1.7 Formalities PDF

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Formalities Introduction Introduction Simple contract  Requires consideration to be enforceable  May be written, oral or both  Requires at least two parties (consideration) Formal contracts: Deeds  Must be in writing and comply with legislation (See: Conveyancing Act 1919 (NSW), s 38)  Consideration not required - formalities make the deed binding ("signed, sealed and delivered")  Can be made by 1 person ("deed poll")

Simple contracts required to be in writing   

Common law does not require contracts to be in writing, although its prudent to record agreements in writing Obligation to record simple contracts in writing is statutory Examples o Credit contracts (National Credit Code, Pt 2,Div 1) o Home building contracts (Home Building Act 1989 (NSW) ss 7, 7AAA, 10) o Contracts that create or transfer and interest in land (Conveyancing Act 1919 (NSW), ss 23C, 54A)

Contracts that must be at least Evidenced in writing  

Statute of Frauds 1677 (Imp), ss 4, 17 and Conveyancing Act 1919 (NSW), s 54A(1) Summary of types of contracts needed to be evidenced in writing under Statute of Frauds o A special promise by an executor or administrator to satisfy the liability of the deceased out of the executor’s/administrator’s own money o A promise to answer for the debt, default or miscarriage of another person (a guarantee) o Agreements made in consideration of marriage o Agreements for the transfer of land o Agreements not to be performed within the space of one year from the making thereof o Agreements for sale of goods of value of $20.00 or more

Policy reasons for requirement   

Creates certainty Parties can reflect on obligations before signing Prevent fraud

Consequences for failure to comply 

Common outcomes o Contract void of unenforceable o Offence committed/party liable to punishment

Conveyancing Act 1919 (NSW). S 54A 

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Original obligation toe vidence contracts concerning interests in land was the 'Statute of Frauds' enacted in 1677. (Actual title: "AN Act for Prevention of Frauds and Perjuries".) The current law is Conveyancing Act 19191 (NSW), s54A Judgements sometimes refer to the 'Statute of Frauds' - cite the Conveyancing Act as your authority ‘No action or proceedings may be brought upon any contract for the sale or other disposition of land or any interest in land, unless 'the agreement upon which such action or proceedings is brought, or some memorandum or note thereof, is in writing, and signed by the party to be charged or by some other person thereunto by him lawfully authorised to be charged.’ Therefore in order to satisfy s54a in relation to agreements over land, a contract, or at least some sort of note/memorandum must exist in written down format (and must be signed) An oral agreement in relation to land is not enforceable Sale of other disposition of land or any interest in land - jurisdictional issue Unless the agreement upon which such action or proceedings is brought, or some memorandum or note thereof, is in writing - evidentiary issue Signed by the party to be charged or by some other person thereunto lawfully authorised by the party to be charged - evidentiary issue No action or proceedings may be brough - legal consequences

Interest in Land Sale or other disposition of land or any interest in land 

Section 54A applies when there is a o Sale or other disposition o Land(itself) of interest in land o Jurisdictional issue

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Interest in land o Ownership o Leasehold o Options o Mortgages o Easements Generally NOT a ''mere licence'' to use land Technicalities of "interest in land" will be covered in Real Property

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Conveyancing Act 1919 (NSW), s 54A

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"Sale or other disposition" suggests that the relevant interest must be preexisting, but it also includes creation of interest in land

Disposition includes a conveyance, and also an acknowledgement under section 83 of the Probate Adminsitration Act 1898, vesting instrument, declaration and trust, disclaimer, release and every other assurance of property by any instrument except a will, and also a release, devise, bequest, or an appointment of property contained in a will; and dispose has a corresponding meaning (s 7) Example: granting a lease creates an interest in the land

Evidence in writing Agreement…is in writing  

A signed contract will be used in most sales and leases Example: Contract for the Sale and Purchase of Land 2019 Ed

Consent in a Note or Memorandum  

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Need not be in a prescribed form but must contain all the material terms (Sinclair Scott and Co Ltd v Naughton) Must have details of property, price and parties (Pirie v Saunders) o Three P’s: this will be sufficient in constituting a valid property transaction ‘Material means essential’ (Harvey v Edwards Dunlop and Co Ltd) Note must identify the parties (Rosser v Austral Wine and Spirit Co Pty Ltd) Must state consideration (price) accurately (Ram Narayan v Rishad Hussain Shah) Must describe the subject matter (Pirie v Saunders) o In this case, reference to the property being on the Princes Highway in the Sylvania region is too vague (represents a large stretch of road But it need not take a particular form – can include a photocopy, email or fax (Simon Konstantinidis v Theo Baloglow & Ors [2000]) The case of McDowell v Meader also established a level of flexibility in how the property shall be identified, in this case accepting that the land in question was sufficiently described by being located at the intersection of two streets identified by name Could include o An unsigned contract o Correspondence between parties discussing the agreement o Cheques, forms, etc filled out by the parties o Any combination of the above

 All the essential terms; and  Signature of the party to be charged Must be evidenced in writing

Essential terms (sale)    

Parties Property Price (Other key) Promises

Essential terms (Lease)     

Parties Property (rent) Price Term (Duration) (Other key) Promises

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Essential terms must be identified in writing with sufficient certainty Sometimes a description will suffice when identifying parties and property Parol ("extrinsic") evidence can be used to precisely identify the party/property, so long as the evidence is more than asking the authors what the parties intended

Identifying the parties Rosser v Austral Wine & Spirit Co Pty Ltd [1980] VR 313 

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Guarantee (required to be in writing in Vic) expressed in favour of: "each and every member of the Wholesale Spirit Merchants Association of Victoria Wine; and Branchy Producers' Association of Victoria." "It thus appears that Lord Blackburn has concerned to point out in Rossiter v Miller that the parties will be sufficiently described in a writing for the purposes of the Statue of Frauds if the description used can be explained by extrinsic evidence without having to resort to evidence to prove the intention fo the author." (The Corut, 318) "Accordingly we think that the respondents are sufficiently described int eh instruments of guarantee and that the parol evidence is admissible to prove their identity." (The Court, 318)

Identifying the property Oglivie v Foljambe (1817) 3 Mer 53; 36 ER 21 

"The defendant speaks of "Mr Ogilvie's house," and agrees "to give $14,000, for the premises"; and aprol evidence has always been admitted, in such a case, to shew to what house, and the what premises, the treaty related." (Sir William Grant MR)

Plant v Bourne [1897] 2 Ch 281  

Description: "twenty-four acres of land, freehold, and all appurtenances thereto, at Totmonslow, in the parish Draycott, in the county of Stafford." 'I think Mr. Plant means he is selling the twenty-four acres we have been looking at", or "my twenty-four acres" is not twenty-four acres of land anywhere in England, but the place the county, and the parish are all

mentioned…Assuming that the parol evidence comes up to what has been stated, the result would be this: that Mr. Platt had twenty-four acres lying within the meters and bounds sufficiently defined; and if the fact be ascertained that he had no other twenty-four acres that would answer that description, then there would be simply the laying the contract alongside that fact, and the result would be ascertained - namely, that the twenty-four acres lying within the metes and bounds was the property that was intended to be included in this description.' (Chitty J, 290)

Pirie v Saunders (1961) 104 CLR 149 

"Finally, even fi these objections are not properly founded, it will be seen upon examinaiton that there are several reasons why the document could not be regarded as a sufficient note or memorandum. In the first place it does nto specify the property which is to be leased beyond describing it as "part of Lot B, Princes Highway, Sylvania Heights". This alone is, we should think, a fatal objection." (The Court)

Signature Requirements   

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Must be signed by the party to be charged = party against whom the contract is being enforced Both signatures are NOT necessary Three traditional means by which a signature can be produced o Party o Agent o Amanuensis (a person who signs a document on behalf of another under their authority) For instance, the case of Durrell v Evans [1862] established that if you are taken to having assented to the signing of your name, even if you yourself haven’t physically signed it (in this case, the other party’s having had the name written down the name in plain sight of the plaintiff, during a conversation)

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Signature is more than a mark at the end of the document Courts look for an objective indication by the party to be charged that they acknowledge that a certain doument(s) records the entire agreement and that they are bound by it A court may accept a party's name on a particular document is a signature under the authenticated signature fiction o Looking for evidence that the party to be charged has acknowledged a document as recoding the finalised agreement

Authenticated Signature Fiction Theory 

Ultimately whether a party has "signed or "authenticated" a document is a question fo fact

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NOTE: bare fact of a party's name is not conclusive - just stating a point A party’s name that has been written on a relevant document will be considered a signature if that document was recognised by that party as the final recording of the contract (Durrell v Evans) Does not apply to a printed name above which the party intended to, but forgot to sign (Farelly v Hircock) Blackburn J summarised the requirement in the following terms: “If the name of the party to be charged is printed e.g. ‘typed’ or written on a document intended to be a memorandum of the contract, either by himself or his authorised agent, it is his signature whether it is at the beginning or middle or foot of the document”

Durell v Evans (1862) 1 H &C 174 

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"…for the cases have decided it does not signify where the name is placed, if it is put there by the party sought to be charged or some person deputed by him. It may be at the head, in the middle, at the end, or in any party of the document" "If the parties meant the writing to be a memorandum of their contract, it is binding on them." (Crompton J)

Piri v Saunders (1961) 104 CLR 149 

"The prinicple applied in those cases can, we think , have no application to any document which is not ins ome way or other recognisable as a note or memorandum of a concluded agreement."

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“Here there is an allegation of a prior concluded contract and the solicitor's notes are said to constitute a note or memorandum of this contract. But they purport to be and are nothing more or less than a brief notation of his instructions for the preparation of a draft lease for submission to the respondent's solicitor. Neither the existence of the document nor its contents are indicative of the existence of any binding contract. Perhaps, in other words, it may be said that the enumerated particulars do not appear as a note or memorandum of a subsisting contract as distinct from bare instructions for the preparation of a formal lease. Both the document and its contents are quite consistent with the hypothesis that the parties had not made any prior binding contract and that their rights and obligations were not to be effected until the execution of a memorandum of lease in the form which, after discussion, it should finally take. That being so it in no way recognizes the existence of any binding contract and cannot therefore be regarded as a note or memorandum of any such contract.”

Time of creation Haydon v McLeod (1901) 27 VLR 395, 402 

Must be created after contract is formed --> must evidence a concluded agreement

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‘It is quite clear that any documents signed by the defendant after a verbal contract has been made and sent either to the defendant or to a third person may be sufficient if the contract is properly identified: Gibson v. Holland (h). In such cases the documents are considered as an admission or recognition of a pre-existing verbal contract: See Benjamin on Sales (3rd ecl.), p. 171; Lucas v. Dixon (i); Wilkinson v. Evans (k); Buxton v. Rust (l); Gibson v. Holland (m); John Griffiths Co. v. Humber Co. (n). But documents written before any agreement is arrived at and sent to the agent of the writer as an authority to make a contract cannot be admissions or recognitions of that contract; they are merely documents which make it probable that some agreement may thereafter be made, but they cannot be any corroboration of a contract which the agent may or may not make.’ (Hood J)

Exception Heppingstone v Stuart (1910) 12 CLR 126, 131-132 

"Since the case of Rouss v Picksley, deciding in 1866, it cannot be disputed that a written offer, containing all the terms of a proposed contract may be accepted verbally, and if it is accepted verbally then there is a complete contract satisfying the Statute of Frauds." (Griffith CJ)

Electronic signatures Electronic Transactions Act, 2000 (NSW)

Conveyancing Act 1919 (NSW)

Joinder "Joinder of Documents"   

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Reading several documents together A contract complies with the writing requirement if it consists of several documents through the doctrine of joinder Law is prepared to join documents together to complete the picture if there is a link between them that is o Physical o Temporal o Textual There is nothing in s54A that requires the memorandum or note to be in one document. Therefore, it is possible to join different documents together and gather the essential requirements that way If the documents are physically connected (i.e. stapled or in an envelope) there will be a joinder o Pang v Bydand Holdings Pty Ltd: a Mr Pang took out a multimillion dollar loan, citing newly acquired property as the guarantee. He fills in the details of the contract but leaves the ‘purchaser’ section unsigned. This document is meant to be signed and in the absence of a signature, fails to meet statutory requirements. When bank tries to later claim guarantee, Pang argues that the contract was not binding, as his name was not on the document. However, joinder of document applies, given that the contract of guarantee was connected to other documents which did have his name written down on them Thomson v McInnes: Griffith CJ: “It is well known that the note or memorandum which the statute requires need not be contained in one piece of paper” In Thomson v McInnes, a narrow interpretation was adopted – there must be in the joined document a connecting reference must be to some other document and not merely to some transaction or event

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In Harvey v Edwards Dunlop and Co Ltd, a broader interpretation was adopted, whereby a reference can be to a transaction or event in which the other document arose and parole evidence can be used to clarify this connection o “if you can spell out of the document a reference in it to some other transaction, you are at liberty to give evidence as to what that other transaction is, and, if that other transaction, contains all the terms in writing, then you get sufficient memorandum within the statute reading the two together,” (drawing for Stokes v Whicher) Harvey v Edwards Dunlop established that an express reference to a dealing between the parties amounts also to an implied reference to any written record of that dealing

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Physically attached (Glue, Sticky tape, staple)

Pang v Bydand Holdings Pty Ltd [2010] NSWCA 175 (1 July 2010) 

[18] What man has physically joined the law does not put asunder:…The composite document must be rad and construed as a whole. (Handley AJA, Allsop P and McFarlan JA agreeing)

Pearce v Gardner (1897) 1 QB 688, 690 

'The common sense of the matter seems to me to be that the envelope and the letter within it were sent together and may be taken together; so that the effect is the same as the name of the plaintiff had been written at the foot or indorsed on the letter.' (Lord Esher MR)

Temporal/Contemporaneous Pang v Bydand Holdings Pty Ltd [2010] NSWCA 175 (1 July 2010) [19] In Toohey v Gunther [1928] HCA 19, 41 CLR 181 Isaacs J considered the construction of separate instruments executed by the same parties at or about the same time. He said at 196: “The true principle of construction in such cases is stated by Knight Bruce LJ, when delivering the judgment of the Privy Council in Shaw v Jeffery [1860] EngR 888; (1860) 13 Moo PCC 432, 456-7 as follows: ‘When the same parties execute contemporaneously several instruments relating to different parts of the same transaction all must be considered together; all must be examined in order to understand each; apparent inconsistencies are to be reconciled; and where there are real inconsistencies, the governing intention of the parties is still to be collected from the consideration of the language of all the instruments, and effect given to it.’ …” [20] These principles apply with added strength where one of the instruments is physically incorporated in the other. (Handley AJA, Allsop P and McFarlan JA agreeing)

Textual References Harvey v Edwards Dunlop & Co Ltd (1927) 39 CLR 302, 307 ‘It is also well settled that the memorandum "need not be contained in one document; it may be made out from several documents if they can be connected together." They may be connected by reference one to the other; but further, "if you can spell out of the document a reference in it to some other transaction, you are at liberty to give evidence as to what that other transaction is, and, if that other transaction contains all the terms in writing, then you get a sufficient memorandum within the statute by reading the two together" (Stokes v Whicher).’ (Knox CJ, Gavan Duffy J and Starke J)

Timmins v Moreland Street Property CO Ltd [1958] Ch 110, 130 ‘… it is still indispensably necessary, in order to justify the reading of documents together for this purpose, that there should be a document signed by the party to be charged, which, while not containing itself all the necessary ingredients of the required memorandum, does contain some reference, expressed or implied, to some other document or transaction. Where any such reference can be spelt out of a document so signed, then parol evidence may be given to identify the other document referred to, or, as the case may be, to explain the othe...