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Legally Enforceable Contract Case Study

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1. STEP 1

The issue of law concerns the element of agreement required for the formation of a legally enforceable contract between both parties.


A legally enforceable contract is made up of three main requirements which are intention, agreement and consideration. All of these elements is necessary and if not established then the contract made would not be acknowledged by the law. The element of agreement to form a legally enforceable contract between both parties is discussed.

An agreement is only legally enforceable if the parties intended that the agreement is made to be legally bound. Contracts are consensual transactions and both parties involved must be in complete harmony. Another element of agreement is it requires a like-mindedness
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In the case of Woodward v Johnston [1992] 2 Qd R 214 during which Mrs Woodward agreed to help her husband do work establish a gravel supply business in return for 10% of the business. For 1 year and 6 months, she did tons of work, mostly on weekends. Her husband gained profit from the business but did not give her the promised share. The issue for the court was could Mrs Woodward rebut the presumption that parties in domestic relationships do not intend to be legally bound. The court decided that it was purely a family arrangement and she was not forced to do this work by her husband and he would not have sued her if she failed to do the work. These presumptions can be rebutted by the presentation of evidence to the contrary. In Todd v Nicol [1957] SASR 72 where Mrs Nicol resided in South Australia and invited the Todds in Scotland to move and live with her. She promised them free accommodation and would let them inherited the house after she died. Mrs Todd quit her job and moved to Australia with her daughter. Later, Mrs Nicol told the Todds to leave after an argument. The court wondered whether the requisite intention to be legally bound be established by the Todds. The court found out there was an intention to be legally bound because the Todds only moved in reliance to Nicol’s promise, which if not honoured, carried great consequences to the …show more content…
Person wished to enforce contract must show consideration. Anything valuable to promisor can be consideration and it need not to be adequate but must be sufficient in the eyes of law. In the case of Thomas v Thomas [1842] QB 851, Mr Thomas, the deceased, had expressed the wish that his wife be permitted to live in his house for the duration of her lifetime. The executor agreed to allow the deceased’s wife to live in the house upon payment by her of £1 per year rental. The wife sued and the court concluded that the wish of the husband for his wife to occupy the premises was itself irrelevant to the question of consideration because motive was not the same thing as consideration. Besides, the payment of £1 rental by the wife provides sufficient consideration to bind the executor to his promise despite its obvious

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