commercial law assignment

Jonah Whitelum a1768623 COMMERCIAL LAW 1 Semester One Assignment Q1.) i) Is Michelle’s final reply an offer or an invitation to treat? The issue in this situation is if Michelle’s final reply to Jack from her gumtree post about her Hyundai Getz is an offer or an invitation to treat. An offer is a proposal by one party to enter a legally binding contract on strict terms with another, giving the recipient an opportunity to choose to either accept or reject the offer, this might come in the form of verbal or written. 1 Whereas an invitation to treat is an invitation to enter into offers or to enter into negotiations. 2 In this case Michelle and Jack have an invitation to treat as they never entered into a legally binding contract, from the invitation to treat Michelle and Jack have the option to enter into an offer. For example, Michelle uploaded a post on gumtree which stated that her Hyundai Getz had a selling price of $2000, this is currently an invitation to treat as it allows people to reply to Michelle to enter into further offers and negotiations. Jack asked Michelle to buy the car for $1000 but Michelle said that she would not sell it any lower than $1500, this is an invitation to treat as there is no contract being formed only negotiation for an offer to be created. 3 This is backed up by the Australian Woollen Mills vs Commonwealth case as there was no statement created stating a contract thus is an invitation to treat. 4 ii) Is it a legally binding for Michelle to hold the offer for 1 week? Why? For someone or a party to have an offer there needs to be someone or a member from the opposite party offering a legally binding contract which then the other party has to either accept or decline the offer, once accepted the party needs to adhere by the contract conditions. 5 In this case Jack and Michelle now have a legally binding contract, this is due to there being an initial invitation to treat of the car being posted on gumtree allowing Jack to go into negotiation with Michelle. From here Jack said he’d buy the car for $1500 but needs a week to get the money, at this stage this is still an invitation to treat as Michelle stated that the lowest price, she is willing to sell the car for is $1500 but did not make an offer to Jack. In the Harvey vs Facey (1893) case a similar thing occurred at this point, this being a lowest price was said with the other party thinking this was an offer which the court came to conclusion was not. 6 Thus implying that Michelle has in fact not made an offer to Jack at this point. It then became legally binding as Michelle agrees to Jacks offer but asks for a $200 deposit due to Jack taking a week to find the money. Michelle now has an obligation to hold the offer to one week as both parties have agreed, and a $200 deposit has been made. If 1 Commercial Law Lecture Slides, Contracts (Formation). Accessed on the 19 th , April 2 Commercial Law Lecture Slides, Contracts (Formation). Accessed on the 19 th , April 3 Commercial Law Assignment Task Sheet, Assignment Questions (Page 4). Accessed 19 th , April 4 Australia Contract Law | Case | Australian Woollen Mills, Australiancontractlaw.com. https://www.australiancontractlaw.com/cases/awm.html 5 Commercial Law Lecture Slides, Contracts (Formation). Accessed on the 19 th , April 6 Harvey v. Facey (1893) | Case Brief Summary, Casebriefsummary.com. http://www.casebriefsummary.com/harvey-v-facey-1893/

Jonah Whitelum a1768623 Michelle did not feel comfortable with the offer, she could have declined but now there is a legally binding contract. Q2.) i) Did Suzanne enter into a valid contract with the Adelaide Airport car park? The issue of this case is if Suzanne entered into a valid contract with the Adelaide Airport cark park when she went to welcome her daughter. There are four elements to a contract, these being offer and acceptance, consideration, intention to create legal relations, certainty and completeness of terms. The offer is a proposal by one party to enter a legally binding contract on strict terms with another, giving the recipient an opportunity to choose to either accept or reject the offer. 7 Acceptance is a willingness to take exactly what is offered with and understanding that they may need to pay the “price” required. 8 However the parting that is accepting must be conscious of them accepting. 9 In this case, Suzanne drove into the Adelaide Airport car park which on the sign of the entrance it says “the car park will not be liable for any loss or damages to any vehicle”. 10 The sign being at the entrance of the car park can be considered to be the “offer” as the sign gave Suzanne the option to either accept or reject the offer. It could be considered that Suzanne accepted the offer as she continued to drive into the car park, thus it could be said that she is willing to “pay the price” if required. However, Suzanne may not have seen the sign or paid much notice thus she isn’t conscious as to what she is accepting, this might not have been clear to Suzanne thus there is no contract. Consideration serves to distinguish bargains from gifts and ensures that something of value is given by each party, however mere promises are not legally enforceable. 11 There are two elements to the consideration aspect, benefit/detriment and bargain. In the Currie v Misa case (1875) it stated, “A valuable consideration, in the sense of the law, may consist in some right, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss, responsibility, given, suffered, or undertaken by the other”, this relating to the consideration aspect. 12 13 In this case there was a significant benefit accruing to the Airport car park as they stole Suzanne’s and are “not liable”. Intention to create legal relations is the third aspect of creating a valid contract, this is when the parties must have intended their agreement to be legally enforceable in order for it to be so. 14 Contract formation has three basic rules, these being it must be sufficiently complete, it must also be sufficiently clear on its terms, the courts will endeavour to attribute meaning to the language used by the parties unless it is impossible to do so. 15 In this case Suzanne and the Adelaide Airport did not sufficiently complete a contract as they didn’t agree on any terms even though that the sign was clear in what it meant. This means that Suzanne and the Airport did not have a valid contract. 7 Commercial Law Lecture Slides, Contracts (Formation). Accessed on the 19 th , April 8 Commercial Law Lecture Slides, Contracts (Formation). Accessed on the 19 th , April 9 Commercial Law Lecture Slides, Contracts (Formation). Accessed on the 19 th , April 10 Assignment sheet 11 Commercial Law Lecture Slides, Contracts (Formation). Accessed on the 19 th , April 12 https://www.lawteacher.net/cases/currie-v-misa.php 13 Commercial Law Lecture Slides, Contracts (Formation). Accessed on the 19 th , April 14 Commercial Law Lecture Slides, Contracts (Formation). Accessed on the 19 th , April 15 Commercial Law Lecture Slides, Contracts (Formation). Accessed on the 19 th , April

Jonah Whitelum a1768623 conference room for December 2018 and it burning down in November 2018 the room is completely unusable due to repairs taking 6 months, the contract is a complete failure. 22 As this has occurred the contract will be terminated by frustration, this will allow Mike to get back all money that he paid for the conference room at the Adelaide Hospital conference room. Bibliography o Commercial Law Lecture Slides, Termination and Remedies (1). Accessed on 20 th , April o Commercial Law Lecture Slides, Contracts (Formation). Accessed on the 19 th , April o Commercial Law Assignment Task Sheet, Assignment Questions (Page 4). Accessed 19 th , April o Taylor V Caldwell [1863] 3 B&S 826 Case Summary, Lawteacher.net. https://www.lawteacher.net/cases/taylor-v-caldwell.php o Currie v Misa – Summary, Lawteacher.net. https://www.lawteacher.net/cases/currie-v-misa.php o Harvey v. Facey (1893) | Case Brief Summary, Casebriefsummary.com. http://www.casebriefsummary.com/harvey-v-facey-1893/ o Australia Contract Law | Case | Australian Woollen Mills, Australiancontractlaw.com. https://www.australiancontractlaw.com/cases/awm.html 22 Commercial Law Assignment Task Sheet, Assignment Questions (Page 4). Accessed 19 th , April