Exam Notes — week by week / cased

Offer + Acceptance + Consideration = Contract

1. Sources of Law (Australian Parliaments)

State Parliaments: Upper and Lower House. Proposed laws must pass through both houses. Royal assent is given once passed by representative of the Queen (Governor of the State).

Federal Parliament (Australian/Commonwealth): Makes some laws for whole of Australia. 2 Houses — Upper (The Senate) and Lower (House of Representatives). Both Houses must agree to any proposed laws. Governor General gives assent.

Acts = Enactments, Statutes, Legislation, Laws made by Parliament

Bill = Proposed Law — still to be passed by both Houses.

Non-Statute Law— Made by Judges in deciding cases = Common and Equity

Common law = created rules of law that apply to all cases with the same facts

6. Mistake and Misrepresentation

Mistake of law not efficient to have a contract set aside — mere errors of judgment not sufficient to have a

Leaf v International Galleries — Leaf bought a painting and went to sell it 5 years later but it was a fake. Contract was voidable however too late in this case as he had ample time to get it checked.

Solle v Butcher— S leased flat from B. Both believed flat was not subject to rent restriction legislation. S paid too much and sued for excess rent — B claimed common mistake. Contract voidable but could set aside on condition that S would only get back rent if he left or he stayed on for 5 years at a reasonable rental

Mutual Mistake — parties are at completely cross purposes about the thing they are supposed to be agreeing on — Raffles v Wichelhaus — both were talking about a ship named the Peerless but there were 2 ships with the same name — no contract

Goldsborough Mort& Co v Quinn — sale of land per acre by Q to GM — contract did not specify who would bear the cost of conversion from leasehold to freehold. Q said he thought GM would bear it and the mistake would void contract. Q was liable as a reasonable person would think he was liable for conversion.

7. Genuine Agreement and Legality (Enforceability — Unenforceable Contracts)

Matters affecting enforceability — contracts must be based on genuine consent of both parties

Unconscionability — broad principle of equity that applies to any activity that a court might reasonably agree should allow for the cancellation of a contract — Commercial Bank of Australia v Amadio

Matters affecting enforceability:

• Minors • Insane persons • Intoxicated persons • Married women (no longer) • Aliens, prisoners, bankrupts

• Corporations yet to be formed or where constitutional elements limit purview all have contractual capacity issues

M-11r r

EG - Andrew is 17 and therefore considered a minor and is not regarded as being of full legal capacity ("sui juris"). Consequently the law will refuse to enforce certain contracts. Unless the contract is for the supply of "necessaries" or "beneficial contracts of service" the contract will not be binding. Alcohol and food for a post exam party, for students, would not be considered a "necessary" (defined as things which an individual cannot live without and is determined by status of the person and if it is required at the time of sale and delivery). Refer Nash v Inman (1908) 2 KB 1 where the goods were deemed not necessaries and Inman was not required to pay for them.

Age of Majority Reduction Act (SA) reduced the age of adulthood from 21yr to 18yrs old.

8. Discharge and Remedies

Discharge = contract brought to an end. Parties have no further obligations under the contract BUT either party may have a right to a remedy because of the way the contract was discharged.

EXAMPLE

M contracts to supply N with flowers. M writes to N `unable to supply at contracted price'. N replies `will get flowers elsewhere' and arranges to buy flowers from O. N then sues M for difference between the contract price and price paid to O. Advise M

M contracts to supply flowers to N (=contract with rights and obligations). M repudiates meaning N must ELECT. Can seek damages of difference between M and O prices. If affirms means original contract must be followed through.

1.

M, a person visiting an antiques market, saw a rare piece of Mitcham pottery on a stall owned by Fred. M told

Fred he was very interested in this pottery and was looking for a piece in the form of a black Bulldog. Fred said.

'That is a rare piece and I have one of those at home for $2000'. M became very excited and asked if he could

come to Fred's place 'to inspect and buy it'

1. Fred and M have not formed a contract. M in unlikely to succeed in his claims based on the following:

Offer

The statement by Fred that he has the piece described at $2,000 is not an offer. It is merely an invitation to treat as in

Fisher v Bell (1961) goods on display with price tags are not considered offers.

Acceptance

In any case, M's statement that he would like to" inspect and buy it" is not unqualified acceptance. He has provided an

acceptance "subject to" viewing the item which is a condition. The condition will need to be met prior to forming a

Case Study References / Law Terms

Advertisement =Invitation to treat Timothy v Sirnpson 18 4 172 ER 1 37, P'harmaceuti al tae[ety Y' Qovts Ca l G_hsmiioj — Graw p. 48.

John's request that the photo be held and Anton's agreement is an option agreement if there is consideration. Nothing has been paid or promised by John so no option exists. See Parastatidis v Kotaridis — Graw p. 134.

John has said he will only buy if the photo is proved authentic. This is not an unqualified acceptance and 'so there is no contract' — Graw p. 84.

Promissory estoppel = prevents promisors reneging on their promise ='Estoppel would not operate if the party making the statement expressly reserved his or her rights, or where the statement was equivocal, as in Legione v Hateley' —Graw p. 164, see Cheshire & Fifoot's Law of Contract Butterworths 6th ed p. 160-161.

The arrangement to hold the photo is therefore not binding on Anton — see also Kitkodgo W drard — Graw p. 65.