LAW2102

CONTRACT B
SEMESTER 2, 2014

READING GUIDE
IMPORTANT NOTES:

Required Texts (see Unit Guide):

1. Paterson, Robertson & Duke, Contract: Cases and Materials, 12th ed, LBC, 2012
(Casebook).
2. Paterson, Robertson & Duke, Principles of Contract Law, 4th ed, LBC, 2012 (Textbook).
3. Legislation Pack (containing extracted legislation).
A package of the casebook and the textbook is available from Legibook, and there may be a
package discount for buying the two. Digital bundles and physical+digital combos are also
available and should be considered if the weight of the physical books is a deterrent to
bringing them to class.
The Legislation Pack will be available for download from the Units Moodle site, and a copy
will be made available to you (with the Reading Guide) in the closed book exam.

Recommended text(s) and readings i.e. you may find them useful:
1. Carter, Carters Guide to Australian Contract Law, 2nd ed, LexisNexis (2010).
2. Seddon, Bigwood & Ellinghaus, Cheshire and Fifoots Law of Contract, 10th
Australian ed, LexisNexis (2012).

**NOTES FOR USING THIS READING GUIDE**

1. This Reading Guide should be read in conjunction with the Contract B Unit Guide
2014.
2. Most cases on this reading guide are extracted in the Casebook. The remainder of the
cases are discussed in the recommended textbook or are available online. These cases
are marked with the symbol #.
3. The Competition and Consumer Act 2010 (CCA) was previously known as the Trade
Practices Act 1974 (Cth), and many of the cases listed in the Reading Guide still refer
to the latter. Students are expected to cite the current provisions in the exam and
understand the equivalencies between the old and new provision numbers.
4. A copy of this reading guide will be provided to you in the closed-book exam. You
must not take your own copy into the examination hall.

WEEK ONE
TERMINATION
TERMINATION BY AGREEMENT
TERMINATION UNDER THE ORIGINAL CONTRACT

551

Crawford Fitting Co v Sydney Valve & Fittings Pty Ltd (1988) 14 552
NSWLR 438
TERMINATION BY SUBSEQUENT AGREEMENT

556

TERMINATION FOR BREACH

583

RIGHTS CONFERRED BY THE COMMON LAW

583

WHAT CONSTITUTES A BREACH OF CONTRACT?

583

WHEN IS THERE A RIGHT TO TERMINATE FOR BREACH AT COMMON 584

LAW?
TERMINATION FOR BREACH OF A CONDITION

584

Arcos v Ronaasen [1933] AC 470

L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235

Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd (1938) 61 CLR 585
286
Associated Newspapers Ltd v Bancks (1951) 83 CLR 322
TERMINATION FOR BREACH OF AN INTERMEDIATE TERM

590
592

Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 593
QB 26
Ankar Pty Ltd v National Westminster Finance (Aust) Ltd (1987) 162 597
CLR 549
Koomphahtoo Local Aboriginal Land Council v Sanpine (2007) 233 CLR 601
115

WEEK TWO
TERMINATION (CONTINUED)
TERMINATION FOR REPUDIATION

607

THE CONCEPT OF REPUDIATION

607

CONDUCT AMOUNTING TO A REPUDIATION

608

Express statements

608

Repudiation based on words or conduct

609

Conduct showing an inability or unwillingness to perform

Carr v J A Berriman Pty Ltd (1953) 89 CLR 327
Repudiation inferred from a combination of events

609
609
612

Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 612
CLR 17
Instalment Contracts

619

Goods Act 1958 (Vic) s 38(2)

Maple Flock Co Ltd v Universal Furniture Products [1934] 1 KB 619
148
Evincing an intention not to be bound
Shevill v Builders Licensing Board (1982) 149 CLR 620
Erroneous Interpretation of Contract

801
621

DTR Nominees v Mona Homes (1978) 138 CLR 423

621

Woodar Investment Devt v Wimpey Constructions 1980 1 WLR 227

623

Eminence Property Developments Ltd v Heaney [2010] EWCA Civ 1168

TERMINATION FOR DELAY

625

WHY A SEPARATE ANALYSIS?

625

AT WHAT TIME IS PERFORMANCE REQUIRED?

625

WHERE TIME IS OF THE ESSENCE

625

WHERE TIME IS NOT OF THE ESSENCE

626

Goods Act 1958 (Vic) s 15

Property Law Act 1958 (Vic) s 41
3

NOTICE

626

Louinder v Leis (1982) 149 CLR 509

627

Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 633
CLR 623

WEEK THREE
CONSEQUENCES OF AFFIRMATION OR TERMINATION

643

RIGHT TO ELECT

643

WHERE THE CONTRACT IS AFFIRMED

643

Bowes v Chaleyer (1923) 32 CLR 159

WHERE THE CONTRACT IS TERMINATED
McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457

644
647
832

RESTRICTIONS ON THE RIGHT TO TERMINATE

649

ELECTION

663

Carr v J A Berriman Pty Ltd (1953) 89 CLR 327

609

Tropical Traders Ltd v Goonan (1964) 111 CLR 41

663

Immer (No 145) v Uniting Church in Australia Property Trust (NSW) 666
(1992) 182 CLR 26
READINESS AND WILLINGNESS

649

Foran v Wight (1989) 168 CLR 385

650

ESTOPPEL

670

Legione v Hateley (1983) 152 CLR 406

RELIEF AGAINST FORFEITURE

681
680

Legione v Hateley (1983) 152 CLR 406

681

Union Eagle Ltd v Golden Achievement Ltd [1997] AC 514

Tanwar Enterprises Pty Limited v Cauchi (2003) 217 CLR 315

695

WAIVER

670

Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570

670

WEEK FOUR
REMEDIES FOR BREACH
THE MEASURE OF DAMAGES

709

THE COMPENSATION PRINCIPLE

709

Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64

EXPECTATION DAMAGES

710
734

Bellgrove v Eldridge (1954) 90 CLR 613

734

Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272

737

Ruxley Electronics and Construction Ltd v Forsyth [1996] AC 344

RELIANCE DAMAGES
McRae v Commonwealth Disposals Commission (1951) 84 CLR 377

Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64

710

DAMAGES FOR LOSS OF A CHANCE

744

Chaplin v Hicks [1911] 2 KB 786

LIMITATIONS ON THE AWARD OF DAMAGES

759

CAUSATION

759

Alexander v Cambridge Credit Corp Ltd (1987) 9 NSWLR 310

760

March v E & MH Stramare Pty Ltd (1991) 171 CLR 506

REMOTENESS OF DAMAGE

759

Hadley v Baxendale (1854) 9 Ex 341

Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB #

528
Alexander v Cambridge Credit Corp Ltd (1987) 9 NSWLR 310
MITIGATION OF DAMAGE

760
781

Burns v MAN Automotive (Aust) (1986) 161 CLR 653

781

Simonius Vischer & Co v Holt Thompson [1979] 2 NSWLR 322

787

LIMITATIONS RELATING TO SPECIFIC TYPES OF CLAIM

Disappointment, distress, loss of reputation
6

789
789

Baltic Shipping Co v Dillon (1991) 22 NSWLR 1

Loss of bargain damages and termination under a term
Shevill v Builders Licensing Board (1982) 149 CLR 620

790
800
801

Gumland Propety Holdings Ltd v Duffy Bros Ltd (2008) 234 CLR 804
237

WEEK FIVE
REMEDIES FOR BREACH (CONTINUED)
LIQUIDATED DAMAGES AND PENALTIES

805

THE RULE AGAINST PENALTIES

805

WHEN DOES THE RULE APPLY?

Andrews v ANZ Bank [2012] HCA 30, (2012) 290 ALR 595

DISTINGUISHING LIQUIDATED DAMAGES CLAUSES FROM PENALTY 806

CLAUSES
Is the clause a genuine pre-estimate of loss?

806

Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd [1915] #
AC 79
Ringrow v BP Australia (2005) 224 CLR 656

814

Zachariadis v Allforks Australia Pty Ltd [2009] VSCA 258

SPECIFIC PERFORMANCE AND INJUNCTIONS

845

SPECIFIC PERFORMANCE

845

Dougan v Ley (1946) 71 CLR 142

845

INJUNCTIONS

854

Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337

DAMAGES UNDER LORD CAIRNS ACT

854
860

Supreme Court Act 1986 (Vic), s 38

860

JC Williamson Ltd v Lukey & Mulholland (1931) 45 CLR 282

860

WEEK SIX
REMEDIES FOR BREACH (CONTINUED)
ACTIONS FOR DEBT

821

DEBTS AND LIQUIDATED SUMS

821

REQUIREMENTS OF AN ACTION FOR DEBT

821

Entire obligations and divisible obligations

822

Cutter v Powell (1795) 6 Term Rep 320; 101 ER 573

Steele v Tardiani (1946) 72 CLR 386

822

Legislation
Supreme Court Act 1986 (Vic), ss 53-54
Nemeth v Bayswater Road Pty Ltd [1988] 2 Qd R 406
Substantial performance

826
827

Hoenig v Isaacs [1952] 2 All ER 176

827

Bolton v Mahadeva [1972] 1 WLR 1009

830

Payment independent of performance

832

McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457

Deposits

832
835

Bot v Ristevski [1981] VR 120

835

Property Law Act 1958 (Vic) s 49

MITIGATION AND THE ACTION FOR DEBT
White and Carter (Councils) Ltd v McGregor [1962] AC 413

838
#

Clea Shipping Corp v Bulk Oil International Ltd (The Alaskan Trader) 838
(No 2) [1983] 2 Lloyds Rep 646

WEEK SEVEN
FRUSTRATION
FRUSTRATION AS AN EXCUSE FOR NON-PERFORMANCE

507

WHEN IS A CONTRACT FRUSTRATED?

507

The test for frustration

507

Davis Contractors Ltd v Fareham Urban DC [1956] AC 696

Illustrations

#
507

Destruction of subject matter

508

Taylor v Caldwell (1863) 3 B & S 826

Disappearance of the basis of the contract

508
510

Krell v Henry [1903] 2 KB 740

510

Herne Bay Steamboat Co v Hutton [1903] 2 KB 683

Brisbane City Council v Group Projects Pty Ltd (1979) 145 CLR 512
143
State of affairs essential to performance

515

Codelfa Construction Pty Ltd v State Rail Authority of New South 515
Wales (1982) 149 CLR 337.
Tsakiroglou & Co Ltd v Noblee Thorl GmbH [1962] AC 93

Illegality
Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd #
[1943] AC 32.
LIMITATIONS ON THE DOCTRINE OF FRUSTRATION

530

THE CONSEQUENCES OF FRUSTRATION

531

Common Law

531
Cutter v Powell (1795) 6 Term Rep 320; 101 ER 573

Chandler v Webster [1904] 1 KB 493

Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd 323

[1943] AC 32
Statute: Australian Consumer Law and Fair Trading Act 2012 (Vic) ss 35-44

10

531

WEEK EIGHT
VITIATING
CONDUCT

FACTORS:

MISLEADING

OR

DECEPTIVE 937

RELEVANT PROVISIONS IN THE COMPETITION AND

CONSUMER ACT 2010 (CCA) AND TRADE PRACTICES ACT 1974
s 18 of Schedule 2 (Australian Consumer Law) of the CCA
(previously known as s 52 of the Trade Practices Act 1974 (Cth); s 9
of the Fair Trading Act 1999 (Vic))
s 4 of Schedule 2 (Australian Consumer Law) (previously known
as s 51A of the Trade Practices Act 1974 (Cth); s 4 of the Fair
Trading Act 1999 (Vic))

THE TRADE OR COMMERCE LIMITATION

Concrete Constructions (NWS) v Nelson (1990) 169 CLR 594
THE RELEVANT AUDIENCE

939
939
946

Campomar Sociedad Limitada v Nike International (2000) 202 946

CLR 45
Butcher v Lachlan Elder Realty (2004) 218 CLR 592
MISLEADING CONDUCT

950
963

Silence
Miller & Associates Insurance Broking v BMW Australia Finance 964
(2010) 241 CLR 357
Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31

971

Representations about future matters

976

Promises

977

Futuretronics International Pty Ltd v Gadzhis [1992] 2 VR 217

EXCLUSION CLAUSES AND DISCLAIMERS

981
1036

Byers v Dorotea Pty Ltd (1986) 69 ALR 715

1037

Butcher v Lachlan Elder Realty (2004) 218 CLR 592

950

11

WEEK NINE
VITIATING FACTORS: ABUSE OF POWER
DURESS

1043

BASIC ELEMENTS OF DURESS

Universe Tankships of Monrovia v International Transport Workers 1044
Federation [1983] 1 AC 366
ECONOMIC DURESS

1054

Crescendo Management Pty Ltd v Westpac Banking Corp (1988) 19 #

NSWLR 40, 45
UNDUE INFLUENCE

1057

RELATIONSHIPS OF INFLUENCE

1057

Johnson v Buttress (1936) 56 CLR 113

REBUTTING THE PRESUMPTION

1058
1061

Westmelton (Vic) Pty Ltd v Archer and Schulman [1982] VR 305

1062

UNCONSCIONABLE DEALING

1067

BASIC ELEMENTS AND BACKGROUND

1067

MODERN APPLICATIONS

1067

Drunkenness and mental disorder

1067

Blomley v Ryan (1956) 99 CLR 362

1067

Lack of knowledge and education

1071

Commercial Bank of Australia v Amadio (1983) 51 CLR 447

Emotional dependence

1071
1081

Louth v Diprose (1992) 175 CLR 621

1081

Mackintosh v Johnson [2013] VSCA 10

Bridgewater v Leahy (1998) 194 CLR 457

1087

Gambling addiction?
Kakavas v Crown Melbourne Ltd [2013] HCA 25

12

WEEK TEN
VITIATING FACTORS: ABUSE OF POWER (CONTINUED)
IMPROPRIETY BY THIRD PARTIES

1097

THREE-PARTY SITUATIONS

1097

THE RULE IN YERKEY V JONES

1097

Yerkey v Jones (1939) 63 CLR 649

Garcia v National Australia Bank Ltd (1998) 194 CLR 395

1098

UNCONSCIONABLE CONDUCT UNDER STATUTE

1111

RELEVANT PROVISIONS IN THE COMPETITION AND

CONSUMER ACT 2010 (CCA) AND TRADE PRACTICES ACT 1974
Part 2-2 of the Australian Consumer Law

1111

Note: Pre-2011 equivalents were part IVA of the Trade Practices

Act 1974 (Cth); Sections 7-8B of the Fair Trading Act 1999 (Vic)
s 20 of the Australian Consumer Law
ss 21 and 22 of the Australian Consumer Law [Note that ss 21
and 22 will not be examinable]
THE MEANING OF UNCONSCIONABLE CONDUCT
ACCC v CG Berbatis Holdings Pty Ltd (2003) 214 CLR 51

13

1112
1112

WEEK ELEVEN
REMEDIES FOR VITIATING FACTORS UNDER THE UNWRITTEN
LAW: RESCISSION
RESTITUTIO IN INTEGRUM

1129

Alati v Kruger (1955) 94 CLR 216

1130

Vadasz v Pioneer Concrete (SA) Pty Ltd (1995) 184 CLR 102

1136

BARS TO RESCISSION

1140

Hartigan v International Society for Krishna Consciousness Inc [2002] #

NSWSC 810
REMEDIES FOR VITIATING FACTORS UNDER STATUTE
RELEVANT PROVISIONS IN THE COMPETITION AND CONSUMER ACT
2010 (CCA) AND TRADE PRACTICES ACT 1974
s 236 of Schedule 2 (Australian Consumer Law) of the CCA (previously
known as s 82 of the Trade Practices Act 1974 (Cth); s 159 of the Fair
Trading Act 1999 (Vic))
ss 237-245 of Schedule 2 (Australian Consumer Law) of the CCA
(previously known as s 87 of the Trade Practices Act 1974 (Cth); s 158 of
the Fair Trading Act 1999 (Vic))

Damages under s 236

992

Tort analogy

993

Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1
Contract analogy: expectation loss

993
1001

Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388

1001

Orders under s 237

1007

Loss or likely loss

1008

Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494

Discretion

1008
1016

Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 39 FCR 1016
546
CAUSATION

1024

Henville v Walker (2001) 206 CLR 459

14

1025

15

WEEK TWELVE
REVISION

In week 12, students have an opportunity to discuss the 2013 Contract B exam questions,
which will be posted on the Units Moodle site. It will be a discussion among students
facilitated by the lecturer. The lecturer will not provide a model answer. It is highly
recommended that you write a full answer to the 2013 exam questions under exam-style
conditions. Give yourself 30 minutes reading time (during which you should be
identifying the relevant issues, thinking about the relevant case law and so on) and then
spend 2 hours writing out an answer to the exam as if you were in the examination hall.
This approach will provide valuable law exam practice and allow you to identify areas in
which you could benefit from additional revision.

16