Principles of the Law of Contract

The case in the law assignment lies under law of contract; it is a case which involves four parties Clare, her father Gordon, her Uncle the Director of the Consultancy business and the Garage owner Fred. The issues in this case revolve around Clare and the aim of this essay is to offer advice to her. This will be done by a complete analysis of the issues, the laws relating to the issues, the identification of the agreements and its legal elements.

The issues that provide relevance to us is firstly the domestic agreement between Clare and her father Gordon and whether it constitutes a valid contract. Secondly the agreement between Clare and her Uncle, the Director of the family Consultancy business; the type of agreement and whether or not there has been any consideration supporting Clare's acceptance. The third and final agreement is between Clare and the garage owner Fred, and if any of the two parties are liable and to determine the reasons behind that liability.

Main Section In order to look at various details, regarding the agreement between Clare and her father, we must define the subject matter of this case which is the contract. A contract is a legally binding agreement made between two or more parties for example contracts of sale, contracts of insurance, etc, it is "An agreement which binds the parties to it" [Contract. F. R. Davies]. Nevertheless not all agreements are contracts.

For a contract to exist there must be the existence of four elements; The first is the Offer which must be made by one party the Offeror to another party the Offeree , and could be executed in a number of ways the ones that are relevant to us in this case is the written and oral offer. The second element is that of Acceptance by the Offeree and the unconditional and clear assent to all the terms of the Offeror. The third element is Consideration and is right, interest, and benefit occurring to one party or some loss or undertaken by the other party, a "valid" consideration must be in the form of a value or service.

The final element is the Intention to create legal relations, usually there is no intention for a legal relation when the agreement is domestic or social in nature; however when an agreement is commercial in nature, the intention to create a legal relation is presumed to exist. In the first agreement which happened between Clare and her father Gordon.

The agreement consists of an offer made by Gordon to make monthly payments of 250 as an allowance whilst at university, this means that in the offer of an act for a promise made by a person in this case the father, Gordon; and as when the person (the father) offers a monetary value which when accepted bind the acceptor Clare to reward the offeror for them as a consideration which is shown by her offer to work at the family business as an unpaid receptionist during holidays, however that will amount to consideration if she was doing it in return of getting her monthly payment from her father, not because of the fact that her parents allowing her to live at home rent-free during the holidays, as shown in Dunlop v Selfridge (1915) the house of Lords explained consideration on one party must show "that he or she has brought the defendants promise by doing, giving or promising something in return for it.

" However the agreement between Clare and her father is considered to be a social and domestic arrangement which normally do not amount to binding contracts since they are not intended to be in this case it can be said that Gordon's promise to pay his daughter Clare an allowance while at university ordinarily creates only a moral obligation and thus amounting to a non legal relation, this is also substantiated by Balfour v Balfour [1919] 2 KB 571 (CA) where the husband failed to keep up with allowances to his wife, the plaintiff sought to enforce the agreement, the court held since it was a domestic agreement between husband and wife, it was not an enforceable contract. there is some more cases linked to this matter as in Merritt v Merritt [1970] 2 All ER 760 and Jones v Padavatton [1969] 2 All ER 616 and Simpkins v Pays [1955] 3 All ER 10. In the second agreement between Clare and her uncle, an offer of i?? 900 towards the end of her holidays, was made by the uncle as a way of thanking Clare for helping out in the family business. In this agreement a past consideration is in process and even though her uncle promised to pay her i??

900 he is not legally obligated to as Clare did not work as a receptionist to get paid and referring to the first agreement her intentions was to thank her father for the allowance and free rent during holiday period, in addition the time of her employment therefore it is considered as a past consideration and is not enough to create a valid contract, thus Clare cannot enforce the promise as shown in Re McArdle [1951] Ch 669 (CA) where a property undertook improvements in 1943 by one of the beneficiaries (I. e. one of the owners of the property) wife, who was not under obligation to do so, as a matter of good will the beneficiaries of the property promised in 1945 to pay her a sum of i??

488 in consideration for the deed, this was not paid. The court held that "since the work had been completed before the agreement of 1945, the consideration for it was past consideration and the agreement was unenforceable. " Another case which deals with past consideration is the case of Roscorla v Thomas 1862. In the third agreement Clare and the garage owner Fred, the display of the second hand car by Fred amounts to an invitation to treat, which indicates a willingness to deal but does not display an intention to be bound and is merely a pre contractual negotiation. After Clare made the enquires, about the car. Clare made an offer in writing which stated "Don't sell the car.

Will call after work tomorrow (Saturday) to buy it. Clare. " which will be legally bound if accepted by the garage owner Fred. The acceptance of the offer by Fred lies in the consideration he gave during Saturday when he refused two offers to sell the car, therefore the two offers lapsed when the offeree (Fred) rejected the two offers, however acceptance usually must be communicated to the offeror as shown in Felthouse v Bindley (1862) 11 CB (NS) 869; 142 ER 1037 (CP) The plaintiff and his nephew were negotiating for the sale of a horse . the plaintiff wrote to the nephew stating 'if I hear no more about him, I consider the horse is mine at i?? 3015s'.

the nephew did not respond but did instruct the defendant , an auctioneer ,to reserve the horse in question as it had already been sold. By mistake the defendant put the horse up for sale and it was sold . the plaintiff sued the auctioneer for the conversion of the horse (which meant that he had to show that the horse was his property at the time that the horse was sold). The court held that due to there was no acceptance had been communicated therefore the plaintiff did not have property in the horse. Due to the fact that the agreement between Clare and the garage owner Fred is a form of commercial agreements, therefore it is presumed that both parties intend to be legally bound. As is shown in Jones v Vernons Pools Ltd [1938] 2 All ER 626 and

Rose & Frank v JR Crompton Bros Ltd [1925] AC 445. With Clare not receiving the money promised by her uncle a matter arises of breach of contract between her and Fred. Summarising the three agreements, in the first agreement the agreement is domestic in form and is not legally binding even though it consists of an offer, acceptance and consideration, relating this to the advice to be given to Clare is that this agreement has no particular relevance to the agreement between Clare and her Uncle and between Clare and Fred, if the intention of Clare is to sue her uncle and the family business, there would be a risk of a family dispute which may effect her monthly payments.

The second agreement is which consists of two main elements the offer and acceptance, the consideration made by Clare, of the offer made by Clare's uncle has no efficiency here as the offer was made during the latter stages of the job and is regarded as a past consideration as the intention to create legal relation between Clare and her uncle is purely domestic in nature due to her initial intentions of working at the family business as an unpaid receptionist and as a way of thanking her father. Therefore it is unadvisable for Clare to sue her Uncle as the chances of winning is minimal and she may get herself into financial difficulties and a possible family dispute risking her monthly allowance.

The third and final agreement is commercial, in which both parties intended to create legal relations and thus legally binding, there has been pre contractual negotiations in Clare's enquires regarding the car and price, followed by a written offer from Clare, and an acceptance in the form of inferred from conduct by Fred with a valid consideration in the form of refusing two offers for the car, however if Fred decides to pursue to sue Clare in breach of contract Clare can argue that there was no communicative acceptance orally or in writing, as Lord Denning quotes in Entores v Miles Far East Corporation [1955] 2 ALL ER 493 " Suppose, for instance, that I shout an offer to a man across a river…. But I do not hear his reply because it is drowned by an aircraft flying overhead. There is no contract at that moment.

If he wishes to make a contract, he must wait until the aircraft is gone and then shout back his acceptance so that I can hear what he says. " To conclude I will advise Clare not to sue her uncle but instead communicate her problem with both her uncle and her father in order to resolve the dispute with Fred, the other option is that if Fred decides to sue her then it the chances of her success is scare and she may result in more financial difficulty, the amount and legal costs, it would be a civil case with no risk of imprisonment and would be taken to the civil courts, the process is quite long and the court will consider her status as a student and a poor financial flow therefore my expectations is that a reasonable payment will be made in instalment over a set time.