Discuss About The Councillors And Ratepayers Shire Of Hastings?
An agreement is said to form between two parties when one party makes an offer to another and which is accepted by the other party. The person making an offer is known as an offeror and the one who accepts the offer is known an offeree. But for an agreement to be categorized as a contract, beside an offer and its acceptance, there must also be intention of the parties to be in legal relation, consideration and the capacity of parties. If any of the above components is absent then there cannot be a valid contract. (Gibson & Fraser, 2013)
Offer is the initial step towards contract formulation. It is the intention of an offer which he communicates to an offeree. An offer is concluded only when it is communicated to an offeree. An offer should be specificlly made to the offeree who can be an individual, a group or entire world and is rightly held in Carlill v Carbolic Smoke Ball Co (1893). An offer may be written or oral but must compaly with all other elements to make a valid contract.
Acceptance is when assent upon an offer is made by an offeree. It results in a binding aggrement between the parties. It must be accepted only by that person to whom the offer is made. An acceptance must be before the lapse of an offer and is complete only when it reaches the offeror knowledge (Brinkibon v Stahag Stahl und Stahlwarenhandelsgessellschaft mbH (1983)). In case offeree sends his acceptance at his own tersm then the same is counter offer which ends the original offer and is rightly held in Hyde v Wrench, (1843).
Consideration in a contract is very vital and it implies that when one party makes promise to perform certain task then for such performance it must pay cash or kind. Such benefit which accrues to the performer is known as consideration. Considration may or may not be adequate but same must be sufficient and is held in (Placer Development Ltd v Commonwealth (1969).
Intention to be in legal relation means that the parties who are in contrcat with each other must have the intention to perform the promise and thus their intention must be to be bound by the contract entered by them. In case of social and family realtions such intention is presumed to be absent unless the same is proved (Balfour v Balfour (1919)). Likewise in case of commercial transactions the intention is presumed to be present unless rebutted.(Jones v Padavatton (1969).
Capacity of parties means that the contracting parties must be of sound mind and they must be major, it is then only the contract entered between the parties can be said to be a valid contract. (Clarke, 2012)
An agreement is said to form when an offer is accepted by an offeree. Along with offer and acceptance there must be consideration, intention and capacity to make an enforceable contract. So all agreements can be categorized as contracts but all contracts cannot be termed as agreements. (Graw, 2014)
Now, Contracts can be either in written or oral form. Both the written and oral contracts are binding upon the parties. It is upon the parties to choose which form of contract they want to enter into. The validity of an oral contract is discussed in R v Clarke (1927).
Oral Contracts are formulated when the parties to contract orally or verbally enter into a transaction between them. Oral contracts are formed vocally or by conduct of the parties and are binding upon the parties if all components of contract are present. (Latimer, 2012).
Written Contracts are formed between the parties when they reduce the contract in black and white. In this form of contract the parties write down all the terms of a contract and thus put their respective signatures to create a binding contract with each other.
In case of a written contract all the terms and conditions are reduced in writing and signed by the parties. So in case of dispute it serves as a valid piece of evidence and it is more trusted and authentic mode of contrcating among the parties.
The terms of a written contract being in writing are easily provable in any court of law as it serves as a piece of evidence. When a contarct is in writing the chances and scope of misunderstanding between the parties is less. In case of dispute also the written contrcat has specific procedure written in it which is followed to settle the dispute if it arises.It further clarifies the kind of contrcat the aprties had entered into. It also serves as a valid piece of record and evidence in case of disputs. Also the property transfer or lease contracts are always in written form. (FindLaw, 2017)
Thus, a written contract is more validty in law when compared with an oral contarct.
However, from the point of view of validty, both, written and oral contract have same sanctity in eyes of law. But from the above discussion and by analyzing the benefits of written contracts over oral contracts, it is preferred that the agreements or contracts must be made in writing as they serve as record and evidence for future reference and in case of misunderstanding between the parties they are easily provable. (FindLaw, 2017)
A formal contract is a contract which is formally made as it should be in writing covering all the terms and conditions decided by the parties to the contract. A formal contract has an advantage that it is valid for a period of twelve years. It is rather different from a written contract as a formal contract has its own set of regulations which are to be followed while formulating it which makes it different from a written contract and is analyzed in BP Refinery (Westernport) Pty Limited v President, Councillors and ratepayers of the shire of Hastings (1977). Thus, to make a formal contarct, the main requirements are: (Christensen & Duncan, 2009)
In a contract to be valid there must be an offer, acceptance, consideration, intention of parties and capacity. (Gibson & Fraser, 2013)
The case study provided deals with intention of the parties to be in legal relation.
Intention to be in legal relation means that the parties to a contract must have the intention to be bound by the contract and thus their intention must be to honour the transaction. In case the parties do not have such intention then there is not a valid contract between the parties and is held in Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd (1989).
In case of domestic or family contracts, the intention element is presumed to be absent unless the same is disapproved and is held in Balfour v Balfour (1919). Likewise in case of the commercial transactions there is a presumption that the intention element is present unless disapproved. The case law of Riches v Hogben (1986) states that the basic presumption of absence of intention in socialn contract and presence of intention elament in commercial contracts can be rebutted by laying down the evidence by the parties.
In Trevey v Grubb, (1982) it was held that when two parties were sharing a lotery ticket and upon declaration of prize only one party claimed the prize on the basis that they were in friendly relations and thus there is no contract existed upon them is not upheld by the court. The court held that the intention of the parties was to be in a contract and there was intention of the parties to be in legal relation with each other.
As per the facts, each of the friend contributed $2every for the lottery ticket and after winning one of the friends who purchased the ticket refused to share the prize with other friends claiming that the arrangement was purely social.
From the facts of the question it is clear that all the friends contributed in order to win the lottery and their intention was to pool in money and win. The person who purchased the ticket was only a mere representative of all friends and thus all friends are entitled for the prize as analyzed in Trevey v Grubb , 1982). As the relation was social but the intention element is still present and thus all the friends will have respective share in prize.
Though the relation was social but the same was rebutted and hence the presence of a valid contract between them was established. So all the friends have their right in the prize.
In agency relationship, an agent performs work for his principal and the acts of an agent when performed within agency and in due course of business binds the principal. In such cases the acts of an agent are deemed to be acts of the principal and the liability of the acts of agent also falls on the principal. The principal is only liable, if the acts of the agent are within the authority and scope of work assigned to him. In case of personal acts of agent, the principal cannot be held liable. In case of agent transacting with third party then if third party wants to sue the principal for liability then such third party has every right to sue the principal for the acts of an agent. The principal is held liable for the acts of his agent because an agent works under his control and authority and is held in SCOTT V DAVIS, 2000. (The Law Teacher, 2017)
In case of independent contractor, the contractor carries out the work and thus is liable for the liability arising there from. The leading case Gaitanis v Nicholas Moss Pty Ltd (2003) also states that when acts are carried over by an independent contrcator then such contrcactor is liable for his acts and not the principal. As an independent contrcator not acts within authority and control of the principal so he is liable for his own acts and the principal cannot be made accountable in such cases.(MCCARTHY, 2004)
So in order to fasten the liability of the principal it is necessary to understand the manner in which the person had carried out the task. If it is carried out on behalf then the principal is liable otherwise not.
Reference List
Christensen & Duncan (2009). Sale of Businesses in Australia. Federation Press.
Gibson & Fraser (2013). Business Law 2014. Pearson Higher Education AU.
Graw, S. (2014). An introduction to the law of contract (8th ed.). . Australia: Law Book Co. of Australasia.
Harper, M. (2004). The Implied Duty of Good Faith in Australian Contract Law, Volume 11, Number 3 .
Latimer, P. (2012). Australian business law (34th ed.) North Ryde: CCH Australia.
MCCARTHY, L. (2004). VICARIOUS LIABILITY IN THE AGENCY CONTEXT.
Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd (1989).
Balfour v Balfour (1919).
BP Refinery (Westernport) Pty Limited v President, Councillors and ratepayers of the shire of Hastings (1977).
Brinkibon v Stahag Stahl und Stahlwarenhandelsgessellschaft mbH (1983).
Carlill v Carbolic Smoke Ball Co (1893).
Hyde v Wrench, (1843).
Gaitanis v Nicholas Moss Pty Ltd (2003).
Jones v Padavatton (1969).
Placer Development Ltd v Commonwealth (1969).
R v Clarke (1927).
Riches v Hogben (1986).
Trevey v Grubb, (1982)
Findlaw (2017). Is a verbal agreement legally binding? (online). Available at: https://www.findlaw.com.au/articles/5626/is-a-verbal-agreement-legally-binding.aspx. Accessed on 20th septemebr 2017.
Julie Clarke (2012). Australian Contract Law (online). Available at: https://www.australiancontractlaw.com/law/formation-agreement.html. Accessed on 20th septemebr 2017.
The Law Teacher (2017). Contracts made by agents. (online). Available at: https://www.lawteacher.net/free-law-essays/contract-law/contract-made-by-agents.php. Accessed on 20th septemebr 2017.
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