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In-Class Exercise
on Lecture Topics 1 and 2
PLEASE SPEAK TO YOUR TUTOR IF YOU
MISSED THE IN-CLASS EXERCISE LAST
WEEK
Worth 10% of your mark
Lecture 5
Contract Law (Contd)
Exclusion Clauses/Capacity/Privity/
Vitiating elements
Lecturer: Mr Paul Tuohy
2015 The University of New South Wales
Sydney 2052 Australia
The original material prepared for this guide is copyright. Apart from fair dealing for the purposes of private study, research, criticism or
review, as permitted under the Copyright Act, no part may be reproduced by any process without written permission.
Enquiries should be addressed to the Head of School, Taxation and Business Law, UNSW, Sydney
MAJOR ASSIGNMENT
MAJOR ASSIGNMENT
Research materials:
Your starting point:
- Reading materials on Moodle (PDFs)
- Paul Latimers Australian Business Law, 2015 (or 2014 or
2013 edns BUT NOT earlier than 2013)
Do some independent research beyond the Moodle
readings and beyond the textbook using other research tools:
Look for Cases/Journal articles/Other materials from legal
publishers that are available online through UNSW
Library database
Focus your research on ONLINE materials
Do NOT bother the UNSW librarians unnecessarily
On Moodle
Contract law, problem question
See Guidelines to Students (attached to the assignment)
DUE Monday 4 May by 5pm (beginning of Week 9)
See Course Outline (paragraph 4.4) for details about how to
submit your Assignment
ONLINE SUBMISSION ONLY
- On Moodle (via Turnitin)
- Check your plagiarism score, amend and re-submit as
required
MAJOR ASSIGNMENT
Sample Answer
On Moodle
THIS IS A GUIDE for FORMAT AND STYLE OF
WRITING ONLY
DO NOT COPY the content of the sample answer
the facts are completely different from your
assignment problem!
Remember:
In your discussion/answer, you must include
references to relevant statutory provisions
(legislation name and, where possible, section
numbers) and case names
Legal Research
Legal Research
1.
2.
Legal encyclopedias
-
Textbooks
Journals
Commentaries/loose-leaf services
Statute annotators
9 9
10 10
Legal Research
The Library Website and the Law subject guide has links to:
Legal encyclopedias;
Law Reports;
Legal Journals;
Commentaries & loose-leaf services
11
12 12
Lecture 3: Summary
Lecture 3: Summary
Agreement
Offer
Acceptance
Consideration
13
14
Lecture 4: Summary
Todays lecture
Terms of a contract
Representation:
- Pre-contractual negotiations
Terms
- Express/Implied
- Condition/Warranty
- Uncertain/Meaningless/Ambiguous terms
Exclusion clauses
Collateral contracts
Requirements for a valid contract (contd)
Privity of contract
Capacity
Consent
Proper form
Agency: the exception to Privity
Vitiating elements
Mistake
Misrepresentation
Illegality
Inequality between the parties
Unconscionable conduct (Commercial Bank v Amadio)
15
Overview - Lecture 5
16
Exclusion clauses
Capacity/Privity/Vitiating Elements
On completion of this lecture you should be
able to:
9 Identify and explain what exclusion clauses are
9 Understand what collateral contracts are
9 Explain what it means to have capacity (or to
consent) to enter into contractual relations
9 Explain the doctrine of privity of contract and the
concept of agency
9 Identify different vitiating elements and their effect on
a contract (eg mistake, misrepresentation,
unconscionable conduct etc)
17
Exclusion clauses
Exclusion clauses
20
Exclusion clauses
Exclusion clauses
How to interpret exclusion clauses:
Cases:
Parker v South Eastern Railway Co
Curtis v Chemical Cleaning and Dyeing Co
Causer v Browne
See Latimer at 6-200
Cases:
White v John Warwick & Co Ltd
Bright v Sampson and Duncan Enterprises Pty Ltd
Sydney County Council v West
Thomas National Transport (Melb) Pty Ltd v May & Baker (Aust) Pty Ltd
Darlington Futures Ltd v Delco Australia Pty Ltd
See Latimer 6-240
21
Exclusion clauses
22
Statutory modifications
Insurance
24
Collateral contracts
Example:
In consideration of the manufacturers promise
that his product will do X
You (the customer) will contract with the retailer to
buy it
Main contract: between you and the retailer
Collateral contract: manufacturers contractual
promise to retailer
25
Capacity
26
Capacity
Classes of persons subject to incapacity:
Minors
Mentally ill
Intoxicated
Corporations/companies
See Latimer at 5-510 to 5-570
27
Consent
28
Proper Form
Consider - are there any statutory procedural
requirements that need to be satisfied?
29
30
Privity of contract
Agency
Exception to doctrine of privity
Means part of
Only a party to the contract has any rights under the
contract
Similarly, the contract only imposes obligations on
the parties to the contract
Case: Beswick v Beswick
32
Principal P
Agency: definition
The legal relationship between one person, the AGENT
(A) having authority to act, and having consented to
act on behalf of another person, the Principal (P),
places the Principal in a contractual relationship with a
Third Party (TP)
grant of
authority
The contractual
relationship
Agent A
negotiates
contract on
behalf of P
Third Party TP
33
34
35
36
Agency
Vitiating elements
Vitiate means:
to corrupt
to damage
to reduce value
Vitiating elements include:
Mistake
Misrepresentation
Illegality
Inequality between the parties
Cases:
Powell v Lee: see Latimer at 5-310
Dickinson v Dodds: see Latimer at 5-360
38
Voidable vs void
Vitiating elements
A vitiating factor operates to render a contract
voidable or void retrospectively (ie void ab
initio)
39
40
Mistake
Types of mistake
42
Representation
Misrepresentation
In contract
In tort
Misrepresentation legislation
Australian Consumer Law
43
Misrepresentation
44
Misrepresentation
Minor misrepresentation:
Statement of fact
Communicated to another
An inducement
Major misrepresentation:
Actionable misrepresentation
Voidable: allows innocent party to cancel/rescind the contract
45
Misrepresentation
Fraudulent Misrepresentation:
intention to induce a person to enter into a contract
Innocent Misrepresentation:
misstatement of a material fact
lack of intentional deceit
46
Negligent Misrepresentation:
statement made innocently but carelessly
right to damages
48
Illegal contracts
- by statute
or
- at common law
49
50
Duress
Duress involves use of violence or illegal threats
against a person, their goods or economic interest to
force them to enter into a contract against their will
Duress
Undue influence
Unconscionable conduct
Statute law dealing with unfairness or
unconscionability:
51
Duress
52
Undue influence
To the person
Actual or threatened violence to one contracting party, or
their immediate family or near relatives
To goods
Wrongful threats to seize, damage or destroy the goods
of one contracting party
Economic duress
Economic pressure beyond normal acceptable
commercial practice
53
54
Unconscionable contracts
55
MID-SEMESTER BREAK
Unconscionable contracts
Examples of special disability/special
disadvantage include:
age
financial needs
illness
ignorance
inexperience
inability to understand the language
inability to read
56