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Questions:

1.Paul has come to you for Advice on whether any action can be taken against Rajeev as he had signed the Registration transfer Papers. He wants to know whether he is Entitled to any Damages or Compensation Money.

2.Advise Bhanu whether Rescission Could be used as a Remedy in Resolving this Issue with Rajeev. What would you Advise Bhanu to do? 

3.Can Bhanu Enforce the Contract with Shane? 
 
 

Answers:

1.Issues

  1. Whether there is a valid contract between Rajeev and Paul?
  2. If yes, then are there any remedies that can be availed by Paul for breach of contract?

Law

A Contract is said to exist between parties, when the parties are in an agreement with each other and that agreement is enforceable as per law. In case the agreement cannot be enforced as per the law of land, then, the contract cannot said to be in existence between the parties.

An agreement comes into existence when there is an offer made and the same is accepted. But for an agreement to be categorized as a contract there must also be intention of the parties to be in legal relation, consideration, parties must be capable of entering into contract with each other (Clark, 2010).

Thus, the basic ingredients to form a contract are: (McKendrick, 2014)

An offer is an intention of the person called offeror to the offeree to do some act/omission for the achievement of objective. A valid offer must be simple, clear and unambiguous and is only complete when communicated to an offeree.

An offer is different from an invitation. In invitation, the offer is invited by a person and when offer is made to him, he can accept or reject them, for example, auctions, advertisements, etc (Pharmaceutical Society of Great Britain v Boots [1953]].

An acceptance is said to be complete when the offeree to whom an offer is made confirms the offer. An acceptance must be same as an offer and it must be made before withdrawal of an offer. An acceptance is complete when communicated to the offeror [Shogun Finance Ltd v Hudson[2003].

Consideration is the benefit which is given in exchange for the performance of the promise. It may be in cash or kind. The consideration can be future consideration or present but must not be past (Combe v Combe[1951].

The parties must be capable of contracting with each other i.e. they must be major and of sound mind.

 


The intention to be in contract must be there between the parties, then only there can be a valid contract. In domestic and social relations this element is generally absent unless proved and in case of commercial transaction this element is presumed to be there unless disapproved (Shahid v Australasian College of Dermatologists[2008] FCAFC 72]. (Gibson & Fraser, 2013)

Application of law

Rajeev wanted a car. He saw an advertisement in paper. An advertisement is an invitation and thus an offer is made by Rajeev to Paul wherein he intends to buy the car and signed the registration papers and asked Paul that he will come back next day with money. This offer is accepted by Paul.  But, Rajeev did not paid anything and on next day did not turned up. Thus, Paul was furious.

Thus, Rajeev made an offer which is thus accepted by Paul. Both the parties have intention to bind by the terms of the offer and acceptance. Also, both are major (presumed) and are sound mind. Also, there is a valid consideration though not paid but was to be paid in future and decided at the time of execution of contract. So all the ingredients of contract are present hence there is a valid contract.

Since, the contract is not comply with by Rajeev, thus, there is breach of contract.

So, Paul can sue Rajeev for breach and claim damages.

Conclusion

Since all the ingredients of a valid contract are present hence there is a valid contract between the parties. Rajeev had breached his commitment in this case and thus he will have to pay damages and the contract can also be rescinded by Paul along with demanding damages from Rajeev and he can also sue Rajeev for specific performance of a contract.

2.Issues

  1. Whether a contract is made between Rajeev and Bhanu and if yes, the weather Rajeev has violated the contract by breaching the term?
  2. What remedies can be availed by Bhanu for breach of contract term?

Law

To make a contract, every offer made by the offeror must be supported by an acceptance which should be supported by consideration and the parties must have legal intention to support such contract (Latimer, 2012).

When a contract is made then the parties who make the contract decide the terms of the contract. Some terms are very important and some are less important. Thus the terms are divided into two broad categories (Hodges, 2012).

When the terms are the basis of any contract without which the contract cannot be performed, then, such terms are called conditions. These are soul of every contract and are the essence of the contract Poussard v Spiers(1876). If such terms are breached then the aggrieved party has the right to cancel the contract and ask the defaulting party to compensate the plaintiff for the damages sustained by him.  

When the terms are not the essence of the contract and which are not the heart and core of the contract, then, such terms are called warranties (Bettini v Gye(1876)). These are the supportive terms to the conditions and if these terms are not performed then the aggrieved party has the right to sue the defaulting party only for damages. The aggrieved party has no right to cancel the contract and the contract subsists.

Application

It is submitted that Rajeev and Bhanu entered into a contract wherein they both decided that Rajeev will take the painting of Bhanu on lease. Thus, there is an offer and acceptance that is exchanged amid the parties. Both the parties exchanged consideration and have legal intention to support the contract.

Thus, there is a valid contract amid the parties.

Now, one of the term upon which the painting was provided by Bhanu was that the painting must be insured. It is submitted that the paintings were rare and thus the insurance of the painting is very important and must be carried out by Rajeev. It is the core term upon which the painting was provided by Bhanu to Rajeev. Thus, it is a condition.

But, this term is not performed by Rajeev. So, a condition is breached.

 


Thus, there is a clear contract amid the parties and such contract is breached by Rajeev by non performance of an essential term.

Issue 2

Since a condition is breached by Rajeev, thus, Bhanu has an option to treat the contract as rescinded and he can cancel the contract and sue Rajeev for the claim of damages and compensation for the rare paintings that are destroyed by Rajeev.

Conclusion

It is thus concluded that there is a contract amid Bhanu and Rajeev.

Further, there is an essential term which is breached by Rajeev which has shattered the essence of the contract. so, Bhanu has every right to rescind the contract and sue Rajeev for damages.

3.Issues

There are two main issues that are raised:

  1. Is there is any kind of contractual relationship that is established amid Bhanu and Shane?
  2. If yes, then whether there is contractual breach and what remedies can be availed by the aggrieved party?

Law

There are four main elements required to make a contract (Latimer, 2012):

Offer is the first element and is initiated by an offeror. The desire to carry out any act/omission must be communicated by an offeror to an offeree, either orally, by conduct or in writing, and must receive the offeree. This communication is called offer and is normally made with the hope of approval.

Acceptance is the confirmation given by an offeree to the offer that is made to him by an offeror. an acceptance should be the mirror image of the offer and must receive by an offeror in order to be complete and valid.

The contract should be hold by some gain or benefit which is consideration and which makes any promises amid offeror and offeree enforceable (Clark, 2010).

 


The parties should also hold legal intention, irrespective whether they are in domestic or commercial relationship.

When all these elements are met, then a contract is made but when any one element is missing then there is breach of contract.

Now, if there is breach then what are the remedies that are normally available? Some of the remedies are:

Injunction – In Jaggard v Sawyer(1995), it was held that when the defendant is under some act which the plaintiff wants him to stop, in such situation, he can seek the help of court for order of injunction (Andrews, 2016)

Damages – In State Transport Authority v Apex Quarries[1988] it was submitted that when the plaintiff wants to reinstate his position so that no loss ios caused to him then he can simply ask for damages (Kohl, 2000).

Specific performance – where in the plaintiff wants the defendant to do something which he is not willing to perform. This remedy is granted when providing damages is not an adequate remedy (Prince v Strange (1978).(Bryan & Vann, 2012)

Restitution –In Bhanu Attorney General v Blake[2000] it was held that when the property of the plaintiff is wrongly held by the defendant then the remedy for restitution can be sought in order to recover property from the defendant. (Byrne, 1995)

 


Application

The law is now applied to the facts of the case.

Communications took place between Bhanu and Shane wherein Bhanu decided to sell her house to Shane. Thus, there is mutual offer and acceptances of offer and acceptance. Now, these promises are supported by 10% deposit which is paid by Shane to Bhanu. So, there is consideration. both the party are ready to enter into the agreement with legal intention.

Thus, all the contractual elements, that is, offer, acceptance, consideration and legal intention are present. Thus, there is contract amid the parties.

Now, there is contract between Bhanu and Shane. Now, Shane has to pay the remainder 90% deposit to Bhanu in next six weeks time. But, he did not comply with his contract. Now, Shane was not complying with his contractual obligation so there is clear breach. In such situation, Bhanu can sue Shane for specific performance and damages. He can compel Shane to perform his part because if the contract is not comply with then Bhanu will face damages and thus he must also ask for damages in order to restore his position.  Restitution cannot be asked for as there is no wrongful possession and injunction is not required because Bhanu wants Shane to perform something and not to restrict anything.

Conclusion

Since all the ingredients of a valid contract are present hence there is a valid contract between the parties. Rajeev had breached his commitment in this case and thus he will have to pay damages and the contract can also be rescinded by Paul along with demanding damages from Rajeev and he can also sue Rajeev for specific performance of a contract.

It is thus concluded that there is a contract amid Bhanu and Rajeev.

Further, there is an essential term which is breached by Rajeev which has shattered the essence of the contract. so, Bhanu has every right to rescind the contract and sue Rajeev for damages.

Thus, there is a valid contract between Shane and Bhanu and Bhanu must ask specific performance from Shane so that he does not face any damages.

 

Bibliography

Andrews, N. (2016). Arbitration and Contract Law: Common Law Perspectives. Springer, (p. 304). Australia.

Bryan, M., & Vann, V. (2012). Equity and Trusts in Australia. (p. 33). Cambridge University Press.

Byrne, M. (1995). Restitution and Equity. QUT Law JL.

Clark, E. (2010). Cyber Law in Australia. Kluwer Law International, (pp. 432-434). Australia.

Gibson, A., & Fraser, D. (2013). Business Law 2014. Pearson Higher Education AU.

Hodges, S. (2012). cases and Material on Marine Insurance Law. Routledge.

Kohl, U. (2000). Injunctions v Damages (The Age of the Internet) old Battle of Remedies Revisited . J1LawInfoSci 12.

Latimer, P. (2012). Australian Business Law. CCH Australia Limited, (p. 294). Australia.

McKendrick, E. (2014). contract Law: Text, cases and Material. Oxford University Press.

P, L. (2012). Australian Business Law. CCH Australia Limited. Australia.

VAnn, B. &. (2012). Equity and Trusts in Australia. (p. 33). Cambridge University Press.

Cases

Bettini v Gye (1876) QBD 183.

Bhanu Attorney General v Blake [2000] UKHL 45.

Combe v Combe [1951] 2 KB 215.

Jaggard v Sawyer (1995).

Prince v Strange (1978).

Poussard v Spiers (1876) 1 QBD 410.

Pharmaceutical Society of Great Britain v Boots [1953] 1 QB 401.

Shahid v Australasian College of Dermatologists [2008] FCAFC 72].

State Transport Authority v Apex Quarries [1988] VicRp 26.

Shogun Finance Ltd v Hudson [2003] UKHL 62

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