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Australian Contract Law Notes

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This is an extract of our Australian Contract Law Notes document, which we sell as part of our Contract Notes collection written by the top tier of Griffith University students.

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FORMATION ................................................................................................................................................................................ 38
CONTRACT THEORY .................................................................................................................................................................. 39
INTENTION ................................................................................................................................................................................. 41
OFFER ........................................................................................................................................................................................... 45
ACCEPTANCE AND CERTAINTY ............................................................................................................................................ 50
CONSIDERATION ....................................................................................................................................................................... 57
FORMALITIES AND ESTOPPEL ............................................................................................................................................. 61
CAPACITY AND PRIVITY ......................................................................................................................................................... 67
EXPRESS TERMS ....................................................................................................................................................................... 75
IMPLIED TERMS ....................................................................................................................................................................... 81
INTERPRETATION OF TERMS AND CONSTRUCTION .................................................................................................... 87
PERFORMANCE OF THE CONTRACT ............................................................................................................................... 103

























PAGE 2

LIST OF CASES

Intention to be
Legally Bound Rose and Frank Co v JK
Crompton and Bros Ltd
Balfour v Balfour
Cohen v Cohen
Merritt v Merritt
Riches v Hogben
Jones v Padavatton Todd v Nicol Wakeling v Ripley Roufos v Brewster Simpkins v Pays Rose & Frank v Crompton
Jones v Vernon's Pools
Esso Petroleum v Comm
Taxation
Edwards v Skywards
Banque Brussels Lambert
SA v Australian National
Industries LTD
Gate Gourmet Australia Pty
Ltd (In Liq) v Gate Gourmet
Holding AG


PAGE 3

Intend to be bound: clause which
indicated they weren't intending to
be bound by law
Presumption: there is no intention
in a domestic relationship
Presumption: there is no intention
in a domestic relationship
Presumption: separated couples
are more likely to have intention
Presumption: separated couples
are more likely to have intention
Domestic Relationship: there is no
intention between mother and
daughter
Domestic Relationship: widow
invites sister and niece of deceased
husband to live with her - there was
intention
Domestic Relationship: Invited
sister and brother--in--law to move to
Australia and live with him - there
was intention
Domestic Relationship: Son--in--law
helps out with business deliveries
and the goods were damaged en
route - there was intention
Domestic Relationship:
granddaughter and grandmother
and paying lodger lived together
paying rent and entered a
competition for which they paid 1/3
each. Granddaughter refused to pay intention to be bound
Honour Clauses
Honour Clauses
Puffery
Ex Gratia Payments
Letters of Comfort
Letters of Comfort Coogee Esplanade Surf
Motel v Cth
Administrator of PNG v
Leahy
Australian Woollen Mills v
Cth
Cameron v Hogan
Baldwin v Everingham
Finlayson v Carr Offer

Letters of Intent
Government contracts
Government contracts Voluntary Associations
Voluntary Associations
Voluntary Associations
Presumption: relationship with the
Ermogenous v Greek
Church is not business - no
Orthodox Church
intention - PRESUMPTIONS CAN BE
REBUTTED AND UNORTHODOX
Definition: a statement of the terms
upon which the offeror is prepared
Nielsen v Dysart Timbers
to be bound if acceptance is
Ltd
communicated while the offer
remains alive
Knowledge: parties must have
Fitch v Snedaker
knowledge of the offer, which has to
be communicated
Who: Offer can be made to the
world at large
Puffery: exaggeration which is not
Carlil v Carbolic Smoke Ball
intended to be taken seriously
Invitation to Treat: offer to receive
offers
Agreement: if parties have reached
Clarke v Dunraven
final agreement, there can be a
contract
Intention: it was a government
Australian Woollen Mills v
scheme to promote industry - no
Commonwealth
intention to be legally bound
Puffery: advertisement which
Mitchell v Valherie
exaggerated benefits of the goods -
not misrepresentation
Puffery: reasonable person would
Leonard v Pepsico
not interpret the ad as being factual
Information: request for
Harvey v Facey
information is not an offer or
acceptance
Information: request for
Stevenson Jaques & Co v
information is not an offer or
McLean
acceptance
Gibson v Manchester City
Invitation to Treat: invitations to
Council
treat are not offers
Advertisements: wine list sent out
Grainger and Sons v Gough
as an ad was an invitation to treat
PAGE 4

Shop Displays: invitations to treat
and not offers
Shop Displays: the display of a
Pharmaceutical Society v
product in a store with a price
Boots Cash Chemists
attached is not sufficient to be an
offer
Auctions with Reserve: the call for
Payne v Cave
bids is an invitation to treat
AGC (Advances) Ltd v
Auctions without Reserve: general
McWhirter
rule applies (call = invitation)
Internet Auctions: a binding
contract existed between the two
parties as the essential terms were
Smythe v Thomas
listed on eBay and it wasn't stated
that sale was subject to discussion
or negotiation (sale of a plane)
Pratt Contractors Ltd v
Tenders: the call for tenders is an
Palmerston North City
invitation to treat, but the
Council
submission is the offer
Tenders: the contract is awarded to
Harvela v Royal Trust
the highest fixed bid (bilateral
Company
contract)
Tender - Collateral Contract:
Hughes Aircraft Systems
information about the tender was
International v Airservices
passed to another party - breach of
Australia
a collateral/process contract
Tender - Collateral Contract:
Blackpool & Fylde Aero
tenders, and requests for tenders
Club v Blackpool Borough
are accompanied by a collateral
Council
contract which implies the bid will

be inspected
MacRobertson Miller
Ticket purchase (prior): Issue of
Airline Services v
the ticket = offer, and when the
Commissioner of State
passenger takes their seat =
Taxation (WA)
acceptance
Ticket purchase (automatic
Thornton v Shoe Lane
machine): display of the machine =
Parking
offer, money placed into the
machine = acceptance
Termination: an offer is terminated
Byrne v Van Tienhoven
if it is withdrawn, however
revocation must be communicated
Termination: termination of the
Dickinson v Dodds
offer can be in words or in conduct,
even by a third party
Termination (Option Contract):
Goldsborough Mort and Co
an offer can be revoked by the v Quinn
offeror before communication of
acceptance by offeree
Fisher v Bell


PAGE 5

Acceptance

Termination by Death: a contract
can still be performed if there is a
Carter v Hyde
personal element, or else the offer
will lapse
Termination through Condition
Failure: the signature of one co--
Neill v Hewens
vendor is not binding without the
signature of another - ALL parties
must sign
Rejection/ Revocation and
Unilateral Contracts: breached
Mobil Oil v Wellcome
contract with dealers - revocation
International
made it impossible for acceptance to
occur
Acceptance: must be as a response
Crowne v Clarke
to and as a result of the offer
Counter--Offer: a counter offer is
Hyde v Wrench
not acceptance
Standard Forms: Terms of the
Butler Machine Tool Co Ltd
buyer were different to the terms of v Ex--Cell--O--Corp (England)
the seller. Accepted as a counter
Ltd
offer as it wasn't the original terms
Subject to Contract: finality is
Master v Cameron
subject to another contract being
formed
Empirnall Holding v
Conduct: acceptance can be
Machon Paul Partners
conferred through conduct
Silence: acceptance is not valid if it
Felthouse v Bindley
is stipulated by silence
Postal Rule: acceptance arises as
Adams v Lindsell
soon as the letter is posted, NOT
recieved
Postal Rule: parties must have
Henthorn v Fraser
contemplated post would be means
of communication
Postal Rule Exception: parties
Bressan v Squires
must have stipulated actual receipt
of the acceptance letter
Postal Rule Exception:
Tallerman v Nathan's
circumstances of the case - where
Merchandise
negotiations are complex and highly
contentious
Instantaneous Communication:
Entores Ltd v Miles Far
general rule applies to telexes and
East
telephones, not the postal rule
Instantaneous Communication:
Brinkibon Ltd v Sahag
general rule applies to telexes and
Stahl
telephones not the postal rule

PAGE 6

Reese Bros Plastic Ltd v
Hamon--Sobelco Australia
Foley v Classique Coaches
Ltd Instantaneous Communication:
general rule applies to faxes
Completeness: need final
agreement on all essential terms
Completeness: parties/subject
matter and price need to be decided
Illusory Terms: A term can be
implied based on reasonableness
regarding the deferral of agreement
Completeness: Agreements to
agree or negotiate constitute an
incomplete contract
Certainty: A contract is only legally
enforceable if the terms are officially
agreed on and certain
Illusory Promises: If a promise
gives one party an unrestricted
discretion, the promise is illusory
Illusory Promises: if the promise
isn't illusory, the contract provides
information as to who should
determine important matters
Illusory Promises: If the promise
isn't illusory, the contract provides
an objective criteria for exercise of
discretion
Illusory Terms: Terms can be
implied based on an external
standard
Illusory Terms: Invalid terms can
be severed if the contract can
survive without it. Otherwise the
contract becomes void
Illusory Terms: If a term is for the
benefit of one party only, that party
can waive the term
Definition: Act, or promise of an act
which is done in return for a
promise
Move from the promise: To
enforce it, it must be paid for
Definition: Valuable consideration
must consist of some right, interest,
profit or benefit for one party, or a
forbearance of the other
Definition: Consideration must be
paid for to be enforceable
Hall v Busst Coal Cliff Collieries P/L v
Sijehama P/L
G Scammell and Nephew
Ltd v HC and JG Ouston
Placer Development Ltd v
Commonwealth
Godecke v Kirwan Meehan v Jones Hillas v Arcos Fitzgerald v Masters Whitlock v Brew
Consideration
Dunlop Pneumatic Tyre v
Selfridge and Co Currie v Misa Parastatidis v Kotaridis


PAGE 7

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