Essay on Contract Law of Australia: Case Study

Question 1:

Issue:

The key issue is whether is Nick has a binding contract with Frank. Will Nick still able to claim the money?

Rule:

As a contract law in Australia is embodied in common law which defines the Contract law as an agreement between two or more parties which were stated in “Topic 2 Agreement – Offer in Contract I ”. In order to recognise as a contract, there are 4 element you must be follow:

• Offer: a promise by one party to provide something in exchange for something of value from the other party.
• Acceptance: agreement to the offer.
• Consideration: agree to provide something of legally recognisable value to the other.
• Intention: the willingness of all parties to an agreement to be legally bound by that agreement.

It will not recognise as a contract if one of the elements is not included. Contract is always start with offer. Offer can be made in writing, verbally or may be inferred by the party’s conduct. Although offer made in verbally sometimes are not offer such as:

• Negotiate: conduct between parties before an agreement is made.
• Request for information: help person to decide whether or not to enter into an agreement.
• Advertisement: made to the world at large, but court usually do not consider advertisement to be offer.

Application:

Frank has made an offered $1000 with Nick if he abstains from alcohol for one month starting from 1st of July because of his concern of his nephew health which lead Frank offers was more likely negotiate where he become concern about his nephew health.

Nick has concerned his health before Frank has made an offer, so Nick has joined membership of AA group and sign document with AA group that is one of the conditions for membership to abstain from alcohol.

Nick leads himself to have contract with AA group instead of Frank under the contract law which he has meet all the elements in the contract elements. In that case, both of Nick and AA group has binding contract together under Contract Law in Australia.

Furthermore, he didn’t show that he intent to accept the offer or consider the offer which he stated in case study that “He admits this was more out of concern for his health and the promise to the AA group than any thought of financial reward”.

The similar case occurs

Conclusion:

In conclusion, Nick has no binding contract with Frank because there is no agreement between both parties and under Contract Law in Australia is embodied in common law it doesn’t recognise as a contract because of the elements of the contract is missing. Also, Frank is more likely negotiate with Nick rather offer him, so Nick won’t be able to claim the money.

Question 2:

A. Issue:

Whether can he return the stone to Hugh and claim his money back although there was no discussion, both Donald and Hugh believed it was a rough diamond.

Rule:

Under contract law in Australia is embodied in common law, form of contract can be made in writing, orally or by conduct. Therefore, in the element of the contract, acceptance can be defined into types:

• Express acceptance
• Implied acceptance

Which under the “Topic 1 Introduction to contracts and Topic 3 Agreement – Acceptance in Contract I”.

Application:

Hugh has a stand with the sign “For Sale: Mixed Gemstones at Marked Prices” this was demand as invitation to treats.

Donald was a looking for a stone that suitable for setting in a ring and he has selected stone priced $450 and purchased it from Hugh which a contract between Donald and Hugh has made under the form of Contract “Contract by conduct”.

Although there was no discussion between Hugh and Donald, the stone was later discovering as topaz, this was considered as implied acceptance which the offeree conducts, or actions convey acceptance with no verbal communicating the acceptance is required under Contract Law of Australia.

As similar case happens “Brambles Holdings Ltd v Bathust City Council [2001] NSWCA 61” which the case is demanded as implied acceptance by conduct throughout the action of Bramble wasting liquid at the rate specified in the September letter of offer, and when view objectively. The conduct is respondent could only conclude that the agreement had been accepted on the part of the appellant and was to be acted on by them.

Conclusion:

In conclusion, Donald has no right and legal implication to claim his money back under Contract Law. Donald rights and legal was stated as implied acceptance in this case because there was no communicate or discussion involve in the case.

B. Issue:

Will Donald be able to return the stone and claim his money back, if Donald believe the stone was a rough Diamond but did not discuss his belief with Hugh, who knew it was a topaz.

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Rule:

Under the Contract law of Australia, contract by conduct define as form from the actions of the parties and it still follow the element of the contract.

One of the elements, acceptance can express differently throughout the action involve. Importantly, acceptance can determine for agreement between 2 parties. Acceptance can be implied or expressed. This was stated in “Topic 1 Introduction to contracts and Topic 2 Agreement – offers in Contract I”.

Application:

Under this case, it quite similar to case above which Donald believe the stone was a rough diamond but he didn’t discuss his believe with Hugh about it which lead Donald accept the contract with no other term or under any circumstance under the element of the contract.

On the other hand, Hugh, who knew it was topaz doesn’t realise Donald was looking for rough diamond which Donald doesn’t discuss his belief with him. Furthermore, Donald believe and did not discuss will lead him to an implied acceptance which no communicate, and contract is by conduct.

Conclusion:

In conclusion, Donald has no right and legal implication to claim his money back and return the stone according the Contract Law of Australia embodied in Common law which he has no discussion

C. Issue:

Will Donald be able to claim his money back if Donald told Hugh he was pleased to find a diamond. Hugh did not correct him.

Rule:

Under the Rule of Contract Law of Australia, Invalid contract can be Misrepresentation. Misrepresentation can have 3 different types:

• Fraudulent misrepresentation
• Negligent misrepresentation
• Innocent representation

This was stated in “Topic 2 Invalid Contracts in Contract II under Misrepresentation”.

Application:

Donald told hugh that he was pleased to find a diamond.

Hugh did not correct him and let Donald choose a stone which later identified as topaz. In Invalid Contract stated that Fraudulent misrepresentation is a statement where offeror deliver a false statement to offeree so Hugh know that the stone was topaz when he sell that stone to Donald at the same time when Hugh know Donald was looking for rough Diamond.

Conclusion:

In conclusion, Donald has right and legal implication to claim his money and return the stone which mean the purchaser would be entitled to restitution for any money they have paid.

D. Issue:

Will Donald be able to claim his money back and return the stone to Hugh if Hugh was innocent misrepresentation?

Rule:

Under the Rule of Contract Law of Australia, Invalid Contract can be misrepresentation. Misrepresentation have 3 difference types:

• Fraudulent misrepresentation
• Negligent misrepresentation
• Innocent representation

This was stated in “Topic 2 Invalid Contract in Contract II under misrepresentation”.

Application:

Under this case, Donald was looking for rough diamond.

Hugh was the club’s expert on diamonds. Hugh was offered the stone to Donald which he assumes that it was a diamond as he honestly believed it to be. Donald has purchased the stone and discover later as a topaz. This lead Hugh become an innocent misrepresentation under the condition that he offer to Donald which make a statement that he genuinely believes to be true but in fact, is incorrect.

As similar case happen Whittington v Seale-Hayne (1900) 82 LT 49, Plantiff entitled to rescind on the basis of an innocent misrepresentation as well as a refund of rate and an indemnity on repairs that he had made as these were obligations created by the taking of the lease.

Conclusion:

In conclusion, Hugh misrepresent and offered the stone to Donald which was discovering later as a topaz can be defined as innocent misrepresentation. Also, Donald has right and legal implication to claim his money back and return the stone which represent in ACL s18.

Reference:

1. Gibson, A 2019, Commercial and Enterprise law: law of contract, Pearson, NSW, pp. 212.
2. Gibson, A 2019, Commercial and Enterprise law: law of contracts, Pearson, NSW, pp. 239.
3. Gibson, A 2019, Commercial and Enterprise law: law of Contracts, Pearson, NSW, pp. 227.
4. Gibson, A 2019, Commercial and enterprise law: law of contracts, Pearson, NSW, pp. 326.