La Trobe University, LST2BSL, Semester 2: Law of Contract Assignment

This assignment solution addresses several key issues in contract law. The first answer examines whether statements made during a sale can be considered part of the contract, differentiating between puffery, representations, and contract terms, referencing the cases of Watson v. Foxman and Fox v Percy. The second answer considers whether a sign at a store applies to a contract, analyzing misrepresentation and the importance of proper communication, referring to the cases of Lucas Earthmovers Pty Limited v Anglogold Ashanti Australia Limited and With v O’Flanagan. The third answer explores the application of promissory estoppel, referencing the case of Walton Stores (interstate) Ltd v Maher and Legione v. Hateley. Finally, the fourth answer examines the enforceability of an exclusion clause on a sticker attached to receipts, referencing the cases of L’Estrange v Graucob and Thompson v LMS Railway.

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

1LAW OF CONTRACT
Answer 1
Issue
The issue in this case is that can any of the statements made by Jimmy, regarding
MowMaster 6000, be considered as a part of the contract of sale.
Rule
When a statement is being made by an individual in relation to a contract then such
statement can be classified under four categories. They are representation, opinion, puff and the
term of a contract. Puffery shall be distinguished from the rest as the criteria of statements which
cannot be included in a contract. Puffery are considered to be the statements that are exaggerated
in order to make the purchasers excited regarding the purchasing of a particular objects.
Whereas, representations are considered as knowledge regarding the object that shall be sold.
Puffery may not be included in the contract, however, opinion or representation or the terms of
contract shall be included in the contract.
In the case of Watson v. Foxman (19951), McLelland, CJ, stated that the human memory
cannot always comprehend about the statements and declarations made during normal
conversations. It becomes frail and imperfect and usually such unreliability increases as the time
passes.
The rule in the case of Fox v Percy (2003) 2014 CLR 1182 states that the fact that
whether any statement made by an individual can b Watson v. Foxman (1995)
1 Watson v. Foxman (1995)
2 Fox v Percy (2003) 2014 CLR 118

2LAW OF CONTRACT
e regarded as the part of a particular contract shall be based on the current resources of the case,
the quantitatively recognized facts of the case and the seeming reason of the case.
Application
Applying the rule as provided in Watson v. Foxman (1995), it can be mentioned that
every statement made by any individual cannot be comprehended all the time. Hence, a part of
the statements uttered by Jimmy were made in an unpremeditated manner and only that part
cannot be considered to be the part of the contract of sale. However, the rest of the part can be
included.
Applying the rule of Fox v Percy (2003) 2014 CLR 118, it may be said that whether a
statement made by an individual shall be considered to be part of a contract should be based on
the circumstances of each particular case. Based on the circumstances of this case, it can be
presumed that although Jimmy did not have any legal intentions when he uttered the statements
to Joanna as he was only trying to help her choose the best mowing machine, however the
statement represented the machine and hence can be included in the contract.
Conclusion
In conclusion it can be said that the statements made by Jimmy can be partly presumed to
be part of the contract of sale.

3LAW OF CONTRACT
Answer 2
Issue
The primary issue in the case is that whether the sign applies to the sale contract between
the Lawnmower City and Joanna.
Rule
In the case Lucas Earthmovers Pty Limited v Anglogold Ashanti Australia Limited
[2019]3, the rule provided therein stated that any demeanor or any deed of an institution or any
individual, which is misrepresentative and ambiguous must be restricted by the law. This rule is
also supported by the provisions of the Australian Consumer Law.
The rule as provided in the case With v O’Flanagan [1936] Ch 575 states that any action
or inaction of an association or any individual, to properly communicate any information to a
particular purchaser, shall amount to misrepresentation.
Application
In the given case, the mowing machine bought by Joanna was not functioning properly
only after three days of purchase. On notifying the Lawnmower City about the malfunctioning,
Joanna was informed that the Lawnmower City shall not be responsible for such malfunctioning
as provided in the sign kept at the shop. The sign was moderately hidden by plants and pots.
Applying the rule of Lucas Earthmovers Pty Limited v Anglogold Ashanti Australia
Limited [2019], it can be said that the sign and the manner in which the sign was kept at the
counter of sales in the Lawnmower City was ambiguous and misrepresentative in nature and
hence must be restricted by the law.
3 Lucas Earthmovers Pty Limited v Anglogold Ashanti Australia Limited [2019] FCA 1049

4LAW OF CONTRACT
Applying the rule as provided in With v O’Flanagan [1936] Ch 5754, it may be said that
the sign at the counter of sales, mentioning that the Lawnmower City shall not be accountable for
any damages caused to any property already purchased, was not communicated accurately and
properly to Joanna. Instead, the sign was kept behind plants and pots creating an obstruction for
any customer to see it properly.
Conclusion
Hence, to conclude it might be said that the information mentioned in the sign was not
communicated to Joanna properly and kept hidden behind plants and pots, because of which, the
sign cannot be considered as a part of the contract.
Answer 3
Issue
The main issue in the provided case is that whether an argument can be forwarded by
Joanna against Ronald in relation to promissory estoppel.
Rule
The case of Walton Stores (interstate) Ltd v Maher (1988)5 is regarded as the most
important case in relation to promissory estoppel. In the case it was stated that an argument of
promissory estoppel can be made when certain conditions. Firstly, the promise that is made, must
be in relation to an affiliation to legal obligation earlier. Secondly, the promissory estoppel could
be utilized as a proper defense. These conditions established the law regarding the arguments in
relation to promissory estoppel.
4 With v O’Flanagan [1936] Ch 575
5 Walton Stores (interstate) Ltd v Maher (1988) HCA 7

5LAW OF CONTRACT
The rule in the case of Legione v. Hateley (1983)6, mentions that when a promise is made
by a party in relation to the existence of a contract or any legal relation, then such promise
cannot be denied or discarded.
Application
In this case, Joanna was asked to take care of the orchids by Ronald, her new client.
Special care was needed for the orchids for which special equipment were needed for the special
orchids. Joanna forwarded an agreement because of the concerns about the expenditures and the
perils involved regarding the special equipment. Even after Joanna sent an e-mail regarding the
agreement to Ronald, Ronald was delaying the response to the mail, but, assured Joanna to
proceed and that he would revert to the mail. However, later he said that he does not need the
services of Joanna, because his nephew decided to provide assistance regarding the orchids.
Applying the case of Walton Stores (interstate) Ltd v Maher (1988), it can be said that in
the given case, all the requisites as mentioned in the Walter Stores case has been met. In this
case, a legal relation was being created between Joanna and Ronald, her client. A clear and
unambiguous promise was made by Ronald in relation to the contract that was being made.
Therefore, when the promise that was made is discarded by Ronald, then Joanna will be able to
use promissory estoppel as a defense against Ronald.
Applying the rule as provided in Legione v. Hateley (1983), it can be said that the
promise made by Ronald in relation to the contract that was being drafted, was clear and
unambiguous. Therefore, such promise cannot be denied by Ronald, and if denied, then the
doctrine of promissory estoppel may be argued by Joanna.
6 Legione v. Hateley (1983) HCA 11

6LAW OF CONTRACT
Conclusion
In conclusion, it can be said that based on the circumstances of the case, Joanna can
forward an argument in relation to promissory estoppel against Ronald.
Answer 4
Issue
The chief issue in this case is whether the statement provided on the sticker is obligatory
on the future clients of Joanna.
Rule
The rule in the case of L’Estrange v Graucob [1934] 2 KB 3947, states that when a
document contains provisions that gives rise to contractual relationship, then such document
shall be binding even if the party signing it did not read the exclusion clause, provided there is no
dishonesty or deception.
In the case of Thompson v LMS Railway [1930] 1 KB 418, it was mentioned that if an
exclusion clause is provided, then it must be clear and accurately visible to a party. Rational and
proper steps should be taken to communicate the exclusion clause.
Application
Joanna attached stickers to the back of every receipt. The stickers stated that the
rescission of appointment in the future must be communicated beforehand and if such thing is
not done then the fee shall be payable completely.
7 L’Estrange v Graucob [1934] 2 KB 394
8 Thompson v LMS Railway [1930] 1 KB 41

7LAW OF CONTRACT
Applying the rule as provided in the case of L’Estrange v Graucob [1934] 2 KB 394, it
can be mentioned that exclusion clause provided by Joanna shall be obligatory on the clients that
she is going to deal with in the future.
Applying the rule as mentioned in the case of Thompson v LMS Railway [1930] 1 KB 41,
it can be said that the exclusion clause provided by Joanna in the receipt must be communicated
and interpreted by her to her clients properly and accurately. Her clients should be clearly
informed about the exclusion clause.
Conclusion
In conclusion it can be stated that the statement on the sticker attached to the back of the
receipts shall be binding on the clients of Joanna in the future.

8LAW OF CONTRACT
References
Cohen v Cohen (1929) 42 CLR 91
Esso Petroleum Co Ltd v Commissioners of Customs and Excise [1976] 1 All ER 117
Fox v Percy (2003) 2014 CLR 118
L’Estrange v Graucob [1934] 2 KB 394
Legione v. Hateley (1983) HCA 11
Lucas Earthmovers Pty Limited v Anglogold Ashanti Australia Limited 2019 FCA 1049
Teen Ranch Pty Ltd v Brown (1995) 87 IR 308
Thompson v LMS Railway [1930] 1 KB 41
Wakeling v Ripley (1951) 51 SR (NSW) 183
Walton Stores (Interstate) Ltd v Maher 1988 HCA 7
Watson v. Foxman (1995)
With v O’Flanagan [1936] Ch 575