Table of Contents
CONTRACTS
LAWS1075
NOTES
,Ivan Brcic
Z5115185
, Contracts –
LAWS1075
Identifying the Express Terms..............................................................................................................6
1. Terms and the Communications of the Parties.....................................................................................6
2. Written Terms and the effect of signature (signed contract)................................................................6
Effect of signature binds party.......................................................................................................................................6
Circumstances in which the effect of signature may be avoided................................................................................10
3. Incorporation of Terms by Notice (unsigned contract).......................................................................10
Timing..........................................................................................................................................................................10
Knowledge or Notice...................................................................................................................................................11
Unusual Terms.............................................................................................................................................................13
4. Incorporation by Course of Dealing.....................................................................................................13
Class Notes...................................................................................................................................................................15
5. Statements made during negotiations................................................................................................15
Entire Contract Clauses Wholly in Writing..................................................................................................................15
Parol Evidence Rule.....................................................................................................................................................15
Contracts that are Partly in Writing.............................................................................................................................16
Corbin on Contracts (Liberal Approach) (1950)......................................................................................................16
Strict vs Liberal Approach to the Parol Evidence Rule............................................................................................16
Exceptions to the parol evidence rule in identifying terms.........................................................................................17
Collateral contracts.................................................................................................................................................17
Requirements for establishing a collateral contract...............................................................................................18
Estoppel.......................................................................................................................................................................19
6. When is a statement a term of a contract...........................................................................................20
Warranty vs Condition.................................................................................................................................................22
Breach..........................................................................................................................................................................23
Construing the Express Terms............................................................................................................23
1. Construction.........................................................................................................................................23
2. Extrinsic Evidence in Constructing a Contract.....................................................................................24
Evidence Excluded.......................................................................................................................................................24
Evidence of the surrounding circumstances...............................................................................................................24
Commercial Circumstances.........................................................................................................................................24
3. The Process of Construction................................................................................................................26
Exclusion Clauses.........................................................................................................................................................28
The Common Law approach to exclusion clauses.......................................................................................................28
Ordinary principles of construction and contra proferentem.....................................................................................30
Negligence...................................................................................................................................................................30
Implied Terms.....................................................................................................................................31
When will terms be implied?.......................................................................................................................31
1. Terms implied in fact...........................................................................................................................31
BP Refinery..............................................................................................................................................................31
Conditions for a term to be implied............................................................................................................................31
1
, Contracts –
LAWS1075
2. Terms Implied in Law...........................................................................................................................32
Requirements for implying terms in law for the first time?........................................................................................33
The test of necessity....................................................................................................................................................33
3. Terms Implied by Custom....................................................................................................................33
Australian Consumer Law...................................................................................................................36
The Australian Consumer Law: An Overview..............................................................................................36
Introduction.................................................................................................................................................................36
Background to the legislative scheme.........................................................................................................................36
Commonwealth.......................................................................................................................................................36
States and Territories..............................................................................................................................................36
Overview of the ACL - INCOMPLETE............................................................................................................................36
Part 2-1: Misleading and Deceptive Conduct..........................................................................................................36
Frustration...........................................................................................................................................37
Frustration as an excuse for non-performance...........................................................................................37
When is a contract frustrated?....................................................................................................................37
The test for frustration................................................................................................................................................37
Test..........................................................................................................................................................................37
Examples..................................................................................................................................................................37
Illustrations..................................................................................................................................................................37
Destruction of Subject Matter (destroy the basis of the contract).............................................................................38
Disappearance of the foundation of the contract (the basis of the contract is lost)..................................................39
Limitations on the doctrine of frustration...................................................................................................41
Three important limitations.........................................................................................................................................41
The consequences of frustration.................................................................................................................41
Common Law...............................................................................................................................................................41
Statute Law..................................................................................................................................................................42
Termination (Pt 1)...............................................................................................................................43
Termination by Agreement.........................................................................................................................43
Categories of Agreement.............................................................................................................................................43
Termination under the original contract.....................................................................................................43
Express Powers to Terminate......................................................................................................................................43
Implied Right to terminate a contract of otherwise indefinite duration....................................................................43
Termination by subsequent agreement......................................................................................................44
1. Express Agreements............................................................................................................................................44
Partly performed contracts and the issue of consideration...................................................................................44
Formal Requirements..................................................................................................................................................44
2. Termination inferred from subsequent agreement...........................................................................................44
3. Termination by abandonment............................................................................................................................45
Failure of a contingent condition.......................................................................................................46
Contingent Conditions.................................................................................................................................46
Different uses of the word condition..........................................................................................................46
Promissory conditions.................................................................................................................................................46
2
CONTRACTS
LAWS1075
NOTES
,Ivan Brcic
Z5115185
, Contracts –
LAWS1075
Identifying the Express Terms..............................................................................................................6
1. Terms and the Communications of the Parties.....................................................................................6
2. Written Terms and the effect of signature (signed contract)................................................................6
Effect of signature binds party.......................................................................................................................................6
Circumstances in which the effect of signature may be avoided................................................................................10
3. Incorporation of Terms by Notice (unsigned contract).......................................................................10
Timing..........................................................................................................................................................................10
Knowledge or Notice...................................................................................................................................................11
Unusual Terms.............................................................................................................................................................13
4. Incorporation by Course of Dealing.....................................................................................................13
Class Notes...................................................................................................................................................................15
5. Statements made during negotiations................................................................................................15
Entire Contract Clauses Wholly in Writing..................................................................................................................15
Parol Evidence Rule.....................................................................................................................................................15
Contracts that are Partly in Writing.............................................................................................................................16
Corbin on Contracts (Liberal Approach) (1950)......................................................................................................16
Strict vs Liberal Approach to the Parol Evidence Rule............................................................................................16
Exceptions to the parol evidence rule in identifying terms.........................................................................................17
Collateral contracts.................................................................................................................................................17
Requirements for establishing a collateral contract...............................................................................................18
Estoppel.......................................................................................................................................................................19
6. When is a statement a term of a contract...........................................................................................20
Warranty vs Condition.................................................................................................................................................22
Breach..........................................................................................................................................................................23
Construing the Express Terms............................................................................................................23
1. Construction.........................................................................................................................................23
2. Extrinsic Evidence in Constructing a Contract.....................................................................................24
Evidence Excluded.......................................................................................................................................................24
Evidence of the surrounding circumstances...............................................................................................................24
Commercial Circumstances.........................................................................................................................................24
3. The Process of Construction................................................................................................................26
Exclusion Clauses.........................................................................................................................................................28
The Common Law approach to exclusion clauses.......................................................................................................28
Ordinary principles of construction and contra proferentem.....................................................................................30
Negligence...................................................................................................................................................................30
Implied Terms.....................................................................................................................................31
When will terms be implied?.......................................................................................................................31
1. Terms implied in fact...........................................................................................................................31
BP Refinery..............................................................................................................................................................31
Conditions for a term to be implied............................................................................................................................31
1
, Contracts –
LAWS1075
2. Terms Implied in Law...........................................................................................................................32
Requirements for implying terms in law for the first time?........................................................................................33
The test of necessity....................................................................................................................................................33
3. Terms Implied by Custom....................................................................................................................33
Australian Consumer Law...................................................................................................................36
The Australian Consumer Law: An Overview..............................................................................................36
Introduction.................................................................................................................................................................36
Background to the legislative scheme.........................................................................................................................36
Commonwealth.......................................................................................................................................................36
States and Territories..............................................................................................................................................36
Overview of the ACL - INCOMPLETE............................................................................................................................36
Part 2-1: Misleading and Deceptive Conduct..........................................................................................................36
Frustration...........................................................................................................................................37
Frustration as an excuse for non-performance...........................................................................................37
When is a contract frustrated?....................................................................................................................37
The test for frustration................................................................................................................................................37
Test..........................................................................................................................................................................37
Examples..................................................................................................................................................................37
Illustrations..................................................................................................................................................................37
Destruction of Subject Matter (destroy the basis of the contract).............................................................................38
Disappearance of the foundation of the contract (the basis of the contract is lost)..................................................39
Limitations on the doctrine of frustration...................................................................................................41
Three important limitations.........................................................................................................................................41
The consequences of frustration.................................................................................................................41
Common Law...............................................................................................................................................................41
Statute Law..................................................................................................................................................................42
Termination (Pt 1)...............................................................................................................................43
Termination by Agreement.........................................................................................................................43
Categories of Agreement.............................................................................................................................................43
Termination under the original contract.....................................................................................................43
Express Powers to Terminate......................................................................................................................................43
Implied Right to terminate a contract of otherwise indefinite duration....................................................................43
Termination by subsequent agreement......................................................................................................44
1. Express Agreements............................................................................................................................................44
Partly performed contracts and the issue of consideration...................................................................................44
Formal Requirements..................................................................................................................................................44
2. Termination inferred from subsequent agreement...........................................................................................44
3. Termination by abandonment............................................................................................................................45
Failure of a contingent condition.......................................................................................................46
Contingent Conditions.................................................................................................................................46
Different uses of the word condition..........................................................................................................46
Promissory conditions.................................................................................................................................................46
2
