Week

1 The Role of Law in Business

What is law?
The law is a systematic set of rules to control conduct within a society
These set of rules are enforced by the courts
The law declares how we must behave

Sources of Law in Australia
Australia has adopted the English common law system
The main types of law in the English legal system are:
1. Statute law
a. Laws that are made by the State and Federal Parliaments
b. May be changed by parliament and interpreted by the courts
c. Includes laws made by other government bodies known as delegated legislation and takes the form of:
i. By laws
ii. Orders
iii. Rules and regulations
d. Also known as:
i. Legislation
ii. Acts of Parliament
iii. Enacted Law
2. Common Law
a. Common Law system originated from England
b. It is the law created by the courts/reported decisions of the judges
c. May be changed by the parliament and developed by future court cases
d. Common law is not existent in all law systems
e. Also known as:
i. Case law
ii. Precedent
iii. Unenacted law
Note: In the event that there is a clash between the two, Statute Law will prevail since it is the most important
source of law

Equity
Equity is a body of legal principles of legal rules developed by the Courts of Chancery (Courts of Equity in
England
England had two parallel court systems:
Courts that could only award monetary damages
Courts of equity that could issue broader ranges of remedies
Most people only went to courts to claim damages/compensation this was not enough so the courts of
equity were developed i.e. as a result of the growing inflexibility and rigidity of the common law
E.g. Telstra placing an advertisement on 50% off calls being misleading simple compensation would not be
enough because they would just continue misleading people - Telstra would have to rid of the misleading act
altogether
Courts of Equity imply fairness and justice in the law it extends remedies available to a plaintiff/individual
seeking compensation
There are two main types of equitable remedies
1. Injunction: a court order directing a person to stop doing something; and
2. Specific performance: a court order directing a person to carry out an obligation

In the case of Telstra, an Injunction would be to stop advertising altogether and specific performance would be
to modify the misleading part of the advertisement
Some examples of equitable principles are:
Equity will wont suffer a wrong to be without a remedy
One who comes in equity must come with clean hands
Equity will not allow a statute to be used as a cloak for fraud

Classification Systems in Australian Law
There are a number of ways that laws can be classified, including:
1. International v Domestic Law
a. International law is concerned with regulating the conduct between nation states
a. It also applies to private individuals engaged in international transactions
b. There are two main sources of international law that can affect business within a nations boundaries
these are customary rules of international law and treaties and conventions
c. International treaties and conventions are not part of municipal of domestic law unless they are given
express legislative approval by the Commonwealth Government and are ratified
d. Ramification and approval fall within the ambit of the Commonwealth Constitution under the external
affairs power s51
b. Domestic law (municipal) laws come from statute or case law and regulate relations between people or
organisations within the borders of the state (or country)
2. Public law/Private Law
a. Public Law: the organisation of government and its relationship with the people (natural justice,
information)
i. Can be administrative, constitutional, criminal, industrial, taxation
b. Private law: deals with disputes between individuals or organisations
3. Civil Actions vs. Criminal Actions
a. Civil action is an action brought by one individual/entity against another
i. The emphasis on civil action is on remedies
ii. Standard of proof: plaintiff to prove case on the balance of probabilities
b. Criminal action are actions brought by the crown (state) against an accused individual
i. The emphasis is on punishment
ii. Standard of proof: prosecution to prove case beyond reasonable doubt



Evolution of the Australian Legal System (NSW)
In 1788 the first fleet arrived & Australia inherits the English common law system
The Doctrine of Reception how colonies would receive the common law system
Colonies established by England were classified as either:
Territory acquired by treaty or military victory, in which case the existing institutions were retained or;
Territory that was terra nullius i.e. the inhabitants were no recognised and English ideas of justice and
the English legal system applied
Basically meaning there was no recognition of prior inhabitants the systems in place before the
arrival of the first fleet was not recognised as having existed until the Mabo Decision

Origins of Australian Law
Native Title in the case of Australia, terra nullius meant no recognition was given to the rights of indigenous
people

However in Mabo v Queensland (1992), the High Court of Australia acknowledged that Australia had not been
terra nullius and that common-law would recognise a form of native title to land
A brief history of the Origins of Australian Law
1823 Court System & Legislative Council was established
1828 1853 the development of the NSW parliament
1855 NSW Constitution
1865 Colonial Laws Validity Act
It is importance because it allowed NSW to make its own laws and to allow full effect unless it
contradicted English law (only in NSW however)
1901 Federation the Commonwealth of Australia Constitution Act 1900came into effect six colonies
became the Commonwealth of Australia on 1st of January 1901
A new level of government was established
The Federal Parliament with jurisdiction set down in the Commonwealth Constitution (with some
exclusive powers)
The State Parliaments had jurisdiction within their own borders on any matters not specifically
reserves for the Commonwealth (residual powers)
So basically it created the federal and state system
1931 Statute of Westminster
Allowed full legislative independence six colonies were formed to make a Commonwealth
Pretty much identical to what happened in 1865 but not just NSW but the Commonwealth got legislative
independence
1931 1986 The British Privy Council was the final place was the final court of appeal
1986 Australia Act
Removed any links to Britain no more appeals to the Privy Council the highest court is the High Court
It basically removed any legislative dependence on the UK

Levels of Government - Responsibilities
Federal (or Commonwealth)
State
Local
Defence
Education
Road maintenance
Foreign Affairs
Hospitals/Health
Garbage Collections
Police/law and order/criminal
Immigration/Customs

law
Tax
Family services

Commonwealth & State Powers (a sense of dichotomy going on)
Exclusive powers: exercisable only by the Commonwealth parliament
Peace order and good government of the Commonwealth
Defence
Foreign affairs
Immigration
Concurrent powers: most of Commonwealth powers are held concurrently (shared) with the states; both can
legislate in these areas (if there is a clash federal power presides) s109 of the Constitution provides that the
State laws will be invalid if there is consistency
Health
Education
Tax
Residual powers: non-exclusive and non-concurrent powers
Municipal/local laws garbage collection, etc

The Westminster System

The Westminster System was inherited from Britain, and the three main features are:
A Constitutional Monarchy
The Queen of England is the head of the Australian legal system, but her role is really only ceremonial (i.e.
she is a figurehead), the Queen acts on the instructions of the elected Australian government
Separations of Powers - The functions of government are allocated to different institutions
Queen Sits on Top
The Parliament the legislature the supreme law maker
Role is to make and change the statutes/legislations
The Executive the government (prime minister = head of our executive)
Governor General (act on advice of PM & Cabinet)
Prime Minister and Cabinet
Government Departments
The Judiciary (judges/courts) interpret and apply the law
Note: does not refer to concurrent laws, it refers to difference in parliament, judges, judiciary, etc
Note 2: In reality there is no separation between the legislature and the executive they are different
functions but operate together
Responsible Government
A form of government which is responsive to public opinion and answerable by the electorate (i.e. those
who are elected reflect public decision)
Parliament
In all Australian parliaments there are houses of parliament
Upper and Lower (except Qld)
The House of Representative (lower house) the elected representatives are called members
The Senate (Upper House) the elected representatives are called senators
Legislation must pass both houses of parliament

Dele
gate
d
Legi
slati
on
D
eleg
ated
or

subordinated legislation consists of rules,

regulations, by laws, orders and administrative guides
They do not need to be passed by both houses of parliament
They are made by the Governor General on the advice of the Executive
Some important agencies that are can pass delegated legislation (& form part of the executive):
Australian Taxation Office (ATO)
Australian Securities and Investments Commission (ASIC)
Australian Competition and Consumer Commission (ACCC)
Each agency administers a particular Act(s)
Each agency is responsible/accountable to a particular government Minister


Week 2 Legal Reasoning and Statutory Interpretation
The Rule of Law
What is it? A means of maintaining the balance between personal freedom and legislative power in a modern
democracy (balance of freedom vs. law)
Role of the courts
Courts impose a legally binding decision on the parties to the dispute
The courts have criminal and/or civil jurisdiction
Jurisdiction = power and authority conferred upon a court to hear and determine a matter
You cannot just take any matter to any court e.g. local vs. state court Is the court confined in jurisdiction?
Also involved in the administration of the law as well as the resolution of disputes
Features of the Court Hierarchy
It provides a system of appeals from decisions of lower courts to higher courts
It allows for different forms of hearing according to the gravity or seriousness of the case
It is instrumental in building up precedent
Role of the Police
Police enforce the laws the laws created

The Court System
Original and Appellate Jurisdiction
A courts jurisdiction is established by its enabling Act
Original jurisdiction: the authority to hear a case (most courts in the diagram) when the case is first bought
before a court
Appellate jurisdiction: is the authority of a court to hear appeals from decisions of courts of a lower level in the
same court hierarchy (the courts higher in the hierarchy some only have appellate jurisdiction)

State Court System
Inferior (Magistrate/Local) Courts
Inferior or local courts are located at the bottom of the Court Hierarchy
Generally presided over by a Magistrate
The aim of these courts is to settle disputes locally, quickly & cheaply
There is less emphasis on formality than in higher courts
There are procedural rules and the laws of evidence
Intermediate (County or District) Courts
Form the middle level court in most hierarchies with original civil jurisdiction
In their criminal jurisdiction they deal with the bulk of indictable offences except for serious crimes they
also have limited appellate jurisdiction
Supreme Courts
Highest Court in each State or Territory, a court of record, presided over by a judge
They have unlimited original jurisdiction in both civil and criminal matters but hear only the most serious
cases
They have appellate jurisdiction Vic, NSW, Qld, ACT & NT have established separate Courts of Appeal
Specialist Courts these have specialise expertise Family Courts, Drug Courts, etc
Federal Court System
Federal Magistrates Courts
Established in 2000 to ease the workload on other Federal Courts presided by Magistrate
Deals with minor family law, etc
Family Court

Federal Court of Australia pretty much the same level as the State Supreme Court
In its original jurisdiction, the court hears such matters relating to bankruptcy
Its appellate jurisdiction hears appeals from single judges of the Supreme Courts of the Territories & appeals
from decisions of single judges of the federal court
High Court
Key function as the final/highest court of appeal of State Supreme Courts & Federal Courts
Very limited in original jurisdiction
Appeals do not lie as of right
Approval to hear an appeal must first be granted by the High Court
The final court of appeal within the Australian Legal System

The Adversary System
Features of the Adversary System
1. Two opposing sides who argue their case in a court presided by a neutral third party
One side will win, one side will lose -> they will appeal if they wish
In a civil case parties prove their case on the balance of probabilities
Plaintiff: the person starting a civil action
Defendant: the person defending a civil action
The plaintiff has the burden of proof (onus) to prove the case on the balance of probabilities
Note: For Appeals
Appellant: a person appealing against a previous decision and who can be either the plaintiff or
defendant from the first case
Respondent: the party who was successful in the first action
In a criminal case the Crown proves the case beyond reasonable doubt
Crown: represents the state in a criminal case against an accused R is an abbr. of Regina & Rex and refers
to the crown
Accused: the person against whom a criminal action is brought by the state
The Crown has the burden of proof (onus) to prove the case beyond reasonable doubt
E.g. R v Smith
2. Solicitors and Barristers
Solicitors: most of their work is of a non-litigious nature such as conveyance, preparation of wills, family law
matters, preparation of court documents
Barristers: do not deal directly with the public, though in most states they can now they prepare legal opinions
and have court appearances (briefed by a solicitor)
3. The Judiciary
a. Justices of the Peace (much more administrative in nature i.e. dealing with admin applications)
Honorary positions, with the bulk of their work involved in witnessing of documents
In QLD, SA, etc they reside in Magistrates Courts.
b. Magistrates
Trained, full time salaried public servants selected from among the clerks of the court and the legal profession
They preside over inferior courts and are the sole determiners of both fact and law
c. Judges
Appointed to all courts above the inferior courts and generally appointed from members of the Bar
Duties Include:
Deciding questions of facts and law
Ensuring rules of evidence are followed
Passing sentence in criminal cases
Determining compensation/resolution for criminal Cases

 Hearing appeals
d. The Jury
The jury determines question of fact
In Criminal Trials all accused are entitled to a jury of 12 in all cases where the accused pleads not guilty to an
indictable offence
In a civil case because of the cost, they are not used as much as they once were

How does a dispute get to court?
1. Plaintiff goes to see solicitor
2. Solicitor issues a letter of demand to Defendant
3. Issue o originating process (summons/statement of claim) given to Defendant
4. Defendant makes a Defence document given to court and to the plaintiff
5. Court pre-trial mentions, discovery, exchange of affidavits (documents) matter set down for trial trial (or
hearing)

The Doctrine of Precedent
A court is bound to follow previous decisions of higher courts in the same hierarchy
Court hierarchy is critical to understanding operations of precedent
Exceptions if there are any inconsistencies with a higher courts decision (i.e. two higher courts say different
things) or there is a wrong in law
Binding Precedent:
The facts are the same/similar
Court which made the precedent is in the same hierarchy AND is a court of higher authority/superior court
E.g. Decision of High Court binding on all courts in Australia
Decision of District Court not binding on Supreme Courts
Persuasive Precedent:
Seriously considered; may or may not be followed
Decided by the court on the same level of hierarchy or in a different hierarchy
E.G. Decisions of Supreme Court of NSW is persuasive but not binding on the decision of Supreme Court of
Victoria
Decision of Overseas Courts are persuasive in Australia

Terminology
Stare decisis: the decision stands i.e. the precedent has been supported
Ratio decidendi: the reason for the decision what the case stands for & the rationale behind a courts
decision and the legal grounds on which the decision stands making the case binding and a precedent for lower
courts in the future
Spotting the ratio: in the Law and Decision part it is buried the legal principle is, the law has always held
that..
Obiter Dictum: a remark in passing or material said by the way are observations that do ont form part of the
reasoning of the case and unlike ratio decidendi are not binding on lower courts (they may however be of
persuasive authority, particular the obiter dicta of eminent judges or of higher courts) like making observations
about contingent cases in the future
Affirm/Approve to uphold a judgement
Reverse/Overrule: setting aside a judgemental on appeal
Applied: using relevant case law to decide a case
Followed: applying the law made in a previous case without amendment
Not followed: not applying the law made in a previous case

 Distinguished stating differences between the precedent that is proposed as relevant and the present case

Statutory Interpretation
Other role Courts may have is to interpret legislation made by the parliament
Only when the legislation is unclear can they interpret and form precedents if it is clear, valid and
unambiguous then courts must apply the legislation
If it is unclear courts can make law to clarify the legislation and that becomes part of the judge made law
If there is an inconsistency between case law and legislation, legislation prevails
Rules of Interpretation
a. Literal Rule: court gives effect to the literal meaning of the legislation
b. Golden Rule: court gives effect to the literal meaning unless that leads to some absurdity (the judge is allowed to
depart from the legislations clear result to avoid absurdity)
c. Mischief Rule: where words are ambiguous, inconsistent or illogical, the court interprets the legislation to
overcome the mischief
d. Purposive Approach: (Acts Interpretation Act 1901) the court considers the purposes of the legislation and the
court can consider extrinsic materials based on this (explanatory memorandums, second reading speeches, intl.
treaties) i.e. using purpose to interpret
e. Acts Interpretations Act s15AB when the legislation is ambiguous the Courts may rely on extrinsic material to
interpret the meaning of the section

Alternative Methods to Courts
Alternatives have arisen to formal litigation because of the delays, costs, ignorance and intimidation of the
traditional law system
These includes tribunals, ombudsmen and;
Alternative Dispute Resolution
Has arisen because of the disadvantages of court litigation
Arbitration, mediation, negotiation, etc

Week 3 Introduction to Contract Law
Contracts
Contract: an agreement concerning promises made between two or more parties with the intention of creating
certain legal rights and obligations upon the parties to that agreement which shall be enforceable in a court of law
Therefore, a contract:
Contains promises
Is between two or more parties
Promisor: person who makes a promise
Promisee: person to whom promise is made
Who intend to be legally bound
Making it enforceable by law

Contracts
Contracts are a fundamental part of peoples daily lives
They form the basis of commercial law and dealings
Some basic examples include sales contracts, employment contracts, rental contracts
Contract law is derived from:
a) Judge made law: developed in the English common law courts (decisions from cases)
b) Legislation/Acts of Parliament which have amended or supplemented the case law

Types of Contracts

Formal contracts
Special form of a contract
Contracts under deed or seal
Used it particular circumstances where the parties would otherwise have no contractual obligations due to
the absence of consideration
E.G. Deeds, Wills, Trusts
Simple contracts oral or written
Simple contract
Unilateral only one party under any obligation
Bilateral both parties have obligations

Contract and Agreement 5-010
Terms contracts and agreement are often used to mean the same thing
Traditional definition of a contract is a legally enforceable agreement that is legally binding
An agreement is NOT necessarily legally binding
An agreement is not necessarily a contract
An agreement becomes a contract when it becomes LEGALLY ENFORCEABLE

Essential Elements of a Contract1
1. Intention to enter into a legally binding contract
2. Agreement
a. Offer
b. Acceptance
3. Consideration (or price)
4. Legal capacity
5. Genuine consent
6. Legality of purpose
7. Any formal/procedural requirements that must be satisfied

The Offer: Rules in Relation to Offers
There must be:
1. A meeting of the minds showing intention or willingness to be bound
a. CASE: Clarke v Earl of Dunraven and Mount Earl2
i. When they entered a yacht race, each participant sent a letter to the club agreeing to be bound
by the clubs race rule showing a meeting of the minds
2. A firm promise between the promisor and promise
3. Communication of the offer (in writing, orally or by conduct)
a. The offer may be directed to one person, group or the world at large
i. Carlill v Carbolic Smoke Ball Co deposit of 1K showed intention and also that it was meant for
the world at large

Miscellaneous Rules Relating to Offers
1. Counter offer: a rejection of the original offer
a. Hyde v Wrench3 basically there was a counter offer and then the original price was brought up again
but there was no contract so no revival of offer
2. Invitations to treat: an offer to consider offers they cannot create an agreement

1

i.e. What makes an agreement legally enforceable

5-130
3
5-300
2

a. These must be distinguished from offers. How to do this?

b. Look at the intention of the parties & ASK: Is it an offer to consider an offer?
c. Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd 4
i. Invitation to treat: when you select goods from the shelf you are considering whether to make
an offer to purchase placing them there is an invitation
ii. Offer: at the time you go to pay
iii. Acceptance: when the cashier accepts payment
d. Statements that arent contracts? Auctions, advertisements, catalogues, price lists
3. Statements that are not offers?
a. Tenders unless the tender says otherwise acceptance of a tender will not necessarily result in a
binding contract
i. A tender is an offer to carry out work, and unless the tender states the exact needs it is not a
contract
ii. Spencer v Harding5 a tender made in response to a call for tenders is an offer but the
acceptance of a tender does not result in a binding contract unless the tender calls for the
supply of a definite quantity of goods or a specific service and this is agreed to
b. Requests for information not a firm promise therefore it is not an offer it oes not destroy the offer as
it is only an attempt to obtain information

Choice of action given an offer
Accept or reject the offer
Make a counter offer to effectively destroy the 1st offer
Ask for further information
Take no further action on the offer

The Acceptance
Rules in Relation to Acceptance
1. Acceptance must be made strictly in response to the offer
a. Case: R v Clarke6 A reward was offered however Clarke passed the prerequisites for the $1000 however
he did not accept the offer rather he wanted to be free
2. Acceptance must be communicated can be done either by words (expressed) or by conduct (implied)
a. Felthouse v Bindley7 a letter was sent stating if I hear no more than I consider the horse at such price
but silence is not sufficient acceptance
b. Empirnall Holdings Pty Ltd Machon Paull Partners Pty Ltd since a reasonable bystander would regard
Ps conduct (giving progress payments but having not signed something expressly) it is implied that Ds
offer had been accepted acceptance implied by conduct
c. Brogden v Metropolitan Railway Company8 again a document introducing new terms was unsigned no
acceptance however the conduct implied that there was (once again, by continual dealings)
3. Acceptance must be unqualified, absolute and unconditional or it may amount to a counter-offer 5-240
a. To make sure there is a meeting of the minds the acceptance must be unqualified in the sense that
there are no questions, with nothing further to be negotiated between parties
b. Accepting something by introducing a new term is a counter offer
c. Acceptance that contracts the terms of the offer = counter offer?
4. Conditional assent is NOT acceptance

4

5-180
5-200
6
5-230
7
5-310
8
5-270
5

a. Conditional/not-final assent is not binding unless and until the offeror agrees to the condition and this
condition has to e fulfilled as a prerequisite for a contract
b. There is a presumption that there is a contract if the parties are in full agreement are just waiting to sign
a written contract in the future
c. Masters v Cameron9 subject to the preparation of a formal contract of sale:
i. Parties agree fully and intend to be immediately bound by terms of agreement despite no formal
contract then contract exists
ii. Parties in full agreement on all terms and do not intend to change anything performance has
occurred it is a contract
iii. The parties explicitly do not intent to make a concluded contract unless formal docs arrive as
in this case
iv. Parties are bound by a contract so that neither party can delay performance of the contract
while waiting for signage
5. Acceptance must be clear and certain
a. Scammell and Nephew Ltd v Ouston10 ambiguity of the term hire purchase term no contract existed
b. The parties must be definite about the exact terms of their contract, and if the terms are not clear and
not certain there is no contract if the terms are still being negotiated
c. Trade usage terms may come to the rescue of parties to explain terms, words and standards as long as
they are commonly known and exist

Extra Rules for Agreement
1. The Postal Acceptance Rule
a. Where parties contemplate the use of the post as a medium of exchange of promises, the rules as to the
time of acceptance change as follows
b. An offer by letter is not effect until received by the offeree
c. Acceptance is effective as soon as it is posted
d. If the offer is to be revoked, notice (any way) of the cancellation must be received before the letter of
acceptance is posted
2. Instantaneous Communications
a. The Electronic Transactions Act 1999 provides guidance on times for receipt and dispatch
b. 5-335-The click indicates agreement by the acceptance of the terms and conditions clingwrap
agreement
c. Contract is formed when/where the offeror hears or receives the offerees acceptance
d. I.e. Looking at time of dispatch, time of receipt this is used to sort revocations, etc
e. A web display (even f it says special offer) is still an invitation to treat
f. Clicking I agree, buy, etc is counted as an offer it is not acceptance, because the seller can still choose
to say no
g. When terms are given before however, clicking the I agree means that there has been acceptance
h. Computers can automatically make contracts for you too
i. Typing a mistake is okay as long as you withdraw the mistake ASAP websites should therefore allow
correction of any input errors before a contract is made

Consideration
Something for something
The glue between offer and acceptance
The concept of VALUE it is more than just price (can be promises, acts, etc)
It is what the promisor gives in exchange for the return action from the promise

9

5-250
5-260

10

 Consideration turns an agreement into a contract

Failure of consideration can make an agreement unenforceable

Rules for Consideration
1. Consideration is essential to the validity of every simple contract
a. It may be something the promise gives the promisor
b. The carrying out of some act or
c. The refraining from doing something that the promise had a legal right to do
d. Dunlop Pneumatic Type Co Ltd v Selfridge and Co Ltd 5-405 Dunlop did not provide consideration for
the third party on not to discount = no contract
e. Coulls v Bagots Executor and Trustee Co Ltd the promise was joint and although one of them did not
provide consideration it was still enforceable
2. Consideration must not be past
a. Past consideration occurs where a promise is given after an act has been performed
b. This generally results in non-enforceability
c. If consideration is given BEFORE the contract is created (as in it had been performed e.g. you paid for it),
it is not good consideration
d. Roscorla v Thomas 5-410 P bought a horse and afterwards asked D for a promise that the horse was
good (D gave it) the horse was bad as Ds warranty was made afterwards, P had given no
consideration for it, as the buying of the horse was past consideration now it was used up it was not
enforceable unless new consideration was given
e. Past Consideration can be good consideration if it was provided at the request of the promisor and it can
be shown that
i. The act was done at the promisors request
ii. The parties understood that the act would be renumerated
iii. The promise would have been enforceable if it had been promised in advance of the act
iv. Re Caseys Patents - Lampleight v Braithwait 5-410 Patent owners offered their manager a
share of profits in consideration of earlier work that C had done when A was gone As
executors tried getting money off C because no consideration had been given this is because
when C was doing the work, it was implied that C would be paid later by A & B as agreed
f. Consideration must be:
i. Present (executed) consideration which is an act done now in return of r a promise when the act
is completed 5-430
ii. Future (executor) consideration where the parties agree to exchange promises to do something
in the future 5-420
3. Consideration must have value but need not be adequate
a. It must have a value but need not be adequate as this is something only the parties to the contract can
decide
b. Chappel & Co Ltd v Nestle Co Ltd - 5-440 something about three wrappers?
4. Consideration must be sufficient
a. Means that is must have some legal value (need not be adequate)
b. If not, it may be considered insufficient and no consideration at all
c. As long as consideration exists the courts will not be concerned about its adequacy
5. Consideration must be possible of performance
6. Consideration must be definite
7. Consideration must be legal
8. Consideration must be referable to the other partys promise
9. Practical benefit can be good consideration 5-470

a. Musumeci v Winadell Ptd Ltd Ds promise to reduce rent was a binding contract because the practical
benefit that P remained a viable tenant and the mall remained occupied was good consideration
b. Williams v Roffey Bros & Nicholls (Contractors) Ltd Williams fell into financial difficulty and it was
agreed with Roffey that they would raise the price on part basis. When Roffey failed to pay more of the
price, Williams stopped working. Roffeys promise to pay extra was enforceable it was supported by
consideration of P because of practical benefits (ensured that Williams continued working, avoiding a
penalty, saved expense of hiring others)

Insufficient Consideration
1. Moral Obligations as well as natural love and affection will NOT convert a promise into good consideration
a. Eastwood v Kenyon 5-471 Sarah married D who promised to reimburse P for what he had done over
the years (take care of Sarah) P failed to hold because he had given no consideration for Ds promise
moral obligation =/= good consideration
2. Part Payment is insufficient consideration
a. Part payment is not good consideration
b. UNLESS the creditor agrees to accept smaller amounts (or something In exchange) then a debt is
considered discharged
c. Pinnels Case; 5-480 P sued D for not paying back the full debt, but D said that P had accepted the
part payment with full satisfaction because D has not offered P consideration for enforcing Ps
previous promise not to sue then it =/= consideration (all he had done was make part payment of an
existing contract)
d. Foakes v Beer P tried to recover interest on the debt P could sue for interest because the payment of
the smaller sum was not consideration for P promise to take no further action against D

Consideration and Promissory Estoppel: The Exception to the Rule 5-485
Promissory estoppel11 will allow a promise to be enforced even though the promise has not provided good
consideration for that promise
It operates where it would be inequitable or unconscionable for the promisor not to be held to their promise
Basically it stops people from not going back on their word
1. Central London Property Trust Ltd v High Trees House Ltd
a. Due to WWII lack of renters so P reduced the rent (rented for 99 years). No good consideration was
provided. After the war P asked for the full amount. The courts held that P was estopped from
dishonouring the half rent agreement because P had acted on it. The High Trees Estoppel. Estopped
due to having acted upon it.
2. Legione v Hateley
a. No promissory estoppel. P asked solicitor D for extension. The secretary said I think thatll be all right
but Ill have to get instructions. Contract was terminated and P argued for estoppel of termination. But
there was none because:
i. The secretarys words were not clear and unequivocal (unambiguous)
ii. No actual representation or promise had been given to P to confirm that the settlement date
could be ignored
iii. Lack of authority to make any representation
iv. Therefore D righteously rescinded the contract when P did not pay on time
3. Waltons Stores (Interstate) Ltd v Maher
a. Waltons led on Maher to think that the deal would be completed to demolish an old building to replace
with a new one. The solicitors deliberately slowed down, and a contract was not exchanged. They kept

11

Promissory estoppel cuts in if the promise has relied on the promise and would suffer some detriment if the promisor went
back on the promise

making amendments to slow it down, but Maher assumed it was to proceed. When the building was
40% complete, Waltons bowed out. They were estopped from doing so.
The point of Promissory Estoppel?
The law will not permit an unconscionable or more accurately, unconscientious departure by one party
from the subject matter or an assumption which has been adopted by the other party as the basis of some
relationship which would operate to the other partys detriment if the assumption is not adhered to

Waltons Stores Ltd v Maher created a six point test for estoppel
Promisee (Maher = P) assumes existence of particular legal relationship
Promisor (Waltons = D) induced and is responsible for this assumption
Promisee acted/did not act in reliance on that assumption
Promisor knew what promisee would do or intended the promisee to act this way
Promisee will suffer loss or some detriment or harm if the assumption is not fulfilled
Promisor did not take any steps to warn promisee that assumption may not be fulfilled

Week 4 Contract Law Part 2
Intention, Terms of a Contract, Exclusion Clauses
Intention
There must be evidence that the parties INTENDED to make a legally enforceable contract
When there is expressly no intention (written) then subject to contract clauses it may be implied conversely in
the case of Masters v Cameron (that it was definitive that they would not contract until it was signed)
5-250 Masters v Cameron

Implied Intention
In the absence of expressed intention laws and courts may imply intention
The courts have to determine objectively whether the parties intended the agreement to be legally enforceable
Non commercial agreements three types
IT IS PRESUMED THAT NO INTENTION EXISTS
1. Social agreement friends and acquaintances
2. Domestic agreements ones made between family members and relatives 5-090
a. Where the husband and wife are living together at the time of the agreement, no intention exists
Balfour v Balfour (promise to pay maintenance costs)
b. Where the husband and wife are separated at the time of the agreement, intention exists Merritt v
Merritt the facts are distinguishable
i. Why? It was rebutted because of signage and the meeting of the minds. A husband
promised to pay for maintenance. Property was given to the wife.
c. There is no intention to create legal relations Cohen v Cohen
i. Agreement of dress allowance of 100 deemed domestic and no intention
d. Wakeling v Ripley professor and wife convinced to move to Australia under a domestic agreement
with an old man (he promised to give his house) but he later changed his mind and they sued for
breach of contract they won it was not a domestic agreement anymore because of the letters
and the economic seriousness that the plaintiffs had sacrificed
3. Voluntary agreements where the parties may volunteer their services 5-090
a. Such as where a person volunteers their services, the parties do not normally intend to create legal
relations
b. Teen Ranch Pty Ltd v Brown a volunteer at a camp is injured he could not sue for workers
compensation because there was no intention
c. Ermogenous v Greek Orthodox Community of SA Inc Archbishop could successfully rebut the
presumption that the appointment of a minister of religion is spiritual and not contractual he was

successful in claiming payment for annual leave and long service leave his relationship to the
community was more than an agreement
Commercial or business 5-060
PRESUMED INTENTION TO BE BOUND
The parties may agree that their agreement is binding in honour or in principle only
Advertisements tend to be invtitations to treat rather than showing intentions
1. Rose & Frank Company v JR Crompton & Bros Ltd Commercial business dealing setup there was an
arrangement that said that they do not want to contract together. They only wanted to be bound by
honour/principle the wording is wrong leading to a rebuttal there was an agreement but because of
wording no contract was formed
2. Carlill v Carbolic Smoke Ball Co intention was shown by deposited 1000 in the bank so the advertisement
was deemed to have intention
a. Carbolic case does not mean all promises in advertisements can lead to enforceable contracts the
advertisers intention to contract is what created the contract (otherwise, exaggerated promises in
advertisements do not mean anything)
Only in the absence of evidence are these assumptions placed evidence can prove otherwise
It is just a starting point the presumption is applied and can be rebutted by evidence

The Contract Terms and Representations
Terms and representations can tell us what the parties have agreed to
They can also tell us the extent of the rights and obligations that the parties have entered into
Contents of a contract can be classified into two categories
1. A representation
a. A non-contractual agreement
b. Made pre-contract during negotiations
c. Not intended to be legally binding
d. If they are false they are called misrepresentations
e. Oscar Chess Ltd v Williams a car dealer made a representation about the model of the car (the age) it
turned out to be a misrepresentation but there wasnt an issue because it wasnt the reason the plaintiff
bought the car
f. Bentley (Dick) Productions Ltd v Harold Smith (Motors) Ltd the mileage was wrong and the mileage did
go to the heart of the contract (the seller knew too?) therefore breach of contract
2. A term
a. Contractual statement
b. Intended to be legally binding
c. A breach of a term gives rise to an action for breach of contract
Term or representation? 6-020
1. Reliance of the innocent party on the misrepresentation does it go to the heart of the contract
2. Time period between representation and final agreement
3. Was the innocent party asked to check the statement
4. Was the statement later omitted when the contract was put in writing?
5. The intention behind making the representation to stop the party from finding defects?
6. Consider any special knowledge or skills of the person who made the representation

Parol Evidence Rule 6-015
Parol = oral or spoken
Parol evidence is unable to vary, contradict, add to or subtract from the words from a written document there
are exceptions (translations, ambiguity, etc)

If a contract is in writing and if the writing appears to contain the whole contract, it is presumed that the only
the writing contains all the terms of the contract meaning that parties cannot go beyond it later on to show
that a further point was omitted
Courts are generally reluctant to admit that the evidence of words, acts or representations made prior to
contract execution might add to, vary or contradict the written contract

Terms of the Contract
1. Express can be
a. Oral
b. Written or;
c. Oral and written
d. Makes it very obvious as to what the parties want
2. Implied can be by
a. Established custom
b. Prior dealings/prior conduct between the parties
c. Necessity for business efficacy
d. Statute; or
e. The courts
f. 5-270 Brogden v Metropolitan Railway Company D refused to supply coal the courts said the
contract came into the existence by conduct (the terms were implied by action)
g. Or Ermogenous example behaviour implied there was a contract

Statutory Implied Terms 6-140
Some statutes imply (Add) terms is not a contract which become part of the contract
These terms cannot be excluded in some circumstances where consumers are involved
Australian Consumer Law consumer guarantees, etc
Sales of Goods Act
Mercantile Law Act if parties have no agreed to interest rate, it is implied that it is 8%

Types of Terms 6-050 - 6-090
1. Condition
a. An essential terms going to the root of the contract
b. Allows the injured party the option of rescinding (ending) the contract and/or suing for damage
c. There can be condition precedents - > an agreement becomes a contract subject to finance
d. There can be conditions subsequent - > so long as supplies continue contract will end when supplies
run out
2. Warranty
a. A non-essential term of lesser importance
b. Allows the injured party only to recover damages (and requires continued performance of the contract)
Note: A breach of a condition can justify repudiation. A breach of warranty cannot.
Cases:
1. Bettini v Gye
a. Contractor required the singer to be there 6 days before the opening night for rehearsals. She arrived
four days late the promoter cancelled the contract it was held not to be a condition because it did
not go to the root of the contract. The main terms were to perform at the concert
2. Poussard v Spiers
a. The lead singer in a new opera was not able to appear for the opening night. The promoter could cancel
the opera or employ a substitute (either way, suffering loss). The failure on the singers part went to the
heart of the contract could sue for damage.

3. Gumland Property Holdings Pty Limited v Duffy Bros Fruit Market (Campbelltown) Pty Ltd parties had agreed
that paying rent on time was part of the contract contract was rightfully repudiated when the tenant fell
behind with the rent

Other Terminology for Terms
Uncertain Terms
If there have been prior dealings, courts may imply appropriate terms 6-150
Where there are no past dealings, courts may be forced to find contract void for uncertainty
With an uncertain term there is no real agreement
Meaningless Terms 6-160
If the term has no meaning, the courts will sever and if possible leave the rest of the contract valid
If this is not possible, the contract will be void for uncertainty
With a meaningless term there is something agreed but what does it mean?
Ambiguous Terms 6-170
If a term has more than one meaning, the contract will not necessarily be void for uncertainty, so long as the
term can be given a meaning
This is a matter of interpretation of the contract
Terms and Collateral Contracts
Collateral contract: a promise in the main contract that gives rise to a separate contract
This promise is NOT a term of the main contract it has an independent existence to the main contract
It co-exists side by side with the main contract
E.G. In consideration of the manufacturers promise that his product will do X you the customer will contract
with the retailer to buy it
Main contract: between you and the retailer
Collateral contract: manufacturers promise to the retailer

Changing the terms 6-250
Terms of an existing contact may be changed by:
Complete discharge of the existing contract and substituting the new contract
Leaving the existing contract in place but adding new terms or changing some of the terms this can only
happen by full agreement of the other parties

Week 5 Contract Law Part 3
Capacity, Privity, Vitiating Elements
Capacity
There is a presumption that everyone has full legal capacity
Evidence can imply a lack of capacity which will invalidate the contract
Examples of classes of persons subject to incapacity include: 5-510 to 5-570
Minors (over the age of 18?)
Mentally ill
Intoxicated
Corporations who is the actual mind of the company? Are you dealing with the right person? Who is the
appropriate authority

Consent
Is there genuine consent
Were they pressured to get into the contract?
Did they consent to what information they were given? Misrepresentation?

 There must be genuine agreement between the parties to a contract as to its nature and scope

Proper Form
Consider and ask whether there were any statutory procedural requirements that need to be satisfied
A lack of compliance with the required formalities may make the contract void or unenforceable

FIN ELEMENTS TO A VALID CONTRACT

Parties to the Contract
Privity of Contract 6-260
Privity means part of
Doctrine explains that -> Only a party to the contract will have rights under the contract
Similarly, the contract only imposes obligations on the parties to the contract
Beswick v Beswick12 - B agreed to sell business to A only if he agreed to employ B as a consultant and if A
continued to pay Mrs. C (Bs wife) money after B was gone C applied for specific performance but could only
claim as an admin of Bs estate and not in her own capacity (i.e. she did not get money that was directed to her)
this is because she could sue as Bs admin (a party to the contract) but not under herself because she was a
party to their contract
Exception? That is, a doctrine that is exempted from Privity? Agency
Agency says people that that are not in the contract can have party
Agent: a person who is authorised to enter into contracts on behalf of another person, called the principle
The contract is between the principle and the third party, and is generally not enforceable against the agent
The doctrine of Privity is not relevant in the agency situation
The legal relationship between one person, the AGENT (A) having authority to act, and having consented
to act on behalf of another person, the Principal (P) places the Principal in a contractual relationship with a
Third Party (TP)
This means that the principle can sue or be sued on a contract between their agent and a third party (the
agent i.e., can enforce and make contracts for you)
Examples: real estate agent, travel agent share broker

The Concept of Agency

The creation of agency:

By agreement (express or implied)
By operation of law under the doctrine of necessity
Retrospectively by ratification of the agents acts done on behalf of the principle but without prior grant of
authority (i.e. agent has done it already but the principle approves after it has happened)

12

6-260


TERMINATION OF A CONTRACT
Vitiating Elements
To vitiate means to corrupt, damage and reduce value
A vitiating factor operates to render a contract voidable or void retrospectively
Voidable: the contract will continue on foot unless the party elects to rescind (cancel) or avoid the contract
Void: void back to the moment of formation, as if it never existed (void ab initio)
Vitiating elements include:
1. Mistake it often renders a contract void ab initio places the parties in the same position as if no contract had
ever been made (voidable once there is misrepresentation not simply because of a small mistake)
a. Types of mistakes: 5-620 - 5-695
b. Common mistake both parties make the same mistake res extinct the parties are mutually excused
from performance of the contract
c. Mutual mistake parties are at cross-purposes they have both made a mistake but a different mistake
d. Unilateral mistake: only one of the parties is mistaken, and the other should or is aware of this and does
nothing to correct the mistake selling a painting you know is fake
2. In correct representations, or misrepresentations.
a. A representation is a statement of fact made by one party to another either before or at the time of
contracting relating to an existing fact or a past event, which induces the contract remedies for
misrepresentations include
i. Misrepresentation in contract can make contracts voidable, etc
ii. Misrepresentation in tort- give the representee the right to sue for damages for the tort of
negligence
iii. Misrepresentation legislation actionable under ACL if caused by unconscionable conduct, etc
b. There can be actionable (contractual) misrepresentations or non-contractual misrepresentations:
i. Non-contractual/mere misrepresentation: no remedy for breach of contract but there may be
remedies under other heads of law (ACL, tort, etc)
ii. Major misrepresentation actionable misrepresentation it allows the innocent party to
cancel or rescind the contract
1. Rescission of contract: turning the clock back - to reverse the contract so that each
party is restores to where it was before the contract was made obligations are relieved
and each recovers the benefits (does not cover damages which might flow from the
injury) typically an equitable remedy cannot rescind if parties cannot be restored
reasonably to their original positions
2. You cant rescind if your action after learning of the misrepresentation was bad
c. Fraudulent misrepresentation: intention to induce a person to enter into a contract
d. Innocent misrepresentation: misstatement of a material fact/lack of intentional deceit, etc
e. Negligent misrepresentation statement made innocently but carelessly
f. Australian Consumer Law, s18 of Competition & Consumer Act 2010 (Cth) can help for remedies
3. Illegal contracts contract will be illegal if they involve illegal conduct they can be illegal or void
a. By statute or at common law
b. Examples include contracts to commit a crime, immoral contracts, etc
4. Inequality between the parties due to:
a. Duress13: the use of violence or illegal threats against a person, their goods or economic interest to force
them to enter into a contract against their will
i. To the person to person, immediate family or relatives
ii. To goods wrongful threats to seize, damage or destroy goods

13

Physical violence and threats

iii. Economic duress pressure beyond normal acceptable commercial practice (stopping supplies,
etc)
b. Undue influence14: involves the improper use of a position of influence or power possessed by one
person over another in order to induce that other person to act for their benefit involves a lack of
genuine consent to the agreement
c. Unconscionable or Unfair Conduct15: the contract will be set aside as unconscionable where the
defendant has abused their superior bargaining position in their dealings with the plaintiff
i. Commercial Bank of Australia v Amadio:16 - the Amadios were misled into lending money
thinking that the sons company was in a good position it was not they did not understand
English and hence were misled (alsol, they were old) obviously, they were under a special
disadvantage
ii. Therefore, the plaintiff has to establish unconscionability by proving:
1. They were in a position of specific disadvantage
2. That it substantially affected their ability to protect themselves
3. The defendant knew, or ought to have known of the plaintiffs disability and should not
have taken advantage of it
iii. Examples of special disadvantage? Age, financial needs, illness, ignorance, inexperience, inability
of understanding of language, etc

Restraint of Trade Clauses
The law of restraint of trade makes contracts void if they limit freedom of contract its kind of like exclusive
dealing in consumer law you cant do this one youve contracted, et
Clauses in restraint of trade are found in
Contracts for employment
Contracts for the sale of business
Contracts between manufacturers and traders
Clauses in contracts in restraint of trade will generally be void as being contrary to public policy unless the
restraint is reasonable
What is reasonable is determined by:
Geographic extent
The time period involved
The nature of the business and the activity being restrained
Whether the restraint is reasonable, both in the interests of the party and the public

Week 6 Contract Law Part 4
Breach of Contract/Termination of Contract/Remedies for breach of contract

Classification of Contracts

Contracts classified by enforceability
Valid: a contract which the law will enforce
Voidable: the contract remains valid and binding unless and until it is repudiated (cancelled) by the injured party
Void: no legal rights or obligations from the outset (void ab initio)
Unenforceable: valid on its face but no legal action but no legal action can be brought on the contract, often
because of a procedural defect
Illegal: the purpose of the contract contravenes a statute or the common law, and generally treated as void

14

Misuse of influence or power

Conduct via misuse of bargaining power
16
5-730
15


Contracts Classified by Performance
Executed contracts: where both parties have completed their respective obligations at the time of making the
contract (i.e. performed)
Executory contract: relating to an agreement where one of the parties promises to do, or refrain from doing,
something in the future (i.e. yet to perform)

Breach of Contract
Termination of Contract
Types of breaches when one party
Completely fails to perform their obligations actual breach
Indicates that they do not intend to perform their obligations anticipatory breach
Then the other party is entitled to terminate the contract
Breach of contracts may be either
Total breach: where one of the parties does not perform the contract at all
Partial breach: where one of the parties does not perform the full requirements of the contract
A contract may be terminated or discharged17:
1. By performance contract usually ends when each party has performed its contractual obligations
a. Obligations under a contract must be performed exactly
b. Near good is not good enough -> if you only perform part under a divisible contract -> sue for partial
breach
c. In re Moore & Co Ltd and Landauer & Co fruits were sent in boxes of 24 than 30 buyer can refuse
to accept and can reject the goods
d. Sumpter v Hedges A builder partially built a house but ran out of money and claimed for partial
completion since it was a lump sum (non-divisible) contract he could not recover it under a
quantum meruit (pro rata payment)
e. Entire v Divisible Contracts if the contract is to be delivered by instalments which are to be
separately paid for, then the terms of the contract will show whether the breach is a repudiation of
the whole contract OR whether the breach is severable (i.e. if the breach is a partial breach and not
a total breach) i.e. depends on the terms
2. By agreement contractual obligations can be discharged by agreement between the parties
3. By operation of law (e.g. bankruptcy, mergers)
4. By lapse of time when contract stipulates a time period after which it will expire and parties allow this
time to lapse or expire18
a. Time of the essence performance of the contract must take place in the time specific or within a
reasonable time if no time is specified it can also be implied in commercial contracts
b. If performance at certain times is essential, the contract may contain a time of the essence clause
c. If there is not a time off the essence clause, sending a notice will suffice (give them reasonable time
though)
d. Non-compliance will become a breach
5. By frustration after formation of the contract something unexpected happens that makes performance
impossible!
a. Codelfa Constructions Pty Ltd v State Railway Authority Codelfa was granted frustration of contract.
They had to excavate tunnels, making a lot of noise in the process. The community made them

17

6-280 to 6-350
Statutes of Limitation: protect a person from being forced to defend a case after a certain of years (i.e. it become statute
barred) the period of limitation begins to run as soon as a cause of action arises (so when the first breach of contract occurs)
usually around 6 years (or 12 for formal contracts like mortgages) 6-500
18

refrain from night work. This made it impossible to complete something at a certain time. Frustrated
contract.
b. Ooh! Media Roadside Pty Ltd v Diamond Wheels Pty Ltd Building owner entered into a contract to
let a media company use a sign on the roof for advertising. Revenue fell when another building was
made that obscure the sign. Ooh! Tried claiming for frustration (they tried ending the contract early)
The reduction in visibility was not frustration as performance of the contract had not become
fundamentally or radically different. The new building did affect the site, but was not unsuitable for
advertising.

Remedies
1. Common Law
a. Termination of the contract
b. Damages
2. Equity 19
a. Rescission
b. Restitution
c. Rectification
d. Specific Performance
e. Injunctions
3. And some Australian Consumer Law remedies

Damages
Every breach of contract gives the innocent party a right to claim damages
Aim of damages is
The main purpose of damages is to enable the innocent party to receive (monetary) compensation for injury or
loss suffered because of the breach
Damages are calculated on the basis of looking at what the position of the plaintiff would have been if the
contract had been properly performed
The key issues are causation & remoteness 6-500
Hadley v Baxendale Hadley, a miller operated a mill that contained a crankshaft it broke and he went to
Baxendale to take the crankshaft to the manufacturer to get it fixed. D promised to deliver it the next day
and he ended up taking a break, etc and the crankshaft was delivered late. D was negligent, but because the
only thing he knew was that there was a broken shaft and he did not know it would cause such trouble. It
was also reasonably assumed that a miller would have a spare crankshaft at hand. D won no damage.
Causation is there a causal connection between the breach and the loss suffered? The plaintiff must show that
the breach of contract by the defendant was the cause of the loss
The plaintiff may not be able to recover if an additional factor unconnected with the defendants breach
breaks the causal chain between the defendants action and the plaintiffs loss or damage e.g. H v B P
failed to give additional factor to break causation
Remoteness: compensation will NOT be awarded for damages that are too remote
ASK: Is the loss suffered by the injured party a usual and reasonably direct consequence of the breach of
contract?
The only types of losses that can be claimed are those that:
Flow naturally from the breach of contract
Are special losses20 made known to the defendant when the contract was made
Damages for special losses cannot be awarded unless:

19

Branch of the common law courts

Victoria Laundry Ltd v Newman Industries (normal profits only, no supernormal profits)

20

The plaintiff made known the special circumstances to the defendant at the time the contract was
made
If so, the defendant will be taken to have accepted the risk by default
Victoria Laundry Ltd v Newman Industries

Amount of Damages
Damages are recoverable for provable or economic loss as well as : 6-460
Distress and disappointment
Upset/anxiety
Discomfort
Mental distress
Mitigation of Damages
The innocent party has a duty to take reasonable steps to minimise/mitigate their loss failure to do so can
result in a reduction of damages
Mitigation is a question of loss
The onus of proof is on the defendant to show that the innocent party did nothing to mitigate their loss
Payzu v Saunders 6-480 P cannot recover for losses that could have been reasonable avoided

Types of Damages 6-450
The type of damages that will be awarded will be determined by the seriousness of the breach and whether the
contract has specifies the amount of damages to be paid in the event of a breach
General damages: compensation for loss suffered by the plaintiff as a result of the breach
Nominal damages: defendant breached contract but plaintiff has not suffered any actual loss
Exemplary damages: punitive and may be awarded for non-economic loss
Liquidated damages: plaintiff is able to sue for a specific sum
Unliquidated damages: awarded where an injured party has no fixed sum in mind and leaves the court to
decide
Penalties: only enforceable if the amount is a genuine pre-estimate of the loss from the breach of contract
they cannot be extravagant or unconscionable cannot be used to intimidate or apply pressure and must be
transparent (based on clear and reasonable criterion

Equitable Remedies The court, in its equitable jurisdiction may order;
Restitution: the court orders the return of property or the payment of money that the person had unjustly
received from the plaintiff
Based on the concept of some UNJUST enrichment (someone has benefitted at the expense of someone else
and it would be unjust to allow that person to keep the benefit)
Can be used where there has been
A mistake of fact or of law
Duress
Some element of compulsion
The defendant must establish that:
1. D obtained a benefit or enrichment
2. This benefit was at the plaintiffs expense
3. It would be unjust to allow the defendant to keep the benefit
4. The defendant has no defences (such as estoppel, incapacity, illegality) to rely on
Rescission21: setting aside an agreement and restoring parties to their pre-contractual agreements
Involves termination by right

21212121

6-280

 Is a court order setting aside contract, to restore parties to pre-contractual position

May be granted because of mistake, misrepresentation, undue influence, duress, etc
Rectification22: the court corrects a written document
Court order requiring correction of mistake/error to bring document in line with correct agreement between
parties
E.G Trying to rectify an agreement for rent because by mistake you had forgot to put down terms that had
been agreed upon (must be proof that they intended to have such terms)
To rectify is to adjust as though it actually happened correcting a document to what it should be so one
party cannot deny existence of it because it is not expressly written
Specific Performance: court order requiring a party to specifically perform to their contractual obligations
Injunction: court order prohibiting a party from doing something or requiring or compelling a party to do
something
Lumley v Wagner A singer was contracted and was not meant to sing anywhere else she did the court
awarded Lumley an injunction the singer could not sing anywhere else
Curro v Beyond Production Pty Ltd an injunction was granted to Channel 7 to prevent presenter Curro from
breaching her service by going to Channel 9
Network Ten Ptd Ltd v Rowe Channel 10 could not get an injunction her contract had ended and there
was no serious damage
These are discretionary remedies at equity and are only granted where damages are not an adequate remedy

22

5-695 Cermak v Ruth