You are on page 1of 8

PART B Short answer question

In Australia, the court is divided into higher and lower part of court. Within the court hierarchy, Appeal Court, Supreme Court and High Court of Australia belong to the superior court. Magistrate Court and District Court belong to the lower court. These courts are also separated by the state and territory.

In a particular jurisdiction, the seniority of a court determines whether a decision is binding or not. Previous decision by the superior courts is only binding when it is from the same hierarchy within the same jurisdiction. Courts are not bound by the previous decision of its own level, for instance Magistrate Court are not bound to follow the decision from other Magistrate Court.

The doctrine of precedent also states that previous decision of superior court regarding similar cases in the same jurisdiction have to be followed by the lower court. For instances, previous decision by the judges Court of Appeal are binding on the County Court judges with no regards whether they agree on the decision.

When previous case is not sufficiently similar to a new case or when the decision regarding the new case is not from the same court jurisdiction, their decision is not binding. However it may be treated as persuasive and thus providing a suitable rule of law which the court deciding the new case may choose to follow.

Under persuasive precedent a judge from County Court may decide to follow a previous decision when the materials facts in both cases are similar or when the decision is from different hierarchy.

PART A Four step process

Question 1

Step One: Identify the legal issue

The issue of law is that for a contract to be legally enforceable, the elements of agreement must be present.

Step Two: Explain the rule(s) of law with reference to relevant authority.

The elements of legally enforceable contract are intentions, offer, acceptance, and consideration. The existence of these elements requires a discussion here.

To enter into a legally binding contract both parties have to be adult persons above 18 years old with sound mind. Minors may also be bound by contract for necessities. This is shown in Scarborough v Sturzaker, where Scarborough who was under 18 years old live 12 miles away from the place where he worked. He always travelled to work with bicycle. Scarborough then purchased new bicycle from Sturzaker, trading in his old one as part of the payment but he refuse to pay the remaining amount. This purchase is only legally enforceable if the bicycle is a necessity. The issue was whether the new bicycle can be considered as necessities. The court decided that the bicycle is indeed a necessity because Scarborough travel from work to home using it, and therefore he is bound to pay for the remaining amount.

For a contract to be legally enforceable the related parties need to be intended to be legally bound by contract. In some circumstances courts presumption regarding the intention to create legal relation can be rebutted. This was seen in the case of Merritt v Merritt. Mr. Merritt and his wife jointly owned a house. Mr. Merritt left to live with another woman. They made an agreement that Mr. Merritt would pay Mrs. Merritt a 40 monthly sum, and eventually transfer the house to her, if Mrs. Merritt kept up the monthly mortgage payments. When the mortgage was paid Mr. Merritt refused to transfer the house. The issue was whether the promise to transfer the house to Mrs. Merritt intended to be legally enforceable

despite the parties being spouses. The court decided that it could be inferred in the circumstances that the agreement was intended to be legally enforceable. When a contract was made in business context, the courts presumption that the parties intended the contract to be legally enforceable can be rebutted. This was shown in the case of Esso Petroleum Co Ltd v Commissioners of Customs and Excise. Esso offered a World Cup coin with likenesses of English 1970 squad players, given to every motorist buying over four gallons of petrol. The Revenue argued these coins should have purchase tax charged on them because they were produced in quantity for general sale. The issue was whether Esso had intended to be legally bound by the offer to give the coins to motorist who purchased it offer. The court decided that the terms of the promotion were intended to be legally enforceable.

Under the doctrine of privity only parties that have undertaken the contract have the right to bring an action to enforce it. In Price v Easton, Easton made a contract with builder that in return for builder doing work for him, Easton would pay Price 19. Builder did the work but Easton did not pay, so Price took action. The issue was whether Price was entitled to enforce the promise made by Easton to pay Price. The Court decided that Price was not entitled to enforce the promise.

For something to be an offer, it should not be an invitation to treat, therefore displays of items for sale generally are not considered to be offer. This was shown in the case of Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd. Boots Cash Chemists had instituted self-service method for its customers. Before then, all medicines were stored behind a counter and an assistant had to get what was requested. The Pharmaceutical Society of Great Britain objected that was an unlawful practice. The issue were the drugs and medicines selected by customers from the display sold before the customer took them to the cashiers. The court decided no goods was sold before the goods were taken to the cashier and paid by the customers.

The principle is that acceptance made by fax or telex is considered to be instantaneous as long as the message is actually recieved at the offerors end. This was shown in Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelsgessellschaft mbH. In the course of negotiating a

contract a number of telexes were exchanged by the parties, one of whom was in London, the other in Vienna. Two of these telexes constituted an offer and acceptance. The issue was where and when the acceptance took effect. The court decided that the acceptance took effect when the telex was received in Vienna. When there is consideration there is no requirement that the consideration be of equivalent value, it is enough that the value is relatively small as long as the receiver accept it. This was shown in Thomas v Thomas. Before he died, Mr. Thomas wished that if his wife survived him, she should be allowed to live in his house until her death. After Mr. Thomas died his executors took account of this wish and entered into a contract with Mrs. Thomas, allowing her to live in the house in return for payment by her of 1 per year and a promise to keep the house in good shape. The issue was whether there had been a sufficient consideration by Mrs. Thomas to make the contract with the executors to be legally enforceable. The court decided that Mrs. Thomas was entitled to enforce the contract. Step Three: Apply the law

The question is whether a reasonable person would regard the agreement between both parties to be legally enforceable. Intention to be bound by the contract were shown by Alex and Francis and it could be proven by Esso Petroleum Co Ltd v Commissioners of Customs and Excise case, where the court decided that by selling something Esso have intended to be legally bound by contract. Consideration also being applied by Francis when she gave Alex time to consider until 10am in the next day, like in the Thomas v Thomas case.

Item on display are considered to be invitation to treat like in Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd case and not an offer. In this case the offer start when they began negotiating and not when Alex saw the item on display. Francis offer Alex $200 for the special set.

In this case the acceptance of the offer should be effective when Francis received the message from Alex like in Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelsgessellschaft mbH case where the court decided that the acceptance effective when they received the telex. Eventhough Francis only heard the message from Alex after 10am the day after, the offer is

deem to be accepted at 10pm the day before when Alex telephoned Francis and leave a message..

Given that all of the elements of contract are established, a reasonable person would regard that Alex should have a legally enforceable contract with Francis. Therefore, Francis should have sell the special set to Alex.

Step Four: A logical conclusion should flow from the above steps In conclusion Alex can enforce the contract to be legally binding and Francis should have sell the special set to Alex.

Question Two Step One: Identify the legal issue The principle of law in this case is what are the terms expressedly agreed to in relation to restringing of Wendys racquets. Step Two: Explain the rule(s) of law with reference to relevant authority.

The existence of expressedly agreed terms of contarct requires a discussion here.

The term of partly written and partly oral contract are proved by oral and written contract. This was shown in Van den Esschert v Chappell. In this case immediately before agreeing to buy Esscherts house, Chappell asked if it was free of white ants. Esschert said it was, but this assurance was not included in the written contract of sale that Chappell then signed. Chappell sued Esschert for breach of contract when the house turned out to be infested with white ants. The issue was Chappell entitled to lead evidence of a term, orally agreed, that the house was free of white ants. The court decided that taking the circumtances into account the contrat was partly written and partly oral, thus the parol evidence rule does not exclude evidence of additionally agreed terms. Whether a statement made was intended to be a term of the contract or merely a representation is resolved by asking what can be reasonably be inferred from the circumtanses. This was shown in Handbury v Nolan. Where in this case an auctioneer offered a cow for sale at auction. Before the sale the cow was announced to be pregnant. The buyer bid $3200 to buy the cow, but the cow turned out to be infertile. The issue was whether it an expressly agreed term of the contract of sale that the cow was fertile and pregnant. The court decided the auctioneers staetement was an express term of a contract. Whether particular terms have been includen in the contract depends on the circumtances. In LEstrange v F Graucob Ltd, Mrs. LEstrange bought a cigarette vending machine from Graucob Ltd. She signed the agreement without reading it. After delivery the machine proved to be unsatisfactory. The issue was whether LEstrange bound by the contract that exclude additional warranties even though she did not read the contract before signing it. The court decided that LEstrange was bound by the terms of contract she signed.

Terms may also be implied by fact when in the circumstances it can be inferred that the term was intended to be part of the contract without being expressly stated as long as it meets all the requirements. In Codelfa Pty Ltd v NSW State Rail Authority, Codelfa agreed to build 2 tunnels in Sydney for the State Rail Authority. In particular Codelfa thought that the provision protected then against the possibility of injuctions. However having to work more cost Codelfa extra money and they claimed extra payment from NSW State Rail Authority. The issue was whether the terms in the contract obliging State Rail Authority to pay Codelfa the extra cost. The court decided that there was no such term. Whether a term is condition or a warranty depends on the intention of the parties, as evidenced by the circumtanses. In Bettiny v Gye, Bettini, a singer, contracted to Gye. It was aterm that Bettini arrive 6 days before the first engagement and attend rehearsals. Being ill, she arrived late and missed 4 days of rehearsals. The issue was whether the term attending 6 days rehearsals a condition or a warranty. The court decided that the term was a warranty. Whether contracting parties could restrict their liability by agreement falls in excluding liability category. In Sydney City Council v West , West lost his car when he parked it in Sydney City Council car park. When West was away from his car, another person told the attendant that he lost his ticket and gave him duplicate, the attendant allowed the person to drive West car without any check. West then took action but Sydney City Council deny it by saying that the ticket West obtained contained statement that exclude their liabilities. The issue was whether the clause effectively exclude liability in this circumtances. The court decided that the caluse has become proper term of contract but did not exclude liability for what had happened. Step Three: Apply the law

The expressed term in this case were stated orally and there is no written contract between both parties, but like in Van den Esschert v Chappell case, terms can be orally stated because of the importance of the statements. The terms agreed by both parties was $180 for restinging 6 racquest. This term was easily agreed on by both paties, so it can be concluded that it does not hold so much importance that they would not enter into a contract if not for the term as proven by Bettini v Gye case, an so it was classify as a warranty.

To classify something as terms it should not contain puff, opinion, and repesentation. Statement like best in Western Australia and no one can string racquest like them that are stated in advertisement is not a term, they are puff.

Wendy state that it is very important to restring the racquest with correct materials and tension, Fred responded that the racquest will be correctly restring. This statement was made before the agreement and Fred has special knowledge about racquest, eventhough this was not written in the contract, this staement should be considered as a term, like the court decision on Handbury v Nolan case. This statement hold importance to Wendy that she would not enter into a contract with Fred if it was not for this statement, therefore it was considered to be condition.

The notice written in docket should be considered as term as it was proven to be proper term like in case Sydney City Council v West. So eventhough Wendy claim that she did not read the notice, she did accept the contracts term and she is bound by the contract, like in LEstrange v F Graucob Ltd case.

The notice state that they are no liable for wokrmanship negligence demonstrates by their emplyoees, the caused of the liability was not not their employee, it was the employees son, who are not employee of the shop. As the notice only mention about the workmanship negligence, jugdement is needed to determine whether they are liable or not. Given the circumstances and the notice could be interpret that they are liable for other negligence beside workmanship, it is judged that letting employees son to handle the racquest was a negligence on their part. Therefore they should not be exclude from liability.

Step Four: A logical conclusion should flow from the above steps In conclusion, the terms did not exclude Freds Racquets Restinging from liability given the circumtances.

Word count excluding heading, reference list, and cover : 2537