Contract Law Case Study: Analysis of Key Cases and Principles

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Contents
Solution 1.........................................................................................................................................2
Solution 2.........................................................................................................................................2
Solution 3.........................................................................................................................................2
A – Issue.......................................................................................................................................2
Law...............................................................................................................................................2
Application and conclusion..........................................................................................................3
Case..............................................................................................................................................3
B – Issue.......................................................................................................................................3
Law...............................................................................................................................................3
Application and conclusion..........................................................................................................3
Case..............................................................................................................................................3
C – Issue.......................................................................................................................................3
Law...............................................................................................................................................3
Application and conclusion..........................................................................................................4
Case..............................................................................................................................................4
Solution 4.........................................................................................................................................4
Issue.............................................................................................................................................4
Law...............................................................................................................................................4
Application and conclusion..........................................................................................................4
Case..............................................................................................................................................4
Solution 5.........................................................................................................................................4
Issue.............................................................................................................................................4
Law...............................................................................................................................................4
Application and conclusion..........................................................................................................5
Case..............................................................................................................................................5
Solution 6.........................................................................................................................................5
Solution 7.........................................................................................................................................6
Issue.............................................................................................................................................6
Law...............................................................................................................................................6

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Application and conclusion..........................................................................................................6
Case..............................................................................................................................................6
Reference List..................................................................................................................................7

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Solution 1
The leading case of Ermogenous v Greek Orthodox Community (2002) deals with the presence of
legal intention amid the parties in a contract. The Industrial Relations Court and the Supreme
Court had decided that when the parties are in any kind of religious or family relationship, then,
there is no legal intention that is present. However, the ruling was not found to be favorers by the
High Court and by reversing the decision of courts, the High Court submitted that there is no
strict rule that needs to be followed and it is the concept of objectivity that must be laid down to
decide whether the parties have legal intention or not and not the status of the parties.
The leading case of Ermogenous v Greek Orthodox Community (2002) is a landmark case and it
is of great significance for future cases as with the coming of the decision, there can be a valid
and legal contract that can be made amid the parties even when they are sharing cordial
relationship. On the same footing, now, there is no strict rule that the people in commercial
relations are bound to have legal relationship. It is the circumstances of the cases, the acts of the
parties, etc, which must be kept in mind to decide the presence of legal intention amid the
parties.
Solution 2
a. The effect of the clause that submits that the document does not gave rise to any legal
relationship and is not subject to any jurisdiction in law implies that the parties are not in
any manner willing to abide by the court of law and that the contract is only gratuitous in
nature.
b. The effect of the clause that submits that no court has power to arbitrate in the matter of
dispute in a contract simply implies that the parties do have intention to abide by the
contract legally but the disputes are to be settled privately and amicably.
Solution 3
A – Issue
Can company claim its $500 from David?
Law
Consideration is a contractual element which makes a contract enforceable. It is something
which moves from the promisor in support of the promise made by the promisee. When the
debtor pays part payment to the creditor then as per Pinnel's Case [1602] it was not a sound

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consideration. But, if the debtor pays part payment before the due date then it is a sound
consideration (Foakes v Beer(1884). (Latimer 2012)
Application and conclusion
$ 2000 is borrowed by Donald from Ace. Donald has to pay the money along with interest
($500) by November, 30. Donald paid $2000 in full settlement on 10th November to Ace. The
payment is valid and thus the company later cannot demand $ 500.
Case
Foakes v Beer(1884).
Pinnel's Case [1602] 5 Co. Rep. 117a
B – Issue
Can company claim its $500 from David?
Law
When one of the contractual party makes a promise and the other party acts on such promise then
the first party is obligated to comply with is promises as per promissory estoppel (Waltons Stores
(Interstate) Ltd v Maher (1988).
Application and conclusion
Company promises to take sale proceeds of Donald car in exchange if full settlement. Donald
pays $2000 in full settlement. Thus, as per promissory estoppel company later cannot demand $
500.
Case
Waltons Stores (Interstate) Ltd v Maher (1988).
C – Issue
Can company claim its $500 from David?
Law
Payment in full satisfaction by a third party to the creditor is considered to be a good
consideration in law and is held in Cook v Lister (1863).

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Application and conclusion
Donald’s daughter gave $2000 to company on the promise that the company will not sue David
for interest and is a valid consideration in law.
Case
Cook v Lister (1863).
Solution 4
Issue
Can Chelsea compel Bill to present him Ferrari instead of Mazda?
Law
Consideration is something which moves from the promisor in support of the promise made by
the promisee. No contract is valid without consideration. (Clarke 2019)
Application and conclusion
Bill gave a promise to present a Ferrari to Chelsea. However, in place of Ferrari, a Mazda is
gifted to her by bill. The promise by Bill was never corroborated by Chelsea by any sound
consideration. Thus, the contract is not enforceable and thus Chelsea cannot force Bill. The
contract is not enforceable in law for the lack of consideration.
Case
Glasbrook v Glamorgan County Council [1925].
Solution 5
Issue
i. Is Bob liable to honor the cause on ticket?
ii. If Bob has visited the stadium 10 times, then, is the clause enforceable?
Law
Exclusion terms are those which are made part of the contract before its formation and which
restricts the liabilities of the contractual party on the occurrence of a decided event. When the
term is unilaterally made part of the contract, then, the clause gains its enforceability provided
the clause is brought to the notice of the affected party by reasonable means. (Stone and
Devenney, 2017)

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Application and conclusion
Bob parked his car at the stadium and was given a ticket. The ticket contains a restriction clause
which prevents the liability of the car parking authority from any kind of loss caused to the car or
its accessories.
i. On returning to the car, the car was found to be broken by the supporters of the losing
team. Now, the clause was on ticket but Bob is not aware of the same. The car
parking authority has made no efforts which are reasonable to make Bob aware of the
same. Thus, there is no enforceability of clause and Bob can sue for damages.
ii.
Considering that Bob has visited the place 10 times and thus he must have knowledge that the
clause is part of ticket. In such case, he was already aware of the clause before the same was
handed over to him.
Thus, he cannot sue for the loss caused to him.
Case
J Spurling Ltd v Bradshaw [1956] 1 WLR 461.
Henderson & others V Stevenson (1875) 2 R (HL) 71.
Solution 6
The negotiations are those statements which are exchanged between the parties before the
formation of the contract. However, it is not every negotiation which turns in to a term of the
contract.
A negotiation is a term to the contract when: (O'Riordan 2003)
i. it is made written in the textual documents.
ii. Oral negotiations are also considered as term provided the parties have knowledge
that they want to abide by the term and that it is in consistent to the written term of
the contract.
iii. It is the intention of the party which also decides that a negotiation is a term or not.
iv. However, if the party is making negotiation just for presentation purposes then the
same are representations and are not part of the contract.

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Solution 7
Issue
Are there any provisions of the wrongs Act 1958 are violated by Super Paper Products Ltd by
providing bad quality of paper?
Law
When any buyer buys goods from the seller then it is obligatory on the seller that he must
comply with the statutory provisions of the Goods Act 1958. Every seller has certain implied
condition: (Coote 2010)
i. That the goods that are sold by him on the basis of some description, then, the goods
that are bought by the buyer should be equivalent to such a description and is
evaluated in section 18;
ii. That the goods which are purchased by the buyer by specifying his needs then the
goods which are actually supplied should meet such needs and is analyzed under
section 19 of the Act.
Application and conclusion
Super Paper Products Ltd is a company which sale paper. David bought paper from the company
and told the company that he is need of wrapping paper. Later the paper that was supplied to
David was used by him for printing purpose but the paper was not able to print. It is submitted
that the description and the purpose for which the paper is required is told by David and the same
was provided by the company. But, it was David who misutilised the paper for printing purpose
whereas he needed the same for wrapping purposes. So, the implied conditions are not violated
and action can be raised.
Case
David Jones v. Willis (1934).

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Reference List
Books/Articles/journals
Coote, B 2010, Contract as Assumption: Essays on a Theme, Bloomsbury Publishing.
Stone, R and Devenney, J 2017, Text, Cases and Materials on Contract Law, Taylor & Francis.
Latimer, P 2012 , Australian Business Law 2012 (CCH Australia Limited, 2012).
O'Riordan, J 2003, A2 Law for OCR, Heinemann,.
Legislation
The Goods Act 1958
Case Laws
Cook v Lister (1863).
David Jones v. Willis (1934) 52 CLR 110.
Foakes v Beer(1884) 9 App Cas 605.
Glasbrook v Glamorgan County Council [1925] AC 270.
Henderson & others V Stevenson (1875) 2 R (HL) 71.
J Spurling Ltd v Bradshaw [1956] 1 WLR 461.
Pinnel's Case [1602] 5 Co. Rep. 117a.
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
Online Material
Clarke, J 2015 Consideration- Australian Contract Law <
https://www.australiancontractlaw.com/law/formation-consideration.html>.