LAWS1000 Chapter Notes - Chapter 9: Collateral Contract, Specific Performance, Australian Consumer Law
Document Summary
The courts recognise that a statement may not be a term of the main contract but, equally, that it was seriously made and that without it the main contract would probably not have come into being. In such cases, the promise is collateral to the main contract and, if the necessary pre-conditions are fulfilled, it may be enforceable as a contract in its own right. The consideration for this related or collateral contract, if it exists, is the entering into of the main contract by the person to whom the statement was made. Two requirements must be fulfilled to establish the existence of a valid and binding contract: The representor must have intended the promise to be legally binding. The representee must have entered into the main contract on the basis of the statement and in reliance on it. De lassalle v guildford [1901] 2 kb 215.
