Issue 1: Validity of Contract with Family Member
The issue that has been identified in the given case is whether Fran can hire her niece Jane, instead of Marco.
It can be stated that for the formation of a contract and the same to be binding upon the parties the intention to create legal obligations is necessary. The consideration generally implies the intention to create legal relations between the parties. The consideration provides evidence of the fact that the promisor has agreed to pay remuneration for the fulfillment of the promise and therefore it implies the intention of the parties to be legally bound. However, it can be mentioned that the intention to create legal relation still remains an essential element to assess whether a contract enter into by the parties would be valid or not. An objective test is generally applied to assess whether the parties entering into the contract intended to be legally bound as illustrated in the case Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd.
In accordance with the decision of the case Balfour v Balfour it can be stated that the courts generally apply certain types of presumptions to contracts while assessing the intention to create legal relation of the parties. In case of domestic or social contracts the courts generally assume that the parties to the contract do not intend to be legally bound. However, this provision of applying presumptions has been replaced.
However, In accordance with the judgment of the case Ermogenous v Greek Orthodox Community of SA Inc it can be stated that the High Court of Australia held that the presumptions should not be taken into consideration when determining the intent of the parties to create legal relations.
It has been provided through the facts of the case that Fran had entered in to an agreement with Marco, who is the brother of Fran. The contract had been signed between Fran and her brother Marco. Thus by the application of the case Air Great Lakes Pty Ltd, it can be said that both the parties intended to create legal relations. However Fran cannot avoid the contract just because the other party to the contract was her brother as it has been held in this case Ermogenous v Greek Orthodox Community of SA Inc that any presumptions are not to be considered by the court while determining intent.
Conclusion
Thus to conclude, it can be said that the contract entered into between Fran and Marco is a valid one and therefore she cannot avoid it.
Issue 2: Application of Promissory Estoppel
The issue that has been identified in the given case study is whether the doctrine of promissory estoppel would apply to the case of Fran and Ocavia.
The modern concept of promissory estoppel had been developed in the notable case of Central London Property trust Ltd V. High Tree House Ltd.. Promissory estoppel can be defined as the principle which restricts any person to enforce his legal right on another person if such person has promised that he would not take enforce his right and the other person has relied on such promise. It can be noted that promissory estoppels differs from estoppels at common law as the principle of promissory has strict requirements and it might arise from intention of the parties or their future conduct. The principle of promissory estoppel had first been proposed in the case Hughes V. Metropolitan Railway. However, it can be stated that promissory estoppel would only arise in circumstances in which a contractual relationship exists between the promisor and the promisee as held in the case Combe v Combe . Whether promissory estoppel should be applied in cases in which a legal relationship does not exist between the parties still remains debatable and unresolved. However, in the case Brinkom Investments Ltd V. Carr it had been held by Lord Denning that the doctrine of promissory estoppel might arise in case of promises made by the parties who are negotiating the contract. The basic requirement of promissory estoppels is that the promisor must have provided unambiguous statement that he does not intend to enforce his legal right. The second essential is that promise must have acted on the promise. Promissory estopppel would arise in circumstances in which the promissee suffers a detriment by relying on the promise of the promisor.
In this case it has clearly been provided in the given case study that Fran had promised Octavia that she would take her warehouse on rent and therefore told Octavia that she need Octavia to install a fan in the kitchen. However, after Octavia installed the fan in the kitchen Fran wanted to go back on her promise. Thus in this case, it can be stated that no contractual relationship existed between the parties and therefore Octavia cannot claim to implement the principle of promissory estoppel.
Conclusion
Thus to conclude, it can be stated that the principle of promissory estoppels cannot be applied in the given scenario.
Issue 3: Enforceability of Restraint of Trade Clause
The issue that has been identified in the given case study is whether Fran can enforce the clause of restraint of Trade
The restrain clauses in Australia continue to e governed by common law which does not conflict with the Competition and Consumer Act . The definition of Restraint of trade had been provided in the judgment of Petrofina (Great Britain) Ltd v Martin . A restraint of trade can be defined as the clause in which one of the parties, with the consent of the other party restricts the liberty of the latter party to carry on business with other parties who are not involved in the contract of the employment. However, it can be stated that the scope of the doctrine of restraint of trade has been made limited by the Competition and Consumer Act. As provided in the case Adamson v New South Wales Rugby League Ltd any agreement which includes the restraint of trade would be considered to be void unless:
- Such restraint of trade is reasonable in the best interest of the parties
- Such restraint of trade is in the best interest of the public.
Further it has been provided in aforementioned case that the time for assessing whether such time period is reasonable is not, the courts generally consider the date on which the restraint of trade had been imposed on the parties. Reasonableness is not assessed by the time period when the restraint of trade is sought to e challenged or enforced.
It has been provided in the given case study that the employment contract of Dante contained the clause of restraint which stated that he was restricted him from opening a competitive business in the same area in which the business of Fran operated. He was also restricted from supplying to the customers of Fran. However Dante after six months of apprenticeship quit the job and started supplying chocolates to the customers of Fran. Thus it can be stated that the act of supplying chocolates to the customers of Fran breaches the term of the contract and not in the best interest of his employer. Further, he started doing so Six months into the apprenticeship; however, the restraint clause restricted him from doing so for one year. Thus Fran can enforce the restraint of trade clause on Dante.
Conclusion
Thus to conclude, it can be stated that Fran can enforce the restraint of trade clause on Dante.
The issue that has been identified in the given scenario is whether Arjun is entitled to one month’s supply of chocolates.
As held in the case Carlill v Carbolic Smoke Ball Co an offer can be made to a sing person and to the world at large. In this case it was held that Mrs Carlil was entitled to the reward as the advertisement involved in this case constituted to be an offer of a unilateral Contract which Mrs Carlil had accepted and performed. Therefore she was entitled to the reward.
It has been provided in the given case study that Fran had put up a notice on the front window of her shop that any person who would recommend an apprentice for her business would be entitled to one month’s supply of free chocolates. It can be stated in accordance with the facts as provided in the case study that Arjun had visited the shop and had recommended his neighbor as the apprentice. He provided the name and the number of the neighbor. Thus in accordance with the case of Carlill v Carbolic Smoke Ball Co It can be stated that that the offer involved in this case study was a unilateral and therefore was made to the world at large. Arjun had performed the terms of the offer and therefore is entitled to the reward.
Conclusion
Thus to conclude, Arjun is entitled to receive one month’s supply of free chocolates.
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