Contract law in Australia is similar to other Anglo-American common law jurisdictions but has its unique aspects due to statute law and divergent development by the High Court since the 1980s.
Key elements include motive, reliance, and bargain theory, with 'quid pro quo' being essential.
The law of equity plays a significant role in remedies for breaches of contractual promises.
Important Considerations
Negligent Misstatement: False statement made carelessly.
Promissory Estoppel: Prevents a party from going back on a promise that the other party relied upon.
Misleading or Deceptive Conduct: Prohibited under Australian law.
Formation of Legally Binding Contracts
Essential Elements:
Agreement: Must not be unilateral.
Consideration: Exchange of something of value.
Capacity: Legal ability to enter into a contract.
Intention: Must intend to create legal relations.
Certainty: Terms must be clear.
Written vs. Oral Contracts: Oral contracts are generally as enforceable as written ones, but exceptions exist under statute law.
Agreement
Offer and Acceptance: An offer must be met with an unqualified acceptance.
Invitation to Treat vs. Offer: Displays for sale are invitations, not offers.
Postal Rule: Acceptance is effective when posted, not received.
Consideration
Sufficient Consideration: Anything of value, not necessarily of equivalent worth.
Past Consideration: Not usually sufficient.
Illusory Consideration: Held void if terms are too discretionary.
Capacity
Legal Capacity: Minors, intoxicated, and mentally impaired individuals may lack capacity.
Intention to Create Legal Relations
Commercial vs. Social Agreements: Presumed intent to create legal consequences in commercial settings.
Certainty
Agreements must be complete and specific enough for enforcement.
Terms of the Contract
Express Terms:
Must be available to all parties before contract formation.
Parol Evidence Rule: Prohibits use of outside evidence if a contract is fully written.
Implied Terms:
Implied in Fact: Reflect presumed intentions.
Implied in Law: Automatically included due to legal principles.
Construction of Terms
Ambiguous terms may use external context for interpretation.
Effect of a Signature: Generally binding unless exceptions like misrepresentation apply.
Illegality
Consequences: May render contracts unenforceable or void.
Termination
Methods of Termination:
Express Right: Clearly defined in contract.
Implied Rights: Inferred where not explicitly stated.
Subsequent Agreement: Parties agree to end contract.
For Breach: Depending on severity and terms.
For Repudiation: Intent shown to not perform.
Special Considerations
Frustration: Contract obligations become impossible due to unforeseen events.
Delay: Right to terminate may arise from unreasonable delays.
Election and Affirmation
Election: Decision whether to terminate or uphold contract after breach.
Legislative Influence
Sale of Goods Acts: Include implied terms regarding quality.
Australian Consumer Law: Prohibits misleading conduct.
Equity and Contracts
Equity may intervene for contract voidability in cases of misrepresentation or undue influence.
Vitiating Factors
Unconscionable Dealings: Rarely allowed, may void contracts.