week eleven Flashcards
what happened in Tak and Co v AEL Corporation
AEL claimed there was a separate oral part of the contract whereby the parties agreed the fake non pedigree cows could be delivered, while Tak thought they were all pedigree and they must have overcome their shortage.
what did Hammond J do in his judgment in Tak and Co v AEL Corporation that was interesting
he didn’t talk about the objective intention of the parties, he based his reasoning on the Parole Evidence Rule, which Fisher J didn’t even mention in Newmans. these approaches are different and this happens in NZ and the UK.
The Parole Evidence Rule doesn’t actually do anything in context because you only apply it after you’ve decided that the parties didn’t intend any additional oral terms
who’s words from Investors Compensation Scheme v West Bromwich Building Society 1998 form the UK approach to contractual interpretation (which is likely also NZ’s) and how many principles did they list
Lord Hoffman, in 5 principles
what are the key features of Lord Hoffman’s approach to contractual interpretation
objective - what the contractual language would convey to a reasonable person
contextual - hypothetical reasonable person has all the information available to the parties at the time of contract
what seemingly departure from the English approach to contractual interpretation happened in Gibbons Holdings v Wholesale Distributors 2008
majority of the court held that they could use evidence of subsequent conduct (evidence of what the parties did after the contract was formed) in contractual interprettion
what happened in Vector Gas v Bay of Plenty Energy 2010 (contractual interpretation)
Vector was in a long term contract to supply gas to BOPE at a 1995 price. They tried to terminate that contract and a dispute was taken to court over whether they could.
in the interim, they made an agreement to continue supplying the gas at the 1995 price but if BOPE is unsuccessful, then BOPE will have to pay the difference and top up to $6.50 per GJ.
Ultimately they were unsuccessful but a contractual dispute arose over whether the top up price ($6.50) included or excluded transmission costs (a big difference).
what was held in the CA vs the SC in Vector Gas v Bay of Plenty Energy 2010 regarding the price of gas
CA - price included transmission costs, 1995 price included so this must to
SC - exclusive of transmission costs - if this agreement weren’t reached, BOPE could’ve applied to the court for an injunction that Vector gas be required to continue to supply gas at the 1995 price, but if they were then unsuccessful BOPE would have to pay the difference between the 1995 contract price and the market price at the time (6.50 plus transmission costs). therefore, why would Vector make this agreement excluding transmission costs if without it they could get more.
what did Tipping J say about the NZ approach to contractual interpretation in Vector Gas v Bay of Plenty Energy 2010
- taken to be NZ’s position at the time
very similar to Lord Hoffman, both objective and contextual.
the parties can understand their words to means anything that is not actually linguistically possible, as long as they both understand that that’s what it means.
he doesn’t favour Hoffman’s 3rd principle (exception to pre-contract evidence)
what happened in Firm PI 1 Ltd v Zurich Australian Insurance
said in relation to general principles, NZ should still refer to Lord Hoffman’s judgment, rather than that of Tipping J.
Both are very similar and often used, but perhaps we are swinging back to Lord Hoffman’a approach
what are implied terms
terms of a contract that were not expressed/expressly agreed to by the parties
what are the four different ways in which terms can be implied into a contract
terms implied from custom (within a particular area or industry) or usage (previous history between the parties
terms implied by statute
terms implied into contracts of a class (particular type of contract)
terms implied into particular contracts
what happened in Woods v N J Ellingham & Co (terms implied into contract from custom or usage)
Ellingham was the head contractor and woods the sub-contractor. the adjacent land turned out to be sandfill, making the building process much more difficult and expensive than expected
woods claimed there was a term implied into the contract by custom (claimed that in this industry that where there is abnormal terrain, the other party must give notice of this or pay the extra cost involved)
what did Henry J say about terms being implied into contract from custom or usage
such a term must have notoriety in the market, trade or business, certainty and uniformity and the court needs clear consistent evidence of this
what is an example of a term implied by statute
S139 Contract and Commercial Law Act 2017 - implied conditions that goods are of merchantable quality
what happened in Liverpool City Council v Irwin (implied terms into a contract of a class)
Irwin refused to pay rent, claiming the council was not maintaining the common areas of the building
there was a written lease setting out the terms of the lease, but it didn’t list any responsibilities for the landlord.
Irwin argued an implied term, which would oblige the landlord to maintain the common facilities
