Notes Intention – SOCIAL OR DOMESTIC- do not intend to create legal relations. Balfour v Balfour (1912) Categories of rebuttal – The nature of the document (if drafted by solicitor) – Agreement may expressly state legal relations – Surrounding Circumstance may indicate intention Merritt v Merritt (1970) -Significant reliance on promise- consequences are sufficiently serious. Wakeling v Ripley (1951) – COMMERCIAL NATURE- do intend to create legal relations. Edwards v Skyways (1964) Rebutted- Rose & Frank Co v JR Crompton & Bros Ltd (1925) Letters of Comfort- State of current intentions for the future.
Provide Comfort, not assurance. (Kleinwort Benson Ltd v Malaysia Mining Corporation Berhad  Agreement- has been a valid offer and that it has been accepted. Manifestation by 2 or more persons to the substance of the contract. Would a reasonable person think an agreement had been entered. Can be shown by conduct. Does not have to be express words “I accept your offer” Offer: 1. Offers must be distinguished from an invitation to treat or request for information. – Intention to make offer- Carlill v Carbolic Smoke Balls Co. (1893) * Display of goods- Invitation to Treat. Pharmaceutical Society v Boots Cash Chemists. Request for info does not create offer- Harvey v Facey  2. Offers must be communicated to the person or persons for whom it was intended. 3. Offer can be made to particular person, persons or whole world. – smoke balls case. 4. Offers may terminate- Revocation- Dickinson v Dodds Revocation must be communicated. * Rejection: Offeree says no. * Counter-offer: offeree makes counter offer. Rejects original offer. Hyde v Wrench  * Lapse of Time- specified time, or reasonable lapse. Ramsgate Victoria Hotel Co Ltd v Montefiore  * Lapse by Death- Carter v Hyde Lapse by Failure of Condition: condition must happen before agreement becomes contract. Acceptance: 1. Acceptance must be in reliance on offer. R v Clarke (1927)- Tried to claim reward 2. Acceptance must be communicated- Silence is not acceptance. Felthouse v Bindley (1862) Postal Acceptance Rule: where acceptance by post is contemplated, acceptance occurs when letter is posted. Adams v Lindsell (1818) Communication of Acceptance- time an electronic communication is received is the time it enters an information system designated by the addressee to receive the info.
If none has been designated, the time is when it comes to addressee’s attention. 3. Acceptance with condition is not acceptance. Masters v Cameron. 4. Acceptance cannot be revoked- cannot change mind after accepting, unless offeror agrees to release from contract. CONSIDERATION No consideration means it’s a gift. Consideration cannot be vague, illegal or impossible. White v Bluett (1853) son promised to stop being a spoilt brat to his father. Consideration must move from the promisee, must do something in return for promise.
When acts are performed at the promisors request before any promise of payment is made a contract can exist if there was an implied understanding that complying with the request would be ultimately paid for. -“Past consideration is no consideration”, may be future or present, but not past. Roscorla v Thomas  Consideration must be sufficient, adequacy is subjective and for parties to decide. Chappell & Co Ltd v Nestle Co Ltd  Performing an existing duty is not sufficient consideration. If already legally obliged to do something, it cannot be offered as consideration. Stilk v Myric  crew members of boat.
Part Payment of Debt- not sufficient consideration unless something else is provided. Pinnel’s case. “payment of a lesser sum on the day in satisfaction of a greater, cannot be satisfaction for the whole, because it appears to the judges that by no possibility a lesser sum can be satisfaction to the plaintiff for a greater sum” Part payment is acceptable if- something else is provided. – if paid before the debt is due. – if paid in a different place or currency- if paid by a third party. – Hirachand Punamchand v Temple  GENUINE CONSENT If intention, agreement and consideration are present- prima facie contract.
Following will invalidate consent: Misrepresentation, Mistake, Unconscionability. 2 outcomes for a contract that lacks consent- Void contract: contract does not exist. Voidable Contract: innocent party has right to terminate. Misrepresentation- is a false statement that induces a contract. 3 categories- Innocent: cancel contract. Negligent: cancel contract damages available. Fraudulent: Cancel contract damages in deceit. Whittington v Sean-Hayne (1900) chook farmers- Innocent misrep. Derry v Peek (1889) fraudulent misrep. Mistakes- Common: Leaf v International Galleries. Mutual: Reasonable person.
Raffles v Wichelhaus (1864) Unilateral Mistake: Mistaken Identity- Boulton v Jones (1857) Nature of document- Petelin v Cullen (1975) One party, from within a limited class of people, signs a document which is fundamentally different to what they thought they were signing. UNCONSCIONABLE CONDUCT LAW- one party is at special disadvantage and the other takes unconscientious advantage of it. Commercial Bank of Australia Ltd v Amadio  bank loan. Special disadvantage- drunkness, sickness, illiteracy etc. Unconscientious advantage- stronger party taking advantage. Love- Louth v Diprose.
TERMS- determine whether term or representation. What would a reasonable person believe to be the parties’ intention in regard to the statement. Objective factors- Time lapse. Did statement maker indicate own efforts to verify accuracy. Importance of truth of statement. Special Skills? Was oral statement followed by written document that does not include statement. Dick Bentley Productions Ltd v Harold Smith Motors Ltd – car mileage. To determine if a statement is a term of contract- 1. Is the statement a term or representation? 2. If it is a term, is it admissible as part of the contract? 3.
If it is admissible is it a condition or warranty? Misrep and exclusion clause etc. If asked for advice on ANY terms look at implied terms aswell. Parole Evidence Rule: For a contract wholly in writing, other evidence is not allowed to add to, vary or contradict the written document. Whole document not whole of agreement. It operates to exlude any addition evidence that would alter the written document. -Van Den Esschert v Chappell - white ants in house, was part of contract. Collateral Contract is one where the consideration provided for the collateral promise to enter the main contrac- Del Lassalle v Guildford .
Drains in working order, was not true. To be enforced, must be promissory. (JJ Savage and Sons Pty Ltd v Blakney). Collateral promise must not be inconsistent with main contract. (Hoyt’s Pty Ltd v Spencer) Condition: essential term of the contract. Innocent party has option of termination. Associated Newspapers Ltd v Bancks (1951)- Ginger Meggs. Warranty: non-essential term that only allow for damages, contract remains valid. Bettini v Gye  Opera singer. Collateral promise is always a warranty. Implied Terms: By The Courts- Term must be – reasonable and equitable. necessary to give business efficacy to the contract so no term will be implied if the contract is efficient without it. -so obvious that it goes without saying. –capable of clear express. –must not contradict any express terms of the contract. Bournemouth & Boscombe Athletic FC v Manchester United. EXCLUSION CLAUSES- 1. The exclusion clause must be incorporated into part of the contract. 2. Must be interpreted to be wide enough to cover the legal breach. 3. The nature and extent must not have been misrepresented to the innocent party. (Curtis v Chemical Dry Cleaning Co) 4. Cannot exclude certain statutes. -Signature Rule- L’ Estrange v Graucob Ltd  Terms in a signed document will be part of the contract, regardless of whether they have been read. If no signed document go through reasonable notice factors: 1. Reasonable steps must be taken to bring the clause to the attention of the party. Causer v Browne . –did not take reasonable steps. Thompson v London, Midland & Scottish Railway Co . Railway took reasonable steps. 2. Notice must be before the contract is concluded. Olley v Marlborough Court Ltd - was not given notice. Thornton v Shoe Lane Parking Ltd  was given notice. . If Reasonable notice was not given, has the term been incorporated by prior dealings. Balmain New Ferry Co Ltd v Robertson. Had prior dealings. CLAUSE INTERPRETATION Contra Proferentum- states that a strict construction will be applied against the person seeking to rely on the clause. Any ambiguity will be read in favour of the injured party. White v John Warick & Co Ltd . Bought bike that broke. Was not liable under contract but was under negligence. —4 Corners Rule: states that only breaches within the normal operation of the contract are covered by the exclusion clause.
City of Sydney Council v West (1956). Car was stolen by taking customers parking ticket. Exclusion clause could not be implied. —Where the nature of extent of the clause is misrepresented, the clause is not effective, even when signed. Curtis v Chemical Cleaning & Dyeing Co company was liable. Clause cannot exclude some sections of TPA. REMEDIES- Termination : Right to terminate arises when a condition has been breached. Damages: place the injured party, so far as money can, in the same position as if the contract had been performed.
Specific Performance: court ordering the party who breached the contract to carry out their contractual obligations, unavailable if damages is an adequate remedy. Injunction: court order that prohibits a party either from doing an act, continuing to do an act or repeating an act. IMPLIED TERMS UNDER STATUTE. It is an implied condition that the seller has title to goods, and therefore the right to sell them (TPA s69) Can recover from someone you sells you stolen goods as don’t have title. S68 states implied terms in TPA can not be excluded by agreement. DESCRIPTION- Where goods are sold by description buyer relies on seller’s description) it is an implied condition that the goods will correspond with their description (TPA s70) Varley v Whipp  – Second hand reaper with more miles than described. Ashington Piggeries Ltd v Christopher Hill Ltd  Mink food, mink died but still mink food. MERCHENTABLE QUALITY- implied condition that the goods will be of a merchantable quality (TPA s 71) FITNESS FOR PURPOSE- a buyer explicitly or impliedly makes known their purpose for a particular product, and the seller’s judgment is relied on, there is an implied condition that the goods are reasonably fit for their purpose. TPA s17) SERVICES- is an implied warranty that services will be rendered with due care and skill and any materials supplied in connection with that service will be fit for purpose (TPA s74) Take action against manufacturer. –s74B- Fitness for Purpose. –s74C Correspondence with description. S74D Merchantable Quality. S74 E- Sale by sample. S74F must ensure there is a reasonable availability of repair facilities and spare parts. S74G Failing to comply with an express warranty about the goods. If retailer is sued, could seek indemnity from manufacturer if the problem is their fault. (s74H)
Manufacturers and importers liable for -defective products- means that the safey of the product is not to the level that generally expected. (S75AC) Manufacturers are liable for defective goods that cause injury (s75AD), to third parties (s75AE), to personal/household domestic goods (s75AF) and to land/buildings (s75AG). Misleading or deceptive conduct- TPAs52 a corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive, or is like to mislead or deceive. Disclaimers and fine print- should be prominent enough to form part of the audience’s overall impression of the advertisement.
Remedies- court may order damages under s82 or injunction under s80 Unconscionable Conduct- TPAs51AA – a corporation must not, in trade or commerce, engage in conduct that is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories. Does not apply if covered by s51AC unconscionable conduct in business transactions. Company must not be unfair when it makes deals with any person or non publicly listed company. S51AB- supply of goods or services to consumers. Are the terms or the contract reasonably necessary to protect the legitimate interests of the corporation?
Any undue influence, pressure or unfair tactics were used. ACCC v Lux Pty Ltd . TORTS Negligence- Test: The def. owes a duty of care to the pl. – The def. breaches that duty. – The breach causes recognized damage to the pl. – The def. has no defences. 1. Duty of Care- Occupirers owe a duty of care to invited visitors. (Australian Safeway Stores v Zalunza) Donoghue v Stevenson  snail in drink. Prove duty of care- precedent eg. Doctor/patient, solicitor/client, teacher/student, parent/ child, land/entrants. Manufacturers owe a duty of care to consumers.
Neighbour principle. Hackshaw v Shaw (1984)- occupier/entrant, farmer that shot at car. Did owe duty of care. If novel case- Reasonable Foreseeability- would a reasonable person have foreseen that the pl. may suffer harm as a result of def. actions. Chapman v Hearse – car overturned, doctor died trying to help. Duty was owed. Hay v Young  pl. tried to sue cyclist who ran into tram. Was not reasonably foreseeable that she would be injured from this. Salient Features- Vulnerability of the pl. (can they protect themselves from harm? Perre v Apand Pty Ltd (1999) * what level of control over the situation does the def. have? 2. Breach of Duty- A person must show the standard of care of a reasonable person in the circumstances. No breach unless- 1. The risk was foreseeable (section 9(1)(a). 2. The risk was not insignificant (section 9(1)(b). 3. A reasonable person in the position of the def. would have taken the precautions against the risk of harm (section 9(1)(c) The court considers these factors (section 9(2)- The probability that the harm would occur if care were not taken. – The likely seriousness of harm. The burden of taking precautions to avoid the risk of harm. – the social utility of the activity that creates the risk of harm. Professionals have a higher standard of care. 3. Damage- Causation- CLA s11. 1) the breach of duty was a necessary condition of the occurrence of the harm (factual causation) 2) It is appropriate for the scope of liability of the person in breach to extend to the harm so caused (scope of liability) – specific damage must be foreseeable. The Wagon Mound (no1) Novus Actus Interveniens- something not foreseeable happens that breaks the chain of causation.
Yates v Jones (1990) 4. Defences- 2 defences to negligence- Voluntary assumption of risk. – Contributory Negligence. Voluntary assumption of risk- complete defence. (Insurance Commissioner v Joyce) Must prove the pl. – was fully aware of the specific risk. And- freely consented to it. CLA ss13-19- obvious risk. Ie. A risk that would have been obvious to a reasonable person in the position of the pl. Includes risks that have low chance of occurring. Does not include the risk that the defendant has not properly maintained something. s13) S14- a person is presumed to be aware of an obvious risk unless they can prove otherwise. Contributory Negligence- The plaintiff was negligent in looking after their own interests. CLA S23 states that the same factors apply to the pl. as for the normal standard of care in s9 for the defendant. . S47 creates a presumption of CN if a person is injured while intoxicated (damages are reduced by 25%) and s48 creates a presumption of CN if a person was injured while relying on the skill of someone known to be intoxicated. (Joslyn v Berryman)
VICARIOUS LIABILITY – person is liable for another’s negligence. – Employee/ employer relationship. Test: Does the employer have the right to exercise control over not only what the employee does but also the manner in which the employee does it. (Hollis v Vabu Pty Ltd (2001)) – bicycle courier who knocked someone over. In the course of employment: employee acts in the course of employment when performing tasks that he or she was employed to do or are related to employment. Century Insurance v Northern Ireland Road Transport Board petrol tanker exploded after dude lit a cigarette.
Not liable for actions unrelated to employment. Deatons Pty Ltd v Flew (1949) NEGLIGENT MISSATEMENT – can be sought whether there has been a contract or not. L Shaddock & Associates Pty Ltd v Parramatta City Council (1981) road widening. How to establish duty of care- is it reasonably foreseeable that a failure to take care could cause the type of harm (pure economic loss) to the type of defendant? Salient Features- Reasonable reliance- special skills of the advisor. –how was the advice given. – length of relationship between parties. whether a reasonable person would rely solely on the advice. Assumption of Responsibility- did the advisor hold themselves out as an expert? –did the advisor encourage reliance? This proves duty of care was owed. Still need to go through Breach (s9), Causation( s11) , Defences (ss 13, 14, 23, 47, 48). LIABILITY TO 3RD PARTIES. – the advisor must know or ought to reasonably know that the info given would be communicated to the specific third party, and – the advice would be very likely to lead that third party to enter into a transaction.