Professional Documents
Culture Documents
Standing in the shows of the offeree, would that person really have
understood the offer within the definition described.
The use of the word offer and acceptance is insufficient make it a legally viable.
o A says to B, will you do this for $4? What constitutes the it (a contract to buy a
coffee, clothes, house, space ship). Depends, to a certain extent, to what you are
negotiating about.
Presumptions: There are certain situations where there exists a presumption.
Auction: Is the offer made 1. By the seller when they advertise the option. 2. By the
buyer when they make a bid or 3. When the auctioneer bangs the hammer.
o Usually when a buyer makes an offer during step 2 (the bid).
o Consider the legal test (Finality), was the seller willing to negotiate further? Seller
says make an offer and I will negotiate whether it is an acceptable price.
Judges were unanimous in regarding the advertisement as an offer. Advertisement = a
unilateral contract (a promise in return for an act) and plaintiffs acceptance occurred by
the plaintiffs conduct without any direct contact with the company prior to her lodging
the claim for 100 pounds.
Advertisment states that 1000 pounds had already been deposited
Invitation to Treat: That statement is not an offer, but is instead, an invitation.
o Tenders: A process (often conducted by governments and large companies) when
goods and services are needed. Government makes an offer for a new fighter
plane and suppliers compete for the contract and make offers. This is merely an
invitation to treat.
Withdrawal: Withdrawing an offer before there is acceptance.
o Online Purchases: Withdrawing offers from online purchases. There is no contract
until the end of the auction. The seller has the power of acceptance and can
withdrawal the offer before the end of the auction.
Ebay has T & C that state it is not an auctioneer, instead, it merely acts as
an online venue to allow members to offer, sell and buy using an auctionstyle format?
Generally speaking, listing items in an advertisement (bait advertising),
brochure is not an offer. It is instead, an invitation to treat.
Offeree manifesting their consent to the terms of the offered by the offeror.
1. Only an offeree can accept an offer.
2. Acceptance must match precisely the offer. Accept the precise terms.
Machine Company? Sellers?
Seller put forward a letter on certain terms These terms will prevail over any later
correspondence.
Buyer agrees to terms and writes Please sign and return to signal acceptance.
Two approaches to this case:
Charity controlling reward: You didnt even know that the reward existed when you
found the cure, therefore we do not give you the reward.
o Law when a person doesnt act in response to an offer, they must be intending to
accept the offer by performing the act.
R v Clarke (1927) 40 CLR 227 3-34:
o Clarke gave evidence to police that led to successful conviction. Led to reward.
o At the time Clarke gave info, he was not responding to reward, principle desire
was to exonerate himself.
o Is Clarke entitled to the reward given these circumstances?
In order to accept the offer, the offeree must be acting pursuant or on the
faith of or upon reliance on the offer. Act is responsive partly replying on
or partly in an attempt to activate the offer made.
There exists a legal presumption: court will presume that by doing the act
with knowledge of the offer, the court will presume that it was a response
to the act.
Held Clarke was not acting pursuant or reliance on the offer for reward.
Principle concern was to save his own skin.
Can make an offer and revoke the offer prior to any time before acceptance.
Dickinson v Dodds (1876): Revocation can occur at any time prior to acceptance of offer.
o Dodds made an offer to Dickinson to sell a property. Dodds said I will keep offer
till 9am till Friday. Dickinson finds that Dodds is selling house to someone else.
Dodds finds Dickinson and writes an acceptance only to find out that house is
already sell.
o Was there a contract formed and binding when Dickinson gave acceptance to
Dodds?
Although Dodds said he would keep offer open, an offeror is not obliged
to honour the statement. Can retract at any time. Has no binding legal
effects.
How was the offer revoked? Revoked by the third person telling Dickinson
about Dodds other intentions. Therefore notices of revocation can come
from a 3rd person.
No specific formula for revocation.
o Consider shortcomings of the case:
1. No discussion whether the 3rd party was a reputable source. May not
have been sanctioned by offeror.
2. Did the seller really believe the deal was off? (? Not sure about this?)
(a) Generally
Uncertainty Unable to give parties language a sufficiently precise and clear meaning in
order to identify scope of rights and obligations agreed to. Differs from ambiguity. If no
meaning can be attributed to a certain clause/term uncertain.
Distinction between a term of a contract that is ambiguous and uncertain.
Upper Hunter County District Council v Australian Chilling Freezing Co Ltd (1968)
4-06
The lease is to be upon such reasonable terms as commonly govern such a lease
Therefore becomes necessary to determine whether the condition is severable from the
rest of the provision of the contract or whether the whole contract fails.
o When a contract contains a number of number of stipulations one of which is void
for uncertainty whether contract is void depends on the intention of the parties
to be gathered from the whole contract. If the contract is dividable, clause which is
void may be separated and it does not affect the contracts validity.
o Contract to sell land. Contract stipulated that part of land had to be leased to Shell.
However, there was an uncertain clause about the lease stating that the buyer had
to give Shell a lease for that part of land on such reasonable terms as commonly
governed such a lease. Clause was uncertain (lacked content) as there was no
standard lease which such a lease could be compared (it was not ambiguous
because there was no meanings at all).
Does the uncertainty of the clause affect the rest of the contract?
Severance: Process of assessing severance.
Must figure out what the parties have intended. Would the parties
have intended the contract still exist even in the absence of the
uncertain term?
If the parties intention was to continue, uncertainty is severed and
the rest of the contract plays through.
Not what parties intended term is not severable Entire
agreement fails no contract.
Lecture 3
Finding a lost dog on the promise of $100 conditional promise. There is no binding
offer and acceptance until a party performs the act of finding the dog and returning it and
claiming the reward (= a contract)
o Promise + Act = unilateral contract
(difference) Owner promises to pay fee and then you promise to find dog.
o Promise + Promise= bilateral contract
3 conditional elements (for contract formation)
1. Condition precedent to contract (CP) unless and until that contract is satisfied, there
is no contract (party can pull out any time).
o Enter a contract to purchase a car, there is a condition precedent that the car must
be registered.
Consideration
Definition: An act or forbearance or the promise thereof that is provided to purchase
another persons promise or act.
o Necessary element in creating a legally enforceable contract.
Law does not enforce all promises that people make, only makes selects a few promises
to enforce.
o Consider whether there was an exchange or bargain reached when the promise
was given. Law will enforce bargained for promises, but not gratuitous
promises.
E.g. if you do well in the HSC, I will buy you a guitar as a reward. Are
these contractual promises that the law can enforce? (Law only enforces
promises that are bargained for).
o Are these contracts enforceable?
E.g. I promises on Friday I will give you me iPad.
E.g. If you get a D average in law I will give you an iPad.
E.g. If youI will give you an iPad.
o Dog reward example:
Member of the pubic provides consideration Consideration is the act of
finding the dog.
Owners consideration is the promise of reward.???
Bilateral Contract: Investigator provides consideration by promising to find the
dog.???What is the consideration of the owner?
Is there a consideration in return for the other sides consideration.
Impossible to hold that any contract was constituted at any stage binding
the Commonwealth to pay a subsidy to the plaintiff in consideration of a
purchase of wool for local manufacture.
Only promises which have been purchased may be enforced. A promise
not supported by consideration is a gratuitous promise not enforceable by
contract.
o High court considered it a case of consideration. Was there a matching
consideration between gov and what woollen mills did.
Must take a look at bargain.
Consideration to give wool for gun?
HC found that gov was not actually trying to purchase/buy wool. No
exchange or bargain b/w the two departments.
When you arrive in Sydney tomorrow, I will pay you $1,000 With only that
knowledge it is not a contract. There is no contract as there is no possible pri quo, no
enough prior infor??
o 1. You borrow $1000 forum your friend now come to see you. (No bargain, just a
statement)
o 2. Person is a good friend, they come to visit you for your bday (Just a gift,
gratuitous promise).
o 3. Friend comes to fix your macbook, would not come to Sydney otherwise
[elements of bargain + contract].
Benefit from getting macbook.
Detriment for friend to come over to Sydney.
Is it necessary to show a benefit to another party?
o I ask you to support a charity. I will sing a song and you pay money to charity
Binding contract as there I an exchange of consieraiton.
(My consideration is to perform song)
(your consideration is to pay money)
Carlill v Carbolic
o Carlill consideration = 1. She uses the smokeball, others follow and therefore it is
marketed. 2. It is enough that Carlill suffered a detriment when fulfilling contract
as she had to snif ball (she didnt have to somke it, but she did).
Sometimes there are contracts to multiple people.
o E.g. With a group of friends, busker says they will sing song for $5, 1 person
gives money. not binding contract as not everyone had consideration.
o E.g. Agree to pay KISS to sing a song, only Paul sings. Q: What happens if you
give a promise to multiple people? Band is a joint-promisee it is enough that
only one person gives consideration to form a binding contract.
Quarry land case Hed wife does not need to do anything more, dead
husband already gave consideration, that is sufficient.
Value of Consideration
Consideration need not be sufficient, but only needs to be adequate.
Law does not look into whether it is a fair deal. Only interested in whether it is
technically correct.
However, this leads to absurdities.
o Nestle v Chuckle Music (Rockin shoes)
Was the consideration the x shillings and chocolate wrappers or were the
chocolate wrappers just for eligibility.
Argued wrappers are worthless, not necessary.
Held wrapper was consideration as owner had detriment in
parting with wrapper.
Past Consideration
What you have done in the past does not constitute consideration.
What you do in response to a consideration = a promise??
o B finds As dog. A, I will pay you $1,000 tomorrow. A does not pay.
There is no contract as there is no consideration. At first, there was
consideration, but when B asks for money there is no contract.
o A puts sign reward for finding dog. B finds dog and says pay me $1,000 =
binding contract that matches up with promise.
When I first performed those services, t was understood that there wuld be renumeration
for those serices (sm is not discussed, but is implicit). You are beneficiary, I promse to
pay you x dollars. How to use these 2 arguments?
o 1. Paying x sum is reasonable amount.
o 2. When you nominated a sum later, that is evidence of what a reasonable sum is.
???????? WTF???
REA CASIES PATENTS CASE
Illusory Consideration
Parties can make contracts that have substance superficially, but they are so
discretionary that in reality they promise little.
o X engaged in exporting goods, Gov promised to pay a subsidy to the
company. Subsidy described of an amount or at a rate as determined by the
gov from time to time. Gov ended up reneging from the promise.
o Does the contract have any content?
o HCA (majority) Contract lacks content, can we fill in the gaps? Courts
could not fill the gaps
Can gov just pay a reasonable sum?
Does not necessarily mean the court will provide a n objectionably
reasonable price.
Difficult to give a value to the subsidy.
o HCA (minority) Gov should have at least fulfilled its promise. Should have
made an attempt to make a value etc.
Meehan Jones
3. I agree to buy land provided I have satisfactory finance
o Held It is not true to state that it was at the purchasers absolute discretion.
The small promise of acting honestly/reasonably saves the contract??
o If there is variation, change must make way for a new, additional contract. What
has changed in the new contract (for both parties)? Are they doing what they
already obligated to do?
Pay to get car fixed for $300. Repair car Mechanic finds it took more
labour changes price to $400 or else he will not replace. Price change,
mechanic did what they were already obliged.
Underperformance: There is a change in contract. One party does what they were already
obliged to do, the other underperforms. Is the 2nd contract binding?
o If you promise or under promise what you are already obliged to do not good
consideration, new contract is not binding.
If someone asks for more money for the same service/promise, the new
contract is not binding.
CASE: Stilk v Myrick
Defendant has reason to expect that if its bid proved the lowest it would be used by
plaintiff. This induced actionof a definite and substantial character on the part of the
promise.
Reasonable reliance holds the offeror in lieu of consideration ordinarily required to make
the offer binding.
Issues
1.
2.
Yes. An offer that the promissor should reasonably expect to induce action or forbearance of a
definite and substantial character by the promisee, and which does induce such action or
forbearance, is binding if injustice can be avoided only by enforcing the promise. See Restatement
(2d) of Contracts 90.
The court turned to Restatement (2d) of Contracts 45; merely acting in justifiable reliance on a unilateral
offer is sufficient to make that offer irrevocable for a reasonable period of time to complete performance.
Public Policy
o E.g. Plaintiff wants to sue the commonwealth, but believe that Cth will raise
statute of limitations. Cth ok sue us, but come case, cth raise statute of limitations
Plaintiff states estoppel
Hold the promise for everything i.e. compensation and suing.
Hold the promise in a more limited state, only compensate plaintiff for
waste in legal costs.
HCA STATES MINIMUM EQUITY remedy for estoppel. Do as
little as possible to undo the harm that the plaintiff has suffered.
o Jimmely v jimmely: proprietary estoppel (land). Family dispute.
Either make promise come true = Give son compensation for house on
land.
Reliance loss = money for building house on land or money lost for
foresaking jobs.
Estoppel summary
Can I use contractual solutions to solve problem? Incompleteness etc.
If you pursue estoppel, Must fulfil elements of what type of estoppel? (Is it 1, 2 or 3)
What is the x factor (e.g. unconscionability)
What type of remedy?
o Simply compensate for minimum equity.
o Hold them to their promise.
Lecture new
Contract dealing with land
Note and memorandum.
o Popu and Popu Case
o Wife left the husband, husband promised her half share of the house
Husband say: consideration argument, Half share of the house (tha is a
disposition of the land) you need it in writing which wife does not have
Therefore, there is no contract.
Person can give written evidence. Mr, Popu wrote evidence and described
did not give an open memorandum but you did sign a document
saying that you will give evidence = written memoranda.
What you can look at as an issue
o A writes to B Im interested in buying property B writes to A, I will pay for
this price A writes to A etc. etc.
No single document tells the whole picture. However, can aggregate
documents. Each document must at least refer to a prior letter (e.g. Refer
to prior letter = suggests that there were past documents).
How much of an agreement must be in writing? All of the essential terms must be in
writing.
o E.g. Period v Saunders Essential term was not in document. Was not described
in sufficient detail.
Oral Variations
You have a contract in writing for selling hosue for 1 million. Orally agree to change
contract for 1.5milllion Have already agreed to a contract, but the variation is oral.
o Oral part of the agreement is unenforceable. Written part continues on.
Orally agreeing to end a written contract
o In thi ase, ending/rescinding the contract and can, by oral agreement, end a written
contract. Cannot have an oral change for a written contract.
Morris v Baron: In 1914 contract, M sells goods to B. 1915: Enter a new
contract that a) agrees to settle dispute in relation to1914 contract, b) nw
agreement M will supply rest of goods to B [Provided in letter signed by
B].
M sues B [over 1914 agreement].
B sues M [over 1914 + 1915 agreement].
o Can B sue M over the 1915 agreement? NO. Only B signed
letter. If B wants to sue, B must hold a document that M has
signed.
o Can B sue M over 1914 agreement? Apply the variation
rule 1915 does not work, 1914 does work. [Another pov,
1915 cancels out 1914 degree].
Buyer inquires about what engine goes fast? Seller says using this engine,
boat goes at 15mph. Buyer buys boat with that particular engine boat is
too slow buyer sues.
Held Buyer failed. Seller did draw buyer in, but seller stated that
estimated speed was 15mph. This is different from seller saying I
promise/guarantee that boat will go at 15mph. On the facts, it was not
guaranteed.
Collateral contract cannot have a conflict b/w collateral contract and Main contract. If
there is, MAIN CONTRACT PREVAILS over collateral.
o Spencer Case
Estoppel can be used to solve collateral contracts. (Use sparingly)
o
Trend, there is a main contract then other promies about the quality.