Contractual Agreement Case Study

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INTRODUCTION This case gives us an insight into why potential promises cannot always be accepted as contractual agreements and thus the contractual claims on the basis of such promises cannot be made. The mentioned case says- 1. Nick contracts with John to provide catering facilities at a cost of $5,000 and at the last minute agrees to pay John a bonus of $1,000 to ensure that things run smoothly. 2. Hanson agrees to fly an aircraft trailing a banner showing party's emblem for free of charge. Later on, he finds that his costs were more than anticipated. Nick agrees to ‘reimburse him fully in due course'. 3. Ian, a sympathiser of Nick's program, writes to Nick saying that he will provide $10,000 to help with the expenses of the rally but informs Nick later that he will not be able to pay this because his business had a sudden decline in profitability. 4. Nick asks police authorities for additional protection for which he agrees to pay $3,000, however later he refuses…show more content…
Nick shouldn't have agreed to pay Hanson for his work as initially, it was free of cost act. Nick and Ian ISSUE: Is there a contractual agreement between Nick and Ian on the basis of which Ian has a duty to provide Nick $10,000 to help with the rally expenses? RULE: These facts are from the case of Nick v Ian. The case bears a remarkable similarity to Australian Woollen Mills Pty. Ltd. v. The Commonwealth [1954]. Both cases are concerned with an offer being made but at the end not being fulfilled. The problem is that just the statement from one part cannot be considered as a legally binding contract as there was no intention to be legally bound and the consideration should be for both the parties. The courts may be prepared to say that the offer cannot be turned into a contract on the basis of an offer just being
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