University Business Law Assignment: Contract Law Case Analysis

This business law assignment delves into the core principles of contract law through a case study involving Roman, Sinclair, Nikola, and Hayden. The assignment analyzes whether a valid contract was formed between Roman and Sinclair for the sale of a car, considering elements such as offer, acceptance, intention to create legal relations, and consideration. It references key legal precedents, including Carlill v Carbolic Smoke Ball Company and Australian Woollen Mills Pty Ltd v The Commonwealth, to support its arguments. The assignment also examines the impact of Hayden's minor status on the contract's validity and explores the implications of delayed payment and potential breaches. The analysis concludes that a valid contract existed between Roman and Sinclair, but not between Nikola and Hayden due to Hayden's age. Furthermore, the assignment includes a bibliography of relevant cases and legal resources.

Running head: BUSINESS LAW
BUSINESS LAW
Name of the Student
Name of the University
Author Note

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Issue
The primary issues in the provided situation are as follows:-
 Whether an offer has been forwarded between Sinclair and Roman and the offer has been
made by whom.
 Whether the offer had been accepted and in what manner was the acceptance
communicated or expressed.
 Whether an intention was present for establishing legal relations.
 Whether any consideration had been forwarded.
 Whether there would be any reason as to why a valid contract might not be established
between Hayden and Nikola.
Rule
The case of Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 11 shall be
considered to be a significant case in connection to the provided situation. This particular case
was in relation to a flu cure or remedy known as the "carbolic smoke ball". It had been advertised
by the manufacturer that if any purchaser discovers that the cure or remedy does not work, then
that purchaser would be granted an amount of hundred pounds, a substantial quantum of money
during that time. It was found that the organization was bound in relation to its advertisement.
The advertisement had been interpreted as offer that the purchaser accepted, by utilizing the
smoke ball, hence, establishing a contract. It was held by the Court of Appeal that all the
essential components in relation to a contract were present, which included an offer and the
1 Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1.

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acceptance concerning the offer, an intention for the establishment of legal relations as well as a
consideration.
Australian Woollen Mills Pty Ltd v The Commonwealth [1954] HCA 202 must be
considered to be a pertinent case in connection to the provided scenario. In this specific case, it
was said that the presence of any agreement in relation to the involved parties is generally
evaluated with the help of the rules relating to offer and the acceptance in connection to that
offer. An offer may be conveyed as a strong indication or signal by an involved party of an
inclination to be bound by certain conditions or terms.
Beaton v McDivitt (1987) 13 NSWLR 1623 shall be regarded as an important case in
connection to the provided scenario. In this specific case, it was mentioned that the second
component that is compulsory in relation to the formation of contract is consideration. A
particular promise shall be enforced or implemented as a contract only when a consideration
exists to support such enforcement.
Musumeci v Winadell Pty Ltd. (1994) 34 NSWLR 7234 must be regarded as a pertinent
case in relation to the provided scenario. In this specific case, a thirty reduction in rent had been
agreed upon by Winadell in case of Musumeci. However, certain other disputes between
Winadell and Musumeci had not been resolved, and afterwards it was decided by Winadell that
he does not wish to keep Musumeci as a tenant. In order to evict and remove Musumeci, it was
argued by Winadell that the new and fresh lease at decreased rent was not binding in the legal
sense. The issue in this case was whether Musumeci had provided adequate consideration in lieu
of the promise of Winadell to cause a reduction in the rent that would give rise to a binding
2 Australian Woollen Mills Pty Ltd v The Commonwealth [1954] HCA 20.
3 Beaton v McDivitt (1987) 13 NSWLR 162.
4 Musumeci v Winadell Pty Ltd. (1994) 34 NSWLR 723.

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agreement. It was held that the promise to cause a reduction in the rent was adequately supported
and upheld by a consideration, and hence, legally binding.
Ipex Software Services Pty Ltd v Hosking [2000] VSCA 2395 shall be considered to be a
significant case in connection to the provided scenario. In this specific case, a software company
was owned by Hosking. An agreement was reached between Hosking and Schwalb that the
company of Hosking would merge with Ipex Software Company of Schwalb. Schwalb indicated
to Hosking in an informal manner that Hosking would receive certain shares in relation to the
new association of companies. Prior to the formalization of such undertaking, the business of
Hosking was transferred by him to the new association. Only when such step was taken by
Hosking, Schwalb forwarded a written promise stating that five percent shares in relation to the
new association of companies would be transferred to Hosking. However, Schwalb did not
perform the promise and a suit was filed by Hosking for enforcing the promise. The issue was
that whether the promise was certain in a sufficient manner in order to implement it. It was held
that the promise was certain in a sufficient manner.
Helmos Enterprises Pty Ltd v Jaylor Pty Ltd [2005] NSWCA 2356 must be considered to
be a pertinent case in connection to the provided situation. It was stated that a particular
component in relation to the formation of contract is that the involved parties should establish an
intention in order to give effect to legal relations.
In the case of Merritt v Merritt [1970] EWCA Civ 67, it was stated that nature relating to
the dealings between the wife and the husband was much more than any particular domestic
5 Ipex Software Services Pty Ltd v Hosking [2000] VSCA 239.
6 Helmos Enterprises Pty Ltd v Jaylor Pty Ltd [2005] NSWCA 235.
7 Merritt v Merritt [1970] EWCA Civ 6.

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arrangement. Hence, it was established that it must be presumed that the intention for creating
legal relation existed concerning the wife and the husband.
In the case of Blomley v Ryan [1956] HCA 818, it was stated that if there is an absence of
the capacity for establishing contract, then any specific agreement shall be considered to be void.
Such factors for determining capacity includes intoxication, minor and mental imparity.
In the case of Perri v Coolangatta Investments Pty Ltd [1982] HCA 299, a condition was
present for the completion of the contract. The prerequisite condition was the delivery of the
commodity within a reasonable time. Therefore, when the commodity was not delivered within a
reasonable and rational time, the contract was rescinded for failure to complete the contract in an
adequate manner.
Application
In the given scenario, Roman and Sinclair were good friends. Sinclair purchased a second
hand car from Roman for his daughter named Nikola. After six months, Nikola sold the car to
her friend named Hayden, who is of seventeen years of age. Meanwhile, Roman was not happy
with his friend Sinclair because Sinclair has still not made the payment for the car Roman sold to
Sinclair. Roman tried to forward indications and even indirectly asked Sinclair regarding the
money, although Sinclair did not deliver any answers. Afterwards when Roman demanded the
payment, Sinclair refused to pay anything.
Applying Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 110, it may be said
that in the given scenario, all the essential components in relation to a contract are present, which
8 Blomley v Ryan [1956] HCA 81.
9 Perri v Coolangatta Investments Pty Ltd [1982] HCA 29.
10 Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1.

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included an offer and the acceptance concerning the offer, an intention for the establishment of
legal relations as well as a consideration.
Applying Australian Woollen Mills Pty Ltd v The Commonwealth [1954] HCA 2011, it
may be said that the presence of any agreement in relation to the involved parties is generally
evaluated with the help of the rules relating to offer and the acceptance in connection to that
offer. In the given scenario, an offer has been conveyed as a strong indication or signal by
Roman of an inclination to be bound by certain conditions or terms.
Applying Beaton v McDivitt (1987) 13 NSWLR 16212, it may be said that in the given
scenario, a particular promise has been enforced as a contract only because a consideration exists
to support such enforcement.
Applying Musumeci v Winadell Pty Ltd. (1994) 34 NSWLR 723, it may be stated that the
component of consideration is present in the given scenario13.
Applying Ipex Software Services Pty Ltd v Hosking [2000] VSCA 23914, it may be said
that in the given scenario, the promise was certain in a sufficient manner in order to implement
it.
Applying Helmos Enterprises Pty Ltd v Jaylor Pty Ltd [2005] NSWCA 23515 in the given
scenario, it may be stated that the involved parties should establish an intention in order to give
effect to legal relations.
11 Australian Woollen Mills Pty Ltd v The Commonwealth [1954] HCA 20.
12 Beaton v McDivitt (1987) 13 NSWLR 162.
13 Musumeci v Winadell Pty Ltd. (1994) 34 NSWLR 723.
14 Ipex Software Services Pty Ltd v Hosking [2000] VSCA 239.
15 Helmos Enterprises Pty Ltd v Jaylor Pty Ltd [2005] NSWCA 235.

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Applying Merritt v Merritt [1970] EWCA Civ 616 in the given scenario, it may be stated
that nature relating to the dealings between Roman and Sinclair was much more than any
particular domestic arrangement, hence, intention for giving effect to legal relations were
present.
Applying Blomley v Ryan [1956] HCA 8117, it may be stated that Hayden is a minor,
which renders him incapable for establishing contracts.
Applying Perri v Coolangatta Investments Pty Ltd [1982] HCA 2918, it may be said that
the car was delivered within a reasonable and rational time, and hence, the contract cannot be
rescinded for failure to complete the contract in an adequate manner.
Conclusion
Toc conclude, it may be said that:-
 An offer has been forwarded by Roman towards Sinclair.
 The offer had been accepted by Sinclair when Nikola drove away with the car and
Sinclair agreed to pay the relevant amount.
 An intention was present for establishing legal relations.
 Consideration had been forwarded.
 Contract shall not be established between Hayden and Nikola as Hayden is minor.
16 Merritt v Merritt [1970] EWCA Civ 6.
17 Blomley v Ryan [1956] HCA 81.
18 Perri v Coolangatta Investments Pty Ltd [1982] HCA 29.

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Bibliography
Australian Woollen Mills Pty Ltd v The Commonwealth [1954] HCA 20.
Beaton v McDivitt (1987) 13 NSWLR 162.
Blomley v Ryan [1956] HCA 81.
Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1.
Currie v Misa (1875) LR 10 Ex 153.
Helmos Enterprises Pty Ltd v Jaylor Pty Ltd [2005] NSWCA 235.
Ipex Software Services Pty Ltd v Hosking [2000] VSCA 239.
Merritt v Merritt [1970] EWCA Civ 6.
Musumeci v Winadell Pty Ltd. (1994) 34 NSWLR 723.
Perri v Coolangatta Investments Pty Ltd [1982] HCA 29.