Contracts: Capacity, Requirement of Writing, Express Terms, Implied Terms, Incorporation by Notice, Parol Evidence Rule, Exams of Law

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P a g e | 1 Contents Capacity ............................................................................................................................................................ 7 Statute .......................................................................................................................................................... 7 Minors (Property & Contracts) Act 1970 (NSW) ....................................................................................... 7 General Law .................................................................................................................................................. 7 Necessaries ................................................................................................................................................... 7 Scarborough v Sturzaker (1905) 1 TasLR 117 - Necessaries contracts are enforceable against a minor . 7 Bojczuk v Gregorcewicz [1961] SASR 128 – Contract not for necessaries................................................ 7 Beneficial contracts of service ...................................................................................................................... 8 De Francesco v Barnum (1890) 45 ChD 430 – not beneficial, restraint term denied ............................... 8 Hamilton v Lethbridge (1912) 14 CLR 236 – Restraint term upheld ......................................................... 8 Mentally unsound and intoxicated: .............................................................................................................. 8 Hart v O’Connor [1985] AC 1000 – other party did not reasonably know ............................................... 8 Matthews v Baxter (1873) LR8Exch 132 – Cannot ratify agreement and then preclude agreement ...... 8 Requirement of Writing .................................................................................................................................. 10 General Rules .............................................................................................................................................. 10 Contracts for Sale of Land ........................................................................................................................... 10 Section 54A Conveyancing Act 1919 (NSW) ........................................................................................... 10 Welsh v Gatchell [2009] 1 NZLR 241 ....................................................................................................... 10 Exceptions ................................................................................................................................................... 10 Fraud ....................................................................................................................................................... 10 Wakeham v Mackenzie [1968] 2 AllER 783 – non-compliance with statute would amount to fraud ... 10 Doctrine of Part Performance................................................................................................................. 11 Section 54A Conveyancing Act 1919 (NSW): .......................................................................................... 11 Regent v Millett (1976) 133 CLR 679n- part performance ..................................................................... 11 Masterton Homes v Palm Assets (2009) 261 ALR 382 - PArT PERFORMANCE & PAROL EVIDENCE RULE ................................................................................................................................................................ 12 Express Terms ................................................................................................................................................. 13 General Principles ....................................................................................................................................... 13 Representations of a Contract .................................................................................................................... 13 Ellul and Ellul v Oakes (1972) 3 SASR 377 – term vs representation ...................................................... 13 Oscar Chess Ltd v Williams [1957] 1 All ER 325 – totality of evidence, innocent misrepresentation .... 13 J J Savage and Sons v Blakney (1970) 119 CLR 435 – promissory nature of a statement ...................... 14 Incorporation by signature ......................................................................................................................... 14 L’Estrange v Graucob [1934] 2 KB 394 – signature rule ......................................................................... 14 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 79 ALJR 129 – signature rule ..................................... 14 Exclusions .................................................................................................................................................... 14 P a g e | 2 Curtis v Chemical Cleaning and Dyeing Co [1951] 1 KB 805 – signature induced by misrepresentation ................................................................................................................................................................ 14 Incorporation by Notice .............................................................................................................................. 15 Olley v Marlborough Court [1949] 1 KB 532 – timing of notice ............................................................. 15 Thornton v Shoe Lane Parking [1971] 2 QB 163 – given at or before contract ...................................... 15 Parker v South Eastern Railway Co (1877) 2– where a party knows about the contract, reasonable notice ...................................................................................................................................................... 16 Incorporated by Prior Dealings ................................................................................................................... 16 Henry Kendall & Sons v William Lillico & Sons Pty Ltd [1969] 2 AC 31 - reasonableness ....................... 16 Hays Personnel v Motorline Pty Ltd [2008] QCA 375 ............................................................................. 16 La Rosa v Nudrill Pty Ltd [2013] WASCA 18 ............................................................................................ 16 Parol (oral) Evidence Rule ........................................................................................................................... 17 Exceptions ................................................................................................................................................... 17 L G Thorne & Co v Thomas Borthwick & Sons (1955) 56 SR (NSW) 81 ................................................... 17 Masterton Homes v Palm Assets (2009) 261 ALR 382 ............................................................................ 17 State Rail Authority v Heath Outdoor Ltd (1986) 7 NSWLR 170 ............................................................. 18 Collateral Contract ...................................................................................................................................... 18 De Lassalle v Guildford [1901] 2 KB 215 ................................................................................................. 18 Promissory in nature .................................................................................................................................. 18 J J Savage and Sons v Blakney (1970) 119 CLR 435 ................................................................................. 18 Hoyt's v Spencer (1919) 27 CLR 133 - inconsistency .............................................................................. 19 Inntrepreneur Pub Co v East Crown [2000] 2 Lloyd’s Rep 611 ............................................................... 19 Chint Australasia v Cosmoluce [2008] NSWSC 635 ................................................................................ 19 Implied Terms ................................................................................................................................................. 20 On the facts of the case .............................................................................................................................. 20 Con-Stan Industries of Australia P/L v Norwich Winterthur Insurance (Australia) P/L (1986) 160 CLR 226 -So Obvious it Goes Without Saying ................................................................................................ 20 Will only imply terms in written contracts where conditions are met that are established in BP Refinery v Shire of Hastings (1977) 180 CLR 266 (Australian case taken to Privy Council). ................... 21 Codelfa Construction Pty Ltd v SRA of NSW (1982) 149 CLR 337 ........................................................... 21 Attorney General of Belize v Belize Telecom Ltd [2009] 2 All ER 127 .................................................... 22 The Moorcock (1889) PD 64 ................................................................................................................... 22 Informal, unwritten contracts .................................................................................................................... 22 Implication of Terms by Law ....................................................................................................................... 22 Butts v O’dwyer (1952) 87 CLR 267 ........................................................................................................ 23 Hawkins v Clayton (1988) 164 CLR 539 .................................................................................................. 23 Byrne v Australian Airlines Ltd (1995) 185 CLR 410 ................................................................................ 23 Implication of Terms by Custom and Usage ............................................................................................... 24 Con-Stan Industries of Australia P/L v Norwich Winterthur Insurance (Australia) P/L (1986) 160 CLR 226 - Implications by Custom ................................................................................................................. 24 P a g e | 9 Matthews v Baxter (1873) LR8Exch 132 – Cannot ratify agreement and then preclude agreement • Party can be precluded from voiding a contract on the grounds of intoxication or state of mind if they later ratify the agreement • At auction one party bought the property when he was drunk and later, in a better mental state, actioned to ratify the agreement and was later precluded from rescinding from the contract because he had later ratified it P a g e | 10 Requirement of Writing General Rules • No general requirement for contracts to be written, however, some contracts are required by statute to be formal • Prima facie Noncompliance w/ s51 means the contract for sale of land is not enforceable. However, there are two exceptions to the rule • Contracts required to be evidenced in writing may be discharged verbally • If a contract must be evidenced in writing, any variation of that contract must be in writing Contracts for Sale of Land Section 54A Conveyancing Act 1919 (NSW) • (1) A contract for the sale of land is not enforceable unless it is in writing or some memorandum or note and signed by the party to be charged or an authorised party • Memorandum or note: fully written contract or a letter, email receipt, electronic communication if there is a clear/logical relation between documents • Must include: o Material terms: identity of parties, Consideration identified (price/method of price determination), description of land (address) Pirie v Saunders (1961) 104 CLR 149 • Internal acknowledgement of the contract: even if the written document contains all the essential terms, apart from identifying the parties, property and price, the written memorandum or note must also contain words indicative of the parties’ intention to contract. Welsh v Gatchell [2009] 1 NZLR 241 1. Pre-contract: Negotiating price and agreement 2. Contract (exchange): Both parties sign contracts o Party buying has equitable interest o Enforceable if section 54A is satisfied o Often, 10% deposit paid • 3. Post-contract: take action (about 4-6 weeks) • 4. Completion (settlement): representatives, banks, change of registered proprietor • ⇒ Contract is discharged by performance Exceptions MISSING Fraud Wakeham v Mackenzie [1968] 2 AllER 783 – non-compliance with statute would amount to fraud • Man promised a woman he would leave her his house if she moved in with him and took care of him. He also agreed to put that into writing, when she raised it he assured he had put it into writing, however he had not and the property was left to someone else • The executor of his estate argued she cannot win as statute requires the transfer of land must be in writing • Court held this was inequitable fraud P a g e | 11 McBride v Sandland (1918) 25 CLR 69 – Part Performance • A contract unenforceable because of the Statute of Frauds could become enforceable by virtue of the acts which the plaintiff did afterwards. The doctrine as justified by two • reasonas, the first was a form of estoppel, as Lord Reid said in Steadman v Steadman [1976] • The second reason was that the acts done by the plaintiff oculd in themselves prove the existence of the contract in a way which could be an acceptable substitute for the not or memorandum required by the state • The third matter to be established for the doctrine to apply is that the acts done must be unequivocal and in their own nature be referable to a contract of the general nature of the alleged oral agreement McBride v Sandland at 78 Doctrine of Part Performance Section 54A Conveyancing Act 1919 (NSW): • Parties may be able to prove the non-written contract if you can prove that the contract was partly performed in reliance of the oral contract (assumed as good as or better than writing) • Part performance: if one party permits the other party to reasonably act on their promise in an oral agreement, the court will stop the party from arguing there is no contract as the party did not stop the acting party • Acts must be authorised by the oral contract • Acts must be unequivocally referable to the type of contract you allege exists. o Painting the kitchen refers to purchasing house, tenants don’t paint the kitchen • Must be acts of the asserting party Khoury v Khouri [2006] NSWCA 184 • Unless authoritatively directed to do otherwise, the court of appeal should apply the • doctrine of part performance as it has received it, according to the terms in which it has been recognised in decisions of the high court of Australia • Bryson JA on an oral agreement relating to land said “in the present case there are no acts of ownership such as taking possession, paying rates or paying for the upkeep or improvement of the property, or receipt of rent or profits, or any other act at all. Act of part performance have been almost universally related to possession and use or tenure of land itself, such as where a purchaser is put into possession by the vendor, or allowed to take possession by the vendor or where the purchaser carries out improvements. They have not necessarily been acts which the contract requires to be done. Regent v Millett (1976) 133 CLR 679n- part performance • Bought a property and got a mortgage, then agreed with daughter and husband that if they give him the money he gave to the bank and take over bank payments the daughter and son in law can live there and the property will be transferred to them. • He didn’t transfer property, children sought order for performance without written contract. The court ruled in favour of the children as they had acted in accordance with the authorised actions by the father (part performance)