.
Commercial agreements is deemed as those agreements which are of commercial nature, and
generally it is presumed that while entering into such type of agreements parties intend to create
legal relations with each other. In other words, it is the general resumption that commercial
contracts are legally bound on the parties.
In case arties clearly state that the agreement is not legally bound, which means, that agreement
does not entertain any legal consequences then such contracts are not deemed as valid contract
(Jones v Vernon’s Pools [1938] 2 All ER 626}.
In case law Rose and Frank v Crompton Bros [1923] 2 KB 261, Court stated that agreement in
question was not legally bound on the parties. In this case arties confess that arrangement

Law 3
between them was not entered as the legal and formal agreement, but both the parties give true
promise to conduct the contract.
Therefore, it can be said that any contract which is of commercial nature is binding on the arties
enter into the contract and it is deemed that arties related to such contract have intention to create
the legal relations with each other.
In case any arty fails to fulfil the promise under the contract then such failure is deemed as
breach of contract, and following are the contractual remedies available to the arties-
Common law provides the remedies of thee damages and liquidated claims in terms of the breach
of the contract. Damages are considered as the substitute of the performance of the contract, and
they are provided for putting the plaintiff in the position they would in case contract is performed
in proper manner by the defendant. It is necessary that loss claimed by the plaintiff must not be
too remote in terms of the breach, and necessary actions are taken by the non-breaching party for
reducing the resulting damages occurred from breaching of the contract (Legal Service
commission, n.d.}.
There are some other remedies which are also available in terms of the contract breach and these
remedies are known as liquidated damages. These types of damages are available in those cases
in which clause is stated under the contract signed between the parties that specific amount is
given to the arty in case contractual breach (ACL, n.d.}.
Other types of remedies are equitable remedies which are also given in case of the contractual
breach. There are almost two types of remedies under this-
Specific performance- In this order is given to the breaching party to perform their obligations
under the contract in the similar manner as directed by the Court. Court give this order in those
cases only in which damages will not be considered as the adequate compensation and also in
those cases also which involves the personal services.
Application
In the resent case, Linda holds the position of manager in the Johns supermarket, and actual
owner of the supermarket is John Miley. In this, Linda is expressly restricted to purchase any
stock for the supermarket. By acting out of his authority, Linda places the order of goods worth
$45000 with the AFS Grocery Wholesalers Co Pty Ltd. Later, when John visits the store he
denies making payment to the AFS Grocery Wholesalers Co Pty Ltd on the ground that Linda
does not hold any authority.
In this case, regulations of legal relationships will apply. The intention of the parties to create
legal relations with each other is deemed as most important factor, and arties can create the legal
relations with other arty either in express or implied form. Intention is considered as implied
intention if all the surrounding situations support such intention, which means, if all the