Contract and Relevant Legal Rule Essay

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Assignment 2 LEGAL PROBLEMS

(30 marks)

Note – All students are expected to use the prescribed textbook when undertaking this assignment and all cases cited at c) in each problem below should be taken from the textbook.

If you use any source other than the prescribed textbook you are required to include the relevant case notes as an appendix to your assignment. The page/s should be scanned and merged with your assignment Word document. Failure to do this will result in your paper being returned unmarked when you will then have seven days to return in the required form. Penalties will apply, as per the UIG, from the DUE DATE and not the date of your resubmission.

Marking criteria
You will be assessed on your ability to: identify the legal issues; apply your knowledge of the law whilst solving the problem; identify relevant statutes and cases as appropriate; and reach the correct conclusion.

Problem 1 (6 marks) Topic 3

Jack’s son Tim is hoping to start a new computer business. He asks his father if he would be willing to lend him $50,000 to help him start the business. In return, Tim promises to give his father a new computer. Jack accepts Tim’s offer. Tim buys his father a new computer but then Jack tells Tim that he has changed his mind and will not be lending him the promised money.

a) What is the issue you need to consider? (1mark)
Jack and Tim had an agreement, but did they intend that agreement to be binding (ie a contract)?

b) What is (or are) the relevant legal rule (or rules) relating to this problem? (1mark)
Courts are reluctant to interfere in social or domestic arrangements unless that was the clear intention of the parties.
c) What is (or are) the main case (or cases) related to this problem? (1 mark)
Balfour v Balfour [1919] 2 KB 571(UK Court of Appeal).
Todd v Nicol [1957] SASR 72 (Supreme Court of South Australia)
d) Based on this information, if Tim sues Jack for breach of contract, will he win in court? What is your answer – Yes? or No? Explain your answer. (3 marks)
No, he will not win. Although the Court of Appeal acknowledged that there is an agreement existing between Jack and Tim, they had not amount to a contract. What’s more, domestic arrangements of this type were not intended to finish up in court in general.

Problem 2 (6 marks) Topic 3

On Monday Brian enters a contract to sell Bonnie his computer for $3000. They have agreed to exchange the computer and the $3000 at 11.00 am on Friday. When they meet at the agreed time, Bonnie asks Brian if the computer will have iTunes among its software. There had been no discussion of iTunes when the original contract had been made. Brian tells Bonnie that the computer does include the iTunes program. When she takes the computer home she discovers that there is no iTunes on the computer. She sues Brian for breach of contract, claiming he had promised that iTunes was on the computer.

a) What is the issue you need to consider? (1mark)
There was a contract for sale of the computer, but was the assurance about the software iTunes a term of that contract? If not, was there any consideration for the promise that the computer will have iTunes among its software?
b) What is (or are) the relevant legal rule (or rules) relating to this problem? (1mark)
Consideration can be present or future, but not past.
c) What is (or are) the main case (or cases) related to this problem? (1 mark)
Roscorla v Thomas (1842) 114 ER 496; 3 QB 234 (Queen's Bench Division)
d) Based on this information, if Bonnie sues Brian for breach of contract, will she win in court? What is your answer – Yes? or No? Explain your answer. (3 marks)

No, she won’t win in court. In this case, the software iTunes in computer is a promise which made after completing the contract for sale of the computer. Therefore, it is not warranted and supported by any fresh consideration. The consideration that iTunes software should be given prior to the making of the contract.
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