Question 1

All contracts are agreements but all agreements are not contracts.1

This statement is a valid and true. According to Section 2(a) of Contracts Act 1950
"every promise on every set of promises bring into existence of the consideration for
each other an agreement. It is a fact stated that an agreement is a proposal and its
acceptance, by which by more than one person or parties agreed to do abstain from
doing an act. But a contract which is in line with Section 2(h) of the Indian Contract
Act, " An agreement enforceable by law is a contract, it has clearly explained that the
elements of a contract are between Agreement Contractual Obligation and
Enforceability by Law.

All Contracts are Agreements :

For a Contract, it is essential to be there an agreement. Without an agreement, no

contract can be drawn up. Moreover, another crucial element of a contract is the legal
obligation for the parties to the contract, there are many agreements that do not
require any legal obligations. As a result, these agreements cannot be called contracts.
An Agreement implies fulfilling some agreed condition and it is necessarily imply that
the stipulated conditions conform to the law and enforceable by it.

All Agreements are not Contracts :

An agreement is termed a contract just in the case when the agreements is enforceable
by law.2 All agreements are not necessarily legally enforceable. It can appropriately be
said that an agreement has a much wider scope than a contract. To take an illustration
that agreements are not legally binding are an invitation to dinner or to go for a drink
and latter accepts the invitation. These are social agreements not contracts.
1 http://www.slideshare.net/RofidahAzman/assignment-43382819

2https://raselbbaeducationhelpcentre.wordpress.com/2013/07/04/all-contracts-
are-agreements-but-all-agreements-are-not-contracts/
An agreement need not necessarily involve in a legal obligation on the parties to the
agreement. It is import here to analyze what exactly is an obligation. Obligation is a
legal tie which set by a person or persons the necessity of doing or abstaining from
doing definite act or acts.

All in all, an agreement is not necessarily be within the framework of law and be
legally enforceable. If it is, in any cases, then it is a contract. Any agreement of which
the object or consideration is unlawful is strictly be void and cannot be called a
contract.

Acceptance

A binding contract is officially formed once a valid acceptance takes place.

3
Therefore, it is important to know what constitutes a valid acceptance in order to set
up a contract if the parties are bound by the agreement. There are always have three
essential rules relating to acceptance. As it is in Section 2(b) of the Contracts Act
1950, an acceptance of an offer is the final and unqualified assent to the terms of the
offer. The terms of the acceptance must exactly match the terms of the offer. So, an
acceptance must normally be communicated to the offeror before there can be a
contract, whether oral or written. Moreover, the agreement must be certain because
once acceptance takes place it will be the final and the agreement cannot be pulled
back.

The case of acceptance is the case of Low Kar Yit & Ors. v. Mohd Isa & Anor
[1963] MLJ 165. In this case, the defendants gave option to agent of the plaintiff to
buy a piece of land that subject to a formal contract to be drawn up and agreed upon
by the parties as stated in Section 2(b) of the Contracts Act 1950. The sales have been
approved by the High Court at Kuala Lumpur. The plaintiff's agent had used the
option but the Defendant refused to sign the agreement , so the plaintiff sued the
defendant for specific performance or damages for breach of contract.

3http://www.preservearticles.com/2012012621479/brief-notes-on-all-contracts-
are-agreements-but-all-agreements-are-not-contracts.html
The opinion was conditional upon a formal contract to be drawn up agreed upon by
the parties. In an appropriate way, there was no concluded contract between the
parties. Based on S.7(a) provides that an acceptance must be "absolute and
unqualified" the asserted acceptance must be clear and unconditional.

Another case of acceptance is the case of Adams v Lindsell (1818) 106 ER 250.4 On
September 2, 1817, Lindsell(defendant) wrote to the Adams(claimant) offering to sell
Adams a certain amount of wool and asked for a reply by written notice sent through
mail 'in the course of post'. The letter was delayed in the post. Lindsell expected to
receive a response from Adams by September 8th, however, Adams did not receive it
until September 5th. Adams posted a letter of acceptance on the evening of the same
day. Lindsell received Adams’ acceptance on September 9th. However, on September
8th, due to the delay Lindsell had assumed the Adams was not interested in the wool
and sold it to a third party. Therefore, Adams sued for breach of contract.

There was a valid contract which came in to existence the moment when the letter of
acceptance was placed by Adams in the mail. This case established the postal rule.
This applies where post is the agreed form of communication between the parties and
the letter of acceptance is correctly addressed and carries the right postage stamp. The
trial court entered judgment for Adams, and Lindsell appealed.

In the case of Hyde v Wrench (1840) 49 ER 132 Chancery Division,5 Wrench

offered to sell his farm in Luddenham to Hyde for £1200, Hyde offer declined the
offer. On 6 June 1840, Wrench wrote to Hyde offering to sell the farm for £1000,
stating that it was the final offer and that he would not make any changes from it.
Hyde immediately response with an offer £950, which Wrench need time to consider.
After examining the offer Wrench rejected, and informed Hyde of this on 27 June.
Then, on the 29th, Hyde agreed the original offer to buy the farm for £1000 without
any additional agreement from Wrench, and after Wrench changed his mind and
refused to sell the farm to him, he sued for breach of contract.

4 http://www.e-lawresources.co.uk/cases/Adams-v-Lindsell.php

5http://contractlawcases.blogspot.my/2010/05/hyde-v-wrench-1840-49-er-132.html
Court Held: There was no contract. Where a counter offer is made this destroys the
original offer so that it is no longer open to the offeree to accept.

As a conclusion, under the circumstances stated in this bill, there exists no valid
binding contract between the parties on purchasing this property. The defendant
offered to sell it for £1000, and if that had been at once unconditionally accepted there
would undoubtedly have been a perfect binding contract. Instead of that, the plaintiff
made a counter offer to purchase the property for £950, but he have rejected the offer
previously made by the defendant. It was not afterwards still available for him to
revive the proposal of the defendant, by tendering an acceptance of it. Therefore, there
is no obligation of any sort between the parties.

Intention to Create Legal Relations6

The requirement of intention to create legal relations in contract law is aimed at

selecting cases which are not really applicable for court action. It is not every
agreement will be brought to a binding contract which can be enforced through the
courts. For instance, you may have an agreement to meet a friend at a restaurant. You
may have a moral duty to respect that agreement but not a legal duty for doing so.
Generally, the parties to such agreements do not intend to be legally bound and the
law seeks to mirror the party's wishes. Therefore, for the purpose of determining
which agreements are legally binding and have an intention to create legal relations,
the law must draws a clear differentiation between social and domestic agreements
and also the agreements made in a commercial context.

For the case like Jones v Padavatton [1969] 1 WLR 328 Court of Appeal,7 A
mother promised to her daughter, a secretary in the Washington DC, if she would give
up her job and went to London study for the bar, the mother would provide $200 per
6 https://en.wikipedia.org/wiki/Intention_to_be_legally_bound

7https://www.coursehero.com/file/p5sv8pn/Jones-v-Padavatton-1969-1-WLR-328-as-
a-rule-when-arrangements-are-made-between/
month maintenance for her. At first, the daughter was reluctant to do so as she had a
well paid job with the Indian embassy in US and she was settled and adapted to the
environment. However, the mother persuaded her that it would be in her interest to do
so. The mother's idea was that the daughter could then join her in Trinidad as a
lawyer. This beginning agreement wasn't working out as the daughter believed the
$200 was US dollars whereas the mother meant Trinidad dollars which was about less
than half of what she was expecting. The daughter thinking that she could only afford
to rent one room for her and her son to live in. Later the agreement was varied, the
mother then agreed to purchase a house for the daughter to live in. She purchased a
large house and give it to the daughter. So that the daughter could rent out other
empty rooms and use it as her maintenance. The daughter then has married with a new
stage of life and did not complete her studies with an unsuccessful attempt at passing
the Bar examinations. The mother sought possession of the house.

The question for the court was whether there existed a legally binding agreement
between the mother and daughter. In another perspective, whether the agreement was
merely a family agreement not intended to be binding.

Court Held: The agreement was entirely a domestic agreement which raises a
presumption that the parties do not intend to be legally bound by the agreement. There
was no evidence that this case can be rebut for this presumption. Consequently, on the
mother's claim for possession of the house, held that the arrangement was not
intended to be legally binding which means the mother was entitled to possession.

Apart from that, this is the case of agreement made in commercial context, Esso
Petroleum v Customs & Excise [1976] 1 WLR 1 8 House of Lords. Esso were
offered a promotion whereby any person purchasing four gallons of petrol would get a
free 'World Cup Coin' from their World Cup Coins Collection. There were millions of
such coins been distributed. The Excise claimed that that these coins were being sold,
and therefore, it is liable to tax.

The question for the court was whether these coins were 'produced in quantity for

8https://en.wikipedia.org/wiki/Esso_Petroleum_Co_Ltd_v_Comrs_of_Customs_and_
Excise
general resale' if it is, they would be subjected to tax and Esso would be liable to pay
taxes that up to £200,000. Esso argued that the coins were purely just a free gift and
the promotion was not intended to have legal effect because there was no resale.

Court Held: There was an intention to create legal relations. It is related to the coins
were offered in a commercial context which raised a presumption that they did intend
to be bound. Nevertheless, the coins were not exchanged for a money consideration
and therefore the coins were not for resale.

Harris v Nickerson (1873) LR 8 QB 2869

The Defendant set an ad in London papers that specific things, including preparing
hardware and office furniture, would be set available to be purchased more than three
days in Bury St. Edmunds. The Plaintiff got a commission to purchase the workplace
furniture and consumed time and cost to go to Bury St. Edmunds to offer for the
workplace furniture. On the third day, the parts for the workplace furniture were
pulled back. The Plaintiff sued for loss of time and cost. The judge at first occasion
found for the Plaintiff. Leave was given to engage the High Court. The Plaintiff
presented that the ad constituted an agreement amongst themselves and the Defendant
that the last would offer the furniture as indicated by the conditions expressed in the
commercial, and that in like manner the withdrawal of the furniture was a break of
agreement. The Defendant presented the notice of a deal did not constitute an
agreement that a specific part or class of parcels would really be set available to be
purchased. The court held collectively that the commercial did not constitute an offer,
but instead was an unimportant presentation of purpose. Blackburn, J. established his
judgment on open arrangement grounds, calling it a "startling recommendation" that
"anyone who publicizes a deal by distributing a notice dependable to everyone who
goes to the deal for his taxi contract or voyaging costs". Quain and Archibald, JJ.
Likewise drew open strategy contentions, underlining that there existed no power on
which to base a choice that the Defendant be at risk to reimburse every one of the
individuals who went to his closeout. The court maintained the interest.

9 https://en.wikipedia.org/wiki/Harris_v_Nickerson
Byrne & Co v Leon Van Tien Hoven & Co10 [1880] 5 CPD 344

Van Tienhoven and Co posted a letter from their office in Cardiff to Byrne and Co in
New York City, offering 1000 boxes of tinplates available to be purchased on 1
October. Byrne and Co got the letter on 11 October. They transmitted
acknowledgment around the same time. Yet, on 8 October Van Tienhoven had sent
another letter pulling back their offer, since tinplate costs had recently risen 25%.
They declined to proceed with the deal. Judgment for the offended parties has won the
case. It is on account of Lindley held that the repudiation of the offer was not
powerful until it had been imparted to Byrne. While the postal lead stays great law for
acknowledgment, he finds no support for the commence that disavowal of an offer is
additionally finished once it has been placed via the post office. Therefore, the
disavowal was not imparted to Byrne until the twentieth, and soon thereafter the
agreement was at that point shaped and in this manner the renouncement is of no
impact. To govern generally would be unfeasible for business substances.

Dickinson v Dodds (1876) 2 Ch D 463

On Wednesday 10 June 1874 Mr Dodds conveyed Mr Dickinson an offer to offer a

few houses for £800, an offer open until 9am on Friday 12 June. On Thursday
evening, another man called Mr Berry told Mr Dickinson that the houses had as of
now been sold to somebody called Mr Allan (who was the second respondent). Mr
Dickinson discovered Mr Dodds in the railroad carriage at 7am on Friday morning,
leaving Darlington Railway Station, and gave his acknowledgment there. Be that as it
may, Mr Dodds said it was past the point of no return. Mr Dickinson sued for break of
agreement. Bid is permitted. The composed assessments (from Mellish and James)
concur that the letter was only an offer and nothing more. At the point when an offer
has been made, the offeror is as allowed to renounce it as the offeree is to
acknowledge or dismiss it. Dickinson contended that the main way the offeror can
renounce the offer is by unequivocal correspondence to the offeree, however this is
dismisses by the court. It is clear in law that an offer does not add up to an
understanding and can be pulled back anytime. Despite the fact that it was said that
the offer was to stay open until Friday, this was not official on Dodds. There must be a
"meeting of the psyches" at the time the agreement is shaped, and this clearly couldn't

10 https://en.wikipedia.org/wiki/Byrne_%26_Co_v_Leon_Van_Tienhoven_%26_Co
happen here (as Dodds had effectively consented to offer the property to an outsider),
so there could be no agreement.

Nash v Inman11

Nash was a tailor working in Saville Row. Inman was a minor learning at Cambridge
University. Nash sold some apparel using a loan to Inman for what was around £145.
Nash sued to recuperate the cash, and Inman argued early stages. In the wake of
listening to confirm, the trial judge held that Inman was really a minor and that he as
of now had enough dress at the season of offer. Thus, the trial judge found that there
was no proof that the dress could be thought to be in the class of necessaries, and
guided the jury to enter judgment for Nash. Inman advanced, guaranteeing that the
judge had chosen the issues of reality, rather than giving the jury a chance to choose.
The three individuals from the Court gave a different feeling. Cozens-Hardy MR, set
up a circumstance where minors' agreements are totally void, with the exception of
those for necessaries. To recoup cash from a minor's agreement for necessaries, it is
insufficient to demonstrate that the products were reasonable to the baby's condition
in life; one should likewise demonstrate that the minor was not adequately provided at
the time. Fletcher-Moulton LJ, it is not entirely right to state that a minor contracts for
necessaries. Or maybe, such an activity against a minor is based upon the possibility
of quantum merit. The offended party should dependably put forth out their defence,
which implies that they should demonstrate that the products were not just reasonable
to the minor's condition in life, additionally that they were not adequately provided at
the time. Buckley LJ, minors can contract, and an activity against them emerges from
contract. A minor may contract for necessaries at a sensible cost, yet it won't be
enforceable unless they are important to his station in life and he doesn't as of now
have enough. In the event that both of these things are debated, the onus is on the
offended party to demonstrate them. The judge must figure out if the merchandise are
equipped for being necessaries as an issue of law, and on the off chance that they are
so able, let the jury choose whether they are in actuality necessaries.

Hart v O'Connor [1985] UKPC 112

11 https://en.wikipedia.org/wiki/Nash_v_Inman
Jack O'Connor was the trustee of a trust that claimed the family cultivate in Waimate
since their dad passed on in 1911. Jack and his two siblings Dennis and Joseph both
worked and lived on the homestead possessed by the trust. By the mid-1970s, the
siblings were in their 80s, and given their propelled age, their specialist suggested that
something be done about the homestead possession. As it turned out, a neighbour, Mr
Hart was keen on purchasing the property and after transactions with Jack and his
specialist; they organized the homestead to be rented to Mr Hart, with a statement of
appropriate to buy. Inside a month, Mr Hart, despondent with renting the homestead,
reached the merchant's specialist to get a by and large offer of the ranch, and they later
consented to a deal at an unspecified cost to be controlled by a valuer. Mr Hart then
engaged the Privy Council. The Privy Council exhorted that the agreement was not an
unconscionable deal. With respect to the trust's case, the Court said the agreement was
unreasonable in value in the event that one gathering is crazy and the other party
doesn't know about this, the agreement can be put aside because of craziness if the
agreement was considered to be "out of line". For this situation the Privy Council held
that Mr Harts direct was "blameless", stressing that the greater part of the deal terms
and conditions were proposed by the trust's own specialist, which Mr Hart just
acknowledged.

Consideration

Eastwood v Kenyon13

This is a fact happened between Eastwood and John Sutclife’s child, Sarah. Eastwood
is the overseer of Sarah after John’s death. He obtained money to pay for Sarah’s
education fees and Sarah also confirm that she will make the repayment to Eastwood.
She gave the commitment that she will pay when she arrived particular age. Kenyon,
who is Sarah’s husband guaranteed to help his wife to pay off the loan to the
Eastwood. Therefore, Kenyon unable to pay back the loan as promised so Eastwood
decided to sue him. But, Kenyon argued that he will pay the loan if he has a child
from Sarah. This case had shown a past consideration as the payment already settled

12 https://en.wikipedia.org/wiki/Hart_v_O'Connor

13 http://casebrief.wikia.com/wiki/Eastwood_v_Kenyon
before any promises. The court decided that this fact is not a contract because at the
beginning Eastwood was voluntarily to request for loans and pay for Sarah’s
education fees. It can be concluded that past consideration is not valid as the payment
already made before the promises is given.

Tweddle v Atkinson14

Both of the fathers, John Tweddle and William Guy make an agreement with each
other that they will give a number of money to each other’s child after their child
married. By the way, William Guy died before he successfully made the payment to
John Tweddle’s son. So, the administrator of William Guy was sued by John Tweddle
because of the unpaid loans. The son of William Guy claimed that he is not carry out
any agreement that made to his father and he is not involved in any consideration.
These types of consideration design the doctrine of privity of a contract. This can be
explained as there is only one party involved is able to sue upon the contract’s term.
The decision from the court is that the claim by the John Tweddle was failed as the
third party cannot reinforce in a contract. This case show that the third party does not
contain any rights or concern to the contract.

Thomas v Thomas15

The fact is that John Thomas, who is the husband of Plaintiff had orally specified a
desire for his wife to have either the house serviced as their residence for her rest of
life or the 100 pounds in inclusion to other provisions made her in his will. This is
John Thomas’s dying wish before he die. Samuel Thomas and Benjamin Thomas who
is the executors of his estate decided to make an agreement with Plaintiff, “in
consideration of John’s desire”. Meanwhile, Plaintiff will take over the tenancy of the

14 https://en.wikipedia.org/wiki/Tweddle_v_Atkinson

15 http://casebrief.wikia.com/wiki/Thomas_v_Thomas
house and she will pay 1 pound per year towards the ground rent. However, after
Samuel died, the appellant don’t want to continue keep the promise to complete the
conveyance and they said that the consideration is not valid. Benjamin and Plaintiff
appealed in lower court. The court decision is appeal dismissed. The court said
construct that the agreement between Ms Thomas and executors involved the promise
to pay 1pounds per year and this show that this is not a voluntary gift. 16Therefore, it
was a sufficient consideration.

Certainty

Walford v Miles

The fact is that the certainty between Walford and Miles couple. In the sale of a
photographic processing business, Mr and Mrs Miles have an agreement with Walford
orally. Besides, they have achieved a promise to cut off the use of negotiations during
the sale of business when communicate with any competing buyers. As the time past,
Miles who is the sellers of this business expressed that they would not willingly to
continue the negotiations for the sale and they decided to sell their company to
another party. Miles claimed that the oral agreement was an agreement to negotiate in
good faith. The former buyer of the company, Walford decided to sue Miles for crack
their contract. At trial, Walford successed but they failed in the appeal. The law state
that the oral agreement cannot be enforced and the agreement with negotiable is
unable to work. This kind of agreement is uncertain and without legal verify.

Edwards v Skyways

In a discussion between the Secretary of the Board of Skyways and the British Air
Line Pilot Association, they had made an agreement to provide money to selective
excessive pilots. Those payments are made in the form of ex gratia amount regarded
to the pension payments and the contributions refund. There are one selective excess
pilot already accepted his refund but he was informed that he will not be able to

16http://www.casebriefs.com/blog/law/contracts/contracts-keyed-to-murphy/the-
bases-of-contract-liability/thomas-v-thomas-2/2/
accept the ex gratia payment and the Skyways will not have the responsible to give
money on it. Skyways claimed that because of the phrase ex gratia, they did not
purposely to be legally bound by the agreement. Also, they continue argued that the
payment is not valid bacause it was shown that the redundant will not be taxed based
on the payment. The court said the commercial setting agreement is not involved in
creating a legal relations and the word “ex gratia” is not enough to take place
assumption. Thus, in the tax argument, the court said that the proves are not enough to
claimed the intention of the parties. This case show that the agreement presumption
made based on the commercial setting is legally binding.