Issue
Whether Vincent is bound by the advertisement of lease of shops owned by him in Fashionista Shopping Complex, made on the notice board?
Rule
For a valid contract to constitute there must be agreement, intention, consideration and capacity to form a legally enforceable contract. For an agreement there must be an offer upon that the acceptance must be made considering the consideration and the terms and the conditions. There must be consensus ad idem that is meeting of mind of both the parties on the same thing in same sense. An offer is the communication of intention of the offeror to perform certain act or to abstain from doing something, in order to receive accent of acceptance of the other party in order to conclude in an agreement. An offer must be differentiated from an invitation to offers; advertisements of all kinds falls in this category. These types of contracts become binding on the acceptance, and it is merely invitation to offer. Goods in display in the shops are invitation to offer to which the customer makes an offer in order to purchase the goods. On acceptance of the offer by shopkeeper with consideration makes a valid and enforceable contract. Pharmaceutical Society of Great Britain v Boots
Application
Under the given case study, the notice on the notice board on the Fashionista Shopping Complex by the manger on behalf of owner for lease is also an invitation to offer. Upon the notice given by Vincent it was clearly mentioned in the specific words that electricity charges are included in the rates of lease of shops. Upon the basis of the notice Madonna taken the action to take on lease one of the shops in the complex. Now, Vincent cannot change the requirements of notice by denying the inclusion of electricity charges in the lease amount. Upon the basis of invitation to make offer in the notice Madonna made her offer to take lease of the shop. Now Vincent can not deny with the terms of the notice of electricity charges being included in the lease rates. It was an invitation to the whole world to make the offer on the conditions laid in the notice. Vincent can only accept or deny the offer but can not change the condition embedded in the notice.
Conclusion
As the notice is an invitation to offer made to whole world by the Vincent to invite people to make offer upon which Madonna made in compliance with terms of notice made offer too. Now Vincent cannot deny the terms of inclusion of electricity charges in the leases rates. Thus, makes Vincent bound by the advertisement on notice board.
Question 2
Issue
Whether the acceptance made by Madonna is valid or not?
Rule
In order to constitute a valid contract, there must be an agreement which has two parts on is offer and other one is acceptance. acceptance is the statement made in oral or in writing which specifically provides the intention of other party to accept the offer with the terms and conditions related to it. In order to constitute a valid and enforceable contract it is necessary that the acceptance must be communicated. Mere intention or mental decision of acceptance of an offer does not make an enforceable agreement there is need to convey the acceptance to offeror in the time prescribed or in reasonable time period. Upon the communication of acceptance, the agreement is deemed to be concluded. There is no formal method of conveying of acceptance but there are certain methods in use in the market like postal methods, instantaneous method includes telephone and fax machine. According to the postal rule the acceptance is deemed to be made when the latter as to assent to the offer is posted and leads to existence of a valid contract from the moment the latter is put into the latter box does not matter the whether the offeror received or read it or not. Adams v Lindsell
However, postal rule does not apply to other instantaneous mode of communication of acceptance. Brinkibon v Stahag Stahl und Stahlwarenhandelsgessellschaft mbH
Application
Under the given case study, Vincent in the meeting with the terms and conditions of the offer specifically laid the mode of acceptance that is through e- mail. but Madonna made the acceptance through latter and not through email in reply to the oral offer concluded between them. This leads to inapplicability of postal rule in the prescribed case study as Vincent at the time of making oral offer and prior to formation of agreement with Madonna specifically quoted the mode of communication of acceptance that is through email only. Thus, due to inappropriate mode of communication of acceptance been made by Madonna does not lead to formation of contract between Madonna and Vincent.
Conclusion
As Vincent specially provided the mode of communication of acceptance at time of making offer to Madonna that is through email. Thus, the acceptance of Madonna by letter does not leads to valid acceptance and conclusion of valid contract between parties.
Question3
Issue
Whether there is valid consideration between Mickie and Vincent?
Rule of law
Consideration is one of the important elements in formation of contract. It is the price that is asked by the promisor and is paid by the offeree for the promise. In the common law consideration is must in order to form a valid and enforceable contract between the two parties. Consideration must be in form of soe monetary value and does not needed to be adequate or of same value in relation to goods or services involved in the contract. consideration can be paid at time of contract or can be paid in future or can be partly paid too. A gratuitous promise without considerations is not a valid and enforceable contract. Thomas v Thomas
Application
Under the given case study, Vincent’s offer to Mickie to lease his shop at $100 per week to which Mickie gave acceptance at that moment constitutes valid contract. There is good consideration involved in the contract between them. However, the amount is not adequate but for a valid contract this is not an important factor to consider. There is a consideration which can be measured in value though less but is certain and flowing from Mickie only to the Vincent in lieu of the lease of shop provided by Vincent. The electricity charges are included in the cost of lease thus makes a valid consideration in contract between both parties.
Conclusion
From the above discussion it can be concluded that there is presence of consideration between Mickie and Vincent however not adequate which concludes a valid contract between the parties.
Question 4
Issue
Whether Robin can stop Vincent in denying his promise on the basis of rule of promissory estoppel?
Rule
Promissory estoppel is the rule of equity is also called as equitable estoppel. Theses are the promises which causes the other person to belief and make him or her to enter into legal relations with the other party. The other party in belief of the promise of other party had actually enacted and altered his position in such way that cannot be restored in the original position. This makes the party liable who by his conduct and promises makes the other person belief and act in accordance with the promises made and not to deny the promises made by him with the other party. A promise in promissory estoppel is honoured if the promise is made with intention to create legal relations and the promise acted upon the promise on belief that it is acted by the promisor. Thus, it acts as a shield to protect the later denial of the promisor to perform or acting inconsistently with the promise made. Central London Property v High Trees
Application
Under the given case study, the promise of Vincent with robin regarding reduction of rent from $2,000 per week to $1,000 per week due to inconsistency in business faced by robin acts as promissory estoppel against robin. As robin in belief of this promise sustained the lease in reduced rent for next 10 weeks. Robin according to the promise is paying the reduced rent which is duly accepted by Vincent too. These terms of promise resemble the relation under promissory estoppel. Now Vincent cannot demand the arrears of rent from robin as he is estopped by the shield of promissory estoppel to deny the promise made by him with robin. The relations between them suffices all the elements of promissory estoppel that it is the intention of Vincent to reduce the rent upon which Robin enacted by continuing the lease on reduced rent for next 10 weeks. The rent is accepted by Vincent without any argument during that period which makes a valid and enforceable promise between them.
Conclusion
Thus, from above it can be concluded that there is applicability of rule of promissory estoppel in promise of payment of reduced rent to which Vincent cannot deny and cannot claim arrears in rent from robin.
Bibliography
- Books/Article/Journals
Lambiris, Michael and Griffin, Laura, First Principles of Business Law (Oxford University Press, 2017, 10th edition)
McKendrick, Ewan and Liu, Qiao, Contract Law Australian Edition (Palgrave Macmillan, 2015).
Radan, Peter, Gooley, John and Vickovich, Ilija Principles of Australian Contract Law
Cases and Materials (LexisNexis Butterworths,2010)
- Legislation
Contract law.
- Cases
Great Britain v Boots [1953] 1 QB 401
Adams v Lindsell (1818) 1 B & Ald 681
Brinkibon v Stahag Stahl und Stahlwarenhandelsgessellschaft mbH [1983] 2 AC 34
Thomas v Thomas (1842) 2 QB 851
Central London Property v High Trees [1947] KB 130
- others
Australiancontractlaw, Formation of contracts.
(2018.) <https://www.australiancontractlaw.com/contractlaw/formation.html>
Julie Clarke, Terms of a contract. (2013) <https://www.australiancontractlaw.com/law/scope-terms.html>
Australiancontractlaw, Formation of contracts | Consideration (2018) < https://www.australiancontractlaw.com/contractlaw/formation-consideration.html#considdefinition>.
