Contract Law: Intention And Operation Of Sutton's Surf School

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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
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- Implied.
- If the intent is absent a contract is null and void.

o Higgins J. gave the following warning in McBride v. Sandland: “In dealing with conversations between near relatives great care has to be taken lest words of unguarded speech should be constructed as creating legal obligations. They should be scrutinized most closely before the conclusion is drawn that the parties intended to bind themselves in conversation by legal bonds”.

Consideration: The doctrine of consideration requires that something must be given in return for a promise in order for it to be binding (Dunlop Pneumatic Tyre Company Ltd v Selfridge & Company Ltd).

It can be regarded as:
- A promise the promisee gives the promisor.
- Carrying out of an act. o Even when the contract is set aside, the person is still liable to pay a reasonable price for any goods or services provided if they can fairly be regarded as “necessaries” (both at common law and under s 7 of the sale of goods act 1923 (NSW)).

- An exchange of
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Molly had provided 20 hours a week of bookkeeping services in order for the efficient operation of Sutton’s Surf School. It would be true that Molly’s services are regarded as “necessaries” and therefore Jack and Levi are liable to pay a reasonable price for such services. (both at common law and under s 7 of the Sale of Goods Act 1923 [NSW]).

7. Even though Jack and Levi did not provide consideration to Molly, their promise is still enforceable with the application of promissory estoppel Waltons Stores (Interstate) Ltd v Maher [1988].

- Molly forwent 20 hours of paid work on the assumption she would be entitled to profits of the business.
- It would, therefore, be insurmountable to allow Molly to receive nothing in return for her 20 hours foregone.

Conclusion:
In reviewing the case it is resolved that Molly Sutton is entitled to a share of the profits which have been generated by Suttons Surf School. Molly has provided 20 hours a week of unpaid work in the belief that she would be entitled to any future profits of the business. It can, therefore, be said that based on the offer to form the business, Molly accepted. Under the objective test, it is stipulated that there was, in fact, an agreement and intentions to create legal relations. There was no announcement to Molly that the offer had been revoked and therefore within implied conduct renders the agreement between Molly, Jack, and Levi to be legally binding. Although good consideration was absent it can be said through

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