LST2BSL: Common Law - Business Law and Ethics - Assessment Answer

Law Assignment

Assignment Task

PROBLEM

Jen is organising a surprise party for her grandparents’ 50th wedding anniversary. She looks online and finds ‘Tiny Tim’, a professional DJ who is just 17 years old. She emails Tim and asks him what he charges for his DJ services. Tim emails back the next day, providing a brochure listing different kinds of services he provides, at different rates. Jen then replies, saying:

‘I am interested in booking a DJ for my grandparents’ anniversary celebrations on 2rd April. Would you be available on that date? It looks like your ‘weekend special’ package would be most appropriate, because I expect the party to last about 4 hours. But what if we go beyond that time limit? And do you have a good collection of Cuban music? That is their favourite style of music.’

Tim emails back: ‘Yes, I have plenty of Cuban music, and I’m available on 2nd April. If you want me to stay longer than 4 hours, then I charge $30 per extra hour.’

Jen does not reply to Tim, because she hears from a friend who is willing to provide DJ services for free. Jen wants to know whether she can change her mind about hiring Tim.

Jen also wants to arrange a cake for the party. On Sunday she goes into Delish Cakes, a local cake store, and speaks to the owner, Simon. Jen explains that the party is for her grandparents, and will have a Cuban theme. Simon suggests a particular style of cake, and Jen agrees that it would be perfect for the party. Simon says that he can specially make some Cuban-style fondant cake decorations. Jen is about to catch a train, so she doesn’t have time to finish filling out the order form. She gives Simon her details and takes the order form with her, saying that she will return it to Simon in the next couple of days.

On Tuesday, Simon calls Jen. She doesn’t answer, so he leaves a message, asking for the order form to be submitted. He also says that he will begin making the Cuban cake decorations. Jen listens to the message but doesn’t call Simon back. Over the next couple of days she is too busy to complete the form and give it to Simon. By the end of the week, Jen is starting to worry that Simon’s cake will be too expensive. On Friday she decides that she will simply make a cake herself. She calls Simon and tells him this. Simon is furious – not only has he spent hours making the Cuban decorations, but because they are unusual he will not be able to use them for any other customers’ orders.

Finally, Jen wants help in setting up the venue for the party. She sends a text message to her cousin: ‘Hey Adam! I need you to spend a few hours helping me put up balloons and streamers for the party on Saturday.’

Adam replies ‘Ok, I’ll help you – but what’s in it for me? What will you give me in return?’

Jen texts him again: ‘Remember how I helped you with your college assignment last month? That’s the payment. It’s time to return the favour.’

Adam is not convinced. Jen texts her other cousins, in case Adam doesn’t turn up:

‘Calling all cousins! If you come and help me prepare for the party on Saturday, I’ll pay you $20.’

Jen’s uncle Bill sees the text message on his daughter’s phone. He decides to help Jen set up for the party on Saturday, so he can get $20.

1. Is there an enforceable contract between Tim and Jen?
2. Is promissory estoppel relevant to Jen’s dispute with Simon from Delish Cakes?
3. Is there an enforceable contract between Jen and Adam? 4 marks 4. Is Bill entitled to the $20 if he helps Jen set up for the party?

Issues

1. Is there an enforceable contract between Tim and Jen?
2. Is promissory estoppel relevant to Jen’s dispute with Simon from Delish Cakes?
3. Is there an enforceable contract between Jen and Adam?
4. Is Bill entitled to the $20 if he helps Jen set up for the party?

Relevant law

Offer, acceptance, consideration, intention and capacity are the five essential elements that are required to make a binding contract under the Australian contract law.

An offer is a kind of proposal which is made by an offeror to an offeree. It is the offeror intention which is communicated with a belief that his desires are approved by the offeree without making any changes to the terms of the proposal. An offer can be made to an individual, to a group of persons or to the world at large. The basic rule is that an approval must be received from such person (s) to whom an offer is made. If an approval is received by any other person then an offeree then such approval has no value in law.

When an acceptance is made to an offer and an offeree agrees to comply with the terms of an offer without brining any change to it, then, it is called an acceptance. It is necessary that an acceptance must be communicated by an offeree to an offeror in order to make it binding upon the parties. If an offeree does not communicate an acceptance and remain silent then it is not an acceptance in law. However many a times there is an implied acceptance and in such situations even a silence can be considered as a valid acceptance in law. In such cases an offeree makes an implied actions which are deem to be considered as an acceptance.

Also, when instead of making an acceptance, an offeree makes an enquiry regarding an offer, then; the same cannot be regarded as an acceptance in law. Rather, the same is mere inquiry and is no equivalent to acceptance in order to make a binding contract amid the parties.

Also, there are situations under which one party undertakes an action on behalf of another party on a belief that such another party will enter into a contract with him if such actions are performed. The belief is supported by a promise which is made by such another party, then, in such situation if the first party undertakes such desired actions then the second party is compelled to fulfil his promise and is obligated under the rule of promissory estoppel. The

party making the promise is then compelled to comply with the terms of his promise because it is on the basis of such promise some other person has undertaken actions which he would otherwise have no taken.

When a valid offer ad acceptance is made by a party, then it is necessary that such exchange of promises must be supported by something of value and is called consideration. A consideration only makes an agreement binding upon the parties. A valid and lawful consideration is one which is made by one party to another either at the time of making the contract or before the formation of contract. If a consideration is made which is a past consideration, that is something which is already been done then such kinds of consideration has no value in law and any agreement supported by such past consideration cannot make a valid contract.

Further, every agreement must be made between the partied that are major, are of sound mind and are not prohibited in law. Such parties are capable to make a valid contract. Also, the partied must also have legal intention to make a binding contract. Absence of legal intention does not make a contract.

Thus, all contract essentials must be present in order a make a valid contract in law.

Application of law

Issue i

Jen finds online Tiny Tom who is seventeen years old and who is a professional DJ. Emails are exchanged amid them. When Jen mailed Tim to enquire about his charges, then, there is no offer that was made because as per Stevenson, Jaques, & Co v McLean case, an enquiry is neither an acceptance nor an offer. Tim relied back through an email. The same is just a reply to the query of Jen and thus is not an offer. Jen again send an email in which he shows his interest to book his DJ service and asks his availably on 2nd April, Cuban music and his extra charges for the services. The specifications asked by Jen again are not an offer under the law of contract. Later the reply by Tim to Jen answering his questions is also not an offer in contract law.

There were no further communications amid the two. Thus, since there was no offer at the first place by either of the parties which can be accepted, hence, there is no contract that is formed between the two. Thus, Jen can easily change her mind about hiring Tim.

Issue ii

Jen visited Delish Cakes store and met Simon (owner). Jen wishes a Cuban cake. Thus, there is no offer, rather, only an enquiry is made. The reply by Simon suggesting a particular cake is also not an offer as there is no exchange of promises amid the two.

Now, when Jen agreed to the specific cake that was mentioned by Simon and took an order form with her by making a promise that she will return with the form in some days, then, a promise was made by Jen upon which Simon acted. Thus, there is applicability of promissory estoppel rule. It makes no difference when no reply was given by Jen to the call of Simon or here is no submission of order form. By applying he rule in Empirnall Holdings Pty Ltd case it is submitted that since Simon acted on the implied promise of Jen, then it is nothing but an acceptance given to the implied offer of Jen. Simon spent hours making the Cuban decorations and thus there exists a contract amid Jen and Simon.

Issue iii

When Jen messaged her cousin that she needs his help to set up the venue for the party then a statement was made by Jen where in specification was provided. However the same was no accepted by Adam, rather a reply was made which was in the form of enquiry. It was held in Stevenson, Jaques, & Co v McLean case that an enquiry is not an acceptance. Adam seeks the consideration that is given in exchange of the acceptance. Jen grants consideration which was of past nature, that is, how he helped him when Adam was in college. By applying the law in Harrington v Taylor case it is submitted that consideration must be present or future but not past. But the consideration provided by Jen was a past consideration. Thus, since the consideration is not valid in law, thus, even if Adam replies in affirmative, still there is no contract amid the pries.

Issue iv

When Jen texts her other cousins to help him to prepare for the party on Saturday against $20, then though the consideration is valid, but, the offer is made to specify persons. In law, when an offer is made to specific person then the reply must also be from such person only. Thus, if Bill replies to such message or acts on such message hen he same is not a good acceptance in law and thus Bill will not be authorised to seek $20.

Conclusion

It is concluded that Jen indulge in several activities with mainly four persons, that is, Tim, Simon, Adam and Bill, However, it is only with Simon that a valid contract exist due to the presence of promissory estoppel. Otherwise, in all other transaction one or more of the contract essentials are missing.