The Australian Contract Law calls

Issue 1
The issue in the given case is to examine whether there was a valid contract in
existence between Graham and the shop assistant at the antique shop.
Rule 1
The Australian Contract Law calls for the compliance of five key conditions for a valid
formation of a contract. The first condition is that an agreement must exist between
the parties, that is a valid offer and acceptance thereon must be present. An offer
refers to a communication whereby a promise for something to be done or not to be
done has been made by one party to the other, as was pronounced in the case of
Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 527.
In return the other party must communicate the acceptance and thus leading to the
meeting of the minds as necessitated for an agreement to be formed. However, it
must be noted that an offer must be distinguished from an “invitation to treat.” An
invitation to treat refers to a mere willingness of the parties intending to enter into a
“negotiation” and not a contract. Apart from this, an agreement must be mandatorily
supported by a consideration, which is an amount paid in exchange of the promise,
as held in Beaton v McDivitt (1987) 13 NSWLR 162. In addition, the terms of the
contract must be certain, the parties must have a legal capacity to enter into the
contract and have intentions to enter into a legally binding relationship. The same
was held in the leading case of Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty
Ltd [1989] 2 NSWLR 309. Thus, if all the above conditions are present, it can be
concluded that a legally enforceable contract exists between the parties.

Application 1
The application of the above determined rules to the given situation is as follows.
The fact that the antique dining table has been kept in the shop is an invitation to
treat for further negotiation among the parties. As Graham asks the details of the
table, he is extending an offer to the shop assistant. The fact that the shop assistant
agrees to terms of payment and delivery highlights his acceptance to the offer. In
response to the offer, not only the consideration of the table has been stated, but
also other terms are mentioned in clear terms. A promise has been made by Graham
by stating the address and mentioning the desired terms of the payment. Thus, not
only the consideration exists of $ 5000, but also terms are certainly specified. In
addition to state that the commercial contracts by their very nature depict the
intention to be legally bound. Thus, all the five condition of the valid contract
formation are fulfilled.
Conclusion 1
The study of rules and application to the given situation lead to the observation that
all the legally prescribed conditions of the contract formation are complied with the
parties, a valid contract existed between Graham and Shop Assistant.
Issue 2
The issue is to examine whether Andrew is correct in stating that the concerned
agreement was not enforceable as the same was in nature of the domestic contract.
Rule 2
One of the essential conditions of the contract formation is intention of the parties to
enter into legally bound relation. This means when the said intention is missing, an

agreement though valid in other terms may not be enforceable at the courts of law. It
is to be further noted that it is presumed by the courts that there is an absence of the
contract in nature of the domestic agreements (Latimer, 2016). These agreements
are in nature of the harmonious relationship between the parties who are otherwise
connected by blood (parents, siblings and others) or through other kinds of
relationship such as one between husband and wife. The significant point to be
noted is that the relationships are amicable based on mutual affection and trust, as
was held in the leading case of Jones v Padavatton [1969] 1 WLR 328. Thus, in such
cases, the courts disregard the existence of the legal intentions between the parties
on the lines of mirroring the parties’ wishes. Apart from the intentions to be in a legal
relationship, it is essential that an agreement is supported by an offer and
acceptance, consideration, legal capacity, and the certainty of the terms. The
fulfilment of above would lead a contract to be enforceable.
Application 2
The application of the above stated legal principle to the case study is as follows.
The agreement between Susan and Andrew is comprised of the promises of acts to
be done on part of both parties. The acts to be performed are the payment by Susan
for the interest portion in the matrimonial home, and payment by Andrew for the
contribution towards the mortgage payments on the home. The consideration is the
amount of $250,000 and of $1000 per month, as the same is of the monetary value.
Further, the parties are capable and terms are certain. It is to be essentially noted
that the intentions of the parties cannot be adjudged to be in the nature of domestic
agreement as both of them have got separated in the year 2018 and it is been 12
months for the same. This means apart from other conditions, there is an intention to