Enforceability of Amended Contract

PRINCIPLES OF CONTRACT LAW
STUDENT ID:
[Pick the date]

Question 1
Issue
The main issue is to find whether there is an enforceable contract enacted between Fern and
Jane & Sarah. The required elements for contract enactment would also be taken into account
in order to comment on contractual liabilities of the parties.
Rule
The presence of following elements in any scenario would imply that a valid contract would
be formed and both the parties have to satisfy the contractual obligation.
Offer & Acceptance: Valid agreement is an essential element of a contract. Valid agreement
would be formed between the parties when there is valid offer and acceptance. The actions of
both the parties would be equally imperative to form a legal agreement. Any request of one
party to bring the other party to engage into some work would be categorised as offer and the
party who extends the offer would be termed as offeror1. It is essential that acceptance must
be communicate to the offeror in order to form a valid agreement. However, acceptance
would also be conveyed to the offeror by performing the required action stated by the
offeror2. The verdict announced in Smith v Hughes3 case is the evidence of this fact where
creation of the ad idem was essential element to form a valid agreement between parties.
Consideration: It is a key essential for contract enactment. It is imperative that consideration
must be mutually agreed by the parties and both the parties must have valuable consideration.
It is not essential that consideration should be adequate but should be sufficient and valuable
for the underlying party as highlighted in Chappell & Co Ltd v Nestle Co Ltd4. Further, if no
consideration is present for either of the party then contract would not be enforceable5.
Intention: When the parties do not have intention to form legal contractual relationship, then
no contract would be formed. Hence, it is essential that both the parties must show their
1 Carter John, Contract Act in Australia, (LexisNexis Publications, 2014, 3rd edition) 77
2 Peel Edwin,The Law of Contract, (Thompson, 2017, 6th edition) 67
3Smith v Hughes (1871) LR 6 QB 597
4 Chappell & Co Ltd v Nestle Co Ltd [1959] UKHL 1
5 Latimer Paul, Australian Business Law CC, (LexisNexis Study Guide, 2014, 4th edition) 89
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