LLB170 Final: Scaffold for Answering Exam Questions
1. Is there a contract?
2. What are the express terms? (week 1 & 2)
3. Is it a written contract? (week 1 & 2)
- Presumption that all relevant terms have been included
- Priority is given to the written contract
- Is the contract signed? (L’Estrange)
- Can the signature be avoided? → misrepresentation, non-contractual documents
4. Is there more to the contract? (week 1 & 2)
- Incorporation of terms by notice (Oceanic Sun Line) OR by course of dealings
(Balmain New Ferry)
- Are the terms unusual? (Baltic Shipping Co)
- Statements made in negotiations (SRA v Heath) → look at how to determine if a
pre-contractual statement is a term
- Is there an entire agreement clause?
- Does the parole evidence rule apply? Is it excluded? Circumstances where it
DOESN’T apply:
▪ Part oral/part written → if the contract looks like it is missing something,
if it looks like there would be more added (SRA v Heath; Equuscorp)
▪ Collateral → pre-contractual statement actually formed the basis of a
contract separate to the written contract. Must be promissory,
inducement and not contradictory. No new consideration (Esso v
Commissioner for Customs; Shepperd v Ryde Council)
Cannot be inconsistent with written contract (Hoyts v Spencer)
▪ Estoppel → the pre contractual statement provides the foundation for an
estoppel → promise was made, cant go back on promise, inducement,
reliance, detriment (Saleh v Roumanous)
▪ Consumer protection
- If it DOESN’T apply:
▪ What extrinsic material can be taken into account?
▪ What material cannot be taken into account?
▪ ‘The golden rule’ → grammatical and ordinary meaning OR breaking the
golden rule?
If terms are found to be part of the contract, they can be breached
When is a statement a term of the contract?
When there are problems with the parol evidence rule, a party can show that a statement made in negotiations
forms part of the contract.
Two requirements:
1. Whether extrinsic evidence of a term supplementing a written contract can be admitted
2. Whether that evidence establishes the existence of the term being alleged
• Oral term → statement must have been intended by the party to be a promise
• Intention judged objectively → court assesses whether or not a person in the circumstances of the
parties would reasonably have considered the statement a contractual promise (Oscar Chess v Williams)
5. Is the contract missing terms? (week 3)
- When will terms be implied?
▪ Implied in law
Terms apply to all contracts of a particular class or description
Based not on intentions but policy
Relevant questions:
1) Is this type of contract one in which a particular term is always
implied?
2) Has the term been excluded by the parties in their contract?
Test of ‘necessity’ → parties significantly diminished without the
implied term (Liverpool CC v Irwin; Breen v Williams)
▪ Implied by custom
Where the custom is “well known and acquiesced in”; then
“everyone making a contract in that situation can reasonably be
presumed to have imported that term into the contract”
Principles in Con-Stan
▪ Implied in fact
Said to be “presumed” intentions
Unique to contract in question
Is the contract formal? (written) → BP Refinery test
Informal (oral or part/oral/part written) → terms must be (1)
necessary for the operation of the contract and (2) ‘so obvious
that it goes without saying’
- On what basis should terms be implied?
▪ “policy” or “necessity”
▪ promise and consent theories
If terms can be implied, they can be breached
6. Are the terms protected by Consumer Guarantees? (week 3)
- Australian Consumer Law → supply of goods and services to consumers
- Consumer Guarantee Law
- Cannot be excluded, restricted or modified
- Who is a consumer?
- What guarantees are protected?
- Exclusions?
- What remedies are available?
If terms are protected, they can be breached
7. Has the contract been frustrated? (week 4)
- What will amount to a frustrating event?
1. Event must have a ‘substantial impact’ → examples:
▪ Destruction of subject matter (Taylor v Caldwell)
▪ Disappearance of a state of affairs essential to performance (Compare
Tsakiroglou v Noblee; Davis Contractors; Codelfa)
▪ Disappearance of the basis of the contract (Krell v Henry; BCC v Group
Projects; Scanlan’s New Neon Ltd v Tooheys)
▪ Change in the law (Gamerco v ICM; Fibrosa v Spolka)
▪ Delay
▪ Death or incapacity of a party
2. Event must occur after contract formed
3. Risk of event not provided for by contract
4. Event must occur without fault of party seeking to rely on it
5. Event not reasonably foreseeable
See Codelfa; Brisbane CC v Group Pro
- Is the doctrine limited?
▪ Express provision in the contract
▪ Foreseen events
▪ Fault and self-induced frustration
- What are the consequences of frustration? → common law and statutory
Determining Frustration:
1. Purpose of the contract
- Was the continued existence of person or thing a condition without which the contract is impossible to
perform
- Look at the substance, terms, inferences of the surrounding circumstances
2. Frustration
- Event cannot have been reasonably in the contemplation of the parties
- Was performance prevented?
3. Fundamentally different situation
- Compared to what was contracted – to what occurred
4. Not foreseen or reasonably foreseen
- Contract does not provide for the risk
- Party claiming frustration cannot be at fault
Common Law Recovery
1. Look to express terms of contract
2. Leave the losses where they fall
3. There is a total failure of consideration
4. Is the contract divisible? If so, pay for what has been performed
5. Has the contract been fully performed? If so, full payment
Document Summary
Is there a contract, what are the express terms? (week 1 & 2, is it a written contract? (week 1 & 2) Presumption that all relevant terms have been included. Priority is given to the written contract. Misrepresentation, non-contractual documents: is there more to the contract? (week 1 & 2) Incorporation of terms by notice (oceanic sun line) or by course of dealings (balmain new ferry) Are the terms unusual? (baltic shipping co) Statements made in negotiations (sra v heath) look at how to determine if a pre-contractual statement is a term. When there are problems with the parol evidence rule, a party can show that a statement made in negotiations forms part of the contract. Intention judged objectively court assesses whether or not a person in the circumstances of the parties would reasonably have considered the statement a contractual promise (oscar chess v williams)
