School of Business Law Contract Law Assignment Solution

This document presents a comprehensive solution to a contract law assignment, meticulously analyzing a case study involving a dispute between two parties. The assignment follows a four-step process, identifying the legal issues, explaining relevant legal principles with case law support, applying the law to the facts, and reaching a conclusion. The analysis focuses on the formation of a legally binding contract, examining the elements of offer, acceptance, and consideration, as well as the intention to create legal relations. The document addresses whether a valid contract was formed, considering the communications between the parties and the presence of essential elements. The assignment provides a detailed legal argument, supported by relevant case law, to determine the enforceability of the contract and the potential liabilities of the parties involved. The analysis also explores the concept of social contracts and the relevance of intention and consideration in establishing a legally binding agreement. Finally, the document concludes with the determination of whether a valid contract was formed and the potential liabilities of the parties involved.

RUNNING HEAD: CONTRACT LAW
Contract Law
Name of the student
Name of the university
Author Note

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Reply to question (1):
Step 1:
The main concern regarding the provided case is that whether a legally bound contract is formed
between Rick and Cliff.
Step 2:
A contract can be considered to be legally valid if the offeror provides an offer and that offer
should be accepted by a person who gave the offer. There should be presence of all the essential
elements of a valid agreement given by the offeror. This statement of essential elements of an
agreement can be supported by the case study of Carlill v Carbolic Smoke Ball Co1.
The primary necessity for developing a valid agreement is that there should be an offer in the
agreement and also that offer should be accepted by the person to whom that offer is made. Such
document of contract is necessary to be conveyed and the main focus is to be pointed for the
construction of a legal connection between the parties of the contract which created the contract
by over the terms and conditions. This statement can be supported by the case study of Smith v
Hughes (1871)2.
The essential elements of a valid agreement are explained as follows:
Acceptance:
When there is a presence of an offer in the agreement, there should also be a presence of
acceptance. When a contractual document is made there should be a presence of acceptance from
1 QB 256; (1891-4) All ER Rep 127
2 LR 6 QB 597

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the opposite party from the opposite person. When the offer is clear to the opposite party there
should be an acceptance of the offer once the opposite party is clear with the regulations and the
rules of the offer being made in the contractual document. A contract cannot be considered if the
contractual parties continue to discuss or negotiate there will be no provision to accept that offer.
The contractual parties and make acceptance of an offer either orally or in writing where the
contract is spoken out or being made verbally.
Offer:
The primary element to create a legally valid agreement is an offer. In a contract, there should be
a presence of a promise or an offer. If there is no presence of an offer the contract will be invalid.
According to the contract act the essential element of a contract is the offer. It is such an
essential element from which it will be clear whether the contract is lawfully valid or whether it
will be lawfully acceptable. In a contractual document it is very necessary that a party should
provide an offer. There is a distinction of an offer between an option and an advertisement. For
the creation of a valid contract there should be presence of two parties or more than that, and
those parties of the contract should be lawfully capable of entering into the agreement. When
acceptance of an offer takes place it is considered that unlawfully valid agreement is created.
When an offer is being provided to the opposite party that individual or the person should have a
clear idea what will come in return of the offer made if the offer is being accepted by the
opposite party. For example a family decides to take a tour within agency during the holidays to
a particular place like Hong Kong for a few days. The family makes a contract with the tourist
agency by filling up a form where they accept the regulations and the rules and by signing the
contract it makes clear to the tourist company that the party or the family has agreed and is clear

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to the terms and conditions the mentioned in the form. After filling up the form it is well
understood that the family has entered into a contract with the tourist agency.
Step 3:
In the provided scenario it has been observed that Rick has made offer to Cliff for organising a
trip to Los Angeles. He mainly offered for booking the accommodation and flights for the trip.
Accordingly due to the requirement of Rick he received an offer through email from Cliff
regarding the expense of the trip and about the description of the tour and also about the number
of days that will be required to finish the trip. There was also a presence of consideration or price
about the tour. Therefore the offer made or provided to Cliff was valid.
In return to that offer made, Rick accepted the made offer through email at the required time
given by the offeror. It is seen that Cliff had received the acceptance via email from Rick. But as
his office was closed or locked, he was unable to view the acceptance letter from Rick. Here a
social contract was made as Rick and Cliff were cousins. It can be considered that there was no
intention of creating a legal relation. In the first instance it can be seen that unlawful contract was
formed between them as there was a presence of an offer and acceptance. All the essential
elements of legal contract are seen to be present here; therefore, the contract can be considered as
lawfully valid and enforceable as both of them were major and above 18 years of age, and all the
essential elements of the contract are fulfilling in this given scenario. The above mentioned cases
can be referred for giving strong support to the statements. It would become a social contract if
there were not any consideration or transaction made between them. Travel agency once upon a
time Pty Ltd cannot be held liable first instance.

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A contract made between them was lawfully valid according to the contract law, and there was
the presence of all the essential elements of the contract which makes an agreement lawfully
valid. Accordingly the formation lawful enforceable contract is seen in the given scenario which
involves Rick and Cliff. All these communications were made via email, and according to the
provisions of the contract law, it is saying that an offer is not valid until the mail of acceptance is
received by the offeror. This can be seen in several case studies where the formation of a valid
contract is formed between two friends or cousins, and it becomes legally enforceable according
to the contract law
Step 4:
Therefore it can be concluded that a legally valid contract was formed between Rick and Cliff.
Reply to question (2):
Step 1:
The secondary concern regarding the provided case is whether there was any intention or
consideration of fulfilling the contract present between the contractual parties.
Step 2:
A contract is considered as an official document or an agreement. A contract can be made using
informal or formal terms, or it can be spoken or verbal. It is considered as when a contract is
made there is a development of promise between two or more than two parties where the court
allows for making the judgement. There are many important elements offer valid contract where
there is a presence of intention, consideration, acceptance, capacity and uncertainty.

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Intention for developing lawful relation:
It is also one of the essential element to make a valid contract. It is necessary to carry your
intention for creating a legal relation according to the Contract Act. It has been observed this Act
is silent about the matter of intention for creating a lawful relation as this is one of the essential
requirement for creating a lawful agreement. Strictly it can be said that this element in a contract
creates an agreement does not create a contract until there is a presence of common intention
between the contractual parties which should be e lawfully enforceable. If there is no presence of
intention for creating a lawful relation in an agreement the contract is being subjected to a
lawsuit. For example: when agreement is developed between the children and a parent the
children receive all the possession of property that is being left by the parent after the parent
passes away.
Capacity:
Capacity is one of the essential elements of a contract where the contractual parties should have a
lawful capacity for entering into the contract. The contractual parties should be above the 18
years of age which is considered as the age of major according to the contract law. Those
individuals under the 18 years of age are considered as minor, and they do not carry the capacity
for entering into a contract. As a result people those who have unsound mind or any insane
people do not carry the capacity for entering into a lawful contract. For example, an individual
who is under 18 years of age cannot stay in a hotel. The hotel authority and the staff will not
allow that particular individual who is below eighteen years of age to stay at the lodging house
since that particular person is not major which is considered as 18 years of age or above. For

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staying in a hotel she or he should have a proper guardian who is above 18 years of age or a
parent for accompanying him to stay in a particular hotel.
Certainty:
Another essential element to create a valid contract is a certainty. The regulations and the terms
that are made in an agreement should be understood and stated clearly by the contractual parties
of the agreement. If the contract is not considered as certain it will be not valid. For example: if
any guest I want accommodation in a hotel, he or she must inform about the number of days he
wants to stay and also the type of accommodation that is required. He or she should also state the
date how long they are going to stay and the number of days they will be continuing in that
particular hotel.
Step 3:
In the given scenario, it has been observed that there was no legal intention for creating a legal
relationship as they both were cousins. From the above mentioned facts it is observed that it does
not satisfy the elements of intention and consideration as Cliff does not perform any action
intended to have bus or to upset Rick. But in the second instance it is observed that Cliff
demanded some amount of money for the next trip offered to Rick. It is necessary to carry your
intention for creating a legal relationship according to the Contract Act. It has been observed this
Act is silent about the matter of intention for creating a lawful relation as this is one of the
essential requirement for creating lawful agreement. Strictly it can be said that this element in a
contract creates an agreement does not create a contract until there is a presence of common
intention between the contractual parties which should be e lawfully enforceable. The regulations
and the terms that is made in an agreement should be understood and stated clearly by the

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contractual parties of the agreement. If the contract is not considered as certain it will be not
valid.
Therefore Cliff can be held liable as after the acceptance of the offer, he has not provided the
service to his client or cousin. As there is a matter of transaction or consideration formed
between the two contractual parties and a valid contract was made between them in that situation
Cliff was responsible for not arranging a proper trip in spite of the offer and also the acceptance
that created a legal contract between the two parties. It is also one of the essential element to
make a valid contract. It is necessary to carry your intention for creating a legal relationship
according to the Contract Act.
Step 4:
Therefore it can be concluded that there was no intention, but there was presence of
consideration that was fulfilled in the contract between the contractual parties.

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Reference:
Carlill v Carbolic Smoke Ball Co QB 256; (1891-4) All ER Rep 127
Smith v Hughes (1871) LR 6 QB 597

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