CONTRACT LAW

Contract Law

A Contract is defined as a legal binding obligation created under an agreement between two or more persons that is enforceable by law . A contract is made valid by the following factors : there must be an offer and an acceptance , there must be an intention to create legal relations the contract must be under deed or consideration , there must be a contractual capacity , a genuine consent which must not be obtained from mistake , fraud , duress and unconscionability and lastly the contract must be lawful

Therefore in this case of

Hillary and Barrack , we find that Hillary is provided with an obligation to sue Barrack for the breach of contract for failure to perform since the law provides that where a person fails to perform a contract , when the performance is due , the other party can hold him liable for the breach , provided the time of performance was made as the essence of the contract . In all commercial agreements we find that time is presumed to be the essence of the contract , and unless otherwise provided , the failure to act the obligation gives the innocent party a right to treat the contract discharged and claim for the damages . Therefore Hillary may claim his damages basing on the fact of Specific Performance as related to the Australian law , whereby we find that specific performance is regarded as an equitable remedy which is awarded at the discretion of the court to a person who has suffered a legal injury where damages would not be an adequate remedy . Therefore Hillary is advised to note that specific performance is an requiring a person to carry out a contractual obligation

On the other hand Barrack is advised to defend himself by applying the rule of exemption clauses , in which the law provides that the purpose of exemption clauses is to limit or extinguish the liability of one of the parties to which he would otherwise be liable in law . Such a clause will be enforced by the court if the document containing it was an integral part of the contract and reasonable care was taken to bring it to the attention of the other party before the contract was made . But where a party has failed to carry out the basic obligation of the contract , the court will not allow him to rely on the exemption clause to escape liability . This indicates that Barrack may claim that he actually informed Hillary on the existing option clause of the contract , and that he Hillary did not exercise the renewal two months before the expiring of the initial term of contract

This is well explained in the case of Karsale v Wallis , 1956 : where W inspected a car and agreed to buy it from K . the agreement contained the following clause : No condition or warranty that the vehicle is roadworthy or so to its age , condition or fitness for any purpose is given by the owner or implied herein ' When delivery of the car was...