Contr

actLawNotes
Cont
ract
s‘A’
Of
fer Page9

- Bi
lat eralcontr
acts
- Unilateralcontr
acts
- Offer stothepubli
catl
arge

Whati
sanoffer? Page9
- Merepuf f
- Supplyofinf
ormat
ion
- Inv
itat
iontotr
eat

Cat
egor
izi
ngt ransact i
ons Page10
- Advertisement s
a)Adv er t
isementsinacatal
ogueoracur
ricul
ar
b)Adv er t
isementsinnewspaper
sormagazines
c)Adv er t
isementsappeari
ngonthei
nter
net
d)Di splayofgoods
- Auctions
a)Adv er t
isementofaucti
on
b)Auct ionswithreserv
es
c)Auct ionswithoutareserv
e
- Tender i
ng
- Standingof fers
 Opt ions

Communi
cat
ionofanof
fer Page12

Ter
minat
ionofanof f
er Page13
- Anof f
ermaybet er
minatedby
a)Rev ocati
onbyt heoff
eror
b)Rejectedbyt heoff
eree
c)Lapseoft ime
d)Failureofaconditi
onsubjectt
owhi
cht
he
of
ferwasmade
e)Deat h

Accept
ance Page14

Requi
rement
sofaccept
ance Page14

Accept
ancemustcorr
espondtoof
fer Page14
- Off
ereemusthaveknowl
edgeofandacti
nrel
i
ance
toanoff
er

1
 - Acounteroff
eri
snotaccept
ance - Bre
- Accept
ancemustbeunquali
fi
ed akd
- Mereenquir
ydoesnotconst
it
uteaccept
ance ow
nof
Not
if
icati
ontot heoffereroft hef actofaccept ance me
- Met hodofaccept ance cha
a)Met hodofaccept ancest ipul
atedbyof f
er ni
s
b)Accept ancebysi lence m
c)Accept ancebyconduct to
- I nst
antaneouscommuni cation:Acceptancemustbe co
communi cated mpl
a)Gener alrule ete
b)Meani ngofi nst antaneouscommuni cat
ion
- Post al
accept ancer ule
a)St at
ementoft her ul e
b)Pol i
cybehi ndt her ule
c)Towhatcommuni cat iondoesther ul
eextend Page16
d)Wher eist her uledi splaced
e)Rev ocationofaccept ancepri
ortor ecei
pt

Accept
anceinunilat
eral
contracts
- Acceptancecommonl ybyconduct
- Withdr
awal ofanoff
eraf t
eraccept
ancehas
commenced

Whomayacceptanof
fer
?

Contr
actformati
on:ti
meandpl
ace
- Inst
antaneouscommuni
cat
ion
- Post

Cer
tai
ntyandCompl
eteness
Page18
St
atementoft
herul
e
- Facetstot
hepri
nci
pal

Ambi
guit
yanduncer
tai
nti
es Page18
- Indi
vi
dualt
erms
- Agreement
stonegoti
ate Page19

Sav
ingambiguous,uncertainormeaningl
esst
erms
- Linktoexternalstandard
- Linktoreasonablenessstandard Page19
- Severance
- Waiverorremov al ofcer
tai
nty Page20

I
ncompl
eteagr
eement
- Agreementcont
ainsmechanism t
ocompl et
e Page20
a)Refer
encetoat hi
rdpart
y
b)Discr
eti
onretai
nedbycontract
ingpart
y

2
Page21 Cir
cumst a
nces
i
ndicati
ng
absence
ofint
ent
- Hon
Page22 our
cl
a
use
- Pr o
mot
Sav
ingi
ncompl eteagr eement s i
on
- Incomplet i
onoft erms al
- Fail
uretospeci fyapr ice puff
a)Cont ractsi l
entonpr ice and
b)Cont ractpr ovidesf orpartiestoagreeinthe fr
ee
future gi
f t
c)Cont ractmakepr ovisionsf ormechanism t
o s
compl ete - Ex
d)Cont ractpr ovidesf orpay mentofar easonabl
e grat
price i
a
- Subjecttoagr eement s pay
 Subj ecttof inanceagr eement s me
a)Sat isfactor yfi
nance nts
b)St epst obet akent oobt ai
nfi
nance and
 Subj ecttocont ract wit
hou
t
I
ntent
iont
ocr
eat
elegal
rel
ati
ons prej
udi
St
atementofr
ule ce
offe
Domest
icandsocialrelati
onships rs
- Presumpti
on - Let t
- Rebutt
ingthepr esumpt i
on er
a)Husbandandwi fe of
b)Separ atedhusbandandwife co
c)Otherf ami l
yrel
ati
onshi
ps mf o
d)Social r
elati
onships rt
- Let t
Commer
cialagreement er
- Presumption of
- Rebutti
ngthepresumpt
ion i
nte
nt
Gov
ernmentact
ivi
ti
es and
- Commer ci
alagr
eement
s und
- Poli
cyini
ti
ati
ves erst
and
Vol
unt
aryassoci
ati
ons i
ng

3
Consi
der
ati
on Page32

Natur
eofconsi
der
ati
on Page32
- Consi
der
ati
oninbi
l
ater
alcont
ract
s
Page23 - Con
si
d
erat
i
on
i
n
unil
ater
al
con
tr
ac
ts
- Exe
cut
ed
and
exe
Page27 cut
ory
Page27 con
si
d
Page27 erat
i
on

Rules
governing
consi
der at
i
on
- Con
Page29 sid
erat
i
on
mu
Page30 st
mo
ve
fro
Page30 m
the
Page30 pro
mi s
ee
a)B
e
n

4
 efi
tneednotmov et othepr omisor
b)Joi ntpr omises Page33
c)Ov erlapwi thDoctrineofpr iv i
ty
- Considerati
onmustbebar gainedf or
- Considerati
onmustbesuf fi
cient
a)Gener alpri
ncipal
b)Consi der at
ionneednotbeadequat e
c)Consi der at
ioncanbenomi nal
- Considerati
onmustnotbepast
a)Gener alpri
ncipal
b)Pastconsi derati
ondi stinguishedfr
om
execut edconsideration

Consi
derat
ionandf
ormal
agr
eement
s
- Deeds

Consider
ation:speci f
icexampl es Page35
- Mor alconsi derati
on
- Performanceofexi st
ingduties
a)Per formanceofexi st
ingcont ractualduti
es
Page35
b)Per formanceofapubl i
cdut y
c)Wher epr omiseismadet oat hirdpar t
y
-Paymentofadebt
a)Rul einPi nnel’
scase
b)Ci r
cumst ancesinwhi chther ulewillnot
operate
 Par t
iesenterintoadeed
 Accommodat i
ont obenef i
tt hecredi
tor
 Amountowi ngi sdisputed
 Pay mentbyat hir
dpar ty
 Composi t
ionwi t
hcr editor
s
- Forbear ancet osue
- Bargainf orconductal readyper f
ormed

Equi
tabl
eEst
oppel

El
ement
sofest oppel Page38
- Assumpt ionofexpectat
ion
- Encouragedori nduced
Page39
- Reli
ance
- Knowledgeori ntenti
on
- Detri
ment
- Fail
uretoav oi
ddet r
iment

Remedi
es

Page41

5
Pr
ivi
ty Page42

Gener
alr
ule Page42

St
atut
oryabr
ogationofr i
ght
s Page42
- Queensland
a)Pr omi sor
b)Benef iciary
c)Pr omi se
d)Accept ance
e)Def ences
f) Vari
at ionandr escissi
onofpromise
g)Imposi tionofburdens
h)Commonl awstil
lappli
cabl
e
- Commonweal th
- Insur anceCont r
actsAct1984(Cth)s48
 Ent i
tl
ementofanamedper sont
ocl
aim
- Mar i
ti
mecont ractsofcarri
age
a)Ser vant soragent sofseacarri
ers
b)Consi gneesandendor sees

Socal
l
edexemptionatcommonl aw Page45
- Agency
 Defini
ti
on
 Exempt i
onclausesandt
hir
dpar
ti
es
 Trusts
 Unjustenri
chment

For
mal
i
ties Page47

Guarantees Page47
- Nat ureofguar ant ees
- Tr ansacti
onwhi char enotguarantees
a)Cont ractsofi ndemni t
y
b)Pr omiseofguar anteemadet othedebt or
c)Per sonagr eestotakeov erthedebtofanot her
d)Theagr eementi mposesnoper sonall
iabi
li
ty
ontheper son
e)Let t
ersofcomf ort
- Requi rementsofwr i
ti
ng:content
a)I nf
ormat ionpar ti
cul
artot heguar ant
ee
b)Acknowl edgementoft heagr eement
- Requi rementsofwr i
ti
ng:signedbypar tytobe
chargedoragent

Contr
act
sr el
ati
ngtoland
- Natureofcont
ractneedi
ngwriti
ng Page50
- Requir
ementsofwr i
ti
ng:cont
ent
a)I

6
 nfor
mationparti
culartotheguarantee
b)Acknowl edgementoft heagreement I
ncorporat
i
- Requirementsofwrit
ing:signedbypartytobe onby
chargedoragent ref
erence

Joi
nderofdocument
- Ref er
encetoadocument
a)Documentsthatar
ephysi
call
yconnect
ed
b)Documentsthatar
eexecut
edatthesame
ti
me Page52
- Ref er
encetoatr
ansacti
on

Ef
fectofstatutor
ynon- compli
ance:commonl aw
- Cont ractvali
dt opasstit
le
- Recov eryofmoneypai dunderunenforceabl
e
contract Page53
a)Recov eryofdeposit
b)Recov eryofamountmor ethandeposit
- Ot herr est
it
utionarycl
aim maysti
l
l beavail
abl
e

Ef
fectofstat
utorynon-compl iance:equit
y
- Doct ri
neofpar tper f
ormance
a)Act sareunequi vocall
yreferabletosomesuch Page55
contr
act
b)Act sdonei nr el
i
anceont heagreementand
withknowl edgeoft heotherparty
c)Act sdonebyt hepar t
yseekingt oenforcethe
contr
act
d)Or alcontractmustbeot herwiseenforceabl
e
- Est oppel
- Const ructi
vetrust

Est
abl
i
shi
ngcont
ract
ual
ter
ms

I
ncor
por
ati
onbysi gnat
ure Page56
a)Generalr
ule
b)Whent herulei
sdispl
aced Page56

I
ncor
porati
onbynoti
ce:unsi
gneddocument
a)Reasonablest
epstakenbythedefendant
b)Reasonablest
epsmustbet akenonorbefor
e Page57
cont
ractf
ormati
on

I
ncor
porati
onbynoti
ce:si
gns
c)Reasonablest
epstakenbyt
hedefendant
d)Reasonablest
epsmustbetakenonorbefor
e Page58
cont
ractf
ormati
on

I
ncor
por
ati
onofnot
ice:
websi
te

7
 I
nterpreti
n
Page59 gthe
meaning
Page59 ofterms
I
ncorpor
atingoral terms - Gen
- Merepuf f eral
- Represent at i
onort er
m app
a)Wor dsorconductofpar ties roa
b)Knowl edgeandexper ti
seofst atementmaker ch
c)St at ementmakerhascont r
ol i
nr el
ati
onto - Ad
i
nfor mat i
on mi s
d)Or al statementnotr educedt owr it
ing sibl
e)Int erv alofti
me e
- Coll
ateral cont ract
s evid
a)Nat ur eofacol l
ateralcontract enc
b)Bi par titeandtri
partit
ecollateralcontract
s e
c)Consi stencywiththemai ncont ract a)T
h
Par
oleev
idencer ul
e e
- Statementoft herule p
- Whent her uleappl
ies a
- Exceptionsoft herule r
a)Ev idenceofacol lat
eralcontr
act o
b)Ev idencethatthewr i
ttencontracti
snotyeti
n l
force e
c)Ev idencethatthewr i
ttencontractwasl
ater e
variedorchanged v
d)Ev idencetoi mplyaterm i
e)Ev idencenecessar yforrect
if
icati
on d
e
I
mpl
iedter
ms n
- Termsi mpliedt ogiveeffecttot hepresumed c
int
enti
onoft hepar t
ies e
a)Ter mi mpl i
edont hebasi sofbusiness r
effi
ciency u
b)Ter mi mpl i
edf r
om pr eviousconsi st
entcourse l
ofdeal i
ngs e
c)Ter mi mpl i
edf r
om cust om orusage b)F
d)Ter mi mpl i
edt ocompl eteanagr eement a
- Termsi mpliedirrespecti
veofpar ti
esintenti
ons c
e)Ter mi mpl i
edasal egalincidentofapar t
icul
ar t
classofcont ract u
f) Gener aldutyofco- operation a
g)I mpli
cat i
onofdut iesofgoodf ait
h, f
air l
deali
ngsandr easonableness m
h)Ter mI mpl i
edbyst atute a
t
r
Const
ruct
ionoft
erms i
x

8
Page59 c)E
x
c
e
p
t
i
o
n
s
t
o
t
h
Page61 e
p
a
r
o
l
e
e
v
i
d
e
Page62 n
c
e
r
u
l
e
 A
m
b
i
g
u
i
t
y
 I
Page66 d
e
Page66 n
t
i
f
i

9
 cat i
onofsubj ectmatter
 Identif
icati
onofpar t
iesandt heir
relati
onship
 Identif
icati
onoft herealconsiderat
ion
 Cust om orusage
 Rect i
fi
cation
- I
nadmi
ssi
bleevidence
a)Subj
ectiv
ei ntenti
on
b)Pri
ornegot i
ation
c)Subsequentconduct

Legal
eff
ectofwords:typesandter
ms
- Pr
omissoryterms
a)Condi t
ions
 Thest at
utor
yposit
ion
b)War ranti
es
 Thest at
utor
yposit
ion
c)Intermediateori
nnominat
eterms

Conti
ngenci
es
- Condit
ionsprecedent
- Condit
ionssubsequent Page69

Exempti
onclauses
- Speci
ficrul
esofconstructi
on
a)Thecont r
apr of
erentem r
ule
b)Attemptstoexemptnegl igence
 Therulesregardi
ngat t
empt
stoexempt
negli
gence
c)Thef ourcorner
srule Page72

Page73

Cont
ractLawExam Not
es

Of
fer
:

Anofferi
sanexpr
essi
ont
oanot
herofawi
l
li
ngnesst
obeboundbyt
he
st
atedter
ms

Aust
ral
i
anWool
l
enMi
l
lsPt
yLt
dvTheCommonweal
th

10
Bi
l
ater
alCont
ract
s

UnderBi l
ater
alCont
ract
seachpartyunder
takestotheotherpart
ytodoorto
refr
ainfrom doi
ngsomethi
ng,andintheeventofhi
s/herfai
luret
opref
orm
his/herundert
aki
ng,t
helawprovi
destheotherpart
ywithar emedy.

Uni
tedDomi
nionsTr
ustLt
dvEagl
eAi
rcr
aftSer
vicesLt
d

Uni
l
ater
alCont
ract
s

Underunil
ater
alcont
ractsthepromisorundertakest
odoort or
efrai
nfr
om
doi
ngsomet hingi
fanotherparty
,thepromisee,doesorr
efr
ainsfr
om doing
somethi
ng,butthepromiseedoesnotatt heti
meoft heoff
erundert
aketodo
ortoref
rai
nf r
om doi
ngt hatt
hing.

Uni
tedDomi
nionsTr
ustLt
dvEagl
eAi
rcr
aftSer
vicesLt
d

Thepositi
oninsuchcasesi ssimplyt
hatt
heconsider
ati
ononthepartofthe
off
ereeonthepar toftheoffer
eeiscompl
etel
yexecut
edbythedoingofthe
ver
ythingthatconsti
tutesaccept
anceoft
heoffer
.

Aust
ral
i
anWool
l
enMi
l
lsPt
yLt
dvTheCommonweal
th

Of
fer
stot
hePubl
i
catLar
ge

Anof
fercanbemadet
othepubl
i
catl
arge.

Car
li
llvCar
bol
l
icSmokeBal
lCompany

Whati
snotanOf
fer
?

Mer
ePuf
f

Somet
imesstat
ementscanberegar
dedonl
yas‘merepuf
fer
y’-t
hecl
aimsar
e
madeonl
yforadver
ti
singpur
posesandmeannot
hing.

Car
li
llvCar
bol
l
icSmokeBal
lCompany

Suppl
yofI
nfor
mat
ion

Thesuppl
yofi
nfor
mat
ioni
snotanof
fer
.

Arequestf
orinf
ormat i
onmustbedi scer
nedfrom acontr
actual
offer
.A
cl
eareri
ndi
cati
onofapr eparednesstoenteri
ntoacontr
act,
thanmer el
y
pr
ovidi
ngtermsorinformati
onuponwhi chapartymaybepreparedtoenter
i
ntosuchacontract
,isneeded.

Har
veyvFacey

11
I
nvi
tat
iont
oTr
eat

Aninvi
tati
ontot reati
sani ndi
cat
orofaparti
eswil
li
ngnesstonegot
iateentr
y
i
ntoacont r
act.Itisat echni
queusedbyapartywhodesir
eanotherpartyt
o
makeanof ferandcannotbeconst ruedort
heter
msbeaccept edasifitwer
e
avali
dlegalofferinit
self.

Car
li
llvCar
bol
l
icSmokeBal
lCompany

Thedi
spl
ayofgoodsi
nast
orei
sani
nvi
tat
iont
otr
eat
.

Phar
maceut
icalSoci
etyofGr
eatBr
it
ainv
.Boot
sCashChemi
sts(
Sout
her
n)
Lt
d

Anadvert
isementt
hatgiv
esinfor
mati
onaboutgoodsf
orsal
eandt
hei
rpr
ice
wi
llgener
all
ybeaninvi
tati
ontotr
eatr
athert
hananoff
er.

Par
tri
dgevCr
it
tenden

Cat
egor
izi
ngTr
ansact
ions
Adv
ert
isement
s

Mostadv ert
isementsareconsi
der
edinvit
ati
onst
otreatbutsomemaybe
regardedasof f
ersdependi
ngonlanguageusedi
ntheadv er
ti
sementand
otherrel
evantfactor
s.

a)Adv
ert
isement
sinacat
alogueori
nacur
ri
cul
ar.

Circul
ars,
whichprovidei
nformati
onaboutit
emsforsal
eandt heirpri
ces,
are
regardedasinvi
tat
ionstotreat
.Ifi
twereregar
dedasanofferandt he
manuf act
urerr
anoutofst ock,
theywoul
dbei nbr
eachofcontractforany
one
whoaccept edsuchanof f
erastheycoul
dnotprovi
destock

Gr
aingervGough

b)Adv er
ti
sement sinNewspaper sandMagazi nes.
Thesearealsoconsideredinvi
t at
ionstotreatunlesstheadv
erti
sementis
couchedintermswhi chindi
cat etheretai
l
erswi l
l
ingnesstobeboundif
thespeci
fi
edt er
msar eaccept ed(eg.thereisapr omi
se(Carl
il
l
)rather
thanamer einvi
tat
ion(Partr
idgevCr it
tenden).

c)Adv
ert
isement
sappear
ingont
heI
nter
net
.

Theappl
i
cat
ionoft
hesamepr
inci
pleasnewspaper
sandmagazi
nesi
sused.

d)Di
spl
ayofGoods.

12
I
temsappeari
nginr
etai
lout
let
s,ev
eni
fthepr
icei
sat
tached,
arer
egar
dedas
aninv
itat
iont
otr
eat
.

Phar
maceut
icalSoci
etyofGr
eatBr
it
ainvBoot
sCashChemi
sts.

Auct
ions

a)Adv
ert
isementofAuct
ions

Theadvert
isementofanauct
ionisconsi
deredaninvi
tat
iontotr
eatonthe
partoft
heaucti
oneer.Theaucti
oneermaywithdrawi
temsf r
om theaucti
on
orcancelt
heaucti
onallt
ogetherwi
thouti
ncurr
inganyli
abil
i
tyfr
om potenti
al
bi
dders.

Har
ri
svNi
cker
son

Theaucti
oneermaywi t
hdrawv ari
ouslot
sfrom t
heaucti
onorcancel
the
auct
ional
togetherwi
thoutincurr
inganyl
iabi
li
tyf
rom pot
ent
ial
bidder
s.

Har
ri
svNi
cker
son

b)Auct
ionswi
thReser
ve

Eachbidrepresent
sanof f
er,
whi chtheaucti
oneermayrejectoraccept.
Acceptanceofanofferoccur
s,andanagr eementisf
ormed, whent he
auct
ioneerknocksdownt hepropert
ytothesuccessf
ulbidder.

Becauset
heagreementi
snotfor
medunti
lthebi
disknockeddown,
the
bi
ddercanwi
thdrawabid(of
fer
)bef
oret
histi
me.

Pay
nevCav
e

c)Auct
ionwi
thoutaReser
ve

Eveni
nanaucti
onwithoutareser
ve,eachbi
drepr
esent
sanof
fert
hatcoul
d
beaccept
edorr
eject
edbyt heauct
ioneer
.

AGCLt
dv.McWhi
rt
er

Tender
ing

Anadv er
ti
sementfortenderswil
lgeneral
lybethesameasanadv ertisement
foranaucti
on,whi
chi saki
nt oaninvi
tati
ontotreat.Theref
orenoliabili
tywil
l
beincurr
edift
hepersondoesnotacceptanyoft hetendersorevenconsi der
them i
nabonaf i
deway .Eachtenderwillbeconsider
edanof f
er,
whi chcan
beacceptedorrej
ected.

Spencerv
.Har
ding

13
St
andi
ngOf
fer
s

Astandi
ngofferi
sanindi
cati
onbyonepar
tyofhi
s/herwi
l
li
ngnesst
opr
ovi
de
goodsoveraspeci
fi
edperi
odofti
me.

Astandi
ngofferi
sacceptedever
yt i
meanorderi
splaced.I
fthegoodsare
notdel
iv
eredorarer
efusedtheoffendi
ngpar
tywil
lbeinbreachofcont
ract
.

Gr
eatNor
ther
nRai
l
wayCov
.Wi
tham

Anof
ferormaywithdr
awtheoff
er,
any
time,
bef
oreaccept
anceoft
heof
feri
s
madeinthef
orm ofanor
der.

Furt
her,
unlesstheparti
esagreetothecontr
ary
,ther
eisnoobli
gat
ionoft
he
off
ereetoordergoodsonlythroughtheof
fer
or,(
eg.theof
fer
eemaychoose
nottoacceptthestandi
ngoffer)

Col
oni
alAmmuni
ti
onCovRei
d

 Opt
ions
Thestandingoff
ermayber evokedatanyt
imebefor
eacceptancebythe
offer
ee.However,i
ftheof
fereeprovi
desconsi
derat
ion(
egpay i
ngmoney)t
o
theoffer
ortokeeptheoff
eropenf orsomeper
iod,t
heoffercannotbe
withdr
awnduringthi
speri
od.

Rout
ledgevGr
ant

Communi
cat
ionofanOf
fer
Foranoff
ert
obevali
ditmustbecommuni
cat
edt
otheof
fer
eebyt
heof
fer
or,
orsomeoneaut
hor
isedbyt
heoffer
or.

Col
evCot
ti
ngham

Anof
ferbecomesef
fect
iveoncei
tiscommuni
cat
edt
otheof
fer
ee

Tay
lorv
Lai
rd

Acceptancemusttakeplacei
nrel
ianceuponanoffer
.Iftheoff
ereeperfor
ms
aparti
cularactt
hatcor
respondst
ot heter
msoftheofferwit
houtknowledge
oftheoffer,
ther
eisnoagreement
, andnocont
ractcomesintoexist
ence.

Ti
nnvHof
fman&Co

I
fiti
sanoff
ertot
heworldatl
arge,
theof
fercoul
dbeaccept
edbyany
f
ulfi
l
li
ngt
herequi
rement
softheoff
er.

Car
li
llvCar
bol
i
cSmokeCompany

14
Ter
minat
ionofanOf
fer
Anof
fermaybeterminat
edatanyti
mebef or
eiti
saccept
ed.Howev
er,
once
anof
feri
saccept
editbecomesir
revocabl
e.

Gol
dsbr
oughMor
t&CoLt
dvQui
nn

Anof
fermaybet
ermi
nat
edby

a)Rev
ocat
ionbyt
heof
fer
or

Revocationi
sthef
ormalwi
thdrawaloftheof
ferbyt
heof
fer
or.Bef
ore
acceptance,
anoff
ercanbefreel
yrevoked

Gol
dsbroughMort&CovQui
nn
Vei
ver
svCor di
ngl
y

Unl
esst
her
eisapr
omise,suppor
tedbyconsi
der
ati
onorunderseal
,byt
he
of
fer
ort
okeepi
topenforafi
xedperi
od.

Rout
ledgevGr
ant

Arev
ocat
ionwil
lonlybeef
fect
iveoncei
thasbeencommuni
cat
edt
oand
r
ecei
vedbytheoff
eree

Br
yrnevLeonVanTi
enHov
en

Inuni
lat
eral
contract
s,t
heof f
ercannotbewit
hdrawnaftert
heoff
ereehas
beguntoperf
ormt henecessarycondi
ti
onsofaccept
anceoftheoff
erand
complet
ionofthecontr
act.

AbbotvLance

b)Rej
ect
edbyt
heof
fer
ee

Thereject
ionmustbecommuni catedtotheof f
erorbef
oreitiseff
ecti
ve.
Oncerejected,anoff
ercannotbelateraccepted.Ifanoff
ereeattemptsto
accepttheofferbuti
ntr
oducesnewt er
ms, t
heof f
ereei
srejectedtheoff
er
andisdeemedt obemakingacount eroff
er

St
evensonJaques&CovMcLean

c)Lapseoft
ime

Anoffer
ormayst ipul
atethathisorherof
fermustbeacceptedwithi
na
cer
tai
nperiodoftime,andift heof
fer
eefail
stoaccept,t
heofferwil
llapse.I
f
noti
mei sprescr
ibed,theoffermustbeacceptedwit
hinareasonabletime.

Ramsgat
eVi
ctor
iaHot
elCovMont
efi
ore

15
d)Fai
l
ureofacondi
ti
onsubj
ectt
owhi
cht
heof
ferwasmade

I
facondit
ionuponwhichtheof
feri
smadei
snotf
ulf
il
ledt
heof
ferwi
l
llapse
McCaulPt
yLtdvPittClubLt
d

e)Deat
h

I
ftheofferordi
esandtheoffer
eehasnotbeennot
if
iedofthatdeat
h,i
tissti
ll
possi
blefortheof
fereet
oaccepttheoff
er,t
husbi
ndingtheoff
eror
’sest
ate.
I
ftheoffereehasbeennoti
fi
edofthedeathhe/
shecannotacceptt
heoffer.

Coul
thar
tvCl
ement
son

Norcanarepr
esent
ati
veoft
heof
fer
orsest
ateacceptt
heof
feront
hei
rbehal
f
t
heref
oret
heofferl
apses

Rey
nol
dsvAt
her
ton

Accept
ance:
Requi
rement
sofAccept
ance
Acceptanceofanoff
eristheexpr
essi
on,bywordsorconduct
,ofassentto
theter
msoft heof
ferinthemannerpr
escri
bedorindi
cat
edbyt heoff
er.
Thusacceptancemaybeexpressedorimpl
ied

HBFDal
get
yvMor
ton

Ther
ear
etwor
equi
rement
stosat
isf
yforv
ali
daccept
ancet
ooccur
:

1.Theoff
ereemustagr
eet
oacceptt
hetermsoft
heoffer
2.Thi
sinf
ormati
onmustbecommunicat
edtot
heoff
eror.

Accept
ancemustcor
respondt
oOf
fer
Of
fer
eemusthav
eknowl
edgeofandacti
nrel
i
ancet
oanof
fer

Theoffer
eemusthav eknowl
edgeofthetermsoft heofferatt
het i
meof
purpor
tedacceptance.Accept
anceisnotvalidift
woi denti
cal
offersar
e
madeorifapar t
yper f
ormstheactofacceptancewithoutknowledgeofthe
off
er.

Ti
nnvHof
fman

16
ACount
erOf
feri
snotAccept
ance

Ifacounterofferismade,theori
ginalof
ferisrej
ectedandt hecounteroff
er
canthenitsel
fbeaccept edorrej
ected.Onceacount erofferismadeandt he
ori
ginal
of f
errejected,
theoff
ereecannol ongeraccepttheorigi
naloffer

Hy
dev
.Wr
ench

Apurpor
tedacceptancet
hatdepart
sfrom t
heter
msoftheof
ferbutonl
yina
mi
nornon-mat
erial
waymaybeef fecti
veandnotamountt
oacounterof
fer

Tur
nerKempsonvCamm

Accept
ancemustbeUnqual
i
fied

I
fther
eisanagreementonal
lter
msoftheoff
er,andthepar
tiesint
endtobe
boundimmedi
ately
,thi
swoul
dbeconsi
deredunquali
fi
edacceptanceoft
he
off
er.

Mast
ersvCamer
on

Mer
eInqui
rydoesnotConst
it
uteAccept
ance

Afterr
eceivi
nganoffer,anof
fer
eemaywantfur
thercl
ari
fi
cati
onofoneor
mor et
erms.Thisinquir
ycanatmost ,
onl
ycommunicat
einter
estbutnot
acceptancenorr
ejecti
onofanoffer
.

St
evensonJaquesvMcLean

Not
if
icat
iont
otheOf
fer
oroft
heFactofAccept
ance
Theof
fer
eemustcommunicat
eacceptanceoft
heoffertotheoff
erorand
agr
eementi
snotcompl
eteunt
ilsuchcommunicat
ionisaff
ected.

PowellvLee
Soar
esvSi mpson

Met
hodofAccept
ance

Whatisanappropri
atemet hodofaccept ancei nanygivensituat
ionwill
dependoneachsituat
ion,whethertheof f
er orhasoutl
inedaspeci f
ied
methodofacceptancewithintheoffer,orifitisnotsti
pulat
ed, t
he
appropr
iat
emethodofaccept ancewilldependont heintent
ionoftheparties
asderiv
edfrom t
heparti
cularfact
s.Whet heracceptancehasoccur red
dependsonwhethertheoffereehascompl iedwiththerequir
ement sforthe
methodofacceptancefortheparti
cularsituati
on.

17
a)Met
hodofAccept
anceSt
ipul
atedbyOf
fer
or

Theoffer
ormaystipul
atehowacceptanceshoul
dtakepl
ace(eg.t
he
per
formanceofanact,ret
urnpostet
c.).I
faccept
ancedoesnotoccuri
nthi
s
way,gener
all
yther
eisnoagr eement
.

Alt
hough,i
ftheoff
ereeacceptsi
namannerthati
smor
eadv
ant
ageousf
or
theof
feror
,thent
heacceptancewil
lbev
ali
d

Ti
nnvHof
fman

Al
so,ift
hemethodofaccept
ancewasinsert
edfortheconv
enienceoft
he
of
fer
ee,theof
fer
eemaywav ethebenef
itofthecl
auseandacceptina
di
ff
erentway

Oreveni famannerofaccept
anceisprescr
ibedi
ntheof
fer
,ont
hetrue
constr
uct i
onoftheter
msintheoff
er,t
hismaynotbetheonl
ymethodof
acceptancethatwil
lbeef
fect
ive

Manchest
erDi
ocesanCounci
lforEducat
ionvCommer
cial&Gener
al
I
nvest
mentsLt
d

b)Accept
ancebySi
l
ence

Theoff
erorcannotst
ipul
atesi
l
encet
oconst
it
uteconsentunderany
ci
rcumstances.

Felt
housevBindley
Empirnal
lHol
dingsPtyLt
dvMachonPaulPar
tner
sPt
yLt
y
BraundvMutualLife&Ci
ti
zens’
Assur
anceCoLtd

Thetechni
queofdeli
ver
ingaproductwithanot i
cestati
ngthatunlessthe
goodsareret
urnedwit
hinastatedper
iod( orr
ejecti
oncommuni catedina
dif
fer
entway),t
hebuyerwil
lbetakentohav eagreedtobuythepr oducton
thest
atedter
msi snowprohibi
tedbystatute.

TradePracti
cesAct1974(ct
h)s.64&s.
65
FairTr
adingAct1989(ql
d)s.52&s.
53

c)Accept
ancebyConduct

Anofferormaystipulat
ethemannerofacceptancebyadvisi
ngtheoff
eree
thati
fhe/shewishest oacceptt
heoff
er,
theof f
ereeshoul
dperfor
m
sti
pul
atedact swaivi
ngtheneedtocommuni cat
eacceptance.Accept
ance
canbeexpr essorimpli
ed.

BrogdenvTheDi
rect
oroft
heMet
ropol
i
tanRai
l
wayCompany
Carl
il
l’
scase

I
nst
ant
aneousCommuni
cat
ion:
Accept
ancemustbe

18
communi
cat
ed

a)Gener
alRul
e

Whenthemodeofaccept anceisinst
antaneouscommunicati
on,t
hegeneral
rul
eofl
awi sthatt
hecontractwil
lbeformedwhenacceptanceoftheoff
eris
communicatedtotheof
ferorandthatcommuni cat
ioni
srecei
ved.

Ent
oresLDvMil
esFarEastCor
por
ati
on
Bri
nki
bonLt
dvStahagSt
ahlundSt
ahl
warenhandel
s-Gesel
l
shaf
tmbH

b)Meani
ngofi
nst
ant
aneousCommuni
cat
ion

Facetofacecommunicat
ion,telephoneconver
sat
ionsandtel
exmessages
areal
lconsi
deredf
ormsofi nstantaneouscommunicat
ion.

Entor
esLDvMil
esFarEastCor
por
ation
ReeseBr
osPl
ast
icsLt
dvHammon- SabelcoAust
ral
i
aPt
yLt
d

Post
alAccept
anceRul
e

Thepostal
accept
ancer
ulei
stheexceptiontothegeneral
rulet
hat
accept
anceoccur
swheniti
scommuni catedtotheoff
eror.

a)St
atementoft
her
ule

Wher et heci
rcumstancesaresuchthatitmusthavebeenwithi
nthe
contempl ati
onoftheparti
esthat,
accordingt
otheordinar
yusagesof
manki nd,thepostmightbeusedasameansofcommuni cat
ingthe
accept anceofanoffer,
theacceptanceiscomplet
edassoonasi ti
spost
ed.

Hent
hor
nvFr
aser

Ther
uleoperatesonl
ywherethepostisanacceptablemethodof
communicat
ionbetweenthet
wopar t
ies(eg.t
heof f
erwasmadebypostori
t
i
ssti
pul
atedint heof
fert
hatt
hepostisanacceptablemethodof
communicat
ion)

AdamsvLi
ndsel
l

b)Pol
i
cybehi
ndt
her
ule

Thepost
alr
ulepr
omot
escont
ract
ual
cer
tai
nty
.

c)Towhatcommuni
cat
iondoest
her
uleext
end

Thepostalaccept
anceruleappl
iestoformsofcommuni cat
iont
hatareaki
n
tomailbutdoesnotextendtoanyform ofinstantaneouscommunicati
on,
evenift
hatcommuni cati
onbearssomesi milari
ti
estocommuni cat
ionby
post.

19
CootPt
yLt
dvAdmi
nManagementPt
yLt
d

d)Wher
eist
her
uledi
spl
aced?

Ther ul
eisdi splacedifthecourtdecidesthatitwasnotwi t
hinthe
contempl ati
onoft hepar t
iesthatthepostwasanaccept edmet hodof
communi cati
on.Whet herthepostalrul
eisdisplacedtur
nstheintenti
onof
theof f
eror.Iftheofferorsaysorimpl i
esthatactualnoti
fi
cati
onisrequir
ed
beforeanagr eementifformedt hepostalacceptancerul
ewi l
lbedispl
aced.

Br
essanvSqui
res

e)Rev
ocat
ionoft
heaccept
ancepr
iort
orecei
pt

Theof
feri
sformedwhenthelett
erofacceptanceispost
ed.Asubsequent
pur
por
tedwit
hdrawal
ofthataccept
ancewi l
lbeineff
ecti
ve.

Therei
sstil
lnodefini
ti
veAustr
ali
anaut hor
it
yontheissue,
onlyear
lyNew
Zeal
anddictat
hat’ssuggest
sthatitcannotbewithdr
awninthiswayandan
evenear
li
erScott
ishauthori
tyt
osuggestt hati
tcan!!

Weinkheim vArndt(NZ)
Dunmor e(Countess)vAl
exander(
Scot
ti
sh)

Accept
ancei
nUni
l
ater
alCont
ract
s
Accept
ancecommonl
ybyconduct

Therequi
rementf oracceptancetobecommuni cat
edisof
teni
mpli
edl
y
waived.Acceptanceisaffectedbytheof
fer
eebyper f
ormi
ngthe
requi
rementsthatarespecifi
edbytheoff
eror.

Car
li
llvCar
bol
l
icSmokeBal
lCompany

Wi
thdr
awal
ofanof
feraf
teraccept
ancehascommenced

Gener
all
y,onceanof fer
eehasbeguntoaccepttheoff
erbyper
for
mingt
he
act
ssti
pulated,i
tisl
ikel
ytobetoolatefort
heoffer
ortowit
hdr
awtheof
fer
andcl
aimt herehasbeennocontractfor
mation.

AbbotvLance

Whomayacceptanof
fer
?
Anof
fercanonl
ybeaccept
edbyt
heper
sont
owhom i
twasmade.

20
Rey
nol
dsvAt
her
ton

Accept
ancemaybecommuni
cat
edonl
ybyt
heof
fer
eeorhi
sorheragent

Powel
lvLee

I
fanof f
erismadet ot
hepubl i
catlargeitcansomet i
mesbeaccept edbya
numberofpeople.InCarlil
l
’sCaset heofferwascapabl eofacceptanceby
anyonewhoqualifi
edundert hetermsoft heirof
fer(eg.anyonewho
pur
chasedasmokebal l,howev er,i
nthecaseofar eward,whil
emanypeopl e
mayhav ethei
nformati
onwhi chquali
fi
est hem f
ort hereward,
onlythefi
rst
per
sont ocomef or
thwil
l beel i
gibl
e).

Car
li
ll
’
scase

Cont
ractf
ormat
ion:
timeandpl
ace
I
nst
ant
aneouscommuni
cat
ion

Acontracti
sfor
medwhenandwher
etheof
fer
orr
ecei
vesandaccept
sthe
accept
ancecommuni
cated.

HampsteadMeat
sPtyLtdvEmer son&Yat
esPt
yLt
y
Ent
oresLDvMi l
esFarEastCor
porati
on

Post

I
fthepost
al accept
ancerul
eappli
es,t
hecont
racti
sfor
medwhen,
andatt
he
pl
acethat
,thelett
erofaccept
anceispost
ed.

Hent
hor
nvFr
aser

ThePost
alRul
ecanbeexcl
uded{
Cov
eredear
li
eri
n“Thepost
alAccept
ance
Rul
e”at(
d)}

Hol
wellSecur
it
iesLt
dvHughes
Br
essanvSquires

Cer
tai
ntyandCompl
eteness:
Conceptsofuncer tai
ntyorv aguenessarer el
evanttoadet erminationof
whetherther ehasbeenanof f
ermadewhi chiscapableofaccept ance, and
whetherthepar ti
escoul dhav ehadt herequisit
eintent
iont oenterintolegal
rel
ati
ons.I fanof feri
ssov aguethatther especti
veobligati
onsoft hepar t
ies
onacceptancear eunclear ,
iti
sunlikel
ytobeav ali
dofferinlegalterms.
Simil
arl
y,ifthetermsoft heof f
erarevagueanduncer t
ai n,
itmayi ndicatethat
thepart
iesl ackintenti
on, nothavi
ngy etreachedthestageofnegot iati
onsat

21
whi
cheachi
ntendst
obel
egal
l
yboundt
otheot
herpar
ty.

St
atementoft
heRul
e
Inordertoconsti
t ut
eav ali
dcontr
actthepar t
iesmustsoexpressthemselves
thatthei
rmeaningcanbedet er
minedwi thareasonabl
edegreeofcertai
nty.
Iti
spl ai
nthatunlessthiscanbedonei twouldbeimpossibl
etoholdthatthe
contracti
ngparti
eshadt hesamei nt
entions;i
notherwordstheconsensusad
i
dem woul dbeamat terofmereconjecture

GScammel
landNephewLt
dvHCandJGOust
on

Facet
stot
hepr
inci
pal

Ther
ear
eanumberoff
acet
stot
hispr
inci
ple:

 Acontractcontai
ningl anguagethati
ssoobscur eandsoi ncapableof
anydefini
teorprecisemeani ngthatt
hecour tisunabl
etoat t
ribut
eto
thepart
iesanyparticularcontr
actual
intenti
onwi l
lbeunenforceabl
e
Theuncertai
ntymayr elat
etooneoft hepivotalt
ermsofthe
agreementormaygot otheveryheartoftheagreement.

GScammel
landNephewvHC&JGOust
on

 Evenwhereuncert
ainorambi guouslanguagei
snotused,i
fthepar
ti
es
havenotagreedonalloftheessenti
altermsoftheagr
eement,t
he
contr
actwil
lbeunenforceabl
e.

Lof
tusvRober
ts

 Acontr
actwil
lbeunenf
orceabl
eifitr
eser
vesadi
scr
eti
onf
oronepar
ty
nott
ocarryouthi
sorherobli
gat
ions

Thor
byvGol
dber
g

Ambi
gui
tyandUncer
tai
nty
I
ndi
vi
dual
Ter
ms

Ther ecanbenocont ractunlesswhatt heparti

esagreedcanbedet ermined
object i
velywithar easonabledegr eeofcert
ainty.Anumberofdi ff
erentterms
hav ebeenusedt odescr i
beclausesthatarestruckdownforwantofcer tainty
.
Whet hert heclausei ssaidtobev ague,ambiguousoruncer t
ainmat t
erslit
tle,
thecl ausei svoi
d.Somet i
mest hecourtwil
llabelater
m meani ngl
essor
i
llusor y.Ameani ngl
esscl auseisonetowhi chameani ngcannotbe
attri
but edandwi llbetreatedthesamewayasanuncer tai
nclause.An
i
llusor yclausehasani denti
fi
ablemeani ngbutwi l
lbetr
eatedasuncertainas
i
tpr omi sesani l
lusoryt er
m.

22
Themodernapproachappearstoemphasisethecourt
swill
i
ngnesstouphol
d
anagreementent
eredint
obyt hepar
ti
es,part
icul
arl
ywheretheci
rcumst
ance
i
ndicat
ethatt
heparti
esintendedt
obeboundbyt heagreement.

LendLeaseFi
nanci
alPl
anni
ngLt
dvSout
hcapPt
yLt
d

Agr
eement
stoNegot
iat
e
I
fparti
esdonotreachfi
nalagreementonessential
ter
ms,i
nst
eadagr
eeingto
f
inal
isesuchmatter
satalaterti
me,thecontr
actisanagr
eementt
oagree,
t
herefor
eiti
sincomplet
eandwi ll
notbeenforced.

BookerI
ndust
ri
esPt
yLt
dvWi
l
sonPar
kingQl
dPt
yLt
d

Ifanagr
eementtonegot
iat
eisr
egar
dedasanagr
eementt
oagr
ee,
itt
owi
l
l
beunenf
orceabl
e

CoalCl
i
ffCol
l
ier
iesPt
yLt
dvSi
j
ehamaPt
yLt
d

Howev er
,itwascont empl atedbyKi rbyP( nCoal
i CliffColl
ieri
esPt yLtdv
Sij
ehamaPt yLt d),t
hati nappr opri
atecircumst ances, anagr eementt o
negotiatecouldbeenf orceabl e.Heconcl udedt hati fthepar t
iesprovided
goodconsi derat i
onandt het ermsoft heagreementt onegot i
atewer e
suffi
cientl
ycer tain, suchagr eementmi ghtbeenf orceable.Onemechani sm
tomakeanagr eementt onegot iat
emor ecertain,itwassuggest ed,wouldbe
toincl
udeapr ov i
sionr eferr
ingmat tersindisput etoat hi
rdpar t
y.

Sav
ingAmbi
guous,
uncer
tai
normeani
ngl
esscont
ract
s
Li
nkt
oExt
ernal
Standar
d
Aclausei nacont
ract,whi
ch,onit
sf ace,
appearsuncert
ain,maybe
enforceablei
fameaningcanbegi ventoitbyrefer
encetoanexternal
standard.Thepart
iesmaypr ov
idefor“astandard,machi
neryorformula
designedbytheparti
estotaketheplaceoftheirownagreement”
.

Hawt
hor
nFoot
bal
lCl
ubvHar
ding

Ther ef
erencemaybemadei nadir
ectwayforexample,i
ncor
porat
ing
standardhir
epurchaseter
msusedbyt hepart
icularhi
ri
ngcompany.Ifsucha
setofstandardhi
repurchaseter
msexist
s,theclausewil
lbeval
i
d.

Recour
semayalsobemadetoext
ernal
standar
ds,
evenwher
ethecont
ract
i
tsel
fdoesnotexpr
essl
ypr
ovi
desuchali
nk.

Hi
l
lasandCoLt
dvAr
cosLt
d

Speci
fi
cat
ionsagr
eedi
ntheor
igi
nal
cont
ractcoul
dber
egar
dedasanext
ernal
st
andard.

Somet
imes,
thecont
ractmaypr
ovi
def
oroneormor
eter
mst
obei
nser
tedby

23
at
hir
dpar
ty.(
Inaf
ashi
on,
thi
sisal
soal
i
nkt
oanext
ernal
standar
d).

HawthornFootbal
lCl
ubvHar
ding
GodeckivKir
wan

Li
nkt
oreasonabl
enessst
andar
d
Thecour tmaybewil
l
ing,
insomecircumstances,t
oadoptpri
nci
plesof
reasonablenesst
omakecert
ainsomethi
ngt hat
,onit
sface,
isnot
.

‘
Theimpli
cati
onofwhatisj
ustandreasonablet
obeascer
tai
nedbythecour
t
asamat t
erofmachi
nerywherethecontr
actual
int
ent
ioni
scl
earbutthe
cont
racti
ssil
entonsomedetail
’

Hi
l
lasandCoLt
dvAr
cosLt
d

Sev
erance
Thei nvali
dit
yofonet erm wil
l notnecessari
lymeant hatthewhol
econtr
act
willbeunenf orceabl
e.Insomeci rcumstancestheinvali
dter
m canbe
severedandt heremainderoft hecontr
actwi l
lbeenforceabl
e.Gener
all
y,i
f
thepartieswoul dhaveintendedt obeboundi ntheabsenceofanuncertai
n
clause,theclausecanbesev eredandt heremainderofthecontr
acti
s
enforceable

Fi
tzger
aldvMast
ers

Iftheoffendi
ngclausef
ormsapivot
alpar
tofthecontr
act,
sothatwit
houtout
i
tt heparti
escoul
dnothaveint
endedtobebound,sev
eranceofthepar
ti
cular
clauseisnotpossibl
e.

Whi
tl
ockvBr
ew

Wai
verorRemov
alofUncer
tai
nty
Ifaclauseisinser
tedi
nacontractf
ort
hebenefitofonepart
yonly,butis
draft
edi nsuchvagueter
msast omakeitv
oid,t
hatpartycanchoosetowai ve
thebenef i
tofthecl
auseandhavether
emainderofthecontr
actspecif
ical
ly
enforced.

Whi
tl
ockvBr
ew

I
ncompl
eteagr
eement
Thecourtswil
lnotlendt
hei
rai
dtotheenfor
cementofanincomplete
agreement,
beingnomor et
hananagreementf
orthepar
ti
est oagreeatsome
ti
mei nt
hefuture.

24
BookerI
ndust
ri
esPt
yLt
dvWi
l
sonPar
kingQl
dPt
yLt
d

Agr
eementcont
ainsmechani
sm t
ocompl
ete
I
tmaysui
ttheneedsofcontr
actingpar
ti
esnottofi
nali
sevariousaspectsof
t
hei
ragr
eement,butrat
hert
oinserti
namechanism fordeter
mi ni
ngoneor
mor
eter
msatal aterdat
eforexampleext
ernal
standardorthir
dparty.

a)Ref
erencet
oat
hir
dpar
ty

Par
ti
estoacontractmayleav
eter
msoft
hecont
ractt
obedeci
dedbyat
hir
d
par
ty,
evenessenti
alt
erms.

GodeckevKirwan
HawthornFootbal
lCl
ubLt
dvHar
ding

b)Di
scr
eti
onr
etai
nedbyacont
ract
ingpar
ty

I
tisuncert
aint
hatacontr
actthatleavesminort
ermst
obedet
ermi
nedbyone
ofthecont
ract
ingpar
ti
esisenforceable.

Acontractt
hatleavesessent
ialmatt
erf
orlaterdet
ermi
nati
onbyoneofthe
contr
acti
ngparti
eswi l
lbeunenfor
ceabl
easitiseit
heri
ncomplet
eor
uncert
ainorbecausethepromisescont
ainedintheagr
eementarei
l
lusor
y.

CoalCl
i
ffCol
l
ier
iesPt
yLt
dvSi
j
ehamaPt
yLt
d

However
,ifasubsi
diarymatt
erwaslef
ttot
hedetermi
nati
onofoneofthe
par
ti
essuchashowt hecont
ract
ual
obli
gat
ionsar
ecarr
iedoutbyt
hatpart
y,i
t
maybeenf or
ceabl
e.

GodeckevKi
rwan

Br
eakdownofMechani
sm t
oCompl
ete

I
fthepart
iesamechanism f
ordeter
mi ni
ngat
erm andthatmechani
sm f
ail
s,
t
hecourtwil
lnotsubst
it
uteit
’sownviewandcompletetheagr
eement.

Mi
l
nesvGer
y

I
fthedisput
edissuei
soneofsomet hingsuchasthe“pri
ce”ofsomet hi
ng( eg.
Rent
),acourtmaybepreparedtodetermi
neafairandreasonabl
eprice,and
nott
oregardthatdet
erminati
onascompleti
ngtheagreementforthepar t
ies.

BookerIndust
ri
esPtyLtdvWil
sonParki
ngQl
dPt
yLt
d
SudbrookTradi
ngEstat
eLtdvEggl
eton

Sav
ingI
ncompl
eteAgr
eement
s

25
I
mpl
i
cat
ionofTer
ms

Thereisawi l
li
ngnessoft hecourtstoimpl ytermsintoanagr eement.I
tisnot
forthecourttomaket hecontr
actforthepar ti
es,ortogoout si
dethewor ds
theyhaveused, exceptinsof
arastherear eappr opri
ateimpli
cati
onsoflaw,as
fori
nstance,theimplicati
onofwhatisj ustandr easonabletobeascert
ained
bythecourtasmat t
erofmachi nerywher ethecont r
actuali
ntent
ioni
sclear
butthecontractissil
entonsomedet ai
ls.

Hi
l
lasvAr
cos

Howev er,thecourtmaynotr ewrit

etheagreementforpar t
ieswher et he
part
iesthemsel veshav efai
ledt oagreeonessenti
alterms.Thegr eat ert
he
numberoft ermsnotf i
nal
lyagr eeduponbyt hepart
ies,t
hel essinclinedthe
courtwil
l bet oexer
ciseit
sdi scret
iontoimplyaterm.Acont r
actcoul donly
beregardedasconcl udedi fthepar t
iesagr
eedont hethreeessent ial
el
ement s: “
theparti
es”,“t
hesubj ectmatter
”and“ t
hepr i
ce”andift hese
el
ement shav ebeenagreeduponwi thsuff
ici
entcert
aint
yt hecourtwi ll
provi
det her est
.

Hal
lvBusst

I
naddit
ion,
ther
ear
etwoot
herf
act
orst
hatmayber
elev
anti
nthecour
ts
det
ermi
nati
on.

Fir
st,i
fiti
scleart
hatthepart
ieshavegonebeyondthest
ateofnegot
iat
ion
andintendtobecontr
actual
lybound,t
hecourtwil
lbemoremindedtoimplya
ter
m andenf or
cetheagreement.

Hi
l
lasvAr
cos

Secondly,
andrel
atedtothefi
rst
,ifthecontr
acthasbetweenpartl
yexecuted,
forexamplei
nacont r
actfort
hesal eofgoods,pr
opertyhasbeendel
iver
ed
andtitl
ehaspassed,t
hecourtwil
l seekt
oimplyat er
m necessar
yforthe
vali
dit
yoftheagreement

Hal
lvBusst

Fai
l
uret
ospeci
fypr
ice

a)Cont
ractsi
l
entonpr
ice

Thegener alpri
ncipl
eisthatacontractwil
lonlyberegardedasv al
idift
he
parti
est oitagreeonpri
ce( ast
hisisoneoftheessent i
alterms),t
hismeans
thati
ft hereisnoagreementonpr i
cestipul
atedint
hecont ract
,thenthe
contractisnotcomplete,andwouldnotbeuphel dbythecour t
.

Hal
lvBusst

Howev
er,
ther
ear
eexcept
ions.

26
Thereisadi st
inct
ionbetweenthesaleoflandandsal eofgoodswi t
hrespect
totheimplicat
ionoftermsbyacour t.Forthesaleofgoods, thecourti
s
somet i
mespr eparedtoimplyatermt hatt
hepur chaserwill
payar easonable
pri
cef ort
hegoods.Thi sint
enti
oni sdemonst r
atedf orexample,wherethe
contracti
spartlyexecut
edandpr opertyi
nt hegoodshaspassed.Acour twi
ll
notimplyat er
mf orpaymentatar easonablepri
cei ntoacontractf
orthesale
ofland

Hal
lvBusst

b)Cont
ractpr
ovi
desf
orpar
ti
est
oagr
eei
nfut
ure

Anagreementtoagr
eeinthef ut
urealsooffendsagainstt
hegener al
princi
ple
ofcomplet
eness.However,
insomei nstances,i
ncont r
actsforthesaleof
goodsthecour
tmayimplyar easonablepri
ceandt hecontractwil
lbeupheld.

Fol
eyvCl
assi
queCoachesLt
d

Howev er
,ifthecont
racti
stosel
ll
and,
oronrent
ali
nanopti
ont
orenewa
l
ease,iti
sunl i
kel
ytobeuphel
d)andwil
lbet
reat
edassuchmat
ter
swhichar
e
si
lentonpr i
ce.

St
ocks&Hol
dingsPt
yLt
dvAr
rowsmi
th

c)Cont
ractmakespr
ovi
sionf
ormechani
sm t
ocompl
ete

Acontractt
hatcont
ainsamechani
sm f
orset
ti
ngater
m atal
atert
imei
s
l
ikel
ytobev al
i
d.Iti
snotuncommonforsuchamechani
sm t
obeusedi
n
r
elat
iontosett
ingaprice.

GodeckevKi
rwan

d)Cont
ractpr
ovi
desf
orpay
mentofar
easonabl
epr
ice

Whet hert
heagreementisuphel
dasbeingsuf
fi
cient
lycert
ainmayt ur
nonthe
natureofthesubj
ectmatteri
ndisput
e.Acontr
actforthesaleofgoodsata
reasonabl
epricei
sli
kelytobevali
d.

Sal
eofGoodsAct1896(
Qld)

Reasonablepri
ceisanobjecti
vest
andardthatcanbedeter
minedwit
hout
fur
theragreementbet
weent hepar
ti
es.Ifonepartybr
eachestheagr
eement
,
thecourtcanassesst
hepr i
cetobeattr
ibutedtot
hegoods,anddamages
canbeawar dedaccor
dingly
.

Br
it
ishbankofFor
eignTr
adeLt
dvNov
inexLt
d

However,cl
ausest
oattr
ibutereasonabl
epri
cetothesaleoflandwil
l
gener
all
ybeuncert
ainorforthesaleofgoodsi
ftheyareuniqueorofver
y

27
speci
alchar
act
eregor
igi
nal
pai
nit
ing

Hal
lvBusst

Subj
ectt
oagr
eement
s:

Sometimespar ti
esmayber eadytosi
gnacontractbutnotabl
eornot
prepar
edt ocommi ttooneormoreaspectsoftheagreement.I
nt hese
ci
rcumst ancespart
iesmaydecidetoent
erint
oagreementssubjecttothe
happeningofapar t
icul
arev
ent.

Subj
ectt
ofi
nanceagr
eement
s

Contr
actsf orsalemaycont ainaclausestatingt hatt
hecontracti
ssubjectt
o
thepurchaserrecei
vingappr oval
forfinanceonsat i
sfact
oryter
msand
condi
tions.Thecont racti
simmedi atelybindingont heparti
esbutwi
llcome
toanendi fthepurchaserisunabletoobt ainfinanceandt er
minat
esthe
contr
actpur suantt
oi t
sterms.

MeehanvJones

a)Sat
isf
act
oryFi
nance

Ithasbeenar guedt hataclausethatprovi

dedforfinancetobeobtai
nedon
‘
satisfact
oryterms’ i
seithertouncert
aintobevalidorgav et
hepurchaser
suchawi dedi scret
ionthatitwasil
lusory
.TheHi ghCour tdi
sagr
eed,and
statedthatast heclausewasi nser
tedforthebenefitoft
hepurchaser,
the
determinati
onofwhet herthefi
nancewassat i
sfactorywaslef
ttothe
purchaser

MeehanvJones

b)St
epst
obet
akent
oobt
ainf
inance

Thefinanceclauseinmostst
andardlandcont
ractsimposesanobli
gat
ionon
thepurchasertotakeal
lst
epsreasonabl
ynecessarytoobtai
nfi
nance
approval
.

MeehanvJones

Subj
ectt
oCont
ract

Foragr
eement st hatareformedsubjectt ocontr act
,thecasecouldfal
linto
oneofthreecategori
es:
1.Thepartieshaver eachedfi
nali
tyinar r
angingallter
msandintendtobe
i
mmedi atelyboundt o perf
orm thoset erms,butatt hesamet i
me
proposet ohav ethet er
msr estatedinaf orm whichwil
lbef ul
l
eror
mor epreci
sebutnotdi ff
erenti
nef fect.Thepar t
iesint
endtobebound
i
mmedi atelythusabi ndi
ngcontractisformed.

28
 Mast
ersvCameron
Br
ancavCorbar
ro

2.Thepar t
ieshav ecompl etel
yagr eeduponal lter
msandi ntendno
departurefrom oradditi
ontothoset er
ms, buthavemadeper f
or mance
ofoneormor eoft hoseter
mscondi t
ionalupont heexecuti
onofa
for
maldocument . Anof f
erinsuchacasei snotexpressedt obe
subjecttoorcondi t
ionaluponaf ormalexecutionofacontractandall
essentialtermshav ebeenagr eedupont husabi ndi
ngcont r
actis
for
med.

Mast
ersvCamer
on
Ni
esmannvCol
li
ngr
idge

3.Thei nt
ent
ionofthepartiesisnottomakeaconcludedbargainatal
l
,
unlessandunti
ltheyexecuteaformalcont
ract
.Part
iesinsuchacase
donoti nt
endtobeboundunt ilt
heyenter
edintoaf or
maldocument
thusnobindi
ngcontractisfor
med.

Mast
ersvCamer
on

Thecategoryapar t
icularcasef
all
sint
ot urnsontheint
enti
onofthepar t
ies.
I
fthepartiesint
endt heagreementtobebindingonthem evenbefor
eent ry
i
ntothefinalcontr
act ,
thecontr
actwil
lfall
intooneofthefi
rstt
wocat egories.

Mast
ersvCamer
on.

I
ntent
iont
ocr
eat
elegal
rel
ati
ons:

St
atementoft
heRul
e
Tocr
eateacont
ractt
her
emustbeacommoni
ntentionoftheparti
estoent
er
i
ntol
egalobl
i
gat
ions,
mutual
l
ycommuni
cat
edexpresslyori
mpliedl
y.

RoseandFr
ankCovJRCr
ompt
on&Br
osLt
d

Thecour t
suseanobj ect
ivetesti
nmakingadet er
mi nationaboutt
he
i
ntenti
onoft hepart
ies.I
nmaki nganobjecti
vedet
ermi nati
onoftheparti
es
i
ntenti
on,thecourtl
ooksatt hesurr
oundingcir
cumst ancesandasksifa
reasonabl
eper sonwouldregardtheagr
eementasi ntendedtobebinding.

Mer
ri
ttvMer
ri
tt

Domest
icandsoci
alr
elat
ionshi
ps

29
Pr
esumpt
ion

Thepr
esumpti
onist
hatdomest
icandsoci
alagr
eement
sar
enoti
ntendedt
o
havel
egal
for
ce.

HeslopvBur
ns
Balf
ourvBalf
our
JonesvPadavat
ton

Rebut
ti
ngt
hepr
esumpt
ion

Thepr esumpti
oncanbeeasilyrebutt
edforexampl eifparti
eswhoar ei
na
famil
ialrel
ati
onshi
parecontr
actinginabusi nesscontextorifahusbandand
wifeenterint
oanagreementincircumstancesi nwhichtheyarenol onger
l
ivi
ngi nharmony.Simil
arl
y,i
fthewor dsusedi nthecontracti
ndi
cateal egal
i
ntention,t
hepresumpti
onthatmayot herwisehav eari
senmayber ebutted.

CaseExampl
es:

a)HusbandandWi f
e
Parti
esinvolvedinadomesticrelat
ionship,wil
lgeneral
l
ynothav eintended
l
egal consequencestofol
lowtheirarrangementthusacont r
actwillnotbe
enforceabl
e.Gi v
enmanycoupl esnowchooset ocohabi twi
thoutmar ry
ing,
thesamepr esumptionshouldapplywher eanagr eementisenter
edi nto
betweenacoupl eli
vingi
nadef act
or el
ationshi
p.

Bal
fourvBal
four

b)Separ
atedhusbandandwi
fe

Wherepartiesar
edivorced,separated,orinthepr
ocessofsepar ati
ng,the
negoti
ati
ondonott akeplaceinthecont extofnat
urall
oveandaf fecti
on
ther
eforetherei
snor oom l
eftfortheappl i
cati
onofsuchapr esumpt i
onand
thecourtwill
gener
allyfi
ndthatther equi
sitecont
racti
ntentexist
ed.

Mer
ri
tvMer
ri
t

c)Ot
herf
ami
l
ial
rel
ati
onshi
ps

Partiesinotherfamili
alrel
ati
onshipsareconsider
edt hesameasmar ri
edor
def actocouples,anditispresumedthattheydonoti ntendtocerat
elegal
rel
at i
onshi
psast heagreementsmadei nthiscontextarebasedonnat ur
al
l
ov eandaf f
ection.Thebondofnat ur
alloveandaf f
ecti
onislikel
ytoweaken
accor di
ngtother emotenessoft heti
eandwi l
lsubsequentlybeeasierto
rebut.

30
JonesvPadav
att
on

I
nfact,
thosecaseswher ethecour tfi
ndst hatthepr esumptionhasbeen
r
ebutt
ed,oneormor eofthef oll
owingfactorsar eof
t enr el
evant
 Theser iousnessoft heconducti nvolved(suchasmov i
ngcountries
orgi
vingupf ull
timeempl oyment )
 Theexpensei nvolved,especi
all
yi ftherel
ev antpartyisnotwealthy
 Whet herthereisorhasbeenadegr eeofhost il
it
yintherelat
ionship
 Thecl osenessoft hef amilyt
ies
 Whet herthesubj ectmat t
eroftheagr eementi sbusinessor
commer ciali
nnat ure

Examples
JonesvPadavatton
Wakeli
ngvRipley
RoufosvBrewster

d)Soci
alRel
ati
onshi
ps

Thepresumptionoflackoflegali
ntentcanext
endbeyondfamili
al
rel
ati
onshipst
oagr eementsenter
edi nt
oinasoci
alcontext
,oragreement
s
madebet weenfri
ends.

Hesl
opvBur
ns

Howev er,acour twi l

lnotal waysfi
ndthatthepartieslackedlegal i
ntention,
evenwhent hear rangementi sclearl
ymadebet weenf ri
endsorar elativ
ei na
socialsetti
ng.( eg.partieswhopool f
undstoent eracompet i
ti
oninone
person’snamemayi nt
entt hatar
rangementtohav elegalconsequences.
Therefore,iftheper sonwi ns,act
ioncanbebroughtt oforcethatper sont o
sharethewi nni
ngswi t
ht heothermember softhegr oups.Whi lethisisf ai
r,i
t
i
sdoubt ful t
hatpar ti
eswhopar ti
cipat
edinsyndicatei nt
endedt hei
ract i
ont o
havelegal consequences) .Thecourtmaybemor el i
kelytoupholdsucha
decisi
oni flargeamount sofmoneyar ei
nvol
ved.

Si
mpki
nsvPay
s

Commer
cial
Agr
eement
Pr
esumpt
ion

Wherepart
iesnegot i
ateandagreei
nabusi nesssetti
ng,iti
sassumedt hat
thepar
ti
esintendedtheagreementtohav elegalconsequences.Theref
ore,
thepar
tyal
legingthatanagreementrel
ati
ngt obusinessmat t
erisofnolegal
eff
ecthastheheav yonusofdemonstrat
ingt hatt
obet hecase.

Edwar
dsvSky
way
s

I
tcansomet
imesbedi
ff
icul
tdet
ermi
ningwhet
herat
ransact
ionhast
aken

31
placeinabusi
nesssett
ing,
abr
oadappr
oacht
owhatconst
it
utesabusi
ness
setti
ngmustbeadopted.

EssoPet
rol
eum CoLt
dvCust
oms&Exci
se

Rebut
ti
ngt
hePr
esumpt
ion

Theint enti
onnott ocr
eatelegal r
elat
ionsmaybeevi
dentinanumberof
dif
ferentway s.Forexample, theagreementmaycontai
nanexpresscl
ause
thatnol egalconsequencesflowf r
om thedocument
,ortheov
erallt
enorof
thepar ti
culardocumentmayi ndicatethatt
hepar
ti
eshadnointenti
onto
enterintolegalrel
ati
ons.

RoseandFr
ankCovJRCr
ompt
on&Br
osLt
d

Gov
ernmentAct
ivi
ti
es

Commer
cial
Agr
eement
s

Ifagovernmentcontr
actar
isesoutofthecommerci
alneedfort
heoperat
ion
ofgovernment,f
orexampletheorderofst
ati
onar
yorcontr
actst
opurchase
vehi
cles,t
heusualcontr
act
ualpri
ncipl
esappl
ytodeter
minewhethera
contr
acthasbeenformed.

Forotherty
pesofcontr
acts,
incr
easedformal
it
ymayberequi
redto
demonstratet
henecessar
ylegali
ntentwhenoneoft
hecontr
acti
ngpar
ti
esi
s
thegovernment.

CoogeeEspl
anadeSur
fMot
elPt
yLt
dvCommonweal
thofAust
ral
i
a

Pol
i
cyI
nit
iat
ives

Wherethegover
nmentacti
vi
tyrel
atest
oapoli
cyini
ti
ati
veacourtmaybel
ess
l
ikel
ytofi
ndthatthepar
ti
esint
endedtoent
ercont
ract
ualr
elat
ions.

Aust
ral
ianWool
lenMi
ll
svTheCommonweal
th
Admini
str
ati
onofPNGvLeahy

Vol
unt
aryassoci
ati
ons
Unlesstherewassomecl earpositi
veindi
cat
ionthatt
hemembers
contemplatedthecr
eati
onofl egalrel
atonsi
i nterse,t
her
ulesadopt
edfor
thei
rgovernancewouldnotbet reat
edasamount ingt
oanenfor
ceabl
e
contract
.

Camer
onvHogan

Thepar
ti
escoul
dpossessr
equi
sit
elegal
int
enti
fthememberhasa

32
pr
opr
iet
aryi
nter
esti
nthecl
ub.

Camer
onvHogan

Ci
rcumst
ancesi
ndi
cat
ingabsenceofi
ntent
ion

HonourCl
auses

Thepr esumptiont hatarisesinacommer cialcontextist

hatthepart
ies
i
ntendedt ocreatel egalrelat
ionsbyent eringtheagr eement
.I ti
showever,
openf orthepartiestof orm acontrary.Thepr esenceofanhonourclausein
contracti
ngpar t
iesagr eement swil
l i
ndicat ebyexpr esswor
dst hatt
heydid
notintendtheagr eementt ohavelegalconsequences.

RoseandFr
ankCovJRCrompt
onandBr
osLt
d
JonesvVer
non’
sPool
sLt
d

Pr
omot
ional
puf
fandf
reegi
ft
s

Wherelanguagesuchas‘ f
reegift
’isused,oranapparent
lyextr
av agantclaim
i
ssetoutinanadv ert
isement,t
heremaybeat endencytothi
nkt hataper son
whoact si
nresponset ot
headv er
tisementmaynoti nt
endlegal
consequencestofol
low.Todet erminewhethertherequi
sit
eintentionexists,
thecourtwil
ll
ooknotonlyatthewor dsused,butalsoattheentirecontextin
whichtheadvert
isi
ngtakesplace.

EssoPet
rol
eum CoLt
dvCust
oms&Commi
ssi
oner
sofCust
oms&Exci
se

Simil
arl
y,i
fthelanguageusedconveysint
enti
on,suchasthedeposi
tof
$1000inabankf orthepurposeofpayment,
itwouldhavelegal
consequences.

Car
li
llvCar
bol
i
cSmokeBal
lCo

Exgr
ati
apay
ment
sandwi
thoutpr
ejudi
ceof
fer
s

Par
tieswhoof f
ertomakeanexgrati
apaymentorwhowr i
tea‘
without
pr
ejudice’let
terwhichi
saccept
ed,
arest
il
lseentopossesthei
ntenti
onto
cr
eatel egalr
elat
ions.

Edwar
dsvSky
way
s.

Thewordsexgrati
adonotcarryanecessary,orevenapr obably
, i
mpli
cat
ion
thatt
heagr
eementi st
obewi t
houtlegalef
fect...apartyiscertai
nlynot
seeki
ngtoi
ncludethel
egalenfor
ceabil
it
yoftheset t
lementitsel
fby
descr
ibi
ngthecontempl
atedpaymentasexgr ati
a.

Edwar
dsvSky
way
s.

33
Let
terofComf
ort

Centr
al tothedet ermi nationofwhet heral ett
erofcomf ortgiv esri
setol egal
i
ntentiswhet hert hepar tiesintendedt ocr eatelegal obligationsbyt hegi vi
ng
andreceiv i
ngoft hel ett
er.Todet er
mi net hi
s,thecour tsl ookatt he
constr
uct i
onoft hedocumentandt hecir cumst ancessur r
oundi ngitssendi ng.
Thefollowingpoi ntswer econsi deredbyt heaut hor
ityinassi gni
nglegal int
ent
totheletterofcomf ort:
 Onaconst r
uct i
onoft hel et
ter,t
het ermswer esuf f
icientl
ypromi ssory
innat ure.
 Thel etterwaspar tofacommer cialtr
ansact i
oni nwhi chthereisa
presumpt iont hatl egal r
elati
onswer eintended.
 I ntentioni sdeducedf rom thedocumentasawhol eseenagai nstthe
backgr oundoft hepr acticesofthepar ti
culartradeori ndustry
.

BanqueBr
ussel
sLamber
tSAvNat
ionalI
ndust
ri
esLt
d

Let
terofi
ntentandunder
standi
ngs

Parti
essomet imesconducttheiraff
air
sont hebasisofanunder st
anding
betweenthem, whichmayar i
seor al
lyorbeputi nwrit
ing.Quest i
onaboutit
s
contract
ual standi
ngmayar isewher eonepar t
ynol ongerwishestobebound.
Arelatedissuear i
sesintheareaofl et
ter
sordocument sofintent.General
l
y,
alett
erofi ntentoranunderstandingwill
representsomet hi
ngshor tofan
i
ntentiontoent eraconcl
udedagr eement .

CoogeeEspl
andeSur
fMot elvCommonweal
th
Mil
ner&SonvPercyBil
tonLtd

Consi
der
ati
on:
Whetherornotapromisethatispartofanagreementcanbeenf orced
dependson,amongotherthings,whetherthepromiseehasgiv
en
consi
derat
ionfort
hepromise.Consi derat
ionisper
hapsbestunder st
oodas
anactorpromiseofanactwhi chisthepri
cepai df
ort heot
her
'spromise.
Thecommonl awwi l
lonl
yenf orceapromiseforwhi chapri
ceispaid.

Dunl
opPneumat
icTy
reCovSel
fr
idge&Co

Thedev el
opmentoftheDoctri
neofPromissoryEst
oppel,
underwhi
cha
promisethathasbeenrel
iedupontoanother
’sdetr
imentmaybeenfor
cedby
thatotherdespi
tet
helackofconsi
derat
ion.

Wal
tonsvMaher

Nat
ureofConsi
der
ati
on

34
Anactorforbear
anceofonepart
y,orthepr
omi
sether
eof ,i
sthepri
cefor
whi
chthepromiseoft
heotheri
sbought
,andt
hepr
omisethusgiv
enforval
ue
i
senfor
ceable.

Dunl
opPneumat
icTy
reCompanyvSel
fr
idge&CompanyLt
d

Consi
der
ati
oni
nBi
l
ater
alCont
ract
s

Abilat
eralcont
ractisfor
medwheretheparti
esexchangepr omises.Atthe
ti
meagr eementisreached,
eachpar
tymakesapr omi se.Thepricepai
df or
thatpromise–theconsider
ati
on–istheotherpart
y’spromise.Eachpar t
y
promisestodoanactorr ef
rai
nfr
om doinganact.

Uni
tedDomi
nionsTr
ust(
Commer
cial
)Lt
dvEagl
eAi
rcr
aftSer
vicesLt
d

Consi
der
ati
oni
nUni
l
ater
alCont
ract
s

Unli
kebil
ater
al contracts,aunil
ater
alcontr
actdoesnotconsti
tutean
exchangeofpromi ses.Theonl ypromiseistheonemadebyt hepr omisort
o
doorrefr
ainfr
om doi nganacti ft
heotherpart
ydoesorrefr
ainsfrom doing
anact.Thus,theactorf orbear
anceit
self
,rat
herthant
hepromi se,
consti
tut
estheconsi derati
on.

Uni
tedDomi
nionsTr
ust(
Commer
cial
)Lt
dvEagl
eAi
rcr
aftSer
vicesLt
d

Execut
edandexecut
oryconsi
der
ati
on

Inbilateralcont racts,
theconsi derationi sconsideredexecut ory
.I nbilateral
contract seachpar tyexchangepr omi seswi t
ht heot hertodoorr efrai
nf rom
doinganact .Thi smeanst hattheobl igati
ont operfor m hasnoty etfall
endue,
thereforetheconsi derationis“execut ory”.Inunilateralcontr
actst hepar t
ies
donotexchangepr omi ses.Onl yonepar tywillmaket hepromiseandan
obli
gat ionwill onlyari
sei ftheot herpar tycarr
iesoutt hespecifi
edact s.
Consi derati
onf orthepr omiseisnotexecut orybecauset heacthasnotbeen
promi sedbyt hepr omisee.I fthepr omi seechoosest oanddoesper f
ormt he
specifiedact s, t
heconsi derati
oni s“execut ed”.

Rul
esgov
erni
ngconsi
der
ati
on
Consi
der
ati
onmustmov
efr
om t
hepr
omi
see

Fortheretobeacont
ractbet
weent
hepr
omisorandt
hepr
omi
see,
consider
ati
onmustmov efr
om t
hepr
omi
see.

DunlopPneumat
icTyreCompanyvSel
fri
dge&CompanyLt
d
Tri
dentGener
alI
nsuranceCompanyLt
dvMcNiecebr
osPtyLt
d
TweddleVAtki
nson

35
a)Benef
itneednotmov
etopr
omi
sor

I
twi l
lgeneral
l
ybet hecaset
hatconsi
derat
ionmov esfrom t
hepromiseeto
thepromisor,whethert
hepr
omiseepromisestopaymoney ,ordoorforbear
from doi
nganact .However
,iti
ssuff
ici
entifconsi
derati
onmovesfrom the
promiseetoat hi
rdpart
yatt
hedirect
ionofthepromisor.

b)Joi
ntpr
omi
sees

Whenapromisei
smadetojoi
ntpromisees,i
tisenoughifconsi
der
ati
onis
gi
venbyoneonbehal
fofal
lbecausei
tisthendeemedt ohavemov edfr
om
al
l
.

Coul
l
svBagot
’sExecut
or&Tr
ust
eeCoLt
d

c)Ov
erl
apwi
thdoct
ri
neofpr
ivi
ty

Thedoctr
ineofpri
vi
typrovidesthatonl
yapersonwhoi
sapart
ytoacont
ract
cansueonit.Apromiseeisonlyabletosueonapromi
sei
fthepromi
see
hasgiv
enconsider
ati
onf orthepromise.

Tweddl
evAt
kinson

Consi
der
ati
onmustbebar
gai
nedf
or

Theactoff or
bear
ancemustbedoneinrel
i
anceofthepromiseandatthe
requestofthepr
omisorandnotdonef
orotherr
easons(
thatareunr
elat
edto
thecontracti
nquest
ion)
.

CombevCombe
Aust
ral
i
anWool
l
enMi
l
lsPt
yLt
dvTheCommonweal
th

Consi
der
ati
onmustbesuf
fi
cient

a)Gener
alpr
inci
ple

Tobev al
i
d,consi
derat
ionmustbesuff
ici
entint
hati
tis‘somethi
ngwhichi
s
ofval
ueintheeyesofthelaw’
.Consi
derat
ionmaybev ali
dal
thoughi
tcannot
begiv
enmonet ar
yequival
ent.

ThomasvThomas

b)Consi
der
ati
onneednotbeadequat
e

Consi
der
ati
onmustbesuf fi
cientbutneednotbeadequat
e.Thecour
twi
l
lnot
enqui
rei
ntotheadequacyorvalueoftheconsi
der
ati
on.

Chappel
l&CovNest
leCoLt
d

Amor
alobl
i
gat
ionorwor
thymot
ivedoesnotconst
it
uteconsi
der
ati
on.

36
East
woodvKenyan
ThomasvThomas
Whit
evBluet
t

c)Consi
der
ati
oncanbenomi
nal

Consi
derat
ionwi
l
lber
egar
dedasv
ali
dev
eni
fiti
snomi
nal
onl
y.(
Eg.Token
gest
ure)

ThomasvThomas
LennoxvCamer
on
NiesmannvCol
l
ingr
idge

Consi
der
ati
onmustnotbepast

a)Gener
alPr
inci
ple

Theconsiderat
ionwil
lber
egardedasbei
ngpasti
fithasal
readyfl
owedf
rom
thepromiseetothepromi
sorpri
ortot
heagr
eementbeingenter
edint
o.
Roscorl
avThomas

b)Pastconsi
der
ati
ondi
sti
ngui
shedf
rom execut
edconsi
der
ati
on

Ift
heact,f
orbearanceorpromisethati
scl
aimedtobeconsi
derati
onhas
alr
eadyoccurr
edorbeengi venbefor
etheagreementi
sent
eredint
o,t
he
consi
derat
ionispastnotexecuted.

Consi
der
ati
onandf
ormal
agr
eement
s
Deeds

Formalagr
eement saresignedunderseal ,andar emorecommonl yref
erred
toasdeeds.Becauseoft hesol emnityorseriousnessofthemannerof
executi
onofsuchdocument s,
thecommonl awhasr ecogni
zedthese
agreement
sasv ali
dev enifconsiderati
onhasnotbeenpr ovi
ded.Simpl
e
agreement
sar eagreementsot herthanformal agreements,
whichareoralor
writ
tenandrequi
reconsiderati
ont obev al
id.

Consi
der
ati
on:
speci
fi
cexampl
es
Mor
alConsi
der
ati
on

Apromisemadebecauseofasenseofmoralobl
igat
iontot
hepr
omi
seewi
l
l
notbesuff
ici
entconsi
der
ati
ont
osupportt
hatpromise.

East
wookvKeny
on

Apr
omi
semadebecauseoft
hel
oveandaf
fect
iont
hatt
hepr
omi
sorand

37
pr
omiseehav ef
oreachother,
orthatt
hepromi
sorhasf
ort
hepr
omi
seei
snot
l
egal
l
yr ecogni
zed(wi
thoutconsi
derat
ion)

Whi
tevBl
uet
t

Per
for
manceofexi
sti
ngdut
ies

a)Per
for
manceofexi
sti
ngcont
ract
ual
dut
ies

General
l
yapr omi sebyonepart
y(thepromisee)t
operfor
m anexist
ing
cont
ractualdutyowedtoanotherpart
y(thepromisor
)doesnotconsti
tut
e
goodconsiderati
onforthepr
omisor’
spromise.

Wi
ganvEdwar
ds

Wherethepl
aint
iffi
sboundbyanexist
ingcontr
actual dut
ytothedef
endant,
perf
ormanceofthatdutywi
l
lnotamounttosuffi
cientconsider
ati
onto
suppor
tafurt
herpromisemadebythepromisor,unlessthedutyi
sexceeded.

St
il
kvMy
rick

Acourtmaybeprepar
edtofi
ndt
hatt
hepar
ti
eshav
eagr
eedt
oabandont
hei
r
or
igi
nalagr
eementandent
eranewone.

Har
tl
eyvPonsonby

Thecour
tmaybewill
i
ngt oacceptper
for
manceofanexi
sti
ngcont
ract
ual
dut
yasgoodconsi
derat
ionwhereitpr
ovi
desabenef
itt
othepromi
sor.

Wi
l
li
amsvRof
feyBr
os

b)Perf
or manceofapublicduty
Whereapublicdutyisi
mposedupont hepl
ainti
ffbyl
aw,per
for
manceoft
hat
dut
yisinsuf
fici
entconsi
derat
ionfort
hedefendantspr
omiseunl
esst
heduty
i
sexceeded.

Gl
asbr
ookBr
osvGl
amor
ganCount
yCounci
l

c)Wher
epr
omi
sei
smadet
oat
hir
dpar
ty

Apromiset
operf
orm anexi
sti
ngcont
ract
ual
dut
yowedt
oanot
herpar
tycan
begoodconsi
der
ati
onforapromi
se.

PaoOnvLauYi
uLong

NewZeal
andShi
ppi
ngCoLt
dvAM Sat
ter
thwai
te&CoLt
d

Par
tPay
mentofDebt

a)Rul
einPi
nnel
’
sCase

38
Apromisetopaypartofadebtcannotconst
it
uteconsiderat
ionf
ora
cr
edit
or’
spromisetoforgot
hebalance(commonlyreferr
edtoasthe‘r
ulei
n
Pi
nnel’
scase’
).

Pi
nnel
scase

Ifanamountofmoneyi sowingbyadebt ort oacr edit

or,andt hosepar t
ies
enteri
ntoasubsequentagr eementt hatthecr edit
orwi l
lacceptal esser
amounti nful
lsatisfactionoft heamount ,thelateramountagr eementwi ll
general
lynotbebi ndi ngbecauset hedebt orhasnotpr ovidedconsideration
forthecredit
or’
spr omi setof orgothebalancedue.Ther efore,ev
eni ft
he
debtoractsonthisagr eementbypay i
ngt helessersum agr eed–andt he
sum isacceptedbyt hecreditor–t hecreditorwillgenerallybeabletosuet he
debtorforthebalancedue.

FoakesvBeer

b)Ci
rcumst
ancesi
nwhi
cht
her
ulewi
l
lnotoper
ate

 Par
ti
esent
eri
ntoadeed

Considerat
ioni
snotrequir
ed,however
,forspecial
tyagr
eement
s( f
ormal
agreementunderseal)
.Ifthepar
ti
esenterintoadeedunderwhi
cht he
credi
torfor
goespartoftheamountowing,thatarr
angementwi
llbe
enforceabl
edespi
tetheabsenceofconsiderat
ion.

 Accommodat
iont
obenef
itt
hecr
edi
tor

I
fadebtorpr
ovi
desconsi
der
ati
onf
ort
hecr
edi
tor
’spr
omi
se,
Pinnel
’
srul
ewi
l
l
notappl
y.

VanBur
genvStEdmondsPr
oper
ti
es

Exampl
esofhowthear
rangementcouldbeal teredbythecredi
tor
:
 Paymentonanearl
iert
hanscheduleddat e
 Paymentatal
ocati
onmoreconv enienttot hecr
edit
or
 Paymenti
nacurrencymoredesi
rabl etothecredit
or

Paymentmadeatadi
ff
erentpl
acef
ort
hedebt
or'
sconv
eni
encedoesnot
evadet
herul
e.

 Amountowi
ngi
sdi
sput
ed

TheruleinPi nnel’
scasewillonlyoperatewhent hereisnodisputebet
ween
thepart
iesast otheamountowed.I fthepartiescannotagr
eeonanamount
owing,theymaywi shtoenterintoacompr omiseagreement.Inthecaseofa
compromi se, al
thoughthecredit
orpromi sestoacceptanamountl essthan
whatthecr editorcont
endsistheaccountoft hedebtinful
lsett
lementofthe

39
debt,t
hedebtorhaspr ovi
dedconsi
derat
ionforthecr
edit
or’
spromise.The
debtorhasagreedtopayanamountmor ethanthedebt
orbeli
evestobedue.
Thisisgoodconsiderati
onevenift
hecredit
orisinf
actcorr
ectandthe
amountclai
medbyt hecredi
tori
sactual
lydue.

HBFDal
get
yLTdvMor
eton

 Pay
mentbyat
hir
dpar
ty

Ifadebtori
sunabl etomeethi sdebttothecr edi
torandobt ai
nsassi
stance
from at
hirdpart
yt odoso, thethi
rdpartytoplacatethecredit
ormayof f
era
l
essersomet hant hefullamountowedt obr i
ngthemat t
ert oanend.Ast he
thir
dpartyi
snotindebt edtothecredi
tor,hi
s/herpromiset opayanamount
shouldbegoodconsi derati
onforthecreditor
’spromisetof or
gothebalance
ofthedebt.Thefactt hatpaymentisbyat hirdpartyandnotthedebtortakes
thecaseoutsi
det heoper at
ionoftherul
ei nPinnel’
scase.

Hi
rachandPunamchandvTempl
e

 Composi
ti
onwi
thcr
edi
tor
s

Underacomposi ti
onwi t
hcredi
tor
’sagreement,thecredi
torsal
lagreeto
acceptpaymentofsomet hi
nglessthanthef ul
lamountowi ngbythedebtor,
i
nexchangef orgivi
ngthedebtoraful
lrelease.Credi
torsmayagreet osuch
anarrangementifitappear
sthatt
hisisthemostl i
kel
yav enuetorecoverany
amountf r
om thedebtor

I
ntheEst
ateofWhi
tehead

For
bear
ancet
osue

Aforbearancetosueort orefrainfrom exerci

singsomel egalri
ghtmay
consti
tuteconsi
derati
on,eveni ftheplaint
if
fwoul dhav ebeenunsuccessf uli
n
theori
ginalcl
aim,provi
ded:
- Theclaim wasr easonableandnotf r
ivolousorv exat
ious
- Thepl ai
nti
ffhonest lybeli
evedtheclaim woul dsucceed
- Theplaint
iffdidnotconceal from thedef endantanyfactsthat
totheplai
ntiff
’sknowl edgemi ghtaffectthev al
i
dityoftheclai
m.

Her
cul
esMot
orsPt
yLt
dvSchuber
t

Bar
gai
nforconductal
readyper
for
med

Theexcepti
ont ot
herulethatpastconsider
ati
onwill
beineff
ect
ivetosupport
apromiseisthati
ftheserviceswoul
donl yhavebeenprovi
dedonthebasis
ofpayment.
Insomecasesi ti
spossibl
et oinf
erthatacert
ainsum woul
dbepaid,anda
subsequentpromisemerelyfix
estheamountofpay ment.

ReCasey
’sPat
ent
s

40
Lampl
eighvBr
ait
hwai
te
PauOnvLauYiuLong

I
nal l
caseswher eapr omiseeseekst oenforceapr omisemadeaf tert
he
provi
sionoftheservices,orotherconductr el
iedupon,thepromiseemustbe
abletodemonst r
atet hat
1.t heactmusthav ebeendoneatt hepr omi sor
’sr
equest:
2.t hepart
iesmusthav eunderst
oodt hatt heactwast oberemuner at
ed
eit
herbypaymentort heconfermentofsomeot herbenefi
t
3.pay ment,ortheconf err
ingofthebenef it,
musthav ebeenlegall
y
enfor
ceablehadi tbeenpr omisedinadv ance

PauOnvLauYi
uLong

Equi
tabl
eEst
oppel
TheDoct ri
neofEquit
ableEst
oppelst
atesthatapromisenotsupport
edby
consider
ationcoul
dgiveri
setori
ghtsi
ncircumstanceswhereitwouldbe
unconscionabl
econductfort
hepromisortorenegeonthepromise.An
estoppelmayarisefr
om pre-
cont
ract
ualnegoti
ati
ons

WaltonsSt ores(I
nterst
ate)LtdvMaher
Forequitableestoppeltoapplytheremustbeunconscionableconductbyone
party
.( Unconscionableconductdenotesacreationorencouragementbyt he
defendantint heotherpart
yofanassumpt ionthatacontractwil
lcomei nto
exi
stenceorapr omisewillbeperformedandfort heot
herpartytohaver el
i
ed
upont hatassumpt i
ont ohisorherdetri
menttotheknowledgeoft hef
irst
party
).

Walt
onsStor
es(Int
erst
ate)LtdvMaher
Mi
lchausI
nvest
ment sPtyLtdvLar
kin

Howev er
,adiffer
entr esultmayapplywheretheparti
essubsequentl
yexecute
af or
mal contractthatisexpressedtoconsti
tut
ethewhol eofthecontract
betweent hepar t
ies,butwher eonepart
yassertsthattheotheri
sestopped
from rely
ingonr i
ghtscr eatedbythewri
ttencontr
actduet oanassumpt i
on
formeddur ingnegot i
ations

Sky
westAv
iat
ionPt
yLt
dvCommonweal
th

Theelement
sofest
oppelmustbeposi
ti
vel
ypr
ovedandwi
l
lrar
elyi
fev
erbe
i
nfer
red

Chel
l
aram &CovChi
naOceanShi
ppi
ngCo

41
El
ement
sofEst
oppel
Assumpt
ionorExpect
ati
on

Ther
emustbeacl earandunambiguousassumptionorexpect
ati
onbyParty
Athatacont
ractwil
lcomeintoexi
stenceorthatapromisewil
lbeful
fi
ll
ed.

Wal
tonsSt
ores(
Int
erst
ate)Lt
dvMaher

Encour
agedorI
nduced

Aclearandunambiguousrepr
esent
ati
onmaybei
mpl
iedf
rom wor
dsusedor
beadducedfrom afai
lur
etospeak,
wheret
her
ewasadut
ytospeak,
orfr
om
conduct.

ThompsonvPal
mer
Walt
onsStor
es(
Int
erst
ate)Lt
dvMaher

I
fapartyact
suponmerehoperatherthanabeli
efinducedorencour
agedby
t
heotherpar
ty,
itwi
l
lnotbesuf
ficientgroundsf
orestoppel

Lor
imervStat
eBankofNewSouthWale
Chel
lar
am &CovChinaOceanShi
ppi
ngCo

Ifanunaut hori
zedstat
ementismadet ot
heknowledgeoftheprinci
plei
n
cir
cumst anceswherethepr i
ncipalknowsoroughttoknowt hatthe
statementi sbei
ngreli
edupon, afail
uretodenyt
hest at
ementisinfact
authori
zedandmayr easonablyber el
ieduponbytheotherpart
y.

Cor
per
s(No.664)Pt
yLt
dvNZISecur
it
iesAust
ral
i
aLt
d

Rel
i
ance

Thepart
ycl
aimi
ngestoppelmustactorabst
ainf
rom act
ingi
nrel
i
anceupon
t
heassumpt
ionorexpect
ati
on.

Aust
ral
i
anSecur
it
iesCommi
ssi
onvMar
lbor
oughGol
dmi
nesLt
d

Thepar
ti
esr
eli
anceuponanassumpt
ionmustber
easonabl
e.

Wal
tonsSt
ores(
Int
erst
ate)Lt
dvMaher

Thechar acter
isti
csoftheplai
nti
ffi
nassessingt hereasonablenessoft he
rel
iance,arerelevant
.(Eg.i
fthepart
iesarest ockbr
okersandmer chant
bankerexper i
encedincommer cewiththeintenti
onoft hei
rsoli
citorto
prepareformal documentat
ionorarelargecommer cialenti
ti
esr epresent
ed
bysolici
tors).

Aust
otelPt
yLt
dvFr
ankl
i
nsSel
fSer
vePt
yLt
d

42
Capi
talMar
ketBr
oker
sPt
yLt
dvHamel
ynUPCLt
d

Knowl
edgeorI
ntent
ion

Thepart
ywhoi nducedtheadopti
onofanassumptionorexpect
ationmust
knoworintendtheotherpart
ytoactorabst
ainf
rom act
ingonrel
ianceont
he
assumpti
onorexpect at
ion.

Wal
tonsSt
ores(
Int
erst
ate)Lt
dvMaher

Det
ri
ment

Ther
elev
antdet
ri
menti
sthatoft
hepl
aint
if
f,nott
hedef
endant
.

Gobbl
ersI
ncPt
yLt
dvSt
evens

Theremustbealinkbet
weent
heassumpt
ionorexpect
ati
oncr
eat
edandt
he
detr
imentsuf
fer
ed.

Gobbl
ersIncPt
yLt
dvSt ev
ens
Aust
rali
a&NewZealandBanki
ngGr
oupvPAWr
ight&SonsPt
yLt
d
ReFerdi
nando

Thepar t
yclai
mi ngestoppel
mustsuf f
erdetr
imenti
nthesenset hat‘
asa
resul
tofadoptingtheassumpt i
onasthebasisofacti
onorinact
ion,the
plai
nti
ffwil
lhaveplacedhimselfinaposi
ti
onofmat eri
aldi
sadvantageif
depart
urefrom thatassumptionisper
mitt
ed

ThompsonvPal
mer

Thedetri
mentisdeter
minedasatthedat
ethedefendantseekstoresi
lef
rom
theassumpt
ionorexpectat
ionheorshehasencouragedorinduced,
and
uponwhichtheothepart
yhasacted
Lori
mervStateBankofNSW

Fai
l
uret
oav
oiddet
ri
ment

Theobjectoftheequit
y(equi
tabl
eestoppel)i
snottocompelthepar
tybound
toful
fi
ltheassumptionorexpect
ati
on;i
tistoavoidthedet
ri
mentwhich,i
fthe
assumptionordetr
imentgoesunful
fi
ll
ed, wil
lbesuf
feredbyt
hepart
ywho
hasbeeni nducedt
oactortoabstai
nfrom acti
ngoni t

Wal
tonsSt
ores(
Int
erst
ate)Lt
dvMaher

Thepartyencouragi
ngorinduci
ngtheassumpti
onmustfai
ltoav
oidthe
detr
imentsuffer
edbyt hepar
tyclai
mingest
oppel
,byf
ail
i
ngtoful
fil
the
assumptionorencouragement.

Wal
tonsSt
ores(
Int
erst
ate)Lt
dvMaher

43
Dependi
ngont heci
rcumstances,thedef
endantmayber equi
redt
odono
morethanwarntheplai
nti
ffthatt
heassumpt i
onorexpectati
onsmist
aken
bef
orethepl
ainti
ffi
ncursi
rrever
sibledet
ri
ment

Lor
imervSt
ateBankofNSW

I
tmaybepossibl
etoshowt herel
evantdet
ri
mentwher
ethedefendanthas
madeanatt
empttoav oi
ddetri
mentbeingsuf
fer
edbythepl
aint
if
fbutthe
at
temptpr
ovestobeinadequate.

Si
l
oviPt
yLt
dvBar
bar
o

Remedi
es
Theobjectofequi
tabl
eestoppel
isnotnecessari
lyt
oenf
orcepromi
sesbutt
o
avoi
dthedetri
mentsuffer
edbyapartywhor el
iesonapr
omi se.

Ther
efor
etheremedyf
orequi
tabl
eest
oppel
ist
hemi
nimum equi
tyt
odo
j
usti
cebetweent
hepar
ties

Commonweal
( thvVer
way
en

Howev
er,i
nsomecir
cumstancestheenf
orcementofapr
omi
semaybet
he
onl
ymeansofav
oidi
ngthedetri
ment.

Wal
tonsSt
ores(
Int
erst
ate)Lt
dvMaher

Theremedyshoul dbeproport
ionatet
ot heunconsci
onabi
l
ity
.Nor mall
yt hi
s
wil
lber el
iancelossrat
herthanexpectat
ionloss,(
Eg.compensati
onforloss
i
ncurred inr el
i
ance on t he assumpti
on ratherthan making good the
expectati
onoftheparti
nginvoki
ngestoppel)
.

Commonweal
thvVer
way
en

Ther
emay ,
however,beapr i
mafaci
eent
it
lementtohavetheexpect
ation
madegoodwher ethereli
eftorel
i
ancewouldexceedwhatcoul
dbegr anted
byenfor
cingtheexpectat
ion.

Also,
wherethenat
ureorli
kel
yext
entofthedetr
imentcannotbeaccurat
ely
oradequat
elypr
edi
cted,
itmaybenecessaryi
ntheinter
estofj
usti
cethatthe
assumpti
onbemadegoodt oavoi
dthepossibi
li
tyofdetr
iment.

Conver
sely,
iftheenf
orcementoft
heexpect
ati
oni
sshownt
obet
oogr
eata
remedyitwi
llnotbeenfor
ced.

Gi
umel
l
ivGi
umel
l
i

44
Pr
ivi
ty

Gener
alr
ule
At hi
rdpar
tyt
oacont
racti
sunabl
etoacqui
rer
ight
sorbenef
it
sundert
he
contr
act
.

Wil
sonvDarl
ingIsl
andSt
evedor
ingCo
Pr
icevEast
on
Tweddl
evAtkinson

St
atut
oryAbr
ogat
ionofPr
ivi
ty
Queensl
and

ThePr
oper
tyLawAct1974(
Qld)s55(
1)pr
ovi
dest
hat
:

Apr omisorwho,foraval
uableconsi
derat
ionmovingfrom t
hepr omisee,
promisestodoort oref
rainfr
om doi
nganactoract sfort
hebenef i
tofa
benefici
aryshal
l
,uponacceptancebythebenefi
ciar
y,besubjecttoaduty
enforceabl
ebythebenefici
arytoper
for
mt hatpr
omi se.

(
a)Pr
omi
sor

Ther elevantpr omisorundert hestatueisthepar t

ywhoact ual
lymakesthe
promi sefort hebenefitofthebenef i
ciary.Int heabsenceofanassi gnment,
thepr omisei snotbindinguponanewpar tywhomer el
yst
andsintheshoes
oft hepromi sorwhomakest hepromi se.(Eg.wher ethepr
omiseismadebya
trusteeofat r ustwho,inturn,issubsequent lyreplacedbyanewt r
ustee,t
he
promi sewi l
lnotbebi ndingont henewt r
ust ee).

ReDav
ies

(
b)Benef
ici
ary

Fort
hepurposeofs55,
apartyi
sclear
lyabenefi
ciaryift
heyareexpr
essl
y
namedinacontr
actasrecei
vi
ngthebenef
itofper
f ormanceofworkundera
cont
ract

ReBur
nsPhi
l
pTr
ust
ees

Aper
sonwhoi snotnamedinthepromi
sebuti
sinci
dental
l
ybenefi
tedbyt
he
pr
omisegener
all
ycannotenf
orcethepr
omisei
nrelanceofs55.
i

ReBurnsPhil
pTrust
ees
Nor
thernSandbl
asti
ngPtyLt
dvHar
ri
s

(
c)Pr
omi
se

45
Pr
omi
sei
sdef i
nedins55(6)asbeingapr omise:
 Whichisorappearstobeintendedtobelegal
lybi
ndingand
 Whichcreat
esorisintendedtocreateadutyenf
orceabl
ebya
benefi
ci
ary

Acontract
ualt
ermthatmerelyregulat
est
herel
ati
onshi
pbet weenpr
omisor
andpromiseewil
lnotbeenforceabl
ebyathi
rdpart
yifitdoesnotamountt
o
apromisetobenefi
tthet
hir
dpar tyandcr
eat
eanenforceabledut
y

Dav
isvAr
cherPar
kNewsagencyRockhampt
on

(
d)Accept
ance

Secti
on55( 6)defi
nes‘
accept
ance’asanassentbywordsorconduct
communi catedbyoronbehalfoft
hebenefi
ciaryt
othepromisor–ortoa
personauthori
sedonhisorherbehalf–i
nthemanner( i
fany
)specif
iedi
nthe
promiseandwi thi
nthet
imespecif
iedint
hepr omi
se.

I
tseemsthatanaccept
ancemustoni
tsf
acebeanassent.I
tisi
nsuff
ici
ent
f
orther
etobewordsorconductt
hati
smerel
yconsi
stentwi
thaccept
ance.

ReDav
ies

Itmaybesuf
fi
ci
enti
fthepr
omi
secomest
othenot
iceoft
hebenef
ici
ary
’s
sol
ici
tor
.

ReDav
ies

Provi
dedt hebenefici
ary
’sassentpurport
stoacceptthepromi
se,i
tis
i
mmat eriali
finfactthepurpor
tedacceptanceprecedest
hepromiseto
benefi
tthebenef i
ci
arythusanantici
patoryaccept
ancemaysuffi
ce.

Hy
attAust
ral
i
aLt
dvLTCBAust
ral
i
aLt
d

(
e)Def
ences

Secti
on55(4)pr
ov i
desthatanymat t
erthatwouldot
her
wisebereli
edonas
render
ingapromisevoid,v
oidableorunenfor
ceabl
ewil
lbeavai
labl
ebyway
ofdefencei
nproceedingsfortheenfor
cementofadutyunders55.

Theint
endedobjectofthi
ssubsectionprovidest hatdef
encessuchas
mist
ake,fr
aud,misrepr
esentati
on,Stat
ureofFr audsandSt at
ueofLimi
tat
ions
et
c,whichmaybeav ai
l
abletothepromisoragai nstthepromiseear
eal
so
avai
l
abletotheformeragainstthebenefi
ciary.

(
f)Var
iat
ionorResci
ssi
onofPr
omi
se

Unders55(
2),befor
eaccept
ance,
thepart
iestothecontractmayvaryor
resci
ndt
hepromise.However
,s55(3)pr
ovidest
hatafteraccept
ance,t
hei
r

46
t
ermsoft
hepromiseandthedut
yofthepromi
sororbenefi
ciar
ymaybe
v
ari
edordi
schar
gedonlywit
hconsentoft
hepromisorandthebenef
ici
ary
.

(
g)I
mposi
ti
onofBur
dens

Secti
on55( 3)(
b)stat
esthatt
hebenefi
ciarywi l
lbeboundbyanypromiseor
dutythatisimposedaspartoft
hepromi sethatbenefit
shi
m orher.An
obli
gati
onmaybei mposeduponthebenef i
ciarybutonl
yaspartofapromi
se
thatconfersabenefi
tuponhim/her
.

(
h)CommonLawSt
il
lAppl
i
cabl
e

Secti
on55( 7)savesthecommonl awsothatwherethestat
uecannotbe
appli
ed,thecommonl awst
il
l does.Consequentl
y,abenefi
ciarywhois
unabletomakeoutacaseundert hestat
utewouldbel ef
ttor el
yonan
excepti
ontot hepri
vi
tydoctr
ineifonewereav ai
l
ableinthecircumst
ances.

Commonweal
th

I
nsur
anceCont
ract
sAct1984(
Cth)s48
TodayinAustr
ali
a,i
nsurancecasesar ethesubj
ectoflegi
slat
iont
oovercome
thePri
vi
tyr e.Sect
ul ion48oft heInsuranceContract
sAct1984hasprovided
athi
rdpart
ywi t
harighttorecoverdir
ectlyf
rom aninsur
ertheamountofhis
orherl
oss.

Ent
it
lementofnamedper
sonst
ocl
aim

Wher eapersonwhoi snotapar t

yt oacont r
actofgener alinsuranceis
specifi
edorrefer
redtoi nthecontract,
whet herbynameorot herwise,asa
persontowhom t heinsurancecov erprov
idedbyt hecont ractextends, t
hat
personhasar i
ghttor ecovertheamountoft heperson'slossf r
om t heinsur
er
i
naccor dancewiththecont r
actnot wi
thstandingthattheper sonisnotapar ty
tothecontract
.

Sect
ion48oft
heI
nsur
anceCont
ract
sAct1984

Mar
it
imecont
ract
sofcar
ri
age

(
a)Ser
vant
soragent
sofseacar
ri
ers

Ifthepriv
ityr
ulewer etobeapplied,thentheusualexempt i
onf r
om liabi
li
ty
thatappearincontractsofcarri
ageexempt ingthecarri
erfrom li
abil
ityt
othe
ownerofgoodsf orlossordamaget othegoodscouldbesi mpl yevadedby,
forexampl e,
suinginsteadtheser v
antsoragentsoft hecarri
er.Thishas,in
thepast,beenav oi
dedbyt heinclusionofabil
lofladingevidencingthe
contractofcarr
iageapr ovi
sionknownasa‘ HimalayaClause’.

Suchacl
ausemakest
hecar
ri
ert
heagentf
ori
tsser
vant
s,agent
sor

47
i
ndependentcontract
orsinrelat
iontoanexempt i
onofli
abi
li
tyf
orlossor
damaget othegoods.Thecl ausehasbeenheldef f
ect
ivet
oexemptf r
om
l
iabi
li
tyt
hirdpart
iestothecont r
actofcarr
iagesuchasthemaster,
crew,or
stev
edoreswhoar eentrust
edwi thl
oadingandunloadi
ngthegoods.

Nowbyf orceoflawrat
herthanbypr ovi
sionsi
nacont r
act,
parti
essuchas
t
hemast erandcr ew–butnotindi
vidualcontr
act
orssuchasSt evedor
es–
maynowr elyontheexemptionscontai
nedi nacontr
actenter
edintobetween
t
hecarr
ierandt heownerofthegoodsshi ppedbysea.

Car
ri
ageofGoodsbySeaAct1991

(
b)Consi
gneesandi
ndor
sees

All
right
sintheor i
ginal
cont
ractofcarr
iagearetr
ansfer
redtoathi
rdpar
ty
buyerasfrom t
het i
meofconsignmentorindorsement.Eff
ecti
vel
y,t
her
efor
e,
aconsigneeorindorseemaynowenf orceri
ghtsunderacontr
actt
owhichhe
orshewasat hirdparty
.

SeaCar
ri
ageDocument
sAct

Secondly,
all
outstandi
ngl i
abi
li
ti
esundertheori
ginal
contr
actofcar r
iagear e
transf
err
edtoathirdpartybuyerwhenheorshedemandsort akesdeliver
yof
thegoods.Thus, i
tispossibl
etoimposeaburdenonaconsi gneeori ndorsee
despit
ethefactthatheorshewasat hir
dpartytotheori
ginalcontr
actof
carri
age.

SeaCar
ri
ageDocument
sAct
.

Socal
l
edexcept
ionsatcommonl
aw
Agency

Agencyisal egalrelat
ionshipbetweent wopeopl ewhereoneoft hem, the
pri
ncipal,
givet otheot her,t
heagent ,theaut hori
tytocreatel
egal r
elati
ons
betweent hepr i
ncipalandt hethi
rdpar ty.Iftheagentact swit
hinhisorher
act
ual author i
ty,
eitherexpressorimpl ied,orwi t
hinhi
sorherost ensibl
e
authori
ty,suchactwi l
lbindtheprincipal:t
hati sthepri
ncipal
cant akeaction
i
nhi sorherownnamet oenf or
cet hecont ractmadebyt heagentorbecome
personall
yliableshoul dthecontractbebr eached.

Tri
dentGeneralI
nsur
anceCoLtdvMcNi
eceBr
other
sPt
yLt
d
TeheranEur
opeCoLt dvStBel
tonLt
d

Def
ini
ti
on

Thepri
nci
palisnotast
rangertoacont
ractmadebyt
heagent,
hei
soneof
thepar
ti
es,t
heagentbei
ngt hemedi
um bywhicht
hecont
racti
smade.

48
Har
vest
erCoofAustPt
yLt
dvCar
ri
gansHazel
denePast
oralCo

Theprinci
plesofagencymayalsoapplywheretheagentdoesnotdiscloset
o
theothercontr
acti
ngpart
ythatheorsheisacti
ngonbehalfofaprincipali
f
theotherpart
yiswill
i
ngtocontractwi
thanyoneonwhosebehalftheagent
acts,
suchwi l
li
ngnessmaybeassumedbyt heagent.

Teher
an–Eur
opeCoLt
dvStBel
ton(
Tract
ors)Lt
d

Exempt
ioncl
ausesandt
hir
dpar
ti
es

Theissueofwhetherapartywhoisnotpar
tyt
oacont
ract
,par
ti
cular
lyfort
he
carr
iageofgoods,cannevert
hel
essrel
yonanexempt
ionf
rom l
iabi
li
ty
contai
nedinthatcont
ract
.

Anexcl
usioncl
auseinadocumentli
keabi
llofl
adi
ngmaybedraftedsoatt
o
ef
fect
ivel
yprot
ectt
hirdpar
ti
essuchasst
evedor
esiff
ourcondi
ti
onsaremet:

1.therel
evantbi l
lofl
adi
ngmustmakei tcl
earthatthestevedoreis
i
ntendedt obepr ot
ect
ed;
2.thebil
lofladingmustalsomakei tclearthatthecarri
eriscontract
ing
notonlyoni tsownbehalfbutal
soasagentf orthestevedoresin
rel
ati
ont otheexemption;
3.thecarr
ierwassoaut hori
sedbythest ev
edores,alt
houghlater
rat
if
icati
onbyt hestev
edoreswilldo;and
4.anydiff
icult
iesconcer
ningconsi
der ati
onmov i
ngfrom thestevedores
areovercome.

Ift
hesefourcondi
ti
onsaresati
sfi
ed,
thecarr
ier
-pr
omi
soref
fect
ivel
y
contr
act
sasagentf ort
hestev
edore-
benef
ici
ary.

Scr
utt
onsvMi
dlandSi
l
icones

Tr
ust
s

At
rusti
scr
eat
edwher
eat
rust
eehol
dspr
oper
tyonbehal
fofabenef
ici
ary
.

Thetr
usteehol
dsthelegalt
it
let
osuchpr
oper
tysubj
ectt
othei
nter
estoft
he
benef
ici
aryi
nsuchpropert
y.

Apromiseewi llberegardedasatrusteeofapr omiseifitwast heclear

i
ntenti
onoft hatpartyattheti
meoft hecont
r actwasent er
edi nto.Unlessan
i
ntenti
ontocr eateat r
ustiscl
earl
ytobecollectedfrom thelanguageused
andthecircumst ancesofthecase,t
hecourtswi l
lbereluctanttoinf
ersucha
tr
ustexist
s.

ReSchembsman
Tr
identvMcNi
ece

Whet
herat
rusti
scr
eat
edwi
l
ldependonat
rueconst
ruct
ionoft
het
ermsof

49
t
hecontractandthei
ntent
ionoftheparti
es.Inderi
vi
ngintent
ionfrom t
he
l
anguagethatthepar
ti
eshaveempl oyedthecourt
smayl ooktothenatureof
t
hetransacti
onandthecir
cumstances,i
ncludi
ngthecommer cial
necessit
yof
t
hearrangement.

Tr
identvMcNi
ece

Theintent
ionrequir
edt ocr
eat
eatr
ustneednotbehel
dbybot
hpar
ti
es,
iti
s
suf
fi
cientift
hepr omiseeal
onehol
dsthei
ntent
ion.

Tr
identvMcNi
ece

Unj
ustEnr
ichment

I
faninsureri
spaidandrefusest
ooff
erbenefi
ttoathi
rdpart
yontheground
thatt
heyarenotpar
tytothecontr
act
,thet
hir
dpartymaytakeact
iononthe
pri
nci
plesofunj
ustenr
ichment.

Tr
identvMcNi
ece

Thekeyelementofunj ustenri
chmentistheunconscionabil
it
yofthe
defendant’
sconductinretai
ningapart
icularbenefi
tattheexpenseoft
he
plai
ntif
f.Butthisi
ssueremainswhetherthebenef i
tret
ainedbythedef
endant
i
st hepremium paidorthepromisedbenefit
.Anar gumentcouldbemade
thatthedefendanthasbeenunjustl
yenri
chedonl ytotheextentoft
he
premium paidtoit
.

For
mal
i
ties
Provi
dedacontracti
svalidlyformedandtherearenovi
ti
ati
ngfact
ors,
acti
on
canusual
lybebroughttoenf orceaver
balcontract
.Notwi
thst
andi
ngthis
gener
alproposi
ti
onhowev er,
al i
mit
ednumberofcontr
actsmustbe
evi
dencedbywriti
ngforthem t obeenfor
ceable.

Guar
ant
ees
Acont ractofguar anteemustbei nwrit
ingandsi gnedbythepartyt
obe
chargedi nordert obeenforceable.“
Noact ionmaybebr oughtuponany
promiset oguar anteeanyli
abili
tyofanotherunlessthepr
omi seuponwhi
ch
suchact ionisbr ought,
orsomememor andum ornot eofthepromise,
isi
n
writ
ing,andsi gnedbyt hepartytobechar ged,orbysomeot herper
sonbythe
part
yl awf ul
l
yaut hori
sed”.

Sect
ion56(
1)oft
hePr
oper
tyLawAct1971(
Qld)

50
Nat
ureofGuar
ant
ee

Acont
racttoanswerfort
hedebt,def
aul
tormi
scar
ri
ageofanot
herwhoi
s
pr
imar
il
yliabl
etothepromisee.

YoemanCr
edi
tLt
dvLat
ter

Tr
ansact
ionswhi
char
enotguar
ant
ees

Tr
ansacti
onsthatar
enotguarant
ees‘wi
l
lnot
’hav
etocompl
ywi
tht
he
st
atut
oryrequi
rementsoff
ormali
ti
es.

a)Cont
ract
sofi
ndemni
ty

I
nani ndemnity,t
hesur et
yundertakespr
imaryl
i
abi
li
ty,
rat
hert
hansecondar
y
l
iabi
li
ty,meaningthatthesuret
ywi ll
beli
abl
enotwi
thst
andi
ngthatt
he
pri
nci
pal t
ransacti
onisunenforceable

YeomanCr
edi
tLt
dvLat
ter

b)Pr
omi
seofguar
ant
eemadet
othedebt
or

I
tispossi bl
eforaper sontopr
omi set
hepri
nci
palobl
igator(t
hedebtor)
,
ratherthanthecredi
tor,t
hatheorshewil
lpayt
hedebtoft hedebtor.Asthe
promi seisnotmadet othepersonwit
hwhom thepri
ncipalobl
igorcont
ract
s,
thecont r
actisnotoneofguarantee

East
woodvKeny
on

c)Per
sonagr
eest
otakeov
ert
hedebtofanot
her

Wher eadebtorandcredit
orhaveenter
edintoacont r
actofloan,
itcoul
d
occurthatathi
rdpartyagreeswit
hthecredit
ortotakeoverthedebtofthe
debtor.Suchanarrangementisnotacontractofguarant
eeandt her
efor
e
neednotcompl ywit
ht hestat
utor
yrequi
rementoff or
malit
y.

Gr
ayvPear
son

d)Theagr
eementi
mposesnoper
sonal
li
abi
l
ityont
heper
son

I
fapersondoesnotunder
takeper
sonall
iabi
li
ty,buti
nst
eadproff
ershi
sor
herpr
oper
tyassecuri
tyt
othepromiseeunderthepri
nci
palt
ransact
ioni
tis
notaguar
antee.

Har
veyvEdwar
ds,
Dunl
op&CoLt
d

e)Let
ter
sofcomf
ort

Whetherthel
ett
erofcomforti
sbi
ndi
ngasacontractual
document,sothathe
t
hir
dpar t
ymaybecalledupontopay
,dependsontheconst
ruct
ionofthe

51
document.Fr
equent
lyt
heissuei
swhethert
herewasanint
enti
onbythe
part
ies,
namel
ythethi
rdpart
yandthel
ender
,tocr
eatel
egalrel
ati
ons.

BanqueBr
ussel
sLamber
tSAvAust
ral
i
anNat
ionalI
ndust
ri
esLt
d

Requi
rementofwr
it
ing:
cont
ent

Foracont r
actofguar anteetobeenforceabletherel
evantstatutor
ypr ovi
sion
requi
reseitherthepromi seistobeinwrit
ing,orsome‘memor andum ornot ’
ofthepromi seistobei nwr i
ti
ng.Theprov i
siondoesnot,howev er
,elaborate
onprecisel
yt heinf
ormat ionthatmustbecont ai
nedinthewr i
ti
ngt osati
sfy
thestat
utoryr equi
rement .

Pr
oper
tyLawAct1974(
Qld)

Guidancef
rom casel
aw,inHarveyvEdwar
dsDunl
op&Co,pr
ovidest
hatt
he
documentmustcontai
n‘all
essenti
alt
ermsoft
heagr
eement
’.

a)I
nfor
mat
ionpar
ti
cul
art
otheguar
ant
ee

Fi
rst,‘
theguaranteemustcontainthenamesoft herelevantpar t
ies:the
l
ender,thedebtorandtheguarantor’
.Itmayhappent hatt heguar ant
ee
makesr efer
encet oapart
ywithoutexpresslyi
denti
fyi
ngt hem.Aut horit
ies
suggestthatevenifapartyi
snotexpr esslyi
dent
if
ied,‘adescripti
onoft he
partywil
lbesuf f
ici
enti
fthedescri
pti
onusedcanbeexpl ainedbyext rinsic
evi
dencewi thouthavi
ngtoresorttoevidencetoprovethei nt
entionoft he
author.

RosservAust
ralWi
ne&Spi
ri
tCo

Secondly,‘
therelevantt
ermsoft heguaranteemustbest ated’
.Thiswoul
d
generall
yrequiretheamountofdebtbeingguar anteedmustbespecifi
ed.If
theguaranteeisgivenoft heamountadv ancedbythelendertoget
herwit
h
i
nterestont hatamount,theint
erestpay
abl ebythedebtorshouldal
sobe
specif
ied.

Ther
earet
wootheri
mportantcaveat
stothegener
alpr
oposi
ti
ont
hata
guar
ant
eemustcont
ainal
loftheseessent
ial
ter
ms.

Fir
st,
whilethel
endermustprovi
deval
uableconsi
der
ati
ontotheguar
ant
or
foraval
i
dcont r
actofguarant
eetobefor
med, t
henatur
eofthat
consi
derati
onwil
lnotberequi
redtobecontai
nedint
heguarant
ee.

Pr
oper
tyLawAct1974(
Qld)s56(
2)

Second,whereamat eri
alterm hasbeenomitt
edf r
om theguarantee,there
maybel imit
edci r
cumst ancesinwhichtheguarant
eewi l
lsti
ll
beenf orceable
againsttheguarantorf
orexampl e,i
ftheter
mi sforthebenefi
tofthel ender,
thelenderwil
lbeent i
tl
edt owaivethebenefi
toftheoralter
m notreducedt o
writ
ingtoenforcetheguar anteeasmodifi
ed(Eg.Awai vert
ocollectinter
est

52
ont
heamountowedi
fdet
ail
soft
hei
nter
est
edar
eomi
tt
ed)

Hawki
nsvPr
ice

b)Acknowl
edgementoft
heagr
eement

Thewr
it
ingmustcont
ainanacknowl
edgementofaconcl
udedagr
eement
.

Pi
ri
evSaunders
Ti
ver
tonEst
atesLt
dvWear
wel
lLt
d

Requi
rementofwr
it
ing:
signedbypar
tyt
obechar
gedoragent

Tosatisf
ythest
atutoryprovi
sion,t
hepromi
seornoteormemor
andum ofthe
pr
omi semustbe‘signedbythepar t
ytobechar
ged,
orbysomeotherper
son
bythepartyl
awf
ullyauthori
sed’.

(Upont hedebtor’
sdefaul
t,t
helenderwill
seektoenf or
cet heguarantee
againsttheguarantor
.Therefor
e,iti
stheguarantorwhoi sthepartytobe
chargedwi t
hinthemeaningoftheprovisi
on.Tosatisfytheformali
ti
es
requir
ement ,
theref
ore,t
heguaranteemustbesi gnedbyt heguarantor)
.

Pr
oper
tyLawAct1974(
Qld)

Toapplythi
sprinci
plei
nthecontextofaguar ant
ee,i
ft heguarant
or’sname
appearsontheguarant
ee,anditi
st heguarantor
’si
ntentionthatt
hename
authent
icat
esthedocument,i
twillbesuffi
cientt
osatisfythestat
utory
requi
rement.

Dur
rel
lvEv
ans

Cont
ract
srel
ati
ngt
oland
Noact i
onmaybebr oughtuponanycontractforthesal
eorotherdisposi
ti
on
oflandoranyi nt
eresti
nlandunlessthecontractuponwhichsuchactionis
brought,orsomememor andum ornoteofthecontract
,isi
nwrit
ing,and
si
gnedbyt hepart
ytobechar ged,
orbysomeper sonbythepart
ylawfull
y
authori
sed.

Pr
oper
tyLawAct(
Qld)s59

Nat
ureofcont
ractneedi
ngwr
it
ing

Therequi
rementoff
ormal
it
yappli
estoacont
ractf
orthesaleoflandorany
i
nter
estinlandaswel
lasacont
ractf
ortheot
herdi
sposit
ionoflandorany
i
nter
estinland.

Pr
oper
tyLawAct(
Qld)s59

53
Requi
rementofwr
it
ing:
cont
ent

Aswasthecaseforguaranteest
hedocumentmustcont
ain‘
al
ltheessent
ial
ter
ms’
,i
salsorel
evanttoland.

Har
veyvEdwar
ds,
Dunl
op&Co

a)I
nfor
mat
ionpar
ti
cul
art
othecont
ract

Therearefourmat
ter
sthatmustberecor
dedt
osat
isf
ythest
atut
ory
requi
rementinacont
racti
nvol
vi
ngland.

Twy
nam Past
oralCovAnbur
n

1.Thedocumentmustcont
aint
hepar
ti
est
othecont
ract

Wi
l
li
amsvBy
rnes

Aswithguar
ant
ees,asl
ongastheint
enti
onofthepar
ti
esiscl
ear,
ext
ri
nsi
c
ev
idencemaybeint
roducedt
oestabl
isht
heident
it
yofthepar
ti
es.

RosservAust
ralWi
ne&Spi
ri
tCo

2.Thepr
oper
tymustbeadequat
elydescr
ibed.

Pi
rievSaunder
s
SouthCoastOi
lsvLookEnt
erpr
ises

I
ftheproper
tythesubj
ectofthesal
eispar
tonl
yofapar
ti
cul
arl
ot,
car
emust
betakentospeci
fi
cal
lyi
denti
fythepor
ti
onbei
ngsol
d.

Pi
ri
evSaunder
s

I
ncontrast
,iff
reeholdproper
tyissol
dsubjecttoanexist
ingleasehol
dand
t
heleasehol
dinteresti
sknownt othepurchaser,
ther
eisauthorit
ytosuggest
t
hatthepropert
yissuffi
cient
lydescr
ibedevenifther
eisnoreferencet
othe
l
ease.

Ti
mmi
nsvMor
elandSt
reetPr
oper
tyCo

3.Theconsi
der
ati
onf
ort
hepr
omi
se,
namel
ythepr
ice,
mustber
ecor
ded

Bur
gessvCox
Wai
nvWalter
s

4.Theprinci
palter
msofthecont
ractmustbediscl
osed.(
Eg.Ifthe
par
tiesrequi
reti
metobeoftheessence,
thatcondi
ti
onshouldbe
i
ncludedinthecont
ract
).

Fai
l
uret
oincl
udei
nthedocumental
lessent
ial
ter
msmi
ghtnot

54
 necessari
l
ybefatal
tothepl
aint
if
f,i
ftheter
m omit
tedi
sforthebenef
itof
theplai
nti
fft
heymaywaivet
hebenef i
tofcl
auseandseekenfor
cementof
thecontr
actwit
houtit
.

Pet
ri
evJensen

b)Acknowl
edgmentofagr
eement

Thewr i
ti
ngmustcont
ainanacknowledgmentofagr
eementaswellast
he
ter
msoft heagr
eement.Suchacknowledgementmaybeexpr
essedor
i
mpl i
edinthewri
ti
ng.

Pi
ri
evSaunders
Ti
ver
tonEst
atesLt
dvWear
wel
lLt
d

Ther
ewillbeinsuf
fi
cientwr
it
ingwher
eacontr
acti
smade‘
subjectt
o
cont
ract
’inthesenseofacondit
ionmadebef
oret
hef
ormat
ionofthe
cont
ract
.

Ti
vert
onEst
atesLt
dvWear
wel
lLt
d
Dar
tervMol
loy

Requi
rementofwr
it
ing:
signedbypar
tyt
obechar
gedoragent

Thedocumentmustbesi
gnedbyt
hepar
tyt
obechar
ged.

Pr
oper
tyLawAct(
Qld)

(Ift
herei
spurport
edcont ractf
orthesaleofthelandandthesel
lercl
aimsnot
tobeboundbyt heagreement ,
thesell
erwil
lbethepartytobechargedfort
he
purposesofanyacti
onbr ought.Simil
arl
y,i
fthebuyercl
aimsnottobebound,
thebuyerwil
lbethepartycharged).

Aper sonmayhav ebeent akent osi

gnadocumenti ft
hesignat
urei sabsent
aslongast henameoft hepartyispl
acedont hedocumentandt hatparty
expresslyorimpli
edlyindi
catesthatheorsher ecogni
zesthewrit
ingasbei ng
anaut hent
icatedexpressi
onoft hecont
ract
.Iti ssuff
ici
enti
faper sonwhoi s
dulyauthori
sedbyt hepartytobechargedsignst hedocument.

Pi
ri
evSaunder
s

Joi
nderofdocument
s
I
tispossibl
etosat i
sfythestat
utor
yr equir
ementofwri
ti
ngevenifal
lofthe
rel
evanti
nformationisnotcontai
nedi ntheonedocument.Adocumentmay
beabletobejoinedifther
eisar ef
erence,expr
essorimpl
ied,t
oanother
documentortoat r
ansacti
on.

Har
veyvEdwar
ds,
Dunl
opandCo

55
Ref
erencet
oadocument

Wherethedocumentsi
gnedbythedef
endantmakesr
efer
encet
oanot
her
document,
joi
nderoft
hatdocumenti
spermit
ted.

Toni
tt
ovBassal

Asthedocumentjoinedinthi
swayi sr
eferr
edt oint
hedocumentsignedby
thedef
endant,
itfol
l
owst hatthejoi
neddocumentwi l
lbei
nexist
enceatthe
sametimethedocumenti ssignedbythedefendant
.Therear
etwo
except
ionst
othisgeneralposit
ion.

a)Document
sthatar
ephy
sical
l
yconnect
ed

Adocumentphysi
cal
l
yconnect
edt
othedocumentsi
gnedbyt
hedef
endant
maybejoi
ned.

M’
EwanvDy
non

Wher eal et
teri
ssignedbyt hedefendantandsentt ot
heplai
nti
ff
,butt
he
l
etterdoesnot ,onit
sown, containthenecessaryi
nfor
mati
on,thecour
twil
l
al
lowt heenv el
opetobej oi
nedt othelet
ter.Inthi
sway,t
herewill
beanoteor
memor andum oftheinf
ormationont heenvelope,
namelythenameofthe
pl
ainti
ff.

Pear
cevGar
dner

b)Document
sthatar
eexecut
edatt
hesamet
ime
.
‘
Wher etwodocument sreli
edonasamemor andum ar esignedand
exchangedatoneandt hesamemeet ingaspar tofthesamet ransact
ion,so
thattheymayfair
lybesaidtohavebeent oallintentsandpur poses
contemporaneouslysi
gned,thedocumentsignedbyt hepar t
yt obechar ged
shouldnotbetreatedasincapabl
eofreferr
ingt otheot herdocumentmer el
y
becausethelatt
er,onami nutei
nvest
igati
onoft heorderofev entsatthe
meet i
ng,i
sfoundtohav ecomesecondi ntheor derofpr eparationand
signi
ng.

Ti
mmi
nsvMor
elandSt
reetPr
oper
tyCo

Ref
erencet
oat
ransact
ion.

Wherethewri
ti
ngsignedbyt hepartyt
obechar gedr
efer
stoat r
ansact
ion
(
rat
herthanadocument ),
Joinderisal
lowedandparolev
idencemaybegiven
t
oexplaint
hetransact
ion,andtoident
ifyanydocumentr
elat
ingtoi
t.

FauziEl
i
asvGeor
geSahel
y&Co

56
Ef
fectofst
atut
orynon-
compl
i
ance:
commonl
aw
Undercommonl awpri
nci
ples,
ifacontr
actfail
stocomplywithstat
utory
provi
si
ons‘noacti
oncanbebrought’
.Theref
oreifoneofthepart
iesref
uses
tocompleteacontr
act
,noacti
oncanbet akenbytheotherpart
ytoenforce
thecont
ract…

Pr
oper
tyLawAct(
Qld)

…Act
ioncannotbebr
oughtf
orspeci
fi
cper
for
mance…

Ti
ver
tonEst
atesLt
dvWear
wel
lLt
d

…Orf
ordamagesf
orbr
each.

Ti
mmi
nsvMor
elandSt
reetPr
oper
tyCo

Cont
ractv
ali
dtopasst
it
le

Alt
houghacontractf
aili
ngt ocomplywithst
atut
oryr
equir
ement swil
lbe
unenfor
ceabl
e,i
twill
beav ali
dcontr
act.Thi
smeanst hat
,ifthecont
racti
s
perf
ormedbytheparties,
itwillbeef
fect
ivet
opassgoodt i
tle.

May
wal
dvRi
edel

Recov
eryofmoneypai
dunderunenf
orceabl
econt
ract

a)Recov
eryofdeposi
t

Adepositpaidbyabuyerisconsideredtobe‘ anearnesttobindt
hebargai
n’
.
Ift
hesaleisnotcompletedduetot hebuy er
’sdefaul
t,t
hedepositi
sli
ablet
o
for
fei
turetothevendor
.Thisistheposi t
ionifthecontracti
sonethat
complieswit
horf ai
l
sthestat
utoryr equi
rementsoff or
mal i
ty.

Fr
eedom vAHRConst
ruct
ions

Whereanenf or
ceabl
econt r
actforthesaleoflandisnotcompl et
edbecause
ofthesell
er’
sdefaul
t,t
hedeposi ti
srecoverabl
ebyt hebuyerasmoneyhad
andreceiv
eduponat otalf
ail
ureofconsiderati
on,wheretheconsiderati
onfor
whichitwaspaidistheconveyanceortransfert
hathasnott akenplace.The
act
ionisonebroughtinrest
itut
ion,notonthecontract.

Ful
l
brookvLawes

b)Recov
eryofamountmor
ethandeposi
t

I
fthepurchaserbreachesthecontr
actandrefusest ocompletet
hepurchase,
anydepositpaidmaybef orf
eit
ed.However
,itislikel
ythatanyamountover
andabovet hatwhi
chisdeemedt obethedeposi tcouldberecov
ered.

57
Fr
eedom vAHRConst
ruct
ions

Ot
herr
est
it
uti
onar
ycl
aim mayst
il
lbeav
ail
abl
e

I
fthecont racti
sunenf
orceabl
e,i
twill
notusual
l
ypr
eventacl
aiminrest
it
uti
on
forrecov
eryonaquant um merui
t(somuchmoneyasthepl
aint
if
fdeser
vesto
have)basis.

Pav
ey&Mat
hewsPt
yLt
dvPaul

Ef
fectofst
atut
orynon-
compl
i
ance:
equi
ty
Doct
ri
neofpar
t-
per
for
mance

Ifparti
esenteri
ntoanoralcontr
actforthesal
eoflandand,relyi
ngonthat
contract,
onepartydoescert
ainacts,t
hecourtsmaybepr eparedtogr
ant
thatpersonspeci
ficper
for
manceoft hecontracti
ffourcondit
ionsar
e
sati
sfied.

a)Act
sar
eunequi
vocal
l
yref
erabl
etosomesuchcont
ract

Theactsrel
ieduponbythepl
aint
if
fmustunequivocal
l
yref
erabl
etosome
suchagreementasisal
l
egedbetweenthepart
ies.

RegentvMil
l
er
MaddisonvAlder
son.

Thepaymentofmoneyal
onecannotber
egar
dedasasuf
fi
cientactofpar
t
per
for
mance.

MaddisonvAlder
son.
St
eadmanvSt eadman
CooneyvBurns

Gi
vinginstr
ucti
onsandtheensui
ngprepar
ati
onofdocument
sar
eunl
i
kel
yto
beconsideredsuf
fi
ci
entact
sofpartperf
ormance.

St
eadmanvSt
eadman

b)Act
sdonei
nrel
i
anceont
heagr
eementandwi
thknowl
edgeofot
her
par
ty

Thepl
aint
if
fmustshowthatt
heact
sweredonei
nrel
i
anceont
heagr
eement
andwi
ththeknowl
edgeoftheot
herpar
ti
es.

McBr
idevSandl
and

I
tisnotnecessar
yt hatt
heactsberequir
edbyt
hecont
ractbutt
hef
actt
hat
t
heyweredonev oluntar
il
yissuf
fi
cient
.

58
RegentvMi
l
ler

c)Act
sdonebyt
hepar
tyseeki
ngt
oenf
orcet
hecont
ract

Theactsofpar
tper
for
mancemustbebyt
hepar
tywhoi
sseeki
ngt
oenf
orce
thecont
ract
.

Ki
ngvGr
imwood

d)Or
alcont
ractmustbeot
her
wiseenf
orceabl
e

Thepl ai
nti
ffmustbeabletoshowthatthecontactwouldhavebeen
enforceabl
ehaditsati
sfi
edthestat
utor
yr equi
rementofwri
ting.The
agreementmustbeconcl udedandsati
sfytheusual
lycontr
actual
requi
rement sf
orenfor
ceabil
it
y.

McBr
idevSandl
and

Est
oppel

Alt
ernat
ivel
y,i
nappropr
iat
eci
rcumst
ancesapar
tymaybeest
oppedf
rom
rel
yi
ngont heProper
tyLawAct

Wal
tonSt
oresvMaher

Const
ruct
ivet
rust

I
nanappropr
iat
esit
uati
on,apersoncanclai
m ani
nter
estinlandont
hebasi
s
ofcr
eat
ionofaconst
ruct
ivet
rustalt
houghther
eisnowrit
ing.

Baumgar
tnervBaumgar
tner

Est
abl
i
shi
ngCont
ract
ual
Ter
ms:
Indeter
miningwhet
herwrit
tent
ermsform par
tofthecont
ractt
heparti
es,
the
cruci
ali
ssueiswhethert
hepart
iescanberegardedashav
ingassent
edtothe
writ
tenter
ms.

Ol
l
yvMar
lbor
oughCour
tLt
d

I
ncor
por
ati
onbySi
gnat
ure
a)Gener
alRul
e

Whenadocumentcont
aini
ngcontr
actualt
ermsissigned,
intheabsenceof
f
raudormi
srepr
esent
ati
on,thepar
tysigni
ngthedocumentisboundbyits

59
ter
ms.I
tisi
mmat
eri
alwhet
hert
hesi
gni
ngpar
tyhasr
eadt
hedocumentor
not.

L’
Est
rangevFGr
oucobLt
d

b)Whent
heRul
eisDi
spl
aced

Thepar
tymaynotbeboundbyt heter
msev enthoughthecontracti
ssigned
i
ftheci
rcumstancesi
ndicat
et hatthesignat
uredoesnotsigni
fyassent.Thi
s
maybethecaseif:
 Thepersonrel
yingont heclausemisrepr
esentedi
t sef
fect.

Cur
ti
svChemi
calCl
eani
ng&Dy
ingCo

 Thedocumentsi
gnedi
sthoughtt
ohav
enocont
ract
ual
eff
ect
.

DJHi
l
l&CoPt
yLt
dvWal
terHWr
ightPt
yLt
d

 Thepersonsigni
ngcanpl eadnonestfact
um ( Themi nddidnot
accompanythesignature…noint
ent
).(
Theper sonrel
yingonthe
defencemustshowt hatthedocumentisradicall
ydif
ferent
fr
om theonehe/shet houghtt
heyweresigning.Usuallyusedfor
bli
ndoril
li
ter
atepeople).

Pet
eli
nvCul
l
en

I
ncor
por
ati
onbyNot
ice:
Unsi
gnedDocument
Apersoni
slikel
ytobeboundt het
ermsinawr it
tendocument(notsi
gnedby
hi
m orher
)ifreasonabl
enoti
ceoftheexi
stenceoft heter
mshasbeengiven,
andthi
snoti
cewasgi venbef
oreoruponcontractformati
on.

a)Reasonabl
eSt
epsmustbeTakenbyDef
endant

Reasonablestepsmustbetakent
ogivethecl
assofper
sontowhi
chthe
reci
pientbel
onged,not
iceoft
heexi
stenceoft
heter
m.(Thi
sisaquest
ionof
fact
).

Par
kervTheSout
hEaster
nRail
wayCo
Mendel
ssohnvNormandLtd

I
ndet er
mi ni
ngwhetherr
easonablest
epswer
etakeni
tmayberel
evant
whetherthedocumentwasonet hatwoul
dbeassumedbyar
easonabl
e
per
sont obecontr
actuali
nnature.

CauservBrowne
MendelssohnvNor
mandLt
d

I
freasonablestepsar
etakeni
tdoesnotmatt
eri
fthereci
pientoft
henot
ice
di
dnotr eadthetermsort
hatheorshewer
eunabletoreadthem.

60
ThompsonvLondonMi
dland&Scot
ti
shRai
l
wayCo.

Theonuswil
lbeonthedefendanttodemonstr
atet
hatt
hedocumentwasnot
del
iver
edt
otheplai
nti
ffasav oucherorr
ecei
pt,
butasacont
ract
ual
document
.

CauservBr
owne

b)Reasonabl
est
epst
akenbef
oreoruponcont
ractf
ormat
ion

Reasonabl
estepsmustbetakentobri
ngter
mst
otheat
tent
ionoft
hepl
aint
if
f
befor
e,oratt
hetimeof,
contractf
ormati
on.

Thor
ntonvShoeLanePar
kingLt
d

 Ef
fectofPer
sonnotbei
ngabl
etoReadorUnder
standTer
ms

Apersonwhoi spart
icul
arl
yunwor l
dly
,anddoesnotknowthataparti
cular
documentwi l
lcontai
ncont r
actualt
erms,wi
llst
il
lbeboundbythoseterms,
provi
dingtheissuert
ookr easonabl
estepst
obr i
ngthatf
actt
ot henoti
ceof
peopleingeneral.

Par
kervTheSout
hEast
ernRai
l
wayCo

I
ncor
por
ati
onbyNot
ice:
Signs
Apersonislikelytobeboundthet
ermsinasi
gnifr
easonabl
enoti
ceofthe
exi
stenceoft hetermshasbeengi
ven,
andthi
snoti
cewasgivenbefor
eor
uponcontractformati
on.

a)Reasonabl
est
epst
akenbyt
hedef
endant

Reasonablestepsmustbetakent
ogivethecl
assofper
sontowhi
chthe
reci
pientbel
onged,not
iceoft
heexi
stenceoft
heter
m.(Thi
sisaquest
ionof
fact
).

Bal
mainNewFerr
yCoLtdvRober
tson
Oll
yvMarl
bor
oughCour
tLtd

I
freasonablestepsar
etakeni
tdoesnotmatt
eri
fthereci
pientoft
henot
ice
di
dnotr eadthetermsort
hatheorshewer
eunabletoreadthem.

ThompsonvLondonMi
dland&Scot
ti
shRai
l
wayCo.

b)Reasonabl
est
epst
akenbef
oreoruponcont
ractf
ormat
ion

Reasonabl
estepsmustbetakentobri
ngter
mst
otheat
tent
ionoft
hepl
aint
if
f
befor
e,oratt
hetimeof,
contractf
ormati
on.

61
Thor
ntonvShoeLanePar
kingLt
d

 Ef
fectofPer
sonnotbei
ngabl
etoReadorUnder
standTer
ms

Apersonwhoi spart
icul
arl
yunwor l
dly
,anddoesnotknowthataparti
cular
documentwi l
lcontai
ncont r
actualt
erms,wi
llst
il
lbeboundbythoseterms,
provi
dingtheissuert
ookr easonabl
estepst
obr i
ngthatf
actt
ot henoti
ceof
peopleingeneral.

Par
kervTheSout
hEast
ernRai
l
wayCo

I
ncor
por
ati
onbyNot
ice:
Websi
te
Theissueisyettobeencounteredbythecourtsbyiti
slikel
yitwi
ll
appl
ythe
samepr i
ncipl
esastheincor
por at
ionoftermsinanunsigneddocumentoron
asign.Reasonabl
estepsmustst il
lbetakenandthesestepsmusthave
occurr
edpriortooruponcontractfor
mat i
on.

I
ncor
por
ati
onbyRef
erence
Termscont ai
nedel
sewherecanbeincorporat
edi
ntoacontr
actbyr
efer
ence
tothoseterms,r
egardl
essofwhetherthedocumenti
ncor
porat
ingt
hose
ter
msi ssignedbythepar
ti
esorisat i
cketorasi
gn.

Smi
thvSout
hWal
esSwi
tchgearCoLt
d

I
ncor
por
ati
ngor
alTer
ms
Mer
ePuf
f

A“puff
”isanexaggerat
edclai
m aboutt
hesubj
ectmattert
hati
snoti
ntended
tobetakenseri
ousl
y.Ther
eisnocommonl awconsequencest
hatar
isefr
om
suchsalest
alk.

However
,anexcessi
veorexagger
atedcl
aim/
scannowbeabr
eachof
st
atut
e.

Tr
adePr
act
icesAct1974(
Cth)

Repr
esent
ati
onorTer
m

Astatementwil
lbeat
erm ofacontractifi
tisi
ntendedt
obepr omi
ssor
yin
nat
ure.Astat
ementwi
llbepromissoryinnatur
eifthest
atementmaker
warr
antsit
strut
h.

OscarChessLtdvWil
li
ams
Hospit
alProduct
sLt
dvUnit
edSt
atesSur
gicalCor
por
ati
on

a)Wor
dsandconductoft
hepar
ti
es

62
Thewor dsandconductofthepar
tiescangiveanindicat
ionofi
ntent
ion.(
Iti
s
rel
evantwhethert
hewordsar epr
omi ssor
yinnatureaswellast
heconductof
thepart
iesthati
ndi
catetheimpor
tanceoft hest
atement).

Har
li
ngvEddy

b)Knowl
edgeorexper
ti
seoft
hest
atementmaker

I
fthepart
ywhomadet hestat
ementi
sinabet
terposi
ti
onthant
heother
par
tytoascer
tai
ntheaccur
acyoft
hestat
ement,
iti
sprobabl
yater
m.

Mi
hal
j
evi
cvEi
ff
elTowerMot
orsPt
yLt
d

c)St
atementmakerhascont
rol
inr
elat
iont
oinf
ormat
ion

Apersonwhohascont
rol
overthesubj
ectmat
terwi
l
lbei
ntheposi
ti
ont
o
guar
anteet
hetr
uthoft
hestat
ements.

Hospi
talPr
oduct
sLt
dvUni
tedSt
atesSur
gicalCor
por
ati
on

d)Or
alst
atementnotr
educedt
owr
it
ing

Astatementthati
smadeorall
ybutnoti
ncl
udedwhent
hecontr
acti
sreduced
towri
tingmaybeani ndi
cat
ionthatt
hepar
ti
esdi
dnoti
ntendi
ttobe
cont
ractual
innatur
e.

Rout
ledgevMckay

Al
loft
heprevi
ousf
actor
sareindi
cator
sofint
ent
iononl
y.Fail
uretoreducean
or
alst
atementt
owri
ti
ngisnotdeter
minat
iveoft
hematter.Asil
lust
ratedi
n:

Hospi
talPr
oduct
sLt
dvUni
tedSt
atesSur
gicalCor
por
ati
on

I
fanoralst
atementl
aterbecomespartofthewr
it
tencont
ract
,iti
sli
kel
yit
wasi
ntendedtofor
m partofthecont
ract
.

OscarChessLt
dvWi
l
li
ams

e)I
nter
val
oft
ime

I
fther
eisalongi
nter
valbetweenmakingt
hestat
ementandt
heconcl
usi
onof
acont
ract
,iti
spr
obablynotapartoft
hecont
ract
.

Rout
ledgevMckay

Col
l
ater
alcont
ract
s

a)Nat
ureofacol
l
ater
alcont
ract

63
Acol
lat
eral
contracti
soneinwhi
cht
heconsi
der
ati
onf
orapr
omi
sei
sthe
maki
ngofanothercontr
act
.

Hei
lbutSy
mons&CovBuckl
eton
DeLassal
levGui
l
dfor
d

Thr
eeel
ement
smustbeest
abl
i
shed:

 Astat
ementmustbemadet oi
nduceent
ryint
othecontr
act
 Thest
atementmustberel
i
edupon
 Thest
atementr
eli
eduponmustbepromissor
yinnat
ure.

JJSav
age&SonsPt
yLt
dvBl
akney

Wherethemaincontractprecedesthecol
lat
eral
cont
ractt
her
ecanbeno
cont
ractaspastconsider
ationisnotgoodconsi
der
ati
on.

Her
cul
esMot
orsvSchuber
t

b)Bi
par
ti
teandt
ri
par
ti
tecol
l
ater
alcont
ract
s

Acol
lat
eralcont
racti
sbipart
it
ewher
ethepar
ti
est
oitar
ethesameast
hose
whoentert
hemai nagreement.

Shepper
dvTheCounci
loft
heMuni
cipal
i
tyofRy
de

Acol
l
ateral
cont
ractmaybetri
par
ti
tewher
ethepar
ti
est
oitar
edi
ff
erentf
rom
t
hepart
iesi
nthemaincont
ract
.

Wel
l
s(Mer
stham)Lt
dvBuckl
andSand&Si
l
icaCoLt
d

c)Consi
stencywi
tht
hemai
ncont
ract

Thecour
tswi
ll
onlyrecogni
seacol
l
ater
alcont
racti
fiti
sconsi
stentwi
tht
he
ter
msofthemaincontr
act.

Hoy
t’sPt
yLt
dvSpencer

(
Therehasbeencr
it
icism oft
hisr
uleasi
tdoesnotgi
veef
fectt
otheact
ual
i
ntent
ionoft
hepar
ties)

I
nanappr
opr
iat
ecaseest
oppel
mayappl
y.

Wal
tonsSt
oresvMaher

Par
oleev
idencer
ule
St
atementoft
her
ule

64
Whenacontractisreducedint
owr i
ti
ng,andthecont
ractappearsi nt
he
wri
ti
ngtobeent i
re,i
tispresumedthatthewri
ti
ngcontai
nsal l
thet er
msofi t
andevi
dencewi l
lnotbeadmi t
tedofanyprevi
ousorcontempor aneous
agr
eement,whichwoul dhavetheeff
ectofaddingt
oorv ar
yingt hecont
racti
n
anyway.

Mer
cant
il
eBankofSy
dneyvTay
lor

(
Theruleappl
i
estotwoaspect
s:1.thecont
entofthecontr
actand2.t
he
i
nter
pret
ati
onofcont
ract
s…Heretherul
eappli
estothecontent
).

Whent
her
uleappl
i
es

Therul
edoesnotapplywhent
hepar
ti
esi
ntendacont
ractt
obepar
tl
yin
wri
ti
ngandpart
lyoral
.

CouchmanvHi
l
l

Regardi
ngt hecontentofthecontract
:Ift
hepar
ti
esint
endedt
hecont
ractt
o
bewhollyinwrit
ing,parol
eevidenceisnotadmi
ssi
bletoaddt
o,v
aryor
cont
radictthewrit
ing.

Rober
tsonvKer
nLandPt
yLt
d

Thei
ntent
ionoft
hepar
ti
esi
sconst
ruedobj
ect
ivel
y.

CouchmanvHi
l
l

Except
ionst
other
ule

a)Ev
idenceofacol
l
ater
alcont
ract

Thecoll
ater
alcontr
acti
sasepar
atecontr
act,t
heref
orether
ulepr
event
ing
evi
dencebeingledtoef
fectt
hemaincont
ractdoesnotappl
ytoit
.

DeLassal
l
evGui
l
dfor
d

b)Ev
idencet
hatt
hewr
it
tencont
racti
snoty
eti
nfor
ce

Evi
dencethatt
hecontr
acthasnotyetcommencedoper
ati
oni
sadmi
ssi
ble,
ev
enifthepart
ieshav
esignedtheagreement
.

Py
m vCampbel
l

c)Ev
idencet
hatt
hewr
it
tencont
ractwasl
aterv
ari
edordi
schar
ged

Ev
idencecanbel
eddemonst
rat
ingt
hatt
heagr
eementhasbeenv
ari
edor
di
scharged.

65
Nar
ichPt
yLt
dvCommi
ssi
onerofpay
-rol
lTax

(
Theparoleevi
dencer uleprev
entstheint
roduct
ionofev
idenceregar
ding
whathappened“before”theagreementwasreducedtowri
ting,
notevi
dence
t
hatthepart
ies“l
ater”agreedtochangeorendit).

d)Ev
idencet
oimpl
yat
erm

Thecour
tmayhearev
idenceregardi
ngat
ermthati
sonethati
simpl
i
edby
thecommonl
aw.(Thi
swilldependonwhythet
ermissoughtt
obeappl
i
ed)
.

Summer
svTheCommonweal
th

e)Ev
idencenecessar
yforr
ect
if
icat
ion

Extr
insi
cevidencemaybeal lowedtorecti
fyacontractwher
etheagr eement
cannotberegar dedasrefl
ecti
ngthecommoni ntentionoft
heparti
esora
mistakei
nthewr i
ti
ngofthecontr
act(suchasthewr ongpri
cerecorded
uni
ntenti
onall
y).

Mar
ali
ngavMajorEnt
erpr
ises
NSW Medi
calDef
enceUni
onLt dvTr
anspor
tIndust
ri
esI
nsur
anceCoLt
d

I
mpl
i
edTer
ms
Ter
msimpl
i
edt
ogi
veef
fectt
othepr
esumedi
ntent
ionoft
he
par
ti
es

a)Ter
mimpl
i
edont
hebasi
sofbusi
nessef
fi
cacy

At er
mt hatisei
thersoobv
ioust
her
ewasnoneedtoexpr
essit
,ornot
thoughtofbytheparti
esmaybeimpli
edbyt
hecour
tsi
nordert
osuccessf
ull
y
carryoutthecontr
act.

TheMoor
cock

Thefoll
owi
ngelementsmustbesat
isf
iedbef
oreacour
twi
l
limpl
yat
erm on
thebasi
sofbusinessef
fi
ciency
.

 Thei
mpl
i
cat
ionmustber
easonabl
eandequi
tabl
e.

 Theimpli
cat
ionmustbenecessar
ytogiv
ebusi
nesseff
icacyt
othe
cont
ractsot
hatnoter
m wil
limpli
edi
fthecont
racti
sef
fecti
vewit
hout
i
t.

 Thet
erm mustbesoobv
ioust
hat“
itgoeswi
thoutsay
ing”
.

 Thet
erm mustbecapabl
eofcl
earexpr
essi
on.

66
  Thet
erm mustnotcont
radi
ctanyexpr
esst
erm oft
hecont
ract
.

BPRefi
nery(West
ernpor
t)Pt
yLt
dvShir
eofHast
ings
Codel
faConstr
uct
ionsPtyLt
dvStat
eRai
lAut
hor
ityofNSW

I
fthepart
ieshavegonetosomel engthtoreducethei
ragr
eementtowri
ti
ng
andtoensurei
trefl
ect
stheiri
ntent
ions,i
tisdif
fi
cultt
osuggestt
hatt
heterm
omit
tedissoobvioust
hatitgoeswithoutsayi
ng.

Anset
tTr
anspor
tIndust
ri
esvCommonweal
th

b)Ter
msi
mpl
i
edf
rom pr
evi
ousconsi
stentcour
seofdeal
i
ngs

Ift
wopar ti
eshav emadeaser i
esofsi
mi l
arcontract
seachcontaini
ngcer
tai
n
condit
ions,andthentheymakeanotherwithoutexpressl
ywit
houtexpr
essl
y
ref
erri
ngtot hosecondit
ionsi
tmaybet hatthoseconditi
onsoughtt
obe
i
mpl i
ed.

Henr
yKendal
l&SonsvWi
l
li
am Li
l
li
co&SonsLt
d

Rel
evantt
otheassessmentare
- Thenumberofdeal i
ngsbet
weenthepar
ti
es;and
- Theconsistencyoft
hedeal
ingsbet
weenthepar
ti
es.

Horr
iervRamblerMot
ors(
AMC)Ltd
HenryKendal
l&SonsvWil
li
am Li
l
li
co&SonsLt
d
Chat
tisNomineesPt
yLtdvNor
manRossHomewor
ks

c)Ter
mimpl
i
edf
rom cust
om orusage

Ater
m canbeimpl
iedi
fther
eisexi
stenceofaparti
cul
arcust
om orusage
t
hati
srecogni
sedasgi
vingeff
ectt
ot hei
ntent
ionsoft
hepart
ies.

SagarvRi
dehal
ge
Con-St
anI
ndustr
iesofAust
ral
i
aPt
yLt
dvNor
wichWi
nter
hurI
nsur
ance(
Aust
)
Ltd

Thefoll
owi
ngelementsmustbesatisf
iedbeforeacour
twi
lli
mpl
yat er
m on
thebasi
sofcustom orusage:
- Theexistenceoft
hecustom ortr
adeusagei
saquest
ionoffact
.

- Thecust
om ortr
adeusagemustbesowel
lknownthatal
l
par
ti
escanreasonabl
ybeassumedt
ohaveimpor
tedthatt
erm
i
ntothecont
ract
.

- Theter
m wil
lnotbei
mpl
i
edi
fiti
scont
rar
ytot
heexpr
esst
erms
oft
heagreement.

- Apersonmaybeboundal
thoughtheyhadnoknowl
edgeoft
he
t
erm prov
idedt
her
equi
rementsofthesecondel
ementar
e

67
 est
abl
i
shed.

Con-
StanI
ndust
ri
esofAust
ral
i
aPt
yLt
dvNor
wichWi
nter
hurI
nsur
ance(
Aust
)
Lt
d

d)Ter
mimpl
i
edt
ocompl
eteanagr
eement

Acourtmayatt
empttoconst
ructt
hecont
ractbyimpl
yingt
henecessar
yter
m
i
nordertof
il
li
nthegapsandcomplet
eanagr eement
.

Hi
l
las(
WN)&CoLt
dvAr
cosLt
d

Ter
mimpl
i
edI
rr
espect
iveofpar
ti
esi
ntent
ion

e)Ter
mimpl
i
edasal
egal
inci
dentofapar
ti
cul
arcl
assofcont
ract

Termsmaybeimpli
edasamatterofl
awincont
ract
sofapar
ticul
arcl
ass.
(Exampl
esofsomeoft
hesecl
assesaregi
venatp256oft
ext
).

Li
verpoolCi
tyCounci
lvI
rwi
n
SamuelsvDavis
Derbyshi
reBui
ldi
ngCoPtyLt
dvBecker

Alt
hought er
msofthi
skindarei
mpl
i
edt
hroughnecessi
ty,
thepar
ti
esmay
expressl
yagreet
othecontr
ary.

Byr
nevAustr
ali
anAir
li
nesLt
d
GemmelPowerFarmi
ngCoLtdvNies
Der
byshi
reBui
ldi
ngCoPtyLt
dvBecker

f
) Gener
aldut
yofco-
oper
ati
on

I
tisani mpl
iedt
erm ofal
lcont
ract
sthateachpar
tyagreestodoallt
hings
necessaryt
oenabl
et heot
herpart
ytohavethebenef
itofthecont
ract
.

But
tvMcDonal
d

Thepar
ti
esmayexpr
essl
yagr
eet
othecont
rar
y.

But
tvMcDonal
d

Exampl
es:

 Ther
eisadut
ytocompl
ywi
thr
easonabl
erequest
s.

Secur
edI
ncomeRealEst
ate(
Aust
)Lt
dvStMar
ti
nsI
nvest
ment
sPt
yLt
d

 Ther
eisadut
ynott
oimpai
rthebasi
soft
hecont
ract
.

68
RDJI
nter
nat
ionalPt
yLt
dvPr
efor
medLi
nePr
oduct
s

 Ther
ei sadutyt
odoal
lthi
ngnecessar
ytoenabl
etheagr
eementt
obe
completed.

Adel
aidePet
rol
i
um vPosei
don

g)I
mpli
cati
onofduti
esofgoodf
ait
h,f
airdeal
i
ngand
r
easonabl
eness

I
thasbeensuggest
edthatt
hecour
tsmaybepreparedt
oimpl
yadut
yfort
he
par
ti
estoacti
ngoodfait
hinpr
efor
mingacont
ract.

RenardConst
ruct
ionsvMi
nist
erf
orPubl
i
cWor
ks
ButtvMcDonald

h)Ter
msi
mpl
i
edbyst
atut
e

Ater
m maybei
mpli
edintoacont
ractbyarel
evantst
atute.Howev
ert
hese
t
ermsmaybenegat
ivedorv
ari
edbyexpressagreement.

SaleofGoodsAct1896(Qld)
TradePracti
cesAct1974(Cth)
ConsumerCr edi
tCode1994
HirePurchaseAct1959(Ql
d)
I
nsuranceCont r
act
sAct1984(Cth)
Etc.

Const
ruct
ionofTer
ms
I
nter
pret
ingt
hemeani
ngoft
erms

Gener
alappr
oach

Construct
ionofcontr
actsmaybeseenasi nvol
vingt woacti
vi
ti
es.Fir
stl
y,
ascert
aini
ngthemeani ngofthewordsused(Questionoffact
).Secondl
y,
deter
mi ni
ngthelegal
ef f
ectofthosewor
ds(Questionoflaw).

Li
feI
nsur
anceCoofAust
ral
i
aLt
dvPhi
l
li
ps

Adocumenti
sreadasawhol
e.

Geor
gevCluni
ng
Amalgamat
edTel
evi
si
onSer
vicesPt
yLt
dvTel
evi
sionCor
por
ati
onLt
d

Thepurposeistoconst
ruet
hedocumentast
opr
oducewhati
twas
ul
ti
matelyint
endedfor.

69
HumevRundel
l
Ll
oydvLl
oyd

Thecour
tdoesi
tsbestt
ogi
veef
fectt
othepar
ti
es’
bar
gai
n.

Hil
l
as&CoLt dvArcosLt
d
YorkAi
rcondi
ti
oni
ng&Refri
ger
ati
on(
Aust
ral
asi
a)Pt
yLt
dvCommonweal
th

I
ngi
vi
ngef
fectt
otheagr
eement
:

- Thecour
twi
l
lendeav
ourt
obenei
thert
oast
utenort
oopedant
ic.

Hil
l
as&CoLt dvArcosLtd
UpperHunt
erCountyDi
str
ictCounci
lvAust
ral
i
anChi
l
li
ng&Fr
eezi
ngCoLt
d

- Thecourtwil
lst
eercl
earofmeani
ngst
hatar
ecommer
cial
l
y
unworkabl
eorinconv
eni
ent.

Hi
de&Ski
nTr
adi
ngPt
yLt
dvOceani
cMeatTr
ader
sLt
d

Thecour ttakesanobject
iveapproachtointer
pretat
ionasthatofa
reasonablethirdpar
ti
esviewpoint,r
atherthanthesubject
iveoract
ual
i
ntenti
onsoft hepar
ti
es.

Hospi
talpr
oduct
sLt
dvUni
tedSt
atesSur
gicalCor
por
ati
on
Tayl
orvJohnson

Admi
ssi
bleev
idence

a)ThePar
oleEv
idencer
ule

Whenacont r
acti
sreducedi nt
owrit
ing,andthecontr
actappearsinthe
wri
ti
ngtobeenti
re,i
tispresumedthatthewr i
ti
ngcontai
nsallt
het er
msofi t
andevi
dencewil
lnotbeadmi tt
edofanypr ev
iousorcontemporaneous
agr
eement,whi
chwoul dhavetheeff
ectofaddingtoorvaryi
ngt hecont
racti
n
anyway.

Mer
cant
il
eBankofSy
dneyvTay
lor

(
Theruleappl
i
estotwoaspect
s:1.thecont
entofthecont
ractand2.t
he
i
nter
pret
ati
onofcont
ract
s…Heretherul
eappli
estoint
erpr
etat
ion)
.

Whenafor
maldocumentisconclusi
veofacontract
,it
smeani
ngcanonl
ybe
det
ermi
nedbyr
eferencet
owor dsinthatdocument.

GordonvMcGregor
Al
lenvCarbone

b)Fact
ual
mat
ri
x

70
Whendetermi
ningthepar t
iesint
enti
ons,t
hecourtmayt
akeintoaccountnot
onl
ythewordsrecordedint hedocumentbutal
sotheev
idenceofthe
sur
roundi
ngci
rcumst ances

Al
lenvCar
bone
DTRNomineesPt
yLt
dvMonaHomesPt
yLt
d

Theev i
denceofthesur
roundi
ngcircumstancesmustbeknowntobot
h
part
ies,al
thoughi
ffact
sarenotor
iousthecourtmaypresumeknowl
edgeof
them.

Codel
faConst
ruct
ionPt
yLt
dvSt
ateRai
lAut
hor
it
yofNSW

Inacommer cial
contr
acti
tisappr
opriateforthecourtt
ohav erefer
enceto
thecommer ci
alpur
poseofthecontr
act ,whichi
nturnpresupposes
knowledgeofthewaythetr
ansact
ionst art
ed,it
sbackground,andthecont
ext
andmar keti
nwhichinpar
ti
esareoper ati
ng.

Rear
donSmithLineLt
dvYengv
arHansen-
Tangen
Codel
faConst
ructi
onPtyLt
dvStat
eRai
lAuthor
it
yofNSW

c)Except
ionst
othepar
oleev
idencer
ule

 Ambi
gui
ty

Casesofobvi
ousorunder
lyi
ngambi
gui
ty.I
tmaynotal
waysbesafeto
assumethatt
hewordsofadocumentwi
llsi
mpl
ycarr
ythei
rpl
ainorordi
nar
y
meaning.

Whit
evAust
ral
i
an&NewZeal andTheat
resLtd
HopevRCAPhotophoneofAustr
ali
aPtyLtd

 I
dent
if
icat
ionofsubj
ectmat
ter

Ext
ri
nsi
cevi
dencei
sadmi
ssi
blet
oresol
veambi
gui
tyaboutt
hesubj
ectmat
ter
oft
hecont
ract
.

Whit
evAust
ral
i
an&NewZealandTheatr
esLtd
Cf
.HopevRCAPhot
ophoneofAust
ral
iaPtyLt
d

 I
dent
if
icat
ionofpar
ti
esort
hei
rrel
ati
onshi
p

Ext
ri
nsicev
idencei
sadmissi
blet
oresol
veanambi
gui
tyconcer
ningt
he
i
denti
tyoft
heparti
esoft
heagreement.

Edwar
dsvEdwards
GRSecur
it
iesPt
yLtdvBaul
kham Hi
l
lsPr
ivat
eHospi
tal

I
tmayal
sobeusedt
oresol
veanambi
gui
tyconcer
ningt
hecapaci
tyort
he

71
r
elat
ionshi
pbet
weent
hepar
ti
es.

Gi
l
ber
tovKenny

 I
dent
if
icat
ionofr
eal
consi
der
ati
on

Extr
insicevidencei
sadmissi
bleinor
dert
opr
ove/
ident
if
yther
eal
considerat
ionunderacontr
act.

PauOnvLouYiuLong
Yar
oombeBeachDevel
opmentCovCoeurDeLi
onI
nvest
ment
sPt
yLt
d

 Cust
om orUsage

Wher
ethelanguageusedhasapart
icul
armeaning(eg.Bycust
om orusagein
apar
ti
cul
artrade,
indust
ryorr
egi
on),ev
idenceoft
hatmeaningisadmissi
ble,
ev
enift
hereisnopatentambi
gui
ty.

Summer svCommonweal
th
Thor
nleyvTil
l
ey

 Rect
if
icat
ion

Extr
insi
cevidencemaybeadmitt
edt oshowthatapart
ies’i
ntent
ionwasnot
accurat
elyr
ecordedinthewr
it
teninstr
ument.I
ntheappropri
ate
ci
rcumstancesthedocumentmayber ect
if
iedsothati
taccordswitht
he
part
ies’
actualagreement
.

Marali
ngavMaj
orEnt
erpr
ises
BacchusMar
shConcer
ntr
atedMi
l
kCoLt
dvJosephNat
han&CoLt
d

I
nadmi
ssi
bleEv
idence

I
npar
ti
cul
art
hef
oll
owi
ngext
ri
nsi
cev
idencei
sinadmi
ssi
ble:

a)Subj
ect
ivei
ntent
ion

Ev
idenceoft
heact
ual
,subj
ect
ivei
ntent
ionsoft
hepar
ti
esi
snotadmi
ssabl
e

Li
feI
nsur
anceCoofAust
ral
i
aLt
dvPhi
ll
i
ps
DTRNomineesPt
yLt
dvMonahomesPtyLt
d

b)Pr
iornegot
iat
ions

Thenegoti
ati
onst
hatprecededtheagreementar
enotpermi
tt
edasiti
sonly
thef
inal
documentthatproper
lyref
lect
saconsensusbet
weenthepar
ti
es.

Pr
ennvSimonds
Cf
.Codel
faConst
ruct
ionPt
yLt
dvSt
ateRai
lAut
hor
it
yofNSW perMasonJ.

72
 c)Subsequentconduct

Anyt
hingthatt
hepart
ies’
sayordoaftert
hecont
ractcannotbeusedi
nor
der
toai
dintheconst
ruct
ionofthecont
ract

Admini
str
ati
onofPapua&NewGui
neavDaeraGuba
Codel
faConstr
uct
ionPt
yLt
dvStat
eRai
lAuthor
it
yofNSW

Legal
eff
ectofwor
ds:
typesoft
erms
Pr
omi
ssor
yter
ms

Apr omi ssorytermisonepur suanttowhi chapar t

ymakesapr omiseto
anotherpar tyregardi
ngev ent
sthatwi l
lorwil
l notoccurinaccordancewit
h
theagr eement .I
fthepar t
yfai
lstocar r
youtthepr omise,thatpart
ywill
have
breachedt het er
m.Theef f
ectofthebreachdependsuponwhet hert
heter
m
i
scl assifi
edasacondi t
ion,awarranty,oranintermediateter
m.
Determi nati
onoft heappropri
atet er
mi sanobj ect
ivetestofthepart
ies
i
ntention, t
akingintoaccounttheirwordsandconduct .

BowesvChaleyer
Associ
atedNewspaper
sLt
dvBancks

a)Condi
ti
ons

Aconditi
onisater
mt hatisessent
ialt
ot heperf
or manceofthecontr
act
.The
promisei
sofsuchimportancetothepromi seethathewouldnothave
enter
edintot
hecontr
actwi t
houtassuranceoftheperformanceofthe
promise,
andthi
soughttohav ebeenappar entt
ot hepromi
sor.

Associ
atedNewspaper
sLt
dvBancks

Anybreachofthi
sty
peofter
m will
all
owtheinnocentpar
tytot
ermi
nat
e
fur
therper
for
manceofthecont
ractandt
oclaim damagesfort
hebr
each.

LSchul
erAGvWi
ckmanMachi
neToolSal
esLt
d

Thefactt
hatater
misdescri
bedi
nanagr
eementasacondi
ti
on,
is
per
suasiv
enotconcl
usi
ve.

LSchul
erAGvWi
ckmanMachi
neToolSal
esLt
d

I
fdamagesaloneseem t
obeaninadequater
emedy
,thecour
tsmaybe
per
suadedt
oconstrueater
m asacondit
ion.

AnkarPtyLt
dvNationalWest
minst
erFi
nance(Austr
ali
a)Lt
d
Associ
atedNewspapersLt
dvBancks(Regar
dingessent
ial
i
ty)

Thecour
tsmaybei
nfl
uencedt
oconst
rueat
erm asacondi
ti
oni
fapar
ti
cul
ar

73
const
ruct
ionl
eadst
oanunr
easonabl
eresul
t.

LSchul
erAGvWi ckmanMachi
neToolSal
esLtd
Associ
atedNewspaper
sLt
dvBancks(Regar
dingessent
ial
i
ty)

 Thest
atut
oryposi
ti
on.

Inl
egisl
ati
onrel
ati
ngtothesaleofgoods,i
tisi
mplici
tint
hedraft
ingthat
abreachofcondi
ti
oninacontractfort
hesaleofgoodswil
lhavethe
sameeffectasabreachofcondit
ionundert
hecommonl aw.

Sal
eofGoodsAct1896(
Qld)s.
14(
2)

b) War
rant
ies

Awarr
antyi
sater
mt hati
ssubsi
diaryt
ot hemai
npur
poseofthecont
ract
,a
br
eachofwhi
chonlyent
it
lest
heinnocentpar
tyt
odamages.

Bett
inivGye
El
lulvOakes

 Thest
atut
oryposi
ti
on.

Anagr eementwithrefer
encetogoodswhi charethesubjectofacontr
act
ofsalebutcoll
ateralt
othemai npurposeofsuchcontract,t
hebreachof
whichgivesri
set oaclai
mf ordamagesbutnott heri
ghttorejectt
he
goodsandt r
eatthecont r
actasrepudiat
ed.

Sal
eofGoodsAct1896(
Qld)s.
3

I
thasal
sobeensuggest
edt
hatt
hist
estmi
ghtal
soappl
yatcommonl
aw.

Associ
atedNewspaper
sLt
dvBancks

c)I
nter
medi
ateori
nnomi
nat
eter
ms

Anint
ermediat
etermi soncet
hatstandsbetweenacondi
ti
onandawar
rant
y
andcannotbesati
sfactor
il
ycl
assi
fi
edaseither.

AnkarPt
yLt
dvNationalWest
minst
erFi
nance(
Aust
ral
i
a)Lt
d
HongKongFi
rShi
ppingCovKawasakiKi
senKai
shaLt
d

Itmaybedefi
nedasat
erm capabl
eofav
ari
etyofbr
eaches,
someser
ious
sometri
vi
al.

BungeCor
por
ati
onNewYor
kvTr
adaxExpor
tSA(
Panama)

Theremedyfort
hebreachofani
nter
medi
atet
ermv
ari
esaccor
dingt
othe
sev
erit
yofthebr
each.

74
Ift
hebreachdepri
vestheinnocentpart
yofsubst
anti
all
ythewhol
eofthe
benefi
tofthecont
ract
,thentheinnocentpar
tywi
llbeenti
tl
edt
otermi
natet
he
contr
act.

I
ftheef
fectoft
hebreachisnotsi
gni
fi
cant
lyser
ious,
thei
nnocentpar
tywi
l
l
onl
ybeabletocl
aim damages

Associ
atedNewspaper
sLtdvBancks
HongKongFirShi
ppingCovKawasakiKi
senKai
shaLt
d

Thecourtmustfi
rstascert
aint
hei nt
enti
onsoft
hepart
iesi
nordert
o
cat
egori
setheter
m.I fthecour
tdecidesiti
sani
nter
mediat
etermitt
hen
det
erminesthegr
av i
tyofthebreach

BungeCor
por
ati
onNewYor
kvTr
adaxExpor
tSA(
Panama)

I
nordert
odeter
minetheser
iousnessoft
hebr
eachanumberofmat
ter
smay
bet
akenint
oaccount
:

- Thedegr
eeofperf
ormanceuptothebreachcompar
edt
othe
per
for
mancerequi
redundert
hecontr
act.

- Whetherdamageswil
ladequat
elycompensat
ethel
ost
expect
ati
onsofthei
nnocentpar
ty.

- Whethert
heexpect
ati
onsofthepart
yinbreachwoul
dbe
unf
air
lypr
ejudi
cedbyter
minati
ngthecont
ract.

- Atti
tudeandconductofthepart
yinbr
eachi
ncl
udi
ngt
he
l
ikel
ihoodofthebreachpersi
sti
ng

HongKongFi
rShi
ppi
ngCovKawasakiKi
senKai
shaLt
d

Thedeci
si nHongKongFi
oni rShi
ppi
ngcaseal
soappl
i
est
oacont
ractf
or
sal
eofgoods.

Cehav
eNVvBr
emerHandel
gesel
l
schaf
tmbH

Cont
ingenci
es
Si
nceacont ingencycl
ausemaybeabl etobeconstr
uedaseit
heracondi
ti
on
precedentoraconditi
onsubsequentt
heessent
ialquest
ioni
swhateff
ect
doest heconti
ngencyhaveonthecontr
act.

Per
rivCool
angat
taI
nvest
ment
sPt
yLt
d

Underappr
opri
ateci
rcumst
ancesapar
tymaybeest
oppedf
rom r
ely
ingupon
aconti
ngency
.

75
Condi
ti
onpr
ecedent

Acondi
ti
onpr ecedentisacondi
ti
onthatwil
lpr
eventacontr
actf
rom comi
ng
i
ntoexi
stenceuntilsucht
imeasthecondit
ioni
sfulf
il
led.

Per
rivCool
angat
taI
nvest
ment
sPt
yLt
d

Condi
ti
onsubsequent

Acondi t
ionsubsequenti
sacondi
ti
onwit
hinacontr
actt
hathastakeneff
ect.
Howev ertheperf
ormanceoft
hecontr
acti
sprevent
edunti
lthecondi
ti
onis
f
ulf
il
led.

MeehanvJones

Cl
ausessuchas“subj
ecttofi
nance”
,“subj
ecttor
ezoni
ng”or“
subj
ectt
otown
pl
anni
ngapprov
al”arecondi
ti
onssubsequent.

MeehanvJones

Apar
tymaywai
veacondi
ti
onsubsequentt
hati
ssol
elyf
ort
hei
rownbenef
it

MeehanvJones

I
fthecl
ausei
sfort
hebenef
itofbot
hpart
ies,
eit
hermaybeabl
etoter
minat
e.
Suchacl
ausemayonl
ybewai v
edwitht
heconsentofbot
hpar
ti
es.

Ray
sunvTay
lor

Whereacl auseprovidesfortheacont
racttoberenderedvoi
dont he
occur
renceornon- occurrenceofanev
ent,andtheeventisoutthecontr
olof
bothpart
ies,thecontractmaybeautomatical
l
yendedi ft
heev entoccur
s.

Car
pent
ari
aInv
est
ment
sPt
yLt
dvAi
rs

Aclausesuchas“
subjectt
ocontr
act”isusual
l
ycategori
sedasacondi
ti
on
pr
ecedentbuti
twi
lldependontheint
enti
onoftheparti
es

Exempt
ioncl
auses
Ther
ear
ethr
eemai
nty
pesofexempt
ioncl
auses:

1. Acompl
eteexcl
usi
onofapar
ti
esl
i
abi
l
ity

Eg.ThomasNat
ionalTr
anspor
t(Mel
b)Pt
yLt
dvMay&Baker(
Aust
)Pt
yLt
d

2.Al
i
mit
ati
ont
otheext
entofl
i
abi
l
ityt
oapar
ti
cul
armaxi
mum amount
.

Eg.Dar
li
ngt
onFut
uresLt
dvDel
coAust
ral
i
aPt
yLt
d

76
 3.Li
abil
i
tymaybesubjectt
ocertainpr
econdi
ti
ons,suchast
he
commencementofanysuitorthegi
vingofnot
iceofadef
aul
twi
thi
na
cer
tai
nti
me.

Eg.NewZeal
andShi
ppi
ngCoLt
dvANSat
ter
thwi
th&CoLt
d

Thecourtmustappl
ythesamer
ulesofi
nter
pret
ati
onr
egar
dlessoft
heki
nd
ofexcl
usion.

Dar
li
ngt
onFut
uresLt
dvDel
coAust
ral
i
aPt
yLt
d

Exempt
ioncl
ausesmayi
nvol
vet
hedet
ermi
nat
ionoft
wosepar
atei
ssues:

 Whet
hert
hecl
ausef
ormspar
toft
hecont
ract

Thi
( siscov
eredear
li
eri
n“I
ncor
por
ati
ngWr
it
tenTer
ms”
).

 Whether
,onthet
rueconst
ruct
ionoft
hecl
ausei
tcov
erst
hel
i
abi
l
ity
t
hathasari
sen.

Anexempt
ioncl
ausei
sdet
erminedbyconst
ruingt
heclauseaccor
dingt
oit
s
nat
ural
andordi
nar
ymeani
ng,r
eadinli
ghtofthecont
ractasawhole.

Dar
li
ngt
onFut
uresLt
dvDel
coAust
ral
i
aPt
yLt
d

Speci
fi
crul
esofconst
ruct
ion

Ther
earealsoanumberofspeci
fi
crul
esofconst
ruct
iont
hathel
ptoi
nter
pret
anexempt
ionclause.

ThomasNat
ionalTr
anspor
t(Mel
b)Pt
yLt
dvMay&Baker(
Aust
)Pt
yLt
d

a)TheCont
raPr
ofer
ent
em r
ule

Anexempt
ionclausewil
lbeconst
ruedaccordi
ngt
owhi
chpar
ti
esbenef
itt
he
cl
ausewasinser
tedfori
ncaseofambiguit
y.

ThomasNat
ionalTranspor
t(Mel
b)PtyLtdvMay&Baker(
Aust
)Pt
yLt
d
Darl
i
ngt
onFuturesLtdvDelcoAust
ral
iaPtyLt
d

b)At
tempt
stoexemptnegl
i
gence

Aclausewi l
lrel
ieveapar t
yofliabi
l
ityf
ornegligenceoftheirownorthe
ser
v antsoragents,i
fitexpressl
yorimpliedl
ycov er
ssuchl i
abil
it
y.Aterm wi
ll
coversuchliabi
li
tyift
herecanbenogr oundofliabi
li
tyotherthannegli
gence
towhi chi
tcouldrefer
.

ThomasNat
ionalTr
anspor
t(Mel
b)Pt
yLt
dvMay&Baker(
Aust
)Pt
yLt
d

77
  Rul
esr
egar
dingat
tempt
stoexemptnegl
i
gence

ThePr
ivyCounci
li
nst
atedt
hef
oll
owi
ngr
ulesi
n:-

CanadaSt
eamshi
pLi
nesLt
dvTheKi
ng

i
) Expr
essexcl
usi
oni
sef
fect
ive.

i
i
)Wher ethe“onl
y”possi
blecauseofactionagainstthedefendantisan
act
ionfordamagesbasedonnegl i
gence, t
henthecourtwilli
nter
preta
“wi
de”clauset
ocoverthedefendant’
sliabil
i
tyfornegl
igence.

Al
der
sladevHendonLaundr
yLt
d

i
i
i)Ifthewor dsusedinthecl
ausearewi deenought ocovernegli
gence,
butt her
eissomeot hergr
oundofliabil
it
yotherthannegli
gence,the
clausewi l
lbereadasapplyi
ngonlytothatothergroundofliabi
li
tyand
willnotoperat
et oexcl
udethecl
aimf ornegl
igence.

Whi
tevJohnWar
wick&CoLt
d

Fort
hefi
rstr
ulet
oappl
yitther
ewoul
dhav
etobet
heuseoft
hewor
d
negl
i
genceoracl
osesynonym.

Smi
thvSout
hWal
esSwi
tchgearLt
d

c)Thef
ourcor
ner
srul
e

Apersoncanonl
yrel
yonthecondi
ti
onsofacont r
act
,thatwereintendedt
o
prot
ectt
hem,ift
heyhav
ecarr
iedoutthecont
ractint
hewayt hattheyhad
contr
act
edtodo.

ThomasNati
onalTr
ansport(
Mel
b)PtyLt
dvMay&Baker(
Aust
)Pt
yLt
d
Counci
loft
hecit
yofSydneyvWest
Davi
svPier
ceParki
ngStati
onPt
yLtd

I
nQueenslandthecourthasnopowert
odi
sal
l
owanexempt
ioncl
auseont
he
basi
sthati
tisunreasonabl
e.

Far
amusvFi
l
m Adv
ert
ises’
Associ
ati
on

78