Contract: Case of Sarah and Richard

A contract is an agreement of two people or two entities that were never forced to enter on such agreement and therefore intended to accomplish the terms of their agreement. Contracts can either be orally agreed upon or presented on written documents (Goldberg, 2005, p. 524). Nonetheless, whatever be the type of contract agreed by the two parties, the contract is still deemed as legally enforced by two competent parties.  If one of the parties failed to comply, then there is a breach of contract, and the party or person who failed to meet the agreed terms would be legally punished in accordance to the losses of the other person (Clark, Griggs, Cho & Hoyle, 2013, p. 32). This paper aims to discuss the Common Law, the Tort Law and the Australian Consumer Law with regards to contracts and how people disrespect the terms of agreement.

I. The Case

 Sarah and Richard, who are friends and fellow teachers at College, arranged to spend a week together at Noosa over the Christmas break. Richard told Sarah that he will book a motor vehicle and drive them both to Noosa if Sarah books and pays for the week’s accommodation in Noosa. Sarah then took the week off work and booked and paid for the accommodation in Noosa. On the day of the proposed departure, Richard tells Sarah that he has changed his mind and now proposes to spend the week in Sydney with a lady friend that he has just met.

II. Definition of a Contract

A contract should have all completed elements like offer and acceptance by competent persons with given considerations that have mutual obligations (Australian Consumer Law 2010, p. 15). In the given case, the agreement between Sarah and Richard falls perfectly to the Common Law Legal System because they have all the elements present. Sarah and Richard are currently of legal age and voluntarily agreed with given conditions. The mutual responsibilities are for Sarah to book and pay for the accommodation in Noosa while Richard would book a motor vehicle and drive them there. The contract of Sarah and Richard is entirely oral and by conduct and does not need to be written at all. 

Even the Australian Competition and Consumer Commission (2010) claimed that a contract starts when a person offers the other individual an offer that both agreed through communication wherein both persons involved accepted it (p. 10). And to make matters more specific, the Australian Competition and Consumer Commission claimed that a contract may either be a written document, an agreement on the phone, and even clicking the button with a sign “I agree” in any computer website (Goldberg, 2005, p. 529).  Again with the case, Richard was the first person that offered the details of the agreement. And because Sarah found the terms of the agreement reasonable, their agreement was now a contract (Clark, Griggs, Cho,& Hoyle, 2013, p. 34). Though there was no written document, the fact that both agreed with the terms of the agreement to enjoy their Christmas Break in Noosa was already binding and legal in its own right (Australian Consumer Law 2010, p. 15).

III. Proofs that the Case is a Contract

 The case between Sarah and Richard is a contract because of three important elements, (1) Offer and Acceptance, (2) Intention, and (3) Consideration (Australian Consumer Law 2010, p. 16).  The offer was coming from Richard to spend the Christmas Holiday in Noosa. And because Sarah agreed on the arrangement that she will book and pay for the accommodation while Richard pay and manage the transportation to Noosa, everything seemed to be reasonable (Carter, Peden& Tolhurst, 2007, p. 73).  

The intention of the trip was of good purpose because both persons were able to equally be responsible to their assigned tasks. And the consideration given to both persons were of equal value. The statement was all arranged except when the day of the trip Richard declined the offer and has changed its agreement.

 The formation of the contract of Sarah and Richard were also legal and justifiable because (1) both had the capacity to engage with the said contract and agreement. The case must have been different if in case Sarah was 17 years old. In Accordance to State Law in Australia, only persons of 18 years old and above are considered adults and therefore would be of legal age to engage I such contracts and agreements (Australian Consumer Law, 2010, p. 7). However, going back to the case that Sarah was of legal age, both persons had the right to engage in such contract.  The purpose of the contract was lawful. Though there are no other details of why Sarah agreed to be with Richard during the Christmas Holidays, we will pretend that their intention was really to enjoy themselves in Noosa.  The form of contract is also legal because it was orally made with conduct. It is viewed that after they agreed on their individual mutual responsibilities, Sarah already did her part and she was expecting Richard to be doing his part as well. There was the intention on both sides for the agreement. Richard was the person who initiated the intention.

IV.  The Conflict in the Case

There was a lawful contract between Sarah and Richard. However, during the day of the said departure to Noosa, Richard just told Sarah that he cannot perform his part of the responsibilities. What Richard did was a mistake because under Contract Law, Richard made an erroneous act that gave Sarah casualties because of their agreement. Tort Law claimed that Richards' wrongful act gave Sarah injury on person, property and reputation and that Sarah seeks compensation to his actions (Goldberg, 2005, p. 575). The injury on person was that Richard did not informed Sarah earlier that he cannot fulfill his part of the agreement. There was negligence in his part and would prove his intentions were wrong that resulted to harm Sarah (Clark, Griggs, Cho,& Hoyle, 2013, p. 37).  The injury on property was that Sarah already paid for the accommodation which was part of her agreement. And the injury of reputation was that Richard was the one who initiated the trip, and Sarah agreed on the trip and expecting to have that trip. Richard broke the news to Sarah on the day they were supposedly travelling to Noosa. Surely, Sarah's emotions were hurt and therefore Richard has all responsibility to pay for the damages he had given Sarah (Clark, Griggs, Cho,& Hoyle, 2013, p. 41). 

V. Conclusion

 A contract is a legal agreement between persons who are mature enough to commit to a decision wherein both persons were never forced to engage with the agreement and were able to mutually share the responsibilities in order to accomplish the said agreement (Goldberg, 2005, p. 524). When all the elements of the contract are there whether the contract is written or oral, the contract is binding and legal. The formation of the contract should also be checked to make sure that the contract has no loopholes. Furthermore, when there is a breach of contract or one of the persons who agreed on the contract was unable to deliver his part of the responsibilities, justice should be given to the other person who received the damages (Wilmott, Christensen & Butler, 2005, p.  55).




Australian Consumer Law. (2010). A Guide to the Unfair Contract Terms Law. Australia: Commonwealth of Australia, pp. 5 – 24.

Carter, J., Peden, E. & Tolhurst, P. (2007). Cases and Materials on Contract Law in Australia. 5th Edn. Victoria: Butterworths Law, pp. 67 – 92.
Clark, E. , Griggs, L., Cho, G. & Hoyle, A. (2013). Contract Law in Australia. Victoria: Wolters Kluwer Law & Business, pp.  32 – 45.

Goldberg, J.C. (2005). The Constitutional Status of Tort Law: Due Process and the Right to a Law for the Redress of Wrongs.  JSTOR, 115 (3), pp. 524 – 627.

Wilmott, L., Christensen, S. & Butler, D. (2005). Contract Law. USA: Oxford University Press, pp. 53 – 78.





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