The contract between Peter (uncle) and Brett (nephew) comes under the head of Domestic, Family agreements. In these type of agreements the parties do not usually intend to create legal relationships, when the agreement is entered into whilst relations are harmonious. The main issue is that, there is no legal agreement between them.
This agreement cannot be legally binding because Peter and Brett are from one family and did not intented to create a legal relationship as it is essential for valid contract. According to law, both parties should have clear expression for making a legal contract which was missing in this case. The agreements between families is generally treated as not legally binding with law under Domestic, Family agreements.
SIMILAR CASE “BALFOUR V BALFOUR”1919
In this case Peter can sue Brett in court and claim his money but he will likely to face an uphill battle proving in this case(like Balfour v Balfour), because they have family relations which comes under Domestic, family agreement. This law states that the parties do not have a legal relationship. The agreement is not bind because of their family relation. For any legal contract there should be legal relationship between both parties otherwise agreement will be consider as promise.
In conclusion, Peter cannot sue Brett for his claim as there is no legal relationship. In this case Peter cannot take legal action against Brett as they have uncle and nephew relationship which does not come under Contract law.
The acceptance of contract is the main issue in this case as acceptance should be in oral or written form. Offeree’s silence should not be considered as acceptance of contract or agreement. In this case Brett did not even respond to Peter’s letter so there is no binding contract between Peter and Brett.
According to law, Acceptance occurs when an offeree agrees to be mutually bound to the terms of the contract by giving consideration. Acceptance can be in actions and words but if offeree did not give any expression of acceptance or respond to offeror, it can not be legally binding of agreement. We cannot impose a condition that silence on the part of the offeree will amount to acceptance.
SIMILAR CASE “FELTHOUSE V BINDLEY” 1862
Brett did not accepted the offer made by peter and neither have consent to buy Peter’s diesel car but he receive the letter which is sent by Peter and after reading it he start driving his car to and from university for some days. Which means Brett gives him expression to accept the offer of buying Peter’s car and now he is legally bound with the agreement. So Brett cannot deny the legal agreement between them and can be sued by Peter for his claim.
It can be concluded that, Brett’s actions of driving peter’s car after knowing all the facts that he accept the offer of buying peter’s car and this contract seems to be valid. Brett is now liable for all the liability of peter under contract law.
In lawful terms the valid consideration of contract between Brett and Peter is the basic issue. Peter offered sufficient price for his diesel car which can be considered as a valid consideration. But In this case, Brett did not accepted the offer and neither accepted to pay the consideration for peter’s diesel car which cannot be consider as valid consideration under contract law.
According to the law, Consideration is something of value promised by one party to another while entering into a contract. The first and most important thing to be considered while making a contract is that the consideration must be passed on with the willingness of the promisor. Consideration should contain payment of money, some act, abstinence or promise. For a consideration to be valid there must be a promise from both sides. This means that there must be a promise by one party against the promise of the other party. There are some acts which cannot be consider as valid consideration and cannot be enforceable by law such acts are gambling, speculation.
Peter offer his diesel car worth $2000 to Brett for $500 which is sufficient amount as consideration and can be considered as valid consideration for the exchange of car, but still the contract is not legal because the other rule of consideration states that consideration must move from the promise. As Brett has not accepted any offer and did not pay anything as consideration to the peter for his car. Promisor and promisee must have legal agreement between them because it is necessary for a valid consideration. If the element of valid consideration is missing between both parties the contract should be consider as void or illegal. The valid consideration is that there should be a exchange of money for car and consideration should move from one party to another then only it can be known as valid consideration and enforceable by law.
No, it is not a valid contract because the element of valid consideration is missing from agreement. Which make this agreement invalid and void ,cannot be enforced by law.
The issue in this case is that uncle Peter offer his diesel car to his Nephew Brett without knowing that he did not want to buy a diesel car. The issue is about mutual misunderstanding weather both parties make it by mistake or unilateral. In this case Peter can sue Brett as Brett use to drive Peter’s car for some days after knowing the fact that car has a diesel motor and he did not want a diesel car. And peter did not confirm with Brett that he wants to buy his diesel motor car or not.
In class of such cases mistakes occur if one or more parties under contract misunderstand each other about the fact of agreement. Such kind of mistakes are consider under common law such as :- common mistake, unilateral and mutual mistake about the material facts in contract.
(a) Common mistake :- Common mistake occurs when both parties are factually mistaken about the subject matter of the agreement. This kind of mistake may warrant a Court voiding the entire agreement. If the contract contains a negligible error relating to the subject matter, it is less likely that the contract will be made void, and more likely that the Court will read down the contract to the extent of the mistake.
(b) Mutual mistake :- In such case, both parties are mistaken by same material fact and figures in a valid contract. If this is done between both parties contract will be void or illegal.
(c) Unilateral mistake:-A unilateral mistake occurs
when one party is aware, made aware, or ought to be aware, of a mistake in the agreement. There are several circumstances under which a unilateral mistake occurs. First of all, if one of the contracting parties is, or should be, aware of a mistake, then they must do something about the mistake as soon as is practicable. They cannot simple choose to ignore the mistake or plead ignorance. If the other party then claims that there is a mistake in identity, then they must argue against the presumption that both parties intended to be bound by the terms of the contract. If this party is able to prove in Court that the other party has made a unilateral mistake and done nothing to rectify this, the contract may be void and unenforceable.
In this case, mistake can be clearly seen that as Peter do not know that his nephew Brett did not want to buy a diesel car,but after receiving the car and letter Brett know the fact that the car has diesel motor and still choose to remain silent. So this contract is void or illegal. This is a unilateral mistake as well as mutual mistake. As Brett drove his uncle’s car for somedays even he know that it was a diesel car which is mentioned in letter by Peter. On other hand ,in this case both parties make mistake as Brett did not read letter properly and Peter did not confirm with Brett weather he wants to buy his diesel car or not.
Yes, In this case Brett can refuse contractual obligation and he did not have to pay claim for his uncle’s car. Because peter did not confirm with Brett that weather he wants to buy his diesel car or not. But On Other hand, Brett already know that his uncle’s car is diesel and after knowing that he choose to remain silent and drove peter’s car for few days. Brett did not want to buy car but he drive Peter’s car so in such case he has to pay all the liabilities for Peter’s car.
3. “Understanding business law” 8th edition by
Stephen, David, Keturah,Elfriede and Christina.
Firstly, I would like to thank my Lecturer of business law subject, MR. MARCUS KATTER for the most valuable advice and guidance regarding this subject. I am really inspired by him and get motivated to work on this assignment to contribute to a great extent. He always gives live examples regarding our subject and I am also thankful for that. Besides, I would also like to thank the authorities of James cook university(Brisbane) for providing us such a friendly campus and facilities which leads us to achieve the requirements of assignment material. I am very grateful to the “DEPARTMENT OF INTERNATIONAL STUDENT” for offering us to study this subject. I am also thankful to Queensland government for providing valuable guidance and online legislation websites for their valuable information for my assignment.