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Available from Week 5 (next week) On Moodle Due 5pm, Monday 5 May (Week 9)
Discussion Forum
Available from this week Separate Discussion Forum for each tutorial Contributions to the Discussion Forum will be worth 5% of overall Course Participation Mark Tutors will provide details about how to use the Discussion Forum for your tutorial class
Discussion Forum
Marks will be awarded for the QUALITY of contributions over the semester. It is not just about the number of comments or contributions you have but: whether you have "engaged" or "collaborated" with peers online by commenting on their contributions, answering or attempting to answer a peer's query, directing a peer to some interesting case/website/article you have found etc how you have reflected on your learning
For example, tutors will consider how well you have thought about the issues by looking at the level of analysis in your contributions/comments
Discussion Forum
NOTE: This is NOT INSTEAD OF class participation, as there is still at 5% mark for participation in class discussions This mark will be awarded IN ADDITION TO YOUR IN-CLASS CONTRIBUTIONS .
Your Tutors
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Reminder: you can only attend the tutorial you are enrolled in! Tutors will refuse your attendance in a class where you are not on the roll, unless prior arrangements have been made (eg: due to illness, unavoidable absence because of a job interview etc) Remember there is an 80% attendance requirementdont miss your tutorials!
Lecture 3: Summary
Essential elements of a contract: Intention to enter into a legally binding contract (to be covered today) Agreement Offer Acceptance Consideration (or price)
Lecture 3: Summary
Other elements for a valid contract: Legal capacity Genuine consent Legality of purpose Any formal/procedural requirements must be satisfied (See Latimer at 5-510 to 5-570)
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Lecture 3: Summary
Essential elements of contract
Lecture 3: Summary
2. The Acceptance
Must be in response to Offer (R v Clarke) Communicated (note: silence is not acceptance: Felthouse v Bindley) Express or implied (eg by conduct: Brogden v Metrop Rw a y Corp; Empirnall Holdings) Absolute, unqualified Any conditions must be fulfilled Clear and certain Postal Rule/Instantaneous communications
1. The Offer
Must be Firm promise Communication: Notice of Offer (Carlill v Carbolic Smoke Ball) Revocation of offer to occur before acceptance Invitation to treat (Pharmaceutical Society of Great Britain v Boots): offer to make an offer Counter -Offers (Hyde v Wrench) Requests for Information (Harvey v Facey)
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Lecture 3: Summary
3. Consideration
Must be: Essential Present or Future, NOT past (unless act done at promisor s request and parties understood act to be renumerated later: Lampleigh v Braithwait and Re Caseys Patents) Something of value but need not be adequate ( Chappell & Co Ltd v Nestle Co Ltd) Sufficient Possible of performance Definite Legal Referable to the other partys promise
Lecture 3: Summary
3. Consideration Can be: Practical benefit (Williams v Roffey; Musumeci v Winadell )
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Lecture 3: Summary
Note: Consideration cannot be: Moral obligation (Eastwood v Kenyon) Part payment (Pinnels case; Foakes v Beer some exceptions, such as creditors)
Todays lecture
Consideration and promissory estoppel exception to the rule Intention to enter into legal relations Terms of a contract Representation vs terms Parol evidence rule Express vs implied terms Collateral contracts Conditions and warranties Uncertain terms Meaningless terms Ambiguous terms
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Promissory estoppel
Cases: Central London Property Trust Ltd v High Trees House Ltd Legione v Hateley Waltons Stores (Interstate) Ltd v Maher See Latimer at 5-485
Promissory estoppel
Brennan Js ( Waltons v Maher ) six- point test for when the promisor cannot go back on his/her word: Promisee (Maher = P) assumes existence of particular legal relationship Promisor ( Waltons = D) responsible for this assumption Promisee acted/did not act in reliance on that assumption Promisor knew what promisee would do or intended for promisee to act in this way Promisee will suffer loss or some detriment or harm if the assumption/expectation is not fulfilled Promisor did not take any steps to warn promisee s/he may not fulfil expectation etc
Promissory estoppel
The central principle of the doctrine is that 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, course of conduct, act or omission which would operate to the other partys detriment if the assumption be not adhered to.
Deane J in Commonwealth of Australia v Verwayen [1990] HCA 39 See Latimer at 5-485
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Subject to contract
Expressly NO intention
Subject to contract clauses Document not in its final form Subject to preparation of written document Case: Masters v Cameron: see Latimer at 5-250
Implied intention
The courts have to determine objectively whether the parties intended the agreement to be legally enforceable To assist, consider two categories: Social, family, domestic, voluntary Commercial or business
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Implied intention
Traditionally: Social, family, domestic, voluntary PRESUMED NO INTENTION Commercial or business PRESUMED INTENTION TO BE BOUND
Implied intention
Traditionally:
Apply the relevant presumption The presumption could be rebutted by evidence
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Intention: Non-commercial
Non-commercial agreements Three types: 1. Social agreements - ones made between friends or acquaintances 2. Domestic agreements - ones made between family members and relatives and 3. Voluntary agreements - where the parties may volunteer their services
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Intention: Non-commercial
Under the traditional approach no intention is presumed to exist, though this is rebuttable by the evidence produced by the plaintiff
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Intention: Non-commercial
Domestic - Agreements between husband and wife Traditionally in domestic situations: Where the husband and wife are living together at the time of the agreement, no intention:
Case: Balfour v Balfour
Intention: Non-commercial
Other domestic arrangements In the case of other domestic situations the courts may look at the words and conduct of the parties as well as the seriousness of the consequences: Case: Wakeling v Ripley See Latimer at 5-090
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Intention: Non-commercial
Voluntary agreements In cases of voluntary agreements, such as where a person volunteers their services, the parties do not normally intend to create legal relations: Cases: Teen Ranch Pty Ltd v Brown Ermogenous v Greek Orthodox Community of SA Inc See Latimer at 5-090
Intention: Commercial/Business
In business and commercial agreements the courts assume that there is an intention to create legal contractual relations The parties may agree that their agreement is binding in honour or in principle only Case: Rose & Frank Company v JR Crompton &Bros Ltd See Latimer at 5-060
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Representations
Importance of truth of the representation Reliance of innocent party on representation Time period between representation and final agreement Intention behind making of representation Omission of representation from contract Consider any special knowledge or skills of person who made representation See Latimer at 6-020
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Representation
Cases: Oscar Chess Ltd v Williams Bentley (Dick) Productions Ltd v Harold Smith (Motors) Ltd (Compare these two decisions)
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Implied Terms
Case: The Moorcock See Latimer at 6-110
Implied Terms
For terms to be implied into a contract, they must: be reasonable and equitable be necessary to give business efficacy be so obvious it goes without saying be capable of clear expression not contradict an express term of the contract
See Latimer at 6-110 at footnote 16: BP Refinery Case
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Types of terms
1. Condition
an essential term going to the root of the contract allows injured party option of rescinding ( i e ending) the contract and/or suing for damage
2. Warranty
a non-essential term of lesser importance allows the injured party only to recover damages (and requires continued performance of the contract)
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Condition or Warranty
Cases: Bettini v Gye Poussard v Spiers (Compare these two decisions) Gumland Property Holdings Pty Ltd v Duffy Bros Fruit Market See Latimer at 6-050
Uncertain terms
If there have been prior dealings, courts may imply appropriate terms Where there are no past dealings, courts may be forced to find contract void for uncertainty See Latimer at 6-150
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Meaningless terms
If the term has no meaning, the courts will sever it if possible and leave the rest of the contract valid If this is not possible, the contract will be void for uncertainty See Latimer at 6-160
Ambiguous terms
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 See Latimer at 6-170
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Exclusion Clauses
Limitation of liability clauses To be discussed next week
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Next lecture
Exclusion Clauses Collateral contracts Changing terms of a contract Capacity Privity Agency Vitiating elements (eg mistake, misrepresentation, unconscionabl e conduct etc) Read: Latimer Ch 5 5-610- 5-810; Ch 6 6-180- 6-275; Ch 11
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