Principles of Contractual Liability -141Problem Solving Using 1RAC

What is IRAC?

IRAC is one of many possible approaches to answering legal problems. You will meetIRAC or variations of it (eg MIRAT) in Orientation, ALS and several other coursesthrough your degree. It is a model that will help give basic structure to your answer andgive you some guidance as to required content, but it is not the only appropriateapproach. Over time, you will probably develop your own approach to dealing with legalissues. This document gives you some idea of our understanding of the appropriate useof the IRAC model.

IRAC stands for: I - Issue;

R - Relevant law;

A - Application of the law to the facts;

C - Conclusion.

In legal practice, you start by ascertaining the material facts of a (potential] dispute,usually through a client interview. In exams, tutorials and some assignments in LawSchool you are given the facts. There is no need to repeat them upfront (although youwill need to refer to them when applying the law to the facts, that is, when you get to the"A" in the "IRAC" model].

Issue

An issue is usually expressed as a legal question, properly raised on the facts, eg Wasthere a valid contract? or Has the contract been breached?

If the facts raise more than one issue, you should generally identify the first logical issueand deal with it, reaching a conclusion before turning to the next issue, and so on. Thestructure is thus repeated: I1RAC, I2RAC, etc.

Within each major issue, there may be sub-issues, eg: Was there a valid contract? [mainissue] To decide whether there was a valid contract, it is necessary to decide whether therewas an offer [sub-issue 1] and whether that offer was validly accepted [sub-issue 2]. TheIRAC model can then be applied to each of these sub-issues in turn, and this will lead toa conclusion on the main issue.

You need to deal with all issues that are properly raised on the facts, even if yourconclusion on one or some of those issues would finalise the whole case. For example,where the validity of a contract depends on the two sub-issues mentioned above, if yourconclusion on the first sub-issue is that there was no offer, there would be no contractand the second sub-issue would be irrelevant. Despite this, you need to go on to dealwith the second sub-issue. This can be done in a number of ways. In the example given,

if your conclusion on the first sub-issue is that there was no offer, you could move to thesecond sub-issue by stating, for example, 'However, if I am wrong and it was found anoffer was mode, the next issue is whether the offeree validly accepted that offer.'

Relevant law

You need to state the relevant law applicable to the issue you are discussing. You aregenerally permitted to paraphrase the relevant law. However, you should retain'important' words and otherwise ensure that relevant law is accurately stated. Youshould also include the relevant case name(s] and/or statutory provisionfs) asauthority. Always try to cite primary sources [cases or statutes). No matter howconvenient or clever they may be, textbooks, journal articles and your course notes orlecturer's views are not binding on a court. At best, they may be persuasive where theexisting legal authority is unclear or unsatisfactory. If you do cite these secondarysources, you should explain why you think a court would find them persuasive.

With more complex problems, it is seldom sufficient to refer to a single relevant law. Itis more likely you will have to discuss a combination of relevant laws, a list ofrequirements or elements, exceptions to relevant laws, contradictory relevant laws andperhaps even the principle behind the relevant laws, etc.

Unless specifically asked to do so, there is no requirement for full case citations inexams or tutorials; but references must be clear, so that there is no doubt to whichauthority you are referring. Full citations (and appropriate pin point references) areusually required in assignments.

Application/Arguments/Analysis

You should apply the relevant law/s to the facts you have been given. This applicationstep should justify the conclusion you are about to reach.

The "A" in "IRAC" does not only stand for Application. Where there is more than onepossible argument, such as where your facts support alternative arguments or wherethere are contradictory cases, you should explain each Argument and also discuss (i.e.Analyse) which one is stronger and why.

The facts may not fit into neat little boxes - for example, the facts may not be the sameas the facts that gave rise to the existing case law. Do not ignore this or let it frustrateyou. You should discuss whether the facts are analogous to or distinguishable from therelevant cases, and what difference this might make to the outcome.

The "A" of "IRAC" is where students are usually weakest. You should NOT assumemarker knowledge. You should be as transparent as possible in your Application,pointing to the relevant facts as you go. You should NOT condense your treatment of anissue into a simple conclusion with an authority, eg Anne and Bill intended thisarrangement to be legally binding [Todd v Nicof). Apart from being misleading (by givingthe impression that the court in Todd v Nicol actually decided Anne and Bill's case), it

skips the "A" of "IRAC". At least when dealing with important issues, you should expandthis treatment so that you refer to the relevant law in Todd v Nicol (R], citing the case asauthority; discuss the reasoning in that decision as applied to the current facts andinclude a discussion of any counter-arguments or contrary cases (A]; and then reachyour conclusion (C).

Conclusion

At the end of your treatment of each issue, you should come to a conclusion on thatissue, ie the likely result.

If there is more than one possible outcome, or you have doubts about what conclusion acourt might reach, you should say so (but you should have explained the reasons foryour doubt in your Application/Arguments/Analysis - the "A" in the "IRAC" model].

You should, if necessary, also include an overall conclusion at the end, so that you leaveyour reader with a clear picture of the likely overall result.

USE IRAC AS A GUIDE, NOT A RIGID MASTER TO BE FOLLOWED LIKE A SLAVE.

Here are some examples

Please note they do not represent 'model answers'. They merely illustrate anapproach to answering the question.

Example One-an early attempt

Question: Mary knows that her friend, Ginger, has spent all her money on shoesand needs cash for her weekly living expenses. Mary, who is a known collector ofPrada handbags, has always loved Ginger's Prada handbag. Mary tells Ginger thatshe will buy her Prada handbag for $500. Ginger hesitates and then replies 'it isworth a lot more than that! Is that the highest price you can offer?' Ginger callsMary the next day and tells her that she agrees to sell her Prada handbag to herfor $500. Mary does not wish to proceed. Assume that Ginger had found out,through a mutual friend, that Mary had purchased another Prada handbag justbefore calling her. Advise Mary.

New students typically find it useful to use the IRAC steps as headings. Here is anexample (but see the later comments on improvements that could be made andexamples of those improvements).

Issue - Is there a valid contract between Mary and Ginger for the purchase of Ginger'sPrada handbag?

A valid contract requires: agreement [generally offer and acceptance], certainty andcompleteness, intention to enter into legal relations (IELR] and consideration. Thisquestion raises issues with offer, acceptance and IELR.

Sub-Issue 1 - Did Marv make an offer?

Relevant law - An offer is an expression by one party (the offeror) to the other party(the offeree) of a willingness to be bound by certain terms if the other party is preparedto accept those terms [Carlill). Whether a statement is an offer is tested objectively[Carlill).

Application - Here, Mary's language is clear and explicit. When viewed objectively, herstatement can be seen as a serious commitment. There has been an expression by Maryto Ginger of a willingness to be bound to purchase her Prada handbag for $500 if Gingeris prepared to accept those terms.

Conclusion - It is likely that Mary has made an offer to Ginger.

Sub-Issue 2 - Did Ginger reject Mary's offer?

Relevant law - Where an offeree introduces new terms, a counter-offer has been madeterminating the original offer [Hyde v Wrench, Butler v Ex-Cell-O). However, a mererequest for information or inquiry relating to an alteration of terms is not a counteroffer [Stephenson, Jacques). The relevant question is, how would the reasonable personin Mary's position view the statement in all the objective circumstances? [Powierzo],

Application - It is arguable that such a person would view the statement as a mereprovision of information about the value of the handbag and an inquiry relating to analteration of terms. No reasonable person in Mary's shoes would understandGinger to be intending to reject or make a counter-offer.

Conclusion - It is likely that Ginger has not rejected Mary's offer, and the offer remainsopen for a reasonable period of time.

Sub Issue 3 - Has Mary's offer been revoked?

Relevant law - An offer can be revoked at any time before acceptance, but the revocationmust generally be communicated to the offeree [Byrne v van T). This communicationneed not come from the offeror. Once an offeree learns (presumably from a reliablesource) that the offer has been revoked, there is no longer an offer available foracceptance [Dickinson v Dodds).

Application - Ginger had learnt from a mutual friend (presumably a reliable source) thatMary had purchased another Prada handbag. Hearing that she has purchased anotherPrada handbag does not necessarily communicate that she will not be purchasingGinger's Prada handbag. This is especially the case here, as Mary is a collector of Pradahandbags. Consequently, this case is distinguishable from Dickinson v Dodds.

Conclusion - It is unlikely that there has been a valid revocation. It is likely that the offeris still open for acceptance by Ginger at the time she telephones Mary.

... [go on to deal with acceptance and IELR and provide an overall conclusion]

Comments and improvements

1. You could improve your answer by taking the opportunity to show anengagement with the relevant laws rather than just dropping in the name of a case.You could do this by trying to describe the important and most relevant cases in away that shows you have read them and understood what they say. Sometimes thisonly takes another sentence or two; but with complex cases it might require moretime and effort.

Of course, you will not have time to describe every case you cite. Unless they add weightto your argument, there is no need to repeat the facts of a case you are citing. The factswill usually only add weight to your argument where they illustrate well an importantlegal argument you are making, or where they are analogous to or distinguishable fromyour facts. In the example above, it would have been be useful to set out briefly the factsof Dickinson v Dodds, so as to properly explain how the facts in the question can bedistinguished from that case.

2. Do not waste unnecessary time on non-issues or issues where there is a clear orobvious answer. If the facts are incomplete in some material respect, identify themissing facts and deal with them. However, you should not waste time on non-material missing facts. Here are some comments that illustrate these points.

Don't deal with non-issues, eg consideration: Our early answer identified therequirements for a valid contract, including consideration. But it did not go intoconsideration in any more depth. This is because there was obviously validconsideration. To mechanically go through all the requirements for a valid contract,including those obviously satisfied on the given facts, would be wasting valuable time.

Don't waste time on non-material missing facts, eg capacity: We also know, that wherethe promisor does not have legal capacity, the contract may, in certain circumstances, beset aside at the behest of the party lacking legal capacity. We were not told how oldGinger and Mary were. However, there is no need to invent this as an issue - if theexaminer wanted you to discuss capacity, the question would have told you, forexample, that one of the parties was only 17. Since the problem is obviously about offer(including revocation}, acceptance and, perhaps, intention to enter legal relations, wewould not describe age as a material fact. You wouldn't be wrong if you brieflymentioned this, but when pressed for time (eg in an exam} you will find that mentioningall potentially missing facts will leave you with too little time to spend on the importantissues.

Identify material missing facts, but don't make assumptions about them - play the 'IF'game: Sometimes missing facts are material in that they would make a difference to theissue you are being asked to discuss. Our early answer identified that Ginger hearing ofMary's recent Prada handbag purchase, did not necessarily communicate to Ginger, thatMary would not also purchase her Prada handbag from her. If it did not, she did not hearof 'a revocation' from a third party. However, this will very much depend on theevidence and how a reasonable person would have viewed the information in thecircumstances. If we could say that Ginger objectively knew that Mary was only lookingto purchase (or could only afford) one Prada handbag at the time, then it is likely that

Ginger, hearing of Mary's recent Prada handbag purchase from a third party, would beviewed by a court as effective revocation. On the facts you have been given, you shouldnot assume that the revocation is not valid because you are not told about the otherpossibly essential details. It may have been obvious to Ginger that Mary was onlylooking to purchase one Prada handbag at the time. Nor should you assume that this isan inessential detail. At most, you have identified material facts that are potentiallymissing. You should take the opportunity to show you can identify such missing facts,but do not dwell on them. In our problem, for example, you might cover bothpossibilities (what we sometimes call playing the 'IF' game) by saying:

For there to be an effective revocation in this case, hearing of the other handbagpurchase would have to lead a reasonable person in Ginger's position tounderstand that Mary was "no longer minded" to purchase Ginger's Pradahandbag. This will come down to the evidence. IF we could say that it wasobjectively known to Ginger that Mary was looking to purchase (or could afford)only one Prada handbag, then it is likely that Ginger's hearing of her buyinganother would be viewed by a court as an effective revocation. IF this were notobjectively known to Ginger, then this conclusion is unlikely, especially in light ofthe fact that Mary is a collector of Prada handbags.

3. Try to identify and concentrate most of your time on the issues that areproblematic or arguable rather than on the issues that are straightforward. Whatfollows is a discussion of the difference, and some examples of cutting down thetime spent on the straightforward issues. However, note that while this technique isparticularly prevalent in exams when students are short of time, you should bewary of it. As pointed out when describing the "A" of'TRAC", it does not cover the "A"in sufficient depth, so it should be avoided when dealing with significant issues.

The first issue in our scenario is hardly problematic. If the question had really wanted totest your understanding of the requirements for a valid offer, it would have given you ascenario in which Mary's first statement was arguably a puff, a request for informationor an invitation to treat. The same, except to a lesser extent, could be said of Ginger'sreply. The more likely problem area is whether Mary's offer had been properly revoked.You should therefore spend less time dealing with Mary's first statement and Ginger'sreply, and more time dealing the purported revocation. One technique for dealing, morequickly, with the less problematic issues is to condense the RAG steps so that you dealwith them together. Here are some examples.

Sub-Issue 1 - Did Mary make an offer?1

Mary has made an offer to Ginger [C]. Mary's statement is clear and explicit and,when viewed objectively, can be seen as serious commitment. She has expressed awillingness to be bound to purchase the handbag from Ginger, for $500, if Gingerwas prepared to accept those terms (Car////) [R&A].

Sub-Issue 2 - Did Ginger reject Mary's offer?2

1 Combining the Relevant Law, Application & Conclusion2 Combining the Relevant Law, Application & Conclusion

If Ginger had offered alternative terms [A], this could have been a counter-offerterminating Mary's original offer [Hyde v Wrench) [R&C]. However; Ginger'sstatement would be viewed by the reasonable person in Mary's position, in all theobjective circumstances [Powierza] [R&A], as the mere provision of informationand an inquiry relating to an alteration of terms, and, in this regard, is similar tothe statement made in [Stephenson, Jacques) [RA&C]. No reasonable person inMary's shoes would understand Ginger to be intending to reject or make acounter-offer.

4. As you develop your skills, you will find that the "R" and "A" of "IRAC" tend to getmixed together in various combinations. Merely listing and explaining six differentcases in one section of your answer; and then in a separate section going on toexplain the relevance of each case to the facts of your problem, will be repetitive andwill not be easy to read. Here are the common solutions:

It might be better to state a relevant law (R) based on a case, and explain how thatrelevant law would apply (A) to the facts of your problem, and then go on to explain acounter-argument based on another case (R) and the difference this might make to yourfirst argument (A). Your structure often looks more like: I1-RARA...C1, then the nextissue I2-RARA...C2.. It might be equally acceptable to state and discuss a number ofcontradictory cases first, before developing arguments based on them: ie I1-RRA...C1,then the next issue I2-RRA...C2, etc.

5. As illustrated in our early answer, it might be useful to use the IRAC steps as yourheadings to begin with. Once you are used to the structure, however, you will find itfar more elegant to avoid these headings. You should soon begin to use headingsthat are more meaningful and intuitive to both you and your reader.

Example2 -a more developed approach

Consider the same question: Mary knows that her friend, Ginger, has spent all hermoney on shoes and needs cash for her weekly living expenses. Mary, who is aknown collector of Prada handbags, has always loved Ginger's Prada handbag.Mary tells Ginger that she will buy her Prada handbag for $500. Ginger hesitatesand then replies 'it is worth a lot more than that! Is that the highest price you canoffer?' Ginger calls Mary the next day and tells her that she agrees to sell herPrada handbag to her for $500. Mary does not wish to proceed. Assume thatGinger had found out, through a mutual friend, that Mary had purchased anotherPrada handbag just before calling her. Advise Mary.

Putting together what we have learnt so far, and avoiding slavishly using the IRACsteps as headings, we might end up with something like this. Note that the IRACstructure is still discernible, but the answer flows logically from one point to thenext.

This problem raises issues as to whether the statements made by Mary and Gingerresult in a valid contract. Ginger will be the party asserting the existence of the contract.Therefore, it will be for Ginger to prove that there is an agreement (generally offer and

acceptance), intention to enter into legal relations (IELR), sufficient certainty andcompleteness and consideration. The issues in this problem are offer, acceptance and,perhaps, IELR.

Did Mary make an offer to Ginger to purchase her Prada handbag?Mary has made an offer to Ginger. Mary's statement is clear and explicit and, whenviewed objectively, can be seen as a serious commitment. She expressed a willingness tobe bound to purchase the handbag from Ginger, for $500, if Ginger was prepared toaccept those terms [Carlill).

Did Ginger reject Mary's offer?If Ginger had offered alternative terms, this could have been a counter-offer terminatingMary's original offer [Hyde v Wrench). However, Ginger's statement would be viewed bythe reasonable person in Mary's position, in all the objective circumstances [Powierza),as the mere provision of information and an inquiry relating to an alteration of terms,and, in this regard, is similar to the statement made in [Stephenson, Jacques]. Noreasonable person in Mary's shoes would understand Ginger to be intending to reject orcounter-offer.

Has Mary's offer been revoked?An offer can be revoked at any time before acceptance, but the revocation mustgenerally be communicated to the offeree [Byrne v van T). Ginger hears of Mary's otherpurchase just before her purported acceptance over the telephone (see below foracceptance). Once an offeree learns (presumably from a reliable source) that the offerhas been revoked, there is no longer an offer available for acceptance [Dickinson vDodds).

In Dickinson v Dodds, Dodds offered to sell a property to Dickinson. Before hisacceptance, Dickinson heard, via a third party, that the property had been sold. Thecourt held that there had been an effective revocation as, at the time of the purportedacceptance, Dickinson knew that Dodds was "no longer minded" to sell. For there to bean effective revocation in this case, hearing of the other handbag purchase would haveto lead a reasonable person in Ginger's position to understand that Mary was "no longerminded" to purchase Ginger's Prada handbag. This will come down to the evidence. IFwe could say that it was objectively known to Ginger that Mary was looking to purchase(or could afford) only one Prada handbag, then it is likely that Ginger's hearing of herbuying another would be viewed by a court as an effective revocation. IF this were notobjectively known to Ginger, then this conclusion is unlikely, especially in light of thefact that Mary is a collector of Prada handbags.

... go on to deal with acceptance and, perhaps, IELR and provide an overall conclusion.

Of course, the number of issues raised and their importance will dictate how muchtime you dedicate to each issue. Here, offer (including revocation), acceptance and,perhaps, intention, were the only issues raised. If additional issues were raised, onemight have needed to cut down the time spent on some issues to ensure the otherissues were adequately dealt with.

Kylie Fletcher-JohnsonJanuary Semester, 2014

The content of this document draws largelyon a previous work co-authored with Jay Forder

and such work is duly acknowledged.