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
Police/law
and
order/criminal
Immigration/Customs
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
Dele
gate
d
Legi
slati
on
D
eleg
ated
or
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
5-180
5-200
6
5-230
7
5-310
8
5-270
5
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
5-260
10
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
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
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
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
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
18
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
20
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
22