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Six essential elements of a valid contract
Essay on essential elements of a valid contract
Essay on essential elements of a valid contract
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Task 4: Applications of Essential Legal Elements for a Valid Contract. Scenario 1: Madison v Edinburgh City Council In Madison v Edinburgh City Council, Mr Madison, a council tenant, applied to purchase his council house from the council. He received a letter from Edinburgh City Council saying they ‘may be prepared to sell the house to you’ for £2180.00. Mr Madison said that the path to the house was in a bad state and queried the price had stated. The council said the price had been fixed allowing for the condition of the property and would not amend the price. On 18th March 1971 Mr Madison wrote to the council again and requested that they ‘carry on with the purchase as per my application’. In May 1971 the political control of the council …show more content…
Application: The council’s letter was not an offer and it was only an invitation to treat therefore no contract had been made with Mr Madison. His application was an offer that the council had refused. The words ‘may be prepared to sell the house to you’ and the request for a formal application clearly indicated that the offer was being invited from Mr Madison In similar case to Gibson v Manchester City Council, Mr Gibson requested details from the council about the proposed sale of its housing stock to existing tenants. The council replied by letter, stating that ‘the council may be prepared to sell the house to you’. It included a discounted purchase price and mortgage and invited formal applications. Mr Gibson applied but after local elections the council reversed its policy and refused to sell. The court held it was only an invitation to treat and not an offer by the Manchester City Council. Scenario 2: Jennifer …show more content…
The bungalow formed part of the estate of her husband’s father who had died leaving the property to his wife for life and then on trust for Jennifer’s husband and his four siblings. After the work had been carries out the brothers and sisters signed a document stating in consideration of you carrying out the repairs we agree that the executors pay £480 from the proceeds of sales. However, the payment was never made. Application: No valid contract existed since the bungalow improvements were past consideration; they had been carried out before any promise to pay had been made. In Re McArdle, a similar case, a house was left by Re McArdle to his wife for life. On her death it was to be sold and the proceeds divided equally between the children of the marriage. The wife of one of the children paid for home improvements at a cost of £488. When the work had been done all the children agreed that she should recover this sum from the proceeds of the eventual sale. After Mrs McArdle died the validity of this agreement was disputed. It was held that past consideration before the act was carried out is not valid consideration. Scenario 3: Wodehouse v
La Trobe Capital & Mortgage Corp Ltd v Hay Property Consultants Pty Ltd (2011) 190 FCR 299
The rule is that for an offer to be present, there must be an act whereby one person confers upon another the power to create a contractual relation between them. For example, in Owen v. Tunison, Owen inquired about buying Tunison’s property for $6,000, and Tunison replied that “he would not able to sell for anything less than $16,000”. The reply to the first inquiry was a quote on the price and an did not convey a desire to sell his property. Tunison did not intend his reply to be a binding offer but an opening of negotiation, he does not confer the power to accept the contractual relationship to Owen through his response. In this case, there is a similar initial question, by Puck, asking how much Oberon would sell his tavern for. Oberon responds telling him that if he was to give him a buck and take on whatever tax debt that my come up then, he would “almost” surely give him the tavern. Here, when Oberon says almost he does not intend to be bound by the price quote, but is expressing that, if he was to sell the tavern, it would be for those conditions. He does not confer the ability to conclude the contractual agreement to Puck. There is no valid offer by Oberon to sell his tavern to Puck, his response was a price
The case of Bernard, Charleen & Damien v. Alan depicts the obligations of an offeror and offeree, if the contract is permitted and if the sale of goods were delivered as per the terms stated in the initial offer or contract. There were no intention to create legal relations as this case was held between the context of social and domestic agreements amongst friends and family.
In analyzing the various facets of these two cases, we must first look at the arrangement between Mr. Sam Stevens and the store to determine if, in fact, a legal contract was at hand. The first necessary element in a contract is the agreement. An agreement is reached when one party makes an offer, and the other party accepts. In this case, the store offered to purchase 1,000 units of Mr. Stevens’ product, his verbal assent to the store manager constitutes an acceptance of said offer.
It is highly unlikely that a court would find that Billy Jean owed Donald and Co a duty of care to avoid the purely economic loss. Pure economic loss is described as financial, monetary loss generally attributed to ‘damage’ to an individuals ‘wallet’. For a claim to be valid and considered the steps to pursue a cause of action in negligence must be followed, the first of which is establishing a duty of care owed, in this case by Billie Jean to Donald & co. In this case it is found that no duty of care is owed and thus no claim for compensation can be lodged. In an attempt to establish a duty of care the plaintiff must be deemed vulnerable under the salient factors, the plaintiff being Donald & Co which in this case are not vulnerable. This characterisation of non-vulnerability is derived from the class of sale of the property as well as numerous general assumptions as to the experience of Donald & Co. It is expected under the assumption of Caveat Emptor as well as for the magnitude of purchase that Donald & Co have access to the building records and history of inexperienced builder Billie Jean as well as the financial status of
To categorise a term as essential, is best described through the ruling of the courts within the case of Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd: 1O. Within this case the essentiality test is applied. The test consists of determining if it was a shared intention of the parties, that it was expressed within the contract and that the term be essential that failure to fulfill the term would justify termination. This test confirms that the innocent party, Josh, would not have entered into the contract with Brendan unless performance of the promise was to be
Winnie, a resident of Australia, decided to sell her business of horse breeding located in the Melbourne's south-eastern suburbs in 2015. However, the buyer did not want to purchase the land. Bought for $1m in 2005, the real estate is 10 hectares in size. At first, he opted for auctioning the entire real estate, but that attempt failed to raise her reserve price of $10m, so she passed it in. Although the reserve was a fair market value, her real estate agent felt that buyers would not be impressed in buying the entire land. Winnie sought advice from various accountants and agents who recommended that most home buyers would find smaller blocks more affordable. For example, 10 vacant one-hectare blocks would only require minimal subdivision costs, and sell for $2
It is highly probable that George’s financial contribution from the sale of his flat has directly increased the value of Paul’s house. [William & Glyns Bank v Boland (1981)] [Lloyds Bank v Rosset (1989)] In the case of William & Glyns Bank v Boland (1981), a husband was the registered sole legal owner of the matrimonial home. His wife had made contributions to the purchase, but she had failed to register her rights in equity as a minor interest.
In the case of Yaxley v Gotts (2000) ch 162, the defendant, Gotts bought a building to Yaxley, a self employed builder and in...
The English contract Offer and Acceptance General principles There are three basic essentials to the creation of a contract which will be recognised and enforced by the courts. These are: contractual intention, agreement and consideration. The Definition of an Offer. This is an expression of willingness to contract made with the intention (actual or apparent) that it shall become binding on the offeror as soon as the person to whom it is addressed accepts it. An offer can be made to one person or a group of persons, or to the world at large.
In the case Thomas v. Thomas [1842] QB 851, after John Thomas death, the executors of his estate entered into an agreement with P that P can occupy the house by paying£1 per year. However after P live in the house for some time, D refused to convey the house and claimed that there was no consideration for his promise. It was held that P pay £1 per year is consideration and need not to be adequate.
The guarantor (the wife) decided to do so without any expectation of deriving any benefit from the transaction (voluntary basis).
In the sale of goods act 1979 S 4.-(1) Subject to this and any possible Act, a contract of sale may be made in composing (either with or without seal), or by word of mouth, or somewhat in composing and halfway by word of mouth, or may be implied from the behavior of the pa...
This case is same as O’Kelly v Trusthouse Forte plc [1983]. In my opinion, even though no money has changed by the hands, there was no intention to create legal relation and consideration but the transaction was beneficial to both sides. So, it indicates that the contract is