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Question No.1 Business Entities 20 marks

This question was focussed on the agreement aspect of contract law and also involved
the elements of intention and consideration.

Joel would be the plaintiff seeking to enforce the contract against Rebecca. This
question has three main contract law issues that need to be addressed. First, whether
the Rebecca is liable to pay the payment demanded by Ooh Orchids or not? Secondly,
whether, driver namely Mathew having Agency relationship with Joel and Rebecca?
Thirdly, what business terms has been discussed between Joel and Rebecca?

Is there a binding contract?

Given that Rebecca and Joel were related as business partner in Fusion Flowers, it is
assumed that there is intention to create a legally binding contract between them:
Balfour v Balfour.

In relation to issues of offer and acceptance, Joel may waive his right to have Rebecca
acceptance communicated to him but may not insist that a failure to communicate is
acceptance by itself. This rule is established in the case of Felthouse v Bindly.
Furthermore, an agreement is not formed until Rebecca has communicated her
acceptance to Joel as established in the case of Powell v

Lee.

Issue No.1

Rebecca is liable to pay to Ooh Orchids?

Based on the case of Dickinson v Dodd Rebecca is entitled to pay $ 1500 to Ooh
Orchids which they demanded for rare supply of expensive Orchids on order of Joel.
Joel and Rebecca are in legally binding relationship through which they are liable to
pay business expenditures equally. Goldsborough Mort & Co Ltd v Quinn

Issue No.2
Mathew having Agency relationship with Joel and Rebecca?
Relationship of Agent and Principle.
Agent:
An agent is one who acts on behalf of another. The law recognizes several
types of agents, including (1) the general agent, one who possesses authority to carry
out a broad range of transactions in the name of and on behalf of the principal; (2) the
special agent, one with authority to act only in a specifically designated instance or set
of transactions; (3) the agent whose agency is coupled with an interest, one who has a
property interest in addition to authority to act as an agent; (4) the subagent, one
appointed by an agent with authority to do so; and (5) the servant (“employee” in
modern english), one whose physical conduct is subject to control of the principal.

The agency relationship can be created in two ways: by agreement (expressly)

or by operation of law (constructively or impliedly). Agencies created by consent—
agreement—are not necessarily contractual. It is not uncommon for one person to act
as an agent for another without consideration. For example, Abe asks Byron to run
some errands for him: to buy some lumber on his account at the local lumberyard.
Such a gratuitous agency gives rise to no different results than the more common
contractual agency.

Weingart v. Directoire Restaurant, Inc.

333 N.Y.S.2d 806 (N.Y., 1972

Conclusion:
By virue of such relationship, possesses no original power to bind the driver by
contracts made on his behalf; and power of driver for such purpose must, therefore,
be derivative. It appears from the scenario that authorities, that the law will, in some
cases presume that driver of Rebecca to be agent and when such presumption will
exist as to another person also the will to work as a driver imply larger authorities on
owner of the business (Principle). Church vs. Launders 2011. So Rebecca is a Principle
Agent of the driver and liable to pay compensation caused by driver during accident i.e
$5000/- to another driver.

Issue No.3

What business terms has been discussed between Joel and Rebecca? Does Rebecca
shall start separate business of selling flowers for weddings?

Fiduciary duty is a legal relationship between two or more parties. And it's a big duty.

One party is the fiduciary, or the entity with the duty and the other party is the
principle, or the entity benefiting from the duty. In general, it is a mutual relationship
among partners who owe the duty to each other and their partnership. It is to be
considered here that whether the Rebecca has performed business activity as duty of
honesty, care, loyalty, fairness or duty to act in good faith. Duty to act in good faith fall
in to the ambit of law of Equity not in law of Contract.

In this scenario the acceptance by Joel must be oral or written given to the Rebecca for
conducting such business activities. Communication of acceptance can be made by
Offeree. Powell vs. Lee.

Conclusion:

Rebecca possible liability is to pay the increased insurance cost which has been
increased by selling products flowers to the wedding industry without consultation
with her partner Joel and she is also liable to the loss incurred on doing business
supplies to the wedding industry. Because Joel has not given his oral nor written
consent of enhancing the business as this type of transaction has not gone through
previously.

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Question No.2 Contracts 15 marks

This question was focussed on the contract and agreement aspect of contract law and
also involves the actual and anticipatory breach of contract in which defendant
discharge by breach of agreement.

Tanya seeks your advice as to what damages (if any) she might obtain against
Bentley for breach of contract.

Tanya would be the plaintiff seeking claim for damages of breach of contract against
Bentley in which he had left Tanya for more profitable job. This question has three
main contract law issues that need to be addressed.

1. Whether the Tanya is liable to claim damages from Bentley?

2. Does Tanya having a valid contract with Bentley?
3. Has Tanya agreed on the terms offered by management of Spicy boy’s concert?

Issue No. 1

Contacts are a fundamental part of people’s daily lives and form the basis of
commercial law. The contact made between the Tanya and Bentley legally enforceable
agreement as Tanya had given the amount of $ 500 immediately as advance amount
and agreed to pay the remaining amount on day of concert i.e 17 September 2019. In
eye of law Tanya had made valid contract which is enforceable. If it is proven that
Bentley had breach the valid contract, Tanya is liable of claiming damages from
Bentley. And furthermore it is assumed that there is intention to create a legally
binding contract between them: Balfour v Balfour.

Issue No.2

Is there any legal relationship build between the parties?

According to Contract Law 1972,

“An agreement concerning promises made between two or more parties with the
intention of creating certain legal rights and obligation upon the parties to that
agreement which shall be enforceable in the court of law”

It is clear in the whole scenario that Tanya agreed upon the terms of Bentley and paid
him $500 in advance and made legal relationship through agreement with him which is
enforceable in court of law. Tanya had made valid simple contract by fulfilling the
requisite of simple contract i.e intention to create legal relations by accepting the offer
of Bentley, secondly making agreement and paid consideration. Contract is simple in
nature as it made orally not implied by conduct or in writing. Masters v Cameron
(1954) 91 CLR 353

Issue No.3

The agreement between Tanya and management of Spicy Boy’s concert has been
made on invitation to treat which doesn’t include any purported acceptance and offer
and invitation to treat is not distinguished from offer. In these type of agreement
notice to offer is either given to one person, group of persons or public at large
through advertisement? Carlill v Carbolic Smoke Ball Co. (1893) Offer made by Spicy
Boy’s concert has been withdrawal before acceptance indirectly. Dickinson vs. Dodds
(1876)
- Byrne v Leon Van Tienhoven (1880).

Conclusion:

Here, court has to determine objectively whether the parties of the contract had
intended the agreement which is to be legally enforceable. Court has to be assist that
contract between the Tanya and Bentley is commercial in nature and is business
transaction. In which court has to presumed intention to be bound. Edwards v
Skyways Ltd (1964)

Ermogenous v Greek Orthodox Community of SA [2002]

Futhermore, request for more information has not been made by Tanya to
management of concert of Spicy boy’s which was unadvertised and was a spontaneous
gesture to dedicated fans of Spicy boy’s. Tanya don’t have a knowledge that request
for information is not a firm promise and so is not an offer, nor does it destroy the
offer as it is only an attempt to elicit information. Harvey v Facey [1893].

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 Question No.3 Contracts (short answer questions)

20 marks
The issues which arise in this problem are invitation to treat, counter-offer, the status of a
promise to keep an offer open, revocation and the postal rule.

Abdul sends an email stating……………. (5 marks)

In this scenario, Jeremiah has not come to the agreement as Abdul has not given his
consent of acceptance. According to contract definition validity of contract is based on
consent of parties through which they agree upon the terms and conditions of the
contract, the contract may still fail because there is no real consent to it by one of both
parties. Here, Abdul has not given his real consent and the agreement between them
is not enforceable in eye of law.

Public Service Employees Credit Union Co-operative Ltd v Campion (1984) 56 ACTR 39

Conclusion:

Validity of contract is in question in this scenario, as we already know that agreement

is made between the parties if one party offer something and acceptance is given by
other party and basis of contract is agreement or consensus ad idem(meeting of the
minds), there are many elements which act as a obstacle in genuine consent, in this
scenario unconscionable conduct of Abdul leads to the result of the superior
bargaining position and consent has not been given by him which cause to contract to
be void and not enforceable by law.

Bianca calls Jeremiah and states that she is interested……………… (5 marks).

Before assuming that simple contract has been created between Bianca and Jeremiah
we must considered that introduction to term has been made or not, question in this
scenario is that terms and condition has been delivered to the Bianca and consent has
been taken and given to both parties and upto what extent of the rights and obligation
that the parties have entered into? Jeremiah has not expressed the term orally not
even written of both. In contract law expressed term having legal sanctity and creates
legal obligations between the parties and breach of it may result in injured party being
able to sue. Without having expressed terms Bianca is unable to sue the Jeremiah.
Conclusion:

In this scenario, court will considered the following points to adjudicate the matter.
The time elapsed between the making of the statement by Jeremiah and the final
agreement; Whether or not the innocent party was asked to verify the statement;
Whether the statement was made with the intention of preventing the other party
from looking for/finding any defects: Hopkins v Tanqueray (1854) The importance
attached to the statement: Pym v Campbell (1856); and Whether one of the parties
had special skill or knowledge: Oscar Chess v Williams [1957]

Mason emails Jeremiah late one night to say he will buy the tree for $500………………..
(5 marks).

The issue which arises in this problem is revocation of contract and agreement
between the parties. In the law of contract, revocation is type of remedy for buyers
when the buyer accepts a nonconforming good from the seller. It can be revoke at any
time before acceptance of offer. Masons has revoke his offer before acceptance and
Jeremiah has not seen the message of revocation and Masons fails to be communicate
the message of revocation, which is although not necessarily be communicated by the
Mason. Mason has revoke by recalling and cancelling the contract through his second
email.
Conclusion:
In conclusion I consider that the outcome of this problem is neglegency of Jeremiah
who hastily in read the email of Mason. Mason had used reliable source through which
he had revoked the contract and is not enforceable contract. It is held essential that
revocation be communicated to the offeree. The postal rule does not apply to revocation;
therefore a letter of revocation does not take effect until it is received by the offeree
(Byrne v. Van Tienhoven). Revocation need not necessarily be communicated by the
offeror. In Dickinson v. Dodds the defendant offered to sell his house to the plaintiff, and
promised to keep the offer open for two days. The following day a third party told the
plaintiff that the defendant had sold to someone else. The plaintiff immediately
purported to accept the offer. The Guardians of the Navan Union v. McLoughlin, the
defendant was held to be entitled to revoke his offer because the plaintiff’s acceptance
had not yet been communicated to him.

Over the year it is being decided that when one party made an offer the invitation to
treat has been given rather than offer, Staphanie just calls Jeremiah who doesn’t answer
the call which explains that he doesn’t made any acceptance on the message delivered by
him. This type of contract is not enforceable because contract lapse ambiguity and
acceptance has not been given. Terms has not been explained yet. An offer made by
Staphanie is not clear, and unambiguous in terms upon which Jeremiah is not prepared
to make contract and yet has been decided to accept by him. It is important rule of law
tat offer itself is manifest an intention to be bound. Here Jeremiah is feeling his way
towards an agreement or initiating negotiation from which an agreement might or might
not result is no offer. Instead Jeremiah has constitutes an invitation to treat an offer to
receive offer.

“Stephanie calls Jeremiah, who doesn’t answer and leaves a message saying she is on the
way with $500….. (5 marks)

Conclusion:

Over the years the courts have held that in these type of situation constitutes invitation
to treat rather than offer, for example goods in a shop window (Though as a general rule
advertisements merely constitute invitations to treat, it is possible for an advertisement
to be construed as an offer, if the court feels that it displays a definite intention to be
bound So this case decided in the favour of Jeremiah as he has constitutes the invitation
to treat through advertisement.

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Reference list
Mehdi, B 2019, topic 3 contracts I enterprise law, (Unit 700254 WTCP PREP)
online lecture, viewed 17th december 2019, VUWS learning management
system.

Mehdi, B 2019, topic 3 contracts II enterprise law, (Unit 700254 WTCP PREP)
online lecture, viewed 17th december 2019, VUWS learning management
system.

Mehdi, B 2019, topic 3 contracts III enterprise law, (Unit 700254 WTCP PREP)
online lecture, viewed 17th december 2019, VUWS learning management
system.

All Answers ltd, 'Byrne and Co v Van Tienhoven' Lawteacher.net, December

2019, viewed 15th December 2019, https://www.lawteacher.net/cases/byrne-
and-co-v-van-tienhoven.php

All Answers ltd, 'Edwards v Skyways Ltd', Lawteacher.net, December 2019

viewed 14th December 2019,https://www.lawteacher.net/cases/edwards-v-
skyways.php?