Sinclair and Roman are very good friends. They have been friends for over 20 years having met during their

undergraduate studies at La Trobe University. Sinclair and

Roman try as much as possible to have lunch

together once a week to keep up their friendship.

On one of those occasions, Sinclair discussed his intention to buy a second

-

hand car for his 18 years old

daughter, Nikola, who is now studying accounting at La T

robe University. The family live about two hours away

from La Trobe Uni and access by public transport has been extremely difficult. Roman tells Sinclair he has an

old car which could be useful for that purpose and he is happy to 'let go' of the car to Sin

clair. Roman invites

Sinclair to his house to inspect the car. Sinclair and Nikola visit Roman's house and were shown a Toyota

Corolla, 2010 model with registration number ANT 202. Nikola doesn't quite like the car as all her friends drive

brand new

cars,

but she says nothing.

Sinclair informs Roman that the car looks quite good and would serve Nikola's purpose. All she needs is a

means of transportation to uni and when she starts working, she could save up to buy another car. Roman

replies saying he feels

the same way and that he had the car checked by a mechanic and serviced and that cost

him about $2,000, so the car is in good condition and ready to go. Sinclair and Roman discuss the market value

of the car which they both agree is about $5,000. Roman pr

esents a roadworthiness certificate to Sinclair and

hands over the key to Nikola. Roman says he is happy for Nikola to drive the car away on the day and that

himself and Sinclair would conclude the deal. Sinclair has since registered the car in Nikola's na

me.

Six months later, Nikola's 17 year

s

old friend, Hayden tells her he needs to buy a car and that his parents have

agreed that he could buy one. Since Nikola doesn't quite like the Toyota Corolla, she decides to sell it to

Hayden for $3,000.

Hayden

pays

Nikola

$1,000 and promises to pay the balance in 2 weeks. It's now over two

months and Hayden has yet to pay the outstanding sum of $2,000. Nikola does not want the car back since she

has used up the initial $1,000 as deposit for a new car, and in any cas

e, Hayden had an accident with the

car,

and it is no longer in good condition.

Meanwhile, Roman has been quite unhappy with Sinclair. Sinclair has also noticed a change in Roman's

attitude and their friendship has soured. Roman claims that Sinclair has mad

e no payment for the car he sold

to him and has in fact said nothing about it. He says he had waited as a good friend for S

inclair

to say

something for months. He says on occasions, he had indirectly requested for

payment,

but S

inclair

had always

pretended

not to understand him.

Ro

man

says he called S

inclair

three days ago after months of no contact and

demanded that S

inclair

pay the $5

,0

00 outstanding on sale of his

2010

model Toyota Corolla,

ANT

202

. S

inclair

says he does not owe Ro

man

a cent.

1.

Is there an

offer

between Roman and Sinclair

and who made the offer?

(

4

marks)

2.

Wa

s

the offer accepted and how was acceptance expressed and communicated?

(

4

marks)

3.

Was there an intention to create legal relations

?

(

4

marks)

4.

Was any consideration provided

?

(

4

marks)

5.

Is there any particular reason why there might not be a valid contract between Nikola and Hayden?

(4 marks)