The given case primarily deals with the principles and elements of contract based on the regulations of common law of Australia. The present situation involves the issue on entitlement of Ben’s claim for an amount of $100,000 that is owed by Mojo Beverage with respect to contract offered on 25 January. In the present case, Mojo Beverage changed its offer to lower amount whereas at the execution time Mojo Beverage modified the content as well as the scope of the contract, which was advertised in the newspaper. Besides, while catching Lord Harry, Ben was unaware about the changes in the prize money claimed for compensation of original advertised amount $100,000.
As per the principles on Australian common law, any contract should be formed by incorporating contractual formation, contractual scope and contents, avoidance of contractual obligation and contractual performance (McKay, 2017). The principles on common law also provides the formation of contract should associate with the remedies in there is breach of contract. According to the principles of common law, certain contracts are not required to be exclusively in writing but can also be in the form of verbal communication (Bayern, 2015). In case of BP Refinery Pty Ltd v Hastings Shire Council (1977) 180 CLR 266, the court stated that, the in case of verbal contract or a written contract excluding the expressed terms should incorporate reasonable implied terms. The court further stated that the implied terms has to be equitable as well as obvious so that the contract represents clear expression without even specifically mentioned in writing (Connolly, 2014). In addition, as per the equitable principles in Australia, it is essential for the offering party to present the contract free from any contradictions which has been ruled in the case of Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337.
In the present situation, Ben believed to have agreed to the formation of the contract while departing to grab Lord Harry along with the consideration for exchange and significant requirements. Moreover, departing to catch Lord Harry indicates Ben’s acceptance to the offer and eventually forms a legal relationship for compliance of legal formalities. Additionally, the terms of offer provided by Mojo Beverage incorporated implied and conditional terms, which were not expressly written. In view of the referred case rulings, it can be said that the Mojo Beverage reduced the prize money while other conditions remained same hence, the offering party held considerably right as well as valid. Similarly, it has been observed that other people who went for the contest were aware of the prize money and other conditions of the offer but Ben failed to come across the fact. Hence, Ben considered to be at fault for entering into the contract without an appropriate review of all the elements.
Additionally, in the light of rulings in case of Con- Stan Industries v Norwich Winterthur Ltd (1986) 64 ALR 481, it has been observed that the contract offered by Mojo Beverage did not contain any deficiency. With respect to the delivering expression for implied terms and conditions, participants other than Ben expressed their consent. Accordingly, it can be said that Ben failed to acknowledge the changes in the contract, which implies his actual intention to ignore the facts.
Therefore, based on the above discussion and analyzing the applicable case laws, offering party that is Mojo Beverage requires to explain Ben about his claim amounted to $100,000 since it was inappropriate and involves contract violation. As per the grounds of custom, implied contracting terms of Mojo Beverage has been validated under the custom legislations. Ben heard the true rumor about the changes in prize money yet he did not confirmed or clarified the same with the representative of Mojo Beverage and found to have acted negligently. Accordingly, Mojo Beverage is required to pay only $1,000 by providing explanation and interpretation on scope as well as elements of the contract.
Answer 2 (a)
The present case incorporates an issue for rights and liabilities of the parties for sale of sheep, which was offered to Livestock Brokers on 1 June with a condition to reply within 14 days. The acceptance for the offer was rejected by Dorper Sheep Sellers on 14 June on the grounds that Livestock Brokers was too late to reply and accept the contract.
According to the principles of common law and contract law of Australia, a contract is legally valid only when the contract constitutes the elements of offer, acceptance, intention to create contract, legal capacity of the contracting parties and consideration. As stated by Kosonogova (2016), a legal and valid contract requires acceptance within a validity or reasonable period. It is further mentioned that a contract stands terminated if the offer made by the party is revoked, discarded or if the specific time is elapsed due to failure of contract condition. Considering the rulings in the case of Coal Cliffs Collieries v Sijehama Pty Ltd (1991) NSWLR 1, court held that a contract to another contract is not binding. The case involved a situation of an agreement in which parties bargained in good faith, which was considered as enforceable by the aggrieved party (Olatawura, 2014). The regulations of contract law provides that the process of negotiation between the parties does not validate a contract and is not enforceable on the contracting party that has been ruled in case of Philips v Life Insurance Co, Australia (1925) HCA 18, 36 CLR 60. The court in this case held that the uncertain agreement through a negotiation process as well as an uncertain time to consider the scope of contract is not enforceable on the offering party.
The given situation involves a negotiation process between Dorper Sheep Sellers and Livestock Brokers to set the price and deadline for the confirmation of deal. Dorper Sheep Sellers offered to sell a number of dorper sheep on 1 June with a condition to reply within 14 days. Livestock replied on 6 June to make further enquiry for the confirmation of terms of sales to which Dorper Sheep Sellers did not communicate. However, on 14 June Livestock communicated about the acceptance of offer which was rejected by the offering party. In this situation it has been observed that the contract was under negotiation process until the 14th day of June. Besides, the present contract includes the basic elements of a legal contract that is offer, acceptance, intention of the parties to create contract and capacity. At the same time, common law and equity principles provides that the offering party have the right to terminate the contract by revocation or rejection before its acceptance or during the time of acceptance (Smith, 2016).
The case involves a situation of lack of communication in formation of contract by the offering party because the intimation for acceptance was made on the 14th day hence the stipulated time cannot be said to have been elapsed. As the offeror did not reply to the letter of confirmation from Livestock Broker, it was presumed that Dorper Sheep Sellers would not waive off the contract with the same contractual terms. Further, common law as well as contract law proves that consideration is a vital factor to validate a contract, which was not confirmed and agreed by the parties. Livestock Broker in this case wanted to clarify the conditions of sale of sheep in terms of price but the offeror’s silence formed incomplete contract, which involved lack of professionalism. Hence, Livestock Broker is entitled to claim for rights and liabilities for the loss due to non- professional behavior and ignorant attitude of Dorpor Sheep Sellers.
Answer 2 (b)
In the second situation if the letter of intimation sent by Livestock Broker could not received be received on 14 June due to transmission error then the case will be examined by applying postal rules. As per the postal rules, message containing acceptance of terms and conditions should be executed whether it has been received by the intending party or not (Farisa Tasneem, 2015). As the message sent in accordance to the express or implied terms, a contract is believed to be activated by the sender as ruled in case of Stahag Stahl v Brinkibon (1983) 2 AC 34. The court held that the method of communication is not significant unless it is precisely stated in the contract that the acceptance of should be made in the particular manner (Farisa Tasneem, 2015). In the given case, the specific manner of acceptance is not mentioned hence if Livestock agreed and accepted the offer on Dorpoer Sheep Seller’s terms, the parties would have followed postal rules enforcing the contract to be legally binding on both the parties.
The present scenario involves an issue with regard to the changes in agreed terms of the contract between Stuart and Westphalia Marts together with the changes in contract scope as per the business situation. The given case involves an issue related to unfairness and undue influence raising the situation for voidable contract.
As per the regulations of commercial law in Australia, it is essential for the contracting parties to sustain the promise that has been agreed in the original contract. The contract law further states that a legally valid contract, the contracting parties are required to have intention to create a legal relationship in order to enforce the agreement (Fried, 2015). Under the rulings in case of Australian Woollen Mills v Commonwealth (1954) 92 CLR 424, court held that there was no legal contract between the parties as the amount of consideration had not been offered by the party hence a promise to pay subsidy cannot be considered as contractual consideration. In addition, enforcement of contractual agreement to act by fulfilling the conditions of offeror, which is termed as unilateral contract whereas a bilateral contract involves agreement based on mutual promises between the two or more contracting parties (Cheung et al., 2014). In case of Mobil Oil Australia v Wellcome International (1998) FCA 205, court held that the acceptance act is considered as a part of performance and consideration, which cannot be revoked by the offeror one the promise is accepted by the party. Contract law further states that due to absence of express term, breach of contractual conditions gives a right to the innocent party to terminate the contract (Jacobi & Weiss, 2013).
In the given case, contractual promise to pay the rental amount has been changed and agreed by both the parties. However, Westphalia changed the decision and asked Stuart to repay the original amount of rent $1,000 as well as the shortfall amount $300 per week, it can be said that the two conditions are operating simultaneously. Considering the charge of rental amount $1,000 by Westphalia during the period January 2015 can be termed as lawfully correct as the contract law principles gives right to the offering party to negotiate to widen the scope of original contract. Besides, the condition for repayment of shortfall amount $300 per week for the period 2014, can be termed as unfair which was agreed between the parties under revised contract. At the same time principles on contractual obligations gives right to Westphalia to charge the waived rent because of Stuart’s contractual obligations on establishment of lawful relationship.
Moreover, in the present case both the contracting parties associates with the intention to create legal relation but based on the regulations of common law, landlord cannot charge back the reduced amount which was revised under mutual promises. In view of the rulings of case Mobil Oil Australia v Wellcome International (1998) FCA 205, it is essential to be unilateral contract to bind the conditions of one party, which is not the case in the present situation. Hence, the act of Westphalia for reclaiming the original amount of rent can be held as breach of contract as the accepted and acted offer cannot be nullified by the offeror. The present case constitutes bilateral contract hence the acceptance of offer cannot be revoked by the party unless there is an expressed terms mentioned in the contract. Therefore, it can be concluded that Stuart is entitled to claim and refuse to pay full amount of rent in January 2015 since the act of Westphalia involved breach of contract.
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