Making a Contract

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STUDENT CASE STUDY NOTES 3. Making a contract Case study 1. Franco is an exchange student from Italy studying at a university in Australia. He bought a bicycle when he arrived so he could easily travel around the campus and to his accommodation. He met with Robert and agreed to sell his bicycle to him for $500 and to deliver it at the end of semester, but has since decided to extend his exchange for another semester: he now wants to keep his bicycle. Whether he can legally renege on the deal with Robert or not depends upon whether a legally enforceable contract has been made. a) What elements need to be present to decide if there is a binding contract between Franco and Robert? b) Identify exactly what conduct or actions would constitute each of the required elements in the agreement between Franco and Robert? c) Is there a problem with any of the required formation elements in the agreement between Franco and Robert? If so, identify which element(s) may be a problem. 2. Over coffee and via phone calls and SMS messages, Jeremy and Anna are negotiating over the sale of some computer equipment. Finally, on Tuesday, Jeremy says, ‘Look, you can have it all for $1500 – just let me know by Friday.’ Anna goes to the Gold Coast for a short break. On Thursday she posts Jeremy a postcard saying, ‘Having a great time and I hope you are as well. I will buy that computer equipment for $1500.’ On Friday, Jeremy, who has not received the postcard, sends Anna an SMS message that says, ‘Have sold computer equipment to Bonita for more money.’ Advise Anna as to her rights. 1. a) What elements need to be present to decide if there is a binding contract between Franco and Robert? Agreement – meeting of the minds, which has two sub-elements: offer and acceptance. An offer is a statement that signifies a willingness to contract: Carlill v
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