Case Study Of Rahul And Saurav

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Case Study Of Rahul And Saurav

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Case Study Of Rahul And Saurav

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Questions:
1.Advise Saurav if he can pull out of the deal in this Way?

2.Advise the bank what Counter arguments it may need to rely on if Mrs Ming claims she did not sign with genuine Consent.

Answers:

1.Issue:
Whether there is any contract between Rahul and Saurav for the purpose of buying the plane?
Law:
For a valid contract, there must be an agreement between the parties which includes offer, acceptance, and intention to create legal relation. Generally, it also includes meeting of the minds between two or more parties.
Offer- Offer is considered as a communication between two or more parties for the purpose of doing or not doing something if other person to whom the offer is directed do or not do something or makes any promise in return (ACL, n.d.).
Acceptance- Acceptance is considered as unequivocal statement given by offeree for agreeing the offer. It must be noted that there is no particular form of acceptance. This can be understood through case law Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 527. In this case, Court stated that conduct of the offeree can be determined for considering the acceptance.

Consideration- Consideration is considered as price quoted by the promisor for the promise. For this purpose price is considered in broad sense, which means it is not necessary that price must be of monetary nature or even it has any monetary value (ACL, n.d.).
Intention- for the purpose of contract to exist it is necessary that parties must intend to create legal relations. Generally, presence of consideration is considered as evidence that parties intend to create legal relations. In case promisor quoted price for the promise, then in number of cases it is assumed that there is intention to create legal relations. For the purpose of determining contractual intention, Court adopts objective approach. This can be understood through case law Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd. In this case, Court stated that contract was the consequence imposed by law and through contract Court determines the words and actions of parties. Court further stated that actual subjective intention related to the contract was that factor which was considered by Court for the purpose of determining the existence the contract (ACL, n.d.).
Application:
In the present case, all essential elements of the contract are present such as offer, acceptance, consideration, and intention. Words and conduct of Saurav clearly shows that he has intention to create legal relations because he prevent the Rahul from selling the Plane to anyone else and promise to pay consideration in 10 days. Therefore, there is contract between Rahul and Saurav.

Conclusion:
Rahul can rely on the contract because there is clear intention to create legal relations
2.Counter Arguments by bank: In case Commercial Bank of Australia v Amadio (1983) 151 CLR 447; [1983] HCA 14, Court stated that it was the duty of the bank to act in good faith and make necessary disclosures to the surety if there was any special arrangement between the bank and the principal debtor. Special arrangement means any transaction between bank and principal debtor which was not naturally expected. Therefore, liability of bank arises when case involves any unusual features. Court further stated that bank ensures that surety receive independent advice from experts before entering into contract with the bank.
In the present case, Mrs. Xi speaks very little English and local Australian bank advised her to take independent legal advice from the experienced and certified interpreter before enter into a formal contract with the bank.

From the above facts and cases it is clear that local Australian bank act in good faith and there is no special feature in the case because of which bank is liable to make any disclosure to the surety. Bank also advise Mrs. Xi to take independent legal advice from the experienced and certified interpreter before enter into a formal contract with the bank.
Damages and remedies seek by Mrs. Xi if she wins the case against bank: Mrs. Xi can seek equitable remedies if she wins the case against the bank. It must be noted that equitable remedies are discretionary in nature and Court is not obliged to award the remedies, and these remedies are stated below:
Injunction- Mrs. Xi can seek injunction, which means party can seek orders from the Court for the purpose of directing the other party not to do something. This can be understood through example which states that Court order the party not to continue with the contractual breach.
Equitable damages- in some cases, court can also provide equitable damages. It must be noted that generally Court does not award damages in these cases, but if defendant breach duty of care towards surety then Court can order damages and this ruling was stated in case Hedley Byrne & Co Ltd V Heller & Partners Ltd (1964) AC 465 (HL).

Crime committed by Bank: banks committed a crime if it fails to act in good faith, and engage in conduct which is Unconscionable Conduct for its own benefit. Section 20(1) of the Act states that any person engaged in trade or organization must not engage in any such conduct which is unconscionable in nature within the meaning of law. In other words, it is the duty of the bank to act in good faith and make necessary disclosures to the surety if there was any special arrangement between the bank and the principal debtor. This can be understood through case law Lloyds Bank Ltd v Harrison. In this case, Court stated that bank must inform the surety if there is any special arrangement held between the bank and principal debtor, and such arrangement which directly affects the interest of surety.
Court considers following factors for the purpose of determining the contravention stated above:

Court must not consider any circumstances which were not foreseeable at the time of the contravention of contract.
Court must consider the conduct of the engaged parties and also the circumstances at the time parties enter into contract

References:
ACL. Agreement. Retrieved on 25th August 2017 from: https://www.australiancontractlaw.com/law/formation-agreement.html.
ACL. Consideration. Retrieved on 25th August 2017 from: https://www.australiancontractlaw.com/law/formation-consideration.html.
ACL. Intention to create legal relations. Retrieved on 25th August 2017 from: https://www.australiancontractlaw.com/law/formation-intention.html.
Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd Supreme Court of New South Wales [1989] 2 NSWLR 309.
Commercial Bank of Australia v Amadio (1983) 151 CLR 447; [1983] HCA 14.
Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 527.
Hedley Byrne & Co Ltd V Heller & Partners Ltd (1964) AC 465 (HL).
Lloyds Bank Ltd v

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