Discuss about the Business Laws and Ethics for Australian Contract Law.
Whether La Trobe University would be liable to pay for the sum which was due on the invoice or not?
A lawfully binding promise, a set of promises and an agreement which was done among two individuals could be regarded as a valid contract.[1] Agreements of such kind could be initiated in both a written and a verbal way. The only positive point which was considered by people in order to constitute a written contract more preferably was that in such agreements a proof could be established which could not be done with verbal contracts. But it does not mean that the verbal contracts were invalid, both the written and the verbal contracts have equal applicability and validity.[2]
There have been five essential elements which were essentially required for formation of a lawfully binding agreement such as:
There must be a proposal and acceptance should be made and a agreement must be made among two individuals;[3]
There must be a price paid for a promise and offer which was made;
Capacity to enter into lawful relations;
There must be intention to enter into a lawful relation by the parties and it must be understood in the same thing in the same sense.[4]
The agreement has to be complete, definite and binding upon both the parties to the agreement.
In the case of Smith v Hughes [1871] LR 6 QB 597 [5]it was concluded that it has been affirmed that if one of the individuals who were party to the contract proposes to make a contract on one set of conditions, and the other aims to make an agreement on another set of conditions.[6] As it was occasionally articulated, if the individuals who were parties to the contract were not ad idem then there would be no contract, unless the situations were such as to prevent one of the individuals from denying that he has established to the conditions of the other individual.
Although in the case of Raffles v Wichelhaus (1864) 2 H & C 906 [7]it was concluded that, if two individuals enter into an evident agreement relating to a specific individual or ship, and it turns out that each of the two individuals, deluded by a resemblance of name, had a dissimilar individual or ship in his mind, no agreement would exist between them.
At last it could be confirmed by looking in an established case of Tamplin v James (1880) 15 ch d 215[8] that if an individual would not take rational care to determine what that individual was contracting about then that individual must bear the consequences.
So, the intention of the parties must be lawful and must be similar i..e there must be meeting of minds between two parties for the same thing in the same sense in order to initiate a agreement.
The parties to the current situation have contracted with each other so it was assumed that they intend to create lawful relations between themselves. There were no facts to counter this assumption and at the same time they have made an oral contract.
As mentioned above that if the parties to the contract have different intentions and do not intend and agree on the same situations and conditions in the same way as it was offered then there would be no contact. So, in this case as the police wanted a extra payment which it mentioned clearly to the university before granting the services but the same was not intended in the same sense by the university. As it thought that it was the duty of police to give services and hence university would not pay extra cost for the services. And it was the university who supposed that it was the obligation of the police to protect the people of the state so there would be no additional price which would be paid.
Conclusion
Therefore, it could be concluded that yes, the La Trobe University would be liable to pay for the sum which was due on the invoice i.e the extra cost as the same was intended and mentioned to the university by the police. As the services which would be interpreted in a different way by the university even after the clear mentioned term of extra payment which was made by the police. So, the University has to pay the cost which was asked by the police officials at the time of contract.
Whether a lawfully binding agreement been made among Mr. Dowell and Dodgy Accounts Associates or not?
In order to create a valid agreement or a contract there must be 6 elements that must be satisfied for the formation of an agreement between two or more individuals.[9] In the absence of any of the one element a contract would not be said to be binding on the individual who were parties to the contract.[10] The elements were as follows:
There must be agreement which have been initiated between the parties which commonly included a proposal and a acceptance;[11]
There must be a price paid or consideration for a promise which was made by the individuals who were party to a contract;
The parties must have the lawful ability to enter into a binding contractual association;
The agreement must convene any principles which were set out in statute for it to be lawfully binding;
It must be sufficiently complete and appropriately recognize the privileges and the duties of both of the individuals.[12]
An acceptance of an agreement or a allowance of a authorization to a agreement or proposal which was made could be made by way of post. In the case of Entorres v Miles Far East [1955] 2 QB 327 [13] it was clearly stated that with observance to a valid recognition there has been a rule which should be applied i.e. the acceptance or the approval must be communicated to the other party before it was successful.
Similarly, there has been a omission to the rule of acceptance and its communication i.e the postal rule. According to the postal rule, where a letter was appropriately concentrated on and imprinted then the acceptance would come into effect as soon as the letter was placed in the post box.
Although, the rule of postal rule was established in the case of Adams v Lindsell (1818) 106 ER 250[14] in which the tribunals concluded that a a agreement would be valid as soon as it came in to persistence at the same point of time when the letter of acceptance was posted by a party in the post box.
An fascinating insinuation of the process of the posting rule was provided in the case of Byrne v Van Tienhoven (1880) 5 CPD 344[15] where it was clearly stated that an approval would be absolute once the letter of acceptance was posted because it makes no disparity whether the other party essentially receives the letter or not.
In another matter of Henthorn v Fraser 1892[16] it was concluded that, “Where the situations were such that it must have been within the consideration of the individuals that, as per the normal practice of a human, the post might be utilized as a way of communicating the acceptance of a proposal, the acceptance was complete as soon as it was posted.”
As in this case Dowell as soon as he received the letter of appointment replied to the letter and granted his acceptance by posting the letter by notifying Mr. Welwisha that he would be willing to join but on a specific date on the offer that Dowell has been chosen as the senior accountant for his firm in reaction of which letter was posted by Mr. Dowell by post who sent an acceptance to him.
So, in this situation the postal rule would be applicable. And the approval for the proposal was provided as specified above after which the verdict was distorted.
Conclusion
Therefore, it could be accomplished that yes, a justifiably binding agreement was constricted in between Dodgy Accounts Associates and Mr. Dowell as all of the indispensable ingredients which forms a lawful binding agreement were nearby there and as per the postal rule which has been described above the approval was given by post which was also suitable and legalized acceptance which would institute a lawful agreement.
So, it could be long-established that when the committee of the corporation met again after the proposal was sent to Dowell they made a pronouncement that Dowell would not be prearranged now for the organization for which he was projected to be preferred then the people would be a in violation of a valid contract as the contract was completed by post which was given by Mr. Dowell.
Therefore, now the committee of the organization could not make such decision to withdraw a agreement which was justifiably established by him in a enforceable way.
References
Adams v Lindsell (1818) 106 ER 250.
Byrne v Van Tienhoven (1880) 5 CPD 344.
Entorres v Miles Far East [1955] 2 QB 327.
Henthorn v Fraser 1892.
Raffles v Wichelhaus (1864) 2 H & C 906.
Smith v Hughes [1871] LR 6 QB 597.
Tamplin v James (1880) 15 ch d 215.
Australian Contract Law, Smith v Hughes Court of Queen’s Bench [1871] LR 6 QB 597, < https://www.australiancontractlaw.com/cases/smith.html>
christian Tager, The requirements for creating a valid e-commerce contract, (1 November 2011) < https://www.diamondconway.com.au/the-requirements-for-creating-a-valid-e-commerce-contract/>
craig Hong, What are the elements of a contract?, (29 July, 2015) < https://www.hillhouse.com.au/legal-question/what-are-the-elements-of-a-contract/>
D W McLauchlan, “Objectivity in Contract” [2005] University of Queensland Law Journal 28, 24(2) 479.
E-Lawresources, Contractual agreement – offer and acceptance, < https://www.e-lawresources.co.uk/Offer-and-acceptance.php>
Fair Dealing, Contracts < https://www.fairtrading.nsw.gov.au/ftw/Consumers/Contracts.page>
Networked Knowledge, Contract Law, < https://netk.net.au/Contract/02Formation.asp>
Paul Kordic, Australia: Recitals, definitions & interpretation clauses in commercial contracts, (3 July 2014) < https://www.mondaq.com/australia/x/324358/Contract+Law/Recitals+definitions+interpretation+clauses+in+commercial+contracts>
Simpsons, The Principles of Contract, < https://www.simpsons.com.au/documents/visarts/visarts89/1Princip.pdf>
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