Contract Law Case Study: Analysis of Precedent and Contracts

This document presents a comprehensive analysis of three contract law case studies. The first case examines the doctrine of precedent, determining whether a decision of the High Court is binding on the Victorian Supreme Court of Appeal. The second case focuses on contract formation, specifically the rules of offer, acceptance, and revocation, analyzing whether a valid contract was formed between two parties considering the timing of communications. The third case explores the intention to create legal relations in a domestic setting, examining whether a contract exists between friends, considering the principles from cases like Merritt v Merritt and Balfour v Balfour, alongside the application of the objective test. Each case study includes the identified issue, relevant rules, application of those rules to the facts, and a conclusion. The document references key cases such as Byrne v Van Tienhoven, Adams v Lindsell, and Carlill v Carbolic Smoke Ball Co to support its arguments.

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

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Case study 1
Issue
The identified issue in relation to the case study is that whether the decision of the High
Court or its own decision would be binding upon Victorian Supreme Court of Appeal.
Rule
According to the doctrine of precedent a Lower court is bound by the decision which has
been provided by a Higher Court having similar facts. The judges do not have the right to deviate
from a decision which has been provided by the Higher Court. For instance a decision which has
been made by the high court would be binding upon the decision of the judges of the supreme
court of any state as per Parker v the Queen (1963) 111 CLR 610.
On the other hand the decision which has been made at the same level of court is not
binding upon the Court. The decision is merely persuasive in nature. This means that the judges
at same level may only be persuaded by the decisions of each other made in relation to similar
facts. For instance a decision which has been made by the High Court is only persuasive to the
judges of the high court and not binding upon it.
Application
From the above discussed rule it is clear that the decision which has been provided by the
High Court would be applicable in Bryson's case because the Victorian Supreme Court of appeal
is at a lower level than the High Court. The decision of the high court is binding upon the judges

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of the supreme court of appeal. In the same way the decision of the VSCA would not be binding
upon the judges in the Bryson’s case as it is at the same.
Conclusion
The decision of the high court would be applicable.
Case study 2
Issue
Whether a valid contract has been formed between Nico and James based on the
provisions of revocation of offer and acceptance.
Rule
In the case of Byrne v Van Tienhoven (1880) LR 5 CPD 344 it has been ruled by the court
that revocation of the offer have to actually reach the party before the letter of acceptance has
been posted or the offer has been accepted in order to be effective. Merely posting the revocation
would not make it effective.
According to the principles of Adams v Lindsell (1818) 1 B & Ald 681 an acceptance is
said to be made by the use of post when the acceptor has sent the letter of acceptance. Even if the
letter does not reach the intended person the acceptance is said to be made.
In case of email acceptance is made when the Email reaches the mailbox of the intended
person as per Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd [2015] WASCA 21
Application

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In the given situation an offer had been made by James to Nico for organising a party for
50 people at $4,000. However James sent a letter of revocation on 7th November to Nico. The
letter was received by Nico on 9 November and before that he had sent a letter of acceptance to
James on 7 November. Therefore as the letter of revocation did not reach Nico before the
acceptance has been made through email a contract has been created between Nico and James.
Conclusion
There is a valid contract between Nico and James and he can go ahead with the party
Case study 3
Issue
The identified issue in this case is that whether a contract has been formed between Jane
and Jilly
Rule
In the case of Merritt v Merritt [1970] 1 WLR 1211 it had been provided by the court that
where there is a domestic relationship between the parties presumption is generally present that
there was no intention of creating a legal relationship between them. The presumption can
however be rebutted by the parties through providing proper evidence.
In the case of Balfour v Balfour [1919] 2 KB 571 it was identified by the court through
the application of the objective test that intention of creating legal obligation was present
between the parties. This was because any reasonable person in the position of the plaintiff

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would assume that intention of creating legal obligation is present. The intention is further
strengthen when the plaintiff has provided the consideration in relation to the offer.
The objective test was also used in the Carlill v Carbolic Smoke Ball Co [1893]1QB 256.
Application
Both Jane and Jilly have been great friends. Therefore the principles of Merritt case
would suggest that there is no ICLR between them. However the presumption can be rebutted as
per the Balfour case. In addition by applying the carbolic case it can be stated that any person in
the position of jame would have been deemed the existence of a legal intention. Jane has already
done the part of her consideration. Thus there is a contract between the parties
Conclusion
There is a valid contract between Jane and Jilly

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References
Adams v Lindsell (1818) 1 B & Ald 681
Balfour v Balfour [1919] 2 KB 571
Byrne v Van Tienhoven (1880) LR 5 CPD 344
Carlill v Carbolic Smoke Ball Co [1893]1QB 256
Merritt v Merritt [1970] 1 WLR 1211
Parker v the Queen (1963) 111 CLR 610
Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd [2015] WASCA 21
1.