Sinclair and Roman are very good friends. They have been friends for over 20 years having met during their undergraduate studies at La Trobe University. Sinclair and Roman try as much as possible to have lunch together once a week to keep up their friendship.
On one of those occasions, Sinclair discussed his intention to buy a second-hand car for his 18 years old daughter, Nikola, who is now studying accounting at La Trobe University. The family live about two hours away from La Trobe Uni and access by public transport has been extremely difficult. Roman tells Sinclair he has an old car which could be useful for that purpose and he is happy to ‘let go’ of the car to Sinclair. Roman invites Sinclair to his house to inspect the car. Sinclair and Nikola visit Roman’s house and were shown a Toyota Corolla, 2010 model with registration number ANT 202. Nikola doesn’t quite like the car as all her friends drive brand new cars, but she says nothing.
Sinclair informs Roman that the car looks quite good and would serve Nikola’s purpose. All she needs is a means of transportation to uni and when she starts working, she could save up to buy another car. Roman replies saying he feels the same way and that he had the car checked by a mechanic and serviced and that cost him about $2,000, so the car is in good condition and ready to go. Sinclair and Roman discuss the market value of the car which they both agree is about $5,000. Roman presents a roadworthiness certificate to Sinclair and hands over the key to Nikola. Roman says he is happy for Nikola to drive the car away on the day and that himself and Sinclair would conclude the deal. Sinclair has since registered the car in Nikola’s name.
Six months later, Nikola’s 17 years old friend, Hayden tells her he needs to buy a car and that his parents have agreed that he could buy one. Since Nikola doesn’t quite like the Toyota Corolla, she decides to sell it to Hayden for $3,000. Hayden pays Nikola $1,000 and promises to pay the balance in 2 weeks. It’s now over two months and Hayden has yet to pay the outstanding sum of $2,000. Nikola does not want the car back since she has used up the initial $1,000 as deposit for a new car, and in any case, Hayden had an accident with the car, and it is no longer in good condition.
Meanwhile, Roman has been quite unhappy with Sinclair. Sinclair has also noticed a change in Roman’s attitude and their friendship has soured. Roman claims that Sinclair has made no payment for the car he sold to him and has in fact said nothing about it. He says he had waited as a good friend for Sinclair to say something for months. He says on occasions, he had indirectly requested for payment, but Sinclair had always pretended not to understand him. Roman says he called Sinclair three days ago after months of no contact and demanded that Sinclair pay the $5,000 outstanding on sale of his 2010 model Toyota Corolla, ANT 202. Sinclair says he does not owe Roman a cent.
- Is there an offer between Roman and Sinclair and who made the offer? (4 marks)
- Was the offer accepted and how was acceptance expressed and communicated? (4 marks)
- Was there an intention to create legal relations? (4 marks)
- Was any consideration provided? (4 marks)
- Is there any particular reason why there might not be a valid contract between Nikola and Hayden?(4 marks)