LAW OF CONTRACT - Home - The University of Sydney 2016...be the absence of legal obligations e.g. the absence of a contract) • However, there was a concern that equitable estoppel

LAW OF CONTRACT

LPAB – Summer 2016/2017

Week 4

Alex Kuklik

Lecture 4Aims and objectives

• At the end of this lecture, students should have an understanding of the doctrine of promissory estoppel and its relationship to contract.

• In addition, students should have an understanding of the requirement of an intention to contract as a necessary requirement to contract formation and a general understanding of writing instruments.

Lecture 4• Equitable Estoppel

– R&G, Chapter 36– Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 (R&G(C) [36.2])– *Je Maintiendrai v Quaglia (1980) 26 SASR 101 (R&G(C) [36.3])– Austotel v Franklins (1989) 16 NSWLR 582– *Giumelli v Giumelli (1999) 196 CLR 101.– Sidhu v Van Dyke [2014] HCA 19– Delaforce v Simpson-Cook [2010] NSWCA 84– Saleh v Romanous [2010] NSWCA 274

• Formation of a Contract - Intention to Create Legal Relations

– R&G, Chapter 7– Balfour v Balfour [1919] 2 KB 571– Jones v Padavatton [1969] 2 All ER 616– Esso Petroleum Ltd v Commissioners of Customs & Excise [1976] 1 All ER

117– Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95

Lecture 4

• The Requirement of Writing – Do Contracts Have to be in Written Form?

– Radan & Gooley, Chapter 8– Conveyancing Act 1919 (NSW), s 54A– *Pirie v Saunders (1961) 104 CLR 149– *Khoury v Khouri (2006) 66 NSWLR 241

Equitable Estoppel• This doctrine evolved partly to overcome some of the injustices that were

perceived to arise from the requirement of consideration.

• ‘Estopped’ means precluded or prevented.

• Estoppel is a doctrine designed to protect a party from the detriment that would flow from that party’s change of position if the assumption the or expectation that gave rise to it were to be rendered groundless by another.

• Equitable estoppel arises where legal rights exist but it would be unconscionable to allow the person to exercise that legal right (which can be the absence of legal obligations e.g. the absence of a contract)

• However, there was a concern that equitable estoppel would be tantamount to enforcing voluntary promises without consideration, thus undercutting the principles of the law of contract.

Equitable Estoppel

• The traditional approach to equitable estoppel was that it applied only in context of a pre-existing legal relationship, protecting rights under that relationship, not generating new rights (being seen as a shield, not a sword)

• Walton Stores v Maher was a landmark case which allowed equitable estoppel to be set up as a cause of action in respect of pre-contractual representations, thus unravelling the operation of equitable estoppel only as a shield.

• Promissory estoppel (one kind of estoppel) is when a promisor is prevented from going back on her promise even though the promise is not supported by consideration moving from the promisee.

• Therefore it operates as an exception to the requirement for consideration.

Equitable Estoppel• There is also common law estoppel.

– This is more limited:

• Common law estoppel is confined to assumptions and representations of existing fact.

– Jordan v Money [1843-60] All ER Rep 350.

• Common law estoppel is a rule of evidence and does not confer substantive rights.

• Equitable estoppel is not limited to assumptions of existing fact – can also hold representor to statement of future intention.

Equitable Estoppel• Equitable estoppel brings together 2 types of estoppel:

– Promissory estoppel

– Proprietary estoppel

• The difference is:

– “In cases of promissory estoppel, equity binds the holder of a legal right who induces another to expect that the right will not be exercised against himF In cases of proprietary, equity binds the owner of property who induces another to expect that an interest in the property will be conferred upon him.”

Equitable EstoppelWaltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 (R&G(C) [36.2])

• Waltons wanted to lease land from Maher in Nowra. Agreed that Maher would demolish the current building.

• A draft agreement was negotiated, sent to Walton’s solicitors who said that they expected it to be executed and would let Maher know if the amendments weren’t agreed.

• In November Maher informed Waltons that demolition had commenced and it was therefore important to conclude the lase quickly. Later that month Waltons started to have reservations about the lease and instructed its solicitors to 'go slow'.


• In January Maher commenced building. Later that month, when approximately 40% of building work was completed, Waltons informed Maher it did not wish to proceed. Maher brought action to enforce the agreement.


• Issue: Was Waltons estopped from denying a binding contract?

• Yes. Majority said that equitable estoppel applied (others said that common law estoppel applied). The majority held that, although formal contracts had not been exchanged, Maher was entitled to assume the exchange was a mere formality. Maher could rely on promissory estoppel which extends to representations or promises as to future conduct.

• In this case the crucial question was: was the appellant entitled to stand by in silence when it must have known that the respondents were proceeding on the assumption that they had an agreement. There were two considerations that led their honours to conclude in the negative:F.


1. The urgency required for completion and commencement of demolition – the new building had to be ready quickly.

2. The executed document sent to Waltons’ solicitors; assumed that exchange was a formality. Waltons knew that they had begun demolition and still sat on the signed agreement for another month. Should have told Mahers within reasonable time of receiving agreement or when they learned that demolition was beginning, that they may not complete the agreement.


Mason CJ and Wilson J

• The test to be applied is:

1. The promisor must make promise.

2. The promisor must create or encourage an assumption that contract will come into existence/promise will be performed.

3. The promisee must rely on this to his/her detriment.

4. It must be unconscionable, having regard to the promisor’s conduct, for the promisor to be free to ignore it.


Brennan J:

Proposed a slightly different test. Elements of the estoppel:

1. P assumed or expected that a particular legal relationship then existed or would exist between the parties, or expected that a particular relationship would exist (and couldn’t be withdrawn from).

2. D has induced P to adopt that assumption or expectation.

3. P acts or abstains from actin in reliance of on the assumption or expectation.

4. D knew or intended him to do so.

5. P’s action/inaction will cause him detriment if assumption/expectation not fulfilled.

6. D failed to act to avoid the detriment by fulfilling assumption/expectation or otherwise.


• Although Brennan J’s test has not been approved of by the High Court as a whole, it is the most commonly cited and applied formulation in lower courts.


Nature of the representation:

• Mason CJ and Wilson J proceeded on the premise that Maher was aware that no binding contract existed. They found that Waltons had encouraged Maher to assume that a contract would come into existence.

• Brennan J left open the question as to whether there was an expectation that a contract had come into existence instead holding that Waltons had created an expectation in Maher that contracts would be exchanged.

• Deane J did not wish to interfere with the lower courts’ findings that an expectation had been created that a contract had come into existence.

• Gaudron J found that Maher had acted on the assumption that exchange had taken place.


Nature of the representation:

• As such, on Deane and Gaudron JJ’s construction, the case could have been dealt with as one of common law estoppel, nevertheless, all judges dealt with equitable estoppel.

• Another significant aspect of this case is that it has consolidated the two aspects of estoppel ) promissory and proprietary, into a single broader, principle of equitable estoppel. Therefore promissory estoppel can be used as a ‘sword’ as well as a ‘shield.’

Equitable Estoppel*Je Maintiendrai v Quaglia (1980) 26 SASR 101 (R&G(C) [36.3])

Detriment

• Quaglia entered lease for a hair salon with Je Maintiendrai Pty Ltd for 3 years at rent of $278 per month. Quaglia was finding it difficult to pay the full rent and Je Maintiendrai agreed that for a period of 18 months rent would be reduced to $240. Quaglia paid this, but wanted to leave early. When found out that Quaglia was about to vacate the premises, he demanded for the full arrears based on original rent. Quaglia argued that Je Maintiendrai should be estopped from succeeding in the claim.

• In their defence, Quaglia, the tenant, raised promissory estoppel, based on the promise that the rent would be reduced. The trial judge agreed

• The issue before the Full Court was: Had the tenants relied to their detriment on the landlord’s promise? (i.e. Was Je Maintiendrai estopped from demanding the back rent after it had promised (without consideration) to accept less?)


Held: Yes.

• Promisee must have changed position on faith of promise – must suffer detriment. Otherwise how is it unjust for promisor to enforce his her legal right?

HELD King CJ

• There can be no estoppel unless the promisee has altered their position on the faith of the promise. A person who makes a promise which is intended to be acted upon is not prevented from resiling from that position unless in doing so, it would result in some detriment or injustice to the promisee.


• In the present case, no doubt the promisor could revert to the original position with respect to future payments upon giving due notice.

• But would recognising this entitlement to the full rent for the period elapsed work any injustice?

• Evidence of detriment in this case was sparse. The case would have been stronger if there was evidence of financial hardship or embarrassment as a result of the debt accumulating or that the money had been spent in another way making the tenants unable to pay without difficulty or inconvenience (Holt v Markham).

• But the trial judge made a finding that the accumulation of debt of the arrears can be a problem. On this basis the plaintiff should be estopped from claiming full rental arrears.


• Here evidence was sparse (small business) but followed judge’s original decision because he heard some financial evidence and was in a better position to know whether there was any financial detriment and why this was not expressed explicitly

Held White J:

• Detriment is to be assessed as at the time the promisor proposes to resile from the promise.

• In this case Quaglia may have suffered detriment by continuing in the relationship in reliance on the promise to reduce rent. Otherwise Quagliacould have abandoned the contract and taken a chance on being sued for breach; or Quaglia may have been able to assign the balance of the lease to another.


• The tenant had no doubt spent the money on other things and may not have had it to meet a demand for a lump sum.

HELD Cox J (dissenting)

• The detriment must not be speculative or conjectural but substantive. The evidence here failed to establish detriment. It is not established merely by the court speculating about possible alternatives and then attributing them to the party.

__________________________________________

• It is not enough that the promisee acted on the promise. Going back on the promise must result in detriment.

• Need not be financial detriment, but needs to be substantial.

– *Sullivan v Sullivan [2006] NSWCA 318

Equitable Estoppel*Austotel v Franklins (1989) 16 NSWLR 582

• Austotel were going to build a new shopping mall and Franklins were going to be the tenants. They exchanged letters of intent expressed to be “subject to a formal agreement for lease.”

• Franklins provided specifications and was incurring other liabilities. Subsequently the size of the store was increased but no agreement was reached on the rent to be charged for the larger premises. Franklins started spending money on building work for the supermarket

• Austotel needed some financing. The banks wanted assurance that project had a confirmed tenant. Austotel asked Franklins to sign the lease now or write a letter committing themselves to the lease but Franklins refused to do so.

• Austotel became more agitated so they began negotiating with BiLo. Franklins became aware of this and claimed an estoppel.

Equitable Estoppel*Austotel v Franklins (1989) 16 NSWLR 582

• Franklins argued that Austotel should be estopped from denying that there is a binding agreement. Franklins won at first instance.

• Was Austotel estopped from leasing the premises to the other party?

Equitable EstoppelAustotel v Franklins (1989) 16 NSWLR 582

Held:

• The parties were commercial entities who had deliberately refrained from coming to an agreement and as such, no equity arose. There was no representation and no special element e.g. stood by knowingly.

• The point of distinction with Walton Stores v Maher was that the terms of the agreement had not been finalized when Franklins started their work:

– The rent for that extra space had not yet been agreed.

– Rent for premises is a fundamentally important term in a lease.

– Franklins was taking a risk.

Equitable EstoppelAustotel v Franklins (1989) 16 NSWLR 582

Held:

• This does not mean there can be no estoppel where the terms aren’t agreed but the more uncertain the terms, the less likely estoppel will be found.

• Also Priestly JA took broader view on the first element of Brennan J’s test in Waltons Stores v Maher. He said that it was enough if the promisee assumed that assumed that “a promise [would] be performed.”

Equitable Estoppel*Giumelli v Giumelli (1999) 196 CLR 101 (R&G(C) [36.4])

• A married couple lived on, and conducted a business on an orchard property.

• In 1971 their second son (R) left school and commenced full-time work for the partnership. He received no wages but was given pocket money and keep. In 1973 R was admitted to the partnership without payment. R worked for the partnership without wages but was credited with earnings in its accounts. He was engaged with others in the family in developing and improving the larger property. All expenses for materials and contractors' charges were paid by the partnership.

• In 1974 the parents promised R, then 18, that he would be given (an unidentified) part of the property to compensate him for working without wages, for his efforts in the development and, later, for the fact that costs were being borne by the partnership (the first promise).


• In 1980 R intended to marry and was told by his parents that he could build a house on the larger property and that “the house” would be his (the second promise). R engaged a builder and with him built a house costing $47,000. He was advanced $25,000 from partnership funds against his partnership account.

• After his marriage in 1981 the parents promised R that property would be subdivided to create a lot (the promised lot) which would include the house and the orchard if he stayed on the property and did not accept an offer from his father-in-law of work elsewhere (the third promise). He refused that offer but his wife refused to live on the property. They separated late in 1981 and were divorced in 1983.


• R lived and worked on the property and planted a new orchard. He decided to marry a woman of whom his parents disapproved. In May 1985 they told him he would have to choose between his proposed new wife and the property. He married and left the property.

• R commenced proceedings seeking, inter alia, the property.


Held:

• R had incurred detriment from acting in reliance on the third promise so as to entitle him to equitable relief. He gave up the opportunity to have a job elsewhere.

• But in the circumstances an order for conveyance should not be made and the appropriate relief was an order for payment of a monetary sum representing the present value of R's claim to the promised lot.

• The circumstances in this case, which included further proceedings relating to the family partnership, the breakdown in family relations and residence on the promised lot by another son, and improvements made by other family members, pointed to relief expressed not in terms of acquisition of title to land but in a money sum.


Held:

• Therefore relief can be granted on the basis of making good the promisee’s assumption or expectation rather thanreliance lss or any actual detriment.

• The court can order a transfer of property, impose a constructive trust or grant a charge or lien over property. Ultimately the form of relief will depend upon what is appropriate in the circumtances.

Equitable EstoppelSidhu v Van Dyke [2014] HCA 19

• Mr Prithvi Sidhu and his wife, Mrs Lajla Sidhu, lived in the main homestead of a property which they owned as joint tenants. The homestead block was part of a larger property known as Burra Station. From 1996 Ms Lauren Van Dyke and her husband (Mrs Sidhu’s brother) lived in a house on the homestead block known as Oaks Cottage, which they rented from Mr and Mrs Sidhu.

• In 1997 Mr Sidhu and Ms Van Dyke commenced a romantic and sexual relationship. In January 1998, Mr Sidhu told Ms Van Dyke that he would arrange for title in the Oaks Cottage to be transferred to her after a planned subdivision of Burra Station had been carried out. Ms Van Dyke’s husband found out about the affair and they divorced. She did not however seek a property settlement from her husband.


• Mr Sidhu had previously said to her, “Lauren, you have the Oaks, you do not need a settlement from him.” Ms Van Dyke (and her young son) continued to live in Oaks Cottage, for which she paid below-market rent. She also assisted in the running of Burra Station in various ways.

• During 2000 and 2005 Mr Sidhu promised to transfer to Ms Van Dyke both Oaks Cottage and a surrounding area of 7.3 hectares (once in an email once in a note).

• A subdivision of the Homestead Block was conditionally approved by the local council in 2005. In February 2006 however a fire destroyed Oaks Cottage, for which Mr and Mrs Sidhu received an insurance payment of $175,000.


• Ms Van Dyke then moved into a relocatable cottage, before leaving Burra Station in July 2006 after her relationship with Mr Sidhu had broken down. At around that time, Mr Sidhu told Ms Van Dyke that he would not transfer the land to her as promised.

• Mrs Sidhu (whom Mr Sidhu had asserted would give her necessary consent as joint tenant) also indicated that such a transfer would not take place. Ms Van Dyke commenced proceedings against Mr Sidhu for the transfer to her of the land (or either a charge over it, or the declaration of a constructive trust), plus compensation for the value of Oaks Cottage. Alternatively she sought compensation for the detriment she had suffered in reliance on his promise to transfer the land to her.


• That detriment was said to comprise the non-payment of wages for the work she had performed for Burra Station and other opportunities she had forgone:

– a potential payment resulting from a property settlement with her ex-husband,

– payment for full-time work from 1998 to 2006, and/or

– the acquisition of other land.


Issues:

1. Did Mrs Van Dyke rely on the promise – is there a presumption of reliance?

2. Was it appropriate to compensate for detrimental reliance or for the value of the Sidhu’s promises?


Held:

• Presumption of Reliance:

– The detrimental reliance in this case was that Mrs Van Dyke did not seek a property settlement with her former husband and did not receive wages for work done. Sidhu argued that Van Dyke would have done this anyway regardless of the promise.

– The plaintiff must prove each element of the action and therefore must prove detrimental reliance. It is a very low threshold but must still be proved on the balance of probabilities.

– To speak of deploying a presumption of reliance in the context of equitable estoppel is to fail to recognise that it is the conduct of the representeeinduced by the representor which is the very foundation for equitable intervention. Reliance is a fact to be found; it is not to be imputed on the basis of evidence which falls short of proof of the fact.


Held:

• Presumption of Reliance:

– Nonetheless, in this case, the court accepted Van Dyke’s contention that, on the balance of probabilities, Sidhu’s promises contributed to her

conduct in remaining on the property and not seeking a settlement.

– It was not necessary to find that the promise was the sole inducement on

Mrs Van Dyke; it was sufficient to find that she was influenced by the

promise, or that the promise was a significant factor in her making the decision that she did.


Held:

• Remedy:

– The default position is to hold the representor to the representation. Because the fundamental purpose of equitable estoppel is to protect the plaintiff from the detriment which would flow from the defendant's change of position if the defendant were to be permitted to resilefrom his or her promise, the relief granted may require the taking of active steps by the defendant including the performance of the promise and the performance of the expectation generated by the promise.

– It should be noted, however, the requirements of good conscience may mean that in some cases the value of the promise may not be the just measure of relief.


Held:

• Remedy:

– There may be cases where “it would be wholly inequitable and unjust to insist upon a disproportionate making good of the relevant

assumption”; but in the circumstances of the present case, as in Giumelli v Giumelli, justice between the parties will not be done by a remedy the value of which falls short of holding the appellant to his promises. While it is true to say that “the court, as a court of conscience, goes no further than is necessary to prevent unconscionable conduct”, where the unconscionable conduct consists of resiling from a promise or assurance which has induced conduct to the other party’s detriment, the relief which is necessary in this sense is usually that which reflects the value of the promise.


Therefore:

• In cases of proprietary estoppel, the onus is on the representee to make out detrimental reliance. Australian law does not presume reliance on the part of a representee and the burden of proof at no time shifts to the representor.

• Additionally, the approach to establishing causation in cases of proprietary estoppel is whether the promise is a significant factor or a contributing cause in the plaintiff’s conduct.

• The judgment demonstrates that where specific enforcement of the promise would be appropriate, but is not practically possible and would cause hardship to third parties, the Court will instead grant necessary relief in the form of a sum which reflects the value of the promise.

Equitable EstoppelSaleh v Romanous [2010] NSWCA 274

Pre-contractual oral statements

• The appellants, husband and wife, contracted in May 2004 to sell a development property to the respondents with completion due in 42 days. The contract on the standard terms, which included, in cl 10.1.5, an entire agreement clause, was on its face unconditional.

• The parties contemplated that the property would be developed in accordance with a development consent obtained by the vendors and the owner of an adjoining property for the erection of eight two-storeyed town houses on the two properties. The purchase of the property for the agreed price only made sense if that development could proceed. The purchasers were not able to negotiate a satisfactory joint venture agreement with the neighbouring owner, who was a brother of one of the vendors.



• Although the contract was relevantly unconditional the purchasers alleged, and the trial Judge found, that the vendors promised the purchasers before exchange that if the neighbouring owner did not want to build “you don’t have to buy and you’ll get your money back”.

• The Judge held that the vendors were prevented by a promissory estoppel, based on that promise, from enforcing the contract against the purchasers and that the latter were entitled to rescind the contract and recover their deposit. The vendors appealed



• Although the contract was relevantly unconditional the purchasers alleged, and the trial Judge found, that the vendors promised the purchasers before exchange that if the neighbouring owner did not want to build “you don’t have to buy and you’ll get your money back”.

• The Judge held that the vendors were prevented by a promissory estoppel, based on that promise, from enforcing the contract against the purchasers and that the latter were entitled to rescind the contract and recover their deposit. The vendors appealed



Held:

• Promissory estoppel is a purely equitable doctrine established by Hughes v Metropolitan Railway Co (1877) 2 App Cas439 and Birmingham & District Land Co v London & North Western Railway Co (1888) 43 Ch D 268 CA.

• The estoppel, which imposes equitable restraints on the enforcement of rights, was negative in substance.

• The estoppel could be based on pre-contractual conduct.

• The legal rights protected by the parol evidence and entire contract rules are trumped where pre-contractual conduct establishes a ground for equitable relief. A pre-contractual promissory estoppel is such a ground.



Held:

• The promissory estoppel prevented the vendors enforcing the contract of sale.

• The purchasers were not entitled to an order rescinding the contract which was positive relief but were entitled under s 55(2A) of the Conveyancing Act to an order for the return of their deposit.

Intention to Create Legal Relations

• Balfour v Balfour [1919] 2 KB 571 (R&G(C) [7.2])

• Jones v Padavatton [1969] 2 All ER 616 (R&G(C) [7.3])

• Esso Petroleum Ltd v Commissioners of Customs & Excise [1976] 1 All ER 117 (R&G(C) [7.4])

• Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 (R&G(C) [7.5])


• An integral element of a contract at law is that the parties to it must intend their agreement to have legal force in the sense that each party can take legal action to enforce it.

• Unless there is an express statement in the agreement on this matter, there is a presumption that agreements of a family, social or domestic character are not intended to have legal effect. In all other agreements (commercial agreements) the presumption is that the parties did intend it to have legal intent. In both situations the presumptions can be rebutted by evidence to the contrary.


• The intention to create legal relations (ITCLR) is an essential element of a legal contract.

• It does not require that the parties consciously refer to the legal implications of what they are doing, but it would be paradoxical if an agreement could be held a contract in the face of the parties’ intention that it should not give rise to legal rights and obligations.

• Test for ITCLR is an objective test based on the facts of each case

• Usually in practice, the issue of ITCLR does not arise.

Intention to Create Legal RelationsFamily and social situations:

• The presumption can be rebutted. An contracts between husband and wife have been upheld in the following situations:

– A written partnership

– An agreement to pay for a weekly amount for maintenance

– An agreement by the wife to return to live with her husband in return for transferring the house into both names

•

Intention to Create Legal RelationsCohen v Cohen (1929) 42 CLR 91

• The parties were married in 1918 and separated in 1923. In 1928 an action was commenced with respect to money which P said was owed her by D. P claimed that before they were married, D had promised to pay £100pa as a dress allowance. The payments were made up to 1920, but £278-00 was outstanding for the period 1921-1923.

• Was there a contract?


“The plaintiff's next claim is for £275 arrears of dress allowance. She saysthat before their marriage she suggested to her husband that he should giveher the same amount for pin-money as her sister received from her husband,namely, £100 a year, and that it should be paid quarterly in sums of £25. Shesays that he promised her that he would make her this allowance, and that infact he did pay her £25 a quarter until January 1920. The statement of claimalleges no consideration for this supposed contract, and none appears fromthe facts given in evidence unless it be the intended marriage. Probably acontract to marry had already been made between the parties before thehusband promised to make a dress allowance, and, if so, it is difficult to seehow the intended marriage could be a consideration which would support thedefendant's new promise to pay £100 per annumF.


FSee Anson on Contracts In any case such a consideration would bring thecontract within the fourth section of the Statute of Frauds, and although thatdefence is not pleaded it may be said that the defendant's pleader should bepermitted to wait until the plaintiff's statement of claim is amended so as tostate the consideration for the agreement sued upon. But these matters onlyarise if the arrangement which the plaintiff made with the defendant wasintended to affect or give rise to legal relations or to be attended with legalconsequences Balfour v Balfour 1919; Rose & Frank Co v JR Crompton &

Bros Ltd 1923. I think it was not so intended.

The parties did no more, in my view, than discuss and concur in a proposalfor the regular allowance to the wife of a sum which they consideredappropriate to their circumstances at the time of marriage. For these reasonsI think this cause of action fails.”

Intention to Create Legal RelationsBalfour v Balfour [1919] 2 KB 571 (R&G(C) [7.2])

• Married couple moved to UK. He went back, but she delayed for medical reasons. He promised to pay a monthly stipend for maintenance. Later he stopped paying. They divorced. She sought to recover the outstanding monthly payments.

• Was there a contract?

• Court said no for different reasons:

– Duke LJ: no consideration

– Warrington LJ: lack of terms

– Atkin LJ: Domestic arrangement. No intention to be bound.


• Domestic arrangements of this kind not binding because parties did not intend the agreement to have legal consequences.

• These arrangements are outside the realm of contract.

• But this is a rebuttable presumption


Atkin LJ:

“there are agreements between parties that do not result in contractsF.the ordinary example is where two parties agree to take a walk togetherFone of the most usual forms of agreement that does not constitute a contract appears to me to be the arrangements that are made between husband and wife. It is quite common, and it is the natural and inevitable result of the relationship of husband and wife, that the two spouses should make arrangements between themselvesFthose agreements, or many of them, do not result in contracts at all, and they do not result in contracts even though there may be what as between other parties would constitute consideration for the agreement..”


Jones v Padavatton [1969] 2 All ER 616 (R&G(C) [7.3])

• Divorcee moved to UK to study. Her mother provided accommodation and agreed to pay tuition fees if she did so. Later varied such that mother bought house and rented it out. Daughter lived rent free in one part of it.

• They fell out and mother tried to recover the house. Daughter counter claimed for money spent on house.

• Did the presumption against contractual intention apply here?

Intention to Create Legal RelationsJones v Padavatton [1969] 2 All ER 616 (R&G(C) [7.3])

• Majority Held: No. Absence of contractual intention. Salmon LJ said there was intention but agreement too vague. It is a presumption of fact. Must apply the objective test for determining ITCLR

‘Court has to consider what the parties said and wrote in the light of all the surrounding circumstances, and then decide whether the true inference is that the ordinary man and woman, speaking or writing thus in such circumstances, would have intended to create a legally binding agreement.’

• Atkinson LJ: ‘I do not think that the lack of formality and precision in expressing the arrangement is necessarily an indication that no contract was intended having regard to what the court knows of the parties and their relationship.’

• As a rule, in family situations, there is a presumption against ITCLR –but this case shows that the mere fact that an arrangement is made between close relatives does not mean that the arrangement cannot be a contract.


Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 (R&G(C) [7.5])

• GOCSA hired priest from USA to come to Australia. Discussed basic terms. He was there for about 2 decades. They paid him during leave and took out tax.. After retiring, he asked for accrued entitlements. GOSCA said no, because he held ecclesiastical office – he was doing God’s work.

• Could priests be employed? Had he demonstrated intention to enter into an employment agreement?

•


Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 (R&G(C) [7.5])

• Yes – agreement existed. Therefore he was entitled to benefits.

• Inquiry into intention requires assessment of objective circumstances of each case, so no prescriptive rules.

• Presumptions just identify who has onus of proof. Presumptions may distract from that. It may be just a matter of showing who has the onus of proof and whether it has shifted from one party to another

• Here there was such an intention.

• Later cases show that there is dispute as to the function and weight of such assumptions. See (R&G [7.41] – [7.44])

•

Intention to Create Legal RelationsCommercial Situations

Esso Petroleum Ltd v Commissioners of Customs & Excise [1976] 1 All ER 117 (R&G(C) [7.4])

• Esso Service Stations were distributing ‘World Cup’ coins, which bore insignificant intrinsic value

• Millions were produced and the sale of petrol was promoted by an ‘offer’ of one free coin with every 4 gallons

• Issue: Was Esso ‘selling’ the coins? (taxation issue).



Held:

• Viscount Dilhorne and Lord Russell: No ITCLR because the offer of a gift of a free coin is not a business matter, nor is there any reason to impute to every motorist who went to a garage where the posters were displayed to buy 4 gallons of petrol any intention to enter into a legally binding contract for the supply to him of a coin. The facts in this case negative a contractual intention on the part of the motorist filling petrol in his car that then gets a coin.



Held:

• Lord Simon and Lord Wilberforce: There WAS ITCLR because Essoput the material out for their commercial advantage, and designed it to attract the custom of motorists. The whole transaction took place in a setting of business relations. It seems undesirable to allow a commercial promoted to claim that what he has done is a mere puff not intended to create legal relations. The coins may themselves have been of little intrinsic value; but all the evidence suggests that Essocontemplated that they would be attractive to motorists and that there would be a large commercial advantage to themselves from the schemeF



Lord Glaisdale

– Advertisement was distributed for commercial advantage. It was in setting of business relations. Not a puff. Esso contemplated that they would be attractive to motorists.

•

Lord Fraser

– Advertisement was precise: would get a coin for every 4 galoons.


• Esso Petroleum Ltd v Commissioners of Customs & Excise [1976] 1 All ER 117 (R&G(C) [7.4])

• In commercial situations, there is a presumption that parties intend to be legally bound by their agreements

• It is rare in commercial agreements for this presumption to be rebutted. Onus to rebut presumption rests on the party so contending.


Rose and Frank Co. v J.R. Crompton & Bros Ltd [1923] 2 KB 261

• The defendant manufactured carbon paper in England. The plaintiff bought the defendant's paper and sold it in New York. After dealing with each other for a number of years they entered into a written agreement as to the plaintiff having exclusive rights to buy and sell the defendant's goods. The agreement said inter alia:

• "this agreement is not a formal or legal agreement. It will not be subject to

the jurisdiction of either the British or American courts. It is a record of the

intention of the parties to which they honourably pledge themselves and is

to be carried out with mutual loyalty and friendly co-operation.“

• Following a series of disputes the plaintiff claimed that the defendant was in breach of the agreement and the trial judge held that it was legally binding. The defendant appealed.



• The defendant manufactured carbon paper in England. The plaintiff bought the defendant's paper and sold it in New York. After dealing with each other for a number of years they entered into a written agreement as to the plaintiff having exclusive rights to buy and sell the defendant's goods. The agreement said inter alia:

• "this agreement is not a formal or legal agreement. It will not be subject to

the jurisdiction of either the British or American courts. It is a record of the

intention of the parties to which they honourably pledge themselves and is

to be carried out with mutual loyalty and friendly co-operation.“

• Following a series of disputes the plaintiff claimed that the defendant was in breach of the agreement and the trial judge held that it was legally binding. The defendant appealed.



HELD Bankes LJ

• An intention to be legally bound is essential. With business arrangements it usually follows as a matter of course that legal relations are intended. With social arrangements the reverse is the case. It is most improbable that firms engaged in international business arrangements, which are intended to take place over a period of years, should not have intended legal consequences. But there is no legal obstacle to prevent them from doing so. There is no law or issue of public policy against it. Once one reads the agreement in its ordinary meaning, then it is manifest that no action can be maintained on the basis of it.



HELD Scrutton LJ

• If the parties clearly express themselves so as to avoid legal relations, then no reason in public policy why they should not do so.

HELD Atkin LJ

• The normal presumption may be offset by implication and if that is so then it may surely be offset expressly. I have never seen a clause whereby business people would enter into a written agreement which was not intended to be legally binding - but it is not necessarily absurd to do so. I do not agree with the judge that the clause should be rejected on the basis of repugnancy. It is a dominant and operative clause.



• [NB. It is worth noting, that for all this, the court took the view that once the plaintiff actually ordered goods from the defendant, there would be a contract of sale in regard to that transaction. It could be argued then that this makes the "agreement" here rather like a "tender to supply" which does not have any contractual effect until an order is actually placed].

Intention to Create Legal RelationsLetters of comfort

Banque Brussels Lambert SA v Australian National Industries Ltd (1989) 21 NSWLR 502

• Spedley Ltd wanted to borrow $5m from a Belgian Bank. The bank wanted some additional assurance that the loan would be paid off. Spedley was partly owned, through a holding company by ANI. They wrote to the bank saying that they were aware of the loan, and that they have shares in the holding company. They would not reduce their holding in the holding company until the loan was paid off, and that they would give 90 days notice of any intention to reduce their holding and the bank could then ask for the loan to be repaid within 30 days. Their practice is to ensure that obligations are met as they fall due.



• ANI did sell its shares without that notice, and Spedley Ltd was not in a position to repay. ANI said it was not liable to repay the bank in place of Spedley, based on Kleinwort Benson v Malaysia Mining [1989] 1 All ER 785 which held that a statement in a letter of comfort did not impose any legal obligation - they made no contractual promise and their repudiation of their moral responsibility was not thought to be a matter for the court.

Letters of comfort

• They were first used in the 1960s in USA when people were reluctant to give guarantees, because they would have to be disclosed in accounts as contingent liabilities. In this way, they could provide some degree of support without the incurring some legal liability which might affect its credit rating, or have adverse tax or foreign exchange implications.



The claim in contract

• Is there an intention to create legal obligations? Is the letter sufficiently promissory? Start with the assumption that in commercial transactions, legal relations are intended. The onus of proving the absence of such intention rests with those who assert it - Edwards v Skyways. The bank says to look at the negotiations and the text and context of the letter. Greigand Davis said look at the document against the background practices of the parties. At the time it was important to the bank to obtain a suitable letter from ANI. There should be no room in the proper flow of commerce where statements made by businessmen after hard bargaining and made to induce another to enter into a transaction would, without any express statement to that effect, reside in a twilight zone of some merely honourable engagement.



• The thrust of the modern law is to give effect to transactions. For this reason uncertainty as a concept has fallen into disfavour as a tool for striking down commercial bargains. If statements are appropriately promissory, the courts should enforce them when uttered in the course of business and there is no clear indication that they are not intended to be legally enforceable.

• The test prescribed by the law of Australia to determine if a statement is promissory or representational is different from that of England. The cases of Heilbut Symons and Oscar Chess lead to the view that whether a warranty was intended, depends on the words and conduct of the parties, (rather than on their thoughts) and what a reasonable bystander would reasonably infer was intended. Denning suggested that it depended on whether the statement was made "for the purpose of inducing a party to act on it, and actually inducing that party" to enter into the contract.



• There is authority binding upon us to say that such factors are not sufficient - Savage v Blakney and Ross v Allis-Chalmers. What factors are important? Clearly the words are important. But a finely tuned linguistic fork is inimical to justice.

• The statement re 90 days notice was clearly intended to confer a benefit upon the bank. That notice with provision for demand allows for recovery. In this case, the "not our intention to reduce" carries the import of intention to give rise to legal relations. The third para gives assurance that ANI wished to assure that Spedley would be able to repay its loans - its promissory nature is clear. The bank has made out its case that ANI was in breach of 2 enforceable contractual promises.

The Requirement of Writing• At common law there is no requirement that any contract has to be in

written form. However, statute imposes such a requirement in certain types of contract, a significant example being contracts involving land or interests in land. However, oral contracts for the sale of land can in some circumstances be enforced.

• R&G, Chapter 8

• Conveyancing Act 1919 (NSW), s 54A

• *Pirie v Saunders (1961) 104 CLR 149

• *Khoury v Khouri (2006) 66 NSWLR 241

•

The Requirement of WritingGeneral Principles

• At common law contracts do not have to be in writing.

• If the contract is completely in writing, the “parol evidence rule” applies (this will be discussed in detail next week), but basically means that evidence beyond the contents of the contractual materials themselves will note be generally admitted to prove the meaning terms of the contract.

• If the contract is oral or partly-written and partly-oral, then evidence of oral exchanges is admissible, as is evidence of things said and done after formation.

• Obviously the presence of writing makes it easier to establish the existence of a contract and the meaning of its terms.

The Requirement of WritingGeneral Principles

• In 1677 the English Parliament passes the Statute of Frauds. It required written contracts for certain types of contract:

– Land

– Goods

– Guarantee

• In Australia this has been translated into state legislation:

– Most states have provisions dealing with the requirement of writing in relation to guarantees (Not NSW, SA, ACT).

– Only WA and Tas have a requirement of writing in relation to some contracts for the sale of goods.

– All Australian jurisdictions have provisions dealing with contracts for sale of land.

The Requirement of Writing

54A Contracts for sale etc of land to be in writing

(1) 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 lawfully authorised by the party to be charged.

(2) This section applies to contracts whether made before or after the commencement of the Conveyancing (Amendment) Act 1930 and does not affect the law relating to part performance, or sales by the court.

(3) This section applies and shall be deemed to have applied from the commencement of the Conveyancing (Amendment) Act 1930 to land under the provisions of the Real Property Act 1900.

The Requirement of WritingSection 54A

• Purpose was to avoid courts determining interests in land based upon working out which evidence of an oral promise was to be believed: Too messy. Gives rise to perjury.

“It is, however, important to bear in mind that the purpose of the statute was precisely to avoid the need to decide which side was telling the truth about whether or not an oral promise had been made and exactly what had been promised. Parliament decided that there had been too many cases in which the wrong side had been believed. Hence the title, "An Act for prevention of frauds and perjuries". It is quite true, as Mr McGhee said, that the system of civil procedure in 1677 was not very well adapted to discovering the truth. For one thing, the parties to the action were not competent witnessesF The terms of the statute therefore show that Parliament, although obviously conscious that it would allow some people to break their promises, thought that this injustice was outweighed by the need to protect people from being held liable on the basis of oral utterances which were ill-considered, ambiguous or completely fictitious.”

• Actionstrength Limited v International Glass Enginerring IN.GL>EN SpA [2003] 2 AC 541.


• The section covers:

– Sales

– Dispositions (this includes devise in will)

• Not just sale or disposition of land, but also “interests” in land. This includes other interests such as:

– Leases (but not licences to occupy)

– Mortgages

– Easements

– Other rights of way


• A contract that fails to comply with s 54A of the Conveyancing Act is not illegal or void, but unenforceable.

– *Maddison v Alderson (1883) 8 App Cas 467

• Thus one is prevented from bringing any action on the contract, but its existence is not denied.

• If a contract contains several severable promises, some but not all of which are required to be evidenced in writing, the absence of written evidence may not render the whole contract unenforceable – may be able to sever the offending parts. (Horton v Jones)

•

The Requirement of WritingWhat must this ‘written evidence’ contain?

• Generally speaking, must contain all the terms of the contract. At least, all the ‘essential terms’ (Harvey v Edwards Dunlop & Co Ltd).

– Must identify the parties to the contract

– Must state the consideration for the promise sought to be enforced

– Must sufficiently describe the subject matter of the contract

• *Hall v Busst (1960) 104 CLR 206

•


• Depending upon the facts and circumstances, other matters may also be essential and therefore required to be in writing:

– Date for completion if time is of the essence.

– Payment by instalments

– The vendor was not to give vacant possession, but could stay until he could find an alternative

– Separate prices for separate lots

– Chattels included in the price

– A party’s obligations are guarantees by a third party


• Conveyancing Act requires that the document must be signed by the party to be charged or by some other person thereunto lawfully authorised by the party to be charged. However, this is loosely interpreted so as not to allow the statute to be the engine of injustice.

– Electronic signature okay.

– Also see: Electronic Transactions Act 2000 (NSW), s 9

• No requirement that one single document contain all the necessary evidence; can be a variety of written evidence.

• Compliance does not create a specific right. It just allows enforcement of whatever right is contained in the memorandum.

The Requirement of WritingWritten memorandum or note

*Pirie v Saunders (1961) 104 CLR 149 (R&G(C) [8.2])

• Saunders sued for breach of lease of commercial premises. Claimed that handwritten notes prepared by Ds’ solicitor constituted sufficient note or memorandum for purpose of s 54A.

• Notes set out rent, identified land as “Lot B Princess Highway, Sylvania”, and terms, but did not specify commencement date.

• Was this enough?

•

The Requirement of WritingWritten memorandum or note

*Pirie v Saunders (1961) 104 CLR 149 (R&G(C) [8.2])

• No. No enforceable lease.

• These notes were a brief note of the solicitor’s instructions and did not evidence a concluded agreement. Neither the existence of the note or its contents are indicative of a binding agreement (as opposed to instructions to prepare a lease document). They were consistent wit the hypothesis that the parties had not yet entered into an agreement.

• Even if that was not the case, the notes did not adequately specify the property (too vague), and did not sufficiently set out the terms (it contemplates special conditions after ascertaining requirements of board of health)..

The Requirement of WritingExceptions

• Fraud.

• Doctrine of part performance.

• Note: s 54A(2) – ”..does not affect the law relating part-performance..”

The Requirement of WritingFraud

• The courts have long recognised that, if the reason for non-compliance with the statutory requirement is fraud on the part of the

defendant, the contract will be specifically enforced.

• McCormick v Grogan (1869) LR 4HL 82 at 97:

“The Court of Equity has, from a very early period, decided that even an Act of Parliament shall not be used as an instrument of fraud; and if in the machinery of perpetrating a fraud an Act of Parliament intervenes, the Court of Equity it is true, does not set aside the Act of Parliament, but it fastens on the individual who gets a title under that Act, and imposes upon him a personal obligation, because he applies the Act as an instrument for accomplishing a fraud. In this way the Court of Equity has dealt with the Statute of Frauds.”

The Requirement of WritingFraud

• Ball promised Wakeham that, if she moved in with him and looked after him, she would inherit the house when he died. Ball agreedtohave this oral agreement reduced to a written form, but despite assurances to Wakeham that this had been done, he did not do so before he died. In response to the argument by Ball's executor that any agreement by the deceased had not been in writing, the court held that Ball's conduct amounted to equitable fraud. It made an order against Ball's estate enforcing the oral agreement and requiring the house to be transferred to Wakeham.

– Wakeham v MacKenzie [1968] 2 All ER 783

The Requirement of WritingDoctrine of Part Performance

• Where the plaintiff establishes sufficient acts of part performance to justify equitable intervention, the defendant is charged upon the equities resulting from the acts done in execution of the contract, and not upon the contract itself

• In such a case, the ‘equity’ that arises is to have the entire contract carried into execution by both sides.

• This means that the contract must be amenable to relief by specific performed if the issues are to be remedied through equity.

“ln order that acts may be relied on as part performance of an unwritten contract, they must be done under the terms and by the force of that contract and they must be unequivocally and in their nature referable to some contract of the general nature of that alleged.”

• Waltons Stores (Interstate)Ltd v Maher (1988) 164 CLR 387


• Part Performance:

1. Acts must be done by party seeking to rely on doctrine, or his/her authorised agent.

2. Acts done by plaintiff were permitted, but not necessarily required, to be done by the terms of the oral agreement.

3. Act of part performance must be unequivocal, and in their own nature referable to a contract of the general nature of the alleged oral agreement.

• The performance must relate unequivocally and in its nature be referable to some contract. Payment of money is not enough. It has to be relative to possession, use or tenure of the land, e.g. taking possession, paying rates, paying upkeep or improvement of property, receipt of rent or profits. (although there some UK controversy about this).

•


*Khoury v Khouri (2006) 66 NSWLR 241 (R&G(C) [8.3])

• In 1988, the siblings Marina and Peter Khoury purchased a house in Bass Hill with a loan that was secured by a mortgage over the house to the bank.

• In 1992, Peter orally agreed to hold his share in the house on trust for his brother Bechara Khouri and to transfer that share to his brother when called upon to do so. In return, Bechara agreed to pay Peter $30,000 and to meet Peter's share of the loan repayments to the bank. Bechara paid the $30,000 as agreed.

• About the same time, Marina agreed to transfer her share of the house to a senior clergyman, Bishop Gibran, who was a family friend. In return, Bishop Gibran paid $70,000 and agreed to take over responsibility for her share of the loan repayments to the bank.



• Shortly after this agreement, Bechara agreed with Bishop Gibran to pay $70,000 to the bishop, and in return the bishop agreed to make repayments of the loan to the bank that Bechara had agreed to make pursuant to his earlier oral agreement with Peter.

• Bechara made the payment to the bishop, who then made payments over the ensuing years in reduction of the loan.

• In 1996, Marina and her husband borrowed money from the Arab Bank. Part of the loan was used to pay out the amount then outstanding on the loan to the bank (CBA). The other part of the loan was used to re-purchase the share of the house she had earlier sold to Bishop Gibran. The loan from the Arab Bank was secured by a mortgage over the Bass Hill property with Peter acting as a guarantor on the loan.



• In 2002, Bechara demanded that his share of the house be transferred to him by Peter.

• Issue: Were Bechara's payments of $30,000 to Peter and $70,000 to Bishop Gibran sufficient acts of part performance upon which it could an order for specific performance in favour of Bechara?

• Note: s 54A(2) – ”..does not affect the law relating part-performance..”

•



• Not sufficient acts of part performance. Bechara paying the money was not enough.

•

“In a suit founded on such part performance, the defendant is really ‘charged’ upon the equities resulting from the acts alone in execution of the contract, and not (within the meaning of the statute) upon the contract itself. If such equities were excluded, injustice of a kind which the statute cannot be thought to have had in contemplation would follow”

• Citing H of L in *Maddison v Alderson



• Here [268]:

“I take the same view. In the present case there are no acts of ownership such as taking possession, paying rates or paying for the for the upkeep or improvement of the property, or receipt of rent or profits, or any other act at all. Acts of part performance have been almost universally closely related to possession and use or tenure of the 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. Acts on the land can much more readily be seen as unequivocally referable to the contract than payments of money. The anomaly of not recognising payment as an act of part performance is clear ...”



• Here [268]:

“I take the same view. In the present case there are no acts of ownership such as taking possession, paying rates or paying for the for the upkeep or improvement of the property, or receipt of rent or profits, or any other act at all. Acts of part performance have been almost universally closely related to possession and use or tenure of the 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. Acts on the land can much more readily be seen as unequivocally referable to the contract than payments of money. The anomaly of not recognising payment as an act of part performance is clear ...”

ProblemsConnie writes to Debbie offering to sell her a rare book for $500.

Debbie replies: “I’m quite happy to pay $500, but it may take me some time to find the money. However, I have $350 in the bank, and if you want a quick sale I’m prepared to buy it straight away for $350. If that’s OK, post it to me as soon as you can”.

Connie writes in reply: “I’m in no hurry for the money; so the book is yours at $500. But since you are so keen to have it at once, I’ll post it to you later today’.

She posts the letter and then a parcel containing the book. The parcel, which is correctly addressed, reaches Debbie the following day. Debbie decides that she does not like the book, and sells it on the same day to Edward. The letter, however, is addressed with the wrong postcode, and does not reach Debbie for a week.

How much must Debbie pay Connie? Would the position be different if Connie’s letter bore the correct postcode, but was nevertheless delayed for a week in the post?

ProblemsAn electronics store has a sale on and advertises “On the spot credit! NO DEPOSIT! Interest free for 12 months (on approval)”. You select a stereo, fill in the loan forms and receive approval from the manager, who gives you a copy of the documentation. When you go to collect the stereo the next day, they refuse to give it to you. They claim that the agreement was without consideration. Did you give consideration?

How does this differ from Australian Woollen Mills?

ProblemsAn electronics store has a sale on and advertises “On the spot credit! NO DEPOSIT! Interest free for 12 months (on approval)”. You select a stereo, fill in the loan forms and receive approval from the manager, who gives you a copy of the documentation. When you go to collect the stereo the next day, they refuse to give it to you. They claim that the agreement was without consideration. Did you give consideration?

How does this differ from Australian Woollen Mills?

ProblemsSybil is an eccentric 92-year-old matriarch with full possession of her mental faculties and considerable property holdings. She wishes to dispose of her assets before her death, since she wants nothing to do with “wills and those leeches in the legal profession”. At a family gathering she announces her plans. The family home is to be auctioned. The proceeds of the sale and the rest of her property are to be distributed amongst the family, except for her jewellery, paintings and wine.

The jewellery is to go to the first of her grandchildren “who brings a member of the Richards family to justice”. The Richards have been sworn enemies of Sybil’s family since one of their number killed her fourth husband in a squabble over mining rights. The present members are believed to be engaged in various criminal activities. The paintings are to go to Polly, her eldest daughter “in recognition of her devoted service to me”. Polly has been Sybil’s unpaid secretary and housekeeper for the past 45 years. As for the wine, Sybil promises it to Basil, her biographer. Basil has nearly completed work on the book and Sybil, who is pleased with the draft chapters she has seen, intends the wine as a bonus over and above the remuneration originally agreed.

Problems

Sybil has now undergone a change of heart and wishes to revoke these arrangements. Two of her grandsons have succeeded in apprehending members of the Richards family. First Manuel, a police officer, arrested a Richards during a police raid on a gambling den in Sydney. Then two days later Terry was mugged while walking through Hyde Park. In self-defence he overcame his attacker and handed him over to the authorities, the assailant turning out to be a Richards. Both those arrested are now awaiting trial. Meanwhile Basil has spent a considerable sum of money investing in wine-racks to hold the wine he was expecting to receive. There is no prospect of reselling them to recoup the expenditure.

• Basil, Terry and Polly come to you for advice. They wish to know whether they are entitled to the benefits promised to them by Sybil and specifically, what arguments they might use to overcome any perceived difficulties in their claims. What is your advice?

Documents

LAW OF CONTRACT - Home - The University of Sydney 2016...be the absence of legal obligations e.g. the absence of a contract) • However, there was a concern that equitable estoppel