Explanation of Creating a Legally Binding Contract
1.A.The issue in this situation is that whether a valid contract had been formed between Shona and Raymond in terms rules of contract law and specifically the rules in relation to the essential elements of a valid contract. The formation of a contract needs offer, acceptance, capacity, consideration and intention of forming legal relationship (McKendrick 2014).
In the case of Smith v Hughes (1871) LR 6 QB 597 it has been provided by the court that an offer would be considered to be valid if a reasonable person thinks that it has the effect of legally binding him to the terms if it is accepted. Thus intention of the offeror is derived objectively.
Acceptance needs to be communicated to the person making the offer. It must be unequivocal as per Entorres v Miles Far East [1955] 2 QB 327. Without acceptance contract cannot be formed.
Consideration is the value which is paid by each party against the promise of the other party. Without consideration there is no contract. If the parties do not intend to form a contract it would not be binding at law.
In this situation any person who is placed in the position of Shona would not feel that if she goes to check out the book according to the advertisement it would be an acceptance as the advertisement does not reasonably depict intention to bind legally. In addition there was no acceptance made by Shona. There have also been no considerations provided by the parties. Thus there is no contract.
B.The statement which has been made by Raymond would be considered as invitation to offer and not an offer (Knapp, Crystal and Prince 2016). This is because he had made a general advertisement and it is not considered as an offer as provided in the case of Partridge v Critenden (1968) 2 All ER 425. An advertisement is taken to be an invitation to treat which has no legal significance. A valid offer can be made against an invitation to treat but it cannot be considered as an offer in itself. The rationale which had been made by the court in this situation is that if an advertisement is considered to be offer, the person would have to supply goods and services to all people who intend to accept the advertisement.
In this situation it can be stated that Raymond has made an advertisement which states that he is willing to sell business study text books. With respect to the advertisement Shona has planned to meet Raymond. The application of Partridge v Critenden, would signify that the advertisement is an invitation to treat. In addition an invitation to treat is not considered to be an offer and cannot be accepted. Shona could have only made an offer against an invitation to treat. There are no legal consequences in relation to an invitation to treat. Thus, in this situation it can be stated that the assertion made by Shona that Raymond has failed to provide what he has offered would not have any legal backing as no offer had been made by Raymond. The actual offer was the one where he asked to buy the remaining books.
Legal Position of Raymond’s Advert
2.In this situation it needs to be analyzed that whether Shafiq needs to be pay for the advertising material based on the provisions in relation to a valid acceptance. In the case of Entorres v Miles Far East [1955] 2 QB 327 it had been stated by the court that a valid acceptance has to be communicated to the person making the offer. It must be unequivocal and without it contract cannot be formed (Poole 2016). In addition it has been clarified by the court in the case of Felthouse v Bindley [1862] EWHC CP J35 that when a person is silent it would not lead to an acceptance. However, this is a general rule and subjected to few exceptions. In case the offeree givens an impression to the offeror that through silence acceptance is made it would be a valid acceptance when the offeror has told the offeree that silence would be acceptance then it be considered an acceptance (Knapp, Crystal and Prince 2016).
In the given situation it has been provided that Shafiq has found the price of the advertisement material to be very high. He has been provided with a mail that if he does not convey his answer in 24 hours it would be considered that an acceptance has been made by him. The application of the case of Entorres v Miles Far East signifies that there has been no acceptance. However, the exception to the rule signifies acceptance as it was notified to Shafiq that if he does not give an answer then silence would be acceptance. Thus Shafiq needs to pay for the advertising materials.
3.In this case it needs to be analyzed whether Johnathon would be entitled to get $8000 upon the formation of valid contract. This has to be specifically analyzed in terms rules relating to consideration. Consideration is the value which is paid by each party against the promise of the other party. Without consideration there is no contract. There are specific rules which need to be analyzed for the purpose of identifying a valid consideration. In addition a condition precedent is an event which is needed to take place when a contract becomes due. In the given situation all elements of contract have been met. The contract is based on condition precedent that if the house is sold he would be given $8000. This means that the contract is due when the property is sold and he is entitled to receive the money.
4.In the present situation it needs to de indentified that whether there is a valid contract between Chung lee and Katie and the property actually belongs to Katie. When a person acts on behalf of another person which respect to the law of agency, the person binds the principal to his actions as provided in the case of Ireland v Livingstone (1872) LR 5 HL 395. In this situation it can be clearly stated that Katie is the agent of the owner of the property and thus there is a valid contract for the sale of the property. In addition, the principles of a valid contract have been fulfilled and Chung Lee had acted in good faith to get into a contract with Katie and thus he can claim damages for the losses which have been incurred by him from Katie.
Payment for Advertising Materials
5.In the given circumstances it needs to be analyzed that whether the refund clause in relation to the sofa is valid and whether a claim can be made in relation to the defective TV. The Australian Consumer Law provides consumer guarantees to goods and services sold. In addition these guarantees are also applicable on second had goods and have been provided through s 51 to 59. Further it has been provided through the rules under s 64 that a person does not have a right to include an exclusion clause which excludes consumer guarantees. In addition even if it is a private sale consumer guarantees are applicable.
Thus, in the present situation the clause that there would be no refund in relation to the sofa would be invalid as it is not allowed as per s 64. In addition the sofa did not meet the description by which it was sold so it was a breach of consumer guarantees. Further, it can be stated that the TV would also be dealt under the ACL irrespective of it being a private sale as Ted and Daphne are consumers.
6.Whether the store is required to sell the knife to Kieran and by not doing so would it result in the violation of a valid contract based on the rules of legality
One of the requirements for the formation of a valid contract is that the subject matter or object of the contract has to be legal. In case the object is not legal, the contact would be considered by law as a void contract (Eisenberg 2018).
In the case of David Taylor & Son v Barnett Trading Co [1953] it had been stated by the court that when an action has been prevented expressly by the law through a legislation or a court order it would not be valid and thus cannot be enforced.
In the given situation it has been stated that Kieran has gone into a contract with the shopkeeper for the purpose of purchasing a knife as he wants to imitate his favourite martial art character. The shop keeper had promised him that he is going to sell him the knife. However, after a few days the shop notified him that he cannot sell the knife as it is prohibited by law in UK. The application of the case of David Taylor & Son v Barnett Trading Co would clearly signify in this situation that the shop keeper is not bound to sell the knife to Kieran as the contract is not enforceable at law due to the legality of object. This is because when an action has been prevented expressly by the law through legislation or a court order it would not be valid and thus cannot be enforced. Thus, the shopkeeper has not breached the contract.
7.In this case the issue is to determine the legality of the agreement which Aisha wishes to form with Saba for the purpose of getting into a marriage.
One of the requirements for the formation of a valid contract is that the subject matter or object of the contract has to be legal. In case the object is not legal, the contact would be considered by law as a void contract (Hein 2017). This means that the consideration provided must not contradict any existing law in the country. A contract would be considered to be illegal at formation when they cannot be carried out unless an illegal act is performed. No party would have the right under such contract in case of breach (Marsh 2017). It would be treated that the contract is void ab initio signifying that it has not been entered at all. Contract preventing the access of justice are considered illegal under Hyman v Hyman [1929] AC 601.
Rules of Contract as it Applies to Johnathon
In the case study it has been provided that Aisha wishes to form a contract with Saba for the purpose of getting into a marriage according to which he would not be allowed to marry any other person in life after break up and also he would not be able to claim any form of financial support. Both the terms are illegal at law as a person cannot be prevented to marry and also right to alimony is present in case of a divorce. Thus in the situation it can be stated that the contract is illegal at formation and would be considered as being void ab inito by the court.
8.In this case it needs to be determined that whether Dirk and Harry can enforce the agreement between them with respect to splitting the proceeds for the credit card use
It has been provided through the provisions of the case of Re MahMoud and Ispahani [1921] 2 KB 716, that in case where a statutory provision has expressly prohibited the terms of a contract then there would be no questions in relation to its legality. No party to the contract would be able to enforce the contract without taking into consideration the innocence of any of the parties (McDermott 2017). In addition contract of committing a crime is considered to be illegal as stated by the case of Bigos v Boustead [1951] 1 All ER 92.
In the present situation there has been a contract between Dirk and Harry by which they are to use credit cards which have been obtained illegally for the purpose of buying cars and travelling to Europe. The proceeds of the card have to be divided between them. It is clear that such an activity is prevented by the crime legislation in UK. Therefore the application of the case of Re MahMoud and Ispahani would signify that where a statutory provision has expressly prohibited the terms of a contract then there would be no questions in relation to its legality. No party to the contract would be able to enforce the contract. Thus, in the same way harry, would have no right to get the contract for splitting the proceeds of the credit card enforced by law as its object is illegal.
9.One of the requirements for the formation of a valid contract is that the subject matter or object of the contract has to be legal. In case the object is not legal, the contact would be considered by law as a void contract. However, this rule is subjected to a few exceptions.
One of the most famous cases where these exceptions had been discussed by the court is the case of Parkingeye Ltd v Somerfield Stores [2012]. In this case it had been stated by the judge that
The law in relation to illegality is not a Straightjacket. All sorts of illegality would not render a contract to be unenforceable and all facts of a case have to be individually assessed for deriving the illegality. The first of the factors which had been set out in this case was the intent and object of the party who is seeking to enforce the contract. According to this factor where a party has the intention to carry out a term of a contract in a manner which includes an illegal activity when the contract was entered, the contract would evidently be unenforceable. In the same way in case the parties to the contract did not have knowledge from the outset that the contract is illegal and there was no fixed intention on the part of the parties to act in an illegal manner, the contract can be enforced. The gravity and centrality of the illegality has to be taken into consideration. In case the illegality is not central to the contract and is very minor it may be considered as too remote for the contract to be enforced.
Advice on Binding Agreement for Property between Chung Lee and Katie
In this situation, it has been stated that there has been a contract between Naom and the farmers for the purpose of sale of their land. The farmers have agreed to sell their land Naomi at a price of 5000. Further, it has been analyzed by Naomi that the land which the farmers are willing to sell is a property of her grandmother. Thus selling a land which does not belong to the person is illegal and the contract can be rendered illegal. However, as per the case of Naomi in case the parties to the contract did not have knowledge from the outset that the contract is illegal and there was no fixed intention on the part of the parties to act in an illegal manner, the contract can be enforced. Whether the contract had been entered there was no intention or knowledge on the part of the parties to carry out the contract in an illegal manner. Thus the contract can be enforced. However, In case the illegality is not central to the contract and is very minor it may be considered as too remote for the contract to be enforced. Here the illegality is central to the contract and thus the contract would not be enforceable due to illegality.
10.A.The legal positions of Steve and Brian have to be determined in the situation with respect to the contract to sale the bike.
Unilateral mistake takes place when a party to the contract is mistaken. The mistake can be in relation to contract terms or identity. In Hartog v Colin & Shields [1939] 3 All ER 566 it was held that the contract can be void as there was a mistake. In the case of Smith v Hughes (1871) LR 6 QB 597 it was stated that the mistake has to be reasonable for the contract to be void.
In this situation Brian has purchased a bike from Steve. When the purchase was made by Brain there was a mistake in relation to the identity of the bike. However, it was stated clearly that the bike was dominator in the offer. Thus there is no reasonable mistake and the contract is binding.
B .The legal remedies for Brian have to be determined in the situation with respect to the contract to sale the bike
When a person has breached a contract the other party has the right to claim damages. The damages are provided to the party so that they can be placed in a position where they would be if the contract was not breached according to Addis v Gramophone Co Ltd [1909] AC 488. They can also rescind the contract
In this situation Steve has violated the contract with Brain as it was implied that the bike would have original parts but it was not. Thus in this case Brian has the right to rescind the contract with Steve for breach.
11.A.The issue is in relation to the contract vitiating factor of misrepresentation. It has to be determined that whether it was a term of contract that the motor home would be safe for trip or it was a false statement of fact in relation to pre contractual representation.
A statement may be a term of the contact if the same can be identified on the balance of probability of the four factors. The four factors income expertise of parties, importance of term, time elapsed from negotiation as the parole evidence rule as per the case of Dick Bentley v Harold Smith Motors [1965] 1 WLR 623.
Enforceable Contract between Kieran and KUNG-FU-KIT
If the person who is purchasing goods or services tells the seller about the importance of the statement, it is most likely to be a term of the contract. In addition, if more time has passed between the formation of contract and the correspondences between the parties it would be a representation rather than law.
A party would not be able to claim misrepresentation when they had a chance of verifying the statement by themselves and they did the same as provided by the case of Attwood v Small [1838] UKHL J60.
In this situation it has been provided that the Kiran and Tasmin have gone into a contract for the purchase of a motor home belonging to Kiran. In this case it has been seen that the van is not fit for the purpose for which it had been purchased by Tasmin. It was informed by Tasmin to Kiran that she needs the van for a trip. It was further promised by Kiran to Tasmin that the van is appropriate for the trip. This means that the person who is purchasing goods or services have told the seller about the importance of the statement, and it is most likely to be a term of the contract. Thus it is a breach of contract on the part of Kiran. A claim for misrepresentation would not be valid as she had been provided an opportunity to check the real age of the vehicle which Tasmin did not put to use. Thus it is clear that the condition of the vehicle was a term of the contract between Kiran and Tasmin. Tasmin cannot claim misrepresentation as he had verified the car on her own.
B.The legal remedies which Tasmin may give in this situation with respect to the law of contract needs to be taken into consideration in this section on the paper.
There are a few equitable remedies which are provided to parties in case it has been found that the rights they have in relation to a contract have been violated. These remedies include specific performance, damages, injunction and recession. In case of damages compensation is provided to the parties with respect to the loss incurred by them for the breach of contract as per The Monarch Steamship v Karlshamns Oljefabrika [1949] AC 196. In case of injunction the party is asked to abstain from indulging in an action to give effect to a contract. With respect to the remedy of recession, the court allows the party to get out from the contract in a way as the contract had never been formed. In the case of Poussard v Spiers (1876) 1 QBD 410 the court stated that the breach of a fundamental term of the contract would result in the breach of condition which would make the aggrieved party to claim damages as well as rescind the contract.
In the present situation Tasmin has suffered damages as she had not been able to go for a trip and she also had to call a towing van. These damages would be provided by the court to Tasmin under the application of the case of Poussard v Spiers. In addition, the court may also order Tasmin to rescind the contract which had been formed between her and Kiran and she would be able to return the van to Kiran and also not have to pay any money in relation to it. This is because one of the main conditions of the contract has been breached by Kiran in this case. The remedies of specific performance or injunction would not be of good effect in this case as they would not be able to achieve the purpose of remedies.
C.In relation to this answer, it needs to be indentified that whether the exclusion clause which has been signed by Tasmin preventing her to make a claim for misrepresentation is valid.
Enforceability of Agreement between Saba and Aisha
In the landmark case of L’Estrange V Graucob [1934] 2 KB 394, it was ruled that when a document containing contractual terms have been signed without any form of fraud or misrepresentation then the terms of the document would be legally imposed on the party irrespective of the fact that they have not read the terms.
In the case of Interfoto Picture Library v Stiletto Visual Programmes Ltd (1988) it had been ruled by the court that an exclusion clause which is considered to be unreasonable in relation to its terms have to be expressly brought to the attention of the party to be validly incorporated. In the case of Smith V Eric Bush [1989] 2 All ER 514 this provisions had been further provided support by judges. Further it has been stated in the case of Hyman v Hyman [1929] AC 601 that a term which prevents a person from carrying out a legal right would be an invalid term.
In order to determine the validity of the term into the contract between Kiran and Tasmin, it needs to be seen that it has been validly incorporated into the contract or not. In this situation the term has been incorporated though signature. This is because there was no misrepresentation or fraud on the part of Kiran to induce Tasmin to sign the contract. This assertion can be supported through the application of the L’Estrange V Graucob case. The next situation which needs to be seen is that whether the clause is valid or not. It can be stated that the clause is not only unfair but also illegal. Unfair contract terms act 1977 do not allow for the incorporation of a clause which is of an unfair nature. In addition as per the case of Hyman v Hyman a term which prevents a person from carrying out a legal right would be an invalid term. In the present situation the term is preventing Tasmin to make a claim of misrepresentation which is her legal right under the law of contract. Thus, as her right to obtain a legal remedy is prevented through the introduction of the term into the contract the term would be invalid.
References
Addis v Gramophone Co Ltd [1909] AC 488.
Attwood v Small [1838] UKHL J60.
Bigos v Boustead [1951] 1 All ER 92.
David Taylor & Son v Barnett Trading Co [1953].
Dick Bentley v Harold Smith Motors [1965] 1 WLR 623.
Eisenberg, M.A., 2018. Foundational Principles of Contract Law. Oxford University Press.
Entorres v Miles Far East [1955] 2 QB 327.
Felthouse v Bindley [1862] EWHC CP J35.
Hartog v Colin & Shields [1939] 3 All ER 566.
Hein, K.Ö.T.Z., 2017. European Contract Law. Oxford University Press.
Hyman v Hyman [1929] AC 601.Interfoto Picture Library v Stiletto Visual Programmes Ltd (1988) Ireland v Livingstone (1872) LR 5 HL 395.
Knapp, C.L., Crystal, N.M. and Prince, H.G., 2016. Problems in Contract Law: cases and materials. Wolters Kluwer Law & Business.
L’Estrange V Graucob [1934] 2 KB 394 Marsh, P., 2017. Contract law. In Contracting for Project Management (pp. 65-80). Routledge.
McDermott, P.A., 2017. Contract law. Bloomsbury Publishing.
McKendrick, E., 2014. Contract law: text, cases, and materials. Oxford University Press (UK).
of Poussard v Spiers (1876) 1 QBD 41.
Parkingeye Ltd v Somerfield Stores [2012].
Partridge v Critenden (1968) 2 All ER 425.
Poole, J., 2016. Textbook on contract law. Oxford University Press.
Re MahMoud and Ispahani [1921] 2 KB 716.
Smith V Eric Bush [1989] 2 All ER 514.
Smith v Hughes (1871) LR 6 QB 597.
Smith v Hughes (1871) LR 6 QB 597.
The Monarch Steamship v Karlshamns Oljefabrika [1949] AC 196.
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