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Establishment of Valid Contract: Swan Valley Pty Ltd (SVP) and Best Fruits, SVP and Lin

Assignment question on the validity of a contract and the sale of goods in the context of a fruit wholesaler and retailer.

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Added on  2023-06-08

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This article discusses the establishment of a valid contract between Swan Valley Pty Ltd (SVP) and Best Fruits, and SVP and Lin. It covers the relevant laws and their application to the case. The article explains the essential requirements for a valid contract, including offer and acceptance, consideration, legal intention, and capacity of the parties. It also discusses the difference between an offer and an invitation to treat, and the concept of a counter offer. The article concludes that there is no valid contract between SVP and Best Fruits, but there is a valid contract between SVP and Lin.

Establishment of Valid Contract: Swan Valley Pty Ltd (SVP) and Best Fruits, SVP and Lin

Assignment question on the validity of a contract and the sale of goods in the context of a fruit wholesaler and retailer.

   Added on 2023-06-08

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Contents
Solution............................................................................................................................................2
Issue.............................................................................................................................................2
Relevant law.................................................................................................................................2
Application of law........................................................................................................................3
Conclusion...................................................................................................................................4
Bibliography....................................................................................................................................5
Establishment of Valid Contract: Swan Valley Pty Ltd (SVP) and Best Fruits, SVP and Lin_1
2
Solution
Issue
i. Whether a valid contract is established between Swan Valley Pty Ltd (SVP) and Best
Fruits?
ii. Whether a valid contract is established between SVP and Lin?
Relevant law
In Australia, any contractual relationship between two or more private parties is governed by the
law of contract. In order to formulate a valid contract the basic essential requirements include an
offer and acceptance, consideration, legal intention capacity of the parties. (Collins, 2003)
An offer is the primary ingredient in the formation of a contract. When an offeror communicates
his intention or proposal to an offeree specifying the terms of proposal that he is intending to be
complied by the offeree, then, it is an offer in law and is held in (Carlill v. Carbolic Smoke Ball
Co , 1891). An offer must be communicated to make it valid.
When the offer reaches the offeree, then, he can either accept the offer or he can reject the offer.
Acceptance is the act by the offeree when the terms of the offer are confirmed by him without
bringing any variations to the terms of the offer and is held in (Felthouse v Bindley , 1862). An
acceptance can be made by conduct or by words or in written form but it is necessary that the
acceptance made must be communicated to the offeror in order to be held valid in law and is held
in (Latec Finance Ltd v Knight , 1969).
An invitation to treat is considered to be distinct from an offer. In an invitation, the interested
party does not make an offer rather he invites offer from the general public or from some specific
person and is held in (Pharmaceutical Society Of Great Britain v Boots Cash Chemists
(Southern) Ltd , 1953). In (Partridge v Crittenden, 1968)an advertisement was held to be an
invitation to treat in contract law. Persons who are interested in the invitation must make an
offer to the inviter. The inviter when accepts the offer results in the formation of a contract.
(Burrows, 2016)
At times the offeree does not accept the terms of the offer rather he brings new terms to the
original offer, then, it is not an acceptance in law. It is treated as a counter offer which has the
capability to cancel the original offer made by the offeror and is held in (Hyde v Wrench , 1840).
The only offer that now stands valid after the counter offer is the counter offer (new offer). When
this counter offer is accepted by the original offeror then it results in the formation of a contract.
(Stone & Devenney, 2017)
In (Stevenson Jaques& Co v McLean , 1880) and (Butler Machine Tool Co Ltd v Ex-Cell-O
Corp Ltd, 1977)it was submitted that that slight variations to the terms of the offer or mode of
Establishment of Valid Contract: Swan Valley Pty Ltd (SVP) and Best Fruits, SVP and Lin_2

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