Answer: The issue in this question is whether Donny acted in reliance of Ann s offer to get the reward of $1000.

Transcription

1 MLC101 OFFER AND ACCEPTANCE Questin: It is the week befre ANZAC day and Ann s huse is rbbed. The thieves steal many items, including her Great grandfather s Wrld War 1 medals. Ann is distraught and puts an advertisement in the lcal newspaper and ffers a reward f $1,000 fr whever finds and returns the precius medals. Dnny is a cleaner at the lcal shpping centre. As he was emptying the bins, the medals fell ut f the rubbish. Nt knwing whm they belng t, he tk them t his lcal RSL club, wh in turn cntacted Ann. Ann was verjyed at the return f the medals. Dnny nw wants t claim the reward f $1,000 she prmised. Dnny argues he perfrmed the required act t accept the ffer. Des Ann have t ay him the $1,000.00? Answer: The issue in this questin is whether Dnny acted in reliance f Ann s ffer t get the reward f $1000. The law relating t this issue is that the fferee can nly accept the ffer if the fferee is either aware f the ffer r has acted in reliance f the ffer. In R v Clarke, The Curt held that the acceptance must be in reliance f the ffer, if nt there is n prbable acceptance. When cnsidering the facts f the questin, Dnny has retuned the medals t Ann, nt in respnse t the ffer made by Ann. In ther wrds, Dnny was unaware that Ann has made an ffer t the wrld at large as in the case Carlill v Carblic Smke Ball Cmpany. Therefre, Dnny will nt be able t claim $1000 award frm Ann. SUBSTANTIAL PERFORMANCE Questin: Jacb has purchased a large prperty and hires Jeff t plant 200 native trees n the prperty at a cst f $2,000. Jeff plants 150 native trees, hwever des nt plant the remaining 50 trees. Jeff seeks payment frm Jacb fr planting the 150 trees. Jacb tells Jeff he is nt paying him fr anything, as he has nt cmpleted perfrmance f the cntract. Jeff argues he needs t be paid fr the wrk he has dne, nt the full amunt. Advise Jeff.

2 Answer: The issue in this questin is whether Jeff has substantially perfrmed the cntract t get paid fr the wrk cmpleted. The rule is that if ne party has nt perfrmed exactly as prmised, he/she is nt discharged frm his/her bligatins and may be sued fr breach f cntract. Hwever, an exceptin t the exact perfrmance rule is substantial perfrmance. In Henig v Isaacs, curt held where a party has substantially perfrmed their bligatins, they will be able t claim the cntract price subject t the right f the inncent party deducting the amunt required fr exact perfrmance. In this case Jeff culd argue that he has substantially perfrmed his bligatins (150 ut f 200 trees), therefre he can seek payment f $2000 less any amunt Jacb has t pay smene else t plant the remaining 50 trees. Fr instance if it csts Jacb $500 fr smene else t plant the trees then Jeff can claim $1500. Therefre, Jeff can claim a prtin f the payment fr substantial perfrmance. DAMAGES Questin: Yang is a Seafd Whlesaler. He cntracts with Matthew t purchase a new refrigeratin unit fr his seafd. At the time f cntracting he tells Matthew that the changever frm the ld refrigeratin t the new ne must g smthly because he has nging cntracts with many restaurants wh will buy their seafd elsewhere if there are any prblems. The new refrigeratin unit is installed and after a few days the unit breaks dwn and is n lnger cling. Yang lses $20,000 wrth f seafd that ges bad. Yang is als unable t fulfil the rders f the restaurants and they terminate their cntracts and he lses a further $200,000 in prfit. Yang sues Matthew fr damages. Can Yang claim bth lsses? Answer: There are tw parts t the questin. One is $20,000 lss and the ther is lss f prfits. Therefre the issue in this questin is whether Yang can claim the $20,000 and the $200,000 in damages frm Matthew fr the breach f cntract.

3 The law relating t this questin is the remteness and assessment f damages. The purpse f damages is as discussed in Rbinsn V Harman t put the inncent party in the psitin they wuld had been had the cntract been prperly perfrmed. The lsses must be caused by the breach f cntract and nt be t remte. T determine this we need t lk at the rule in Hadley v Baxendale. a. First limb causatin lsses that are freseeable and flw naturally frm the breach; and b. Secnd limb remteness was the lss in reasnable cntemplatin f the parties at the time the cntract was made? First part: $20,000 in seafd that went bad this appears t fall under the first limb, as it is freseeable that if the refrigeratin did nt wrk, anything within the unit (stred seafd) wuld g bad. This is a lss that flws naturally frm the breach. Secnd part: $200,000 lst prfit frm restaurant cntracts this appears t nt flw naturally frm the breach. Therefre, under the secnd limb it must have been in cntemplatin f the parties at the time f making the cntract. Here n the facts Yang specifically tld Matthew that the changever must g smthly because f the cntracts with the restaurants. This is different t Victria Laundry v Newman where the defendant was nt aware f the ministry cntracts. The facts f this questin shw that it was cntemplated at the time f making the cntract. Yang can claim bth the $20,000 and $200,000 in damages. BREACH OF CONTRACT Questin: Marley is having a 50 th birthday party and has invited 100 guests. Marley hires caterers On The G Pty Ltd t cater the party. After the party the majrity f guests including Marley fall vilently ill with fd pisning. Many have t be hspitalised. It turns ut the fd cntained salmnella and the guests were pisned. Has Caterers On The G breached any statutry guarantees relating t the supply f services? Answer: The issue in this questin is whether Caterers n the G breached any statutry guarantees relating t the supply f service.

4 The law relating t this issue is that the guarantees apply t cntracts fr the supply f gds and services t a cnsumer. A persn requires gds as a cnsumer nly if: (a) The amunt payable fr the gds des nt exceed is $40,000 (b) The gds are f a kind rdinarily acquired fr persnal, dmestic r husehld use r cnsumptin (c) The gd cnsisted f a vehicle r trailer acquired fr use principally in the transprt f gds n public rads. Under the Australian Cnsumer Law, if a persn supplies services t a custmer in trade r cmmerce, there is a guarantee that the services will be rendered with due care and skill. When cnsidering the facts f this questin, Marley has satisfied all the requirements t becme a cnsumer. By prviding fd cntained salmnella making the guests pisned, Caterers n the G bviusly failed t render the services with due care and skills and thus, breached the statutry guarantee as t due care and skill. In cnclusin, Caterers n the G breached the cnsumer guarantee as t due care and skill relating t the supply f services RATIFY Questin Melissa expressly authrises her business agent, Mlly, t buy her a hairdressing saln and t spend n mre than $200,000. Mlly meets Derek wh is selling his exclusive Chapel Street Saln. Mlly tells Derek that she is an agent and she is lking at purchasing a hairdressing saln n behalf f Melissa. Derek says he will nly sell the saln fr $250,000. Mlly tells Derek it s a deal and purchases his saln fr Melissa. When Melissa finds ut, she is unhappy at paying the extra $50,000; hwever she is excited abut the exclusive saln and its lcatin. Melissa agrees t ratify the agreement. Can Melissa d this? Answer The issue in this questin is whether Melissa can ratify the agreement between her and Mlly. The law relating t this issue is that the principal can ratify the cntract cncluded with the third party if the agent act utside his r her actual

5 WEEKLY QUIZZES Tpic ne: AUS LEGAL SYSTEM Interrgatries are: Used in civil prceedings Designed t btain admissins f fact Designed t narrw the issues in dispute. Infrmal meetings between the parties that take place prir t cmmencement f the case Ejusdem generis: Is an inflexible rule Means that express mentin f ne matter suggests that ther matters are excluded Means that where there is a cnflict between a specific and a general prvisin, the specific prvisin shuld be applied Means that a general wrd shuld be restricted t the same class as the particular wrds used An indictable ffence is: A mre serius civil wrng A less serius civil wrng A mre serius criminal ffence A less serius criminal ffence Tpic tw: INTRODUCTION TO THE LAW OF CONTRACT; OFFER AND ACCETANCE Where acceptance f a cntract is by Acceptance ccurs where the cmmunicatin is received. Acceptance is invalid. Acceptance must be cmmunicated in persn Acceptance is effective nly when it is cmmunicated t the fferr Acceptance is effective even if the is never received If ne party has threatened anther party t enter int a cntract, the element that is missing is: Acceptance Intentin t create legal relatin Cnsent Legality Which f the fllwing statements abut acceptance is incrrect? A time must be prescribed within which acceptance is t be made The existence f the ffer must be knwn by the persn accepting it Acceptance must be made nly by the party r parties t whm the ffer was made Acceptance must be cmmunicated in a regular and authrised manner

6 TOPIC5CONSENTINTERPRETATIONOFTHECONTRACT Whenpartiesarenegtiatingtheymakemanystatements Cntractualstamens-Terms,Cllateralterms(cllateralcntracts)Express/Implied NnCntractualstatements-Representatins,Opinins,puffsLEONARDVPEPSICO Hwtfindweatheritisacntractualrnn-cntractualstatement? Truthfthestatement? Wuldthepartyhavecntracted unlessitwastrue? Whattimeperid? Wasitmadewiththeintentinf preventingthefindingfdefects? Wasthestatementlatermitted? Didthepartywhmadethe statementhavespecial knwledge? ParlEvidenceRuleNICOLAZZOVHARB Presumedcumentcntainsentireagreement,nralevidencecanaddrvary Bydingthisitrecgnisestheprimacyfthewrittenwrdverthespken Thisappliesnlywhenthetermsftheagreementarewhllycntainedinwriting Thereareexceptins:CllateralCntracts Cllateralwarranties-mainreasntenterintthecntract. VerbalStatement-.TheCurtslkattheprecntractualrepresentatint determinewhetheritwasaprmise(cntractualterm)rmere representatin(nncntractual)jjsavagesonsptytdvblankey Termsfthecntract Cnditins-aretermsthatareffundamentalimprtance.Terminatindamages. Warranties-aretermsthatareflesserimprtance.Onlydamages. Representatins-arestatementiffactmadebynepartywhennegtiatingacntract OSCARCHESSLTDVWILLIAMS Opinins-arestatementsfpersnalviewsrbeliefs.Evenifwrngtheexpressinfan pininfesntcreatelegalliabilityifhnestlymade Salespuff-areexaggeratedrbviuslyinsincerestatementsmadebyacntractingparty tengageattractrexcitethersintcntracts.carlillvcarbolicsmokeballco ExemptinClauses(limitatinCauses/ExclusinClauses)L ESTRANGEVFGRAUCOBLTD ThemstimprtantquestiniswhethertheclauseisvalidrntEXAM Incrpratinissue-ifECisincludedinthecntract Cnstructinissue-whethertheECcversthebreach Exclusinclauses-(ntsigned)BALTICSHIPPINGCOVDILLON/CAUSERVBROWNE ImpliedTerms Termsagreedbyimplicatinadhc Bycurt Pastdealings Custmstradeusage Businessefficacy(tgiveeffecttthe business) Termscreatedbyparliament(legislatin) StatutryimpliedtermsGdsAct1958 Sectin18Descriptin Sectin19bQuality Sectin19aFitfrpurpse Sectin20Sample PrivacyfCntractTWEDDLEVATKINSON-nlythepartiestacntract-acquirerights underit,incursliabilitiesunderit.exemptins-agencytrust,insuranceprperty

7 TOPIC6TERMINATION Perfrmance Thecntractshuldvluntarilybeperfrmedcmpletelyexactly/fully. Thereareexceptinstacmpleteperfrmance Entirecntracts-exactperfrmanceruleCUTTERVPOWELL Partialperfrmance-PaymentfrwrkdneREGENTVMILLETT Substantialperfrmance-minrHOENIGVISAACS Divisiblecntracts Timefrperfrmance-timeisftheessence Agreement Cntractsmaybevariedrdischargedbyagreement ExpresspwertterminatePANFOODSCOMPANYIMPORTERS DISTRIBUTORSPTYLTDVANZBANKING ImpliedpwertterminateCRAWFORDFITTINGCOVSYDNEYVALVE FITTINGSPTYLTD SubsequentcntractsCOUGHLANVPYOANEE Cntingentcnditins CnditinprecedentPERRIVCOOLANGATTAINVESTMENTS CnditinsubsequentGEIPELVSMITH Breach BreachCnditin-terminatindamages BreachWarranty-Damages Actualbreach Inncentpartymayterminatecntractwheretherpartyisunwilling/ unabletperfrmbligatins(repudiatin)zlaurindaplvcapalaba Inncentpartymayterminatewhereseriusbreachftherpartyin fulfillingcertaintermsfcntract(ntcmpletecnsciusrepudiatin) AnticipatryBreach-FORANVWRIGHT Terminatinprirtbreach,knwingthecntractwillntbefulfilled FrustratinDAVISCONTRACTORSLTDVHAREHAMURBANDISTRICTCOUNCIL Eventsthatccurafteracntracthasbeenmadethatmakeacntract fundamentallydifferenttthenaturebligatinsftheparties. Hardship,incnveniencermateriallss=ntsufficient Superveningillegality/Gvernmentinterventin Deathrillness Destructinfsubjectmatter/Cmmnbjectnlngerattainable Requirements Theremustbeaneventthatccursafterthecntracthasbeenmade Theeventwasntthefaultfeitherparty Theeventwasntfreseeable Operatinflaw Bankruptcy Bankruptpersnallyrelievedfthecntracttherpartymayprvein bankruptsestate Certificatefdischargefbankruptcyreleasesbankruptfrmalldebts prvableinbankruptcy-ntliabilityfrfraud Merger Deedmaydisplaceasimplecntract:simplecntractisterminated rights/liabilitiesfpartiesmergeintaregvernedbythedeed

8 TOPIC7REMEDIES Thiscanbediscussedunder Cmmnlaw-damages Statutrylaw-damages Lawfequity-EquitableRemedies-Injunctin-Specificperfrmance,Damages, EquitableRemedies,Restitutin Cmmnlaw Tcmpensatetheinncentpartybyanawardfdamages Frwhatlsstheguiltpartyisliable?(Remtenessissue) Whatamuntshuldbepayable(Measurementissue) Therearefurstepstbefllwed-AssessmentfDamages-HadleyvBaxendale Causatin,breachmustrmusthavecaused/causethelss.CTHVAMANN AVIATION 2-Remteness,breachthelssmustntbetremte.HADLEYVBAXENDALE 3-Mitigatin,iflss/lssescanbeminimisedeffrtshuldbemadetreducethelss. PAYZULTDVSAUNDER 4-Measurefdamages,thedifferencebetweenthemarketprincethecntractprice Lawfequity ThesearecalledEquitableRemedies Theseremediesarenlyavailablewhendamagesarentadequate-Atthe discretinfthecurt Types Injunctin-CurtrderimmediatestpPAGEONERECORDSLTDVBRITTON SpecificPerfrmance-Orderfcurtrequiringapartytprefrmtheirbligatins undercntractturnervbladin Restitutin-reparatinmadebygivinganequivalentrcmpensatinfrlss, damage,rinjurycaused;indemnificatin.paveymatthewsvpaul Rectificatin-returntthecnditinprirtthecntract Terminatin Breachinafundamentaltermrepudiatin Breachfacnditin-terminatindamages Breachfwarranty-damages Identifylsses- Causatin->causedthelss Remteness->ntremtefrmthebeach-,usualcursefthings Damages- Unliquidated(nsumstipulatedinthecntract), Liquidated(specifieshwmuchistbeawarded), Penalties(ifitisntagenuineestimatestipulatedinthecntractitwillbe cnstruedaspenalty)o DEAVALLSTATESLEASINGSYSTEM