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Flowchart for Contract Law

Flowchart for Contract Law

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Published by Simon James

Flowchart for contracts

Flowchart for contracts

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Published by: Simon James on Jan 31, 2013
Copyright:Attribution Non-commercial


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Performance & Breach
Termination by AgreementFailure of Contingent ConditionTermination for BreachTermination for RepudiationTermination for Delay
(Need to choose one)
Damages(available for everybreach of contactunless contractexcludes damages)
UnliquidatedLiquidatedExpress term, Subsequent Agreement, Implied AgreementOrder, standard,and method of performanceContingent condition/condition Anticipatory Breach/actual breachNotice to completeElecting to Terminate Affirmation
Restrictions on Termination
Election, estoppels, and waiver 
Specified amount claimed
No s
pecified amount claimed**placed in the same position if thecontract had been properly formed**
Cannot recover more then what you lost 
Not to prove:
He/she suffered loss or damage and the extent of the loss or damage;
the loss or damage was caused by the defendant’sbreach; and
the loss or damage was not too remoteExceptions:
Plaintiff can claim damages for mental suffering,anxiety, injured feelings, and disappointment – if physical hurt due to the defendants breach
Plaintiff can recover damages for mental sufferingwhen a plaintiff has sustained
 physical inconvenience
due to the defendants breach
Plaintiff can recover damages for distress, vexation(annoyance) and frustration where the
very object of the contract 
has been to provide pleasure,relaxation or freedom from molestation.
***Civil Liability Act 2002 
Loss of Reputation
e.g. applies to actors etc
Loss of Use of Money
Reliance damage
e..g put in money expecting to lossmoney to make money
Diminished Value OR Reinstatement Costs for Defective Building Work?
Net loss only recoverable
 – 1
limb (flowed naturally) and 2
limb(defendant had knowledge)
Duty to Mitigate
– once a contract is breach - Thismeans that the plaintiff must take reasonable steps tokeep loss to a minimum and do nothing to inflate theloss.
Contributory Negligence
Law Reform (MiscellaneousProvisions) Act 1965 
(NSW) e.g. doctor patent
Date for Assessment
– damage assessed date of breach
The ‘once and for all’ rule
– asses damage and put thelump sim through
Damages difficult to assess –
still can put a claimthrough
Agreed Damages Clauses
, if amount specified to high willbe a
Penalty clause
Accelerated Payment Clauses
– if you’re late with paymentneed to pay whole sum straight away.
Actions for Debt
Recovery of Debt after Termination
Exceptions to Exact Performance
Severable or Divisible Contracts e.g. contract for a year but paid weekly
De Minimus Non Curat Lex (the law is not concernedwith small things)
Substantial Performance – don’t enough to be paid for the part you have done
Partial Performance or Implied Contract – paid in a prorata way
Recovery of deposits
Recovery of Debt Following Affirmation
Do not need to provethe elements in agreeddamages clause
Common law remedy for contract breach is damages
Injunctive Relief Prohibitory InjunctionsMandatory Injunctions/Specific PerformanceThe requirements for an award of injunctive relief:1.Valuable consideration2.Enforceable contract3.Inadequacy of Damages4.Breach of Contract5.The defendant must be within the jurisdiction of the court
MisrepresentationMisleading & Deceptive Conduct
*** make sure you look at statueThe Australian Consumer Law
:1.Was a false statement (representation) made? – Silence not false/vitiatingrelationships2.Was the false statement one of fact? – is it puffery or fact/negotiations
 3.Was the false statement addressed to the party misled? Statement is reasonbale...4.Was the false statement intended to induce entry into the contract, and did it soinduce entry into the contract?
Type of Misrepresentation:
Fraudulent – rescind contractNegligent - tortInnocent – only remedy rescissionRemedies:Whether they chose to affirm or rescind the contractSection 29 to 37Elements of section 181.Conduct2.In trade or commerce3.Misleading or likely to misleadREMDEIES – SEE PAGE 36In answering a question on misrepresentation you need to first assess whether a false representation was actually made – i.e. that it went beyondbeing a puff, that it was a false statement of fact, addressed to the party misled, and intended to induce entry into the contract.Then you need to assess what category of misrepresentation the statement falls into. This will then guide you to the appropriate remedy that appliesto the case – e.g. damages in tort for fraudulent and negligent misrepresentation, and rescission of the contract. Remember that there arerestrictions placed upon rescission of the contract, especially in the case of innocent misrepresentation where equitable damages are not availableto supplement rescission in the case that precise
restitutio in integrum
cannot be achieved. We will explore this in depth in Week 10.This can be seen in the following summary of established principles in relation to establishingmisleading or deceptive conduct:1)
Question of fact 
: it is a question of fact whether the conduct in question was misleading;2)
Positive conduct 
: most examples of misleading conduct in the context of contract negotiationstake the form of express or implied representations which hare both factual and false;3)
: although, generally, silence will not be misleading conduct, silence may be conductin a broader range of cases than under the general law of misrepresentation;4)
Burden of proof 
: the burden is on the party alleging misleading conduct to prove both theconduct and the reliance; and
if the conduct alleged to be misleading was a representation which by its naturewas calculated to induce the representee to contract, and the representee entered into acontract, reliance will be inferred.
On McHugh’s reasoning, weFundamental elements are1. Pressure2. Inducing contract3. Illegitimacy of the pressure.There may be other specific issues we can raise to assist us in identifying duress:1. Pressurea. Threats of violenceb. Death threatsc. Threats of imprisonmenti. These can be against the party or someone elsed. Threats to detain goods owned by the partye. Threats to destroy or damage goods owned by the partyf. Threats to breach contract with the other party2. Inducing the party contracta. This may be the sole reasonb. It may be one of several reasonsc. It must be an operative reasond. If the threat is to breach a contract, the innocent party must not be able to follow a reasonable legal alternative such as courtproceedings or arbitration3. Illegitimacy of Pressurea. The pressure is illegalb. The pressure is unlawfulc. The pressure amounts to unconscionable conductd. The pressure is knowingly made without lawful claim.
Duress [stranger]Illegitimate pressureDuress to the personDuress to goodsEconomic duress

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