Legal Liabilities And Enforceable Contracts: An Analysis Of Relevant Cases

1. Demonstrated an interesting and/or original approach/idea/argument.

2. Demonstrated mastery of the relevant referencing system

Mojo Beverage Case: Legal Liabilities and Formation of Contract

The central issue in this case is to comment on the legal liabilities on behalf of Mojo Beverage on the account of the claim made by Ben in relation to the prize amount.

The party who has extended the offer is known as offeror/promisor, while the party who receives the offer is known as offeree/ promisee. There can be several offerees at a time, when the offeror has floated a unilateral offer (Richard, 2003). It is essential that the offeree must convey the unconditional acceptance towards the offer to enact a contract. The leading case in this scenario is Carlill v Carbolic Smoke Ball Co (1893) case. Moreover, it is noteworthy that an offer becomes effective, when the offer has been received by the concerned offeree and the acceptance becomes effective, when it has accepted by the offeree and communicated to the offeror as per the verdict of Brogden v Metropolitan Railway Co. (1877) case. Any unconditional acceptance results in the termination of the offer because it leads to the formation of a counter offer as per the decision of Hyde v Wrench (1840) 3 Beav 334 case. Consideration is another crucial part for the formation of a contract. It is essential that the consideration must be legally valid as per the common law (Andrews, 2011).

Unilateral offers are the offers that are extended to several offerees at a single time.  Further, it is not necessary that the contract can be made only when the offeree has conveyed the acceptance for the offer. This is apparent from unilateral offers where any offeree who accepts the offer and performs the desire action given in the offer is legally enforced into a contractual relation with the offeror. The Great Northern Railway Company v Witham (1873) case is the testimony of this. Further, if the offeror has made any alteration in the consideration amount or in the offer then, it is vital that it must be communicated to the offeree before the action is completed by the offeree (Carter, 2012). 

It is apparent from the information provided in the case that offeror Mojo Beverage has extended an offer by putting an advertisement in the local newspaper. The offer is a unilateral offer because it has directed to several offerees. It contains the condition that anyone who gets the Lord Harry would be rewarded with a consideration amount of $100,000. Later on, Mojo Beverage has made an announcement that there was an error in the advertisement and the actual price amount would be $1,000.

Dorper Sheep Sellers Pty Ltd Case: Enforceable Contract Formation

Ben is one of the offeree who has accepted the offer by actively searching for Lord Harry. Minutes before catching the Lord Harry, he heard that the price money has fallen from $1000, 000 to $1,000.  However, instead of confirming the reduction in the price with the representative of Mojo Beverage, who was there to certify the catch, he continued searching and finally caught Lord Harry.

 It is apparent that Ben has accepted the changes made in the offer (consideration amount) by Mojo Beverage and hence, he continued his pursuit for Lord Harry. Thus, it can be said that there is legal contract between Ben and Mojo Beverage with a consideration of $1,000.

Conclusion

There is a legal contract has formed between Mojo Beverage and Ben based on the alteration in the offer and thus, Mojo Beverage is legally accountable to pay $1,000 to Ben. Further, Ben cannot claim for the initial prize money because he accepted the modified offer made by Mojo Beverage.  

The issue is to ascertain whether an enforceable contract is formed between Livestock Brokers and Dorper Sheep Sellers Pty Ltd in the present scenario and to extend an advice to Livestock Brokers about their legal rights.

For the enactment of a contract, it is vital that the offer is accepted by the offeree without any further conditions. Any acceptance binding with conditions are known as counter offer and this would cause termination of the offer (McKendrick, 2003). Further, if the offeree has asked for additional information, then it would not reflect as counter offer. Hence, the original offer is still valid and available for acceptance on the part of the offeree as per the verdict of Stevenson v. McLean (1880) case. Moreover, when the offeree has made some material amendments in the offer, then it would create a counter offer as per the decision of Hyde v Wrench (1840) 3 Beav 334 case. Moreover, conveying the acceptance to the offeror by the offeree is important as per the decision of Brogden v Metropolitan Railway Co. (1877) case. In case of postal mode of communication, the acceptance become enforceable at the time when the offeree has post the acceptance to the concerned offeror (Paterson, et al. 2015). However, in case of electronic media, the acceptance becomes enforceable, only when the offeror has received the mail or fax as per the decision of Entores Ltd v Miles Far East Corporation (1955) case (Pendleton, 2005).

Stuart's Lease Payment: Analysis of Legal Liabilities

In this case, Dorper Sheep Sellers Pty Ltd (offeror) has directed an offer to Livestock Brokers (offeree) for the sale of the flock. Further, Livestock Brokers has conveyed a letter, which comprises inquiries about the price, mass and so forth. It is apparent that offeree does not create a counter offer because the letter contains only inquiries not conditions. It means the offer is still open and legal for Livestock Brokers for acceptance. Further, on June 14, Livestock Brokers has accepted the offer and hence, conveyed the same through electronic media (fax). Further, fax is received by the offeror on the same day (within the time mentioned by the offeror), which means that acceptance becomes enforceable on the offeror. Therefore, the parties have formed a legal contract and hence, Dorper Sheep Sellers Pty Ltd is legally binding to complete the contractual duties or else offeree can sue the offeror for breaching the contract.

In this case, if the fax has not been received by the offeror then as per the common law, no contract would form between the parties. Hence, Livestock Brokers cannot sue the Dorper Sheep Sellers Pty Ltd for not satisfying the contractual liabilities.

Conclusion

In this case, it can be concluded that the enforceable contract is enacted between the parties because fax indicating acceptance to the offer is received by the Dorper Sheep Sellers before the time expired. 

To advice to Stuart about his accountability for paying initial lease pay and the shortfall lease amount claimed on behalf of Westphalia Marts.

When the parties have enacted a written agreement, then the respective liabilities must be necessarily satisfied by the parties. If any of the party is not fulfilling the contractual legal responsibilities, then the other party has the legal right to take legal action on the other party for breaching the contract (Pendleton, 2005).

Moreover, with the help of mutual understanding the parties can alter the obligation or contractual conditions at any time. It is noteworthy that once the parties have entered into a new agreement (modified the conditions), then the party cannot force the other to perform the initial obligation. Therefore, any modification in the exiting contract on the basis of the mutual consent on behalf of the concerned parties would result in a new enforceable agreement thus nullifying the original agreement (Taylor and Taylor, 2015). If the modification in the contract is made in written mode then it is essential ,that the contract must be signed by the respective parties. However, if the modification is made on behalf of the parties with the help of oral agreement then also it would be enforceable same as written agreement as per the decision of Texaco v Pennzoil (1987) case In such scenario, parties are legally binding into contract based on the modified contractual liabilities  (Latimer, 2005).

As per the various facts provided in the case, it can be said that Stuart and Westphalia Marts Pty Ltd has enacted a written agreement regarding the lease of a music shop in the Price Mall. According to the agreement, Stuarts needed to make a payment of $1000 as a lease amount to Westphalia Marts every week. Due to sudden drop in the music business, Stuarts was facing various difficulties to pay the lease amount. After 2.5 years of the lease period, Stuart had requested Westphalia Marts to reduce the lease amount till his business recovered. The owner of the Westphalia Marts has agreed to the request and from that moment the new consideration amount ($700) was enforceable on the parties. It is noteworthy that this communication and understanding between the parties results in enactment of an oral agreement and hence, the terms made in the initial written agreement are not enforceable. Therefore, Westphalia Marts cannot force Stuart to make the payment of $1,000 for the lease. Also, they cannot recover the shortfall amount from Stuart on the account of initial agreement.

Conclusion

It can be concluded based on the common law that company cannot bind Stuart to pay the initial lease pay i.e. $1000. Moreover, Stuart is not liable to make payments of shortfall lease amount to the company.    

Reference

Andrews, N. (2011) Contract Law. 3rd edn. Cambridge: Cambridge University Press

Carter, J. (2012) Contract Act in Australia. 3rd edn. Sydney:  LexisNexis Publications.

Harvey, C. (2009) Foundations of Australian law. 3rd edn. London: Tilde University Press.

Latimer, P. (2005) Australian business law. 24th edn. Sydney: CCH Australia Ltd.

McKendrick, E.  (2003) Contract Law. 5th edn. Basingstoke: Palgrave.

Paterson, J. Robertson, A. and Duke, A. (2015) Principles of Contract Law. 5th edn. Sydney: Thomson Reuters.  

Pendleton, W. and Vickery, N. (2005) Australian business law:  principles and applications. 5th edn. Sydney : Pearson Publications.

 Richard, S. (2003) The Modern Law of Contract. 5thedn. London: Cavendish.

Taylor, R. and Taylor, D. (2015) Contract Law. 5th edn. London: Oxford University Press.