Validity of Contract under Australian Law

Business Law
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Contents
Introduction...........................................................................................................................................3
Question1..............................................................................................................................................4
Question2..............................................................................................................................................8
Conclusion...........................................................................................................................................10
Bibliography.........................................................................................................................................11
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Introduction
To clear concept of validity of contract, various essentials of the contract that are defined in
the Australia contract law have been discussed. It is analysed as to whether there was a
contract between Avinash and Café. All steps are considered in this regard and each division
of contract is analysed in facts of the case. In later part, exclusion clause provision is analysed
in the applicable law as well as its expression in the common law. On the basis of this, it is
further examined as to when a defendant can fully exclude his liability under the exclusion
clause for the negligence. And lastly the express and implied terms are discussed and the
operational difference is also made to analyse the validity of the statement of a problem. This
way entire assignment revolves around the contract law and its related terms of the contract.
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Question1.
a) Formation of the contract takes place under the contract law in Australia. The act specifies
essential that has to be there in the valid contract and these includes:
Agreement: Agreement includes in it the offer and its acceptance. Information of the
agreement the offer has to be accepted by the other party to the contract I the form and
essence in which it was offered to him. Case of Smith v Hughes, subjective intention of the
party is irrelevant and for the formation of the contract conduct of the parties showing the
acceptance to perform the contract is sufficient. In the contract between Avinash and Café,
the agreement took place when the order was selected and placed by Avinash and in turn to
that he received the foodstuff (Giancaspro, 2014).
Offer:
There is no hard and fast format to make an offer for the agreement it can be in any form,
either in writing or verbally. Offer can be in relation to the performance of some act or non-
performance in exchange of which some consideration will be offered to Offeree. It is also
possible that offer is made to a single person or it can at the same time be made to the large
public as per judgment of Carlill v Carbolic Smoke Ball Co, Court of Appeal [1893] 1 QB
256; [1892] EWCA Civ 1. Café makes a running offer to the public to buy the products of it
in exchange for the consideration. The requirement of offer was fulfilled in the above fact by
displaying the prices of different products over the screen of system (Marshall, 2012).
Acceptance:
To make agreement out of offer it has to be accepted by a person to whom it is made or by
some person authorised by him in this behalf. The acceptance cannot be qualified and
conditional. The mode of acceptance can be chosen as specified in the offer and when no
mode of communication is specified then it can be accepted in any form and manner.
Decision of Crown v Clarke, (1927) 40 CLR 227, held that even silence can amount to
acceptance of offer. The acceptance of the offer of café for food and beverages was accepted
by Avinash when he selected the food item and drink for him.
Consideration:
Consideration in contract is essential no contract can be entered without paying consideration
by one party to another party. The consideration in the contract must not be set so high nor so
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