Legal Contract Essentials And Promissory Estoppel: An Essay Analysis.

1. Is Fran bound by the written agreement with Marco? (5 marks)
2. Does the doctrine of promissory estoppel apply to Fran and Octavia? (6 marks)
3. Is Dante bound by the contract with Fran?
4. Is Arjun entitled to the month’s supply of free chocolates?
 

In this given case study the issue that can be identified is whether Fran can avoid the contract of employment signed between her and Marco and hire Jane instead of Marco.

For a contract to be legally binding upon the parties, the same has to fulfill some important criteria. The essential elements of a valid contract thus include:

Offer- Terms proposed by the offeror to the offeree.  An offer can be made to a single person and to the world at large as held in the case Carlill v Carbolic Smoke Ball Co.

Acceptance- Acceptance of the offer is a must for valid contract formation. However an offer has to be accepted on the terms exactly as proposed in the offer. An change in the terms of the offer will not amount to acceptance but a mere counter offer as held in the case Hyde v Wrench.

Intention to create legal relations- It is important to assess whether the parties entering into the contract intended to e legally bound by the terms of the contract. In case of domestic or family agreements the courts generally presumed that the parties to the contract did not intend to e legally bound as held in the case Jones v Padavatton. However this approach of the court of taking into considerations the elements of presumption was later discarded in the case Ermogenous v Greek Orthodox Community of SA Inc. In this case the High court of Australia had held that presumptions should not be taken into consideration by the courts while assessing the intention of the parties to the contract.

Consideration- Consideration can be defined as the price stipulated by the promissor to pay to the promissee for the fulfillment of the promise Consideration is an important element of the contract as it implies the intention of the parties to be bound. Consideration can be anything stipulated by the promissr as held in the case Chappell & Co Ltd v Nestle Co Ltd

Thus by analyzing the facts of the case it ca ne be said that Fran had offered to give employment to Marco. Marco relied on such offer and accepted the offer proposed by Fran. They further signed a written agreement in which the remuneration for the deliveries, insurance of the vehicle and other specific terms were present. Thus it can be said that a valid contract had been formed between the two. Fran cannot avoid the contract with Marco even, though Marco is Fran’s brother. This can be said in accordance with the decision if the case Ermogenous v Greek Orthodox Community of SA Inc, in which the court stated that the no presumptions would be taken into consideration by the courts while determining the intention of the parties.

Doctrine of Promissory Estoppel

Conclusion

Thus to conclude, it can be said that Fran cannot avoid Marco’s contract of employment.

In this given case study, the issue that has been identified is whether the doctrine of promissory estoppel would apply to Octavia’s defense

The doctrine of promissory estoppel can be defined as a doctrine in which any party who promises not use his legal right on another person is prevented from doing so if the other person had relied on such promise.  This doctrine had first been established in the case Property trust Ltd V. High Tree House Ltd.. Promissory estoppels is however different from estoppels at common law. The following are important essentials of establishing proissory estoppel as ground of defense:

Firstly the claimant must prove the contractual relationship between the parties held in the case Combe v Combe  

The promise made by the promisor must be clear and unambiguous as held in the case Woodhouse A.C. Israel Cocoa Ltd. v. Nigerian Product Marketing Co. Ltd.. An promise which is ambiguous and unclear would not constitute promissory estoppels.                

The next requirement is to prove that there had been a change in position of the claimant by relying on the promise. The same has been illustrated in the case Alan v El Nasr

 The next important essential for establishing promissory estoppels is to prove that it is inequitable for the promisor to go back on his promise as held in the case D & C Builders v Rees 

In the notable case Brinkom Investments Ltd V. Carr it had been held by the Lord Denning that promissory estoppels may also arise in instances when the parties are negotiating a contract.  In another case  Durham Fancy Goods V. Michael Jackson it had been held y the court that the contractual relationship between the parties would be irrelevant in there existed a pre contractual relationship between the parties.

Thus by analyzing the facts of the case it can be stated that Fran had shown interest in renting Octavia’s storehouse. However Fran had proposed that she required Octavia to install a fan in the kitchen in the ware house. Octavia had sent the documents of the lease agreement for Fran to inspect and before Fran signed such documents, Octavia had installed the fan in the Kitchen. However later Fran changed her mind about renting the warehouse of Octavia. She had decided to open her own shop and therefore she no longer needed to rent the warehouse from Octavia. Thus in this given case study it is clearly evident that no contract had been formed between the aforementioned parties. Thus by the application of the decision of Combe v Combe, it can be stated that the doctrine of promissory estoppels would not arise in this situation. There was no pre contractual relationship between the parties. Thus by the application of the Durham Fancy Goods V. Michael Jackson case it can be stated that the claim of promissory estoppel would not be valid.

Validity of Promissory Estoppel - A Case Study

Conclusion

Thus, to conclude, it can be said that Octavia in this case cannot rely on the doctrine of promissory estoppels as a valid ground of defense.

In the given circumstances, the issue that can be identified is whether Fran is liable to supply Arjun chocolates for one month free of cost.

For a contractual right to be enforced by either of the parties, it is primarily important to establish that the contract entered into between the parties was a valid one. For a contract to be formed, the first important essential is the offer.   An offer can be defined as the promise by the promisor to the promisee to pay remuneration upon fulfillment of the pomise. Acceptance of such offer on its original terms gives birth to the contractual relationship between the parties. As held in the case Pharmaceutical Society of Great Britain v Boots an offer should be differentiated from an invitation to treat. The test of intent is applied by the courts to assess whether the promise constituted a valid offer or was merely an invitation. The test of intent assesses whether the affirmative response by the promisee to the promise proposed by the promissor would give rise to a contract or simply further the process of negotiation. However an exception to the aforementioned rule is the case of Carlill v Carbolic Smoke Ball Co. In this case it had been held by the court that a offer can be made to single person and to the world at large. Such offers which are made to the world would be treated as Unilateral offers. Such do not need to be accepted and communicated to the offeror. A mere performance of the terms of the offer would constitute valid acceptance. The person who performs the terms of the unilateral offer would be entitled o the consideration as mentioned in such unilateral offer. However, as held in the case R v Clarke, it is essential to act in reliance of the offer in order to claim a reward.  

Thus by analyzing the facts of the given case study it can be said that the advertisement which had been up by Fran on the window of her shop constituted a valid offer. This can be said in regards to the decision of the case Carlill v Carbolic Smoke Ball Co. It had been clearly specified in the advertisement that any person who recommends an apprentice to Fran would be entitled to receive free supply of chocolates for one month.  It has provided in the case study that Arjun had recommend his neighbor as the apprentice Fran had been looking for. He gave the details of his neighbor to Fran. Thus it can be stated that he had performed the terms of the Unilateral offer. However, Arjun did not hae prior knowledge of the offer and thus by the application of the Rv Clarke case it can be stated that he is not entitled to the reward, Thus Arjun is not entitled to receive free supply of chocolates from Fran for a month. 

Conclusion

Thus to conclude, it can be said that Fran would not be liable to provide Arjun with free chocolates for one month.   

Reference List:

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

Hyde v Wrench (1840) Beav 334

Jones v Padavatton [1969] 2 All ER 616

Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95

Chappell & Co Ltd v Nestle Co Ltd [1960] AC 87

Property trust Ltd V. High Tree House Ltd (1974)1 KB 130

Combe v Combe [1951] 2 KB 215

Woodhouse A.C. Israel Cocoa Ltd. v. Nigerian Product Marketing Co. Ltd [1972] AC 741

Alan v El Nasr[1972] 2 WLR 800                                

D & C Builders v Rees [1966] 2 WLR 28.

Brinkom Investments Ltd V. Carr (1979)CA

Durham Fancy Goods V. Michael Jackson (1969) 2 QB 839 

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

R v Clarke

Lambiris ML Griffin, First Principles Of Business Law (10th edn, Oxford University Press 2018)