Any agreement which has the enforceability of law is contracts To make an  enforceable contract the main elements are:

1. Offer – It is a proposal made by offeror to offeree specifying his intention and made with the expectation of approval.
2. Acceptance – The offer when confirmed without bringing any changes is an acceptance.

• Legal intention – That both the parties are legally intent to abide by the contract. Intention is normally present in commercial contact and absent in social. But in Masters v Cameronthe contract was binding in social arrangements as there was legal intention.

1. Capacity – The parties must be major and of sound mind.
2. Consideration – The price which is exchanged amid the parties to support the promises made

Application and Conclusion 

Fran runs ‘Fran’s Fine Treats’. For business expansion he requires an assistant. She approaches Marco. Now, an offer is made by Fran which is duly accepted by Marco. So there is presence of offer and acceptance. Both Fran and Marco are major and are of sound mind, thus there is presence of capacity of the parties.

Further, Marco agrees to help Fran but left his job in near town on the pretext that if Fran agrees to insure his van against traffic accident while making deliveries, then he is ready to help him. Thus, there is a condition attached before finalizing the contract. As per Masters v Cameron , a formal contract was established wherein hours/pay/reimbursement for fuel and maintenance costs, responsibility for vehicle insurance and other details are mentioned. The document is signed by both the parties. Thus, there is presence of legal intention that is supporting the contract.

The compliance of insurance against the help of Marco is a valid consideration.

Thus, all elements are present and there is a valid contract amid the parties.

Issue

Does the doctrine of promissory estoppel apply to Fran and Octavia?  

Law

A valid contract requires an agreement which is made with legal intention by capable parties along with consideration. A consideration is something of value which is exchanged amid the parties in order to support the promises. A consideration can be anything, that is:

1. It can be a Promise to do/not do something;
2. An Act or performance of obligation

• A practical benefit , regardless of the facts whether it is adequate or not. A consideration must be sufficient.

However, promissory estoppel is an exception to the rule of consideration. The rule submits that a contract was considered to be formulated even if the basic contractual rules are not comply with. The main elements of promissory estoppel are:

1. There is some form of legal relationship that exist amid the parties or is expected by the parties;
2. One party has made a representation to another party;

• The other party has relied on the promise made by  the first party;

1. The party who is relying must have faced some sort of detriment because of the reliance;
2. No reasonable notice was brought to the relying party that the promise might not be comply with.

Application and Conclusion

Fran looking for a warehouse approached Octavia. Fran wants to take the warehouse on rent. Octavia submitted that she is in dealing with estate agent and if Fran is interested in the warehouse then she will not proceed. Fran likes the warehouse but requires a extractor fan.

It is submitted that there is valid contract amid Fran and Octavia because of promissory estoppel:

1. Both the parties are in anticipation of establishing a legal relationship as landlord and tenant. Fran intend to take the warehouse on rent;
2. Fran has made a representation that if Octavia will arrange for an extractor fan then he is willing to take the warehouse on rent. Octavia confirms the intention of Fran via email which was acknowledge by Fran;

• Based on the representation made by Fran Octavia has arranged for an electrician and prior any denial from the side of Fran, the fan was installed;

1. Thus, Octavia will face detriment of Fran does not take the lease as the fan was already installed prior cancellation of the promise made by Fran;
2. Fran has not brought any reasonable notice in the knowledge of Octavia that he might not comply with the promise.

Thus, all the elements are met and there is valid contract amid Octavia and Fran.

Issue 

Is Dante bound by the contract with Fran?

Law

When any person intends to take services of another person then the contractual relationship amid them can be established with the help of an employment contract. There are several contract terms that are made part of the contract. One such term is called Restrain of trade clause.

Restraint of trade clause is a clause that restrains an employee from undertaking the same busies activities with that of the employer for particular time duration or to certain geographical region. Such kinds of restrain clause are valid provided the same are incorporated with the consent of both the parties and are justifiable. It was held that the restrain for one –two years was held to be valid. Whereas, a restrain clause with more than two years was held to non valid.

Application and  Conclusion 

Fran requires an assistant and thus hires Dante. As per the employment agreement, Dante is bound by a restraint clause according to which he is not allowed to open a competitor business in the same area or supplying to the same clients, for one year after leaving the apprenticeship.

As per Seven Network (Operations) Limited since the restrain is only for one year thus the clause is valid.

Thus, Dante is in violation when he has approached other clients. Hence, Fran can enforce the restraint of trade clause.

Issue 

Is Arjun entitled to the month’s supply of free chocolates?

Law

A valid contract requires presence of offer, acceptance, consideration, legal intention and capacity of the Parties. An offer is a proposal which is made by the offeror to an offeree with an expectation of approval. An offer must reach the offeree in order to be complete. An offer is different from invitation to treat. An invitation requires people to make offer to the inviter. An invitation can be made through advertisement, tenders auctions, etc.

Likewise, an acceptance is the confirmation to the terms of the offer without bringing any variations. It is necessary that an acceptance must correspond to the offer. Further, an acceptance must be made only when the offeree is area of the offer. An acceptance without knowledge of the offer is no acceptance in law and thus there cannot be a binding contract amid the parties. But, unilateral offer can be made wherein an offer is made and the same can be accepted by complying with the terms of the offer, there is no need for the communication of acceptance.

Application and Conclusion 

Fran made an advertisement wherein he offers a ‘a month’s supply of free chocolates to anyone who can recommend a suitable, trustworthy assistant or apprentice’. Thus, a unilateral offer is made and whosoever provides an assistant as per Frans requirement results in establishing contract with Fran.

Arjun provides details of an assistant without knowledge of the offer. Thus, an acceptance is provided without knowledge of offer is no acceptance.

It make no difference if Arjun areas of the offer after the performance. So, there is no binding contract amid the parties.

References

Brown , M. 2016. A global guide to ‘restrictive covenants.

Brown. S. 2014. 5 Elements of Promissory Estoppel in Contract Law and Legal Agreements. https://etiennelawyers.com/5-elements-of-promissory-estoppel-in-contract-law-and-legal-agreements/ retrieved on 18^th April 2018.

Latimer, P. 2012. Australian Business Law 2012. CCH Australia Limited.

Ballantyne v Phillott [1961] HCA 17

Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1.

Hamilton v Lethbridge – [1912] HCA 20 

Masters v Cameron (1954) 91 CLR 353.

Partridge v Crittenden (1968) 2 All ER 421.

Pearson v HRX Holdings Pty Ltd (2012).

R v Clarke [1927].

Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387.

Wakeling v Ripley (1951).

Seven Network (Operations) Limited v Warburton (No 2) (2011).