Business Law And Ethics Essay

Questions:

1. Is there an enforceable contract between Samantha and Julie?
2. Is promissory estoppel relevant to Samantha’s dispute with Dave from ‘Outrageous Costumes’?

Answers:

1. In the instant case, Samantha was a high school drama teacher. She was going to produce and present her own created drama play for the annual school drama named Smurfs in Space. She had to take care of different aspects such as catering, costumes etc. For the purpose of catering, she had approached Julie, a 16 year old student. She had a domestic set up for her business. Samantha had asked her to prepare sandwiches and cakes for 100 people to which she agreed. Herein, an offer had been made and acceptance was also conveyed (Khourya, 2009). Julie had put in certain conditions to her service. She had asked for a week’s notice before commencement of her preparations. She had decided to charge $ 5 per person, i.e. $ 500 for the entire service. Julie had also mentioned that she had a Facebook page wherein orders could be placed. Samantha had sent a text message to her telling her to start her preparations for the cakes and sandwiches. This covers up the aspect of consideration which is in monetary terms. However the possibility of this agreement of becoming a contract gets marred due to Julie’s age. Julie was 16 years old which made her a minor [1](Monahan, 2007). Any contract made with a minor becomes void at the inception. This aspect can be reviewed by the minor once he/she reaches an age of majority i.e. 18 years[2]. However in cases where a minor attains property and gets entangled to certain legal obligations like partnerships, minor is bound by such obligations unless avoided by the minor (Willmott, 2005). There is legislation in the state of Victoria which speaks of a minor’s obligation. According to section 49 of the Supreme Court Act [No. 6387 s. 70] certain contracts are considered void-

  • Contracts where the minor has either borrowed or lent money[3].
  • Contracts where a transaction of goods take place where money is the consideration.
  • Contracts involving accounts related matter.

In the instant case, the second concept comes into consideration. Julie had entered into an agreement to deliver homemade food to Samantha for monetary value. The contract law of Australia prohibits such a contract. Hence it can be concluded that the contract between Samantha and Julie cannot be validated due to Julie being a minor.

2. Samantha had looked online for costumes and found ‘Outrageous Costumes’, an online based store. Dave was the proprietor of this establishment. She contacted Dave informing her requirement of ‘three Smurf space suits with extra silver and blue material’. Dave responded by saying that the extra requirements were costly and he would have to order them specially. She agreed to the proposition. At this junction, both offer and acceptance had been completed. A week later, Dave sent a message to Samantha saying that he had arranged for the materials and unless he got a notification from her, he was going start preparing for the costumes. Samantha received the message but chose to ignore it. She had got a much better offer from a parent from her school wherein her work was promised to be done for free. Two days prior to the drama day, she contacted Dave and cancelled her order. Dave was disappointed by this since he had almost completed the costumes and could not reuse them.

By this act, the concept of promissory estoppel comes into play. It was true that no consideration was discussed (Latimer, 2015). However in the case of estoppels, mere promise is sufficient (Radan, 2009). When intent to enter into an agreement is shown, and breaking of the promise causes deprivation or damage to either party, estoppel comes into limelight[4]. The traditional concepts of contract creation can be ignored in cases of promissory estoppel (Lindsay, 2004). Some essentials of promissory estoppel can be discussed as below:

  • There must be a relationship of contract. Even hints of contractual talks can be considered[5].
  • When one party makes a proposition to carry out a promise and the other party believes that the promise is going to be performed.
  • The party who believes the promise must suffer to the promise made. He/she must have faced a loss.
  • Breaking of promise is not prohibited but if that results in loss or is in detriment to the promisee, estoppel will ensue[6].

In such matters courts determines methods to relieve the sufferer from the ill effects of the contract breach. They usually don’t force a party to complete one’s promise until it is absolutely indispensable.

In this instant case, Samantha is bound by the rule of promissory estoppel and she might be sued by Dave for equitable relief.

Reference

Khoury, D. and Yamouni, Y. (2009). Understanding contract law. Chatswood, N.S.W.: LexisNexis Butterworths.

Latimer, P. (2015). Australian business law 2015. CCH Australia.

Lindsay, G. (2004). Contract. Pyrmont, N.S.W.: Lawbook Co.

Monahan, G. and Carr-Gregg, S. (2007). Essential contract law. New York, NY: Routledge-Cavendish.

Radan, P. and Gooley, J. (2009). Principles of Australian contract law. Chatswood, N.S.W.: LexisNexis Butterworths.

Willmott, L., Christensen, S. and Butler, D. (2005). Contract law. South Melbourne, Victoria, Australia: Oxford University Press.

How to cite this essay: