The legal law is whether the element of intention to be legally bound and consideration between Bryce and Damien.
There are three main requirements for the formation of a legally enforceable contract, intention, agreement and consideration (Do and Duperouzel 2017). The element of intention and consideration will be discussed in this issue.
A lawful binding agreement requires the intention to be legally bound to enter a contract and it must be proved by parties in such situation. The court will do an objective test and examine for surrounding situations to make decision whether there is the intention (Do and Duperouzel 2017).
The court can make a presumption that the relevant parties in a commercial relationship have intention for the contract to be legally bound, while the parties in a domestic or social relationship have no intention to generate an officially binding arrangement (Do and Duperouzel 2017). Woodward v Johnston 1992 2 QD R 214 case is an example for a domestic contract, Mrs Woodward accepted to support her husband with a gravel supplier for 10 percent of the business. She put much effort to work for 18 months, yet she received nothing from her husband as promised. Nonetheless, the court judged that they did not intend to be legally bound. The reason is that it was purely a family agreement.
Second, the intention is infrequently stated, but regularly implied. There is a variety of factors to investigate whether an agreement can be made in a domestic or social contract. If the alleged rights and obligations are clearly stated, there is more likely to be an agreement. Additionally, a party incurs considerable expense, disruption or substantial loss. Take legal action as anticipated by the parties (Do and Duperouzel 2017). For instance, in Todd v Nicol 1957 SASR 72 case for a social contract, Mrs Nicol lived in the Southern Australia, and invited her sister-in-law and Todds to leave Scotland and live in her house. She gave a promise to them a free accommodation and she would give her house to them after her rest in peace. After that, Mrs Todd stopped her job and moved to Australia with her daughter. Latterly, they argued and the Todds received a requirement to leave the house. The court judged that the Todds’ decision to move to Australia heavily relied on Mrs. Nicol’s promise and it will result in substantial inconvenience and detriment to the Todds, if it is not performed. Thus, it can be considered as a legally enforceable agreement.
Nonetheless, the Esso Petroleum Ltd v Commissioners of Customs and Excise 1976 1 All ER 117 case is an example that illustrates the presumption of intention to be lawful bound of parties in commercial arrangement, Esso produced to supply motorists commemorative “coin” to promote their petrol sales. They promised to give motorists a “free coin” for each four gallons purchased. Nevertheless, the Commissioner of Customs and Excise disputed that the coins were “produced in quantity for general sale” and therefore must be subject to tax. The court judged that although the coin could be “free”, it still was a commercial promise and made with an intention to be lawfully bound. If an arrangement is legally enforceable binding, it must bring valuable consideration.
Consideration refers to an exchange of promises between parties and is considered as the price paid for the other person’s promise. Consideration also must be given by the person who receives the promise and the role of promise is assumed by both parties. Consideration is necessary for informal contract that is needed to provide (Do and Duperouzel 2017).
Consideration can valid consist of anything which has value to promisor, even for a small amount. It must be complete in the eyes of the law instead of being adequate (Do and Duperouzel 2017). Thomas v Thomas 1842 QB 851 case is an example that Mr John Thomas send his will via word of mouth to let his wife to have two choices between the house and 100 pounds on the morning of his passing. After that, Thomas’ executives signed the contract with his wife by which she would receive the house and in return pay one pound per year for the “ground rent”. When one of the executors passed away, the remaining one is Thomas refused to complete the conveyance. He attainted that there was no consideration, but the court judged in favour of Thomas’ wife. The court stated that the consideration does not need to be in equivalent value and is still enough to make a legally binding agreement even if relatively small.
If the consideration is valid, it must be provided in response to the promisor’s promise (Do and Duperouzel 2017). Carlill v Carbolic Smoke Ball Co 1893 1 QB 256 can clearly demonstrate this requirement. Moreover, when a consideration is a promise to complete a current obligation to a person who promises, it is not valid (Do and Duperouzel 2017). For instance, in the Stylk v Myrick 1809 2 Camp 317: 170 ER 1168 case, Myrick hire Stylk to do the essential voyage and works on Myrick’s ship. When the ship docked at Cronstadt, two sailors left and there is no replacement for such two sailors. Then, he gave a promise to pay these two mens’ salaries to the crew’s rest, if they do both of their work which is same with these missing crews. After arriving at the port, Myrick denied paying. Thus, Myrick was sued by Stylk. Nonetheless, the court held that the primary arrangement bound them to do all duties on the ship and hence the additional works were not appropriate to be a consideration.
A contract is merely lawfully enforceable, if the parties have intention to be legally bound at the time when the agreement is created. An objective assessment of situations in which Bryce and Damien made the arrangement needs to be accepted.
The question is whether a reasonable individual, in the situations, would focus on the offer which provide the services, namely the tickets to the final games and premium travel and accommodation during the NBA tournament can consider as intended to be legally bound. It goes without saying that Bryce had plan to participate in NBA finals tour and enjoy the final matches and he pay enough money for the tour based on the letter which was accepted by both parties.
Bryce and Damien have family relationship, namely Bryce is Damien’s cousin. This arrangement could not be predicted as not intended to legally bound. The reason is that Bryce paid a large amount of money, and he would stand bear substantial detriment and receive discomfort, if Damien could not effectuate the offer as accepted. Furthermore, Bryce prepared his plans and pay deposit of $20,000 in the new offer for the NBA tournament so that his schedules could not be simply change. Thus, Bryce v Damien case is quietly same with Todd v Nicol case, so the arrangement can be intended to be legally bound. In this case, Damien runs a sports tourism agency in Perth and it can be considered that sports tourism agency is the partner of Bryce in a commercial relationship. Hence, both of them have intention to be legally bound in this agreement.
It is found that the consideration is available on this case. Damien promise to provide the tickets and premium travel and accommodation for the NBA finals tour in June 2018 in return for the promise of Bryce to pay deposit of $20,000 as mentioned in the offer. Consequently, fulfilling the consideration is necessary to make a legally enforceable agreement.
In conclusion, both intention to be legally bound and consideration were complete in this case. Therefore, the agreement was lawfully made between Bryce and Damien.
The legal issue is whether the element of form a contract between Bryce and Damien.
There are three main requirements for the formation of a legally enforceable contract, intention, agreement and consideration (Do and Duperouzel 2017). The element of agreement will be discussed in this issue. An agreement refers to a meeting of the minds that both parties may understand what the essential terms of the contract are (Do and Duperouzel 2017). There are two components in the element of agreement, such as an offer by one party and an acceptance by the second party (Do and Duperouzel 2017). While offeror make offer to express the willingness to these certain terms of agreement, acceptance is the agreement to contract’s terms of offeror or offeree (Do and Duperouzel 2017). There are a variety of following rules of contract in an offer.
First and foremost, sufficient completion and promise which must be available on an offer (Do and Duperouzel 2017). The case of Harvey v Facey 1893 AC552 is an example, Harvey sent an offer to Facey about the purchase of Bumper Hall Pen and Facey replied that the purchase price is at least £900. Harvey accepted this price, yet Facey denied selling its pen and was sued by Harvey. However, the court judged that it was not a promise to sell the pen to Harvey so that it was merely a statement providing information on what terms that Facey might be willing to sell.
Furthermore, if an offer is accepted, it must be intended to make a contract so that advertisements cannot be generally considered as offers (Do and Duperouzel 2017). In Partridge v Crittenden 1968 2 All ER 421 case, Patridge put an advertisement in a magazine with the title “Bramblefinch cocks and hens, 25/-each” and then Partridge was being prosecuted due to statutory offense of providing illegal wild birds for sale. Nonetheless, the court held that it was merely an “invitations to treat and could not be generally considered to be an offer, which people are interested and can make an offer for purchase.
The next rule of law is that an offer can be generated to an individual or the whole world with large volume of products or services (Do and Duperouzel 2017). For instance, in Carlill v Carbolic Smoke Ball Co 1893 1 QB 256 case, the film published an advertisement with offering 100 pounds for the smoke ball users three times per day regarding to diseases. Carlill, who gets influenza for utilizing smoke balls as instructed in the advertisement and asked the corporation to pay him 100 pounds as promised. Unfortunately, the company denied paying him as promised and the issue was sent to court. The court judged that this advertisement is an offer since it is addressed to a specific person who has capability of accepting the offer. Hence, it had intention to create legal bond.
Finally, reasonable time is necessary for an offer to be open and the offer can be revoked withdrawn before acceptance (Do and Duperouzel 2017). In addition, if a counter-offer is made, the original offer will lapse (Do and Duperouzel 2017).
On the contrary, acceptance is unconditional and agreement on the terms of an offer. Additionally, acceptance must be identical to the proposal and communicated to the offeror without a particular form, yet it cannot be undone after being communicated (Do and Duperouzel 2017).
The timing is an important factor to make decision whether the acceptance is effective. In general rule, acceptance of an offer occurs, when it is communicated to offer creator and a contract can be reached at the time and the place where offer is accepted. Moreover, the postal acceptance rule is an exception, which is when acceptance is made by post (Do and Duperouzel 2017).
When the parties contend that the mode of accepting the offer can be sent by post, the offer will be accepted at the time that the letter is addressed in the email. Besides, a binding contract is established at the time when and the place where the acceptance offer is posted (Do and Duperouzel 2017). Adams v Lindsell (1818) 106 ER 250 case is an example, Lindsell sent an offer to Adams to sell him variable wools and required a reply “in the course of post” and it was unfortunate that the letter was delayed in the post. When Adams received the letter, he posted the acceptant letter in the same day. However, before Lindsell had received the letter, she sold the wools to another part. For this reason, Lindsell was sued by Adams due to breach of contract. According to the postal acceptance rule, the court agreed with Adams that a contract was reached at moment when Adam posted the letter.
The postal acceptance rule is applied, when it must be correctly addressed. If the parties specify an alternative mode of acceptance, the postal acceptance rule will not be applied (Do and Duperouzel 2017). However, Telephone, email, and facsimile are variable instantaneous methods of communication that the postal acceptance rule does not apply (Do and Duperouzel 2017). A contract is created at the time when and the place where acceptance is communicated to the offeror is applied (Do and Duperouzel 2017). For instance, in Entores Ltd v Miles Far Eastern Corp 1995 case. Moreover, the acceptance takes place, when the fax is received. N M Superannuation Pty Ltd v Baker (1992) case is an example.
A contract is legally enforceable, when the parties have intention to generate legal bond at the time that the contract is made. There is an objective assessment of these situations that the agreement, which is created by Bryce and Damien, and needs to be handled.
In this study case, the question is about whether an agreement’s requirements can be satisfied to make a legally enforceable agreement between Bryce and Damien.
Bryce asked Damien a contract of NBA tours in June 2018. After Damien’s checking the available places left, Damien gave an offer to Bryce with $25,000 price including premium travel and accommodation in each city. This is considered promissory and sufficiently complete since it clearly stated the service that Damien’s company can provide for a specific price. There is no an invitation to treat to a particular person as Bryce. Damien sent the offer in one day of March 2018, and this offer was open in a specific period of time. However, the budget of Bryce had limitation so that the offer is unacceptable. Moreover, there is no change in other terms of the agreement.
Nonetheless, Bryce made a new offer to Damien that he had plan to enjoy NBA and needed Damien to help him places to participate such events. Damien sent an email to Damien regrading to the National Basketball Association finals tour, which would take place in June 2018 with the package including premium travel and accommodation in each city for $20,000 with the accounting business. This is considered promissory and sufficiently complete since it clearly stated the services that Damien’s agency can provide for a detailed price. An invitation to treat is not available on a particular individual as Bryce. The offer, which sent in one day of March 2018, and was open in a specific period of time. In the next day, Bryce asked Damien to make an offer with new price with $20,000 by email before 2 hours when the business closed and then, Damien reply Bryce’s email immediately with a confirmation. Therefore, such email can be a valid offer. Damien were happy with this offer and the email of Damien, which sent to Bryce, or is considered as an acceptance letter to Bryce in the same day.
If the letter is considered as acceptance, it had the same terms with offer and was made in applicable time. In general, a contract will be reached, when Bryce receives the acceptance letter of Damien. Unfortunately, there was an unexpected event that affected to Bryce’s plan of NBA tours in June 2018. Damien checked the tour documentation, and he had dealt informally with Bryce that he had not booked flights and accommodation for Bryce. Bryce desires Damien’s premium travel and accommodation instead of the cheap ones, when he received the notice from Damien. However, email which is an instantaneous method of communication so that the postal acceptance rule does not apply.
From the mentioned above, Bryce can require Damien to provide him with the premium travel and accommodation for the tour. The offer between Bryce and Damien had this term not only in the first offer, but also the second offer. When Damien send the acceptance letter to Bryce through email, Damien accepted that he will provide Bryce the premium travel and accommodation for the tour.
In conclusion, the contract between Bryce and Damien is a legally enforceable agreement. The reason is that Bryce made a valid offer and Damien lawfully accepted his offer. The agreement was made at the time when and the place where Damien posted his letter of acceptance.
List of cases referred to:
Woodward v Johnston 1992 2 QD R 214
Todd v Nicol 1957 SASR 72
The Esso Petroleum Ltd v Commissioners of Customs and Excise 1976 1 All ER 117
Thomas v Thomas 1842 QB 851
Carlill v Carbolic Smoke Ball Co 1893 1 QB 256
The Stylk v Myrick 1809 2 Camp 317: 170 ER 1168
Harvey v Facey 1893 AC552
Partridge v Crittenden 1968 2 All ER 421
Carlill v Carbolic Smoke Ball Co 1893 1 QB 256
Adams v Lindsell (1818) 106 ER 250
Entores Ltd v Miles Far Eastern Corp 1995
N M Superannuation Pty Ltd v Baker (1992)
List of other sources:
Do, Christina and Duperouzel, Christian. 2017. Understanding Business Law (Custom publication for Curtin University: Business Law). 3rd Ed. Chatswood: LexisNexis Butterworths.
Duperouzel, Christian. 2017. “Lecture 3: Making a contract”. PowerPoint lecture notes. http://lms.curtin.edu.au.