Equitable Estoppel in Australia Essay Paper

Jay’s legal considerations are several. On some of those issues he is on firm legal standing while on others he should reconsider his position. The first issue facing Jay is how he should resolve the payment of the $15,000 contract payment that Westside Construction Group was promised by Jay in the event that project was completed by March 1. Ordinarily, the terms of a contract are unalterable once agreed upon but the situation presented between Jay and Westside are different and present an exception. The parties’ original contract called for the contract to be completed by March 1st so the new contract involving the Port Torrens Football Club does not mark a new completion date but WCG’s guarantee of completion provides WCG the capacity to contract with Port Torrens that otherwise they may not be able to do. WCG’s assurance, through Tom, makes Jay’s contract with Port Torrens a reality (Musumeci v. Winadell Pty. Ltd., 1994). Parties to a contract are permitted the opportunity to alter the terms of the contract but such alteration must be by mutual agreement and must be supported by consideration. In the instant case, consideration is definitely present in the form of the additional $15,000 payment by Jay and WCG’s agreement to complete the project earlier. If Jay has any argument that he is not obligated to pay WCG the additional consideration it must be based on the fact that Tom, the project manager for WCG, did not have authority to bind WCG (Chapple, 2002). Unfortunately, even if Tom lacked such authority, Jay still must get by the WCG detrimentally relied upon the representations made by Jay to Tom. Undoubtedly, WCG incurred additional expenses and time restraints in an effort to complete the contract in a timely manner (Walton’s Stores (Interstate) Ltd. v. Maher, 1988). For whatever reason, Jay was the one that made the offer to WCG and must, therefore, have felt that WCG’s guarantee was of value to him. WCG may have completed the contract by March 1st without the additional consideration but once the additional consideration was offered, and accepted, it becomes part of the contract and Jay is obligated to tender it.

Jay also has a potential problem in relationship to his agreement with Harris (Brereton, 2007). Contrary to the advise that Jay may received relative to his not being obligated to pay Harris because Jay has not signed the contract with Harris, Jay’s position on this issue is similar to his position relative to the $15,000 payment to WCG (Empirnall Holdings Pty. Ltd. v. Machon Paull Partners Pty. Ltd., 1988). This time, however, Harris is the principal and his signature on the contract with Jay firmed the agreement. Jay made the offer, reviewed Harris’ plans, and encouraged him to begin and complete the work. Under such circumstances, Jay cannot subsequently avoid liability through a technicality such as his not having signed the contract. Harris has completed 66% of the contract and Jay would be stopped from denying the existence of an agreement. The fact that the mural is no longer wanted by the new buyers may have afforded Jay the opportunity to strike a deal with Harris but that opportunity was likely lost when Jay did not broach the issue when the sale to the Port Torrens Football Club was being negotiated. At a minimum, Harris is entitled to 2/3 of the contract price based on quantum meruit (Planche v. Colburn, 1831).

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Jay’s concern regarding the chandelier and the purchase made by Adelaide City Council should be abandoned. First, he no longer needs the chandelier as the property has been sold to the Port Torrens Football Club and, secondly, he is likely to lose any claim for damages as the facts do not support his position. Jay attempted to purchase the chandelier for less than that originally purposed by the seller and balked at the terms that were subsequently offered by the seller. By the time that Jay was prepared to accept the seller’s counter-offer, the chandelier had been purchased by the Adelaide City Council. Jay’s argument, if he were to decide top proceed against the seller, was that he had conveyed his acceptance by mail and that such posting occurred prior to the date that the Adelaide City Council had tendered its acceptance. Unfortunately for Jay, his posting of his acceptance by regular mail does not constitute receipt of acceptance by the seller unless the seller (offeror) intended that acceptance be accepted in that manner (Tallerman & Co. Pty. Ltd. v. Nathan’s Merchandise, 1957). With other, more efficient forms, of notification being available for Jay to utilize his choice of regular mail was not a prudent one. The law does recognize the posting of regular mail to be a form of acceptance and in the case of regular mail the posting of the written acceptance would constitute the official date of acceptance but it must have been contemplated by the parties that mailing was an appropriate method of acceptance (Bressan v. Squires, 1974). The facts, in the instant case, fail to make this clear. As a result, Jay’s acceptance was received the day following Adelaide’s acceptance and, therefore, invalidates any subsequent acceptances such as Jay’s. As a secondary matter, Jay’s damages in regard to the chandelier would be minimal and, in light of the fact that the chandelier is no longer needed, pursuing the matter would be a poor financial decision.

WCG’s claim against Jay for the additional $15,000 in compensation for the completing the contract on time is a strong one assuming that Tom, the project manager, had the authority to bind the company. If Tom did posses the authority WCG’s claim is extremely strong and should result in their being successful in court. Even in the event that Tom did not have the authority, the fact that the company worked diligently to complete the contract by March 1 would likely serve as a ratification of Tom’s agreement with Jay. In light of the fact that WCG’s original contract called for completion by the same date, March 1st, the fact that Tom did not have authority to bind the company could be argued by Jay if he can demonstrate that acceptance was never officially tendered by an authorized agent of the WCG. If there had been a change in the date, ratification could be more strongly argued but, because the completion date remained the same, it is possible that officials in the company with greater authority than Tom may have never known of the additional $15,000 offered by Jay. Unless the additional $15,000 was officially accepted or ratified by someone with proper authority to bind WCG there would be no alteration in the contract and Jay would not be obligated to make the additional payment.

AJC’s cause of action against Jay is without substantial legal support (Air Great Lakes Pty. Ltd. v. KS Easter (Holdings) Pty. Ltd., 1989). The right of parties to contract freely is a recognized tenet of law and has been throughout the history of the common law. Jay is free to contract with whomever he desires. The fact that AJC’s offer was lower than that of WCG’s or that AJC’s offer complied with all the elements of the criteria contained in Jay’s original advertising has no bearing on Jay’s decision making process. Jay is free to accept whatever contract proposal that was offered to him. For whatever reason, Jay decided to proceed with a contract with WCG and reject the offer made by AJC. There is no requirement under either existing case or statutory law that would require Jay to accept AJC’s offer. AJC may be disappointed with Jay’s decision but such disappointment does not give rise to a valid cause of action.

Delight’s position relative to the sale of the chandelier is a strong one. Delight provided Jay with every opportunity to complete the contract for the sale of the chandelier at terms which benefitted both parties and the fact that Delight ultimately sold it to someone other than Jay for terms better than those offered to Jay does not diminish the value of Delight’s claim. Jay’s failure to act more expeditiously inures to his disadvantage and Delight should not be injured by Jay’s procrastination (Hudson Holdings Ltd. v. Rudder and French, 1973). The purchase by the Adelaide City Council one day in advance of the receipt of Jay’s acceptance does not void the sale. Delight has the legal right to sale the chandelier at whatever terms they can in advance of Jay’s official acceptance which did not arrive in timely manner.

Harris’ cause of action against Jay for payment is equally as strong. Harris had every reason to believe that he had a valid contract with Jay for the mural and the fact that circumstances have changed has only minimal affect on Harris’ contract with Jay. Harris’ obligation under the contract with Jay was to complete the mural and his having moved forward toward that goal satisfies his obligation. Jay’s duty under the contract was to pay Harris for his designing and preparing the mural. Unless there is language in the contract absolving the parties from their respective duties in the event of a change in circumstances, both the duties of both parties remains the same. Jay may attempt to approach Harris and offer to pay him in accordance with what he has already completed but Harris is under no legal duty to accept such a compromise. Harris can either complete the mural project and tender it to Jay and demand full payment, depending on the terms of the contract, or negotiate with Jay for partial payment for the work that has already been completed. Harris is in the superior negotiating position and should hold firm. Under the presented circumstances, Harris has little to lose.


Air Great Lakes Pty. Ltd. v. KS Easter (Holdings) Pty. Ltd., 2 NSWLR 309 (Supreme Court of New South Wales 1989).

Brereton, P.L. (2007). Equitable Estoppel in Australia: The Court of Conscience in the Antipoded. Sydney: Australian Law Journal Conference.

Bressan v. Squires, 2 NSWLR 460 (Supreme Court of New South Wales 1974).

Chapple, L. (2002). Corporate Authority and Dealings with Officers and Agents. CCH Australia Limited, 1-192.

Empirnall Holdings Pty. Ltd. v. Machon Paull Partners Pty. Ltd., 14 NSWLR 523 (Court of Appeals Supreme Court NSW 1988).

Hudson Holdings Ltd. v. Rudder and French, 128 CLR 387 (High Court of Australia 1973).

Musumeci v. Winadell Pty. Ltd., 34 NSWLR 723 (Supreme Court of New South Wales 1994).

Planche v. Colburn, 172 ER 876 (Court of Appeals 1831).

Tallerman & Co. Pty. Ltd. v. Nathan’s Merchandise, 98 CLR 93 (High Court of Australia 1957).

Waltons Stores (Interstate) Limited v. Maher, 164 CLR 387 (Australian High Court 1988).

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