Principles of Contractual Liability -141

Problem Solving Using 1RAC

What is IRAC?
IRAC is one of many possible approaches to answering legal problems. You will meet

IRAC or variations of it (eg MIRAT) in Orientation, ALS and several other courses
through your degree. It is a model that will help give basic structure to your answer and
give you some guidance as to required content, but it is not the only appropriate

approach. Over time, you will probably develop your own approach to dealing with legal
issues. This document gives you some idea of our understanding of the appropriate use

of 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 Law
School you are given the facts. There is no need to repeat them upfront (although you
will 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 Was
there a valid contract? or Has the contract been breached?
If the facts raise more than one issue, you should generally identify the first logical issue
and deal with it, reaching a conclusion before turning to the next issue, and so on. The
structure is thus repeated: I1RAC, I2RAC, etc.
Within each major issue, there may be sub-issues, eg: Was there a valid contract? [main
issue] To decide whether there was a valid contract, it is necessary to decide whether there

was an offer [sub-issue 1] and whether that offer was validly accepted [sub-issue 2]. The
IRAC model can then be applied to each of these sub-issues in turn, and this will lead to
a conclusion on the main issue.
You need to deal with all issues that are properly raised on the facts, even if your
conclusion 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 your
conclusion on the first sub-issue is that there was no offer, there would be no contract
and the second sub-issue would be irrelevant. Despite this, you need to go on to deal
with 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 the
second sub-issue by stating, for example, 'However, if I am wrong and it was found an

offer 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 are
generally permitted to paraphrase the relevant law. However, you should retain
'important' words and otherwise ensure that relevant law is accurately stated. You

should also include the relevant case name(s] and/or statutory provisionfs) as
authority. Always try to cite primary sources [cases or statutes). No matter how
convenient or clever they may be, textbooks, journal articles and your course notes or
lecturer's views are not binding on a court. At best, they may be persuasive where the
existing legal authority is unclear or unsatisfactory. If you do cite these secondary
sources, 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. It
is more likely you will have to discuss a combination of relevant laws, a list of
requirements or elements, exceptions to relevant laws, contradictory relevant laws and
perhaps even the principle behind the relevant laws, etc.
Unless specifically asked to do so, there is no requirement for full case citations in
exams or tutorials; but references must be clear, so that there is no doubt to which
authority you are referring. Full citations (and appropriate pin point references) are
usually required in assignments.

Application/Arguments/Analysis
You should apply the relevant law/s to the facts you have been given. This application
step should justify the conclusion you are about to reach.
The "A" in "IRAC" does not only stand for Application. Where there is more than one
possible argument, such as where your facts support alternative arguments or where
there 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 same
as the facts that gave rise to the existing case law. Do not ignore this or let it frustrate
you. You should discuss whether the facts are analogous to or distinguishable from the
relevant cases, and what difference this might make to the outcome.
The "A" of "IRAC" is where students are usually weakest. You should NOT assume
marker 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 an
issue into a simple conclusion with an authority, eg Anne and Bill intended this

arrangement to be legally binding [Todd v Nicof). Apart from being misleading (by giving
the 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 expand
this treatment so that you refer to the relevant law in Todd v Nicol (R], citing the case as
authority; discuss the reasoning in that decision as applied to the current facts and
include a discussion of any counter-arguments or contrary cases (A]; and then reach

your conclusion (C).

Conclusion
At the end of your treatment of each issue, you should come to a conclusion on that
issue, ie the likely result.
If there is more than one possible outcome, or you have doubts about what conclusion a
court might reach, you should say so (but you should have explained the reasons for

your 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 leave
your 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 an
approach to answering the question.

Example One-an early attempt

Question: Mary knows that her friend, Ginger, has spent all her money on shoes
and needs cash for her weekly living expenses. Mary, who is a known collector of

Prada handbags, has always loved Ginger's Prada handbag. Mary tells Ginger that
she will buy her Prada handbag for $500. Ginger hesitates and then replies 'it is
worth a lot more than that! Is that the highest price you can offer?' Ginger calls
Mary the next day and tells her that she agrees to sell her Prada handbag to her
for $500. Mary does not wish to proceed. Assume that Ginger had found out,

through a mutual friend, that Mary had purchased another Prada handbag just
before calling her. Advise Mary.

New students typically find it useful to use the IRAC steps as headings. Here is an
example (but see the later comments on improvements that could be made and
examples of those improvements).
Issue - Is there a valid contract between Mary and Ginger for the purchase of Ginger's

Prada handbag?
A valid contract requires: agreement [generally offer and acceptance], certainty and
completeness, intention to enter into legal relations (IELR] and consideration. This
question 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 prepared
to 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, her
statement can be seen as a serious commitment. There has been an expression by Mary

to Ginger of a willingness to be bound to purchase her Prada handbag for $500 if Ginger
is 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 made
terminating the original offer [Hyde v Wrench, Butler v Ex-Cell-O). However, a mere
request for information or inquiry relating to an alteration of terms is not a counter
offer [Stephenson, Jacques). The relevant question is, how would the reasonable person
in 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 mere
provision of information about the value of the handbag and an inquiry relating to an
alteration of terms. No reasonable person in Mary's shoes would understand
Ginger 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 remains
open 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 revocation
must generally be communicated to the offeree [Byrne v van T). This communication
need not come from the offeror. Once an offeree learns (presumably from a reliable
source) that the offer has been revoked, there is no longer an offer available for
acceptance [Dickinson v Dodds).

Application - Ginger had learnt from a mutual friend (presumably a reliable source) that
Mary had purchased another Prada handbag. Hearing that she has purchased another
Prada handbag does not necessarily communicate that she will not be purchasing
Ginger's Prada handbag. This is especially the case here, as Mary is a collector of Prada
handbags. 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 offer
is 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 an
engagement 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 a
way that shows you have read them and understood what they say. Sometimes this
only takes another sentence or two; but with complex cases it might require more

time and effort.

Of course, you will not have time to describe every case you cite. Unless they add weight
to your argument, there is no need to repeat the facts of a case you are citing. The facts

will usually only add weight to your argument where they illustrate well an important
legal argument you are making, or where they are analogous to or distinguishable from
your facts. In the example above, it would have been be useful to set out briefly the facts
of Dickinson v Dodds, so as to properly explain how the facts in the question can be
distinguished from that case.
2. Do not waste unnecessary time on non-issues or issues where there is a clear or
obvious answer. If the facts are incomplete in some material respect, identify the
missing facts and deal with them. However, you should not waste time on nonmaterial missing facts. Here are some comments that illustrate these points.
Don't deal with non-issues, eg consideration: Our early answer identified the
requirements for a valid contract, including consideration. But it did not go into
consideration in any more depth. This is because there was obviously valid
consideration. 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 where
the promisor does not have legal capacity, the contract may, in certain circumstances, be

set aside at the behest of the party lacking legal capacity. We were not told how old
Ginger and Mary were. However, there is no need to invent this as an issue - if the
examiner wanted you to discuss capacity, the question would have told you, for
example, 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, we
would not describe age as a material fact. You wouldn't be wrong if you briefly

mentioned this, but when pressed for time (eg in an exam} you will find that mentioning
all potentially missing facts will leave you with too little time to spend on the important
issues.

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 the
issue you are being asked to discuss. Our early answer identified that Ginger hearing of
Mary's recent Prada handbag purchase, did not necessarily communicate to Ginger, that
Mary would not also purchase her Prada handbag from her. If it did not, she did not hear
of 'a revocation' from a third party. However, this will very much depend on the
evidence and how a reasonable person would have viewed the information in the
circumstances. If we could say that Ginger objectively knew that Mary was only looking

to 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 be
viewed by a court as effective revocation. On the facts you have been given, you should
not assume that the revocation is not valid because you are not told about the other

possibly essential details. It may have been obvious to Ginger that Mary was only
looking to purchase one Prada handbag at the time. Nor should you assume that this is
an inessential detail. At most, you have identified material facts that are potentially
missing. 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 both

possibilities (what we sometimes call playing the 'IF' game) by saying:

For there to be an effective revocation in this case, hearing of the other handbag
purchase would have to lead a reasonable person in Ginger's position to
understand that Mary was "no longer minded" to purchase Ginger's Prada
handbag. This will come down to the evidence. IF we 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 her buying
another would be viewed by a court as an effective revocation. IF this were not

objectively known to Ginger, then this conclusion is unlikely, especially in light of

the fact that Mary is a collector of Prada handbags.
3. Try to identify and concentrate most of your time on the issues that are

problematic or arguable rather than on the issues that are straightforward. What
follows is a discussion of the difference, and some examples of cutting down the
time spent on the straightforward issues. However, note that while this technique is
particularly prevalent in exams when students are short of time, you should be
wary 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 to
test your understanding of the requirements for a valid offer, it would have given you a
scenario in which Mary's first statement was arguably a puff, a request for information
or an invitation to treat. The same, except to a lesser extent, could be said of Ginger's
reply. 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's
reply, and more time dealing the purported revocation. One technique for dealing, more
quickly, with the less problematic issues is to condense the RAG steps so that you deal
with 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 a

willingness to be bound to purchase the handbag from Ginger, for $500, if Ginger
was prepared to accept those terms (Car////) [R&A].
Sub-Issue 2 - Did Ginger reject Mary's offer?2

1 Combining the Relevant Law, Application & Conclusion

2 Combining the Relevant Law, Application & Conclusion

If Ginger had offered alternative terms [A], this could have been a counter-offer
terminating Mary's original offer [Hyde v Wrench) [R&C]. However; Ginger's
statement would be viewed by the reasonable person in Mary's position, in all the
objective circumstances [Powierza] [R&A], 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) [RA&C]. No reasonable person in

Mary's shoes would understand Ginger to be intending to reject or make a
counter-offer.

4. As you develop your skills, you will find that the "R" and "A" of "IRAC" tend to get
mixed together in various combinations. Merely listing and explaining six different
cases in one section of your answer; and then in a separate section going on to

explain the relevance of each case to the facts of your problem, will be repetitive and
will 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 that
relevant law would apply (A) to the facts of your problem, and then go on to explain a
counter-argument based on another case (R) and the difference this might make to your
first argument (A). Your structure often looks more like: I1-RARA...C1, then the next
issue I2-RARA...C2.. It might be equally acceptable to state and discuss a number of
contradictory 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 your
headings to begin with. Once you are used to the structure, however, you will find it
far more elegant to avoid these headings. You should soon begin to use headings
that 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 her
money on shoes and needs cash for her weekly living expenses. Mary, who is a
known collector of Prada handbags, has always loved Ginger's Prada handbag.

Mary tells Ginger that she will buy her Prada handbag for $500. Ginger hesitates
and then replies 'it is worth a lot more than that! Is that the highest price you can
offer?' Ginger calls Mary the next day and tells her that she agrees to sell her
Prada handbag to her for $500. Mary does not wish to proceed. Assume that
Ginger had found out, through a mutual friend, that Mary had purchased another
Prada handbag just before calling her. Advise Mary.
Putting together what we have learnt so far, and avoiding slavishly using the IRAC
steps as headings, we might end up with something like this. Note that the IRAC
structure is still discernible, but the answer flows logically from one point to the
next.

This problem raises issues as to whether the statements made by Mary and Ginger
result 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 and
completeness 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, when
viewed objectively, can be seen as a serious commitment. She expressed a willingness to

be bound to purchase the handbag from Ginger, for $500, if Ginger was prepared to
accept those terms [Carlill).
Did Ginger reject Mary's offer?
If Ginger had offered alternative terms, this could have been a counter-offer terminating
Mary's original offer [Hyde v Wrench). However, Ginger's statement would be viewed by
the 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]. No
reasonable person in Mary's shoes would understand Ginger to be intending to reject or
counter-offer.

Has Mary's offer been revoked?

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

Dodds).
In Dickinson v Dodds, Dodds offered to sell a property to Dickinson. Before his
acceptance, Dickinson heard, via a third party, that the property had been sold. The
court held that there had been an effective revocation as, at the time of the purported
acceptance, Dickinson knew that Dodds was "no longer minded" to sell. For there to be
an effective revocation in this case, hearing of the other handbag purchase would have
to lead a reasonable person in Ginger's position to understand that Mary was "no longer
minded" to purchase Ginger's Prada handbag. This will come down to the evidence. IF
we 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 her
buying another would be viewed by a court as an effective revocation. IF this were not

objectively known to Ginger, then this conclusion is unlikely, especially in light of the
fact 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 much
time you dedicate to each issue. Here, offer (including revocation), acceptance and,
perhaps, intention, were the only issues raised. If additional issues were raised, one
might have needed to cut down the time spent on some issues to ensure the other
issues were adequately dealt with.

Kylie Fletcher-Johnson
January Semester, 2014
The content of this document draws largely
on a previous work co-authored with Jay Forder
and such work is duly acknowledged.