Business Law Assignment 1 - Contract Formation and Agreement Analysis

This business law assignment analyzes the formation of a contract between Jasmine and Curtis, addressing key elements such as intention to create legal relations, consideration, and agreement. The assignment explores whether these elements were met to establish a legally binding contract. The analysis examines the issue of intention, demonstrating that both parties showed intent to create legal relations, and consideration, where Jasmine provided $1200 to Curtis. It also examines the agreement element, determining that a valid agreement, including an offer by Jasmine and acceptance by Curtis, existed. The conclusion confirms the presence of all necessary elements for a legally binding contract between Jasmine and Curtis. The assignment also references various legal resources to support its arguments.

Business Law Assignment
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Table of Contents
Answer a)...................................................................................................................................3
Answer b)..................................................................................................................................4
References..................................................................................................................................5
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Answer a)
Issue - Whether the elements of intention as well as consideration essential for the formation
of contract met in order for the existence of contract between Jasmine and Curtis.
Law - For the existence of a contract between the parties to an agreement, it is essential to
establish intentions to create legal relationships between the two parties. In general, the
existence of consideration provides for the evidence in this context, but it does not occur
always, so this requirement must be separately required to be proved in each and every case.1
The onus to prove the existence of contract is on the party that seeks to demonstrate the
intention as well as the extent of the relationship between the parties when there is relevance,
there is not any presumption regarding the contractual intentions of the parties that have been
involved in the contract. As per general rules in the formation of contract, the intention
remains to be the requirement without any further reliance and must be individually verified.
In cases, however, the consideration exists without existence of any contract because this
prerequisite has not been satisfied.2
The consideration is the amount given to a party to the contract in exchange for the promise
and is critical requirement in Australia already binding to a contract. As a result, the
complimentary assurances are generally not legally binding and consideration is a
multifaceted obligation that contains various rules as well as qualifications. In addition to it,
the doctrine of promissory estoppels in the present scenario operates to enable the
enforcement of the agreements even in the lack of existence of valid consideration.
Application - In the case scenario, for the existence of the contract, both the parties i.e.
Curtis and Jasmine have shown their intention to create legal relations. For the formation of
contract, the consideration has been provided by Jasmine, which was $1200 to Curtis in order
to confirm the contract. In exchange for the promise, consideration has been paid by Curtis
1 Clarke, "Formation."
2 Clarke, "Intention to Create Legal Relations."
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considering it to be the essential requirement in Australia because of which, contract is
binding between both the parties. Instead of it, the responsibility to prove is on the party that
seeks to verify the contract for demonstrating the intention as well as nature of the bond
between both the parties. However, the onus to prove the existence of contract for indicating
the intention is on Curtis regarding the opinion about the contractual intentions of the parties
involved in the contract.
Conclusion - For the enforceable contract between Jasmine and Curtis, the essential elements
of contract i.e. intention and consideration, have been fully met, so existence of legal contract
make them binding to the fulfilment of the contract.
Answer b)
Issue - Whether the element of agreement essential for framing contract between Jasmine and
Curtis can be recognised.
Law - The first and the foremost prerequisite for a valid contract is considered as an
agreement. The agreement usually comprises of an ‘offer’ as well as an ‘acceptance’,
however, the parties might not clarify their understanding in such terms and it also comprises
of meeting of thoughts or the consensus between the parties to the contract. There is existence
of complex rules for determining if an offer and acceptance are valid or not.3 For the
agreement to be effective it must also have certain relevance to all material aspects, so when
an agreement is proved to be vague or ambiguous or exhibits mere agreement, it could not be
enforceable.4
Application - The contract is considered as valid only after agreement between two parties
and in this case, Jasmine offered help to Curtis which was accepted by Curtis with consensus
between both the parties and it was determined objectively. The offer was made by Jasmine
3 Clarke, "Agreement."
4 US Legal, "Elements of a Contract."
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and was accepted by Curtis, considering which, Curtis provided him with the consideration
that amounted to $1200 for the legal formation of the contract. The acceptance is considered
as an unequivocal statement which was given by Curtis verbally and by conduct of paying the
consideration amount to Jasmine for the initiation of the contract.5 The offer by Curtis and the
acceptance by Jasmine enabled the formation of contract due to which, both become binding
for the successful formation of contract. Even after establishment of legally binding contract
between the two parties, Jasmine failed to complete the contract as well as refused to pay the
consideration amount given by Curtis to her.6
Conclusion - It confirms that there is existence of element of agreement which is necessary
for the formation of legally binding contract between Jasmine and Curtis along with existence
of intention as well as consideration which is also essential for the formation of contract.
References
Clarke, Julie. "Agreement". Australian Contract Law, 2013.
https://www.australiancontractlaw.com/law/formation-agreement.html.
Clarke, Julie. "Formation". Australian Contract Law, 2013.
https://www.australiancontractlaw.com/law/formation.html.
Clarke, Julie. "Intention to Create Legal Relations". Australian Contract Law, 2013.
https://www.australiancontractlaw.com/law/formation-intention.html.
Small Business Development Corporation. "Contracts and Agreements". Small Business,
2019. https://www.smallbusiness.wa.gov.au/business-advice/legal-essentials/contracts-
and-agreements.
US Legal. "Elements of a contract". US Legal, 2016. https://contracts.uslegal.com/elements-
of-a-contract/.
5 Small Business Development Corporation, "Contracts and Agreements."
6 Villanova University, "Essential Contract Elements and Formation Components."
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Villanova University. "Essential Contract Elements and Formation Components". Villanova
University, 2015. https://www.villanovau.com/resources/contract-management/contract-
elements-formation-components/.
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