Table of Contents
Natasha has been accused for the breach of contract by Montana. Natasha is the owner of “Natasha’s boutique” in Perth, where Montana chose a garment to purchase. As the garment was defected due to a spot on the fabric, the price was reduced from$129 to $ 119 in both the party’s consent. Natasha’s opposition party Montana was still unable to make her mind regarding the purchase and the maximum time to take the decision and purchase the garment was finalized to be taken by close of business on Friday. Though Montana made up her mind and enclosed the cheque for $109 on Thursday, it did reach to Natasha on Monday. As the cheque was not reached to Natasha within the due date, she sold the garment for which the agreements were made between both the parties. Both the parties can communicate via phone calls, online portal and face to face discussion. Even though, the postal communications were used as the means of communication for the contract. The final price quotation for the garment was reduced by Montana, which was not discussed earlier. Secondly, Montana was asked to telephone Natasha by the end of business day on Friday. No such telephone calls were made to Natasha for the final conformation. Most remarkable point is Natasha is being accused for the breach of contract. The issue for the considered case is was there any valid agreement formed between Montana (offeror) and Natasha (acceptor) regarding the cloth including the final price quotation and the due date of payment?
Secondly, the cheque reached delayed to Natasha due to the wrong postal address and pin code related issues. The incident creates the issue: “is the postal acceptance of cheque is valid in this case when both the parties can easily communicate to each other by another means of communication?”
A contract is considered as the agreement binding legally which identifies and governs the duties and rights of the parties associated to the agreement (Eldridge, 2019). The agreement is considered as valid when it meets the approval of law and legally enforceable (Bigwood, & Mullins, 2018).
The Australian contract law depicts the first key for the validity of a contract is the agreement, which involves offer (offering the agreement proposal) and acceptance (agreeing and accepting the same). There are no such specific format for constituting an offer, similarly, acceptance could also be written, oral or by conduct. The Australian contract law defines the five factors of a valid contract are agreement, consideration, the intention for legal relations, capacity and the formalities of the contract. Consideration is crucial aspect for the contract, which determines the exchange of money or any object between the promisor and promise (Carter, & Peden, 2003). When there is a consideration, the contract is legally valid. The Contracts law ensures a contract’s validity with the legal relations between the offerer and the offeree (Bigwood, & Mullins, 2018). The another element which determines the validity of a contract is the certainty. The certainty of a contract refers to the regulations, conditions and terms agreed by both the parties entering to the agreement. The last factor which governs the validity of contract is the capacity of both the parties entering to the contract. The age of the pirates, legality and previous legal impositions determine the capacity of the party to enter to the contract. It is indifferent for both the parties (offeror and offeree). If each of the elements are present in a contract, it is called recognised as a ‘valid’ contract by the Australian contract laws (Hemming, & Daniel, 2018).
The Australian contract law defines the communication of acceptance of agreement and the postal rules. According to Harper, et al., (2019) the acceptance decision is required to be communicated. The time when the acceptance of offer is received, the agreement is concluded. The Australian contract law recognises both instantaneous and non-instantaneous communication modes for communication of the agreements between both the parties (Goldberger, 2016). As per the provision of the Australian contract law, there is a special rule in case of the communication of agreement which takes place by post. The issues associated to the postal rule are often regarded as the controversial parts of the law of contracts. These rules are developed as the exceptional case to the general offers and acceptances of contracts. The agreements conveyed through posts get long time to be reached to the recipient. According to the revocation and formation of a contract, the delay in posts create issues in agreements, as there is uncertainty regarding the receiving the post on time (Defossez, 2019).
When the offer of the contract is likely to be accepted by the post, is needed to form the place and time of posting the acceptance and the place and time at which the contract will be taken. However, the rule is not valid when the offerer does not receive the acceptance. The posting of contract is complete when the offeree recieves the offer and the offerer receives the acceptance (Postal acceptance rule - Sewell & Kettle Lawyers. 2020). In simple terms, when the postal rule applies, acceptance of the contract is recognised when the acceptance is posted to the offerer. However, it is noteworthy that the postal rule of acceptance is not valid for every instance. As suggested by Che Hashim, (2018) the rule is valid in the specific instance when the offerer impliedly authorised the other party to manifest the acceptance of offer by postal communication. The postal rule of acceptance will not be valid when there is the face-to-face communication or other instantaneous communication is possible between both the parties.
The verbal contract took place between Natasha and Montana. In the verbal contract, there was offeree (Natasha) and offerer (Montana). The offer proposed by Montana was agreed by Natasha. Moreover, in this contract, there was consideration. The price for the costume was agreed as $119 by both the parties. The contract intended to create the legal relations between both the parties as there were some terms and conditions. The final decision of Montana was agreed to be conveyed within the end to business day on Friday. If the due date surpasses, their will be no validity of the agreements and contracts took place between them. Moreover, considering the ‘capacity’ of a legal agreement, it could be stated that both the parties possesses the capacity for entering to a legal contract. Though some of the factors are fulfilled in the instance, some are not being compelled. The price which was discussed between both the parties was ultimately changed by the offerer without taking consent of the offeree. Secondly, as per the verbal communications, offerer was to telephone the offeree regarding the final decision regarding the agreement.
No such telephonic calls were made; instead the cheque was posted by post to the offeree. Applying the Australian contract law, it could be stated that the validity of the contract between the parties are not justifiable as the terms and conditions were not maintained. Secondly, applying the postal rule of acceptance, it could be seen that both the parties had the option for instantaneous communication. Both the parties have communicated via online and telephonic communications. Secondly, both of them were of the same locality, the face to face communication between both the parties were possible. In fact, Montana and Natasha met when the dispute regarding the breach of contract arose. As the instantaneous communication is possible between both the parties, it is not acceptable to send the documents via post. The postal address and pin codes were wrong, which delayed the receiving of contract. Moreover, the contract would be valid when the offeree accepts the offers and provides the acceptance of offer. The offeree, Natasha did not send any such acceptance; hence, the agreement is not complete. Offerer has changed the price, without taking permission of the offeree, which does not compel with the provisions of Australian contract law.
The analysis and application of law depicts that there was no valid contract between both the parities as it does not comply with the provisions of a valid contract guided by the Australian contract law. Hence, the offeree (Natasha) has not breached the contract, as the contract is not valid and enforced by law itself.
Adam, Bob, and Chive started the business along with their study. They advertise their brand and start working with some good clients. They entered into a partnership agreement to operate the company jointly. Through their partnership, a company is developed in the name of ABC Mowing Service. The company was engaged in grass cutting and removing services. The joint operation of the company allows them to separate their job differently. Adam was involved in cutting the grass. Adam was managing the debris and waste. Chive was engaged with accounting and finance. They had been smoothly managing the company. At a point, Bob and Chive focused more towards study. Their lack of concentration and engagement made Adam perform the task differently. Adam is overpowered with the instinct of earning more and personally handled the company's client.
Adam as a part of ABC Mowing Service employed the company’s name and fame to handle the client personally. The profit earned in cash form is deposited in the personal bank account of Adam. Chive traced some client’s transactions with the bank account of Adam. They came on the verge of breaking partnership.
Adam’s engagement with the clients of the company weakens the partnership agreement, and Adam I found to have been broken the trust of other partners have sincerely and honestly working and sharing profit with him. Adam’s act is found to be misguided and is not fruitful while sharing a workspace. Adam has broken the trusts of the partner, and therefore, Bob and Chive moved to seek legal advice to handle the situation effectively and efficiently to strengthen their partnership if settled and disintegration of the current partner taking strategic action after the legal procedure.
The rule that dominates the case is the rule of partnership act and the acts related to the joint venture. The partnership act is a widely accepted legal framework while managing the joint venture of the company or managing the ownership when more than one party is involved. Through the partnership act in the common contract law context, the partnership Act regulated the relations of partners to the person dealing with the company's partner, the relationship of a partner to partners, the dissolution o venture among the partners and its succeeding consequence and the rules to determine the partnership existence (Fletcher, 2001). The partnership is not considered to be an exhaustive code of law and the common law and rules of equity. The act also focuses on limited liability partnerships and involved limited partnerships. The partnership act existed since 1891, and the law is applied when the issue evolves in the partnership relation.
There are certain rights and duties specified in the act. The law enumerates the management of the business, ideas, book of account, ownership, and proper use of the company's property and equally sharing the profit (Partnership Act 1891, p.16).
As per the partnership law, it is found that the people operating business jointly will share the income in a similar way (Partnership Act 1891, p.29). The debt and obligation of the company will be shared equally. All debt and obligation will be shared accordingly.
A partnership agreement is known to be a contract between the partners in which some and conditions are set, and the terms regarding the ownership distribution and sharing of loss and profit are also defined. Duties and power management are also distributed accordingly.
The act involves the misapplication of the property and money that has been available with the organization. In this case, the personal property of the company has been exploited by Adam for personal gain. The use of any kind of property is a breach of the system.
The case also involves the fraud representation of the company’s goodwill for the personal gain.it is a breach of partnership law for breaching the partnership agreement to jointly operate and share the profit. The Australian legal system offered great support to the partnership business with the partnership Act 1891 that provides a proper direction and resolution to the cases involving the partnership issues (Partnership Act 1891).
The case of the breaching of the partnership agreement by Adam is considered as he acted against the partnership agreement. The partnership Act as a part of the common law framework to deal with the partnership issue, a partner cannot misrepresent the company’s reputation and goodwill for personal gain. A partner is not allowed to exploit the property of the company for personal gain and profit.
Adam as a partner in the joint venture took advantage of the situation of the absence of the other two partners and accessed the information of clients and exploits the goodwill of the company to gain personal profit (Lindsay, Kirby, Dluzewska & Campbell, 2015). Adam gained a lot of profit with the client’s information available in the company and goodwill of the company. Adam earned a lot in the absence of Chive and Bob.
In the partnership act, there are certain rights and duties of the partners that require to be followed. The partners need to share the profits and obligations of the company accordingly. The sharing of rights and duties leads them to hare profit accordingly. The share of profit will be equal and as per their performance and obligations (Deva, 2006).
Adam is found to be a hardworking person and is engaged more in the activities of the company in terms of having rights and sharing the profit. But Adam breached the partnership terms when he employed the client’s information and deposited the cash into his account.
the discovery of the clients’ transaction with Adam affected the partner and they found that there is complete negligence of the term and the act in this regard reveals," If a partner in a firm, other than an incorporated limited partnership, being a trustee, improperly employs trust property in the business or on the account of the partnership, no other partner is liable for the trust property to the persons beneficially interested in it” (Partnership Act 1891, p.16). The misappropriate using the trust property will affect the partners.
It is found Adam had broken the terms and conditions of the partnership agreement as per the Australian law. Adam took advantage of the absence of two other partners, and broke the trust and breached the partnership agreement. The law prohibits the use of the company’s property for personal gain. The breach of the agreement made it mandatory for Adam to return the earned money that he acquired using the contact of the company’s client. The use of the company property in the form of company client contact and the good of the company is a wrong act. he is found to have breached the obligation as a partner. As they have previously agreed to work on the company along with continued study. Adam would have been compensated for extra work that he has performed as a partner. But instead of working with the company, he exploited the company's resources to achieve personal profit.
Adam is here liable to pay compensation for the loss and damages done to the company and its goodwill in the absence of Bob and Chive. Bob and Chive have few options to settle the issue with the partner Adam. They can settle the matter making Adam transfer all cash that he has earned from the client. The partner Adam can be removed as a member of the company and seek compensation higher than he has earned in the absence of Bob and Chive. Adam is liable to pay compensation for the damages done to the client. Chive as an accounting expert can understand the average income that Adam might have earned in their absence and seek compensation accordingly. The compensation sought must be paid by Adam. In case of failure of the payment, he can be sued in a higher court. The partnership agreement can be revoked and the company can be started with the joint venture of Chive and Bob.
Firstly, an organization is by law isolated by law from investors, managers, advertisers, and so on, as the distinct legal substance from its individuals, and as such it is subject to rights and is dependent on particular obligations. This is the first focus of the House of Lords on the Salomon-v Salomon situation and Company Ltd. AC 2. The judgment exemplified to a certain extent by Lord Macnaghten 's decision in the above text of the task, not least that where the obligation of the individual is limited, the obligations of the institutions may not be considered only subject to outstanding situations (Veldman, 2018). Under the concept of limited risk, the owners of the organization can not be liable or accountable in normal circumstances for the ensuing commitments of the organization that only the unpaid transactions of owners and investors will be put at risk and not the obligations of the institution. The Salamons case rule firmly resolved that a company has a distinct legal personality to that of its owners and was extended to a wide variety of cases (Veldman, 2018).
The principal object of the Law is to regulate the relation in the general public between people. The legitimacy of people's protests and oversights is addressed on the basis of their aesthetic. -- of those demonstrations that do not adversely impact other people's excitement are considered legitimate while the demonstrations that conflict with others' rights are deemed unlawful (Ali, 2019). In this way, legislation upholds such responsibilities on humans for the protection of human excitement. In this way, rights and responsibilities structure the notion of making a decision regarding the legitimacy of keeping an eye on the act (Ali, 2019). The law places a responsibility on ludicrous and unconstitutional acts that are assured to be carried out by legitimate approval. The law is preoccupied with regulating the human lead the concept of valid approvals. The law being concerned about direct managing the human being, the idea of genuine character maintains a substantial status topic on the grounds that without an individual, there can be no rights and obligations (Waqas & Rehman, 2016).
The key impacts of an organization's growth are twofold. Second, its members, and their transferees, become an affiliate's persons, and all things considered are granted privileges. Pre-famous now include, as a principle, forces of impact in the widest terms of the luxury of showing an interest in, by registering to vote, the management of a company by means of an agreement in place and the abolishment of its directors, the availability of advantages and the various choices of the establishment when all is said and done, and, furthermore, the capacity to carry out the organization. (Waqas & Rehman, 2016). So when discussing the registration of a corporation under the Corporation Act, we identify the organization or the corporation as an entity of its own, having its own distinct personality. (464 words)
The Promissory Estoppel doctrine is an authentic law and is invoked in the case of breach of agreement or of any dispute regarding the govt. (Baird, 2019). This doctrine figure, it is the key rule that all courts of value proceed when the parties who, shortly after, through their protests or with their consent obtained, enter into a course of negotiation that leads one of the gatherings in simple and specific terms with certain valid outcomes, to take the view that the exacting rights under the agreement do not come into force (Baird, 2019). This law is an overarching principle. It is a doctrine developed by equity in order to evade injustice, and although generally referred to as the authentic 'promissory estoppel,' the doctrine belongs neither in the sect of an estoppel nor any common contract or an agreement (Maute, 2017). The accurate concept of aforesaid doctrine is that where another participant has established a strong and unmistakable commitment by speech or writing to another, which again is meant to develop contractual consequences or impact a formal contract that will emerge in the process, realizing or attempting that some other participant will respond ensures that the other party has to comply (Maute, 2017).
Waltons traded for the property rent requested by Maher with Maher. The meetings Maher understood would destroy a present structure and build another, involving Waltons. Comprehension of terms and leases was achieved. In October, Waltons experts sent a draft loan to Maher's experts, and a few amendments were examined. Maher then sent a modified rent to Waltons (Harris, 2018). Maher informed Waltons in November that the destruction began, and it was essential to finish the procedure quickly in these ways. Shortly afterwards, Waltons started to question the rent and educated its experts to the "fair" side of the deal. Maher started building in January. Soon afterwards, Waltons told Maher that she did not want to proceed with approximately 40% of the research (Harris, 2018). As Brenan J said, for the purpose of a case being acknowledged under the stoppel, it is necessary that the complainant prove that,
(1) the offending party has decided that the offended party is in a specific legitimate relationship, or expects a specific legitimate relationship between the offending party and the respondent and, in the final case, that the litigant cannot pull back;
(2) the contender encouraged the person offended to receive such suspicion or such a desire;
(3) behaving or not working on the basis of the fear or the wish of the offended party (Harris, 2018) ;
(4) it was known to the litigant or was intended to do so;
(5) if the supposition or wish is not fulfilled, any behavior or inaction of the offended parties shall become weak;
(6) it has failed, by satisfying suspicion, desire, or something else, to avoid the disorder of the respondent (Harris, 2018).
Based on the failure of the case to meet these facts, the doctrine of promissory estoppel could not be applied as (on their finding of actuality) the supposition identified with the presence of present realities, not future desires. (499 words)
Ali, M. (2019). From Separate Legal Entity to Economic Unity: The Criminal Liability of Parent Company. Media Hukum, 26(2), 158-167.
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Che Hashim, R. (2018). Postal rule in acceptance via email. Commonwealth Law Bulletin, 44(1), 111-127.
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Eldridge, J. A. (2019). Codifying Contract Law in Australia: Issues and Obstacles (Doctoral dissertation).
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Goldberger, J. (2016). An overview of developments in key areas of Australian contract law. Commercial Law Quarterly: The Journal of the Commercial Law Association of Australia, 30(1), 17.
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Harris, A. P. (2018). The Doctrine of Promissory Estoppel in an Arm's Length Commercial Transaction in Tennessee: A Primer. U. Mem. L. Rev., 49, 813.
Hemming, A., & Daniel, M. (2018). Halsbury's laws of Australia: contract GC I_II_V. Update of contract GC I, II, and V.
Lindsay, K., Kirby, D., Dluzewska, T., & Campbell, S. (2015). " Oh, the Places You'll Go!": Newcastle Law School's Partnership Interventions for Well-Being in First Year Law. Journal of learning design, 8(2), 11-21.
Maute, J. L. (2017). Race Politics, O'Hare Airport Expansion, and Promissory Estoppel: The More Things Change, the More They Stay the Same. Hastings LJ, 69, 119.
Partnership Act of 1891. (2009). Retrieved 18 June 2020, from https://www.legislation.qld.gov.au/view/pdf/inforce/2008-07-02/act-1891-007
Postal acceptance rule - Sewell & Kettle Lawyers. (2020). Retrieved 18 June 2020, from https://sklawyers.com.au/dictionary/postal-acceptance-rule/#:~:text=%E2%80%9CThe%20general%20rule%20is%20that,intended%20that%20his%20offer%20might
Veldman, J. (2018). The Separate Legal Entity and the Architecture of the Modern Corporation. Veldman, J.(2018)'The Separate Legal Entity and the Architecture of the Modern Corporation', in Boeger, N. and Villiers, C.(eds.) Shaping the Corporate Landscape: Towards Corporate Reform and Enterprise Diversity. Hart Publishing, 1-424.
Waqas, M., & Rehman, Z. (2016). Separate Legal Entity of Corporation: The Corporate Veil. International Journal of Social Sciences and Management, 3(1), 1-4.
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