Using case law and
legislation
LEGAL PROBLEM SOLVING
Source of legal rights
Torts
Contract
Statute
We will look at:
Contract
◦Example of use of common law (cases)
Australian Consumer Law
◦Example of use of legislation (and interaction with case law)
How to use case law and legislation in legal
problem solving.
What is a contract?
How do we know whether or not a contract has been
formed?
Case law
A contract is an
agreement that is
enforceable at law.
Source of law
How do we find the law of contracts?
Mainly case law
◦ e.g. Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256
Carlill v Carbolic Smoke Ball
[1893] 1 QB 256
Unilateral contract
Offer can be made to world at large
Distinguish offer from invitation to treat by looking at
intention of offeror
Unilateral contract – offer made at large, but only accepted
by those who actually perform
Unilateral contract – communication of acceptance not
required
Consideration can equal detriment/effort
OFFER/ACCEPTANCE ANALYSIS
OFFER
+
ACCEPTANCE
=
AGREEMENT
INTENTION
CONSIDERATION
Offer
“the indication by one person to
another of his or her willingness to
enter into a contract with that person
on certain terms”
Carter and Harland, “Contract Law in Australia” 4th edn p28
Case law?
An offer is not....
A request or the supply of information
◦ Harvey v Facey [1893]AC552
From Harvey to Facey:
From Facey to Harvey:
From Harvey
to to
Facey:
"We agree
buy Bumper
Hall Pen for the sum of nine
hundred pounds asked by
you.
Please
send
us
your
title
"Will
you sellprice
us Bumper
Hall Pen?
"Lowest
for
Bumper
deed in order that we may
Telegraph
lowest
cash
price-answer
early£900.“
possession."
HallgetPen
paid;”
Harvey v Facey
“the mere statement of the lowest price at
which the vendor would sell contains no
implied contract to sell at the lowest price.”
Lord Morris at 556
An offer is not...
An invitation to treat
◦ Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd
[1953] 1QB 401
Examples of Invitations to Treat
advertisements/circulars
price lists
displays of goods in shops
calls for bids at auctions, and
calls for tenders.
So, is every ad an invitation to treat?
What do the cases tell us about offers?
 The offeror must intend to be bound by the offer
 E.g Harvey v Facey
 Boots case
 We can often determine this intention by looking
at the amount of detail in the offer (it should
contain enough detail to allow a binding contract
to come into existence)
 E.g Carlill v Carbolic Smoke Ball
 The offer must be communicated to the offeree
 All cases
All an offer needs is
a ‘yes’ to make a
contract
OFFER/ACCEPTANCE ANALYSIS
OFFER
+
ACCEPTANCE
=
AGREEMENT
INTENTION
CONSIDERATION
Acceptance
A FINAL and UNQUALIFIED assent to
the terms of an offer made in the
manner specified or indicated by the
offeror
The “yes” which ends
negotiations
Acceptance must respond to the offer
So, only those persons:
◦ to whom the offer was made; and
◦ who have the offer in mind at the point of “acceptance”
may accept
The Crown v Clarke (1927)40CLR 227
Must accept offer with offer ‘in mind’
R v Clarke
“it is not an absolute proposition of law that one who,
having the offer before him, acts as one would
naturally be induced to act, is deemed to have acted
on the faith of or in reliance upon that offer. It is an
inference of fact and may be excluded by contrary
evidence.”
Starke J at 244
Acceptance must be
communicated
Silence is not
sufficient
Felthouse v
Bindley
(1862) 142 ER
1037
OFFER/ACCEPTANCE ANALYSIS
OFFER
+
ACCEPTANCE
=
AGREEMENT
INTENTION
CONSIDERATION
INTENTION TO CREATE LEGAL RELATIONS
To create a contract there must be
a common intention of the parties
to enter into legal obligations,
mutually communicated expressly
or impliedly”
“
Atkin LJ in Rose & Frank Co v JR Crompton & Bros Ltd [1923] 2 KB 261 at 293
Rebuttable presumptions
In social and domestic agreements there is a presumption
against legal obligations
◦ Balfour v Balfour [1919] 2 KB 571
◦ Cohen v Cohen (1929) 42 CLR 91
◦ Jones v Padavatton [1969] 1 WLR 328
The presumption is rebuttable
◦ Merritt v Merritt [1970] 1 WLR 1211
◦ Wakeling v Ripley (1951) 51 SR (NSW) 183
Balfour v Balfour
“There are agreements between parties which do not result in
contracts within the meaning of that term in our law. The ordinary
example is where two parties agree to take a walk together, or
where there is an offer and acceptance of hospitality. Nobody would
suggest in ordinary circumstances that those agreements result in
what we know as a contract, and one of the most usual forms of
agreement which does not constitute a contract appear to me to be
the arrangements which are made between husband and wife…they
are not contracts because the parties did not intend that they
should be attended by legal consequences.”
Atkin LJ at 578
Rebuttable presumptions
In business or commercial agreements,
there is a rebuttable presumption that the
parties did intend to create legal obligations
◦Carlill v Carbolic Smoke Ball [1893] 1 QB 256
◦Rose & Frank Co v Crompton & Bros Ltd [1925]
AC 445
◦Honour clause
OFFER/ACCEPTANCE ANALYSIS
OFFER
+
ACCEPTANCE
=
AGREEMENT
INTENTION
CONSIDERATION
Consideration...
The price paid for the
promise
Wedding cake
As well, Mavis is being threatened with legal action by Chrissie
Saranrap. Chrissie was married a month ago and was
expecting Mavis to provide her specialty – the “nouveau
doveau” - a tiered tower of cupcakes, iced in white and
arranged to resemble the wings of doves – as the centrepiece
cake for her wedding reception. Mavis loves doing cakes for
weddings – in fact she now makes more money from doing
wedding cakes than she does from her regular cooking classes.
Chrissie saw information about Mavis’ cake services after
an article in the local paper, and called round to see
Mavis, and look at the different cakes she could make.
They discussed possibilities and pricing and Chrissie left
with a price list. Apparently, Chrissie called and left Mavis
a message on the answering machine ordering the
“nouveau doveau” for her wedding, to be delivered on
2nd May at the wedding reception, for $2,000 COD. In her
message, Chrissie had said: “If I don’t hear to the contrary,
I’ll assume everything is OK. Call me if there is a problem –
otherwise I will see you on the 2nd. Looking forward to
your lovely creation.”
Unfortunately, because of all the work being
done to the kitchen and problems with electrical
work and electrical supply, Mavis had
experienced a number of black outs which had
interrupted her answering machine. Mavis –
never received the message from Chrissie, and
so of course, had not provided the cake. Chrissie
is very angry and claims her wedding was ruined
without the cake. She has threatened to sue
Mavis.