Issue 1: Payment for Tile Installation
Whether any liability of Benjamin is raised to pay $25000 to orchid Grey for finishing the Counter tiles under the contract?
If contract is established as per the law, then such contract is legally binding on the parties. Parties to the contract shall perform their respective obligations as per the terms of the contract. However, no party has right to modify or cancel the terms of the contract. In other words, Contract established under the law must be protected by the law.
As per the provisions related to indeterminate terms of the Contract law means if any term related to contract such as quality, price, and place, etc. was not stated under the contract or not clearly stated under the contract after the formation of the contract then parties has right to decide such terms through supplement agreement. In case, party fails to reach the supplementary agreement then such terms shall be determined through the relevant provisions of the contract or on the basis of relevant usage.
This further states that if any relevant provisions of the term are not clear or it is not possible to determine the terms above stated method of the contract law then this method will apply. If term related to price and remuneration is not clear then in such case market price of the place of performance is applied which exists at the time of concluding the contract.
In the present case, Benjamin sign the contract because Dom represents that tile is sold at market rate, and market rate for that tile at the time of concluding the contract is $20000 which means it cost almost $20000 to Benjamin. Later, Dom says that market rate is increased because of reality show and now Benjamin is liable to pay $25000.
Term is not clear at the time of conclusion of the contract which means contract is not concluded between parties. This can be understood through case law Ellul and Ellul v Oakes, (1972) 3 SASR 377, Supreme Court of South Australia. In this case, Court stated that if any representation is made at the time of formation of contract for the purpose of influencing the other party to act on the basis of that representation then is actually inducing other party to act upon it, and such term is considered as warranty term. Therefore, Benjamin is liable to pay only $20000 to Dom and not $25000.
Issue 2: Validity of Contract Condition
Whether condition stated in the contract signed between Kane and Benjamin is valid or not?
Contract law also defines the provisions related to effectiveness of contract. As per this article contract is effective in nature at the time of its formation. There is an exception to this rule also which states that if effectiveness of contract is subject to any procedure such as approval or registration, etc. then it is required by relevant law that such provisions will applied on the contract.
Provisions further states the provision related to effectiveness of the contract in case contract subject to certain conditions, which means if any contract is subject to condition precedent then such contract becomes effective only when such condition is fulfilled. If any contract is subject to condition subsequent then such contract is extinguished effective only when such condition is fulfilled. It must be noted that if party impaired the satisfaction of a condition, then it is considered that condition have been satisfied.
In the present case, Contract between Kane and Benjamin is subject to condition precedent, and as per this condition effectiveness of contract is subject to approval because as stated above if effectiveness of contract is subject to any procedure such as approval or registration, etc. then it is required by relevant law that such provisions will applied on the contract and article. However it must be noted that condition is valid only when reasonable person have knowledge about the condition and this is stated under case law Raffles v Wichelhaus, (1864) 2 H & C 906. In this case, Court stated that no contract exists because of the ambiguity and condition sated in the contract.
In this case, both the parties know about the condition which means condition is valid in nature, and as per above stated provisions of the contract, effectiveness of contract are subject to certain conditions, and if any contract is subject to condition precedent then such contract becomes effective when such condition is satisfied. Therefore, condition stated under contract is valid condition and Benjamin is not bound to enter into contract unless such condition is fulfilled.
Conclusion:
Benjamin is not bound to enter into contract unless such condition is fulfilled
Whether additional term stated in the side contract is valid and Benjamin is not bound to purchase the bags at $25 instead of $17 which is decided between the parties at the time of formation of contract?
Issue 3: Validity of Additional Term in Side Contract
Contract law states the binding effect of the contract. As per this article, if contract is formed lawfully then such contract is legally binding on parties. In other words, parties to the contract are under obligation to perform their duties in accordance with the contract, and no party has right to terminate or amend the contract arbitrarily. It must be noted that lawfully formed contract is protected by law.
As stated above parties to the contract are bound by the terms of the contract, and contract terms are of two types express term and implied term. Express terms are those terms which are stated by party or written in the contract. Express terms are binding on the parties.
The Parol evidence rule states that if any written agreement exists between the parties then it is not possible for parties to present any evidence in the Court related to any oral or implied agreement which contradicts the written terms of the contract. this rule is also known as four corner rule, and this rule further states that if contract is exists between the parties then court only consider the terms of the contract for the purpose of finding what is stated in the four corners of the paper.
In the present case, contract between the parties states the express term that bags are sold for $ 17 and this term are stated in additional letter. As stated above, parties to the contract are bound by the terms of the contract, and contract terms are of two types express term and implied term. Express terms are those terms which are stated by party or written in the contract. Express terms are binding on the parties. This can be understood through case law Gordon v Macgregor, (1909) 8 CLR 316, High Court of Australia.
Therefore, Benjamin is not bound to pay $25 for bags as additional term between the parties is valid.
Conclusion:
After considering the above facts, it is clear that parties are bound with the express terms of the contract and Benjamin is bound to pay only $17 as agreed between the parties.
Whether there is any valid contract between the Benjamin and Eden, and whether Eden is bound to purchase business from Eden for $300,000?
It must be noted that agreement is the most important requirement of valid contract, and agreement include two factors that are offer and acceptance. Both offer and acceptance can be understood through case law Smith v Hughes, Court of Queen’s Bench [1871] LR 6 QB 597. In this case, court stated that offer is the clear statement about the terms of the contract under which offeror wants to bind himself/herself, and no further changes required. Offer is the statement which is made by offeror to the offeree for entering into contract.
Acceptance is the statement through which party to whom offer is directed accepts the offer and acceptance can be given in any form either in writing, orally, or by conduct.
Another important requirement of contract is intention to create legal relation. As per this requirement parties must intend to create binding relations at the time of formation of contract. For the purpose of determining the intention of the parties, Court usually considers the evidence of consideration.
In the present case, Benjamin direct offer to the Eden which is accepted by the Eden. Both parties intended to create legal relations between them and this can be proved through the presence of consideration. In this case Benjamin offers his business for $300,000 to the Eden which is accepted by Eden. As stated, for the purpose of determining the intention of the parties, Court usually considers the evidence of consideration. Therefore, there is valid contract between the Benjamin and Eden and she is liable to purchase business for $300000 from Benjamin.
Conclusion:
There is valid contract between the Benjamin and Eden and she is liable to purchase business for $300000 from Benjamin.
Website
ACL. Terms, https://www.australiancontractlaw.com/law/scope-terms.html, Accessed on 14th October 2017.
ACL, Ellul and Ellul v Oakes, (1972) 3 SASR 377, Supreme Court of South Australia, < https://www.australiancontractlaw.com/cases/ellul.html>, Accessed on 14th October 2017.
ACL, Agreement, < https://www.australiancontractlaw.com/law/formation-agreement.html#certainty>, Accessed on 14th October 2017.
ACL, Raffles v Wichelhaus, (1864) 2 H & C 906, < https://www.australiancontractlaw.com/cases/raffles.html>, Accessed on 14th October 2017.
Lawhandbook (2017), The terms of the Contract, < https://www.lawhandbook.org.au/07_01_03_the_terms_of_a_contract/>, Accessed on 14th October 2017.
ACL, Gordon v Macgregor, (1909) 8 CLR 316, High Court of Australia, < https://www.australiancontractlaw.com/cases/gordon.html>, Accessed on 14th October 2017.
ACL, Smith v Hughes, Court of Queen’s Bench [1871] LR 6 QB 597, < https://www.australiancontractlaw.com/cases/smith.html>, Accessed on 14th October 2017.
Consumer Affairs Victoris, Building contracts, < https://www.consumer.vic.gov.au/housing/building-and-renovating/plan-and-manage-your-building-project/contracts>, Accessed on 14th October 2017.
Case laws
Gordon v Macgregor, (1909) 8 CLR 316, High Court of Australia.
Smith v Hughes, Court of Queen’s Bench [1871] LR 6 QB 597.
Ellul and Ellul v Oakes, (1972) 3 SASR 377, Supreme Court of South Australia
Raffles v Wichelhaus, (1864) 2 H & C 906
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
