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Contract Law : Lawfully Binding Agreement

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Contract Law : Lawfully Binding Agreement

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Describe about the Contract Law for Lawfully Binding Agreement.
According to Halsbury’s Laws of Australia, “A lawfully binding agreement or promise to do an act is a Contract.” Monash University, Commercial law: Contract law (30 Aug 2016)

A contract is an agreement between two parties wherein one party makes a promise of performing an act to another party. Law gives a remedy for any breach of such a contract. Any word or conduct by one or both the parties which communicates that there is a legally enforceable promise is a contract.[1]
A lawfully enforceable contract comes into force when:
One party must make a proposal and other party should accept the same
Each party must give a consideration in return for the duty undertaken by other party
Parties must create a lawful relationship between themselves
The agreement must be complete and certain.
Verbal agreements are oral contracts which are not written down on paper in writing and are binding on the parties to contract. However, verbal contracts may have unique complications to them.[2]
Contracts may be oral or written. Oral contracts are also a form of contract. But more relevance is given to written contracts .As if the contracts are written then they can form a part of evidence. They should be expressed and not merely implied.
Enforceability is majorly formed when a contract is lawfully done and the same have came into force y a lawful manner.
Under contract law, a person who is below the age of 18 is considered as a minor. Any contract entered into with a minor is thus regarded as a not enforceable contract unless it is shown that it was fair and reasonable. Most of the contracts which are entered by a minor are not enforceable. Minors do have a limited ability to enter into an agreement. There are several situations under which a person who is below 18 has the legal capacity to make a contract.[3]
Exceptions to this rule are the Life Insurance, Necessities, and Employment contracts which are enforceable against minors. Although the court may interfere if:
The profits they obtain under the agreement are so insufficient as to be unfair
Any condition is inconsiderate or unfair.[4]
A contract by a minor for necessities is binding on both the parties to contract. Necessities can be determined by referring to the minor’s life and must be necessary to maintain a lifestyle.
Inference can be made from the case of Nash v Inman in which it was held that, “To furnish a contract by a child for necessities is regarded as enforceable on fulfillment of two conditions:
The contract must be for goods reasonable necessary
He must not have already a sufficient supply of these necessities”. Thus the plaintiff was unable to enforce the contract…..
In the present situation the contract will not be enforceable as Julie is a minor and the medium of consent which was given by Samantha by way of text message which was not in the way as asked by Julie. However Julie asked the consent to be given on the facebook page of hers which Samantha failed to follow. So it will not be regarded as an enforceable contract.
As it has been one of the major elements to form a contract that the person contracting should be a major. So it should be a part of the contract which should not be avoided and thus the contract which was dine between Julie and Samantha is void and is not enforceable. Enforceability is through lawful manner and minority is to a legal process of having a contract.
A Privity of Contract is defined as the contract which imposes only on the parties to the contract a right to enforce or be bound by the terms in the contract. It prevents the enforcement of rights and duties of the contract against or by the third party.
It was held in the case of Dunlop Pneumatic Tyre Co Ltd v Selfridge and Co Ltd [1915] AC 847 that although the promise was made between Dew and Selfridge and for the benefit of Dunlop. But Dunlop was not entitled to enforce such a contract as he was not the party to contract.[5]
Similarly in the case of Jackson v Horizons it was upheld that Compensation can be given to Mr. Jackson but will not be divided to his family.And it was Mr. Jackson to believe his relatives in compensation and the court will not grant them independently.
Due to Contracts (Rights of Third Parties) Act, 1999 has different changes have been seen in the contract law. As in that it has been executed that a substantial exception to doctrine of privity.The two distinct rules are:
Non- contracting Party cannot be apprehended accountable for a agreement in which he is not get-together to or is uninformed of.
Anon contracting party cannot take legal action upon to achieve price promised presentation even though the deal has benefited him or not.
But in the present situation if it will be assumed also that there is an enforceable contract between Julie and Samantha. Then also Samantha is not liable t pay $100 to Julie’s mother Martha as it is well established from the above case. In the above case although a contract was being done for the benefit of Dunlop but he was not entitled to enforce as he was not a party to contract. In this case, as the agreement was not done for the benefit of Martha which is clear and similarly Samantha is not liable to pay Martha.
Similar thing was happened in the case mentioned above in which the compensation was given only to the plaintiff who asked for compensation which was not extended by the court to his family.
As mentioned in the contract (rights of third party act 1999) that partied to the contract are being provided with a technique of avoiding the difficulties of third party rights. Under this act although rights have been provided to the third party.[6] also but when no benefit is arising still for the sake of getting something if a person sue the party to the contract for consideration would be void and in such cases no damages would be paid to such a party to contract.[7]
Promissory estoppels are an equitable doctrine under which, in some situations an individual can stop the other party to go back on a promise which is not supported by price.
In order to impose promissory estoppels some requirements have to be fulfilled:[8]
There must be a pre- existing contract or lawful duty which is modified then
There must be clear and unequivocal promise.
Position must be changed
It must be inequitable to allow promise to go back on their promise.[9]
It arises when unfairness can be avoided only by means of enforcement of a guarantee or else be unenforceable for be deficient in providing concern. It is more often than not useful in cases in which a party has relied on another party’s promise, and that other party’s non binding promise will be imposed because to do otherwise would be unfair.
In the case of Mclntosh v Murphy it was upheld that as there was a oral contract to hire the plaintiff at the defendant’s auto dealership. The court found that it was done in favor of plaintiff because he had relied on the promise of defendant and render part performance.[10]
In the case of Walton’s Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 it was held that promissory estoppels arises where the promise is given in circumstances that lead the other party too assume the promise will be performed.
Therefore in the current case promissory estoppels would be relevant as Dave has communicated his acceptance. And have also communicated that he is proceeding towards the work. It was Samantha who ignored the message which she got from Dave as clearly mentioned, as now as upheld in the above case Samantha cannot go back and breach the oral agreement done between them. As it was concluded that the costumes cloth will be expensive still the cloth was asked to be bought by Dave. Rather it would not have been the situation of promissory estoppels if Samantha would have made it clear to Dave to not continue the work as she got someone else who will do the work for her.
Yes, Will be eligible for getting two free tickets for helping the students setting up for the school play. As he arrived on the time which Samantha have mentioned I her mail. And in that mail, nothing as to whom all will be eligible was given. So it is an open mail to all who would come at 12:00 pm for helping Samantha in making the students ready for the play. As Samantha has no one to assist her on the same morning on which the play was about to take place.

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