Contract Law In Australia: Formation, Capacity, Intention, Formalities, And Certainty

Agreement

Henrietta engaged a firm of solicitors to obtain an injunction to prevent a former male friend from visiting her and making a nuisance of himself. An unqualified litigation clerk was given the matter to handle, but his incompetence over an 11- month period created further embarrassment for Henrietta. Has Henrietta any claim against the firm for ‘mental distress and upset’?
 

The Contract of Australia is totally based and is quite inherited from the English Contract Law, which has a specific and basic statutory modification applicable in some places. The developments of Australian Laws started developing through the decisions given by the Australian Courts since the year 1980 and by the several kinds of legislation that has been passed by the Australian Parliament and also by many other territories and states. In Australia, there is a great role played by “Law of Equity” in increasing the changes regarding the Contract Laws, and the remedies also when they are breached. The basic six elements which are essential for legally binding the formation of “Law of Contract” they are as follows:

An agreement which includes offer and also acceptance;

Consideration which includes supply of money, a promise which needs to be undertaken, property or services regarding which will suffice relating to the consideration of money or commitment that is needed to be undertaken or not undertaken regarding any particular act
(Furmston et al. 2012).

Capacities to enter any legal and logical relations which can be considered regarding legal age and sound mind;

Intention of the parties to come into any legal and logical relations (that is not commercial or private agreements with the members of family will not necessarily be important to constitute a contract for the purpose of creating any legal relation is also not often present) (Dyson and Ibbetson, 2013).

Formalities- In most of the jurisdiction in Australia Contract it is not required to be presented writing until and unless exceptions are applied (Davies 2016).

Certainty;

The foundation of legal relation which is known as Contract is an agreement between parties. To translate the order from an agreement into Contract or the variations into of an existing Contract has to be favoured in consideration. The agreement should be full proof, complete, certain and sufficient to get enforced in court and there should also be the intentions of the parties to transfer their agreement into contact. If there is an absence of any kinds of elements, then it will clearly state that no point of law in the agreement or rather it is not enforceable to be a contact (Lewis 2014).

To analyse the existence of any agreement between “the parties,” there must be the presence of rules of ‘Offer and Acceptance’. It must also have to clear indication (offer)  of expression by one of the parties (the offeror) in order of willingness bound on certain terms which must be accompanied by other of the party (the offeree) the offeror of unqualified assent as to that offer which is the acceptance (Burrows et al. 2012).

Capacity

Offer that clears the intentions of the offeror which can be bounded with negotiation or discussions, based on the set out terms. The court will further determine the objective intention of the offeror. It is also different from “invitation to treat” that is requests to the others in order of making offers for negotiating a contract in mind. An offer is also quite different from ‘mere puff’. An offer can also be made for making anyone liable who in beforehand accepts, withdraws offers. It may also be restricted to a class of people, or otherwise, be made to anyone before the withdrawal can accept the offer, which can include unascertained persons or the public. However, the offer remains ineffective until it is communicated, by anyone who is an offeror or any third person within the authority of the offeror (McKendrick 2014).

Contractual capacity refers the capability of the party who legally enters into a Binding Contract. In a case of drunks, minors, or mentally impaired persons may not possess a proper capacity to enter into the contract and other ordinary person may presume default to have a contractual capacity (O’Sullivan and Hilliard, 2014).

This is regarded to the person’s manifestation of intention to create legal relation. Preliminary agreements become apparent as soon as the parties may enter into an agreement, however, which has yet to be formalised more in intricate the agreement which has to be identified by both the parties. The intentional requirement has often been approached based on the commercial agreements of the parties which are presumed to intend legal consequences.

In many of the jurisdiction in Australia Contract is not required to be presented in writings but exceptions are applicable. The oral contract has the power equally as a written contract. These requirements are replaced by statute to prevent and protect the consumers from fraud.

The term certainty is encompassed with three related kinds of overlapping the problems vise-

The agreement can be regarded as incomplete as the parties were not able to reach all essential elements or they have decided that agreement will further determine critical matter;

The agreement can be quite uncertain as the terms are ambiguous or vague for the meaning that is attributed by the court.

A particular promise can be illusory as contract or promisor has discretion whether should perform the promise. 

Relating to the sale of goods most states have affected its statutes such as (Sales of Goods Act 1896) which includes warranties relating to merchantability and fitness. There are many similar terms which are implied under “Australian Consumer Law” relating to duty to take fitness and reasonable care some contract classes and it is also not displaced by contrary intention which is implied into ‘parties’ intention. The Australian Consumer Law allows both on a legal trading through all states which corporate a person can be sued if they have been engaged in misleading or deceptive in conduct relating to trade or commercial matters.

Taking into consideration the Case Laws which are applicable in matter of “Breach Of Contract” regarding ‘Mental distress or upsets” are as follows:

Intention

It is an English Contact Law Case which is totally concerned with measurement for the availability of damages in distress matters. Mr Farley, who bought a large estate with Housing at Riverside in Blackboys, Sussex, which was not far from Gatwick which had croquet lawn, an orchard, a tennis court, a swimming pool and a paddock. On 28^th of February 1991 he purchased it with £420,000and . Further, he spends £125,000 for its improvement. He was also an owner of a flat in London, an owner of a house in Brighton and also one in overseas. He thus hired Mr Skinner to survey the house particularly to clarify the aircraft noise level. Skinner stated that it was an acceptable noise, but in reality, the sound was intolerable at 6 am from the holding pattern above the house. Distressed Mr Farley often slept early morning in the garden. During the trial, the held that no one more had paid about the noise than him. Thus, there was a loss financially so awarded £10,000 for being distressed. Court further overturned his judgment and rescinded award of £10,000 (Andrews 2016).

The “House of Lords” stated the award of the judge of trial for not being to put in such kind of inconvenience which was an important term.

Lord Scott stated that Farley had knowledge about the noise aircraft while he had bought the property. So he could claim on being deprived of contractual benefits or could have a claim for breach of contract or loss. He also stated that there was a reduction in market value of the house, although £10,000 was quite valuable within the right range. Lord Clyde, it regarded the peacefulness of the property. So there is the chance of surveyors be liable for the defective house that will cause distress (Rowan 2012).

In an English case law based on consequential of damages and losses from the breach of contract and breaching of a party is always liable for the damages and the losses which have been foreseen by the but it was overlooked. Mr Hadley and another who were millers and mealmen and worked in partnership as proprietors in city Steam-Mills at Gloucester. Hadley had a contract with defendant Baxendale and or for delivering crankshafts to repair it by engineers dated fixed at the cost £2. Terling and four shillings. But the defendant failed to deliver it on fixed date for which loss was suffered (Ashley et al. 2014).

In the Court of Exchequer which was led by “Baron Sir Edward Hall Alderson” declined by stating that he would not allow in this case Hadley to recover profits or losses as Baxendale cannot be held liable for the losses suffered which were foreseeable in case if Hadley in advance had mentioned in the special circumstance in which he couldn’t have entered into the contract into dire circumstances. But quite obvious it is also stated that great multitude of this case where he sends broken shafts to a third person under ordinary circumstances and certain circumstances the plaintiff and the defendant has never communicated. For the important circumstances of the parties which provided basically ‘breach of contract’ for the damages made in this case and according to this circumstance. It is quite unjust to deprive them, so the court also stated that such a breach of contract could have been completed by both parties when they entered into the contract (O’Gorman 2016).  

Reference List:

Furmston, M.P., Cheshire, G.C. and Fifoot, C.H.S., 2012. Cheshire, Fifoot and Furmston’s law of contract. Oxford university press.

Dyson, M. and Ibbetson, D.J. eds., 2013. Law and Legal Process:’The hypostasis of prophecy’: legal realism and legal history Charles Donahue, Jr; 2. Chancery, the Justices and the making of new writs in thirteenth-century England Paul Brand; 3. Copulative complexities: the exception of adultery in medieval dower actions Gwen Seabourne; 4. Arbitration and the legal profession in late medieval England Anthony Musson; 5. Privileges and their application in the main English central courts in the fourteenth and fifteenth centuries Susanne Jenks; 6 ….

Davies, P.S., 2016. JC Smith’s the Law of Contract. Oxford University Press.

Lewis, B., 2014. Jersey Law Review| Jersey’s contract law: a question of identity.

Burrows, J.F., Todd, S.M. and Finn, J., 2012. Law of contract in New Zealand. LexisNexis NZ.

McKendrick, E., 2014. Contract law: text, cases, and materials. Oxford University Press (UK).

O’Sullivan, J. and Hilliard, J., 2014. The law of contract. Oxford University Press, USA.

Poole, J., 2014. Textbook on contract law. Oxford University Press, USA.

Andrews, N., 2016. Appointing the Tribunal. In Arbitration and Contract Law (pp. 91-102). Springer International Publishing.

Rowan, S., 2012. Remedies for breach of contract: a comparative analysis of the protection of performance. Oxford University Press on Demand.

Ashley, P.S., Palmer, B. and Aldersey-Williams, J., 2014. An International Issue:’Loss of Profits’ and’Consequential Loss’. Business Law International, 15(3), p.261.

O’Gorman, D.P., 2016. When Lightning Strikes: Hadley v. Baxendale’s Probability Standard Applied to Long-Shot Contracts. Loy. U. Chi. LJ, 47, pp.859-969.