Contract Law (Australia) - Essay Example

has done or abstained from doing, or does or abstains from doing, or promises to do or abstain from doing something, such an act or abstinence or promise is called a consideration for the promise.” “A contract is an agreement enforceable at law made between two or more persons by which rights are acquired by one or more to acts or forbearance on the part of the other or others.” (Quoted in ReportBD.com) Since both the plaintiff and defendant maintained social relationship, the agreement between them was a bit social in nature, as there was no intention of either of the parties to enter into any legal remedies against non-compliance of either of the parties to the contract.

There are two types of agreements i.e. Social agreements are the agreements which are just promises between two or more persons or parties, but do not enjoy the status of contract. For example one person invites another at his office to have dinner with him, but if he fails to host dinner, no legal remedy can be demanded, as it is social agreement in nature. Such promises do not bind the parties, to fulfil the promise, thus no legal rights between the parties are created, as in the case of Balfour and Balfour (1919) 2 KB 571: “When a husband failed to pay a promised allowance, the wife sued.

The court announced the judgement in these words: "There are agreements between parties which do not result in contracts within the meaning of that term in our law. The ordinary example is where two parties agree to take a walk together (or) arrangements which are made between husband and wife. They are not contracts because the parties did not intend that they should be attended by legal consequences. Each house is a domain into which the Kings writ does not seek to run.” (Quoted in Duhaimes Canadian Contract Law Centre) On the other hand, there are some contracts, which are legal in nature, and the parties are bound to execute the promise and agreements.

In case of not complying with which,