2105AFE- Model ILAC Hypothetical Answer for Students PDF

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Contract Law - Model ILAC Hypothetical Answer Guide for Students Workshop 2 ILAC Hypotheticals Keith & Patti: This is a model answer to help students learn how to answer ILAC problem questions. Whilst it is a contract law problem, the same set-out and approach is used for answering all ILAC questions in the course. Scaffolded comments are placed on the side of the document. Please read these in conjunction with the document ‘A guide to answering ILAC hypotheticals’ available on the course website.

Keith and Patti lived in Sussex England, with their two daughters. Keith worked in the music industry and Patti as a hairdresser.

Patti’s only living relative is her

wealthy 85 year old grandmother, Trudy, who moved into an apartment on the Gold Coast in Australia in 2016. Trudy greatly missed her great-grandchildren and in 2018 wrote to Patti and Keith asking them to leave Sussex and come and live at the Coast so she could be close to them and their children. She said she would buy them a large family home, right on the beach and pay for all their living expenses until Keith and Patti found new jobs. While Keith had a good job, Patti’s career was going nowhere, so based on Trudy’s offer the family sold their house, quit their jobs and moved to Australia. The whole family lived in Trudy’s large apartment while they tried to find a suitable place of their own. Unfortunately, Trudy and the family fought day and night. Trudy did not get on with the girls, now teenagers, and in a rage threw the whole family out of her apartment and told them she would not buy them a house afterall. The family moved out of Trudy’s apartment and rented a house at Nerang.  Keith and Patti want to know if they can force Trudy to honour her promise to buy them a house and to pay for their living expenses until they find jobs.

Hint for students for finding the legal issue and cases: Read the text and lecture notes and look for evidence to support there being/not being a contractual relationship and find similar type of cases (Intention). The answer must be set out in the following legal format – Issue, Law, Application, Conclusion.

Hint for students in regard to framing the issue: Phrase a legal question that you are going to use to answer the problem – for example, in this case the issue (legal question) should discuss whether there was an enforceable contractual relationship between the parties. Try to use the parties’ names within the legal question, as part of the issue.

 In order to answer this question, you need to think about Elements 1 & 2 discussed in Lecture 3. 1

Issues: 

Is there a legally binding contract between Keith, Patti and Trudy in regard to the purchase of a new house on the beach and pay for all their living expenses until Keith and Patti found new jobs?



More specifically, did Trudy, Patti and Keith intend for their agreement to have legally binding effect?

Hints for students in working out what Law applies: For the Contract hypotheticals, legislation will not apply. For our purposes most of contract law is based on the common law. Hints for students:



What is the specific part of the law that is in question?



What is the case that is going to support your client’s argument?



What is the case that is going to be adverse to your client’s argument?

State the names of the supporting cases and the legal principle here. Law: Balfour v Balfour: Presumption of no intention in domestic/social/voluntary agreements. Todd v Nicol: Rebuttal of presumption where serious consequences.

Hints to students for developing the Application/Analysis/Argument: (Whichever heading you want to use): Make sure you leave plenty of white space between the headings. Underline your headings and case names – and legislation in second part of the semester. It makes it easier for you markers to follow. In the application you only need the first or last name of the cases, as long as you have listed their full name under the heading of Law above. Explain how the cases apply to this scenario. Treat it like a short essay, supporting your argument by use of the cases (references). Whenever possible show both sides of the argument when advising a party (the good  & the bad) Who is the plaintiff/respondent? Explain how the cases you have mentioned above apply to the question. Sometimes it will be necessary to show both sides of the argument i.e. the arguments the different parties will use to have the dispute (issue) resolved in their favour.

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Application/Analysis/Argument: (Most marks are given for this section. It is a demonstration of your understanding of how the cases apply to the facts of the ILAC). If the agreement between the parties is of a social, voluntary or domestic nature, the courts will presume that the parties do not intend to create legal relations (be legally bound). This legal principle was originally developed in Balfour v Balfour, where the courts found there was no binding contract when a man promised to pay his wife a regular maintenance (income), because the matter was domestic (family) in nature. In this hypothetical the agreement is between Trudy and her Granddaughter Patti and Patti’s husband Keith. They are clearly relatives so this agreement is of a domestic nature and prima facie (on the face of it), the presumption that there was no intention to be legally bound by their agreement will apply. However, the courts will allow the presumption to be rebutted if the consequences are serious as in the following cases.

In Todd v Nicol the courts allowed the presumption to be rebutted due to the serious consequences of reliance on promises made. In both cases, the court looked at the seriousness of the consequences for the plaintiffs’ if the promises were broken. The court believed that consequences such as quitting their jobs, selling their house/terminating leases, selling their furniture, buying travel tickets and leaving their country of origin based on the relative’s promise was serious enough for the presumption of not being legally bound by a domestic agreement to be rebutted.

Here, similar to Todd v Nicol, Patti and Keith have left their jobs, sold their house and moved half way across the world to Australia based on their elderly relative’s (Trudy’s) promise, and were then evicted after family disputes arose. Like the give ILAC scenario, in Todd v Nicol the elderly had promised the individual plaintiffs that if they moved to Australia to live and look after them, they would be rewarded with considerable benefits, such as the promise of free housing and help with emigration and finding jobs. Therefore it is most likely that the courts will accept the seriousness of the significant commercial consequences (cost and inconvenience) if Trudy is not bound to keep her promise. Thus it is likely to allow the presumption of ‘no intention to be bound in domestic agreements’ to be rebutted in this case, as it is more of a commercial nature with significant consequences involved. 3

Hints to students for developing a Conclusion: Come to a conclusion of what you think the court is likely to decide based on the cases discussed in your application. Do not ‘sit on the fence’, you must try to make a firm conclusion i.e. what is likely to happen.

 

A good way to start your conclusion part of the answer would be: ‘On the balance of probability, it is likely that ….. ‘ Give a brief summary of how your application applies the legal principles to answer the legal question posed by yourself at the beginning.

Conclusion: On the balance of probabilities, the Queensland Supreme Court will most likely find that there was an intention between Trudy, Patti and Keith to be legally bound by their promise, and thus a binding contract exists between them. It is likely that Trudy will be legally bound to honour her promises and will be required to purchase Patti and Keith the house on the beach as promised or pay them an equivalent amount of money, and also pay for their living expenses until they find jobs.

Scenario (2) Continued from the facts above… A week after Keith and Patti had moved into their new house, they went shopping and saw a 46 inch, high definition plasma TV in the window of ‘Amazing Hi Fi’, for only $1,500.

They were so

impressed with the price that they walked into the store and told the sales assistant that they would immediately buy the TV in the window. On closer inspection the sales assistant realised the price was wrong and told them it should be $2,500. He apologised and asked them if they still wanted the TV at the proper price. Keith and Patti were not happy, and insisted that the store sell them the TV at the advertised price. Keith and Patti wish to know if they have a legal agreement with ‘Amazing Hi Fi’ to purchase the TV for $1,500.

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Follow the same hints from above Answer: Issue: Is there a legally enforceable contract between Keith, Patti and Amazing Hi Fi or was the advertisement in the shop window for the TV an offer or an invitation to treat? Law: Pharmaceutical Society of Great Britain v Boots Cash Chemists (Boots Chemists): invitation to treat (Note to students: Whilst we would award possible part marks for Grainger v Gough because it is taking about an initiation to treat, you can hopefully see that it is not about the sale of goods in a shop window as per the ILAC scenario given – it is about prices of goods in a catalogue). Application: An offer must be distinguished from an invitation to treat. An invitation to treat is an offer to make an offer. In Boots Chemists the court held that the display of goods in a shop window or on its shelves is an invitation to treat and not an offer. The court held that the shopper offered to buy the goods when they took them to the cash register. At this stage it was up to the shop assistant (pharmacist) to accept or reject the offer. Here, the price on the TV, as in Boots Chemists, is an invitation to treat because the goods are being displayed in a shop i.e. advertised. Thus, when Keith and Patti go inside and say they would like to buy the TV, they were, as in Boots Chemists, making an offer to buy the TV at the advertised price. It was thus well within the shop assistant’s power to reject the offer, as he did. Conclusion: On the balance of probabilities, the Queensland Civil and Administrative Tribunal (QCAT) would find that Patti and Keith have not accepted an offer by the store as there was no offer, but an invitation to treat. Therefore there is no contract between the parties as there was not a true offer and acceptance (agreement). Hence Keith and Patti cannot force Amazing Hi Fi to sell them the TV at $1500 and should not lodge a claim against Amazing Hi Fi. Note to students: On slightly different facts, there may be an action for misleading and deceptive conduct or bait advertising but that is not relevant for us at this point in the course. The main purpose of the first contract law workshop is to assist in learning how to answer legal questions using the ILAC method. In particular the workshop is to help assist students find the right part of the law (that is, which element most specifically applies) and to form legal

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questions to be answered, and supporting case(s). Then to determine which cases help answer that question.

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