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C o n t e n t s o f C o n t r a c t

Mercantile Bank of Sydney v Taylor [1891] 12 LR  Parol evidence rule

In the event of an inconsistency between a written term of a contract and a verbal representation or promise, the court will favour the written term and disregard the verbal representation or promise

Van Den Esschert v Chappell [1960] WAR 114  Parol evidence rule  Exceptions

If the court decides that the verbal representation or promise was intended to be a term of the contract, the court can decide that the complete contract consists of the written agreement plus the verbal representation or promise, and the parol evidence will not apply.

Section 12, Sales of Goods Act  Implied terms  Right to sell  Quiet possession

Implied condition that the seller has the right to sell the goods to buyer, that the seller is the owner of the goods Implied warranty goods free from any third party charges Implied warranty that buyer enjoys quiet possession of the goods

Rowland v Divall [1923] 2 KB 500  Implied terms  Breach of S12  Stolen goods

The seller have breached the statutory term section 12, and contract will be void

Section 13, Sales of Goods Act  Implied terms  Sales of goods by description

Implied condition that the goods will correspond with the description The description may be in writing, made verbally, or an image on packaging or advertisements

Reynolds v Tuner [1989] ASC 55-922  Implied terms  Breach of S13  False description Baele v Taylor [1967]  Implied terms  Breach of S13  False description

If the actual goods do not correspond with the description of the goods, the seller will have breached the statutory term regarding description. Buyer may rescind the contract and claim damages for false description by seller.

If the actual goods do not correspond with the description of the goods, the seller will have breached the statutory term regarding description, whether he knows it or not. Buyer may rescind the contract and claim damages for false description by seller.

Section 14(2), Sales of Goods Act  Implied terms  Satisfactory Quality

Where the seller sells goods in the course of a business, there is an implied condition that the goods supplied under the contract are of satisfactory quality, or merchantable quality.

Rogers v Parish Ltd [1987] QB 933  Implied terms  Breach of S14(2)

If the actual goods are not of a satisfactory quality, the seller will have breached the statutory term Appearance & finish are also part of common expectation

David Jones Ltd v Willis [1934] 52 CLR 110  Implied terms  Breach of S14(2)

Safety & durability is also part of common expectation

Section 14(2C), Sales of Goods Act  Implied terms  Satisfactory Quality  Seller’s Defence

Seller will not be liable if seller has drawn buyer’s attention to defect, or buyer examined the goods before making the contract and that examination ought to reveal the defects

Section 14(3), Sales of Goods Act  Implied terms  Fitness

Goods must be reasonably fit for purpose Seller informed of buyer’s special purpose Buyer relies on the seller’s skill or judgement (Only applicable to seller normally dealing in goods of that description. If goods purchased from e.g. private sales, caveat emptor)

Grant v Australian Knitting Mills Ltd [1936] AC 85  Implied terms  Breach of S14(3)

Thornton v Shoe Lane Parking [1971] 2 QB 163  Exemption Clause

Disclaimer or Exemption clause given within reasonable notice before sales will be incorporated into the contract However, there are exceptions under Singapore Statutory law which prohibits unfair clause against consumers such as Section 6 (2) of the Unfair Contract Terms act

Olley v Marlborough Court Hotel  Exemption Clause Section 6(2) Unfair Contract Terms Act  Implied terms  Protection of SOGA to consumer  Exception to exemption clause Section 6(3) Unfair Contract Terms Act  Implied terms  Exclusion to S6(2) Section 12(A-F) Lemon Law  Implied terms

Implied terms from the Sales of Goods Act cannot be excluded or restricted in the case of consumer sales Buyer may rescind the contract and claim damages, or just claim damages, within reasonable time

Implied terms from the Sales of Goods Act may be excluded or restricted in cases other than consumer, if it satisfies the requirement of reasonableness

Under the lemon law, a consumer would be able to make claim for a defective product within 6 months of purchase. It is compulsory for a seller of a defective product to repair, replace, refund or reduce the price of the defective product The law defines “defective product” such as, product not corresponding with their description, of satisfactory quality, and/or not fit for any purpose communicated to the seller before the point of purchase

M i s r e p r e s e n t a t i o n

A Misrepresentation is a false statement of act made by one person to induce another person to enter into a contract, and that in fact induces that person to enter into the contract. There are three types of misrepresentation: 1. Fraudulent misrepresentation, 2. Negligent misrepresentation, and 3. Innocent misrepresentation Derry v Peek [1889] 14 App Cas 337  Fraudulent Misinterpretation

Misinterpretation is fraudulent if it was made, knowingly, without belief in its trust, or recklessly, that is, the person did not care whether the statement was true or false. Plaintiff can terminate the contract under contract law, and Recover damages under tort law in the tort of deceit

Dimmock v Hallett [1867] LR 2 Ch App 21  Fraudulent Misinterpretation  Salesman’s statement, Puffery

One has to determine if said statement is in fact a misinterpretation or merely just a puffery which cannot be taken for truth under reasonableness.

Bisset v Wilkinson [1927] AC 177  Fraudulent Misinterpretation  Opinion

A fairly given opinion cannot amount to a misrepresentation

Smith v Land and House Property Corporation [1884] LR 28 Ch D 7  Fraudulent Misinterpretation  Opinion, c.f from Bisset

A statement of opinion can represent that one knows certain facts, and therefore one may have still made a misrepresentation.

De Lasalle v Guildford [1901] 2 KB 215  Breach of collateral contract

If a representation or promise prompted the other party to enter into main contract in the first place, it may be decided that a collateral contract has come into existence. A collateral contract is a secondary contract in return for the representation or promise the other party has entered into the main contract. Plaintiff entitled to damages and equitable remedies for breach of the collateral contract, but cannot terminate the main contract

D Curtis v Chemical Cleaning & Dying Co i [1951] 1 KB 805 s  Disclaimer c l a i m e r s

A disclaimer will be part of a contract if  It is expressly set out in a written contract that has been signed by the parties  It is expressly brought to the attention of the other party by reasonable notice given before the contract was formed  It is implied into the contract as a result of prior dealings between the parties When a signature to a condition, purporting to exempt liability, is obtained as a result of misrepresentation (innocent or otherwise) the party making that representation cannot rely on the exemption

R e Gold Coast Oil Co Pty Ltd v m Lee Properties Pty Ltd [1985] 1 Qd R 416 e  Complete failure to perform d i e s Bettini v Gye [1876] 1 QBD 183  Partial failure to perform  Warranty

A party to a contract will completely fail to perform if  They make no effort at all to perform contractual obligations  Actual performance is completely different to what they were required to do under the contract  Prior to the time for performance they clearly indicate that they will not be performing their obligation Plaintiff can terminate the contract, and sue for damages and equitable remedies such as specific performance or an injunction A party to a contract will partially fail to perform the contract if they comply with some of the terms of the contract but breach one or more of the other terms. Partial failure to perform is a breach of the contract, entitling the other party to damages and range of equitable remedies. A Warranty is a term of contract of lesser importance  Plaintiff have the rights to sue for damages, but  Does not have the rights to terminate the contract

Associated Newspapers Ltd v Bancks [1951] 83 CLR 322  Partial failure to perform  Condition

A condition is a term of the contract of fundamental importance  Plaintiff can confirm the contract and recover damages, or  Terminate the contract and recover damages.

Cehave NV v The Hansa Nord [1976] QB 44  Partial failure to perform  Intermediate terms  Minor Breach

Intermediate terms are when it is not possible to categorise a term of the contract as either a condition or a warranty. Whether or not a breach of an intermediate term entitles the other party to terminate the contract depends upon the seriousness of the breach: a serious breach will justify termination, a minor breach will not

Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] 233 CLR 115  Partial failure to perform  Intermediate terms  Serious Breach

A serious breach deprives the other party substantially of the benefit for which they entered into the contract in the first place

Plaintiff can only sue for compensation, no rights to terminate the contract

Plaintiff can terminate the contract

D a m a g e s

Kuofos v C Czarnikow Ltd; The Heron II [1969] 1 AC 530  Damages  Direct Losses

Direct losses are those losses incurred by the plaintiff that flow naturally from the breach according to the ordinary course of events. Damages payable for direct losses are called general damages

Hadley v Baxendale [1854] 9 Ex 341  Damages  Indirect Losses

Indirect losses are losses that are not caused directly by the breach or that would not ordinarily be expected to result from the breach. Such losses are only recoverable if it can be shown that the parties had the possibility of such losses in mind when the contract is formed. Damages payable for indirect losses are called special damages

Brace v Calder [1895] 2 QB 253  Mitigation

Although one may claim for damages, one is also under the obligation to mitigate their loss; to take reasonable steps to minimise their loss.

Payzy Ltd v Saunders [1919] 2 KB 581  Mitigation Dougan v Ley [1946] 71 CLR 142  Equitable Remedy  Specific Performance Buckenara v Hawthorn Football Club Ltd [1988] VR 39  Equitable Remedy  Injunction

Specific performance is a court order directing the defendant to fulfil their contractual obligations, instead of the defendant paying monetary compensation to the plaintiff Specific performance will only be ordered if the goods are unique or rare, or have a special or particular value An injunction is a court order forbidding someone from engaging in particular conduct that will be a breach of the law or infringe the legal rights of another. An injunction may be sought by the plaintiff to prevent the defendant from engaging in a threatened or anticipated breach of contract, or in an actual ongoing breach of contract An injunction is more likely to be granted than specific performance...