Contract Law Case

Good Essays
Issue:
This IRAC is to determine whether a contract exists between Molly, jack, and Levi in relation to the setup and operation of Sutton 's Surf School. In particularly whether or not Molly is entitled to a share of the business profits.

The relevant focus of this case is contract law. In order for a contact to exist these three attributes need to be met:

Rules:
The relevant focus of this case is contract law. In order for a contact to exist these three attributes need to be met:

Agreement: An agreement creating obligations enforceable by law. The basic elements of which include mutual assent, consideration, capacity and legality.

a. S.54(A) Conveyancing Act 1919 (NSW) clearly states that a written contract only applies to the sale or
…show more content…
An offer can be made to an individual, group of people, or the whole world (Carlill v Carbolic Smokeball company (1892)).

b. Revocation of an offer must be communicated to the other part before it can be effective Dickson v Dodds (1876)

Acceptance: Contracts can be classified according to the method in which they are accepted:
- Expressly communicated (Carlill v Carbolic Smoke Ball Co).
- Implied Acceptance (Silence & By Conduct) (Brogden v Metropolitan Railway)

o An offeror cannot stipulate that a lack of response on the part of the offeree will be treated as an acceptance. (Felthouse v Bindley). However, this rule is subject to two qualifications (Empirnall Holdings Pty Ltd v Machon Paul Partners Pty Ltd):
♣ If an estoppel can be raised against the offeree; or
♣ The conduct of the offeree amounts to an implication that he/she has accepted the offer.

To revoke an intention, objective testing is applied Empirnall Holdings Pty Ltd v Machon Paul Partners Pty Ltd; Brogden v Metropolitan Railway).

o In such cases, an objective test is used (whether a reasonable bystander would regard the conduct of the offeree, including silence, to indicate to the offeror that the offer had been accepted.) (Empirnall Holdings Pty Ltd v Machon Paul Partners Pty Ltd; Brogden v Metropolitan
…show more content…
In this instance, a written contract was not needed as S.54(A) Conveyancing Act 1919 (NSW) stipulates that a written contract only applies to the sale or other deposition of land or any interest in land.

2. As the offer to start the lessons were jointly agreed on by Molly, Jack and Levi at a family dinner it could, therefore, be accepted by her siblings. Carlill v carbolic smokemachine company (1892)
3. Jack and Levi did not communicate their desire to revoke the offer to Molly of her acceptance to create a surf school. Therefore, by action and words effectively forming an express contract that stipulates that Molly is able to work within the Business. Brogden v Metropolitan Railway Company (1876).

4. Therefore, a reasonable bystander based on the objective test would regard the conduct of Molly’s role in the operation of the bookkeeping side of the business, to be of indication that she had accepted the offer. (Empirnall Holdings Pty Ltd v Machon Paul Partners Pty Ltd; Brogden v Metropolitan Railway).

5. In this case, due diligence must be given in regard to the relationship of Molly, Jack, and Levi. Higgins J. specifies that “they should be scrutinized most closely before the conclusion is drawn that the parties intended to bind themselves in conversation by legal bounds” (McBride v

Related Documents

  • Decent Essays

    Hyder V Wrench Case Study

    • 1795 Words
    • 8 Pages

    Counter-offer figure out whether in his answer to an offer, whther the offeree introduced a new terms or changed the terms of the offer, then that the answer cannot be equal to an acceptance. Instead, the reply is considered as a ‘counter-offer’, and the original offeror is free to accept or reject it. A counter- is also the rejection of the original offer, which cannot be accepted subsequently. A case illustrative of this is Hyde v. Wrench (1840), where because of an offer to offer a home at a specific piece, the offended party made an offer to purchase at a lower cost. This offer was rejected, and the plaintiff sought to accept the preliminary offer.…

    • 1795 Words
    • 8 Pages
    Decent Essays
  • Decent Essays

    Whether Peter is contractually bound to oblige his actions with Anita, Benny, Alice and Mark depends on whether a legal contract had been formed between the parties. a) Whether an offer was made by or to Peter? b) Had the offer been accepted by both the parties? A Contract is an agreement made between two or more people that creates legal rights and obligations that are enforceable by the courts (Miles et al, 2013, p.281). Elements such as Intention, Offer, Acceptance and Consideration are essential to the validity of a contract.…

    • 926 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    In Bankway Properties Ltd vs. Pensfold-Dunsford, similar question was answered regarding the areas where contractual provisions shall not stand effective where a pretence ‘sham’ has occurred. The court’s decision in Autoclenz’s case stated that the Court of Appeal needs to identify if the parties were bound by any legal obligations, rather than emphasising upon the way a contract was carried out. In overall context, the sham provisions can be treated well through analysing reality of a specific scenario and the underlying legal obligations. Originality of the contractual agreement needs to be proved in such legal cases. It is evident that if the actual version of the employer-employee relationship is different from what is mentioned in the contractual agreement, than employer shall be subjected to legal implications.…

    • 956 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    But first we have to consider whether this has a proper intention in which equity looks to the intent rather than to the form. As established in the act s.52 of LPA act 1925 . Hence the property must be registered. So it is crystal clear that Andy has not completed the proceeding. Then we must focus on the object matter of the scenario.…

    • 1894 Words
    • 8 Pages
    Decent Essays
  • Decent Essays

    Bilateral Contract Law

    • 1043 Words
    • 5 Pages

    1-3) Acceptance in Bilateral Contract In bilateral contract the acceptance must be communicated to the offeree. So, in principle acceptance must be communicated to offeror and takes effect once they receive it, Entores v Miles Far East Corporation. Nevertheless, there is a dispatch which is postal rule, Adams v Lindsell (1818). With the postal rule the acceptance become effective when posted. A contract is created by posting acceptance even if is acceptance is delayed by post, Household FireInsurance v…

    • 1043 Words
    • 5 Pages
    Decent Essays
  • Decent Essays

    It means when one party makes an offer; the other party must accept that offer and then get an agreement. In the occasion that the offeree makes a counter-offer, the agreement can not be settled. Second, intention to contract in other words is the intention to create legal relations between the parties. The courts classifies agreement into social, domestic, business, and commercial, parties only in business and commercial agreement do intend to create legal relations. Third, consideration is describes as something of value with the purpose to exchange a promise-in a contract is the obligation for each party.…

    • 1378 Words
    • 6 Pages
    Decent Essays
  • Decent Essays

    Lesson 5 Short- Answer Essay 1. A contract is a binding agreement between two or more persons or parties and make a promise or set of promises for the breach of which the law in some way recognizes a duty. The interactions that are included in a valid contract are offer, acceptance, consideration, capacity, and legality. Offer: The first element in a valid contract would be offer. if there is no offer than there will be no contract.…

    • 703 Words
    • 3 Pages
    Decent Essays
  • Decent Essays

    In this case, rescission and restitution are at request. The plaintiff is entitled to remedies when the defendant could foresee what the plaintiff is complaining about. The account of foreseeability is evident here. Both the construction company and Byrd and his partners could have seen tenants leaving, this act was foreseeable. All things considered, buyer's remedies is working based on the facts and judgments of the…

    • 702 Words
    • 3 Pages
    Decent Essays
  • Decent Essays

    Offer may defined as a final statement or proposal by the offeror to the offeree. Statement or proposal is generally based on certain terms and follows a process of negotiation between the parties; an offer only could stand when the terms are finalized between offeror and offeree and the offer could only be legally bound when both parties accepted (Monahan 2001, 5). Consideration is one of the essential element of contract formation. It based of barter system with the same principle of “something for something”. For the promise will be legally enforceable, it requires a price be paid for a promise (Khoury and Yamouni…

    • 1124 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    1. Define and explain the significance of grundnorm. Essentially a grundnorm is an ordinance that states follow to make contracts between each other (J.G. Rumsey, International Law Lecture 2)(Murphy, 11). The significance of this term is that it helps to establish what states can put down on their treaties, so that they have something to refer to and go off of when making such a contract.…

    • 2324 Words
    • 9 Pages
    Decent Essays

Related Topics