Contract between Delicious Hamburgers and Extreme Printers - Assignment Example

Four-Step Process and Short Answer College: Name: Students ID: Date: Course Name: Unit Code: Instructor's Name PART A – Four step process Question (1) Legal issue The legal issue is to determine whether the element of agreement required for a contract to be enforceable can be determined. This will help us to find out whether Delicious Hamburgers is required to endow Kyle and George each with a Mazda CX-7. This falls under the Law of Contract. Applicable rules of law A contract is a legally binding agreement or bond involving two or more parties to do or desist from performing certain acts. Agreement (offer and acceptance) for a contract is mandatory. An offer has got to be backed by acceptance of which there has got to be consideration. Parties drawn in a contract are obliged to be set to create legal relation on a lawful issue which should be entered into freely and should be doable. Accordingly, a contract consists of three mandatory elements: (1) An agreement (not being declared void by Law); (2) intention to create a legal obligation; and (3) Lawful consideration (a duty enforceable by law). The element that requires discussion here is whether an agreement by the parties to enter into a contract can be established. For a contract to be there agreement is indispensable; with no agreement, there can be no contract. Agreements can be formal or informal. Basically, for agreement to exist, offer and acceptance are mandatory.  An offer constitutes a plain suggestion of the terms that lead an individual to be bound. The offeror is obliged to assume liability. In the case of Placer Development Ltd v Cth (1969), the government said it would financially support importers. The court was tasked with determining whether a legally enforceable promise existed. The court came to a decision that, in fact, what the government had said was not a legally enforceable promise, even though it appeared promissory. An offer is expected to engender a contract if accepted. An advertisement generally does not form an offer but an ‘invitations to treat’. In the case of Partridge v Crittenden [1968] the issue was to determine whether an advertisement was an offer or simply an invitation to treat. The court held that the advertisement was an invitation to discuss with concerned buyers who could themselves offer to pay money for the advertised birds. In the case of Carlill v Carbolic Smoke Ball Co [1893] the issue was to determine whether the promise to shell out the advertised prize was anticipated to be legally binding. The court decided that the promise was intended to be legally binding. An offer can as well end after a reasonable time and can be withdrawn. On the other hand, acceptance means to assent to, to agree, to receive the terms offered. Acceptance ought to be bound by the terms of an offer, it can be made even as the offer is still in existence, by the individual to whom the offer was addressed, and made in a satisfactory form. In general, an acceptance is considered to be effective once the offeror receives it. Application of the law An agreement constitutes an offer that has got to be accepted for a consideration that is legally binding. The objective here is to determine whether Delicious Hamburgers made a valid offer that would be accepted by Kyle and George so as to create a legally binding contract for them to claim their prize (a Mazda CX-7). Given that Delicious Hamburgers advertised on radio, TV and in newspapers their types of burgers so as to boost the sales of the chain, this merely constituted an ‘invitation to treat’. An invitation to treat does not result to a valid offer, even though the offer was intended to be legally binding and would result in the winner(s) claiming the prize. Seeing as Delicious Hamburgers decided to withdraw the promotion, the restraint chain is at liberty to do so. Conclusion In conclusion, Delicious Hamburgers is not obliged to endow Kyle and George each with a Mazda CX-7. Even if the resultant offer was intended to be legally binding, it was not valid; therefore there was no agreement that would be required to form an enforceable contract for Kyle and George to claim their prize. Question (2) Legal issue The legal issue is to thrash out the terms as expressly agreed in relation to the contract between Delicious Hamburgers and Extreme Printers. The other matter is to discuss whether Extreme Printers can rely on the exclusion clause in the contract and to determine the status of any relevant terms, including pointing out whether they are a warranty or a condition. This also relates to the Law of Contract. Applicable rules of law In the Law of Contract, a term defines a definite responsibility or undertaking agreed upon by parties in a situation such that it is intended to be legally binding. The terms of a contract depict the full stuffing of a legally enforceable agreement. Terms describe the rights and duties of the parties and present the benchmark with which performance of the contract is calculated. Terms to a contract can be wholly oral, wholly written or partially oral and partially written. Parties to a contract or other witnesses are tasked with providing evidence for wholly oral terms to a contract. Terms happen to be part of a contract through either an agreement (express or implied); or they can be integrated in a contract by operation of law (general law or legislation). Express terms are those that have, in reality, been confirmed or definitely affirmed, either orally or in writing. For a term to be ‘express’ it must have been discussed; incorporated in a signed deed; or referred to on a ticket or notice. Exclusion clauses also form part of a contract; however, they should be correctly integrated into the contract. If correctly integrated, exclusion clauses are commonly interpreted just like any other term. If the connotation of an exclusion clause is unclear, probably, it will be interpreted not in favour of the interest of the favoured party (contra proferentem). Vague words are hardly interpreted and occurrences not falling within the ‘four corners’ of the contract will not enclosed by an exclusion clause that is projected to eliminate liability for things done within the scope of the contract. In the case of Sydney City Council v West (1965), the court held that the ‘four corners’ rule will be relevant only if the exclusion clause covers a loss occurring during the operations outlined by the contract Terms in a contract have differing implications; some are more important than others. Classifying terms as conditions and warranties offer a means of telling apart terms that are more important from those of less importance. Conditions denote terms of deep-seated importance in a contract. Breach of a condition results to the plaintiff ending the contract and/or suing for damages or affirming plus suing for damages. Warranties denote terms of minor importance weighed against conditions. Breach of a warranty merely entitles the plaintiff to claim for damages. Classification of a term as a condition or a warranty is dependent upon the intention of the parties, having considered the circumstances. In the case of Associated Newspapers Ltd v Bancks (1951), the issue was to determine whether the display of drawings on the front page was a condition or a warranty. The court held that, under the circumstances, the term was a condition that was breached; hence, the defendant had the right to end the contract. Application of the law As Delicious Hamburgers and Extreme Printers were negotiating, Delicious Hamburgers clearly stated ‘that all reasonable care must be taken to ensure that all materials delivered are without errors’ is a term of the contract. Extreme Printers asserted ‘that all materials would be proof-read before delivery’ before the lawyers drawn in the contract. Terms to the contract between Delicious Hamburgers and Extreme Printers were wholly orally discussed and agreed. These terms hence formed the express terms of the contract between Delicious Hamburgers and Extreme Printers. Extreme Printers incorporated an exclusion clause in the contract, stating that; “Extreme Printers accepts no responsibility for any loss or damage whatsoever caused by errors in printing, resulting from defective typesetting work by the printer or any of its employees.” The above exclusion clause forms part of the contract and is correctly integrated into the contract and is to be interpreted just like any other term. As to whether the terms in the contract are a condition or a warranty, the key here is to establish whether, from the situation, the promise was so essential that Delicious Hamburgers would not have entered the contract exclusive of it, and this was clear to Extreme Printers. Conclusion In conclusion, terms to the contract between Delicious Hamburgers and Extreme Printers were expressly agreed. Secondly, Extreme Printers can rely on the exclusion clause seeing as it was correctly integrated into the contract and the incident occurred as Extreme Printers were performing their task as stipulated in the contract. Finally, the terms in the contract are conditions. Judging from the circumstances, Delicious Hamburgers would most likely have not entered into the contract with Extreme Printers in they failed to give assurance to Delicious Hamburgers, more so in the presence of their lawyers (witnesses). PART B – Short answer question The Australian court system is referred to as a common law system. Conventionally, this (common law) system operates with appellate courts (trial courts that hear cases on appeal) plus a Supreme Court or a High Court. The subordinate courts hear minor cases, including drug dealings, trivial criminal offence cases, and theft, among others, on a daily basis. The higher courts are tasked with handling more severe cases. Cases heard by the higher courts, in general, are fairly legally important. The hierarchy of courts strongly influences the approach used by a judge to come to a decision on individual cases. The entire Australian court system follows the principle of precedents. A precedent is a judgment arrived at in an earlier case that a judge is obliged to tag along. If a present case has no precedent to follow a judge is allowed to make a ruling by evaluating comparable circumstances and following the principle of precedents along with a definite set of principles to establish the end results. The principle of precedents too restrains the judges’ law-making responsibility. Common law is, therefore, created by precedents. This system of precedents originates from a doctrine known as stare decisis, which is a Latin expression meaning 'to stand by things decided'. The doctrine’s main importance is to ensure that the law is consistent. Precedents arising from cases determined in a lower court can be upturned by judges in a higher court. However, cases determined in a higher court along with the arising precedents are regarded as binding authorities, implying that the decisions have got to be followed. This is equally linked to the power of reversal that a lower court is obliged to tag along the decisions of the court that has another look at its judgments on appeal. Typically, under the common law system judges have to every now and then follow an applicable precedent regardless of whether they agree or disagree with it. This, all together means that all past decisions of a superior court are made law, but all present decisions simply pertain pre-existing law. These paradoxical implications spawn a distinctive blend of stability along with flexibility. Read More