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General

* General
The court will do its utmost to uphold the spirit of the agreement: Hillas & Co Ltd v Arcos Ltd Tenders will receive due consideration is an implied contract: Blackpool & Flyde Aero Club V Blackpool Council, Hughes Aircraft Systems International Inc V Airservices Australia, damages for breaching this contract would likely be for costs involved in preparing the tender. A binding contract is where there is agreement, consideration and intention to be legally bound. Spencer v Harding, Harvela Investments Ltd V Royal Trust Company of Canada (CI) Ltd

* Agreement: A concluded agreement (consensus ad idem) has been reached where an offer has been accepted.
The statement (did/ did not) represent an agreement to extend: Empirnall Holdings v Machon Paul Partners If there is clearly an agreement, it does not matter if the offer and acceptance is unidentifiable: Clarke v dunhaven

* Offer: An offer may be defined as the expression to another of a willingness to be bound by stated terms.
An offer made may be rejected: Hyde v Wrench, after which time it is impossible to accept. standing offer accepted each time its conditions are fulfilled, able to be freely revoked for the future; Colonial Ammunition Co Ltd v Reid, Note that inquiries from the offeree to clarify the offer should not be construed as a rejection: Stevenson, Jacques & Co v McLean Parties may enter an agreement to keep the offer open for a period of time, this is called an option: Watson v Phipps; Goldsborough Mort v Quinn, however there must be consideration in exchange for the promise to keep the offer open, otherwise this agreement is not binding and the offer may be withdrawn at any time before acceptance; Routledge v Grant Offers remain open to acceptance for a reasonable time frame unless stated, but lapses after a reasonable amount of time Ramsgate Victoria Hotel Co Ltd v Montefiore; (another need citation, important) The mere supply of information does not constitute an offer. Harvey v Facey , Death of offerer terminates the offer generally; Fong v Cili Invitation to treat: An advertisement or the display of goods with a price tag is considered an invitation to treat and not an offer; as Lord Parker said in Fisher v Bell, It is perfectly clear that according to the ordinary law of contract, the display of an article with a price on it is merely an invitation to treat. It is [in] no sense an offer for sale, the acceptance of which constitutes a contract. This is supported in Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd. Partridge v Crittendon, Spencer v Harding & Grainger & Sons v Gough, Puffery test: Whether the statement is puffery or not is an objective test from the perspective of the recipient of the statement: Carlill v carbolic smoke ball co , Leonard v PepsiCo Inc. (change puffery example) Whether or not an offer has been made or accepted is objective, not subjective: Taylor V Johnson A call for tenders is normally construed as only an invitation to treat unless It indicates that the best tender will be accepted: Spencer V Harding, Auctions - An auctioneer's request for bids is an invitation to treat - Payne v Cave. - The offer is made in the form of a bid which the auctioneer may accept or reject - British Car Auctions v Wright. -Auctions being announced as without reserve make a contractual obligation to sell to the highest bona fide bidder; Warlow v Harrison -On the other hand, in AGC Ltd V McWhirter, Holland J said I see no reason to distinguish between a sale by auction with notice that a reserve price has been fixed and one with notice that a sale will be without reserve An auction remains, in my opinion, an invitation to treat (similarly in British Car Auctions V Wright, the auctioneer

Revocation of offer
May revoke an offer before acceptance (seen in Routledge v Grant) but this is not effective until communicated, which is when it is received by the offeree : Byrne v Van Tienhove Once an offer has been accepted it is irrevocable: Great Northern Railway Co v Witham Revocation must be communicated by the offeror or an authorised agent or a reliable third person, offeree must be aware: Dickenson V Dodds Postal rule does not apply to revocation of Offers to world at large can be revoked through similar media, doesnt matter if an individual hasnt heard revocation: Shuey v United States

* Acceptance: Acceptance is final agreement to an offer, communicated to the offeror.


What is Sufficiently certain? . Must act in reliance of an offer to accept it. In R v Clarke, The Court held it was necessary to act in "reliance on" an offer to accept it and therefore create a contract. Starke J said The performance of some of the conditions required by the offer also establishes prima facie an acceptance of the offer, however per curiam, Mr Clarke was not acting on the offer and Ipso Facto Selecto there was no acceptance of the offer and no contract. This is supported in Williams v. Carwardine; Gibbons v Proctor Question as to whether offer can be accepted by multiple people (Patterson V Dolman), or just one (Robinson v MEwan). Acceptance may be explicit or implied. If the actions of one party imply an acceptance of the contract, and there has been no explicit rejection, the court may rule that acceptance occurred; Empirnall Holdings v Machon Paull Rumours of acceptance do not constitute communication of acceptance, it must come from a reliable source; Powell v Lee Unilateral contracts: These are where an offeror does not require to be notified that the acceptor is accepting the offer. The acceptor accepts by performing the contract such as with a reward - Carlill v Carbolic Smoke Ball Co Motivation for acceptance does not matter, as long as the offer is in mind when accepting. Williams v Carwardine An offer must be accepted as it stands, any extra terms is a counter offer, Jones v Daniel, Stevenson v Maclean, Hyde V Wrench Silence does not constitute acceptance: Felthouse v Bindley Acceptance an be express or implied, as sometimes parties will act in a way that leads to the implication that an agreement exists: Brogden v metropolitan Railway Company

Because the amount of money payable as consideration to the offeror is usually an important aspect of a contract of service, the absence of an agreement on this point would indicate that the agreement was not concluded: Hempel v Robinson, Howard Smith & Co v Varawa, Scammell and Nephew Ltd v Ouston Must be communicated (not for unilateral): Acceptance is not effective until it is communicated: Bryne & Co v Leon Van Tienhoven & Co, Entores Ltd v Miles Far East Corporation. Rumours of acceptance does not constitute communication of acceptance: Powell v Lee If parties are using instantaneous forms of communication, the acceptance must be heard or received by the offeror the be effective: Entores Ltd v Miles Far East Corporation By post: Acceptance by post must be stipulated or reasonably within the parties contemplation in the circumstances. Henthorn v Fraser; Holwell Securities v Hughes; The fact that circumstances indicate no sense of urgency indicates that post was contemplated as a method of acceptance: Quenerduaine V Cole Where it would ordinarily be within the parties contemplation that in normal circumstances, the post would be used as a means of communicating acceptance, acceptance is complete as soon as the letter is posted: Adams V Lindsell; Dunlop v Higgins. This is referred to as The Postal rule The rule applies even if the letter is lost - Household Fire Insurance v Grant, Acceptance made by post cannot be withdrawn, this is supported by new Zealand authority (Weinkheim v Arndt), however there is a Scottish authority which contradicts this by allowing withdrawal of acceptance (Dunmore (countess) v Alexander), especially if the offeror never received notification of the acceptance. The Australian rule is still open to debate. Email, Telex and Facsimile (Fax) are seen as being instantaneous communication, therefore the general rule apples and an acceptance is made when received and read by the offeror - Entores v Miles Far East Corporation .

* Intention to be legally bound:


commercial agreements are presumed legally enforceable and the parties intend to be legally bound, unless there is evidence to the contrary. Carlill v Carbolic Smoke Ball Co However an agreement which contains a clause that the contract is binding in honour only will rebut the presumption; Jones v Vernon's Pools; Rose & Frank v Crompton An offer must be intended to give rise to an obligation, the absence of this intention means there is no real offer; Australian Woollen Mills Pty Ltd The salient features of the relationship are taken into account: Ermogenous v Greek Orthodox Community of SA Inc . Here, parties are at arms length, and there is commercial advantage to the parties. Although the relationship was of commercial nature, the court may find that based on the evidence, there was no intention to be legally bound Rose & Frank Company v Crompton & Bros Ltd, Kleinwort v Benson Ltd v Malaysia Mining Corporation Berhard, Hurley v McDonalds Australia Ltd If the agreement is of a social or domestic nature, the presumption is that there is no intention that the parties intended to be legally bound, however this presumption can be rebutted if it can be shown that not honouring the agreement would result in serious economic loss. Supporting social presumption: Balfour v Balfour; Jones v Padavattan Rebutted in: Merritt v Merritt; Simpkins v Payes; Parker v Clark; Merritt v Merritt

* Consideration: e.g what did the promisor have to do?


Definition: Consideration was defined in Curie v Misa as *S]ome right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other .... It must move from the promisee, but may move to a third party rather than the promisor. There must be Quid pro quo. Unilateral contracts: Same act may be both the Acceptance and Consideration: Carlill v Carbolic Smoke Ball co, Leonard v PepsiCo Inc. Consideration must be sufficient, not adequate; Chappell & Co Ltd v Nestle Co Ltd (e.g tokens to redeem a prize are sufficient consideration); Bainbridge v Firmstone To be binding: Must be definite and not too vague: Shiels v Drysdale, possible of performance, bona fide and reasonable. Must be more than the performance of an existing obligation such as a public duty imposed by law; Collins v Godefroy, a duty already imposed by a contract; Stilk v Myrick; Hartley v Ponsonby, or an existing obligation to repay money; Hirachand Punamchand v Temple; Foakes v Beer. However exceeding an existing obligation and obtain[ing] in practice a benefit, or obviat[ing] a disbenefit is good consideration; Williams v Roffey Bros & Nicholls (Contractors) Ltd; Glasbrook Bros v Glamorgan County Council; Hartley v Ponsonb;. Performance of an existing contractual obligation to a third party is good consideration; Shadwell v Shadwell, New Zealand Shipping Co Ltd v AM satterthwaite & Co Ltd Consideration must flow from the promise to the promisor OR a third party, however the third party will not have legal rights to enforce the contract; Beswick v Beswick, Coulls v Bagots Executor & Trustee Co Ltd Consideration needs to be more than a moral obligation: Eastwood v Kenyon Consideration may be executory, i.e a promise in return for a promise is sufficient consideration: Dunlop Pneuatic Tyre Co Ltd v Selfridge & Co Ltd Past consideration: Consideration cannot be something that has already occurred prior to the promise or offer. This situation is often referred to as past consideration: Lampleigh v Braithwaite; Roscorla v Thomas, Anderson v Glass, Re McArdle. In some circumstances, the past consideration will be valid consideration when actions forming the past consideration were done at the

request of the promisor, it was understood that the services would be paid for, and there is no bar to recover; Stewart v Casey, Pao On v Lau Yiu Long Joint promisees are in solidum; consideration only has to be provided by one of them, and each is obliged to provide up to 100% of the total. Penny v Cole (Pinnel's case): Part payment of an existing debt without anything extra is not consideration for that debt. This was reaffirmed in Foakes v Beer where it was established that even if the creditor accepted the debt as full and final, they may still sue for the balance later. Providing something extra as well as the existing debt is good consideration, however. If a Third party has entered into an agreement to pay a lesser amount in full settlement of the debt, the court may accept this as sufficient consideration: Hirachand Punamchand v Temple If the use of rules established in Pinnels case creates an outcome that is grossly unfair, estopple may be used in the court of equity to stop this section of the law being taken advantage of; Central London Property Trust v High Trees House Ltd

Privity rule:
Consideration must flow from the promise to the promisor OR a third party, however the third party will not have legal rights to enforce the contract; Beswick v Beswick, Coulls v Bagots Executor & Trustee Co Ltd Possible exceptions/evasions to privity rule: Joint promisees, who are each privy to the contract. Consideration which has moved from joint promisees are considered to have moved from all promisees, and so any joint promisee can enforce the contract; Coulls v Bagots Executor & Trustee Co Ltd. The obligation may be in solidum; each is obliged to provide up to 100% of the total, or Pro Rata; each is liable to only their share of the debt. An agency relationship (see below) Trust relationship- was the intention for one of the parties to hold a promise for the plaintiff? Trident General Insurance Co Ltd v. McNiece Bros Pty Ltd Unjust enrichment Estopple (possibly related to apparent authority below) Insurance beneficiaries: In Australia, it has been held that third-party beneficiaries may uphold a promise made for its benefit in a contract of insurance to which it is not a party; Trident General Insurance Co Ltd v. McNiece Bros Pty Ltd Agency relationship: Express actual authority: Principal expressly told agent that they may act with authority; Ireland v Livingstone Implied actual authority: extra authority that an agent has to reasonably complete their actual authority; Hely-Hutchinson v Brayhead Ltd Apparent authority: Principal has created the impression that authority Is given but there is no actual authority. Third parties protected as long as they acted reasonably, the principal will be estopped from denying the grant of authority if third parties have changed their positions to their detriment in reliance on the representations made; Rama Corporation Ltd v Proved Tin and General Investments Ltd, Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd

*Formalities:
Formalities originally arising from The Statute of Frauds Act required that some agreements be in written form or evidenced by memorandum or note. The Statue of Frauds Act is now only applicable in WA, in Victoria it has been replaced by the Instruments Act 1958 (Vic) s. 126 which provides Contracts disposition of land: Instruments Act 1958 (Vic) s. 126 provide that no action may be bought before the court for sales on the disposition of interests for land unless that agreement is in written form or evidenced by a memorandum or note. It is now possible to do so electronically. Failing to meet this formality does not mean the contract is void, but it is unenforceable. This means that If it is not objected to, the contract may be fulfilled. This is illustrated by Thomas v Brown. S.60 of the Property Law Act 1958 (vic) supports this. <check this> Contracts for guarantee (e.g. guarantor for the loan of 3 party): provides that no action may be bought before the court for contracts for guarantee unless that agreement is in written form or evidenced by a memorandum or note. It is now possible to do so electronically. Failing to meet this formality does not mean the contract is void, but it is unenforceable. This means that If it is not objected to, the contract may be fulfilled. This is illustrated by Thomas v Brown. However, The question is whether <the defendant> undertook a primary or a secondary liability; in Lakeman v Mount Stephen the phrase see you paid was treated as a primary liability. As an indemnity, promises of this kind fall outside the statute of the Instruments Act and can be enforced against <the defendant> even though it was oral. Contracts that must be written: contracts for the performance of domestic building work to the value of $12 000 or more [ Building Work Contractors Act 1995 s 28 ] contracts for the sale of second hand motor vehicles by dealers [Second Hand Vehicle Dealers Act 1995 s 17] contracts for the sale of land, or any interest in or concerning land [Law of Property Act 1936 s 26] unsolicited consumer agreements (e.g. door to door sales, telephone sales) [Competition and Consumer Act 2010, Schedule 2, ss 78, 79]. cheques (sec 10(1), Cheques Act 1986 (Cth)); Bills of exchange (sec 8(1), Bills of Exchange Act 1909 (Cth)); transfers of shares (sec 1071B, Corporations Act 2001 (Cth)); assignments of copyright (sec 196(3), Copyright Act 1968 (Cth)); To be effective a memorandum must include the essential elements; Harvey v Edwards Dunlop & Co Ltd:
rd

(NOTE: elements dont have to be in 1 document, it can be joined. See below.) A) the names of the parties; B) the sufficient identification of the subject matter (i.e. the property, reference to your land is not enough; Pirie v Saunders ); C) the consideration (unless it is a guarantee); and D) Be signed by the party to be charged or their agent with acknowledgement that the agreement has been concluded; Tiverton Estates Ltd v Wearwell. Signature may be typed, handwritten or printed if it is intended to authenticate the whole of the document; Durrell v Evans. Acknowledgement may be express or implied. Joining multiple sections of memorandum or notes It is also possible for more than one note or memorandum to be joined together; Harvey v Edwards Dunlop & Co Ltd. Thus, if material terms are contained on one note and the signature on another, it may be possible to join the documents together to satisfy all required formalities. However, in order to do this the documents must - expressly or by implication - refer to each other: Fauzi Elias v George Sahely & Co (Barbados) Ltd. Physically joining documents is an implied reference; Pearce v Gardner. A letter is joined to its envelope.

Four classes of subject to contract:


It is necessary to examine the intention of the parties1)Where parties have reached finality in their negotiations and intend to be bound immediately, but propose to restate the terms in a more formalised manner parties will be immediately bound by their agreement; Masters v Cameron 2)Where parties have completely agreed but have made performance of one of the terms conditional upon the execution of a formal document - parties will be immediately bound by their agreement; Masters v Cameron 3) Where parties do not intend to be bound unless and until a formal document is entered into- parties will not be bound until that formal document is executed; Baulkham Hills Private Hospital Pty Ltd v GR securities Pty Ltd, Masters v Cameron 4)Where parties are content to be bound immediately by the terms that they have agreed upon while expecting to make a further contract in substitution for the first contract containing , by consent, additional terms parties will be immediately bound by their agreement; Masters v Cameron

Doctrine of part performance:


The doctrine of Part Performance provides that where the plaintiff has partly carried out the contract, relying on the defendants promise, equity may enforce a contract despite non-compliance with formalities. A strict test to determine application to the doctrine of part performance is used in Australia. It must be shown that there were sufficient acts of part performance that were unequivocally referable to the alleged agreement, performed by the party wishing to enforce the contract and to the knowledge of the other party: Maddison v Alderson; Watson v Delane; Brogden v Metropolitan Rly Co; Empirnall Holdings v Machon Paull apply: sufficient act of part performance made by claimant? Was it unequivocally referable to alleged contract? In Australia, where part performance is established the court may order specific performance of the contract - this equitable remedy is discretionary, so courts will only order it where it appears to them to be equitable to do so: JC Williamson Ltd v Lukey & Mulholland; McBride v Sandland, Regent v Millett Can there be equitable specific performance?

The Electronic Transactions Act 1999(Cth)


Offer and acceptance via electronic communication, as per The Electronic Transactions Act 1999(Cth). Section 14 (1) states that: "a message is sent once it enters a single information system outside the control of the of the originator." S.14(3): "if the addressee of an electronic communication has designated an information system for the purpose of receiving electronic communications then unless otherwise agreed between the parties the time of receipt of the electronic communication is when it enters that information system." S.14(4): " if the addressee of the electronic communication has not designated an information system for receiving electronic communications then unless otherwise agreed between the parties then the time of receipt of the communication is when it comes to the attention of the addressee." S.14(5)& (6): the electronic communication is deemed to be dispatched from where the originator has its place of business or if an individual their normal place of residence and the electronic communication is received