Does the correspondence between Ashley and Ben give rise to a concluded agreement? American Football Australia (AFA) will be liable for the bill that Ben sent to Ashley on behalf of Gridiron Association (GA), if there is a binding contract between the two parties. There are essential elements which must be satisfied for a binding contract to exist including agreement, consideration and intention to create legal relations.
Offer and acceptance analysis may be used to show agreement. An offer is a statement of intention by one party to be bound by certain terms of the contract without further negotiation. Whether a statement is an offer is dependence on how a reasonable person in the position of the offeree would interpret …show more content…
In the battle of the forms, the last form that was dispatched and received without objection govern the contract. If that is the case, the standard terms proposed by Ben would be the terms of the contract. Nonetheless, it might be evident that they reached agreement during the phone call.
A promise is legally binding only if consideration that is an act or promise is provided in return by the promisee. Ben promise to secure a US team which is sufficient consideration for the promise of payment by Ashley and vice versa. As illustrated by Chappell & Co Pty Ltd v Nestlé Co Ltd consideration have to be sufficient but not adequate.
It could be argued that no consideration is provided for the promise to recompense BA if contract does not eventuate. The promise to secure a team would be past consideration which is not a valid consideration.
Intention to create legal relations
To form a contract two parties must give mutual consent that the agreement is legally enforceable. There is a strong presumption that commercial agreement are intended to have legal consequences. The presumption cannot be rebutted as there is no express or implied repudiation of the …show more content…
Firstly, there must be expressed or implied unequivocal promise leading to an assumption that legal relationship exists or would eventuates. Fedos claim that they are ready to sign on and expressed great interest which clearly might imply the promise to sign the contract to play in the game leading to the assumption of future legal relationship. Secondly, promisor could reasonably expect promisee would be encouraged or induced due to action or inaction of promisor, to act on the assumption. When Ashley contacted Fedos, they might reasonably expect the words ‘ready to sign on’ and expression of interest would induce Ashley to adopt the assumption. Thirdly, there must be actual and reasonable reliance causing detriment and promisor fail to avoid detriment. Ashley relying on the assumption suffered detriment by endeavour to secure a US team and option to football stadium which lapsed and selling broadcasting right. The correspondence between Ashley and Fedos must be assessed in full and detail. It might be proven that Fedos did not attempt to avoid the detriment that might result. For instance, early notice of the availability to play and notice of reserving the right to bail out. Lastly, it would be unjust and unconscionable if the promise is not enforced. Unconscionable departure is dependence upon all the circumstances of the case including the reasonableness of the conduct of promisee in adopting the assumption and extent