CASE STUDY 3 Problem 1

Last Christmas Mark received a board game as a present. Mark has no interest in such a game and since he owes his cousin Mandy $1000, Mark asks Mandy if she is interested in buying the game. Mandy says: “Yes, I am interested. How much do you want for it?" Mark says: “We will call it quits on the money I owe you. Is that okay?" Mandy says: “Yes." Mark hands over the board game to Mandy after Mandy writes a note in her diary that she has written off Mark’s debt for $ 1,000.

Mandy opens the board game and in it she finds a coupon to enter into a competition. Mandy follows the instructions in the coupon and submits an entry using certified mail. After a few weeks, Mandy inquires about her success in the competition and is told that the competition organisers had not received her competition entry and was pointed to the following statement at the back of the coupon entry: “Entry into this competition does not create a contract or any legal relationship whatsoever".

Mandy wants to return the board game to Mark since she did not get any benefit out of the game. Alternatively she wants Mark to pay her the $1000 he owes her.


Area of law


Motive & Vagueness

Intention be legally bound



Walkeling vs Ripley

Thomas v Thomas

Problem 2 (Topic 9)

Jo is a photographer and has come to Perth to take photos of the sunset coast. She wants to rent a house overlooking the ocean. She makes inquiries at Perth Holiday Villas who has agreed to rent her their villa. Before she signed the lease documents Jo asked the leasing officer of Perth Holiday Villas if she could smoke in the villa. The leasing officer told Jo that she did not know, but thought it would be alright if she keeps the windows open. Jo did not make any further inquiries of whether she would be allowed to smoke in the villa. A week later Jo signed the lease documents, which contained a clause which prohibited smoking in the villa.


Area of law

parol evidence

The Parol evidence rule stats that contract is reduced into writing and it appears to be presumed that the writing contains all the terms on which party has signed and agreed upon, where as it will not be admitted of any previous or contemporaneous agreement which would have the effect of adding or varying in it any way. This rule was formulated in Goss v Lord Nugent(1833).

2) Case can be used

Henderson v Aurther

In this principle case two parties involved in the contract where as plaintiff has leased the theater to defendant, at the time of agreement it was mentioned in the written agreement that the defendant will pay an annual quarter’s rent by cash of pound 2500 and defendant paid the amount by cheaque as it was stated orally by the plaintiff that the cash will be ok don’t worry.

When the lessor sued defendant that the quarter’s rent was allegedly unpaid, the defendant tried to proof a prior oral agreement that the lessor would accept the payment by cheque but the court didn’t permit lessee to give oral evidence of the previous agreement since it contradicted the express terms of the written lease and the later, written expression of intention had to be preferred.


As in the Jo case, who came to Perth for the photography searched for the Holidays villa on lease, before he signed the agreement jo asked lessor that would be ok if she smoke in the villa and lessee said she didn’t know, as jo assumed that it would be ok to smoke with windows open. A week later jo sign the lessed documents which contained the smoking clause which states that its prohibited to smoke in villa. Similar to the case of Henderson v Plaintiff it was written in the document that the defendant will pay the payment through cash and defendant paid through cheque and court favored the way of plaintiff since it contradict with the express term of the written and smoking clause can be enforced on Jo since she signed the written document and oral words won’t be permitted as an evidence.

As part of their business expansion, Perth Holiday Villas is building four additional townhouses at Scarborough. They entered into a specially written contract with BG Construction whereby it was agreed that Perth Holiday Villas will pay construction fees in installments and the construction will only commence after the first payment, due a month after the contract is signed, and is paid.


Advise Perth Holiday Villas:

whether they can enforce the smoking clause with Jo; and

the consequences of not paying the first payment of construction fees to BG Construction.

Area of Law


A condition is a major term which is vital to the main the contract in which the injured party is entitled to claims for the damages and the injured party may also choose to go on with the contract, despite the breach, and recover damages.

Implied Terms

Cases to be used