Case 1: TLAW 401 BUSINESS LAW - ZHEN CAI - 20177379

TLAW 401 BUSINESS LAW_ZHEN CAI_20177379
Case 1
This analysis based on case 1 between Winnie and her mother. The case is about premises lease between
Winnie, a fashion designer and her mother, who owned the property. Winnie’s mother agreed to lease one
of her building to Winnie at half price to open her retail outlet. And Winnie decided to renovate the place
after inspection. She promised to get permits from local council for the renovation and to pay for $50,000
alteration fee.
Winnie informed her mother that the shop to be opened on the date agreed to in the proposed lease is
crucial for the her to get healthy financial return but she didn’t want to start on renovation before get
confirmation from her mother said that she will rent the property to Winnie as the price agreed before.
Winnie’s mother said she will let Winnie know in the next few days if she changed her mind about the
rental.
Winnie started renovation after a week without hearing anything from her mother. But she did notice her
mother drive past the building after the renovation has begun. However, Winnie’s mother informed her
1
Latimer P, Australian Business Law (35th ed, Oxford, 2016). 1
2
Hyde v Wrench [1840] EngR 1054 (hereinafter Hyde v Wrench case) discussed in Latimer P, Australian Business Law (35th ed, Oxford,
2016) p 322.
3
Felthouse v Bindley [1862] EngR 931 (hereinafter Felthouse v Bindley case) discussed in Latimer P, Australian Business Law (35th ed,
Oxford, 2016) p 325.
4
Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 (hereinafter mpirnall Holdings Pty Ltd v Machon
Paull Partners Pty Ltd case) discussed in Latimer P, Australian Business Law (35th ed, Oxford, 2016) p 326.
5
Balfour v Balfour [1919] 2 KB 571 (hereinafter Balfour v Balfour case) discussed in Latimer P, Australian Business Law (35th ed, Oxford,
2016) p 305.
6
Evans v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] FCAFC 81 [12]-[13] discussed in
Latimer P, Australian Business Law (35th ed, Oxford, 2016) p 306.
7
Adams v Lindsell [1818] EWHC J59, discussed in Latimer P, Australian Business Law (35th ed, Oxford, 2016) p 329.
8 Entores Ltd v Miles Far East Corporation [1955] EWCA Civ 3, discussed in Latimer P, Australian Business Law (35th ed, Oxford, 2016) p
328.
that she didn’t want to continue with the agreement when the 6-month renovation was almost finished. By
this time, the rental lease has still not been signed.
This paper will advise Winnie her legal rights based on relevant principles of contract law. There are a
few issues in the case violated the essential elements of contract law.
Firstly, when Winnie start renovation, the lease hasn’t been signed by her mother. The action of offering
rental proposal, contacting renovation, rejecting of original agreement were all based on the oral contract
between Winnie and her mother. However, a contract related to real estate must be evidenced in writing to
be enforceable 1. Thus, the oral contract was void and there was no contract between Winnie and her
mother. Winnie didn’t have legal right to renovate the place nor sue her mother for against the contract.
What’s more, one of the essential element of a contract is agreement. Agreement means there needs to be
an offer which has been accepted1. In this case, Winnie’s mother offered to rent the property to Winnie at
half price. It was an offer Winnie’s mother made. In this situation, Winnie’s mother was offeror and
Winnie was the offeree. However, this offer was rejected by proposing a counter offer with new terms that
Winnie would need to renovate the place. Winnie offered to get permits from council about the renovation
1
2
2016) p 322.
3
Oxford, 2016) p 325.
4
5
2016) p 305.
6
7
328.
2
and to pay for the alterations. The Hyde v Wrench case can be used as reference. In Hyde v Wrench
case, X first offer to sell to Y for price 1,000 euro. Y offered 950 euro in reply. X rejected Y’s offer so Y
offered to pay the original price. The judgment for this case is no contract because the previous offer X
give to Y has been rejected by Y by offering a new price. The similarity of Hyde v Wrench case and
Winnie case is that the previous offer are rejected because of the proposing of a new counter offer from
offeree. Therefore, the new offer was proposed by Winnie as offeror, wait for Winnie’s mother to accept
as offeree. Nevertheless, the new offer proposed by Winnie has not been accepted by her mother in this
case. Because Winnie has not heard anything from her mother before she started renovate the place.
Acceptance from offeree must be communicated to the offeror and silence can not be seen as acceptance 1.
For example, in the Felthouse v Bindley case 3, plaintiff’s uncle wanted to buy a horse from plaintiff for
$30.75 and he added ‘If I hear no more about him, I consider the horse mine at that price’. The plaintiff
didn’t reply and court decided that the plaintiff’s silence couldn’t be seen as acceptance of the offer.
Similar with this case, Winnie’s mother said she would let Winnie know if she changed her mind about
renting the building. But Winnie start renovate the place without hearing anything from her mother. So
Winnie has no legal right to sue her mother because her mother never accepted the contract. Even though
Winnie has noticed her mother to drive passed the building that was doing construction and her mother
didn’t show her unwillingness. Winnie mother’s silence could not be seen as an action to accept the offer.
1
2
2016) p 322.
3
Oxford, 2016) p 325.
4
5
2016) p 305.
6
7
328.
According to Empirmall Holdings Pty Ltd v Machon Partners Pty Ltd case 4, D (architecture firm) sent P
(property developer) contract. P never signed the contract but made progress payments in line with the
contract. In this case, the court decided P accepted D’s offer by conducting the payment. However, the
difference between Winnie case and this case is that Winnie mother’s silence of the renovation can’t be
seen as conducting the contract. Without acceptance, the contract in void for Winnie. Therefore, Winnie
has no legal right to against her mother.
Moreover, the contract Winnie intended to sign with her mother is contract between family members. Two
presumptions of law decided the argument between family members has no intention to create legal
relations1. The case Balfour v Balfour5 indicated that even though husband didn’t pay for wife’s
maintenance, wife could not sue him because the arrangement was a domestic agreement between family.
The case Evans v Secretary, Department of Families, Housing, Community Services and Indigenous
Affairs6 can also support that there is no intention to create legal relations of Winnie case. In that case, the
son could not prove the arrangement that he made with his parents about their family business and family
home because there was no written evidence or witness to show the arrangement is a commercial contract
instead of family arrangement. And the court claimed no intention to create legal relations between family
because of the lacking of evidence. Same as Winnie’s case, Winnie could not prove that the arrangement
1
2
2016) p 322.
3
Oxford, 2016) p 325.
4
5
2016) p 305.
6
7
328.
she had with her mother is under business condition and intended to create legal relations because of the
unsigned lease. Thus, the contract will be void.
To conclude this result, Winnie has no legal right to sue her mother about violating the law and taking
back the property because the contract is void by missing two essential element of contract – agreement
and intention to create legal relations. Winnie rejected the previous offer by proposing a counter offer
which has not yet been accepted by her mother. Therefore, the agreement of the contract is missing. The
case between Winnie and her mother is a family case and Winnie can’t prove they made deal under
serious commercial consideration, which provide no intention to create legal relations to the case.
Furthermore, the contract related to real estate can not be simple oral form but only written form. The oral
arrangements Winnie had with her mother were not legally banded.
1
2
2016) p 322.
3
Oxford, 2016) p 325.
4
5
2016) p 305.
6
7
328.
Case 2
This analysis based on case 2, a case between TimberCo and BuildCo. TimberCo received order for cut
timber from BuildCo on Monday. TimberCo posted back the confirmation the day it received the order
and agreed to dekiver the timber on the following Monday. However, BuildCo didn’t receive the
confirmation post until the following Monday, so it already booked timber from SupplyCo on the last
Friday. BuildCo faxed TimberCo to cancel the order the same day it made order to SupplyCo. But no one
opend the fax until Monday after TimberCo had delivered timber to BuildCo. Now BuildCo reject to
make payment to TimberCo for the timber.
According to the case and relevant contract law, TimberCo should be able to enforce the contract because
of the following reasons:
The contract between BuildCo and TimberCo has been valid after TimberCo sent the confirmation letter
to post. According to postal acceptance rule, the offer would consider to be accepted as soon as the
confirmation of acceptance posted1. Even BuildCo hasn’t received the acceptance confirmation until the
next Monday due to industrial strike by postal workers. The acceptance considered to be communicated
as long as it was posted. On Friday of the week the order was placed, BuildCo faxed the cancelation letter
1
2
2016) p 322.
3
Oxford, 2016) p 325.
4
5
2016) p 305.
6
7
328.
to TimberCo. However, the fax was read after TimberCo delivered the timber on the next Monday. For the
faxed cancelation letter, postal rule does not apply because fax is instantaneous methods of
communication and the acceptance of cancelation letter didn’t consider to be communicated with
TimberCo until it opens the mail1. Therefore, the contract of buying timber BuildCo made to TimberCo
was valid. The cancelation offer BuildCo made to TimberCo was lacking of agreement and void.
The case of Adams v Lindsell7 can be used as reference for this case. In Adams v Lindsell case, the
offeror post the offer on the 2nd of September. The offeree received offer and posted the acceptance
confirmation on the 5th of September. On the 9th of September, offeror received the confirmation. But he
has sold the goods to others on the 8th of September. The court decided the contract was made when the
offeree posted the acceptance confirmation on the 5 th of September. Similar with TimberCo and BuildCo
case, the contract was valid on Monday when TimberCo posted the acceptance confirmation. The case
Entores Ltd v Miles Far East Corporation 8 can also be used as reference. In this case, court decided the
contract was made when and where the acceptance was received in instantaneous communication. Which
means, in TimberCo and BuildCo case, TimberCo didn’t accept the offer of cancelation because no one
read it before they sent out the timber.
1
2
2016) p 322.
3
Oxford, 2016) p 325.
4
5
2016) p 305.
6
7
328.
To conclude the case. TimberCo is able to enforce the contract and ask payment from BuildCo because of
the validity of the contract. The timber order BuildCo sent to TimberCo on Monday acted as a valid offer
which as been accepted by TimberCo on the same day when it posted the confirmation letter. The
cancelation offer BuildCo made to TimberCo couldn’t be seen as a valid contract because it was not open
by anyone from TimberCo before they conduct the original contract and delivered the timber. The
cancelation offer was seen as not communicated and accepted by offeree. Therefore, in this case, the only
contract existed was the one BuildCo order timber from TimberCo. TimberCo conducted its duty in the
contract by delivered the timber. BuildCo will need to proceed the payment to TimberCo.
1
2
2016) p 322.
3
Oxford, 2016) p 325.
4
5
2016) p 305.
6
7
328.
Bibliography
Latimer P, Australian Business Law (35th ed, Oxford, 2016).
1
2
2016) p 322.
3
Oxford, 2016) p 325.
4
5
2016) p 305.
6
7
328.

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