Explaining Contract Formation and Implied Terms in a Cafe Case

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Contents
Ques 1. Explain how Avinash made a contract with the café........................................................1
Smith v Hughes............................................................................................................... 2
Ques 1.2 Explain whether the café is legally entitled to rely on the clause printed on the ticket to escape
liability in relation to Avinash’s accident................................................................................3
Issue........................................................................................................................ 3
Rule......................................................................................................................... 3
Application/ Analysis............................................................................................... 4
Conclusion............................................................................................................... 4
Question 2.................................................................................................................. 5
‘In contrast to express terms found in a contract, implied terms can arise in a variety of ways and are
beneficial to at least one of the parties to the contract. Some contracts may contain both express and

Contract
implied terms, but the ways these two types of terms operate are significantly different from one another’.
................................................................................................................................... 5
1. By Conduct of the parties:............................................................................. 6
2. By law:........................................................................................................... 7
3. By Custom:.................................................................................................... 7
Bibliography:.................................................................................................................. 7
Ques 1. Explain how Avinash made a contract with the café.
A contract is a legally obligatory oral or written agreement among two or more people. For the
formation of contract there must be an agreement between two or more person in which one
party offeror creates a proposal to another party with certain terms and condition with the
intention to bind the other party who is accepting the proposal with the same terms and
condition. Contract must be definite and clear enough for the understanding of both parties. A
person who decided to accept the offer he must communicate his intention with the offeror
without communication of his intention of acceptance to the offeror there is no valid acceptance
of the offer.1
After the offer has been made or accepted by the both parties with intent to create a legal
obligation payment of consideration is required for the legally binding contract. In the contract,
consideration is a price of promise or offer made by the offeror. Every day we all are entering in
contract with each other. For example in a coffee shop when we buy a coffee we are making a
contract with the coffee shop in which they are offering a coffee as an offer, we accept a coffee
as an acceptance and we are giving them money as a consideration of the contract.2
Essential Legal Elements of the Valid Contracts are:
1 Jill Poole, Textbook on Contract Law (Oxford University Press 13th ed, 2016).
2 Linda A Wendling, Contracts: Legal Principles and Practical Applications for Paralegals, (Wolters Kluwer Law
& Business 2019).

Contract
Agreement, Offer, Acceptance, Intention to make legal relationship and Consideration are the
legal elements of valid contract.
Agreement is first requirement for the formation of valid contract. And for the formation of
agreement there is an offeror who offers or promise to another party with intent to create a legal
relationship and acceptor accepts the offer or promise and consideration is a price for the offer. 3
Smith v Hughes
In the formation of an agreement intention for creating a legal relationship is that what is the
conduct of the party is it reliable for the reasonable person that he was agreeing to the terms
offered by the another party and on this belief other party entered into the contract, conduct of
the person is equally bind as he express his intention.4
Contract can be made in the form of either express or implied. In the express form of contract
offer directly express his intention to the another party but in the implied form of contract the
intention of creating a legal relationship is implied itself in the contract and the party accepting
the offer show his intention of accepting the offer with his conduct. If any party fails to perform
his duty or follow the terms and condition of the nature of the contract in that case it is a breach
of contract5
A promise which is enforceable by the law rises from the conduct of offeror and acceptor under
the legal obligation that one party will pay the price in form of consideration for the benefit he
received from the another party is an implied contract. In the implied contract verbal or written
confirmation is not required. Therefore it is very difficult to prove the existence of implied
contract as there is no evidence of the intention of creating any legal relationship. But if it is
enforced its effect is same as an express contract.
3 McKendrick Ewan, Contract Law (Macmillan International Higher Education, 11th ed. 2015).
4 (Australian contract law, 2016).
5 Helewitz J. A, Basic Contract Law for Paralegals (Aspen Publishers 6th ed, 2010). P-8-9.