University Contract Law Report: Employment Scheme and Max's Rights

This report examines a contract law case study concerning Max's employment rights and his entitlement to access an employment scheme. The analysis focuses on whether Max has a legal basis to access the scheme, considering the initial offer made by the company and subsequent changes to the terms. It delves into the validity of the employment contract, potential misleading and deceptive conduct under the Australian Consumer Law, and the applicability of promissory estoppel. The report analyzes relevant legal principles, including the binding nature of preliminary agreements, the importance of clear employment terms, and the prohibition of deceptive practices by employers. It considers whether Max is entitled to the employment schemes, even if he has not fulfilled the company's requirement of two years of service, and provides a conclusion based on the legal analysis and relevant case precedents. The report also assesses whether Max would be entitled to the scheme if the promise was made six months after he started working for the company, also considering the principles of promissory estoppel.

Running Head: CONTRACT LAW
CONTRACT LAW
Name of the Student:
Name of the University:
Author Note

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Issue:
In his given scenario the issue that has been identified is whether Max has any legal entitlement
to access the employment scheme regarding the compensation.
Rule:
It is worth mentioning that the scenario as provided through the facts of given case study deals
with the legal and the validity of employment contracts. In this given scenario, it has been
provided that certain preliminary agreements had been made between the company and Max.
The company had made an offer to Max. It is worth mentioning that preliminary employment
contracts are generally binding upon the parties. It had been held in the case Masters v
Cameron (1954) 91 CLR 353, in case of preliminary employment contracts the terms of the
contract become the subject matter of the contract. However, it had been further held in the
aforementioned case that the terms of the contract can change if the subject matter of the contract
changes and such terms will be legally binding upon the parties. It has been further provided in
section 18 of the Australian Consumer Law, that no person should engage in misleading and
deceitful conduct or any conduct which is misleading and deceiving in nature. It is worth
mentioning that there are several other legislations in Australia which misleading and deceiving
conduct. It had been further held in the case ACCC v TPG Internet Pty Ltd Case Page that
the basic purpose of the section is to protect the interest of the consumers. It has been further
mentioned in section 20 of the Australian Consumer Law that an individual should not indulge or
engage in unconscionable conduct.
It has been provided in section 31 of the Australian Consumer Law that an individual engaged in
trade and commerce is not expected to engage in any activity or any work which might mislead

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another individual who is seeking employment in an organization. Therefore it is worth
mentioning in this regard that employers have the obligation to maintain all the offers. In the
notable case Coal Cliff Collieries v Sijehama (1991) 24 NSWLR the court held that employees
should have clarity about the commercial terms of employment and the court also held that there
must be presumption that the parties intend to be bound by the terms of the contract. The terms
unconscionable can be defined as an statement which is undesirable in nature which in turn
defies good conduct. It has can be stated in accordance with the provisions of Protected
Disclosures Act 2000 that any conduct or act must not be tolerated in the workplace.
Application:
Thus by analyzing the facts of the given case study, it becomes evident that Max had an
employment contract with the company. It has been provided that the company had assured max
that he would be entitled to get the employment schemes. It is further worth mentioning that the
rules and the legal provisions relating to verbal contracts is applicable in this given scenario.
Max had accepted the offer given to him by the advertising agency. Therefore it can be assumed
that the parties to the contract had the intention to be bound by the terms of the contract.
However it has been provided that after Max signed the contract he was told that he could access
the employment schemes after he served two years in the office. Therefore it can be inferred that
the nature of the offer presented to Max was deceptive in nature as per the provisions of section
18 of the ACL. Further it can be stated in accordance with the decision of the case Masters v
Cameron, that an offer which made by an employer constitutes the major subject matter of the
employment contract. Thus it can be inferred that the employer is required to perform the terms
of the offer as present in the offer. Further, as discussed before, it can be stated that employers
are prohibited to engage in any deceptive conduct which might affect an employee during the

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course of his employment under the employer. Thus it can be inferred that Max will get the
benefit of the employment scheme as it was promised to him. It has been further provided in
section 31 of the ACL that of that a person should not make any statement or representation
which is misleading or deceptive in nature and which is likely to cause any harm to an
individual.
Conclusion:
Thus in conclusion, it can be stated that Max is entitled to avail the employment schemes without
having to serve two years in office.
Issue:
In the given scenario, the issue is to identify whether Max would have been able to access the
employment schemes of the company had the company made the promise to Max six months
after he started work in recognition of the excellent work done by him.
Rule:
It has already been discussed before that no employer is allowed to make an offer which is
deceptive in nature to an employee. In the Holloway v Gilport Pty Ltd (1995) 59 IR 305 case
the court held that if a company makes any promise of giving certain benefits to an employee,
such benefits as promised by the employer becomes subject matter of the contract upon
acceptance of the offer by the employee. It has been further illustrated in the Coal Cliff
Collieries v Sijehama (1991) 24 NSWLR that an employee must be given certain clarities about
the terms of the employment. In the aforementioned case the court presumed that the parties to
the contract intended to be bound by the contract.

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The principle of promissory estoppel is also applicable in this scenario. The principle of
promissory estoppel can be defined as a doctrine which prevents a party who has made a promise
to the other party from going back on his promise. However for a party to rely on the doctrine of
promissory estoppel, the following essentials need to be proved:
 A promise made by either of the parties
 Reliance on the promise by the aggrieved party
 Change of position or causation of detriment to the aggrieved party due to going back on
the promise by the promissory.
It can be stated in accordance with the principles of general law particularly those related to
promissory estoppels, that a promisor is prohibited or restricted to go back on his promise. The
rationale behind this is that non performance of the promise is expected to cause detriment to the
aggrieved party who has relied on the promise. The doctrine of promissory estoppel had been
first established in the case Central London Property Trust Ltd. v High Trees Ltd [1947] KB
130. In the notable case D & C Builders v Rees [1966] 2 WLR 28, the court held that if a
promisor goes back on his promise, it would be inequitable to the promisee. In the case
Woodhouse A.C. Israel Cocoa Ltd. v. Nigerian Product Marketing Co. Ltd. [1972] AC 741,,
the court held that the promise made by the promisor must be clear and ambiguous. It is to be
mentioned that the provisions of Australian Consumer Law prohibits the employer to promise
anything to the employee which might affect the nature of employment of the employee. Further,
it is worthwhile to mention that employment benefits are complimentary to the complimentary to
the employment contract. In this case the an oral contract had been entered into between the
parties. The offer, made by the company to Max had been accepted on its original terms and
therefore such terms were binding upon the parties.

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Application
Thus, by analyzing the facts of the case it can be stated that Max would have the right to access
the employment schemes as he had been promised the same by the company at the time of
entering the contract. In this case, the statement which had been made to Max by the company
can be held to be deceptive and misleading. Thus this is in contravention with the provisions of
section 31 of the ACL which states that a person must not give any statements which is
misleading in nature due to which a detriment might be suffered by the aggrieved party. Further
it is worth mentioning that the doctrine of promissory estoppels as established in the case of case
Central London Property Trust Ltd. v High Trees Ltd [1947] KB 130 is relevant to the
given scenario. The Company had made a promise to Max six months after he started for the
company that he would be entitled to access the employment schemes. He relied on the promise.
However, he was later told that the company policy restricted any employee who has not worked
for two years to access the employment schemes. Thus in this case it becomes evident that the
promisor, the company went back on his promise which is inequitable in nature as held in the
case of D & C Builders v Rees. Thus, in this case Max would be entitled to access the
employment schemes.
Conclusion
Thus o conclude it can be stated that Max would be entitled to access the employment schemes
immediately and would not be subjected to the terms of the company policy as he had been
promised so.

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Reference List:
Masters v Cameron (1954) 91 CLR 353
ACCC v TPG Internet Pty Ltd Case Page
Coal Cliff Collieries v Sijehama (1991) 24 NSWLR
Competition and Consumer Act 2010
Protected Disclosures Act 2000
Holloway v Gilport Pty Ltd (1995) 59 IR 305
Coal Cliff Collieries v Sijehama (1991) 24 NSWLR
London Property Trust Ltd. v High Trees Ltd [1947] KB 130
D & C Builders v Rees [1966] 2 WLR 28
Woodhouse A.C. Israel Cocoa Ltd. v. Nigerian Product Marketing Co. Ltd. [1972] AC 741