Questions on Contracts: Formation and Contents
1. Is there any enforceable agreements between any of the parties? If so which one or both and what are the terms?
2. Can Essence argue that there is no contract with Boyano because he is a minor?
Questions on Contracts: Validity and Ending
3. Can Essence use the legal principle of either ‘common mistake’ or ‘mutual mistake’ to make any contract between her and Boyano void?
4. Do you believe that there has been a breach of contract by Manolo? If so what type of remedy might be appropriate?
Questions on Agency
5. Can it be argued that Manolo is an agent for his nephew and therefore Boyano is bound by the terms in the subsequent agreement?
Question on Competition and Consumer Law
6. Would the Australian Consumer Law apply to either agreements? Why/why not?
A mistake in a contract can arise under multiple scenarios, it can devolve from offering something to be performed, mistakenly, was held in (Hartog v Colin & Shields , 1939), and in (Smith v Hughes , 1871), the Court opposed the idea, that when one party remains silent, then that silence cannot be used as an object to claim damages, based on mistake done by the other party. But, under the present facts, the terms are implied in fact, which in other words mean that, E, tried to impose obligation on B, for qualifying their terms of bargain, and hence is considered by the Courts as the presumed intentions so made on the face of it by E, was held in in case of (Codelfa Constructions Pty Limited v State Rail Authority of New South Wales , 1982), and it is legally possible to have the full effect of it to make the terms within the contract to accord with the other terms which are essentially expressed was held in case of (BP Refinery (Westernport) Pty Ltd v Shire of Hastings, 1977) and in (Byrne v Australian Airlines Ltd , 1995). Again, the court reasoned that, if the implied terms are at all incorporated, then the other clauses within the contract cannot exclude that, was held in (JJ Savage & Sons Pty Ltd v Blakney , 1970) and in (Bae Systems Australia Ltd v Cubic Defence New Zealand Ltd , 2011). But, to ascertain that the intentions of the parties are implied there are some guidelines to be followed as was mentioned in (BP Refinery (Westernport) Pty Ltd v Shire of Hastings, 1977). According to the rationale of that decision, to consider the presumed intention of one party, it has to be reasonable and also equitable (BP Refinery (Westernport) Pty Ltd v Shire of Hastings, 1977), but under no circumstances presence of only reasonableness can only suffice to that (Codelfa Constructions Pty Limited v State Rail Authority of New South Wales , 1982). Again, the ratio states that, the implied terms must be so made so as to render the business the efficacy (Attorney General of Belize v Belize Telecom Ltd , 2009), (Breen v Williams ("Medical Records Access case") , 1996)and also in (Hawkins v Clayton , 1988). Again, the implied terms must also be supported by the obviousness, which in other words means that, any reasonable person could have seen that, and it is similar to the fact that, no other thing could have meant by those terms, other than that used in the contract was held in (Southern Foundries (1926) Ltd v Shirlaw , 1940)and (Gwam Investments Pty Ltd v Outback Health Screenings Pty Ltd , 2010), but the terms must have clarity (Ansett Transport Industries (Operations) Pty Ltd v Commonwealth , 1977), with consistency so that it do not create an contradictory meaning and remains persistent with the terms which are already expressed, is upheld by the Court from time to time, (Hospital Products Ltd v United States Surgical Corporation , 1984), and (Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd , 1979).
Thus, it is evident that, E cannot use mistake to void the terms between her and B, but can contend that, the implied terms were meant to be such that the contract between them becomes void, provided that, the terms are reasonable, obvious and also supports the efficacy of the business, and furthermore, in no way it becomes detriment to the express terms of the contract.
To answer the second issue, as whether, there is any breach of contract so done by M, it is important to know the very fact which cause breach. Based on the present facts of the case it is evident that, if at all there is a breach then it is an actual breach as well as a material breach. A material breach is defined in (Forklift Engineering Australia Pty Ltd v Powerlift (Nissan) Pty Ltd , 2000), and the Court held that, in order to perform material breach an essential term which is equally fundamental must be breached by either of the parties. Fundamental term is that very essence, the non- performance of which leads to the substantial failure of the contract was held in (Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd , 1938). Furthermore, Court in (Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited , 2007), held that to determine, whether a certain term is fundamental or essential, one must be able to construe that, based on that very term, the whole contract lies (Fewstone Pty Ltd v Ross Nielson Properties Pty Ltd and George (No 171) Pty Ltd , 2003). Again, Court in (Zonebar P/L v Surfers Paradise Inv P/L , 1997), held in line of (Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd , 1938), and highlighted that if the term so agreed upon is not performed and that becomes the breach, then that non- performed term is the fundamental term. Again, repudiatory conduct, which leads to the substantial non- performance can also lead to breach (Koompahtoo Local Aboriginal Land Council & Anor v Sanpine Pty Ltd & Anor , 2007). So, repudiatory conduct must be such that, there resembles an unwillingness, or there is a persistent inability, in performing the contract (Shevill v Builders Licensing Board , 1982). So, in the present facts of the case, the action so performed by M, only reflects the inability, so E is at liberty to cause termination to contract and sue M for the loss so suffered, through his substantial non- performance (Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) , 1993), but this action must be unequivocal so that there remains no ambiguous terms (Sargent v. A.S.L. Developments Ltd. (13), 1974). So, E, have the option, to seek termination of the contract, and in so doing must express that in clear unambiguous terms, since the inability on part of M will only lead towards the non- performance of the contract substantially, and hence M then will be barred from bringing any action for termination as against E, so E must before electing the termination, be well aware that, the conduct by M must be repudiatory, or else termination by her will become repudiatory in the absence of the repudiatory conduct on part of M.
An agency can be legally created to form a relationship between the two parties, i.e. the agent and that of the principal. Also, an agent is the one who acts under the authorisation of the principal and in so doing cannot act as against the will of the principal, when acting as an agent. Again, agent’s act as determined by the authority, will also be determining the extent till which the principal will be liable to the third parties, and that authority can range from being actual and also apparent depending on the facts and circumstances of the cases. Court in (Consolo v Bennett , 2012), determines the extent of the action so made by the agent, which can bind the principal. So, basically the concept of agency lies on the fiduciary duty (New Zealand Netherlands Society "Oranje" Inc v. Kuys , 1973), and that duty must correspond with the and also accommodate with the terms of the contract, so as to make that aligned with the original contract (Henderson v. Merrett Syndicates Ltd, 1995), thus to maintain the fiduciary duty and to held the breach of it, one must satisfy that, the agent did not act under the authorisation of the principal and have actually acted independently (Kelly v. Cooper , 1993). So, coming back to the present circumstances of the case, the relationship between M and B can only be construed as a relationship of agency if B have actually authorised M to act for him (Blakney v. J.J. Savage &Sons Pty. Ltd., 1973). But, a close look at the case study reflects that, there are no instances of contractual obligation between M and B, except the hand-written agreement sought between the three of them, that is E, B and M. B have only forwarded M’s name, and that do not make him an agent of B, so as to make the latter as principal.
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Ansett Transport Industries (Operations) Pty Ltd v Commonwealth ,  HCA 71, (1977) 139 CLR 54 (HCA 1977).
Attorney General of Belize v Belize Telecom Ltd ,  UKPC 10 (2009).
Bae Systems Australia Ltd v Cubic Defence New Zealand Ltd ,  FCA 1434 (FCA 2011).
Blakney v. J.J. Savage & Sons Pty. Ltd.,  V.R. 385 (1973).
BP Refinery (Westernport) Pty Ltd v Shire of Hastings,  UKPC 13, (1977) 180 CLR 266 (1977).
Breen v Williams ("Medical Records Access case") ,  HCA 57, (1996) 186 CLR 71 (HCA 1996).
Byrne v Australian Airlines Ltd ,  HCA 24, (1995) 185 CLR 410 (HC 1995).
Codelfa Constructions Pty Limited v State Rail Authority of New South Wales , (1982) 149 CLR 337 (1982).
Consolo v Bennett ,  FCAFC 120 (FCA 2012).
Fewstone Pty Ltd v Ross Nielson Properties Pty Ltd and George (No 171) Pty Ltd ,  QSC 82 (2003).
Forklift Engineering Australia Pty Ltd v Powerlift (Nissan) Pty Ltd ,  VSC 443 (2000).
Gwam Investments Pty Ltd v Outback Health Screenings Pty Ltd ,  SASC 37 (2010).
Hartog v Colin & Shields ,  3 All ER 566 (1939).
Hawkins v Clayton ,  HCA 15, (1988) 164 CLR 539 (HCA 1988).
Henderson v. Merrett Syndicates Ltd,  2 A.C. 145 (1995).
Hospital Products Ltd v United States Surgical Corporation ,  HCA 64, (1984) 156 CLR 41 (HCA 1984).
Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) , (1993) 182 CLR 26 (HCA 1993).
JJ Savage & Sons Pty Ltd v Blakney ,  HCA 6, (1970) 119 CLR 435 (HCA 1970).
Kelly v. Cooper ,  A.C. 205 (1993).
Koompahtoo Local Aboriginal Land Council & Anor v Sanpine Pty Ltd & Anor , (2007) 233 CLR 115 (2007).
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited ,  HCA 61 (HCA 2007).
New Zealand Netherlands Society "Oranje" Inc v. Kuys ,  1 W.L.R. 1126 (1973).
Sargent v. A.S.L. Developments Ltd. (13), (1974) 131 CLR 634 (HCA 1974).
Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd ,  HCA 51, (1979) 144 CLR 596 (HCA 1979).
Shevill v Builders Licensing Board , (1982) 149 CLR 620 (HCA 1982).
Smith v Hughes , (1871) LR 6 QB 597 (1871).
Southern Foundries (1926) Ltd v Shirlaw ,  AC 701 (1940).
Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd , (1938) 38 SR (NSW) 632 (1938).
Zonebar P/L v Surfers Paradise Inv P/L ,  QSC 196 (1997).