TYLER’S CONTRACT NOTES
OTHER

Introduction
o Who are the parties? V/E contract? Who has the complaint?
 Brambles (Heydon) – post contractual conduct may be used to show that there is a contract
o What is the substance of the complaint?
o What remedy does the complainant want?
 Bailment contracts – onus of proof is reversed. Bailee must prove
 Agents Toll; Causer (husband)




Void - If void, to get money back or get fair pay for work = quasi contract  quantum meruit Tardiani
o No contractual damages
o Mistake – extincta, res sua, cross purposes, identity cases
o Non est factum Gallie v Lee
Voidable
o CL – need to put it back in same position

Duress (see s 50 of ACL or CRA (go check),

Deceit
o Equity (discretionary) – substantial restoration (see Mason in Amadio – lists)

Misrepresentation

Duress

UI

UC

Innocent misrepresentation?
o Statute
Statute
o ACL – s 243
o CRA – s 7
Dixon in Alati – for false statements
o Contract
o ACL
o General law – tort of deceit
o Rescission
TERMS
1. General Rules
a. The victim must prove the contract but the defendant has the BOP regarding the defence of the exclusion clause
b. Terms are what each party by words and conduct would have led a reasonable person in the position of the other party to believe
– objective test – Toll v Alphapharm
c.
i.
ii.
Typical Problem
PF is it included, if yes? Is the exclusion clause included? If so, does it cover what happened?
E.g. Signing something contractual prima facie you are bound…a RP would conclude that there would be T&Cs on the document  exclusion clause – by notice or
is it a ticket case? Does it cover?
d. Olley
2. Identifying Express Terms
a. Signature
i. Signing = bound (even if not read) in the absence of fraud/misrepresentation L’Estrange; Toll
ii. Exceptions – CL fraud (tort of deceit), misrepresentation Curtis
1. Non-CD: where the DOC cannot reasonably be considered a CD (e.g. has another function like a receipt) Causer; Curtis
2. Fraud is conscious or reckless lying Derry v Peek SAME AS TORT OF DECEIT (JUST DIFFERENT REMEDY)
3. Misrepresentation – communicating something that is not true – (can be innocent, negligent, all others) Curtis
4. Others e.g. Olley, non est factum, equitable considerations e.g. rectification Joscelyne
iii. For unsigned documents (e.g. tickets) – necessary to prove party was aware, or ought to have been aware (assent) of its terms
(even if not read). L’Estrange
b. Ticket (similar to notice)
i. “See over” the ticket is considered an offer Parker; Oceanic – not a ticket case – antecedent agreement in Sydney.
1. Knowledge or constructive knowl. of term on ticket? Did they do what reasonable to notify that ticket had terms
a. Parker – know that the ticket had printing? Know that it contained or referred to conditions? Did they do what was
reasonable to notify persons of the existence of conditions?
b. NEED at least reasonable notice which depends on the severity or unusualness of the term Thornton
2. Ticket = offer = accepted if taker retains w/o objecting to its terms so long as there is an opportunity not to keep it
ii. If non-CD it cannot be a term (e.g. receipt docket to retrieve dress) Causer
c. Notice
i. Timing Requirement – terms must be shown/available to the party before contract formation Olley; Oceanic Sun; Thornton
ii. Knowledge/Notice Requirement
1. Knew that a DOC/sign displayed contained contractual terms Parker; Thornton OR
2. Reasonable notice Thornton
a. Contractual document – presentation sufficient. CD = DOC which a RP would expect contractual terms Parker; Causer
b. Non-CD – take reasonable steps to bring those terms to the notice of the other party Thornton; Interfoto
c. If the clause is unusual/wide/destructive must draw attention to it explicitly – red hand rule Thornton; Spurling
d. Reference to terms not readily available is usually insufficient (especially unusual 1 + if hard to access) Dillon; Thornton
i.
d.
Entitled to assume no unusual provisions I.e., significantly limiting liability
Course of Dealing  Where parties have consistently contracted on the same terms a sufficient # of times the CT will incorporate the term
(where usually not) even if relevant party had no actual knowledge of the term in Q
1.
Cases – claim no knowledge, S/N/T rules don’t work, but consistent dealings => assent to inclusion (even if was not one on that last occasion)
ii. Regular and uniform Henry Kendall
iii. Documents to be considered in incorporation by COD need to be reasonably considered as contractual DJ Hill; Rinaldi
1. If it is presented for signature after delivery/performance on a non-CDOC (delivery receipt) = cannot be included DJ Hill;
Rinaldi  prior dealings need to have had the term incorporated (if not in the 1 st how can it be after?)
2. Need to be pre-contract DJ Hill; Rinaldi; Olley
iv. However in Henry Kendall it was incorporated even though post contract because it was presented many times
1. Did you by words or conduct lead the other person reasonably to believe that it was included
v. Say AUS approach is …X but any similarities with Hardwick case (UK – HK) – weigh up evidence + other cases
1.
Analogously to Hill, the clause was presented for signature after delivery/performance on a non-contractual document (delivery receipt). Nonetheless,
because the receipt was presented many times, Ann may seek to rely on Henry Kendall which allowed incorporation even though the document was postcontract. Hill should be followed
vi.
e.
i.
ii.
iii.
Terms that are expected in the industry British Crane
Statements Made During Negotiations
Promissory – seek to incorporate; mere representation – seek remedy for misrepresentation
Is it mere puff? No because it is so important & specific + capacity to do it
Is it a promise? Oscar Chess
1. Language of promise – agree, guarantee or warrant – if they use ‘estimate’ or ‘guess’ = representation Blackney
2. Importance – the more importance the more likely promissory - Van Den Esschert
3. Relevant Expertise – if the doer/seller has more expertise than the other (inexperienced) more likely to be promissory Dick
Bentley – position of power & check the statement (mileage was wrong)
4. Timing – must be made pre-contract Olley
5. Existence of a formal written contract Equuscorp
iv. Intention to be wholly in writing? Goss – if yes than PER applies Masterton and no extrinsic evidence admitted. If no than
considered partly written and partly oral.  look at facts
1. Parol Evidence Rule - prohibits extrinsic evidence to vary the contract where it is wholly in writing Goss; Hoyt’s also limits
what evidence can be used to construe the contract
a. HOWEVER, extrinsic evidence can be used to determine if the contract is wholly in writing Heath
i. E.g. undetailed written contract + other verbal agreements
b.
2.
HOWEVER, strict approach Hoyt’s – extrinsic evidence cannot be used to determine if wholly in writing & it is presumed to be so.
Exceptions
a. Collateral Contracts – statement needs to be promissory in nature Blackney, induced the other to enter the contract
Blackney, and must be consistent with the main contract Hoyt’s (entrance into the main contract as consideration for a promise)
b. Equitable Estoppel – PER does not apply in equity Saleh. Australian Co-operative Foods – if EAC, cannot use equity
because it would be inconsistent with the EAC which purports to be the entire agreement
c. Others – rectification, contract subject to a condition precedent (EE admitted), true consideration, implied terms (use EE
when determining if a term should be implied)
3. Construing Express Terms
a. PF if the term is plain & clear ‘natural & ordinary meaning” you must comply with it even if it is unjust. Codelfa.
b. The terms are construed objectively Toll; PC which means actual intentions (subjective) are not permitted in evidence Codelfa
c. Extrinsic Evidence/Context – PF you cannot use extrinsic material for contracts wholly in writing.
i. HOWEVER, you can if the language is ambiguous (2 meanings) or susceptible of >1 meaning Codelfa; Royal Botanic
ii. Context limited to facts known to both parties or if the facts are notorious (should know) – knowledge is presumed Codelfa
iii. Context includes commercial BG, genesis of contract & the commercial purpose of the contract Codelfa; Pacific Carriers (PC)
d. Exclusion Clauses  construe according to natural & ordinary meaning & if ambiguity than construe it contra-proferentem (against
person relying on the clause) Darlington. Sub rules…
i. 4 Corners – act that was done was not authorised by the contract & negligence in those circumstances is outside the scope of the
clause West – did not use usual procedures
1. Deviation (a version) – TNT – unauthorised way of performing the contract was not covered by EC. It covers only things that
go wrong when the contract is being performed as intended  does not cover if deviate from the route
2.
Gibaud- if you undertake to do a thing in a certain way under certain conditions & have broken the contract by not doing the
thing contracted for in the way contracted you cannot rely on the conditions which were only intended to protect you if you
carried out the contract in the way in which you had contracted to do it
ii. Deliberate Wrongs can be covered if clear enough Securicor
iii. Negligence – must make explicit reference to a breach of negligence Canadian Steam Ship (be clear)
1. “will not be responsible for loss or damage of any description” – enough to cover negligence Davis
4. Implied Terms – cannot be inconsistent with express terms L’Estrange
a. Fact
i. Business Efficacy – key Q is what the instrument…would reasonable be understood to mean?” Belize (BP not a checklist – just do
what a RP would do)
1. Formal BP Refinery; Codelfa
a. Reasonable & equitable – no significant burden on the other party
b. Business efficacy – Moorcock – for it to function in a businesslike manner
c. Obviousness – Shirlaw – so obvious it goes without saying
d. Capable of clear expression
e. Consistency with express terms
2. Informal – if “the implication of the particular term is necessary for the reasonable or effective operation” of the contract
Hawkins. Also obvious Byrne. (business efficacy)
ii. Custom – where a custom is “well known and acquiesced in” and “everyone making a contract in that situation can reasonably be
presumed to have imported that term into the contract Con-Stan - A term will only be implied into a contract where the custom
to be relied upon as showing the implication of the term is so well known and agreed upon that all parties to the agreement
would have agreed to its importation
iii. Course of Dealings
b. Law
i. Implied by Law (Class of Contracts) - implied in all contract of a particular class or description (e.g. reasonable fitness and
merchantable quality on a contract for the sale of goods, bailment, professional services) Esso Australia cited in Byrne v AA
1. Test of Necessity – unless the term is implied, the rights conferred by the contract would or could be rendered worthless or
seriously undermined Byrne v AA; Liverpool City Council; Gray
2.
Examples – obligation to cooperate MacKay, buildings in good repair for tenants Liverpool City Council, conduct in employment with care,
skill & diligence Lister, RC of house if left empty Stansbie, bailment (reverse onus) – DOC (SN 33)
ii. Statute e.g. SOGA s 19, s 23 (see)
c. Good faith – unclear in Australia Royal Botanic Gardens – according to Burger King it may be implied (not all the time)
d. ACL – non-contractual rights (SEE BOTTOM)
Competition & Consumer Act 2010 – Schedule 2  Adopted in Fair Trading Act NSW 1987 s28  uniform
Guarantees s 51-64A
1.
51-53 goods to a consumer
2.
Rest must be in trade or commerce
3.
64/64A limits capacity to exclude the guarantee
iii. Unfair Contract Terms
1.
Designed to catch terms included by large contracting parties which wants to use a term as benefit
2.
If it’s a standard form contract & you can prove the term is unfair the term is void – s23
a.
Standard Form Contract – s27 - Presumption that it is + Unfair – s24
iv. Remedies
1.
General 232-243
a.
232(1) – injunctions if…Also see provision to see what an injunction can do
b.
236 – damages if contravention caused damage (6 years to do it)
c.
243 – Other orders
2.
Specific
a.
259-66 Goods
i. Consumer can take action if supply in T or C & a guarantee is not complied with
ii. Is the non-compliance a major failure or not a major failure
1.
Major s260 –
2.
Nonb.
267-70 Services
i.
ii.
REMEDIES
TERMS  DAMAGES
1. Did the Breach (quantity, quality or time) of a specific term (express or implied)
2. Cause (a normative judgment with physical & legal cause) – Show a causal connection between the breach and the loss
a. PF use B4 test (has limitations) as a guide Alexander but ultimately it is a matter of common-sense Alexander (Mahoney JA);
March & policy  should this person be responsible Henville…it is a normative decision Barnes v Hay (Mahoney JA)  depends
on purposes & policies of the law Empress
i. Limitations – just shows necessary preconditions jointly sufficient to produce the loss
b. Does not need to be the dominant cause (irrelevant if multiple/concurrent causes) Alexander (no biz dec borrow + economy)
c. NAIs can break the chain of causation Alexander e.g. change in GOV policy; RF do not break the chain Alexander
d. E.g. Stansbie implied term was to protect against the very thing that happened (the loss from stealing)
3. A Loss Robinson v Harman (3 are manifestations of the same principle) – receive compensation to put them in the position as if the
contract had been performed (e.g. the loss of profits + costs incurred to perform). If there is no loss you cannot claim Clark
a. Expectation– compensate for the benefit expected to be gained by performance by the other party
i. Damages for Breach of an Obligation to Repair – damages for repair favoured over market value approach.
1. General rule is the amount to rectify the defects to make it substantially in accordance with the contract Bellgrove i.e.
the cost of putting the premises into the state required by the contract Tabcorp (same position is not the same as financial
position (sometimes – e.g. commoditised goods)
a. A building not to specification might be the same value – there needs to be a remedy
b. Entitled to be given what you contracted for Bellgrove
2.
4.
Qualification
a. Work to produce conformity must be reasonable & necessary (unreasonableness rare) Bellgrove; Tabcorp
b. This is obviously within reason (for example, if a house was built with much better quality bricks, the house-owner
could not sue that the low quality bricks he contracted for weren't used)
b. Reliance –where P cannot establish his expectation loss (~ of expectation damages)  claim reasonable costs wasted.
i. McRae – could not do loss of chance – cannot value a non-existent thing  reliance  all reasonable expenditure in reliance
on the promise from D.
ii. Presumption that P would not enter into a contract where he could not recover costs Amann
1. (if D proves P would not have recouped costs than full compensation for wasted expenditure won’t be awarded)
2. NB in this case the prospect of renewal included because strong prospect
c. Loss of chance (part of E) Chaplin (pageant) – where what P expected to gain from performance was a chance of a benefit
i. Howe  if deprived of something of monetary value a jury is not relieved from assessing the loss merely because the
calculation is difficult & not precise
ii. Test – was D deprived of something which had monetary value due to D’s breach
iii. Measurement – take the expected gain * probability Sellars (expected value)
d. Discount for vicissitudes – that CTH might justifiably terminate Amann
i. If <50% do not apply it, if more than you do apply it. Mihalis (yes), Amann (majority)
e. Date of Assessment – generally the date of the breach Johnson but it gives way where it is necessary to give P that amount which
most fairly compensates him for the wrong he suffered. Consider…
i. Inflation (make D bear it),
ii. P’s intention is relevant (did they intend to sell something on a specific date – what was the market price at that date e.g. sale
of oil delivered late and price falls later)  fluctuations in markets, currency. If planning to sell – should reflect this…if not
than can use date of judgment (provided mitigation is not a concern)
Which was not too Remote Hadley…damages should be fairly & reasonably considered either
a. 1st - Arising naturally (i.e. the usual course of things) from the breach itself [general – presumed contemplation] OR
i. Koufos – sugar delivery late – markets fluctuate – sold at a lower price  serious possibility or real danger. Need not contemplate degree
of damage just the type
b. 2nd – special for this defendant – in the reasonable contemplation of both parties, at contract formation, as the probable result
of the breach [special]
i. Too remote in Hadley because no special knowledge that there would only be 1 mill or what was even happening there
ii. For special things communication necessary (knowledge) so the party is able to accept special risk Blank
iii. Actual knowledge implies acceptance of risk. It is a rebuttable presumption which D must rebut e.g. expressly or price out of
proportion to risk implied (SANIP contract with GOV). Stuart
1.
2.
special losses – actual knowledge of special circumstances necessary + acquired knowledge from P or P knew D knew Stuart
Victoria Laundry – could not recover for special contracts unless D knew of the highly lucrative contracts. Only received
a general sum for loss of profit.
iv. Reasonable contemplation = serious possibility of occurring, thoughtful consideration Alexander – not unlikely to occur
Stuart – it is narrower than foreseeability.
5.
6.
v. Need not have contemplated the degree of loss suffered Wroth or precise details giving rise to the loss. It is sufficient that
they contemplate the kind or type of loss Alexander; Stuart
Mitigation – requiring P to attempt to limit his own losses resulting from the breach of another party (limit on damages)
a. P must take all reasonable steps to mitigate his losses Burns. Losses which P could have mitigated & didn't = not recoverable
i. The onus to prove that mitigation has not taken place rests with D Burns
ii. Doing something that one cannot afford to do is unreasonable = it is unjust to punish for lacking means to mitigate Burns (but
in this case he was not locked in and did not have to go on making losses)
b. P may recover for any additional loss incurred as a result of his reasonable attempts to mitigate Simonius Vischer [even if the
resulting damage is greater than it would have been had the mitigating steps not been taken]
c. P cannot recover for loss that has been successfully mitigated. Simonius; British Westinghouse
Other
a.
Damages for Distress/Disappointment
i. Damages for D/D are not recoverable Addis
ii. Exceptions Baltic
1. Distress proceeds from physical inconvenience caused by the breach
2. Contract has the purpose (a term, E or I) of providing enjoyment, relaxation or protection
a.
The damages flow directly from the breach of contract, the promise being to provide enjoyment, relaxation or freedom from molestation."
b. Contributory Negligence
i. Statute – yes – B4 Astley  no
ii. Where failure to take reasonable care (by P) contributes to the loss he suffered as a result of the D’s breach of contract. Law
Reform (Miscellaneous Provisions) Act 1965 (NSW), s 9 (1) reduces the awarded damages in such cases, to the extent that it
is 'just and equitable'
c. Penalties – are unenforceable AMEV-UDC  get damages. Contract can specify a certain amount is payable to 1 party if the
other breaches a term…if it is not a genuine pre-estimate than = penalty. If anything it just provides a limit to recovery AMEV
i. If the stipulated sum is out of proportion to loss (damages) (irrespective of breach – just look @ r/ship between 2 sums)
Andrews v ANZ (less likely to be penalty if genuine pre estimate of the loss & might not for additional obligations i.e. if you show this film
again you need to pay 4x the original amount – it is like an option.)
ii. Dunlop Rules
1. Is sum extravagant relative 2 greatest loss conceivable from the breach? Y = P, if genuine pre-estimate = N, P.
a. Esanda – all out of proportion. Ascertain the loss by including LOB damages even though you don’t get LOB for
termination by a term of the contract.
2. If breach is failure to pay $, & sum is greater than the sum that ought to have been paid = P
3. If it is a single lump sum which is payable in the occurrence of one or multiple events, some of which only warranting
trifling damages, there is a presumption that it is a penalty Esanda
4. Just because the consequences of the breach are very hard to estimate, doesn't mean it is a penalty. Rather, there is a
presumption that it is a liquidated sum
ACTIONS FOR DEBT
1.
Debt is a fixed amount (liquidated) as a result of a contractual claim…arises from price 4 sale of G/S or rent/periodic payments
a.
b.
2.
3.
4.
5.
Payer sues for damages, the doer sues for the price. Causation/remoteness do not apply – just prove you’ve done the work
Can sue for it even if you have breached the contract yourself.
c. Onus is on D to prove innocence
Entire contract (lump sum Hoenig) = must have performed exactly & fully to sue for the price Tardiani; Sumpter; Cutter
a. Exception  Substantial Performance Boone – sue for price but other can cross-claim for the remedial work
i. Cannot recover money paid in advance unless there has been a total failure of consideration (i.e. no substantial benefit
Baltic)
b. If substantial (kind of works) look at the % that is done & if it is close enough you can sue for price but there will be a cross-claim
for the cost of remedial work Hoenig
Divisible contract (specific tasks + instalments Smith v Jones–not conclusive^)= can get price for the bits you have done Tardiani
a. Each separate divisible obligation must be performed entirely Tardiani unless the specifications (making completion partial) are
dispensed with  imply dispensing of a condition if D takes the benefit of the work  must have a choice to accept or
reject…here D took the wood & sold it + acquiesced (he could have told them they would not receive payment for wrongly cut wood
before he fired them)  obliged to pay reasonable & fair value  quantum meruit.(even if not contractual – quasi)
Substantial performance – applies to divisible obligations and probably to entire contracts Tardiani
a. Sue for price but the other party has a cross-claim for the cost of remedying the defects in performance Hoenig
b. Not substantial performance if P failed to achieve the main purpose for which he was paid Bolton (heating)…also can look at
costs of defects relative to the price of the contract.
Payments independent of performance - sum will become a debt as soon as the time for payment arrives, regardless of whether
performance is completed McDonald
a. General rule – refusal to complete an executory contract = cannot sue for debt
b. Except if contrary intention is shown by terms of contract
c. But accrued right to receive/retain the instalment is conditional on subsequent performance
d. Deposits are able to be retained by the vendor if the contract is breached by the purchaser…can sue for unpaid deposits Bot
i. Deposits not conditional upon performance (subject to construction) – it is an unconditional promise to pay a deposit
immediately for the promise to sell Bot – accrued rights aren’t affected by accepting repudiation.
ii. If vendor breaches cannot retain deposit CCP Australian Airships
OTHER DAMAGES
1.
2.
3.
ACL s 236
CRA
Tort – deceit or negligence
GET OUT OF THE CONTRACT
FRUSTRATION (CL)
1.
2.
3.
4.
5.
6.
Examples – person dies Cutter v Powell (sailor), where something becomes illegal to perform Fibrosa,
Frustrated Contracts Act 1978 – mitigates the loss lies where it falls principle  affects the consequences e.g. getting $ back
a. Seeks to apportion the losses caused by frustration
b. S12: Act requires the return of money paid before the contract was frustrated
c. s13: where expenses have been incurred for the purpose of performance of the contract which is not rendered, the loss relating to
those expenses are to be shared between the parties
d. s10: where a party has performed his obligations under the contract, compensation must be paid
e. s11: Where only partial performance has been rendered, there are complex provisions for valuing the compensation to be paid
i. Where a contract is frustrated and part, but not the whole, of the performance to be given by a party under the contract has been
received before the time of frustration, the performing party shall be paid by the other party to the contract:
1. an amount equal to the attributable value of the performance, except where the attributable cost of the performance exceeds
its attributable value, or
2. where the attributable cost of the performance exceeds its attributable value--an amount equal to the sum of:
a. the attributable value of the performance, and
b. one-half of the amount by which the attributable cost of the performance exceeds its attributable value.
Frustration: without default of either party, a contractual obligation has become incapable of being performed because the
circumstances in which performance is called for would render it a thing radically/fundamentally different from that which was
undertaken by the contract Davis Contractors
a. Unforeseen event + no fault + renders performance fundamentally/substantially/radically difference
Limitations
a. The risk of the frustrating event must not have been provided for in the contract Codelfa
b. The frustrating event must not be one which the parties could reasonably be thought to have foreseen Davis Contractors
c. Frustrating event must have occurred without fault by the party seeking to rely on it Bank Line
Consequences  Discharged from future obligations but the rights accrued up until the contract ends remain. General rules is loss
lies where it falls but see the legislation
Cases
a. Destruction of subject matter – Taylor – contracted on the basis of the continued existence of the hall to be rented out. It burned
down…performance depended it – both are excused from their obligations. Like someone dying in an employment contract. Could
not claim for expenses.
b. Disappearance of the basis of the contract
i. Krell – hired room to watch coronation but King sick – it never happened. The assumption or foundation on which the contract
was based upon ceases to exist. does not need to be an express term (can look at surrounding circs)
1. Extended from destroying subject matter to ^
2. Distinction with Cab example - significance of the event + particular type of contract was extreme – huge sum for just the
daytime just to look out the window
3. Hutton – same thing but 2 day boat trip to watch it…not frustrated – still get a decent trip. (not as bad as being in a room)
ii. Brisbane City Council – were going to rezone the land as residential in return for developing footpaths/drains. Crown resumed
the land. Performance was not impossible but it was a fundamentally different situation where Group Projects were deprived of
substantially all the benefit in the contract (purpose for which they took on obligations was destroyed).
c. State of affairs essential to performance – Codelfa – injunction prevented company from doing what was agreed 3x8 hour shifts
 the situation resulting from the grant of the injunction is fundamentally different from the situation contemplated by contract
on its true construction in light of the surrounding circumstances…the contemplated method was an essential element of the
contract  performance of the contract in the events which have occurred is radically different from performance of the contract
in the circumstances which it was contemplated – could not legally do what was intended
i. Change in state of affairs may not frustrate if there is an alternative of doing the same thing even if more difficult Suez Canal
Cases - Tsakiroglou; Eugenia
d. Fault – Ocean Trawlers – the reason or the frustrating event was your allocation of licences  not frustrated
e. Weather – Davis v Local Council – bad weather did not lead to frustration (building took 22 instead of 8 months)
TERMS  TERMINATION
1.
Termination (5 ways) – termination is from the moment of election. Financial effects depend on whether it was via contract or CL
termination. Validity depends on if a valid ground exists irrespective of what you said Shepherd v Felt. If you get it wrong you will have
wrongly repudiated the contract yourself. There can be more than 1 ground Shevill
a. Contractual – cannot get rights to future profits Shevill (can if you have 1 of the CL grounds as well PMH)
b. By Agreement
i. Express – right to terminate at will (anytime), after a specified period of time or triggered by specified events (e.g. breach). The
term may specify a procedure to be followed before termination.
ii. Implied - derived from the inference that the parties did not intend the contract to continue forever. Reasonable notice would
usually be needed to bring “to an end in an orderly way their relationship” & to enter into alternative arrangements & to wind
up matters which arise out of their relationship Crawford. Reasonable time is a question of fact & will vary according to the
circumstances Crawford
iii. Subsequent Agreement
1.
2.
c.
Consideration will be provided in agreeing to release the other party from remaining obligations. Problem where party has fully performed & other has not
– NP party cannot give consideration by providing a release. Solution is a deed or an ‘Accord and Satisfaction’ where the NP party purchases release by
means of valuable consideration (see notes for more)
Implied – where the subsequent agreement does not specify what happens to the original, the CT examines the intention of the parties in the subsequent
agreement Tallerman. It will either replace the original (e.g. if new is inconsistent Benningtons) or modify the existing (e.g. if it seems unlikely that parties
intended to abandon their rights Worrell or the new agreement cannot stand alone as an independent agreement Tallerman.
Failure of Contingent Condition – “if…or subject to” common examples are finances, licences, weather.
i. Contingent conditions are different to conditions. A CC is when parties make performance of their contract conditional upon
the occurrence of a specified event that neither party promises to ensure will occur (all obligations or a particular one)
1. CC’s in regards to performance  regardless of the contingent condition a contract is formed & neither party can conduct
themselves inconsistently with the contract
2. CC’s in regards to formation  neither party will be bound until it is fulfilled
3. CC’s subsequent is one where the parties’ obligations to perform is immediately binding but will come to an end should the
event specified in the condition occur (e.g. vendors licence not being revoked) Maynard v Goode
ii. Duty to cooperate – express Pender or implied Mackay  party in breach not entitled to terminate + damages (maybe)
iii. Non-fulfilment if events occur contrary to the condition or a time period for the event to occur lapses – express or implied
(what is reasonable is based on circumstances Perri)
1. Judged objectively – subject 2 finance or subjectively – obtaining satisfactory finance (must act honestly Meehan unclear if
there is a reasonableness standard but some support Renard could be implied by fact BE or in law class of contracts)
2.
Consequences – excuses performance Perri (whole contract becomes voidable or a particular obligation is excused) or it just
comes to an end if that is what the term specified (if neither party has any control over CC more willing to accept this New Zealand Shipping;
Gundowda – made it voidable – policy reasons)
3. Who can terminate? Based on construction Gange but if CC unfulfilled due to non-cooperation that party cannot
iv. Waiver – can agree to waive a CC = bound + cannot terminated for non-fulfilment of CC
1. If it is wholly & solely for the benefit/protection of one party, it can be waived by that party alone Perri; Gange; Maynard
a. NB the other party can terminate as long as you don’t waive 1 st
2. 1 party cannot waive the condition if it is for both party’s benefit Gough Bay
v. Restrictions
1. Prevention – a party may lose right to terminate for non-fulfilment of CC if party has prevented its performance or has
intimated an intention not to perform Grieve – led to repudiation. Other – waiver, estoppel, good faith, cooperation, M/D
d. Common Law – can get LOB damages
e. For Breach (quantity, quality or time)  intention of the parties
i. Conditions – entitled to terminate + damages Tramways v Luna – no matter how slight.
1. promise is of such importance that he would not have entered into the contract unless he had been assured of a strict or
a substantial performance of the promise Tramways; Bancks (& this ought to be apparent to the promisor)
2. Basis or essence (heart) of the contract Bettini ; Root of the contract Ankar
3. Just because it says it is a condition does not always mean it is Schuler v Wickman
4. Factors favouring conditions – damages not adequate/available, unfavourable factors = language Ankar
5. SOGA s 19 – merchantability & fitness for purpose
ii. Intermediate – depends on gravity of breach + damages
1. Classification depends on whether the breach deprives the innocent party of substantially the whole benefit Hongkong Fir.
If breach can occur in numerous ways (serious & non-serious) it is likely to be classified as intermediate. HK Fir
2. Allow for termination if breach substantially deprives innocent party of the whole benefit Hongkong Fir; Ankar
a. Other factors – damages not an adequate remedy Ankar; Koompahtoo, CTs are not too ready to construe a term as a
condition (prefer to encourage performance) Ankar
b. Question of construction Koompahtoo
iii. Warranty – damages
f. For Repudiation – when a party’s conduct indicates that it is no longer willing/able to perform the contract Koompahtoo; Carr
i. Consequences – wrongful repudiation entitles the other party to damages and a right to terminate
1. Must be deemed to repudiate entire contract
2. If just repudiating an obligation – can only terminate if essential term Foran or deprives substantially of the whole benefit Tabali
ii. Actual vs. Anticipatory
1.
Anticipatory breach - repudiation of a future term or obligation under the contract prior to the time set for performance. The Aggrieved
party will be entitled to terminate even before the actual breach, and damages will not be affected. That a party which elects not to
terminate upon an anticipatory breach will still be entitled to terminate again when the breach actually occurs….but there is a duty to
mitigate losses from that point
2. It must be practically inevitable Citati  to high a test. Substantially incapable is the test Foran
iii. Conduct Amounting to Repudiation – evinces an intention to not be bound. Measured objectively Citati if you cannot perform
even if you wish to, you have repudiated
1. Words/Conduct – Carr – 2 breaches (actions can be put together) led to the reasonable inference that the contract would
not be performed according to its true construction  he did not intend to be bound (only do it if & when it suits him)
a. A failure to remedy the breach can continue so long & in such circumstances to evince an intention not to be bound
2. Combination of Small Breaches PMH v Tabali
a. In Tabali did not have to choose between termination by express term & repudiation. Still got damages – termination
by contract is not a bar to suing for repudiation or breach damages.
b. Instalment contracts Maple Flock – is it repudiation of whole contract?  look at ratio of breach to contract as a
whole (1.5t to 100t) + degree of probability it will be repeated
3. Insistence upon an erroneous interpretation of the contract DTR Nominees - In order to for a party to be repudiating when
erroneously interpreting the contract, it need to manifest an unwillingness to act in accordance with the contract even after
its error is pointed out to it…bona fide dispute is not enough DTR; Wimpey
4. Terminating without justification = repudiation Tramways; Bancks
g. For Delay (Really Goes UNDER BREACH/REPUDIATION) – depends on whether time is a condition (is it of the essence)
i.
Stipulated –
1. Express condition (breach = termination),
2. Statute (SOGA),
3. Warranty
4. If it’s a reasonable time
ii. Not Stipulated (implied reasonable time Reid look at circs Canning)
1. Inferred condition
2. Warranty
iii. Where time is of the essence – breach = right to terminate
1. Express
2. Statute – s 15(1) SOGA – warranty unless a different intention appears
3. Implied reasonable time Reid – if so cannot terminate until you can infer repudiation Laurinda but can issue a notice to set
a time & if failure = repudiation
iv. If not of the essence = no right to terminate
1. Can only terminate if
a. Delay amounting to repudiation
b. Such a long delay amounting to breach of an intermediate term Neeta in Laurinda
c. Notice Procedure Louinda  Specify a time for completion + must be reasonable (look @ circumstances) + notify that
time is of the essence or failure to adhere may entail termination Laurinda (inference of (step to) repudiation)
i. Can use where time is not of the essence + there is some delay Louinda (breach of express or unreasonable delay
for implied)+ R&W to perform Birdseye (even if breach a warranty could still issue a notice Alexusa)
2. Implied reasonable time will not likely be of the essence Laurinda unless ^ serious consequences
a. Breach arises upon unreasonable delay Louinder
3. Unlikely to be an intermediate term since only 1 type of breach = late Bunge…but degree & consequences of breach vary
Carter -> undecided Ankar
h. Abandonment – if conduct indicates they have mutually abandoned the contract DTR Nominees or if an inordinate length of time
has passed without either party trying to perform or asking the other to perform Fitzgerald
2. Election – must choose to terminate or affirm the contract
a. No need to elect immediately – it can be delayed so long as nothing is done to indicate affirmation Tropical Traders; Tramways
i. Granting a time extension for a time is of the essence clause only amounted to delay of election Tropical Traders
ii. An election cannot be retracted Tropical Traders
b. Affirmation – forfeits right to terminate, can still receive damages. The NP party is treated as normal Bowes. The contract is kept
alive for the benefit of both parties Foran
i. Need to know about the factual situation which entitles termination Immer
ii. Unequivocally showed an intention to affirm Tropical Traders
c. Termination – discharged from future obligations but accrued rights are still recoverable
d. Reading & Willing
3. Restrictions on Termination
a. Ready & Willing – cannot terminate if the aggrieved party itself was not ready & willing to perform. To show R&W a party must
prove that it is not substantially incapable Foran
b. Estoppel – if the party has induced the assumption that it would not terminate
i. Needs to be clear & unequivocal Legione
ii. There is an assumption (broad W v G – lesbian couple children), induced (clear & unequivocal Legione – I will check with my
boss is not enough) which led to detrimental reliance (need not be financial Verwayen, must be material Hawker)
c.
Waiver – in reality it’s not recognised as a stand-alone concept. Describes election and estoppel. Gardiner
i. An intentional act done with knowledge where a person abandons a right by acting in a manner inconsistent with that right
Gardiner  accepting late payments did not = waiver for requirement to pay punctually.
ii. Kirby in Gardiner – waiver if it would be manifestly unfair for the party which had waived its earlier legal rights to later adopt an
inconsistent position and seek to enforce them
iii. Skinner – if you have a right to terminate (solely to your benefit) you may waive that right Verwayen (267.10, 268.05).
d. Relief Against Forfeiture
i. Termination of a contract may result in 1 party suffering the forfeiture of a proprietary interest. CT can provide relief by using its
discretion to order SP in favour of the party in breach. Applicant must be in a position to perform Kostopoulos
ii. Based on the relief against unconscientious conduct Tanwar
iii. Mason & Deane in Legione
1.
2.
3.
4.
5.
Did the conduct of the aggrieved party contribute to the other party’s breach? (yes)
Was the other party’s breach trivial and inadvertent and not wilful? (yes)
What adverse consequences did the aggrieved suffer by the other party’s breach? (Not much)
What is the magnitude of the purchaser’s loss and the vendor’s gain if the forfeiture is to stand? (Huge)
Is specific performance with or without compensation an adequate safeguard for vendor?(Yes)
iv. Example if just built house on the land about to forfeit – if no relief, the terminators get a windfall Legione
v. Tanwar – narrow view – relief only for  Fraud, accident, mistake or surprise.
1. Where mistake and accident are not involved, it will be necessary to point to the conduct of the vendor as having
significantly caused or contributed to the breach of the essential time stipulation
2. Equity will not relieve where the possibility of the accident may fairly be considered to have been within the contemplation
TERMS  RESCISSION
RESCISSION
Cancelling the contract from the beginning & restoring the parties to the positions they were in as if the contract was never made 
can only get it if the contract has not been performed in the sense that you can restore
2. CL – need restitution in integrum – exact restoration – fraud Seddon, duress, total failure of consideration
3. Equity –substantial restoration –mould the order to suit circs Smitt; Erlanger – misrepresentation, mistake (sometimes), duress, UI, UC
4. Equity  Discretionary Remedy (not a right) Smitt; Alati - need to balance competing interests House
a. Smitt – if you get $ back you must compensate for use of the farm. You also only get $ back for expenses that were necessary (e.g.
repair) rather than expenditures that are your own choice before finding out about the defect/wanting to rescind (e.g. tastes or
personal enjoyment) Substantial Restoration via $ compensation.
i. Where substantially destroyed – no rescission
ii. Where improved or deteriorated but remains in substance what it was before = restoration by rescission & $ compensating.
b. Alati – get $ back & indemnity for necessary expenses. Relief moulded 2 fit circumstances  E does what is practically just
i. Dixon – go for contract damages, ACL, fraud (tort of deceit) or rescind via equity
1.
ii.
iii.
c.
i.
ii.
E.g. John constable painting problem (10A) – 20$m but only worth 100k, paid 1m. C= 19m, ToD – get 900k back, R = money back
Verdasz – guarantee partly rescinded to degree they were told (future debts only)  partial rescission or rescission on terms
Barriers - substantial restoration, lachees – delay, hardship, unconscionable actions after being duped, unclean hands
Executed contracts - cannot of be rescinded in the absence of fraud (Vimig Pty LLtd v Contract Tooling Pty Ltd )
Affirmation - an affirmed contract cannot be rescinded (Coastal Estates Pty Ltd v Melevende )
1.
2.
3.
Must be unequivoval…but must know of the material facts entitling rescission + he has a choice to avoid or affirm
Except where person exercises rights adversely to representor after discovering the falsity
Onus on representor
iii. Lapse of time - Delay itself will not be a bar to relief in equity but is relevant to the court’s exercise of discretion (JAD
international; Henjo; Skinner
iv. Misrepresentation becomes a term of the contract - there is authority to suggest that a party may still elect to rescind the
contract on a basis of a misrepresentation even if the misrepresentation becomes a term (i.e., he does not have to sue under
breach of contract) Power SOGA s4(2A)(a)
v. Third Parties - rescission may be barred in cases where a third party became involved and acquired rights under the contract.
However, monetary remedies are available (McKenzie v McDonald)
vi. Exclusion/entire agreement clauses - non-fraudulent misrepresentations will be protected by disclaimers or entire agreement
clauses (Byers)
vii.
viii.
5.
Notification - rescission will only be effective if it is communicated to the Representor. An exception to this bar is when it is impossible to
communicate the rescission (Caldwell [1965])
Rescission can be claimed as a defence to an action of the contract Power
ix. Unconscientious actions after being duped (not the case in Alati) unclean hands
Statute
a. ACL s 243.
b. CRA s 7.
COMMON LAW
Fraud – a lie can be anything, materiality does not matter. Entering a contract because of fraud – a false statement that you know is
false (lie) or 1 that you are recklessly indifferent to its falsity Derry v Peek  can rescind or go for damages under tort of deceit.
2. Duress
1.
EQUITY
Misrepresentation (VOIDABLE) (similar to ACL M/D – BUT saves you if not in trade or commerce)
a. Makes a positive representation by conduct – words, written, behaviour, silence (Henjo)
i. Usually a positive action Smith but exceptions  duty of disclosure where…
1. statement technically true, but gives a false impression Curwan (did not disclose the company was buying land belonging to him)
2. Where a statement is true initially but subsequent circumstances render it false (i.e., a duty to correct oneself) Davies
3. Where the party concealing information is in a better position to know the facts that the other party
4. In certain types of contracts of 'utmost good faith' (uberrimae fidei), i.e. insurance or partnership contracts (Davies)
5. In special/fiduciary r/ships (Hospital Products) – agent/principal McKenzie (RA), solicitor/client, guardian, trustee Davies
a. Agent to sell cannot purchase without full disclosure of what he knew McKenzie
b. The false representation must be a statement of fact. Given
i. Statements of opinions
1. Where the facts are NOT equally well known to both parties, that a SOP by one who knows the facts = statement of a
material fact (for he impliedly states that he knows facts which justify his opinion) Smith v Land
2. SOP implies that fact that the person actually holds this belief if not true = misrepresentation Fitzpatrick
ii. Statements as to future intentions shows the statement of the mind of the man (factual)…just hard to ascertain Eddington
(hard to prove) – misrepresented what they were going to use $ for. Implies a MOF – present intention to fulfil the promise
iii. Can get relief for misrepresentations of law Taylor as it implies the representor knows the law which is a SOF.
iv. The more specific the less likely mere puff Eveready
c. Reliance on the misrepresentation  It must be one of the reasons why you got into the contract Gould
i. Presumption that a FS preceding a contract induced it (representor must satisfy evidentiary onus) Gould
d. It has to be material Nicholas
e. Even if innocent Redgrave
2. Duress (VOIDABLE) (see also s 50 of ACL or s 9(2)(j) CRA)  outcome is voidable
a. Was there pressure? Was the pressure legitimate or illegitimate? Universe Tankships
i. Legitimate – usually lawful things. CF threatening to report a crime for $.
1. Can be illegitimate if no reasonable connection between nature of pressure & the nature of the demand. Universe
Tankships – lawful threat of prosecution of a family member to induce a promise John Whetton
ii. Illegitimate – usually unlawful things  unlawful threats or if it amounts to unconscionable conduct Crescendo
1. Not every unlawful threat is illegitimate (bona fide by legally misguided threats not to perform)
b. Did it impair consent (i.e. absence of choice  compulsion of the will)? Universe Tankships
i. Only need to show it was 1 of reasons why the contract was entered into Barton (not the sole or main reason) Crescendo
ii. Once you show illegitimate pressure, onus on D to prove it did not contribute entering into contract Barton; Crescendo
1. Just need to show a link between illegitimate means & action taken
iii. Person Barton
1. Once you show an illegitimate pressure (e.g. threat to life) presume duress played a part in decision. Onus on D to prove it
played no part in entering the contract etc.
iv. Property Hawker Pacific
v. Economic (Equity – not in readings) Occidental hard to distinguish with commercial pressure Pao On
3. Undue Influence (VOIDABLE) – where a person because of reliance/confidence suffers from impaired judgment as to his best
interests. (Run with UC. UI focuses on victim, UC focuses on wrongdoer)
a. Is it a PF Relationship? parent/child, guardian/ward, solicitor/client, religious advisor (Skinner), physicians & carers for the sick. NOT Husband/wife
b. Is it a relationship of trust or dependence? (ascendency/influence)? Buttress  based on facts
i. Circumstances may indicate this e.g. the attributes of Johnson (illiterate, strangeness) & his dependency on her + give his only
asset to her…if it was a sale CAN look at adequacy of the consideration (gifts vs. sale).
c. If yes = presumption of UI & the wrongdoer has to prove that it was a free decision by the victim (onus reverses). One way to
show this is to tell them to seek independent advice. Buttress; Westmelton
i. Must show the transaction was at arms-length (free will) & was not materially affected by confidence reposed in the
confident. Telling them to seek independent advice is a good way but not the only way Westmelton
ii. Westmelton –directors had more expertise in commerce than the solicitors. No need to obtain independent legal advice. It was
a fair, open & honest dealing with a well-informed corporate client. No advantage was taken.
d. If no = P has burden to prove actual UI. Buttress (presume the act was independent & understood done with free judgment).
4. Unconscionable Conduct/Dealing (VOIDABLE/ACL/CRA)
a. ACL s 20-22
i. S 20 - A person must not in trade or commerce, engage in unconscionable conduct within the meaning of the unwritten law
1. ACCC v Berbatis – was just the rough & tumble of commerce. No SD, they made the decision that was in their best
interests. SD =/= inequality of bargaining power…people do not have to forfeit their own interests.
2. It was not unconscientious it was just advantageous of a superior bargaining position.
1.
Disadvantage was no legal entitlement to a renewal  nothing special about that…they could still make a judgment in
their best interests & they did.
ii. S 21(1) – a person must not, in trade or commerce in connection with
1. (a) supply or possible supply of G/S to a person (other than a listed public company)
2. (b) acquisition or possible acquisition of goods or services from a person (other than a listed public company)
3. engage in conduct that is, in all the circumstances, unconscionable
4. (3) cannot account for things that were not RF at the time
iii. S 22 – factors to take into account
1. (1) as a supplier (2) as an acquirer
2. (a) relative bargaining position
3. (b) whether customer had to comply with conditions that were not reasonably necessary for protection of supplier
4. (c) understanding of documents
5. (d) UI, pressure, unfair tactics,
6. (e) market value elsewhere
3.
7.
8.
9.
10.
(f) suppliers behaviour in relation to other customers compared to the customer in question
(g) industry code h)
(i) failure to disclose (i) intended conduct related to customer (ii) an risks from this conduct
(j) contract (i) how negotiable with the customer (ii) T&Cs (iii)conduct of supplier & customer in complying with T&Cs (iv) any conduct of the parties after
entering into the contract
11. (k) whether supplier has right to vary a term or condition
b.
c.
12. (l) acting in good faith
CRA  Unjust
Amadio CL Rules
i. If some party is at a special disadvantage in relation to another party
1.
Blomley – long periods of intoxication affecting his ability to form rational judgment. Mere drunkenness is not enough (although if
drawn him into drink would = rescission).
a. Improvidence – 2 + 4 – sale price too low, deposit 5p, constructed as a reverse loan
b. 3 Agent knew of 1.
2. Amadio – lying of son + illiteracy, = assumed it was truth, bank knew, took advantage
3. Louth – lying+ deceit + crisis + infatuation (not just by itself)
4. Bridgewater – emotional relationship
5.
5.
Examples - poverty, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy or lack of education, lack of
education or lack of explanation where it is necessary Blomley
ii. This disabling condition is 1 that seriously affects the innocent party making a judgment/decision in their own best interests
1. Drunkenness impaired mental capacity LT Blomley
iii. The wrongdoer knows or ought to know of that condition & of its effect (1075.6)
iv. The wrongdoer has taken unconscientious advantage of that circumstance
1. Amadio – bank should have informed them of the position of the company & the guarantee
d. A disadvantageous contract is strong proof to show that UC (position of SD + unconscientious advantage) took place Blomley
i. Not necessary that consideration be inadequate Amadio
ii. Manufactured a false sense of crisis to manipulate him (suicide)
3rd Party Impropriety (VOIDABLE) “darling please sign the form”…2 categories…Yerkey
a. General basis – agency, UC, UI, Yerkey, Statute
b. Yerkey – if wife’s consent to guarantee husbands debt is procured by husband w/o understanding its effect she has a pf right to
set it aside. It is a relationship based on trust & confidence of marital partners (also a ‘volunteer’). Garcia. (minimum is H&W)
Garcia r/ship known or ought to be known to the lender.
c. Did not know terms/effect of what they signed (Category Understanding) Yerkey (OR)
i. Lender needs to explain relevant parts of the agreement or ascertain whether the effect of the transaction had been
explained to her by a competent, independent and disinterested stranger Garcia
ii.
d.
Is she a wife? Yes, does she fall into cat 1? Did they explain? No  thank you for coming Garcia – it was not explained to her – she wins.
Pressure/influence from husband (Category UI even if you understand) Yerkey
i. Have to make sure there is independent advice
MISTAKE
1.
Pure/Common Mistake – No Fault on Either Party
a. Common Mistake
b. There can be no fault unlike McRae
c. Common Law = VOID (basically total failure of consideration + also for condition precedent Great Peace)
d. Res Extinca – if 2 parties contract for specific goods but unknown to both parties the specific goods do not exist or have been
destroyed the contract is void Couturier (distinction from McRae – goods never existed in the 1st place + were @ fault – Neg –
induced other party)…there is an implied promise that the good is in existence Goldsbrough
i. S 11 SOGA – specific goods perish at time when contract is made + w/o knowledge of seller = void
ii. S 12 – specific goods perish w/o fault by either pty B4 risk passes to the buyer = (a)void(ed). Perish B4 sale but after contract
e. Res Sua – cannot contract with yourself Cooper – cannot pay $ for what you already own.
f. All Others Bell –“essentially different” - “mistake as to the existence of some quality which makes the thing without the quality
essentially different from the thing as it was believed to be” affirmed by Great Peace (if yes than void)
i.
ii.
iii.
g.
i.
Examples (too bad)
1. Horse is unsound, bought & no representations as to soundness = bound
2. Sale of art believed to be the work of a master & a high price is paid – turns out to be a copy. No remedy in the absence of a representation or warranty
3. Uninhabitable house – if no representation or warranty – bound regardless whether B knew
4. A buys garage business, known to B, bypass being constructed – no remedy if no rep/war.
Essentially need a total failure of consideration Bell
Solle argued equity could make it voidable if it was fundamentally different. Great Peace Shipping said this was wrong
Cross Purposes (Not Common Mistake)
Raffles – when the 2 parties meant 2 different things (e.g. 2 ships of same name) they are @X purposes + CT cannot decide
objectively which is right = no consent to agreement = VOID.
ii. Quin – if there is an objective true answer that is correct than the contract will be for that. If it cannot be determined than ^.
iii. If parties contract on objectively different terms there is no consensus = no agreement = void Smith v Hughes
h. Unilateral Mistake – when 1 party knows the mistake exists
i. Hearthog – buyer realised there was a real mistake- bought it and tried to enforce – could not.
ii. Equity = voidable
1. Taylor v Johnson – equity can rescind if written contract + serious mistake about a fundamental term + other party knows
you are under that mistake & deliberately sets out to ensure that you do not learn of that mistake
2. Non Est Factum (VOID)
a. Class of person - permanently or temporarily unable through no fault of their own to have without explanation any real
understanding of a particular document, whether that be from defective education, illness or innate incapacity Gallie
i. Blind Gallie, language deficiencies Petelin or those who must rely on others for advice
b. There must be a radical difference between what he signed and what he thought he was signing Gallie
c. Where an innocent c/party, there cannot be any carelessness Petelin (reasonable precautions) proving this is a heavy onus.
3. Equitable Rectification (VOIDABLE) (Crane & Josceleyne rectified…none in AUS) – written doc says this but should have said that.
a. There must be a continuing common intention Joscelyne that by mutual mistake is not in written DOC Crane; Pukallus
i. The CCI need not be recorded Joscelyne but must be articulated otherwise not objectively proved
ii. Intention must have been continuing at contract formation Pukallus
b. There must be convincing/irrefragable evidence that the written contract does not embody the final intention of the parties
Pukallus  objectively shown Joscelyne (Pukallus – intention was transfer of land portion x, not bore & cultivated area)
c. The omitted ingredient must be capable of such proof in clear & precise terms Pukallus; Maralinga
4. Mistakes as to Identity Shogun
a. Face to face – V/E until it is rescinded (voidable) – based on O&A – you are contracting with THAT person. If not quick enough
the property may be on sold in which case the original seller will not have a claim against the 3rd party. Lewis v Avery (deception
is about attributes rather than identiy).
b. Arm’s length – void– you think you are contracting with someone else. Cundy; Shogun
i. Exception where they purport to be someone or something that does not exist King’s Norton Metal
STATUTE  OTHER REMEDIES/ORDERS
ACL
Unfair Contract Terms ss 23-28 (TERMS)  Standard Form Contracts
a. S 23(1) void if (a) term is unfair (b) standard form
b. S 24 – what is an unfair term, s 25 – examples, s 26 – exceptions
c. S 27 – standard form contract
2. Consumer Guarantees ss 3, 51-64A (TERMS)
3. s 18(1): A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive
a. A person or corporation
b. Trade or Commerce – are you in the business of…
i. Needs to be connected to an actual or potential trading or commercial relationship Concrete Constructions (not employees)
1. Providing G&S for a reward  must be in trade or commerce not in connection with trade or commerce.
ii. Smolongov – does not include private sales between individuals not in trade or commerce
iii. Houghton – a person although not in T/D may make statements that are in T/D e.g. encouraging investment in an entity
c. Misleading Conduct –
i. Misleading if it has the capacity to lead into or cause error
1. Public – judge from perspective of the ordinary person. We can ignore fanciful reactions as the RP takes care Nike – e.g.
Nike brand for pet stores different to Nike sports fragrance vs Nike products
a.  Is the alleged misconception likely to arise for reasonable members of the public? Confusion is not M/D Taco Bell
2. Particular individuals – look @ nature of the parties (expertise & ability to seek help), transaction, conduct itself Butcher
a. Butcher – shrewd buyers & RA did not hold themselves out as possessing skills to verify title details. The disclaimer
should have been seen – the document & decision was of high importance & brevity.
3. Audience – not the overly gullible person. S 236 requires cause, the loss cannot be caused by gullibility
ii. Conduct includes making something, refusing to do something, something inadvertent or not doing something (includes
silence (from the act))
1. Context is important, TV ads assessed on an impressionistic basis Hogan but in some circumstances the RP pays close
attention especially if the information is of high importance
2. Extends to sales puff (if reasonably specific) & silence
3. Silence if there is a duty to disclose or where circumstances give rise to a reasonable expectation of disclosure Henjo
a. Silence in combination with other factors (sight of 124 seats + card) = misleading conduct Henjo
iii. S 4 misleading representations regarding future matters  presumed to be misleading if there is no reasonable grounds for
making the representation
d. Only needs to be one of the causes of doing whatever P did Henjo
4. S 20/21/22 – Unconscionable Conduct (see above)
5. S 50 – Duress -A person must not use physical force, or undue harassment or coercion in relation to supply/payment of G&S or land
6. Remedies
a. S 232 Injunction if CT satisfied person has/will engage in conduct breaching a provision (CH 2/3/4)
b. S 236 Damages – Tort method usually Gates; Murphy (could not have got anything better @ that price)what did you get? What
1.
did you pay?
i. (1)(a) Suffers loss because of conduct of another person (CAUSATION Henville (above)) + (1)(b) conduct contravened CH 2/3
ii. (1) Can recover loss against that person or against any person involved in the contravention (SUE OTHERS s2 involved in)
iii. Type – can be a loss of opportunity Sellars
c. S237-238 Compensation Orders for breaches
d. S 239 Orders to redress loss or damage suffered by non-party consumers
i. S 239-241 – damages for non-party customers (persons not directly involved)
e. S 243 Other Remedies (that can be made under s 237, 238, 239
i. (a) void
ii. (b) vary
iii. (c) refusing to enforce any or all of the provisions
iv. (d) refund money or return property
v. (f) repair goods provided (at own expense)
vi. (g) supply services (at own expense)
vii. (h) in relation to land, creating or transferring an interest in land
7. Remedies for Consumer Guarantees (T/D)
a. S 259 – actions against supplier of goods – in T/D
i. (2) if not a major failure just fix the goods
ii. (3) major failure  reject goods or recover compensation
1. S260 major failure if…
iii.
iv.
v.
b.
i.
ii.
iii.
a. (a) goods would not have been acquired by a reasonable consumer with knowledge of the failure
b. (b) departs from description
c. (c) substantially unfit for purpose + cannot reasonably remedy
d. (d) unfit for a disclosed purpose + cannot reasonably remedy
e. (e) unacceptable quality or unsafe
How suppliers can remedy a failure s 261
1. (b) repaid, (c) replace (d) refund
S 262 when you cannot reject goods
S 266 – gift receiver can exercise same rights as purchaser
S 267 Actions against supplier of services – in T/D
(2) non-major failure – remedy the failure
(3) major failure – terminate + recover compensation
1. S268 – major failure if
a. (a) services would not have been acquired by a reasonable consumer with knowledge of the failure
b. (b) substantially unfit for purpose
c. (c) unfit for particular purpose made known
d. (d) product from those services are not of the quality that might reasonably be expected & cannot reasonably be
remedied
e. (e) unsafe situation
(4) may get damages for loss if it was RF that consumer would suffer such loss

Chapter 3, Part 2, Division 1 of the ACL implies certain elements into all consumer contracts
s2 – A consumer good is one used for personal, domestic or household use or
1. General
Principles
&
Definitions
consumption
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s3(1) – A consumer has acquired a good if and only if:
o It did not exceed $40,000
o Goods of a kind ordinarily acquired for personal, domestic or household use or consumption
o The vehicle was acquired for use principally in transport of goods on public roads
s3(3) - Similar provisions for services (a & b i.e. no c)
s3(2) – s3(1) does not apply for purposes of (a) re-supply or (b) using/transforming in trade or commerce
s3(10) – if alleged, its presumed a person is a consumer in relation to a G/S unless contrarily established
o i.e. Onus on supplier to deduce they weren’t a consumer
s51(1) - The title to goods passes to the consumer, with full rights to the goods, when the property is passed to
the consumer
o s51(3) - It however does not apply to supply by way of hire or lease
s52 Guarantee as to undisturbed possession
s53 Guarantee as to undisclosed securities – (1) free from any security/charge that was not disclosed in writing &
was not expressly consented to by the consumer
Trade or commerce provisions

s54(1)-(2) - Guarantee that goods supplied, in trade or commerce, to a consumer (and not from an auction) are of
acceptable quality
o
o
o
o

o Durable
s54(3) - Matters to determine acceptable quality (reasonable person s54(2)):
o
o
o
o
o
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2.
Consumer
Guarantees
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Fit for all the purposes commonly supplied
Acceptable in appearance and finish
Free from defects
Safe
Nature of the goods
Price of the goods
Statements on package or label
Any representation made (supplier or manufacturer)
Any other relevant circumstances
s54(4) - If the reason why they are not of acceptable quality is drawn to the consumer’s attention, the goods are
of acceptable quality. s54(5) – written transparent notice displayed with goods is fine
o s54(6) - Goods do not fail to be of acceptable quality if damaged by abnormal use by the consumer
s54(7) – acceptable quality if consumer examines the good + examination ought to reasonably have revealed
goods were not of acceptable quality.
s55 – guarantee as to fitness for any disclosed purpose (what is represented)
s56 – guarantee as to goods corresponding with their description
s57(1) – If supplier sells a good from a sample, the corresponding good must be free from any defect that:
o Would not be apparent on reasonable examination of the sample
o Would cause the goods not to be of acceptable quality
s59 – guarantee as to express warranties
s58(1) – Guarantee that a manufacturer will take reasonable action to repair goods for a reasonable period
after supply
s60 – Guarantee that services to a consumer are rendered with due care and skill
s61(1) – Guarantee services will be reasonably fit for that purpose ((1) makes known (2) reasonably expects)
s62 – Guarantee services will be supplied within a reasonable time
s63 – S60-62 do not apply to transportation or storage of goods for business, trade, profession or
occupation, or a contract of insurance
s64(1) – A term is void if it excludes, restricts or modifies a right (or liability from failure) under this division
o s64(2) – That term must do so expressly, or be inconsistent with the provision
o s64A(1) – That term is not void under s64 by limiting liability for:
 Replacement of goods
 Repair of goods
 Payment of costs of replacing or repairing
 S64A(2) – services – supplying them again + payment to have services supplied again
S64A(3) – However, does not apply if not fair or reasonable to rely on that term
S64A(4) – Court is to consider when determining s64A(3):
o Strength of bargaining position – alternative sources of supply?
o Whether buyer received an inducement to agree to the term
o
o
Section
Whether buyer knew or ought reasonably to have known existence & extent of term
Whether the goods were manufactured, processed or adapted to the special order of the buyer
Description
s 23 sets the prohibition against unfair terms, and describes what sort of contracts are affected by the act.

s23
s 23 (1) specifies that a term of a consumer contract is void if:
o
(a) the term is unfair; and
o
(b) the contract is a standard form contract.
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s 23 (2) specifies that the rest of the contract remains binding if it is capable of operating without the unfair term.
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s 23 (3) specifies a consumer contract is a contract with an individual whose acquisition of:
a) a supply of goods or services; or
b) a sale or grant of an interest in land;

is predominantly for personal, domestic or household use or consumption.
NOTE: basically, someone who is buying goods/services/property for non-business purposes.
s 24 describes the meaning of an unfair term.
s 24 (1) specifies that a term is unfair if (all are needed):
(a)
(b)
(c)
it would cause a significant imbalance in the parties’ rights and obligations.
it is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term
it would cause detriment (whether financial or otherwise) to a party.
s 24 (2) in determining whether a term is unfair, the court consider such matters as it thinks relevant, yet must take into account:
(a)
(b)
S24
the extent to which the term is transparent (see below).
the contract as a whole.
s 24 (3) specifies that a transparent term is (all are needed):
a)
b)
c)
d)
expressed in reasonably plain language
legible
presented clearly
readily available to any party affected by the term.
s 24 (4) specifies that a term is presumed to be in contravention of subsection (1) (b) (not necessary for protection of legitimate interests) until proven
otherwise.
NOTE: onus is on the defendant to prove a term is necessary to protect his legitimate interests
s 25 provides some examples of unfair terms. The examples, however, are not limiting.
s 25 (1) - Without limiting s24, following are examples of the kinds of terms of a consumer contract that may be unfair:
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
k)
l)
m)
n)
S25
permits one party (but not another party) to avoid or limit performance;
permits one party (but not another party) to terminate;
penalises one party (but not another party) for a breach or termination;
permits one party (but not another party) to vary the terms;
permits one party (but not another party) to renew or not renew;
permits one party to vary the upfront price payable under the contract without the right of another party to terminate;
permits one party unilaterally to vary the characteristics of the goods or services to be supplied, or the interest in land to be sold or granted;
permits one party unilaterally to determine whether the contract has been breached or to interpret its meaning;
limits one party’s vicarious liability for its agents;
permits one party to assign the contract to the detriment of another party without that other party’s consent;
limits one party’s right to sue another party;
limits the evidence one party can adduce in proceedings relating to the contract;
imposes the evidential burden on one party in proceedings relating to the contract;
a term of a kind prescribed by the regulations.
(2) – GG can declare a kind of term unfair – look at detriment to consumers, impact on business & public interest
indicates that terms defining the main subject matter of the contract are immune to s 23 and thus cannot be voided by it.
S 26 (1) specifies that s 23 will not apply to a term to the extent (and only to the extent) of which the term:
S26
a)
b)
c)
defines the main subject matter of the contract; or
sets the upfront price payable under the contract; or
is a term required, or expressly permitted, by Australian laws.
S 26 (2) defines that the upfront price means the considerations that is:
a)
b)
provided for the supply, sale or grant.
disclosed at or before the time the contract is entered into
But does not include other consideration that is contingent on the occurrence or non‑occurrence of a particular event.
s 27 specifies what constitutes a standard form contract.
Specifies that if a party alleges that a contract is a standard form contract, it is presumed to be so until proven otherwise.
s 27 (2) describes what the court may take into considerations when determining whether a contract is a standard form contract (these considerations
are not limiting):
S27
a)
b)
c)
whether one of the parties has most of the bargaining power;
whether contract was prepared by one party before any discussion relating to transaction occurred between parties;
whether another party was, in effect, required either to accept or reject the terms of the contract (other than the terms referred to in section 26(1))
in the form in which they were presented;
whether another party was given an effective opportunity to negotiate the terms of the contract that were not the terms referred to in section 26(1);
whether the terms of the contract (other than the terms referred to in section 26(1)) take into account the specific characteristics of another party or
the particular transaction;
any other matter prescribed by regulations
d)
e)
f)
Does not apply to contracts or marine salvage, charterparty of a ship, carriage of G/S by ship
S28
CRA
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S 4 - "unjust" includes unconscionable, harsh or oppressive, and "injustice" shall be construed in a corresponding manner.
S 6 – limitations
o (1) Crown, local/public authority or a corporation may not be granted relief under this Act
o (2) no relief in relation to a contract entered into in the course of or for the purpose of a trade, business or profession carried on
by the person or proposed to be carried on by the person (other than a farming undertaking)
S 7 Principal Relief
o (1) IF UNJUST = CT may
i) (a) it may decide to refuse to enforce any or all of the provisions of the contract,
ii) (b) it may make an order declaring the contract void, in whole or in part,
iii) (c) it may make an order varying, in whole or in part, any provision of the contract,
iv)

S 8 – Ancillary relief – see Sch 1
o
o
o
o
o
o
o
o
o
o
o
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(d) it may, in relation to a land instrument, make an order for or with respect to requiring the execution of an instrument that:
(1) (i) varies, or has the effect of varying, the provisions of the land instrument, or
(2) (ii) terminates or otherwise affects, or has the effect of terminating or otherwise affecting, the operation or effect of the land instrument.
(a) the making of any disposition of property,
(b) the payment of money (whether or not by way of compensation) to a party to the contract,
(c) the compensation of a person who is not a party to the contract and whose interest might otherwise be prejudiced by a decision or order
under this Act,
(d) the supply or repair of goods,
(e) the supply of services,
(f) the sale or other realisation of property,
(g) the disposal of the proceeds of sale or other realisation of property,
(h) the creation of a charge on property in favour of any person,
(i) the enforcement of a charge so created,
(j) the appointment and regulation of the proceedings of a receiver of property, and
(k) the rescission or variation of any order of the Court under this clause,
S 9 – Matters to Consider to determine if “unjust”
o
(1) public interest & all the circumstances of the case including
i) (a) compliance with provisions
ii) (b) non-compliance
o
(2)
i)
ii)
iii)
(a) material inequality in bargaining power between the parties to the contract,
(b) whether the provisions were the subject of negotiation,
(c) whether or not it was reasonably practicable for the party seeking relief under this Act to negotiate for the alteration of or to reject any
of the provisions of the contract,
iv) (d) whether any provisions of the contract impose conditions which are unreasonably difficult to comply with or not reasonably necessary
for the protection of the legitimate interests of any party to the contract,
v) (e) not reasonably able to protect their interests
vi) (f) the relative economic circumstances, educational background and literacy of the parties (or agents)
vii) (g) where the contract is wholly or partly in writing, the physical form of the contract, and the intelligibility of the language
viii) (h) whether and when independent legal or other expert advice was obtained by the party seeking relief under this Act,
ix) (i) the extent (if any) to which the provisions of the contract and their legal and practical effect were accurately explained by any person to
the party seeking relief under this Act, & whether that party understood the provisions and their effect,
x) (j) whether any UI, unfair pressure or unfair tactics were exerted on or used against the party seeking relief under this Act:
xi) (k) conduct of the parties in relation to similar contracts or courses of dealing to which any of them has been a party, and
xii) (l) The commercial or other setting, purpose and effect of the contract.
o
(3) For purposes of subsection (2), a person shall be deemed to have represented a party to a contract if person represented the party, or assisted the party to a
significant degree, in negotiations prior to or at the time the contract was made.
o
(4) In determining whether a contract or a provision of a contract is unjust, the Court shall not have regard to any injustice arising
from circumstances that were not reasonably foreseeable at the time the contract was made.
(5) In determining whether it is just to grant relief in respect of a contract or a provision of a contract that is found to be unjust, the Court may
have regard to the conduct of the parties to the proceedings in relation to performance of the contract since it was made.
AGC v West ^ is split into substantive & procedural injustice. Argued she did not get independent advice but she was a mature age woman who had an
o
o
accountant as a son

S 16 – time limits
o
o
o
(a) within 2 years
(b) 3 months before or 2 years after time for the exercise or performance of any power or obligation
(c) period of the pendency of maintainable proceedings arising out of or in relation to the contract, being proceedings that are pending against
the party seeking relief under this Act

S 18 – an offence to exclude the CRA
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S232 Injunctions
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S236-9 Damages
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S243 Other Orders
Remedies Specific to Consumer Guarantees

S259-62 Consumer Guarantees – Actions against Suppliers of Goods (259-66)

S266-268 Actions against Suppliers of Services (267-70)