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NEGLIGENCE

According to common law, negligence is defined as a conduct that fall below


the standard of care necessary to protect other from unreasonable risk of
injury. The legal issue is whether [.] can successfully sue [.] for
negligence. In order to know whether the defendant commit negligence or not,
4 elements must be satisfied, including 1) Duty of care (DoC), 2) Breach of
the DoC, 3) Causation and 4) Remoteness.
1) DUTY OF CARE
Case 1: PHYSICAL INJURY: The first element to be proven is whether D
owed P a DOC by.
R: To prove that D owes a DOC to P, the P must show that at the time of Ds
careless action, it was RF that harm to person like P could result.
A: Here, when D carelessly to do (), it was RF that harm to P could result
b/c
Additionally, to know whether [.] owed [.] a DoC for physical injury, we
apply Lord Atkins Neighbour test, we owe a DoC to our neighbours who
are closely and directly affected by our act. According to Donoghue vs
Stevenson,P is the neighbour of D since P is other drivers on the street/
passengers on the D property/ pedestrians/ owners of property next to the
street (Australian Safeway Stores v. Zaluzna), . Therefore,P is the type
that D should RF might be injured by his/her carelessness in Ds action
C: Therefore, D owed/ didnt owe P a DoC for physical injury.
RECOGNISE DoC: Drivers other drivers, passengers, pedestrians, owners
of buildings next to the street; Manufacturers customers (Donoghue v.
Stevenson); Owners/occupiers of property (Australian Safeway Stores
v. Zaluzna) people entering their property; professionals clients.
IF there is 3 rd party >> Failure TO ACT to prevent harm (2 factors):
R: No DoC unless it is RF that the Ds failure to act could cause harm to
someone like the P and either (a) The parties are in a relationship of reliance
and dependence (teacher, doctor, prisoner, employer) OR (b) The defendant
has control over the person or property causing the harm (applies to a theft
also).
Case 2: PURELY PSYCHOLOGICAL INJURIES
I: The legal issue is whether D owed P DOC regarding pure
psychological injuries by ...
R: The rule is Neighbour test, which says that the defendant (D) owed a DOC for psychological
injury to the plaintiff (P) if Ds action was reasonably foreseeable (RF) to cause serious
psychological harm to persons like P and P has good evidence of serious mental illness. To prove
that, we consider 2 elements from (Jaensch v Coffey) case.

a. Neighbour test: It must have been RF that our actions could have caused
someone like the P to suffer a serious mental illness b/c

b. The plaintiff must have good evidence of a serious mental illness.


(Doctor diagnoses or other good evidence: cannot sleep, eat, lost many
weights) IF NO good evidence=No DOC

Case,similar to. Gifford v. Strang Patrick Stevedoring Pty Ltd (employers liability to children
of worker). Mount Isa Mines Ltd v Pusey (employer owed a DOC to employee who assisted a
seriously burned co-worker). Sullivan v. Moody (there cannot be a duty of care that conflicts with
a statutory duty to carry out investigations)

These 2 elements are/not satisfied, D owed/ didnt owe P a DOC for purely
psychological injuries.
Case 3: PURE ECONOMIC LOSS The legal issue is whether D owed P a
DOC for PEL by
R & A: The law says that D owed a DOC for PEL to the P if the P could
prove 4 perre v. Apand factors.
(a) Neighbour test: Was the type of P RF? Here, it was RF, that Ds careless act
could cause economic loss to a type of person like P b/c... (Cause severe damage to property and
then cause economic loss to adjacent properties due to repairs, rebuilding,etc.).Thus, D was
more/less likely to owe a DOC to P.
(b) Legitimate business interest: Were the Ds actions legitimately
protecting the Ds business interests? Here, D had (no) legitimate business
interest in Ds action), D did it due to Thus, D was more/less likely to owe a DOC to P. (If D
was protecting business interest, no DOC owed.)
(c) Vulnerability of plaintiff: Was the plaintiff able to prevent the
defendants negligence? Was there any way for the P to protect itself from
the Ds negl? Here, (1) or (2). P was very (1 or 2)...
1) Vulnerable: There was no way that P could protect her/himself in this situation b/c he/she could
not control(Ds action). Thus, D was more likely to owe P a DOC.
2) NOT Vulnerable: P are NOT vulnerable b/c he/she could have: (a) and/or (b). a) Back-up
plans i.e. an alternative supplier/customer/. b) Purchased business interruption insurance

which would compensate the plaintiffs for any lost profits due to an interruption in business.
Thus, D was less likely to owe P a DOC
(d) Defendants knowledge of plaintiffs vulnerability: Did the D have
knowledge of the risk to the P?

? Here, D was aware or should have been aware-

that. Thus, D was more/less likely to owe P a DOC. (Cartex oil v The dredge Willemstad)
C: In sum, (numbers) of four Perre v. Apand factors favour the existence of the DOC. Therefore, D
owed/did not owe P a DOC for PEL.
Case 4: NEGLIGENT MISSTATEMENT(Bad advice) The legal issue is
whether D owed P DOC for
This case involves negligent misstatement which means one person gives bad
advice to another person, and the other person relies on that bad advice and
suffers a loss because of it. To prove it exists, we apply MLC v. Evatt
elements: 1.The speaker realises they are being trusted to give information, which they
are believed to know. This element is (not) satisfied,b/c of his job.... 2.The subject of the advice
is of a business or serious nature. This is dealing withso it is..(busin matter). 3.The speaker
realises that the recipient intends to act on the advice. This element appears to be satisfied b/c P
met/speak with D in connection with its decision to do (based on the report). 4.It is reasonable
in the circumstance for the recipient to accept and rely on the advice (reasonable reliance).
This element is (not) satisfied, b/c(Shaddock v.Paramatta) not buying land vs road, and (Esso
v. Mardon) petrol station
C: Therefore, these 4 elements are/note satisfied, so D owed/didnt owe P a
DoC for
2) BREACH OF THE DOC The legal issue is whether D fails to meet the
required SOC regarding
R: The law says that a D breached a duty of care if that person failed to act as a reasonable,
ordinary, careful person (ROCP) would in the same situation. We analyse the four Romeo v.
Conversation Commission factors to tell how a ROCP should act:
1.The magnitude of the risk. This means what is the worst that could happen? The worst that
could happen from.... is...b/c.... so the gravity of harm is high. This means a higher SOC required
and it tends to show that A failed to act as a ROCP. How many people would be affected?
Daction would have caused(list 2 or 3) b/c... Also, many people could be
affected b/c...
2.The probability of the risk: How likely was Ds conduct to cause harm? Here, the probability
of the risk was high/low b/c..3.The difficulty and expense of eliminating the risk: Would it
have been easy and cheap for D to act more safety? Here..4.Other conflicting priorities: Did
D have other conflicting priorities that prevented it from eliminating the risk? Did D have a good
reason to do the risky act? As discussed above, the magnitude and probability of the
risk is.. its easy/difficult & cheap/expensive to eliminate the risk, as well as
competing responsibilities. Thus, a ROCP would have, but D didnt act like
this. Hence,D breach the DOC/ breaches the SOC.
C: D failed to act as a ROCP would have in the same circumstance and D breached a DOC to P.

3) CAUSATION the legal issue is whether D caused all damages, injuries or


loss to P
The law says that the D caused actual damage, injury, and loss to the P if the P could list all actual
damage, injury, loss that were caused by the D and prove the but-for test. Therefore, P must prove
2 elements: 1.Actual damage, injury or loss: List the damage 2: But for Test: But for
the Ds actions, the P would not have suffered damages. If we could go back in
time and remove the Ds negli, the P would not have injuryIt is clear that the
negl cause injury C: To conclude, two factors are satisfied so the causation is established.
Therefore, P can prove that D caused all of Ps damages
4) REMOTENESS The legal issue is whether the types of damages P suffered were not too
remote at the time of the accident. The rule is the Ps specific damages were not too remote if the P
could prove that these damages were RF by the D at the time of the accident.(Oversea Tankskip
case)
Here, Ps..(Physical/psycho injuries, medical bills, economic loss, etc.) Were RF by D at the time
of the accident b/c. However, Ps (being robbed, falling to the hole,etc.) was not RF b/c that is
not something one expects to result from(i.e car accident). Thus, it was too remote and P cannot
recover from that. In conclusion, Ps..(Injuries) were RF by D but Ps..(Robbed) was too remote.
5) DEFENSE: CONTRIBUTORY NEGLIGENCEThe legal issue is whether P can be
proved for contri neg. R: The P can be proved for contri negl if the D could prove 2 elements: 1)
The P was also negligent at the time of the accident. 2)Ps negligence contributed to Ps
damage.
A: Here, P was also negligent because she failed to act as a reasonable, ordinary, careful person
(ROCP) would do. A ROCP in this situation would notAlso, Ps negligence contributed to her
injury b/c..C: Therefore, the court will divide up liability between the P and D, considering the
case of March v. Stramare.

Conclusion:P can successfully sue D for negligence for everything except for(stolen
money, lost purse,etc).
6) MONEY DAMAGES
The court will try to make the defendant the amount of money damages that
would put the plaintiff back in the position he was in before he was injured by
the defendant. (1) Medical expenses (medical bills, rehabilitation expenses)
(2) Lost income (3) Property damages (4) pain and suffering, loss of enjoyment
of life (5) Lost profits.
7) VICARIOUS LIABILITY
The legal issue is whether employer is responsible for the employees negligence. R: The law says
that the employee was vicariously liable for the employees negligence if that negligence happened
within the scope of employees employment, considering the following factors for employee: On
the clock-during time working; at his place of work or out related to work; appear in process
of work (wear uniform, com logo); was activity a part of his job? (Most important factor).
In conclusion, employer will have vicarious liability for employee negligence. (Steven : what
employment want employee to do)
DEFECTIVE GOODS
There was no contract between [...and..], so [...] cannot sue for breach of
contract. However, it was an unsafe product which caused [injury/death to]
OR [property damage/ destruction]. Hence, the legal issue is whether [.] can
successfully sue [.] for defective goods.

In order to claim for defective goods, [.] must prove these elements.

1)A manufacturer: Under ACL (sec. 71), there are many different types of
manufacturer: grower, extractor, producer, processor, assembler, own brander
and importers. [Explain]

(*)grower: farmer who grows plans; extractor: honey, milk, oil, gas, diamonds,
gold; producer; assembler: take components manufactured by others and
assemble them into a finished product; own brander: if a company doesnt
make a good itself, but it puts its own brand, name or logo on it and sells it as
if it were its own goods; importer: if the actual manufacturer is located outside
of Aus and does not have an office or store in Aus >>>>sue importer

2)Supplies goods: Which means providing a physical and tangible productnot merely a service (but gas and electricity are considered as goods). Here,
[] supplied its goods [name] (tangible product), which can be touched by
consumers.

3)In trade and commerce: It means [] was in the business of


manufacturing/supplying this good-for profit. Here, [] was in the business of
trade and commerce as they sold goods to open market was its main business
activities and for making profit.

4)The goods are defective: Under ACL (sec 9(1)), Goods are defective under
the ACL if their "safety is not such as persons are generally entitled to expect."
Safety refers to capability of causing personal injury or death to a person, or damage /
destruction-of-property.
To decide whether the safety of a good is what persons are generally entitled to expect,
we must consider all of the relevant circumstances, including

+Marketing: How was the good marketed?

Was it marketed as being especially safe? This (product) is guaranteed not to


(burn your house down) If so, then maybe the average person is entitled to
expect that the (product) will not(burn their house down). C: This factor tends
to show the good is unsafe

Was it marketed to children? If (product) is for children, the average person


would expect the good to be even safer than usual. B/c children often do
stupid things/use (product) in stupid Ways as, so (product) need tobe safer
than usual.

>> The goods failed to meet safety expectation of community.

+Packaging: was the packaging itself unsafe or did the packaging


show the good used in unsafe way? The packaging (plastic bag) may itself
make the good unsafe, as (a child may put its headnot be able to breathe)
What if the box packaging has a picture of someone using the product (in a
wrong way), then an average person may see that photo and expect that it is
safe for children (to use the product in that way).

+Instructions & warnings: Did the good include proper and adequate
instructions/warnings? If a good is unsafe unless it is used properly, or
assembled properly, and the manufactory does not include any instructions
telling the customer how to use or assemble the good- or includes the
instruction in a foreign language, then that may make the good unsafe. If a
good is dangerous if used properly, the manufactory may also need to include
a warning to make the good safe, e.g. Warning: DO NOT (Glendale
Chemical Products v. ACCC)

+Reasonable expected use: was the consumer using the good in the way
the manufacturer reasonably expected it would be used?

+Time of supply: did the good meet communitys reasonable expectation of


safety at the time it was supplied? -Not at the time the injury occurred

Based on the analysis, the goods failed to meet safety expectation of


community under some of the above circumstances, thus, [..s product] was
defective goods.

5)the defective goods cause the plaintiffs damage, injury or loss.


Here, the defective goods caused [.]

(*) loss from individual injuries (medical expenses, lost income, pain, loss of
enjoyment), loss to the injured persons dependants (child, spouse) because
of the injuries, loss from destruction or damage of personal, domestic or
household goods, loss from destruction or damage of private land, buildings or
fixtures

Next, we need to apply test for causation in negligence. But for


causation: But for the defective good, [.] would not have suffered the
above damages/injury/loss. If we could go back in time and take away
mistakes of the good, which means [manufacturer had did], [.] would
not.not suffered So, the defective good caused these damages/injury/loss.

The next step is to decide whether the above damages/injuries/losses suffered


by [.] were RF or too remote? [explain]

6)Defenses: as all elements of a defective goods claim exist, then unless


[manufacturer] can prove that one of the following four defenses applies, it is
liable for [.s injuries]. None of the defenses and contributory negligence
can be applied here.

(1) the defect did not exist at the time the manufacturer supplied the good,
(2) the good is defective only because of compliance with mandatory
government standards if the manufacturer follows the govs requirements
and the good is defective

it isnt manufacturers fault, (3) the state of the

art defense (Graham Barclay Oysters v. Ryan) we made the goods as


safe as the best scientific knowledge at the time would be allow, (4) the
defect was caused by designs, markings or instructions added after the goods
were finished.(5) Contributory negligence: even though [] can prove all
elements for claiming defective goods and none of the defenses is applied, but
[manufacturer] may claim contributory negligence. To be successful,
[manufacturer] must show that consumers conduct showed lack of care for

his/her safety () and His/her negligence was cause of her injuries.

7)Exemption clause: although there is an exemption clause, it is not valid


under the ACL, thus [manufacturer] cannot exclude modify or limit liability by
using exemption clause.

In conclusion, [.] can successfully sue [.] for defective goods. A court
would award [.and some additional compensation for pain and suffering].
Supposing [.] is found to be [..%] at fault, he will only recover [.] due
to his contributory negligence.

CONTRACT FORMATION
Under common law, a contract is a legally binding and enforceable agreement.
4 Elements of a contract formation: 1) Intention to be bound/ Intention to
create a legal relationship, 2) Consideration, 3) Capacity, 4)
Agreement Offer and Acceptance.
1) INTENTION TO BE BOUND/ INTENTION TO CREATE LEGAL
RELATIONSHIP
R: Elements: -Agreements that are obviously social in nature are not normally
intended to be contractual and so the parties do not likely have the intention to
be bound. However, even though family, if there was economic seriousness,
there was legal intention.
2-Agreements that are obviously commercial in nature usually are contractual
and the parties usually do have the intention to be bound. However, in some
situation, there was no legal intention.
Wakeling v. Ripley sister giving up jobs and house which are valuable and
important to taking care of brothers house. Therefore, although it is social
agreement, the action proves the intention to be bound
2) CONSIDERATION
Under comm law, consideration is that the offeree must give up something of
value in exchange for the promise of the offeror (both parties must give up
something of legal value). Consideration comes in 4 forms: 1) Money, 2)
Goods, 3) Services, 4) Legal Right
In this case, we need to determine whether there was a contract b/w
.and. According to the rule, [consideration.]
Consideration cannot be past
Consideration cannot be something the offeree already did before the time the
promise the offeree seeks to enforce was made the offeree must give up
something new of value either at the time or after the time promise was made
(Roscorla v. Thomas) Executory consideration promise for promise, Executed
consideration act exchange for a promise.
Consideration does not have to be adequate
The consideration must have some legal value, but it can be very low in value
[explain the value]
Food wrapper (Chappell & Co. v. Nestle), peppercorn rent (Thomas v.
Thomas), giving up a right to sue (Wigan v. Edwards)
Consideration must be sufficient
The consideration cannot be doing something that the offeree already had an
existing duty/ obligation to do. (Stilk v. Myrick)
2 common situations applied this rule: re-negotiating a debt or renegotiating a contract.
Conclusion of consideration: Therefore, [.] gave merely past/insufficient
consideration in exchange [.promise/offer], which was a bare promise/offer
unsupported by consideration. Consideration is required for a valid contract,
so no contract was formed and [.] OR Therefore, [.] provided valid
consideration in exchange for [..offer/promise]. Bs offer/promise was
binding and supported by consideration from [.]. A contract was formed,
and [.]

OPTION CONTRACT: a special type of contract in which the offerer


promises to keep their offer open and exclusively available to the offeree
for a certain period of time, in exchange for the offeree giving up
something of legal value as consideration for the offerors promise.

1) The offeree must agree to give up sth of legal value as consideration


for the offerors promise.
An option contract exists only when the offeror promises to keep his

offer open for certain period of time


3) LEGAL CAPACITY
Under common law, having legal capacity means that a party has the
ability to understand what a contract says and what it means when
they sign a contract that they are agreeing to the contract and that
by signing its, it become binding and legally enforceable against
them.
MINORS (under the age of adulthood under 18)
The law dealing with minor states that contracts cannot be enforced against
minors if the minor choose to void it, but that minor can enforce most
contracts against the other party (as long as other party has legal capacity
itself).
BUT: some contracts are fully enforceable against minors:
Contracts for necessities (housing, clothing and food) are fully enforceable
against minors, but only to a reasonable level.
Employment training contracts contracts for someone to provide
employment training to a minor (provide benefit to minor) are fully
enforceable against a minor.
All other contracts with minors are valid but voidable by the minor. When
voiding contracts, the minor must tell/ confirm the court before reaching
the age of 18 or within a reasonably short time thereafter (3 months
after 18 is reasonable).
The option to void the contract belongs to the minor only, not to the adult.
Therefore, [the minor] did have legal capacity to enter the contract with
[.], although she/he was a minor. A valid contract was formed and [.] may
sue [the minor] for breach of contract. OR
Therefore, it was not contracts for necessities/employment training
contracts; [the minor] can void this contract. Hence, [.] isnt successful to
sue [the minor] for breach of contract.
MENTALLY ILL
[.] would like to enforce contract against [] who was mentally
ill/intoxicated. The law dealing with mentally ill/intoxicated class states
contracts with the mentally ill are valid unless:
1) The mentally ill person was so mentally ill that they did not know what
they were doing at the time they entered the contract AND 2) The other
party knew about their mental illness.
Therefore, [.] did not lack legal capacity due to mental illness/
intoxication. A valid contract was formed between [.] and [.], and [.]
may not void it based on lack of capacity. OR
These 2 elements are satisfied, [.] did not have legal capacity to enter the
contract with [.]. Hence, [...] isnt successful to sue [.] for breach of
contract.
INTOXICATED
Contracts with someone who is intoxicated (drunk or on drugs) are valid
unless:
1) The intoxicated person was so intoxicated that they did not know what
they were doing at the time they entered the contract AND 2) The other
party knew that they were intoxicated.
4) AGREEMENT
According to common law, an offer is a clear statement of the terms
upon which the offeror is prepared to be contractually bound upon
acceptance of the offer by the offeree.
OFFER The legal issue here is whether a contract was formed
between [...and...]
We need to decide whether the advertisement was an invitation to treat.
Most ads are invitations to treat, which are only inviting the people reading the
ad to make offers to buy the item indicated for sale. An ad can be a serious
offer if it contains either a unilateral offer(*) or call itself an offer and
contains good evidence to present the ad is serious offer (Carlill v. Carbolic
Smoke Ball Co.)
(*) Unilateral offer: is an offer which is made to a group or class of
people instead of one, specific person, and which is acceptable by
performance by a limited number of people. (require the performance of a
specific actlike1stperson,subjectmatterandprice,quantity)
We need to decide whether [......s statement] was a legal offer or a supply of
information: where the buyer is only requesting information about sth and is
not clearly making an offer not clearly offering to be bound. Then the court
will treat that request as a request for information, not an offer (Harvey v.

Facey)
RULES OF OFFER
1) Offers must be clear and complete: contain all key detail: subject
matter of the offer, quantity and price
2)Offers must be communicated to the offeree - offeree was aware of
the offer
3)Offers can be revoked by the offeror any time before acceptance.
The offerors revocation must be communicated to the offeree to be effective.
Revocation does not have to be communicated to the offeree directly by the
offeror. It can be communicated to the offeree by a 3rd party (Dickinson v.
Dodd)
(*) Rejection: must be communicated the other party is aware of it.
Rejection occur by: a) Express rejection, b) Implied rejection by conduct
inconsistently with accepting the offer, c) A counteroffer which
terminates the original offer because it is a rejection with a new offer.
(*) Terminate: when an offer is terminated, it cannot later be accepted
(Hyde v. Wrench). An offer can be terminated by a) Revocation, b)
Rejection, c) Lapse of time either specified in offer or a reasonable
amount of time, d) Death of either party before acceptance.

ACCEPTANCE [RULES] To be a valid aceptence, the offerees


acceptance must be an unconditional positive responses to the offer.
1)Mirror image rule: to be an effective acceptance, the acceptance must be
the exact mirror image of the offer. In other words, the acceptance must be
complete and unconditional. Any attempt to change the original offer is a
rejection and making a counter offer.
2)An acceptance must be clear and certain: the material terms of the
contract must be clear from looking at the offer and acceptance together.
Acceptance cannot include a vague or ambiguous terms (Scammell &
Nephew v. Ouston); except parties had prior business dealings (Hillas v.
Arcos).
3)The offeror can require a certain method of acceptance by the
offeree
4)Acceptance must be communicated. Silence does not equal acceptance,
EXCEPT
a)
b)

Unilateral offer may be accepted by its performance (Carlill v. Carbolic


Smoke Ball Co.).
Acceptance by post acceptance by post takes effect when the letter of
acceptance is posted. It is considered at the date the letter is sent, NOT
when its received (Henthorn v. Fraser). This rule is applied UNLESS the
offeror states that offeree cannot use the post.

Both parties must give up something of legal value


The legal issue is whether [.] gave any consideration in exchange for
[.]
For an agreement to be binding and legally enforceable, both parties must
agree to give up something that has legal value or suffer some detriment. If
only one party agrees to give up something of value, then we have a mere
bare promise that is unsupported by consideration not a binding, legally
enforceable contract.
[explain transaction]
[.] provided no consideration and therefore [.offer] was merely a bare
promise/offer unsupported by consideration. There was no enforceable
contract, as consideration is one of the required elements to form a contract.
Therefore, [.]
CONTENT OF CONTRACT
After deciding contract was formed between parties, the court still need to
determine what the parties actually agreed to in the contract content of
contract
1) TERM or MERE REPRESENTATION
Here, [.] breached the statement [.]. Before determining this
statement is a condition or a warranty, we need to consider it is a term or a
mere representation.
Term is a statement of fact, guarantee or promise about the subject matter
of the contract; and it can be verified by an independent 3rd party
whether it is true or not. While mere representation is words of salesmanship,

encouragement or statement of opinion. Here, [.] is a statement of fact


and it is possible for a 3rd party to verify [.]. Next we need to consider
reasonable bystander test (Oscar Chess v. Williams) to decide whether
the statement of fact is a term.
1) What time period between the statement and the signing of the
contract?
The closer in time the statement was made to the time the contract was
signed, the more likely it is to be a term.
2) Was the statement included in the written contract?
If the statement is actually written in the contract, it is more likely to be a
term.
3) Did the party making the statement have special knowledge or skill
regarding the subject matter?
If the party making the statement is an expert or just knows more about the
subject matter, more likely to be a term.
4) How important was the truth of the statement?
The more important, the more likely to be a term.
After considering these 4 factors, the statement which was promised by
[.is] a term-a binding, legally enforceable part of contract OR a mere
representation-not be a binding, legally enforceable part of contract breach
the term/mere representationcan/cannot sue for breach of contract
2) CONDITION or WARRANTY
Next we need to determine the term is a condition or a warranty. Condition is
an essential term that is extremely fundamental and important to the subject
matter of the contract. While warranty is a term that is not as important to the
subject matter of the contract, it is of secondary importance of the contract.
Essentiality test (Tramways Advertising v. Luna Park) is applied.
[explain how fundamental & important]. So if [.] had known [.] would
not do his/her promise, [.] would not have been in the contract with [.].
It means the term is a condition. OR [explain it is secondary importance].
So if there is no [the statement], [.] still entered into the contract. Thus
the term is a warranty.
If the term is a condition, then the term is breached terminate the
contract & sue for damages
If the term is a warranty, then the term is breach sue for damages
3) INCORPORATION BY REFERENCE
To determine whether [.] can incorporate the outside [document/sign] to
the contract by reference OR [.] can bring the [statement] into the
contract, we need to consider rule of incorporation by reference. A court will
usually incorporate by reference an outside written statement outside the
contract as long as REASONABLE NOTICE is given to all parties that the
outside written statement is part of the written contract (Parker v.
Southeastern Railway). It must be clear to a reasonable person reading the
contract itself that the outside written statement is part of the contract. In
order to determine whether the outside statement can be successfully brought
into the contract, we need to follow these steps.
1) Wheres the statement?

Inside the contract: it must be clear which outside


statement/document was being incorporated by reference. The
outside statement/document needs to be identified specifically
(Maxitherm Boilers v. Dundlop). [explain how it clear, specific &

2)

reasonable notice] reasonable notice is given or not.


Outside the contract: is the statement in a document, sign or verbal
statement?
If a document, was it contractual in nature the document itself must
look and feel like a contract (Le Mans Grand Pix v. Iliadis) (ticket)? If a
sign, was it prominently displayed? If a verbal statement, did
parties discussed the matter? Moreover, a contract could be partly
written and partly verbal. Therefore [Explain] reasonable notice is

3)

given and valid or not.


Did it come before or during the time the contract was entered

into? reasonable notice is given and valid or not.


Based on the analysis, the [.......] can be successfully incorporated by
reference because reasonable notice was given to all parties.
4) EXCLUSION/ WAIVER CLAUSES
The legal issue is whether D gave P reasonable notice of sth exclusion clause

[.] attempted to exclude/ waive its liability for [certain things, statement].
In order for exclusion/ waiver clauses to be valid, REASONABLE NOTICE that
the exclusion clause existed, must be given at the time the parties entered
into the contract. To determine whether the exclusion clause is valid, we need

to follow these steps. [3 steps like Incorporation by reference].

Le Mans Grand Pix v. Iliadis-document, Causer v. Browne-receipt. Exstay in the hotel few times.
As analysis, the exclusion clause was valid because reasonable notice was
given to all parties.
Breach of contract
A contract may be terminated by (brought to an end and realising the parties
from further obligations under the contract): performance, agreement,
frustration, breach and rescission.

DISCHARGED BY PERFORMANCE:
1.The parties must perform their contractual obligations exactly
If they are not the contract will be terminated. If the contract says
that the performance must be completed within a certain period of
time, the parties must perform fully within this amount of time. If not,
the performance must be in a reasonable time period. (Sumper v.
Hedge The court said that D had not yet fully performed its contractual
obligations so P didnt have to pay the D until the house was 100%
complete.
2. If the contract does not specify the amount of time for performance, the
performance must still occur within a reasonable time

Company A agrees to deliver the goods to Company B. If Company A


has not delivered the goods to Company B a year after the contract was
signed, the court would probably decide that Company A had not performed
its contractual obligations within a reasonable amount of time

BREACH OF CONTRACTS:
The parties fail to perform fully and discharge his obligations by:

Non-performance: a party makes no effort to do anything or might


have done completely wrong.(Varley v. Whipp)
Partial performance: (not perform fully (<100%) The legal issue is
whether B is entitled to compensation for his partial
performance, and if so, how much
+ Where one side has partially performed and the other side has
accepted the benefit of the partial performance, that side is bound
to pay for the value of the work done. (Steele v. Tardiani)
+ Where the other side has not accepted the benefit of the partial
performance, that side is not bound to pay anything. (Sumper v.
Hedges)
Substantial performance: The legal issue is whether B is entitled to
compensation for his substantial performance, and if so, how much
+Where one side comes very close to performing its obligations
under the contract .This is a special type of breach called "substantial
performance." The non-defaulting party is required to pay the
contract amount minus the amount needed to get the other
side's performance up to 100%.
Anticipatory breach:(whether A who do contract can terminate
the contract b/c of AB by B). R: the time for a partys performance is
not yet due, but the party has already made it clear that they will
not perform its obligations under the contract. Thus, P can sue
now, and no need to wait until the time required for the performance.
We have to prove 2 elements:
1)It must be clear that the party has completely refused to perform
its obligations
2)P must be able to prove the court that it was still ready and willing
to perform its own obligations. C: after 2 elements, A can successful
to sue B for anticipatory breach of contract. Thus, P can terminate the

contract and sue for damages.


TERMINATE OF CONTRACT:
Frustration: (whether this contract was terminated by F). R:
After the parties have entered into a contract, sth happens. It makes the
contract impossible to perform; the contract is terminated by frustration.
Prove 3 elements:
1)there must be a radical/extreme change in the parties abilities to
perform their obligations under the contract (state their obligations)Ex: The
house completely destroy by a fire. As a fire very dangerous which actually
destroy the house, it occur naturally and it actually cause a serious change bc
the house was destroy=> 1st element proved
2) neither party caused the event that made it impossible for the parties to
perform their obligations under the contract. Ex: The fire that happened was
out of control and A the owner of the house didnt do anything to set the fire,
its clear that neither party cause the event.
3) the event that made it impossible for the parties to perform their
obligations under the contract was not contemplated/foreseen in the
contract itself. Ex: As theres no mention about the fire in the contract, its
assumed that the contract itself didnt saod anything about what would happen
if the event occurred=> 3rd proved.
CL: As 3 elements proven, contract was terminated by frustration and
therefore A can avoid liability to B.

AVOIDING A LEGAL TRANSACTION


A) FAILURE OF GENUINE CONSENT rescission
For a contract to be valid, both parties must genuinely consent-truly agree- to
enter the contract. Here, [.] seems likely not to genuinely consent to enter
the contract, so we need to discuss failure of genuine consent in this case.
1) DURESS
The legal issue is whether the A-B and A-C contracts are voidable by A due to duress

Duress exists when one party uses illegitimate pressure to force the other
party to enter the contract against their will. The pressure can be physical,
economic or psychological pressure, but it must be illegitimate (not legal or
not appropriate) (Barton v. Amstrong). The target of the illegitimate
pressure does not have to be person signing the contract it can be someone
else with a close relationship with that person like a family member, near
relative or someone close.
Scolio Pty Ltd v. Cote not illegal or illegitimate not duress
REMEDY: contracts made under duress are voidable by the
illegitimately threatened party (the party forced to sign the contract).
2) UNDUE INFLUENCE
The legal issue is whether B unduly influenced A to enter the land sale contract

Undue influence occurs when a party enters into a one sided contract only
because that party trusted the other party so much because of their special
relationship that they entered into the contract solely based on their trust of
the other party not based on their own free will or judgment and without
receiving any other independent advice.
(a) With a special relationship (parent-child, lawyer-client, doctor-patient,
preacher-church member), the court presumes undue influence exists. In
this case, the defendant must prove undue influence does not exists by
disproving:
(1) A party enters into a one-sided contract cannot disprove
(2) Because the party trusted another party so much that they entered
into the contract cannot disprove
(3) Without the free exercise of their own will or judgment and without
receiving any other independent advice cannot disprove
(*) ordinary business relationship is not a special relationship
(b) No special relationship the court does not presume undue influence,
thus, to claim undue influence exists, the plaintiff must prove these 3
elements:
(1) The contract was one-sided
(2) The entry into the contract was not because of their own independent
will and judgment and was instead because of the other partys
influence over them
(3) The party claiming undue influence received any independent advice
REME: the weaker party can have the contract seat aside as void, return
good and money paid
3) UNCONSCIONABLE DEALING

The legal issue is whether the contract between X and David was unconscionable.

The court usually assumes that the parties to a contract are equals, have
equal bargaining power. However, a contract is unconscionable (Commercial
Bank of Australia v. Amadio) if
1) One party has superior bargaining power vd: (international university vs. poor
rice farmer)
(1)
(2) The other party has special disability (poverty or need, physical or mental
sickness, age very young or very old, drunkenness, illiteracy, lack of
education, lack of assistance/explanation)
(3) The parties enter into a unfair, one-sided, take-it-or-leave-it contract
REMEDY: the weaker party can have the contract set aside as void,
4) MISTAKE
Sometimes, one or both parties to a contract have really made a genuine
mistake about a key part of the contract.
COMMON MISTAKE (compared with Frustration)
Both parties to the contract made the same mistake. A common mistake
must exist at the time the contract was made. The common mistake
must be extremely fundamental to the subject matter of the contract. a)
The identity, the existence or the ownership: whether the subject matter
of the contract has been destroyed or does not exist (Couturier v.
Hastie), b) Nothing to sell (Scott v. Coulson).

If

the subject matter is only different in character, value or quality than

what the parties thought, then is NOT a common mistake (Leaf v.


International Galleries). May sue for breach of contract, nor return
the good for a refund.
REMEDY: the contract is void and unenforceable by either party.
MUTUAL MISTAKE The legal issue is whether the contract between A and B is
void due to mutual mistake

Each party to the contract made mistakes about key parts of the contract,
but each party made a different mistake (Raffles v. Wichelhaus)..
[explain]. Thus, there was no binding contract because [.] and [.] each
intended to contract about different terms. No meeting of the minds
REMEDY: the contract is void and unenforceable by either party,
return goods and price paid
UNILATERAL MISTAKE The legal issue is whether the contract
between A and B is voidable due to unilateral mistake
Only one party was mistaken about a key part of the contract and the
other party knew or should have known about that mistake (Taylor v.
Johnson). Here, [.made mistake about]. While [.knew it, explain]. OR
[.should have known this mistake because based on objective test, a
reasonable person.]
REMEDY: the contract is voidable by the innocent party who made the
unilateral mistake. It can be enforced against the party who knew about the
mistake party.
5) ACTIONABLE MISREPRESENTATION

The legal issue is whether P can rescind the contract with RMIT
due to actionable misrepresentation by D
Actionable misrepresentation exists when one party makes a false statement
of material fact which is addressed directly to the other party and which
induces the other party to enter into the contract (Alati v. Kruger). We need
to consider these 4 elements to decide whether an actionable
misrepresentation exits.

1)False statement D made a false statement about.

2)Material of fact a statement of fact about sth important to the contract


not just salesmanship or opinion.

3)Addressed directly to the other party the false statement was


actually made directly to the other party not just overheard by the other
party

4)Inducement the other party likely would not have entered the contract if
the false statement had not been made

(*) Silence does not usually equal actionable misrepresentation but it can in

some limited cases


a) If a statement made was half truth (technically true but creates a
misleading impression). OR person making the statement does not tell the
other party information that they know (or reasonably should know) is
important to the other partys decision to enter the contract.
b) if the statement was true at the time it was made, but became false before
the parties executed (completed) the contract.
c) if there is a fiduciary relationship (a special relationship of trust) between
the parties
REMEDY: the remedy for actionable misrepresentation is rescission the
contract can be set aside and the parties restored to their positions before the
contract by the innocent party.
B) ILLEGALITY OF CONTRACT
The legal issue is whether the A-B contracts meet any of the three categories of illegal
contracts

If a contract is either illegal or void, it may not be enforced by either party to


the contract.
ILLEGAL BY STATUE
1) ILLEGAL AS FORMED: the type of contract itself is forbidden by statue, the
parties cannot enter into that type of contract contract which is illegal as
formed is void and unenforceable, although restitution (repayment) may
be allowed.
In this case, [explain illegal action]. It violated the law which stated
[that.]. Thus, it can be seen the contract between [&] was illegal as
formed. Then the contract can be voided by both parties.
2) ILLEGAL AS PERFORMED: Even though the type of contract is not illegal,
what the parties are contracting to do is illegal if the purpose of the
contract is illegal contract is illegal as performed is voidable and is
enforceable by the innocent party.
Here, [& had a contract about]. The contract was legally formed.
However, the way [.] performed his/her obligation was illegal.
[explain.which was an important matter of the contract]. Thus, the
contract was illegal as performed. Hence, the contract can be voidable by
[.] and s/he can force [.] to perform his/her obligation legally.
3) INCIDENTAL ILLEGALITY: if the illegality is very minor and secondary or
incidental to the main purpose of the contract, it is only incidental
illegality, in which case the contract remains enforceable.
[&] had a contract that [.]. Then [.] performed his/her obligation.
However, when performing, s/he [explain action]. Even though s/he violated
the law, it was just minor illegal to the main purpose of the contract. This
contract was incidental illegality, hence, it was still valid and both parties
need to perform their obligation. So, [must]
ILLEGAL AT COMMON LAW - contracts threaten the public good/ harmful to
society

+ The commission of a crime or fraud: Beresford v. Royal Insurance Co.


Ltd.

+ Contracts for sexually immoral purposes - Upfill v. Wright modern


trend: not illegal

+ Contract that prejudice the administration of justice (pay a witness to


testify falsely)

+ Promote corruption AND harm public safety


REMEDIES
When the plaintiff-[.] wins a lawsuit for breach of contract, the court may
award remedies to him/her. There are 2 types of remedies:

1) Common law remedy of damages


Here, it can be seen [.] suffered contractual damages. The purpose of
the plaintiff-[.] is entitled to the amount of contract damages is to put
her/him back in the position s/he would have been in if the other party[.] had fully performed its obligations under the contract. There is a

requirement for contractual damages is that they must be reasonably


foreseeable and not too remote. The case of Hadley v. Baxendale is
applied to determine whether this requirement is satisfied. [list and explain
a)

each damage]
Direct loss [explain why RF]

b)Consequential loss: the plaintiff can recover those unusual/ unexpected


damages only if the defendant knew/was made aware that those
damages were a possibility.

2) Equitable remedies
Here, there were no contractual damages, so we need to consider equitable
a)

remedies.
Specific performance
To generate a fair result, the court will order the breaching party to
perform what he agreed to perform under the contract-specific
performance. However, specific performance is only available when the
subject matter of the contract is unique (real estate). [explain]
(*) It is not available if the contract is for personal service

b)

(lawyer, paint house)


Injunction
To generate a fair result, the court will order the breaching party to STOP

c)

doing sth they agreed not to do under the contract-injunction. [explain]


Restitution
To generate a fair result, the court will order the breaching party to pay
back money/value that was previously paid by the plaintiff to the
breaching party-restitution. [explain]
STATUORY LAW (CONSUMER PROTECTION)

The legal issue is whether A breached any implied terms under the
Australian Consumer Law (ACL) in the contract with B
Under the ACL all "consumer goods contracts" contain certain
implied terms. First we determine whether a consumer goods
contract exists, and if so, next we determine which terms were
implied and remedies for the breach of those terms. Three
elements required for a consumer goods contract are:
CONSUMER SERVICES CONTRACT

In order to apply statutory implied terms, we need to determine whether there


was a contract between [.]. In this case, [.seems likely to be a service],
thus we should decide whether there was a consumer services contract
between them. These 3 elements will be considered.

1) Supplying a service (sec.2 (1))-not a physical, tangible good but a service.


2) Supplied in trade or commerce (sec18): the company provides this
service as part of its business activities to make profits not a hobby or
sth does for fun
3) The service is being provided for a consumer purpose (sec 3(3))
a)

either
Ordinarily for personal, domestic, or household use. Even if it is not
actually being used in that way at the time (for business/ commerce

purpose)
b) The total price of the service is $40,000 or less
These 3 elements are satisfied, a consumer services contract existed between
them. Thus, according to ACL implied terms will be applied.
1) The service shall be provided with due care and skill (sec 60) provide well
service as other firms in industry
2) If the person supplying the service is made aware that the service has been
requested for any particular purpose, that the service shall be fit for
intended purpose (sec 61).
(*) The guarantees under the ACL cannot be excluded, limited or modified in
any way (sec.64 (1)), EXCEPT
A company may limit its liability under a consumer service contract to the
cost of re-supplying the services they are not ordinarily for personal,
domestic or household use (sec 64A). But such a limitation must be fair
and reasonable (sec 64(1)).
Providers of recreational services which involving some forms of risk (skiing,
football, bungie) can include an exemption clause in their contracts to

exclude or restrict liability for death or personal injury (sec .68B).


REMEDY: Under ACL, if the service provider fails to comply with any of
these guarantees, the consumer may require the service provider to remedy
the failure within a reasonable time. If the seller does not do so, the consumer
may sue for the supplier for breach of contract and recover any reasonable
damages caused by the failure.

CONSUMER GOODS CONTRACT

In order to apply statutory implied terms, we need to determine whether there


was a contract between [.]. In this case, [.seems likely to be a good],
thus we should decide whether there was a consumer goods contract between
them. These 3 elements will be considered.

1) Supplying a good-a physical, tangible good, not service


2) Supplied in trade or commerce: the company provides this good as part of
its business activities to make profits not a hobby or sth does for fun
3) The good is being provided for a consumer purpose (sec.3(1)) : either
a) Ordinarily for personal, domestic, or household use. Even if it is not
actually being used in that way at the time (for business/ commerce
b)

purpose)
The total price of the good is $40,000 or less

4) the good is not be for re-supply or to be transformed in trade or


commerce

These 3 elements are satisfied; a consumer goods contract existed between


them. Thus, according to ACL implied terms will be applied.

1)
2)
3)
4)

Goods are of merchantable quality (acceptable quality) (sec 54)


Goods are fit for customers disclosed/ specific purpose (sec 55)
Goods will match the description (sec 56)
Goods will match the spample(sec 57)
(*) The guarantees under the ACL cannot be excluded, limited or modified in
any way (sec.64 (1)), EXCEPT: A company may limit its liability under a
consumer goods contract to the cost of repairing or replacing the goods
if the goods are not ordinarily for personal, domestic, or household use
(sec.64 (1)). But such a limitation must be fair and reasonable (sec.64
(1)).
REMEDY: Under ACL, if the seller fails to comply with any of these
guarantees, the consumer may require the supplier to remedy the failure
within a reasonable time. If the supplier does not do so, the consumer may
sue the supplier for breach of contract and recover any damages caused by
the failure. If there is a major failure to comply with one of the
guarantees, then the consumer may also reject and return the goods and
recover the price paid major failure is one in which the goods would not
have been acquired by a reasonable consumer who was fully acquainted with
the nature and extent of the failure.

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