Unsw Legt1707 Assignment 1

Hit the Harbour with Harry (Hit the Harbour) is considering whether they are eligible to claim compensation for the financial loss incurred when the their engine was stolen whilst undergoing repairs at Smooth Sailing Pty Ltd’s (Smooth Sailing) premises. To determine whether Hit the Harbour is contractually entitled to compensation for the loss of the engine, it must be determined if a legally binding contract exists. Once it has been confirmed that both parties knowing entered into a legally binding relationship, it will then be necessary to determine whether Harry is bound by the words of the exclusion clause stated on the back of the receipt and on Smooth Sailing’s website. For a contract between two parties to be binding, three essential elements must be satisfied. An offer has to be put forward and accepted for which consideration is given, both parties must have the intention to create a legally binding relationship and there must be certainty of terms listed in the contract. From the information provided about the business agreement between Hit the Harbour and Smooth Sailing, it is evident that Barnaby’s offer to fix Harry’s engine in return for payment was accepted when Harry received the receipt. Unlike other cases the offer and the acceptance is perfectly clear as the acceptance was widely communicated when Harry accepted the receipt and left the engine at Smooth Sailing to be repaired. Therefore, this agreement between Hit the Harbour and Smooth Sailing has satisfied three out of the four essential elements of a contract. The final element that needs to be satisfied is intention.

Under contract law, both parties must have had the intention to be legally bound by the contracts terms and conditions. It is often difficult to test the parties intention since it’s objective and often a question of interpretation of the words used in the construction of the agreement . To help determine whether intention exists, the courts will either presume the