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Week 1 The Role of Law in Business What is law? The law is a
systematic set of rules to control conduct within a society These
set of rules are enforced by the courts The law declares how we
must behave Sources of Law in Australia Australia has adopted the
English common law system The main types of law in the English
legal system are: 1. Statute law
a. Laws that are made by the State and Federal Parliaments b.
May be changed by parliament and interpreted by the courts c.
Includes laws made by other government bodies known as delegated
legislation and takes the form of:
i. By laws ii. Orders iii. Rules and regulations
d. Also known as: i. Legislation ii. Acts of Parliament iii.
Enacted Law
2. Common Law a. Common Law system originated from England b. It
is the law created by the courts/reported decisions of the judges
c. May be changed by the parliament and developed by future court
cases d. Common law is not existent in all law systems e. Also
known as:
i. Case law ii. Precedent iii. Unenacted law
Note: In the event that there is a clash between the two,
Statute Law will prevail since it is the most important source of
law Equity Equity is a body of legal principles of legal rules
developed by the Courts of Chancery (Courts of Equity in
England England had two parallel court systems:
Courts that could only award monetary damages Courts of equity
that could issue broader ranges of remedies
Most people only went to courts to claim damages/compensation
this was not enough so the courts of equity were developed i.e. as
a result of the growing inflexibility and rigidity of the common
law
E.g. Telstra placing an advertisement on 50% off calls being
misleading simple compensation would not be enough because they
would just continue misleading people - Telstra would have to rid
of the misleading act altogether
Courts of Equity imply fairness and justice in the law it
extends remedies available to a plaintiff/individual seeking
compensation
There are two main types of equitable remedies 1. Injunction: a
court order directing a person to stop doing something; and 2.
Specific performance: a court order directing a person to carry out
an obligation
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In the case of Telstra, an Injunction would be to stop
advertising altogether and specific performance would be to modify
the misleading part of the advertisement
Some examples of equitable principles are: Equity will wont
suffer a wrong to be without a remedy One who comes in equity must
come with clean hands Equity will not allow a statute to be used as
a cloak for fraud
Classification Systems in Australian Law There are a number of
ways that laws can be classified, including: 1. International v
Domestic Law a. International law is concerned with regulating the
conduct between nation states
a. It also applies to private individuals engaged in
international transactions b. There are two main sources of
international law that can affect business within a nations
boundaries
these are customary rules of international law and treaties and
conventions c. International treaties and conventions are not part
of municipal of domestic law unless they are given
express legislative approval by the Commonwealth Government and
are ratified d. Ramification and approval fall within the ambit of
the Commonwealth Constitution under the external
affairs power s51 b. Domestic law (municipal) laws come from
statute or case law and regulate relations between people or
organisations within the borders of the state (or country) 2.
Public law/Private Law
a. Public Law: the organisation of government and its
relationship with the people (natural justice, information)
i. Can be administrative, constitutional, criminal, industrial,
taxation b. Private law: deals with disputes between individuals or
organisations
3. Civil Actions vs. Criminal Actions a. Civil action is an
action brought by one individual/entity against another
i. The emphasis on civil action is on remedies ii. Standard of
proof: plaintiff to prove case on the balance of probabilities
b. Criminal action are actions brought by the crown (state)
against an accused individual i. The emphasis is on punishment ii.
Standard of proof: prosecution to prove case beyond reasonable
doubt
Evolution of the Australian Legal System (NSW) In 1788 the first
fleet arrived & Australia inherits the English common law
system The Doctrine of Reception how colonies would receive the
common law system
Colonies established by England were classified as either:
Territory acquired by treaty or military victory, in which case the
existing institutions were retained or; Territory that was terra
nullius i.e. the inhabitants were no recognised and English ideas
of justice and
the English legal system applied Basically meaning there was no
recognition of prior inhabitants the systems in place before
the
arrival of the first fleet was not recognised as having existed
until the Mabo Decision Origins of Australian Law Native Title in
the case of Australia, terra nullius meant no recognition was given
to the rights of indigenous
people
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However in Mabo v Queensland (1992), the High Court of Australia
acknowledged that Australia had not been terra nullius and that
common-law would recognise a form of native title to land
A brief history of the Origins of Australian Law 1823 Court
System & Legislative Council was established 1828 1853 the
development of the NSW parliament 1855 NSW Constitution 1865
Colonial Laws Validity Act
It is importance because it allowed NSW to make its own laws and
to allow full effect unless it contradicted English law (only in
NSW however)
1901 Federation the Commonwealth of Australia Constitution Act
1900came into effect six colonies became the Commonwealth of
Australia on 1st of January 1901 A new level of government was
established
The Federal Parliament with jurisdiction set down in the
Commonwealth Constitution (with some exclusive powers)
The State Parliaments had jurisdiction within their own borders
on any matters not specifically reserves for the Commonwealth
(residual powers)
So basically it created the federal and state system 1931
Statute of Westminster
Allowed full legislative independence six colonies were formed
to make a Commonwealth Pretty much identical to what happened in
1865 but not just NSW but the Commonwealth got legislative
independence 1931 1986 The British Privy Council was the final
place was the final court of appeal 1986 Australia Act
Removed any links to Britain no more appeals to the Privy
Council the highest court is the High Court It basically removed
any legislative dependence on the UK
Levels of Government - Responsibilities
Federal (or Commonwealth) State Local Defence Education Road
maintenance
Foreign Affairs Hospitals/Health Garbage Collections
Immigration/Customs Police/law and order/criminal law
Tax Family services Commonwealth & State Powers (a sense of
dichotomy going on) Exclusive powers: exercisable only by the
Commonwealth parliament
Peace order and good government of the Commonwealth Defence
Foreign affairs Immigration
Concurrent powers: most of Commonwealth powers are held
concurrently (shared) with the states; both can legislate in these
areas (if there is a clash federal power presides) s109 of the
Constitution provides that the State laws will be invalid if there
is consistency Health Education Tax
Residual powers: non-exclusive and non-concurrent powers
Municipal/local laws garbage collection, etc
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The Westminster System The Westminster System was inherited from
Britain, and the three main features are: A Constitutional
Monarchy
The Queen of England is the head of the Australian legal system,
but her role is really only ceremonial (i.e. she is a figurehead),
the Queen acts on the instructions of the elected Australian
government
Separations of Powers - The functions of government are
allocated to different institutions Queen Sits on Top The
Parliament the legislature the supreme law maker
Role is to make and change the statutes/legislations The
Executive the government (prime minister = head of our
executive)
Governor General (act on advice of PM & Cabinet)
Prime Minister and Cabinet
Government Departments
The Judiciary (judges/courts) interpret and apply the law Note:
does not refer to concurrent laws, it refers to difference in
parliament, judges, judiciary, etc Note 2: In reality there is no
separation between the legislature and the executive they are
different
functions but operate together Responsible Government
A form of government which is responsive to public opinion and
answerable by the electorate (i.e. those who are elected reflect
public decision)
Parliament In all Australian parliaments there are houses of
parliament Upper and Lower (except Qld)
The House of Representative (lower house) the elected
representatives are called members The Senate (Upper House) the
elected representatives are called senators
Legislation must pass both houses of parliament
Delegated Legislation Delegated or
subordinated legislation consists of rules, regulations, by
laws, orders and administrative guides
They do not need to be passed by both houses of parliament They
are made by the Governor General on the advice of the Executive
Some important agencies that are can pass delegated legislation
(& form part of the executive):
Australian Taxation Office (ATO) Australian Securities and
Investments Commission (ASIC) Australian Competition and Consumer
Commission (ACCC)
Each agency administers a particular Act(s) Each agency is
responsible/accountable to a particular government Minister
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Week 2 Legal Reasoning and Statutory Interpretation The Rule of
Law What is it? A means of maintaining the balance between personal
freedom and legislative power in a modern
democracy (balance of freedom vs. law) Role of the courts
Courts impose a legally binding decision on the parties to the
dispute The courts have criminal and/or civil jurisdiction
Jurisdiction = power and authority conferred upon a court to hear
and determine a matter You cannot just take any matter to any court
e.g. local vs. state court Is the court confined in jurisdiction?
Also involved in the administration of the law as well as the
resolution of disputes
Features of the Court Hierarchy It provides a system of appeals
from decisions of lower courts to higher courts It allows for
different forms of hearing according to the gravity or seriousness
of the case It is instrumental in building up precedent
Role of the Police Police enforce the laws the laws created
The Court System Original and Appellate Jurisdiction A courts
jurisdiction is established by its enabling Act Original
jurisdiction: the authority to hear a case (most courts in the
diagram) when the case is first bought
before a court Appellate jurisdiction: is the authority of a
court to hear appeals from decisions of courts of a lower level in
the
same court hierarchy (the courts higher in the hierarchy some
only have appellate jurisdiction) State Court System Inferior
(Magistrate/Local) Courts
Inferior or local courts are located at the bottom of the Court
Hierarchy Generally presided over by a Magistrate The aim of these
courts is to settle disputes locally, quickly & cheaply There
is less emphasis on formality than in higher courts There are
procedural rules and the laws of evidence
Intermediate (County or District) Courts Form the middle level
court in most hierarchies with original civil jurisdiction In their
criminal jurisdiction they deal with the bulk of indictable
offences except for serious crimes they
also have limited appellate jurisdiction Supreme Courts
Highest Court in each State or Territory, a court of record,
presided over by a judge They have unlimited original jurisdiction
in both civil and criminal matters but hear only the most
serious
cases They have appellate jurisdiction Vic, NSW, Qld, ACT &
NT have established separate Courts of Appeal
Specialist Courts these have specialise expertise Family Courts,
Drug Courts, etc Federal Court System Federal Magistrates
Courts
Established in 2000 to ease the workload on other Federal Courts
presided by Magistrate Deals with minor family law, etc
Family Court
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Federal Court of Australia pretty much the same level as the
State Supreme Court In its original jurisdiction, the court hears
such matters relating to bankruptcy Its appellate jurisdiction
hears appeals from single judges of the Supreme Courts of the
Territories & appeals
from decisions of single judges of the federal court High
Court
Key function as the final/highest court of appeal of State
Supreme Courts & Federal Courts Very limited in original
jurisdiction Appeals do not lie as of right Approval to hear an
appeal must first be granted by the High Court The final court of
appeal within the Australian Legal System
The Adversary System Features of the Adversary System 1. Two
opposing sides who argue their case in a court presided by a
neutral third party One side will win, one side will lose ->
they will appeal if they wish In a civil case parties prove their
case on the balance of probabilities
Plaintiff: the person starting a civil action Defendant: the
person defending a civil action The plaintiff has the burden of
proof (onus) to prove the case on the balance of probabilities
Note: For Appeals
Appellant: a person appealing against a previous decision and
who can be either the plaintiff or defendant from the first
case
Respondent: the party who was successful in the first action In
a criminal case the Crown proves the case beyond reasonable
doubt
Crown: represents the state in a criminal case against an
accused R is an abbr. of Regina & Rex and refers to the
crown
Accused: the person against whom a criminal action is brought by
the state The Crown has the burden of proof (onus) to prove the
case beyond reasonable doubt E.g. R v Smith
2. Solicitors and Barristers Solicitors: most of their work is
of a non-litigious nature such as conveyance, preparation of wills,
family law
matters, preparation of court documents Barristers: do not deal
directly with the public, though in most states they can now they
prepare legal opinions
and have court appearances (briefed by a solicitor) 3. The
Judiciary a. Justices of the Peace (much more administrative in
nature i.e. dealing with admin applications) Honorary positions,
with the bulk of their work involved in witnessing of documents In
QLD, SA, etc they reside in Magistrates Courts. b. Magistrates
Trained, full time salaried public servants selected from among the
clerks of the court and the legal profession They preside over
inferior courts and are the sole determiners of both fact and law
c. Judges Appointed to all courts above the inferior courts and
generally appointed from members of the Bar Duties Include:
Deciding questions of facts and law Ensuring rules of evidence
are followed Passing sentence in criminal cases Determining
compensation/resolution for criminal Cases
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Hearing appeals d. The Jury The jury determines question of fact
In Criminal Trials all accused are entitled to a jury of 12 in all
cases where the accused pleads not guilty to an
indictable offence In a civil case because of the cost, they are
not used as much as they once were How does a dispute get to court?
1. Plaintiff goes to see solicitor 2. Solicitor issues a letter of
demand to Defendant 3. Issue o originating process
(summons/statement of claim) given to Defendant 4. Defendant makes
a Defence document given to court and to the plaintiff 5. Court
pre-trial mentions, discovery, exchange of affidavits (documents)
matter set down for trial trial (or
hearing) The Doctrine of Precedent A court is bound to follow
previous decisions of higher courts in the same hierarchy Court
hierarchy is critical to understanding operations of precedent
Exceptions if there are any inconsistencies with a higher courts
decision (i.e. two higher courts say different
things) or there is a wrong in law Binding Precedent:
The facts are the same/similar Court which made the precedent is
in the same hierarchy AND is a court of higher authority/superior
court E.g. Decision of High Court binding on all courts in
Australia Decision of District Court not binding on Supreme
Courts
Persuasive Precedent: Seriously considered; may or may not be
followed Decided by the court on the same level of hierarchy or in
a different hierarchy E.G. Decisions of Supreme Court of NSW is
persuasive but not binding on the decision of Supreme Court of
Victoria Decision of Overseas Courts are persuasive in
Australia
Terminology Stare decisis: the decision stands i.e. the
precedent has been supported Ratio decidendi: the reason for the
decision what the case stands for & the rationale behind a
courts
decision and the legal grounds on which the decision stands
making the case binding and a precedent for lower courts in the
future Spotting the ratio: in the Law and Decision part it is
buried the legal principle is, the law has always held
that.. Obiter Dictum: a remark in passing or material said by
the way are observations that do ont form part of the
reasoning of the case and unlike ratio decidendi are not binding
on lower courts (they may however be of persuasive authority,
particular the obiter dicta of eminent judges or of higher courts)
like making observations about contingent cases in the future
Affirm/Approve to uphold a judgement Reverse/Overrule: setting
aside a judgemental on appeal Applied: using relevant case law to
decide a case Followed: applying the law made in a previous case
without amendment Not followed: not applying the law made in a
previous case
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Distinguished stating differences between the precedent that is
proposed as relevant and the present case Statutory Interpretation
Other role Courts may have is to interpret legislation made by the
parliament Only when the legislation is unclear can they interpret
and form precedents if it is clear, valid and
unambiguous then courts must apply the legislation If it is
unclear courts can make law to clarify the legislation and that
becomes part of the judge made law If there is an inconsistency
between case law and legislation, legislation prevails Rules of
Interpretation a. Literal Rule: court gives effect to the literal
meaning of the legislation b. Golden Rule: court gives effect to
the literal meaning unless that leads to some absurdity (the judge
is allowed to
depart from the legislations clear result to avoid absurdity) c.
Mischief Rule: where words are ambiguous, inconsistent or
illogical, the court interprets the legislation to
overcome the mischief d. Purposive Approach: (Acts
Interpretation Act 1901) the court considers the purposes of the
legislation and the
court can consider extrinsic materials based on this
(explanatory memorandums, second reading speeches, intl. treaties)
i.e. using purpose to interpret
e. Acts Interpretations Act s15AB when the legislation is
ambiguous the Courts may rely on extrinsic material to interpret
the meaning of the section
Alternative Methods to Courts Alternatives have arisen to formal
litigation because of the delays, costs, ignorance and intimidation
of the
traditional law system These includes tribunals, ombudsmen and;
Alternative Dispute Resolution
Has arisen because of the disadvantages of court litigation
Arbitration, mediation, negotiation, etc
Week 3 Introduction to Contract Law Contracts Contract: an
agreement concerning promises made between two or more parties with
the intention of creating certain legal rights and obligations upon
the parties to that agreement which shall be enforceable in a court
of law Therefore, a contract: Contains promises Is between two or
more parties
Promisor: person who makes a promise Promisee: person to whom
promise is made Who intend to be legally bound
Making it enforceable by law Contracts Contracts are a
fundamental part of peoples daily lives They form the basis of
commercial law and dealings Some basic examples include sales
contracts, employment contracts, rental contracts Contract law is
derived from:
a) Judge made law: developed in the English common law courts
(decisions from cases) b) Legislation/Acts of Parliament which have
amended or supplemented the case law
Types of Contracts
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Formal contracts Special form of a contract Contracts under deed
or seal Used it particular circumstances where the parties would
otherwise have no contractual obligations due to
the absence of consideration E.G. Deeds, Wills, Trusts
Simple contracts oral or written Simple contract
Unilateral only one party under any obligation Bilateral both
parties have obligations
Contract and Agreement 5-010 Terms contracts and agreement are
often used to mean the same thing Traditional definition of a
contract is a legally enforceable agreement that is legally binding
An agreement is NOT necessarily legally binding An agreement is not
necessarily a contract An agreement becomes a contract when it
becomes LEGALLY ENFORCEABLE Essential Elements of a Contract1 1.
Intention to enter into a legally binding contract 2. Agreement
a. Offer b. Acceptance
3. Consideration (or price) 4. Legal capacity 5. Genuine consent
6. Legality of purpose 7. Any formal/procedural requirements that
must be satisfied The Offer: Rules in Relation to Offers There must
be: 1. A meeting of the minds showing intention or willingness to
be bound
a. CASE: Clarke v Earl of Dunraven and Mount Earl2 i. When they
entered a yacht race, each participant sent a letter to the club
agreeing to be bound
by the clubs race rule showing a meeting of the minds 2. A firm
promise between the promisor and promise 3. Communication of the
offer (in writing, orally or by conduct)
a. The offer may be directed to one person, group or the world
at large i. Carlill v Carbolic Smoke Ball Co deposit of 1K showed
intention and also that it was meant for
the world at large Miscellaneous Rules Relating to Offers 1.
Counter offer: a rejection of the original offer
a. Hyde v Wrench3 basically there was a counter offer and then
the original price was brought up again but there was no contract
so no revival of offer
2. Invitations to treat: an offer to consider offers they cannot
create an agreement 1 i.e. What makes an agreement legally
enforceable 2 5-130 3 5-300
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a. These must be distinguished from offers. How to do this? b.
Look at the intention of the parties & ASK: Is it an offer to
consider an offer? c. Pharmaceutical Society of Great Britain v
Boots Cash Chemists (Southern) Ltd 4
i. Invitation to treat: when you select goods from the shelf you
are considering whether to make an offer to purchase placing them
there is an invitation
ii. Offer: at the time you go to pay iii. Acceptance: when the
cashier accepts payment
d. Statements that arent contracts? Auctions, advertisements,
catalogues, price lists 3. Statements that are not offers?
a. Tenders unless the tender says otherwise acceptance of a
tender will not necessarily result in a binding contract
i. A tender is an offer to carry out work, and unless the tender
states the exact needs it is not a contract
ii. Spencer v Harding5 a tender made in response to a call for
tenders is an offer but the acceptance of a tender does not result
in a binding contract unless the tender calls for the supply of a
definite quantity of goods or a specific service and this is agreed
to
b. Requests for information not a firm promise therefore it is
not an offer it oes not destroy the offer as it is only an attempt
to obtain information
Choice of action given an offer Accept or reject the offer Make
a counter offer to effectively destroy the 1st offer Ask for
further information Take no further action on the offer The
Acceptance Rules in Relation to Acceptance 1. Acceptance must be
made strictly in response to the offer
a. Case: R v Clarke6 A reward was offered however Clarke passed
the prerequisites for the $1000 however he did not accept the offer
rather he wanted to be free
2. Acceptance must be communicated can be done either by words
(expressed) or by conduct (implied) a. Felthouse v Bindley7 a
letter was sent stating if I hear no more than I consider the horse
at such price
but silence is not sufficient acceptance b. Empirnall Holdings
Pty Ltd Machon Paull Partners Pty Ltd since a reasonable bystander
would regard
Ps conduct (giving progress payments but having not signed
something expressly) it is implied that Ds offer had been accepted
acceptance implied by conduct
c. Brogden v Metropolitan Railway Company8 again a document
introducing new terms was unsigned no acceptance however the
conduct implied that there was (once again, by continual
dealings)
3. Acceptance must be unqualified, absolute and unconditional or
it may amount to a counter-offer 5-240 a. To make sure there is a
meeting of the minds the acceptance must be unqualified in the
sense that
there are no questions, with nothing further to be negotiated
between parties b. Accepting something by introducing a new term is
a counter offer c. Acceptance that contracts the terms of the offer
= counter offer?
4. Conditional assent is NOT acceptance
4 5-180 5 5-200 6 5-230 7 5-310 8 5-270
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a. Conditional/not-final assent is not binding unless and until
the offeror agrees to the condition and this condition has to e
fulfilled as a prerequisite for a contract
b. There is a presumption that there is a contract if the
parties are in full agreement are just waiting to sign a written
contract in the future
c. Masters v Cameron9 subject to the preparation of a formal
contract of sale: i. Parties agree fully and intend to be
immediately bound by terms of agreement despite no formal
contract then contract exists ii. Parties in full agreement on
all terms and do not intend to change anything performance has
occurred it is a contract iii. The parties explicitly do not
intent to make a concluded contract unless formal docs arrive
as
in this case iv. Parties are bound by a contract so that neither
party can delay performance of the contract
while waiting for signage 5. Acceptance must be clear and
certain
a. Scammell and Nephew Ltd v Ouston10 ambiguity of the term hire
purchase term no contract existed b. The parties must be definite
about the exact terms of their contract, and if the terms are not
clear and
not certain there is no contract if the terms are still being
negotiated c. Trade usage terms may come to the rescue of parties
to explain terms, words and standards as long as
they are commonly known and exist Extra Rules for Agreement 1.
The Postal Acceptance Rule
a. Where parties contemplate the use of the post as a medium of
exchange of promises, the rules as to the time of acceptance change
as follows
b. An offer by letter is not effect until received by the
offeree c. Acceptance is effective as soon as it is posted d. If
the offer is to be revoked, notice (any way) of the cancellation
must be received before the letter of
acceptance is posted 2. Instantaneous Communications
a. The Electronic Transactions Act 1999 provides guidance on
times for receipt and dispatch b. 5-335-The click indicates
agreement by the acceptance of the terms and conditions
clingwrap
agreement c. Contract is formed when/where the offeror hears or
receives the offerees acceptance d. I.e. Looking at time of
dispatch, time of receipt this is used to sort revocations, etc e.
A web display (even f it says special offer) is still an invitation
to treat f. Clicking I agree, buy, etc is counted as an offer it is
not acceptance, because the seller can still choose
to say no g. When terms are given before however, clicking the I
agree means that there has been acceptance h. Computers can
automatically make contracts for you too i. Typing a mistake is
okay as long as you withdraw the mistake ASAP websites should
therefore allow
correction of any input errors before a contract is made
Consideration Something for something The glue between offer and
acceptance The concept of VALUE it is more than just price (can be
promises, acts, etc) It is what the promisor gives in exchange for
the return action from the promise
9 5-250 10 5-260
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Consideration turns an agreement into a contract Failure of
consideration can make an agreement unenforceable Rules for
Consideration 1. Consideration is essential to the validity of
every simple contract
a. It may be something the promise gives the promisor b. The
carrying out of some act or c. The refraining from doing something
that the promise had a legal right to do d. Dunlop Pneumatic Type
Co Ltd v Selfridge and Co Ltd 5-405 Dunlop did not provide
consideration for
the third party on not to discount = no contract e. Coulls v
Bagots Executor and Trustee Co Ltd the promise was joint and
although one of them did not
provide consideration it was still enforceable 2. Consideration
must not be past
a. Past consideration occurs where a promise is given after an
act has been performed b. This generally results in
non-enforceability c. If consideration is given BEFORE the contract
is created (as in it had been performed e.g. you paid for it),
it is not good consideration d. Roscorla v Thomas 5-410 P bought
a horse and afterwards asked D for a promise that the horse was
good (D gave it) the horse was bad as Ds warranty was made
afterwards, P had given no consideration for it, as the buying of
the horse was past consideration now it was used up it was not
enforceable unless new consideration was given
e. Past Consideration can be good consideration if it was
provided at the request of the promisor and it can be shown
that
i. The act was done at the promisors request ii. The parties
understood that the act would be renumerated iii. The promise would
have been enforceable if it had been promised in advance of the act
iv. Re Caseys Patents - Lampleight v Braithwait 5-410 Patent owners
offered their manager a
share of profits in consideration of earlier work that C had
done when A was gone As executors tried getting money off C because
no consideration had been given this is because when C was doing
the work, it was implied that C would be paid later by A & B as
agreed
f. Consideration must be: i. Present (executed) consideration
which is an act done now in return of r a promise when the act
is completed 5-430 ii. Future (executor) consideration where the
parties agree to exchange promises to do something
in the future 5-420 3. Consideration must have value but need
not be adequate
a. It must have a value but need not be adequate as this is
something only the parties to the contract can decide
b. Chappel & Co Ltd v Nestle Co Ltd - 5-440 something about
three wrappers? 4. Consideration must be sufficient
a. Means that is must have some legal value (need not be
adequate) b. If not, it may be considered insufficient and no
consideration at all c. As long as consideration exists the courts
will not be concerned about its adequacy
5. Consideration must be possible of performance 6.
Consideration must be definite 7. Consideration must be legal 8.
Consideration must be referable to the other partys promise 9.
Practical benefit can be good consideration 5-470
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a. Musumeci v Winadell Ptd Ltd Ds promise to reduce rent was a
binding contract because the practical benefit that P remained a
viable tenant and the mall remained occupied was good
consideration
b. Williams v Roffey Bros & Nicholls (Contractors) Ltd
Williams fell into financial difficulty and it was agreed with
Roffey that they would raise the price on part basis. When Roffey
failed to pay more of the price, Williams stopped working. Roffeys
promise to pay extra was enforceable it was supported by
consideration of P because of practical benefits (ensured that
Williams continued working, avoiding a penalty, saved expense of
hiring others)
Insufficient Consideration 1. Moral Obligations as well as
natural love and affection will NOT convert a promise into good
consideration
a. Eastwood v Kenyon 5-471 Sarah married D who promised to
reimburse P for what he had done over the years (take care of
Sarah) P failed to hold because he had given no consideration for
Ds promise moral obligation =/= good consideration
2. Part Payment is insufficient consideration a. Part payment is
not good consideration b. UNLESS the creditor agrees to accept
smaller amounts (or something In exchange) then a debt is
considered discharged c. Pinnels Case; 5-480 P sued D for not
paying back the full debt, but D said that P had accepted the
part payment with full satisfaction because D has not offered P
consideration for enforcing Ps previous promise not to sue then it
=/= consideration (all he had done was make part payment of an
existing contract)
d. Foakes v Beer P tried to recover interest on the debt P could
sue for interest because the payment of the smaller sum was not
consideration for P promise to take no further action against D
Consideration and Promissory Estoppel: The Exception to the Rule
5-485 Promissory estoppel11 will allow a promise to be enforced
even though the promise has not provided good
consideration for that promise It operates where it would be
inequitable or unconscionable for the promisor not to be held to
their promise Basically it stops people from not going back on
their word 1. Central London Property Trust Ltd v High Trees House
Ltd
a. Due to WWII lack of renters so P reduced the rent (rented for
99 years). No good consideration was provided. After the war P
asked for the full amount. The courts held that P was estopped from
dishonouring the half rent agreement because P had acted on it. The
High Trees Estoppel. Estopped due to having acted upon it.
2. Legione v Hateley a. No promissory estoppel. P asked
solicitor D for extension. The secretary said I think thatll be all
right
but Ill have to get instructions. Contract was terminated and P
argued for estoppel of termination. But there was none because:
i. The secretarys words were not clear and unequivocal
(unambiguous) ii. No actual representation or promise had been
given to P to confirm that the settlement date
could be ignored iii. Lack of authority to make any
representation iv. Therefore D righteously rescinded the contract
when P did not pay on time
3. Waltons Stores (Interstate) Ltd v Maher a. Waltons led on
Maher to think that the deal would be completed to demolish an old
building to replace
with a new one. The solicitors deliberately slowed down, and a
contract was not exchanged. They kept
11 Promissory estoppel cuts in if the promise has relied on the
promise and would suffer some detriment if the promisor went back
on the promise
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making amendments to slow it down, but Maher assumed it was to
proceed. When the building was 40% complete, Waltons bowed out.
They were estopped from doing so.
The point of Promissory Estoppel? The law will not permit an
unconscionable or more accurately, unconscientious departure by one
party
from the subject matter or an assumption which has been adopted
by the other party as the basis of some relationship which would
operate to the other partys detriment if the assumption is not
adhered to
Waltons Stores Ltd v Maher created a six point test for estoppel
Promisee (Maher = P) assumes existence of particular legal
relationship Promisor (Waltons = D) induced and is responsible for
this assumption Promisee acted/did not act in reliance on that
assumption Promisor knew what promisee would do or intended the
promisee to act this way Promisee will suffer loss or some
detriment or harm if the assumption is not fulfilled Promisor did
not take any steps to warn promisee that assumption may not be
fulfilled Week 4 Contract Law Part 2 Intention, Terms of a
Contract, Exclusion Clauses Intention There must be evidence that
the parties INTENDED to make a legally enforceable contract When
there is expressly no intention (written) then subject to contract
clauses it may be implied conversely in
the case of Masters v Cameron (that it was definitive that they
would not contract until it was signed) 5-250 Masters v Cameron
Implied Intention In the absence of expressed intention laws and
courts may imply intention The courts have to determine objectively
whether the parties intended the agreement to be legally
enforceable Non commercial agreements three types
IT IS PRESUMED THAT NO INTENTION EXISTS 1. Social agreement
friends and acquaintances 2. Domestic agreements ones made between
family members and relatives 5-090
a. Where the husband and wife are living together at the time of
the agreement, no intention exists Balfour v Balfour (promise to
pay maintenance costs)
b. Where the husband and wife are separated at the time of the
agreement, intention exists Merritt v Merritt the facts are
distinguishable
i. Why? It was rebutted because of signage and the meeting of
the minds. A husband promised to pay for maintenance. Property was
given to the wife.
c. There is no intention to create legal relations Cohen v Cohen
i. Agreement of dress allowance of 100 deemed domestic and no
intention
d. Wakeling v Ripley professor and wife convinced to move to
Australia under a domestic agreement with an old man (he promised
to give his house) but he later changed his mind and they sued for
breach of contract they won it was not a domestic agreement anymore
because of the letters and the economic seriousness that the
plaintiffs had sacrificed
3. Voluntary agreements where the parties may volunteer their
services 5-090 a. Such as where a person volunteers their services,
the parties do not normally intend to create legal
relations b. Teen Ranch Pty Ltd v Brown a volunteer at a camp is
injured he could not sue for workers
compensation because there was no intention c. Ermogenous v
Greek Orthodox Community of SA Inc Archbishop could successfully
rebut the
presumption that the appointment of a minister of religion is
spiritual and not contractual he was
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successful in claiming payment for annual leave and long service
leave his relationship to the community was more than an
agreement
Commercial or business 5-060 PRESUMED INTENTION TO BE BOUND The
parties may agree that their agreement is binding in honour or in
principle only Advertisements tend to be invtitations to treat
rather than showing intentions 1. Rose & Frank Company v JR
Crompton & Bros Ltd Commercial business dealing setup there was
an
arrangement that said that they do not want to contract
together. They only wanted to be bound by honour/principle the
wording is wrong leading to a rebuttal there was an agreement but
because of wording no contract was formed
2. Carlill v Carbolic Smoke Ball Co intention was shown by
deposited 1000 in the bank so the advertisement was deemed to have
intention
a. Carbolic case does not mean all promises in advertisements
can lead to enforceable contracts the advertisers intention to
contract is what created the contract (otherwise, exaggerated
promises in advertisements do not mean anything)
Only in the absence of evidence are these assumptions placed
evidence can prove otherwise It is just a starting point the
presumption is applied and can be rebutted by evidence The Contract
Terms and Representations Terms and representations can tell us
what the parties have agreed to They can also tell us the extent of
the rights and obligations that the parties have entered into
Contents of a contract can be classified into two categories 1. A
representation
a. A non-contractual agreement b. Made pre-contract during
negotiations c. Not intended to be legally binding d. If they are
false they are called misrepresentations e. Oscar Chess Ltd v
Williams a car dealer made a representation about the model of the
car (the age) it
turned out to be a misrepresentation but there wasnt an issue
because it wasnt the reason the plaintiff bought the car
f. Bentley (Dick) Productions Ltd v Harold Smith (Motors) Ltd
the mileage was wrong and the mileage did go to the heart of the
contract (the seller knew too?) therefore breach of contract
2. A term a. Contractual statement b. Intended to be legally
binding c. A breach of a term gives rise to an action for breach of
contract
Term or representation? 6-020 1. Reliance of the innocent party
on the misrepresentation does it go to the heart of the contract 2.
Time period between representation and final agreement 3. Was the
innocent party asked to check the statement 4. Was the statement
later omitted when the contract was put in writing? 5. The
intention behind making the representation to stop the party from
finding defects? 6. Consider any special knowledge or skills of the
person who made the representation Parol Evidence Rule 6-015 Parol
= oral or spoken Parol evidence is unable to vary, contradict, add
to or subtract from the words from a written document there
are exceptions (translations, ambiguity, etc)
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If a contract is in writing and if the writing appears to
contain the whole contract, it is presumed that the only the
writing contains all the terms of the contract meaning that parties
cannot go beyond it later on to show that a further point was
omitted
Courts are generally reluctant to admit that the evidence of
words, acts or representations made prior to contract execution
might add to, vary or contradict the written contract
Terms of the Contract 1. Express can be
a. Oral b. Written or; c. Oral and written d. Makes it very
obvious as to what the parties want
2. Implied can be by a. Established custom b. Prior
dealings/prior conduct between the parties c. Necessity for
business efficacy d. Statute; or e. The courts f. 5-270 Brogden v
Metropolitan Railway Company D refused to supply coal the courts
said the
contract came into the existence by conduct (the terms were
implied by action) g. Or Ermogenous example behaviour implied there
was a contract
Statutory Implied Terms 6-140 Some statutes imply (Add) terms is
not a contract which become part of the contract These terms cannot
be excluded in some circumstances where consumers are involved
Australian Consumer Law consumer guarantees, etc Sales of Goods Act
Mercantile Law Act if parties have no agreed to interest rate, it
is implied that it is 8% Types of Terms 6-050 - 6-090 1.
Condition
a. An essential terms going to the root of the contract b.
Allows the injured party the option of rescinding (ending) the
contract and/or suing for damage c. There can be condition
precedents - > an agreement becomes a contract subject to
finance d. There can be conditions subsequent - > so long as
supplies continue contract will end when supplies
run out 2. Warranty
a. A non-essential term of lesser importance b. Allows the
injured party only to recover damages (and requires continued
performance of the contract)
Note: A breach of a condition can justify repudiation. A breach
of warranty cannot. Cases: 1. Bettini v Gye
a. Contractor required the singer to be there 6 days before the
opening night for rehearsals. She arrived four days late the
promoter cancelled the contract it was held not to be a condition
because it did not go to the root of the contract. The main terms
were to perform at the concert
2. Poussard v Spiers a. The lead singer in a new opera was not
able to appear for the opening night. The promoter could cancel
the opera or employ a substitute (either way, suffering loss).
The failure on the singers part went to the heart of the contract
could sue for damage.
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3. Gumland Property Holdings Pty Limited v Duffy Bros Fruit
Market (Campbelltown) Pty Ltd parties had agreed that paying rent
on time was part of the contract contract was rightfully repudiated
when the tenant fell behind with the rent
Other Terminology for Terms Uncertain Terms If there have been
prior dealings, courts may imply appropriate terms 6-150 Where
there are no past dealings, courts may be forced to find contract
void for uncertainty With an uncertain term there is no real
agreement Meaningless Terms 6-160 If the term has no meaning, the
courts will sever and if possible leave the rest of the contract
valid If this is not possible, the contract will be void for
uncertainty With a meaningless term there is something agreed but
what does it mean? Ambiguous Terms 6-170 If a term has more than
one meaning, the contract will not necessarily be void for
uncertainty, so long as the
term can be given a meaning This is a matter of interpretation
of the contract
Terms and Collateral Contracts Collateral contract: a promise in
the main contract that gives rise to a separate contract This
promise is NOT a term of the main contract it has an independent
existence to the main contract It co-exists side by side with the
main contract E.G. In consideration of the manufacturers promise
that his product will do X you the customer will contract
with the retailer to buy it Main contract: between you and the
retailer Collateral contract: manufacturers promise to the retailer
Changing the terms 6-250 Terms of an existing contact may be
changed by:
Complete discharge of the existing contract and substituting the
new contract Leaving the existing contract in place but adding new
terms or changing some of the terms this can only
happen by full agreement of the other parties Week 5 Contract
Law Part 3 Capacity, Privity, Vitiating Elements Capacity There is
a presumption that everyone has full legal capacity Evidence can
imply a lack of capacity which will invalidate the contract
Examples of classes of persons subject to incapacity include: 5-510
to 5-570
Minors (over the age of 18?) Mentally ill Intoxicated
Corporations who is the actual mind of the company? Are you dealing
with the right person? Who is the
appropriate authority Consent Is there genuine consent Were they
pressured to get into the contract? Did they consent to what
information they were given? Misrepresentation?
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There must be genuine agreement between the parties to a
contract as to its nature and scope Proper Form Consider and ask
whether there were any statutory procedural requirements that need
to be satisfied A lack of compliance with the required formalities
may make the contract void or unenforceable
FIN ELEMENTS TO A VALID CONTRACT
Parties to the Contract Privity of Contract 6-260 Privity means
part of Doctrine explains that -> Only a party to the contract
will have rights under the contract Similarly, the contract only
imposes obligations on the parties to the contract Beswick v
Beswick12 - B agreed to sell business to A only if he agreed to
employ B as a consultant and if A
continued to pay Mrs. C (Bs wife) money after B was gone C
applied for specific performance but could only claim as an admin
of Bs estate and not in her own capacity (i.e. she did not get
money that was directed to her) this is because she could sue as Bs
admin (a party to the contract) but not under herself because she
was a party to their contract
Exception? That is, a doctrine that is exempted from Privity?
Agency Agency says people that that are not in the contract can
have party
Agent: a person who is authorised to enter into contracts on
behalf of another person, called the principle The contract is
between the principle and the third party, and is generally not
enforceable against the agent The doctrine of Privity is not
relevant in the agency situation The legal relationship between one
person, the AGENT (A) having authority to act, and having
consented
to act on behalf of another person, the Principal (P) places the
Principal in a contractual relationship with a Third Party (TP)
This means that the principle can sue or be sued on a contract
between their agent and a third party (the agent i.e., can enforce
and make contracts for you)
Examples: real estate agent, travel agent share broker
The Concept of Agency
The creation of agency: By agreement (express or implied) By
operation of law under the doctrine of necessity Retrospectively by
ratification of the agents acts done on behalf of the principle but
without prior grant of
authority (i.e. agent has done it already but the principle
approves after it has happened)
12 6-260
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TERMINATION OF A CONTRACT
Vitiating Elements To vitiate means to corrupt, damage and
reduce value A vitiating factor operates to render a contract
voidable or void retrospectively
Voidable: the contract will continue on foot unless the party
elects to rescind (cancel) or avoid the contract Void: void back to
the moment of formation, as if it never existed (void ab
initio)
Vitiating elements include: 1. Mistake it often renders a
contract void ab initio places the parties in the same position as
if no contract had
ever been made (voidable once there is misrepresentation not
simply because of a small mistake) a. Types of mistakes: 5-620 -
5-695 b. Common mistake both parties make the same mistake res
extinct the parties are mutually excused
from performance of the contract c. Mutual mistake parties are
at cross-purposes they have both made a mistake but a different
mistake d. Unilateral mistake: only one of the parties is mistaken,
and the other should or is aware of this and does
nothing to correct the mistake selling a painting you know is
fake 2. In correct representations, or misrepresentations.
a. A representation is a statement of fact made by one party to
another either before or at the time of contracting relating to an
existing fact or a past event, which induces the contract remedies
for misrepresentations include
i. Misrepresentation in contract can make contracts voidable,
etc ii. Misrepresentation in tort- give the representee the right
to sue for damages for the tort of
negligence iii. Misrepresentation legislation actionable under
ACL if caused by unconscionable conduct, etc
b. There can be actionable (contractual) misrepresentations or
non-contractual misrepresentations: i. Non-contractual/mere
misrepresentation: no remedy for breach of contract but there may
be
remedies under other heads of law (ACL, tort, etc) ii. Major
misrepresentation actionable misrepresentation it allows the
innocent party to
cancel or rescind the contract 1. Rescission of contract:
turning the clock back - to reverse the contract so that each
party is restores to where it was before the contract was made
obligations are relieved and each recovers the benefits (does not
cover damages which might flow from the injury) typically an
equitable remedy cannot rescind if parties cannot be restored
reasonably to their original positions
2. You cant rescind if your action after learning of the
misrepresentation was bad c. Fraudulent misrepresentation:
intention to induce a person to enter into a contract d. Innocent
misrepresentation: misstatement of a material fact/lack of
intentional deceit, etc e. Negligent misrepresentation statement
made innocently but carelessly f. Australian Consumer Law, s18 of
Competition & Consumer Act 2010 (Cth) can help for remedies
3. Illegal contracts contract will be illegal if they involve
illegal conduct they can be illegal or void a. By statute or at
common law b. Examples include contracts to commit a crime, immoral
contracts, etc
4. Inequality between the parties due to: a. Duress13: the use
of violence or illegal threats against a person, their goods or
economic interest to force
them to enter into a contract against their will i. To the
person to person, immediate family or relatives ii. To goods
wrongful threats to seize, damage or destroy goods
13 Physical violence and threats
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iii. Economic duress pressure beyond normal acceptable
commercial practice (stopping supplies, etc)
b. Undue influence14: involves the improper use of a position of
influence or power possessed by one person over another in order to
induce that other person to act for their benefit involves a lack
of genuine consent to the agreement
c. Unconscionable or Unfair Conduct15: the contract will be set
aside as unconscionable where the defendant has abused their
superior bargaining position in their dealings with the
plaintiff
i. Commercial Bank of Australia v Amadio:16 - the Amadios were
misled into lending money thinking that the sons company was in a
good position it was not they did not understand English and hence
were misled (alsol, they were old) obviously, they were under a
special disadvantage
ii. Therefore, the plaintiff has to establish unconscionability
by proving: 1. They were in a position of specific disadvantage 2.
That it substantially affected their ability to protect themselves
3. The defendant knew, or ought to have known of the plaintiffs
disability and should not
have taken advantage of it iii. Examples of special
disadvantage? Age, financial needs, illness, ignorance,
inexperience, inability
of understanding of language, etc Restraint of Trade Clauses The
law of restraint of trade makes contracts void if they limit
freedom of contract its kind of like exclusive
dealing in consumer law you cant do this one youve contracted,
et Clauses in restraint of trade are found in
Contracts for employment Contracts for the sale of business
Contracts between manufacturers and traders
Clauses in contracts in restraint of trade will generally be
void as being contrary to public policy unless the restraint is
reasonable
What is reasonable is determined by: Geographic extent The time
period involved The nature of the business and the activity being
restrained Whether the restraint is reasonable, both in the
interests of the party and the public
Week 6 Contract Law Part 4 Breach of Contract/Termination of
Contract/Remedies for breach of contract
Classification of Contracts
Contracts classified by enforceability Valid: a contract which
the law will enforce Voidable: the contract remains valid and
binding unless and until it is repudiated (cancelled) by the
injured party Void: no legal rights or obligations from the outset
(void ab initio) Unenforceable: valid on its face but no legal
action but no legal action can be brought on the contract,
often
because of a procedural defect Illegal: the purpose of the
contract contravenes a statute or the common law, and generally
treated as void 14 Misuse of influence or power 15 Conduct via
misuse of bargaining power 16 5-730
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Contracts Classified by Performance Executed contracts: where
both parties have completed their respective obligations at the
time of making the
contract (i.e. performed) Executory contract: relating to an
agreement where one of the parties promises to do, or refrain from
doing,
something in the future (i.e. yet to perform)
Breach of Contract Termination of Contract Types of breaches
when one party
Completely fails to perform their obligations actual breach
Indicates that they do not intend to perform their obligations
anticipatory breach
Then the other party is entitled to terminate the contract
Breach of contracts may be either
Total breach: where one of the parties does not perform the
contract at all Partial breach: where one of the parties does not
perform the full requirements of the contract
A contract may be terminated or discharged17: 1. By performance
contract usually ends when each party has performed its contractual
obligations
a. Obligations under a contract must be performed exactly b.
Near good is not good enough -> if you only perform part under a
divisible contract -> sue for partial
breach c. In re Moore & Co Ltd and Landauer & Co fruits
were sent in boxes of 24 than 30 buyer can refuse
to accept and can reject the goods d. Sumpter v Hedges A builder
partially built a house but ran out of money and claimed for
partial
completion since it was a lump sum (non-divisible) contract he
could not recover it under a quantum meruit (pro rata payment)
e. Entire v Divisible Contracts if the contract is to be
delivered by instalments which are to be separately paid for, then
the terms of the contract will show whether the breach is a
repudiation of the whole contract OR whether the breach is
severable (i.e. if the breach is a partial breach and not a total
breach) i.e. depends on the terms
2. By agreement contractual obligations can be discharged by
agreement between the parties 3. By operation of law (e.g.
bankruptcy, mergers) 4. By lapse of time when contract stipulates a
time period after which it will expire and parties allow this
time to lapse or expire18 a. Time of the essence performance of
the contract must take place in the time specific or within a
reasonable time if no time is specified it can also be implied
in commercial contracts b. If performance at certain times is
essential, the contract may contain a time of the essence clause c.
If there is not a time off the essence clause, sending a notice
will suffice (give them reasonable time
though) d. Non-compliance will become a breach
5. By frustration after formation of the contract something
unexpected happens that makes performance impossible!
a. Codelfa Constructions Pty Ltd v State Railway Authority
Codelfa was granted frustration of contract. They had to excavate
tunnels, making a lot of noise in the process. The community made
them
17 6-280 to 6-350 18 Statutes of Limitation: protect a person
from being forced to defend a case after a certain of years (i.e.
it become statute barred) the period of limitation begins to run as
soon as a cause of action arises (so when the first breach of
contract occurs) usually around 6 years (or 12 for formal contracts
like mortgages) 6-500
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refrain from night work. This made it impossible to complete
something at a certain time. Frustrated contract.
b. Ooh! Media Roadside Pty Ltd v Diamond Wheels Pty Ltd Building
owner entered into a contract to let a media company use a sign on
the roof for advertising. Revenue fell when another building was
made that obscure the sign. Ooh! Tried claiming for frustration
(they tried ending the contract early) The reduction in visibility
was not frustration as performance of the contract had not become
fundamentally or radically different. The new building did affect
the site, but was not unsuitable for advertising.
Remedies 1. Common Law
a. Termination of the contract b. Damages
2. Equity 19 a. Rescission b. Restitution c. Rectification d.
Specific Performance e. Injunctions
3. And some Australian Consumer Law remedies Damages Every
breach of contract gives the innocent party a right to claim
damages Aim of damages is The main purpose of damages is to enable
the innocent party to receive (monetary) compensation for injury
or
loss suffered because of the breach Damages are calculated on
the basis of looking at what the position of the plaintiff would
have been if the
contract had been properly performed The key issues are
causation & remoteness 6-500
Hadley v Baxendale Hadley, a miller operated a mill that
contained a crankshaft it broke and he went to Baxendale to take
the crankshaft to the manufacturer to get it fixed. D promised to
deliver it the next day and he ended up taking a break, etc and the
crankshaft was delivered late. D was negligent, but because the
only thing he knew was that there was a broken shaft and he did not
know it would cause such trouble. It was also reasonably assumed
that a miller would have a spare crankshaft at hand. D won no
damage.
Causation is there a causal connection between the breach and
the loss suffered? The plaintiff must show that the breach of
contract by the defendant was the cause of the loss The plaintiff
may not be able to recover if an additional factor unconnected with
the defendants breach
breaks the causal chain between the defendants action and the
plaintiffs loss or damage e.g. H v B P failed to give additional
factor to break causation
Remoteness: compensation will NOT be awarded for damages that
are too remote ASK: Is the loss suffered by the injured party a
usual and reasonably direct consequence of the breach of
contract? The only types of losses that can be claimed are those
that:
Flow naturally from the breach of contract Are special losses20
made known to the defendant when the contract was made
Damages for special losses cannot be awarded unless:
19 Branch of the common law courts 20 Victoria Laundry Ltd v
Newman Industries (normal profits only, no supernormal profits)
-
The plaintiff made known the special circumstances to the
defendant at the time the contract was made
If so, the defendant will be taken to have accepted the risk by
default Victoria Laundry Ltd v Newman Industries
Amount of Damages Damages are recoverable for provable or
economic loss as well as : 6-460
Distress and disappointment Upset/anxiety Discomfort Mental
distress
Mitigation of Damages The innocent party has a duty to take
reasonable steps to minimise/mitigate their loss failure to do so
can
result in a reduction of damages Mitigation is a question of
loss The onus of proof is on the defendant to show that the
innocent party did nothing to mitigate their loss Payzu v Saunders
6-480 P cannot recover for losses that could have been reasonable
avoided
Types of Damages 6-450 The type of damages that will be awarded
will be determined by the seriousness of the breach and whether
the
contract has specifies the amount of damages to be paid in the
event of a breach General damages: compensation for loss suffered
by the plaintiff as a result of the breach Nominal damages:
defendant breached contract but plaintiff has not suffered any
actual loss Exemplary damages: punitive and may be awarded for
non-economic loss Liquidated damages: plaintiff is able to sue for
a specific sum Unliquidated damages: awarded where an injured party
has no fixed sum in mind and leaves the court to
decide Penalties: only enforceable if the amount is a genuine
pre-estimate of the loss from the breach of contract
they cannot be extravagant or unconscionable cannot be used to
intimidate or apply pressure and must be transparent (based on
clear and reasonable criterion
Equitable Remedies The court, in its equitable jurisdiction may
order; Restitution: the court orders the return of property or the
payment of money that the person had unjustly
received from the plaintiff Based on the concept of some UNJUST
enrichment (someone has benefitted at the expense of someone
else
and it would be unjust to allow that person to keep the benefit)
Can be used where there has been
A mistake of fact or of law Duress Some element of
compulsion
The defendant must establish that: 1. D obtained a benefit or
enrichment 2. This benefit was at the plaintiffs expense 3. It
would be unjust to allow the defendant to keep the benefit 4. The
defendant has no defences (such as estoppel, incapacity,
illegality) to rely on
Rescission21: setting aside an agreement and restoring parties
to their pre-contractual agreements Involves termination by
right
21212121 6-280
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Is a court order setting aside contract, to restore parties to
pre-contractual position May be granted because of mistake,
misrepresentation, undue influence, duress, etc
Rectification22: the court corrects a written document Court
order requiring correction of mistake/error to bring document in
line with correct agreement between
parties E.G Trying to rectify an agreement for rent because by
mistake you had forgot to put down terms that had
been agreed upon (must be proof that they intended to have such
terms) To rectify is to adjust as though it actually happened
correcting a document to what it should be so one
party cannot deny existence of it because it is not expressly
written Specific Performance: court order requiring a party to
specifically perform to their contractual obligations Injunction:
court order prohibiting a party from doing something or requiring
or compelling a party to do
something Lumley v Wagner A singer was contracted and was not
meant to sing anywhere else she did the court
awarded Lumley an injunction the singer could not sing anywhere
else Curro v Beyond Production Pty Ltd an injunction was granted to
Channel 7 to prevent presenter Curro from
breaching her service by going to Channel 9 Network Ten Ptd Ltd
v Rowe Channel 10 could not get an injunction her contract had
ended and there
was no serious damage These are discretionary remedies at equity
and are only granted where damages are not an adequate remedy
22 5-695 Cermak v Ruth