Contract Law - Sample Answer

Notes on Sample Contract Question: This question was focussed on the agreement aspect of contract law and also involved the elements of intention and consideration. Leo would be the plaintiff seeking to enforce the contract against Jasmine. This question has two main contract law issues that need to be addressed. First, is there a binding contract between Leo and Jasmine? Second, if Leo withdraws his offer on Thursday can Jasmine still accept it on Friday? Is there a binding contract? Given that Jasmine and Leo were related as brother and sister, it is assumed that there is no intention to create a legally binding contract between them: Balfour v Balfour. This transaction was economically serious so it could be argued that even though Leo and Jasmine were related this agreement was still legally binding as seen in the case of Wakling v Ripley. In Wakling v Ripley the court found that someone who left their job and life in the UK and came to Australia was relying on an economically serious commitment and as such the promise by her family member was enforceable because an intention to be legally bound was recognised by the court. In this case even though the amount of money is serious ($45 000) Jasmine has not made any serious commitments or relyed on this promise as in the case of Wakling. The court will probably find that there was no intention to create legal relation between Leo and his sister and there for no contract. In relation to issues of offer and acceptance, Leo may waive his right to have Jasmines acceptance communicated to him but may not insist that a failure to communicate is acceptance by itself. This rule is established in the case of Felthouse v Bindly. Furthermore, an agreement is not formed until Jasmine has communicated her acceptance to Leo as established in the case of Powell v Lee. Can Jasmine accept if the offer is withdrawn? Based on the case of Dickinson v Dodd Leo is entitled to take back his offer at any time even if he has set a time limit on keeping the offer open. If Jasmine

paid a deposit or gave Leo something of value as consideration for the offer to remain open until Friday this offer period can be enforced: Goldsborough Mort & Co Ltd v Quinn The cup of coffee that Jasmine purchased for Leo would still be seen as consideration in that even though it is not valuable it is still something of value. This rule was established in the case of Thomas v Thomas and would apply here. Leo would be obliged to keep the offer open until Friday. In conclusion, in relation to whether Jasmine is liable to pay the $45 000 it would appear that since there was no valid acceptance of Leo’s offer and probably no intention to create a legal contract between the parties, there was no agreement and no contract. Silence is not acceptance and cannot be deemed acceptance. In relation to whether Jasmine is entitled to accept Leo’s offer on Friday despite his revocation on Thursday, Jasmine would indeed be entitled to accept the offer as she paid for the offer by buying a cup of coffee so that it may remain open until the end of the week.