Introduction

Billy is attempting to claim the extra $20,000 and a share in the farm, which he believes he is entitled to. Choy, however, has calculated that the cost of Billy’s school and university fees amount to greater than the promised $20,000 and that the co-owner of the farm would not allow the transfer of a share in the farm.

In order to advise Billy in whether he is entitled to the extra $20,000 and a share in the farm, the key facts and relevant issues must be examined to determine if the elements of a legally binding contract exists. Whether there was an agreement and intention to create legal relations between the two will be used to determine whether Choy has breached a contract between the two. If a contract is found to exist, then the terms must be examined against the facts of the case and the aspects of consideration and promissory estoppel will be considered.

a) Are the elements of a contract present in the initial agreement?

To determine whether Billy has a right to the extra payment and share in the farm, it must be decided whether the agreement between Choy and Billy is classified as legally binding or not. Three main prerequisites for a valid contract are relevant to this issue: agreement (offer and acceptance), intention to create legal relations and consideration.

Choy’s request that Billy give up his tertiary studies for one year to work on the farm for a payment of $30,000 and a share in the farm has the characteristics of an offer, as Choy had the intention to bind his promise if Billy were to accept. There was a firm promise and proper communication was directed at Billy only. Choy’s request can be distinguished from an “invitation to treat” as Billy could not make an initial offer in response, he could only accept, reject, or make a counter offer.

The nature of Billy’s decision to accept Choy’s offer implies the