Decisions are binding down the courts of the same juridiction-­‐ Ratio Decendai Precedent goes down Full Court of the Federal Court High Court 7 Judges-­‐ Chief of Justice if cote is equal QLD Supreme Court of Appeal 3 Judges Other State Supreme Court of Appeal The federal court Law matters up to $200,000 QLD Supreme Court 1 Judge $750,000 + Other State Supreme Court Federal Circuit Court QLD District Court (intermediate court) $150,001-­‐$750,000 Other State District Court Federal Tribunals a QLD Magistrates (Minor Courts) $25,001-­‐$150,000 Other State Magistrates Court QLD Tribunals $25,000 Obiter Dictum-­‐ decisions of other courts are not binding but may be influential in cases with similar facts -­‐persuasive Appeal goes up Lecture 1: Legal Foundation What is Law? Rule of Law Purpose of Law Purpose of Ethics Ethics Corporation Corporate Governance Theories of Law Divine Law Human Law Positvism The Legal System Sources of Law Statutory law/Legislation Common Law Classification of Laws Legal Systems of the World Civil Law Common Law System Other Systems Common Law System Civil Law Criminal Law Origins of English Law Before the Norman Conquest in 1066 William the Conqurer Equity Statute Law 18th Century England History of Australian Law From Penal Colony 1828 1828 to 1901 Federation 1901 Origins of Australian Law Military Victory Treaty (Cession) Settlement – Doctrine of Reception Development of Native Title Stolen Generations Stolen Wages Surrender Adoption Policy Powers Exclusive Concurrent Residual Commonwealth & State Powers Separation of Powers Doctrine of Precedent The Constitution Legal System Flowchart 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 4 4 5 5 5 5 5 5 6 b Lecture 2: Types of Law Statutes Common Law Legislation (statutes) Delegated Legislation 1. Regulations 2. (Legal) Rules 3. By-­‐laws 4. Ordinances Rules of Statutory Interpretation Section 15AA (1) Section 15AB Common Law Rules 1. Literal Rule 2. Golden Rule 3. Mischief Rule Roles & Parties Solicitors Barristers Judges Magistrates Justices of the Peace The Jury Australian Court System Original Jurisdiction Appellate Jurisdiction Civil Jurisdiction Criminal Jurisdiction Burden of Proof Original Jurisdiction (Civil Claim) Plaintiff Defendant Original Jurisdiction (Criminal Claim) Crown Defendant Appellant Jurisdiction (Civil Appeals) Appellant or Applicant Respondent Appellant Jurisdiction (Criminal Appeals) Appellant or Applicant Respondent Courts High Court Federal Court Family Court Federal Circuit Court (FMC) Supreme Court District Court Magistrates Court Alternative Methods to Courts Ombudsmen Tribunals Alternative Dispute Resolution Case Law – Doctrine of Precedent State Decisis Binding Persuasive 6 6 6 6 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 8 8 8 8 8 8 8 8 8 8 8 8 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 10 10 10 10 10 10 10 10 11 11 Obiter Dictum (Dicta) echniques Judicial T
Adopted Overruled Reversed Distinguished Disapproved Affirmed 11 11 11 11 11 11 11 11 c Lecture 3: Law of Contract Contract Law 6 Essential Elements of a Simple Contract Classification of Contracts Formal or Simple Information Express Implied Quasi-­‐Contracts Promise Unilateral Bilatera Performance Executed Executory Enforceability Valid Voidable Unenforceable Void Illegal Element 1-­‐ Agreement Rules relating to OFFER Invitation to treat Tenders Revocation of Offer Option Termination Rules relating to ACCEPTANCE Postal Acceptance Rule Exceptions Contracts and e-­‐commerce Electronic or Instantaneous Communication Electronic Transactions Act Element 2 – Intention Social Domestic Voluntary Non-­‐Commercial Agreements Domestic Social Voluntary Commercial Agreements 11 11 11 11 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 13 13 13 13 13 14 14 14 15 15 15 15 15 15 15 15 15 16 16 16 d Lecture 4: Law of Contract Element 3 – Consideration 17 Promisor 17 Promise 17 Consideration 17 1. Consideration must be sufficient but not adequate 17 2. Consideration must not be illusionary 17 3. Consideration must be executed/executory not past 17 4. Exception to Past Consideration Rule 17 5. Consideration promise to refrain from legal action 17 6. Performing existing obligation is bad consideration 18 Practical Benefits Test 18 Formalities 18 Contracts Under Seal 18 Contracts required to be in writin 18 Promissory Estoppel 18 Element 4 – Capacity 18 Minors 19 Valid 20 Voidable 20 Void 20 Corporations 20 Bankrupts 20 Mentally Unsound/Intoxicated/Married Women 20 Element 5 – Consent (Genuine) 20 Types of Mistake 20 Common 20 Unilateral 21 Mutual 21 Non est factum 21 Misrepresentation 21 Fraudulent 22 Innocent 22 Negligent 22 Duress 23 Undue Influence 23 Unconscionable Conduct 23 Element 6 – Legality of Object 24 Contract affected by Statute 24 Contracts illegal at Common Law 24 Contracts void at common law but not illegal 24 Contracts in restraint of trade 24 e Lecture 5: Law of Contract Contents & Interpretation Representation or Term Express Terms Collateral Contracts Condition Warrant Innominate Term Condition Precedent Condition Subsequent Parol Evidence Rule Exclusion Clauses 1. Exemption Clause must form part of the contract Signed Document Unsigned Document 2. Interpretation of the Exclusion Clauses Contra Proferentum Rule Four Corners Rule 3. Exclusion clause must be limited by legislation Online Contracting Clickwrap Agreements Browsewrap Agreements Implied Terms Termination Performance Agreement Breach Frustration Remedies Damages Equitable Remedies Specific Performance Restitution Statutes of Limitations 25 25 26 26 26 26 26 27 27 27 27 27 27 28 28 28 28 28 28 28 28 29 29 29 29 30 30 30 30 31 32 32 32 f Lecture 6: Australian Consumer Law Consumer Protection Law Legislation applies to: Regulation of the CCA ACC new investigation & enforcement powers Substantiation notices (ss219-­‐222) Infringement notices (Regs) Public Warning Notices (s223) Apply to court for: Door to Door Sales & Telemarketing Misleading & Deception Conduct s18 & 19 Objective test Major Consumer Protection Provisions Unconscionable Conduct Consumers & businesses (s21) Unfair Contract terms of consumer contracts (s23) Unfair Contract terms of consumer contracts (s24-­‐25) False of Misleading Representation (s29) Goods and Services (s29) False or Misleading Country of Origin (ss255-­‐257) Other Prohibited Business Conduct Manufacturers’ Liability for Defective Goods Consumer Guarantees Remedies for non-­‐compliance Manufactures liability (s271) National Product Safety Regime CAA Enforcement & Remedies 32 33 33 33 33 33 33 34 34 34 35 35 35 35 36 36 36 37 37 37 38 38 38 39 39 39 g Lecture 1: Legal Foundation What is Law? Rule of Law the principle that every person and organisation (incl government) is subject to the same laws. • Purpose of law is to govern the conduct of all members of society both natural and legal • Purpose of Ethics is to provide guidance for individuals in respect to their business relationships Ethics is concerned with that is right and what ought to be and not accepting what is, as members of society. Businesses have now adopted business Code of Ethics to guide employees with ethical issues. As such, legislation has been enacted which provide for legal recognition of these codes (e.g. Australian Competition and Consumer Law – Competition and Consumer Act 2010 (Cth)) Corporation: law recognises it as a separate legal entity in addition to its office holders. Corporations are required to act in an ethical manner as set out by legislation. Corporate governance is carried out by ASIC (Aus Securities & Investment Commission) (The Corporations Act (Cth) –ss180-­‐197-­‐ Director’s Duties) Theories of Law Divine law: •
•
•
•
the law of God independent of the will of humans there is a natural or divine reason for the existence of laws, so laws have a reason beyond those that humans have created laws should reflect the principles by which we should live: the essence of humanity Human law: •
law as an invention of people Positivism: •
•
a law is correct, if the source of that law is correct/valid – i.e. validly made by govt. Positive laws deals with what the law is, and now what it ought to be. The Legal System (the authority that binds the law) Effective Legal System •
•
•
•
Certainty: uncertainty leads to inconsistency & unpredictability Flexibility: law which is capable of reflecting changing morals and social values Fairness: if a law is not fair it will not be followed Accessibility: a law which is inaccessible cannot provide fair/just outcomes Sources of Law 1. Statutory law (Legislation) and delegated legislation •
•
•
•
•
Enacted laws established by the people through parliamentary representatives and other govt bodies Most important, as majority of law comes through parliament Legislation, Acts, Statutes, Delegated Leg’n Made prospectively – into the future Responsive to the community 1 2. The Common Law Created through reported decisions of judges in superior courts (judge made law) Acts reactively Usually includes the law of equity Not responsive to the community •
•
•
•
Classification of Laws While the law is a set of rules, it should be noted that all rules are not automatically laws. Common law 1. v 2. (System in parts of Western Europe) Public v Substantive v Organisation of govt and its relationship with people 3. Civil law Private Deals with the disputes between individuals or organisations The actual rights and duties of individuals or organisations under law Procedural The rules of evidence and conduct of criminal and civil proceedings International v Municipal Regulating the (domestic) laws come from statute or case law. conduct between Regulate relations between people or organisations nation states* within the borders of the state (Country) *International treaties and conventions are not part of municipal or domestic law unless they are given express legislative approval by the Cth (federal) Government and are ratified. *In the last 100 years, Australia has ratified over 900 international treaties and conventions. *International law also applies to private individuals engaged in international transactions. 4. Legal Systems of the World Civil Law: •
•
•
•
Based on Roman Law Primary source of law is legislation (enacted) Inquisitorial E.g: Western Europe, Indonesia, Japan etc. Common Law System: •
•
•
Sources of law include both legislation and judge made (case) law Accusatorial/adversarial E.g: Cth nations (i.e. Australia, Canada) & the USA Other Systems: •
Islamic, Talmudic, Hindu, Sino-­‐Soviet Common Law System 1. Civil Law Citizen v Citizen; covers actions brought by one individual against another, which results in remedies for the winning party and liabilities to the losing party. • Emphasis on remedies $$$$ • Standard of proof: balance of probabilities. • Burden (onus) of proof: plaintiff (person bringing the case to court) 2 2. Criminal Law State (Govt), v Accuses; covers actions brought by the state (crown R) against a person for doing an act the state considers to be a crime and which is punishable by a penalty. • Emphasis on punishment • Standard of proof: beyond reasonable doubt • Burden (onus) of proof: crown (state, govt, police etc) Origins of English Law Before the Norman Conquest in 1066 •
Local customary law •
•
•
Kings as ultimate authority Appointment of judges: administer a uniform system of law across England & levy taxes Overtime a uniform body of law (decisions by judges) developed throughout England •
•
Equity developed as a result of the growing inflexibility and rigidity of the common law Supplementary only; not a complete legal system in its own right. In the event of conflict with common law, equity will prevail Equity does not apply to all civil disputes and it has no application in criminal law William the Conqueror – growth of Common Law Equity •
Statute law •
•
•
Divine right and Magna Carta (everybody, including the King is subject to the law) King John 1215 powers limited Parliamentary sovereignty (supreme and independent power or authority in government as possessed or claimed by a state or community) 18th Century England •
•
Black Act 1723 (death penalty for the unlawful killing or maiming of animals) Hulk Act 1774 (housing convicts on ships) History of Australian Law From Penal Colony to 1828 •
•
Australia, as a convict settlement, had a system differing from that in Britain as it was subject to martial law (military rule) The New South Wales Act 1823 (Imp) – established the New South Wales Supreme Court with civil and criminal jurisdiction and Legislative Council of 5 to 7 members. 1828 to 1901 •
•
•
•
The Australian Courts Act 1828 (Imp) – beginning of the evolution of Australian law The Australian Constitution Act 1850 (Imp) – enabled the colonies to create local law making bodies, next step towards independence. The Colonial Laws Validity Act 1865 (Imp) – gave the states the right to change their own constitutions and enact legislation without applying English domestic law to Australian conditions. Before Federation in 1901, Australia consisted of a group of British colonies Federation 1901 •
•
January 1, 1901 six colonies became the Commonwealth of Australia and the Australian Constitution became law set •
The Commonwealth of Australia Constitution Act 1900 (Imp) The Constitution • Set up Australia’s Federal System -­‐ a two-­‐tiered system of government 1. Gives the Federal and State Parliaments the power to make laws (and restricts them from doing so!) 2. Provides the laws of government -­‐ sets out how power is divided between the States and the Cth (and the federal courts) 3 Origins of Australian Law Reception of English Law in Australia Colonies established by England were colonised by either a) Military Victory (Conquest) • Where the British conquered people, the British could impose on them the laws they wished, but until that time, the local laws remained in force. If Australia was declared to be a conquered land then it is likely that the existing laws of the conquered would have been observed with some colonial alteration. b) Treaty (Cession)
• Where a nation ceded or gives up their sovereignty to another nation by way of a treaty c) Settlement – The Doctrine of Reception
• British common law, as accepted in International Law at the time, recognised methods by which the Crown could ‘legitimately’ acquire new territory and claim sovereignty over it. • If the land was terra nullius (no ones land or the land belongs to no one) then the laws of the colonisers applied to the new colony • According to the English at the time, indigenous Australians appeared to the Europeans to have no system of property ownership as they appeared nomadic (wanderer) and did not cultivate the land, as the Europeans of the time did. • The effect of Australia being declared a settled colony by virtue of ‘terra nullius’, was that the rights and customary laws of the Indigenous Australian people and even their very existence were ignored. • Marital (military) Law began in Australia to govern the colony with the coming of the first fleet • In the case of Australia, this meant no recognition was given to the rights of the Aboriginal people in earlier before Mabo v Queensland (No 2) (1992). Development of Native Title The long held fiction of Australia being ‘terra nullius’ at the time of colonisation was overturned in: • Mabo v Queensland (No. 2) (1992) The High Court acknowledged that Australia had not been terra nullius and that common law recognises a form of native title to land. Certain pastoral leases (Crown land that government allows to be leased) did not necessarily extinguish native Title. The significance of the overturning of ‘terra nullius’ was initially that it brought into question the validity of the Constitution and subsequently the whole Australian legal system, but in a now famous statement by Brennan J, it was stated that: • “The court is not free to adopt rules that accord with contemporary notions of justice and human rights if their adoption would fracture the skeleton of principle which gives the body of our law its shape and internal consistency. So the Crown maintains sovereignty, thus validating the Australian legal system The 'Stolen Generations' generations of Aboriginal children taken away from their families by governments, churches and welfare bodies to be brought up in institutions or fostered out to white families. The 'Stolen Wages' 1890s to 1970s the wages and savings of aboriginal workers were controlled by successive governments under compulsory labour contracts. The ‘Surrender Adoption Policy’ and National Apology thousands of unwed mothers (of all races) were forcefully separated from their children at birth in Australia from the 1940s to 1970s. Powers The Australian constitution provides: • the Cth (Federal) parliament with Exclusive powers; powers only exercisable only by the Cth government; 4 •
Federal and State governments with Concurrent powers; which are exercisable by either Cth or State parliaments. • granted specifically to the Cth under s 51, but remain shared between Cth & State Governments • State parliaments with Residual powers; meaning, jurisdiction within their own borders, on any matters not specifically reserved solely for the Cth Commonwealth Govt -­‐ Federal System -­‐ State Govt Exclusive Concurrent Residual • s.90: Custom, Excise Section 51 • Local Govt and bounties • Tax • Transport • s. 92: Free trade • Building of roads, • Education between the states railways • Health • s. 114: Military forces • s. 115: Currency 1901 to 1986 The Statute of Westminster 1931 (Imp) -­‐ extended the operation of the Colonial Laws Validity Act to Acts of the federal parliament. The Australia Act and the Australia (Request and Consent) Act 1986 (Cth) -­‐ marked the completion of constitutional independence and statehood by repealing the Colonial Laws Validity Act. Commonwealth and State Powers •
•
•
•
Where there is any inconsistency between laws made under the Powers provisions of the Cth Constitution and a State, section 109 provides that the State laws, to the extent of the inconsistency, shall be invalid Most of the Cth powers are held concurrently (shared) with the states (s 51) This means that both can legislate in these areas and where they conflict, the Cth law will prevail if the intention of the Cth parliament is to ‘cover the field’ To change the Constitution requires a referendum – which is set out in section 128 – Approved by an absolute majority of both Houses of Parliament; – Referendum (vote) approved by majority of the voters in a majority of the stages; and – The Governor-­‐General gives Royal Assent. Of the 44 proposals to change the Constitution, only 8 successful. Separation of Powers The doctrine of precedent seeks to confine the exercise of the Legislative, Executive and Judicial branches of government exclusively to their respective institutions. 1. The Parliament (legislative)-­‐ Make the law 2. The Executive-­‐ administer the law 3. The Judiciary (courts)-­‐ interpret and enforce the law The Constitution Section 1; the legislative power of the Cth is vested in the federal parliament, which consists of the Queen, the Senate & House of Reps -­‐ Federal Parliament has 2 houses, 1) The Lower House (House of Reps) 2. Upper House (Senate) -­‐ Qld Parliament is set up under the Qld Constitution and is unicameral (one chamber of house) • Section 61; the executive power of the Cth vested in the Queen & Governor General as the Queens Representative. Also called the Cabinet, Made up of government departments, ministers and prime ministers • Section 71; the Judicial power of the Cth is vested in High Court Aust Parliament has Legislation Powers Cabinet has Executive Powers Judiciary has Judicial Powers •
5 The Legal System Flowchart Lecture 2: Types of Law Two Types of Law Statutes (legislation) Common Law (judge made law) Made by parliament Operates prospectively (in the future) Written in one text (lesser extent nowadays) Can be very broad Responsive to community, takes the initiative Easier to change Democratic but political Made by judges Operates reactivity (in reaction to something) Dispersed Directed at particular issues Not as responsive, has to await litigation Harder to change – slow Above partisan politics Legislation (statutes) Making of Statutes 1.
2.
3.
4.
5.
6.
Proposal Drafting of Bill Lower House Upper House Royal Assent Commencement Recognising Legislation Section 180, Corporations Act 2001 (Cth) Section of Act Name of Statute Year Enacted Name of Parliament Delegated Legislation The law making power of parliament can also be delegated (transferred to others) E.g. Councils (BCC & GCCC) or Government Agencies (Centrelink, ACCC) 6 Four Forms of Delegated Legislation Regulations: Practical legal guideline (have the power of the law) that provide administrative support for a statute (Legal) Rules: Administrative procedures that are written as support to legislation and that are therefore enforceable. By-­‐Laws: Laws that apply to a particular geographical area Ordinances: Laws that apply to a particular territory Rules of Statutory Interpretations Section 15AA (1) of the “AIA” states that courts must use the purpose approach to interpret statues Section 15AB of the “AIA” allows courts to use extrinsic (outside) material when interpreting statues E.g. reports by ministers, reports of parliamentary proceedings, explanatory memoranda Three common law rules §
§
§
charged Bell under the Restriction of Offensive Weapons Act 1959 which stated: “Any person who sells, lends or gives an offensive weapon [this included flick knives] to any other person commits an offence.” The court decided not guilty as Bell did not sell the weapon. Golden Rule if a literal interpretation would let to an absurdity (repugnant result), words given a meaning that would avoid the absurdity. Re Sigsworth (1935) Literal Rule (plain meaning) give the literal (ordinary) meaning to the words used in the legislation, consulting dictionaries, even if it leads to an absurd result. Fisher v Bell (1961) Constable Fisher saw a flick knife with a price tag displayed in Bell’s shop window. He A son had murdered his mother. The mother had not made a will, but in accord with rules set out in the Administration of Justice Act 1925 her next of kin (her son) would inherit her possessions. There was no ambiguity in the wording of the Act, but the court was not prepared to let a murderer benefit from his crime because it would be repugnant to do so. Mischief Rule “Purposive Approach”, search for the mischief (defect), which a statute was intended to remedy. Smith v Hughes (1969) The Street Offences Act 1959 prohibited soliciting by prostitutes “in the street”. To try to get around the operation of the Act, because its meaning was not entirely clear (ambiguous), the prostitutes began to try to attract business by standing at their windows or on their balconies and calling out to passers-­‐by. The purpose of the legislation was to stop prostitutes all together. Roles & Parties Solicitors (legal practitioners) appointed to all courts above the inferior courts Magistrates and Tribunals, generally appointed from member of the bar (barristers). Most of their work is of a non-­‐litigious nature such as conveyancing, preparation of wills, commercial, family law matters, and preparation of court documents Barristers Generally do not deal directly with the public, though in most states they now can. Main roles: are preparation of legal opinions, and court appearances Judges Appointed to all courts above the inferior courts (Magistrates Court and tribunals) and generally appointed from members of the Bar (barristers) Duties include: 7 §
§
§
§
Deciding questions of fact and law; Ensuring rules of evidence are followed; Passing sentence in criminal cases or determining appropriate compensation in civil cases; and Hearing appeals. Magistrates trained, full-­‐time salaried public servants selected from among the clerks of the court or member of the legal profession. Preside over inferior courts and are the sole determiners of both fact & law Justices of the Peace honorary positions with the bulk of their work involved in witnessing of documents. Qld, SA and WA they can preside in a Magistrates Courts The Jury the jury determines questions of fact/not law The courts have a criminal and civil jurisdiction In criminal trials: All accused are entitled to a jury of 12 in all cases in intermediate and superior courts where the accused pleads ‘not guilty’ to an indictable offence In civil matters: Because of cost, they are not used as much as they once were Australian Court System Jurisdiction powers and authority conferred upon a court to hear and determine a matter Original Jurisdiction is the authority to hear a case when the case is first brought before a court. Appellate jurisdiction is the authority of a court to hear appeals from decisions of courts of a lower level in the same court hierarchy. Each court has a Civil ($) & Criminal Jurisdiction (seriousness) (Division), whilst tribunals only deal with civil matters Civil Jurisdiction •
•
•
An individual or organization commences an action against another individual or organistion. Where the matter is heard depends on the seriousness of the breach in terms of $$$ Standard of Proof-­‐ on the balance of probability. In an original jurisdiction the Plaintiff is the person starting the civil action & the defendant is defending the civil action In an appellant jurisdiction is appellant/application is a person who is appealing against a previous decision and who can be either a plaintiff or defendant from a previous case. Criminal Jurisdiction •
•
•
•
•
The state (R ) brings an action against the accused, where the matter is heard depends on the seriousness of the offence-­‐ all must start in the magistrates. Standard of Proof-­‐ beyond reasonable doubt Summary(minor) offence Indictable offences (serious – possibility or definite jail as punishment) In an original jurisdiction represents that state in a criminal action against an accused (defendant) In an appellant jurisdiction the respondent is the person who was successful in the first case. Burden of Proof Civil: parties bringing the case to court Criminal: Crown proves its case Original Jurisdiction (Civil Claim) Plaintiff person starting a civil action Defendant person defending a civil action 8 Original Jurisdiction (Criminal Claim) Crown (Name of Gov’t Dept or ‘R’) – represents the state in a criminal action against an accused (defendant) Defendant person against whom a criminal action is brought by the state Appellant Jurisdiction (Civil appeals) Appellant or Applicant a person appealing against a previous decision and who can be either the plaintiff or the defendant from the first case Respondent the party who was successful in the first action Appellant Jurisdiction (Criminal appeals) Appellant or Applicant a person appealing against a previous decision and who can be either the plaintiff or defendant from the first case Respondent the party who was successful in the first action Courts High Court of Australia §
§
§
§
§
Top of Federal and State hierarchies Can hear disputes between: State Gov & Cth Gov, 2 State Govt’s, Residents of different States, Foreign affairs matters Can hear appeals from State Supreme Courts and the Full Federal Court, Family Courts Special Leave (special permission), must be granted for a matter to the high court 7 current members including the Chief Justice Federal Court §
§
Original Jurisdiction: Traditional Commonwealth matters -­‐ administrative law, bankruptcy, human rights, consumer protection and trade practices, privacy, migration, copyright, industrial law and admiralty law. Appellate Jurisdiction: Some Supreme Courts, single judge Federal Court (including Magistrates and Tribunal decisions), State courts exercising federal jurisdiction Family Court §
No fault divorce (the spouse asking for a divorce does not have to prove that the other spouse did something wrong) Federal Circuit Court (FMC) §
§
Original Jurisdiction: The FMC deals primarily with Family Law matters and hears simple bankruptcy, human rights, administrative law, industrial law and trade practices law matters up to $200,000 Appellate Jurisdiction: Hears appeals from Federal Tribunals (e.g. Administrative Appeal Tribunal) Supreme Court §
§
§
§
§
§
§
AKA superior courts AKA court of records because the decisions are recorded in law Reports Courts below Supreme Courts are called inferior courts Appellate jurisdiction: the SC hears appeals from the DC before a single judge. The SC also has an appeals division. The Court of Appeal (three judges) in Queensland hears appeals from the decision of single SC judge and sometimes from the DC. Original jurisdiction: the SC in Queensland hears serious criminal matters such as murder and civil matters where the amount of compensation claimed is more than (≥) $750,000. The matter is heard by a single judge. Jury: A jury is used for criminal matters heard for the first time, and for some civil claims such as defamation. A jury is a group of ordinary citizens who decide a matter 9 District Court §
§
§
Intermediate court Original jurisdiction: Civil disputes and claims between $150,000 and $750,000, Some serious criminal matters Appellate jurisdiction: DC judge may hear an appeal from the decision of the Magistrates Court Magistrates Court §
§
§
§
§
§
§
Original jurisdiction: Magistrates Courts are often known as summary courts because they deal with minor or summary offences Civil matters where the amount claimed is normally $25,000 to < $150,000 Criminal jurisdiction – all offences start in the Magistrates but the court can only sentence where the offences are less serious For criminal trials, the magistrates court has different types of hearing: Committal Hearings (for Indictable (jail) offences): A preliminary hearing on a serious (indictable) criminal matter (e.g. murder) to determine whether the prosecution has sufficient evidence indicating that the person charged may be guilty (prima facie). If so, the accused will be sent to a higher court for trial by a judge and jury. Summary Trials (for Summary offences): A hearing on less serious criminal matters (e.g. Drink driving if challenged, Drug charges apart from supply or commerciality) to determine whether the prosecution has sufficient evidence to be found guilty. If so, the accused will be sentenced to jail or fined (or if insufficient let free sometimes – but rarely with costs awarded to them). Also function as Children’s Court, Coroner’s Court, Traffic Court, Probations, Domestic Violence and an Industrial Court Alternative Methods to Courts 1. Ombudsmen “agent of the people” investigates complaints about administrative actions and governmental decision-­‐making § Commonwealth Ombudsman § Telecommunications Industry Ombudsman § Banking & Financial Services Ombudsman 2. Tribunals body established by statute to regulate specific matters §
§
§
§
§
Tribunals are not courts, subject to review by the courts Tribunals are needed as there is an increasing number of cases in the court system, and there is a need for specialization QCAT (Queensland Civil & Administrative Tribunal) (Small Claims Tribunal QLD) deals with claims up to $25K AAT (Administrative Appeals Tribunal) ACCC (Australian Competition and Consumer Commission) Three differences between Tribunals and Courts 1. Tribunals review administrative decisions while higher courts review decisions of courts lower in the hierarchy 2. Non-­‐lawyers sometimes preside over tribunals, whilst Judges (i.e. former lawyers) preside over courts 3. Tribunals are limited to jurisdiction outlined in the statute which created them 3. Alternative Dispute Resolution Case Law – Doctrine of Precedent Precedent a (previous) judgement that is authority for a case on similar facts Stare Decisis to stand by a decision (let the decision stand) Doctrine of Precedent the decision of a court in a decided case binds judges lower in the same court hierarchy in deciding cases of similar nature 10 Precedent is relevant to the hierarchy of courts: • Binding this happens when the decision is from a higher court in the same hierarchy •
§
§
§
and is based on similar facts to the current case Persuasive-­‐ this is when the decision comes from a lower court in the same hierarchy or from any court (normally higher) in a different hierarchy. Cases decided in one hierarchy are not strictly binding on the courts in another but will be of persuasive authority only. The perpetual clause of the decisions of the appellate courts of other states is very strong. The High Courts decisions are binding on all courts in Australia (but not itself) Obiter Dictum (dicta) statement of principle made in the earlier case that was not strictly necessary for the decision (oh by the way, remarks made in passing). The statements are NEVER binding, but may be persuasive/influential (if based on similar facts) Judicial Techniques •
•
•
•
•
•
Adopted followed or applied Overruled if an appellant court decides a similar matter, in a later case, on the basis of a different legal principle-­‐ the decision in the later case in a higher court must be followed Reversed changed by the appeal in a higher court Distinguished the court finds some material difference between the facts of the two cases Disapproved if the court cannot overrule a case it may state that it believes that the earlier case is not longer good laws. Affirmed agree with the earlier decision Lecture 3: Law of Contract Contract Law Definition: An agreement between two or more parties under which legal rights and obligations are created which be enforce in the courts… a promise(s) that the law will enforce. An agreement is NOT necessarily a contract because it may lack one of the elements that govern contractual relations such as intention, consideration or legality or purpose. 6 Essential Elements of a Simple Contract Agreement, Intention, Consideration, Capacity, Consent, Legality • If one of these elements is lacking then the courts will not normally enforce the agreement. • In addition the courts require a contract that is properly constructed (ie. terms are valid and enforceable). Classifications of Contracts According to Formal or Simple Contracts • Formal Contract (contracts under seal)-­‐ are those that require a special form or •
method of creation but do not require consideration (some loans, contracts of record, hire purchase) Simple Contracts all contracts are termed simple contracts, very simple contracts require consideration. Some must be in writing and enforceable. (real estate) 11 According to Information • An Express where the parties have used express words, written or oral eg. Lease • An Implied contract is one implied from the conduct of the parties eg. Taxi • Quasi-­‐contracts are agreements imposed by the law eg. Compulsory third party insurance According to Promise • Unilateral involves the exchange of an act for a promise. Promise for an act eg reward Mobil Oil Australia v Wellcome International Pty Ltd (1998) -­‐ no unilateral offer made. Bilateral is an exchange of promises. Promise for a promise eg. Work-­‐wages bargain, delivery of a product •
According to Performance • Executed where parties have performed all present contractual promises (promises •
made at the time of making contract) (washed car and paid) Executory where promises remain unperformed, car still to be washed According to Enforceability • Valid all elements are present and enforceable by either party. Usual remedy for a •
•
•
•
breach is damages but equitable remedy may also be available. Voidable a valid contract that contains some defect, such a defect allows the innocent party to rescind the contract (induced by fraud to buy shares) Unenforceable valid (prima-­‐facie) on its face, such a defect allows the innocent party to rescind the contract Void lacks legal validity and is enforceable by either party Illegal void from the beginning void Ab initio (void from the beginning) eg. Hiring a hitman Element 1 – Agreement (offer & Acceptance) There is no valid contract unless the parties are in agreement as to fundamental terms 1. The offerer makes an offer (proposal) to the offeree, to enter into a legally binding contract -­‐> the offer may be oral, written or combination of both or implied by conduct 2. IF the offeree accepts the offer, a contract comes into existence at the moment acceptance is noted (received) (exception is the postal acceptance rule) • However, as the “offer-­‐acceptance” approach does not always work, the courts have taken a ‘global approach’ by examining the acts and conduct of the parties At least two parties + An offer + Acceptance of that offer = CONTRACT Rules relating to OFFER •
•
•
•
•
•
•
•
•
•
Characterised by an ‘offer’ by one party and an ‘acceptance’ by another It must have clear terms which are brought to the attention of the offeree Whether a statement amounts to an offer depends on whether the person to whom it is addressed would reasonably interpret it as an offer A statement alleged to be an offer must indicate a willingness by the offeror to be bound without further negotiation Must have clear terms which are brought to the attention of the offeree Must be distinguished from an invitation to treat Persons to whom an offer may be made & communication of the offer The refusal by the offer mut be brought to the attention to the offeree and any all conditions must be strictly followed unless waived. A counter-­‐offer ovr rights previous offer The offer must be communicated to the offeree/s The offer may be directed to only one person, a group of people, or to the world at large 12 •
•
The offer must be more than mere ‘puff’, must be ‘clear, definite & explicit” – Calill v Carbolic Smoke Ball Co. (1893) – flu epidemic – take medicine taken as directed – offer accepted Note: Section 52 of the Australian Consumer and Competition Law (ACCL) is likely to cover this kind of conduct, where the sales talk of puffery leads the recipient into error. Invitation to Treat is just an indication of willingness to deal or trade. “A statement that provides information but does so without indicating that the person intended to make an offer is not an offer.” (see Gibson v Manchester City Council [1979] – may be prepared to sell “I will sell you my car for $5,000”? – Offer “I want to sell my car but I will not let it go for less than $5,000? – Invitation to Treat An offer must be distinguished from an invitation to treat: An invitation to treat is an offer to consider offers and cannot create an agreement, even if there is a purported acceptance. They can include: 1. Goods in a shop window; Pharmaceutical Society of Great Britain v Boot Cash Chemists (1952)-­‐ Sale of drugs (Argued that the offer is when the customer goes up to cashier and provides money and asks to buy. Simply an invitation to treat) 2. Catalogues; Grainger v Gough (1896)-­‐ price lists are an invitation to treat, Patridge v Crittenden (1986) – adv’t of bramble finches not an offer 3. Advertisements; (unless advertising a reward) 4. Auctions; where there is a reserve price there is no offer. Where there is a ‘reserve price’, the auctioneer calling for bids is not making an offer, but is asking for offers from prospective purchasers. If there is no ‘reserve price’ the auctioneer becomes the offeror and must sell the goods to the highest bidder: Harris v Nickerson (1872-­‐73) – Advertisement of auction was not an offer (withdrawn), Smyth v Thomas [2007] – Online auctions Tenders are not normally offers unless the tender states its exact needs, as distinct from what it may only require. •
Revocation of Offer Offerer can revoke (withdrawn & cannot subsequently be accepted) offer anytime up until acceptance, even if the offereor has said that the offer will remain open -­‐> unless agreement was created with consideration or under a deed. Option to keep an offer open for a specified time; it must be supported by consideration, Goldsborough Mort & Co. Ltd v Quinn (1910) – option to purchase land Revocation (withdrawal) – termination of offer To be effective, withdrawal by the offereor must be brought to the notice of the offeree before acceptance, although the offeree can learn of the withdrawal directly or indirectly, Byrne & Co v Leon Van Tienhoven & Co (1880) – withdrawal of the offer was ineffective, see timeline. 1 Oct: V.T. sent letter by mail 8 Oct: V.T. decided to withdraw from offer (letter went missing) 11 Oct: Byrne accepted by telegram 15 Oct: Byrne accepted by post 20 Oct: V.T.’s letter arrived Withdraw was too late, as the offer had already been accepted. Rejection or counter-­‐offer–termination of (original) offer compared to a request for further information Refusal by the offeree to agree to the terms or a counter-­‐offer by the offeree will terminate the offer but not if it is a request for further information. Hyde v Wrench (1840) – counter offer (land) compared with Stevenson Jacques & Co v McLean (1880) – request for further information Offer will lapse if a party to the contract dies, but not if offer is made to estate or an option can be exercised Carter v Hyde (1923) – lease hotel option available to estate 13 Offer will lapse if there is a loss of contractual capacity someone goes insurance crazy EXAMPLE: Leonard v PepsiCo Inc (1999) USA – Harrier Jet 1. Was there a genuine offer from Pepsi to consumer (Leonard) that could be accepted or was the advertisement of the harrier jet puffery. 2. Carlil v Carbolic Smoke Ball Co. (1893) – Offer must be more than mere ‘puff’ 3. An offer may be made to a specific person/s, class or persons or the world at large via an advertisement. However for it to constitute a ‘genuine’ offer that can be accepted, the terms must be clear definite and explicit. In this scenario Pepsi would distinguish the case from Carbolic where the offer of reward was considered genuine because of the ‘prize money’ deposited in the bank. In this case however a reasonable person would understand twinning the jet as puffery. Rules relating to ACCEPTANCE •
•
•
•
•
•
•
•
•
In a unilateral contract the offereor has waived its right to communication of acceptance. Acceptance must be absolute and unconditional: Masters v Cameron (1954) –subject to memorandum of understanding for purchase of rural property Acceptance must follow the conditions, if any, stated in the offer – If the offered specifies a method of acceptance it must be followed: Gilbert J MacCaul (Aust) Pty Ltd v Pitt Club (1954) –lease and irregular payments Only the party to whom the offer was made can make acceptance. Acceptance can be revoked, provided the revocation is communication to the offeror before the acceptance is received. Acceptance must be made within the time prescribed or, if no time has been prescribed, within a reasonable time: Ramsgate Victoria Hotel Co v Montefiore (1866)-­‐ offer to buy shares not accepted in reasonable time – facts not in text just legal principle Acceptance must be communicated in regular and authorized manner – must be communicated by some positive act to the offeree by the offeror – must be conveyed with some authority: Powell v Lee (1908) –headmaster position Question of Certaintity Rules as to contracts by post – Postal Acceptance Rule • Where the parties contemplate the use of the Post as a medium of exchange of promises, the rules as to the time of acceptance are as follows: • An offer by letter is not effective until received by the offeree • Acceptance is effective as soon as it is posted • Acceptance is not affected by delay or loss of letter (provided the parties contemplated post as a means of communication) • If revoked it must be done before the offeree posts their acceptance. • Adam v Lindsell (1818) -­‐ postal acceptance rule applied • Excluded when intention is that communication is required (an offer can stipulate the required method of acceptance of their offer): Holwell Securities Ltd v Hughes (1974) – ‘by notice in writing to the intending vendor’, Elizabeth City Centre Pty Ltd v Corralyn Pty Ltd (1995) – rule excluded by clause requiring communication by certified mail. Exceptions 1.
2.
3.
4.
5.
where acceptance takes the form of performance of an act notification has been dispensed with by offeror where means of communication is instantaneous acceptance must be within a reasonable time frame postal acceptance rule applies 14 Contracts and e-­‐commerce Electronic or Instantaneous Communication Where means of communication is instantaneous, the formation of contract is governed by general rule that contract is concluded at the time, when and the place where, the acceptance is received and communicated. Electronic Transactions Act provides a legal framework to encourage business and consumer to use electronic commerce by providing that the law shall treat electronic and paper-­‐
based commerce equally. Features include: –
A transaction is not invalid because it took place wholly or partly electronically or the information is recorded electronically • Electronic form is equivalent to hard copy –
A requirement to give information in writing can be satisfied electronically –
Electronic signature is acceptable if certain requirements are satisfied –
Establishing time and place of dispatch & receipt of electronic communications Element 2 – Intention Intention is not normally expressly stated or obvious. Therefore the courts have to determine objectively whether the parties intended the agreement to be legally enforceable. Intention to create Legal Relations Presumption: Parties do not intend legal relations (not binding), but can be rebutted if the consequences are serious Social, Domestic & Voluntary Relationship is based on einancial transaction. Presumption: Parties intend to create legal relations (binding), but can be rebutted if not of a commerical nature Business or Commerical Social agreements -­‐ ones made between friends or acquaintances; Domestic agreements -­‐ ones made between family members and relatives; and Voluntary agreements -­‐ where the parties may volunteer their services Non-­‐Commercial Agreements Domestic: • Where the husband and wife or de-­‐facto are living together or in a continuing domestic relationship at the time of the agreement, there is no intention to be bound by contract • Balfour v Balfour (1912) – Civil servant stationed in Sri Lanka • Where the husband and wife or de-­‐facto are separated at the time of the agreement an intention may exist – as the parties are no longer together in a domestic relationship therefore principle does not apply • Shortall v White (2007) – De-­‐facto relationship ended -­‐ facts not in text just legal principle • Merritt v Merritt (1970) – Husband had left wife to live with another woman 15 •
•
•
•
In the case of other domestic situations the courts may look to the seriousness of the consequences and decide that because of the serious nature of the agreement, it was intended to be binding Milliner v Milliner (1908) – partnership – commercial in nature – extended facts not in text Todd v Nicol (1986) – traveled from Scotland Riches v Hogben (1986) – traveled from England Social: • the parties do not normally intend to create legal relations but the agreement may result in an intention to contract where it is clear from the facts that it is what the parties would have intended • Trevey v Grubb (1982) – 3 person lotto syndicate Voluntary: • such as where a person volunteers their services, the parties do not normally intend to create legal relations • Teen Ranch Pty Ltd v Brown (1995) – volunteer at camp • but the presumption can be rebutted • Ermogenous v Greek Orthodox Community of SA Inc (2001) – not a spiritual relationship Commercial Agreements •
•
•
•
•
•
•
•
•
•
In business and commercial (financial) agreements the courts assume that there is an intention to create legal contractual relations, but this can be rebutted if the court decides the contracts are more of a social rather than commercial nature. Malago Pty Ltd v AW Ellis Engineering Pty Ltd (2012) “without affecting the binding nature of the these Heads of Agreement the parties are within 7 days [are] to execute a formal document or documents as agreed between their respective solicitors to carry out and express in more formal terms and additional terms as these Heads of Agreement”. Souter v Shyamba Pty Ltd (2002) – intention to be bound by all essential terms present in sale of hotel An intention not to be bound can be shown by the use of clear words, for example by the use of an Honour Clause or Memorandum of Understanding which may be accepted by a court Rose and Frank Co v Crompton and Bros Ltd (1925) – express exclusion Jones v Vernon’s Pools (1938) – pools lottery competition – it may be that this is less likely to occur today due to protective statute such as the Australian Competition and Consumer Law Letters of comfort are often construed by the courts as merely statements of commercial intent, but this is not always the case, as the principle in business that commercial agreements are intended to be legally binding unless enough evidence can be adduced to rebut the intention: Banque v Brussels Lambert SA v Australian National Industries (1989) – promissory in nature – Court stated: “The whole thrust of the law today is to attempt to give proper effect to commercial transactions….if the statements are appropriately promissory in character, courts should enforce them when they are uttered in the course of business and there is no clear indication that they are not intended to be legally enforceable.” •
•
Government contracts do not always result in contractual relations Australian Woollen Mills Pty Ltd v The Commonwealth (1954) – wool subsidy – administrative scheme rather than a contractual obligation 16 Lecture 4: Law of Contract Element 3 -­‐ Consideration Consideration is what each contracting party bargains for and gives in exchange for the return promise or performance of the other party. Consideration is the price you pay to buy the other person’s promise and it is this concept of ‘price paid’ that was adopted in: -­‐ Dunlop Pneumatic Tyre Co Ltd v Selfridge Co Ltd [1915] -­‐ An act or forbearance of one party, or the promise thereof, is the price for which the promise of the other is bought; and the promise thus given for value is enforceable Promisor: person undertaking (giving) the promise Promisee: person receiving the promise Consideration (is essential) must be present in every simple contract • If A promises to give B $100, B cannot enforce the contract unless doing or promising something in return for the promise • A promise without something (promise or act) in return is known as a gratuitous promise and is unenforceable unless under seal • Consideration does NOT need to be present in a formal contract Rule 1: Consideration must be sufficient but need not be adequate Consideration must have a value that is recognised by law. The Court will not assess whether the consideration is adequate, as that is for the parties to decide. Thomas v Thomas (1842) – left life tenancy left to wife for token rental Rule 2: Consideration must not be illusionary The Court must be able to identify the value that is the consideration. Otherwise, the Court will declare the consideration provided to be so vague as to be illusory and therefore no consideration. White v Bluett (1853) – son to stop complaining Chappell & Co Ltd v Nestle Co Ltd [1960] – chocolate bar wrappers Rule 3: Consideration may be executed (present) or executory (future) but cannot be past consideration Present Consideration -­‐ act done in return for a promise – e.g. reward situation Future Consideration -­‐ parties exchange promises -­‐ each promise being consideration for the other Anderson v Glass (1868) – higher wages for work already done Past consideration – is not normally good consideration because promise is given after an act is done Anderson v Glass (1868) – higher wages for work already done Rule 4: Exception to the Past Consideration Rule: Past consideration (promise is given after an act is done) can only be good consideration if it can be shown that: – it was provided and done at the promisor’s request; – the parties understood that the act would be remunerated either by payment or the conferment of some other benefit; and – the promise would have been enforceable if it had been promised in advance of the act in question. Pao On v Lau Yiu Long [1980] – An act done before giving of a promise at promisor’s request Rule 5: Consideration may consist of a promise to refrain from taking legal action Bona fide (genuine belief) belief in claim & prospect of success 17 Not vexatious or frivolous Wigan v Edwards (1973) – remedy defects in house Rule 6: Performing an existing obligation (at law or under contract) is not good consideration A person already required to perform a duty imposed by the law or an act under a contract cannot rely on that act or duty as consideration to support a contract Collins v Godefroy (1831) – obliged to attend court on subpoena Part payment of a debt of is usually not sufficient consideration unless there is some other consideration given such as part-­‐payment by a third party unless promisor agrees to do something more Glasbrook v Glamorgan County Council (1831) – police had done more than public duty required Foakes v Beer (1884) – repayment of debt Stilk v Myrick (1809) –2 crew member deserted Compared with: Hartley v Ponsonby (1857) ) – desertion of 17 of the 36 crew Practical Benefits Test In more recent times some courts have adopted perhaps a more commercially realistic, but controversial approach to disputes of this kind to expand the concept of valuable consideration Williams v Roffey Bros & Nicholls (Contractors) Ltd [1990] – penalty clause promise enforceable Musumeci v Winadell Pty Ltd (1994) – reduced rent on lease Formalities Contracts under Seal –
–
A contract under seal must be in writing and signed, sealed and delivered Obtain binding force by form alone Contracts required to be in writing – Bills of exchange and promissory notes – Cheques – Assignment of copyright – Contracts of marine insurance – Assignments and mortgages of life insurance policies – An acknowledgment of a debt barred by the State Limitations Act – Most forms of consumer credit contract Note that the courts of equity can enforce non-­‐compliance if part-­‐performance has been allowed. Promissory Estoppel (stop the promise from being broken) AKA Equitable Estoppel Unconscionable conduct of one party, which is relied upon by another, to the latter party’s detriment. It is an exception to the rule of consideration that: “a promise is not enforceable unless some consideration is given for it by the promisee.” – Promissory Estoppel will allow a promise to be enforced, even though the promisee has not provided good consideration for that promise Promissory Estoppel may provide relief to an innocent party who has suffered a detriment Waltons Stores (Interstate) Ltd v Maher (1988) – demolished building Element 4 – Capacity Under the common law (and under some State legislation) there are classes of people who are treated as NOT having full contractual capacity, which affects the validity of any contracts entered into by those persons 18 Minors (infants) Age of Majority is 18 in Qld -­‐ Statute: Law Reform Act 1995 (Qld) Three types of contracts minors can enter into: Cash, Necessaries and beneficial contracts of service. Three main classifications of contracts with minors include: 1. Valid 2. Voidable 3. Void 1. Valid Contracts with minors may be classified as Necessaries or Beneficial Contracts: Necessaries: Includes articles and services necessary for the reasonable comfort of the minor, as well as basic items of food, clothing and shelter • The plaintiff must establish that: the goods or services could be necessaries 1. Are the goods or services within the classes of goods which can be classed as necessaries for a person in the circumstances of the minor? 2. Were the goods or services in fact necessary to the minor at the time? Bojczuk v Gregorcewicz (1961) – Polish girl immigrated And • The goods or services were necessaries at the time of sale or delivery Scarborough v Sturzaker (1905) – Bikes traded and bought Beneficial Contracts of Service: • Examples include: contracts of employment, apprenticeships, training or education • To determine whether such a contract is valid the courts examine the contract as a whole: 1. Check whether the beneficial terms outweigh the onerous terms; and 2. Decide whether there is benefit to the minor: -­‐ Hamilton v Lethbridge (1912) – articled clerk & restraint of trade but c/f -­‐ De Francesco v Barnum (1980) – seven year, stage dancing apprenticeship 2. Voidable 1. Those contracts which are binding unless REPUDIATED: Are limited to: – Shares in a company – Leases – Partnerships – Marriage settlements Rescission only ends future liability if benefit accrued –
any obligations already accrued must be satisfied, if the minor has enjoyed a benefit –
any money paid by the minor cannot be recovered unless a total failure of consideration can be shown (did not benefit) 2. Those contracts which are not binding unless RATIFIED Those that are not of a continuing nature, for example, goods and services that are not necessaries 3. Void Contracts cannot generally be enforced during infancy, nor after attaining majority, unless, the (now) adult elects to ratify it: – Within a reasonable time after attaining the age of majority At common law a minor is not liable on contract to repay a loan, even if the loan has been given for the purchase of necessaries. 19 Corporations Corporations have virtually the same legal capacity as natural persons under s124 of the Corporations Act 2001 (Cth) Bankrupts If a bankrupt wishes to obtain goods or services of more than $3,000 in value (indexed), they must disclose to the lender that they are an undischarged bankrupt under the Bankruptcy Act 1966 (Cth) Mentally Unsound, Intoxicated Persons & Married Women To void the contract, mentally unsound or intoxicated persons need to prove that at the time the contract was entered into: 1. They were incapable of understanding the nature of what they were agreeing to at the time they contracted; and 2. They other party was aware, or should have been aware of their incapacity If the contract is for the supply of necessaries, the person who is mentally unsound or intoxicated must pay a reasonable amount for them. If the goods are not for necessaries, and IF, at the time of making a contract the person is mentally unsound or intoxicated s/he may be able to repudiate the contract when they are again of sound mind or sober -­‐ therefore the contract is voidable. Married (and single) women have the capacity to contract. Element 5 -­‐ Consent (Genuine) If one of the parties has not given genuine consent, then the contract could be either Void or Voidable depending on what the parties have agreed to. Is there genuine Consent between the parties? – Was the consent obtained through a: • mistake of fact or law? OR – Was the consent of one party induced by: • a misrepresentation? or • duress? or • undue influence? or • unconscionable conduct? Types of Mistake Common mistake -­‐ same mistake Unilateral Mistake -­‐ one party mistaken Mutual Mistake -­‐ different mistake (cross-­‐purposes) Non est Factum -­‐ “it is not my deed” If a mistake of fact operates, it normally renders a contract -­‐ Void (or Voidable for a unilateral mistake) – Only mistakes of fact (not law) can render a contract – Void – Money paid under a mistake of law may be recoverable, but can prove difficult to recover (Void ab initio) Common Mistake There is an agreement, but both parties make the same mistake of fact (common error) as to existence of subject matter which is a condition precedent: Scott v Coulson [1903] – contract of the assignment of a life insurance policy & patient was dead. If the condition precedent does not exist/occur, it makes the contract Void at common law And under legislation: Australian Competition and Consumer Act (2010) 20 The mistake will not make a contract void at common law where the common mistake is about quality or attributes possessed by the subject matter: Leaf v International Galleries (1950) – painting -­‐ no common mistake Depending on the facts, remedies may be available under the: Australian Competition and Consumer Act (2010) If there is an implied promise of the existence of the subject matter (or quality) and the other party acts in reliance of that promise to their detriment, common mistake will not have occurred to void the contract McRae v Commonwealth Disposals Commission (1951) -­‐ sunken oil tanker -­‐ common mistake did not occur & therefore breach of K’ Unilateral Mistake Only one of the parties is mistaken to the terms of the contract, and the other is, or ought to be, aware of this, but does nothing to correct it Mistake can be typically about the content or subject matter (term) or whom the person is dealing with. The contract may be void or voidable Taylor v Johnson (1983) – purchases of land for $15K or $150K Parties meeting Face to Face The plaintiff must be able to rebut the presumption that they did not intend to deal with the party in front of them & to show that they intended to deal with another person (and no one else) Postal Dealings The courts presume that the plaintiff only intended to deal with the addressee Mutual Mistake If the parties misunderstand each other and are at cross purposes (talking about two different things) there is no genuine agreement between the parties. But this alone does not necessarily invalidate the contract, the court seeks to determine whether a “reasonable person” would infer a contract: Raffles v Wichelhaus (1864) Ships names Peerless departing from Bombay in October & December Would a reasonable person infer a contract? • If YES Parties are bound by the contract a reasonable person would infer • If NO There is no contract (Because a reasonable person would be able to see how the parties could be talking about two different things) Non est factum (It is not my deed: Mistake as to the nature of the transaction) The signer must show -­‐ signed document is fundamentally different from that which signer thought it was & Failure to read was not due to carelessness on their part. Only two groups of persons are able to raise this defence: -­‐ Those unable to read owing to blindness or illiteracy & must rely on others for advice as to what they are signing; and -­‐ Those who through no fault of their own are unable to understand the meaning of a particular document. Petelin v Cullen (1975) – granted option to Cullen, but had not understood the terms of the extension of option & though it to be a receipt -­‐ illiterate Ford by his Tutor Beatrice Ann Watkinson v Perpetual Trustees Victoria Limited (2009) – intellectual impairment & illiterate “the mind does not go with the pen” Misrepresentation With misrepresentation, the parties have agreed but one of them has been motivated to agree to a statement, as to some existing fact or past event that is not true. A representation is a statement of fact by one party to another that induces a party to make a contract. -­‐ If the representation is clearly untrue, it constitutes a misrepresentation. 21 If a party promises the truth of a statement in the sense of making it part of the contractual bargain, then it becomes a term of the contract. -­‐ Non-­‐fulfillment of the term entitles the other party to take action for breach of contract 1. Fraudulent 2. Innocent 3. Negligent Fraudulent When a person makes an untrue statement either: 1. knowing it is untrue, or 2. without a belief in its truth, or 3. recklessly without caring whether it is true or not. Innocent When a person makes an untrue statement: 1. in good faith and 2. without knowing that they have made a false statement or created a wrong impression. Negligent When a person makes an innocent but negligent untrue statement: 1. it can give rise to an action where a ‘special relationship’ can be shown to exist between the parties. 1. Fraudulent There must be intentional deceit; there must be a false statement of fact that the representor knew was false. There must be a false statement of fact made at the time of contract that the representor knew was false or did not believe was true, which it was known would be acted on and which was acted on Redgrave v Hurd (1881) – appraised return on business was wrong -­‐ -­‐ rescission – A contract induced by fraud is voidable – Damages – Remedies also available under ACL for Misleading Conduct 2. Innocent A misstatement of a material fact, not known to be false, made by one party to another, which induces the other to enter into a contract: -­‐ Oscar Chess Ltd v Williams [1957] – sale of Morris Minor -­‐ Redgrave v Hurd (1881) – appraised return on business was wrong – rescission The appropriate equitable remedy depends on whether the misstatement becomes a term of the contract & whether the representation is a: Condition or Warranty – If Condition -­‐ sue for damages/or for a total failure to perform the contract – voidable – rescission in equity or specific performance – If Warranty -­‐ sue for damages only/no order for rescission in equity – If not a term, generally no remedy under common law and therefore only court of equity can provide above remedies. 3. Negligent An innocent but negligent misrepresentation can give rise to an action where a ‘special relationship’ can be shown to exist between the parties Guidelines for Negligent Misrepresentation 22 –
–
–
–
–
A relationship exists between parties such that the person providing the information or advice must exercise a duty of care Subject matter is of a serious or business nature Person providing the advice realises that the recipient intends to act upon that advice or information It was reasonable for recipient to rely on the advice or information; and Damage was suffered by the recipient, usually monetary loss Duress Type Description Duress to the person Actual or threatened violence against one contracting party (or their immediate family or near relatives) to coerce/pressure that party to enter into a contract: Barton v Armstrong [1976] – shares Remedy Contract voidable at option of coerced party Economic Duress Economic pressure beyond normal acceptable commercial practice: North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd [1979] – extra payments Contract voidable at option of coerced party Duress to goods Wrongful threats to seize, damage or destroy the goods of one contracting party Contract voidable at option of coerced party Undue Influence Involves the improper use of a position of influence or power possessed by one person over another in order to INDUCE the victim to act for the benefit of the controller -­‐ Lack of GENUINE CONSENT to the agreement • Undue influence is presumed in some relationship e.g: Doctor and patient • In relationships where undue influence is presumed, the party attempting to deny it must show that undue influenced was not exercised -­‐ Johnson v Buttress (1936) – onus of proof shifted • Action is based in Equity and usual remedy is Rescission • Action must commence within a reasonable time or right to rescission may be lost -­‐ Allcard v Skinner (1887) – facts not in text, only legal principle Unconscionable Conduct In its equitable jurisdiction, the court will set aside a contract as unconscionable (unfair & unjust) where the defendant has abused their superior bargaining position in their dealings with the plaintiff. For the contract to be set aside the plaintiff must prove: 1. She was in a position of “special disadvantage” at the time of the contract 2. The special disadvantage substantially affected her/his ability to protect oneself 3. The defendant knew (or should have known) of the disability & took advantage of it and 4. The actions of the defendant were unconscionable Commercial Bank of Australia v Amadio (1983) – Italian immigrant Louth v Diprose (1992) – infatuation, love? C/f Mackintosh v Johnson (2013) – not atmosphere of crisis -­‐ could easily afford 23 Element 6 – Legality of object Contracts can be illegal or void at both stature and common law. The extent of the invalidity depends upon the terms of the statue – it may be possible to sever the void term out of the contract and leave the remainder of the contract still valid. Illegal contracts as formed: • A contract deemed illegal when it is formed is void ab initio & therefore unenforceable • Neither party has any rights or remedy Void Contracts: • An agreement rendered void at common law by stature will NOT be enforced by the courts • Any money paid or property transferred under such agreement may be irrecoverable Contracts affected by Statute Consequences of statutory illegality depends upon when the contract becomes illegal. – If the contract is illegal as formed, the contract is void ab initio. The parties have no rights or remedies -­‐ Re Mahmoud v Ispahani [1921] – linseed oil – If the contract is illegal as performed, the contract is void, but NOT void ab initio. The guilty party has no rights, but an innocent party may be able to recover up until the date of the matter becoming void -­‐ Ashmore, Benson, Pease & Co Ltd v AV Dawson Ltd [1973] – unlawful to use on road motor vehicle weighing more than 30 tons Contracts illegal at Common Law Contract which violate the social or moral attitudes of the community are illegal & void an initio; • Contracts to commit a crime, a tort or a fraud on a third party • Contracts that are sexually immoral or which prejudice that status of marriage • Contracts prejudicial to the administration of justice -­‐Public Service Employees Credit Union Co-­‐operative Ltd v Campion (1984) – misappropriated $ • Contracts which tend to promote corruption in public life -­‐ Parkinson v College of Ambulance Ltd [1925] – Knighthood • Wilkinson v Osborne (1915) – Legislative Assembly • Contracts to defraud the revenue Contracts (& clauses) Void at common law but not illegal Clauses in contracts in restraint of trade are prima facie void, as being contrary to public policy, unless the restraint is reasonable. – Contracts to defraud the revenue – Prejudicial to the status of marriage – Contracts in restraint of trade In determining reasonableness of the clause what sort of things does the court take into account? • The nature of the business • The geographical extend of the restraint • The time period involved • The bargaining strengths and weaknesses of the parties during the negotiations Contracts in restraint of trade Restraints imposed upon the vendor of a business • Sale of a business: court assumes the parties are in a more equal bargaining position than contracts of employment • Can protect the purchased of a business • Is often made to prevent disclosure of confidential information 24 •
Are questions of fact as to whether the restrain is reasonable, which the party insisting on the restraint must prove o Various pieces of Commonwealth (and state) legislation have impacted on the area of restraint of trade, price fixing and maintenance etc., by targeting grounds of public policy. Lecture 5: Law of Contract Contents & Interpretation (Construction) of the Contract (Terms) Assuming that a contract has been created and that there are no elements that affect its validity – the next question to be considered is: What is the extent of the rights and obligations, to which the parties have entered into? Representation or Term The courts distinguish between statements that are not actionable and do not form part of the contract (representations) & those that are actionable and form part of the contract (terms.) A statement WILL form part of the contract • As a Term-­‐ that forms part of the contract and creates contractual obligations between the •
parties As a collateral (or preliminary) contract-­‐ which is preliminary agreement on which the main contract is entered into o Both of which if breached will result in the injured party being able to sue A statement that WILL NOT form part of the contract • A representation that induces an offeree to enter into the contract but id not part of the •
contract and not actionable in contract law. o Remember: if a representation is misrepresented, then it becomes a misrepresentation and remedies for breach may be available o A remedy may lie under the Australian Competition and Consumer Act 2010 (Cth) Sales Puff is not intended to have any legal effect and no remedy is available 25 Simple representations as top fact are not If a party promises the truth of a statement terms of the contract; they are just including in the sense of it making it a part of the causes of it being made. contractual bargain, then it is a term of the contract. Non-­‐fulfilment entitles the other party to take action for breach of contract “In my experience the best fuel “If you buy that car it comes with a 5 year consumption that this car would have is guarantee as to…” 10km/litre.” Statements: Representation or Term? -­‐ The courts distinguish between statements that are not actionable and do not form part of the contract (representations & puffs); and -­‐ Those that are actionable and form part of the contract (terms). Express Terms Those specifically identified and agreed upon; in trying to ascertain the intentions of the parties from the particular facts before it, the courts will take into account the following matters; • Time elapsed between the making of the statement and the finale agreement • The importance attached to the statement • Whether the innocent party was asked to verify the statement • Whether the statement was made with the intention of preventing the other party from looking for any defects and whether it succeeded. • Whether the parties negotiated in good faith • Whether on of the parties has special skill or knowledge Oscar Chess v Williams [1957] -­‐ Morris Minor 1948/1939 C/f Dick Bentley Productions v Harold Smith [Motors] Ltd [1965] – 100 000km not 20 000km Collateral Contracts A preliminary contract on which the main contract is entered into, a breach of which may result in the injured party being able to sue. A collateral contract must not be inconsistent with the terms of the main contract. Oral promises made by the parties prior to entry into the main contract which are not terms may have contractual effect as a collateral (preliminary) contract on which the main contract is based. -­‐ Hoyt’s Pty Ltd v Spencer (1919) – sublease required 4 weeks’ notice – verbal agreement unenforceable as terms inconsistent with main contract -­‐ JJ Savage and Sons Pty Ltd v Blakney (1970) -­‐ suitable engine -­‐ expression of opinion If it is important, put it in writing! Condition or Warranty or Innominate Term It is important for the courts to decide whether a term is a condition or a warranty as this will affect remedies available to the injured parties Condition Warranty Innominate Term Terms fundamental to the contract. If breached, the injured party will be allowed to rescind the contract and/or sue for damages Less important terms which if broken, allows the contract to proceed but the injured party can get damages for financial loss Associated Newspapers Ltd v Bancks (1951) -­‐ cartoon character Bettini v Gye [1876] -­‐ experienced opera singer agree to appear 6 days in advance but fell ill and only arrived two days before One not necessarily identified by the parties as a condition or warranty but which, depending on the consequences of the breach, may operate as a condition. The court must look to the intentions of the parties as manifested by the entire agreement and surrounding circumstances to determine if breach is sufficiently 26 serious and substantially deprived of the benefit of the contract. An essential term of the contract. A stipulation which “goes to the root of the matter; a failure to perform it would render the performance of the rest of the contract … different in substance from what the defendant has stipulated for.” As quoted from – Bettini v Gye [1876] A term of the contract that is is regarded as subsidiary to the main purpose of the contract Not all contractual undertakings fall into one of two categories – breach of a warranty or condition. Question to be asked: Has the breach given rise to a situation where the party not in default had been deprived of substantially the whole benefit, which they were to entitled to expect? Condition Precedent; a term that prevents an agreement turning into a contract until the happening of a stated event (subject to finance-­‐ real estate) OR Condition Subsequent; a term in the contract which can terminate it on the occurrence of some external event (completion after certain date eg buildings) Parol Evidence Rule Excludes oral evidence that will “ad to, vary or contradict” the written document. “Where the contract is reduced into writing and appears to be entire, it is presumed that the writing contains all the terms of it, and evidence will not be admitted of any previous oral agreements.” Mercantile Bank of Sydney v Taylor (1891) There are exceptions; • Where language of contract is ambiguous or susceptible of more than one meaning • Evidence may be given to identify the parties Gilberto v Kenny (1983)-­‐ house contract • Custom or trade usage demands otherwise • Document was not intended to embody all the terms • When fraud/duress etc had been used • A collateral -­‐ verbal agreement relating to the subject matter and not inconsistent with the writing Van Den Esschert v Chappll (1960)-­‐ white ants, the contract is now void. Exclusion Clauses A term that attempts to limit or exclude a party from liability for breach of contract or for negligence, their effectiveness are a matter of construction of the contract as whole, taking into account the bargaining position of the parties. Steps followed when examining the exclusion clause; 1. The exclusion clause must form part of the contract 2. Interpretation of the exclusion clause must be sufficiently wide to comprehend the breach 3. The exclusion must not have been limited by legislation Step 1: The exemption clause must form part of the contract Signed document If the document is signed, the exclusion clause will form part of the contract, regardless of whether it has been read or not. L’Estrange v F Graucob Ltd [1934] – Sales agreement limited liability -­‐ not read Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) -­‐ application for credit agreement – binding 27 BUT A person will NOT be bound by an exclusion clause in a contract they have signed, where there was a misrepresentation or fraud on the part of the sales person, regarding the effect of the document. Curtis v Chemical Cleaning & Dyeing (1951) -­‐ not binding as it was misrepresented. Le Mans Ltd v Iliadis [1998] -­‐ ‘to help out with advertising’ Curtis v Chemical Cleaning & Dyeing [1951] -­‐ wedding dress -­‐ sequin beads Signed document NOT BOUND if: There is a harsh, onerous or unusual term that has not been brought to their attention. Interfoto Picture Library Ltd v Stiletto Visual Programs Ltd [1989] – penalty clause Unsigned document It must be shown that the document is an integral part of the contract; § Have reasonable steps been taken to give sufficient notice of the terms? And § Were the terms included after the contract has been completed? (this will also apply to signed documents) Thornton v Shoe Lane Parking Ltd [1971] -­‐ injured in car park – terms were subject to conditions, displayed on premises Olley v Marlborough Court Ltd (1949) -­‐ conditions on back of door § Would a reasonable person have regarded the document as containing contractual terms or regarded it as a mere receipt? Causer v Browne (1952) -­‐ terms on back of receipt, stained dress from dry cleaning Step 2: Interpretation of the exclusion clauses Once it is established that the exemption clause has been incorporated into the contract, there are two possible ways of interpreting the clause 1. Contra Proferentum Rule The courts will resolve any ambiguity against the party relying on the clause (Strict construction against the party relying on the clause). Clear and unambiguous words are needed Elder Smith Goldsbrough Mort Ltd v McBride [1976] -­‐ “all lots are 2. Four Corners Rule An exclusion clause will not apply to actions outside the contract, therefore an exclusion clause will not apply to situations involving deliberate breaches or for conduct that is outside the purpose of the contract Council of the City of Sydney v West (1965) -­‐ stolen car Step 3: The exclusion clause must not have been limited by legislation Sections in the CCA imply or guarantee terms into all consumer contracts (for goods and services of less than $40 000) with corporations, cannot be excluded -­‐ Competition and Consumer Act (2010) Therefore any contract which purports to exclude any or all liability Online Contracting •
•
•
General principles of contract apply Terms must be incorporated (agreed upon) before or at time of entering into contract Seller must ensure that the customer agrees to terms: Two Broad Categories: 1. Clickwrap agreements: generally present the terms of contract that are offered, and ask website user to indicate that they acknowledge and agree to the website provider’s terms by clicking an online “button”, usually with words such as “I agree” on the button. 2. Browsewrap agreements: similar to above, except that terms of contract are not on the page where the website user indicates their agreement – their terms of contract are on another webpage or website and the website user is able to access those terms 28 through visiting, or linking, to that other page or site. Key issue is whether reasonable notice has been given and whether customer was aware of terms. Implied terms Terms that are not expressely state by the parties but may be implied to give ‘business efficacy’ to the contract. Implied terms are derived: 1. By the courts: The Moorcock (1889) -­‐ moored ship damaged while being unloaded on low tide 2. From custom or trade usage 3. Statute, e.g., consumer protection legislation The Competition and Consumer Act 2010 (Cth) implies certain conditions into every contract → Correspondence with description → Fitness for purpose → Merchantable quality → Services will be rendered with due care and skill 4. Act in good faith 5. To be honest Termination 1.
2.
3.
4.
5.
6.
Performance Agreement Breach Frustration Operation of Law Lapse of Time 1. Performance Actual (Exact) Performance The parties must carry out as closely as practicable the terms of the contract Cutter v Powell (1975) – died on journey Entire and Divisible Performance (Contracts) Substantial (Partial) Performance Generally, payment for partial performance does not automatically follow unless the contract is divisible as a matter of construction. Exceptions: –
–
–
if there has been free and willing acceptance of partial performance by the party receiving the benefit there has been substantial performance & cost of rectification is small – Hoenig v Issacs (1952) – interior decorator if one party is prevented from performing 2. Agreement Parties can agree to discharge obligations Under the Original Contract Express Power to Terminate (e.g. happening of event or time period) Implied Right to Terminate (e.g. reasonable notice) By Subsequent Agreement Cancellation of original contract • Mutual termination • Release (e.g. release under seal or by giving some other form of consideration) • Accord and satisfaction (e.g. release involves the giving of some further consideration) By substituted agreement Contingent Conditions Condition precedent Condition subsequent 29 3. Breach Where one party fails to perform their obligations as agreed, they are liable for breach of contract. The effect of breach depends on the importance of the term that is broken i.e. condition, warranty or innominate term The remedies available to the injured party will depend on the nature of the breach: Actual Breach (repudiation for non-­‐performance) (due to sell car at 12:00 and don’t settle, breached the contract) OR Anticipatory breach (due to sell car at 12:00 and ring and say you cant get finance, can get back the deposit) 4. Frustration Can only arise where: • An unforeseen event outside the control of the parties has significantly changed the obligations of the parties; Taylor v Caldwell (1863) -­‐ hired concert hall destroyed (destruction of subject matter) • Neither party caused the supervening event • Neither party contemplated the supervening event; and • It would be unjust to hold the parties to their original contract. The effect of frustration is to discharge the contract by only as to the future; Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) -­‐ restrained from working at night (radically or fundamentally different) Termination: law rendering performance impossible, common objective no longer attainable, death or illness, destruction of subject matter, lapse of time, operation of law • Termination due to supervening illegality (Law rendering performance impossible) • Termination due to common objective no longer obtainable, including death or illness: Krell v Henry [1903] -­‐ coronation ceremony postponed • Termination by Operation of Law (Governmental intervention) – Bankruptcy – Merger • Termination by lapse of time at common law Remedies Damages – Common Law Aims to enable the innocent person to receive monetary damages and put the injured party back, as close to the position they would have been in, had the breach never occurred – Damages are recoverable for provable or economic loss as well as: • Expectation losses • Reliance losses: Commonwealth of Australia v Amann Aviation Pty Ltd (1991) -­‐ agreement terminated early 30 Mitigation of Damages The plaintiff must take reasonable steps to mitigate, that is to minimise their loss that resulted from the breach of contract. Failure to do so can result in a reduction of, or no, damages. Types of Damages The type of damages that will be awarded will be determined by the seriousness of the breach and whether the contract has specified the amount of damages to be paid in the event of breach. • They are calculated on the basis of looking at what the position of the plaintiff would have been if the contract had been properly performed • They are assessed on a once and for all basis at the date of breach Difficulty in calculation is not a ground for disallowing a claim Howe v Teefy (1927) -­‐ racehorse taken back after 6 months not 3 years Damages are sometimes, but not normally, recoverable for Distress and Disappointment Jarvis v Swan Tours (1972) -­‐ few statements in brochure proved accurate Baltic Shipping Co Ltd v Dillon (1993) -­‐ ship sunk 8 days into cruise & passenger injured -­‐ part recovery Liquidated Awarded where a plaintiff is able to sue for a specified sum, which must be a genuine or bona fide pre-­‐estimate of the actual loss that will flow from the breach if the amount is a genuine pre-­‐
estimate of damages for loss sustained through breach of the contract = liquidated damages Unliquidated Penalty Awarded where an injured party has no fixed sum in mind and leaves the court to decide the amount A threat to ensure performance is not enforceable because it is not a genuine pre-­‐estimate of the damage that will result from the breach An amount mentioned in the if the amount is merely in contract, as the amount to be terror in order to deter the paid by a defaulting party on a other party from a possible breach of contract may be breach = penalty considered liquidated damages or a penalty: Equitable Remedies (why we go to court!) Injunction –
–
–
A court order restraining preventing a person from doing a wrongful act It is a discretionary remedy and normally aims at enforcing negative promises It normally will be provided where damages are adequate 31 Specific Performance –
–
A court order for specific performance requires one party to perform the obligations under the contract. It is not available in contracts where : • damages are an adequate remedy • the it is for personal services • the contract would require constant supervision • it is not available for both parties • Ryan v Mutual Tontine Westminster Chambers Assoc. (1893) -­‐ porter to be constantly in attendance Restitution Is based on the concept of unjust enrichment and sometimes referred to as a quasi-­‐contract – The plaintiff must establish: • the defendant must obtain a benefit or enrichment; • the benefit is at the plaintiff’s expense; • it would be unjust to allow the defendant to keep that benefit or enrichment; • the defendant has no defences available to them to rely upon; and • the court can require the defendant to pay to the plaintiff a sum of money equal to the sum received from the plaintiff. – this may arise where there has been money paid for goods and services received from the plaintiff if there has been a total failure of consideration : – Pavey v Mathews (1987) -­‐ oral contract should have been in writing Statutes of Limitations The Statutes of Limitations of the States and Territories determine the TIME LIMITS within which an injured party must take action. An injured party can loose their right to an action in contract unless they act within a certain time period – 6 years for simple contracts or 12 years for deeds under seal -­‐ Limitation of Actions Act 1974 (Qld) Lecture 6: Australian Consumer Law Consumer Protection Law The Competition and Consumer Act 2010 (Cth) (CCA) was introduced on 1 January 2011. It provides new national uniform laws offering consumer protection. • It is an Act of the Australian Federal (Commonwealth) Parliament that applies to all jurisdictions (Federal, State & Territory level). • It replaced provisions across 20 State and Territory (Fair Trading related) Acts, plus amended and renamed the Trade Practices Act 1974 (Cth) (TPA) as the CCA. • The consumer protection provisions of the former Trade Practices Act 1974 (Cth) (TPA) were generally directed towards conduct engaged in by corporations, but the ACL has a much broader application to conduct engaged in by persons. • Much of the case law discussed in this chapter was decided under the corresponding provisions of the former TPA. 1. Prohibition of; Misleading & Deceptive conduct, unconscionable conduct, unfair contract terms, specific false representation provisions 2. A national product safety regime 3. Unsolicited supplies & selling practices 4. Linked credit contracts 5. Country of origin claims 6. Lay-­‐by agreement 7. Multiple pricing 8. New statutory consumer guarantees 9. Prohibition, investigation & enforcement of unfair practices 32 Specifically, the Australian Consumer Law (ACL) covers consumer protection and its provisions are located in Schedule 2 of the CCA. • protecting consumers from the unfair practices of businesses. • in effect it is a response to the recognised need for new systems and procedures to protect consumers under one national law, rather than many different but similar laws across the Nation. Legislation applies to: Australia, the CCA generally applies to the activities of corporations and to individuals dealing with Consumers in certain circumstances. Accordingly, the Act applies to: • The activities of corporations • The activities of commonwealth departments and statutory corporations • The activities of individuals (including sole traders, partnerships, and other unincorporated bodies) Consumer: (s3)means a person (can include businesses) to whom goods or services are, or may be, supplied to by participants in the industry. s3(1) A person is taken to have acquired particular goods as a consumer if, and only if: 1. the amount payable for the goods did not exceed $40,000; or 2. the goods were of a kind ordinarily acquired for personal, domestic or household use or consumption; or 3. the goods consisted of a vehicle or trailer acquired for use principally in the transport of goods on public roads. s3(2) A person does not purchase goods as a consumer if they purchase them for re-­‐supply, or to use them in the course of production. Regulation of the CCA •
•
•
•
•
The Australian Competition and Consumer Commission (ACCC) promote competition and fair trade in the market place to benefit consumers, businesses and the community. Regulates national infrastructure services Primarily responsible for ensuring that individuals & businesses comply with Commonwealth competition, fair trading & consumer protection law Regulator’s (ACCC) new investigation and enforcement powers, Undertakings (which can be enforced by the court if breached s.218) ACCC v Apple-­‐ demonstrates the importance of local adaptation of global marketing For consumers (can often include a business) The ACCC is provides information about consumer rights & how to make a complaint and prosecutes companies engaging in the misconduct. For businesses The ACCC provides business with support in regard to franchising, mergers, authorisations, obligations, professions and industry codes of conduct. ACC new investigation & enforcement powers Substantiation notices (ss219-­‐222) -­‐ may be issued where suspected contravention -­‐ information/documents must be provided within 21 days of the notice being issued Infringement notices (Regs) -­‐ may be issued where there has been reasonable grounds to believe that a person has contravened consumer protection laws Public warning notices (s223) -­‐ may be issued where reasonable grounds to suspect there has been a contravention 33 ACCC can also apply to the Court for: -­‐ pecuniary maximum penalties per contravention up to: • $1.1 million for corporations • $220,000 for individuals • Adverse Publicity Order (s247) • Disqualification orders (s248) Door to Door Sales & Telemarketing: As you may be aware, the Australian Competition and Consumer Commission (ACCC) enforces the Australian Consumer Law (ACL), which includes the national law on unsolicited sales (often referred to as door-­‐to-­‐door sales or telemarketing). – Door-­‐to-­‐door sales people can breach Australian Consumer Law (ACL) by: – Not leaving a household when requested, including by not respecting a ‘Do Not Knock’ sticker displayed on a householder’s home. – Visiting a household outside the permissible restricted visitation times. A salesperson can only visit on weekdays from 9am to 6pm, on Saturdays from 9am to 5pm and cannot visit on Sundays or public holidays. – Not showing their identification. – Not explaining to the customer that they have a right to cancel the contract within a 10-­‐day cooling-­‐off period. –
Misrepresenting to the customer what the purpose of the salesperson’s visit is (for example, by saying that they are promoting a free competition when the purpose of their visit is to try and sell something). Misleading & Deceptive Conduct-­‐ Sub Sections 18 & 19 To catch what might loosely be terms unfair business practices” which may not strictly fall within the scope of the other specific prohibitions. Section 18 (1) provides in general terms that: a person must not, in trade or commerce engage in conduct that is likely to mislead or deceive. • Section 18 of the Australian Consumer Law (‘ACL’) largely replicates s52 of the former Trade Practices Act 1974 (‘TPA’); many of the cases decided under TPA s52 will be relevant in interpreting ACL s18. “Before a statement can be said to be misleading or deceptive or falsely to represent a fact, it must convey a meaning inconsistent with the truth. A statement which conveys no meaning but the truth cannot mislead or deceive or falsely represent; although a statement which is literally true may nevertheless convey another meaning which in untrue, and be proscribed accordingly.” World Series Cricket Pty Ltd v Parish (1977) A person must not in trade or commerce, engage in conduct that it misleading or deceptive or is likely to mislead or deceive (s18). • Trade or commerce: the conduct must have a trading or commercial element O’Brien v Smolnogov (1983) • Conduct: a representation about a future matter(e.g. prediction or opinion). s4: If there are no reasonable grounds for making the representation, law presumes it to be misleading. Conduct: Has a wider definition than “representation” under s29. o Can be doing something or not doing something (e.g. silence = conduct); Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) • Misleading: “to lead astray in action or conduct; to lead into error, to cause to err.” • Deceptive: to deceive -­‐ “to cause to believe what is false.” • Likely: more probable than not. o McWilliam’s Wines Pty Ltd v McDonald’s Pty Ltd (1980); C/f o Apand Pty Ltd v The Kettle Chip Co Pty Ltd (1994) 34 Objective test (misleading or deceptive) 1.
2.
•
•
Identify the sections of the public targeted by the conduct eg. Public at large, particular consumers such as teenagers, professionals Would a reasonable person from that section of the communication be misled or deceived? You can use actual members of the public who are misled and deceived to assist you with the objective test here. An exemption clause cannot be successfully relied upon as a defence to an action for contravention of s18. However it might be one factor that the court takes into account in decided whether the misleading conduct was relied upon by the applicant. o Butcher v Lachlan Elder Realty Pty Ltd (2004) – disclaimer stated: cannot guarantee accuracy – make own enquires ACL exempts certain “information providers” (including the news media), from the general prohibition of misleading or deceptive conduct: s19 Major Consumer Protection Provisions •
•
•
•
Misleading & deceptive conduct-­‐ Sub Section 18-­‐19 Unconscionable conduct-­‐ Sub Section 20-­‐22 Unfair contract terms-­‐ Sub Sections 20-­‐22 False Representation-­‐ Section 29 Unconscionable Conduct A pecuniary (monetary) penalty may be imposed for a contravention of these subsections 1. Unconscionable conduct within unwritten law-­‐ Section 20 2. Unconscionable conduct with a consumer-­‐ Section 21 (A person must not, in trade or commerce, engage in conduct that is unconscionable, within the meaning of the unwritten law from time to time) 3. Unconscionable conduct in business transactions-­‐ Section 22 4. Section 20(2), Section 20 does not apply to conduct that is prohibited by ss21 & 22 Unwritten law: common law (including equity) -­‐ Unconscionable: “clearly unfair & unjust” 1. Weaker party is at a “special disadvantage” (i.e. a condition which seriously affects their ability to judge for their own best interests) 2. Stronger party knew or should have known (objective test) of the special disadvantage 3. Stronger party took advantage of the weaker party’s “special disadvantage’ 4. The act of the defendant (stronger party) was unconscionable (unfair/unjust) -­‐ Commercial Bank of Australia v Amadio (1983) Consumers & businesses (s21) Section 21(1)CCA: A person must not, in trade or commerce, in connection with the supply or possible supply, acquisition or possible acquisition of goods or services to/from another person (other than a publicly listed company), engage in conduct that is, in all the circumstances, unconscionable. ACCC v Lux Distributers Pty Ltd (2013) – vacuum cleaner sales Unconscionable (s22(1)&(2)): List of factors (not exhaustive – term not defined) – • Bargaining strengths of supplier and consumer • Whether consumer required to comply with unnecessary conditions • Whether consumer was able to understand any documents relating to the supply of goods & services • Whether undue influence or pressure exerted or unfair tactics used against the consumer • The amount for which the consumer could have acquired identical or equivalent goods & services from a person other than the supplier • Compliance with industry codes (if any) • Non-­‐disclosure of any conduct that may affect the business consumer or add to its risks 35 Unfair Contract terms of consumer contracts (s23) Unfair terms of consumer contracts s23: (1) a term of a consumer contract is void if: § the term is unfair; and § the contract is a standard form contract. (2) The contract continues to bind the parties if it is capable of operating without the unfair term. (3) A ‘consumer contract’ is a contract for: a) the supply of goods or services; or b) a sale or grant of an interest in land; § an individual whose acquisition of the goods, services or interest is wholly or predominantly for personal, domestic or household use or consumption. Unfair Contract terms of consumer contracts (s24-­‐25) Meaning of Unfair Terms: s24 • A term of a consumer contract is unfair if: (a) it would cause a significant imbalance in the parties rights and obligations under the contract; and (b) it is not reasonably necessary in order to protect the legitimate interests of the advantaged party; and (c) the term would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on. Some examples of unfair terms (not exhaustive): s25: • A term permitting one party (but not the other): – to avoid or limit performance, or terminate the contract – to penalise the other party for a breach or termination of the contract – to vary the terms of the contract False or Misleading Representation (s29) Goods or Services-­‐ Section 29; a person must not in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services, make a false or misleading representation. (a) Goods are of a particular standard, quality or value had a particular standard or have had particular history or particular previous use. (b) That services are of a particular standard, quality (c) The goods are new (d) A particular person has agreed to acquire the goods or services (g) The person making the representation has a sponsorship, approval, performance, characteristics, accessories, uses or benefits (f) The purports to be testimonial by any person relating to goods and services, concerning: • a testimonial by any person; or • a representation that purports to be such a testimonial; relating to goods or testimonials. (h) that the person making the representation has a sponsorship, approval or affiliation (j) concerning the availability of facilities for the repair of goods or of spare parts for goods; (k) concerning the place of origin of goods; (l) concerning the need for any goods or services; (m) concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy; (n) concerning a requirement to pay for a contractual right that: • is wholly or partly equivalent to any condition, warranty, guarantee, right or remedy; and • a person has under a law of the Commonwealth, a State, or a Territory (other than an unwritten law). 36 Goods and Services (s29) A statement or representation about “price” in relation to goods and/or services may give rise to a misleading impression (misrep’n) of the price and therefore be actionable. ACCC v Dell Computer Pty Ltd (2002) -­‐ Price of computer did not include delivery which was compulsory National News Pty Ltd v Australian Competition and Consumer Commission (1996) -­‐ Free mobile phone -­‐ “conditions apply” -­‐ must be spelt out Ascot Four Pty Ltd v ACCC (2009) -­‐ Strike through price (was $x Now $Y) was not what a customer would have paid prior to the sale ACCC v Australian Superstore Pty Ltd (2014) – defective refrigerator False or Misleading Country of Origin Claims (ss255-­‐257) Goods labeled “Made in Australia” Goods can only be labeled “Made in Australia” if: - substantially transformed in that country - at least 50% of the cost of their production or manufacturing occurred in Australia. - same applies for imported goods, but does not apply to a representation as to a particular region of origin (e.g. California). As such sections 18 & 29(1)(a) or (k) or s151(a) or (k) apply. Goods labeled “Product (or Produce)of Australia” Goods can be labeled “Product of Australia” if: - all the significant ingredients or components of the goods come from Australia; and - virtually all of the production or manufacturing processes associated with the goods occur within Australia. Other Prohibited Business Conduct ACL also prohibits certain other kinds of business conduct in relation to the supply of goods and services: § False or misleading representations in connection with Land (s30): Given v Pryor (1979) -­‐ misleading representation about how land could be used § Profitability or risk of certain business activities (s37):Ducrete v Colourshot Pty Ltd (1981) -­‐ false statement about processing and developing film franchise Conduct: Misleading conduct: employment (s31) Offering rebates, gifts, prizes, or other free items with the intention of not providing them as offered (s32) § Misleading conduct re: nature of or manufacturing process of goods (s33) § Misleading conduct re services (s34) -­‐ Dawson v World Travel Headquarters Pty Ltd (1981) -­‐ 15 day tour not 16 § Bait advertising: Reardon v Morley Ford Pty Ltd (1890) – Car not really for sale at advertised price § Accepting payment without being able to supply as ordered (s36) § Sending unsolicited credit /debit cards (s39) § Assertion of right to payment for unsolicited goods or services (ss40-­‐42) o Recipient not liable to pay for unsolicited goods or services o Assertion of right to payment for unauthorised entries or ads § Pyramid selling (ss44-­‐46) § Pricing (ss47-­‐48) § Referral selling (s49) § Harassment and coercion (s50) §
§
37 Manufacturers’ Liability for Defective Goods If goods supplied are defective and cause personal injury and property loss, the consumer may have an action against the manufacture for damages for negligence, at common law. Consumer does not need to establish fault on the part of the manufacturer and manufacturer cannot exclude, restrict, modify consumer rights (s150) The manufacturer (defined in s7) is liable if: 1. The manufacturer supplies goods in trade and commerce 2. The goods have a safety defect Determining a safety defect – s.9 - Manner and purpose - Packaging - Use of mark - Instructions/ warnings - Reasonable use - Time of supply 3. The individual suffers injuries because of the defect Type of Loss/Damage - S.138 to person - S.139 to third persons - S.140 of consumer’s other goods - S.141 of consumer’s land, buildings etc. UNLESS Defence s.142 $ 2.148 or exclusion applies or outside time limitation. An action may be taken against the manufacturer by: 1. An individual who is injured because of a safety defect (s138) 2. An injured third party who got injured because of a safety defect such as a bystander (s139) 3. A person for damages to personal, domestic or household goods because of a safety defect. (s140) 4. A person for damages to land, building or fixtures because of a safety defect (s141) Consumer Guarantees Goods; • Title of goods; s.51-­‐s.53 • Acceptance quality; s.54 • Fitness for purpose; s.55 • Correspondence with description; s.56-­‐s.57 Supply of Services; • Guarantee as to due care & skill; s.60 • Guarantee as to fitness for a particular issue; s.61 • Guarantee as to reasonable time for supply; s6.2 s.64 Guarantees CANNOT be excluded by contract Eg. Exclusion clauses Remedies for non-­‐compliance with consumer guarantees •
•
If failure to comply is not a major failure, supplier will need to remedy the failure within a reasonable time. If they refuse, the consumer can reject the goods and recover the costs they have incurred: s259(1), (2). If failure to comply is a major failure the consumer can reject the goods or recover compensation for any reduction in the value of the goods below the price paid (s259(3)) and recover damages for their loss (s259(4)). 38 Manufacturers liability and consumer guarantees limitations: s271 •
Consumers can recover from the manufacture for the breach of the following consumer guarantees: – Goods not of acceptable quality: s54. – Goods do not correspond with a description which the manufacturer has applied, or allowed to be applied to the goods: s56. National Product Safety Regime Under the provisions of the CCA the Minister is now empowered to: • conduct market surveillance • issue public warning notices about consumer goods or services • require mandatory recalls of consumer goods • impose interim or permanent bans on the supply of consumer goods or services • make mandatory safety and information standards • require all supply chain participants to report goods or product related services that have caused or may have caused serious injury, illness or death, within 48 hours • apply threshold test for safety bans and recalls based on the concept of: reasonably foreseeable use and misuse of goods CCA Enforcement & Remedies In addition to the Regulator’s (ACCC) new investigation and enforcement powers, the ACL provides for other enforcement measures: o criminal penalties: ss151-­‐168 o a pecuniary penalty: s224 o an injunction: s232 o damages: s236 o other orders (for example, rescission or variation of contracts (s237, s243) 39 Case Notes 33 37 37 35 Text -­‐ 318 317 309 Adam v Lindsell (1818): Postal Acceptance rule, if revoked, it must be done before the offeree posts their acceptance 14 86 Allcard v Skinner (1887) Anderson v Glass (1868) Apand Pty Ltd v The Kettle Chip Co Pty Ltd (1994) Ascot Four Pty Ltd v ACCC (2009) Ashmore, Benson, Pease & Co Ltd v AV Dawson Ltd (1973) Associated Newspapers Ltd v Bancks (1951) 23 17 34 37 24 26 161 113 296 317 174 201 Balfour v Balfour (1912): Domestic (non-­‐commercial agreements), Where the husband and wife or de-­‐facto are living together or in a continuing domestic relationship at the time of the agreement, there is no intention to be bound – Civil Servant stationed in Sri Lanka 15 98 Baltic Shipping Co Ltd v Dillion (1993) 31 272 Banque v Brussels Lamberta SA v Australaion National Industries (1989) 16 104 Barton v Armstrong (1976) Bettini v Gye (1876) Bojczuk v Gregorcewicz (1961) Butcher v Lachlan Elder Realty Pty Ltd (2004) 23 26, 27 19 35 159 202 132 304 Byrne & Co v Leon Vab Tienhoven & Co (1880): Revocation, termination of an offer. To be effective withdrawal by the offeror must be brought to the notice of the offeree before acceptance, although the offeree can learn of the withdrawal directly or indirectly. – Withdrawal was ineffective. 13 78 Carlill v Carbolic Smoke Ball Co. (1893): Offer, The offer must be more than mere ‘puff’, must be ‘clear, definite & explicit’ 13, 14 75 Carter v Hyde (1923): Offer will lapse if a party to a contract dies, but not if an offer is made to estate or an option can be exercised – lease hotel option available to estate. 13 81 Causer v Browne (1952) Chappell & Co Ltd v Nestle Co Ltd (1960) Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) Collins v Godefroy Commercial Bank of Australia v Amadio (1983) Commercial Bank of Australia v Amadio (1983) Commonwealth of Australia v Amann Aviation Pty Ltd (1991) Council of the City of Sydney v West (1965) Curtis v Chemical Cleaning & Dyeing (1951) Cutter v Powell (1975) Dawson v World Travel Headqaurters Pty Ltd (1981) 28 17 30 18 23 35 30 28 28 29 37 211 112 253 115 163 305 264 214 212 236 323 ACCC v Apple ACCC v Australian Superstore Pty Ltd (2014) ACCC v Dell Computer Pty Ltd (2002) ACCC v Lux Distributors Pty Ltd (2013) 40 De Francesco v Barnum (1980) Dick Bentley Productions v Harold Smith [Motors] Ltd (1965) Ducrete v Colourshot Pty Ltd (1981) Dunlop Pneumatic Tyre Co Ltd v Selfridge Co Ltd (1915) Elder Smith Goldsbrough Mort Ltd v McBride (1976) 19 26 37 17 28 113 198 320 110 214 Elizabeth City Centre Pty Ltd v Corralyn Pty Ltd (1995): Postal Acceptance Rule, Excluded when intention is that communication is required (an offer can stipulate the required method of acceptance of their offer) – rule excluded by clause requiring communication by certified mail 14 87 Ermogenous v Greek Orthodox Community of SA Inc (2001) 16 101 Fisher v Bell (1961): Literal Rule, give the literal (ordinary) meaning to the words used in the legislation, consulting dictionaries, even if it leads to an absurd result. (Statutory Interpretation) 7 -­‐ Foakes v Beer (1884) 18 115 Ford by his Tutor Beatrice Ann Watkinson v Perpetual Trustees Victoria Limited (2009) 21 147 Gibson v Manchester City Council (1979): Invitation to Treat, “A statement that provides information but does so without indicating that the person intended to make an offer is not an offer” 13 71 Gilbert J MacCaul (Aust) Pty Ltd v Pitt Club (1954): Acceptance; must follow the conditions, if any, stated in the offer – If the offered specifies a method of acceptance it must be followed – lease and irregular payments 14 85 Gilberto v Kenny (1983) Given v Pryor (1979) Glasbrook v Glamorgan County Council (1831) 27 37 18 196 319 115 Goldsborough Mort & Co. Ltd v Quinn (1910): Option to keep an offer open for a specified time; it must be supported by consideration – option to purchase land. 13 77 Grainger v Gough (1986): Invitation to treat (Offer), price lists are an invitation to treat – catalogues. 13 72 Hamilton v Lethbridge (1912) 19 113 Harris v Nickerson (1872-­‐73): Invitation to Treat -­‐ Auctions; If there is no reserve price the auctioneer becomes the offeror and must sell the goods to the highest bidder. 13 73 Hartley v Ponsony (1857) Hoenig v Issacs (1952) 18 29 116 237 Holwell Securities Ltd v Hughes (1974): Postal Acceptance Rule, Excluded when intention is that communication is required (an offer can stipulate the required method of acceptance of their offer) – by notice in writing to the intending vendor 14 87 Howe v Teefy (1927) Hoyt’s Pty Ltd v Spencer (1919) 31 26 270 199 41 Hyde v Wrench (1840): Rejection c/w request for further information, refusal by the offeree to agree to the terms or a counter-­‐offer by the offeree will terminated the offer but not if it is a request for further information – counter offer (land) 13 80 Interfoto Picture Library Ltd v Stiletto Visual Programs Ltd (1989) Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) Jarvis v Swan Tours (1972) JJ Savage and Sons Pty Ltd v Blakney (1970) Johnson v Buttress (1936) Jones v Vernon’s Pools (1938) Krell v Henry (1903) L’Estrange v F Graucob Ltd (1934) Le Mans Ltd v Illiadis (1998) Leaf v International Galleries (1950) 28 34 31 26 23 16 30 27 28 21 210 301 271 200 161 103 251 205 207 141 Leonard v PepsiCo Inc (1999): “Puff” (offer), the offer from Pepsi to consumer (Leonard) was mere puffery and could not be accepted. 13 75 Louth v Diprose (1992) 23 164 Mabo v State of Queensland (No.2) (1992): Decision and recognition that Australia 4 was not Terra Nullius – we have the concept of Native Title. 9 Mackintosh v Johnson (2013) Malago Pty Ltd v Aw Ellis Engineering Pty Ltd (2012) 23 16 166 102 Masters v Cameron (1954): Acceptance; must be absolute and unconditional – subject to memorandum of understanding for purchase of rural property 14 84 McRae v Commonwealth Disposals Commission (1951) McWilliam’s Wines Pty Ltd v Mcdonald’s Pty Ltd (1980) Mercantile Bank of Sydney v Taylor (1981) 21 34 27 142 295 195 Merrit v Merrit (1970): Domestic (non-­‐commercial agreements), where the husband and wife or de-­‐facto are separated at the time of the agreement an intention 15 may exist – as the parties are no longer in a domestic relationship therefore principle does not apply – Husband had to left wife to live with another woman 98 Milliner v Milliner (1908): Domestic (non-­‐commerical agreements), in the case of other domestic situations the courts may look to the seriousness of the consequences 16 and decide that because of the serious nature of the agreement, it was intended to be binding – partnership; commercial in nature 98 Mobil Oil Australia v Wellcome International Pty Ltd (1998): Unilateral contract (classification of contracts) 12 79 Musumeci v Winadell Pty Ltd (1994) 18 118 National News Pty Ltd v Australian Competition and Consumer Commission (1996) 37 317 North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd (1979) O’Brien v Smolnogov (1983) Olley v Marlborough Court Ltd (1949) 23 34 28 160 289 209 42 Oscar Chess Ltd v Williams (1957) Oscar Chess v Williams (1957) Pao On v Lau Yiu Lon (1980) Parkinson v College of Ambulance Ltd (1925) 22 26 17 24 155 198 113 178 Patridge v Crittenden (1986): Invitation to Treat (Offer), advertisement was not an offer, just an invitation to treat. 13 73 Pavey v Mathews (1987) Petelin v Cullin (1975) 32 21 279 147 Pharmaceutical Society of Great Britain v Boot Cash Chemists (1952): Invitation to treat (Offer), offer is when the customer goes up to the cashier and provides money and asks to buy, otherwise just an invitation to treat. 13 72 Powell v Lee (1908): Acceptance; must be communicated in regular and authorised manner, must be communicated by some positive act to the offeree by the offeror, must be conveyed with some authority – headmaster position 14 86 Public Service Employees Credit Union Co-­‐operative Ltd v Campion (1984) 24 177 Raffles v Wichelhaus (1864) 21 143 Ramsgate Victoria Hotel Co v Montefiore (1866): Acceptance; must be made within the time prescribed, or if no time has been prescribed, within a reasonable time – offer to buy shares not accepted in reasonable time. 14 86 Re Mahmoud v Ispahani (1921) 24 172 Re Sigsworth (1935): Golden Rule, if a literal interpretation would lead to an absurdity (repugnant result), words given a meaning that would avoid absurdity. (Statutory Interpretation) 7 -­‐ Reardon v Morley Ford Pty Ltd (1890) Redgrave v Hurd (1881) Redgrave v Hurd (1881) Riches V Hogben (1986) Rose and Frank Co v Crompton and Bros Ltd (1925) Ryan v Mutual Tontine Westminster Chambers Assoc. (1893) Scarborough v Sturzaker (1905) Scott v Coulson (1903) 37 22 22 16 16 32 19 20 324 155 155 100 102 277 132 141 Shortall v White (2007): Domestic (non-­‐commercial agreements), where the husband and wife or de-­‐facto are separated at the time of the agreement an intention 15 may exist – as the parties are no longer in a domestic relationship therefore principle does not apply – De-­‐facto relationship ended 98 Smith v Hughes (1969): Mischief Rule, “purposive Approach”, search for mischief (defect), which a statute was intended to remedy. (Statutory Interpretation) -­‐ 7 Smyth v Thomas (2007): Invitation to Treat – Auctions; advertisement of an auction 13 was not an offer (withdrawn) – online auction. 74 Souter v Shyamba Pty Ltd (2002) 102 16 43 Stevenson Jacques & Co v Mclean (1880): Rejection c/w request for further information, refusal by the offeree to agree to the terms or a counter-­‐offer by the offeree will terminated the offer but not if it is a request for further information – request for further information Stilk v Myrick (1809) Taylor v Caldwell (1863) Taylor v Johnson (1983) Teen Ranch Pty Ltd v Brown (1995) Thomas v Thomas (1842) Thornton v Shoe Lane Parking Ltd (1971) Todd v Nicol (1986) Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) Trevey v Grubb (1982) Van Den Esschert v Chappll (1960) Waltons Stores (Interstate) Ltd v Maher (1988) White v Bluett (1853) Wigan v Edwards (1973) Wilkinson v Osborne (1915) Williams v Roffey Bros & Nicholls (Contractors) Ltd (1990) Woollen Mills Pty Ltd v The Commonwealth (1954) World Series Cricket Pty Ltd v Parish 13 80 18 30 21 16 17 28 16 27 16 27 18 17 18 24 18 16 34 116 261 145 100 111 209 99 206 100 196 121 112 114 178 117 105 -­‐ 44 GLOSSARY A Accessibility-­‐ a law which is inaccessible cannot provide fair outcomes Actual performance; the parties must carry out as closely as practicable the terms of the contract Adopted-­‐ followed or applied Affirmed-­‐ agree with the earlier decision B Bilateral-­‐ is an exchange of promise. Promise for a promise eg. Work-­‐
wages bargain Binding-­‐ this happens when the decision is from a higher court in the same hierarchy and is based on similar facts to the current case By-­‐laws-­‐ laws that apply to a particular geographical area By subsequent agreement; cancellation of original contract (mutual termination, release) and substituted agreement C Certainty-­‐ uncertainty leads to inconsistency & unpredictability Common Mistake-­‐ both parties make the same mistake Condition-­‐ Sure for damages for a total failure to perform the contract-­‐ rescission in equity-­‐ voidable Contingent conditions; condition precedent and condition subsequent Contract-­‐ An agreement between two or more parties, under which legal rights and obligations are created, which will be enforced in the courts…. A promise that the law will enforce Civil Law: Citizen v Citizen; covers actions brought by one individual against another which resuts in remedies for the winning party and liabilities to the losing party. There is an emphasis on remedies the standard of proof: balance of probabilities. Criminal Law: State (Govt), v Accuses; covers actions brought by the state (crown r) against a person for doing an act the state considers to be a crime and which is punishable by a penalty. Emphasis on punishment, the standard of proof: beyond reasonable doubt D Disapproved-­‐ if the court cannot overrule a case it may state that it believes that the earlier case is not longer good laws. Distinguished-­‐ the court finds some material difference between the facts of the two cases Domestic-­‐ relationships made between family and relatives E Executive-­‐ administer the law Express-­‐ where the parties have used express words, written or oral eg. Lease F Fairness-­‐ if a law is not fair it will not be followed Flexibility-­‐ law which is capable of reflecting changing morals and social values Formal Contract (contracts under seal)-­‐ art hoe that require a special form or method of creation but do not require consideration (some loans) 45 Fraudulent-­‐ There must be intentional deceit, there must be a false statement of fact that the representor knew was false. The contract is voidable. Derry v Peek (1890) G Golden Rule-­‐ if the literal interpretation would lead to an absurdity, words given a meaning that would avoid the absurdity. Re Sigsworth (1935) H I Illegal-­‐ void from the beginning Ab initio eg. Hiring a hitman Implied-­‐ contracts is on implied from the conduct of the parties eg. Taxi Innocent-­‐ A misstatement of material fact, not known to be false, and is made by one party to another. The appropriate remedy depends on whether the representation is a condition or warranty. Redgrave v Hurd (1881) International-­‐ concerned with regulating the conduct between nation states-­‐ international treaties and conventions are not part of municipal or domestic law unless they are given express legislative approval by the Commonwealth (federal Govt) J Judges-­‐ appointed to all courts above the inferior courts Magistrates and Tribunals) generally appointed from member of the bar (barristers) Judiciary (courts)-­‐ interpret and enforce the law Jury-­‐ the jury determines questions of fact/not law Justices of the Peace-­‐ honorary positions with the bulk of their work involved in witnessing of documents K L Liquidated damages-­‐ awarded where the plaintiff is able to sue for a specified sum, which must be a genuine pre-­‐estimate of the actual loss. Literal Rule (plain meaning)-­‐ give the litera meaning to the words used in the legislation, even if it leads to an absurd result. Fisher v Bell (1961) M Magistrates-­‐ trained, full-­‐time salaried public servants selected from among the clerks of the court or member of the legal profession Mischief Rule “purposive approach”-­‐ search for the mischief/defect which a statute was intended to remedy. Smith v Hughes (1969) Municipal-­‐ these laws regulate relations between people or organisations within the borders of the state. Mutual Mistake-­‐ both parties make different mistakes (2 boats same name) N Negligent-­‐ when a person makes an innocent but negligent untrue statement; it can give rise to an action where a ‘special relationship can be shown to exist between the parties. Non Est. Factum-­‐ it is not my deed O Obiter Dictum (dicta) -­‐ Statement of principle made in the earlier case that was not strictly necessary for the decision. These statements are NEVER binding, but may be persuasive (if the case has similar facts) 46 Ombudsman-­‐ investigates the complaints about administrative actions and governmental decision-­‐making. They cannot force businesses but it should be followed Ordinances-­‐ laws that apply to a particular territory Overruled-­‐ if an appellant court decides a similar matter, in a later cae, on the basis of a different legal principle-­‐ the decision in the later case in a higher court must be followed P Parliament (legislative)-­‐ Make the law Partial performance; generally, payment for partial performance does not automatically follow unless the contract is divisible as a matter of construction Penalty-­‐ a threat to ensure performance is not enforceable because it is not a genuine pre-­‐estimate of the damages that will result in a breach. Parties meeting face to face-­‐ the plaintiff must be able to rebut the presumption that they did not intent to deal with the party in front of them & to show that they intended to deal with another person. Persuasive-­‐ this is when the decision comes from a lower court in the same hierarchy or from any court (normally higher) in a different hierarchy. Postal Dealings-­‐ in the case of postal dealings, the courts presume that the plaintiff only intended to deal with the addresses. Private-­‐ deals with disputes between individuals or organisations Procedural-­‐ is concerned with the rules of evidence and the conduct of criminal and civil proceeding Public-­‐ the organization of governemt and its relationship with the people Purpose of Ethics-­‐ is to provide guidance for individuals in respect to their business relationships Purpose of law-­‐ is to govern the conduct of all members of society both neutral and legal Q Quasi-­‐contracts-­‐ are agreements imposed by the law eg. Compulsory third party insurance R Regulations-­‐ practical legal guidelines that provide administrative support for a statute Reversed-­‐ changed by the appeal in a higher court Rules (legal)-­‐ administrative procedures that are written as support to legislation and are therefore enforceable S Simple Contracts-­‐ all contracts are termed simple contracts, very simple contacts requires consideration. Some must be in writing and enforceable. (Real Estate) Social-­‐ ones made between family & friends. Trevey v Grubb (1982) 3 person lotto Substantive-­‐ the actual rights and duties of individuals and organisations under the law T Tribunals-­‐ a body established by statute to regulate specific matters 47 Terra Nullius – territory that nobody owns, ‘land belonging to no one’. The legal fiction constructed by the British government that provided the basis for the colonisation of Australia U Under the original contract; express power to terminate, implied right to terminate Unenforceable-­‐ valid (prima-­‐facie_ on its face, such a defect allows the innoent party to rescind the contract Uni-­‐lateral-­‐ involves the exchange of an act for a promise. Promise for an act eg reward Unilateral Mistake-­‐ one party is mistaken (sewing machine, button holes) Unliquidated damages-­‐ awarded where an injured party has no fixed sum in mind-­‐ court decides the amount V Valid-­‐ all elements are present and enforceable by either party. Usual remedy for a breach is damages but equitable remedy may also be available. Valid Contracts-­‐ • Necessaries-­‐ articles & services necessary for those of reasonable comfort of the minor as well as food, shelter, clothing etc. Bojczuk v Grergorcewicz (1961)-­‐ Polish Girl Beneficial contracts of series-­‐ contracts of employment, training or education, It must be checked to see if the beneficial terms outweigh the onerous terms and decide whether there is benefit to the minor. Void-­‐ lacks legal validity and is enforceable by either party Voidable-­‐ a valid contract that contains some defect, such a defect allows the innocent party to rescind the contract Voidable Contracts-­‐ Those contracts which are binding unless repudiated are limited to; shares, leases, partnerships and marriage settlements; Those contracts which are not binding unless ratified; not continuing in nature, goods and services. Voluntary-­‐ parties may volunteer their services. W Warranty-­‐ sure for damages only/no order for recession in equality. Magistrates – 25,000 – 150,000 District – 150,000 – 750,000 Supreme – over 750,000 48