Legal Contract - La Trobe University And Dodgy Accounts Associates Essay.

Essential Elements of a Contract

1.Does La Trobe University have to pay for the amount owing on the invoice?

2. Has a legally binding contract been made between Mr. Dowell and Dodgy Accounts Associates?

Bressan v Squires Supreme Court of New South Wales [1974] 2 NSWLR 460.

1. Is La Trobe University is liable to pay $5000, that is amount mention on the invoice sent by the police officers?

An agreement between two parties which is enforceable by law is known as contract. For a valid contract there are some essential elements of the contract that is offer, acceptance, consideration, and intention to create legal relation between the parties. It is necessary that these elements must be present in the contract for making the contract legally enforceable. Following is the brief discussion on the essential elements of contract:

First essential element is offer which is given by one person to another person for doing something, if that another person does something in return. Offer is given by offeror to the offeree, and no particular method is defined for giving the offer. In other words offer can be given in written form, oral form or by conduct. This element is the most essential element of the valid contract, and offeror can give offer to the individual, group or to the whole world. There is a landmark case for understanding this that is Carlill v Carbolic Smoke Ball Co, Court of Appeal [1893] 1 QB 256; [1892] EWCA Civ 1[1]. Judge decided in this case that Mrs. Carlill was entitled for the prize money because there is valid contract between parties which constitute valid offer made by the company to the world. Further judge stated that language in which offer is given was clear and there is confusion, and offer is understandable to enforce[2].

Second element is Acceptance, this is a statement by which offer is accepted by the offeree. Acceptance can be given in any form either in written or oral statement or by conduct. For valid acceptance is valid only when it is made by the person to whom offer is made, and it must be given in reply of offer given by offeror to the offeree. It is necessary that offeree conveyed the acceptance to the offeror. This is a leading case for this element Crown v Clarke (1927) 40 CLR 227[3].

Third element of valid contract is consideration and it is defined as price paid in exchange of the promise made by the parties to the contract. Consideration is must for contract to be valid and it can be in any form such as money, right, benefit, any type of interest and in Australia common law provides that consideration is necessary for contract to be valid. If consideration is present then only contract is binding on parties[4].

La Trobe University and Police Extra Security

Last element is Intention to create legal relations at the time of making of contract. Contract is not legally enforceable unless parties to the contract have intention to create legal obligations under the contract. Agreement between parties must be legally binding on the parties and parties must have intention to create legal relations between them. This term can be understand with the help of the case law that is Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd[5].

Many countries in which common law is applicable consider that if consideration is present in the contract then parties intend to create legal relations between them. There are many situations in which consideration is present but a still party does not have intention to create legal relation between them. The onus to proof that parties intend to create legal relation between them at the time of making the contract is on the party who wants to enforce the contract[6].

Officials of the La Trobe University organize a ball night for their student and staff but the VC of La Trobe University is worried about the security arrangements. For the arrangements of security at the ball night he contact with local police and approached them for providing security at the ball. Senior Sergeant Ratty of police told him that police van patrolling the area of university at ball night but VC approached them for extra security.

VC said that he needs two police officers on the dance floor and also van for the campus security. Sergeant Ratty accepts the offer of university and also stated that they charge for the extra security but officials of the university believe that there is no requirement to pay extra amount for the security provided by Police officers because it is the duty of police. After providing their services local police send invoice of $5000, which university refused to pay.

 In the present case, university gives valid offer to the police for providing extra security which was accepted by the local police. Therefore we can say that there is valid offer and acceptance between the parties. Further $5000 is the charge for providing extra security is valid consideration for contract between parties.

As we stated above in Australia, if consideration is presented than court consider that there is intention to create legal relation between parties. Therefore, all the essential elements of the contract are mention, and there is valid contract between the parties.

Dodgy Accounts Associates and Mr. Dowell Job Offer

Conclusion:

In this case, there is a valid contract between the parties and university is legally bound to pay $5000 to the local police for giving the security at the ball night in the university.

2. Issue:

Is there any legally enforceable contract between Mr Dowell and Dodgy Accounts Associates?

Contract is an agreement between two parties which consist of offer, acceptance, consideration, and intention to create legal relation. If these essential elements are present in the contract then contract is legally enforceable. Following are the essential elements of the contract:

Offer is the first element of the contract, and it is the most important element of the contract also. It is necessary that one party gives offer to another party and that another party accepts that offer, then only contract is legally binding on the parties. Agreement between parties can be in any form such as oral, written or by conduct. It must be necessary that at the time of making the contract there must be intention to create legal relation between the parties[7].

For contract to be valid one party must gives offer to the other party and other party accepts the offer given by first party. No particular form to give offer is described in the law and party can give offer in any form such as by written or oral statement or by conduct. Offer is communication between two persons in which offeror promise to do something if offeree does something, and this communication is completed when offeror gives offer to the offeree.

Invitation to treat is different from offer because invitation to treat is an invitation given by one party to others to make offer to the party who gives invitation. It must be noted that invitation to treat is not an offer, and it does not create any legal relation between parties. Any reply which was received on invitation to treat is determine as an offer and if that offer is accepted by the party who gives invitation then of formed valid contract between parties [8]. Pharmaceutical Society of Great Britain v Boots Court of Appeal [1953] 1 QB 401; [1953] EWCA Civ 6; [1953] 1 All ER 482, [1953] 2 WLR 427[9] is the leading case.

On the other hand acceptance is also necessary to form a valid contract between parties, and the communication of acceptance is valid when communication of acceptance is received by the offeror. We can understand this with the help of case law Bressan v Squires Supreme Court of New South Wales [1974] 2 NSWLR 460[10].

In this case there is valid contract between the parties because management committee of Dodgy Accounts Associates decided to appoint Mr. Dowell as senior accountant in their firm. Offer is given by the member of committee that is Mr Welwisha through the telegram to Mr. Dowell.

Telegram also stated that formal letter of appointment is send by mail. After receiving this telegram Mr. Dowell send letter to the committee in which he gives his acceptance related to offer of the committee. Later committee decided not to appoint Mr Dowell. Therefore, we can say that there is valid offer and acceptance between the parties and contract is legally binding on the parties.

Conclusion:

The contract is legally enforceable between the parties.

References:

ACL, Formation <https://www.australiancontractlaw.com/law/formation.html>.

ACL, Agreement< https://www.australiancontractlaw.com/law/formation-agreement.html>.

Carlill v Carbolic Smoke Ball Co Court of Appeal [1893] 1 QB 256; [1892] EWCA Civ 1.

Crown v Clarke (1927) 40 CLR 227.

ACL, Consideration <https://www.australiancontractlaw.com/law/formation-consideration.html>

ACL, Intention to create legal relations <https://www.australiancontractlaw.com/law/formation-intention.html>.

Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd.

Pharmaceutical Society of Great Britain v Boots Court of Appeal [1953] 1 QB 401; [1953] EWCA Civ 6; [1953] 1 All ER 482, [1953] 2 WLR 427. 

Hill, Email contracts –When is the contract formed< https://www.austlii.edu.au/au/journals/JlLawInfoSci/2001/4.html>

Law Teacher, Difference Between Offer And Invitation<https://www.lawteacher.net/free-law-essays/contract-law/difference-between-offer-and-invitation-contract-law-essay.php>.