Topic 3: Contract Law
*What is a contract?
a legally enforceable agreement; that is, an agreement enforceable in a court *Types of contracts
Number of parties:
* Unilateral – one party (eg reward case)
* Bilateral – two parties, both with mutual obligations * Multilateral – more than two parties, all with obligat0ions Form:
* Simple Contracts: written; oral; part-written & part-oral * Need all elements of a contract , including consideration * If all elements present, enforceable unless written contract required and not present * Formal Contracts (normally ‘Deeds’): satisfy formality requirements (eg written, signed, sealed & delivered) * No need for ‘consideration’ (that is, mutual promises) Deeds required for: unilateral contracts & where statute requires *When is written contract required?
General rule: not normally, simple contract will be sufficient. Exceptions:
You CANNOT enforce (unless evidenced in writing & signed by the person you are enforcing against): * Contracts for ‘disposition’ (= sale / transfer) of land (Instruments Act (Vic) s 126) * Assignment of copyright (s 196(3) Copyright Act (Cth))
* Transfer of Co securities (eg shares) (Corporations Act (Cth), s 1071B(2)) * Credit contracts regulated by the Consumer Credit Code (Uniform Consumer Credit Code, s 12(1)) * Cheques, bills of exchange, marine & life insurance policies (& mortgages & assignments of them) COMMON LAW EXCEPTIONS:
* Gifts & trusts (because they are unilateral contracts)
Topic 3b: Elements of a simple contract
1. intention to create legal relationship - presumed in commercial but not family/social relationships; rebuttable by evidence 2. Mutual agreement - often proven by identifying separate offer & acceptance; can also be proven by circumstances / conduct 3. Consideration - promises need to be mutual, from each party to the other. Not required for formal contracts such as deeds 4. legal capacity of all parties’ capacity (eg mental state, minors, not-yet-registered Cos) & objects (ie purpose) 5. real & genuine consent – no mistakes, misrepresentation, duress, non est factum, unconscionable conduct, illegal contracts 3b(1) Intention to create legal relations
*presumed to exist in commercial relationships
*presumed NOT to exist in family & social relationships
*can be ‘rebutted’ (= disproved) by evidence to contrary Case: P13
Rose & Frank Company v Crompton & Bros Ltd: (doc stated no intention to create legally enforceable contract) Carlill v Carbolic Smoke Ball Co – detailed & specific language indicated intention to be legally bound (‘offer to the world’) *Domestic arrangements: Balfour v Balfour
*Social agreements: presumption: no intention to be legally binding Ermogenous v Greek Orthodox Community of SA; Simpkins v Pays *Commercial agreements: presumption: intended to be binding Nyulasy v Rowan *rebutting presumption(反驳推定)
-International move in reliance on offer of house: binding in Riches v Hughes -Express exclusion of intent in a specific clause: Jones v Vernon’s Pools -Honour clauses (‘binding in honor only’) will rebut the presumption: Rose & Frank Co v JR Crompton & Bros (not binding) *Letter of comfort:
Kleinwort Benson v Malaysia Mining Corporation: not a binding offer; instead merely confirming a policy. Banque Brussels Lambert SA v Australian National Industries Ltd: Court: sufficient to rebut presumption; letter was binding. Applies equally to ‘heads of agreement’, ‘memo of understanding’ etc Ambiguous language: courts will disregard language & look at circumstances. Eg Edwards v Skyway 3b(2) Agreement: (a) Offers
*Offer (made by ‘offeror’ to ‘offeree’): = clear & unequivocal promise to be bound, if accepted
* an “invitation to treat”:
Partridge v Crittendon, newspaper classified ad = invitation to...
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