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Inside the notes:
1. General flowchart 2. Definitions 3. Quick access 45pg cheat sheet for exam 4. Extra content throughout semester 1a Offer 1b Acceptance 1c Consideration 1d Introduction to promissory estoppel 1e Intention 1f Certainty / Completeness 2a Privity 2b Capacity (minority) 2b Capacity (mental incapacity) 3a Express terms 3b Extrinsic evidence 3c Implied terms 3d Interpretation / Construction / classification 3e Exclusion clauses 4a Formalities / Part performance 4b Statutory illegality 4c Public policy 4d Consequences of illegality 5a Misrepresentation 5b Duress 5c Undue influence 5d Unconscionable conduct 5e Third party impropriety 5f Rescission 5g Non est factum (mistake) 6a Breach and repudiation 6b Performance / Actions for payment 6c Termination by agreement 6d Frustration
*****Quick access notes/cheat sheet for exam. General content see beneath.*****
1. Was there an offer and an acceptance? a. A valid contract is an agreement between two or more parties whereby legal rights and obligations are created which the law will enforce ( Dunlop, Carlill) b. Elements of Offer: i. Definite, communicated (all terms), manifests an intention to create legal obligation, a valid consideration ( Australian Woollen Mills )
- Withdrawal a. An offer may be revoked at any time before accepted. The withdrawal of an offer is effective only when it has been actually communicated to the offeree.
- Option a. A promise to hold an offer open is binding at common law if consideration has been given in return for that promise. i. Make an offer, give you $5 to keep the offer. I won’t withdraw my offer ii. Objective test ( Carlill ): Would it appear to a reasonable person in the position of the offeree that an offer was intended and that a binding agreement would be made upon acceptance? c. Elements of Acceptance: i. Communicated, establishes the formation of a contract, in response to the offer, must be a meeting of the minds/”consensus ad idem” ( Dickenson ) ii. Implied acceptance through reasonable conduct to the offer → party would be bound ( Smith )
- Some cases → must be mandatory on the receiving party to either explicitly reject or be bound ( Empirnall Holdings Pty Ltd ) iii. Discuss 3 classes of contract from Masters v Cameron iv. Consider Postal Rule if need be
- Where the postal rule does apply, the contract is made when the acceptance is posted, even if it is received some time later or is lost in the post. Also means that the contract is formed at the place where the acceptance is posted: When the Offeree has placed his acceptance in the post there is a fictional meeting of minds, which concludes the offer and gives effect to the acceptance (Adams) d. Acceptance and offer must correspond → if not, consider counter offers i. Counter offers: when A offers, and B alters the offer, this is a counter offer not acceptance of the original offer.
- Counter offers TERMINATE the original offer ii. Death
- Death of either party will terminate the offer ( Dickson v Dodds) iii. Rejections of offer
- Once it is rejected, it can no longer be available for offer
- By requesting information, the offeror is not intending to reject the offer, but only to obtain some guidance in deciding whether to accept or reject iv. Battle of the forms
- the sending of the last form will usually be regarded as a counter- offer, and so the ‘last shot’ will prevail, provided the recipient of the counter-offer can be taken to have accepted the terms
- Defendant acted unconscionably ( Austotel ) 3. Intention: Did the parties manifest an intention to create legal relations? a. Objective Approach: Considering the context of the situation, would a reasonable person regard the agreement as intended to be binding? ( Merritt) b. If you find good consideration, you’ll most likely find the intention c. Express intention v Implied intention (Jones) d. Domestic/family/social agreements: can be legally binding, consider circumstances ( Merritt) [ Balfour; old position] e. Presumptions in commercial agreements of intention to be bound ( Ermogenous Greek Orthodox: presumptions should be carefully used) 4. Certainy & Completeness: Were the terms of the contracts sufficiently certainty and complete? ( Pagan) a. Certainty: A term may be too vague or imprecise so that the courts cannot attribute a meaning to it. The courts cannot enforce an agreement if they are unable to discern the obligation with sufficient certainty i. Language employed must be sufficiently unambiguous to lead to single interpretation of parties (Biotechnology) b. Completeness: No contract is made unless all the essential terms have been agreed upon ( Thorby) c. Conditional contract - ‘subject to…’ ( Meehan) d. Severance is an option ( Fitzgerald)
- Are there any issues of contractual capacity?: voidable contracts a. Minor i. Minors (Property and Contracts) Act 1970 (NSW)
- elements for Act to apply- transaction is a civil act (includes contract) (s 6), minor is must less than 18yo (s 8), minor understands what they were entering (suis juris) (s 18), is it presumptively binding? If not, has it becoming binding due to lack of repudiation?
- If Act applies, minor may be presumptively bound, s 19, 20, 21, 23, 26, 27, 28, 29, 36
- If Act doesn’t apply, prima facie the transaction is not binding on the minor (s 17) a. If wishing to proceed: stay/leave contract, ask court to affirm on behalf (s 30), affirm upon reaching 18yrs (s 30) b. If wishing to leave: repudiate (s 31) by notice/writing (s 33) before 19th bday (s 31), or ask court to repudiate while minor (s 34). If fail to repudiate, becomes binding on 19th bday
- Exception to minor rule: if contract is re supply of ‘necessaries’ e.g. food and drink ( Helps) , the Act does not apply b. Mental incapacity i. No fixed standard of capacity but a requirement that each party be of ‘such soundness of mind as to be capable of understanding the general nature of what he is doing by his participation’ ( Gibbons)
- person of impaired mental capacity must show they were incapable of understanding contract at the time it was made AND that the other party knew or ought to have known of the incapacity c. Intoxicated
• AWM claimed a unilateral contract had arisen out of the Cth’s wool subsidy scheme.
• This case demonstrates the inextricable connection between the requirement of offer and
acceptance, intention, consideration and certainty.
• Consideration : there must be a quid pro quo - the statement and act referred to must exist in a
clear relationship to each other. The doing of the act must be based upon the promise - not merely coinciding with it.
• Court held for there to be a unilateral contract – promise must be made in return for doing
the act – relation of quid pro quo (this for that)
• Eg – I will pay you $100 when you get to Melbourne, as opposed to I will pay you $100 if you
come to Melbourne
• Court held that given the context in which the documents arose there was no offer capable
of acceptance by the act of purchase. The subsidy was not a request, invitation or an inducement to purchase wool. There was nothing to suggest that the subsidy and purchase of wool were related, no quid pro quo.
• No contract between the parties, Commonwealth under no obligation to pay subsidy.
Importance of intention A number of standard transactions tend to be categorised but in the end each case will be decided on its merits.
• Distinction between offer and a mere supply of information: Harvey v Facey 1893
Harvey v Facey [1893] AC 552:
• Offer and Mere Puff (not serious) Leonard v Pepsico Supp 1999
• Invitations to Treat – advertisements, Advertisements: Partridge v Crittenden 1968
• Brochure Distribution- can’t claim a brochure is an offer Grainger and Son v Gough 1896
• Shop displays – are not an offer, are invitations to treat Pharmaceutical Society Of
Great Britain v Boots Cash Chemists (Southern) Ltd 1953
• Display of items in shop window – invitation to treat Fisher v Bell 1961
Advertisements and invitations to treat (60)
• An offer is often distinguished from an invitation to treat, which is an invitation to others to
make offers or enter into negotiations. Shop sales:
• Display of goods for sale, in window or on shelves, is ordinarily treated as an invitation to
treat, not an offer.
• Case of Fisher v Bell ([1961] 1 QB 394 – held that the owner of a shop who displayed a flick-
knife in a shop window had not committed the statutory offence of offering the knife for sale
