Fundamental law — contract law

8Contract Law

Contract law

Section 1

Whether Taylor and Smith formed an enforceable contract and if Taylor is likely to win her lawsuit

The issue is whether Taylor and smith formed an enforceable contract and if Taylor is likely to win her lawsuit. This is after Taylor was interviewed for an associate position by the company and promised the job if she successfully completed her law program. As a result of the promise, she turned down the offer from another firm. Taylor moved to Melbourne two weeks before the exams and the Smith provided her with an amount that covered part of her moving cost. However two days before the exam she received a phone call from an associate of Smith cancelling the offer. She however did her exams and passed.

According to the contract law, a promise is a declaration made by the promisor to the promisee1. It is also considered as an agreement to perform an act, refrain from acting or make payment or deliveries. When parties exchange a promise in the contract law, each promise is considered a consideration for the other promise. Failure to fulfill a promise is therefore considered a breach of contract. The party that has suffered from the breach of contract can therefore sue for damages or performance. Consideration is one of the most important aspects that are required in the process of determining whether or not the promise is enforceable. When a promise is conditional, the condition must be met or performed before the promise becomes binding2. A party will be in breach of promise if it fails to honour the promise after the other art has fulfilled the required condition. A promise may not be enforceable if the certain situations like frustrations arise. In the case of Hall v Wright, there was a promise for marriage. The defendant indicated that he had promised to marry but was infected with a dangerous bodily disease making him incapable of marriage3. The court ruled that he could not be forced into the marriage but has to pay for damages. According to the contract law, if a promised event is not within the control of the promisor, then they must pay the damages. However, if it is within the control of the promisor, it must be performed.

Application

The promise that was made to Taylor by Smith was conditional and she was required to complete the program in order to be employed. It is as a result of the promise that Taylor rejected the offer made to her by the other firm. The promise was binding since the company even paid part of the amount she required for relocation. There was an existence of consideration in the promise made to Taylor. It is as a result of the consideration that she turned down the offer. However the Smith canceled the promise before one condition was fulfilled. The promise was cancelled before Taylor had sat for her examination. This means that she had not fulfilled the conditions required at the time of cancellation4. This was carried out after the firm assessed its hiring needs. The assessment was carried out by the firm which means it was within the control of the firm.

Conclusion

Taylor and Smith formed an enforceable promise since there were conditions and considerations. However, Taylor may not win the case since she had not fulfilled the conditions required at the time the promise was cancelled. This means that it cannot be enforced but she can successfully sue for damages as she rejected another offer based on the promise.

Defenses for smith on the breach of contract

According to the contract law, a conditional promise comes into effect when all the conditions have been met5. Smith informed Taylor that the promise cannot be enforced after the company made an assessment of the hiring needs. This had not been carried out before the promise was made and can therefore be considered as an ordinary consequence. In the case of Kaufos v C. Czarnikow Ltd, The court ruled that the ship owner was liable for damages that led to losses after ship delayed to transport sugar for nine days6. However the court also ruled that the ship owner had no way of foreseeing that the losses would be made at the time of the contract. Smith therefore was not aware that a reassessment would be made at the time of making the profit. Smith had made partial payments to Taylor to carter for the cost involved during the process of moving in. This can be considered as part of the damages as a result of Taylor moving to the city. Since the promise was cancelled before the exams, Smith had no way of knowing that Taylor would pass and complete the program. In order for one to complete an academic program successfully, the must pass their exams. The promise could therefore not be enforced when one party had not met the conditions.

Possible remedies for Taylor if she proves that the contract was breached

According to the contract law, the breach of contract usually attracts damages. The damages are mainly aimed at restitution of interest, reliance of interest and restoring the expectation of interest7. The expectation interest involves the value that the promise would have created due to specific performance. According to the contract law, the measure of damage is different from the contract price. This was highlighted in the case of Hardley V Baxendale8. The Courts usually find it difficult to determine the actual value that would have been derived in a contract when no amount was specified9. The remedy for Taylor involves a monetary amount in order to put her in a position that she was before the promise was made. This is considering that it is unlikely for the courts to compel the firm to employ her. Smith may therefore be required to pay the full amount that she incurred during the process of moving into the city. The court may further award some amount as damages for the loss suffered after rejecting the other job offer. This will therefore play an essential role in putting her back to the position that she was before the promise was made.

Advice to Jenny

A lease agreement between the tenant and the landlord is considered a contract under the common law10. The tenant has obligations to the landlord regarding the use of land. The land use has to be reflected on the agreement. Under the common law, the property belongs to the tenant while the land belongs to the landlord. The caravan belongs to Jenny but the land belongs to Bob. The tenant is legally free to use the land during the lease period for whatever reasons as long as it is not in violation of the contract or any other law. At the end of the lease period, the tenant has a right to move out with their property that they brought with them when they were moving in. Since the caravan belongs to Jenny, she has the right to move out with it as the lease period has already expired. According to the contract law, the parties to the contract are required to act in good faith. This was highlighted in the case of Alcatel Australia Ltd v Scarcella11. A party to the contract that fails to act in good faith may be penalized. As a result of this Bob may end up being penalized for not acting in good faith.

Bob’s right to keep the caravan

After the lease period, the land is reverted back to the owner according to the common law. It is the responsibility of the person who has leased the land to remove the all their property after the expiry of the lease period12. The permanent structures that have been developed become the property of the landlord if it cannot be removed from the site. In most cases, the tenant is required to demolish any permanent structures that cannot be moved after the expiry period. If this is not dome, the structure will be in possession of the land owner. The caravan is sunk into the soil and it cannot be towed away. This is after Jenny added shade awnings to the caravan, brick barbeque, fenced garden and wooden deck. As a result of this the caravan has become a permanent structure which cannot be towed away. This therefore gives Bob the right to keep the caravan as part of a permanent structure. Bob has a right to retain the property which has become part of his land.

Person likely to prevail in a case filed in court

Jenny is likely to prevail if the matter is taken to court. It is Bob who has not allowed her to remove the caravan using any means including demolishing some of the structures that have been built on it. The owner of the land has a duty to ensure that the person who was leasing it has the adequate time to remove whatever they intend to do so. It is also illegal for the landlord to confiscate any property of the tents. This amounts to breach of contract and it is also considered illegal. The breach of contract gives the court an opportunity to rule against the defendant13. The same is also common when a person is acting in bad faith which is contrary to the contract laws. Jenny is therefore likely to prevail and the court may order Bob to ensure that Jenny gets the caravan back.

References

Hall v Wright, 125 F. Supp 269 (SD Cal 1954).

Kaufos v C. Czarnikow Ltd [1967] UKHL 4.

Hardley V Baxendale [1854] EWHC J70

Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349

Sweeney, B, O’Reilly, J., & Coleman, A. (2013). Law in Commerce 5th Ed. Chatswood, NSW : Lexis Nexis.

McKendrick, E. (2014). Contract law: text, cases, and materials. Oxford University Press.

Poole, J. (2012). Casebook on contract law. Oxford: Oxford University Press.

Clarke, P., Clarke, J., & Zhou, M. (2012). Contract law: commentaries, cases and perspectives. Oxford University Press.

1
McKendrick, E., 2014. Contract law: text, cases, and materials. Oxford University Press.

2
McKendrick, E., 2014. Contract law: text, cases, and materials. Oxford University Press.

3
Hall v Wright, 125 F. Supp 269 (SD Cal 1954).

4
Poole, J., 2012. Casebook on contract law. Oxford: Oxford University Press.

5
Clarke, P., Clarke, J., & Zhou, M., 2012. Contract law: commentaries, cases and perspectives. Oxford University Press

6
Kaufos v C. Czarnikow Ltd [1967] UKHL 4.

7
Clarke, P., Clarke, J., & Zhou, M., 2012. Contract law: commentaries, cases and perspectives. Oxford University Press

8
Hardley V Baxendale [1854] EWHC J70

9
Clarke, P., Clarke, J., & Zhou, M., 2012. Contract law: commentaries, cases and perspectives. Oxford University Press

10
Sweeney, B, O’Reilly, J., & Coleman, A. (2013). Law in Commerce 5th Ed. Chatswood, NSW : Lexis Nexis

11
Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349

12
Sweeney, B, O’Reilly, J., & Coleman, A. (2013). Law in Commerce 5th Ed. Chatswood, NSW : Lexis Nexis

13
McKendrick, E., 2014. Contract law: text, cases, and materials. Oxford University Press.