Contracts Subject Guide

LAW EXTENSION COMMITTEE UNIVERSITY OF SYDNEY

02 CONTRACTS SUBJECT GUIDE SUMMER SESSION 2007-08 Course Description and Objectives 1 Teacher 1 Assessment 1 March 2008 Examination 2 Texts and Materials 2 Lecture Program 3 LEC Orientation 5 Legal Institutions and Contracts Introductory Weekend School 5 Weekend Schools 1 and 2 6 Tutors and Legal Skills Workshops 7 Assignments 7 Assignment Questions 8 Prescribed Topics and Course Outline 9 2 1

LAW EXTENSION COMMITTEE SUMMER 2007-08 02 CONTRACTS

COURSE DESCRIPTION AND OBJECTIVES

The law relating to contracts is one of the pillars of the common law system. An understanding of the basic elements of contract law is thus a critical pre-requisite for the study of a number of later subjects, including Conveyancing, Commercial Transactions and Industrial Law.

The course aims to provide students with an understanding of the basic principles of contract law which apply to nearly all contracts. In fulfilling this aim, the course focuses primarily on a study of relevant case law and statute law. The course covers the elements of formation of contracts, terms of a contract, matters affecting consent to a contract, discharge of contracts, illegality, remedies, and third party rights.

Special principles that apply to specific types of contracts are dealt with in later courses.

The objectives of the course are: (a) to provide students with an understanding of basic principles of contract law; and (b) to develop in students an ability to analyse fact situations and correctly identify the relevant principles of contract law that are applicable to the resolution of problems raised by particular factual situations.

TEACHER

Dr Peter Radan, BA, LLB, PhD (Syd), Dip Ed (SCAE)

Dr Radan is an Associate Professor of Law at Macquarie University. He holds the degrees of Bachelor of Arts, Bachelor of Laws and Doctor of Philosophy from the University of Sydney, as well as a Diploma in Education from Sydney College of Advanced Education. Dr Radan has been a Teacher with the Law Extension Committee since 1984. His most recent published books include (with A Pavkovic) Creating New States: Theory and Practice of Secession (Ashgate, UK, 2007); (with C Stewart & A Lynch) Equity & Trusts – Butterworths Tutorial Series (2nd Ed, LexisNexis Butterworths, Sydney, 2005), (co-edited with D Meyerson & R Croucher) Law & Religion, God, the State and the Common Law (Routledge, London, 2005) and The Break-up of Yugoslavia and International Law (Routledge, London, 2002).

ASSESSMENT

To be eligible to sit for the Board’s examinations, all students must complete the LEC teaching and learning program, the first step of which is to ensure that you have registered online with the LEC in each subject for which you have enrolled with the Board. This gives you access to the full range of learning resources offered by the LEC.

Then, students must achieve a satisfactory result (at least 50%) in each subject where a compulsory component is prescribed. In Contracts there is a compulsory requirement of satisfactorily completing two assignments (see page 7).

To register with the LEC, go to www.usyd.edu.au/lec and click on the WEBCAMPUS link and follow the instructions. Detailed guides to the Webcampus are contained in the material distributed by the LEC, in the Course Information Handbook, and on the Webcampus. 2

MARCH 2008 EXAMINATION

Candidates will be expected to have a detailed knowledge of the prescribed topics: formation of contracts, terms of a contract, matters affecting consent to a contract, discharge of contracts, illegality, remedies, and third party rights. A more detailed outline of the prescribed topics is set out below (p. 9 and following) under the heading ‘Prescribed Topics and Course Outline’.

Candidates will be expected to have made a study of the prescribed materials in relation to those topics, and to have analysed the cases and statutory provisions referred to in the Law Extension Committee's course outline.

The examination will consist of six questions. Students will have to complete five of the six questions. There may be internal choice within some of the questions. All questions will be of equal value.

At least five of the questions will be problem-type questions.

The examination will be an open book examination, although students will not be permitted to take into the examination room electronic sources of material nor library books borrowed from any University of Sydney library.

Please note: All questions in relation to the examination should be directed to the Legal Profession Admission Board, not the Law Extension Committee.

TEXT AND MATERIALS

Course Materials

 Guide to Presentation and Submission of Assignments (available on the LEC Webcampus)

Prescribed Materials

 Gooley & Radan, Principles of Australian Contract Law, LexisNexis Butterworths, 2006  Gooley, Radan & Vickovich, Principles of Australian Contract Law, Cases and Materials, LexisNexis Butterworths, 2007

Reference Materials

 Carter, Carter’s Guide to Australian Contract Law, LexisNexis Butterworths, 2006 (a useful introductory contracts textbook)  Carter, Peden & Tolhurst, Contract Law in Australia, 5th ed. LexisNexis Butterworths, 2007  Heffey, Paterson & Robertson, Principles of Contract Law, 2nd ed, Thomson Lawbook, 2005  Heffey, Paterson & Robertson, Contract: Commentary and Materials, 10th ed. Thomson Lawbook, 2004  Willmott, Christensen & Butler, Contract Law, 2nd ed, Oxford University Press, 2005  Starke, Seddon and Ellinghaus, Cheshire and Fifoot's Law of Contract, 8th Australian ed. LexisNexis Butterworths, 2002 (9th edition due on Nov 1st , 2007)  Journal of Contract Law  CCH, Australian Contract Law Reporter

The guide lists the cases that should be read as a minimum for students to gain a grounding in the basic principles of contract law. The guide also lists relevant statutory provisions that need to be studied and understood.

Students are encouraged to read beyond these cases, and in this respect the other cases mentioned in the textbook and casebook serve as a starting point. 3

LEC Webcampus

Once you have registered online with the LEC, you will have access to all the facilities on the LEC Webcampus including the problem questions for each class, plus any other materials that the lecturer may make available to students. These course materials as well as links to relevant cases and legislation can be found on the Course Materials section of the LEC Webcampus.

LECTURE PROGRAM

The first of 15 lectures will be held on Thursday 15 November 2007.

Lectures will be held on some Mondays and Thursdays during each week of the session as set out on the next page.

All lectures will be for 3 hours and will start at 6 pm.

The venues for the lectures are set out in the lecture program below. Lectures will be held in the Eastern Avenue Auditorium (EAA) on the main campus.

For details as to the location of these venues refer to the back page of the Course Information Handbook for a map of the University of Sydney main campus.

Structure of Lectures

For all lectures, be they for evening students or for distance students at the two weekend schools, students will be expected to have read, before each lecture, the relevant chapters of the Gooley & Radan textbook and the cases and statutory provisions set out below in the course outline (p. 9 and following). The cases are found in the Gooley, Radan & Vickovich casebook. Statutory materials can be downloaded from the Austlii website.

On each lecture day the teacher will spend approximately the first two-thirds of the allocated time lecturing on the relevant topic(s). The teacher will not comprehensively cover all the materials that are covered in the textbook and cases. Rather, the focus will be elaborating on key cases and principles. Therefore, for students to get the maximum benefit of the lecture they must have read the relevant materials beforehand.

The last third of the allocated time for each class will be devoted to working through selected problem questions on the topic(s) for that class. The discussion of problem questions is important for two reasons. First, it will reinforce and consolidate one’s knowledge and understanding of the topic(s). Second, it will develop one’s problem solving skills that are so crucial to successfully completing the assignments and final examination in the subject.

The problem questions for each class can be found on the Contracts page of LEC Webcampus. 4

WEEK DATE ROOM LECTURE TOPIC KEY CASES 1 Thurs EAA 1 Introduction 15 Nov (p. 9)*

2 Mon EAA 2 Fact of Agreement Carlill v Carbolic Smoke Ball Co 19 Nov (p. 10) Stevenson, Jacques & Co v McLean

2 Thurs EAA 3 Consideration; Intention to Williams v Roffey Bros 22 Nov (p. 11) Create Legal Relations Ermogenous v Greek Orthodox Community of SA Inc

3 Mon EAA 4 Certainty; Requirement of Booker Industries v Wilson Carparking 26 Nov (p. 12) Writing; Capacity Masters v Cameron 3 Thurs EAA 5 Express Terms Oscar Chess v Williams 29 Nov (p. 13) Toll (FCGT) v Alphapharm

4 Mon EAA 6 Implied Terms; Construction of Codelfa Construction v SRA 3 Dec (p. 14) Terms; Construction of Exclusion Darlington Futures v Deleco Australia Clauses 6 Mon EAA 7 Misrepresentation; Mistake Edgington v Fitzmaurice 17 Dec (p. 15) McRae v Commonwealth Disposals Commission 6 Thurs EAA 8 Duress; Unconscionability; Crescendo Management v Westpac 20 Dec (p. 16) Undue Influence Amadio v CBA

STUDY BREAK: Saturday 22 December 2007 to Sunday 13 January 2008

7 Mon EAA 9 Discharge by Performance; Hoenig v Isaacs 14 Jan (p. 17) Discharge by Agreement; McDermott v Black Discharge by Breach Thurs EAA 10 Discharge by Frustration; Codelfa Constructions v SRA 7 17 Jan (p. 18) Illegality Yango Pastoral v First Chicago Australia Amoco Australia v Rocca Bros Thurs EAA 11 Damages Commonwealth v Amann Aviation 8 24 Jan (p. 19) Victoria Laundry v Newman Industries

9 Thurs EAA 12 Actions for a Fixed Sum and Dunlop Pneumatic Tyre v Selfridge 31 Jan (p. 20) Debt; Specific Performance; Co-operative Insurance Society v Argyll Injunction Stores 10 Mon EAA 13 Rectification; Rescission; Coastal Estates v Melevende 4 Feb (p. 21) Equitable Estoppel Walters (Stores) v Maher

11 Thurs EAA 14 Torts; Restitution; Misleading or Derry v Peek 14 Feb (p. 22 Deceptive Conduct; Statutory Pavey & Mathews v Paul Unconscionability West v AGC (Advances)

12 Thur EAA 15 Privity of Contract Trident General Insurance v McNiece 21 Feb (p. 23) NZ Shipping Co v AM Satterthwaite

*Refers to the page in the Subject Guide relevant to this topic. 5

LEC ORIENTATION

An Orientation for new students is provided by the LEC on Friday 2 November 2007 in the Eastern Avenue Auditorium (EAA) on the main campus of the University, from 2.30pm to approximately 7pm. You will find it on the map in your Course Information Handbook.

The Orientation will provide you with an opportunity to understand the roles of the Legal Profession Admission Board (LPAB) and the Law Extension Committee; the LEC Curriculum Officer will guide you through the features of the Webcampus; the LEC Law Librarian will explain library resources; approaches to the course by former and present students will be discussed and you will be able to meet other students.

A full program of the day can be accessed on the LEC Webcampus and was included in your Enrolment Package.

LEGAL INSTITUTIONS AND CONTRACTS INTRODUCTORY WEEKEND SCHOOL

This is the commencement of the teaching program in Legal Institutions and Contracts. All external students enrolled in these subjects, whether for the first time or returning, should attend where relevant on the weekend of 3-4 November 2007 in the Eastern Avenue Auditorium (EAA). Evening lecture students are welcome to attend if they wish

A detailed program of the Weekend was included in your Enrolment Package. It is also available on the LEC Webcampus.

The classes to be held in Contracts are as follows:

TIME MAJOR TOPICS KEY READING Sunday 4 November 2007 – Eastern Avenue Auditorium (EAA) 9.30am-10.55am Introduction

11.05am-12.30pm Fact of Agreement Carlill v Carbolic Smoke Ball Co Stevenson, Jacques & Co v McLean Bressan v Squires 12.30pm-1.30pm LUNCH BREAK

1.30pm- 3.20pm Consideration Williams v Roffey Bros and Nicholls (Contractors) 3.30pm- 4.30pm Problem Solving 6

WEEKEND SCHOOLS 1 AND 2

Classes in Contracts are held at both Weekend Schools 1 and 2. The focus of these classes is the external students. Lecture students may attend on the understanding that weekend classes aim to cover the topics covered in weekly lectures and are principally for the benefit of external students.

It will not be possible to cover the entire course at the weekend schools. These programs are a general guide, and may be varied according to need. Readings are suggested to introduce you to the material to be covered in the lecture, to enhance your understanding of the topic, and to encourage further reading. You should not rely on them alone.

WEEKEND SCHOOL 1

TIME MAJOR TOPICS KEY READING Saturday 1 December 2007: 8.00am – noon in Eastern Avenue Auditorium 8.00am-9.20am Express Terms Oscar Chess v Williams Toll (FCGT) v Alphapharm

9.30am-10.40am Construction of Exclusion Darlington Futures v Delco Australia Clauses 10.45am-11.45am Misrepresentation Edgington v Fitzmaurice

Sunday 2 December 2007: noon – 4.00pm in Carslaw Lecture Theatre 157 (CLT157) 12.15pm-1.25pm Mistake; Duress McRae v C’th Disposals Commission Crescendo Management v Westpac 1.30pm- 2.40pm Illegality Amoco Australia v Rocca Bros

2.45pm-3.55pm Problem Solving

WEEKEND SCHOOL 2

TIME MAJOR TOPICS KEY READING Saturday 2 February 2008: 8.00am – noon in Eastern Avenue Auditorium (EAA) 8.00am-9.20am Damages Commonwealth v Amann Aviation Victoria Laundry v Newman Industries

9.30am-10.40am Actions for a Fixed Sum and Dunlop Pneumatic Tyre Co v Selfridge Debt 10.45am-11.45am Specific Performance Co-operative Insurance Society v Argyll Stores

Sunday 3 February 2008: noon – 4.00pm in Eastern Avenue Auditorium (EAA) 12.15pm-1.25pm Equitable Estoppel Walton (Stores) v Maher

1.30pm-2.40pm Privity Trudent General Insurance v McNiece

2.45pm-3.55pm Problem Solving LPAB Contracts examination paper for March 2007 TUTORS AND LEGAL SKILLS WORKSHOPS 7

Skills workshops are offered to assist students in Legal Institutions and Contracts. Susan Carter, our principle teacher in Legal Institutions, will hold workshops during the Summer Session 2007-08, which will focus on issue analysis and problem solving. The workshops are complementary to, and not a repeat of the lectures. They are not designed to teach the law, but rather to teach students how to apply the law they have learned to answer legal problem questions.

Workshops may be accessed in three ways:

 Regular workshops which will be held each Thursday of the session commencing on Thursday 8 November 2007. Workshops will be held in the Law School Lecture Theatre 2 (LSLT2) at the Law School, from 12.30 -1.30 pm. Workshops are designed to be informal and students are welcome to come for all or part of the workshop (and bring their lunch.). Students should bring the relevant tutorial question, downloaded from the Tutors’ Page of the LEC Webcampus. Some January workshops are offered as web-based package.

 These workshops will be reprised on the Sunday morning of each of the weekend schools (Sunday 2 December 2007 and Sunday 3 February 2008) for those students unable to attend during the week. The workshops will run from 8 am – 12 noon in CLT 275 on 2 December 2007 and CLT159 on the 3 February 2008. Again, questions should be downloaded from the Tutors’ Page of the LEC Webcampus.

 Workshop material may also be accessed via the LEC Webcampus for any students unable to attend either the week day or the weekend school face to face sessions. The Friday preceding the relevant workshop, question(s) will be placed on the Tutors’ Page. An approach to answering the question will be posted on the following Friday allowing students unable to attend an opportunity to attempt the question and receive the answer via the Webcampus- either at the time, or later as a package of materials to prepare for the exam. As always, if students have any questions about this material, they should contact the tutors by email: [email protected]

The workshops will examine strategies for answering the questions, which will usually deal with an issue that has been covered in Legal Institutions or Contracts. The aim of the workshops is to assist you in applying legal principles to a set of facts. It is not to teach law. The timetables and room venues for these workshops are set out on page 51 of the Course Information Handbook. Please note that the Tutors cannot be expected to answer questions placed on the Legal Institutions or Contracts Forums.

The Tutors can be contacted by phone between 10am-12 noon on Thursdays during the Summer Session on (02) 9392 0320 or at any time by email on [email protected].

ASSIGNMENTS

There are two compulsory assignments in Contracts. Assignments must be submitted by the due dates. The maximum word length for each assignment is 2000 words (inclusive of all footnotes but not bibliography).

The rules regarding the presentation of assignments and instructions on how to submit an assignment are set out in the LEC Guide to the Presentation and Submission of Assignments which can be accessed on the LEC Webcampus. Please read this guide carefully before completing and submitting an assignment. 8

Completed assignments should be lodged through the LEC Webcampus by 9.00am on the following dates:

Assignment 1 – 50 Marks Wednesday 12 December 2007 (Week 5) Assignment 2 – 50 Marks Friday 18 January 2008 (Week 7)

To be eligible to sit the examination in Contracts, you must: a) submit both assignments by the due dates, and b) demonstrate a sufficient command of the lecture material. This will most usually be demonstrated by achieving a combined total of 50 or more for the two assignments. In extraordinary cases it may also be demonstrated by a significant improvement from the first to the second assignment.

Markers will mark the assignments as quickly as possible. However, please note that many of the markers are busy practitioners or academics. Do not wait for the return of the first assignment before commencing the second assignment.

ASSIGNMENT QUESTIONS

To obtain copies of the assignment questions for the Summer Session 2007-08 of the Contracts course, please follow the instructions below:

1. Register online with the LEC (see page 27 of the Course Information Handbook for detailed instructions). Once you have registered, you will have access to all the facilities on the LEC Webcampus.

2. Then go into the Webcampus, select the Course Materials section and click on the link to the Assignment questions for this subject. 9

PRESCRIBED TOPICS AND COURSE OUTLINE

LECTURE 1 (15 November 2007)

Aims and Objectives

At the end of this lecture students should understand the following:

(a) the definition of contract (b) the sources of contract law (c) the various classifications of contracts (d) the basic principles relating to answering problem questions.

Introduction to contract law

Text: Gooley & Radan, Chapter 1

The introduction to the subject of Contracts looks at the following issues:

(a) The definition of contract

(b) The sources of contract law

(c) The classification of contracts.

There will also be an introduction to problem solving techniques in law. 10

Aims and Objectives

At the end of this lecture students should understand the circumstances in which an offer is made as part of process of creating a contract as well when an offer comes to an end and the rules as to the acceptance of offers as part of the process of formation of an agreement by the parties to a contract.

The Fact of an Agreement - The Rules Relating to Offer and Acceptance

Where a court has to determine whether persons have entered into an agreement the tools of offer and acceptance are usually used. This technique is not always suitable and in some instances other techniques will be employed.

1. The Offer

Gibson v Manchester City Council [1979] 1 All ER 972 Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) [1953] 1 QB 401 Barry v Davies [2001] 1 All ER 944 Blackpool and Fylde Aero Club v Blackpool BC [1990] 1 WLR 1195

2. Termination of Offers

Stevenson, Jacques and Co v McLean (1880) 5 QBD 346 Dickinson v Dodds (1876) 2 Ch D 463 Mobil Oil v Lyndell Nominees (1998) 153 ALR 198, at 222-228

3. The Acceptance

R v Clarke (1927) 40 CLR 227 Felthouse v Bindley (1862) 142 ER 1037 Household Fire & Carriage Accident Insurance Co v Grant (1879) LR 4 Ex D 216 Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 Brinkibon v Stahag Stahl [1983] 2 AC 34 Bressan v Squires [1974] 2 NSWLR 460

4. Alternatives to Offer & Acceptance

Butler Machine Tool Co v Ex-Cell-O Corpration [1979] 1 All ER 965 11

Aims and Objectives

At the end of this lecture students should understand the concepts and rules relating to the doctrine of consideration and intention to create legal relations as requisite elements in the requirements for the formation of a contract.

The Fact of an Agreement – Consideration and Intention to Create Legal Relations

Text: Gooley & Radan, Chapters 5 & 6

1. Consideration

The element of consideration refers to the requirement that a contract is a bargain in the sense that there is an exchange between the parties of promises or an exchange of a promise for an act for the agreement to amount to a contract at law. The requirement of consideration is reflected in the major rule that unless a promisee has given consideration he or she cannot enforce the promisor’s promise. In such a case the promisee would be held not to have given consideration. The use of a deed allows for the enforcement at common law (but not in equity) of a promise for which no consideration has been given.

Australian Woollen Mills v The Commonwealth (1954) 92 CLR 424 Coulls v Bagot's Executor and Trustee Co (1967) 119 CLR 460 Pao On v Lau Yi Long [1980] AC 614 Williams v Roffey Bros and Nicholls (Contractors) [1991] 1 QB 1 Foakes v Beer (1884) 9 App Cas 605

2. Intention to Create Legal Relations

An integral element of a contract at law is that the parties to it must intend their agreement to have legal force in the sense that each party can take legal action to enforce it. Unless there is an express statement in the agreement on this matter, there is a presumption that agreements of a family, social or domestic character are not intended to have legal effect. In all other agreements (commercial agreements) the presumption is that the parties did intend it to have legal intent. In both situations the presumptions can be rebutted by evidence to the contrary.

Balfour v Balfour [1919] 2 KB 571 Jones v Padavatton [1969] 2 All ER 616 Esso Petroleum Ltd v Commissioners of Customs & Excise [1976] 1 All ER 117 Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 12

Aims and Objectives

At the end of this lecture students should understand the concepts and to rules relating to requirements that contracts should be certain and complete, the extent which contracts are required to be in writing, and the capacity of persons, especially minors, to enter into contracts.

Certainty and Completeness of Contracts, The Requirement of Writing, and Contractual Capacity

Text: Gooley & Radan, Chapters 7, 8 & 9

1. The Requirement of Certainty and Completeness

A contract that is incomplete or uncertain is void and unenforceable.

Booker Industries v Wilson Parking (Qld) (1982) 149 CLR 600 Masters v Cameron (1954) 91 CLR 353 Whitlock v Brew (1968) 118 CLR 445 Coal Cliff Collieries v Sijehama [1991] 24 NSWLR 1

2 The Requirement of Writing – Do Contracts Have to be in Written Form?

At common law there is no requirement that any contract has to be in written form. However, statute imposes such a requirement in certain types of contract, a significant example being contracts involving land or interests in land. However, oral contracts for the sale of land can in some circumstances be enforced.

Conveyancing Act 1919 (NSW), s 54A Pirie v Saunders (1961) 104 CLR 149 Khoury v Khouri [2006] NSWCA 184

3 Capacity – Who Can Enter into a Contract?

Some classes of persons have a limited or no capacity to enter into a contract. In particular, the limitations on the contractual capacity of persons under the age of 18 (minors) is to be analysed.

Minors (Property and Contracts) Act 1970 (NSW) 13

Aims and Objectives

At the end of this lecture students should understand the following:

(a) the operation of the rule excluding the proof of contractual terms by oral evidence in relation to written contracts (b) the circumstances in which pre-contractual statements amount to terms of a contract (c) the formation of collateral contracts (d) the principles for the incorporation of contractual terms.

Express Terms

1. Express Terms

This topic is concerned with establishing the express terms of the contract between the parties to the contract. In written contracts additional express terms may be added by oral evidence unless the oral evidence rule applies to exclude this possibility. However, it needs to be established first that such evidence establishes that the parties intended pre-contractual statements to be express terms and were not merely representations. Alternatively such statements may amount to collateral contracts – contracts that are collateral to the main contract between the parties. Even in situations where one party intends a statement to be a part of the contract questions arise as to whether that party has done enough to have the term incorporated into the contract.

Ellul and Ellul v Oakes (1972) 3 SASR 377 Oscar Chess v Williams [1957] 1 All ER 325 SRA v Heath Outdoor Ltd (1986) 7 NSWLR 170 J J Savage and Sons v Blakney (1970) 119 CLR 435 Hoyt's v Spencer (1919) 27 CLR 133 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 79 ALJR 129 Curtis v Chemical Cleaning and Dyeing Co [1951] 1 KB 805 Thornton v Shoe Lane Parking [1971] 2 QB 163 Parker v South Eastern Railway Co (1877) 2 CPD 416 D J Hill & Co Pty Ltd v Walter H Wright Pty Ltd [1971] VR 749 14

LECTURE 6 (3 December 2007)

Aims and Objectives

At the end of this lecture students should understand the following rules and principles by which terms are implied into a contract as well as the principles by which terms of a contract, especially exclusion clauses, are construed or interpreted.

Implied Terms, Construction fo Contractual Terms Generally, and Construction of Exclusion Clauses

1. Implied Terms

Terms may also arise by implication, either under common law principles or pursuant to statute. Furthermore, terms can also be implied because of the existence of a custom in a particular industry, trade or locality.

Codelfa Construction v State Rail Authority of New South Wales (1982) 149 CLR 337 Byrne v Australian Airlines Ltd (1995) 185 CLR 410 Con-Stan Industries of Australia P/L v Norwich Winterthur Insurance (Australia) P/L (1986) 160 CLR 226

2. The Meaning of Terms of a Contract

ABC v Australasian Performing Right Association Ltd (1973) 129 CLR 99

3. The Legal Effect of Terms

Associated Newspapers Ltd v Bancks (1951) 83 CLR 322 Hongkong Fir Shipping Co v Kawasaki Kisen Kaisha [1962] 2 QB 26 Perri v Coolangatta Investments P/L (1982) 129 CLR 99

4. The Construction of Exclusion Clauses

Darlington Futures v Delco Australia (1986) 161 CLR 500 Sydney City Council v West (1965) 114 CLR 481 Alderslade v Hendon Laundry Ltd [1945] KB 189 White v John Warwick & Co [1953] 2 All ER 1021 Trade Practices Act 1974 (Cth), s 68-68A 15

Aims and Objectives

At the end of this lecture students should, as part of the broader topic of vitiating factors, have an understanding of the following:

(a) the law relating to misrepresentations (b) law of mistake at both common law and equity.

The topic of vitiating factors relates to factors that affect the quality of the consent given to the entry into of a contract. In most cases the consequence of the relevant factor is that the contract is voidable. In cases of mistake at common law the contract will be void as from the very beginning (ab initio). The distinction between voidable and void ab initio has particular consequences for the rights of third parties to the contract who have innocently acquired property that has in the meantime passed between the parties to the contract.

Misrepresentation and Mistake as Vitiating Factors

Text: Gooley & Radan, Chapters 14 & 15

1. Misrepresentation

Balfour & Clark v Hollandia (1978) 18 SASR 241 Edgington v Fitzmaurice (1885) 29 Ch D 459 Smith v Land and House Property Corp (1884) 28 Ch D 7 Gould v Vaggelas (1984) 157 CLR 215 Redgrave v Hurd (1881) 20 Ch D 1 Nicholas v Thompson [1924] VLR 554

2. Mistake

(a) Common Mistake

McRae v Commonwealth Disposals Commission (1951) 84 CLR 377 Associated Japanese Bank (Int) v Credit du Nord SA [1988] 3 All ER 902 Bell v Lever Brothers [1932] AC 161 Great Peace Shipping Ltd v Tsavliris (International) Ltd [2002] QB 679

(b) Mutual Mistake

Scriven Brothers & Co v Hindley [1913] 3 KB 564

(c) Unilateral Mistake

Cundy v Lindsay (1878) 3 App Cas 459 Shogun Finance Ltd v Hudson [2004] 1 All ER 215 Taylor v Johnson (1983) 151 CLR 422 Petelin v Cullen (1975) 132 CLR 355 16

Aims and Objectives

At the end of this lecture students should, as part of the broader topic of vitiating factors, have an understanding of the law relating to duress, unconscionable bargains and undue influence. In each of these cases the effect of the relevant factor is that the contract is voidable.

Duress, Unconscionable Bargains and Undue Influence as Vitiating Factors

1. Duress

Universe Tankships Inc of Monrovia v International Transport Workers Federation [1983] 1 AC 366 Barton v Armstrong [1976] AC 104 Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd (1991) 22 NSWLR 298 Crescendo Management Pty Ltd v Westpac Banking Corp (1988) 19 NSWLR 40 North Ocean Shipping Co v Hyundai [1979] QB 705

2. Unconscionable Bargains

Blomley v Ryan (1956) 99 CLR 362 Commercial Bank of Australia v Amadio (1983) 151 CLR 447 Elkofairi v Permanent Trustee Co [2002] NSWCA 413 Louth v Diprose (1992) 174 CLR 621 Bridgewater v Leahy (1998) 194 CLR 437

3. Undue Influence

Johnson v Buttress (1936) 56 CLR 113 Lancashire Loans Ltd v Black [1934] 1 KB 380 Westmelton (Vic) P/L v Archer & Shulman [1982] VR 305 Yerkey v Jones (1939) 63 CLR 649 Garcia v National Australia Bank Ltd (1998) 194 CLR 395 17

LECTURE 9 (14 January 2008)

Aims and Objectives

At the end of this lecture students should, as part of the broader topic of discharge, have an understanding of the following:

(a) the order of performance in relation to contractual obligations (b) the meaning of performance at common law and qualifications to its applications (c) the discharge of contracts by agreement (d) the discharge of contract by breach.

The topic of discharge covers the means by which parties to a contract are discharged or released from liability under the contract.

Discharge by Performance, Agreement and Breach

1. Discharge by Performance

Louinder v Leis (1982) 149 CLR 509 Cutter v Powell (1795) 101 ER 573 Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd (1938) 38 SR (NSW) 632 Hoenig v Isaacs [1952] 2 All ER 176

2. Discharge by agreement

Crawford Fitting Co v Sydney Valve & Fitting P/L (1988) 14 NSWLR 438 Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 McDermott v Black (1940) 63 CLR 161 at 183-184

3. Discharge by Breach of Contract

Foran v Wight (1989) 168 CLR 385 Sargent v ASL Developments Ltd (1974) 131 CLR 634 DTR Nominees Pty Ltd v Mona Homes P/L (1978) 138 CLR 423 Heyman v Darwins Ltd [1942] AC 356 Legione v Hateley (1983) 152 CLR 406 18

Aims and Objectives

At the end of this lecture students should, as part of the broader topic of discharge, have an understanding of the following:

(a) the discharge of contractual obligations by frustration (b) the effect of frustration.

The topic of illegality deals with circumstances under which statute and common law principles declare certain classes of contract either illegal or void. Public policy concerns are the basis of these principles. At the end of this lecture students should have an understanding of the circumstances in which contracts are illegal both pursuant to statute and common law principles, the effect of illegality on contractual obligations, the recovery of property that has passed pursuant to illegal contract, and the circumstances and effects of contracts that are void on common law grounds.

Discharge by Frustration; Illegality

Text: Gooley & Radan, Chapters 22, 23, 24 & 25

1. Discharge by frustration

Chapman v Taylor [2004] NSWCA 456 Krell v Henry (1903) 2 KB 740 Codelfa Construction v State Rail Authority of New South Wales (1982) 149 CLR 337 Taylor v Caldwell (1863) 122 ER 309 Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour [1943] AC 32 Frustrated Contracts Act 1978 (NSW)

2. Illegal Contracts

George v Greater Adelaide Land Development Co Ltd (1929) 43 CLR 91 Re Mahmoud and Ispahani [1921] 2 KB 716 Yango Pastoral Co v First Chicago Australia (1978) 139 CLR 410 St John Shipping Corp v Joseph Rank [1957] 1 QB 267 Singh v Ali [1960] AC 167 Wilkinson v Osborne (1915) 21 CLR 89 A v Hayden (1984) 156 CLR 532 Nelson v Nelson (1995) 184 CLR 538 Fitzgerald v F J Leonhardt Pty Ltd (1997) 189 CLR 215 Bowmakers Ltd v Barnet Instruments Ltd [1945] 1 KB 65 Alexander v Rayson [1936] 1 KB 169 Thomas Brown and Sons v Fazal Dean (1962) 108 CLR 391

3. Contracts void on public policy grounds

Nordenfelf v Maxim Nodenfelt Guns & Ammunition Co Ltd [1894] AC 535 Lindner v Murdock’s Garage (1950) 83 CLR 628 Amoco Australia v Rocca Bros Motor Engineering Co (1973) 133 CLR 288 Restraints of Trade Act 1976 (NSW) 19

Aims and Objectives

Common law damages involves the innocent party accepting a breach of contract and being compensated for losses suffered as a result of such breach. Upon proof of a breach an innocent party is entitled to an award of damages. The principles relating to common law damages are fundamentally concerned with assessment of the amount of compensation to be awarded to the innocent party. Equitable damages can also be awarded.

At the end of this lecture students should have an understanding of the following:

(a) the compensation principle as the basis for the recovery of damages (b) the nature of interests protected in an award of damages (c) the requirement that the breach must cause the losses sought to be recovered (d) factors that affect the quantum of damages awarded (e) the principles governing the recovery of equitable damages.

Damages

1. Common Law Damages

Paper Reclaim Ltd v Aotearoa International Ltd [2006] 3 NZLR 188 Johnson v Perez (1988) 166 CLR 351 Howe v Teefy (1927) 27 SR (NSW) 301 Baltic Shipping Co v Dillon (1992) 176 CLR 344 McRae v Commonwealth Disposals Commission (1951) 84 CLR 377 The Commonwealth v Amann Aviation (1991) 174 CLR 64 Bellgrove v Eldridge (1964) 90 CLR 64 Hadley v Baxendale (1854) 154 ER 145 Victoria Laundry (Windsor) v Newman Industries [1949] 2 KB 528 Stuart Pty Ltd v Condor Commercial P/L [2006] NSWCA 334 Simonius Vischer & Co v Holt & Thompson [1979] 2 NSWLR 322 British Westinghouse& Manufacturing Co v Underground Electric Railways Co [1912] AC 673 The Mihalis Angelos [1971] 1 QB 164

2. Equitable Damages

Supreme Court Act 1970, s 68 Johnson v Agnew [1980] AC 367 20

Aims and Objectives

Apart from an action in damages at common law, a plaintiff may be able to recover sums of money by way of actions for the recovery of fixed sums and in debt.

At the end of this lecture students should have an understanding of the following:

(a) the principles governing the validity of the parties’ contractual agreement as to the measure of damages in the event of a breach (b) the principles for the recovery of debts.

As an alternative to common law damages, equitable remedies to enforce the contract may be available to a plaintiff. At the end of this lecture students should have an understanding of the following:

(a) the nature of the equitable remedy of specific performance (b) the principles for awarding the equitable remedy of injunction for the enforcement of negative contractual obligations.

Actions for Fixed Sums and Debt; Specific Performance & Injuctions

1. Actions for a Fixed Sum & Debt

Dunlop Pneumatic Tyre Co v New Garage and Motor Co [1915] AC 79 McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 White & Carter (Councils) Ltd v McGregor [1962] AC 413

2. Specific Performance

Beswick v Beswick [1968] AC 58 Giles v Morris [1972] 1 All ER 960 Co-operative Insurance Society v Argyll Stores (Holdings) Ltd [1998] AC 1 Mehmet v Benson (1965) 113 CLR 295 Price v Strange [1978] Ch 337

3. Injunction

Warner Brothers Pictures v Nelson [1937] 1 KB 209 Curro v Beyond Productions P/L (1993) 30 NSWLR 337 Page One Records Ltd v Britton [1967] 3 All ER 822 21

LECTURE 13 (4 February 2008)

Aims and Objectives

At the end of this lecture students should have an understanding of the following equitable remedies and principles relating to contracts:

(a) the remedy of rectification of contract (b) the principles permitting rescission of contracts (c) relief based upon principles of equitable estoppel.

Rectification, Rescission & Equitable Estoppel

1. Rectification

Muriti v Prendergast [2005] NSWSC 28 George Wimpey UK Ltd v V I Construction Ltd [2005] EWCA Civ 77

2. Rescission

Coastal Estates v Melevende [1965] VR 433 Alati v Kruger (1955) 94 CLR 216 Vadasz v Pioneer Concrete (SA) Pty Ltd (1995) 184 CLR 102

3. Equitable Estoppel

Waltons Stores (Interstate) v Maher (1988) 164 CLR 387 Je Maintiendrai v Quaglia (1980) 26 SASR 101 Giumelli v Giumelli (1999) 196 CLR 101 22

Aims and Objectives

This lecture deals with non-contractual remedies that provide relief in circumstances not dependant upon establishing a contract, in particular, torts-based common law principles, restitution, and statutory principles under a variety of federal and state acts, especially the Trade Practices Act 1974 (C’th) and the Contracts Review Act 1980 (NSW), dealing with unjust contract.

Torts-Based Remedies; Restitution & Statutory Based Remedies

Text: Gooley & Radan, Chapters 33, 34, 35 & 36

1. Torts-Based Remedies

(a) Deceit

Derry v Peek (1889) 14 App Cas 337

(b) Negligence

Esso Petroleum v Mardon [1976] QB 1 Koufos v C Czarnikow [1969] 1 AC 350 H Parsons (Livestock) Ltd v Uttley Ingham & Co [1978] 1 QB 791

(c) Interference With Contractual Relations

OBG Ltd v Allan [2007] 2 WLR 920 Zhu v Treasurer of NSW (2004) 218 CLR 530

2. Restitution

Pavey and Mathews v Paul (1987) 162 CLR 221 Sumpter v Hedges [1898] 1 QB 673 David Securities P/L v Commonwealth Bank of Australia (1992) 175 CLR 353 Steele v Tardiani (1946) 72 CLR 386

3. Misleading & Deceptive Conduct

Trade Practices Act 1974 (Cth), ss. 52, 80, 82, 87 Fair Trading Act 1987 (NSW), ss. 42, 65, 68, 72 Marks v GIO (1998) 196 CLR 494 Henjo Investments v Collins Marrickville (1988) 79 ALR 83 Taco Co of Australia v Taco Bell Pty Ltd (1982) 42 ALR 177 Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 Henville v Walker (201) 206 CLR 459

4. Statutory Unconscionability

Trade Practices Act 1974 (C’th), ss 51AAB, 51AA, 51AB, 51ACAA Australian Securities & Investments Commission Act 1989 (C’th), s 12BAB Contracts Review Act 1980 (NSW), ss. 6, 7, 9, 14, 16, 17, 21 ACCC v Berbatis Holdings P/L (2003) 214 CLR 51 Baltic Shipping Co v Dillon (1991) 22 NSWLR 1 Industrial Relations Act 1996 (NSW), s 106 Brown v Rezitis (1971) 127 CLR 157 Retail Leases Act 1994 (NSW), ss 62A, 62B 23

Aims and Objectives

At the end of this lecture students should understand the following: a) the meaning of the doctrine of privity of contract b) the relationship of the privity doctrine to the consideration rule that consideration must move from a promisee c) the remedies available at common law and equity to a promisee when enforcing a contractual promise by a promisor to benefit a person who is not a party to the contract d) the ‘exceptions’ by which a person not a party to a contract can take enforcement action in relation to a contractual promise for his or her benefit e) assignment of contractual rights and liabilities.

Third Party Right: Privity of Contract

Tweddle v Atkinson (1861) 121 ER 762 Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] AC 847 Trident General Insurance Co v McNiece Bros (1988) 165 CLR 107 Coulls v Bagot's Executor and Trustee Co (1967) 119 CLR 460 Scruttons Ltd v Midland Silicones Ltd [1962] AC 446 New Zealand Shipping Co v A M Satterthwaite and Co (The Eurymedon) [1975] AC 154