Australian Commercial Law: Contracts, Consumer Law, and Negligence

Running Head: TERM 2, 2019 – ASSESSMENT 1 – INDIVIDUAL ASSIGNMENT 0
Australian Commercial Law
LAWS20058
Student’s Name
9/15/2019

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Contents
Part A...............................................................................................................3
Issue (a) 3
Rules (a) 3
Application (a) 3
Conclusion (a) 3
Issue (b) 4
Rules (b) 4
Application (b) 5
Conclusion (c) 5
Issue (c) 5
Rules (c) 5
Application (C) 5
Conclusion (c) 6
Part B...............................................................................................................6
Issue 6
Rules 6
Application 7
Conclusion 8
Part C...............................................................................................................8
Issue 8
Rules 8
Application 9
Conclusion 10
Bibliography...................................................................................................11
Case Laws 11
Legislations 11
Books/ Journals 11
Other Resources 11

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Part A
Issue (a)
How a court would check the presence of an intention to create a legal
relationship in the agreement developed by Sally and Ethan?
Rules (a)
Every contract/binding agreement required to have the intention of parties to
enter into and create a legal relationship with each other. To determine
whether a contract contains such intention or not, the law draws a distinction
between commercial and domestic agreements. It is assumed that where
parties to an agreement have a social relationship, parties do not intend to
create legal relations. However, it does not mean that such parties cannot
develop commercial contracts. The above-mentioned presumption may be
disproved by evidence on the contrary. In the case of
Errington v Errington
Woods1, courts decided that if parties have a social relationship but it has a
contract in written then they are assumed to have the intention to create a
legal relationship2. Courts check various aspects while determining such
intention. For instance, in the case of
Simpkins v Pays3, it has been decided
that if there is a third party to the contract then intention to create legal
relationship seems to be there.
Application (a)
In the given scenario, Ethan and Sally entered into an agreement, which was
developed in a written mode. Although these people are cousins of each
other and have a social relationship yet, the court will use the decision of the
case of
Errington v Errington Woods, to determine the existence of an
intention to create a legal relationship.
1
Errington v Errington Woods [1952] 1 KB 290
2 E-lawresources.co.uk,
Errington v Errington Woods [1952] 1 KB 290 Court of Appeal (E-
lawresources) < http://www.e-lawresources.co.uk/Errington-v-Errington-Woods.php>.
3
Simpkins v Pays [1955] 1 WLR 975