contracts

This memorandum analyses the issues arising from the purported bilateral contract between our client, Fit2U (Tess) and PUP Fin. Fit2U provides businesses with on-site remedial massage services and PUP Fin sought to engage this service. The legal issues concern whether appropriate acceptance occurred and if so at what time did it occur, whether there was sufficient certainty, if consideration was sufficient and whether estoppel can be utilised. Fit2U requires clarification on whether they will be paid the higher rate for their services ($30,455 plus GST calculated retrospectively) on PUP Fin’s contractual termination.

On the facts, documentary evidence and case law, a valid contract was formed between the parties after January 16. The key issue is whether the higher pay rate ($30,455 plus GST) which was to be paid to Fit2U if PUP Fin terminated the contract within 12-months is a valid contractual term. The facts and relevant case law strongly suggest this is a term of the contract. However, there are some factual circumstances that support PUP Fin in arguing there was never a contract formed or the contract was formed prior to January 16 so the $30,455 rate was not an agreed term. Nonetheless, given PUP Fin terminated the contract after 8-months Fit2U should seek the difference between $30,455 and $20,400 plus GST for that 8-month period.

When Tess met with PUP Fin director (Alex) she gave Alex a brochure outlining services Fit2U offered, proposed terms and price structures. This brochure is an invitation to treat rather than an offer. Therefore there was no intention to create legal relations at this time.

At their following meeting, Alex stated the terms PUP Fin were willing to be bound by ($20,400 plus GST per month with...

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...o its detriment in employing another full-time staff member to provide services to PUP Fin on-site. There was considerable financial detriment to Fit2U resulting from such reasonable reliance on PUP Fin’s promise that they could be estopped from denying that fact .

For a contract to be valid, it must be complete and clear in its essentials . The modern approach appears to emphasise the courts’ inclination to adopt principles of reasonableness to make certain something that prima faice is not . Therefore, as the draft contract clearly states the terms and conditions of the contract, there is sufficient certainty for the contract to be deemed valid.

Fit2U had a valid contract with PUP Fin. Fit2U should be advised they are owed the difference between $30,455 and $20,400 per month plus GST for 8-months as PUP Fin terminated the contract before its specified end date.