Company and Commercial Law Assessment Essay Example

Company and Commercial Law

Submission Date:

Contract Formation

When two parties enter into a legally binding agreement or rather a valid agreement, the act is then known as a contract. Australian law considers a contract to be legally binding when the contract comprises of individual elements. The components include the legality of an agreement, the legal capacity of the parties, the intention of creating binding relations between the parties, offer and acceptance, the consideration which is the payment submitted for approval and valid consent of the parties (Treitel, 2003). An agreement that contains neither of the elements is considered to be null and void.

In the case of John agreement with Li Wu was valid since there were offer and acceptance. Li Wu entered into the contract with John immediately he accepted to pay the price which remained offered. Li Wu accepted the offer, and this, therefore, became a valid contract between the two. For instance, the acceptance of paying $80 was unconditional, and there was no intention of revoking it whatsoever. Even though consideration was not sufficient on both sides, the contract was to some extent null and void.

Since both parties got into an agreement with the intention of getting full consideration from John, the performance did not relate to the expected benefits. However, from Johns flyer, part of understanding entailed benefits such as a new pair of bathers and a bottle of sunshine to take home for the first fifty customers. Later, the consideration turned to be insufficient on Li Wu and Venessa side. According to Andrews argue that (2016, p.330), for a valid contract, review must determine the validity of the contract. When John explained about his promise of giving a pair of bathers and a bottle of summer in return, it meant that he had the intention of exchanging the promise of something of value from the two parties and that was the price.

Therefore, John did not bind to the contract when he did not exchange the promised reward in the contract to both sides. On the other hand, under contract law, liability for damages is explained in the indemnity clause (Anson et al., 2010). Venessa situation of undergoing injuries during this adventure, John had no express obligation of compensating her for the injuries or damages since there was no explicit agreement in the contract. It also applies to Li Wu when his camera got broken after tripping several times. He could not make any claim against John since the price he paid did not include indemnity clause.

Terms and Remedies for Contract Law under Common Law

A breached contract probably needs legal representation. In this case, John was liable for the violation of contractual terms they agreed on. The reason possibly being, all terms remained written in the paper, but John failed to fulfill some of them. For example, on the flyer, it was Johns contractual obligation to offer the first fifty students with as a new pair of bathers and a bottle of sunshine, but he never performed as the contract suggested. Also to some point, Johns deal was in a written form, and as Australian contract law explains, the documented terms which both the parties are consent about does not prove any breach of contract. So, John did not become liable to some performances the parties thought was Johns contractual responsibility.

According to Australian consumer law, the terms of the contract may be express or implied (Anson et al., 2010). Express terms are contractual agreements between the parties themselves. However, in the case of breach of contract, the innocent party is guaranteed the right of taking action. On the other hand, implied terms, applies when there are no written contracts, and therefore this can favor the other person when there are circumstances of breach of contract (Jajodia, 2012). As a matter of fact, in Johns case, the contract they entered with Li Wu and Venessa was considered as an expressed contract since it comprised of all the elements in required in a contract. John engaged the parties in a written agreement whereby, both of the individuals signed after agreeing to the terms and conditions of the contract.

Even though Li and Venessa just signed the certificate of contract issued by John without reading the words carefully, John was not considered liable for any breach of contract. Since both parties agreed to the terms and there was the fulfillment of contractual elements, then John was not obligated for any violation of the contract. However, implied terms work differently from express terms of the contract. When Li and Venessa sue John for breach of contract, the Australian courts determine whether the contractual performance or non-performance occurred before or after. When Venessa was injured and admitted to the hospital, John refused to pay. The court’s decision will rely on the contractual fact that John unfairly received the $80 price without offering quality services in return. Jajodia states (2010) according to Australian courts, the judge will most likely order John to compensate the injured parties or pay back the money fairly even though the parties did not read the terms.

In such a case, Venessa and Li Wu would automatically get entitled to seeking the damages they exposed to by John. For example, according to Johns certificate, there occurred various injuries to both parties which the document stated that John would not act liable. Although John wrote the conditions on the receipt of the contract, the parties were still right to claim for the damages. Australian consumer law states that refusal to reward the customers with the services they paid for there is likeliness of restitution. Probably John had to pay fairly for the damages Venessa, and Li Wu encountered during this contractual performance they agreed on.

Venessa and Li Wu are undoubtedly entitled to bathers and bottles of sunshine even though John believes he remained well covered against any claims because of the signed Certificate of Adrenaline Junkie. According to Australian Consumer Law, both parties need to get awarded for the damages since the performance of awarding the parties with bathers and bottles of sunshine was part of terms as written on the flyer. Due to this breach of contract, the damages stay referred to as punitive damages (Collins, 2003). And reward for this breach of contract according to Consumer law is to apply punitive damages to punish John. Such a reward is offered to both parties because John acted fraudulently towards the contract. Therefore, compensatory damages are also preferred in such a case because it helps the parties to recover the actual losses. Contrary, punitive damages according to Australian Consumer Law, punishes the wrongdoer who acts fraudulently.

Statutory Guarantees

Under Part 3-2- 1 of the Australian Consumer Law, there exists three legal guarantees to consumers that apply to consumer services delivery. About the provision of services as in the case of Johns Adventure Seeking scenario, the first guarantee is, John should provide services to Venessa and Li Wu with due care and skills. Despite John claiming that both parties signed Certificate of Adrenaline Junkie, he is still entitled to remedies for breach of contract. According to Nottage (2009 p.111), this guarantee, in the case of damages or loss as a result of the breach of performance, then both parties can claim compensation. Therefore, Venessa and Li Wu are guaranteed to obtain automatic compensation from John.

Other statutory warranties as stated Under Part 3-2- 1 of the Australian Consumer Law include, for any specified purpose, the services will be fit. John must provide both parties with his services even if he did not qualify to offer some services since the performance was part of the contract without any exceptions. Also, another legal agreement states that the services will be timely supplied (Nottage, 2009 p.111). If at all Johns adventure did not have a reasonable time for completion then for him not to breach the contract, he is supposed to offer the services within a specified period.

In conclusion, both parties are only required to enter into an agreement only when the limiting factors are satisfactory to both sides. A contract usually does not come into existence without a full agreement. However, if both sides agree on formal documents to bound their contract, it is important that everyone stay familiar with the contents before signing. Lastly, the breach of law is worth reasonable remedy that favors both parties to get a fair compensation.


Andrews, N., 2016. Remedies for Breach of Contract. In Arbitration and Contract Law (pp. 279-333). Springer International Publishing.

Anson, W.R., Beatson, J., Burrows, A.S. and Cartwright, J., 2010. Anson’s law of contract. Oxford University Press.

Collins, H., 2003. The law of contract. Cambridge University Press.

Jajodia, G., 2012. Remedies for Breach of Contract. [Online]., Accessed 4/16/2017

Nottage, L., 2009. Consumer law reform in Australia: Contemporary and comparative constructive criticism. Queensland U. Tech. L. & Just. J., 9, p.111 [Online]., Accessed 4/16/17

Treitel, G.H., 2003. The law of contract. Sweet & maxwell.