眾律國際法律事務所

There are three questions to be asked before looking into whether a person may recover the amounts claimed or any part thereof in the contract. They are: the nature of the contract, the nature of the obligations; and the degree of performance which was rendered.
There are two types of contract when it comes to the nature of contract. They are divisible contract and lump sum contract. A divisible contract is one for which the consideration is apportioned according to the work to be done. One contract would be divided between the performance of work and the payment of consideration expressly.[1] A lump sum contract is one which provides for payment of specified sum on completion of specific work.[2] When the court look at the performing party’s whole obligations under the contract, the court would see whether the performance rendered satisfies the requirements of the contract as a whole. Nevertheless if a party who partially performs a lump sum contract will not be entitled to the contract price when it comes to damages and claim. They may however be entitled to damages or quantum meruit in some circumstances.[3]

When ending a contract, there are always questions regarding to contract termination. There are circumstances where an innocent party will be able to terminate a contract in the following situations:
I. In order to validly terminate a contract, terminating party must show either test of essentiality, proving that one party would not have entered the contract unless he/she assured of a strict or substantial performance of the term and the other party knows or ought to know such contract term.[1]

A contract would not be considered as legally binding unless both parties agreed to be determined objectively with a reasonable degree of certainty.[1] Therefore if the terms are sufficiently certain, agreements to agree can be enforceable.
In circumstances where a contract containing language that is incapable of giving any definite or precise meaning and the court is unable to attribute to the parties any contractual intention in the eyes of law, will be deemed unenforceable.[2] When there is one or more terms considered uncertain or ambiguous, the court will do its utmost to hold an agreement[3] and to adopt reasonableness principle to interpret uncertain clause.[4]

Termination of an offer can be divided into five categories: withdrawal by offeror, rejection by offeree, lapse of time, failure of a condition subject to which the offer was made and by death.
An offer can be withdrawn at any time prior acceptance[1], this is even the case where the offeror has promised to keep the offer open for a period of time (except the offeree has provided consideration in the eyes of law). Please keep in mind that revocation of an offer is only effective to be communicated to and received by the offeree.[2] Such revocation can also be withdrawn by a third party, provided such withdrawn are from a reliable source.[3] If the offeror wishes to withdraw offer to world at large, the offeror should use the same method as they did to advertise the offer to make such withdrawn to be valid. On the other hand, in unilateral contracts, such offer may not be withdrawn after the promise has begun to perform the necessary condition to fulfill the contract.[4] Nevertheless in the case of Mobil Oil Australia Ltd v Lyndel Nominees Pty Ltd[5] indicates that this legal principal is not clear as there is no clear expression made by the Federal Court that an offeror could not be revoked after acceptance had commenced.

There are in total three elements of a simple binding contract in common law countries. They are:
Agreement (offer and acceptance)
Intention to crate legal relations; and
Consideration