Question

"PLEASE ANSWER ACCORDING TO AUSTRALIAN LAW"

Word Limit: Minimum 2,700 words – Maximum 3,000 words [includes footnotes and bibliography]

QUESTION 1 [30 marks] On 1 August, Nandini, who owns an electrical appliance store, Nandini Electro Pty Ltd, places an advertisement in the newspaper which states: “Huge Electronics Sale. All Computers 50% off.” Visit our web site and see the large range of goods we carry.” On 2 August, Angelo reads the advertisement and visits the web site. He sees a picture of a Apple Model Number 5 Computer and clicks on the picture. Angelo is linked to a page which has all the details on this computer. At the bottom of the page are words “Contact Us” and the store’s email address. That afternoon Angelo sends the following email to the store: “What is the price of the Apple Model Number 5 computer? How many models of this computer do you have in stock? Within 1 hour, Nandini replies to Angelo by email, saying: “We have five Apple Model Number 5 computers in stock. Our retail price is $2,000 and the sale is price is $1,000.” Angelo telephones several other computer stores to check their prices and discovers Nandini’s price is very cheap. Angelo decides to buy this computer from Nandini Electro Pty Ltd. On 3 August Angelo telephones Nandini’s store and asks if this model computer is still on sale. Nandini, who answers the phone, replies: “Yes, I can see one on the shelf right now, it is sale priced at $1,000.” Angelo says: “Great, I will buy it. My name is Angelo and I will come and pick it up immediately.” Nandini replies: “See you soon, Angelo.” Angelo takes a taxi to Nandini’s store. When Angelo walks into the store, Angelo sees one the advertised computer he wants on the display shelf with price tag saying “Sale Price $1,000.” 2 Angelo says to Nandini: “I just telephoned you about buying this computer for $1,000. I am here to pay for it and take it home. Nandini replies: “I’m sorry, I have changed my mind. This is the last Apple Model Number 5 computer I have in stock and I have decided to give it to my brother, Raju, as a wedding present for his wedding tomorrow.”

(a) Advise Angelo what legal rights he has under the common law of contract in respect of the computer that he wished to purchase. Your answer must include relevant legal principles and relevant case law to support your answer. [20 Marks]; and

(b) Assume the computer is still available for sale but Nandini says to Angelo she has changed her mind about the price and that it is now for sale for $1, 800. Analyse whether Nandini has acted in breach of a relevant statute law studied in this course. Your answer must identify the relevant statute and section(s) together with a discussion on its relevance to the given facts. [10 Marks]

Answer 1

A it is an oral contract ,and consideration of breach of contract

An oral agreement is as equally valid, as a written one. The legality, of an oral agreement, cannot be questioned, if it falls under the ambit of the requirements stated in section 10 of the Indian Contract Act, 1872.

This was substantiated by the Delhi High Court, in the case of Nanak Builders and Investors Pvt. Ltd. vs. Vinod Kumar Alag AIR 1991 Delhi 315, whereby the Court held that even an oral agreement can be a valid and enforceable contract. Therefore, in the strict sense, it is not essential that a contract must be in writing, unless specified by law or the parties themselves contemplate the reduction of terms of agreement to writing.

The same was reiterated by the Supreme Court in the case of Alka Bose vs. Parmatma Devi & Ors [CIVIL APPEAL NO(s). 6197 OF 2000], whereby the Court held that even a sale agreement can be oral and have the same binding value and enforceability, as a written agreement. The agreement should be in tandem with the essentials listed in section 10 of the Indian Contract Act, 1872 and thus, will have the equal force of evidentiary value, as a written one.

Admissibility of Oral Agreement as Evidence

As per the Act of 1872, a valid oral agreement is of value and can be enforced in the court of law. However, it is always difficult to prove the existence or the exact terms of the agreement, in case of dispute.

Furthermore, Section 48 of the Registration Act, 1908, states that all non-testamentary documents duly registered under this Act, and relating to any property, whether movable or immovable, shall take effect against any order, agreement or declaration relating to such property, unless where the agreement or declaration has been accompanied or followed by delivery of possession.

Also, Section 92 of the Indian Evidence Act states that when the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms. However, its proviso (2) makes an exception to that if there is any separate oral agreement as to any matter where the document is silent and the terms are inconsistent, then the oral agreement may be proved valid. And proviso (3) further makes an exception that if there is any separate oral agreement which constitutes a condition precedent to the attaching of any obligation under any such contract, then also oral agreement may be proved.

In the case of S.V. Narayanaswamy vs. Savithramma 2013R.F.A. No. 1163 of 2002 c/w R.F.A.No.1164 of 2002 Karnataka High Court, the Appellant sought to prove the existence of a oral agreement, which was vehemently claimed to exist, with respect to sale of property. With the onus to prove being on the Appellant, it did so, by producing cheques of several amounts, towards the entire consideration of the property. By producing various pieces of evidence, which indicated towards a whole, the court upheld the existence of the oral agreement, based on the scrutiny of the evidence provided.

B.

LOGINSIGNUP

Business Laws > Indian Contract Act 1872: Part II > Anticipatory and Actual Breach of Contract

Indian Contract Act 1872: Part II

Anticipatory and Actual Breach of Contract

A breach is a failure by a party to fulfil the obligations under a contract. It is of two types, namely, anticipatory breach and actual breach. In this article, we will focus on understanding both types of breaches with the help of some examples.

Anticipatory Breach of Contract

As the name suggests, an anticipatory breach is a breach of contract before the time of performance. So, if a promisor denies to perform his promise and signifies his unwillingness before the time for performance, then it is an anticipatory breach of contract.

The promisor can convey his unwillingness either by:

Expressing it in words (spoken or written)
Implying it by his conduct
Let us look at an example. Peter enters into a contract with John on May 30, 2018. In the contract, Peter agrees to sell his house to John provided he receives a token amount of Rs 5,00,000 from John on or before June 30, 2018. However, on June 15, 2018, John informs Peter that he will not be able to provide the token amount on the said date, thereby expressing rejection of the contract.

Here is another example. Peter enters into a contract with John on June 01, 2018. As per the contract, Peter agrees to sell his guitar to John on June 10, 2018, for an amount of Rs 5,000. However, he sells this guitar to Oliver on June 07, 2018. Hence, it is an anticipatory breach of contract due to Peter’s conduct.

B. The nticipatorybreach of contract is specified under Section 39 of the Indian Contract Act, 1872. It states: “When a party to a contract has refused to perform or disable himself from performing, his promise in its entirety, the promisee may put an end to the contract, unless he has signifi­ed, but words or conduct, his acquiescence in its continuance.”

When a promisor refuses to perform his promise leading to an anticipatory breach of contract, the promisee is excused from performance or from further performance of his obligations. Also, he can either:

Treat the contract as cancelled and file a suit against the other party for damages arising from the breach. This suit can be filed immediately without waiting until the date of performance specified in the contract.
OR

Choose not to cancel the contract but treat it as an operative and wait until the time of performance has passed before holding the other party responsible for the damages caused due to non-performance. However, he will need to keep the contract alive for the benefit of all parties involved.