University Contract Law Case Analysis: Iron Man vs Spiderman Scenario

This case study analyzes a contract law dispute between Iron Man and Spiderman, focusing on the enforceability of agreements and the application of legal principles. The analysis addresses several key issues: the relevance of statements not included in the written contract (parol evidence rule), the enforceability of subsequent promises (collateral contracts), the use of promissory estoppel to enforce promises even without a valid contract, the classification and requirements of collateral contracts, and the significance of contract terms (conditions vs. warranties). The case involves a construction project where Spider-Man agrees to build a residence and fencing for Iron Man, with a subsequent discussion about a retaining wall. The analysis explores whether the retaining wall agreement is enforceable, considering the absence of it in the written contract and the applicability of various legal doctrines. The student's analysis provides a comprehensive examination of contract law concepts, including the importance of cooling-off periods and how they apply to this particular scenario. The assignment concludes with a list of relevant legal cases used to support the analysis.

Running head: BUSINESS LAW
Business Law
Name of the Student
Name of the University
Author Note

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Memorandum of Advice
In pursuant to the discussion with Iron Man regarding his contract with Spiderman the questions
that Iron Man has been wondering about can be answered in the following way:
a) The first issue that has been brought by Iron Man was whether the statement made by Spider-
Man that he is only bound to what is written in the contract has any meaning and which clause it
has been referring to.
As per the parol evidence rule, once the parties to a contract has reduced their contract to written
form and has duly executed the same they will not be able to introduce any further terms that has
been agreed upon during the negotiations but has not been inculcated within the written form.
This principle can be best explained with the case of Henderson v Arthur [1907] CA1. As per the
principle established in the case of Codelfa Construction Pty Ltd v State Rail Authority of NSW
[1982] HCA 242, when the final contract has been drafted and executed to at least with the
inclusion of one term, all the other terms which has not been included will not for a part of the
contract.
In present question, Spider-Man refer to the parol evidence rule which requires him to leave out
on all the terms of the contract which has been agreed upon during the negotiations but has not
been included within the written contract. He based his contention on the rule that when and a
contract has been drafted written form, no terms promised during negotiations but not included
in the written form would be considered for being performed under the contract. He was
referring to the term of building the retaining wall which has not been included in the written
form but has been agreed upon by him orally by shaking hands. As the retaining wall has not
1 Henderson v Arthur [1907] CA
2 Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24

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been included within the contract while laying it down in a written form Spider-Man refused to
perform the same as for the parol evidence rule.
b) The second issue that has been brought by Iron Man was whether the subsequent promise
made by Spider-Man will be enforceable even though it has not been written in the contract.
Collateral contract implies single term agreement made in favour of the party for whose benefit
the contract has been operating and has a relation with the subject matter of the contract. It
depicts a situation where the parties to the contract institutes another contract connected with the
subject matter of the main contract without including the contract within the main contract. This
can be illustrated with the case of J J Savage & Sons Pty Ltd v Blakney (1970) 119 CLR 4353.
These contracts are binding if the parties have the intention to make it enforceable while
instituting the main contract. This can be illustrated with the case of Evans & Sons Ltd v Andrea
Merzario Ltd [1976] 1 WLR 10784.
Hence, the subsequent promise made by Spider-Man of building the retaining wall would be
enforceable in the absence of any writing of the same.
c) The third issue that has been brought by Iron Man is whether he will be able to rely open any
other doctrine to force Spider-Man to honour his promise, if he is unable to prove the element of
a valid legal contract.
Promissory estoppel depicts a doctrine by virtue of which a person is prevented from denying
any promise to be performed even if the promise has not been escalated to the status of a
contract. The aggrieved party claim damages from the party denying on the promise if he can
claim that he has suffered any detriment or expenditure in pursuing the promise. Even though a
3 J J Savage & Sons Pty Ltd v Blakney (1970) 119 CLR 435
4 Evans & Sons Ltd v Andrea Merzario Ltd [1976] 1 WLR 1078

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promise is required to adhere to all the requisites of a valid contract for the purpose of being
enforceable, but under the doctrine of promissory estoppel, promises are enforceable even in the
absence of the requisites of a valid contract. For the purpose of making a promise enforceable
under the doctrine of promissory estoppel 4 requirements are to be satisfied. Firstly, there has
been a significant promise made by the promise to make the promisee act upon the same.
Secondly, the promisee has actually acted up in the promise. Thirdly, this has made the promisee
to suffer some costs. Lastly, the promisee can only be compensated by fulfilment of the promise.
This can be illustrated with the case of Central London Property Trust Ltd v High Trees House
Ltd (1947) KB 1305.
In case Iron Man is unable to prove the promise to have the elements of a valid contract he
would still be able to enforce the same if he can bring the promise under the purview of
promissory estoppel. However, for the purpose of enforcing the same Iron Man would be
required to establish that the promise has contain all the elements of the promissory estoppel. He
needs to prove that the building of the retaining wall has been significant to the contract, he had
relied upon the same, he has suffered an injury for the non performance of the same and the
injury can only be compensated by the performance of the contract.
d) The fourth issue that has been brought by Iron Man was weather the contract is proven to be
enforceable can be categorised into any kind and as to the elements that are required to be
satisfied for such a contract.
Collateral contract implies single term agreement made in favour of the party for whose benefit
the contract has been operating and has a relation with the subject matter of the contract. It
depicts a situation where the parties to the contract institutes another contract connected with the
5 Central London Property Trust Ltd v High Trees House Ltd (1947) KB 130

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subject matter of the main contract without including the contract within the main contract. This
can be illustrated with the case of J J Savage & Sons Pty Ltd v Blakney (1970) 119 CLR 4356.
These contracts are binding if the parties have the intention to make it enforceable while
instituting the main contract. This can be illustrated with the case of Evans & Sons Ltd v Andrea
Merzario Ltd [1976] 1 WLR 10787. However, for the enforcement of a collateral contract it
needs to adhere to three requisites. Firstly, a collateral contract needs to be a promissory
agreement. Although, the promise does not form a part of the main contract but will still be
enforceable having a connection with the subject matter of the main contract. This can be
illustrated with the case of Crown Melbourne Limited v Cosmopolitan Hotel (Vic) Pty Ltd
[2016] HCA 268. Secondly, there has been all the intentions on the part of the promisor to abide
by the collateral contract. Thirdly, its needs to be supplementary to the main contract and does
not sabotage or contradict the main contract. This can be illustrated with the case of Hoyt's Pty
Ltd v Spencer (1919) 27 CLR 1339. All these elements are required to be adhered to for the
purpose of enforcing a collateral contract.
In the present case, the agreement for creating a retaining wall is has been collateral contract
connected to the main contract of building the house and fencing of Iron Man. Hence, the
contract for building the retaining wall collateral to the main construction of the house will be
enforceable.
e) The fifth issue that has been brought by Iron Man is whether what Spider-Man said regarding
the fact that all the terms of the contract are not critical or essential to the contract means
anything.
6 J J Savage & Sons Pty Ltd v Blakney (1970) 119 CLR 435
7 Evans & Sons Ltd v Andrea Merzario Ltd [1976] 1 WLR 1078
8 Crown Melbourne Limited v Cosmopolitan Hotel (Vic) Pty Ltd [2016] HCA 26
9 Hoyt's Pty Ltd v Spencer (1919) 27 CLR 133

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Terms of a contract can either be warranty or condition. In case there has been a breach in the
contract, it needs to be determined that whether a condition or a warranty has been contravened.
A condition depicts a significant part of the contract and can be traced to have the source at the
root of the contract. The breach of a condition would entitle the aggrieved to repudiate that
contract along with the claiming of damages from the party in contravention. This can be
illustrated with the case of Poussard v Spiers (1876) 1 QBD 41010. On the other hand, warranties
are minor terms inculcated within the contract for supplementing the contract and cannot be
traced to the centre of the contract. The breach of warranty by one party to the contract only
entitles the aggrieved to claim damages from the party in contravention but does not entitled the
aggrieved repudiate the contract. This can be illustrated with the case of Bettini v Gye 1876
QBD 18311.
The building of the retaining wall is important with respect to the construction of the House
along with fencing. This is because due to the slope in the land there can be a significant
flooding if the retaining wall has not been built. Hence, the condition of building the wall has
been tracing to the root of the contract and would be treated as a condition. Spider-Man pointed
towards warranties when he stated that all the terms belonging to the contract are not critical
essential to the contract.
f) The first issue that has been brought by Iron Man is whether agreements are binding instantly
or do they required something to occur first before the agreement comes into operation.
There are certain circumstances when the contract needs to be accompanied by a certain period
of time to gain its enforceability. Within that span of time the parties involved in the contract
cancel the contract. This period of time is referred to as cooling off period. During this time the
10 Poussard v Spiers (1876) 1 QBD 410
11 Bettini v Gye 1876 QBD 183

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parties are empowered to cancel the contract. However, the cancellation of a contract under this
claim of cooling off period is only available in case of contracts executed between parties who
are at distance from each other. The contract executed between the parties physically present and
having a face to face negotiation would not be allowed to have the cancellation power within the
cooling off period for such contracts would not have any cooling off period. The party who have
been claiming to cancel the contract because of the presence of a cooling off period and because
of their dissatisfaction from the services for goods supplied would be able to recover the full
refund of the expenses they have been bearing for the purpose of availing search goods and
services.
In the present case, Iron Man has purchased a block of land upon which he has been planning to
build his residence. He engages Spider-Man for building his residence. This has made Spider-
Man visit the site and quote the expenses for building the residence along with fencing. However
later on Spider-Man has been informed by Iron man that the land would require are retaining
wall for preventing flooding due to the slope of the land was having. This has made both of them
to agree upon the building of the retaining wall. However the contract only contain the building
of the residence and the fence and no retaining wall has been included within the written contract
but Spider-Man has promise to build the retaining wall without charging any costs. As the
contract has been side face to face both the parties being physically present, the same becomes
enforceable instantly and there is no cooling off period which the party can cancel the contract.
Hence, the contract is instantly binding and does not require any incident to happen forests
coming into operation.

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Bibliography
Bettini v Gye 1876 QBD 183
Central London Property Trust Ltd v High Trees House Ltd (1947) KB 130
Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24
Crown Melbourne Limited v Cosmopolitan Hotel (Vic) Pty Ltd [2016] HCA 26
Evans & Sons Ltd v Andrea Merzario Ltd [1976] 1 WLR 1078
Henderson v Arthur [1907] CA
Hoyt's Pty Ltd v Spencer (1919) 27 CLR 133
J J Savage & Sons Pty Ltd v Blakney (1970) 119 CLR 435.
Poussard v Spiers (1876) 1 QBD