Question:

Answer:

Scenario 3

Issue

The issue which has been identified in the given situation is that whether the driver if XJ8 Jaguar motor car has to pay Fred based in the rules of past consideration in contract law

Rule

A past consideration is considered as a bad consideration in contract law.

In the case of Eastwood v Kenyon [1840] EngR 90, [1840] 11 Ad & E 438, 113 Eng Rep 482 the plaintiff had taken a loan for the purpose of educating his girl in order to enhance the prospect of her marriage. Upon the marriage of the girl the husband made a promise to repay the loan taken by the defendant. However he did not pay it. It was held by the court that the plaintiff cannot enforce the promise as it was a past consideration as it was completed before promise.

Application

In the same way Fred has already done the act before the promise to pay had been made by the driver of XJ8 jaguar car and therefore it is a past consideration and cannot be enforced by law.

Conclusion

The driver has no liability to pay jack based on the rules of past consideration.

Scenario 4

Issue

Whether there is a legal contract between the credit union with Daniel and Elena or not based on the provisions of Minors’ Contract Act 1969.

Rule

A minor is a person who has not yet attained the age of 18 years

All contract with a minor are void unless contracts such as contract of necessities

According to section 6 of the Minors’ Contract Act 1969 every contract which have been entered into by the minor is unenforceable against the minor and otherwise has affect that the minor has reached majority. however if the court finds it just and reasonable to do so the court at its discretion can cancel the contract or make the aggrieved party receive some kind of compensation in relation to the contract

Application

In the given situation it has been provided that Daniel and Elena had made no misrepresentation in relation to their age. The credit union made a mistake while calculating their age. The credit union must have had the knowledge that the minors cannot provide a valid consent. They should not have approved the loan of Daniel and Elena. In addition s they have already sold the vehicle and recovered the amount they cannot make any further claim.

Conclusion

A Claim cannot be made

Scenario 5

Issue

Whether there has been misrepresentation or not Eddie to Malcolm and Lucy as per the four principles of misrepresentation and whether Malcolm and Lucy are entitled to any damages or not

Rules

The four elements of  fraudulent misrepresentation are

1. The party made a false statement intentionally
2. The statement is in relation to a material fact
3. The statement had been made to induce the party to the contract
4. The other party actually acted based the inducement

In the case of Derry v Peek (1889) 5 T.L.R. 625   it had been ruled by the court that where a person intentionally makes a fraudulent misrepresentation the other party is entitled to rescind the contract as well as claim damages.

Application

Eddie gas made a false statement intentionally

The statement is in relation to the condition of the house which is a material fact

The statement has been made to induce Malcolm and Lucy

Malcolm and Lucy relied in the statement to get into the contract

Thus fraudulent misrepresentation is established

In the given situation Malcolm and Lucy can rescind the contract and also claim damages which have been suffered by them such as the motel cost.

Conclusion

There is misrepresentation and the parties can claim damages

Scenario 6

Issue

Whether the elderly widow can make a claim against Dr Donald or not with respect to the rules of unconscionable bargain

Rules

According to the case of James v Morgan (1663) 83 Eng Rep 323 an unconscionable bargain is a situation where a person entraps a deal on gross unfair terms like purchasing property for a person at a grossly undervalued price or providing a loan at extortionate terms to a person who is in dire need. It is a kind of dealing which would not be entered upon by any reasonable person. In such situation the court modifies or nullifies such transactions.

Application

In the given situation Mr Donald has entered upon in a deal which has unfair terms as he wants to purchase a property at a much lower rate

The elderly widow is in dire needs to get the elderly house and thus accepts the deal which no reasonable person would have done

She did not have a bargaining power

Thus unconscionable bargain has been caused and the court can modify or nullify such bargain

Conclusion

The elderly widow can make a claim

Scenario 7

Issue

The issue is to analyze the validity of restraint of trade clause between Monica and Isabella and Monica and Fiona.

Rule

In the case of Nordenfeldt v Maxim Nordenfeldt Guns and Ammunition Company [1894] AC 535 it was stated by the court that to protect business interest a restraint of trade clause can be imposed

In Lindner v Murdock’s Garage (1950) 83 CLR 628 it was stated that a restraint of trade clause can only be applied in order to ensure reasonable interest of business and not to subject the other party to additional detriment

Stenhouse Australia v Phillips [1974] AC 391 stated that a party cannot prevent another from giving competition

In Seven Network (Operations) Limited v Warburton (No 2) [2011] NSWSC 386 it was stated that the clause can only be imposed for a period of 8 months.

Application

From the above discussed rules it can be concluded that additional burden cannot be imposed on the parties other than what is required to protect the legitimate interest of the business. Here it can be evidently stated that the clause which have been imposed upon Fiona is unreasonable as it puts much more burden and on the other hand the clause with Isabella is justified

Conclusion

The clause with Isabella is justified and the clause on Fiona is unjustified

Scenario 8

Issues

The issue in this case is to determine whether a the contractual liabilities of Martha towards Andy have been discharged and if yes, when

Rule

According to section 7(3)(c) of the Contractual Remedies Act 1979 the parties to the contract can cancel the contract in case it is clear that the other party is going to violate a term of a contract. According to section 7(4) of the CRA the party may cancel the contract of the performance of such term is essential to the party, in section 7(5) it has been stated that the party cannot cancel the contract if they have affirmed a future breach.

Application

In the given situation Martha had told Andy to start the painting work by 1^st Australia, however it was informed by Andy that he would not be able to do so before 20^th august. On 20^th July Martha informed Andy that she is appointing another person to pain at high cost. Thus Martha can cancel the contract as she clearly knew that Andy is not going to perform its terms. In addition the performance of the term was necessary for Martha. Thus she can discharge the contract. The contract was discharged on 20^th July when it was notified to Andy.

Conclusion

The contract has been discharged on 20^th July

Scenario 9

Issue

The issue which has to be determined in this case is the extent of damages which can be claimed by MaCallum from the cab company

Rules

In the case of Hadley v Baxendale (1854) 9 Ex Ch 341 it had been stated by the court that with respect to the principles of remoteness of damages in the law of contract a party is only entitled to claim losses which are considered to have reasonably arise naturally from the breach of the contract or those which may be supposed reasonably made in contemplation of the parties at time when the contract was made.

Application

In the given situation it is not reasonably natural for the cab company to assume that MaCallum will lose a million dollar contract if he misses the flight. Thus as per the above discussed principles the cab company is only liable to pay for the missing flight.

Conclusion

The cab company is liable to pay for the missing flight to MaCallum and it could not foresee about the loss of the million dollar contract

Scenario 10

Issue

Whether Chris can make a claim of the remaining $750 according to the rules of part consideration in contract from Beth

Rules

In the case of Foakes v Beer (1883-84) L.R. 9 App. Cas 605 it has been ruled by the court that a part consideration for the settlement of claim is not a valid consideration in the law of contract. The case applied the principles provided by the Pinnel’s case 1602 5 Rep, 117

Application

In the given situation Beth owed Chris $3000. However he only paid Chris an amount of $2250 which was $750 less than the original amount. According to the principles of the above discussed case a part consideration is not valid. Thus Beth cannot make a claim that he paid $2250 in full settlement of the contract.  In the given situation Chris can make a valid claim for the remaining amount of $750 from Beth as per the principles of pinnels case.

Conclusion

A claim can be made by Chris against Beth as part consideration is not considered as a valid consideration in the law of contracts

Scenario 11

One clause of dispute resolution

According to the clause of dispute resolution the party to the dispute which is the employer and the employee have to undertake mandatory arbitration. The employee would be allowed to bring in a third person for personal assistance. The decision provided by the arbitrator would be binding on the parties to the dispute

Other clauses

Leave – The employees would be entitled leaves. Each employee would be provided with one casual leave and one sick leave every month. The employees would also be allowed to take other forms of leaves which have been approved by the employment legislation.

Notice- the employer and the employee have the duty to provide each other with a minimum notice period in lieu of which the employer may pay or charge compensation. The notice period for the purpose of resigning the job is one month.

References

Contractual Remedies Act 1979

Derry v Peek (1889) 5 T.L.R. 625

Eastwood v Kenyon [1840] EngR 90, [1840] 11 Ad & E 438, 113 Eng Rep 482

Foakes v Beer (1883-84) L.R. 9 App. Cas 605

Hadley v Baxendale (1854) 9 Ex Ch 341

James v Morgan (1663) 83 Eng Rep 323

Lindner v Murdock’s Garage (1950) 83 CLR 628

Minors’ Contract Act 1969.

Nordenfeldt v Maxim Nordenfeldt Guns and Ammunition Company [1894] AC 535

Pinnel’s case 1602 5 Rep, 117

Seven Network (Operations) Limited v Warburton (No 2) [2011] NSWSC 386

Stenhouse Australia v Phillips [1974] AC 391