CONTRACT LAW
SUMMARY
2010
LAWSKOOL LTD
CONTRACT LAW
TABLE OF CONTENTS
CASES
7
1.
14
2.
INTRODUCTION
1.1
DEFINITION
14
1.2
TRADITIONAL ELEMENTS FOR LIABILITY OF BREACH OF CONTRACT 15
OFFER
2.1
16
16
AGREEMENT
2.1.1 What is an offer?
16
2.1.2 Advertisements
17
2.1.3 Contractual intention negatived
18
2.1.4 Auctions and Tenders
19
2.1.5 Tenders
19
2.2
TERMINATION OF OFFERE
21
2.2.1 Communication of Revocation
21
2.2.2 Revocation and Unilateral Contracts
22
2.2.3 Options Contracts
22
2.2.4 Rejection, Lapse, Non-occurrence and Death
23
2.2.5 State of affairs ceasing to exist
24
3. ACCEPTANCE
3.1
25
GENERAL RULES FOR ACCEPTANCE
3.1.1
25
Acceptance must be in response to the offer
25
3.1.2 Acceptance must be absolute and unqualified
26
3.1.3 Acceptance must generally be communicated
26
3.1.4 Silence as Acceptance
26
3.1.5 Acceptance must be unconditional
27
3.1.6 Postal Acceptance Rule
27
28
3.1.6.1 Displacing the Postal Acceptance Rule
3.1.7
Faxes
29
3.1.8 Electronic Communication
29
3.1.9 Acceptance can be inferred
29
3.2.6 Illusory Promises, Incompleteness and Uncertain Contracts
29
3.2.6.1 Illusory Promises
30
3.2.6.2 Incompleteness
30
3.2.6.3 The Machinery Clause
31
3.2.6.4 Failure of Machinery Clauses
32
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3.2.6.5 Uncertainty
32
3.2.6.6 Severance of Inessential Terms
33
4. CONSIDERATION
34
4.1 INTRODUCTION
34
4.2 RULES OF CONSIDERATION
35
4.2.1 Consideration must move from the promise but not necessarily to the
promisor
35
4.2.2 Consideration must be referable to the promise
37
4.2.3 Consideration must be sufficient, but need not be adequate
38
4.2.4 Forbearance and Compromise
39
4.2.5 Past consideration is not good consideration
40
4.2.6 Existing duty as consideration
42
4.2.6.1 Duties owed to the other contracting party
42
4.2.6.2 Duties owed to a third party
44
4.2.6.3 Duties imposed by law
45
4.2.7 Payment or promise of payment of a lesser sum that that owing
46
4.2.8 Consideration cannot be illusory
47
5. PROMISSORY ESTOPPEI
49
5.1 ESTOPPEL IN THE CONTEXT OF PRE-EXISTING RELATIONSHIPS
49
5.2 THE AUSTRALIAN DEVELOPMENT OF ESTOPPEL
50
5.3 ESTOPPEL IN NEW ZEALAND
52
6. INTENTION TO CREATE LEGAL RELATIONS
54
6.1 DOMESTIC ARRANGEMENTS
54
6.2 COMMERCIAL TRANSACTIONS
55
6.3 DEALINGS WITH THE GOVERNMENT
56
7. FORMALITIES
7.1 CONTRACTS REQUIRING WRITING
59
59
7.1.1 Statute of Frauds
59
7.1.2 Property Law Act 2007
60
7.2 THE EFFECTS OF NON-COMPLIANCE
7.2.1
Common Law – contract unenforceable but not void
7.2.2 Equitable intervention – the doctrine of part performance
8. IDENTIFICATION OF TERMS
8.1 EXPRESS TERMS
61
61
62
64
64
8.1.1 Pre contractual negotiations – Terms and mere representations
64
8.1.2 Collateral Contracts
67
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8.1.3 Elements of a collateral contract
8.2 CONTRACTS IN WRITING – THE PAROL EVIDENCE RULE
8.2.1 Exceptions to the Parole Evidence Rule
8.2.1.1 Integration Clauses
8.3 CONST5RUCTION OF TERMS OF A CONTRACT AND THE USE OF
EXTRINSIC MATERIAL
9. INCORPORATION OF TERMS
9.1 SIGNED CONTRACTS – THE EFFECTS OF SIGNATURE
68
69
71
71
72
73
73
9.1.1 General Rule – signature binds
73
9.1.2 Misrepresentation as to contents
73
9.1.3 Non est factum
74
9.1.4 “Surprise” terms
75
9.2 INCORPORATION OF UNSIGNED DOCUMENTS – THE TICKET
CASES
76
9.3 INCORPORATION BY COURSE OF DEALING
78
9.4 INCORPORATION BY REFERENCE
79
10. IMPLIED TERMS
80
10.1 TERMS IMPLIED IN FACT
80
10.2 TERMS IMPLIED IN LAW
82
10.3 TERMS IMPLIED BY CUSTOMER OR TRADE USAGE
82
11. EXCLUSION CLAUSES
84
11.1 CONSTRUCTION OF TERMS OF THE CONTRACT
84
11.2 THE INTERPRETATION OF EXCLUSION CLAUSES
84
11.2.1 Types of exclusion clauses
84
11.2.2 Construction contra preferentum
85
11.2.3 Excluding fo5r negligence
86
11.3 STATUTORY CONTROL OF EXCLUSION CLAUSES
12. PRIVITY OF CONTRACT
12.1 THE COMMON LAW POSITION
87
88
88
12.1.1 Third Parties and Benefits
88
12.1.2 Third Parties and Obligations
88
12.1.3 Exceptions to the rule
89
12.2 CONTRACTS (PRIVITY) ACT 1982
13. CONTRACT VARIATION
13.1 CONTRACT VARIATION BY CONDUCT
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90
90
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14. PERFORMANCE
91
14.1 ORDER OF PERFORMANCE
91
14.2 SUBSTANTIAL PERFORMANCE
91
15. CANCELLATION FOR BREACH OF CONTRACT
92
15.1 INTRODUCTION
92
15.2 BREACH OF CONTRACT
92
15.2.1 Generally
92
15.2.2 Contractual Remedies Act 1979
92
15.3 REPUDIATION
93
15.4 SERIOUS BREACH
94
15.4.1 Essential Term
95
15.4.2 Effect of the breach
95
15.5 AFFIRMATION OR CANCELLATION
95
15.6 NOTICE OF CANCELLATION
96
15.7 FRUSTRATION
97
16. DAMAGES AND EQUITABLE REMEDIES
99
16.1 IDENTIFYING THE LOSS
99
16.2 CAUSATION
100
16.3 REMOTENESS
101
16.4 MITIGATION OF LOSS
101
16.5 HEADS OF DAMAGE
102
16.5.1 Loss of Profit (Expectations loss)
102
16.5.2 Reliance loss
103
16.5.3 Loss of chance
103
16.5.4 Injured feelings
104
16.5.6 Contractual Damages – liquidated damages and penalties
105
17. MISREPRESENTION
107
17.1 STATEMENT OF FACT
107
17.1.1 Positive Statement
108
17.2 FALSE OR MISLEADING
109
17.3 INDUCEMENT
109
17.4
109
DAMAGES FOR MISREPRESENTATION
17.5 CANCELLATION FOR MISREPRESENTATION
18. MISLEADING AND DECEPTIVE CONDUCT UNDER THE FAIR
TRADING ACT 1986
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111
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18.1 “PERSON” AND “IN TRADE”
111
18.2
112
MISLEADING OR DECEPTIVE CONDUCT
18.3 REMEDIES FOR MISLEADING AND DECEPTIIVE CONDUCT
19, MISTAKE
19.1 ASSESSING MISTAKE UNDER THE CONTRACTUAL MISTAKES
ACT 1977
19.1.1 Definition of Mistake
112
113
113
113
19.1.1.1 Unilateral mistake
114
19.1.1.2 Mutual mistake
115
19.1.2
Inequality of Value
115
19.1.3 Assumption of Risk
115
19.2 RELIEF UNDER THE CONTRACTUAL MISTAKES ACT 1977
20. CONTRACTS VOIDABLE ON GROUNDS OF
UNCONSCIONABLE CONDUCT
116
117
20.1 GENERAL PRINCIPLES
117
20.2 DURESS
117
20.2.1 Physical Duress
118
20.2.2 Duress of Goods
118
20.2.3 Economic Duress
118
20.2.4 Undue Influence
120
20.2.4.1 Presumed undue influence
120
20.2.4.2 Situations of Dependence
121
20.2.5 Unconscionable Bargaining
SOURCES CONSULTED
CASES
ACCC v Berbatis Holdings (2003) 197 ALR 153………………………………………21.2.5
Alfred McAlpine Constructions Ltd v Panatown Ltd [2001] 1 AC 518...........................17.1
Alexander v Cambridge Credit Corp Ltd [1985] 2 NSWLR 685…………..………….…17.2
Allcard v Skinner (1887) 36 Ch D 145………………………………………..………21.2.4.2
Antons Trawling Company Ltd v Smith [2003] 2 NZLR 23 (CA)...............................4.2.6.1
Australian Woollen Mills Pty Ltd v Cth (1954) 92 CLR 424...........................4.1, 4.2.2, 6.3
B Seppelt & Sons Ltd v Commissioner for Main Roads (1975) 1 BPR 9147...............2.1.1
Baker v Taylor (1906) 6 SR (NSW) 500......................................................................2.2.4
Balfour v Balfour [1919] 2 KB 571..................................................................................6.1
Ballantyne v Raphael (1889) 15 VLR 538………………………………..………….……18.1
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Baltic Shipping Co v Dillon (Mikhail Lermontov) (1993) 176 CLR 344......................17.5.4
Banco de Portugal v Waterlow and Sons Ltd (1932) AC 452…………..……………….17.4
Barrett v IBC International Ltd [1995] 3 NZLR 170 (CA)..............................................7.1.2
Barrick v Clark (1950) 4 DLR 529 (SCC)...........................................................2.2.4, 3.2.4
Barton v Armstrong [1976] AC 104………………………………………21.1, 21.1.1, 21.1.3
Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd
(1986) 40 NSWLR 622……........................................................................…….6.4
Beaton v McDivitt (1987) 13 NSWLR 162............................................................4.1, 4.2.2
Bevanere Pty Ltd v Lubidineuse (1985) 7 FCR 325………………………….……..……19.1
Betham v Margets [1996] 2 NZLR 708.........................................................................15.3
Biotechnology Australia Pty Ltd V Pace (1988) 15 NSWLR130...............................3.2.6.1
Bolton v Mahadeva [1972] 1 WLR 1009.......................................................................14.2
Bolton v Madden (1873) LR 9 QB 55...........................................................................4.2.1
Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600.......3.2.6.4
BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266…..10.1
Bradbury v Morgan (1862) 1 H & C 249; 158 ER 877.......................................2.2.4, 3.2.4
Bradley West Solicitors Nominee Co Ltd v Keeman [1994] 2 NZLR 111....................9.1.3
Bressan V Squires [1974] 2 NSWLR 460....................................................................3.1.6
Bret v J S & Wife (1600) Cro Eliz 756………………………………………..…….........4.2.8
Bridgewater v Leahy (1998) 158 ALR 66……………………………………..………...21.2.5
Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelsgesellshaft mbH
[1983] 2 AC 34 (HL).........................................................................................3.1.7
Brogden v Metropolitan Railway Company (1877) 2 App Cas 666…………………...3.1.9
Bunge Corp....................................................................................................................16
Butler Machine Tool Co Ltd V Ex-Cell-O Corporation (Eng) Ltd [1979] 1
All ER 965......……………………………………………………………....2.2.4, 3.1.5
Byrne v Australian Airlines (1995) 185 CLR 71............................................................10.1
Byrne v van Tienhoven [1880] 5 CPD 344..................................................................2.2.1
Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256...................2.1.1, 2.1.2, 3.1, 4.1
Casey v Commissioner for Inland Revenue [1959] NZLR 1052.................................4.2.5
Causer v Browne [1952] VLR 1.......................................................................................81
Cavallari v Premier Refrigeration Company Co Ltd (1952) 85 CLR 20.......................2.1.3
Central London Property Trust v High Trees House Ltd [1947] KB 130.........................5.1
Chappell & Co Ltd v Nestle & Co Ltd [1960] AC 87....................................................4.2.3
Chaplin v Hicks [1911] 2 KB 786...............................................................................17.5.3
Chatfield v Jones.............................................................................................................16
Civil Service Co-Operative Society of Victoria v Blyth (1914) 17 CLR 601..................17.1
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Coal Cliff Collieries Pty Ltd v Sijehama Pty Ltd (1991) 24 NSWLR 1.......................3.2.6.2
Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337
………………………................................................................8.2, 8.3, 10.1, 15.6
Collins v Godefroy [1831] 1 B Ad 950.......................................................................4.2.6.3
Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447............................21.2.5
Commonwealth of Australia v Verwayen (1990) 170 CLR 394.......... ...........................5.2
Conlon v Ozolins [1984] 1 NZLR 489 (HC & CA).......................................20.1.1.2, 20.1.2
Cook Island Shipping Co Ltd v Colson Builders Ltd [1975] 1 NZLR 422..................4.2.6.1
Couch v Branch Investments (1969) Ltd (1980) 2 NZLR 314......................................4.2.4
Couchman v Hill [1947] KB 554............................................................................8.1.1, 8.2
Couldery v Bartrum (1880) 19 Ch. D 394....................................................................4.2.7
Council of the City of Sydney v West (1965) 114 CLR 481...........................11.2.1, 11.2.2
Coulls v Bagot’s Executor and Trustee Co Ltd (1967) 119 CLR 420..........................4.2.1
Cox & Coxon Ltd v Leipst [19991] 2 NZLR 15..............................................................19.3
Currie v Misa (1875) LR 10 Ex 153; (1875-76) LR 1 App Cas 554................................4.1
Curtis v Chemical Cleaning & Dyeing Co [1951] 1 KB 805.........................................9.1.2
Cutter v Powell (1795) 101 ER 573..............................................................................14.1
Darlington Futures Ltd v Delco Australia (1986) 161 CLR 500......................11.2.1, 11.2.2
David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353..17.5.3
Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696.....................15.6
De Lassalle v Guildford [1901] 2 KB 215.....................................................................8.1.2
Dennis Friedman (Earthmovers) Ltd v Rodney County Council
[1988] 1 NZLR 184.........................................................................................20.1.3
Dick Bentley Productions Ltd v Harold Smith Ltd (1965) 1 WLR 623..........................8.1.1
Dickinson V Dodds [1876] 2 Ch D 463..............................................................2.2.1, 2.2.4
Dimmock v Hallet (1866) LR 1 Ch App 21.................................................................18.1.1
Doughty-Pratt Group Ltd v Perry Castle [1995] 2 NZLR 398 (CA)..............................7.1.2
Dunton V Dunton (1892) 18 VLR 114..........................................................................4.2.4
Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] AC 847.........................12.1.2
Dunlop Pneumatic Tyre Company Ltd v New Garage and Motor Co Ltd
(1915) AC 79..................................................................................................17.5.6
Eastwood v Kenyon (1840) 11 Ad & E 438, 113 ER 482...............................................4.1
Edgington v Fitzmaurice (1885) 29 Ch.D 459...............................................................18.3
Edwards v Skyways Ltd [1964] 1 WLR 349....................................................................6.2
Eggleston v Marley Engineering Pty Ltd (1979) 21 SASR 51.........................................9.3
Ellul & Ellul v Oakes (1972) 3 SASR 377....................................................................8.1.1
Entores Ltd V Miles Far East Corp [1955] 2 QB 327...................................................3.1.7
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Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471...................8.2
Esanda Finance Corp v Tong & Ors (1997) 41 NSWLR 482....................................21.2.5
Esso Petroleum Ltd v Commissioners of Customs & Excise [1976] 1 All ER 117.........6.2
Eastwood v Kenyon (1840) 11 Ad & E 438; 11 ER 482.................................................4.1
Falco v James McEwan & Co Pty Ltd [1977] VR 447................................................17.5.4
Felthouse v Bindley (1862) 142 ER 1037...................................................................3.1.4
Financings Ltd v Stimson [1962] 3 All ER 386.................................................2.2.4, 2.2.5
Fleming v Beevers [1994] 1 NZLR 385 (CA)........................................................6.1, 7.2.2
Foakes v Beer (1884) 9 App Cas 605........................................................................4.2.7
G Scammell & Nephew Ltd v HC & JG Ouston [1941] AC 251................................3.2.6.5
Garcia v National Australia Bank (1998) 194 CLR 395.............................................21.2.5
Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1.............................12.2
George Hudson Holdings Limited v Rudder (1973) 128 CLR 387............................3.1.6.1
Gibson v Manchester City Council [1979] 1 All ER 972..................................................2.1
Glasbrook Bros Ltd v Glamorgan County Council [1925] AC 270............................4.2.6.3
Goldsborough Mort & Co Ltd v Quinn (1910) 10 CLR 674................................2.2.1, 2.2.3
Great Northern Railway Company v Witham (1873) LR 9 CP 16................................2.1.5
Hadley v Baxendale (1854) 9 Ex 341...............................................................17.3, 17.5.1
Hardwick Game Farm v Suffolk Agricultural & Poultry Producers Association
[1969] 2 AC 31....................................................................................................9.3
Harling v Eddy [1951] 2 KB 739...................................................................................8.1.1
Hartley v Ponsonby (1857) 7 E & B 872...................................................................4.2.6.1
Harvela Investments Ltd v Royal Trust of Canada (CI) Ltd [1986] AC 207.......2.1.4, 2.1.5
Harvey v Facey [1893] AC 552 (PC)...........................................................................2.1.1
Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd (1991) 22 NSWLR 298............21.2.2
Hawkins v Price [1947] Ch 645....................................................................................7.1.2
Helmos Enterprises Pty Ltd v Jaylor Pty Ltd [2005] NSWCA 235..................................6.4
Henry Kendall & Sons v William Lillico & Sons [1969] 2 AC 31......................................9.3
Henthorn v Fraser [1892] 2 Ch 27...........................................................2.1.1, 2.2.1, 3.1.6
Hercules Motors Pty Ltd v Schubert (1953) 53 SR (NSW) 301...................................8.1.2
Heywood v Wellers (1976) QB 446...........................................................................17.5.4
Hobbs v London and South Western Railway Company (1875) LR 10 QB 111.......17.5.4
Hoenig v Isaacs [1952] 2 All ER 176............................................................................14.2
Holwell Securities Ltd v Hughes [1974] 1 WLR 155.................................................3.1.6.1
Hope v RCA Photophone of Australia Pty Ltd (1937) 59 CLR 348..............................8.2.1
Howe v Teefy (1927) 27 SR (NSW) 301....................................................................17.5.1
Hoyts Pty Ltd v Spencer (1919) 27 CLR 133.....................................................8.1.2, 8.1.3
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Hughes v Huppert [1991] 1 NZLR 474.........................................................................18.4
Hughes v Metropolitan Railway Co (1877) 2 AC 439……………………………………...5.1
Hughes Aircraft Systems v Airservices Australia (1997) 146 ALR 1…………………..2.1.5
Hyde v Wrench (1840) 3 Beav 334, 49 ER 132..............................................................2.2
Interphoto Picture Library Ltd v Stilleto Visual Programmes Ltd [1989] QB 433............9.2
Jamieson v Renwick (1891) 17 VR 124………………………………………………......4.2.4
JJ Savage & Sons Pty Ltd v Blakney (1970) 119 CLR 435.........................................8.1.3
J Spurling Ltd v Bradshaw [1956] 2 All ER 121 (CA)......................................................9.3
Johnson v Buttress (1936) 56 CLR 113..................................................................21.2.4.2
Johnson Matthey Ltd v AC Rochester Overseas Corporation
(1990) 23 NSWLR 190..................................................................................8.2.1.1
Jolly v Palmer .................................................................................................................16
Jones v Padavatton [1969] 2 All ER 616........................................................................6.1
Kaufman v Gerson [1904] 1 KB 501………………………………………..……….......21.2.3
Kean v Dunfoy [1952] NZLR 611.................................................................................2.2.4
Krukziener v Hanover Finance Ltd (2008) 19 PRNZ 162 (CA).......................................5.3
L’Estrange v Graucob [1934] 2 KB 394..........................................................................9.1
Latec Finance Ltd v Knight [1969] 2 NSWR79 (CA)…………………….………………3.1.3
Legione v Hateley (1983) 152 CLR 406…………………………………….……..…….5, 5.2
Lexmead (Basingstoke) Ltd v Lewis [1982] AC 225………………………....………......17.2
LG Thorne & Co P/L v Thomas Borthwick & Sons (A’Asia) Ltd
(1956) 56 SR (NSW) 81......................................................................................8.2
Life Insurance Co. Of Australia Ltd v Phillips (1925) 36 CLR 60..............................3.2.6.6
Liverpool City Council v Irwin [1977] AC 239................................................................10.2
Livinstone v Roskilly [1992] 3 NZLR 230.......................................................11.2.1, 11.2.3
Louth v Diprose (1992) 175 CLR 621……………………………………………….......21.2.5
Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd
(1938) 61 CLR 286......................................................................15.4.1, 17.6, 17.1
Lucy v The Commonwealth (1923) 33 CLR 229...........................................................17.4
Maddison v Alderson (1883) 8 App Case 467……………………………..……..….......7.2.2
Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181………..……..……...8.3
Manchester Diocesan Council v Commercial & General Investments [1970] 1 WLR
241…………………………………………………….……..............................................2.2.4
Markholm Construction Co Ltd v Wellington City Council [1985] NZLR 520...............2.1.5
Masters v Cameron (1954) 91 CLR 353.....................................................2.1.1, 2.1.3, 6.4
McDonald v Dennys Lascelles Ltd......................................................................16.1, 16.2
McRae v Commonwealth Disposals Commission (1950) 84 CLR 377......................17.5.2
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Meates v Attorney-General [1983] NZLR 308................................................................1.1
Meehan v Jones (1982) 149 CLR 571............................................................3.2.6.5, 4.2.8
Mills v United Building Soc [1988] 2 NZLR 392 (CA)....................................................19.2
Mobil Oil Australia Ltd v Lyndel Nominees Pty Ltd (1998) 153 ALR 198.....................2.2.2
Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723....................................4.2.6.1, 4.2.7
Newmans Tours Ltd v Ranier Investments Ltd [1992] 2 NZLR 68...........................4.2.6.1
North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd [1979] 1 QB 705......21.2.3
Olley v Marlborough Court Hotel [1949] 1 KB 532……………………………………….9.2
Oscar Chess v Williams (1957) 1 WLR 370................................................................8.1.1
Pao On v Lau Yiu Long [1980] AC 614.....................................................................4.2.6.2
Paradine v Jane (1647) Aleyn 26, 82 ER 897..............................................................15.6
Parker v South Eastern Railway Co. (1877) 2 CPD 416................................................9.2
Paulger v Butland Industries Ltd [1989] 3 NZLR 549 (CA).....................................20.1.1.2
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221...............................................14.1
Payne v Cave (1789) 3 Term Rep 148, 100 ER 502.........................................2.1.4, 2.2.1
Peppers Hotel Management Pty Ltd v Hotel Capital Partners Ltd
[2004] NSWCA 114.............................................................................................8.3
Perpetual Executors & Trustees Assoc of Australia Ltd v Russell
(1931) 45 CLR 146...........................................................................................7.2.1
Petelin v Cullen (1975) 132 CLR 355..........................................................................9.1.3
Pharmaceutical Society of Great Britain v Boots Cash Chemist Ltd [1953] 1
QB 401.............................................................................................................2.1.2
Photo Production Ltd v Securicor Transport Ltd [1980] AC 827……………..…….…….17
Pinnel’s Case (1602) 77 ER 237.................................................................................4.2.7
Popiw v Popiw [1959] VR 197........................................................................4.2.6.3, 7.1.2
Prenn v Simmonds [1971] 1 WLR 1381.........................................................................8.2
Pym v Campbell (1856) 119 ER 903..............................................................8.2.1, 8.2.1.1
R v Clarke (1927) 40 CLR 227....................................................................................3.1.1
Re Casey’s Patents [1892] 1 Ch 104...........................................................................4.2.5
Re London and Northern Bank; ex parte Jones [1900] 1 Ch 220………….................3.1.6
Re Selectmove Ltd [1995] 2 All ER 531 (CA)………………………………………......4.2.7
Reg Glass Pty Ltd v Rivers Locking Systems Pty Ltd (1968) 120 CLR 516.................16.2
Reynolds v Atherton (1922) 66 Sol Jo 404…………………………………………….....2.2.4
Ridgeway v Wharton (1857) 10 Eng. Rep. 1287………………………………...........3.2.6.2
Roscorla v Thomas (1842) 3 QB 234.........................................................................4.2.5
Rose and Frank Co v JR Crompton & Bros Ltd [1923] 2 KB 261...................................6.2
Rothmans of Pall Mall (NZ) Ltd v Attorney-General [1991] 2 NZLR 323..............4.2.8, 6.3
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Sagacious Procurement Pty Ltd (Subject to a Deed of Co Arrangement) v Symbion
Health Ltd (formerly Mayne Group Ltd) [2008] NSWCA 149…………………....8.3
Savill v NZI Finance Ltd [1990] 3 NZLR 135................................................................18.3
Shadwell v Shadwell (1860) 142 ER 62………………………………………………..4.2.6.2
Shepperd v Ryde Corporation (1952) 85 CLR 1................................................8.1.2, 8.1.3
Shevill v Builders Licensing Board (1982) 149 CLR 620...........................................17.5.1
Shuey v United States, 92 U.S. 73 (1875)………………………………………………..2.2.1
Smith v Land & House Property Corporation (1884) 28 Ch D 7 (CA).................….….17.1
Smith v William Charlick Ltd (1924) 34 CLR 38………………………………………21.2.3
Spencer v Harding (1870) LR 5 CP 561......................................................................2.1.5
Starlight Enterprises Ltd v Lapco Enterprises Ltd [1979] 2 NZLR 744 (CA)................15.3
Steadman v Steadman [1976] AC 536…………………………………………………..7.2.2
Stilk v Myrick (1809) 2 Camp 317; ER 1168.............................................................4.2.6.1
Sturt v McInnes [1974] 1 NZLR 729...........................................................................7.1.2
Sudbrook Trading Estates v Eggleton [1983] 1 AC 444……………………………....3.2.6.4
T A Dellaca Ltd v PDL Industries Ltd [1992] 3 NZLR 88...................................7.1.2, 7.2.2
Tak & Co Inc v AEL Corp Ltd (1995) 5 NZBLC 103,887.............................................8.1.1
Taylor v Caldwell (1863) 3 B & S 826, 122 ER 309......................................................15.6
The Power Co Ltd v Gore District Council [1997] 1 NZLR 537 (CA)............................15.6
Thomas v Thomas (1842) 2 QB 851……………………………………………….........4.2.3
Thompson v Palmer (1933) 49 CLR 507...........................................................................5
Thorby v Goldberg (1964) 112 CLR 597………………………………………………..3.2.6
Thornton v Shoe Lane Parking Ltd [1971] 2 QB 163............................................2.1.1, 9.2
Tilden Rent-A-Car Co v Clendenning (1983) 83 DLR (3d) 400 (Ont CA)....................9.1.4
Toll (FGCT) Pty Ltd V Alphapharm Pty Ltd (2004) 219 CLR 165…………………...8.3, 9.1
Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165
CLR 107...........................................................................................................4.2.1
Tri-Star Customs and Forwarding v Denning [1999] 1 NZLR 33............................20.1.1.1
Tropical Traders v Goonan...........................................................................................16.1
Tweedle v Atkinson (1861) 1 B & S 393, 121 ER 762...............................................12.1.1
Universe Tankships of Monrovia v International Transport Workers Federation
[1983] 1 AC 366.................. ………………………………….…………………21.2.3
Update Constructions Pty Ltd v Rozelle Child Care Centre Ltd
(1990) 20 NSWLR 251......................................................................................13.1
Upper Hunter County District Council v Australian Chilling and Freezing Do.
(1968) 18 CLR 429................................................................................3.2.6.5, 8.3
Veivers v Cordingly [1989] 2 Qd R 278.......................................................................2.2.2
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Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528..................17.3
Ward v Byham [1956] 2 All ER 318……………………………………………....….....4.2.6.3
Wakelin v RH & EA Jackson Ltd (1984) 2 NZCPR 195................................................18.1
Wallis, Son & Wells v Pratt and Haynes [1911] AC 394……………….11.2.2, 15.3.3, 16
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387................................5.2, 5.3
Whitlock v Brew (1968) 118 CLR 445.......................................................................3.2.6.3
Whittet v State Bank of New South Wales (1991) 24 NSWLR 146.............................8.2.1
Wigan v Edwards (1973) 1 ALR 497...........................................................................4.2.4
Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1................4.2.6.1, 4.2.7
With v O’Flanagan [1936] Ch 575.....................................................................18.1.1, 18.2
Woods v N J Ellingham & Co Ltd [1977] 1 NZLR 218..................................................10.3
Woolworths Ltd v Kelly (1991) 22 NSWLR 189………………………....…………….....4.2.3
Young v Queensland Trustees Ltd (1956) 99 CLR 560…..………………....…..........17.5.6
1. INTRODUCTION
1.1 DEFINITION:
•
A contract is simply an agreement between two parties that is legally binding.
The law of contract is concerned with:
o
The making of the contract
o
The enforceability, and effect of the terms of the contract on the parties
o
The performance and discharge of the contract
o
Rights and remedies available where the contract is breached
•
General principles of contract law are derived from common law.
•
The modern law of contract is based upon the idea of freedom of contract
whereby parties are free to choose who to contract with, and to negotiate the
terms therein. This is assumes that parties all parties are equal bargaining
strength to maximise the outcome. Thus, it is recognised that there are
exceptions when parties are not equal:
o
Growing recognition in contracts that far more consumers enter into
contract than commercial people/entities. Parliament has recognised the
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need to protect consumers, and allow the courts jurisdiction to grant relief
for “unjust” contracts.
o
Emphasis on the will and intention of parties, rather than what is on
paper.
•
Many contracts are informal, and the terms are implied. Thus, contract law often
has an important role in completing the contract.
•
A contract exists when there is (i) an offer (ii) acceptance of the offer (iii)
consideration (iv) an intention to create legal relations.
•
Courts use an objective test to determine whether a contract exists ie would a
reasonable person perceive that a contract exists based on words, conduct, and
background circumstances? (Mechanex Pacific Services Ltd v TCA
Airconditioning (New Zealand) Ltd).
1.2 TRADITIONAL ELEMENTS FOR LIABILITY OF BREACH OF CONTRACT
•
A claim for breach of contract will succeed if it is shown that:
o
A valid contract was made between the parties
o
The party has breached the contract as properly construed; and
o
There are no excusing factors for non-performance; and
o
The contract was terminated; and
o
It is not unconscionable to make the claim.
2. OFFER
•
The law of contract will enforce obligations where there has been agreement
between the parties. Absent of agreement, there is can be no contract. (Gibson v
Manchester City Council)
•
The courts are looking for consensus ad idem – a meeting of the minds between
the two parties.
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•
The traditional analysis is to ask: has there been an offer made by one party to
be bound by terms of a contract which is accepted by another?
•
Besides offer and acceptance, the necessary elements of an enforceable
contract are (i) an intention to create binding legal relations and (ii) consideration.
2.1 AGREEMENT
2.1.1 What is an offer?
•
Any proposition is an offer if it shows a party’s intention to be legally bound
immediately upon acceptance of the proposal. Such an intention is met where
an offer has been made in clear and unequivocal terms.[Gibson v Manchester
City Council]
•
An offer can be made by words and/or conduct. The existence of an offer is
ascertained by asking whether a reasonable third party would conclude an offer
had been made. This objective test takes into account:
o
The express conduct or words used by the parties rather than their
subjective intentions.
o
Whether the terms are complete enough so that acceptance is enough to
constitute a contract.
•
An offer must be communicated to the offeree and received, otherwise the offer
is ineffective. Thus, one cannot receive an offer from a third party; offer must be
communicated by offeror or an authorised agent of offeror to offeree. (Wilson v
Belfast Corporation)
•
When an offer is made, the terms of the proposed contract must be
communicated to the offeree. (Thornton v Shoe Lane Parking)
♠♠♠♠
If you have any queries regarding the contract law summary please email info@lawskool.co.nz
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