Contract Law Research: Ultimate Lease And AFL Contract (Case Study Sample)

Contract Law: Case Study
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Issue
The issue reigning, in this case, is to the enforcement of the agreement for lease (AFL) and the viability of the lease contract that Mr. Simonds claims to have entered with Franklin Ltd on behalf of Pinnacle Ltd. In this case, Pinnacle accepts an unsigned letter stating the regulations for the lease of their land with Franklin Ltd. The client believes that since he accepted Franklin’s letter dated 22nd March 2012, he fills that he had a binding contract with Franklin Ltd. Further, the letter had relevant lease documents with one of its clause (5) indicating that the acceptance by the Lessee would qualify as a binding contract. However, the other provisions were subject to negotiations and depended on the signing of the Final Development Plan for leasing the premises.
Question 1
The two parties are in the process of making an ultimate Lease and AFL contract. Contract law stipulates that there has to be an offer followed by an acceptance involving people of sound mind with consideration in place. Neither Franklin Ltd nor Pinnacle Ltd has signed an acceptance to the offer of the lease and as a sign of an agreement to the terms in the lease document. Therefore, the lease agreement as held by Mr. Simonds is void. Nonetheless, negotiations were still ongoing meaning no contract had been made since changes were made to the original lease letter as held in Baker v. Taylor (1906). There seems to be just an agreement subject to the contract which in this case is not binding. Furthermore, Pinnacle has no legal documents signed as prove of legally being in possession of the land owned by Franklin Ltd hence, no binding AFL and ultimate lease has taken place.[Neil Andrews, Contract Law (Cambridge University Press, 2nd ed, 2015).] [(1906) 6 SR 500]
Question 2
The Australian act of 1936 on the law of property states that a binding contract entails offer and acceptance by the relevant parties in the form of writing. The contract should also constitute a consideration as declared by the lessor and accepted by the lessee without any change of the original document. Further negotiations as highlighted in the case is a reflection of a non-binding contract. With the negotiations and change of terms qualifies as a termination of the original lease agreement. Thus, the rental offer should be particular, just as held in Scammel and Nephew Ltd v Ouston case where it took place that the hire purchase offer was void. Also, there should not be any other give-and-take considerations for that leads to a counter offer as held in Hyde v, Wrench. Agreement exists when there is a Consensus ad idem, subjective acceptance. Additionally, silence does not qualify acceptance. Thus, Pinnacle’s silence upon receiving the lessor’s offer letter does not indicate acceptance and the lessor had not mentioned silence as a mode of recognition. Further, Franklin had also not accepted and signed the lease letter.[South Australia Property Law Act 1936 (Vic) s 3.] [[1941] 1 AC 251.] [[1840] 49 ER 132.] [Ewan McKendrick, Contract Law (Palgrave Macmillan, 11th ed, 2015).] [Felthouse v. Bindley (1862) 142 E.R. 1037]
Question 3
Collection of an informal and unsigned letter in writing does not constitute a binding contract. The contract law states that for a contract to be legally binding, it has to be duly signed by both parties under writing. The parties should be aware of the clauses therein and no other adjustments should be made after the signing of the agreement. Furthermore, the 1936 Australian Act on rent law indicates that a contract for a sale must constitute a binding contract in the form of writing[Ibid 6]
Question 4
Mr. Simonds wo...