Amelia Richards runs a very successful business undertaking…

Ok, sorry I wasn't fully aware of this. Once I have written an answer I will send it to you, so you can tell me if I'm on the right track? Will I have to pay again ?

Kind regards

En

Hi, I have written an answer. Can you check it please?

Amelia could firstly argue that the arrangement between her and Bryce constituted a contract and that Bryce breached that contract.

To show that a contract existed between her and Bryce, Amelia would have to show that she and Bryce reached an agreement, and that this agreement satisfied the requirements of a binding contract.

To show that an agreement (legally binding contract) was reached between the parties, and to do so she must prove intention. To show this a test is used by the courts known as an objective test, considering the parties’ actions and words and what it would lead a reasonable party to believe. Bryce would use in his favour that Amelia is his sister, and there is a presumption that arrangements between family members usually lack the intent to form legal associations. To add, he also clearly stated ‘as his sister…’ which, may reasonably be understood to mean it was not intended to create a legally binding contract. However, Bryce also said in his email ‘Agreement for renovations’ in the subject line, which may lead the reasonable person to believe that a formal document was omitted (ignored) merely for convenience reasons. Amelia would then proceed to rebut the presumption regarding domestic arrangements by proving the clear commercial nature of the agreement agreeing to pay $10,000 to cover cost of materials, as it was found in Roufos v Brewster, there can be clear intention to create legal relations even amongst family members if the contract is of commercial nature.

Having established intention, Amelia would then have to show that Bryce gave her an offer, which she accepted that lead to a legally binding contract. Amelia may use the structure of offer and acceptance evaluation. In this analysis, agreement is usually said to arise when an offeree essentially communicates acceptance of an offer to the offeror. Bryce may argue that Amelia made an offer during their first meeting for lunch on October 1, which was accepted by Bryce at that same meeting, and that Bryce’s following email was simply a memorandum recording the contents of their discussion. Alternatively, Amelia may argue that their meeting on the 15^th October was a negotiation which gave rise to an offer by Bryce (or the email he sent her) at that meeting stating he could pay her a few thousand dollars to help cover cost of materials and one of their grandmothers paintings in lieu of part of the fee and this offer was then accepted by Amelia via email. Either interpretation could be successful.

An important note is that if there is a contract, it is a unilateral one. The reason for this is due to it is only binding on Bryce and not on Amelia; she was under no obligation to renovate Bryce’s’ café. This is essential because offer and acceptance vary in unilateral contracts as they are in bilateral contracts. In addition, as an initial step, this agreement must be identified as either: a conditional gift or a unilateral contract with reference to ‘something for something’ in Latin quid pro quo. In Australian Woollen Mills, the absence of quid pro quo denied any form of contract. Bryce would therefore bring up the fact that Amelia already told him that she wanted to renovate his café, and hence there is no quid pro quo. Though, there is a weakness in his argument: the reward of one grandmothers paintings and in exchange for renovating the café was clearly to induce Amelia into working for him, which satisfies the third test in Australian Woollen Mills for quid pro quo.

Amelia must then prove that both the meeting on the 15^th October and the Agreement for renovations email constituted an offer. An offer must be intended to lead to a contract if accepted. For this reason, Bryce would argue that the email he sent was not an offer, as it stated, “Can you confirm this is your understanding of the situation, according to our conversation?” showed this was still in its draft form and hence is only a supplying of information, which is not an offer. Bryce would also attempt to argue the email was an invitation to treat due to the casual nature of the style of writing used, ‘Hi big sister’, but Amelia would say an offer existed through the email because it was of a commercial nature and is hence capable of acceptance. It is likely that the email will be found to be an offer.

Acceptance of an offer must be by method stipulated by the offeror and in a unilateral contract acceptance only takes place when the required act is completed. The required act according to the contract was ‘if (Amelia) renovates the café, she would get one of their grandmothers (painting) in lieu of part of the payment for the job for (Bryce)’. Amelia did not accept the offer, as she had not performed the required act before Bryce withdrew the offer of giving her one of their grandmother’s paintings. According to Mobil Oil v Lyndel Nominees, the offeror is permitted to withdraw the offer anytime before the required act is performed. However, it was also said that there might be an ancillary contract not to revoke the original contract whilst the required act is being performed. In this case, Amelia would argue that because the requested act requires much preparation, there must be an implied ancillary contract that it will not be revoked whilst it is being performed. According to the Federal Court in Mobil Oil, a breach of such a contract could make Bryce liable in damages assessed by the offered promise duly paid for, or Amelia may seek an injunction.

The requirement of certainty stipulates that terms must be sufficiently clear that meaning can be attributed to them. Bryce may successfully argue that his promise to give Amelia one painting is too uncertain. This is because he said ‘we can agree which one later’. Where a promise is found to be uncertain, although, the promise can be removed from the agreement and that the contract is preserved, provided the term is not essential and that the courts can assume that the parties intended the agreement to be enforceable absent the term in question. It is likely that if the term were considered uncertain, Bryce would successfully argue that the term in question was a non-essential term of the agreement without which the agreement would still be intended to be enforceable.

It appears to be possible that Amelia could succeed in establishing that a contract to renovate his café in return for a painting existed between the parties, and that this contract was breached by Bryce. Her possible remedies for breach shall be considered.

It may be unlikely that a court would order specific performance of the contract, as this would cause severe (financial) hardship to Bryce (the defendant). Bryce is growing his business, and courts will not order specific performance where performance is impossible in the circumstances. Amelia, would hence seek expectation damages to put her into the position she would have been in had the contract not been breached. Bryce would likely successfully argue, however, that Amelia’s damages ought to be reduced on the grounds that she ought to take reasonable steps to mitigate her loss. It seems reasonable that Amelia has been offered by Bryce to take the $30,000 for the renovations of his café, which were estimated by him it would of initially cost.

If Amelia were unsuccessful in establishing that she and Bryce’s agreement constituted a contract, which Bryce breached, she may argue that the circumstances give rise to an estoppel. Amelia would likely successfully argue that Bryce’s actions induced her to adopt an assumption about the prospect of a pending legal relationship, and this can give rise to an estoppel.

To establish equitable estoppel, Amelia must first show that Bryce led her to believe an assumption (that she would receive money to cover the cost of materials and one of their grandmothers paintings upon completion of the job). She must then show that she relied on that assumption to her detriment. Amelia may have issues doing so due to although Amelia accepted Bryce’s offer, there is no reason to suggest she would be affected financially which would constitute a detriment, which according to Je Maintiendrai v Quaglia, is necessary in a claim of estoppel. In addition, Amelia was the first to suggest that she could help him out, saying that ‘because he is her brother’ she would do the work at a lower price. Although, judging from her reaction upon hearing the news that Bryce didn’t want to renovate his café after all and that he wouldn’t want to give her one of the paintings (disappointed), it may be implied that she was never going to renovate his café, if it weren’t for Bryce’s promise that she would receive one of their grandma’s paintings. Hence, detrimental reliance may be argued, but must then prove that Bryce’s action of revoking the promise is unconscionable. Again, Amelia may be successful in proving so as Bryce’s reasoning for reneging on the promise is due to personal (financial) reasons having found out the pictures are valued at 80,000 each. Therefore, it is likely that Bryce’s conduct will be found to be unconscionable. Bryce knew Amelia had long wanted a painting. An estoppel is generally given effect by ensuring the relying party has their assumption made good. In this case, although, the benefit to Amelia of forcing Bryce to make good Amelia’s assumption would drastically exceed the value of the detriment she incurred, and an approach would likely be favoured in which Amelia is compensated for her detriment.