LAWS1015 Contracts

Question 1

Is the election to terminate or affirm the contract final?

Answer 1

Yes

Question 2

(White & Carter Council v McGregor)

Answer 2

A party cannot choose to affirm the contract in all circumstances. Common law principle that party’s have a duty to mitigate their loss - cannot do something to exacerbate that loss.

Question 3

(Saleh v Romanous)

Answer 3

P: EAC does not prevent party from claiming equitable remedy.

F: representation “I am taking responsibility for Eddy, if he terminates JV, you do not have to buy, and you’ll get your deposit back”

Question 4

PER

Answer 4

1. Prevents extrinsic evidence from adding to, vary, or contradict terms of the written contract.
2. Prevents use of extrinsic evidence as an aid in construction to explain meaning of words in a written contract.

Question 5

(State Rail Authority v Heath Outdoor)

Answer 5

P: PER has no application until it is determined that the parties intended for the written doc to contain all of the terms of the contract. Thus, Extrinsic evidence can be used to determine whether parties objectively intended that the contract be wholly in writing.

e.g. nature of agreement as large commercial contract, large amounts of money involved

Question 6

(Hospital Products v Surgical Corp)

Answer 6

T: Pre-contractual oral statement is a binding promissory term (as opposed to mere representation) if, on the totality of the evidence, the maker had an intention to guarantee the truth of their words. Ascertained objectively by asking what a reasonable person in the position of the hearer would have concluded?

Question 7

(Ellul v Oakes)

Answer 7

Secondary guides to determine intention:

• time statement was made
• importance of statement (Couchman v Hill)
• existence of a written memorandum
• relative knowledge and expertise (Oscar Chess v Williams) (Dick Bentley v Harold Smith Motors)

Question 8

(Couchman v Hill)

Answer 8

Importance of pre-contractual oral statement.

F: can you confirm cows are virgins?

Question 9

(Oscar Chess v Williams)

Answer 9

P: If seller has made it clear that he had no knowledge of his own, but got his info from elsewhere, not so easy to imply a warranty.

F: mother’s car model year, simply repeating registration book

Question 10

(Dick Bentley v Harold Smith Motors)

Answer 10

P: If seller states fact that claims to know, or ought to be within his knowledge, to which the buyer is ignorant, then it is easy to infer a warranty.

F: 20,000 mile on replacement engine

Question 11

(JJ Savage v Blakney)

Answer 11

D: A collateral contract is a contract for which the consideration is entry into the main contract.

T: In order for a pre-contractual oral statement to be a collateral contract:

1. Statement must have been intended to be relied upon
2. Party relies upon it
3. Maker intends to guarantee its truth

F: Speedboat 15m/h, merely an expression of opinion

Question 12

(Shepperd v Ryde Corporation)

Answer 12

P: easier to infer a warranty where the statement is not one you would expect to find in the main contract.

F: consideration for the promise to maintain the parkland was Shepperd’s entry into the main contract for sale of land itself.

Question 13

(Hoyts v Spencer)

Answer 13

P: pre-contractual oral statement must be consistent with the terms of the main contract.

F: claimed that in consideration of entering into the sub-lease, Spencer promised not to terminate unless required by head lessee. (Estoppel?)

Question 14

(Crown Melbourne v Cosmopolitan Hotel)

Answer 14

P: terms of the collateral contract cannot be illusory.

F: “looked after” when renewing restaurant lease, too vague, reasonable person could not have understood it to be promissory.

Question 15

(L’estrange v Graucob) affirmed by HCA in (Toll v Alphapharm)

Answer 15

Incorporation by Signature.

P: general rule is that a person who signs a contractual doc, will be bound by the terms, regardless of whether they have read or understood those terms

Question 16

(Curtis v Chemical Cleaning)

Answer 16

P: exception where nature or extent of the contractual terms contained in the document has been misrepresented. (By words or conduct)

F: inquired about doc terms. Not accept liability for damage to sequins, when in fact, much wider.

Question 17

(Causer v Brown)

Answer 17

Incorporation by notice.

T: whether the party knew that the document was not merely a docket/receipt, but also contained terms?

T: OR whether reasonable steps were taken to bring those terms to the notice of the party to be bound? (at the time of contract)

F: reasonably understood the document merely to be a receipt to be presented when collecting dress, and not to contain contractual terms

Question 18

(Oceanic Sun Line Shipping v Fay)

Answer 18

P: terms contained in a notice must be brought to the parties attention before the contract is formed.

F: contract formed when cruise fare paid. Ticket received upon boarding

Question 19

(Parker v South Eastern Railway)

Answer 19

The “ticket” cases. Same principle as (Causer v Brown)

F: luggage storage ticket contained exclusion clause

Question 20

(Thronton v Shoe Lane Parking)

Answer 20

P: if the exclusion clause/ term is particularly wide and destructive of rights, it should be drawn to the parties attention in the most explicit way.

F: cannot negotiate with carpark machine dispensing tickets.

Question 21

(Balmain New Ferry v Robertson)

Answer 21

D: Terms can be incorporated by course of dealings, because by continuing to deal with the party seeking to incorporate terms, the other party has evidenced a willingness to be bound.

P: for a term to be incorporated, the course of dealings must have been regular, consistent and sufficiently long. But it is not necessary to show that the other party had actual knowledge of the terms.

Question 22

(Rinaldi & Patroni v Precision Mouldings)

Answer 22

P: the document relied on must reasonably be considered a contractual document.

P: document relied on cannot be given to party after contract performance.

Question 23

(McKeith v Royal Bank of Scotland)

Answer 23

Incorporating standard terms by reference.

F: whether the company’s redundancy policy had been incorporated by reference into the employee contracts? No, because, if it was to be covered at all by a contract of employment, it would be covered explicitly.