INTRODUCTION TO LAW LAW 1101

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INTRODUCTION TO LAWLAW 1101

• Week 9
• Module 7 (Part 2)
• Intention and Consideration

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CONTRACT LAW

• 1. Offer
• 2. Acceptance
• 3. Intention to Create Legal Relations
• 4. Consideration

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INTENTION

• Two Presumptions
• Social, family or domestic arrangements
• no intention
• Commercial or business arrangements
• intention to be legally bound

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SOCIAL FAMILY OR DOMESTIC ARRANGEMENTS

• PRESUMPTION APPLIED
• Balfour v Balfour

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SOCIAL FAMILY OR DOMESTIC ARRANGEMENTS

• PRESUMPTION REBUTTED
• Riches v Hogben
• Simpkins v Pays
• Trevey v Grubb
• Indicative Factors
• Gravity of detriment
• Precision or certainty
• Serious legal consequences

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BUSINESS AND COMMERCIAL ARRANGEMENTS

• Presumption Rebutted
• Rose and Frank v Crompton (J.R.) Bros Ltd
• Letters of Comfort
• Malaysia Mining Corp Bhd v Kleinwort Benson Ltd
• Banque Brussels Lambert SA v Australian National
  Industries Ltd

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CONSIDERATION

• Right, interest, profit or benefit accruing
  to one party or some forebearance, detriment,
  loss or responsibility given, suffered or
  undertaken by the other

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CONSIDERATION

• EXECUTED or EXCECUTORY
• A promise for a promise
• MUST EXIST TO ENFORCE A CONTRACT
• NOT A MORAL OBLIGATION
• NEED NOT BE ADEQUATE
• Chappell Co. Ltd v Nestle Co. Ltd

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CONSIDERATION

• CANNOT BE TOO VAGUE
• Sheils v Drysdale
• PAST CONSIDERATION NOT GOOD
• Roscorla v Thomas

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CONSIDERATION

• Cannot Be to Carry Out an Existing Public or
  Legal (Contractual) Obligation
• Collins v Godefroy
• Glasbrook Bros v Glamorgan County Council
• Stilk v Myrick
• BUT Consideration Different
• Hartley v Ponsonby

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CONSIDERATION

• OR Practical Benefit, Commercial Advantage or
  Obviates a Disadvantage
• Williams v Roffey Bros Nicholls (Contractors)
  Ltd
• OR Consideration for the Performance of Existing
  Obligation to Third Party
• Shadwell v Shadwell

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COMPROMISE OF A DEBT

• Rule in Foakes v Beer - Existing contractual
  obligation
• Exception
• accord and satisfaction

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PROMISSORY or EQUITABLE ESTOPPEL

• Central London Property Trust Ltd v High Trees
  House Ltd
• 1. Some pre-existing legal relationship
• 2. Promise or undertaking by one party that they
  will not insist on their strict legal rights
• 3. Reliance by the 2nd party on the promise and
  behaviour of the 1st party
• 4. 2nd party acts to their disadvantage or
  suffers a material disadvantage
• 5. Unconscionable for 1st party to insist on
  their strict legal rights

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IN AUSTRALIA

• Walton Stores (Interstate) Ltd v Maher
• Austotel Pty Ltd v Franklins Selfserve Pty Ltd
• The Commonwealth v Verwayen
• 1. An assumption or expectation of a particular
  legal relationship or an existing legal
  relationship between the parties
• 2. 1st party induces that assumption or
  expectation not to rely on his/her strict legal
  rights
• 3. 2nd party abstains or acts in reliance on the
  assumption or expectation
• 4. 2nd party acts or fails to act to his/her
  detriment or future detriment
• 5. Unconscionable to insist on strict legal rights

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INTENTION

• TWO REBUTTABLE PRESUMPTIONS
• Social, family or domestic arrangements - no
  intention
• Commercial or business arrangements - intention
  to be legally bound

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CONSIDERATION

• Not a moral obligation
• Need not be adequate
• Cant be too vague
• Past consideration is not good consideration
• Not to carry out an existing public or legal
  obligation, performance of a contractual
  obligation or payment of a debt
• Promissory estoppel -avoids consideration if
  conditions satisfied

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After the break

• Module 8 - Construction of Terms of a Contract