Contract Law -Business Law Memo

Contract Law

  Camille failed to give the traditional 25% down payment. Following the production of the entire units required, Camille refused to buy the sweaters and hats. In this case scenario, Sonya may seek a legal alternative against Camille. Basing on the Contract Act of 1872, there was contract between Camille and Sonya of producing 500 sweaters and hats. The basic tenets of a contract were observed by both parties. These include offer, acceptance and consideration. From the case, an offer was made when Camille gave a direct order to Sonya to produce the sweaters and hats. Both parties agreed to the terms and conditions of the contract whereby Sonya would make 500 sweaters and hats and sell them to Sonya at $ 100 each which indicates acceptance of the contract. Offer and acceptance indicates that there was mutual assent to the contract. However, what lacked in the contract was a down payment whereby Camille forgot to give the traditional 25 percent. This is the contentious issue in the case.

            It is clear that Camille used to mark the contract by giving a 25% down payment. However in this case, it was not given. The consideration was that Sonya would make 500 sweaters and hats using particular materials and within a period of time which Camille requested. On Camille’s part, she promised to buy the sweaters and hats at $ 100. Trading a promise in this case can be regarded as a valid consideration. In Common Law, bargain is considered as part of the consideration and the terms may be used interchangeably (Stone & Devenney, 2015). Sonya relied on Camille’s words to produce the sweaters and hats and this constitutes consideration. Sonya will thus succeed in an action against Camille.

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Camille and Sonya’s prior course dealings impact on the case

            When parties are engaged in recurring relationships, there may be documents issued during the beginning of the relationship which contain various ‘terms and conditions.’ These terms and conditions may never be mentioned in subsequent agreements. In case of such recurring relationships in contract, the terms and conditions may be used as reference for future contracts in special circumstances. This may be so in informal agreements that are characterized by short discussions that cover the price, timing, and scope. In the case law La Rosa V Nudrill Pty Ldt, the court held that an exclusion clause in previous dealings did not hold in the current dealings. The current dealings involved the transportation of a drill rig where La Rosa, the transporter, damaged the drill rig in the course in transportation (Kelly, 2013). The exclusion clause held that the transporter was not liable for any damages during transportation. The court held that the exclusion clause was not part of the agreement based on the frequency and existence of reasonable notice of the existence of such a clause. Prior course dealings have no impact on the communications between them.

            Sonya would not be successful against CARDWARE INC. should a breach of contract lawsuit be brought against her. Supposing Sonya failed to make the sweaters and hats, Camille can bring a lawsuit against her for breach of contract. This is because all the elements of a contract are in place which include offer, acceptance and consideration. In case the contract lacked consideration, no lawsuit could succeed against Sony since the doctrine of promissory estoppel could apply in the case.


Kelly, T. (2013). When will previous dealing lead to terms being incorporated in agreements? A case note on La Rosa v Nudrill Pty Ltd [2013]. Norton Rose Fulbright. Retrieved from:   

Stone, R., & Devenney, J. (2015). The Modern Law of Contract. New York, NY: Routledge.

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