Contract Law: Analyzing Contractual Agreements and Legal Rights

This report delves into the intricacies of contract law, analyzing two distinct cases to determine the legal rights and obligations of the involved parties. The first case examines a potential contract between Jane and Eric, the manager of a gardening store, focusing on the elements of offer and acceptance. The analysis concludes that no binding contract was formed due to the lack of acceptance. The second case explores a situation between Jane and Grace, friends who entered into an agreement for the sale of a house. Despite the presence of offer, acceptance, and consideration, the report argues that no legally enforceable contract was established because the parties lacked the intention to create a legal relationship, highlighting the importance of this element in contract formation. The report uses the IRAC method to structure the analysis, applying relevant legal principles and case law to reach its conclusions.

Assessment 1 - LAW IN Contract

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
CASE 1............................................................................................................................................1
Issue.............................................................................................................................................1
Rule..............................................................................................................................................2
Application..................................................................................................................................2
Conclusion for the case 1.............................................................................................................3
CASE 2............................................................................................................................................3
Issue:............................................................................................................................................3
Rules:...........................................................................................................................................3
Application:.................................................................................................................................4
Conclusion for the case 2:............................................................................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
A contract is that legal binding or set of promise between 2 people which is enforceable
by law and if it is violated that this will be injuring one or the other party. This will be
recognising and governing the right and duties that is incurring after the agreement between 2
parties (Eldridge, 2018). There are certain elements which are considered while coming into any
agreement or contract like offer, acceptance, consideration, mutual obligation, competency,
capacity and written instrument.
In this particular assignment there will be discussion about 2 different contract and
advising Jane about her legal rights against Eric and Grace through the process of IRAC.
CASE 1
As per the case it could be explained that Jane when she comes to known about sale in
Gardening Gadgets which is retail franchise about discount of new equipment like that of ride on
mover, chainsaw and trailer she decided to buy them on discounted price. However when Jane
go to the store she found out that sale is over but then also argue with the store manager Eric and
insisting him to buy all goods. Then Eric decided that if she buy 2 of the items then he would
give her the 3rd one for free but this sale will only be done till Thursday night. After checking her
overdraft Jane found out that she is having that much amount that would make her buy all 3 new
equipment so she decided to buy it. Then on Wednesday night she e-mailed Eric for accepting
the offer to buy trailer, mover and chainsaw for $8000 but certainly Eric did not read this email.
So certainly the offer which Jane made to Eric was not accepted by him.
Issue
In the contract between any 2 parties there are 6 elements among which 2 of them are
very much important including offer and acceptance. An offer is that expression by one party
who shows the willingness of entering into the contract with specified terms and conditions.
Thus for this offer proposal will be sent to other party who will be deciding whether to accept the
offer or reject it. The offer is only valid at point when the other party is showing some interest
into it and accepting it as it is invited to him which will be then termed to as agreement between
both of them. In one of the case of Brambles Holding Ltd. v Bathurst City Council it was noticed
that offer must be converted into that form that for consideration it is giving offeree any
opportunity in choosing between acceptance and rejection (Smith, 2016). So in case of Jane there
is clear offer but as Eric did not read the e-mail and not even replied to it so there was no
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acceptance between them. Both the parties must be intended to create a legal relations and
negotiation between both of them should be taken place before contract is made which is not
there into present case. Invitation to treat is that difference between one party making offer and
other not intended to binding. So there was no agreement between Eric and Jane as Eric did not
accepted the offer made by Jane through e-mail.
Rule
As per the contract law there should be offer and acceptance between 2 parties for them
to come into clear agreement or contract then only it would be legally correct. As in this case
there is offer made by Jane who is intended to purchase new equipment but there is not
acceptance made by side of Eric as he did not read the e-mail. There was invitation of treat by
Eric who is manager of store as he made an advertisement into newspaper for the discount offer.
In way of forming the contract there must be offer and acceptance of that offer then that would
be called to as bilateral contract. But certainly that offer could be revoked by either of the two
parties as it was done by Eric who at the end time decided not to sell the new equipment to Jane
on discounted price. This offer was not accepted as Eric did not read the e-mail and when Jane
came to store to buy he dined with the fact of selling equipment (Intention to create legal
relation, 2018). There was no intention to create any sort of legal agreement between both the
parties as in case of Placer Development Ltd v Commonwealth was there (Floyd, Williams and
Pickering, 2017).
Application
There is no rule which is applied into the case as there is no acceptance which is made by
Eric so he is not bond to sell any of the item to Jane at the discounted price. If Jane wants the
equipment to be purchase then she could do so at the given price or rate only not on discounted
price. It could also be included that communication of acceptance is only complete when offeror
is able to hear or read it clearly (Anderson, Brodie and Riley, 2017). As acceptance must be
communicated to proposer in order to make a contract valid which is very much important. Both
offer and acceptance have no legal effect unless it is well communicated to other party into either
written or spoken form (Robertson, 2016). As in case of Jane v Eric or Gardening Gadgets there
was no acceptance by side of Eric as he did not read the e-mail which Jane sends him and neither
had he accepted it.
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Conclusion for the case 1
So from the above it could be concluded that on part of Eric there is no legal binding for
him to sell goods to Jane on discounted price as he did not accepted the offer of Jane. So it is
advised that Jane is having no legal right in this case for filling any suit in court as there is no
contract between both of them.
CASE 2
Issue:
 Is there is a legal contract between Jane and Grace?
 Do Jane holds any rights under contract law?
 Can Jane recover the amount spent on the renovation?
Rules:
Australian consumer law (ACL):
Element of form a valid contract: For establishment of a legal contract there are 4 essential
elements that must be fulfilled:
Offer: this is the first element that being the formation of a contract. An offer can be
defined as a proposal made by a person to another for selling or purchasing some items or article
(McKendrick and Liu, 2015). This is an expression of willingness to enter into contract under
particular terms. This is made directly to the party to whom it is intended to be made.
Acceptance: for formation of a contract acceptance must be made in response to offer.
The acceptance must full and clear that the terms of offer must be accepted as it is (Cheng,
Smyth and Guo, 2015). The parties can enter into negotiation to reach an amicable decision
regarding the terms of contract. Once all terms are decided both shall accept the same and it must
be communicated to both the parties, and with communication and acceptance to the terms a
valid agreement is formed between parties.
Consideration: this is another requirement to from a valid contract and this can be
defined as the price paid by one party to another for the promise made under the agreement. For
enforceability of contract under common law this is an essential requirement. A promise which
is not supported by consideration is enforceable on the basis of equitable estoppel.
Intention to create legal relation: this is last element to from a contract that is parties
having an intention to enter into legal relation. In most of the cases parties have intention to
make the contact legally enforceable unless the contact is concerned with social or domestic
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relation. Generally in case of commercial or business contract, parties always intend to create
legal obligation (Intention to create legal relation, 2018). The contract made under social
relation is of the nature that do not create legal relations and as such cannot give rise to a contract
and such contracts are not enforceable under the contract law.
Certainty: this is another requirement of a contract which can be defined as the terms and
condition must be clear and certain and not unfair to any of the parties.
Application:
With application of the above rule of contract law in the given case scenario of Jane and
Grace the following things are determined:
Absence of a valid contract: the case starts with an offer made by Grace to Jane for
selling house and for the same Jane accepted the offer as stated in the case of Brambles Holdings
Ltd v
Bathurst City Council. With further negotiation in the terms of the offer both reaches to an
amicable point regarding the sales prices of the house. The sales price is consideration which is
third requirement to form a valid contract. Jane sent her the cheque of down payment and write
Grace an email about the same. On this Grace replied that she have received the cheque and is en
cashing the same (Peden, 2010). This made the offer and acceptance and it was well
communicated to both Jane and Grace. This made a valid agreement between both Jane and
Grace. Now, a discussion related with the major point that will decide the status of the legality
of establishment of the contract is done, that is intention to create legal relation. As mentioned
Jane and Grace were friends and Grace specifically said that “We need not to worry about
lawyers and that she trust Jane”.
Legal rights of Jane under Contract law: As specified in the above rules that in family
and social contract there is no intention to parties to agreement do not intent to create legal
relation and this do not give rise to a contract. In the present case, agreement made is of social
nature and do not give rise to a legal contract (Contract Law, 2018). This means is those
agreements that are not enforceable by the law.
This can stated with the above rules that all elements of a valid contract are present for
the given case of Jane and Grace except one of giving a legal obligation to the contract. This
made the offer and acceptance a valid agreement but not a contract. The contract of not
enforceable under the contract law of the Australia.
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Conclusion for the case 2:
For the case of Jane and grace this can be interpreted that there was not present a legal
contract between both of them. Though, it has a valid agreement with offer and acceptance, and
also the communication the acceptance to the offer after getting into negotiation. But they both
did not intend to create the contract legal that is the contract was not formed under the law and
this did not give the contract legal obligation. Hence, Jane cannot enforce the contract in the
court under the provision of contract law. She has legal right against Grace as getting back her
payment made for the house through cheque and amount spent of the renovation of the house.
She can claim on the basis of presentation of all the evidence proving the fact of payment related
with the purchase and renovation of the house.
CONCLUSION
From the above report it can be Interpreted that for a valid contract there are 4 elements
which have been identifies as offer, acceptance, consideration and intention to create legal
relation. It has been further identified that Jane holds no legal rights against Eric and Garden
gadgets as there was not a valid no contract between both the parties. Furthermore, it can be
concluded that there was not a legal contract between Jane and Grace as one of the major
element to form a contract, that is intention to make contract legally enforceable is missing.
Hence, Jane did not have a legal rights under contract law but she can seek remedies under ADR.
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REFERENCES
Books and Journals:
Anderson, G., Brodie, D. and Riley, J., 2017. The Common Law Employment Relationship: A
Comparative Study. Edward Elgar Publishing.
Cheng, Z., Smyth, R. and Guo, F., 2015. The impact of China’s new Labour Contract Law on
socioeconomic outcomes for migrant and urban workers. human relations. 68(3). pp.329-
352.
Eldridge, J., 2018. 'Surrounding Circumstances' in Contractual Interpretation: Where are we
Now?. Commercial Law Quarterly, 32(3), pp.3-11.
Floyd, L., Williams, D. and Pickering, A.C., 2017. Employment, Labour and Industrial Law in
Australia. Cambridge University Press.
McKendrick, E. and Liu, Q., 2015. Contract Law: Australian Edition. Macmillan International
Higher Education.
Peden, E., 2010. Incorporating terms of good faith in contract law in Australia. Sydney L.
Rev. 23. p.222.
Robertson, A., 2016. The Foundations of Implied Terms: Logic, Efficacy and Purpose.
Smith, J., 2016. Should enterprise agreements1 be interpreted by the application of the rules that
apply to common law contracts of employment or statutory instruments?-issues for
consideration. Brief, 43(5), p.18.
Online
Contract Law. 2018. [Online]. Available through
:<https://www.australiancontractlaw.com/contractlaw.html>.
Intention to create legal relation. 2018. [Online]. Available through
:<https://www.australiancontractlaw.com/law/formation-intention.html>.
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