Australian Law of Contract - Assignment Example

Running header: Law Student’s name: Instructor’s name: Subject code: Date of submission Question 1 Facts of the case Vladimir owns the Lew Hoa Shopping complex at Norton Place where there are several vacant shops. His managing agents have on his behalf placed advert on the noticeboard advertising for interested people to lease the shop. The adverts states that there will be good rates including electricity. Sasha who wants a venue in which to sell her range of dresses reads the notice and is interested and hence calls Vladimir seeking a meeting, the meeting takes place on June 1 where Vladimir gives his terms of the lease as $1,000 per week for 12 months lease and the tenant to pay all outgoings including electricity. Sasha disagrees with Vladimir’s terms on the basis that the advertisement promised that the electricity charges would be included in the rental payment. Vladimir tells Sasha that that is his offer. The issue The issue in contention is whether the terms contained in the noticeboard advertisement were intended to lead to a contract and hence they can be referred to as an offer in which case Vladimir would be bound by them not to offer differing terms from what the advert promised. If not, did the advert constitute an invitation to treat and hence Vladimir would not be bound by the promise. Australian laws are clear regarding an offer and invitation to treat and their respective characteristics that must be present before an advert can be enforceable on the advertiser. The elements which are contained in the contract law will be discussed with an aim of establishing whether the advert in question and hence its terms will be enforceable on Vladimir in case they are likely to create a binding contract. Relevant law Generally, the Australian law of contract does not regard advertisements as offers but rather invitations to treat or to make a deal and hence when the advertiser does not sell the item at the advertised terms, it will not be considered a breach of contract. In Partridge v Crittenden1 the defendant had placed an advert in a classified section of a magazine offering some bramble finches for sale which was illegal in accordance to S.6 of the Protection of Birds act 1954. He was charged and convicted of the offence but on appeal the court quashed the conviction stating that the advert was an invitation to treat not an offer. An advert can only be considered a valid offer if it is sufficiently definite in its terms as to descriptions, quantity and price as was the case in Carlill v Carbolic2. The offer should be communicated to a specific person or group of people. Finally, the circumstances surrounding the advert must show that the advertiser intended to enter into a contract. An advertisement’s offer will also be enforceable if the plaintiff has actually accepted the offer by acting in a manner intended to fulfill his end of bargain for instance by paying the price quoted in the offer. This was the case in Carlill v Carbolic 3 where it was held that the plaintiff was entitled to the reward since the advert constituted an offer of a unilateral contract which the plaintiff accepted by performing the conditions stated in the advert. Application The bone of contention is whether the promise of good rates and electricity was enforceable on Vladimir. However, as stated above, the advert could only be treated as an invitation to treat based on a number of reasons. First, the advertisement was not sufficiently specific in its terms in regard to description and price since it does not state which shop it is and the rate at which the shop will be leased. It only contains a promise of good rates. Good rates are relative and hence subject to debate. Secondly, the advert was not specifically meant for Sasha but for anyone who might have need for a shop. The circumstances surrounding the advert also do not show that the advertiser had intended to enter into contract without further debate as to terms. Had this been the case, specific terms would have been included in the advert. Sasha seems to acknowledge the fact that the advert was not an offer or final by seeking a meeting with Vladimir. Had she indicated acceptance by for instance paying the lease and Vladimir acknowledging and accepting the lease payment, then Vladimir would have been bound by the advert that electricity would be included in the lease price. Conclusion The above analysis give a clear indication that was Sasha to sue for enforcement of the advert’s terms, the court will treat the advertisement as an invitation to deal. As such, I don’t consider that Sasha would succeed in a claim to the effect that Vladimir should be bound by the advertisement on the noticeboard. Question 2. Facts of the case Sasha had disputed the terms offered by Vladimir and Vladimir had told her to be quick in making decision indicating that he would go on looking for tenant and had advised Sasha to get back to him soon through email. Sasha decides to accept Vladimir’s offer four days later on 5th and writes a letter in her own handwriting to Vladimir accepting the offer. She signs it and posts it on 6th June at 4 pm. On the same day, Vladimir makes an offer to Milo who accepts the offer. Vladimir finds Sasha’s letter of acceptance on 7th June and telephones Sasha informing her that he has already leased the shop. The Issue The issue is whether the letter of acceptance that Sasha writes to Vladimir constitutes acceptance and whether the acceptance was done at the right time and in the acceptable form. In other words, does the circumstances surrounding the letter constitute acceptance hence making Vladimir obliged to lease the shop to Sasha. The elements around offer and acceptance will be discussed below in a bid to establish whether Sasha’s conduct implies acceptance and if so whether Vladimir is obligated to lease the shop to Sasha. The relevant law The contract law states that for a contract to occur, acceptance must be communicated. In Felthouse v Bindley, it was decided that acceptance4 cannot be by silence except in a unilateral contract as was the case in Carill v. Carbolic5. The offer has to be accepted by the offeree and where the offer has specified a method of acceptance, acceptance must be by a method not less effective from the offeror’s point of view than the method specified6. Acceptance may also be inferred from conduct as was held in the case of Rust v. Abbey Life Assurance Co. Ltd. If one accepts an offer, it must be the exact offer without modifications since if the offer is changed in any way, it will be deemed a counter offer effectively killing the original offer and the original offer cannot be accepted at a future time as was held in Hyde v Wrench7. If the post is used as a method of communicating acceptance, then acceptance and hence the contract is deemed to have occurred at the moment that the acceptance is posted as was the case in Adams v. Lindsell8 where it was held that this only applies when explicitly or impliedly, the parties contemplated post as a means of acceptance. Finally, if the offeree fails to accept the offer within the specified, time, the offer will be deemed terminated. Application It is clear that Sasha wrote a letter to Vladimir with the intention of communicating acceptance of the offer made. However, the acceptance by Sasha is by Post while the offeror has specifically asked Sasha to communicate acceptance through email which he though more effective given that he had stated the need to be fast since there was still a lot of interest and he was still looking for a tenant. At the meeting, it should be noted that Sasha conduct might of disputing the terms might have triggered Vladimir to assume that the offer will not be accepted since she was giving a new offer and as stated above, the original offer cannot be accepted at a later date. Although the post is acceptable method of communication, a contract will be deemed to have occurred when the letter is placed on the post office or on 6th June in this case only when the parties had contemplated that post will be used. However, in this case, they had contemplated that email will be used and hence the reason why another contract was signed the same day since no email had been received. Finally, Vladimir had contemplated that the acceptance will be prompt. However, communication only reaches him six days later and given that he had been looking for more interested people, it can be argued that the offer had been terminated on the grounds that it was accepted late. Conclusion From the above analysis, it is clear that Sasha cannot succeed in an action to enforce the contract owing to the reasons stated above. As such, I would advise Sasha to seek for another alternative since her claim will most likely be struck out. Question 3 Facts of the case A lease contract has been signed between Roberto and Vladimir for $1,000 a week. Business conditions deteriorate and Roberto is worried and hence requests Vladimir to reduce lease to $500 per week. Vladimir agrees but with no formal acknowledgement of the arrangement. Roberto pays the reduced rent for 20 weeks which Vladimir accepts. Vladimir hears a rumor that Roberto intends to give a notice of lease termination. Vladimir is annoyed and sues Roberto to recover the $10,000 arrears rent. The issue The issue is Roberto’s legal position. It is whether Roberto was justified in relying on the promise to pay reduced lease and hence whether the court will compel him to pay the arrears. The law of contract on promissory estoppel is clear on the elements necessary for a promise to be enforceable and will be discussed below. The relevant law The doctrine of promissory estoppel requires five elements for a promise to be enforceable on the promisor. First, some form of legal relationship must exist or be anticipated by the parties as was held in Central London Property Trust Ltd v High Trees House Ltd9 where a contract of tenancy existed. There must have been a representation or a promise by one party as was held in Walton Stores v Maher10. The plaintiff must have relied on the promise 11 and hence acted accordingly. The party relying on the promise must have suffered some sort of detriment as a result of the reliance. In addition, it must be proved that in the circumstances, it would be unfair and inequitable for the promisor to go back on his promise. Application There existed a contract of lease between Roberto and Vladimir. On Roberto’s request, Vladimir promised to accept the reduced lease rate of $500. Placing his reliance on the promise, Roberto continued to pay the reduced $500 lease per week for 20 weeks. As a result, the $10,000 arrears that Vladimir has sued him for arose. Vladimir did not do anything to prevent the arrears from accumulating for he continued to accept the reduced rates based on his promise. It should be noted that the promise arose owing to deteriorating conditions over an existing contract. As such, it would be inequitable if Vladimir was to be allowed to renege on his promise and hence be allowed to claim the arrears. As such, he should be estopped from doing so. Conclusion It is highly likely that the courts will estop Vladimir from reneging on his promise and hence claiming the arrears. As such, my advice to Roberto is that he would be right by not paying the arrears and hence allow Vladimir to go on with the court process for the court will not enforce Vladimir’s request for arrears. References Pearsoned.co.uk, 2015, The formation of a contract, p1-43, Retrieved on 4th May 2015, from; http://catalogue.pearsoned.co.uk/assets/hip/gb/hip_gb_pearsonhighered/samplechapter/El liott_contract_C01.pdf Cohen, L, 2000, Choice of a new generation: can an advertisement create a binding contract, Missouri Law Review, vol.65, no. 7, pp. 2-20. Thomas, L2015, Practical law, Retrieved on 4th May 2015, from; http://uk.practicallaw.com/books/9781845921620/chapter04 Hugh, C2003, The law of contract, p.159, Lexis Nexis, Butterworths. E-lawresources.com2015, promissory estoppel, retrieved on 4th May 2015, from; http://e-lawresources.co.uk/Promissory-estoppel.php Hartpub.co.uk, 2015, Consideration and promissory estoppel, p. 1-67, Retrieved on 4th May 2015, from; http://www.hartpub.co.uk/pdf/samples/9781849464468sample.pdf Read More