Top Banner
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
24

LEGT1710 Summaries

Nov 10, 2015

Download

Documents

findhero

Summary
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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)

  • 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.

  • 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?

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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