Contract Law: Elements, Liability, and Implied Terms

Topic: Contract Law
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Topic: Contract Law
A contract refers to a legal binding agreement between two or more competent parties. A
contract can either be expressly stated or implied form the conduct of the parties. Regarding an
enforceable contract, parties are compelled to perform their obligations as stated in the contract.
Therefore, when there is a breach of contract the party in breach is always liable. Following the
facts of the case, Avinash had an implied contract with the café. This is so because, by him being
a regular visitor to the café, the existence of a contract can be implied from his conduct of going
to the café to get the his food of choice (Bailey and McDougall, n.d.). For a contract to be valid
and enforceable, there are certain elements to be satisfied. The elements include: offer,
acceptance, consideration, intention to create a legal relationship and capacity.
Regarding offer, it refers to a promise to perform an obligation. For instance, it may be an offer
towards purchasing a house of one to perform some work as stated in the tender. Therefore, the
cafe by coming up with a system that is able to display their menu to its customers on a touch
screen, it is able to satisfy the requirement of an offer as provided under the law of contract
(Carter, 2019).
On the other hand, acceptance is a demonstration by the other party agreeing to the terms of the
party making an offer. Following this, the party can give its response by making some changes.
Therefore, this will be considered as a counter offer. In this instance, Avinash by paying $4 to be
served coffee is a clear illustration of him accepting the offer. Further, the court in the case of
Crown v. Clarke was of the opinion that there is no specific way in which an acceptance is to be
made. In addition; it was stated in Empirnall Holdings Pty Ltd v. Machon Paull Partners Pty Ltd
that an offeror cannot deem his or her silence to constitute silence
Referring to consideration, it refers to value or price that completes a contract. However, in some
jurisdictions consideration is not considered an essential element as parties reaching a binding
agreement is sufficient. In addition, consideration need not be money. It also requires some
detriment on the promise as was established in the case of Carlill v. Carbolic Smoke Ball Co.
similarly, the consideration should be from the promisee. Therefore in this situation Avinash by
making payment to be served tea he was able to satisfy the requirement of a consideration in a
contract (Clark et al., n.d.).

Topic: Contract Law
On the other hand, capacity refers to group of persons who the provided laws allow to enter into
contracts. This is so since there are categories of people that the law does not allow them to
contract. The categories include minors and mentally ill persons. Regarding mental disorder, the
contract is voidable at the option of the party. This is where the mental ill person does not
understand the contract while the other party was aware of his or her disability as illustrated in
the case of Gibbons v. Wright. Therefore, the parties in this scenario have the contractual
capacity to contact since neither of the two falls under parties barred from contracting.
Following the element of intent to create a contract, the general rule is that: the parties to a
contract prove the intention. In practice, consideration is normally construed to satisfy this
requirement. However, there is always need for the parties to demonstrate a separate requirement
(Davenport and Parker, n.d.). In addition, in social contracts the courts have been presuming
intention until recently where the high court held that: intention should be proved whether in
commercial or social contracts. Following this, the court in the Woolen Mills Case held that the
element of intention was not present. Regarding commercial contracts, parties to it normally
intent that it is binding and therefore it becomes difficult to prove otherwise. Similarly, where
parties do not intend to be legally bound they are given the option to adopt “Honour classes” to
show that the agreement does not bind them.
Therefore in this instance, following that it is a café carrying out business, the contract in
question falls under commercial contracts. In this regard, the intention to legally bind Avinash
existed following the operation of the café. Also, since there is no evidence of honour clauses to
prove otherwise and the fact that Avinash was comfortable with their services, it is right to
conclude that the intention to create a legal binding contract is present (Mason, Carter and
Tolhurst, n.d.).
Question 1b
Issue
The legal issue at hand is in regards to liability of parties upon breach of a contract and therefore
it is important to consider whether the café in this situation is liable to compensate Avinash.
Rule