An Introduction to the Law of CONTRACT by STEPHEN GRAW B.Com., LL.B. (Qld) Solicitor of the Supreme Court of Queensland Associate Professor of Business Law, James Cook University of North Queensland SECOND EDITION THE LAW BOOK COMPANY LIMITED 1993
Table of Contents Preface Table of Cases Table of Statutes vii xv xxiii Chapter 1 Introduction 1.1 What is a Contract? 1 1.2 Form of the Contract 2 1.3 Unilateral and Bilateral Contracts 8 1.4 The Elements of a Contract 8 1.5 Questions 9 Chapter 2 The Offer 2.1 What is an Offer? 11 2.2 Offers and Invitations to Treat 12 2.3 Instances of Invitation to Treat 13 2.4 Instances of Offer rather than Invitation to Treat 16 2.5 Offers and Puff 18 2.6 Offers Become Effective When Communicated 19 2.7 The Offeree's Response 21 2.8 Termination of an Offer 23 2.9 Revocation 23 2.10 Rejection 27 2.11 Lapse of Time 28 2.12 Change of Circumstances 30 2.13 Failure of a Condition 30 2.14 Death of a Party 31 2.15 Supervening Incapacity 32 2.16 Questions 33 Chapter 3 Acceptance 3.1 What is Acceptance? 36 3.2 Who may Accept? 36 3.3 What may be Accepted? 38 3.4 The Problems of Uncertainty and Incompleteness 41 ix
x Chapter 3 Acceptance continued 3.5 The Manner of Acceptance 45 3.6 Revocation of Acceptance 53 3.7 Questions 54 Chapter 4 Intention to be Bound 4.1 The Need to Show an Intention to be Bound 58 4.2 Social and Domestic Agreements 59 4.3 Business or Commercial Agreements 64 4.4 Expressly Excluding Intention 65 4.5 Questions 67 Chapter 5 Consideration 5.1 What is Consideration? 69 5.2 Features of Consideration 69 5.3 Acts or Forbearances not Constituting Consideration 79 5.4 Acts or Forbearances in Performance of an Existing Duty 79 5.5 Acts or Forbearances in Discharge of an Existing Duty 86 5.6 Promissory Estoppel 89 5.7 Questions 96 Chapter 6 Capacity to Contract 6.1 General Principles 99 6.2 Minors' Contracts 99 6.3 Contracts for Necessaries 101 6.4 Beneficial Contracts of Service 108 6.5 Trading Contracts Ill 6.6 Supply of Non-necessaries 113 6.7 The Effect of Legislation 116 6.8 The Mentally 111 and Drunkards 119 6.9 Convicts 122 6.10 Aliens 123 6.11 Bankrupts 124 6.12 Corporations 124 6.13 Married Women 125 6.14 Questions 125
xi Chapter 7 Privity of Contract 7.1 The Common Law Position 128 7.2 Limitations Upon and Exceptions to the Doctrine 131 7.3 Recent Developments 140 7.4 Questions 141 Chapter 8 Contents of a Contract 8.1 Determining the Terms of a Contract 143 8.2 Representation Versus Term of the Contract 148 8.3 An Alternative Collateral Contracts 152 8.4 The Classification of Express Terms 156 8.5 Implied Terms 161 8.6 Questions 165 Chapter 9 Exempting, Excluding and Limiting Terms 9.1 The Background 169 9.2 The Requirement for Notice 170 9.3 The Notice Required 170 9.4 Limiting the Scope of Exemption Clauses 182 9.5 Fundamental Breach 184 9.6 Excluding Versus Limiting Terms 189 9.7 Questions 190 Chapter 10 Mistake 10.1 Mistake as a Legal Concept 193 10.2 Types of Mistake 196 10.3 Common Mistake and Its Effect 196 10.4 Mutual Mistake and Its Effect 203 10.5 Unilateral Mistake and Its Effect 205 10.6 Questions 213 Chapter 11 Misrepresentation 11.1 The Concept of Misrepresentation 217 11.2 The Elements of an Actionable Misrepresentation 218 11.3 A False Statement 218 11-4 Of Fact 222 11.5 Addressed to the Party Misled 225
xii Chapter 11 Misrepresentation continued 11.6 Intended to Induce the Contract 226 11.7 Categories of Misrepresentation 229 11.8 Limitations upon Rescission 234 11.9 The Effect of Legislation 237 11.10 Questions 239 Chapter 12 Duress, Undue Influence and Unconscionability 12.1 The Concept of Duress 242 12.2 Duress of the Person 244 12.3 Parties to the Duress 245 12.4 The Effect of Duress 247 12.5 Duress of Goods 249 12.6 Economic Duress 250 12.7 Undue Influence 252 12.8 Relationships of Trust and Confidence 253 12.9 Actual Coercion and General Domination 256 12.10 The Effect of Undue Influence 258 12.11 Unconscionability 260 12.12 The Effect of Legislation 263 12.13 Questions 265 Chapter 13 Illegal and Void Contracts 13.1 Introduction 268 13.2 Contracts Illegal by Statute 269 13.3 Contracts Illegal at Common Law 273 13.4 Consequences of Illegality 277 13.5 Void Contracts 280 13.6 Consequences of Voidness 288 13.7 Questions 291 Chapter 14 Discharging a Contract 14.1 How Contracts may be Discharged 293 14.2 Discharge by Performance 293 14.3 Discharge by Agreement 301 14.4 Discharge Through Frustration 307 14.5 Discharge Through Breach 318 14.6 Discharge by Operation of Law 323 14.7 Questions 325
xiii Chapter 15 Remedies 15.1 Remedies Depend Upon the Breach 328 15.2 Damages 329 15.3 Damages May Not be Too Remote 331 15.4 Damages are Compensatory 333 15.5 Damages Must be Mitigated 341 15.6 Damages Can be Pre-agreed 343 15.7 Liquidated Damages and Penalties 344 15.8 Deposits 345 15.9 Specific Performance 346 15.10 Injunction 351 15.11 Restitution 354 15.12 Questions 359 Index 363