Promise: Pharmaceutical Society of Great Britain V Boots Cash Chemists (Southern) LTD

Agreement
Two things are necessary: promise and consideration

Promise
Offer an expression of willingness to contract on the terms stated
Invitation to treat an invitation to make an offer
Provision of information
A declaration of intention
Offer
A willingness to be bound on particular terms without futher negotiation
(carter et al)
Self-Serve basis sale is complete when the person takes the goods (offer to
buy) to the counter and the pharmacist accepts the sale (acceptance)
Pharmaceutical Society of Great Britain v Boots Cash chemists (Southern)
Ltd
A mere statement as to the price at which land, goods or services may be sold
or provided is not an offer
Consideration must be given (Australian woollen mills v Cth)
Onus of proof on intention to create legal relations is on the party trying to
disprove (Australian woollen mills v Cth)
An offer is available for acceptance until the time (if any) specified for their
currency, unless previously withdrawn by the offeror and provided that the
offeree has not already rejected the offer
Death (offeror or offeree) may terminate an offer
An offer is terminated by rejection or a counter-offer. (there are exceptions)
(Hyde v Wench)
An offeree does not reject an offer or make a counter offer, merely by
requesting further information about the offer. Stephenson Jaques v McLean
The word offer, does not necessarily mean an offer in contractural terms.
Depends also on intent Seppelt v Commissioner
The offerer must be unequivocal the offer and the acceptance must
correspond.
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Option
Once an option is agreed, the offerer cannot withdraw the offer except in
accordance with the option itself.
Isaacs J has stated that the only feature that distinguishes an option for a
mere offer is the consideration. In his view, it's still an offer. The
consideration merely ensures its continuance, by creating a relation in which
the law forbids the offeror retracting it.
Death (offeror or offeree) does not necessarily mean the option has ended.
The person responsible is the executor of the
Revocation
Revocation an offer may be revoked at any time by the offeror prior to
acceptance even if a time frame has been given, and that time frame has
not expired. Goldsborough v Quinn, Dickinson v Dodd
Revocation only takes affect on receipt Byrne v Van Tienhoven
Acceptance
Acceptance must be unequivocal, unconditional and in terms identical
to the offer.
For an acceptance:
1. The offerer may stipulate what is necessary for an offer to be accepted'
2. Offer and acceptance must exactly correspond
3. Acceptance need not be express: it may be inferred from a partys
conduct
4. Only the entity to 'whom the offer is made may accept it
An offeror can not deem an offer to be accepted by mere silence. Felthouse v
Bindley
Acceptance was done by doing of the act - Carlill v Carbolic Smoke Ball Co.
Is a contract formed by the exchange of a promise for an act or an offer is an
expression of willingness to contract on the terms stated in the offer Carlill v
Carbolic Smoke Ball Co.
When reviewing offers, counter offers and acceptance, they can be viewed in
entirety. Butler Machine Tool v Ex-Cell O Corp
Postal Acceptance Acceptance is concluded when the acceptance is sent.
The address of the offerer has to be correct and acceptance can be received
by post. Bressan v Squires. Places the risk on the offerer.
Postal Rejection are effective when they are received.

Knowledge of Offer is required for acceptance R v Clarke
Acceptance is not effective unless and until communicated to the offeror.
An offeror is entitled to specify the manner of acceptance Carlil v Carbolic
Smoke Bomb
Telephone and instantaneous communication acceptance acceptance is
complete only when heard by the offeror.
Acceptance must be in reliance to the offer.
Agreements to Negotiate are not, generally, considered binding - Coal Cliff
Collieries v Sijehama
Subject to finance clauses are for the protection of the purchaser and are
valid - Meehan v Jones
Subject to approval by solicitors are not binding clauses - Masters v Cameron
Subject to contract may have one of three effects Masters v Camersons
1. Concluded contract and the purpose of the document is simply formal
the contract is not conditional
2. Although here is a concluded contract, it is conditional because there is
an obligation to perform once the document is signed.
3. The clause may postpone the formation of the contract. Neither party
is bound to proceed with the transaction since formation of the contract
is conditional on execution of the document
Consideration
Consideration is an act of forbearance or promise therefore, which is the price
for the promise Dunlop Pneumatic v Selfridge & Co
Consideration needs to be given for a contract to be completed Australian
Woollen Mills Pty Ltd v Cth
"that it should be made to appear that the statement or announcement which
is relied on as a promise was really offered as consideration for the doing of
the act, and that the act was really done in consideration of a potential
promise inherent in the statement of announcement"
Contracts in the form of deeds do not require consideration
Consideration must be related to the promise Australian Woollen Mills v Cth
Promises for which consideration has been given are contracts but they
have to be related see above.
Consideration must move from the promisee (but not necessarily to the
promisor) Coulls v Bagots
Consideration must be sufficient but need not be adequate Chappell v
Nestle
Past consideration is no consideration
Executed consideration is enforceable Re Casey Patents: Stewart v Casey
Illusory whether the law can countenance as consideration a promise which
is illusory in the sense of being impossible to enforce Dunton v Dunton
Condition is illusory if what B is going to do what B promises is entirely at B's
discretion (Placer Developments v Commonwealth)
Illusory 2nd concept, the promise sought to be enforced is entirely
discretionary Placer developments v The commonwealth
Consideration only exists if duty is exceeded (contract voided if illegal)
Glasbrook Bros v Glamorgan, Popiw v Popiw
Right to interest cannot be given up if it is not supported by consideration
Foakes v Beer
Part payment does not mean that person does not have to pay full amount
(Foakes v Beer)
Nominal Consideration can be:
Bringing forward the date for the payment
Changing the place of payment to suit the creditor
The addition of something in kind to the money
Extra consideration can be given if both parties benefit and it's not done under
economic duress or fraud Williams v Roffey
Existing duty can also be exceeded (Ward v Byham)
It is the agreement to compromise the dispute which is the source of the fresh
consideration, rather than what the parties have agreed to do under the
compromise. For that reason, even if one party has, in performing the
compromise agreement, in fact done exactly what it was contractually bound
to do there is still consideration contract of compromise. Wigan v Edwards
Practical Benefit if Williams provided a practical benefit it could be good
consideration for the extra money (Williams v Roffey)
Part payment of a debt can not be discharge of the debt (Foakes v Beer)
Public duty has two cases that are quite different Ward v Byham (taking care
of child) and Glasbrook Bros v Glamorgan County Council
Concluded Agreements
It can be a binding agreement, if it's a settlement or compromise
Depends on establishment of agreement, intention to create legal relations
and consideration.
A concluded agreement will not be effective if what the parties agreed upon
cannot be determined objectively with a reasonable degree of certainty.
Last one who fired the shot for T & Cs is the one in the contract Butler v Excell
Auction acceptance occurs when the hammer is knocked down
A contract may be found in the conduct of the parties
A contract can be severed if clauses are unenforceable. Importance of clause
has to be determined first - Whitlock v Brew
Estoppel
Two areas: 1) where there's a contract and something not working and 2)
where there's no contract (Hightree Case)
Estoppel relies on (Walton Stores v Maher & Legione v Hateley)
1) a promise which must generally be both clear and unequivocal
(Legione v Hateley)
2) Reasonable and detrimental reliance by the person claiming the
estoppel
3) Unconscionable conduct circumstances which make it unequitable,
unconscionable or unconscientious for the person who made the
promise to retract it
Estoppel can occur with and without contract
Estoppel was used as a sword in Waltons v Maher
Intention to Create Legal Relations
If there's consideration, there's intention
Usually, family agreements are not considered to be contracts. There are
exceptions - Jones v Padavatton
Party that wants to enforce the contract has to prove the intention
Usually, in commercial situations the contracts are intended to be binding

An express term of the agreement to the contrary must usually be present
before the conclusion can be reached that there is no intention to create legal
relations (Rose & Frank v JR Crompton)
An intention that the agreement is not to create legal relations may sometimes
be inferred (Esso v Commissioner)
The HC is sceptical of the ability to formulate acceptable rules to prescribe the
kinds of cases un which absence of intention to create legal relations should
be found (Ermogenous v Greek Orthodox Community)
Letters of Comforts are letters given by a third party to the promisee to help in
the decision of contracting
Bulk of cases say that letters of comforts are not binding. However, in
Banque Brussels v Australian National Industries it was found to be binding
Collateral Contracts
Can use the same consideration as long as the consideration moves from the
promisor
Contracts requiring written evidence

Contracts require written evidence if legislature requires it.
In NSW, only contract for the sale of transfer if interests in land have to be in
writing. A note or memorandum is sufficient notice to be considered 'writing',
document must be signed, but this is a loose interpretation. A number of

documents can together constitute a note/memo, but there must be some
internal reference between them. The note must contain all the material
terms of the contract and the failure to include a material term in the oral
contract will mean the note is insufficient.
If one document has a reference to another document with the transaction
information on it, both documents can be used. Harvey v Edwards.
What actually has to be in the document is spelled out in Pirie v Saunders
A contract not complying with the conveyancing act is not void, but
unenforceable
Has to 1) describe with precision the subject of the contract and 2) clearly
identify the parties.
Restitution or Unjust Enrichment
Elements Pavey v Mathews:
1) Benefit received by the defendant (has to be a legal benefit, courts will
often see what the benefit would be if there was a contract)
2) At expense of the plaintiff
3) Unjust factor""
What does it matter if contract is unenforceable v void:
If the contract is unenforceable the money goes back
If the contract is void no contract
Capacity
Parties must have legal capacity
Minors have limited capacity, only to buy necessities
Mentally ill people may have limited capacity
Corporations have legal capacity
Representations
Pre-contractual statements can be puffs, representations or terms.
Representations are statements of fact which indue the representee to enter
into a contract, but which are not guaranteed by the maker of the statement
1. If a statement is a puff, it has no legal effect
2. If a statement is a representation, the receiving party has certain rights,
depending on if it was fraudulent, innocent or negligent
misrepresentation
3. If a statement becomes a contractual term, the remedy depends on
what kind of term it is
Express Terms
Express terms are the terms that are written

Express terms are objective a reasonable person in the position hearing the
statement will understand it
Representations are like terms, but are not guaranteed. They are statement
of facts made to induce a contract
Courts will consider the statement an express term if:
1) Timing of the statement just before signing more likely to be true
and have influenced the signing (Dick Bentley v Harold Smith)
2) Content
3) Oral Statement
4) Expertise if the person making the statement is an expert, then it's
more likely to be an express term (Oscar Chess v Williams and Dick
Bentley v Harold Smith)
"If an intelligent bystander would reasonably infer that a term was intended,
that will suffice" Denning LJ in Oscar Chess v Williams and Dick
Term v Representation what is required is a statement of fact to be present
and the intention to guarantee its truth.
Lord Denning's thoughts are that there has to be intention and it has to be
acted upon for it to be a warranty
Defendant said that in my opinion, the cabin cruiser could do 15 MPH,
though it could not. Court found it was not a term as he stated in my opinion
This case also states that there can be collateral contracts. JJ Savage
Collateral Contracts
Collateral contract is a contract where the same consideration is used as the
consideration for the main contract
It must be proved that the statement was held out as a promise to guarantee
or assurance the consideration for which is entry in the main contract
Even in cases about land, the collateral part does not have to be in writing
(Sheppard v Ryde Corp)
The collateral term has to be consistent with the main contract (Hoyts v
Spencer)
Contract
Sign a document and you're bound regardless of you haven't read them
(Lstrange v Garucob)
Reasons why one may not be bound
1.
2.
3.
4.
Contract is unfair
If there's fraud
Misrepresentation
Non est factum
A & B have an alleged contract. B disputes that a term is not part of the
contract. Would a reasonable person in B's position understand that A was
only contracting on the bases that the term was part of the contract?
Ticket Cases:
The person proffering the ticket was making an offer based on the T&Cs on
the ticket. The person accepting it was accepting it and the T&Cs when they
took the ticket (Thornton v ShoeLane)
1. Did the party taking the ticket know that there was writing on it?
a. If no they are not bound
b. If yes go to 2 & 3
2. Did the party know that the writing referred to terms?
a. If yes they are bound
b. If no go to 3
3. Did the person issuing the ticket do what was reasonable to bring to
the attention of the taker that there were T & Cs?
a. If yes person taking the ticket is bound
b. If no not bound
The words of a contract will not e incorporated as terms of the contract if there
is misrepresentation (Curtis v Chemical Cleaning)
Sometimes receipts handed over are actually notice boards (Causer v
Browne)
In order for ticket cases to apply, the document relied on must be one which a
reasonable person would regard as contractual in nature.
Notice Board Cases
Someone writes some T&Cs on a sign or poster. Different principles
developed
a. Did the person who wants to rely on those terms do what was
reasonable to bring them to the attention of the other party? (Thornton
v Shoe Lane)
Where the terms are unusual the ticket giver has to highlight them in some
way (red hand pointing) Thornton v Shoe Lane
Incorporation by course of dealing
Two requirements (Henry Kendall v William Lillico):
a. A consistent and sufficiently long course of dealing
b. Evidence of assent to the terms, usually in the failure to object to the

term at issue
Whether there is a consistent and sufficiently long course of dealing is a
question of fact
A sold note can be part of the contract if they contain T&Cs and have been
exchanged over the course of the contract (Hardwick v Suffolk)
Would a reasonable person in Sappa's position understand that G was
contracting on those terms? Would a reasonable person in G's position
understand that SAPPA by not protesting had accepted those terms over the
course of dealing?
If the parties don't understand that a contract is being done, then it's not being
done by Incorporation by course of dealing (DJ Hill)
Implied Terms
Implied terms fill in the gaps but courts don't like to fill in gaps
At common law, in order to express a generally accepted incident of the
contract
A term may be implied by statute if the requirements for implication set out in
the statute are satisfied
Formal Contract written contract that appears to be complete at its face
Informal oral or a contract that's written, but not complete
Characteristics for formal contract:
a. Term is reasonable & equitable
b. Term is necessary for business efficacy (Moorcock)
c. Term must be obvious (Codelfa v State Rail)
d. Term must be able to be precisely expressed (Codelfa v State Rail)
e. It can't contradict express terms
Characteristics for informal contract much lower
A term can be implied if you can prove that it's reasonable or necessary
for the contract (Byrne v Australian airlines)
In terms implied by law for a class, you only have to prove to something that
already exists (sale of goods, employment contracts), then it's up to the other
party to disprove If you can't prove to a class, then you have to show that it's
necessary for contracts of that kind
Gummow JJ brings up in necessity in that if a term is so unusual and different
from their current contract, and that they had to behave in a certain manner to
obtain the benefit, and the employee would not know about the term unless
they were made aware of it - the employer has an obligation to bring it to the
attention of the employee (Scally)
Plaintiff has to prove that there's a breach of the implied terms (Liverpool City
Council v Iriwin)
Good Faith in the last 15-20 years courts have been willing to imply terms
that the parties must act in good faith in relationships to exercise rights of
performing obligations under the contract. This has been applied in
commercial cases, mostly where one party goes to terminate.
Construction of Contract
It will be about interpreting the contract. We don't care what the parties meant
to say we care what the parties said.
a. When the parties have dealt with the matter, the court tries to give
meaning
b. When the parties have not dealt with issue, but its arisen the courts
will try to infer what the parties would have intended
c. When the court does 1 or 2 it tries to take a business or commercial
point of view
d. What material can the court look at?
Courts treat the interpretation of spoken words as raising an issue of fact, but
treat the interpretation of written words as raising an issue of law
The words are construed according to their ordinary or natural meanings
Commercial construction
a. Universal approach the general rule is that the same construction
rules apply no matter what the form of nature of the contract
b. Construe contract as a whole in order to determine the meaning or
legal effect of a particular term, the whole contract must be construed
Parole Evidence Rule
This is about what the contract is and what it means
If A + B put their agreement in writing, then we assume that's the whole
agreement. However, the court also figures out if the contract is capturing the
whole agreement.
Proper approach is to determine what the contract is and then, when all the
agreed terms are known, to ignore evidence relating to other terms.
Whatever boundary is drawn, the court accepts no other evidence
Negative rule the parol evidence rule determines what evidence is extrinsic
evidence and prohibits the admission of such evidence for the purpose of
construing a contract
Extrinsic (excluded) evidence maybe include:

a. Direct evidence of the parties actual intention
b. Evidence of the parties negotiations (Prenn v Simmonds)
c. Evidence of the parties conduct after the contract was concluded (L
Schuler v Wickman Machine Tool Sales). This was also re-affirmed in
Codelfa
Application of Parol Evidence Rule is a rejection of LG Thorne v Thomas
Borthwick
Integration can be wholly integrated, or partially integrated
Factual Matrix
A contract should be construed with regard to the context in which the
agreement was reached. This includes:
a. Internal context the case in which the words in issue appear, as well
as the contract as a whole
b. External context the factual context of the contract
c. Legal context the prior cases relevant to the issue
There are two views as to when the factual matrix can be applied:
a. In all cases it is permissible for a court to take the factual matrix into
account prior to construing the contract
b. Mason J in Codelfa said that the word or expression must be
susceptible of more than one meaning ie there has to be ambiguity.
HC approved this in Royal Botanic Gardens and Domain Trust v Sourth
Sydney City Council
c. Mason J you're allowed to think about the object, where did the
parties meet, why are they talking to each other, what's the prevailing
market condition there's difference of opinion according to Mason
J's judgement when it's ambigious
Promises and Contingencies
Contingency is there if something is dependent on something else happening
(that is not an option). A has lost dog and offers $100 to B if they find the dog.
This is a contingency.
Option is the example of the developer and options to buy the apts in the
apartment block.
Exclusion Clauses
Generally means that the party admits it's liable but there is this clause as a
defence. Historically, there have been really big exclusion clauses. Statutes
have been introduced to limit the exclusion clause
Nowadays, the courts tend to assume there is statute to protect the consumer,
therefore except in major commercial contracts, the main permitted use of
exclusion clauses today is in relation to the breach of express contractual

terms
Main principles (Darlington Futures v Delco Australia):
1. Exclusion clauses are to be interpreted in sensible, ordinary meaning,
in light of the surroundings
2. When there is ambiguity read it contra-proferentum read it against
the person who is trying to protect themselves courts lean towards
making people liable
3. Guidelines & rules of thumb
a. The four corners rule: When a clause is very broad, you tend to
interpret it in a way that is inside the contract the exclusion
clause doesn't apply outside the contract (City of Sydney v
West)
b. Deviation rule old principle comes from shipping cases and
carrying goods for someone else. Exclusion clause works when
you're following the agreed route, but not if you deviate from it.
(Thomas National Transport v May & Baker)
Canada SS Rules (from above):

1. if a clause expressly excludes liability for negligence (or an appropriate
synonym ) then effect is given to that. If not,
2. ask whether the words are wide enough to exclude negligence and if
there is doubt that is resolved against the one relying on the clause. If
that is satisfied then
3. ask whether the clause could cover some alternative liability other than
for negligence, and if it can it covers that.
HC has said that if a contract states "The following terms will cause
termination, that's fine but HC still determines substantial damages (Shevill
v Building Board )
Herron J stated, dissenting, in Thorne Before applying the parol evidence
rule it must be determined whether the parties have agreed that the
document embodies the bargain
Main Principles for Parol Evidence Rule:
1. First meaning of the words is the meaning a reasonable person in the
position of the party to whom the words are addressed would place on
them
2. Second In a commercial situation, a court will stive to achieve a
commercially sensible concultion
3. Third extrinsic evidence is not generally admissalbe in the
interpretation
4. Evidence of the factual matrix is not regulated by the parol evidence
rule
Privity
Only a party that is part of the contract can sue.
Exception was made to apply to liability insurance (Trident Insurance v
McNiece)
Each of the ways to do this doesn't break the privity rule:

1. Argue that C is a party, C sues
2. B sues A for breach
3. Specific performance
4. trust trustee B sues on C's behalf
Contracts that attempt to burden a third party
Himalaya Clause the carried excludes liability, this also extends to
stevedores
The Eurymedon an exclusion clause that worked. Need to show four things:
1. Text of the clause covers the stevedores
2. Carrier enters the clause as the stevedores agent
3. Carrier has authority to act as the stevedores agent
4. Stevedores provide consideration to the consignor
Performance
The order of performance depends on the intention of the parties and is
therefore a question of construction
If not stated in contract, assumption is that it's concurrent
Concurrent obligations when the performance of the obligations is at the
same time presumption is that the parties are ready, willing and able to
perform
Where a party cannot perform without the co-operation of the other, a tender
is sufficient to make the other party liable. The offer to perform is treated as
equivalent to performance to the extent that the party refusing to co-operate
will be liable in damages (McKay v Dick)
Severable Contract
Payment obligations are apportioned in accordance with performance.
Often a seller is entitled to receive payment in respect of goods delivered,
even though the contract has not been completed.
Discharge by Performance
Where there is a lump sum payment, there has to be complete performance
by the other side to be paid (Cutter v Powell) and (Sumpter v Hedges)
Substantial Performance can sometimes be used to recover full or part of the
price of the part (Hoenig v Isaacs) and (Bolton v Mahadeca)
Breach
Any failure to discharge a contractual obligation is potentially a breach

For a breach to occur, two preconditions must be met:
1. The breach must be serious, go to the root of the contract
2. The innocent party must elect to discharge the breach
Negligence and intention are irrelevant (unless accounted for in contract)
Types of terms: conditions, intermediate, warranties
Terms are classified by the construction of the agreement.
Nominal
Sustantial
Terminate
Conditions
express or
implied term
Yes
Depends on Loss
Yes
Intermediate
Yes
Depends on Loss
Depends
Warranties
Yes
Depends on Loss
No
Repudiation
Yes
Depends on Loss
Yes
Condition A term will be construed as a condition where it can reasonably be

inferred from the contract that the promisee would not have entered into the
contract but for an implied assurance of strict compliance with the term.
Intermediate terms that can be breached in a number of ways and
sometimes it can be serious and sometimes not. Comes from Hong Kong Fir
Shipping
Intermediate Term the right to terminate the contract will depend upon the
nature and extent of the breach of the intermediate term. If the breach is
serious or continuing, the innocent party has the right to end the contract. If
the breach is minor, or is capable of simple rectification, then the innocent
party retains the right to claim damages but must continue with the
performance of the contract.
Tripariate system of conditions comes from Ankar v National Westminster
Finance
A court will not construe a term as a condition if that would produce an
unreasonable result unless that result was clearly intended by the party
(Ankar v National Westminster)
A condition is a term, the failure to perform which entitles the other party to
treat the contract as at an end. A warranty is a term, breach of which sounds
in damages but does not terminate, or entitle the other party to terminate, the
contract. Lord Roskill (Bunge v Tradax)
Always get damages if there's a breach other damages depends.

Onus is on plaintiff to prove the loss. (Luna Park v Tramway Advertising)
Can't sue for warranties.
Usually termination is separated from breach.
Only way to terminate a time clause is to be late (Bunge v Tradax)
The question to consider is whether a court will allow a party to rely on an
exclusion clause that excludes or limits liability for a fundamental breach. The
answer to this question is found in a rule of construction and not in a rule of
law
Breach for Defective Performance
Usually it's a question of construction as to wether strict performance is
required or reasonable care.
Has to be fit for purpose (Greaves & Co v Baynham Meikle)
Breach for Late Performance
If the contract doesn't specify when something has to be done, then it can be
done in a reasonable time
Look at industry standard
Courts err on the generous side because if you get it wrong, then the
consequences can be very great
If time clause is put in contract, then time is considered to be of the essence.
(Canning v Temby) Need to find out about this case
Breach for Failure to Perform
Consequences of the breach must be very serious for the promisee to be
entitled to terminate for breach of an intermediate term (HK Fir Shipping)
Termination
Stops the contract where it is and any other obligations are discharged (This
includes future payments)
Repudiation/Renunciation
"An attitude problem"
Occurs when the promissor has an absence of willingness, or readiness, or

capacity to perform.
Two kinds:
1) Inability harder to prove
2) Words or Conduct
It's anticipatory if one of the parties calls it off before the other one has a
chance to perform. If it happens after the other person has performed, then
it's still repudiation, but not anticipatory.
Just repudiation does nothing, the other party has to accept it. Once B
accepts the repudiation, it's called anticipatory breach by A.
One party is not going to perform obligation x, and obligation x is a condition
of the contract then it's repudiation.
Level of seriousness is the same as breach, the consequences and impact
needs to be serious. Ie, not going to perform contract at all (Federal
Commerce v Molena Alpha)
Intention is not important but some courts do not talk about it.
Persistent misrepresentation of the contract can amount to repudiation
Only get damages when you accept and terminate the contract.
Wholly and Finally disabled Devlin J (Universal Cargo Carrier v Citati) It's
about the facts, not what a reasonable person would thing.
Brennan J is too demanding a test (Foran v Wight)
Factual Inability - Back to Universal Cargo Carrier v Citati
What was the seriousness - - couldn't have loaded by 21/7 but there was
debate on how much longer
Was loading term a condition or warranty? Devlin said warranty if it was
condition it would have been serious
It's up to the innocent party to accept the repudiation, though they don't have
to but kinda silly if they don't
If repudiated party continues to perform, it has to be exactly to the terms of
the contract (Bowes v Chalayer)
Discharge regarding Time
1) Express contractural term if A is late then B can terminate, this does
not make the above a condition
2) Time is of the essence term" is a condition, based upon commercial
certainty (Bunge v Tradax)"
Commercial Certainty parties need to know at any time where they stand
(Bunge v Tradax)
Discharge regarding time - breach
Can discharge for the following:
1) Express contractual term if A is a late, then B can terminate
2) Time is a conditions "Time is of the essence"
3) Time is an intermediate term has the breach been so severe to
deprive the party with the substantial benefit
4) Notices to Perform way to get around time is of the essence
5) Frustrating Delay
Notice to Perform - Once in breach by being late, innocent party sends a letter
saying you're late,, but I'm going to give you an extension, if you don't
perform, I'm going to terminate the contract. By the party not complying with
that time, it's a repudiation by the other person, so then the innocent party can
terminate (Louinder v Leis)
If a party does not terminate/repudiate/discharge, they lose the right to.
Frustration
Election
After repudiation, once a person terminates, or affirms, they can't go back.
Giving extra time after an election, is not an affirmation. HC said no, it's an
extension of time to election again (Tropical Traders v Goonan)
If payments have been done, with time is of the essence term, person is not
estopped from using time is of the essence again. (Tropical Traders v
Goonan)
Termination
Termination:
1) The parties are discharged from performance in the future
2) Rights that have accrued unconditionally remain
Legitimate interest If the defaulting party can prove the innocent party had
no legitimate interest in performing, then damages can be limited (White &
Carter Council v McGegor)
Legitimate interest can only be applied in extreme cases, it's a hard
argument to make
Can do termination in a way that has not been communicated A agrees to

sell to B, B repudiates, A sells house to C. A's contract with B has been
terminated
If you pick the wrong reason for terminating, it's ok if you can find another
correct reason for terminating (Rawson v Hobbs)
Termination has occurred, parties are discharged from performance in the
future, and also from obligations. There are some exceptions, like arbitration
clauses. (Heyman v Darwins)
Courts often require deposit as being unconditional, but the buyer would most
probably not get I1 and I2 back.
Discharge by Frustration
The event brings the contract to an end.
The frustrating event must be an unforseen event that is not caused by any of
the parties, often called acts of god", the event wasn't planned for.
From Davis: Frustration occurs whenever the law recognises that without
default of either party a contractual obligation has become incapable of being
performed because the circumstances in which performance is called for
would render it a thing radically different from that which was undertaken by
the contract ratified in Codelfa v State Rail
The technique is two fold:
a. The contract must be constructed to determine the scope of the parties
contractual duties
b. The factual circumstances which are alledged to amount to frustration
must e considered. When looking at the factual circumstances the
issue is the degree to which the event or events affected the contract
Frustration occurs whenever the law recognizes that without default of either
party a contractual obligation has become incapable of being prepared
because the circumstances in which performance is called for would render it
a thing radically different from that which was undertaken by contract (Lord
Radcliffe in Davis Contractors v Fernham Urban District Council)
Frustration occurs when there is destruction of subject matter of the contract
(Taylor v Caldwell)
Frustration of Purpose controversial category) non-occurrence of event
which is the basis of the contract (Krell v Henry)
If contract is not rendered entirely or substantially pointless, then it's not
frustrated (Herne Bay Steam Boat co v Hutton and Scanlon New Neon v
Tooheys)
In Codelfa, the HOL distinguished this from Davis v Farenham because one
was foreseeable and the other wasn't.
Sometimes, terms provide for termination on the occurrence of events which
might frustrate the contract. Usually this is to avoid the uncertainty involved in
predicting if a court would conclude the contract has been frustrated.
However, this is not frustrating, rather, it's termination by the terms of the
contract.
Forseable can be reasonable as long it's not far fetched or fancifull.
If, when reading the contract, one party took the risk, by adding something in
the terms, then frustration does not apply.
If you bring about the cause of frustration then you can't rely on it.
(Maritime National Fish v Ocean Trawlers)
Consequences: Frustration discharges the whole contract automatically.
Not like repudiation, where the other party has to accept it.
Frustration is stopping the contract;, the rights that have accrued
automatically still remain
Common Law people paid money in advance want money back people
used restitution total failure of consideration Restitution did you actually
get what you bargained for it the answer is no you can get money back

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Agreement

Two things are necessary: promise and consideration

Postal Rejection are effective when they are received.

Usually, in commercial situations the contracts are intended to be binding

Contracts requiring written evidence

document must be signed, but this is a loose interpretation. A number of

Express terms are the terms that are written

b. Evidence of assent to the terms, usually in the failure to object to the

Extrinsic (excluded) evidence maybe include:

exclusion clauses today is in relation to the breach of express contractual

Canada SS Rules (from above):

Each of the ways to do this doesn't break the privity rule:

Any failure to discharge a contractual obligation is potentially a breach

Condition A term will be construed as a condition where it can reasonably be

Always get damages if there's a breach other damages depends.

Occurs when the promissor has an absence of willingness, or readiness, or

Can do termination in a way that has not been communicated A agrees to

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