Legal Studies Assignment: Contract and Negligence Law Analysis

This Legal Studies assignment delves into two primary areas of law: contract and tort. The first question examines the formation of a valid contract between Ann and Jack. It analyzes the elements of a contract, including offer, acceptance, and consideration, referencing relevant case law such as Emp...Read More

Running head: LEGAL STUDIES
Legal Studies
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1LEGAL STUDIES
Question 1:
Issue
The issue related to this scenario is whether a valid contract was formed between Ann
and Jack.
Rule
It can be said that as per the Contract Act, a contract is referred to an agreement
between two or more parties that are enforced by law. A contract can be formed either orally
or in a written format. As per the law, it has been observed that a few contracts can be formed
under seal. Contracts can be either formal or simple. A simple contract is defined as that
contract, which is not made under seal. On the other hand, formal contract is referred to as the
deed, which must be in a written format and signed by both the parties of the deed. However,
there must be a witness when the deed is formed. The basic elements constitute the formation
of a contract. Bodies of laws, which are not codified but have developed with the help of
judicial interpretations, are known as Common Law in United Kingdom. For an agreement to
be legally enforceable, it should include the three elements. Firstly, an offer and an
acceptance of that offer must be present. Secondly, there must be consideration involved in
the offer. Consideration means something of value given by each of the parties for exchange
of promises. Thirdly, there must be an intention that will create legal relations. Fourthly, there
must be a scenario of mutuality of obligation. This refers to a situation where both the parties
will agree with the terms and conditions of the agreement. Fifthly, there must be involvement
of competency and capacity of the parties. Lastly, a written instrument should be present
when a contract is being formed. Therefore, if all these essential elements are present when a
contract is formed then it will be considered a valid one. While dealing with the cases that
legally bind the contracts, usually the Courts hear the same sort of breach in this situation.

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However, if any of the essential constituents are not present then it will not hold any kind of
legal value and hence it cannot be taken to Court. On the other hand, if there is any kind of
breach or dispute arising out of the same between both the parties involved.
When an offer gets determined in any specific situation then the Court will infer if
there is an involvement of acceptance that is accompanied the offer. An acceptance can be
considered valid if it has been made devoid of any variation of the terms that is linked to the
original offer or the clarification that is associated with the offer. Thereafter, while dealing or
inferring acceptance, it can be considered that within the time which is stipulated in the
contract. At the time of binding the contracts, the same must be accepted within the time-
period as efflux of the acceptance time. It however, leads to a revocation of the original offer
as it have been mentioned in the judgment in the case of Crown v Clarke (1927) 40 CLR 227.
The time factor is not the only essential component that is involved in this situation.
Acceptance of the offer without any variation to the original terms and devoid of the
clarifications is also considered. When there is variation of the original terms in the
acceptance of the contract regarding the same issue, it will be considered as a counter-offer.
However, a counter-offer is not considered a valid acceptance of the offer presented. In the
case of Felthouse v Bindley(1862) 142 ER 1037 it was presented that an original offer was
laid down. In the case of Pharmaceutical Society of Great Britain v Boots [1953] 1 QB 401,
it was held by the Court that there was no offer on the part of the shopkeeper rather it was an
invitation to treat. In Balfour v Balfour [1919] 2 KB 571, the nature of the domestic
agreement was such that it did not create any legal relationship.
While dealing with the rights of the parties to a particular contract and their
succeeding obligations, the basic step is to determine the existence of a valid contract. The
basic consideration related to this situation states that a fact of the case should be established
in the verification of the valid offers and acceptance. These two terms are the most essential

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principles as it has been decided in plenty of judgments and the existence of their legality
must be brought out in the light of the evidence when it is presented. When an offer is
presented, offeror and offeree are the two parties involved in the procedure. An offeror is
referred to that individual who makes the offer and an offeree is that person to whom the
offer is made. The judgment of Empirnall Holdings Pty Ltd v Machon Paull Partners Pty
Ltd (1988) 14 NSWLR 527 the essential principle was stated that an offer can be legally valid
when it is made by someone who has the intention to form legally binding relationships. This
defines a scenario where the offeror should have an intention to form lawful relationships
with the offeree (Lindgren and Vermeesch, 2015). It was therefore, stated in this case that an
offer can be differentiated from an invitation to offer. It is a precursory step that helps in
soliciting an offer. If an individual accepts an invitation to treat it will refer to a situation
where a ensuing offer can be made. On the other hand, if a person accepts a valid offer, he
will be creating legal relationships between the two parties. Hence, a contract will be created
between the two parties thereafter. This was observed in the matter of Bressan v Squires
Supreme Court of New South Wales [1974] 2 NSWLR 460. An invitation to treat can be
accepted but it does not usually create any kind of relationships that can be enforced legally.
Application
As the facts has been stated above, the purpose of the issue is to establish whether a
valid contract existed between Jack and Ann. The scenario stated that the elements mentioned
by common law were present when Ann and Jack made the transactions. There must be an
establishment of the offer, which was made by Ann to Jack as the purpose of it was to create
legal relationships. This situation was established in the case of Empirnall Holdings Pty Ltd
v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 527. Ann had made the first offer
where she wanted to sell her car at $12000. The time period of the offer existed for 7 days.
Therefore, this will help in forming legal relationships between Jack and Ann. The offer was

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hence considered to be valid. The offer was made complete when Jack had received the offer
letter from Ann. Ann thereafter revoked the offer with the help of a mail. However, it will not
be valid until Jack had received the mail from Ann. Thereafter, when Jack got the mail, he
reverted with a clarification where a monthly payment of $1000 will be made for 12 months.
The car will therefore be purchased with the help of this mode of payment. These were the
terms involved with the clarification of the original offer. It however, does not form a valid
acceptance as it has been mentioned in the case of Bressan v Squires Supreme Court of New
South Wales [1974] 2 NSWLR 460. As it has been mentioned above, a valid acceptance
cannot be constituted when a counter-offer is made. It therefore is the outcome in the
revocation of the actual offer, which was made and Ann hence accepted the original offer.
The variation of the terms should also be accepted for the contract including the original offer
to be held valid. Ann received communication on March, 4. The revocation of the offer was
thereafter posted, which Jack not received. This constituted as the aspect of the counter offer
whereas the original offer still existed. Ann can therefore form a valid legal contract by
accepting the offer. Although, there was no communication made. Hence, no contract was
formed between Jack and Ann since Jack had replied with a counter offer that had negated
the original offer and no acceptance was sent to the counter offer, which was made.
Conclusion
Lastly, it can be concluded by stating that no contract was formed legally between
Jack and Jack made Ann since a counter-offer to Ann. In this particular situation, there was a
revocation in the original offer, which was made by Ann.

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Question 2:
Issue
The issue that has been discussed in this situation is whether Batty will be able to
claim compensation for the damage that was caused to him by Qualal Motors.
Rule
The present case scenario involves the concept of law that is related to negligence.
Negligence is a part of the law of tort. It can be said that a tort is a civil wrong that is distinct
from a breach of contract. When a tort arises, legal actions are taken in such situations. The
action generally helps in recovering the compensation for any kind of physical or mental
damage or loss that has been caused by wrongful activities. However, liability should be
established and proved completely claiming for any kind of compensation. Common law in
this scenario deals with the law of torts. Therefore, negligence refers to a situation where, due
to the activities of an individual or group of individuals where another individual suffers
damage or loss. In other words, an individual to take reasonable care for preventing loss,
injury or damage to others in certain situations defines it as the failure. When a tort of
negligence is committed at common law, few of the necessary elements must be present
(Lindgren and Vermeesch, 2015). The person who can claim for compensation should
establish these essentials. In the case of Olley v Marlborough Court [1949] 1 K.B. 532 it was
held by the Court that the hotel will not be held liable for the damages if the properties
belonging to the customers are in any case damaged or lost.
The first and foremost element of tort is duty of care. It requires the claimant to be
able to produce that he has owed duty of care to the defendant. This means that when an
individual failed to provide care by being negligent that has caused injury or harm. The
neighbor principle can be applied in this scenario for establishing whether the defendant owes

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a duty or not. Such a situation has been proved in the case of Grant v Australian Knitting
Mills Ltd [1936] AC 85. It was observed in this case that Dr. G bought underwear from a
retailer as it is related to the articles. Thereafter, he had worn the underwear and due to an
excess amount of an invisible chemical, he had suffered from dermatitis. Thus, Dr. G. sued
the manufacturer. The manufacturer was held liable thereafter. Caparo Industries plc v
Dickman [1990] 2 AC 605 was a scenario that is similar to this element of tort.
The second element of negligence that should be present is breach of duty of care.
This defines a situation where if duty of care exits and has been proved, the plaintiff must
also prove when and how that duty of care was breached. In order to establish that breach of
duty of care exists, a two-part test is generally applied. If any individual fails to take the
necessary care in relation to the probability of harm then a breach will be committed on the
duty of care. Such a scenario was determined in the case of Bolton v Stone [1951] AC 850. It
was observed here that Miss Stone used to reside opposite cricket ground. Therefore, she got
injured when a cricket ball hit her forehead after crossing a fence of 17 foot. It was an
unusual situation for a ball to cross the fence of that height. Thereafter, Miss. Stone had sued
the club in negligence. She however failed since the Court held that the club did not breach
the duty of care because of the level of probability.
The third element that must be present for proving negligence is causation. This refers
to a scenario where there is a breach of duty of care and that particular breach is treated as the
cause of loss or damage. Therefore, the damage should not be too remote. The damages
suffered by the plaintiff should lead to a direct result of the breach of duty of care. The
principle of causation was considered and proved in the case of Yates v Jones (1990) ATR
81–009 (NSWCA). It was observed in this case that Yates had met with a car accident. While
going to the hospital in that condition, she was given heroin to ease out the pain. After taking
that, she got addicted. Thereafter, she sued for the damages caused to her that is linked to the

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accident as well as for the addiction. However, her reason for suing failed as the addiction
was treated to be too remote. Therefore, all these elements are constituted when negligence is
caused. If not all these elements are present, negligence will not be formed.
Thereafter, it deals with the theory of duty to warn. The case of Rogers v Whitaker
(1992) 175 CLR 479 discusses the concept of duty to warn. In this scenario, it was observed
that Whitaker could not see anything with his right eye. Hence, she who suggested her to get
an operation done consulted an ophthalmic. The operation will therefore improve the
condition of her eye. Instead she became blind in the left eye as well. It made her go full
blind. Whitaker was not informed about the risk involved with the operation. Thus, she sued
Rogers and it was held by the Court that Rogers was liable for the damages caused to her. It
can be concluded by stating that a duty to warn lies with the doctor towards the patient if it is
related to material risk. The case of L’Estrange v Graucob [1934] 2 KB 394, can be
mentioned in this regard. In this case, there was an inclusion of exclusion clause relying upon
which the defendant claimed that he will not be held liable for the damages.
Application
As it has been discussed above, the law of negligence can be applied in the scenario
where Betty was injured due to an accident. In the given case study, it was observed that
Betty’s mechanic Eddie tried towing the gear down and slipped, which resulted in making the
car fall backwards and hurting Batty’s foot and toes. Batty therefore suffered loss and injury
due to this accident. He sued Qualal Motors claiming for compensation for the injury caused
to his foot. Qualal Motors was the garage where Eddie used to work. Therefore, the case of
Grant v Australian Knitting Mills Ltd [1936] AC 85 can be applied in this regard as the
scenario deals with this situation. The concept of negligence arose when Eddie clipped on the
towing vehicle down when it slipped open and the car fell by hurting Batty. Eddie did not

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fulfill his duty of care and hence that resulted in causing damage and harm to Batty. When
Batty had claimed for compensation for the damage caused, Qualal Motors rejected it and
stated that there was already a notice on the towing vehicle and to a similar notice that was
displayed in their garage. Therefore, all the elements of negligence must be proved by the
Batty while asking for compensation.
Conclusion
Lastly, it can be concluded in this scenario that Batty can claim for compensation for
the damage and loss suffered by him.

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References:
Balfour v Balfour [1919] 2 KB 571.
Bolton v Stone [1951] AC 850
Bressan v Squires Supreme Court of New South Wales [1974] 2 NSWLR 460
Caparo Industries plc v Dickman [1990] 2 AC 605
Crown v Clarke (1927) 40 CLR 227
Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 527
Felthouse v Bindley(1862) 142 ER 1037
Grant v Australian Knitting Mills Ltd [1936] AC 85
L’Estrange v Graucob [1934] 2 KB 394.
Lindgren, K. and Vermeesch, R. (2015). Vermeesch and Lindgren's business law of
Australia. Chatswood, N.S.W.: LexisNexis Butterworths.
Olley v Marlborough Court [1949] 1 K.B. 532
Pharmaceutical Society of Great Britain v Boots [1953] 1 QB 401.
Rogers v Whitaker (1992) 175 CLR 479
Yates v Jones (1990) ATR 81–009 (NSWCA)