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Question 1

“A person should always be bound by the terms of a valid written contract he or she has signed.” Discuss this statement with reference to contract law theories and cases you have studied this semester.

Answer

It is said that “a person should be bound by the term of valid written contract he or she has signed.” In IBL subject there are some law theories and case which show the ideal of that statement. Traditionally, the courts have treat signed document as giving rise to binding contractual obligations. Hence, an exclusion clause that is contained in a signed document will, prime facie, be binding on the party that signs the document, irrespective of whether the party read or understood its document. The main purpose of the ‘signature rule’ is that it provides certainty to contractual party – they can plan their business affairs with the full confidence that the contract, which has been signed, will be legally enforceable in a court. The rule has its foundations in the leading Courts of Appeal (UK) decision in L’Estrange v Graucob. However under ACL (2010) with consumer contract, the parties generally cannot exclude the implied terms. Under s 64 on the ACL, an exclusion clause which attempt to limit or exclude statutory implied guarantees under the ACL is void under s 64(the case on page 199 IBL text book). A legally binding contains certain essential elements: offer, acceptance, consideration, intention to create legal relation, certainty terms and capacity to contract. However, even if these elements are present, the agreement may not be legally binding if there is no free and voluntary consent. Factors that affect genuine contractual consent are called ‘vitiating factors’. These factors ‘vitiate’ a contract and allow the innocent party to set it aside. Lack of free and voluntary consent arises from: Mistake – when one or both parties misunderstand each other. Misrepresentation – when one party induces the other party to enter into the contract by...