This is case study the word can not pass the 1500

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6Contract Law

Lecturer

Contract Questions

  1. Is the contract between Tim and Jen enforceable?

Generally, a contract made between a minor and another party is no valid unless the contract is or necessities, or for the benefit of the minor1. In this case, Tim is 17 years old DJ who offers his services to the community. Any contracts for providing services to others would be binding on Tim2. According to Clements v London & North Western Railway [1894] 2 QB 482, contracts of employment that are not detrimental or harsh to minors are generally considered valid contract3. The reason for considering such contracts valid is that it helps minors find employment.

Employment contracts are considered valid if there are in the minor’s best interest. In this case, a contract between Tim and Jen, where Tim promises to provide DJ services would be ruled to be a valid contract. Similarly, in Roberts v Gray (1913), a contract between an underage billiards player and a touring company was ruled to be valid4. The court reasoned that the young Billiards player stood to benefit by being involved in the contract. In contrast, contracts that seek to limit a minor right to work for other companies are generally unenforceable against minors5.

However, for contract between a minor and another party to be valid all the elements of contract must also be present. The elements of a contract include offer and acceptance. An offer is defined as an expression of willingness to be bound in a contract under specific terms6. An offer is distinguished from invitation to treat which is an expression of willingness to negotiate a contract. In this case, Jen made an invitation to treat to Tim by email in which he showed his interest in Tim’s services. Tim responded by sending Jen an offer where he said he said he would charge $30 per hour if the party lasted more than 4 hours. However, Jen did not respond to the offer and thus there is no acceptance of the offer. Therefore, there is no enforceable contract between Tim and Jen

  1. Does a promissory estoppel apply

In many cases, a contract can only come into being if it is supported by consideration. However, the doctrine of estoppels allow for the enforcement of a promise as though it was a contract. A promissory estoppel prevents a person from going back on a promise that he had made to another person resulting in detrimental reliance7. The doctrine of promissory estoppel was developed by Lord Denning in Central London Property Trust Ltd v High Trees Ltd [1947] KB 1308. In the case, Lord Denning prevented a landlord from going back on a promise to reduce house rent during the wars years. The landlord had sought to collect arrears for the underpayment of rent during the war years. In the Tool Metal Manufacturing v Tungsten (1955) 1 WLR 76, the elements of promissory estoppels were outlined as follows9:

  1. Existence or intention to create legal relations.

  2. A clear and unambiguous promise.

  3. A change in position

  4. Presence of inequity in allowing the promisor to renege on his promise.

  1. Existence or intention to create legal relations

As seen in Combe v Combe (1951) 2 KB 215, a promissory estoppel only applies in situations where the promisor and the promise have existing or have the intention to create legal obligation10. When Jen was negotiating with Simon her intention was to create a legal relationship; Simon would decorate and supply the cake he needed. Jen’s legal obligation in the case is making payment for the Cuban cake after its delivery.

  1. clear and Unambiguous promise

For a promissory estoppel to apply, a clear and unambiguous promise to induce performance must be made. The promisor must make a representation that induces the promisee to act. However, the promise may be implied by conduct as seen in Woodhouse A.C. Israel Cocoa Ltd v Nigerian Product Marketing Co Ltd (1972) AC 74111. In the case, the plaintiff and the defendant had agreed to a contract for the sale of coffee beans payable in sterling pounds. However, the seller sent an invoice quoted in Kenya shillings by mistake, but the buyer still accepted the invoice without objection. This acceptance formed a clear and unambiguous promise to agree to make payment by the Kenyan shilling. However, the value of the pound in relations to the Kenyan shilling fluctuated dramatically. The buyer then sought to go back on the promise by reverting to the sterling pound. The court held that the buyer had made a clear and unambiguous promise to make payment in Kenya shillings by accepting the invoice.

In contrast, Jen had not made any promise to pay Simon for the decoration of the cake. Jen had simply visited Simon to enquire about the possibilities of having a Cuban cake made. When Simon sent Jen an email notifying her that she would start decorating the cake, Jen did not respond. The lack of response from Jen cannot be taken to be a clear and unambiguous promise to make payments for a Cuban cake. According to Treitel , checking whether the promisor took steps to convince the promisee to take some action is the most important consideration in deciding whether a promissory estoppels is applicable.

  1. Is there an enforceable contract between Jen and Adam

For a contract to exist it must be supported by some valid consideration. Consideration may include a promise to do something, an act, money and a material object12. Consideration is defined as consisting of a benefit to the promisor or a detriment to a contractual party. Currie v Misa (1875) LR 10 Exch 153 defined consideration as a benefit, right, profit, or interest that arise out of performing the contract13. Consideration is also referred to as the loss, detriment, forbearance, or responsibility taken by a contractual party towards securing performance of the contract. However, material benefits conferred to a contractual party in the past is not considered valid consideration14. Particularly, a moral duty associated to past material benefit gained by one contractual party is not considered valid consideration. However, courts have consistently asserted that past consideration is not valid consideration for present and future contracts.15

In our case, Jen is trying to persuade his cousin to assist him in preparing his grandparents birthday party. To convince one of his cousins for assistance, she reminds him that she helped her with her assignment. Jen attempts to convince her cousin to assist do not succeed. Jen would also not get the agreement enforced as there is no valid consideration in exchange for her cousin’s assistance in the preparations for the party. A moral obligation to compensate a person for a past good deed is not considered valid consideration under contract law.4. Is there an enforceable contract between Jena and Adam?

For a valid contract to exist there must be an offer and a response to the offer termed as acceptance in contract law16. An offer is a representation by a person that they are willing to be bound to a contract under specific terms without further changes to the terms. A contract is formed when an acceptance is communicated to the offeror by the offeree. Offer and acceptance analysis reflects a reciprocal relationship in contract where the offeree responds to an offer by the other contractual party. This relationship means that a person can only respond or accept an offer that is directed at him. This relationship was reaffirmed by the Australian High Court in R v Clarke (1927) 40 CLR 227 where Clarke had sought to collect a reward for offering information that led to the arrest of persons that had murdered a police officer17. The high court ruled that Clarke could not collect the reward as he had not been responding to the offer to furnish information. In contrast, only persons targeted by an offer can validly respond and accept an offer.

In this case, Bill sees a message in his daughter phone and decides to assist Jen in preparing for the party in order to receive the $20 on offer. The message sent by Jen to her cousins reads “calling all cousins, if you come and help me prepare for the party on Saturday, I’ll pay you $20”. It is clear that Jen’s offer targets her cousin and not the whole public. The fact that the message is only sent out to his cousins means the offer was only targeted to them. Legally, the acceptance of offer by a person other than the one it was intended for is invalid. As seen in Australian Woolen Mills LTD v The Commonwealth (1954) 92 CLR 424, only the person targeted by an offer can respond to the offer. In this case, Bill’s acceptance of the offer assistance during the preparation for the party is not valid acceptance. Therefore, Bill is not entitled to the $20 promised as payment for the assistance.

Bibliography

  1. Articles/Books/ Reports

Treitel GH. The law of contract. Sweet & Maxwell; 2003.

Australian High Court in R v Clarke (1927) 40 CLR 227

Central London Property Trust Ltd v High Trees Ltd [1947] KB 130

Clements v London & North Western Railway [1894] 2 QB 482

Combe v Combe (1951) 2 KB 215

Currie v Misa (1875) LR 10 Exch 153

Tool Metal Manufacturing v Tungsten[1955] 1 WLR 76

Woodhouse A.C. Israel Cocoa Ltd v Nigerian Product Marketing Co Ltd (1972) AC 741

1 Treitel GH. The law of contract. Sweet & Maxwell; 2003.

3
Clements v London & North Western Railway [1894] 2 QB 482

4
Roberts v Gray (1913)

5
See, Treitel, above , n 1

8
Central London Property Trust Ltd v High Trees Ltd [1947] KB 130

9
Tool Metal Manufacturing v Tungsten[1955] 1 WLR 76

10
Combe v Combe (1951) 2 KB 215

11
Woodhouse A.C. Israel Cocoa Ltd v Nigerian Product Marketing Co Ltd (1972) AC 741

12 See, Treitel, above n 1

13
Currie v Misa (1875) LR 10 Exch 153

14 See, Treitel, above n 1

16 See, Treitel, above n 1

17
Australian High Court in R v Clarke (1927) 40 CLR 227