Boger Rendands
Question 1 (Legal intention) (use ILAC)
Kim and Kathy are best mates who play Powerball Lotto together. They have played the same numbers each week. Kim purchases the Powerball entry one week and Kathy pays the following week. They have orally agreed to share any winnings from Lotto. They have been playing Powerball together in this way for 4 years. On 18 October, Kim purchases the Powerball ticket and registers the entry using her own “Winners Circle Card”. The card gives Kim automatic entry to the Powerball second chance draw and points to be exchanged for gifts every time she purchases a Powerball ticket. Kim and Kathy win $20 million in Powerball that evening.
The following day, Matthew, a representative from Powerball, tracks down Kim address using the Winners Circle Card and presents a novelty cheque made out to Kim for the sum of $20 million. Kathy knows nothing of the win until she sees Kim’s photo in the newspaper. Kathy notices her name is not on the cheque. Kathy contacts Matthew from Powerball and explains to him about their agreement in regard to sharing any Powerball winnings and that her name should also be on the cheque. Matthew contacts Kim in regard to Kathy’s claim. Kim tells Matthew that she has no idea what Kathy is talking about and that there was no arrangement to share any Powerball winnings.
Advise Kathy as to whether there is a binding contract between Kim and Kathy.
The issue at hand is whether or not Kim and Kathy had the intention of entering a binding contract.
The law will only recognise contracts where there is an intention to be legally bound by said contract, contracts of a domestic or social nature will have the presumption that both parties do not have the intention to create legal obligations, furthermore contracts of a commercial or business nature will have the presumption that both parties do intent to create legal obligations.
Given the social nature of the verbal agreement between the two friends Kim
Kim and Kathy are best mates who play Powerball Lotto together. They have played the same numbers each week. Kim purchases the Powerball entry one week and Kathy pays the following week. They have orally agreed to share any winnings from Lotto. They have been playing Powerball together in this way for 4 years. On 18 October, Kim purchases the Powerball ticket and registers the entry using her own “Winners Circle Card”. The card gives Kim automatic entry to the Powerball second chance draw and points to be exchanged for gifts every time she purchases a Powerball ticket. Kim and Kathy win $20 million in Powerball that evening.
The following day, Matthew, a representative from Powerball, tracks down Kim address using the Winners Circle Card and presents a novelty cheque made out to Kim for the sum of $20 million. Kathy knows nothing of the win until she sees Kim’s photo in the newspaper. Kathy notices her name is not on the cheque. Kathy contacts Matthew from Powerball and explains to him about their agreement in regard to sharing any Powerball winnings and that her name should also be on the cheque. Matthew contacts Kim in regard to Kathy’s claim. Kim tells Matthew that she has no idea what Kathy is talking about and that there was no arrangement to share any Powerball winnings.
Advise Kathy as to whether there is a binding contract between Kim and Kathy.
The issue at hand is whether or not Kim and Kathy had the intention of entering a binding contract.
The law will only recognise contracts where there is an intention to be legally bound by said contract, contracts of a domestic or social nature will have the presumption that both parties do not have the intention to create legal obligations, furthermore contracts of a commercial or business nature will have the presumption that both parties do intent to create legal obligations.
Given the social nature of the verbal agreement between the two friends Kim