Case Analysis Contract Law PDF

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LAW FOR COMMERCE CONTRACT LAW ASSIGNMENT 1...

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Case Analysis Case 1 Issue: Whether Jillian is entitled to withdraw her offer to buy Ken’s state-of-the-art Roland synthesizer. Rule: Under the Australian Law, there are six essential elements of the contract that must exist to form a legal contract: offer, acceptance, consideration, capacity, intention, and certainty. As held in the case of Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153, there is a need for both parties to comply with the essential elements of a contract to make a valid contract. As held in the case of Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd [1989] 2 NSWLR 309 (Supreme Court of New South Wales), there must be an agreement between the involved parties that is formed by the set of reciprocal promises made by both the parties and adequate consideration. However, must be adequate and mutually determined at the time of formation of contract. As outlined in the case of AGC (Advances) Ltd v McWhirter (1977) 1 BLR 9454 (Supreme Court of NSW), offer or proposal means expression of his willingness by one party to another to do certain act or not to do certain act. The person who makes the offer is known as offeror and the person to whom the offer is made, is called offeree. The offer is different from the invitation to offer. An offeror may withdraw any offer before receiving any acceptance on such offer. As outlined in the case of Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349, the other aspect of a valid agreement is Acceptance. The person to whom the proposal is made has given his ascent or decent on such offer, offer is said to be accepted and once the offer is accepted by the other party, it become the promise. Consideration includes money or goods or services made

against the promises of another person. As held in the case of ANZ v Frost Holdings PtyLtd [1989] VR 695, it may be anything. When it comes to capacity, the contract must be made between the capable persons who can be held liable in case of breach of contract. If the agreement is executed between incapable persons, agreement shall become void. Also, the agreement is formed with the intention which creates the legal obligation on the part of both parties. This means that the object of the agreement must be certain and the consideration also must be certain. The agreement shall not contain the uncertainly or impossibility whether physical or legal. Application: In this case, Jillian offered to buy Ken’s state-of-the-art Roland synthesizer (advertised for $5000) for $4000 and, since Ken was uncertain about whether to sell it for that price, Jillian gave him two weeks to make up his mind for certain. There is a formal offer but no formal acceptance exchanged between Jillian and Ken, which means there exists no agreement between the two parties. There is no consideration that was paid at that time to make a formal agreement, but rather Ken was given two weeks to think out the price offered by Jillian. After three days’ thinking about it and on the basis of the offer, Ken decided to go out and buy another synthesizer (the latest model). He thought he will accept Jillian’s offer after he got the new synthesizer. If Ken had accepted the offer that was given by Jillian, an agreement could exist and lead to the formation of a valid contract. However, before he could do so, Jillian called Ken and said she was no longer offering to buy, because she had found something else of better value. Initially, there was an offer made by the offeror, but no acceptance was accorded by the offeree. This therefore means there is no chance a legal contract could be formed between the parties.

Conclusion: As per the transactions of the case, there is no agreement between the parties, so Jillian is entitled to withdraw her offer just like that, and since there exists no valid consideration, the court cannot question its adequacy. If Ken accepted the offer of Jillian, the acceptance of Ken could have formed a valid agreement between the parties, and could have a legal binding obligation against each other. If there existed a valid contract, Ken could have held Jillian liable for the breach of contract. If Ken wishes to appeal the decision made by the Victorian Magistrates Court, he can appeal the decision in the Victorian Supreme Court....