CONTRACT LAW SUMMARY 2011 - Lawskool

1 CONTRACT LAW SUMMARY 2011 Lawskool NEW ZEALAND CONTRACT LAW Page 2 TABLE OF CONTENTS CASES 7 1. INTRODUCTION 14 DEFINITION 14 TRADITIONAL elements FOR LIABILITY OF BREACH OF CONTRACT 15 2. OFFER 16 AGREEMENT 16 What is an offer? 16 Advertisements 17 Contractual intention negatived 18 Auctions and Tenders 19 Tenders 19 TERMINATION OF OFFERE 21 Communication of Revocation 21 Revocation and Unilateral Contracts 22 Options Contracts 22 Rejection, Lapse, Non-occurrence and Death 23 State of affairs ceasing to exist 24 3. ACCEPTANCE 25 GENERAL RULES FOR ACCEPTANCE 25 Acceptance must be in response to the offer 25 Acceptance must be absolute and unqualified 26 Acceptance must generally be communicated 26 Silence as Acceptance 26 Acceptance must be unconditional 27 Postal Acceptance Rule 27 Displacing the Postal Acceptance Rule 28 Faxes 29 Electronic Communication 29 Acceptance can be inferred 29 Illusory Promises, Incompleteness and Uncertain Contracts 29 Illusory Promises 30 Incompleteness 30 The Machinery Clause 31 Failure of Machinery Clauses 32 CONTRACT LAW Uncertainty 32 Severance of Inessential Terms 33 4.

2 CONSIDERATION 34 INTRODUCTION 34 RULES OF CONSIDERATION 35 Consideration must move from the promise but not necessarily to the promisor 35 Consideration must be referable to the promise 37 Consideration must be sufficient, but need not be adequate 38 Forbearance and Compromise 39 Past consideration is not good consideration 40 Existing duty as consideration 42 Duties owed to the other contracting party 42 Duties owed to a third party 44 Duties imposed by law 45 Payment or promise of payment of a lesser sum that that owing 46 Consideration cannot be illusory 47 5. PROMISSORY ESTOPPEI 49 ESTOPPEL IN THE CONTEXT OF PRE-EXISTING RELATIONSHIPS 49 THE AUSTRALIAN DEVELOPMENT OF ESTOPPEL 50 ESTOPPEL IN NEW ZEALAND 52 6.

3 INTENTION TO CREATE LEGAL RELATIONS 54 DOMESTIC ARRANGEMENTS 54 COMMERCIAL TRANSACTIONS 55 DEALINGS WITH THE GOVERNMENT 56 7. FORMALITIES 59 CONTRACTS REQUIRING WRITING 59 Statute of Frauds 59 Property Law Act 2007 60 THE EFFECTS OF NON-COMPLIANCE 61 Common Law CONTRACT unenforceable but not void 61 Equitable intervention the doctrine of part performance 62 8. IDENTIFICATION OF TERMS 64 EXPRESS TERMS 64 Pre contractual negotiations Terms and mere representations 64 Collateral Contracts 67 CONTRACT LAW elements of a collateral CONTRACT 68 CONTRACTS IN WRITING THE PAROL EVIDENCE RULE 69 Exceptions to the Parole Evidence Rule 71 Integration Clauses 71 CONST5 RUCTION OF TERMS OF A CONTRACT AND THE USE OF EXTRINSIC MATERIAL 72 9.

4 INCORPORATION OF TERMS 73 SIGNED CONTRACTS THE EFFECTS OF SIGNATURE 73 General Rule signature binds 73 Misrepresentation as to contents 73 Non est factum 74 Surprise terms 75 INCORPORATION OF UNSIGNED DOCUMENTS THE TICKET CASES 76 INCORPORATION BY COURSE OF DEALING 78 INCORPORATION BY REFERENCE 79 10. IMPLIED TERMS 80 TERMS IMPLIED IN FACT 80 TERMS IMPLIED IN LAW 82 TERMS IMPLIED BY CUSTOMER OR TRADE USAGE 82 11. EXCLUSION CLAUSES 84 CONSTRUCTION OF TERMS OF THE CONTRACT 84 THE INTERPRETATION OF EXCLUSION CLAUSES 84 Types of exclusion clauses 84 Construction contra preferentum 85 Excluding fo5r negligence 86 STATUTORY CONTROL OF EXCLUSION CLAUSES 87 12.

5 PRIVITY OF CONTRACT 88 THE COMMON LAW POSITION 88 Third Parties and Benefits 88 Third Parties and Obligations 88 Exceptions to the rule 89 CONTRACTS (PRIVITY) ACT 1982 89 13. CONTRACT VARIATION 90 CONTRACT VARIATION BY CONDUCT 90 CONTRACT LAW 14. PERFORMANCE 91 ORDER OF PERFORMANCE 91 SUBSTANTIAL PERFORMANCE 91 15. CANCELLATION FOR BREACH OF CONTRACT 92 INTRODUCTION 92 BREACH OF CONTRACT 92 Generally 92 Contractual Remedies Act 1979 92 REPUDIATION 93 SERIOUS BREACH 94 Essential Term 95 Effect of the breach 95 AFFIRMATION OR CANCELLATION 95 NOTICE OF CANCELLATION 96 FRUSTRATION 97 16. DAMAGES AND EQUITABLE REMEDIES 99 IDENTIFYING THE LOSS 99 CAUSATION 100 REMOTENESS 101 MITIGATION OF LOSS 101 HEADS OF DAMAGE 102 Loss of Profit (Expectations loss) 102 Reliance loss 103 Loss of chance 103 Injured feelings 104 Contractual Damages liquidated damages and penalties 105 17.

6 MISREPRESENTION 107 STATEMENT OF FACT 107 Positive Statement 108 FALSE OR MISLEADING 109 INDUCEMENT 109 DAMAGES FOR MISREPRESENTATION 109 CANCELLATION FOR MISREPRESENTATION 110 18. MISLEADING AND DECEPTIVE CONDUCT UNDER THE FAIR TRADING ACT 1986 111 CONTRACT LAW PERSON AND IN TRADE 111 MISLEADING OR DECEPTIVE CONDUCT 112 REMEDIES FOR MISLEADING AND DECEPTIIVE CONDUCT 112 19, MISTAKE 113 ASSESSING MISTAKE UNDER THE CONTRACTUAL MISTAKES ACT 1977 113 Definition of Mistake 113 Unilateral mistake 114 Mutual mistake 115 Inequality of Value 115 Assumption of Risk 115 RELIEF UNDER THE CONTRACTUAL MISTAKES ACT 1977 116 20.

7 CONTRACTS VOIDABLE ON GROUNDS OF UNCONSCIONABLE CONDUCT 117 GENERAL PRINCIPLES 117 DURESS 117 Physical Duress 118 Duress of Goods 118 Economic Duress 118 Undue Influence 120 Presumed undue influence 120 Situations of Dependence 121 Unconscionable Bargaining 122 SOURCES CONSULTED 124 CASES ACCC v Berbatis Holdings (2003) 197 ALR Alfred McAlpine Constructions Ltd v Panatown Ltd [2001] 1 AC Alexander v Cambridge Credit Corp Ltd [1985] 2 NSWLR Allcard v Skinner (1887) 36 Ch D Antons Trawling Company Ltd v Smith [2003] 2 NZLR 23 (CA).. Australian Woollen Mills Pty Ltd v Cth (1954) 92 CLR , , B Seppelt & Sons Ltd v Commissioner for Main Roads (1975) 1 BPR Baker v Taylor (1906) 6 SR (NSW) Balfour v Balfour [1919] 2 KB Ballantyne v Raphael (1889) 15 VLR CONTRACT LAW Baltic Shipping Co v Dillon (Mikhail Lermontov) (1993) 176 CLR Banco de Portugal v Waterlow and Sons Ltd (1932) AC Barrett v IBC International Ltd [1995] 3 NZLR 170 (CA).

8 Barrick v Clark (1950) 4 DLR 529 (SCC).. , Barton v Armstrong [1976] AC , , Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd (1986) 40 NSWLR Beaton v McDivitt (1987) 13 NSWLR , Bevanere Pty Ltd v Lubidineuse (1985) 7 FCR Betham v Margets [1996] 2 NZLR Biotechnology Australia Pty Ltd V Pace (1988) 15 Bolton v Mahadeva [1972] 1 WLR Bolton v Madden (1873) LR 9 QB Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR Bradbury v Morgan (1862) 1 H 158 ER , Bradley West Solicitors Nominee Co Ltd v Keeman [1994] 2 NZLR Bressan V Squires [1974] 2 NSWLR Bret v J S & Wife (1600)

9 Cro Eliz Bridgewater v Leahy (1998) 158 ALR Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelsgesellshaft mbH [1983] 2 AC 34 (HL).. Brogden v Metropolitan Railway Company (1877) 2 App Cas Bunge Butler Machine Tool Co Ltd V Ex-Cell-O Corporation (Eng) Ltd [1979] 1 All ER , Byrne v Australian Airlines (1995) 185 CLR Byrne v van Tienhoven [1880] 5 CPD Carlill v Carbolic Smoke Ball Company [1893] 1 QB , , , Casey v Commissioner for Inland Revenue [1959] NZLR Causer v Browne [1952] VLR Cavallari v Premier Refrigeration Company Co Ltd (1952) 85 CLR Central London Property Trust v High Trees House Ltd [1947] KB Chappell & Co Ltd v Nestle & Co Ltd [1960] AC Chaplin v Hicks [1911] 2 KB Chatfield v Civil Service Co-Operative Society of Victoria v Blyth (1914)

10 17 CLR CONTRACT LAW Coal Cliff Collieries Pty Ltd v Sijehama Pty Ltd (1991) 24 NSWLR Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 .. , , , Collins v Godefroy [1831] 1 B Ad Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR Commonwealth of Australia v Verwayen (1990) 170 CLR .. Conlon v Ozolins [1984] 1 NZLR 489 (HC & CA).. , Cook Island Shipping Co Ltd v Colson Builders Ltd [1975] 1 NZLR Couch v Branch Investments (1969) Ltd (1980) 2 NZLR Couchman v Hill [1947] KB , Couldery v Bartrum (1880) 19 Ch. D Council of the City of Sydney v West (1965) 114 CLR , Coulls v Bagot s Executor and Trustee Co Ltd (1967) 119 CLR Cox & Coxon Ltd v Leipst [19991] 2 NZLR Currie v Misa (1875) LR 10 Ex 153.