Contract Law: BSBLEG415 Assessment Event 1 Short Answer Questions

This document provides a detailed response to the assessment questions for the BSBLEG415 unit, focusing on the principles of contract law. The assignment covers key aspects of the Australian legal system relevant to contract law, including the specific courts involved. It defines and explains the four types of invalid contracts: void, voidable, unenforceable, and illegal contracts. The document further clarifies crucial terms such as privity of contract and assignment of contract. It also outlines the two types of consideration in contracts, the intention to create legal relations, and the capacity to contract, especially concerning minors and individuals with mental disabilities. The assignment also explores the four ways a contract can be discharged: by performance, agreement, frustration, and breach. Finally, it lists the available remedies for breach of contract, including damages, rescission, repudiation, injunctions, restitutionary awards, and specific performance.

Assessment Event 1
BSBLEG415: Apply the principles of contract law
Short answer questions - Research
Respond to the questions below.
Complete and save this document and submit according to your assessment event submission instructions.
Questions
1.1
Explain the following:
1. The main features of the Australian Legal System of trial relevant to a contract law matter.
2. The specific institutions (courts) that deal with contract law matters in New South Wales.
Your answer
1. the contract law in Australia is based on the English contract law with some statutory modifications as
well as the development of the law considering the decisions given Australian courts. The law of equity
also played an important role in the contract law of Australia.
2.
1.2
Define and explain the four (4) types of invalid contracts
1. Void contracts
2. Voidable contracts
3. Unenforceable contracts
4. Illegal contracts.
Your answer
1. Void contracts: void contract is an agreement which is illegitimate and unenforceable effectively from
the moment it is created. It cannot be enforced by law.
2. Voidable contract: a contract which is valid but can be declared invalid at the option of one of the parties
due to a defect or illegality in it.
3. Unenforceable contract: this type of contract though valid, cannot be enforced in the court of justice.
4. Illegal contract: the contract which was created for an illegal reason and which violates the law, is called
illegal contract.
1.3
Assessment Event 1 BSBLEG415 R1 Page 1 of 4
Created: 02 Feb 2016 | Revised: 22 Nov 2017 |

Assessment Event 1
Explain the following terms:
1. Privity of contract
2. Assignment of contract
Your answer
1. Privity of contract: This doctrine denotes that a contract will not be able to confer rights or grant
duties on any person who is not regarded as a party to the contract. It does not allow any 3rd party
to enforce it.
2. Assignment of contract: It means the transferring the rights, duties and benefits in a contract from one
party to another.
1.4
Provide a brief explanation of:
1. Two (2) types of consideration in contracts
2. The nature of the intention to create legal relations that is required to form a contract
3. The capacity to contract in relation to minors and persons who suffer mental disabilities.
Your answer
1. The two types of contract are executor consideration where the consideration type is formed out of
exchange of promises between the parties in a bilateral contract whereas the other type is called as the
executed consideration where one party creates a promise in return of an act or conduct to be done by
other party.
2. The parties entering into the contract shall possess the intention of entering into a legal relation and not
a social or domestic relation with one another.
3. Capacity of the parties in a contract means the capability of the parties to create it. Drunks, minors and
the mentally impaired persons do not have the capacity of entering into a contract and any agreement
entered by them is void.
1.5
Provide a brief explanation of four (4) ways discharge of a contract may occur.
Your answer
A contract is usually discharged by 4 ways which are discharge by frustration, discharge by agreement,
discharge by performance of the contract and discharge by contract breach.
Discharge by performance of the contract:
A contract is discharged by performance when the parties in the contract have already performed their
duties as per the agreement.
Discharge by agreement:
Discharge by agreement is generally two types; unilateral discharge and bilateral
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Assessment Event 1
discharge. Unilateral discharge occurs when out of the parties in the contract, one has the right to
surrender. When one party has absolutely done his obligation, he is under no obligation, but he
has the right to compel the other party to perform his part of the agreement. A promise of paying
certain sum of money or providing some other type of consideration in return that the other party
gave up his rights will lead to the discharge of the contract.
Bilateral discharge happens when both the parties in the contract possess the right of
surrendering. It occurs when both the parties have not performed or one party has partly
performed or both the parties have part performed their obligation.
A contract when discharged by agreement, accord as well as satisfaction must exist. Accord
means each of the parties must have agreed to put an end to the contract. Such agreement shall be
given feely. Satisfaction signifies consideration. Both the parties must give consideration. When
both the parties have duties continuing, then in general the consideration will refer to each of the
parties giving away their respective rights as per the contract. However, problem occurs when
one of the parties has done his duty in the contract. In such case the non performing party shall
give consideration to bind the agreement. Rescission and substitution refer to the situation where
the parties may have the intention to rescind the actual contract and finally it is substituted with a
new contract.
Variation refers to the situation where the parties have consented to the variation of the
existing contract, that is, they have agreed modifying or altering the original agreement terms. On
the other hand, waiver means when one of the parties allowed the request made by the other party
to waive his right of strict execution of the agreement, the court may consider that he has given
up his right to perform the contract as formerly agreed by the parties.
Discharge by frustration means because of the subsequent changes in the situation or
circumstances, the contract becomes not possible to perform or the main reason for performing
the contract has ceased to exist. Discharge by breach happens when one of the parties to the
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Assessment Event 1
agreement of the contract failed to comply completely or up to satisfaction of the obligations.
1.6
List the remedies available for breach of contract.
Your answer
There are several types of remedies available in contract law for the breach of contract which are as
follows;
damages, rescission, repudiation, injunctions, restitutionary awards and specific performance.
Assessment Event 1 BSBLEG415 R1 Page 4 of 4
Created: 02 Feb 2016 | Revised: 22 Nov 2017