Engineering Law: Contract Law and Formation Analysis

This report analyzes a case concerning contract law within an engineering context, specifically focusing on the formation of a contract between Luke and Taylor regarding the sale of a honing machine. The analysis examines the key elements of a contract, including offer, acceptance, and consideration, in accordance with Australian contract law. The report delves into whether Taylor's initial statement constituted an offer or an invitation to treat, and whether Luke's actions demonstrated acceptance. It also considers the presence of consideration, specifically the price of the machine, and the intent of both parties to create a legally binding agreement. The report cites relevant legal precedents such as Carlill v Carbolic Smoke Ball Co and Balfour v Balfour to support its arguments. The central issue revolves around whether a valid contract was formed, particularly in light of Taylor's subsequent attempt to revoke the offer. The conclusion affirms that a contract was indeed established, binding Taylor to sell the machine to Luke, based on the fulfillment of offer, acceptance, and consideration elements.

Running head: ENGINEERING LAW
Law on Contract
Name of the student:
Name of the university:
Author note

1ENGINEERING LAW
Issue:
The main issue of the case is to determine whether there is any contract made in between
Luke and Taylor.
Relevant laws:
In Australia, the contract is governed by the Contract law and to certain extent,
employment law. The term contract denotes an agreement that is enforceable by law1. Certain
essentials are to be fulfilled regarding the contract. There should be certain offer and
acceptance regarding the contractual subject, there must be certain intentions of the party to
bind themselves with the legal formalities2. There should be certain consideration in the
contractual agreement and the parties must be competent to make the contract. If these
elements are covered by the parties, there must be a contract exists in between them3.
Offer is one of the main criteria regarding the contract. Offer consists of certain
promises to do a particular job. When an offer is made, it is presumed that there is consent of
the person who made it4. There should not be any ambiguity regarding the conditions of the
offer. There is a rule regarding the revocation of the offer. It can be upheld by the offeror at
1 Gul, F. A., et al. "Factors influencing choice of discipline of study—Accountancy,
engineering, law and medicine." Accounting & Finance 29.2 (2015): 93-101.
2 Scott, Geoff, and K. Warren Yates. "Using successful graduates to improve the quality of
undergraduate engineering programmes." European journal of engineering education 27.4
(2013): 363-378.
3 McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press
(UK), 2014.
4 Ndekugri, Issaka, and Michael Rycroft. JCT98 Building Contract: Law and Administration.
Routledge, 2014.

2ENGINEERING LAW
any time until the offer is accepted by another person to whom the offer is made. Offer can
also be revoked if the contractual time is lapsed5.
Offer sometimes mistranslated with the invitation to treat. Invitation to treat is an
interest regarding certain thing where the person making it has a will to invite others to make
an offer. Advertisement, auction and the tender are fall in such category. In Patridge v
Crittenden [1968] 2 All ER 421, it was held that the term “For Sale” is not an offer, it is
merely an advertisement and fall under the criteria of invitation to treat.
When any party shows his interest regarding the offer and wanted to bind himself is to
be called that he has accepted the offer6. When an offer is accepted, there is an agreement
taken place. Acceptance can be made in written version or verbally or by the conduct of the
person who accepted the same. If an offer is accepted, the parties are become legally bounded
by each other. In Carlill v Carbolic Smoke Ball Co, it was held by the court that an offer
regarding the smoke ball has been made by the company and Mrs. Carlill had accepted the
same. Therefore, if there is any breach made regarding the offer, Mrs. Carlill has every right
to claim damage from the company.
Another condition of the contract is that there must be certain legal relation exists
between the parties. In Balfour v Balfour [1919] 2 KB 571, it was held by the court that
family agreement is like domestic agreement and there is no intention of them to be legally
5 Cartwright, John. Contract law: An introduction to the English law of contract for the civil
lawyer. Bloomsbury Publishing, 2016.
6 Liu, Tingting, Yan Wang, and Suzanne Wilkinson. "Identifying critical factors affecting the
effectiveness and efficiency of tendering processes in Public–Private Partnerships (PPPs): A
comparative analysis of Australia and China." International Journal of Project
Management 34.4 (2016): 701-716.

3ENGINEERING LAW
bound on the parties. Therefore, that cannot be stated as contract. In Wakeling v Ripley
[1951] 51 SR NSW 183, it was held that issues regarding the will of a property are serious in
nature and there are possibilities to bind the parties legally. Therefore, if there is any
agreement regarding the will is made, that can be considered as a contract.
There are certain circumstances, where an offer can be revoked or terminated. The
common rule regarding the same is that an offer can be resolved at any time before the
acceptance. The offer can be revoked even after a date has been fixed regarding the offer. In
Hyde v Wrench, it was held by the court of Australia that if the person to whom the offer has
been made, rejects the same, the offer will be terminated.
Consideration is also playing an important role in this case. If there is no mention
about the stipulated price of the contracting subject in the offer, then the offer could be vague
in nature. If the offer becomes vague, it will fail to meet the criteria of contract and no
contract will exist in between the parties. Therefore, there should be certain consideration
mentioned in the offer.
Application:
In the present case, Taylor had made an offer regarding the honing machine. Luke
was interested in the said offer. Taylor has fixed a date for inspecting the machine and Luke
has decided to inspect the machine on the fixed date7. There are certain strong points have
been pointed out in this case. The offer made by Taylor, on certain circumstances,
misinterpreted with invitation to contract. However, certain facts should be considered
regarding the same. It is clear from the case that Taylor has a wish to be legally bound with
7 Takeuchi, Kazuo, and Peer Pfeilmaier. "Anti-combustion deposit fuel development for 2009
Toyota Formula One racing engine." 15. Internationales Stuttgarter Symposium. Springer
Vieweg, Wiesbaden, 2015.

4ENGINEERING LAW
Luke regarding the honing machine. The conditions of the statements of Taylor were clear in
nature8. Therefore, it can be stated that the statement made by Taylor is an offer in nature.
There is no express statement regarding the issue that Luke has accepted the offer, but there
is a provision that he was interested regarding the offer. It is to be decided that whether the
interest can be treated as acceptance to the offer or not.
If there is an intention of the parties to be bind themselves with certain conditions, it
can be stated that the offer has been accepted by the other party. Offer must be communicated
properly by the person who is accepted the offer9. It has been stated clear in the problem that
Luke has an interest over the facts stated by Taylor and he has revealed his interest to Taylor.
Therefore, an intention regarding the offer by Luke can be seen. Under the law of acceptance,
it is stated that the acceptance can be made vocally or by way of conduct. In this case, Taylor
had fixed a date for the examination of the machine and Luke was showed his interest
regarding the same and even took steps regarding the same by appointing an expert to
examine the machine. Therefore, it is clear that Luke, by conduct, accepted the offer made by
Taylor. Therefore, a contractual agreement is made in between them.
The offer made by Taylor is being supported by certain consideration regarding the
honing machine10. It is stated in the case that Taylor shows his interest regarding the selling
8 Joseph, Pauline, and Pauline Joseph. "Australian motor sport enthusiasts’ leisure
information behaviour." Journal of Documentation 72.6 (2016): 1078-1113.
9 Wilson, John, and Kieran Pender. "Employment law: Terminating employment:
Pornography, policies, and procedural fairness." Ethos: Official Publication of the Law
Society of the Australian Capital Territory 242 (2016): 28.
10 Wright, Ted, M. P. Ellinghaus, and D. Kelly. "A Draft Australian Law of Contract."
(2014).

5ENGINEERING LAW
of the machine if Luke can pay him $375000 for the machine. Therefore, it can be stated that
the offer made by Taylor has met the conditions of the contract. It is of no importance
whether the price is appropriate or not. It is enough that certain consideration has been made
by the offer.
Therefore, the elements of offer, acceptance, and consideration have been fulfilled.
Now it is to be seen whether there is any legal relationship has been made in between the
parties. As per the principle stated in Carlill v Carbon Smoke Ball, it can be stated that when
an offer has been made by a party and the same is accepted by other, there is a contract made
in between them and they will be bind legally. In the present case also, there is an offer is
made by Taylor and the same was accepted by Luke. Therefore, from the essence of the
above named case, it can be stated that contract has been made in between the parties and
they became legally bound to each other.
In this case, a dilemma arose when Taylor had changed his mind regarding the selling
of the product to Luke. The provisions of the termination contract will be applied here. It has
been mentioned that an offer can be revoked even if a date is fixed over the issue. However,
the common rule regarding the same is that an offer can be terminated at any time but the
termination should be placed before the acceptance of the offer. In this case, Taylor had
decided to cancel the offer after the offer was accepted by Luke. Therefore, it can be stated
that Taylor has no right to revoke the offer at this particular stage11.
11 Watts, Ronald L. "Comparing Federal Political Systems." Understanding Federalism and
Federation (2015): 11.

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Conclusion:
Therefore, from the above mentioned facts it can be stated that the criteria of the case
is based on the contract law. The provisions of the contract is discussed here and it can be
stated that the essentials of the case is attracting the criteria of the valid contract and based on
the facts stated herein and principles of the cases laid down, the case can be concluded with
the fact that there is a contract exists in between Taylor and Luke. Therefore, it can be stated
that Taylor is bind by law to sell the machine to Luke.

7ENGINEERING LAW
Reference:
Cartwright, John. Contract law: An introduction to the English law of contract for the civil
lawyer. Bloomsbury Publishing, 2016.
Gul, F. A., et al. "Factors influencing choice of discipline of study—Accountancy,
engineering, law and medicine." Accounting & Finance 29.2 (2015): 93-101.
Joseph, Pauline, and Pauline Joseph. "Australian motor sport enthusiasts’ leisure information
behaviour." Journal of Documentation 72.6 (2016): 1078-1113.
Liu, Tingting, Yan Wang, and Suzanne Wilkinson. "Identifying critical factors affecting the
effectiveness and efficiency of tendering processes in Public–Private Partnerships (PPPs): A
comparative analysis of Australia and China." International Journal of Project
Management 34.4 (2016): 701-716.
McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK),
2014.
Ndekugri, Issaka, and Michael Rycroft. JCT98 Building Contract: Law and Administration.
Routledge, 2014.
Poole, Jill. Textbook on contract law. Oxford University Press, 2016.
Scott, Geoff, and K. Warren Yates. "Using successful graduates to improve the quality of
undergraduate engineering programmes." European journal of engineering education 27.4
(2013): 363-378.

8ENGINEERING LAW
Takeuchi, Kazuo, and Peer Pfeilmaier. "Anti-combustion deposit fuel development for 2009
Toyota Formula One racing engine." 15. Internationales Stuttgarter Symposium. Springer
Vieweg, Wiesbaden, 2015.
Watts, Ronald L. "Comparing Federal Political Systems." Understanding Federalism and
Federation (2015): 11.
Wilson, John, and Kieran Pender. "Employment law: Terminating employment:
Pornography, policies, and procedural fairness." Ethos: Official Publication of the Law
Society of the Australian Capital Territory 242 (2016): 28.
Wright, Ted, M. P. Ellinghaus, and D. Kelly. "A Draft Australian Law of Contract." (2014).

9ENGINEERING LAW