Category Archives: Contract

Consumer Law, Contract, Defences, LAW FIRM, Property Law

Petelin v Cullen [1975] HCA 24

ON 17 JULY 1975, the High Court of Australia delivered Petelin v Cullen [1975] HCA 24; (1975) 132 CLR 355 (17 July 1975).

http://www.austlii.edu.au/au/cases/cth/HCA/1975/24.html

Petelin owned land at Liverpool. He spoke little English and could not read English. Cullen through his agent sent Petelin $50 with a letter seeking his agreement to extend an option to purchase land for a further 6 months. Cullen’s agent then saw Petelin and asked him to sign to the letter that he received the $50. Petelin signed the letter believing he had signed a receipt, not an option.

Cullen sought an order for specific performance in the Supreme Court of NSW. The Supreme Court dismissed the action on the grounds that Petelin had made out the defence of non est factum. The NSW Court of Appeal then overturned the Supreme Court decision, ordering specific performance.

The High Court allowed Petelin’s appeal, overturning the Court of Appeal’s decision and dismissing Cullen’s action for specific performance.

The High Court found that Petelin was entitled to the defence of non est factum as he believed that he had signed a receipt, was not careless and that in any event, Cullen was not an innocent person without knowledge or reason to doubt the validity of the signature.

To make out a defence of non est factum, the defendant must show:

  • that he or she signed the document in the belief that it was radically different from what it was in fact, and
  • that (at least as against innocent persons) his or her failure to read and understand the document was not due to carelessness.

There is a heavy onus on the defendant to show that he or she believed the document to be radically different from what it was in fact.

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Contract, Equity, LAW FIRM, Property Law

Neeta (Epping) Pty Ltd v Phillips [1974] HCA 18

ON 14 MAY 1974, the High Court of Australia delivered Neeta (Epping) Pty Ltd v Phillips [1974] HCA 18; (1974) 131 CLR 286 (14 May 1974).

In a contract for the sale of land in which time is not of the essence, a party seeking to rely on a notice to complete must itself be free of default by way of breach or delay. When such a notice is ineffective, the purchaser’s continued failure to complete does not amount to a repudiation allowing the vendor to rescind.

http://www.austlii.edu.au/au/cases/cth/HCA/1974/18.html

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Barton v Armstrong [1973] UKPC 2

ON 5 DECEMBER 1973, the United Kingdom Privy Council delivered Barton v Armstrong & Ors [1976] AC 104; [1973] UKPC 2 (5 December 1973).

http://www.bailii.org/cgi-bin/markup.cgi?doc=/uk/cases/UKPC/1973/2.html&query=BARTON+and+V+and+ARMSTRONG&method=boolean

A contract may be set aside on the grounds of duress if the use of illegitimate pressure was one of the causes for a party to enter into the agreement. If illegitimate pressure is established, the burden is on the person who applied such pressure to show that the pressure did not operate to cause the party to enter into the agreement.

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Contract, LAW FIRM

Australian Broadcasting Commission v Australasian Performing Right Association Ltd

ON 14 SEPTEMBER 1973, the High Court of Australia delivered Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99 (14 September 1973).

http://www.austlii.edu.au/au/cases/cth/HCA/1973/36.html

At p109-110, Gibbs J said:

“It is trite law that the primary duty of a court in construing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contract is embodied. Of course the whole of the instrument has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another. If the words used are unambiguous the court must give effect to them, notwithstanding that the result may appear capricious or unreasonable, and notwithstanding that it may be guessed or suspected that the parties intended something different. The court has no power to remake or amend a contract for the purpose of avoiding a result which is considered to be inconvenient or unjust. On the other hand, if the language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust, “even though the construction adopted is not the most obvious, or the most grammatically accurate”, to use the words from earlier authority cited in Locke v. Dunlop (1888) 39 Ch D 387, at p 393 , which, although spoken in relation to a will, are applicable to the construction of written instruments generally; see also Bottomley’s Case (1880) 16 Ch D 681, at p 686 . Further, it will be permissible to depart from the ordinary meaning of the words of one provision so far as is necessary to avoid an inconsistency between that provision and the rest of the instrument. Finally, the statement of Lord Wright in Hillas & Co. Ltd. v. Arcos Ltd. [1932] UKHL 2; (1932) 147 LT 503, at p 514 , that the court should construe commercial contracts “fairly and broadly, without being too astute or subtle in finding defects”, should not, in my opinion, be understood as limited to documents drawn by businessmen for themselves and without legal assistance (cf. Upper Hunter County District Council v. Australian Chilling and Freezing Co. Ltd. [1968] HCA 8; (1968) 118 CLR 429, at p 437 ).”

 

 

Contract, Damages, LAW FIRM, United Kingdom

Anglia Television Ltd v Reed [1972] 1 QB 60

ON 29 JULY 1971, the English Court of appeal delivered Anglia Television Ltd v Reed [1972] 1 Q.B. 60.

http://faculty.law.ubc.ca/biukovic/supplements/anglia.htm

The defendant, Robert Reed, was an American actor best known for his role as Mike Brady in the Brady Bunch television series. In 1968 he contracted with the plaintiff, Anglia Television Ltd, to act in a movie to be filmed in Great Britain. Due to a mix-up with his bookings, the defendant repudiated the contract. The plaintiff sought damages for wasted expenditure incurred before and after the formation of the contract. The defendant argued that the plaintiff was only entitled to wasted expenditure after the contract.

The trial judge awarded the defendant damages for the wasted expenditure incurred both before and after the formation of the contract. The Court of Appeal dismissed the defendant’s appeal.

Lord Denning MR held: “If the plaintiff claims the wasted expenditure, he is not limited to the expenditure incurred after the contract was concluded. He can claim also the expenditure incurred before the contract, provided that it was such as would reasonably be in the contemplation of the parties as likely to be wasted if the contract was broken”.

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Contract, LAW FIRM, United Kingdom

Thornton v Shoe Lane Parking Ltd [1970] EWCA Civ 2

ON THIS DAY in 1970, the England and Wales Court of Appeal delivered Thornton v Shoe Lane Parking Ltd [1971] 2 QB 163; [1971] 1 All ER 686; [1970] EWCA Civ 2.

http://www.bailii.org/ew/cases/EWCA/Civ/1970/2.html

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Contract, Damages, LAW FIRM

McRae v Commonwealth Disposals Commission [1951] HCA 79

ON 27 AUGUST 1951, the High Court of Australia delivered McRae v Commonwealth Disposals Commission [1951] HCA 79; (1951) 84 CLR 377 (27 August 1951).

A court must determine damages as best it can. Difficulty in assessing damages does not justify non-assessment.

The defendant was ordered to pay the plaintiff damages for breach of contract, assessed as being his expenses incurred in reliance on the plaintiff’s promise to sell it a shipwrecked oil taker which was in fact, by the defendant’s mistake, a shipwrecked oil barge.

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Yerkey v Jones [1939] HCA 3

ON 6 MARCH 1939, the High Court of Australia delivered Yerkey v Jones [1939] HCA 3; (1939) 63 CLR 649 (6 March 1939).

http://www.austlii.edu.au/au/cases/cth/HCA/1939/3.html

Yerkey v Jones provides that: (1) a wife may have a guarantee set aside if the consent was obtained by undue influence, unless she received independent advice (at 649, per Dixon J); and (2) a wife has a prima facie right to have a guarantee set aside if she failed to understand the effect of the guarantee or its significance, unless steps were taken by the lender to inform the wife of such matters (at 683, per Dixon J).

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Commercial Law, Contract, LAW FIRM

Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd [1938] HCA 66

ON 23 DECEMBER 1938, the High Court of Australia delivered Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd [1938] HCA 66; (1938) 61 CLR 286 (23 December 1938).

http://www.austlii.edu.au/au/cases/cth/HCA/1938/66.html

Only nominal damages should be awarded when a breach of contract causes no identifiable loss. The right to nominal damages follows as “a matter of course”.

A term of a contract will be regarded as a condition if it goes to the very substance of the contract.

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Contract, Damages, LAW FIRM, United Kingdom

Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd [1914] UKHL 1

ON 1 JULY 1914, the House of Lords delivered Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd [1915] AC 79; [1914] UKHL 1 (1 July 1914).

http://www.bailii.org/uk/cases/UKHL/1914/1.html

Liquidated sum clauses are valid and enforceable under contract law; penalty clauses are not. A liquidated sum is a genuine estimate of the losses from a breach; a penalty frightens or deters a party from breach.

A court will construe a clause to be a penalty if:

  • It is extravagant or unconscionable.
  • It is greater than the money payable for a breach for failure to pay money.

A court will presume a clause to be a penalty if it is for a single lump sum payable in the occurrence of one or multiple events, some of which may only warrant minimal damages.

A court will presume a clause to be liquidated if the consequences of a breach are hard or impossible to estimate as it is probable that the pre-estimated damage was the true bargain between the parties.

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