BLAW1004 Business Law: Agreement, Intention, Consideration Analysis

This assignment provides a detailed analysis of Australian contract law, focusing on the elements of agreement, intention, and consideration. It uses a four-step process to examine a scenario involving Rick Booth and Cliff Dalton, addressing issues related to offer and acceptance, intention to create legal relations, consideration, legal capacity, consent, and illegal/void contracts. The analysis applies relevant legal rules and principles to determine whether a legally enforceable contract was formed. The document also explores whether the remaining formation elements of intention and consideration have been satisfied in the given scenario, referencing Australian contract law and English common law.

BUSINESS LAW
STUDENT NAME
STUDENT ID

Australian Contract Law 2
Table of Contents
Question 1..........................................................................................................................3
Issue...............................................................................................................................3
Rule................................................................................................................................3
Application......................................................................................................................7
Conclusion......................................................................................................................9
Question 2........................................................................................................................10
Issue.............................................................................................................................10
Rule..............................................................................................................................10
Application....................................................................................................................13
Conclusion...................................................................................................................15
Bibliography.....................................................................................................................16

Australian Contract Law 3
Question 1
Using the 4 step process, discuss and apply the element of agreement required
for the formation of a legally enforceable contract in the above scenario involving
Rick and Cliff.
Issue
In this case, the original conversation that has happened between the two people
in question, Rick Booth and Cliff Dalton will need to take a formal outlook that will define
the transaction in the form of a contract in order to provide a legal outlook to the
transaction. The creation of the contract will be based on the fact that the one of the
parties of this case had not been able to deliver on the work that the party had
undertaken in the process from an initial stage1. The failure of the deliverance of the
promises would mean that the next step should be dedicated to the formalization of the
processes that constitute the elements of the contract.
Rule
The rule that is applicable in this case is Australian Contract law. Australian
Contract Law is based on English Common Law. The elements that go on to shape an
agreement are essential to consider before jotting it down on paper (Watanabe et al,
U.S. Patent Application 2018). The elements that make up an agreement are as follows:
 Offer and acceptance: A statement can be considered to be an offer when it
has a purposeful definition (Al-Abdulkarim et al, Statement Types in Legal
Argument 2016). Just because person A has been found compliant to provide a
1

Australian Contract Law 4
particular service to person B over a casual conversation cannot be considered
as an offer. The essential terms of the transactions have to be defined and both
the parties have to comply with these terms in the first place. In the above
example, an offer is not validated if person A has not accepted the terms as laid
down in the offer by person A (Gregory, Charles and Orlikoff The University of
Chicago Law Review 17 2016).
 Intention to create legal relations: There can be no contract unless the two
parties involved in the incident are willing to enter into a legal agreement. It might
happen that there is a level of understanding between two individuals or two
groups of individuals (Egdell, Valerie, Dutton and Ronald McQuaid Journal of
Social Policy 2016). However, the individual agreement between the two parties
does not count as an agreement in the court of law. For this, the two parties
would need to get themselves involved in a legal agreement where they will be
required to follow the course of law to advance with their proceedings. It is
required to construct the contents of the mutual understanding of the parties
concerned into a legal framework which will follow a step by step process based
on reason (Hanrahan, Legal framework governing aspects of the Australian
superannuation system 2018).
 Consideration: Consideration is the process where party formally pledges that it
will deliver something if it fails to deliver on the original promise. Let us take an
example of two groups of people: A and B. Person A is a caterer who delivers
service to various groups of people, individual or family or office. Let us consider
B to be a company whose office is located within the radius of operation of A.

Australian Contract Law 5
Office of A gives orders to B for their business dinners where they entertain their
celebrated clients. They have a contract with each other. However, B fails to
deliver A on one of the occasions of business dinners. In consideration, B offers
to A that it will pay the expenses for the particular occasion and offers a discount
on the next two orders (Solinger et al, Bouncing back from psychological contract
breach: How commitment recovers over time 2016). The basis of paying more
than the original promise is that once the breach of the contract occurred, it has
broken the system that was originally in play. Hence, B has to assure A that the
breach of trust that occurred would not occur again.
 Legal Capacity: Everybody is within the capacity to enter into a legal contract
except for the ones which have the following issues attached to them (Harding,
Rosie, and Taşcıoğlu Supported decision-making from theory to practice:
implementing the right to enjoy legal capacity 2018): 1. People with Disabilities –
People with disabilities are exempted from contracts in which they do not have
the capacity to understand the elements of the contract. In such cases, the court
nullifies the contract for them. 2. Young people – Young people are exempted
from contracts and they usually do not have the same power to be involved in a
contract as much as an adult human being has. A young person is defined as
somebody under the age of 18. 3. Bankrupt people (Pavlushina, et al, Economic
expedience of certain procedures of insolvency institute (bankruptcy): statistical
and legal aspect 2017): bankrupt people have the legal obligation to not indulge
themselves in contracts where the value of payment exceeds a certain amount. If
such people enter into agreements, they are liable to be punished. 4.

Australian Contract Law 6
Corporations – Corporations usually have the legal boundaries that are assigned
to an individual human being and therefore have the capacity to function as a
singular being in a legal matter. 5. Prisoners (Shirlow, Mythic rights and conflict-
related prisoner ‘re-integration 2019): Prisoners have the capacity to indulge
themselves in the act of buying and selling a property and put themselves into a
position of contractual transaction.
 Consent: The consent of the parties that are stakeholders to the elements of the
agreement is essential in order to complete the structural and finalization process
which turns the agreement into a contract. The stakeholders would need to have
the full consent of all the clauses and statements that are laid down in the
contract. They need to be aware of the implications of each of the terms as
mentioned in the contract. They have to be aware that the contract in its final
form does not contain any manipulation (Bacon, Alison and Regan Manipulative
relational behaviour and delinquency: sex differences and links with emotional
intelligence 2016).
 Illegal and void contracts: Contracts can be deemed as illegal and void based
on how it is purveyed by the statute. If it is seen as something that does not meet
the legal requirements, then the contract would not be declared as valid and
would not be under the purvey of legal procedures. Some contracts can be
perceived to be illegal because they are directed against the common law and
ethical values based on which legal frameworks are constituted (Hernik
Infringements of Competition Rules: An Analysis of Unethical and Illegal
Behaviours of Entrepreneurs in Poland 2017).

Australian Contract Law 7
Application
Rick Booth, a collector of Hollywood memorabilia, wants to organize a tour of
Hollywood where Rick will have the opportunity to explore famous and well-recognized
landmarks associated with Hollywood. Rick had telephoned regarding this to Cliff
Dalton, who runs a travel agency, to organize the tour. While Cliff initially agreed
through their interaction on e-mail, Rick asked him to organize another two tours.
Cliff could not see Rick's message since it was in the computer of his office and
Cliff could not enter his office for a few days. When Cliff managed to have a look at the
e-mail, he could no longer provide the trip at the same price. He apologized to Rick. Cliff
also offered to organize the two trips as mentioned in a discounted price for Rick for
next year.
Rick had already booked tickets for the events of his two different trips through
his credit card and money had been paid. It is now necessary for Rick and Cliff to enter
an agreement wherein Cliff’s business promises for the damages done on his part can
enter a process of formality. If he breaches it, he is liable to be penalized.
In this case, Rick is the party that is asking for a task to be performed. Cliff is the
party that will be liable to deliver on the services that Rick is asking for. Hence, we can
draw the inference that Cliff is the person who needs to make the offer. As is shown in
the case, the e-mail sends by Cliff can be categorized as an offer by Cliff. Since it was
approved by Rick in the initial period, it can be assumed that the offer and acceptance
of the service are completed.
If the issue needs to develop into a case, both the parties in question need to
have the intention to make a legal outline of the case (Branting, Data-centric and logic-

Australian Contract Law 8
based models for automated legal problem solving 2017). Without the intention of both
parties, it is impossible for it to develop into a legal issue. Since Cliff has already offered
a discounted price for the tour that lies a year ahead, it is presumable that Cliff would be
compliant and agreeable to meet the requirements of consideration. In this case,
consideration is only applicable to Cliff and not to Rick since Rick is the one who is at a
loss in this situation. It is necessary to create an agreement that would be valid under
the legal system of Australia. The process of creation of the legal document would need
to be devoid of any errors and other issues that may render the legal document to be
illegal and void. It would need to be logical in nature and the parties that are associated
with it need to scrutinize the material through to the end of the finalization of the
documents.
Conclusion
The legal issue in this particular case study demonstrates the creation of a legal
document based on the transaction that has gone in the wrong direction in the first
place. The problem in this situation has been created by the situation of the business in
question. However, as has been detailed in the process above, the situation in hand can
be converted into a legal framework. The two parties that are stakeholders in the issue
would need to follow a step by step process to create an element of the agreement.
Based on their work, the transaction would be finally converted into a legal contract.

Australian Contract Law 9
Question 2
Using the 4 step process, also consider whether the remaining formation
elements of intention and consideration have been satisfied in the above
scenario.
Issue
The primary issue, in this case, is the dispute in the agreement made between
Rick and Cliff. The matter was centered with the issues raised regarding the facts
affecting the validity of the agreement. Prior to the execution of the agreement, certain
communication issues were witnessed which affected the validity of the same for one
party. Whereas, the other party continued with the belief of execution of the agreement
along with its validity. In this case, all the elements of a valid agreement are to be
examined for testifying the validity of the contract.
Rule
At the time of entering into a contract, it is crucial to recognize the governing
legal system and understand the same (Arnow-Richman, Rachel Mainstreaming
Employment Contract Law: The Common Law Case for Reasonable Notice of
Termination 2013). In case of any probable disputes, the parties can adhere to the
guidelines of the legislation and follow the same (Bhana, Contract Law and the
Constitution: Bredenkamp v Standard Bank of South Africa 2017). This particular case
upholds the issue regarding a contract made between two Australian citizens.
Therefore, the governing legislation will be the Australian contract law. Now it is to be
stated that, the Australian contract law is highly influenced by the English common law

Australian Contract Law 10
of contract (Yip, Man & Goh Convergence between Australian common law and English
common law 2017). All the aspects of the contract, therefore, are inspired by the
aspects of the common law of contract. To understand the edges of a contract made in
Australia, it is important to understand the critical evaluation of the common law of
contract. According to the common law of contract, a valid contract must satisfy the four
core elements of the same (Louw, Revisiting Recognition of a Constitutionally-Inspired
Implied Duty of Fair Dealing in the Common Law Contract of Employment (Part 3)
2018). The four elements are respectively, an offer, an acceptance, an intention and a
consideration (Mattar Integrating the Unidroit Principles of International Commercial
Contracts as a source of contract law in Arab Civil Codes, 2017). For establishing a
valid contract and execute the same, the parties need to satisfy all these above-
mentioned elements as a part of the same (McGowan, Consumer Contracts and the
Restatement Project 2019). With the satisfaction of all these elements, a valid contract
can be constituted.
Offer is the first element of a valid contract. There must be two parties to constitute an
offer. In the process of offer, one party makes a promise to the other for doing or
refraining from doing a specified action in the coming future. In this process, the parties
abide by the procedure of making an offer which is not disqualified by law. It is
mentionable that the offer must be made in a legal form and of a legal element. For
instance, in the case of A and B entering an agreement, either of the party is supposed
to make an offer, based on which the other party will accept the same. On a valid
acceptance, the process of making an offer and executing the same will be satisfied.

Australian Contract Law 11
Acceptance is the next element of a contract or agreement. Process of acceptance can
be through both written forms and verbal forms. In case of an acceptance made in
written form, the accepting party must generate a document consisting of his intent of
acceptance towards the offer so made (Gikay, et al, The Reluctance of Civil Law
Systems in Adopting the UCC Article 9 'Without Breach of Peace' StandarddEvidence
from National and International Legal Instruments Governing Secured Transactions
2018). This document of acceptance should reach the party who made the offer for the
validity of acceptance (Cabrelli, Liability and Remedies for Breach of the Contract of
Employment at Common Law: Some Recent Developments 2016). In the case of
implied acceptance, which is in the form of verbal expression or gesture, that certain
expression or gesture must be understandable for a general person. It can further be
mentioned that the acceptance must abide by the terms and conditions mentioned in
the agreement. In case of an agreement or contract involving the sale of goods among
merchants, the acceptance does not have to abide by the terms of the agreement. This
forms a matter of exception in that case (Christandl, The ‘dying’ offer Rule in European
Contract Law 2011). With regard to the acceptance as made, the offer gets further
development in its process of becoming an agreement. Based on this acceptance made
by the other party, other elected are testified for the validity of the same.
The next element of a valid contract is Mutual intention. The agreement must
satisfy the mutual intention of both parties. The term mutual intention is an important
factor to be taken into consideration in case of generating a contract or agreement. In
this case, it is unmentionable that, the intention of either party must not be acquired
through fear or any kind of external pressure. The contracting parties should have a

Australian Contract Law 12
general and natural meeting of minds or intentions (Nehf, The Impact of Mandatory
Arbitration on the Common Law Regulation of Standard Terms in Consumer Contracts,
2017). This means that on understanding the terms and conditions of the party and
knowing the expected outcome of the agreement the parties have agreed to bind
themselves with the agreement. An intention which is acquired through fear might make
the contract invalid in the eyes of law (Hook, The concept of modal choice of law rules,
2015). As a concluding matter of fact, it can be said that the intention must be free from
any kind of fear and should be natural for both parties.
Consideration is the last element that is to be satisfied with executing a valid
contract. Consideration is a matter of value and was promised initially in the process of
agreements generation for getting exchanged for a specific action or refraining from any
action. Consideration most generally forms a significant amount of money in exchange
for another valuable matter or a service. Existence of a consideration differentiates an
agreement or a contract from a gift. The gift is a voluntary exchange in the absence of
consideration. Whereas, in case of an agreement consideration is an important part
(Ramos et al, Common Law and International Consumer Protection in the Global Orbit
of Consumption, 2016). To be specific, consideration is a value which makes the parties
enter into the contract. Therefore, it can be said that consideration assures the validity
of the contract.
Application
This particular case is based on the potential agreement made between Rick and
Cliff. As per the occurrences, two elements of a valid contract are under question. the
first elements as per the issues are intention. It is to be clarified whether the intention, in

Australian Contract Law 13
this case, was satisfied or not. It is to be mentioned that, in order to execute a valid
contract or agreement mutual intention of both parties, is required. In this case, Rick
possesses the intention of conducting a tour to Los Angeles. With regard to his soulful
intention of visiting the place, he collected enough amount of money for the same. For
the same purpose thereof, he contacted his cousin who runs a travel agency. On
conversation with his cousin Cliff, both the parties agreed on that potential tour of Rick.
On this purpose, Rick further booked his other tour related matters for a valid
completion of his visit to that place. In this case, it is to be noted that, Rick being one
party had his soulful intention of visiting that place and therefore he contacted Cliff for
making arrangements of his tour. On the other hand, Cliff agreed to this agreement for
the sake of his benefits to be gained out of his travel agency. He had his intention in this
agreement based on the probable benefits he was to gain out of Rick's tour to Los
Angeles.
The other element under question, in this case, was a consideration. As
discussed above, consideration is the most important aspect which gives a contract
matter of validity and differentiates the same from a gift. In this case, the consideration
was in monetary form. With regard to the conversation of Rick and Cliff, the price for
Rick's tour was decided to be $10,700. On completion of the settlement of intentions,
Cliff generated an email to Rick mentioning the price for his tour and asking for his
consent at the same time. In this case, it is further to be demonstrated that Cliff by
himself decided over the price and offered the same to Rick. Rick on receiving the email
accepted the offer and generated an email of acceptance. Now without concerning the
receiving of the acceptance mail, it is understood that there was a presence of

Australian Contract Law 14
consideration. The amount of consideration was even mentioned and known by each
party. Therefore it can be said that consideration was present in the process of
generating the agreement with the intention of both parties.
With the above-stated analysis, it can be said that the elements in question in this
particular case has been satisfied. This can further be demonstrated that both parties
had knowledge about the existence of these elements. Therefore no particular question
is to arise regarding the existence of the elements therein. As a concluding factor, it
can be said that these elements have been satisfied in this particular case.
Conclusion
This particular case gas primarily focused on the procedure for generating a valid
agreement and execution of the same. With regard to the analysis of the case, it was
understood that there are certain edges of a valid contract which are to be followed in
the procedure of generation of the same. In this regard, two elements were in issue
which was examined to testify the existence of the same in the agreement and validity
of the same with regard to the validity of the agreement. On a thorough examination of
the case taking into consideration the mentioned elements, it was determined that the
agreement does not lack the mentioned elements in the process of its construction. It
further can be stated that the agreement obtained validity along with obtaining the
validity and satisfaction of all the necessary elements.

Australian Contract Law 15
Bibliography
Al-Abdulkarim, Latifa, Katie Atkinson, and Trevor JM Bench-Capon. "Statement Types
in Legal Argument." In JURIX, pp. 3-12. 2016.
Arnow-Richman, Rachel S. 2013. "Mainstreaming Employment Contract Law: The
Common Law Case for Reasonable Notice of Termination". SSRN Electronic Journal.
Elsevier BV. doi:10.2139/ssrn.2238220.
Bacon, Alison M., and Lisa Regan. "Manipulative relational behaviour and delinquency:
sex differences and links with emotional intelligence." The Journal of Forensic
Psychiatry & Psychology 27, no. 3 (2016): 331-348.
Bhana, Deeksha. 2017. "Contract Law and the Constitution: Bredenkamp v Standard
Bank of South Africa Ltd (SCA)". Southern African Public Law 29 (2): 508-521. UNISA
Press. doi:10.25159/2522-6800/3665.
Branting, L. Karl. "Data-centric and logic-based models for automated legal problem
solving." Artificial Intelligence and Law 25, no. 1 (2017): 5-27.
Cabrelli, David. 2016. "Liability and Remedies for Breach of the Contract of Employment
at Common Law: Some Recent Developments". Industrial Law Journal 45 (2): 207-219.
Oxford University Press (OUP). doi:10.1093/indlaw/dww006.
Christandl, Gregor. 2011. "The ‘dying’ offer Rule in European Contract Law". European
Review of Contract Law 7 (4). Walter de Gruyter GmbH. doi:10.1515/ercl.2011.463.
Egdell, Valerie, Matthew Dutton, and Ronald McQuaid. "Third sector experiences of
work programme delivery." Journal of Social Policy 45, no. 4 (2016): 729-746.

Australian Contract Law 16
Gikay, Asress Adimi & Stanescu, Catalin Gabriel. 2018. "The Reluctance of Civil Law
Systems in Adopting the UCC Article 9 'Without Breach of Peace' StandarddEvidence
from National and International Legal Instruments Governing Secured
Transactions". SSRN Electronic Journal. Elsevier BV. doi:10.2139/ssrn.3135461.
Gregory, Charles O., and Richard M. Orlikoff. "The Enforcement of Labor Arbitration
Agreements." The University of Chicago Law Review 17, no. 2 (2016): 233-269.
Hanrahan, P. A. M. E. L. A. "Legal framework governing aspects of the Australian
superannuation system." Background Paper 25 (2018).
Harding, Rosie, and Ezgi Taşcıoğlu. "Supported decision-making from theory to
practice: implementing the right to enjoy legal capacity." Societies 8, no. 2 (2018): 25.
Hernik, Joanna. "Infringements of Competition Rules: An Analysis of Unethical and
Illegal Behaviours of Entrepreneurs in Poland." Journal of Corporate Responsibility and
Leadership 4, no. 3 (2017): 57-73.
Hook, Maria. 2015. "The concept of modal choice of law rules". Journal of Private
International Law 11 (2): 185-211. Informa UK Limited.
doi:10.1080/17441048.2015.1070570.
Louw, Andre. 2018. ""The Common Law is … not what it used to be"*: Revisiting
Recognition of a Constitutionally-Inspired Implied Duty of Fair Dealing in the Common
Law Contract of Employment (Part 3)". Potchefstroom Electronic Law Journal 21: 1-53.
Academy of Science of South Africa. doi:10.17159/1727-3781/2018/v21i0a5662.
Mattar, Mohamed Y. 2017. "Integrating the Unidroit Principles of International
Commercial Contracts as a source of contract law in Arab Civil Codes". Uniform Law
Review 22 (1): 168-201. Oxford University Press (OUP). doi:10.1093/ulr/unx009.

Australian Contract Law 17
McGowan, David. 2019. "Consumer Contracts and the Restatement Project". SSRN
Electronic Journal. Elsevier BV. doi:10.2139/ssrn.3446802.
Nehf, James P. 2017. "The Impact of Mandatory Arbitration on the Common Law
Regulation of Standard Terms in Consumer Contracts". SSRN Electronic Journal.
Elsevier BV. doi:10.2139/ssrn.2923746.
Pavlushina, Alla A., Ekaterina A. Anaeva, Larisa V. Levchenko, Andrey V. Loshkarev,
and Valeria M. Nikiforova. "Economic expedience of certain procedures of insolvency
institute (bankruptcy): statistical and legal aspect." In Russia and the European Union,
pp. 121-129. Springer, Cham, 2017.
Ramos, Fabiana D’Andrea, and Vitor Hugo do Amaral Ferreira. "Common Law and
International Consumer Protection in the Global Orbit of Consumption." In Consumer
Law and Socioeconomic Development, pp. 51-62. Springer, Cham, 2017.
Shirlow, Peter. "Mythic rights and conflict-related prisoner ‘re-integration’." Capital &
Class 43, no. 1 (2019): 39-55.
Solinger, Omar N., Joeri Hofmans, P. Matthijs Bal, and Paul GW Jansen. "Bouncing
back from psychological contract breach: How commitment recovers over time." Journal
of Organizational Behavior 37, no. 4 (2016): 494-514.
Watanabe, Hiroki, Akihito Akutsu, Yasuhiko Miyazaki, Atsushi Nakadaira, and Shigeru
Fujimura. "Contract Agreement Method, Agreement Verification Method, Contract
Agreement System, Agreement Verification Device, Contract Agreement Device,
Contract Agreement Program and Agreement Verification Program." U.S. Patent
Application 15/743,523, filed July 19, 2018.

Australian Contract Law 18
Yip, Man & Goh, Yihan. 2017. "Convergence between Australian common law and
English common law". Common Law World Review 46 (1): 61-68. SAGE Publications.
doi:10.1177/1473779516682445.

Australian Contract Law 19