Business Law – Australian Standard

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The more easy manner for complying with that of formalities requirements over the provision are simply just entering in legal written form of contract that signed by the two parties. Although the same is not essential. It shall be sufficient if any memorandum or else note of agreement is executed and the same might, to take an instance, be an informal document like that of letter or diary note and is shall be necessary for party against which the actions are being brought for having signed it. These memorandum or notes must, though, contain all material terms like that of consideration, subject matter and identity. It is further possible for over one memorandum or note in being joined together; hence, if the material terms are being contained over one note as well as signature over another, it could be be possible for joining these documents combined for satisfying all of the required formalities. The applicable act in this regard is the Instruments Act 1958 (Willmott et al 2013; Carter et al 1996).

It is also possible for the non-contractual form of rights like that of proprietary rights in being vested with parties for being unenforceable contract. Any action over debt may also be potential wherein a debt has raised pursuant to any unenforceable contract. In alternate, some remedy could be available over restitution (Willmott et al 2013; Carter et al 1996).

Even though formalities requirement is designed generally for preventing frauds (as an original intent of Statute of Frauds), adherence strictly to the requirements could themselves lead to fraud through paving way for those who have entered in contracts like these for denying overall existence of contract or else otherwise strive for avoiding their obligations promised by way of reliance over non-compliance to be defence for the contractual claims. This has resulted in the development of equitable doctrine for part performances. This specific doctrine offers that wherein a plaintiff has carried out partly the contracts, relying over the promise of defendant, equity could enforce this contract even though there is non-compliance with that of formalities (Willmott et al 2013; Carter et al 1996).

Case a

In this case, there is a circumstance of Livestock Brothers carrying out partly the contract, relying over the promise of Dorper Sheep made in the informal agreement by way of letter. By applying the Doctrine of Equity it can be stated that Livestock Brother had right to purchase based on the informal contract and as Livestock Brothers have complied with a requirement of “response” within 14 days. Thus, a legal action by Livestock Brothers could yield a judgment in favour of them (Willmott et al 2013; Carter et al 1996).

Case b

In case b, there is a genuine instance of failure to commit with the informal contract by Livestock Brothers on account of factors beyond their control. Hence the transmission error makes the failure by Livestock Brothers to comply the response within 14 days clause leading to them losing the right to purchase (Willmott et al 2013; Carter et al 1996).

- Question #3

In the case presented, Stuart has a written, signed and legally binding lease contract with Westphalia Marts P Ltd for a retail commercial space in a mall. As per the contract, the duration of lease is 5 years and the weekly rental of AUD 1000. However during 3rd year of his lease Stuart renegotiates the terms of his lease contract and has the rent revised to AUD 700 per week and possibly earlier termination of the contract. The same seems to be an oral agreement and after about 1 year Westphalia Marts P Ltd on account of certain business plans sought Stuart to pay the differential rent amount (AUD 300) for the previous year and henceforth pay AUD 1000.

As per the Australian Contract Law, there are 5 different elements that are essential and necessary for contract formation that is legally binding, (i) an agreement, that is, offer & acceptance, (ii) consideration, that is, bargain requirement which in general is supply of services, property or money or else promises for undertaking, or else not undertaking a specific act for exchange of certain thing of value, (iii) capacity for entering into legal relations like for instance a sound mind, being of legal age, etc. (iv) intention amongst the parties for entering in legal relations, that is, agreements of private non-commercial nature amongst the members of family may fail to indicate the intention for entering in contract that is legally binding and hence could not be enforced, and, (v) certainty, that is, the contract having to be binding, clear, certain and complete (Willmott et al 2013; Carter et al 1996). There could also be various other requirements of statutory nature or else formalities that guide the formation of contract for specific classes in contracts. In most of the jurisdictions, contracts shall not be required for being represented in form of writing. Although, exceptions do apply, specifically in case of contracts concerning sale / lease of lands (Willmott et al 2013; Carter et al 1996).

In the case presented, despite the formation of contract with respect to amendment in terms of the contract, that is lease rental, being formed clearly between Stuart and Westphalia Marts P Ltd, the same is being undertaken as an oral contract rather than written / signed format. Even the oral agreement can also constitute a legal and valid binding among parties, the onus on the evidence to prove so lies with Stuart. However given the fact that Stuart actually had the negotiation for amendment and having paid the revised rent for about a year without any objection or notice from Westphalia Marts P Ltd wither in writing or in oral form, Stuart has the legal claim and right for continuing to pay the agreed revised rent and not comply with the new requirements of Westphalia Marts P Ltd.

References

ACCU. 2016. ACCU. Available at:

[online] https://www.accc.gov.au/ [Accessed on: 16th Aug 2016]

Carter, J.W., Harland, D.J. and Lindgren, K.E., 1996. Contract law in Australia. MICHIE.

Corones, S.G., 2013. The Australian consumer law. Thomson Reuters, Lawbook Co..

Griggs, L.D., 2011. Australian Consumer Law-An overview, unfair contracts, consumer guarantees and remedies. In Australian Consumer Law (pp. 1-9).

Willmott, L., Christensen, S., Butler, D. and Dixon,

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