Introduction
Magic Pty Ltd ("M") is claiming for the forgone rent arising from Roger's ("R") inability to pay the agreed term with the total difference amounting to $8000 and if R must continue to pay $2000 or the agreed term of $3000. Firstly, in order to determine if the $8000 is claimable, the establishment of a new contract will be looked into. Secondly, it will be determined if promissory estoppel can be applied in this situation. Finally, if the continuation of the original contract can still exists.
Negotiation for a new contract
If M and R were to negotiate in altering the original contract with new terms and agreements, the previous contract could be terminated by both parties mutually agreeing to this. If the consideration of the newly formed contract in which M provides the printing machinery in exchange for R paying $2000 per month for the leased machinery, M will not be able to claim the difference of $8000 considering there is an explicit term which is contractually binding.
Contractual Obligation
A Contract with the Earth
Hard ContractHowever if they did not negotiate and alter the contract, the original contract will still exist and a part debt payment would not be good consideration in which M will still require the full payment allowing him to collect the difference of $8000.
In order for M to sue R for the sum difference of $8000, we must determine if the newly adjusted contract is formed. The contract must contain the following elements: intention to be legally bound, offer, acceptance, consideration, legal capacity, genuine consent and legality.
For an agreement to exist, offer and acceptance must be established. We can determine that the letter for the reduction of payment can either be seen as an offer or an acceptance. If M had written the statement as an offer to R...