Analyzing Contract Law & Promissory Estoppel: Car Rally Case

This case study delves into a scenario involving Fast Track Oils Ltd and Jumping Jack Darcy, focusing on contract law and the potential application of promissory estoppel. Darcy, sponsored by Fast Track Oils, participated in the East to West Rally despite lacking a required roadworthy certificate...Read More

Law Project

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Advice Jumping Jack Darcy as to whether he can claim successfully the winner’s prize under
the contract law............................................................................................................................3
Do you think Jack could use the promissory estoppel to try to enforce the promise?................5
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
The legal system of the Australia comprises of multiple forms which includes the written
Constitution, statutes, unwritten constitutional conventions and judicially determined system of
common law. The legal traditions as well as institutions are derived substantially from the
English legal system and Australia is the common law jurisdiction and its judicial system has
been originated in common law system of the English law. The constitution of it sets the federal
system of the government and there are different legislatures at national level which have the
power to enact the law which have overriding force on different number of express topics
(Goldberger, 2020). This report will cover a case scenario which deals with the law of contract
and promissory estoppel.
MAIN BODY
Advice Jumping Jack Darcy as to whether he can claim successfully the winner’s prize under the
contract law.
Enforceability
The law of contract mainly encompasses the regulations and laws which are directed
towards the enforcement of many promises. This legislation focuses mainly on common law of
the contract with some of the reference to the relevant legislations. Under the law, there is no
specific procedure or form required for the contract, although, it is considered as a good practice
to record contractual terms in written form as more weightage is given to the party’s intention
which is evidenced in the documentary form. But nevertheless, the Australian law gives
recognition to the oral contracts. The essential elements of the valid contract include the
following-
 Agreement: It is the foremost requirement of the valid contract wherein offer and
acceptance must be present. It also involves the meeting of mind of the parties or the
consensus which must be between two or more of the parties. An offer is a willingness of
party wherein it promises to do or abstain from doing something. The acceptance is when
offeree agrees to be mutually bound to terms of contract by way of giving the amount of
consideration or anything of the value such as money in order to seal a deal (Pardolesi,
2017).

 Consideration: It is a price which is being asked by promisor in the exchange of their
promise and is also the essential requirement in the Australia in order to make a contract
binding on parties. It is the complex requirement which contains of many rules as well as
qualifications.
 Intention to create the legal relations: In order to make existence of the contract for
parties to agreement, there must be intent of parties to create any legal relations. The onus
of this lies on parties who seeks to prove that contract must demonstrate the intention as
well as relationship between parties. In the case of Rose v. Frank, the judicature held that
there is a commercial contract, the court takes the presumption that there is intention of
the parties to create the legal relations while in the case of Jones v. Padavatton, the court
held that in case there is a social or domestic contract, there is presumption raised that no
intention is present among parties to create legal relations.
 Capacity: In order to enter into the valid contract, the parties to it must be competent and
have capacity to enter into it. It involves that the party to the contract must not be
suffering from any mental disorder, or be in the state of intoxication or bankrupt or make
lack age capacity such as being minor (Gerhart, 2021).
Issue in the case
Whether Jumping Jack Darcy is entitled for the winning prize despite violating the
condition of entry at rally?
Application of law
In the given case scenario, there is a contract being created between Fast Track Oils Ltd and
Jumping Jack Darcy wherein the Fast Track Oil will direct Darcy top compete in the car races
and in return of it, it will be entitled for the weekly payments. So there is fulfilment of all the
essential elements as there is agreement between the parties, amount of consideration, capacity
of parties to enter into contract and intention to create the legal relations as it is a commercial
contract.
Now that Fast Track Oils have directed it to drive in the East to West rally, Jack Darcy does
not have the roadworthy certificate which was considered as an important condition for the entry
into the race. But the junior official of the rally asked him to go in the rally and participate and
cited the reason that he was a good racer and will give great delight to many people after seeing
him to drive in rally. There are many number of ways in which the terms can be classified that

can impact on the remedies that are available for breach. It includes the terms which can be
classified as condition and if it is breached, the innocent party is allowed to make termination of
the contract. There are different types of conditions which includes condition subsequent,
precedent and concurrent, and in context to given case scenario, condition precedent is present
as the roadworthy certificate was essential before making the participation at the rally. Now
comes the types of performance which includes subsequent performance, satisfactory and
divisible performance. In this case, there is satisfactory performance wherein the contract can be
contingent on satisfaction of the opinion or taste of the person and in order to determine whether
the rejection of performance was reasonable or not, the good faith test is applied by court and in
case rejection is made in the bad faith, court shall enforce the contract (Merkin and Saintier,
2019).
Now that the satisfactory performance is given by Jumping Jack Darcy and the rejection of
performance from Fast Track Oil was made in bad faith it was influenced from the comments of
social media and that it does not show up the roadworthy certificate, so the court will enforce this
contract and Jumping Jack Darcy will be entitled for the winning prize.
Moreover, when there is breach of condition then the compliance with condition may be excused
under many circumstances. As per general rule, if facts of case excuses the compliance with
condition, there can be excuse performance of promise and excuse for the non-performance of
condition may exist in different forms like waiver wherein there is intentional relinquishment of
known right of the performance of condition. And in case there is unintentional failure in
performing the condition, it will result in the forfeiture and the court may make excuse of the
compliance so that injustice can be prevented. The duty of the performance by other party can
arise just as though a condition has been fulfilled if the compliance with the condition is excused.
In the case of Associated Newspapers Ltd v. Bancks, the judicature has held that a promise by
plaintiff must not be made if it is not assured that the defendant would perform it and defendant
must not make any promise unless it is assured that its work shall be done (Arvind, 2017).
Hence, it can be said that there was unintentional compliance with the condition by Jumping
Jack Darcy so he must be made entitled for the winning prize as there was unintentional excuse
of condition.
Do you think Jack could use the promissory estoppel to try to enforce the promise?
Promissory estoppel

It is meant to keep the people from going back to their promises to detriment of others. It
is the legal doctrine which stops the person to go back to the promise even when there is absence
of the legal agreement or the contract. It states that the promise is mainly enforceable by the law
when the person makes the promise to the other person and the other person relies on it to its
detriment. There are many elements of the promissory estoppel which includes the following
which must be fulfilled so that it can be triggered-
 Legal relationship: There must be some kind of a legal relationship being existed or
should be anticipated between parties. commonly, it shall be the contractual relationship
which means that parties to the contract must have formed the legal agreement.
 Promise: Then, out of two, one of the parties is required to make the promise to the other
or representation of the fact. In order to hold up in the court, promisor must make the
promise in the way which can cause other party to make assumption that promisor can
follow through. The promise must be believable and reasonable (McKendrick, 2019).
 Reliance: Another requirement for this legal doctrine is that a party who receives a
promise or the representation should have been act in the justifiable reliance on that
statement.
 Detriment: A party which have relied on promise should have suffered some kind of
detriment. Commonly, promise must have the ability to prove that they are being worse
off than it was prior to making of promise.
 Unconscionability: The last element is this which is to be shown so that promissory
estoppel. It is to be proved that if one of the party do not fulfil the promise which is being
to other, it may create the circumstance of the inequality between parties. this element is
considered as backbone of the estoppel (Stone and Devenney, 2019).
Application on the case scenario
In the given case, Jumping Jack Darcy have relied on the promise of the junior official
who provided it the entry in the rally even if there was absence of the roadworthy certificate. As
Jumping Jack Darcy was not aware regarding the certificate, and junior official have asked to
participate in the rally so it relied on its promise and made its participation. This turned out to be
detrimental for him as he was not being given the winning prize of the amount $750,000 despite
of winning the rally with the wide margin. In the case of Waltons Stores (Interstate) Ltd v.
Maher, the court held that party subsequently have failed to fulfil that promise and other party to

whom the promise is being made suffers the loss or detriment as the result (POOLE, Devenney
and Shaw-Mellors, 2019). In context to the given case scenario, junior official have made
promise to Jumping Jack Darcy to participate in rally despite of absence of the roadworthy
certificate and later on informed the executives of the Fast Track Oil who is in charge of the race
of what he has done. This shows that it has failed to fulfil its promise and Jumping Jack Darcy
have suffered the loss due to it. So the doctrine of promissory estoppel shall apply in this and
Jumping Jack Darcy can claim its winning prize worth $750,000.

CONCLUSION
It is concluded from this report that the contract law is a common legislation which
regulates the relation, conduct and rights of the parties who have entered into the valid binding
contract. As per Australian contract law, there are many essential elements involved in it which
includes the agreement, capacity, consideration and intention to create the legal relations. There
is a doctrine of promissory estoppel which states that when a party fails to fulfil the promise and
other party to whom the promise is being made suffers any loss or detriment as its result, this
doctrine comes into application. The party may recover on basis of promise which is being made
when party’s reliance on that is reasonable and party who is attempting to recover have
detrimentally relied on promise.

REFERENCES
Books and Journals
Arvind, T.T., 2017. Contract law. Oxford University Press.
Gerhart, P.M., 2021. Contract Law and Social Morality. Cambridge University Press.
Goldberger, J., 2020. The concept of mistake in Australian contract law: Part 2 of 3. Commercial
Law Quarterly. 34(3). pp.11-37.
McKendrick, E., 2019. Doctrine and Discretion in the Law of Contract Revisited. The Chinese
Journal of Comparative Law. 7(1). pp.1-25.
Merkin, R. and Saintier, S., 2019. Poole's Textbook on Contract Law. Oxford University Press,
USA.
Pardolesi, P., 2017. Promissory estoppel. In Comparative Contract Law. Edward Elgar
Publishing.
POOLE, J.D., Devenney, J. and Shaw-Mellors, A., 2019. Contract law concentrate: law revision
and study guide. Oxford University Press.
Stone, R. and Devenney, J., 2019. The modern law of contract. Routledge.