La Trobe University-School of Law
LSTBSL Introduction to Business Law and Ethics
Semester 1, 2016
Common Law Assignment
Submitted by: Adele Schifitto
Student ID: 18314911
Seminar day/time: Wednesday 9:00am-11:00am
Seminar leader: Vici Jacobs
Seminar location: John Scott meeting room 106
Word count: 1457 words not including footnotes
1547 words including footnotes
Question 1: Is there an enforceable contract between Tim and Jen?
Answer: Jen has seeked information and prices from Tim the DJ, but she hasnt
decided to proceed with his services. The issues that need to be addressed in
this question are the fact that Tim is still a minor and only has limited capacity
to contract. Secondly, that not all elements of a valid contract are present for
there to be an enforceable contract. The law requires that in order for a
contract to be valid, the parties must have the capacity to enter into legally
binding agreements as individuals. Sound mind adults have full capacity to
contract, however people under the age of Eighteen are considered to be
minors, therefore they have a limited capacity to contract, and only in
situations where the individual will receive a necessity or benefit, they will have
the capacity to legally bind themselves by a contract. Minors also have the
capacity to contract for employment, which will essentially be of a benefit to
them.1 This law has occurred in cases such as Scarborough v Sturzaker 2and
Hamilton v Lethbridge 236 3where the minors have needed to be bound by
contractual agreements for the purpose of necessities or employment which
was beneficial to them. It is essential now to apply the law to the current
situation. In this instance Tom, although a minor, does have capacity to
contract as he is a professional DJ, which implies that he performs this role as
a means of employment which essentially will be of benefit to him. In saying
this, although Tom does have the capacity to be legally bound by a contract,
not all elements have been fulfilled to establish a contract between Jen and
Tom. Jen asked Tom if he was available on the day that she needed him and he
responded saying that he is. However communication after this point no longer
continued and there was never an agreement made by both parties to continue
1 Michael Lambiris and Laura Griffin, First Principles of Business Law (Oxford
University Press, 2016 edition) 93.
2 (1905) 1 TAS LR 117
3 (1912) 14 CLR
and go through with the offer. As well as there never being an intent to enter
into a legal contract Jen never decided to go ahead with Tom and receive his
services in turn for payment upon completion of the task. In conclusion it can
be seen that there is no enforceable contract between the two parties.
Although we established that he has the capacity to contract even though he is
a minor due to employment benefits, the elements required to validate a
contract being offer, acceptance, consideration, intent to enter into a contract
and consent have not all been met. Further proving that a contract cannot
exist.
Question 2: Is Promissory estoppel relevant to Jens dispute with Simon from
Delish Cakes?
Answer: Jen agrees on a cake style that Simon from Delish Cakes has come up
with, and although she doesnt have time to complete all of the form on the
spot she leaves some details, and tells him that she will give him the form over
the next couple of days. The law in this area mentions that Promissory Estoppel
comes about when an individual causes another person to assume wrongly
about a future event. If the person making the wrong assumption relies and
acts on it to their detriment, and if its unconscionable in the situation to allow
the persons behavior giving rise to the assumption which relies on the true
position, they will be stopped from doing so.4 In the case of Waltons Stores
(Interstate) Ltd v Maher 5the law is confirmed. When applying this law to the
problem it can be evidently seen that Jen made a representation to Simon,
when she gave him her details and ensured him that she would be back with
the completed order form. Simon was therefore lead to believe that she would
return with the completed forms and they would be going forward with the
transaction so he relied on the representation. Simon as a result suffered
material detriment when Jen stated that she was not going to continue through
with the cake order, and as a result Simon was left with wasted resources and
time which he spent making the cake decorations. Jen intended Simon to rely
on the promise that she would return with the completed order form, and she
made no attempts to warn him that she may not have delivered the promise. It
can be concluded that Jen acted unconscionably, especially when she listens to
Simons voice message stating that he had started making the cake
decorations and she still didnt bother to call him back and inform him that she
was no longer interested in having the cake made by him. In this case
Promissory Estoppel is relevant to the dispute, as the party who made the
representation in tis case Jen can be estopped from denying the truth of the
situation.
Question 3: Is there an enforceable contract between Jen and Adam?
Answer: Adam-Jens cousin has agreed to help her set up the venue for the
party. The issue raised in the question is whether or not a legally enforceable
contract between Tim and Jen exists. The law stipulates that the first
requirement of the formation of contracts is that the parties intend to take on
4 Michael Lambiris and Laura Griffin, First Principles of Business Law (Oxford
University Press, 2016 edition) 98.
5 (1988) 164 CLR 387
and create legally binding obligations. 6The case of Wakeling v Ripley
7
demonstrates how an agreement between family members may not have the
intent of being legally bound, however given some circumstances it can end up
being an enforceable contract. In applying these law principles to the problem
at hand it can be noted that Jen and Adam are relatives, therefore the
agreement is in a social/domestic context, and in the agreement they made it
was neither of the parties intentions to create a legally enforceable contract
even though they may have the capacity to do so. So, we can infer from this
that there is no enforceable contract between Jen and Adam as it was more of
an agreement made by Adam to do what Jen is asking of him. The
consequences of not having a legally bound agreement in this situation could
be that Adam may not show up on the given day to complete the duties, which
he originally agreed to fulfill.
Question 4: Is Bill entitled to the $20 if he helps Jen set up for the party?
Answer: Jen has clearly made an offer to her cousins, to help prepare for the
party on Saturday, and in return she will pay them $20. This question however
raises two issues, firstly that Bill has accepted an offer, which was never made
to him, and secondly that he is in no position to accept the offer. The Law in
this area states that an offer can only be accepted by the person or persons to
whom it is addressed to, and an attempt made by a third party to accept an
offer not made to them is said to be an offer by the third party to the person
who made the original offer.8 The case of Carlill v Carbolic Smoke Ball Co
9
demonstrates how if an offer was made to any person in the world, it could
result in an acceptance of the offer by anyone who is aware of it. The offer
would then result in an enforceable contract. It is necessary however to now
apply this law to the present situation. In this case we can see that the offer in
which Jen has made, was specifically made to her cousins, belonging to a group
of people, and not to her uncle Bill who just so happened to see the offer,
which was presented to his daughter. It can be concluded that Bill has accepted
the offer, which was not presented to him, therefore as a third party to the offer
which was not directly made to him he cannot accept it because he is in no
position to do so. Only an offeree can accept an offer being made to them.
Consequently Bill can claim that he is entitled to the $20 in return for his
assistance in setting up for the party, however Jen is not required to do so as
she never put the offer forward to him in the first place and he was in no
position to accept the offer, therefore it would be up to Jen as to whether or not
she wanted to pay him but legally she would not be required to do so.
6 Michael Lambiris and Laura Griffin, First Principles of Business Law (Oxford
University Press, 2016 edition) 60.
7 (1951) 51 SR (NSW) 183
8 Michael Lambiris and Laura Griffin, First Principles of Business Law (Oxford
University Press, 2016 edition) 85.
9 (1893) 1 QB 256
