L ' Estrange V. Graucob Ltd

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Introduction In every free market economy individuals are allowed to autonomously enter into contracts and for contracting parties to make their own decisions about the types of contract they enter into and the terms on which they will contract (Paterson, 2009). A definition by Hall (1997) highlights that a contract is an exchange of promises carried through by a process of offer and acceptance with the intention of creating a legally binding deal, of which in the English case of L’ Estrange v F Graucob Ltd, it has been asserted that when a person signs a contractual documents they are bound by all its terms. Issues: In the given case study several issues arise as the conduct of the other party (Mr Walter) is contrary to the signed terms of the contract; 1) non-compliance with Clause 2 of the contract and 2) fraudulent or falsified financial statements by Mr Walter. Law: Section 4 of Restraint of Trade Act 1976 (NSW), Section 47 of the Trade Practices Act of 1974. Application: In the start of our argument it is important to highlight that Mr Casper prior to signing the contract assured Mr Walter, who had thought of not signing the contract if his store would be affected, that when it comes to his Westbrook Liquor Store the restraint of trade clause 2 will be ignored hence Mr Walter continued to sign the contract with clause 2, which still limits business of similar nature by his family. That aspect of the clause remained clear, waiver is given to his own Liquor store
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