Mobil Oil Australia Welcome International

The company conveyed to the dealers that any dealer who would be performing at a set level continually for six years would be provided with a franchise with the tenure of nine years and for such tenure the dealer will not be required to pay anything. The company (Mobil) eventually discontinued the scheme of providing franchise and a good number of dealers started alleging Mobil to have committed a breach of contract (University of Sydney, 2020). The court held that in any one-sided contract or agreement, the act of acceptance is a consideration as well as an act of performance and there is no such precedent that can be considered as a pointer to the fact that an offeror in never at liberty to revoke a one-sided offer once the offeree commences or even embark upon the performance of the concerned act of acceptance. The court found that until and unless there is any additional promise made to not to withdraw the offer once the performance has commenced, the offer can be revoked at any period of time at the discretion of the entity providing the offer. Moreover, the primary issue that came to surface during the concerned legal case was that whether or not any legally applicable contract was formed by Mobil in the course of conveying the offer to the dealers and whether or not any legally viable acceptance and consideration was actually established in the course of the offer (Contract A: Case Summaries, n.d.). Another question surfaced in the course of the trial trying to ascertain whether or not there was the presence of any one-sided contract and whether or not such one-sided contract could be revoked. Also, the case raised the issue regarding whether or not the concept of estoppel was applicable to the case (Australian Contract Law, n.d.). Moreover, in the concerned case the precedent that in a one-sided agreement the act of acceptance can be considered the consideration and an act of performance was applicable to the case. Moreover, the Court considered the precedent that one-sided offer without any additional contract guaranteeing that the main contract would not be revoked, can be revoked at any time.

Issues

The dealers were concerned with the fact that Mobil discontinued and revoked the offer after those dealers indulged in the performance required by Mobil to declare a dealer eligible to receive the offer in the form of franchise for a tenure of nine years without any cost. The issue surfaced entailing the question if one-sided contract can be revoked after the required performance has been partially performed as a core component of the one-sided contract (which in this case was in the form of an offer made by Mobil).

Ruling

The trial judge pointed out that in any one-sided agreement, the act of acceptance is also the consideration and an act of performance and hence, as Mobil’s revocation of the offer/scheme made it impossible for the dealers to complete the act of acceptance, the trail judge held that Mobil should not have revoked the offer/scheme. In this respect, the trial judge held that once Mobil made the offer that required performance as the act of acceptance, Mobil was not in a position to revoke the offer once the offeree had embarked upon performing the performance that equated the act of acceptance of the offer (Australian Contract Law, n.d.). The trial judge supported the proposition that any person who makes an offer that is susceptible to acceptance by performance of a particular act cannot be revoked after the offeree has started performing the act explicitly (Australian Contract Law, n.d.). But the Full Court differed from the judgment of the trial judge. The Court held that even though in some cases there can be an implied additional one-sided contract in which the offeror may promise not to revoke the offer once the offeree starts performing the act required for the offer to be considered to be accepted, in the concerned case such implicitness cannot be applied because such implicit saying cannot be same as saying that the original offer cannot be revoked. The Court conveyed that there is no such universal rule or proposition that support the clause that an offeror cannot by discretion lift up the offer once the offeree starts taking actions in a way that is in sync with the requirements of accepting the clauses of the offer. The Court also held that the suggestion that an offeror cannot revoke an offer once the performance representing the acceptance of the offer has been commenced can also be dismissed because the relationship between the offeror and the offeree varies largely from one case to another. In this respect, the Court held that the respective position of an offeror and an offeree differs and vary largely from one case of one-sided contract to another case and hence, not all cases should be considered as same. In this regard, the Court held that in cases when the offeror revokes the offer without knowing that the offeree has commenced the performance as an act of acceptance, the question of barring the offeror from revoking the offer becomes redundant (Australian Contract Law, n.d.). Moreover, the Court also held that in cases where the offeree might not have a better understanding of the fact that the offeror is at liberty to revoke the offer at any given the fact that the act of incomplete the action denoting that an offer has been accepted will be at the risk of the offeree, the question of suing the offeror for revoking the offer becomes redundant and invalid. The Court also held that on many occasions, the notion of commencement of the action denoting that an offer has been accepted or the notion of embarking upon the act of acceptance can be problematic from the perspective of resulting in injustice to the offeror, and hence, in such cases too, the revocation of an offer cannot be considered as contempt of the law. Hence, refuting the claims made by the appellant, the Court ruled that the universal proposition that an offeree cannot revoke an offer cannot be accepted in this case.

Conclusion

The validity or invalidity of revocation of a one-sided contract relies on certain specific situations and hence the clauses of prohibiting revocation of a one-sided contract cannot be universally applied in each and every case unanimously. Hence, the Court held that that even though in some cases there can be an implied additional one-sided contract in which the offeror may promise not to revoke the offer once the offeree starts performing the act required for the offer to be considered to be accepted, in the concerned case such implicitness cannot be applied because saying about revoking a contract and practically revoking a contract in a given situation are not the same. What has been found is that the pivotal issue surfaced entailing the question if one-sided contract can be revoked after the required performance has been partially performed as a core component of the one-sided contract (which in this case was in the form of an offer made by Mobil). The court legitimately found that until and unless there is any additional promise made to not to withdraw the offer once the performance has commenced, the offer can be revoked at any period of time at the discretion of the entity providing the offer.

References

Australian Contract Law. (n.d.). Mobil Oil v Wellcome. https://www.australiancontractlaw.info/cases/database/mobil-oil-wellcome

Contract A: Case Summaries. (n.d.). https://s3.studentvip.com.au/notes/32084-sample.pdf?v=1562483004

University of Sydney. (2020). Mobil Oil Australia v Welcome International case note. https://www.studocu.com/en-au/document/university-of-sydney/contracts/mobil-oil-australia-v-welcome-international-case-note/12086108