Law Binding Contract
Task A
Issue
The main issue that needs to be addressed here is whether there is binding contract between the two parties, Baldcure Ltd. and Gary Knudenut, and consequently whether Gary can sue under that contract.
Rule
A contract is a legally enforceable agreement between two or more parties. To be valid, a contract must comprise of the following elements: - agreement (offer + acceptance) - intention - consideration - capacity to contract - consent - legality
In order to establish whether there is a binding contract between Gary and Baldcure we need to consider the existence of these elements.
One of the essential prerequisites of a contract (bilateral or unilateral) is agreement. Agreement means that the parties have reached consensus ad idem, indicated acceptance of the offer.
A primary principle of the common law to determine the existence of a contract is the existence of an offer and acceptance. If we apply this principle to the case of Gary and Baldcure Ltd, we will be able to establish the existence of a binding contract.
Sub issue 1
The issue is whether the advertisement for sale the Baldcure Tonic in Sydney newspaper an offer or invitation to treat and whether there is an acceptance.
Rule
An offer is a clear and specific statement, in writing or verbal, that outlines the conditions and terms of the contract. There are several rules in regards to an offer: • It has to be communicated to the offeree before it is accepted • The offeree has to be aware of its existence • An offer may be made to a particular individual, to a group of people or to the whole world. If the offer is made to specific individual, only that person may accept it; if the offer is made to the world, it can be accepted by anyone, as in Carlill v Carbolic Smoke Ball Co [1893] 2 Q.B 49. • Advertisements are normally interpreted as invitations to treat, Granger and Sons v Gough (1896) AC 325. However they may
Issue
The main issue that needs to be addressed here is whether there is binding contract between the two parties, Baldcure Ltd. and Gary Knudenut, and consequently whether Gary can sue under that contract.
Rule
A contract is a legally enforceable agreement between two or more parties. To be valid, a contract must comprise of the following elements: - agreement (offer + acceptance) - intention - consideration - capacity to contract - consent - legality
In order to establish whether there is a binding contract between Gary and Baldcure we need to consider the existence of these elements.
One of the essential prerequisites of a contract (bilateral or unilateral) is agreement. Agreement means that the parties have reached consensus ad idem, indicated acceptance of the offer.
A primary principle of the common law to determine the existence of a contract is the existence of an offer and acceptance. If we apply this principle to the case of Gary and Baldcure Ltd, we will be able to establish the existence of a binding contract.
Sub issue 1
The issue is whether the advertisement for sale the Baldcure Tonic in Sydney newspaper an offer or invitation to treat and whether there is an acceptance.
Rule
An offer is a clear and specific statement, in writing or verbal, that outlines the conditions and terms of the contract. There are several rules in regards to an offer: • It has to be communicated to the offeree before it is accepted • The offeree has to be aware of its existence • An offer may be made to a particular individual, to a group of people or to the whole world. If the offer is made to specific individual, only that person may accept it; if the offer is made to the world, it can be accepted by anyone, as in Carlill v Carbolic Smoke Ball Co [1893] 2 Q.B 49. • Advertisements are normally interpreted as invitations to treat, Granger and Sons v Gough (1896) AC 325. However they may
References: Ardagh A., Guild W. (2010). Business and corporations law [LAW 504 Study Guide]. NSW: Charles Sturt University. Pentony B., Graw, S., Lennard J., Parker D. (2003). Understanding business law (3th ed.). NSW, Chatswood: LexisNexis Butterworths. Statutes: Section 18 – Australian Consumer Law Cases: Balfour v Balfour (1919) 2 KB 571 Carlill v Carbolic Smoke Ball Co [1893] 2 Q.B 49 Dunlop Pneumatic Tyre Co Ltd v Selbridge & Co Ltd (1915) AC 847 Granger and Sons v Gough (1896) AC 325 Masters v Cameron (1954) 91 CLR 353 Powel v Lee (1908) 99 L.T. 284 R v Clarke [1927] 40 CLR 27