Law of Contract A – LLB1120 – Exam Notes
/ 21 – 9:00 am – 3 Hours
Feedback from exam
o Make sure to explain all legal arguments
o Be clear and concise on arguments and analysis
o Make sure meaning is clear
o Make sure ideas are communicated plainly and directly
o More detail in analysis needed
o Make sure to consider how to use legal principles
o Sentence structures lack efficiency
Assessment criteria
1
, Law of Contract A – LLB1120 – Exam Notes
/ 21 – 9:00 am – 3 Hours
Introduction to contract Law
What is a contract
An agreement or set of promises the law will enforce (i.e. for breach of which the law will provide a remedy)
B. Coote, ‘The Essence of Contract Law – Part 1’ (1988) 1 JCL 91, 94-97
“although it is fairly easy to recognise a contract once it is formed, it is by no means an easy task to describe, in general terms,
what a contract is.
The principle characteristic which distinguishes a contract from most other agreements is the quality of enforceability. When a
contract is formed a special relationship comes into existence which confers rights and imposes obligations on the parties.
Those rights and obligations are recognised by law and if one party fails to perform obligations imposed by the contract the legal
system will assist in the innocent party enforce the contract.’
PJ Hocker, Ann Dufty, Peter G Heffey, Cases and Materials on Contract (1985)
Two aspects to a contract
1. An agreement or promise
2. Recognised and enforceable by law
Purpose of contract law
1. To identify which agreements are legally binding contracts and which are not
2. To define the rights and duties (obligations) created by an enforceable agreement
3. To identify the consequences for an unexcused breach of contract
Willmott, Contract law (2nd ed 2005) 5
Importance of knowing which promises are enforceable and which are not
“although moral factors, such as the belief that it is wrong to make promises creating expectations and not to keep them, are also
influential, the principle rationale for the existence of contract law is commercial necessity. The law enforces certain promises
because, were it not to do so, the production, distribution and exchange of goods or services at a sophisticated level would be
impossible. Promises are crucial to modern commerce: buyers promise to pay, sellers promise to deliver, and most methods of
payment we use involve promises of one kind or another. As a result, our system of supplying and acquiring goods and services
would break it down if promises such as these were not binding in law”
P Clarke, R Gamble and J Brebner (2000)
How does contract law relate to different areas of law
Civil v Criminal law
- Civil law concerned with regulating between individuals, creation of rights and liabilities and consequences of breach
- Criminal law concerned with the criminalisation of certain behaviour and its consequences
Public v Private
- Public – relationship between individuals and the state
- Private – concerned with relationships between individuals, rights enforceable by individual holders of the rights
Law of obligations
- Concerned with regulating and adjudicating responsibilities between individuals
- Contract, tort, restitution, together with equities
Where do the obligations come from’
- Contract – self-imposed by the parties
- Tort / restitution – imposed through operation of law
2
, Law of Contract A – LLB1120 – Exam Notes
/ 21 – 9:00 am – 3 Hours
Contract law in context
Origins of contract law
- Principles of contract law shaped by 18th and 19th century philosophies of liberalism and laissez-faire economics
- Emphasised individualism over the collective and the environmental
- Value for self-reliance and freedom of individual choice
- To support a thriving and growing free-market economy, particularly as it became more complex with developments in
finance and globalisation throughout the empire
Freedom of contract
Individual parties decided:
- Whether to enter into a contract
- With whom to contract
- What the terms of the contract will be
The role of the state (through the courts) is to give effect to the bargain made between the parties.
The role of the state is NOT to impose obligations or responsibilities on the parties that are not within the parameters of the
contract
Values endure in the 21st century Australia
‘contract law forms one of the most important elements of any legal framework. It is the bedrock of modern economies and the
basis of many everyday interactions. It is therefore of the utmost importance that Australian contract law maximises the
simplicity, efficiency, and utility of market interactions for the benefit of all Australians.’
Australian Government, Discussion Paper to Explore the Scope for Reforming Australian contract law (2012), p.1
Traditional Indigenous approaches to contract law
Extensive and complex trade routes or the exchange of goods within and beyond Australia
Required a conception of contract
- Beyond bartering and kinship obligations
- Encompasses negotiation, promise, obligations, and institutionalised mechanisms for settling disputes and enforcement
of sanctions for breach of promise
- Included promises regarding both present and future conduct
- Included individuals, groups and trading partners
What values characterise traditional indigenous contract law
- Reciprocity – a sense of reciprocal obligations in both the promise and the performance of the promise
- Privileging of the relationship between the parties above the value of the bargain/ goods exchanged
- Cultural context defined by kinship / family relations and obligations rather than individualism
Alternative theories of contract
Contract a moral obligation
- A person who makes a promise is morally bound to keep it
- There are moral grounds for others to expect performance of the promise
Fits with liberal, individualist approach to contract as self-imposed duty
Contract a consent to the transfer of rights and entitlements
- Arties consent to the transfer of rights, and to the incursion of legal obligations
Fits with liberal, individualist approach to contract as self-imposed duty
Critiques of contract law
Critical legal scholarship
- Expose ideology that underpins contract law
- Elevation of the values of the market, individualism, self-interest, formalism and claims to objectivity/ neutrality
Feminist legal scholarship
- Critique dependent on conception of equality: sameness or difference
- Reveal contract law’s claims to objectivity / neutrality conceal an inherently masculine viewpoint
- Claim emphasis on individualism, autonomy and self-interest does not reflect many woman’s lived experience
Contracts as social relationships
- Emphasis the interests of parties to contracts in maintaining long-term relationships even when disputes arise
- Within commercial transactions, business and often inextricably reliant on each other, rather than autonomous, self-
interested parties presumed by contract law
3
, Law of Contract A – LLB1120 – Exam Notes
/ 21 – 9:00 am – 3 Hours
When reading cases consider
- Is the outcome just? Is it fair? What is the actual result for the parties?
- What is the bargaining power of the parties? Did contextual / extraneous circumstances influence this contract?
- What is the value of the contract to the different parties
- What is the impact of the contract on the community? On the environment?
4
/ 21 – 9:00 am – 3 Hours
Feedback from exam
o Make sure to explain all legal arguments
o Be clear and concise on arguments and analysis
o Make sure meaning is clear
o Make sure ideas are communicated plainly and directly
o More detail in analysis needed
o Make sure to consider how to use legal principles
o Sentence structures lack efficiency
Assessment criteria
1
, Law of Contract A – LLB1120 – Exam Notes
/ 21 – 9:00 am – 3 Hours
Introduction to contract Law
What is a contract
An agreement or set of promises the law will enforce (i.e. for breach of which the law will provide a remedy)
B. Coote, ‘The Essence of Contract Law – Part 1’ (1988) 1 JCL 91, 94-97
“although it is fairly easy to recognise a contract once it is formed, it is by no means an easy task to describe, in general terms,
what a contract is.
The principle characteristic which distinguishes a contract from most other agreements is the quality of enforceability. When a
contract is formed a special relationship comes into existence which confers rights and imposes obligations on the parties.
Those rights and obligations are recognised by law and if one party fails to perform obligations imposed by the contract the legal
system will assist in the innocent party enforce the contract.’
PJ Hocker, Ann Dufty, Peter G Heffey, Cases and Materials on Contract (1985)
Two aspects to a contract
1. An agreement or promise
2. Recognised and enforceable by law
Purpose of contract law
1. To identify which agreements are legally binding contracts and which are not
2. To define the rights and duties (obligations) created by an enforceable agreement
3. To identify the consequences for an unexcused breach of contract
Willmott, Contract law (2nd ed 2005) 5
Importance of knowing which promises are enforceable and which are not
“although moral factors, such as the belief that it is wrong to make promises creating expectations and not to keep them, are also
influential, the principle rationale for the existence of contract law is commercial necessity. The law enforces certain promises
because, were it not to do so, the production, distribution and exchange of goods or services at a sophisticated level would be
impossible. Promises are crucial to modern commerce: buyers promise to pay, sellers promise to deliver, and most methods of
payment we use involve promises of one kind or another. As a result, our system of supplying and acquiring goods and services
would break it down if promises such as these were not binding in law”
P Clarke, R Gamble and J Brebner (2000)
How does contract law relate to different areas of law
Civil v Criminal law
- Civil law concerned with regulating between individuals, creation of rights and liabilities and consequences of breach
- Criminal law concerned with the criminalisation of certain behaviour and its consequences
Public v Private
- Public – relationship between individuals and the state
- Private – concerned with relationships between individuals, rights enforceable by individual holders of the rights
Law of obligations
- Concerned with regulating and adjudicating responsibilities between individuals
- Contract, tort, restitution, together with equities
Where do the obligations come from’
- Contract – self-imposed by the parties
- Tort / restitution – imposed through operation of law
2
, Law of Contract A – LLB1120 – Exam Notes
/ 21 – 9:00 am – 3 Hours
Contract law in context
Origins of contract law
- Principles of contract law shaped by 18th and 19th century philosophies of liberalism and laissez-faire economics
- Emphasised individualism over the collective and the environmental
- Value for self-reliance and freedom of individual choice
- To support a thriving and growing free-market economy, particularly as it became more complex with developments in
finance and globalisation throughout the empire
Freedom of contract
Individual parties decided:
- Whether to enter into a contract
- With whom to contract
- What the terms of the contract will be
The role of the state (through the courts) is to give effect to the bargain made between the parties.
The role of the state is NOT to impose obligations or responsibilities on the parties that are not within the parameters of the
contract
Values endure in the 21st century Australia
‘contract law forms one of the most important elements of any legal framework. It is the bedrock of modern economies and the
basis of many everyday interactions. It is therefore of the utmost importance that Australian contract law maximises the
simplicity, efficiency, and utility of market interactions for the benefit of all Australians.’
Australian Government, Discussion Paper to Explore the Scope for Reforming Australian contract law (2012), p.1
Traditional Indigenous approaches to contract law
Extensive and complex trade routes or the exchange of goods within and beyond Australia
Required a conception of contract
- Beyond bartering and kinship obligations
- Encompasses negotiation, promise, obligations, and institutionalised mechanisms for settling disputes and enforcement
of sanctions for breach of promise
- Included promises regarding both present and future conduct
- Included individuals, groups and trading partners
What values characterise traditional indigenous contract law
- Reciprocity – a sense of reciprocal obligations in both the promise and the performance of the promise
- Privileging of the relationship between the parties above the value of the bargain/ goods exchanged
- Cultural context defined by kinship / family relations and obligations rather than individualism
Alternative theories of contract
Contract a moral obligation
- A person who makes a promise is morally bound to keep it
- There are moral grounds for others to expect performance of the promise
Fits with liberal, individualist approach to contract as self-imposed duty
Contract a consent to the transfer of rights and entitlements
- Arties consent to the transfer of rights, and to the incursion of legal obligations
Fits with liberal, individualist approach to contract as self-imposed duty
Critiques of contract law
Critical legal scholarship
- Expose ideology that underpins contract law
- Elevation of the values of the market, individualism, self-interest, formalism and claims to objectivity/ neutrality
Feminist legal scholarship
- Critique dependent on conception of equality: sameness or difference
- Reveal contract law’s claims to objectivity / neutrality conceal an inherently masculine viewpoint
- Claim emphasis on individualism, autonomy and self-interest does not reflect many woman’s lived experience
Contracts as social relationships
- Emphasis the interests of parties to contracts in maintaining long-term relationships even when disputes arise
- Within commercial transactions, business and often inextricably reliant on each other, rather than autonomous, self-
interested parties presumed by contract law
3
, Law of Contract A – LLB1120 – Exam Notes
/ 21 – 9:00 am – 3 Hours
When reading cases consider
- Is the outcome just? Is it fair? What is the actual result for the parties?
- What is the bargaining power of the parties? Did contextual / extraneous circumstances influence this contract?
- What is the value of the contract to the different parties
- What is the impact of the contract on the community? On the environment?
4
