Cases Making the Contract Elements: 1.

. Has an offer been made- distinguish offer from invitation to treat (ads, catalogues, auctions, tenders)/ indication of a present intention. (1)

1. Harvey v Facey[1893]AC 552 pg-153 Facts: Facey owned a property that Harvey wanted to !y. "e#egraph$c transact$on was %ade and Harvey s!ed Facey and #ost. Harvey on#y s!pp#$ed $n&or%at$on a o!t the #owest pr$ce and d$d not %a'e an o&&er. (at$o: )!pp#y$ng $n&or%at$on on re*!est $s not %a'$ng an o&&er and the $n&or%at$on s!pp#$er $s not o!nd y $t. 2. Partridge v Crittenden[19+8] 2 A## ,( -21 pg-15+ Facts: .artr$dge p#aced an advert$se%ent &or ra% #e &$nch. (at$o: A person does not reach the #aw $& he/her %a'es an $nv$tat$on to treat. Pharmaceutical Society of Great Britain v Boots Cash Chemists 0)o!thern1 2td [1953] 3 45 -61 pg-157 Facts: .har%ace!t$ca# )oc$ety o& 8reat 5r$ta$n 0.)851 tho!ght that 5oot Cash Che%$sts 05CC1 had reached the contract y d$sp#ay$ng dr!gs. "he *!est$on was when the o&&er was %ade. (at$o: A person does not reach the #aw $& he/her %a'es an $nv$tat$on to treat. 9$sp#ay$ng th$ngs $s not %a'$ng an o&&er. -. Grainger & Sons v 8o!gh [189+] AC p.g: 157 Facts: 8 : ) operated a w$nery and d$str$ !ted pr$ce cata#og!e. 3s $t an o&&er; (at$o: 3t was an $nv$tat$on to treat eca!se $& $t wo!#d have een an o&&er then the se##er wo!#d e o!nd to s!pp#y any *!ant$ty de%anded at the pr$ce advert$sed. 5. Carlill v Carbolic Smoke Ball Co [1893] 3 45 25+ pg-159 Facts: Car o#$c )%o'e 5a## Co. 0C)51 %an!&act!red a %ed$ca# preparat$on and advert$sed that anyone who !ses $t w$## e c!red o& $n&#!en<a and $& not then they wo!#d e pa$d 166 po!nds= &or wh$ch they depos$ted 1666 po!nds $n a an'. Car#$## o!ght $t !t was not treated. (at$o: "he co!rt dec$ded that o&&er can e %ade to the wor#d at #arge. A#so $& the o&&eror d$d not $ntend the o&&er to e ta'en ser$o!s#y= why wo!#d he advert$se that he had p!t 166 po!nds $n the an'. +. Harvela Investments Ltd v oyal !rust Co of Canada Ltd [1985]3 >2( pg-1+2 Facts: )hares were e$ng so#d to the h$ghest $dder? (oya# "r!st@s $d was an a%o!nt o& A161=666 $n eBcess o& any other o&&er. (at$o: 3& a $dder 0accept$ng the o&&er1 does not co%p#y w$th the $%p#$ed ter%s o& the o&&er= there $s no sa#e. 2. Acceptance- Onl valid if it is properl communicated. !evocation of offer (2) 3.

7. outledge v Grant018281 - 5$ng +53?136 ,( 926 pg-1+5 Facts: 8 o&&ers to !y (@s ho!se. .ro%$ses to #eave the o&&er open &or + wee's. ( !ys a new ho!se eBpect$ng to se## h$s to 8. 5e&ore eBp$rat$on o& t$%e= 8 w$thdrew h$s o&&er. ( s!es 8 (at$o: "he r!#e $s that an o&&er %ay e revo'ed anyt$%e pr$or to acceptance. 8. Byrne & Co v "an !ienhoven : Co018861 2( 5 C.9 3-2 pg-1+5 Facts: An o&&er was sent &ro% 2ondon to Cew Dor' y post. 9!e to posta# de#ay there were d$&&erences $n acceptance and revocat$on o& the o&&er. (at$o: An o&&er cannot e revo'ed !n$t $t $s rece$ved y the o&&eree. 3n th$s case acceptance was ca #ed e&ore the o&&er was revo'ed. 9. Hyde v #rench018-61 3 5eav 33pg-1+8 Facts: >rench o&&ered to se## h$s property to Hyde and Hyde %ade a co!nter o&&er. >rench d$d not accept $t and Hyde agreed to accept the ear#$er o&&er. (at$o: Ence a co!nter o&&er has een %ade y the o&&eree= the or$g$na# o&&er $s reFected and cannot e accepted aga$n. 16. !urner $em%son & Co Pty Ltd v Camm[1922] G2( pg-1+8 Facts: "!rner He%pson 0"H1 o&&ered rasp erry p!#p to Ca%% who changed the o&&er. "H d$d not accept the changed o&&er so Ca%% s!ed h$%. (at$o: Ence a co!nter o&&er has een %ade y the o&&eree= the or$g$na# o&&er $s reFected and cannot e accepted aga$n. 11. &asters v Cameron0195-1 91 C2( 353 pg-176 Facts: Ca%eron owned a &ar% and Iasters wanted to !y $t. Iasters pa$d 1756 po!nds as depos$t !t d$d no s$gn a contract? d!e to &$nanc$a# d$&&$c!#t$es he w$thdrew the o&&er. "he agree%ent $nc#!ded a ter% that th$s agree%ent was Js! Fect to preparat$on o& a &or%a# contract o& sa#e@. (at$o: 3n th$s case the co!rt dec$ded that an arrange%ent %ade Js! Fect to contract@ $s pres!%ed not to e a contract. "he depos$ts e#onged to Iasters. "here are 3 poss$ $#$t$es $n a case #$'e th$s: 3. "here $s a contract wh$ch $s $%%ed$ate#y $nd$ng= and one o& the ter%s $s that &or%a# doc!%entat$on $s prepared. 33. "here $s a contract !t noth$ng can happen !nt$# a &or%a# doc!%ent $s prepared 333. "here $s no contract. 12. !allerman & Co Pty Ltd v 'athan(s &erchandise )"ic* Pty Ltd pg 17Facts: Cot g$ven (at$o: Act!a# co%%!n$cat$on o& acceptance $s not necessary where the o&&eror has eBpress#y or $%p#$ed#y accepted the ord$nary post as the %eans o& co%%!n$cat$on etween part$es. Acceptance occ!rs when the #etter $s posted= even $& the #etter $s #ost $n the post= !t $t %!st e proper#y sta%ped and addressed 0.osta# (!#e1. 13. Po+ell v Lee019681 99 2" 28pg-17+ Facts: "he %anage%ent co%%$ttee o& a schoo# %et to d$sc!ss app#$cat$on &or head%aster. .owe## was &$rst se#ected and sent a te#egra% y 2ee 0co%%$ttee %e% er1 !t was #ater reFected. .owe## s!ed the% and #ost. (at$o: An acceptance can e co%%!n$cated y the th$rd party prov$ded the th$rd party has een g$ven the act!a# a!thor$ty to co%%!n$cate acceptance. 3n th$s case 2ee was not a!thor$sed to co%%!n$cate dec$s$on to .owe##. 1-. Fe#tho!se v 5$nd#ey 018+21 11 Facts: Cot g$ven (at$o: "he contract $s not %ade !nt$# acceptance has een co%%!n$cated to the o&&eror. )$#ence $s not acceptance. 15. (a%sgate G$ctor$a Hote# Co 2td v Ionte&$ore 0188+1 2( 1 ,Bch 169

Facts: Cot g$ven. (at$o: >hen no t$%e #$%$t $s %ent$oned= the o&&er re%a$ns open &or a reasona #e t$%e. (easona #e t$%e w$## depend on each case.

3.

"ntention- #id parties intend their agreement to be legall binding. #omestic agreements ($d). ($) %or commercial agreement.

1+. !odd v 'ichol [1957] )A)( 72 pg-188 Social or domestic agreement Facts: Irs C$cho# $nv$ted her s$ster $n #aw and n$ece to #$ve w$th her= and that she wo!#d prov$de &ree acco%%odat$on t$## the rest o& the$r #$ves. 9!e to a &$ght she wanted the% to #eave the ho!se. (at$o: 3& the agree%ent $s o& do%est$c nat!re the co!rt eg$ns w$th the pres!%pt$on that the part$es d$d not $ntend to contract. .res!%pt$on can e re !tted $& there $s ev$dence to contrary. "he case had co%%erc$a# &#avor. 17. (o!&os v 5rewster 019711 2 )A)( pg-123

18. Carlill v Carbolic Smoke Ball Co [1893] 3 45 25+ pg-159 Facts: Car o#$c )%o'e 5a## Co 0C)51 %an!&act!red a %ed$ca# preparat$on and advert$sed that anyone who !ses $t w$## e c!red o& $n&#!en<a and $& not then they wo!#d e pa$d 166 po!nds= &or wh$ch they depos$ted 1666 po!nds $n a an'. Car#$## o!ght $t !t was not treated. (at$o: 3t $s pres!%ed that co%%erc$a# agree%ents are to e #ega##y en&orcea #e? however $t %ay e re !tted $& there $s ev$dence to the contrary. 3n th$s case the co%pany %ade a pro%$se wh$ch was $nd$ng. 19. ose and Frank Co v , Crom%ton & Bros Ltd [1923] 2 H5 2+1 pg-189 Commercial agreements Facts: Cro%pton agreed w$th (ose and Fran' that they w$## e %ade the$r eBc#!s$ve d$str$ !tors. Cro%pton %ade $t c#ear that $t was not a contract or a #ega# agree%ent and sha## not e s! Fect to F!r$sd$ct$on. (at$o: As the part$es %ade $t c#ear that they d$d not $ntend to create a #ega# re#at$on. "h!s there was no contract.

26. $lein+ort Benson v &alaysia &ining Cor% Berhard [1988] >2( 799 pg-191 Facts: IIC wanted a #oan &ro% H5 and re&!sed to g$ve a &or%a# g!arantee= $nstead wrote a #etter o& co%&ort. "hey went an'r!pt and IIC s!ed the%. (at$o: A #etter o& co%&ort $s not he#d $nd$ng. "he co!rt he#d that $t was %ere#y a representat$on and not a pro%$se o& &!t!re cond!ct. 21. &asters v Cameron0195-1 91 C2( 353 pg-176 Facts: Ca%eron owned a &ar% and Iasters wanted to !y $t. Iasters pa$d 1756 po!nds as depos$t !t d$d no s$gn a contract? d!e to &$nanc$a# d$&&$c!#t$es he w$thdrew the o&&er. (at$o: 3n th$s case the co!rt dec$ded that an arrange%ent %ade Js! Fect to contract@ $s pres!%ed not to e a contract. 8enera##y co!rts regard agree%ents %ade Js! Fect to contract@ not $nd$ng. "here are 3 poss$ $#$t$es $n a case #$'e th$s: 3. "here $s a contract wh$ch $s $%%ed$ate#y $nd$ng= and one o& the ter%s $s that &or%a# doc!%entat$on $s prepared. 33. "here $s a contract !t noth$ng can happen !nt$# a &or%a# doc!%ent $s prepared 333. "here $s no contract 22. Plastyne Products v Gall -ngineering Co Pty Ltd 019881 C)> pg-193 Facts: "he !yer sent a #etter to the se##er $n wh$ch the !yer stated that $t was prepared to pay A356=666. "he #etter conc#!ded: JKpon rece$pt o& yo!r s$gned acceptance= we sha## $nstr!ct o!r so#$c$tors to draw !p a &or%a# contract. (at$o: "here $s a contract wh$ch $s $%%ed$ate#y $nd$ng= and one o& the ter%s $s that &or%a# doc!%entat$on $s prepared. &. 'onsideration - Have both sides provided something of value. ()ception (deed). a. 'onsideration must move from promisee * &a b. 'onsiderations have to be sufficient and don+t have to be ade,uate. ()ceptions and other clauses included * &b

23. .unlo% Pneumatic !yre Co Ltd v Selfridge and Co Ltd [1915] A## 5.1+ pg-197 Facts: 9!n#op %an!&act!red tyres and entered $nto agree%ent w$th who#esa#er 09ew and Co1 regard$ng se##$ng o& 9!n#op tyres e#ow #$st pr$ce. 9!n#op s!ed )e#&r$dge0reta$#er1 !t #ost. (at$o: En#y the pro%$see co!#d en&orce the pro%$se. 3n th$s case as 9!n#op had not prov$ded any cons$derat$on to )e#&r$dge he #ost the case. 2-. Coull(s v Bagot(s -/ecuter and !rustee Co Ltd 019+71 5.15 pg-197 Facts: Ir Co!##s was the so#e owner o& so%e #and. 3n an agree%ent to re%ove stone &ro% h$s property Ir Co!##s a!thor$sed E@Ce$# to pay a## roya#t$es to h$%se#& and h$s w$&e Fo$nt#y. )o%e t$%e #ater Ir Co!##s d$ed and eBec!ter as'ed whether Irs Co!##s has a #ega# r$ght to one-ha#& o& the roya#t$es. (at$o: 3& a pro%$se $s %ade y the pro%$sor to two or %ore persons Fo$nt#y= on#y one o& those persons need prov$de cons$derat$on. 3n th$s case the co!rt dec$ded that as the pro%$se was %ade on#y to Ir Co!##@s= h$s w$&e was not a Fo$nt pro%$see. 25. oscorla v !homas 018-21 11- ,( -9+? 3 45 23- pg-199 Facts: "he p#a$nt$&& p!rchased a horse &ro% the de&endant &or 36 po!nds. A&ter the sa#e= p#a$nt$&& so!ght ass!rance that the horse was so!nd. Ass!rance was g$ven !t the horse was v$c$o!s. .#a$nt$&& s!ed &or reach o& contract !t #ost. (at$o: Any warrant$es %!st e g$ven pr$or to the %a'$ng o& the contract. 2+. e Casey(s Patents0 Ste+art v Casey [1892] Ch 16- pg-266 Facts: )tewart and Car#ton Fo$nt#y owned patent r$ghts. A&ter Casey !ndertoo' %ar'et$ng act$v$t$es &or the% )tewart and Casey gave Casey one-th$rd share o& the patents. (at$o: 27. !homas v !homas018-21 2 45 851 5.26 pg-266 Facts: Cot g$ven (at$o: Cons$derat$on does not have to ade*!ate= $t %!st e s!&&$c$ent. 3n th$s case the cons$derat$on wasLA1 &or (o##s (oyceL 28. -ast+ood v $enyon 018-61 11 A:, -38 5.22 pg-261 (at$o: Cons$derat$on does not have to ade*!ate= $t %!st e s!&&$c$ent. 3n th$s case cons$derat$on wasL3n #ove and a&&ect$onL 29. .unton v .unton 0198-1 18 G2( 11pg-262 Facts: Ir 9!nton agreed to pay h$s d$vorced w$&e a %onth#y s!% prov$ded that she cond!cts herse#& w$th so r$ety and v$rt!o!s %anner. Irs 9!nton s!ed when her eB-h!s and re&!sed to pay. (at$o: Cons$derat$on does not have to ade*!ate= $t %!st e s!&&$c$ent. 3n th$s case the w$&e had to act $n a respecta #e and order#y %anner. 36. Collins v Godefroy 018311 169 ,( 16-6 5.33 pg-216 Facts: Co##$ns was as'ed to attend co!rt and was pro%$sed to e pa$d y 8ode&ry &or appear$ng. 5!t 8ode&roy re&!sed to pay. Co##$ns s!ed h$% !t &a$#ed. (at$o: A pro%$se to per&or% a p! #$c d!ty= a#ready ow$ng w$## not e a good cons$derat$on !n#ess the pro%$see prov$des so%eth$ng $n add$t$on to the d!ty. 31. #igan v -d+ards 019731 -7 A2M( 58+ pg-263 Facts: Ir and Irs ,dwards s$gned a contract to p!rchase a ho!se &ro% >$gan. A&ter so%e days they gave a #$st o& &a!#ts wh$ch had to e &$Bed e&ore they wo!#d proceed w$th the contract. ,dwards s!ed >$gan when she &a$#ed to carry o!t her pro%$se. (at$o: "he h$gh co!rt he#d that even tho!gh the ,dwards d$d not have a good chance o& w$nn$ng the #ega# c#a$%. 8$v$ng !p the c#a$% was a good cons$derat$on and so >$gan was o!nd y her pro%$se.

32. Stilk v &yrick 018691 176 ,( 11+8 pg-265 Facts: )t$#' s$gned on as a sea%an &or a voyage &ro% 2ondon. 9!r$ng the voyage 2 crew %e% ers deserted and the re%a$n$ng crew were pro%$sed the wages o& the deserters. A&ter voyage the capta$n re&!sed to pay. (at$o: A pro%$se to per&or% a d!ty= a#ready !nder contract w$## not e a good cons$derat$on !n#ess the pro%$see prov$des so%eth$ng $n add$t$on to the d!ty. 33. #illiams v offey Bros & 'icholls0Contractors1 2td [1991] 3 45 1 pg-26+ Facts: (o&&ey entered $nto a contract w$th >$##$a%s. Knder contract >$##$a%s agreed to prov$de carpentry= !t a&ter gett$ng $nto tro! #e he rea#$sed he was !nder payed. (o&&ey agreed to pay eBtra %oney !t d$d not pay a&ter co%p#et$on o& wor'. >$##$a% s!ed (o&&ey and won. (at$o: A pro%$se to per&or% an eB$st$ng contract!a# d!ty co!#d a%o!nt to cons$derat$on $& $t conveyed a pract$ca# ene&$t to the pro%$sor and there was no e#e%ent o& d!ress 0threat1. 3-. Pinnel(s case 01+621 77 ,( 237 0Co!rt o& Co%%on .#eas1 pg.267 Facts: .$nne# was owed so%e %oney and !pon agree%ent was payed #ess !t e&ore d!e date= .$nne# #ater s!ed &or the re%a$n$ng a%o!nt !t #ost. (at$o: As the de t was repa$d e&ore d!e date th$s a%o!nted to so%eth$ng eBtra. 35. Foakes v Beer [1881-5] A## ,( 16+ pg-268 Facts: Cot g$ven (at$o: 3& a party prov$des so%eth$ng o& va#!e 0cons$derat$on1= then the party can protect $tse#& &ro% the contract!a# o #$gat$on. 3+. Hirachand Punumchand v !em%le [1911] A## ,( 1597 5.31 pg-269 Facts: Cot g$ven (at$o: 3& a part pay%ent $s %ade y a th$rd party then the de tor cannot recover the a#ance. Promissory -sto%%el )-lements*0 3. "he pro%$see on reasona #e gro!nds= ass!%ed that a #ega# re#at$onsh$p eB$sted 04!ag#$a@s case1 or wo!#d eB$st 0>a#ton@s case1 etween the pro%$sor and the pro%$see. 33. "he pro%$sor was respons$ #e &or the ass!%pt$on. 333. "he pro%$see acted y re#y$ng on the ass!%pt$on 3G. "he pro%$see w$## s!&&er detr$%ent $& the pro%$sor $s per%$tted to renege 0go ac' on1 on the pro%$se.

37. Centra# 2ondon .roperty "r!st 2td v H$gh "rees Ho!se 2td [19-7] H5 136 pg-1-2 Facts: "he p#a$nt$&& #eased a #oc' to the de&endant 0H"H21 &or 2566 po!nds= wh$ch he red!ced d!e to >or#d >ar 2 !t aga$n $ncreased a&ter th$ngs t!rned ac' to nor%a#. .#a$nt$&& d$d not c#a$% the ac' rent. (at$o: .ro%$ssory estoppe# stopped the de&endant &ro% c#a$%$ng ac' rent wh$#e he was ent$t#ed to ret!rn to the or$g$na# agree%ent. 38. Walton Stores (Interstate) Ltd v Maher 019881 1+- C2( pg-215 Facts: Iaher owned a property w$th !$#d$ng on $t. He entered $nto negot$at$ons w$th >a#ton stores to #ease the #and= tear down the o#d !$#d$ng= and erect a new one. Iaher s$gned the contract and &orwarded $t to >a#ton stores who d$d not s$gn $ts part o& a%ended agree%ent and #ater re&!sed to dea#. Iaher s!ed >a#ton stores and were awarded da%ages. (at$o: "he case !sed pro%$ssory estoppe#. "he co!rt dec$ded that a #ega# re#at$onsh$p eB$sted etween the%= a#so the de&endant $nd!ced the p#a$nt$&&to adopt the pres!%pt$on. "he de&endant a#so 'new that h$s act$ons wo!#d detr$%ent p#a$nt$&&. 39. Je Maintiendrai Pty Ltd v Quaglia and Quaglia 019861 2+ )A)( pg-21Facts: 4!ag#$a #eased a shop &or 3 years at A278/%onth. 9!e to d$&&$c!#t$es the #essor agreed to accept a #ower a%o!nt. >hen 4!ag#$a ca##ed *!$ts the #essor s!ed &or arrears. (at$o: "he co!rt dec$ded that detr$%ent eB$sted as 4!ag#$a had to pay ac' the %oney $n #!%p s!% a%o!nt whereas the s$t!at$on wo!#d have een d$&&erent $& he had to pay $t ac' $n $nsta#%ents. 4!ag#$a won the case. Ex ress terms o! the contract Signature 1 Binding or not binding -6. L(-strange v Graucob [193-] 2 H5 05$nd$ng1 pg-229 Facts: 2@,strange o!ght an a!to%at$c c$garette %ach$ne &ro% 8ra!co 0de&endant1 and s$gned the sa#es agree%ent 0w$tho!t read$ng1 wh$ch conta$ned the eBe%pt$on c#a!se. Iach$ne was de&ect$ve so she s!ed 8ra!co . (at$o: As the doc!%ents were s$gned= so they were $nd$ng. As the doc!%ents d$d not conta$n any $%p#$ed ter%= there&ore she co!#d not re#y on $t. -1. ., Hill and Co Pty Ltd v #alter H #right Pty Ltd [1971] G( 7-9 pg-232 Facts: 9M H$##0H$##1 h$red a cartage contractor0>r$ght1 to carry so%e va#!a #e %ach$nery. "he %ach$nery was da%aged $n trans$t d!e to neg#$gence o& >r$ght. En de#$very one o& H$##@s e%p#oyee s$gned the eBe%pt$on c#a!se0da%ages d!e to trans$t1. "he e%p#oyee d$d not read th$s &or%. .r$or to th$s event oth have een $nvo#ved $n at #east 16 dea#$ngs. H$## s!ed &or reach o& contract and won. (at$o: 3n th$s case the co!rt dec$ded that the doc!%ents d$d not appear anyth$ng !t a de#$very doc'et and so the eBe%pt$on c#a!se was not a ter%. "he n!% er o& past transact$ons d$d not %atter $n th$s case. (Is the document contractual in nature?) -2. 2ceanic Sun Line Shi%%ing v Fay 019881 1+5 C2( pg-23+ Facts: Fay oo'ed a cr!$se &ro% C)> to 8ree' on a 8ree' vesse# owned y E)2). 5roch!re showed that cr!$se was governed y ter%s on the t$c'et wh$ch stated that a## act$ons aga$nst E)2) e ro!ght $n 8reece. Fay was $nF!red and ro!ght the case $n C)>? the owner arg!ed that $t was a cond$t$on o& the contract that the case $s ro!ght $n 8reece. (at$o: "he co!rt dec$ded that the contract was %ade $n C)> and the roch!re d$d not a%o!nt to reasona #e not$ce eca!se the roch!re was not a doc!%ent wh$ch co!#d reasona #y e regarded as contract!a# $n nat!re. "h!s the c#a!se conta$n$ng 8reece was not a ter% o& the contract. (Is the term unusual?) -3. Interfoto Picture Library v Stiletto "isual Programmes Ltd pg-237 Facts: )t$#etto h$red so%e transparenc$es &ro% 3nter&oto. "he de#$very note conta$ned that a de#$very charge o& 5 po!nds/day w$## e charged. Ether #$ rar$es charge on#y 3.56 po!nds/ wee'. )t$#etto ret!rned the transparenc$es #ate. 3nter&oto s!ed h$% !t #ost. (at$o: 3& the !ns$gned ter% $s part$c!#ar#y !n!s!a#= eBtra not$ce w$## have to e g$ven. 3n th$s case 3nter&oto was ent$t#ed to 3.56 po!nds/wee'. A#so the ter% was who##y d$&&erent to the $nd!str$a# nor%= the cond$t$on was not a ter% o& contract. --. State ail 3uthority of 'S# v Heath Pty Ltd 0198+17 C)>2( 176 pg-233 Facts: Heath and )tate (a$# reached an !nderstand$ng that &or &$ve years= Heath wo!#d have r$ght to erect hoard$ngs= !t the wr$tten contract stated that the (a$# co!#d ter%$nate the contract w$th a %onths not$ce. En as'$ng a o!t th$s ter% he was ass!red that $t had &$ve years !t wo!#d e d$&&$c!#t to change the contract. (at$o: 3n th$s case Heath was %ade aware that the contract co!#d not e changed. Hnow$ng= th$s he s$gned the contract. "here&ore= the ter% $n the contract was $nd$ng. 3t was not d$sp#aced y any ora# agree%ent to the contrary.

When are oral re resentations "inding# Promissory statements The reasonable bystander test. -5. "en .en -sschert v Cha%%ell [19+6] >A( 11pg-2-2 Facts: Gen agreed to se## the ho!se to Chappe##. 3%%ed$ate#y e&ore s$gn$ng the contract Gen as'ed a o!t wh$te ants and the rep#y was negat$ve. 5!t a&ter ta'$ng possess$on= she &o!nd wh$te ants. (at$o: An ora# representat$on can e added to the wr$tten ter%s $& the ev$dence s!ggests that th$s $s what the part$es $ntended. 3n th$s case the p#a$nt$&& wo!#d not have s$gned the contract w$tho!t the ass!rance. -+. 2scar Chess Ltd v #illiams [1957] A## ,( 325 pg-2-3 Facts: >$##$a%s so#d a Iorr$s car to Escar. "here were so%e reg$strat$on $ss!es wh$ch >$##$a%s was !naware o&. >$##$a%s so#d the car to Escar who #ater rea#$sed the d$&&erence= they s!ed >$##$a%s. Car@s %ode# year was not stated correct#y. (at$o: "he co!rt dec$ded that >$##$a%s was !naware o& the year o& %an!&act!re. He re#$ed on the reg$strat$on oo' wh$ch was ta%pered. 9enn$ng 2M he#d that the state%ent was %ere representat$on and not a ter% o& the contract. -7. -sso Petroleum v &ardon [197+]2 >2( 583 pg-167 Facts: Iardon0p#a$nt$&&1 #eased a petro# stat$on and was %$sg!$ded on the a%o!nt o& petro# $t w$## se##. 2oca# p#ann$ng a!thor$ty a#tered p#ans. Iardon s!ed &or reach o& warranty and neg#$gent %$srepresentat$on and won. (at$o: "he co!rt o& appea# &o!nd that ,sso had warranted the est$%ate. "h$s $s so eca!se ,sso had a## the re*!$red $n&or%at$on to %a'e the F!dg%ent. Collateral Warranties -8. 9e 2asa##e v 8!$#d&ord [1961]2 H5 215 pg-1+7 Facts: "he p#a$nt$&& s$gned a wr$tten contract and was g$ven ora# ass!rance o& the dra$nage e&ore hand$ng over the contract. 9ra$nage pro #e%s #ead 2asa##e to s!e. (at$o: "he co!rt he#d that there were two contracts $n th$s case. Ene wr$tten 0the wr$tten #ease1 and one ora# 0ass!rance regard$ng the dra$n1 -9. 2 8 "horne : Co .ty 2td v "ho%as 5orthw$c' : )ons 019951 5+ )(0C)>1 81 Facts: "h$s case $s o& sa#e o& o$#. 9!r$ng negot$at$ons sa%p#e o& o$# were presented !t were not %ent$oned $n the contract. >hen o$# d$d not con&or% the sa%p#e !yer s!ed se##er. (at$o: "he co!rt he#d that there were two contracts $n th$s case= part#y ora# and part#y wr$tten. 56. ,, Savage and S4n Pty Ltd v Blakney 019761 119 C2( -35 pg-2-5 Facts: 5#a'ney entered $nto a contract w$th )avage and was to#d the Jest$%ated@ speed o& the cr!$ser wo!#d e 15%ph. "he top speed was #ess and so 5#a'ney s!ed )avage &or co##atera# warranty !t #ost. (at$o: "he h$gh co!rt dec$ded that a representat$on $s not a co##atera# warranty %ere#y eca!se $t $s one o& the &actors the $nd!ced the contract. A co##atera# warranty %!st e pro%$ssory. 51. 8ates v C$ty I!t!a# 2$&e Ass!rance )oc$ety 2td 0198+1 1+6 C2( 3 pg-1+9 Facts: Ir (a$n $rd was an $ns!rance agent and $n&#!enced a carpenter to ta'e a po#$cy %a'$ng &a#se c#a$%s a o!t the ene&$ts. En $nF!ry 8ates d$d not get the c#a$%. (at$o: 3& a co##atera# warranty $s $ncons$stent w$th the %a$n warranty= then no co##atera# contract eB$sts. Meaning o! a term The reasonable person test Parol Evidence Rule

52. $o e v %C& Photo hone o! &ustralia Pty Ltd 019371 59 C2( pg-2-8 Facts: (CA h$red certa$n so!nd syste% to Hope !t Hope re&!sed to pay as the syste% wasn@t new. Agree%ent d$d not $nc#!de th$s cond$t$on. Hope c#a$%ed !nder payro## ev$dence !t #ost. (at$o: As there was no a% $g!$ty $n the agree%ent= paro# ev$dence was not a##owed. "he co!rt a#so re&!sed to accept an $%p#$ed ter%= as $t wo!#d con&#$ct w$th the eBpress ter% conta$ned $n the doc!%ents. 53. 'urger (ing Cor v $ungry Jac)*s Pty Ltd [2661] C)>CA 187 pg-2+9 Facts: 5!rger H$ng05H1 $s a K) &$r% and gave H!ngry Mac'@s0HM1 eBc#!s$ve r$ght to deve#op 5M $n A!stra#$a= $n ret!rn HM pro%$sed to open - o!t#ets every year. 2ater 5H wanted A!stra#$an %ar'et &or $tse#& so secret#y started d$sc!ss$ons w$th )he##. 5H ter%$nated HM@s contract and HM s!ed &or reach o& good &a$th. (at$o: "he co!rt dec$ded that 5H reached $ts $%p#$ed o #$gat$on o& good &a$th. 5-. Costa +raca Pty Ltd v 'errigan Weed , Pest Control Pty Ltd pg-272 Facts: Costa Graca0p#a$nt$&&1 operated a to%ato &ar% and as'ed the de&endant to spray $nsect$c$des. Fo##ow$ng spray$ng= the crop d$ed and CG s!ed the de&endant. (at$o: "he co!rt dec$ded that there was an $%p#$ed ter% that the serv$ces wo!#d e carr$ed o!t w$th reasona #e care and s'$##. As the de&endant d$d not ta'e reasona #e care he was $n reach o& contract and #$a #e &or da%ages. 55. (ead v Cerey Co%$nees .ty 2td

5+. $enry (endall , Sons v Williams Lillico , Sons Ltd [19+2] 2 A## ,( pg-27Facts: "he vendor reg!#ar#y so#d n!ts to )A..A and there were %any transact$ons $n the past. ,ach t$%e the vendor sent a note con&$r%$ng the ora# contract 0the order1 and a d$sp!te arose whether the ter%s were $nc#!ded $n each contract. (at$o: "he Co!rt dec$ded that the ter%s o& the so#d note were part o& the contract on the as$s on cons$stent past dea#$ngs etween the%. "here were on eBpress ter%s to the contrary. 57. 'ritish Crane $ire Cor Ltd v I s-ich Plant $ire Ltd pg-27Facts: .#a$nt$&&0.1 h$red a crane w$th a dr$ver &ro% de&endant091.2ater 9 sent a &or% wh$ch stated that . was #$a #e &or a## the costs &or da%ages d!r$ng h$re. Crane was da%aged eca!se o& the dr$ver. . s!ed 9. (at$o: "he ter% was not an eBpress ter% as $t was sent a&ter the contract= a#so there were $ns!&&$c$ent past dea#$ngs. However= the ter% $n h$re-&or% o!ght to e $%p#$ed on the as$s o& a trade c!sto%. 58. .he Moorcoc) 018891 1- .9 +pg-27+ Facts: .#a$nt$&& 0.1 owned a sh$p and wanted to erth $t on a doc' owned y the de&endant 091. 9 gave per%$ss$on &or a &ee and d!r$ng erth$ng sh$p got da%aged d!e to the hard gro!nd eneath. (at$o: "he co!rt dec$ded that $t was an $%p#$ed ter% that the r$ver $s s!$ta #e 0&$t1 &or the p!rpose o& !se. 59. Codel!a Construction Pty Ltd v State %ail &uthority o! /SW pg-277 Facts: )tate (a$# A!thor$ty was !$#d$ng a new ra$#way and Code#&a won the tender. Code#&a wor'ed 2-N7 wh$ch res!#ted $n no$se ca!s$ng d$s*!$et a%ong #oca#s. 2oca#s too' the %atter to co!rt and c#a$%ed a an. A## those res!#ted $n red!ct$on o& wor' sh$&ts and $ncrease $n eBpenses= )(A then appea#ed to the H$gh Co!rt. (at$o: +6. (ead v Cerey Co%$nees .ty 2td [1979] G( -7 pg-263 Facts: (ead tw$ce too' h$s 5I> car to Cerey to have &$B trans%$ss$on. Cerey to#d (ead that a sw$tch was %$ss$ng. 3n &act the sw$tch was w$red $ncorrect#y y Cerey. En one occas$on the car was not $n ne!tra# and ca!sed da%ages. (at$o: Iar' M he#d that oth ".A s 7- and co%%on #aw $%p#$ed a warranty o& reasona #e care and s'$## $nto the contract. "ho!gh Cerey warned a o!t the de&ect= $t does not %ean that Cerey@s reach had not ca!sed the #oss.

+1. Crago v I!#t$*!$p .ty 2td +2. Carpet Ca## .ty 2td v Chan 019871 A".( pg-217 Facts: Chan o!ght a carpet &or h$s n$ght c#! and as'ed Carpet Ca## to prov$de a good carpet that can w$thstand yo!ng patrons. Chan re&!sed to pay &!## pr$ce a&ter certa$n areas o& carpet were da%aged eca!se o& sta$ns and c!sto%er a !se. (at$o: 3t was a cons!%er contract as the good $s nor%a##y ac*!$red &or persona# !se. As the !yer d$d not re#y on se##er@s s'$## wh$#e s!pp#y$ng good= so Chan #ost the case. +3. 0ran) v 1rosvenor Motor &uctions Pty Ltd [19+6] G( +67 pg-282 Facts: Fran' p!rchased a (ena!#t &ro% 8IA and was to#d that there was noth$ng wrong w$th the car eBcept &or the c#!tch. 2ater he &o!nd that there were %any de&ects w$th the car. (at$o: .ape M o!t#$ned that the car was not o& %erchanta #e *!a#$ty and $& the !yer $nd$cated the p!rpose o& p!rchase were the goods &$t &or that p!rpose. +-. $ 'eecham , Co Ltd v 0rancis $o-ard , Co Pty Ltd [1921] G2( pg-285 Facts: "he !yer wanted to !y t$% er !sed $n %a'$ng p$anos. "he !yer se#ected t$% er &ro% se##er@s yard !t the wood was $n&ected w$th dry rot wh$ch $s !ns!$ta #e &or %a'$ng p$anos !t s!$ta #e &or %a'$ng oBes. (at$o: "he co!rt dec$ded that even tho!gh the wood co!#d e p!t to so%e !se= $t was not o& %erchanta #e *!a#$ty. A#so pr$ce $s an $%portant &actor o& the *!a#$ty eBpected. +5. 1rant v &ustralians (nitting Mills01993156 C2( pg-287 Facts: 8rant s!&&ered &ro% der%at$t$s a&ter wear$ng !nderwear %an!&act!red y AHI as he d$d not wash the% e&ore !se wh$#e there were no co%p#a$nts &ro% other c#$ents. 8rant won the case. (at$o: "he co!rt dec$ded that 8oods %ay e o& %erchanta #e *!a#$ty even tho!gh the de&ect= once detected can e eas$#y re%ed$ed. ++. 2avid Jones Ltd v Willis 0193-1 52 C2( 116 pg-288 Facts: >$##$s wanted a pa$r o& wa#'$ng shoes &or her !#ged &oot $n 9av$d Mones. A&ter second !se the hee#s co##apsed ca!s$ng $nF!ry to >$##$s. (at$o: "he co!rt dec$ded that the goods were not o& %erchanta #e *!a#$ty and not &$t &or the p!rpose spec$&$ed. +7. 1odley v Perry [19+6] 3 A## ,( 3+ pg-289 Facts: A oy p!rchased a toy and ro'e when !sed and ca!sed $nF!ry. (at$o: 3& goods are o!ght &or nor%a# p!rpose= then the !yer $s not ent$t#ed to re#y on se##er@s F!dge%ent. 3n th$s case the good was not o& %erchanta #e *!a#$ty. 0"he sa%e pr$nc$p#e app#$ed to Preist v Last [1963] 2 H5 1-80a hot water ott#e1 and Frost v The Aylesbury Dairy ompany Ltd [1965] 1 H5 +680%$#'11.

+8. "eheran-,!rope Co .ty 2td v )" 5e#ton0"ractors1 2td [19+8] 2 A## ,( pg-232 Facts: "he se##er 05e#ton1 s!pp#$ed a$r co%pressors to the !yer &or eBport to 3ran. "he tractors d$d not sat$s&y the 3ran$an $%port re*!$re%ents. 5!yer #ost the case. (at$o: "he $%p#$ed cond$t$on o& &$tness &or p!rpose on#y app#$es where $t can e sa$d that the !yer has %ade the part$c!#ar p!rpose 'nown to the se##er $n s!ch a way that the se##er 'nows that he or she $s e$ng re#$ed !pon. +9. Ash$ngton .$gger$es v Cr$stopher H$## 2td [1971] 3 A## ,( 737 pg-23Facts: Ash$ngton had a %$n' &ar% and ordered %$n' &ood &ro% H$## who had never prev$o!s#y prepared &ood &or %$n's. H$## got !sed so%e %ea# prov$ded y Cors$#d%e# to prepare %$n' &ood. )o%e react$on %ade the &ood po$sono!s and %$n's d$ed. Ash$ngton s!ed H$## who $n t!rn s!ed Cors$#d%e# &or reach o& contract. atio0 76. E##ey v Iar# oro!gh Co!rt 2td

71. L*Estrange v 1rauco" [193-] 2 H5 pg-229 Facts: 2@,strange o!ght an a!to%at$c c$garette %ach$ne &ro% 8ra!co 0de&endant1 and s$gned the sa#es agree%ent wh$ch conta$ned the eBe%pt$on c#a!se w$tho!t read$ng $t. Iach$ne was de&ect$ve so she s!ed 8ra!co . (at$o: As the doc!%ents were s$gned= so they were $nd$ng. As the doc!%ents d$d not conta$n any $%p#$ed ter%= there&ore she co!#d not re#y on $t. )reasonable notice test* 72. .ar'er v )o!th ,astern (a$#way Co 018771 2 C.9 pg-157 Facts: .ar'er #e&t a ag at ra$#way c#oa'roo%= and pa$d &or $t. En the &ace o& the t$c'et there was a n!% er and the words J)ee 5ac'@. En the ac' there were severa# c#a!ses. Ene c#a!se stated that co%pany w$## not e respons$ #e &or pac'age eBceed$ng the va#!es o& 16 po!nds. En ret!rn .ar'er co!#d not &$nd h$s ag= so he s!ed the ra$#ways &or 2- po!nds and #ost. (at$o: "he F!dge $n th$s case dec$ded that $s reasona #e not$ce has een g$ven= $t does not %atter whether the other party read the c#a!se or not. 73. Ecean$c )!n 2$ne )h$pp$ng v Fay 019881 1+5 C2( pg-158 Facts: Fay oo'ed a cr!$se &ro% C)> to 8ree' on a 8ree' vesse# owned y E)2). 5roch!re showed that cr!$se was governed y ter%s on the t$c'et wh$ch stated that a## act$ons aga$nst E)2) e ro!ght $n 8reece. Fay was $nF!red and ro!ght the case $n C)>? the owner arg!ed that $t was a cond$t$on o& the contract to e ro!ght $n 8reece. (at$o: "he co!rt dec$ded that the contract was %ade $n C)> and the roch!re d$d not a%o!nt to reasona #e not$ce eca!se the roch!re was not a doc!%ent wh$ch co!#d reasona #y e regarded as contract!a# $n nat!re. "h!s the c#a!se conta$n$ng 8reece was not a ter% o& the contract. ()emption 'lause.&. "s the clause a term of the contract/ .0. "f it is a term of the contract, does it cover the breach that has occurred/ 7+. Curtis v Chemical Cleaning and 2yeing Co [1951] 3 H5 865 pg-233 Facts: Irs C!rt$s too' a wedd$ng dress to the de&endant dryc#eaner and was as'ed to s$gn a rece$pt &or d$sc#a$%$ng da%age to the eads and se*!$ns. "he dress was da%aged and C!rt$s c#a$%ed da%ages. (at$o: As the ass$stant had $nnocent#y %ade a &a#se representat$on= so they co!#d not re#y on the eBe%pt$on c#a!se eBcept &or eads and se*!$ns. 77. .hornton v Shoe Lane Par)ing Ltd [1971] 3 A## ,( +8+ pg-228 Facts: "hornton too' h$s car to the car par' operated y the de&endant and o!ts$de s$gn read O.ar'$ng at owner@s r$s'.L "he t$c'et read s! Fect to cond$t$ons o& the pre%$ses. 3ns$de was an eBe%pt$on c#a!se &or persona# $nF!r$es. "hornton was $nF!red and c#a$%ed the car par' 56P respons$ #e. (at$o: "he co!rt he#d that the contract was %ade e&ore the t$c'et was p!rchased 0$.e. vend$ng %ach$ne1? a#so the c#a!se was very w$de. 2ord 9enn$ng I( sa$d that as the c#a!se was very destr!ct$ve $t had to e pa$nted $n red. 78. Andrews 5ros 05o!rne%o!th1 2td v )$nger Car Co 2td [1933] A## pg-178 Facts: )$nger pro%$sed to de#$ver a Jnew@ car the dea#er !t $nstead de#$vered !n!sed !t not new car. )$nger had an eBe%pt$on c#a!se &or any warrant$es !nder co%%on #aw or stat!te. (at$o: "he eBe%pt$on c#a!se d$d not cover reach o& eBpress warranty. 79. White v John War-ic) , Co Ltd [1953] 2 A## ,( 1621 pg-251 Facts: >h$te h$red a tr$cyc#e &ro% >arw$c' and was $nF!red d!e to so%e $cyc#e &#aw. He s!ed >arw$c' &or reach o& contract and tort o& neg#$gence. >arw$c' had an eBe%pt$on c#a!se. >arw$c' #ost tort o& neg#$gence !t was sa&e &or reach o& contract as $t was $nc#!ded $n the eBe%pt$on c#a!se. (at$o: "he co!rt he#d that the eBe%pt$on c#a!se d$d not re#$eve >arw$c' &ro% $ts #$a $#$ty !nder the tort o& neg#$gence.

86. Sydney Cor oration v West 019+51 1- C2( -81 pg-25Facts: >est par'ed h$s car $n a car par' operated y )C. He was $ss!ed a t$c'et w$th the eBe%pt$on c#a!se $n $t. A th$e& !sed a d!p#$cate t$c'et and sto#e >est@s car. (at$o: "he eBc#!s$on c#a!se $n the t$c'et was a ter% o& contract. "he co!rt dec$ded that the eBc#!s$on c#a!se was very w$de= $n the #$ght o& the contract $t %eant eBc#!d$ng da%age y attendant or so%eth$ng #$'e that and not g$v$ng a car away. 81. 9ar#$ngton F!t!res 2td v 9e#co A!stra#$a .ty 2td 0198+1 1+1 C2( pg-183 Facts: 9ar#$ngton 0 ro'er1 traded 9e#co@s share. 9e#co d$d not per%$t the ro'er &or !na!thor$sed trad$ng wh$ch the ro'er d$d and 9e#co s!&&ered #osses. 9ar#$ngton had so%e eBe%pt$on c#a!se. C#a!se $nc#!ded that 9ar#$ngton was not #$a #e &or any trad$ng act$v$ty !nderta'en on eha#& o& 9e#co whether p!rs!ant to the agree%ent or not. "he second c#a!se $nc#!ded that the agent was #$a #e on#y &or 166 do##ars &or da%ages &or= or $n respect to any connect$on esta #$shed y th$s agree%ent. (at$o: "he co!rt he#d that c#a!se1 d$d not eBc#!de the de&endant &ro% #a$ #$ty eca!se $t $s pres!%ed that the de&endant wo!#d carry on act$v$ty !nder 9e#co@s a!thor$ty. 5!t he was eBe%pted !nder c#a!se2 wh$ch stated Oda%ages &or= or $n respect to any connect$on esta #$shed y th$s agree%ent.L )o he was #$a #e on#y &or 166 do##ars. 82. Smith v Land , $ouse Pro erty Cor 0188-1 28 Ch 9 7 pg-98 Facts: 9!r$ng the sa#e o& a hote#= the vendor to#d the p!rchaser that F#ec' was a Odes$ra #e tenantL !t $t t!rned o!t to e otherw$se. "he co!rt had to dec$de whether the state%ent was an op$n$on or &act. (at$o: 3n th$s case 5owen 2M dec$ded that O$& &acts are not e*!a##y 'nown to oth s$des= then a state%ent o& op$n$on y the one who 'nows the &acts est w$## e a state%ent o& %ater$a# &act.L 3n th$s case )%$th 'new &acts a o!t F#ec' where as the !yer d$d not. )o the p#a$nt$&& won the case. 83. $olmes v Jones 019671 - C2( 1+92 pg-166 Facts: "he vendor overstated the no. o& catt#e to the p!rchaser who got h$s agent to con&$r%. .!rchaser s!ed the vendor &or %$srepresentat$on. (at$o: 3n th$s case the co!rt reFected the act$on ro!ght on the as$s o& %$srepresentat$on eca!se the p!rchaser had not re#$ed !pon the %$srepresentat$on. 8-. %edgrave v $urd 018811 26 Ch 9 3 pg-166 Facts: "he vendor %$sstated the a%o!nt o& rece$pts. En as'$ng a o!t other rece$pts the p!rchaser was to#d that they ca%e &ro% other !s$ness. "he owner care#ess#y g#anced at the doc!%ent !t d$d not ana#yse $t. He s!ed the% &or %$srepresentat$on. (at$o: 3n th$s case the co!rt dec$ded that as the representat$on was %ater$a# wh$ch $nd!ced the p!rchaser to enter $nto the contract= de&endant was #$a #e. "here was no o #$gat$on on the p!rchaser to $nvest$gate the vendor@s case. L3t $s not a de&ence to &ra!d to arg!e that the p#a$nt$&& wo!#d have 'nown the tr!th $& he or she eBerc$sed reasona #e care or d$#$genceL 85. 9erry v .ee' 018891 1- App pg-+2 Facts: .ee' was $nnocent#y %$s#ed y 9erry to s! scr$ e &or shares o& a co%pany. "he co%pany #$*!$dated and .ee' s!ed 9erry 0won1. (at$o: 3n th$s case the co!rt dec$ded that a person %ay not s!e on a &ra!d!#ent %$srepresentat$on that was not d$rected at h$% or her and was not $ntended to $nd!ce h$%/her $nto %a'$ng the contract. 8+. $edley 'yrne , Co Ltd v $eller and Partners Ltd [19+-]AC pg-111 Facts: Hed#ey was an advert$s$ng agency and agreed to per&or% tas' &or ,as$power. ,as$power@s an' gave re&erence &or pr$vate !se. ,as$power went $nto #$*!$dat$on and Hed#ey 5yrne s!ed He##er &or neg#$gence. (at$o: "he co!rt dec$ded that a person g$v$ng adv$ce co!#d owe a d!ty o& care to the rec$p$ent $& a spec$a# re#at$onsh$p eB$sted. However no spec$a# re#at$onsh$p eB$sted as the adv$ce was prov$ded !nder cover o& disclaimer5 87. Esso Petroleum Co Ltd v Mardon[197+]2 pg-167 Facts: Iardon0p#a$nt$&&1 #eased a petro# stat$on and was %$sg!$ded on the a%o!nt o& petro# $t w$## se##. 2oca# p#ann$ng a!thor$ty a#tered p#ans. ,sso s!ed and won. Iardon s!ed &or neg#$gent %$srepresentat$on and reach o& contract 0warranty1. (at$o: Iardon s!cceeded on oth c#a$%s. "he pred$ct$on was a ter% and so Iardon co!#d s!e &or reach o& contract. A#so ,sso was neg#$gent even tho!gh he had a## the re*!$red $n&or%at$on to %a'e the F!dg%ent. 88. Car : Kn$versa# F$nance Co 2td v Ca#dwe## [19+5] 3 45 525 pg-2+6 Facts: Ca#dwe## so#d h$s car $n ret!rn &or a che*!e. Che*!e o!nced and the !yer d$sappeared se##$ng the car to a &$nance co%pany. Ca#dwe## $n&or%ed cops and arg!ed that he cance##ed the contract pr$or to &$nance co%pany@s ac*!$re. (at$o: "he co!rt dec$ded $n &avo!r o& Ca#dwe##. "he co!rt he#d that $& a party resc$nds the contract e&ore a contract $s %ade w$th the th$rd party= then the resc$ss$on $s va#$d and the th$rd party w$## e #$a #e to g$ve ac' the good. 89. 3or)e v %oss Lucas Pty Ltd 019831 pg-118 Facts: Dor'e o!ght a !s$ness part#y on the as$s o& t!rnover &$g!re prov$ded y the vendor. Gendor gave the &$g!res to h$s agent 0(21 who passed $t to Dor'e. F$g!res were $ncorrect and Dor'e s!ed the agent &or reach o& ".A s. 52. (at$o: 3n th$s case the co!rt dec$ded that even tho!gh the agent was not aware o& the $ncorrect $n&or%at$on= he $s #$a #e !nder ".A s 52. He co!#d have eBc#!ded $t y stat$ng that @he was F!st pass$ng $n&or%at$on and was not #$a #e &or $t.@ 96. Collins Marric)ville Pty Ltd v $en4o Investments Pty Ltd 019871 pg-117 Facts: CI o!ght a resta!rant part#y on the as$s o& $ts seat$ng capac$ty. "he agent HenFo had %$srepresented the &act a o!t the seat$ng capac$ty and the se##er re%a$ned s$#ent on that $ss!e. CI s!ed &or reach o& ".A s 52 (at$o: 3t was he#d that the representat$on was %$s#ead$ng. (e%a$n$ng s$#ent $s a#so reach o& s 52. 91. 2emagogue Pty Ltd v %amens)y 019921 116 A2( pg-119 Facts: (a%ens'y p!rchased a ho%e !n$t w$th access thro!gh an !n%ade dr$veway. (a%ens'y d$d not 'now that there was no road #$scense &or $t and that an app#$cat$on has een #odged y the vendor. (a%ens'y s!ed &or reach !nder s.52. (at$o: "he co!rt he#d that o ta$n$ng a road #$cence was !n!s!a#. "he de&endant had re%a$ned s$#ent and so the contract was vo$d and the p#a$nt$&& was ret!rned depos$t. 92. Metalcor %ecyclers Pty Ltd v Metal manu!acturers Ltd pg-126 Facts: Ieta#corp s!pp#$ed scrap copper to II and on one occas$on II &orgot to $n&or% Ieta#corp that the scrap was #ost d!r$ng the$r te#ephone conversat$on. Ieta#corp pa$d $ts s!pp#$er !t d$d not get pa$d y II. Ieta#corp co!#d not get %oney ac' &ro% h$s s!pp#$er and so s!ed II &or reach o& s 52. (at$o: "he co!rt he#d that y re%a$n$ng s$#ent II %$s#ead Ieta#corp and so Ieta#corp was #$a #e &or da%ages. 93. Wheeler 1race , Pierucci Pty Ltd v Wright 019891 A".( pg-122 Facts: >8. was a &$nanc$a# cons!#tant and %$s#ead peop#e $nto !y$ng !n$ts o& a %$ne that was str!gg#$ng. >r$ght was %$s#ead and o!ght so%e !n$ts and #oss %oney. He s!ed &or reach o& s 52 and won. (at$o: "he co!rt dec$ded that pro%$se or pred$ct$ons are not act$ona #e !n#ess $t $s %ade y a person who has no $ntent$on o& carry$ng $t o!t 0%$srepresentat$on1. 9-. 'ateman v Slatyer 019871 A".( pg-125 Facts: 5ate%an was %$s#ead y )#ayter to !y a &ranch$se and was g$ven ass!rance o& $ts s!ccess. 5ate%an o!ght one !t s!&&ered #osses. 5ate%an s!ed )#ayter !t )#ayter re#$ed on the d$sc#a$%er c#a!se $nc#!ded $n the contract. (at$o: ,Bc#!s$on c#a!ses or d$sc#a$%ers are not so e&&ect$ve aga$nst s 52. 3n th$s case the co!rt &o!nd the de&endant !nder reach o& s 52 as the d$sc#a$%er was not e&&ect$ve.

95. S-eetman v 'rad!ield Management Services Pty Ltd 0199-1 A".( pg-12+ Facts: An acco!ntant %$s#eads )weet%an to $nvest and ass!red that he had !sed h$s eBper$ence and *!a#$&$cat$ons to assess the sche%e. )weet%an %ade $nvest%ents and #ost heav$#y. )weet%an s!ed &or reach o& s 52= s 82= and neg#$gence $n tort. (at$o: "he co!rt tho!ght that )weet%an wo!#d not acted d$&&erent $& he 'new that the acco!ntant had not cond!cted any $nvest$gat$ons. 2ee M he#d that the acco!ntant was neg#$gent and awarded da%ages &or neg#$gence. 9+. 3 : 2 )ec!r$t$es v H"> Ga#!ers05r$s ane1 .ty 2td [2662] HCA pg-82 Facts: Ca%worth .ty 2td 0 orrower1 owned so%e #and and wanted to ra$se &$nance. "he orrower as'ed H"> to va#!e the property who va#!ed $t at A1.5 %$##$on. "he orrower so!ght %oney &ro% 3:2 and H"> agreed that the va#!at$on co!#d e !sed to o ta$n #oan. 5orrower went an'r!pt and 3:2 got #ess %oney &or the property= so they s!ed H"> !nder neg#$gence and s 52 &or the re%a$n$ng s!% and won. 3 : 2@s care#essness was another reason &or the #oss. (at$o: H$ght co!rt he#d that H"> had een neg#$gent and engaged $n decept$ve cond!ct and so were #$a #e !nder s 52. 3n &!t!re the da%ages w$## e apport$ona #e eca!se o& re&or%s $n the po#$cy. 97. Cash v 3n%an [1968] 2 H5 3 pg-1-8 Facts: A %$nor p!rchased a no. o& wa$stcoats &ro% a ta$#or= and then re&!sed to pay. "he ta$#or s!ed to recover the contract pr$ce. (at$o: A %$nor %!st pay a reasona #e pr$ce &or any necessar$es o!ght. 3n th$s case the %$nor was not #ega##y o!nd eca!se eBcess no. o& wa$stcoats are not necessar$es. 98. Commercial 'an) o! &ustralia v &madio 019831 57 A2M( pg-132 Facts: Ir and Irs A%ad$o were 3ta#$ans and o#d. "hey %ortgaged the$r property to sec!re the$r son@s overdra&t. "he$r son and the an' %anager %$s#ead the%. (at$o: "he co!rt dec$ded that cond!ct was !nconsc$ona #e. 3t %eans that one party was v!#nera #e and other party too' !n&a$r advantage o& that. 3n th$s case the A%ad$o@s were !nder spec$a# d$sa $#$ty and so the agree%ent was not en&orcea #e. 99. "ra%ways Advert$s$ng .ty 2td v 2!na .ar' 0C)>1 2td 019381 38 )( pg-2-8 Facts: Cot g$ven (at$o: "he F!dge $n th$s case dec$ded that a cond$t$on $s a ter% when the pro%$se $s o& s!ch $%portance that the pro%$see wo!#d not have entered $nto the contract !n#ess he has een ass!red that the pro%$se wo!#d e 'ept. 166. 'unge Cor o! /e- 3or) v .radax Ex ort S& Panama [1981] pg-312 Facts: "radaB agreed to se## soya ean %ea# to 5!nge. Cond$t$on re*!$red 5!nge to g$ve 15 days not$ce= 5!nge &a$#ed to co%p#y and "radaB ter%$nated the contract and c#a$%ed da%ages. "radaB won the s!$t. (at$o: "he co!rt he#d that even tho!gh the conse*!ence o& the reach was not over#y ser$o!s= t$%e st$p!#at$ons $n %ercant$#e contracts are genera##y regarded as cond$t$ons. "here&ore= even a %$nor reach wo!#d g$ve the $nnocent party the r$ght to ter%$nate. "he se##er won the case so was ent$t#ed to ter%$nat$on and da%ages. 161. 'ettini v 1ye [187-] A## ,( (ep 2-2 pg-313 Facts: 5ett$n$ per&or%ed &or 8ye at var$o!s #ocat$ons. "he contract stated that Ir 5ett$n$ agrees to e $n 2ondon s$B days e&ore h$s engage%ent. 5ett$n$ &a##s $## and $s !na #e to %a'e $t. 8ye ter%$nated the contract !t 5ett$n$ was r$ght $n eyes o& co!rt. (at$o: "he co!rt dec$ded that ter%$nat$on can on#y ta'e p#ace $& a cond$t$on was reached. 3n th$s case the co!rt dec$ded that t$%e was not a cond$t$on and so the contract co!#d not e ter%$nated. 162. &ssociated /e-s a ers Ltd v 'anc)s 019511 83 C2( 322 pg-316 (at$o: 5anc's was a #ead$ng cartoon$st and wor'ed &or Assoc$ated Cewspaper 0AC1. AC d$d not #$ve !p to a cond$t$on on wh$ch the contract was ased and so 5anc's ter%$nated h$s contract. AC ro!ght an act$on aga$nst h$% and &a$#ed. (at$o: "he co!rt he#d that the state%ent was at the heart o& the contract and so reach o& the cond$t$on g$ves the p#a$nt$&& the r$ght to ter%$nate the contract. 163. $ong (ong 0ir Shi ing Co Ltd v (a-asa)i (isen (aisha Ltd [19+2] 2 pg-31Facts: Hong Hong F$r $s a sh$p owned y HHF). Hawasa'$ h$red $t !nder charterparty 0h$re o& sh$p w$th or w$tho!t crew1. 9!e to #ac' o& eng$ne roo% crew Hawasa'$ #ost 57 sa$#$ng days and so he ter%$nated the contract. Hawasa'$ was ent$t#ed to resc$nd the contract. "he contract conta$ned seaworth$ness c#a!se. (at$o: "he co!rt dec$ded that as Hawasa'$ was depr$ved o& the who#e ene&$t that $t had contracted &or or not. "he de#ay was so ser$o!s as to ent$t#e Hawasa'$ to resc$nd. 16-. /ational Engineering Pty Ltd v Chilco Enter rises Pty Ltd pg-317 Facts: C, agreed to h$re a crane &ro% Ch$#co $n M!ne and $n Iarch Ch$#co had d$&&$c!#ty arrang$ng one. C, eca%e aware o& th$s d$&&$c!#ty and Ch$#co con&$r%ed the &act. C, ter%$nated the contract on the as$s that Ch$#co won@t e a #e to s!pp#y the crane. C, #ost the case and Ch$#co was ent$t#ed to da%ages. (at$o: 3n th$s case the co!rt dec$ded that the $nnocent party w$## not e per%$tted to ter%$nate a contract F!st eca!se the other party has eBpressed so%e d$&&$c!#ty $n eBpress$ng the$r contract!a# o #$gat$on. "he ter%$nat$ng party %!st e a #e to prove that the other party was Jwho##y and &$na##y $ncapa #e@ o& per&or%$ng. 3n th$s case C, &a$#ed to sat$s&y the test and so Ch$#co was ent$t#ed to da%ages. 165. 0oran v Wight 019891 1+8 C2( pg-319 Facts: Foran entered $nto a contract to !y property &ro% >$ght and 2 days e&ore sett#e%ent Foran@s had pro #e% arrang$ng &$nance desp$te wh$ch they $n&or%ed >$ght that they wo!#d proceed w$th the contract. >$ghts had so%e pro #e% as we##= so on the sa%e day they to#d Forans that they w$## not e a #e to co%p#ete sett#e%ent wh$ch stopped Forans &ro% search$ng &or cap$ta#. En sett#e%ent day ne$ther party atte%pted to sett#e.2 days #ater Forans s!ed >$ght &or a ret!rn o& depos$t. "he >$ghts co!nters!ed &or reach o& contract. (at$o: "he co!rt dec$ded that >$ghts &a$#!re was a reach o& cond$t$on. "h$s was eca!se the sett#e%ent date was Jo& the essence o& the contract@. )o Forans co!#d ter%$nate the contract= prov$ded they are a #e to prove that they were ready to carry o!t the$r part. Forans are ent$t#ed to the ret!rn o& the$r depos$t. 16+. $oenig v Isaacs [1952] 2 A## pg-321 Facts: Hoen$g h$red 3saacs to renovate h$s ho!se. "he contract pr$ce was 756 po!nds. 3saacs d$d not per&or% h$s Fo we## and so Hoen$g re&!sed to pay. 3ss!e $s what a%o!nt he sho!#d e pa$d. (at$o: Contract!a# o #$gat$ons have to e s! stant$a##y per&or%ed $n order to s!e &or the contract pr$ce. 3n th$s case the co!rt he#d that the wor' was s! stant$a##y per&or%ed and so 3ssac was ent$t#ed to the contract pr$ce #ess cost o& $nco%p#ete wor'. 167. &ddis v 1ramo hone [1969] AC -88 pg-322 Facts: Add$s was e%p#oyed y 8ra%ophone w$th sa#ary and co%%$ss$on. "he contract re*!$red 8ra%ophone to g$ve + %onths not$ce o& ter%$nat$on. 8ra%ophone d$d so !t h$red rep#ac$ng %anager wh$ch prevented Add$s &ro% earn$ng co%%$ss$on. Add$s s!ed &or da%ages and won the case. (at$o: "he p!rpose o& an award o& da%ages $s to co%pensate the $nnocent party= not to p!n$sh the de&a!#t$ng party. 3n th$s case the co!rt &$rst awarded a #!%p s!% a%o!nt !t #ater overt!rned $t. "he sa%e pr$nc$p#e was app#$ed $n Robinson v !arman ("#$#) I E%ch& 168. %eg 1lass Pty Ltd v %ivers Loc)ing Systems Pty Ltd 019+81 pg-323 Facts: (eg as'ed ($vers )yste%s to &$t a stee#-sh$tted door and #oc'$ng syste% &or h$s shop. "he door was descr$ ed as J !rg#ar-proo&@ door. "h$e& ro'e $nto and sto#e goods. (eg s!ed &or da%ages. (at$o: "he p#a$nt$&& can on#y o ta$n da%ages &or the #osses ca!sed y reach o& contract. "he reach %!st not e the on#y ca!se !t $t %!st e s!&&$c$ent#y $%portant that but &or the reach= the #oss wo!#d not have occ!rred. "he co!rt dec$ded that goods wo!#d not have een sto#en $& the correct door had een $nsta##ed. 169. $adley v 'axendale 0185-1 9 ,Q 3-1 pg-32+ Facts: "he p#a$nt$&& 0Had#ey1 operated a %$## and a ro'en cran'sha&t ca!sed operat$ons at %$## to sh!t down. 5aBenda#e was h$red to get the sha&t changed. 5aBenda#e was s#ow wh$ch %eant %$## had to $nc!r #osses eca!se o& e$ng $noperat$ve. 9e&endant won the case. (at$o: 3& the #osses ca!sed y the reach o& contract are too re%ote= then the p#a$nt$&& wo!#d not e #$a #e &or da%ages.

116. +ictoria Laundry (Windsor) Ltd v /e-man Industries Ltd pg-32+ Facts: G$ctor$a 2a!ndry operated a !s$ness as #a!nderers and dryers. 9!r$ng that t$%e there was a shortage o& dryers and G2 ordered a o$#er &ro% Cew%an. "he ordered was de#$vered %onths #ate and so G2 s!ed &or #oss o& pro&$ts &ro% day today wor' and a #!crat$ve dy$ng contract &ro% I$n$stry o& )!pp#y. Cew%an d$d not 'now o& the contract. (at$o: "he co!rt he#d that &$rst #ot o& #ots pro&$t &e## w$th$n the &$rst #$% o& !adley v 'a%endale 0#osses occ!rr$ng $n the ord$nary co!rse o& th$ngs1= so Cew%an was #$a #e to pay= !t as Cew%an d$d not 'now a o!t the I$n$stry o& s!pp#y contract he $s not #$a #e &or those #osses. 111. Ic(ae v Co%%onwea#th 9$sposa#s Co%%$ss$on 0195118- C2( pg-275 Facts: C9C ca##ed &or tenders &or sa#vage and sa#e o& a tan'er $t tho!ght had gone agro!nd. Ic(ae won the tender and spent %oney &or search$ng the tan'er wh$ch d$d not eB$st 0C9C %ade a %$sta'e1. Ic(ae s!ed &or pr$ce o& tender as we## as eBpense $nc!rred to search &or the tan'er. (at$o: 3t was not poss$ #e to est$%ate whether Ic(ae wo!#d have %ade a pro&$t or a #oss on the operat$on. However $t was reasona #e that Ic(ae wo!#d $nc!r eBpenses= so Ic(ae was awarded da%ages o& a good s!%. "he case &e## !nder !adley v 'a%endal(s second #$% . 112. 'altic Shi ing Com any v 2illon 019931 333 pg-336 Facts: Irs 9$##$on went on a 1- days cr!$se wh$ch san' a&ter 16 days. Irs 9$##$on s!&&ered $nF!ry= #ost e#ong$ng= and was d$stressed and d$sappo$nted. (at$o: "he h$gh co!rt approved o& da%ages $nc#!d$ng d$stress= d$sappo$nt%ent= and #oss o& enFoy%ent. However the co!rt dec$ded that Irs 9$##$on w$## not ret!rned &!## &are as she eBper$enced part o& her ho#$day. 3gency 113. International $arvester v Carrigan*s $a5eldene Pastoral Co pg-378 Facts: Carr$gan was g$ven a pa%ph#et y 3H d!r$ng a se%$nar and was to#d to see the$r agent 8!nnedah. 8!nnedah was a genera# agent as we## as 3H@s agent. Carr$gan entered $nto a contract to !y 3H@s e*!$p%ent and the sa#e doc!%ent descr$ ed the agent as a Jdea#er@ and Jowner@. 3H was not %ent$oned. Carr$gan had pro #e% w$th the %ach$nery and so s!ed 3H. 8!nnedah was an'r!pt y that t$%e. (at$o: "he co!rt dec$ded that JeBc#!s$ve agent@ or Jd$str$ !t$ng agent@ cannot p!t a cons!%er $nto contract!a# re#at$onsh$p w$th the %an!&act!rer. 3n th$s case $t $s c#ear that agent was act$ng on h$s eha#& and not on 3H@s eha#&. ,ven a &ranch$see operates h$s/her !s$ness= $ndependent o& the &ranch$sor. Agency re#at$onsh$p- 28+ 11-. Potter v Customs , Excise Commissioners [1985] )"C pg-379 Facts: .otter was a who#esa#e dea#er o& "!pperware. He appo$nted so%e dea#ers to se## t!pperware and %ade the% s$gn the contract and dec#ared the% @$ndependent agents@. 9ea#ers 'ept anyth$ng over 76P as pro&$t and were re*!$red to %a$nta$n the$r own ad de ts. 3nco%e taB $ss!e and .otter was as'ed to pay taB on tota# pro&$t. (at$o: "he co!rt he#d that dea#ers were not agents &or .otter eca!se they d$d not have to %a'e an acco!nt to the pr$nc$p#e. 115. Petersen v Moloney 019511 25 A2M( pg-381 Facts: .eterson $nstr!cted an agent to &$nd a !yer &or her property and d$d not g$ve any eBpress a!thor$ty to the dea#er. Agent #ocated Io#oney who pa$d the &!## pr$ce and rece$ved a rece$pt. )a#e contract d$d not $nc#!de .eterson and on not rece$v$ng the %oney she s!ed oth agent and Io#oney. (at$o: "he co!rt dec$ded that the !yer &a$#ed to esta #$sh whether the agent had eBpress or $%p#$ed a!thor$ty to rece$ve %oney. "h!s the !yer &a$#ed her c#a$%s. 11+. /or-ich 0ire Insurance v 'rennans [1981] G( 981 pg-385 Facts: 5rennans 0th$rd party1= was see'$ng an $ns!rance cover. "hey were approached y an agent who reco%%ended the pr$nc$p#e 0Corw$ch1. 9$sc!ss$ons were he#d etween the three part$es and pr$nc$p#e $nstr!cted 5rennans that the !s$ness was to e he#d y the agent. Agent #$*!$dated and Corw$ch s!ed &or 5rennans &or the pre%$!%s. (at$o: En the as$s o& the ev$dence= the co!rt he#d that the cond!ct gave r$se to the not$on that A was an agent &or Corw$ch and that A@s a!thor$ty $nc#!ded co##ect$ng pre%$!%. 117. Pole v Leas) [18+1] A## ,( pg-38+ Facts: A acted as an agent &or .o#e and entered $nto contracts and too' %oney &ro% 2eas' on eha#& and w$th consent o& .o#e. .o#e ter%$nated contract w$th A !t d$d not $n&or% 2eas'. A &ra!d!#ent#y too' %oney &or h$s own ene&$t. 2eas' s!ed .o#e. (at$o: agency by esto%%el 118. $ely6$utchinson v 'rayhead Ltd [19+7] 3 A## ,( pg-389 Facts: ($chards was the cha$r%an and C,E o& 5rayhead 2td. En %atter o& &$nance= ($chards too' dec$s$on and oard agreed w$th $t. "h$s one t$%e ($chards gave g!arantee to He#y !t &a$#ed to &!#&$# $t and so He#y s!ed 5rayhead. 5rayhead 2td arg!ed that ($chards had no a!thor$ty. (at$o: "he co!rt dec$ded that ter%s w$## e $%p#$ed $nto a contract on the as$s o& cons$stent past dea#$ngs etween the part$es. 3n th$s case tho!gh ($chard d$d not have eBpress a!thor$ty= he had an $%p#$ed a!thor$ty. 119. 0reeman and Loc)yer v 'uc)hurst Par) Pro erties (Mangal) Ltd [19+-] pg-391 Facts: 5!c'h!rst was set !p to p!rchase and deve#op propert$es. A#tho!gh the agent was never &or%a##y appo$nted as the %anager he acted #$'e one w$th the consent o& the co%pany. En one $ss!e he s$gned a contract w$th Free%an and 2oc'yer !t d$d not pay the%. "hey s!ed the co%pany who sa$d that the agent had no a!thor$ty. (at$o: 3n th$s case the co!rt dec$ded that the agent d$d not have act!a# a!thor$ty !t had ostens$ #e a!thor$ty to do so. An agent $s sa$d to have ostens$ #e a!thor$ty= $& there has een representat$on and the representat$on was %ade y person/s that had Jact!a# a!thor$ty@. 126. Collen v Wright [18-3] A## ,( pg--66 Facts: "he th$rd party entered $nto an agree%ent to #ease a #and owned y the pr$nc$pa#. An agent hand#ed the %atter and e#$eved he had the a!thor$ty to do so. "h$rd party a#so e#$eved the sa%e. 3n &act= the agent d$d not have the a!thor$ty and pr$nc$pa# re&!sed to proceed w$th the #ease. "h$rd party s!ed the agent. (at$o: "he co!rt he#d that there was a contract etween the th$rd party and the agent warranted h$s a!thor$ty. )o the agent can e s!ed &or reach o& contract. 121. Said v 'utt [1926] 3 H5 pg--61 Facts: ". owned a theatre. . was a cr$t$c and had wr$tten !n&avo!ra #e art$c#es a o!t p#ays per&or%ed at ".@s theatre. As a res!#t . was arred &ro% ".@s theatre. En one occas$on . had a &r$end 0A1 !y h$% t$c'et. En arr$va# . was not a##owed $n. He s!ed ". &or the reach o& contract and #ost. (at$o: 122. Ferg!san v Federa# Co%%$ss$oner o& "aBat$on 019791 79 A"C pg-312 Facts: Ferg!san was e%p#oyed $n A!stra#$an navy. He was 'een on #eav$ng the navy and go $nto pr$%ary prod!ct$on. "here&ore= he #eased 5 catt#e &or reed$ng to 266 catt#e &or wh$ch he contracted a property owner to past!re h$s catt#e. He %ade so%e #osses wh$ch he c#a$%ed were ded!ct$ #e &ro% $nco%e taB. "he 3" co%%$ss$oner d$d not a##ow th$s as #osses were not $nc!rred $n carry$ng on the !s$ness. (at$o: "he co!rt he#d that Ferg!san was carry$ng on a !s$ness. "he operat$on had co%%erc$a# &#avo!r $n $t 0pro&$t $ntent$on1. A#so the act$v$t$es were organ$sed. 123. Canny 8a r$e# Cast#e Mac'son Advert$s$ng .ty 2td v Go#!%e )a#es 0F$nance1 .ty 2td 0197-1 131 C2( pg-313 Facts: A co%pany 0Fo!rth Ied$a Ianage%ent .ty 2td1 had contracts w$th so%e per&or%ers. "o &$nance the to!rs= they entered $nto contract w$th Go#!%e )a#es 0F$nance1 .ty 2td. "hey $nc#!ded certa$n ter%s #$'e the contract was a JFo$nt vent!re@ and that Go#!%e )a#es wo!#d e pa$d one-ha#& o& the pro&$ts. Fo!rth %ed$a granted an e*!$ta #e charge over $ts r$ght to oB o&&$ce rece$pts to an advert$s$ng agency ca##ed Canny 8a r$e#. "he *!est$on was who had pr$or$ty over oB o&&$ce ta'$ngs. 3& the agree%ent etween Fo!rth Ied$a and Go#!%e sa#es created a partnersh$p= then Go#!%e )a#es had e*!$ta #e charge. (at$o: A s$ng#e vent!re %ay create a partnersh$p accord$ng to .artnersh$p Act 1958. 3n th$s case the co!rt dec$ded that the part$es were partners a#tho!gh $t was a one o&& to!r. 3t $s eca!se the part$es went $nto agree%ent w$th a v$ew o& pro&$t and to to %a'e Fo$nt dec$s$ons.

12-. CoB v H$c'%an 018+61 33 ,( pg-317 Facts: CoB and others were cred$tors o& a trad$ng partnersh$p wh$ch got $nto &$nanc$a# d$&&$c!#t$es. "he cred$tors agreed w$th the partners that the !s$ness wo!#d e he#d y the cred$tors !nt$# the de ts were pa$d o&& at wh$ch t$%e the !s$ness wo!#d revert to the so#e owners. Knt$# the de ts were pa$d a## the pro&$ts wo!#d e shared y cred$tors. Co!rt had to dec$de whether cred$tors were partners. (at$o: "he co!rt he#d that they were not partners even tho!gh they had pro&$t %ot$ve. "h$s $s ased on s + 031 0a1 wh$ch states that sec!r$ng a repay%ent o& de t y agree$ng to ta'e a proport$on o& pro&$ts doe not res!#t $n partnersh$p. 125. )tec'e# v ,##$ce [1973] 3 A## ,( pg-326 Facts: 5oth the de&endant and the p#a$nt$&& were chartered acco!ntants. )tec'e# was descr$ ed as a Jsa#ar$ed e%p#oyee@. Accord$ng to the agree%ent etween )tec'e# and ,##$ce= )tec'e# was to rece$ve a sa#ary and had no $nterest $n or r$ght to cap$ta# o& the Jpartnersh$p@. A## pro&$ts e#onged to ,##$ce and a## #ooses were h$s respons$ $#$ty. (at$o: Iegarry M he#d that w$th regards to th$rd party= )tec'e# was a partner= $& not act!a##y then y ho#d$ng o!t. 12+. Harvey v Harvey 019761 126 C2( pg-325 Facts: HH Harvey 0HH1 owned a &ar%. 5eca!se o& $## hea#th he wanted to se## the property. However= he dec$ded aga$nst se##$ng when h$s rother approached h$% and s!ggested that &ar% co!#d e wor'ed y H2 and H2@s sons. "he part$es agreed. 3t wo!#d ena #e H2@s sons to ga$n so%e pastora# %anage%ent and preserve the #and &or HH@s son who was then +. "he arrange%ent was ora#. H2 and h$s sons wo!#d contr$ !te s'$## and #a o!r !t no cap$ta#. A## eBpenses= #osses and pro&$ts had to e shared. Ever t$%e= $%prove%ents were %ade to the &ar% wh$ch $ncreased $ts va#!e. "here was no agree%ent a o!t whether the #and was partnersh$p or not. "he partnersh$p ran &or 26 years and then ter%$nated. "he *!est$on $s 3. whether partnersh$p eB$sted and $& $t d$d 33. had the #and eco%e a partnersh$p property or 333. $& the partnersh$p eB$sted and the #and was not partnersh$p property= sho!#d the va#!e o& $%prove%ents e ta'en $nto acco!nt. (at$o: "he co!rt he#d 3. "hat the agree%ent was c#ear#y partnersh$p. 33. "hat the #and d$d not eco%e partnersh$p property eca!se part$es $ntended to preserve the #and &or HH@s son. 333. "hat there $s no genera# pr$nc$p#e that says that $n a sence o& agree%ent= a partner whose property has een $ncreased $n va#!e $s o!nd to share the va#!e w$th other partners. "h$s %eant that HH got the #and and wasn@t #$a #e to pay co%pensat$on to any partner. 127. Do!ng v 2a% : Ers [2661] C)>CA pg-329 Facts: Ir and Irs Do!ng and Ir and Irs Cewe## had a partnersh$p &$r%. Irs Cewe## d$d %ost o& the #ease negot$at$ons and was the one who a#ways pa$d rent to the agent. Irs Cewe## negot$ated a new #ease opt$on w$th the agent= w$tho!t the consent o& the partners. .artners arg!ed that they were not o!nd y her dec$s$on. (at$o: "he co!rt he#d that $n genera# co%%erc$a# partnersh$p= partnersh$p $s o!nd y a partner@s act$on #$'e #eas$ng #and $& they are done $n &$r%@s na%e and w$th$n the co!rse o& !s$ness. 128. 8o#d erg v Men'$ns 018891 15 G2( pg-336 Facts: Men'$ns= a partner $n a !s$ness= orrowed %oney &or h$%se#& $n the na%e o& partnersh$p w$th $nterest rate o& +6P. Men'$ns partner den$ed that $t was a partnersh$p de t and won the case. (at$o: 8enera##y orrow$ng %oney $s not w$th$n the nor%a# scope o& a partner. ,ven $& $t $s= the part$c!#ar transact$on %!st e the !s!a# way o& orrow$ng. 3n th$s case the rates were eBor $tant and d$d not &a## w$th$n the !s!a# way and th!s other partners were not #$a #e. Cor%a# rate $s etween + R 16P. 129. Constr!ct$on ,ng$neer$ng .ty 2td v HeBy# .ty 2td 019851 155 pg-331 Facts: "wo co%pan$es 0"a% e# .ty 2td and HeBy# .ty 2td1 cond!cted a !s$ness o& #and deve#op%ent $n partnersh$p. "a% e# ac*!$red a #and $n $ts own na%e and engaged Constr!ct$on ,ng$neer$ng to !$#d ho%es on $t. "he contract d$d not %ent$on HeBy#. 3n &act= Constr!ct$on ,ng$neer$ng d$d not 'now o& HeBy# and tho!ght "a% e# were act$ng as pr$nc$p#e. A d$sp!te arose and part$es went to ar $trat$on. Constr!ct$on ,ng. tr$ed to $nc#!de HeBy# as a party to d$sp!te !t HeBy# den$ed. (at$o: s 9 states that a partner w$## not e o!nd y act$ons o& other partners where: a1 .artner had no a!thor$ty. 1 1. "h$rd party 'new that co-partner had no a!thor$ty 2. "h$rd party d$d not 'now or e#$eve that there was a partner. 3n th$s case the co!rt dec$ded that "a% e# d$d not have the act!a# or ostens$ #e a!thor$ty to %a'e contracts= a#so Constr!ct$on ,ng d$d not 'now o& HeBy#. 136. .o#'$nghorne v Ho##and : >h$tt$ngton 0193-1 51 C2( 51 pg-33Facts: Ho##and= >h$tt$ngton= and Haro#d Ho##and cond!cted a so#$c$tor@s o&&$ce as partners. Haro#d adv$sed a c#$ent 0.o#'$nghorne1 to se## govern%ent shares and to !y shares o& a &r$end@s &$r%. 3t was $ntent$ona# and other partners d$d not 'now o& $t. A## partners were s!ed and the c#$ent won the case. (at$o: "he h$gh co!rt dec$ded that as they were $n a partnersh$p= each partner was an agent and a## partners w$## e respons$ #e &or acts done $n co!rse o& h$s a!thor$ty as partner. "he acts were !nder ord$nary co!rse o& the !s$ness and so a## partners were #$a #e. 131. >a#'er v ,!ropean ,#ectron$cs .ty 2td 019961 23 C)>2( pg-33Facts: 3 partners ran a chartered acco!ntants &$r%. A## 3 partners had d$&&erent &$e#d o& eBpert$se and one partner %$sappropr$ated a #arge s!% o& %oney. ,!ropean ,#ectron$cs s!ed a## 3 partners. (at$o: "he co!rt dec$ded that the acco!ntant was act$ng $n the ord$nary co!rse o& !s$ness= so a## partners are Fo$nt#y and severa##y #$a #e. 132. 9:H 5!nny .ty 2td v At'$ns and Ca!ghton [19+1] G( 31 pg-33+ Facts: 5!nny operated a !s$ness s!pp#y$ng hardware. At'$ns and Ca!ghton were $nterv$ewed y 5!nny@s cred$tor 05arnard1. At'$ns and Ca!ghton e$ther to#d h$% that they a#ready entered $nto partnersh$p or were a o!t to enter $nto a partnersh$p. 5arnard d$d not as' a o!t partnersh$p ter%s. At'$ns and Ca!ghton never went ahead w$th the partnersh$p and never to#d $t to 5!nny. Ca!ghton o!ght goods on cred$t. "w$ce At'$ns co##ected goods on eha#& o& Ca!ghton. "w$ce he pa$d Ca!ghton@s acco!nt w$th h$s own che*!e. ,vent!a##y Ca!ghton &a$#ed to pay h$s acco!nt and 5!nnny s!ed oth o& the%. At'$ns arg!ed that he was not #$a #e as he was not a partner !t #ost the case. (at$o: "he co!rt dec$ded that At'$ns was respons$ #e and he had he#d h$%se#& o!t as a partner and was #$a #e. 3t $s eca!se tw$ce he acted on eha#& o& Ca!ghton and s$gned rece$pts to Fo$nt na%e. "he F!dge sa$d that At'$ns was ho#d$ng o!t as a partner. 133. "ower Ca $net Co 2td v 3ngra% [19-9] 3 A## ,( pg-337 Facts: Ir Chr$st%as and Ir 3ngra% carr$ed on a partnersh$p. "he &$r%@s #etter had the na%es o& oth partners. .artnersh$p was d$sso#ved and Chr$st%as was the so#e owner= he %ade $t 'now to the an' !t &a$#ed to p!t a not$ce $n the paper $n sp$te o& 3ngra%@s not$&$cat$on. Chr$st%as had new #etter had w$th on#y h$s na%e. 5!t on one order he !sed the o#d #etter head. "he se##er arg!ed that 3ngra% was #$a #e as $& he were a partner. (at$o: Knder s 18= the co!rt dec$ded that 3ngra% had not he#d h$%se#& o!t= on#y representat$on was %ade y Chr$st%as w$tho!t 3ngra%@s not$ce. A#so s -6031 states that a partner $s not #$a #e &or partnersh$p de t a&ter date o& death= an'r!ptcy= or ret$re%ent. 13-. Salomon v Salomon , Co Ltd [1987] AC 22 pg--+7 Facts: )a#o%on was a oot %an!&act!rer who or$g$na##y operated a !s$ness as a so#e trader. He converted the !s$ness $nto a co%pany as severa# o& h$s sons wor'ed w$th h$%. H$s sons and w$&e were g$ven a share each. He was the I9 and h$s sons were d$rectors. )a#o%on so#d h$s !s$ness to the co%pany and rece$ved %ore shares and sec!red #oan &ro% the co%pany. "he co%pany went $nto #$*!$dat$on and )a#o%on was s!ed &or co%pany@s de t. )a#o%on on the other hand arg!ed that he was not the co%pany. (at$o: "he co!rt he#d that a co%pany was a separate ent$ty &ro% $ts shareho#ders and $t cond!cts !s$ness $n $ts own na%e. "h$s case esta #$shed the pr$nc$p#e that contro# and %anage%ent o& !s$ness $s d$st$nct &ro% $ts ownersh$p.

135. Lee v Lee*s &ir 0arming Ltd [19+1] AC 12 pg--+7 Facts: Ir 2ee ran a !s$ness and &or%ed a co%pany to cond!ct the !s$ness. "he cap$ta# co%pr$sed 3666 shares and 2999 were owned y 2ee. He was the I9 o& the co%pany and an e%p#oyee !nder co%pany@s wor'er@s co%pensat$on $ns!rance. Ir 2ee d$ed $n a p#ane crash and h$s w$&e wanted co%pensat$on !nder wor'er@s co%pensat$on act. )he won the case. (at$o: "he .r$vy Co!nc$# esta #$shed )a#%on@s case= $.e. a co%pany $s a separate #ega# ent$ty w$th $ndependent eB$stence &ro% $ts shareho#ders. 13+. 5r$c' : .$pe 3nd!str$es 2td v Ecc$denta# 2$&e Co%$nees .ty 2td 019921=pg-3+6 Facts: 5r$c' : .$pe prov$ded g!arantee to Ecc$denta#. "he deed had to e s$gned y a d$rector and secretary or person e%p#oyed to do so &or the deed to e va#$d. "he deed was s$gned y 8o#d erg 0d$rector1 and F!rst- who s!pposed to e !t was not a secretary. En $n*!$r$ng he was to#d that F!rst was a secretary y a person not a!thor$sed to do so. 8o#d erg heard o& $t !t re%a$ned s$#ent. 3s the g!arantee $nd$ng; (at$o: F!rst was not appo$nted as a secretary o& the co%pany. ,ven the ass!rance was g$ven y Ecc$denta# who d$d not have the act!a# a!thor$ty !t had ostens$ #e a!thor$ty. En the other hand 8o#d erg had the act!a# a!thor$ty and y re%a$n$ng s$#ent he ass!red F!rst was va#$d#y appo$nted. )o= the co%pany was o!nd. 137. .anora%a 9eve#op%ents 08!$#d&ord1 2td v F$de#$s F!rn$sh$ngs Fa r$cs 2td [1971] 2 45 711 pg-3+1 Facts: 5ayne= the co%pany secretary &or F$de#$s F!rn$sh$ngs h$red so%e eBpens$ve cars &ro% .anora%a $n the na%e o& the co%pany. 3n &act= 5ayne !sed the car &or persona# p!rposes. >hen the co%pany re&!sed to pay .anora%a s!ed. (at$o: A co%pany secretary $s regarded as hav$ng c!sto%ary a!thor$ty to %a'e contracts concern$ng the $nterna# ad%$n$strat$ve %atter o& the co%pany. 3n th$s case the co!rt he#d that the secretary had the apparent a!thor$ty to h$re cars= so the co%pany $s o!nd y h$s act$ons. 138. )tate o& )o!th A!stra#$a v C#ar' 0199+1 1- A2C pg-3++ Facts: C#ar' was the I9 and C,E &or )o!th A!stra#$a 5an'. He was $nstr!%enta# $n ac*!$r$ng shares $n a co%pany w$tho!t eva#!at$ng $ts tr!e va#!e. C#ar' 'new that the proceeds &ro% the sa#e wo!#d e !sed to repay a #oan o& a co%pany $n wh$ch C#ar' was a d$rector and had %aFor ho#d$ngs. C#ar' d$d not d$sc#ose h$s $nvo#ve%ent w$th the co%pany. 5an' s!ed h$% &or da%ages and reach o& contract. (at$o: s 186 sets o!t that the d!ty o& co%pany d$rector or o&&$cer $s to eBerc$se a reasona #e degree o& care and d$#$gence. E&&$cer has reached h$s d!ty $& he &a$#s to eBerc$se reasona #e care. 3n th$s case C#ar' had to pay A81 I$##$on as da%ages. 139. >a#'er v >$% orne 0197+1 56 A2M( pg-3+9 Facts: "he d$rectors o& As$at$c ,#ectr$c .ty 2td %ade certa$n pay%ents e&ore #$*!$dator was appo$nted. "he #$*!$dator cha##enged these pay%ents as not e$ng $n $nterests o& As$at$c. At the t$%e these pay%ents were %ade= As$at$c was !na #e to pay $ts de t. As$at$c was a %e% er o& a gro!p o& co%pan$es that had co%%on shareho#ders. "he pay%ents had een %ade on eha#& o& other co%pan$es w$th$n the gro!p. "he d$rectors treated the assets o& each co%pany as the assets o& the gro!p. (at$o: "he co!rt he#d that the d$rectors owed the$r d!ty to the part$c!#ar co%pany $n *!est$on and not to the who#e gro!p. "here&ore d$rectors who %ade pay%ent to other co%pan$es were $n reach o& the$r d!t$es. ) 81 $s !sed here wh$ch states that Ja d$rector or o&&$cer o& a co%pany %!st eBerc$se the$r power and d$scharge the$r d!t$es@. 1-6. 8reen and C#ara .ty 2td 5esto e## 3nd!str$es .ty 2td 019821 3 AC2C pg-371 Facts: 8reen was e%p#oyed y 5esto e##= a Constr!ct$on Co%pany. As a res!#t o& h$s pos$t$on he was aware that 5esto e## $ntended to tender &or a constr!ct$on Fo . 8reen owned a pr$vate co%pany and a#so s! %$tted a tender. 8reen won the tender and 5esto e##@s tender was th$rd. 5esto e## s!ed &or reach o& contract. (at$o: ,ven tho!gh 5esto e## wo!#d not have won 0th$rd1= 8reen was $n reach o& h$s d!ty= so the co!rt ordered h$% to pay a## pro&$ts to 5esto e##. "he co!rt he#d that 8reen had reached &$d!c$ary o #$gat$on not to !se $ns$de $n&or%at$on. 1-1. C!%%$ngs v C#are%ont .etro#e!% C2 019931 3 3 AC2C pg-372 Facts: C!%%$ngs= F!##er and one other person were d$rectors o& C#are%ont= a p! #$c co%pany. C!%%$ngs and F!##er passed certa$n reso#!t$ons wh$ch &avo!red the$r cons!#t$ng co%pan$es and $nc#!ded ter%$nat$on a##owances and &ree #ease o& #!B!ry veh$c#e. "hese pay%ents were eBcess$ve y any ter%s. )! se*!ent#y= they were voted o!t o& the oard and the new oard ordered the ter%$nat$on pay%ents e repa$d. (at$o: s 182 $%poses on the d$rector o& the co%pany not to %$s!se h$s pos$t$on &or persona# ga$n= ga$n y th$rd party or to ca!se detr$%ent to the co%pany. 3n th$s case the d$rectors %$s!sed the$r pos$t$on and were !nder reach. 1-2. Ietropo#$tan F$re )yste%s .ty 2td v I$##er 019971 23 pg-379 Facts: I$##er and others were d$rectors o& (aydar ,#ectr$cs .ty 2td. (aydar had cred$tors de%and$ng o!tstand$ng pay%ents. 3n the sa%e %onth (aydar was contracted to carry o!t so%e wor'. I$##er act$ng on part o& (aydar s! contracted Ietropo#$tan F$re )yste%s to per&or% the tas' and ass!red that pay%ents wo!#d e %ade. (aydar eca%e $nso#vent and Ietropo#$tan s!ed &or reach o& 5888. I$##er and other d$rectors arg!ed that they had a de&ence !nder s.588H021. 2 d$rectors arg!ed that they had a de&ence !nder s 588H031 as they re#$ed on I$##er &or &$nanc$a# $n&or%at$on. (at$o: "he co!rt he#d that there were reasona #e gro!nds to s!spect that (aydar was !nder so#vency. "h$s %eant that s 5888 has een reached. 9e&ence !nder s 588H021 &a$#ed eca!se they were not &o!nded on reasona #e gro!nds. "he co!rt a#so he#d that other d$rectors were a#so #$a #e eca!se they d$d not &!#&$# the$r o #$gat$on to %a'e $n*!$res a o!t the co%pany s$t!at$on. 1-3. A)3C v .#y%$n= ,##$ott and Harr$son [2663] G)C 123 pg-379 Facts: .#y%$n 0I91= ,##$ott 0non-eBec!t$ve d$rector1 and Harr$son 0cha$r%an1 were d$rectors o& >ater >hee# I$##s .ty 2td and >ater >hee# Ho#d$ngs 2td. 3n 2666 the >ater >hee# co%pan$es were p#aced $nto vo#!ntary ad%$n$strat$on y the oard. However= the A)3C too' act$on &or $nso#vent trad$ng pr$or to the date. "he I$## s!&&ered #osses &or 3 years and was a##owed to trade $n sp$te o& so#vency. A)3C arg!ed that the d$rectors reached s.5888 and so!ght da%ages. ,##$ott c#a$%ed that he was !naware o& $t as he was F!st a non-eBec!t$ve d$rector. (at$o: "he d$rectors &a$#ed the$r de&ences and were #$a #e !nder s 5888. "h$s $s eca!se the d$rectors d$d not %a'e any e&&orts to stop the co%pan$es $nc!rr$ng de ts wh$#e $nso#vent.s