Contract Law Case Study: Legal Analysis of Scenarios & Implications

This case study delves into various contract law scenarios, analyzing legal issues and potential outcomes. The first scenario examines an agreement between Rob and Brad, focusing on the validity of consideration and the potential for Melaine to sue for breach of contract. The second scenario explores the principle of promissory estoppel in a situation involving mistaken identity and non-payment for furniture. The third scenario addresses misstatement and misrepresentation in the context of financial advice, determining whether Jeff owes a duty of care to Rob. Finally, the fourth scenario emphasizes the importance of human rights in healthcare, specifically the dentist's obligation to provide equitable and ethical treatment to all patients. Desklib provides this and other solved assignments for students.

Running head: CONTRACT LAW
Contract Law
Name of the Student
Name of the University
Author note

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Scenario 1
Issue
Rob, the owner of Dental Delights Pvt. Ltd. entered into an agreement with Brad, who
was a builder. Since Rob was planning to open for business, he requested Brad to finish the work
three weeks prior and he also promised to pay him bonus for finishing early. Brad roped in
Melaine and the work was completed as Melaine put in hard work for 10 consecutive days. After
celebration and lunch, Brad promised Melaine an extra of $3000. On the next day, Melaine and
Brad had a fight and Brad asked her to leave also asked her to forget the extra bonus she had
paid. The parties are governed by Contract law.
Rules/Relevant Law
In the case of Williams v Roffey Bros and Nicholls (Contractors) Ltd [1990] 1 AII ER
512, it was held that when a practical benefit is received out of any contract, it will be considered
a valid consideration. Therefore, the practical benefit being the early completion of work, it can
be said that the consideration is valid and therefore Melaine can sue Brad. In the case Musemeci
v Winadell Pty Ltd (1994) 34 NSWLR 723, the same principle was upheld that in case of an
benefit received in return of an assigned work, it will be termed a valid consideration.
Application
For a contract to be valid in law, a few elements need to be taken into consideration-
parties, a legally enforceable agreement and consideration. In this case, Melaine is the interior
designer of Brad who was asked to work on ten consecutive days to finish the work on time.
After doing so, they had a fall out and Brad decided to not make the payment as was promised.

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The relationship between Brad and Melaine is that of employer and employee and the
consideration here is the $3000 that Brad had promised to pay Melaine for completing the work.
Conclusion
Contract can be either express or implied. In case of an express contract, the terms are
clearly laid down and in case of an implied contract, the terms are understood from the contract
and they are not clearly spelled out. Contracts can again be of two kinds- oral or written. When
the terms of the contract are communicated verbally, it is called oral contract and when it is done
in a formal way, it is called a written contract. In this particular scenario, it was an express and
oral contract with a valid consideration and therefore Melaine can sue Brad for breach of
contract.
Scenario 2
Issue
Rob has bought furniture but doesn’t want to keep them but the shopkeeper will not take
it back because it has been used. Having no way of selling it, Rob puts and advertisements for
$20,000 and responding to the advertisement, a man comes to check it. The man has an uncanny
resemblance with a well-known actor Vince Colosimo and that man asks Rob to call him Vince
as a result of which Rob is convinced that he is the famous actor. The truth is that he is not the
actor and on the contrary, he is a rogue who looks like actor. “Vince” loves the furniture and
gives Rob $5000 and says the remaining $15,000 he will transfer electronically in two days.
Next day, two of Vince’s friends come and collect the furniture. After not getting the payment,
Rob takes the help of police who trace the furniture to Judy who says that she has bought from
someone who looked like a celebrity.

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Rule/Relevant Law
In the case of Walton Stores (Interstate) v Maher (1988) 164 CLR 387, the principle of
Promissory estoppels was discussed wherein the points were laid down that would make
successful claim of an estoppels. In this case, a legal relationship was assumed by Rob and based
on that assumption
Application
In the current case, the rogue who looked like the celebrity Vince, convinced Rob into
believing that he will pay the remaining amount by paying the $2000. From the conduct of
“Vince” Rob was convinced that he will pay and it formed an implied contract as it could be
gauged from the action of “Vince”, it was an assumption made on the part of Rob. Acting on that
assumption, Rob gave the furniture to him and as a result of that reliance suffered detriment. The
principle of promissory estoppels applies in this case because though there has been a failed
compliance, there has been an assumption on the part of Rob and based on that assumption, Rob
has faced an economic loss of $15,000.
Conclusion
Rob sold the furniture and as a result faced an economical loss. Judy had no knowledge
of the legal relationship that existed between Rob and Vince and without any knowledge bought
the furniture from Vince and therefore he is not liable to pay any amount to Rob. No legal or
contractual relationship exists between Judy and Rob and therefore Rob cannot recover the
amount from Judy. Judy had no intention to cause any economic loss to Rob and in good faith
had bought the furniture from Vince.

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Scenario 3
Issue
Jeff Price is an accountant having sound knowledge of his subject. Rob is a dentist who
meets Rob at a party and tells his that he wants to expand his business. Jeff being slightly
inebriated advices Rob to expand his business telling him that his business is in a safe position to
expand, relying on Jeff’s advice, Rob borrows an amount of $50,000 but it turns out that it was a
bad business investment. Rob has defaulted on the Northpac loan and as a result of the failure to
pay Jeff has been sued for damages.
Rule/Relevant law
Misstatement is a false statement which has been made without taking proper
consideration of facts (Roberts 2017). A misstatement is a negligent statement not made
carefully and which has the capability to mislead anyone.
Misrepresentation is when a party makes a false claim based on facts which are untrue
and thereby induces the other party to enter into the contract, it can give rise to an actionable
claim (Van, Reinecke and Lubbe 2016).
Application
A misstatement can be both fraudulent and non-fraudulent. In case of a non-fraudulent
misstatement, it is very difficult to fix liability because intention cannot be gauged in such cases.
Any statement made with an intention to cause harm can be termed unlawful whereas if the
intention to cause any loss is missing, it is not possible to assign liability. Misrepresentation is
any untrue fact which is directly linked to the terms of the contract. Again, when the person

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induces the other party to enter into the contract, he must have recklessly made a statement
though knowing the truth. In the respondent’s defence, if it can be proved that the other person
relied on his own judgment and not on the respondent’s claims, he cannot make a case of
misrepresentation.
Conclusion
When it comes to attaching duty of care, it is not done so in cases of financial matters.
Liability can only be attracted in cases where the person had reason to base his action on the
person’s advice. In the present case, Jeff was an accountant and he does not owe any duty of care
towards Rob. Jeff was in an inebriated state and having being aware of his conditional to not give
sound advice under the influence of alcohol; Rob should not have based his decision on his
advice.
Scenario 4
Human rights are basic inalienable rights which are paramount for a healthy and secure
living. Every human being has basic human rights which shall include health, life, dignity and
liberty (Fussler, Cramer and Vegt 2017). In a globalized world, the need of the hour is to
recognize that every person has the right to live with dignity and their basic human rights should
be respected. A human right to health suggests that everyone has the right to get the maximum
attainable health which shall be free from any abuse or torture.
The UN Global Compact Human Rights which are a derivation of Universal Declaration
of Human Rights mandate that everyone should be treated with equality irrespective of their
gender, race, ethnicity, caste and nationality (Hakim 2015). As a practicing dentist, it is the moral

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duty of Rob to ensure that his patients get proper medical care and they are not discriminated on
the basis of any trait which is intrinsic to their being.
Rob, being a dentist has an obligation towards serving others and therefore to make sure
everyone’s health issues are addressed and taken care, he has to take special care. His profession
is to help people in need of healthcare and keeping in mind the UN Declaration of Human Rights
and its basic principles, it is imperative that he treats his patients with utmost care and passion.
Access to medicine is another aspect of ensuring that everyone is healthy and treated with
equality (Gibson 2017). Medicine should be free to people in dire need of it and Rob should
make sure that his patients get proper medicinal aid when they are in need and in cases of
patients who cannot expensive medical treatment, they should be given free medicines to
ameliorate their pain.
.

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Reference
Fussler, C., Cramer, A. and Van der Vegt, S., 2017. Raising the bar: creating value with the UN
Global Compact. Routledge.
Gibson, J., 2017. Intellectual property, medicine and health: current debates. Routledge.
Hakim, F.Y., 2015. Universal Declaration of Human Rights. IJIL, 4(1).
Roberts, M., 2017. Negligent Misstatement in the Court of Appeal.
Van Huyssteen, L.F., Reinecke, M.F.B. and Lubbe, G.F., 2016. Contract: General Principles (p.
98). Cape Town: Juta.