Case Study: Social And Domestic Agreement
ISSUE: Is there a legally enforceable contract for the sale of gold between Terry and Susan?
RULES:
1. Social and domestic agreements have a presumption against legal obligations (Balfour v Balfour ). The presumption can be rebutted in a domestic agreement if there is sufficient evidence to demonstrate an intention to create legal relations (Beswick v Beswick ; Errington v Errington ; Parker v Clark ; Riches v Hogben ; Wakeling v Ripley ).
2. An offer must be clear, unambiguous, and have sufficient precision in order to eliminate the need for further negotiation.
3. An offer must be capable of acceptance and create a power of acceptance in the offeree.
4. An offer is only effective from the moment it is communicated.
5. Revocation of an offer …show more content…
Since Terry and Susan are cousins, this issue is a domestic agreement. Social and domestic agreements have a presumption against legal obligations (Balfour v Balfour ) however, there is sufficient evidence to demonstrate an intention to create legal relations between Terry and Susan (Beswick v Beswick ; Errington v Errington ; Parker v Clark ; Riches v Hogben ; Wakeling v Ripley ). It can be argued that Susan wanted to entice Terry into a contract. Susan communicated her intention to sell gold when she mentioned an increase in value of gold. Although Terry was initially reluctant, his interest piqued and was clearly evident when he asked Susan to write to him by post, stating her lowest …show more content…
The elements required to form an enforceable contract have been satisfied. There is an intention to create legal relations, an offer, acceptance, sufficient consideration, and certainty of the terms of the contract. Susan is in breach of the option contract, so she cannot revoke her original offer to Terry. Terry can therefore sue her for breaching the option contract, but he cannot sue her for breaching the main contract. Terry received Susan’s letter of revocation after his letter of acceptance was already posted. Thus, applying the postal acceptance rule, she cannot sell the gold to Renzo
RULES:
1. Social and domestic agreements have a presumption against legal obligations (Balfour v Balfour ). The presumption can be rebutted in a domestic agreement if there is sufficient evidence to demonstrate an intention to create legal relations (Beswick v Beswick ; Errington v Errington ; Parker v Clark ; Riches v Hogben ; Wakeling v Ripley ).
2. An offer must be clear, unambiguous, and have sufficient precision in order to eliminate the need for further negotiation.
3. An offer must be capable of acceptance and create a power of acceptance in the offeree.
4. An offer is only effective from the moment it is communicated.
5. Revocation of an offer …show more content…
Since Terry and Susan are cousins, this issue is a domestic agreement. Social and domestic agreements have a presumption against legal obligations (Balfour v Balfour ) however, there is sufficient evidence to demonstrate an intention to create legal relations between Terry and Susan (Beswick v Beswick ; Errington v Errington ; Parker v Clark ; Riches v Hogben ; Wakeling v Ripley ). It can be argued that Susan wanted to entice Terry into a contract. Susan communicated her intention to sell gold when she mentioned an increase in value of gold. Although Terry was initially reluctant, his interest piqued and was clearly evident when he asked Susan to write to him by post, stating her lowest …show more content…
The elements required to form an enforceable contract have been satisfied. There is an intention to create legal relations, an offer, acceptance, sufficient consideration, and certainty of the terms of the contract. Susan is in breach of the option contract, so she cannot revoke her original offer to Terry. Terry can therefore sue her for breaching the option contract, but he cannot sue her for breaching the main contract. Terry received Susan’s letter of revocation after his letter of acceptance was already posted. Thus, applying the postal acceptance rule, she cannot sell the gold to Renzo