ILAC Problem Scenario PDF

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Mid semester Assignment using ILAC method...

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Heales,'John' '

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46468831'

LAWS1100 Business Law – Semester 1, 2020: ILAC Problem Scenario

Student Number: 46468831

Name: Heales, John

Registered Lecture: Monday

Registered Tutorial: T10

Word Count: 682

LAWS1100 Business Law – Semester 1, 2020: ILAC Problem Scenario 1

[Type'text]' [Type'text]' [Type'text]' ' ' Issue 1: Can Brittney enforce Susan’s oral promise to give Brittney the luxury wooden table? Law: Parol Evidence Rule: When the contract is in writing, it is presumed that the written contract contains all terms agreed between the parties. The general rule is that if there is an inconsistency between a written term and a verbal promise, the court will favour the written term and disregard the verbal promise. No other evidence may be admitted to vary or add to the terms of the written contract. The Parol Evidence Rule states: “Once the parties have reduced their agreement to a writing that they intend to contain the final and complete statement of their agreement, then evidence of terms that would supplement or contradict it are not admissible” See: Mercantile Bank of Sydney v Taylor (1891)

There are a number of exceptions to the Parol Evidence Rule: 1. If the verbal promise was intended to be part of the contract. See: Van den Esschert v Chappell (1960); In the case, Van den Esschert v Chappell (1960), Chappell agreed to purchase a house from Van den Esschert. Before signing the written contract Chappell asked Van den Esschert if the house was free from any infestation of white ants and Van den Esschert assured him that it was. The house turned out to be infested by white ants and Chappell sued Van den Esschert for breach of contract. The court decided that the parol evidence rule did not apply. The written contract made no reference at all to white ants, so the complete agreement consisted of the written contract plus the verbal assurance. 2. Implied Terms; 3. Collateral Contracts. For this case, the focus will be on Collateral Contracts. Collateral Contract: A Collateral Contract is a statement that forms a small preexisting contract, which enables the primary main contract to come into existence. See: De Lassalle v Guildford (1901): De Lassalle v Guildford (1901) was a case where an oral promise had been made prior to the signing of a lease for a property. Guildford promised De Lassalle that the drainage of the property was in order, which induced De Lassalle to enter the contract. Although as a result of the Parol Evidence Rule Guildford’s verbal assurance couldn’t be a term of the lease, the verbal promise did amount to a collateral contract: In return for Guildford’s promise about the drains, De Lassalle entered into the lease. Guildford had breached the collateral contract and De Lassalle was entitled to compensation.

LAWS1100 Business Law – Semester 1, 2020: ILAC Problem Scenario 2 ' '

Heales,'John' '

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46468831'

To establish a Collateral Contract there are four elements that must be satisfied: 1) An oral statement – and a main written contract; 2) The oral statement was intended as a promise – made to induce entry to the main contract; 3) The collateral contract is not inconsistent with the terms of the main written contract; 4) Entry into the main contract is consideration for enforcing the promise made under the collateral contract. Application: 1. There was an oral statement from Susan to Brittney that read: “If you sign now, we can also deliver to you a free luxury wooden table to go with the chair”. Furthermore, there was a main written contract regarding the purchase of the wooden chair. 2. The oral statement given by Susan was intended as a promise and induced Brittney into entering the main contract. This is similar to what happened in the De Lassalle v Guildford case, where Guildford promised De Lassalle that the drainage of the property was in order and hence induced De Lassalle to enter the contract. 3. The main contract had no mention of the wooden table to accompany the chair hence the collateral contract is not inconsistent. 4. Brittney’s entry into the main contract is consideration for enforcing the promise made by Susan to include the free luxury wooden table. Again, this is similar to De Lassalle v Guildford as De Lassalle’s entry into the main contract is consideration for enforcing Guildford’s promise regarding the drains. Conclusion As a collateral contract was established, Brittney can enforce Susan’s oral promise to give her the luxury wooden table.

LAWS1100 Business Law – Semester 1, 2020: ILAC Problem Scenario 3...