FORMATION ..............................................................

     

 

  FORMATION  ................................................................................................................................................................................  38   CONTRACT  THEORY  ..................................................................................................................................................................  39   INTENTION  .................................................................................................................................................................................  41   OFFER  ...........................................................................................................................................................................................  45   ACCEPTANCE  AND  CERTAINTY  ............................................................................................................................................  50   CONSIDERATION  .......................................................................................................................................................................  57   FORMALITIES  AND  ESTOPPEL  .............................................................................................................................................  61   CAPACITY  AND  PRIVITY  .........................................................................................................................................................  67   EXPRESS  TERMS    .......................................................................................................................................................................  75   IMPLIED  TERMS    .......................................................................................................................................................................  81   INTERPRETATION  OF  TERMS  AND  CONSTRUCTION  ....................................................................................................  87   PERFORMANCE  OF  THE  CONTRACT    ...............................................................................................................................  103      

 

                                               

 

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LIST  OF  CASES     Intention  to  be   Legally  Bound  

Rose  and  Frank  Co  v  JK   Crompton  and  Bros  Ltd   Balfour  v  Balfour   Cohen  v  Cohen   Merritt  v  Merritt   Riches  v  Hogben   Jones  v  Padavatton  

Todd  v  Nicol  

Wakeling  v  Ripley  

Roufos  v  Brewster  

Simpkins  v  Pays  

Rose  &  Frank  v  Crompton   Jones  v  Vernon’s  Pools   Esso  Petroleum  v  Comm   Taxation   Edwards  v  Skywards   Banque  Brussels  Lambert   SA  v  Australian  National   Industries  LTD   Gate  Gourmet  Australia  Pty   Ltd  (In  Liq)  v  Gate  Gourmet   Holding  AG        

 

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Intend  to  be  bound:  clause  which   indicated  they  weren’t  intending  to   be  bound  by  law   Presumption:  there  is  no  intention   in  a  domestic  relationship   Presumption:  there  is  no  intention   in  a  domestic  relationship   Presumption:  separated  couples   are  more  likely  to  have  intention   Presumption:  separated  couples   are  more  likely  to  have  intention   Domestic  Relationship:  there  is  no   intention  between  mother  and   daughter   Domestic  Relationship:  widow   invites  sister  and  niece  of  deceased   husband  to  live  with  her  –  there  was   intention   Domestic  Relationship:  Invited   sister  and  brother-­‐in-­‐law  to  move  to   Australia  and  live  with  him  –  there   was  intention   Domestic  Relationship:  Son-­‐in-­‐law   helps  out  with  business  deliveries   and  the  goods  were  damaged  en   route  –  there  was  intention   Domestic  Relationship:   granddaughter  and  grandmother   and  paying  lodger  lived  together   paying  rent  and  entered  a   competition  for  which  they  paid  1/3   each.  Granddaughter  refused  to  pay   –  intention  to  be  bound   Honour  Clauses   Honour  Clauses   Puffery   Ex  Gratia  Payments   Letters  of  Comfort   Letters  of  Comfort  

 

Coogee  Esplanade  Surf   Motel  v  Cth   Administrator  of  PNG  v   Leahy   Australian  Woollen  Mills  v   Cth   Cameron  v  Hogan   Baldwin  v  Everingham   Finlayson  v  Carr  

Offer  

     

Letters  of  Intent   Government  contracts   Government  contracts  

Voluntary  Associations   Voluntary  Associations   Voluntary  Associations   Presumption:  relationship  with  the   Ermogenous  v  Greek   Church  is  not  business  –  no   Orthodox  Church   intention  –  PRESUMPTIONS  CAN  BE   REBUTTED  AND  UNORTHODOX   Definition:  a  statement  of  the  terms   upon  which  the  offeror  is  prepared   Nielsen  v  Dysart  Timbers   to  be  bound  if  acceptance  is   Ltd   communicated  while  the  offer   remains  alive   Knowledge:  parties  must  have   Fitch  v  Snedaker   knowledge  of  the  offer,  which  has  to   be  communicated   Who:  Offer  can  be  made  to  the   world  at  large   Puffery:  exaggeration  which  is  not   Carlil  v  Carbolic  Smoke  Ball   intended  to  be  taken  seriously   Invitation  to  Treat:  offer  to  receive   offers   Agreement:  if  parties  have  reached   Clarke  v  Dunraven   final  agreement,  there  can  be  a   contract   Intention:  it  was  a  government   Australian  Woollen  Mills  v   scheme  to  promote  industry  –  no   Commonwealth   intention  to  be  legally  bound   Puffery:  advertisement  which   Mitchell  v  Valherie   exaggerated  benefits  of  the  goods  –   not  misrepresentation   Puffery:  reasonable  person  would   Leonard  v  Pepsico   not  interpret  the  ad  as  being  factual   Information:  request  for   Harvey  v  Facey   information  is  not  an  offer  or   acceptance   Information:  request  for   Stevenson  Jaques  &  Co  v   information  is  not  an  offer  or   McLean   acceptance   Gibson  v  Manchester  City   Invitation  to  Treat:  invitations  to   Council   treat  are  not  offers   Advertisements:  wine  list  sent  out   Grainger  and  Sons  v  Gough   as  an  ad  was  an  invitation  to  treat    

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Shop  Displays:  invitations  to  treat   and  not  offers   Shop  Displays:  the  display  of  a   Pharmaceutical  Society  v   product  in  a  store  with  a  price   Boots  Cash  Chemists   attached  is  not  sufficient  to  be  an   offer   Auctions  with  Reserve:  the  call  for   Payne  v  Cave   bids  is  an  invitation  to  treat   AGC  (Advances)  Ltd  v   Auctions  without  Reserve:  general   McWhirter   rule  applies  (call  =  invitation)   Internet  Auctions:    a  binding   contract  existed  between  the  two   parties  as  the  essential  terms  were   Smythe  v  Thomas   listed  on  eBay  and  it  wasn’t  stated   that  sale  was  subject  to  discussion   or  negotiation  (sale  of  a  plane)   Pratt  Contractors  Ltd  v   Tenders:  the  call  for  tenders  is  an   Palmerston  North  City   invitation  to  treat,  but  the   Council   submission  is  the  offer   Tenders:  the  contract  is  awarded  to   Harvela  v  Royal  Trust   the  highest  fixed  bid  (bilateral   Company   contract)   Tender  –  Collateral  Contract:   Hughes  Aircraft  Systems   information  about  the  tender  was   International  v  Airservices   passed  to  another  party  –  breach  of   Australia   a  collateral/process  contract   Tender  –  Collateral  Contract:   Blackpool  &  Fylde  Aero   tenders,  and  requests  for  tenders   Club  v  Blackpool  Borough   are  accompanied  by  a  collateral   Council   contract  which  implies  the  bid  will     be  inspected   MacRobertson  Miller   Ticket  purchase  (prior):  Issue  of   Airline  Services  v   the  ticket  =  offer,  and  when  the   Commissioner  of  State   passenger  takes  their  seat  =   Taxation  (WA)   acceptance   Ticket  purchase  (automatic   Thornton  v  Shoe  Lane   machine):  display  of  the  machine  =   Parking   offer,  money  placed  into  the   machine  =  acceptance   Termination:  an  offer  is  terminated   Byrne  v  Van  Tienhoven   if  it  is  withdrawn,  however   revocation  must  be  communicated   Termination:  termination  of  the   Dickinson  v  Dodds   offer  can  be  in  words  or  in  conduct,   even  by  a  third  party   Termination  (Option  Contract):   Goldsborough  Mort  and  Co   an  offer  can  be  revoked  by  the   v  Quinn   offeror  before  communication  of   acceptance  by  offeree   Fisher  v  Bell  

     

 

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Acceptance  

     

Termination  by  Death:  a  contract   can  still  be  performed  if  there  is  a   Carter  v  Hyde   personal  element,  or  else  the  offer   will  lapse   Termination  through  Condition   Failure:  the  signature  of  one  co-­‐ Neill  v  Hewens   vendor  is  not  binding  without  the   signature  of  another  –  ALL  parties   must  sign   Rejection/  Revocation  and   Unilateral  Contracts:  breached   Mobil  Oil  v  Wellcome   contract  with  dealers  –  revocation   International   made  it  impossible  for  acceptance  to   occur   Acceptance:  must  be  as  a  response   Crowne  v  Clarke   to  and  as  a  result  of  the  offer   Counter-­‐Offer:  a  counter  offer  is   Hyde  v  Wrench   not  acceptance   Standard  Forms:  Terms  of  the   Butler  Machine  Tool  Co  Ltd   buyer  were  different  to  the  terms  of   v  Ex-­‐Cell-­‐O-­‐Corp  (England)   the  seller.  Accepted  as  a  counter   Ltd   offer  as  it  wasn’t  the  original  terms   Subject  to  Contract:  finality  is   Master  v  Cameron   subject  to  another  contract  being   formed   Empirnall  Holding  v   Conduct:  acceptance  can  be   Machon  Paul  Partners   conferred  through  conduct   Silence:  acceptance  is  not  valid  if  it   Felthouse  v  Bindley   is  stipulated  by  silence   Postal  Rule:  acceptance  arises  as   Adams  v  Lindsell   soon  as  the  letter  is  posted,  NOT   recieved   Postal  Rule:  parties  must  have   Henthorn  v  Fraser   contemplated  post  would  be  means   of  communication   Postal  Rule  Exception:  parties   Bressan  v  Squires   must  have  stipulated  actual  receipt   of  the  acceptance  letter   Postal  Rule  Exception:   Tallerman  v  Nathan’s   circumstances  of  the  case  –  where   Merchandise   negotiations  are  complex  and  highly   contentious   Instantaneous  Communication:   Entores  Ltd  v  Miles  Far   general  rule  applies  to  telexes  and   East   telephones,  not  the  postal  rule   Instantaneous  Communication:   Brinkibon  Ltd  v  Sahag   general  rule  applies  to  telexes  and   Stahl   telephones  not  the  postal  rule      

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Reese  Bros  Plastic  Ltd  v   Hamon-­‐Sobelco  Australia   Foley  v  Classique  Coaches   Ltd  

Instantaneous  Communication:   general  rule  applies  to  faxes   Completeness:    need  final   agreement  on  all  essential  terms   Completeness:  parties/subject   matter  and  price  need  to  be  decided   Illusory  Terms:  A  term  can  be   implied  based  on  reasonableness   regarding  the  deferral  of  agreement   Completeness:  Agreements  to   agree  or  negotiate  constitute  an   incomplete  contract   Certainty:  A  contract  is  only  legally   enforceable  if  the  terms  are  officially   agreed  on  and  certain   Illusory  Promises:  If  a  promise   gives  one  party  an  unrestricted   discretion,  the  promise  is  illusory   Illusory  Promises:  if  the  promise   isn’t  illusory,  the  contract  provides   information  as  to  who  should   determine  important  matters   Illusory  Promises:  If  the  promise   isn’t  illusory,  the  contract  provides   an  objective  criteria  for  exercise  of   discretion   Illusory  Terms:  Terms  can  be   implied  based  on  an  external   standard   Illusory  Terms:    Invalid  terms  can   be  severed  if  the  contract  can   survive  without  it.  Otherwise  the   contract  becomes  void   Illusory  Terms:  If  a  term  is  for  the   benefit  of  one  party  only,  that  party   can  waive  the  term   Definition:  Act,  or  promise  of  an  act   which  is  done  in  return  for  a   promise   Move  from  the  promise:  To   enforce  it,  it  must  be  paid  for   Definition:  Valuable  consideration   must  consist  of  some  right,  interest,   profit  or  benefit  for  one  party,  or  a   forbearance  of  the  other   Definition:  Consideration  must  be   paid  for  to  be  enforceable    

Hall  v  Busst  

Coal  Cliff  Collieries  P/L  v   Sijehama  P/L   G  Scammell  and  Nephew   Ltd  v  HC  and  JG  Ouston   Placer  Development  Ltd  v   Commonwealth   Godecke  v  Kirwan  

Meehan  v  Jones  

Hillas  v  Arcos  

Fitzgerald  v  Masters  

Whitlock  v  Brew   Consideration   Dunlop  Pneumatic  Tyre  v   Selfridge  and  Co  

Currie  v  Misa  

Parastatidis  v  Kotaridis  

     

 

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