Intention to create legal relation and domestic agreement
Intention to create legal relation- for a valid contract it is necessary that parties to the agreement must have intention to create legal relation. Generally, intention to create legal relation are considered from presence of consideration such as if promisor specified any price for the promise then it is considered that parties has intention to create legal relations. However, there is an exception to this general rule that is in case of social or domestic agreement, parties to the contract does not intend to create legal relations, especially when agreement is entered between the harmonious relations. This can be understand through case law that is Balfour v Balfour
[1919] 2 KB 571, in this case Court stated that there is no valid contract between the parties because there is no intention to create legal relations, even though consideration is present in the case. Court further stated that agreement between spouses does not consider as contract because parties does not intend to attend legal consequences. As per Atkin J, parties never have intention that they should be sued upon. Domestic agreement is not considered as valid contract between the parties, even though consideration is present in the contract or not.
In the present case, there is domestic agreement between the Jenifer and her grandmother, even though consideration in for of house is present in the case but such consideration is affected from natural love and affection which means there is no valid agreement between the parties.
Conclusion:
No contract is exist between the Jenifer and her grandmother, and Jenifer has no right to sue heer grandmother.
Rejection of offer- in case offeree rejects the offer made by offeror then it is not possible for offeree to accept the offer. Rejection can be done in two forms that is outright refusal or a counter offer. Counter offer means offer constitute acceptance but on different terms. Even though different terms are not material in nature then also counter offer are treated as a rejection of offer and new offer. Therefore, it is necessary to determine the difference between the counter offer and mere request for further information. For making the rejection effective it must be communicated, and postal rule does not apply on letters of rejection.
This can be understood through case law that is Hyde v Wrench (1840) Beav 334. As per this case offer made by P is considered as counter offer which effectively results in rejection of original offer and a new offer, and if once offer is rejected hen it cannot be reviewed by subsequent acceptance. As per Lord Langdale, under the present circumstances there is no valid contract for purchase of property exists between the parties. Inn case offer made by defendant is accepted by plaintiff unconditionally, then definitely there is binding contract but in this case plaintiff itself makes an offer which effectively rejects the original offer made by defendant. Therefore, subsequently plaintiff is not competent to accept the offer made by defendant because of which there are no obligations exists between the parties. Court stated that demurrer must be allowed.
Rejection of offer and counteroffer
In the present case, offer made by Sanche was rejected by Richard because Richard made counter offer, and as per the rule counter offer effectively rejects the original offer made by offeror. Therefore, there is no contract exists between the parties.
Conclusion:
No contract exists between the Sanche and Richard.
Parties to the contract are free to enter into contract on those terms which are agreed between them and also to those implied terms imposed by common law and statute. It must be noted that contractual remedies are only available to the parties of the contract. However, in maximum circumstances, contractual relationship exists between the retailer and purchaser, and because of this contract retailer bears the liability for any fault and defect in lieu with the implied terms of the contract.
It must be noted that this contract does not prevent the retailer from seeking damages from manufacturer of the product. ACL affect the relationship exists between the contract and product liability by introducing various provisions which makes the unfair term stated in the contract void, and these provisions also state the statutory guarantees which independently exists at the time of creation of contract. Part 3-2 of the ACL states the statutory guarantees and statutory warranties, and it also states the liability of manufacturer towards the consumer in those cases which are stated below:
- In case goods are not as per their description.
- In case goods are not of acceptable quality.
- In case goods delivered are not as per the sample.
- In case goods are not fit for stated purpose.
- In case goods are not complied with the express warranties.
In the present case, Theresa brought the table from Ravi which create contractual relation between the Theresa, but the original owner of the table was Kevin. At the time of delivery Theresa saw scratch on the table which was not present at the time of inspection of the table. As per part 3-2 of the ACL manufacturer of the table is also liable towards the consumer.
Conclusion:
In the present case, Theresa can sue both Ravi and Kevin under the ACL.
Conduct of the person includes actions and statements, but it is not limited up to actions and statements made by person, such as advertisements made by person, promotions, quotations, and any false representation made by person. For the purpose of deciding whether conduct is misled or deceptive or likely to misled or deceptive, court consider the most important question whether impression created by the conduct is false or inaccurate. Even though true position is discovered before the transaction then also such conduct is considered as misled or deceptive conduct.
However, whether conduct is considered misled or deceptive can be considered from the particular circumstances of the case which means all necessary situations are considered by Court such as advertisement, medium through which advertisement appeared, and representation or statement made by person related to the product.
Liability for defective products under ACL
In this case, Declan steal the music composed by Trevor before he published the music. Later Declan sell the composition to the producer in the Europe, and it becomes the big hit. In this case, Declan conduct was false and inaccurate. Therefore, this conduct is considered as misconduct under the ACCC.
Conclusion:
In the present case, Trevor can sue the Declan for misconduct business practice.
In case court finds out that term of the contract is not fair, then court consider such term void. It must be noted that if such contract is operated without the term then such contract is still binding on the parties. However, term of the contract is considered as unfair term if such term cause any insignificant imbalance between the rights and obligations of the parties arising under the contract, is not reasonably necessary to protect the legitimate interest of the party who get advantage from the term of the contract, and it would cause detriment to any party if such party relied on the term of the contract. For the purpose of deciding whether term of the contract is unfair or not, Court determine following factors:
- The extent up to which term is considered as transparent, and
- Contract as a whole.
The term is considered as transparent term if such term is expressed in reasonably plain language, legible, presented clearly, and any party to the contract directly affected by the term of the contract. It must be noted that contract of sale must not contain any term which disadvantaged any party such as restriction on any trade which does not affect the business of purchaser.
In the present case, Clare sells business of hairdressing to Maddie and contract of sale contains the term that Clare would not set up any business in Adelaide for 10 years. This term is unfair term in the contract because cause any insignificant imbalance between the rights and obligations of the parties arising under the contract and put unnecessary restriction on the Clare. Restriction is unnecessary as it does not affect the business purchased by Maddie. Therefore, Clare can open the café in Adelaide.
Conclusion:
In this case, Clare has right to open the café because term stated in the contract is unfair in nature.
References
ACL, ‘Intention to create legal relations’, < https://www.australiancontractlaw.com/law/formation-intention.html>, Accessed on 7th July 2017.
ACL, ‘Agreement’, https://www.australiancontractlaw.com/law/formation-agreement.html, Accessed on 7th July 2017.
Clayton UTZ, (2015), ‘Product Liability’, < https://www.claytonutz.com/articledocuments/178/ICLG-Product-Liability-Australia-2015.pdf.aspx?Embed=Y>, Accessed on 7th July 2017.
ACCC, ‘Product liability’, < https://www.productsafety.gov.au/product-safety-laws/legislation/product-liability>, Accessed on 7th July 2017.
ACCC, ‘Unfair business practices’, < https://www.accc.gov.au/business/treating-customers-fairly/unfair-business-practices>, Accessed on 7th July 2017.
ACL, ‘Unfair Terms’, < https://www.australiancontractlaw.com/law/unfair.html>, Accessed on 7th July 2017.
Balfour v Balfour [1919] 2 KB 571. Hyde v Wrench (1840) Beav 334.
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