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Contents

CONTRACTS ................................................................................................................................................ 8

SUMMARY ................................................................................................................................................. 8

Intro ...................................................................................................................................................................................................... 8 Agreement ............................................................................................................................................................................................ 8 Consideration ........................................................................................................................................................................................ 8 Intention to Create Legal Relations ...................................................................................................................................................... 8 Certainty ............................................................................................................................................................................................... 8 Privity .................................................................................................................................................................................................... 8

AGREEMENT ............................................................................................................................................... 9

OFFER: PRINCIPLES ................................................................................................................................................... 9 Nature of an offer ................................................................................................................................................................................. 9

Carlill v Carbolic Smoke Ball (1893) .............................................................................................................................................. 9 OFFER VS UNILATERAL CONTRACTS ............................................................................................................................. 9

Definition .............................................................................................................................................................................................. 9 Australian Woollen Mills v Commonwealth (1954) ..................................................................................................................... 9

OFFER V INVITATIONS TO TREAT ............................................................................................................................... 10 Definition ............................................................................................................................................................................................ 10

TERMINATION OF AN OFFER ..................................................................................................................................... 10 Withdrawal ......................................................................................................................................................................................... 10

ACCEPTANCE ......................................................................................................................................................... 10 Conduct constituting acceptance ....................................................................................................................................................... 10 Consciousness of the offer .................................................................................................................................................................. 10 Communication of acceptance ........................................................................................................................................................... 11 Method of acceptance ........................................................................................................................................................................ 11

CONSIDERATION .......................................................................................................................................12

ELEMENTS ............................................................................................................................................................ 12 Notes................................................................................................................................................................................................... 12 Benefit/Detriment Requirement ........................................................................................................................................................ 12 Bargain Requirement .......................................................................................................................................................................... 12 Conditional Gifts ................................................................................................................................................................................. 12 Consideration must move from the promisee .................................................................................................................................... 12 Adequacy/Sufficiency of consideration .............................................................................................................................................. 12

INTENTION TO CREATE LEGAL RELATIONS ..................................................................................................13

THE OBJECTIVE APPROACH ....................................................................................................................................... 13 PRESUMPTIONS ..................................................................................................................................................... 13

Ermogenous v Greek Orthodox Community of SA (2002) .............................................................................................................. 13 A. Commercial Transactions ............................................................................................................................................................... 13

Banque Brussels Lambert v Australia National Industries (1989) ........................................................................................... 13 B. Domestic and Social Agreements ................................................................................................................................................... 13

Todd v Nicol (1957) ...................................................................................................................................................................... 13 C. Government Agreements ............................................................................................................................................................... 13

Administration of Papua and New Guinea v Leahy (1961) ........................................................................................................ 14 PRELIMINARY AGREEMENTS ..................................................................................................................................... 14

Principles............................................................................................................................................................................................. 14 Masters v Cameron (1954) ............................................................................................................................................................. 14 Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) .......................................................................................... 14

CERTAINTY ................................................................................................................................................15

GENERAL REQUIREMENTS ........................................................................................................................................ 15 A. COMPLETENESS ................................................................................................................................................. 15

General principles ............................................................................................................................................................................... 15 Essential terms .................................................................................................................................................................................... 15 Executed contracts ............................................................................................................................................................................. 15 Machinery/Formula for settling a term .............................................................................................................................................. 15

B. CERTAINTY ........................................................................................................................................................ 15

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General principles ............................................................................................................................................................................... 15 Reasonableness .................................................................................................................................................................................. 15 Use of an objective standard .............................................................................................................................................................. 16

C. ILLUSORY PROMISES ............................................................................................................................................ 16 GENERAL PRINCIPLES .............................................................................................................................................. 16

SEVERANCE/WAIVER .................................................................................................................................17

SEVERANCE ........................................................................................................................................................... 17 General principles ............................................................................................................................................................................... 17

WAIVER ............................................................................................................................................................... 17 General Principles ............................................................................................................................................................................... 17

PRIVITY .....................................................................................................................................................18

GENERAL PRINCIPLES .............................................................................................................................................. 18 EXCEPTIONS: AGENCY ............................................................................................................................................. 18 CIRCUMVENTING THE PRIVITY RULE .......................................................................................................................... 18

Main Circumstances ............................................................................................................................................................................ 18 REMEDIES AVAILABLE TO THE PROMISEE ..................................................................................................................... 18

Damages ............................................................................................................................................................................................. 18 Specific Performance .......................................................................................................................................................................... 18

ESTOPPEL ..................................................................................................................................................19

NATURE OF ESTOPPEL ............................................................................................................................................. 19 COMMON LAW ESTOPPEL ....................................................................................................................................... 19 EQUITABLE ESTOPPEL ............................................................................................................................................. 19

Walton Stores v Maher (1988) ..................................................................................................................................................... 19 ELEMENTS OF ESTOPPEL .......................................................................................................................................... 20

General principles ............................................................................................................................................................................... 20 Assumption ......................................................................................................................................................................................... 20 Inducement ......................................................................................................................................................................................... 20 Detrimental Reliance .......................................................................................................................................................................... 20

Je Maintiendrai v Quaglia (1980) ................................................................................................................................................. 20 Reasonableness .................................................................................................................................................................................. 21 Unconscionable Conduct .................................................................................................................................................................... 21 Departure or threatened departure ................................................................................................................................................... 21

EFFECT OF AN ESTOPPEL .......................................................................................................................................... 21 Common Law Estoppel ....................................................................................................................................................................... 21 Equitable Estoppel .............................................................................................................................................................................. 21

REMEDY ............................................................................................................................................................... 21 Remedy ............................................................................................................................................................................................... 21 Expectation or Reliance Loss ............................................................................................................................................................... 21

Cth v Verwayen 1990.................................................................................................................................................................... 22 ESTOPPEL AS A CAUSE OF ACTION .............................................................................................................................. 22

Notes................................................................................................................................................................................................... 22 ESTOPPEL AND CONTRACT ....................................................................................................................................... 22

General Principles ............................................................................................................................................................................... 22 Interplay Estoppel & Contract............................................................................................................................................................. 22 Estoppel as an Alternative to Contract ............................................................................................................................................... 22 Termination of Contracts .................................................................................................................................................................... 22

RELIANCE .............................................................................................................................................................. 22 Why protect reliance? ........................................................................................................................................................................ 22

PROPERTY .................................................................................................................................................24

WHAT IS PROPERTY? .................................................................................................................................24

WHAT IS PROPERTY? .............................................................................................................................................. 24 COHEN ................................................................................................................................................................. 24

Milirrpum v Nabalco (1971) ........................................................................................................................................................ 24 THE RIGHT TO USE OR ENJOY .................................................................................................................................... 24

Yanner v Eaton (1999) ................................................................................................................................................................. 24 Willy v St George Partnership Banking (1999 ............................................................................................................................ 24

THE RIGHT TO ALIENATE .......................................................................................................................................... 24 R v Toohey (1982) ........................................................................................................................................................................ 24

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THE RIGHT TO EXCLUDE ........................................................................................................................................... 24 Stow v Mineral Holdings (Australia) (1977) ............................................................................................................................... 24

CONTRACTUAL LICENSES ...........................................................................................................................25

PROPERTY RIGHTS AND CONTRACTUAL RIGHTS ............................................................................................................ 25 LICENCES: BARE, CONTRACTUAL OR COUPLED WITH AN INTEREST.................................................................................... 25

Licenses and Original Parties .............................................................................................................................................................. 25 Cowell v Rosehill Racecourse Co (1937) ..................................................................................................................................... 25

Availability of Specific Performance ................................................................................................................................................... 25 NSW Rifle Association v Commonwealth (2012) ....................................................................................................................... 26

LICENSES AND THIRD PARTIES; NEW PROPERTY .........................................................................................27

PRINCIPLES ........................................................................................................................................................... 27 King v David Allen & Sons, Billposting Ltd (1916) ..................................................................................................................... 27 Yanner v Eaton (1999) ................................................................................................................................................................. 27 Georgeski v Owners Corporation Strata Plan (2004) ...................................................................................................................... 27

NUMERUS CLAUSUS PRINCIPLE (SEE BRENDAN’S ESSAY) .............................................................................................. 28 Outline ................................................................................................................................................................................................ 28

PROPERTY RIGHTS AND THE RIGHTS OF PERSONS ......................................................................................29

OUTLINE ............................................................................................................................................................... 29 ARE PERSONS PROPERTY? – DAVIES AND NAFFINE ....................................................................................................... 29 PROPERTY AND BODY PARTS .................................................................................................................................... 29

Moore v Regents of the University of California (1990) ............................................................................................................ 29 Doodeward v Spence (1908) ........................................................................................................................................................ 29

PROPRIETARY RIGHTS IN HUMAN TISSUE ................................................................................................................... 29 OUTLINE ............................................................................................................................................................... 29

BOUNDARIES OF PROPERTY RIGHTS ...........................................................................................................31

PROPERTY RIGHTS AND PRIVACY ............................................................................................................................... 31 Outline ................................................................................................................................................................................................ 31

Victoria Park Racing and Recreation Grounds v Taylor (1937) ................................................................................................ 31 Australian Broadcasting Corporation v Lenah Game Meats (2002) ............................................................................................... 31

Australia’s Tort of Privacy Progression ............................................................................................................................................... 31 PROPERTY AND THE RIGHT TO WORK ........................................................................................................................ 32

Outline ................................................................................................................................................................................................ 32 Dorman v Roger (1982) ............................................................................................................................................................... 32

PROPERTY RIGHTS AND CIVIL RIGHTS ........................................................................................................................ 32 Outline ................................................................................................................................................................................................ 32

Davis v Commonwealth (1988) ................................................................................................................................................... 32 PROPERTY RIGHTS AND HUMAN RIGHTS .................................................................................................................... 33

Outline ................................................................................................................................................................................................ 33 Should Australian Bill of Rights Protect Property Rights? ................................................................................................................... 33

#FIXTURES AND CHATTELS .........................................................................................................................34

PROBLEM QUESTION STRUCTURE ............................................................................................................................. 34 Intro .................................................................................................................................................................................................... 34 Presumptions ...................................................................................................................................................................................... 34 Degree & Purpose of Annexation ....................................................................................................................................................... 34 Tenants- Renters and life Tenants ...................................................................................................................................................... 34 Cases ................................................................................................................................................................................................... 34 Irrigation equipment (annexation essential for operation of equipment): NAB v Blacker (2000) .............................................. 34

LAND, FIXTURES & CHATTELS .....................................................................................................................35

FIXTURES .............................................................................................................................................................. 35 General Principles ............................................................................................................................................................................... 35

Holland v Hodgson (1872) ........................................................................................................................................................... 35 Leigh v Taylor (1902) ................................................................................................................................................................... 35 Re Whaley (1908) ......................................................................................................................................................................... 35 Norton v Dashwood (1896) ......................................................................................................................................................... 35 Hobson v Gorringe (1897) ........................................................................................................................................................... 35

Standard Practices .............................................................................................................................................................................. 36 Belgrave Nominees Pty Ltd v Barlin-Scott Airconditioning Pty Ltd (1984) ............................................................................. 36

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Attorney Genral v R T Co (1957) ................................................................................................................................................. 36 NAB v Blacker (2000) ................................................................................................................................................................... 36 Palumberi v Palumberi (1986) .................................................................................................................................................... 36 May v Ceedive (2006) ................................................................................................................................................................... 36

Tenant’s Fixtures ................................................................................................................................................................................. 36

BOUNDARIES OF LAND: ACCRETION ...........................................................................................................38

Boundaries between owners .............................................................................................................................................................. 38

#TORTS/BAILMENT ....................................................................................................................................39

PROBLEM QUESTION STRUCTURE ............................................................................................................................. 39 Intro .................................................................................................................................................................................................... 39 Possession ........................................................................................................................................................................................... 39 Torts .................................................................................................................................................................................................... 39 Rights of Bailees .................................................................................................................................................................................. 39 Finders ................................................................................................................................................................................................ 39

TORTS FOR THE PROTECTION OF CHATTELS ................................................................................................40

OUTLINE ............................................................................................................................................................... 40 TORTS .................................................................................................................................................................. 40

Trespass p94 ....................................................................................................................................................................................... 40 Conversion p94 ................................................................................................................................................................................... 40 Detinue p95 ........................................................................................................................................................................................ 40 Negligence .......................................................................................................................................................................................... 40 Remedies ............................................................................................................................................................................................ 40

POSSESSION .......................................................................................................................................................... 41 Constructive Possession ...................................................................................................................................................................... 41 Right to Immediate possession ........................................................................................................................................................... 41 Right to Future Possession .................................................................................................................................................................. 41

BAILMENT ............................................................................................................................................................. 41 Outline ................................................................................................................................................................................................ 41 Bailment at Will .................................................................................................................................................................................. 41 Bailment for a Term ............................................................................................................................................................................ 41

RIGHTS OF BAILEES ................................................................................................................................................. 41 Rights of bailees against third parties ................................................................................................................................................. 41

Winkfield (1902)........................................................................................................................................................................... 41 Wilson v Lombak Ltd (1963) ....................................................................................................................................................... 42 Anderson Group v Tynan Motors [2006] .................................................................................................................................... 42

OWNERSHIP BY THIRD PARTIES AND JUS TERTII ........................................................................................................... 42 Jeffries v The Great Western Railway Co (1856) ........................................................................................................................ 42

RIGHTS OF FINDERS ................................................................................................................................................ 42 Armory v Delamirie (1722) .......................................................................................................................................................... 42 Parker v British Airways Board (1982) ....................................................................................................................................... 42

#ADVERSE POSSESSION/RECOVERY OF POSSESSION ...................................................................................44

PROBLEM QUESTION STRUCTURE: ADVERSE POSSESSION ............................................................................................. 44 Adverse Possession: elements ............................................................................................................................................................ 44 Adverse Possession: Time ................................................................................................................................................................... 44 Successive Adverse Possessors ........................................................................................................................................................... 44

PROBLEM QUESTION STRUCTURE: RECOVERY OF POSSESSION ....................................................................................... 45 Title in Actions for the Recovery of land ............................................................................................................................................. 45 Title by Transfer of Possessory Rights ................................................................................................................................................. 45 Recovery of Possession ....................................................................................................................................................................... 45

POSSESSION OF LAND ................................................................................................................................46

RECOVERY OF POSSESSION OF LAND .......................................................................................................................... 46 Mc Phail v Persons Unknown (1973) .......................................................................................................................................... 46

FORCIBLE RE-ENTRY................................................................................................................................................ 46 Imperial Acts Application Act 1969 (NSW) ................................................................................................................................. 46

TITLE IN ACTIONS TO RECOVER POSSESSION OF LAND .................................................................................................. 46 General principles: .............................................................................................................................................................................. 46

Asher v Whitlock (1865) .............................................................................................................................................................. 46 JUS TERTII ............................................................................................................................................................. 47

Principles............................................................................................................................................................................................. 47

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Doe d Carter v Barnard: .................................................................................................................................................................. 47

ADVERSE POSSESSION ...............................................................................................................................48

PRINCIPLES ........................................................................................................................................................... 48 Limitation Act 1969 ...................................................................................................................................................................... 48

ELEMENTS OF ADVERSE POSSESSION ......................................................................................................................... 48 Pye v Graham (2003) .................................................................................................................................................................... 48 Whittlesea City Council v Abbatangelo (2009) ........................................................................................................................... 48

Examples of Intention to Possess ....................................................................................................................................................... 49 Adverse Claims to Parts of Land ......................................................................................................................................................... 49

FUTURE INTERESTS P164......................................................................................................................................... 49 Limitation Act 1969 (NSW) .......................................................................................................................................................... 49

EQUITABLE ESTATES P165 ....................................................................................................................................... 49 Limitation Act 1969 (NSW) .......................................................................................................................................................... 49

ADVERSE POSSESSION BY A CO-OWNER P165 ............................................................................................................. 49 Limitation Act 1969 (NSW) .......................................................................................................................................................... 49

SUCCESSIVE ADVERSE POSSESSORS P166 ................................................................................................................... 49 STOPPING TIME RUNNING P168 .............................................................................................................................. 49

General Principles: .............................................................................................................................................................................. 49 EFFECT OF EFFLUXION OF TIME ................................................................................................................................ 50

General Principles ............................................................................................................................................................................... 50

FORMALITIES: DISPOSITIONS OF INTERESTS IN LAND ..................................................................................51

SUMMARY ............................................................................................................................................................ 51 Formal Requirements ......................................................................................................................................................................... 51 Torrens System: Sale of Land .............................................................................................................................................................. 51 Period Between Exchange and Settlement/Registration .................................................................................................................... 51

FORMALITIES: CONTRACTS FOR THE SALE OF LAND ....................................................................................52

ACQUISITION THROUGH TAKING POSSESSION .............................................................................................................. 52 Land .................................................................................................................................................................................................... 52 Chattels ............................................................................................................................................................................................... 52 Manufacture or creation of objects .................................................................................................................................................... 52 Patents, copyright and trademarks ..................................................................................................................................................... 52

CONSENSUAL TRANSACTION WITH PROPRIETARY INTERESTS – LEGAL AND EQUITABLE ....................................................... 52 Sale ..................................................................................................................................................................................................... 52 Goods .................................................................................................................................................................................................. 52

FORMAL REQUIREMENTS FOR THE CONTRACT FOR SALE OF GOODS ................................................................................. 52 FORMAL REQUIREMENTS FOR THE SALE OF LAND ........................................................................................................ 52

Land – legal and equitable interests ................................................................................................................................................... 52 Formal requirements for the passing of a legal interest in land ......................................................................................................... 52 Formal requirements for contracts for the sale of land; equitable interests arising out of enforceable contracts ............................ 52

Bunny Industries v FSW Enterprises (1982) .............................................................................................................................. 53 Tanwar Enterprises v Cauchi (2003) .......................................................................................................................................... 53 Lysaght v Edwards (1876) – Principle ........................................................................................................................................ 54 Ziel Nominees (1975) – Principle ................................................................................................................................................ 54 Walsh v Lonsdale (1882).............................................................................................................................................................. 54

LEGAL LEASE V EQUITABLE LEASE .............................................................................................................................. 54 Limits of Equitable Leases ................................................................................................................................................................... 54

Chan v Cresdon (1989) ................................................................................................................................................................. 55 McMahon v Ambrose (1987) ....................................................................................................................................................... 55

WRITING REQUIREMENTS ........................................................................................................................................ 55 Overview ............................................................................................................................................................................................. 55

ANZ v Widin (1990) ...................................................................................................................................................................... 55

#PART PERFORMANCE ...............................................................................................................................56

PROBLEM QUESTION STRUCTURE ............................................................................................................................. 56 Intro .................................................................................................................................................................................................... 56 Elements ............................................................................................................................................................................................. 56 Application .......................................................................................................................................................................................... 56 Acts that Amount to Part Performance .............................................................................................................................................. 56

PART PERFORMANCE.................................................................................................................................57

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OUTLINE ............................................................................................................................................................... 57 Principles............................................................................................................................................................................................. 57 Dispositions that can rely on Part Performance ................................................................................................................................. 57

ELEMENTS ............................................................................................................................................................ 57 Outline ................................................................................................................................................................................................ 57 Elements from McBride v Sandland 1918, per Isaacs and Rich JJ ....................................................................................................... 57 Acts that Amount to Part Performance .............................................................................................................................................. 57

CASES .................................................................................................................................................................. 57 Narrow View: Australia ....................................................................................................................................................................... 57

Mason v Clarke (1955) ................................................................................................................................................................. 57 McBride v Sandland 1918 ............................................................................................................................................................... 58 Ogilvie v Ryan 1976 ........................................................................................................................................................................ 58

Broad View: England ........................................................................................................................................................................... 58 Kingswood Estate Co v Anderson (1963) ........................................................................................................................................ 58 Steadman v Steadman (1976) ........................................................................................................................................................ 58

Notes: HC Comment on the Broad Test .............................................................................................................................................. 58 Regent v Millet (1976) .................................................................................................................................................................... 58

#ESTOPPEL ................................................................................................................................................59

PROBLEM QUESTION STRUCTURE ............................................................................................................................. 59 Intro .................................................................................................................................................................................................... 59 Elements ............................................................................................................................................................................................. 59 Remedy ............................................................................................................................................................................................... 59 Cases ................................................................................................................................................................................................... 59

ESTOPPEL: PROPRIETARY ESTOPPEL ...........................................................................................................60

NATURE OF ESTOPPEL ............................................................................................................................................. 60 EQUITABLE ESTOPPEL ............................................................................................................................................. 60

Walton Stores v Maher (1988) ..................................................................................................................................................... 60 ELEMENTS OF ESTOPPEL .......................................................................................................................................... 60

General principles ............................................................................................................................................................................... 60 Assumption ......................................................................................................................................................................................... 61 Inducement ......................................................................................................................................................................................... 61 Detrimental Reliance .......................................................................................................................................................................... 61

Je Maintiendrai v Quaglia (1980) ................................................................................................................................................. 61 Reasonableness .................................................................................................................................................................................. 61 Unconscionable Conduct .................................................................................................................................................................... 62 Departure or threatened departure ................................................................................................................................................... 62

EFFECT OF AN ESTOPPEL .......................................................................................................................................... 62 Equitable Estoppel .............................................................................................................................................................................. 62

REMEDY ............................................................................................................................................................... 62 Remedy ............................................................................................................................................................................................... 62 Expectation or Reliance Loss ............................................................................................................................................................... 62

Cth v Verwayen 1990.................................................................................................................................................................... 62 PROPRIETARY ESTOPPEL CASES ................................................................................................................................. 62

Inwards v Baker (1965) ............................................................................................................................................................... 62 Crabb v Arun District Council [1975] .......................................................................................................................................... 63 Austotel Pty Ltd v Franklins Self Serve Pty Ltd (1989) .............................................................................................................. 63 Commonwealth of Australia v Verwayn (1990) ......................................................................................................................... 63 Giumelli v Giumelli (1990) ........................................................................................................................................................... 64 Thorner v Major [2009] ................................................................................................................................................................ 64 Delaforce v Simpson-Cook (2010) ............................................................................................................................................... 65

#AGENCY ...................................................................................................................................................66

PROBLEM QUESTION STRUCTURE ............................................................................................................................. 66 Intro .................................................................................................................................................................................................... 66 Actual Express Authority ..................................................................................................................................................................... 66 Actual Implied Authority ..................................................................................................................................................................... 66 Ostensible Authority ........................................................................................................................................................................... 66 Consequences ..................................................................................................................................................................................... 66

AGENCY ....................................................................................................................................................67

OVERVIEW ............................................................................................................................................................ 67 Outline ................................................................................................................................................................................................ 67

FORMATION .......................................................................................................................................................... 67

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Overview ............................................................................................................................................................................................. 67 A. Actual Express Authority ............................................................................................................................................................ 67 B. Actual Implied Authority ............................................................................................................................................................ 67 C. Ostensible Authority .................................................................................................................................................................. 67

CONSEQUENCES ..................................................................................................................................................... 68 Principles............................................................................................................................................................................................. 68

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CONTRACTS

Summary

Intro

In determining whether there was a valid contract, the relevant considerations are whether there was agreement, consideration, intention to create legal relations, certainty and privity.

Agreement

In order for X to establish that there was an agreement, the conventional approach it to identify offer and acceptance. However, an agreement may be identified without an identifiable offer and acceptance provided that there is a manifestation of mutual assent or a ‘meeting of the minds’: Brambles v Bathurst City Council (2001).

Offer

An offer is an expression of a willingness to enter into a contract on certain terms: Brambles v Bathurst City Council (2001)

Other issues: o Unilateral offers/specific aspects of offers: Carlill v Carbolic Smoke Ball (1893); Revocation o Policy: AWM v Cth (1954); Invitations to Treat: Pharmaceutical Society of GB v Boots Chemists (1953)

Acceptance

An acceptance is an unqualified assent to the terms of an offer which results in an actual consensus between the parties, or a ‘meeting of the minds’: Taylor v Johnson (1983)

Other issues: o Consciousness of offer: Crown v Clarke (1927) o Communication/method of acceptance

Consideration

Required unless contract made by way of deed and can take the form of act, forbearance or promise

Two requirements: benefit/detriment requirement: Currie v Misa (1875) and bargain requirement: AWM v Cth (1954)

Other issues: o Conditional gifts: AWM v Cth (1954) o Consideration must move from promise: Couls v Baggot (1967) o Consideration does not have to be adequate or reasonable but must be sufficient: Woolworths v Kelly (1991)

Intention to Create Legal Relations

Presumptions o Commercial agreements are presumed to be made with an intention to create legal relations

The burden of disproving the intention is on the person denying the enforceability of the transaction o Agreements made outside the commercial sphere are not said to be presumed to create an intention

The onus of proof is on the person seeking to enforce the agreement o Presumption against a finding of intention in relation to family members

i. Onus of proof on the person seeking to enforce the agreement o Preliminary Agreements: where parties have negotiated principle terms of proposed transaction but not finalized

agreements: Masters v Cameron (1954); Baulkham Hills Private Hospital v GR Securities (1986)

Certainty

The requirement that a contract be certain has 3 aspects: o Contract must be sufficiently complete, otherwise it will be considered incomplete: Thompson v White (2006)

Essential terms, machinery/formula for settling a term o Agreed terms must be sufficiently certain and clear, otherwise will be considered uncertain: Council of Upper

Hunter County District v Australian Chilling & Freezing (1968) Vague/imprecise terms, standard of reasonableness, objective standards to set out terms of agreement

o Promises made by the parties must not be illusory: Placer Development v Cth (1969) Discretion as to performance, important matters determined by third party

Privity

Only a person who is a party to a contract can enforce it and incur obligations

To enforce a promise, necessary to show that you are a party to the contract and provided consideration: Coulls v Baggot’s (1967)

Rule does not apply where principle seeks to enforce a contract that their agent has entered into on their behalf: Port Jackson Stevedoring v Salmond & Spraggon (1978)

Privity rule may also be circumvented in trust relationships

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Agreement

Offer: Principles

Nature of an offer

An offer is an expression of willingness to enter into a contract on certain terms (Brambles Holdings v Bathurst City Council 2001)

Carlill v Carbolic Smoke Ball (1893)

Facts Defendants manufactured and sold a device called the carbolic smoke ball which claimed to prevent colds and influenza They placed an advertisement in various newspapers which said that a 100 pound reward would be paid to any person, who

contracted a cold or influenza after having used the device 3 times daily for 2 weeks Advertisement said that a thousand pounds had been deposited in the bank to show they were genuine Plaintiff purchased smoke ball

o Used for several weeks o Contracted influenza

Defendant refused to pay the reward Arguments

Plaintiff claimed that there was a contract Defendant there was no contract because:

1. The advertisement was ‘mere puff’ 2. The offer wasn’t made to a particular person 3. The plaintiff hadn’t notified acceptance of the offer 4. Agreement was uncertain, as it failed to stipulate a period within which the disease must be contracted 5. The plaintiff had not supplied consideration for the defendants promise

Held Court of appeal rejected the defendants argument and held unanimously that a contract had been formed 1st argument- court held that the statement relating to the bank deposit made it clear that the promise was intended

and amounted to more than ‘mere puff’ o Court construed advertisement objectively according to what an ordinary person reading the document would

think was intended rather than by reference to what was actually intended 2nd argument- the court held that the offer was made to the whole world and could be accepted by any person who

performed the conditions on the faith of the advertisement 3rd argument – court held although acceptance of an offer must normally be notified the offeror may dispense with that

notification. An offer that calls for performance of particular conditions may be accepted by performance of those conditions (e.g offer of reward)

4th argument – reasonable construction can be placed on the advertisement to make it sufficiently certain 5th argument – use of the smokeball constituted both a benefit to the defendant and a detriment to the plaintiff

o Either of which would have been good enough to constitute good consideration for the promise

Offer vs Unilateral contracts

Definition

A unilateral contract is one in which the offeree accepts the offer by performing his or her side of the bargain (Carlill) High court; “the consideration on the part of the offeree is completely executed by the doing of the very thing which

constitutes acceptance of the offer” (Australian Woollen Mills) The offer is accepted by performing an act and the performance of that act is all that the contract requires of the offeree

Australian Woollen Mills v Commonwealth (1954)

Facts The plaintiff (AWM) claimed that a unilateral contract had arisen out of the commonwealth governments wool subsidy

scheme As part of the scheme the commonwealth subsidized the purchases of wool by manufactures of woolen products to

enable those manufacturers to supply the products at low prices The scheme was announced in a series of letters to manufacturers in 1946 AWM purchased large quantities of wool in the next 2 years In 1948 the commonwealth announced that it was discontinuing the scheme and manufacturers would only be entitled

to have a certain amount of there stock pile of wool subsidized The stockpile held by AWM exceeded this amount and the commonwealth required AWM to repay the subsidy on that

excess o AWM repaid that amount by later sued to recover it

Held AWM argued that a unilateral contract had arisen

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The HIGH COURT held for a unilateral contract to arise the promise must be made in return for the doing of the act, i.e. there must be a relation quid pro quo (this for that) between the offeree’s act and the offeror’s promise

The court distinguished a unilateral contract from a conditional gift o Court referred to 3 different ways to stating this requirement (all essentially the same test)

1. Whether the offeror has expressly or impliedly requested the doing of the act 2. Whether the offeror has stated a price which the offeree must pay for the promise 3. The court can ask whether the offer was made in order to induce the doing of the act

o Example – a conditional gift would be “I will pay you a thousand dollars on your arrival in Sydney” whereas a unilateral contract would be “I will pay $1000 if you come to Sydney”

In this case AWM failed to establish that there was a relation of quid pro quo between the commonwealths promises and AWM’s acts

Therefore, no contract between the parties and the commonwealth was under no obligation to pay the subsidy PRIVY COUNCIL upheld the High Court’s decision on the basis that the Cth’s letter must be read as statements of policy

and could not be regarded as offers to contract.

Offer v Invitations to Treat

Definition

An invitation to treat is an invitation to others to make offers or to enter into negotiations Examples

o Indication by the owner of the property that he or she might be interested in selling at a certain price (Harvey v Facey)

o Wine merchants’ circulation of a price list (Grainger v Gough 1896) o Display of goods for sale in a shop window or on the shelves is ordinarily treated as an invitation to treat not

an offer (Pharmaceutical Society of Great Britain v Boots Cash Chemist 1953) o Holding a public auction is also usually an invitation to treat (AGC v Mcwhirther 1977) o Tenders – invitation to treat (Harvela Investments) o Tickets are usually regarded as offers which can be accepted or rejected by the passenger after they have had

a reasonable opportunity to consider the conditions of the ticket (McRobertson Miller Airline Services v Commissioner State Taxation 1975)

o Court should look to the correspondence and conduct of the parties as a whole to determine if there is an agreement (Gibson v Manchester City Council 1979)

Termination of an offer

Withdrawal

General rule is offer may be revoked at any time before it is accepted At common law a promise to hold an offer open for a specified period is not binding unless the offeree has given

consideration for that promise (Dickinson v Dodds 1876) A promise to hold an offer open is binding at common law if consideration has been given. This is called an option.

(Goldsborough v Quinn 1910) A offer which is expressed to be available for acceptance for a particular period of time will lapse at the end of that

period (Bartolow v Hancock) Once an offer has been rejected it is no longer available for acceptance (Tim v Hoffman)

o The making of a counter offer is treated as a rejection of the original offer and will therefore also extinguish it (Harris v Jenkins 1922)

Unilateral contract; the offeror is free to revoke the offer even once performance has been embarked on provided that there is no implied ancillary contract not to revoke and no estoppel (Mobil v Wellcome 1988)

o The existence of an implied contract not to revoke will depend on whether the offeror knows that the offeree has embarked on performance and whether the performance of the acts is detrimental to the offeree

Acceptance

Conduct constituting acceptance

An acceptance is an unqualified assent to the terms of an offer The acceptance must result in an actual consensus between the parties or a “meeting of the minds” (Taylor v Johnson)

o A manifestation of mutual assent may be made even though no offer nor acceptance can be identified, and even though the moment of formation cannot be determined (Brambles v Bathurst City Council 2001); Empirnall Holdings v Machon Paull Partners 1988)

Offer and acceptance is the conventional approach to determining the existence of an agreement, but this approach does not apply to all cases

Consciousness of the offer

In the case of unilateral contracts, determining the consciousness of the offer will involve adopting a subjective approach in conjunction with an objective approach

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o While an offeree’s conduct is normally assessed by reference to external manifestations, performance will not give rise to a unilateral contract if the evidence establishes that the offeree was not acting on the faith of the offer. i.e. a unilateral contract will only arise if the offeree only performs the requested acts on reliance of the offer (The Crown v Clarke 1927)

Communication of acceptance

Generally, acceptance only has effect when communicated to the offeror (Latec Finance v Knight 1969) An offeror may expressly or impliedly dispense with the need for actual communication, usually in one of 2 ways;

o Offeror may agree to treat the doing of an act as an effective acceptance (e.g unilateral contract) o Offeror may treat the dispatch (notification) of acceptance by a particular method as effective whether or not

the acceptance is received by the offeror When offeror either expressly or impliedly indicates that acceptance can be communicated by post, then the acceptance

if effective as soon as it is posted; Bressen v Squires 1974 The question of whether the postal rule should apply to communication over the internet has not been authoritatively

determined, although it has been suggested in obiter that email should be treated like other forms of instantaneous communication. Therefore, acceptance only effective when received by offeror. (Olivaylle v Flottweg 2009)

Method of acceptance

If an offer prescribes an exclusive method for the communication of acceptance then only an acceptance communicated by that method will be effective (George Hudson Holdings v Rudder 1973)

A contract cannot however be forced on the offeree by stipulating silence as the prescribed method of acceptance (Felthouse v Brindley 1862)

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Consideration

Elements

Notes

Consideration is not required where the contract is made by way of deed Consideration can take the form of an act, forbearance, or promise.

Benefit/Detriment Requirement

Valuable consideration must consist of a detriment to the promisee or a benefit to the promisor (Currie v Misa 1875)

Bargain Requirement

Bargain requirement: the benefit or detriment must be given in return for the promise. i.e. the act relied on as consideration must be performed as the agreed price of the promise (AWM v Commonwealth 1954)

o It is important to distinguish between an act performed as the agreed price of a promise, and an act performed in reliance on a promise. An act performed in reliance on a promise will not constitute good consideration but may give rise to an estoppel (Beaton v McDivitt 1987)

Conditional Gifts

The court distinguished a unilateral contract from a conditional gift (AWM v Cth 1954) o Court referred to 3 different ways to stating this requirement (all essentially the same test)

1. Whether the offeror has expressly or impliedly requested the doing of the act 2. Whether the offeror has stated a price which the offeree must pay for the promise 3. The court can ask whether the offer was made in order to induce the doing of the act

o Example – a conditional gift would be “I will pay you a thousand dollars on your arrival in Sydney” whereas a unilateral contract would be “I will pay $1000 if you come to Sydney”

Consideration must move from the promisee

Consideration need not move to the promisor, e.g. A may undertake a contractual obligation to B in return for a benefit conferred by B on C

However, consideration must move from the promisee (Couls v Baggot 1967)

Adequacy/Sufficiency of consideration

Consideration does not have to be adequate or reasonable (Woolworths v Kelly 1991) but must be sufficient A promise will not constitute good consideration if the promisor retains an unfettered discretion as to performance

(Placer Development v Commonwealth 1969) Past consideration is not considered sufficient consideration (Roscorla v Thomas 1842) Existing legal duty: neither a promise to perform an existing legal duty nor the performance of an existing legal duty is

regarded as sufficient consideration to support a contract (Wigan v Edwards 1973) o Exceptions

Where beneficiary is providing fresh consideration e.g. where they do something more than normally obliged to do (Stilk v Myrik 1809)

Where the beneficiary’s promise to perform confers a practical benefit on the modifying party (Williams v Roffey Bros 1991, confirmed in Musumeci v Winadall 1994)

Where the promise to perform an existing contractual duty is made by the beneficiary to a third party (Pau On v Lau Yiu Long 1980)

A compromise or forbearance to sue (Wigan v Edwards) Where the original contract is terminated by agreement and replaced with a new contract

Part payment of a debt; does not constitute good consideration for an agreement to discharge a debt (Pinnel 1602)