CONTRACT LAW

RULES OF OFFER

Example answer
a) Is there a contract between Russell and Collie?

Facts:

Russell offered to sell the boat for $1,500 o.n.o.

Collie offered $1,000 (counter-offer).

Russell suggested $1,200 (new offer).

Collie asked if Russell would accept payment in three instalments.

Russell refused and stated he was no longer interested in selling — but his words were drowned out by a plane.

Collie then accepted the earlier $1,200 price.

Legal Issue:
Was there a valid acceptance forming a contract before the offer was withdrawn?

Law: Offer and acceptance: A contract forms when a valid offer is met with an unconditional acceptance.

 Counter-offer terminates the original offer (Hyde v Wrench).

 Communication of withdrawal of an offer must be heard and understood to be effective (Byrne v Van Tienhoven).

Analysis:

Russell’s original $1,200 statement was an offer.

Collie’s response (asking about instalments) was not acceptance, but a counter-offer, which likely terminated Russell’s offer.

Russell’s withdrawal ("no longer interested") was not communicated effectively — it was drowned out.

Collie’s acceptance of the $1,200 could still stand if Russell’s original offer was still open — but it likely wasn’t due to Collie’s counter-offer.

Conclusion:
No contract — Collie’s counter-offer ended the original offer. Even though he later accepted the $1,200, the original offer was no longer
open.

b) What if Collie had said, “I will pay you $1,200 in three weekly instalments of $400 each?”

Facts change: Instead of asking, Collie makes a conditional acceptance.

Analysis:

 This is a qualified acceptance, meaning it's not acceptance at all — it's a counter-offer.

 It still terminates the original $1,200 offer.

 So when Collie later agrees to the $1,200 lump sum, it’s too late — the original offer is gone unless Russell re-offers.

Conclusion:
Still no contract — Collie’s statement was a counter-offer, not valid acceptance

Carlill v Carbolic Smoke Ball Co (1893) Type: offer & acceptance(Unilateral

Contracts)

 Legal Issue: Is a unilateral advertisement a binding offer?

 Relevant Law: Offer and acceptance in unilateral contracts.

 Facts: Company promised £1000 to anyone who used its product and still caught
flu. Carlill did.
  Conclusion: A binding contract existed; the ad was a clear offer, and performance
amounted to acceptance.

Revocation will be valid as long as offeree becomes aware of it through a reliable

source: Byrne & Co v Leon Van Tienhoven & Co [1880] 5 CPD 344

Stevenson Jacques & Co. v McLean [1880] 5 QBD 346, Type: (Lapse of offer)

 Legal Issue: Does a request for information amount to a counter-offer that

terminates the original offer?

 Relevant Law: A counter-offer terminates the original offer; however, a request

for information does not.

 Facts: Stevenson asked for clarification on delivery terms but did not reject the
offer. Later accepted original offer. McLean had sold to someone else without
revoking the offer.

 Conclusion: Stevenson’s message was a request for information, not a counter-

offer — the original offer remained open. Valid contract was formed upon
acceptance.

Goldsbrough, Mort & Co Ltd v Quinn (1910) 10 CLR 674 Type – Option Contracts

 Legal Issue: Can an offer supported by consideration (option contract) be revoked

before the agreed time expires?

 Relevant Law: An option supported by consideration is irrevocable during the

agreed period.

 Facts: Mort paid 5 shillings for a one-week option to purchase land. Quinn tried to
revoke the offer early. Mort accepted within the week.

 Conclusion: The offer could not be revoked due to the paid option. Mort’s
acceptance was valid — a binding contract was formed.

Harvey v Facey [1893] AC 552 Type of Law: Offer and Acceptance

 Legal Issue: Whether Facey’s telegram constituted an offer or merely provided

information during negotiations.

 Relevant Law: A statement providing information in the course of negotiations is

not an offer but an invitation to treat. An offer requires clear intention to form a
contract.

 Facts: Harvey asked Facey if they would sell Bumper Hall Pen and requested the
lowest cash price. Facey responded with the price of £900, but did not make an
offer. Harvey then sought to accept the price, but no contract was formed.

 Conclusion: Facey’s response was not an offer but an informational reply.

Harvey’s subsequent statement was an offer that Facey had not accepted,
meaning no contract existed.
Pharmaceutical Society v Boots (1952)

 Legal Issue: When is an offer accepted in self-service stores?

 Relevant Law: Acceptance occurs at the cash register.

 Facts: Boots had drugs on shelves; customers picked them up.

 Conclusion: Offer made by customer at checkout — store accepted it by

processing sale.

Gibson v Manchester City Council (1979)

 Legal Issue: Was the council’s letter a legal offer?

 Relevant Law: Clarity of intention to offer.

 Facts: Council wrote “may be prepared to sell”.

 Conclusion: No offer — only invitation to treat due to uncertain language.

Hyde v Wrench (1840)

 Legal Issue: Does a counter-offer terminate the original offer?

 Relevant Law: Counter-offer kills original offer.

 Facts: Hyde rejected Wrench’s offer with a counter.

 Conclusion: Original offer was no longer open — no contract.

Consideration
3. Fisher v Bell (1961), type: Invitation to treat

 Legal Issue: Is displaying goods in a shop window an offer?

 Relevant Law: Invitation to treat principle.

 Facts: A flick knife was displayed in a window.

 Conclusion: Display was an invitation to treat — not an offer.

9. Thomas v Thomas (1842), type: consideration

 Legal Issue: Is nominal consideration valid?

 Relevant Law: Consideration must be sufficient but need not be adequate.

 Facts: Widow paid £1 rent.

 Conclusion: £1 was sufficient consideration — contract valid.

11. Collins v Godefroy (1831), type: consideration

 Legal Issue: Can performing a public duty be consideration?

  Relevant Law: Existing public duties are not valid consideration.

 Facts: Plaintiff was subpoenaed.

 Conclusion: No contract — duty was already owed by law.

13. Stilk v Myrick (1809), type: consideration

 Legal Issue: Can performance of existing contractual duty be consideration?

 Relevant Law: No new consideration for same obligation.

 Facts: Sailors promised extra to do same duties.

 Conclusion: No valid contract — no fresh consideration.

14. Hartley v Ponsonby (1857), type: consideration

 Legal Issue: Can extra effort be valid consideration?

 Relevant Law: Exceeding duty = valid consideration.

 Facts: More sailors deserted, increasing danger.

 Conclusion: Valid contract — fresh consideration existed.

15. Anderson v Glass (1867), type: consideration

 Legal Issue: Is past consideration enforceable?

 Relevant Law: Past consideration is not valid.

 Facts: Wages promised after service.

 Conclusion: No contract — promise unenforceable

16. Lampleigh v Braithwaite (1615), type: consideration

 Legal Issue: When is past consideration valid?

 Relevant Law: Valid if at promisor’s request and payment implied.

 Facts: Pardon obtained, then payment promised.

Conclusion: Valid consideration — enforceable promise

Termination and Discharge of contract

Lovelock v Franklyn (1846) 8 QBD 371; 115 ER 916, Type of Law: Anticipatory
Breach (repudiation)

 Legal Issue: Can a party who repudiates a contract by selling property to a third
party be liable for anticipatory breach before the agreed payment is made?
 Relevant Law: A party’s anticipatory breach occurs when they demonstrate an
intention to not fulfill the contract by taking actions inconsistent with the contract,
such as selling to a third party.
  Facts: Dell agreed to sell land to Lovelock for £140, payable within seven years.
Before Lovelock made the payment, Dell sold the land to a third party, Williamson.
Lovelock sued Dell for breach of contract.
 Conclusion: Dell's sale of the land to Williamson was an anticipatory breach of the
contract with Lovelock. By selling to a third party, Dell repudiated the agreement,
and Lovelock was entitled to recover damages.

The Eugenia (1964) Type of Law: Contract Law – NO Frustration

 Legal Issue: Can a party frustrate their own contract?

 Relevant Law: No — frustration must not be self-induced.

 Facts: Ship entered forbidden zone knowingly.

 Conclusion: No frustration — self-induced act.

Tsakiroglou v Noblee Thorl (1962)Type of Law: Contract Law – No Frustration

 Legal Issue: Does difficulty equal frustration?

 Relevant Law: Frustration requires impossibility, not inconvenience.

 Facts: Suez Canal closed, longer route needed.

 Conclusion: No frustration — performance still possible.

Key Case: Taylor v Caldwell (1863) – A contract was frustrated when a music hall
burned down before an event, Fibrosa Spolka Akcyjna v Fairbairn, Lawson, Combe,
Barbour, Ltd [1942] 2 All ER 122, Frustration and Recovery of Money (total failure
of consideration)

 Legal Issue: Can a party recover money paid under a contract that has been
frustrated by an unforeseeable event?
 Relevant Law: If a contract is frustrated, resulting in a total failure of
consideration, the party who made a payment is entitled to recover the money
paid.
 Facts: Fibrosa, a Polish firm, paid a £1,000 deposit for machinery from
Fairbairn, an English firm. The outbreak of World War II and subsequent trading
restrictions made it illegal for Fairbairn to trade with the enemy. Fibrosa
requested the return of the deposit, but Fairbairn refused, claiming work had
already been done on the machinery.
 Conclusion: The contract was frustrated due to the war, and Fibrosa was
entitled to recover the £1,000 deposit. There was a total failure of consideration
as no machinery was delivered.

Case: Taylor v Caldwell (1863) 3 B & S 826, Contract Law (Frustration)

 Legal Issue: Whether a contract is frustrated when the subject matter (the music
hall) is destroyed before the performance.
  Relevant Law: Frustration of Contract – a contract can be frustrated if the
subject matter is destroyed, making performance impossible.

 Facts: Taylor hired a music hall from Caldwell for a series of concerts. Before the
concerts could take place, the hall was destroyed by fire. The concerts could no
longer occur as planned.

 Conclusion: The court held that the contract was frustrated because the specific
subject matter (the music hall) was destroyed, making performance impossible.
The contract was therefore voided, and neither party was required to fulfill it.

Case: Krell v Henry [1903] 2 KB 740, (Frustration)

 Legal Issue: Whether a contract can be frustrated when the underlying purpose of
the contract is destroyed by an unforeseeable event.

 Relevant Law: Frustration of Purpose – if the fundamental purpose of a

contract is destroyed by an unforeseen event, performance may be excused.

 Facts: Henry rented a flat from Krell to view the Coronation procession of King
Edward VII. However, the coronation was postponed due to the King’s illness,
making the original purpose of the contract (viewing the procession) no longer
possible. Although Henry could still use the flat, the purpose of his rental was gone.

 Conclusion: The court held that the contract was frustrated because the purpose
of the contract (viewing the coronation) had disappeared. Henry was excused from
performing his obligations (paying for the flat), even though the flat itself was still
available, because the essential purpose of the contract was no longer achievable.

Acceptance & intention to create contract

R v Clarke (1927) 40 CLR 227, Offer and Acceptance (Unilateral Contracts)

 Legal Issue: Whether Clarke was entitled to the reward money for providing
information.
 Relevant Law: Acceptance in a unilateral contract must be made in reliance
upon the offer, not independently of it.
 Facts: The WA government offered £1000 for information leading to the
conviction of murderers. Clarke provided information, but his primary intent was
to secure his own release, not to claim the reward.
 Conclusion: Clarke was not entitled to the reward because he did not provide
the information in response to the offer, but rather for his own benefit.
Therefore, there was no valid acceptance of the

Empirnall Holdings v Machon Paul (1988) 14 NSWLR 523 Offer and Acceptance

 Legal Issue: Was there acceptance of the contract even though it was not
expressly signed?
 Relevant Law: Acceptance of a contract can be implied through conduct if the
offeree accepts the benefit of the offer, knowing payment is expected.
  Facts: Empirnall engaged Machon Paul for construction work. Machon
submitted a written contract (an offer), but Empirnall never signed it. Despite
this, Empirnall continued to make payments, and work continued. Empirnall
later went bankrupt owing significant sums.
 Conclusion: There was acceptance by conduct. Even though Empirnall did not
explicitly sign the contract, their continued use of the work and payments
implied acceptance of the contract’s terms.

Powell v Lee (1908) 99 LT 284– Offer and Acceptance

 Legal Issue: Can acceptance be validly communicated by an unauthorized

person?
 Relevant Law: Acceptance must be communicated by an authorized person
for a contract to be formed.
 Facts: Powell was informed by an unauthorized board member that he had
been appointed headmaster. The school board later rescinded their decision.
Powell sued for breach of contract.
 Conclusion: There was no valid acceptance, as it was communicated by an
unauthorized person. Acceptance can only be valid if made by an authorized
party, so no contract was formed.

Adams v Lindsell (1818) 106 ER 250, Offer and Acceptance (Postal Rule)

 Legal Issue: When is a contract concluded when acceptance is posted?

 Relevant Law: The postal rule states that acceptance is effective when
posted, not when received.
 Facts: Lindsell sent an offer to Adams, but the letter was delayed. Adams
posted the acceptance, which Lindsell received later. Lindsell argued that
the contract was not formed until the acceptance was received.
 Conclusion: The contract was concluded when Adams posted the
acceptance on 5th September, according to the postal rule. The rule
benefits the offeree, as the offeror assumes the risk of delay in postal
communication.

Balfour v Balfour [1919] 2 KB 571, Intention to Create Legal Relations

 Legal Issue: Whether an agreement between spouses is legally

enforceable as a contract.
 Relevant Law: In domestic agreements, there is a presumption that the
parties do not intend to create legal relations.
 Facts: Mr. B promised to pay his wife £30 per month as maintenance
while he was away in Sri Lanka, and she remained in England. They later
separated, and Mrs. B claimed the monthly payments.
 Conclusion: The court held that no contract existed because the
agreement was made in a domestic context, and there was no intention to
create legal relations between the spouses. Therefore, Mrs. B could not
claim the £30 per month.
Merritt v Merritt [1970] 1 WLR 1211– Intention to Create Legal Relations

 Legal Issue: Whether an agreement between separated spouses is

enforceable as a contract.
 Relevant Law: In cases involving separation, agreements are more likely
to be legally binding if there is clear intention to create legal relations.
 Facts: After separating, the husband agreed to pay the wife £40 per
month to help with the mortgage payments and promised to transfer his
share of the house to her once the mortgage was paid off. The husband
later failed to transfer the house, claiming the agreement was a domestic
arrangement.
 Conclusion: The court ruled that this was not a mere domestic
arrangement but a valid contract. The agreement was made after
separation, involved consideration (the wife paying the mortgage), and
was formalized in writing, showing the intention to create legal relations.
Therefore, the agreement was enforceable.

Todd v Nicol [1957] SASR 72– Intention to Create Legal Relations

 Legal Issue: Whether a family arrangement can be legally binding when

one party incurs significant personal costs.
 Relevant Law: Family arrangements are presumed not to create legal
relations, but intention to create legal obligations can be implied if there is
significant reliance or consideration.
 Facts: Mrs. Nicol invited her sister-in-law and niece to move to Australia,
promising them free accommodation and to alter her will to leave her house
to them. Mrs. Todd quit her job and moved to Australia, but after a dispute,
Mrs. Nicol asked them to leave.
 Conclusion: Despite the presumption that family arrangements do not
create legal relations, the court found that Mrs. Todd's significant reliance
(quitting her job and incurring expenses) indicated an intention to create a
legal obligation. Thus, the agreement was enforceable.

Felthouse v Bindley (1862) 142 ER 1037– Offer and Acceptance

 Legal Issue: Can silence or inaction constitute acceptance of an offer?

 Relevant Law: For a contract to be formed, acceptance must be communicated;
silence or inaction cannot constitute acceptance.
 Facts: Felthouse offered to buy a horse from his nephew, stating that if he heard
no more, he would consider it accepted. The nephew did not reply, and the horse
was sold by an auctioneer, Bindley.
 Conclusion: The nephew’s silence did not amount to acceptance. Acceptance
must be communicated, and silence or inaction cannot infer acceptance.
Therefore, no contract existed.

Estoppel legal capacity and contract with minors

Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 Type of Law: Equitable Estoppel
  Legal Issue: What elements must be met for equitable estoppel to apply?
 Relevant Law: Equitable estoppel prevents a party from denying an assumption of a legal relationship
when the other party relies on that assumption to their detriment.
 Facts: Maher assumed a contract would be signed based on Walton’s statements and began demolition
work. Walton’s later informed him they had changed their mind.
 Conclusion: Estoppel applied as Maher relied on Walton’s conduct, suffered detriment (wasted
expenditure), and Walton acted unconscionably by changing their position without preventing the
detriment.

Steinberg v Scala (Leeds) Ltd [1923] 2 Ch 452 Type of Law: Contract Law –
Contracts with Minors

 Legal Issue: Can a minor repudiate a contract for shares and recover money
already paid?
 Relevant Law: A minor can repudiate a contract, but cannot recover money paid
unless there is a failure of consideration.
 Facts: A minor applied for shares, paid the amounts due, and received the shares.
Eighteen months later, while still underage, she repudiated the contract and
sought to be free from future calls and recover the money already paid.
 Conclusion: The minor could repudiate the contract and be free from future
liability for calls. However, the money already paid could not be recovered, as
there was no failure of consideration; the shares were received as contracted.

Nash v Inman [1908] 2 KB 1– Contracts with Minors(Necessities)

 Legal Issue: Can a contract for clothing be enforced against a minor if the
clothing is not considered necessary?
 Relevant Law: A contract with a minor is only enforceable if the goods provided
are "necessaries," which are defined as items essential for the minor’s well-being.
 Facts: A tailor supplied a Cambridge undergraduate with clothing, including 11
fancy waistcoats. The defendant was already adequately supplied with clothing but
failed to pay for the goods.
 Conclusion: The court ruled that the clothing provided was not "necessaries"
since the minor was already adequately supplied. Therefore, the contract was void,
and the plaintiff could not enforce it against the minor.

Scarborough v Sturzaker (1905) 1 Tas LR 117, Contracts with Minors (Necessities)

 Legal Issue: Is a contract for a bicycle valid if the bicycle is considered a

necessary for the minor?
 Relevant Law: A contract with a minor is enforceable if the goods provided are
considered "necessaries," essential for the minor's well-being.
 Facts: Sturzaker, a minor, traded in his old bicycle and made a part payment for a
new bicycle, which he used to commute 19 kilometers to work. He later repudiated
the contract and refused to pay the remaining amount.
 Conclusion: The court held that the bicycle was a necessary for Sturzaker as it
was required for his daily commute to work. Therefore, the contract was valid, and
the minor was bound by it.
Hamilton v Lethbridge (1912) 14 CLR 236 – Contracts with Minors, Beneficial
Contracts of Service

 Legal Issue: Is a contract entered into by a minor enforceable if it is beneficial to

the minor?
 Relevant Law: A contract with a minor is enforceable if it is considered a
"beneficial contract of service," meaning it is for the minor’s benefit.
 Facts: The defendant, a minor, entered into a clerkship with the plaintiff, with a
condition that he would not practice as a solicitor within 50 km of the plaintiff’s
office. After qualifying, the defendant began practicing in Toowoomba, prompting
the plaintiff to seek an injunction.
 Conclusion: The High Court held that the contract was beneficial to the defendant
as it provided valuable training. Therefore, the contract was enforceable, and the
defendant was bound by its terms.

Genuine consent and legality, terms and representations

Johnson v Buttress (1936) 56 CLR 113 – Undue Influence

 Legal Issue: How is undue influence established in a contract, and when is a

contract voidable?
 Relevant Law: Undue influence occurs when one party uses their position of
power or influence over another to induce them to act for their benefit. Some
relationships, such as parent-child or solicitor-client, raise a presumption of undue
influence. If undue influence is proven, the contract is voidable at the weaker
party's discretion.
 Facts: In this case, Johnson, a vulnerable party, entered into a contract with
Buttress under circumstances that suggested undue influence, as Buttress had a
position of power over Johnson. Johnson later sought to void the contract, claiming
undue influence.
 Conclusion: The High Court held that undue influence had occurred due to the
power imbalance in the relationship. As such, the contract was voidable at
Johnson's discretion, and Buttress failed to prove there was no undue influence in
the specific circumstances.

Oscar Chess Ltd v Williams [1957] 1 WLR 370 – Misrepresentation

 Legal Issue: Is a statement about a car's model year a term of the contract or an
innocent misrepresentation?
 Relevant Law: A statement made without personal knowledge is typically
considered an innocent misrepresentation, not a term of the contract.
 Facts: Williams offered his mother’s car to a dealer, stating it was a 1948 model
based on the registration book. The car was actually a 1939 model. The dealer
sought damages, claiming the model year was a term of the contract.
 Conclusion: The court held that Williams’ statement was an innocent
misrepresentation, not a term of the contract, as Williams was relying on the
registration book and had no personal knowledge of the car's age.
 Implied terms, condition & warranty

Missing column is: implied

Associate Newspapers Ltd v Bancks (1951) 83 CLR 322 – Condition vs. Warranty

 Legal Issue: Whether the term regarding the placement of the comic strip on the front page was a
condition or a warranty?
 Relevant Law: A breach of condition allows the injured party to terminate the contract, while a breach
of warranty only allows for damages.
 Facts: Bancks agreed to provide a comic strip for the newspaper to be published on the front page for 10
years. After 2 years, the comic strip was placed on page 3 for three consecutive weeks. Bancks
repudiated the agreement.
 Conclusion: The court held that the term regarding the placement of the comic strip on the front page
was a condition. The breach of this term allowed Bancks to repudiate the contract.

Bettini v Gye (1876) 1 QBD 18 – Condition vs. Warranty

 Legal Issue: Whether the term requiring attendance at rehearsals was a condition
or a warranty?
 Relevant Law: A breach of a condition allows for termination of the contract,
whereas a breach of a warranty only entitles the injured party to damages.
 Facts: A singer signed a contract to perform and to arrive in London 6 days before
the engagement for rehearsals. Due to illness, the singer arrived 4 days late, and
the promoter cancelled the contract.
  Conclusion: The court held that the term regarding rehearsals was a warranty,
not a condition, as it did not go to the root of the contract. The failure to attend
rehearsals affected the theatrical performance, but not the overall contract for the
15-week engagement. Therefore, only damages could be claimed for the breach.

Hong Kong Fir Shipping v Kawasaki Kisen Kaisha [1952] 2 QB 26 Innominate

Terms, Breach, and Remedies

 Legal Issue: Can a breach of an innominate term give rise to termination or only
damages, depending on the seriousness of the breach?
 Relevant Law: Innominate terms can lead to termination or damages depending
on whether the breach deprives the injured party of the substantial benefit of the
contract.
 Facts: H chartered a ship to K for 2 years, with a seaworthiness term. The ship
experienced multiple serious breakdowns, spending 20 weeks under repair in the
first 30 weeks. Conclusion: The seaworthiness term was an innominate term, and
the breach did not deprive K of the substantial benefit of the contract, as they still
had 20 months of service remaining. Therefore, K could not terminate the contract
but could claim damages for the period of delay.

Exclusion Clause

Thornton v Shoe Lane Parking [1971] 2 QB 163–Formation of Contracts(signed doc

absence)

 Legal Issue: Can an exclusion clause be incorporated into a contract if it is only

visible after the contract has been formed?
 Relevant Law: An exclusion clause cannot be incorporated into a contract if it is
not made clear to the parties at the time the contract is formed.
 Facts: T parked at an automated car park where the ticket dispensed after parking
included an exclusion clause in fine print, stating liability was excluded. T was
injured when collecting his car and the management attempted to rely on this
clause.
 Conclusion: The exclusion clause on the ticket was not valid as the contract had
been formed before the ticket was dispensed. The clause was not visible or agreed
upon at the time the contract was created. Therefore, the contract was not subject
to the exclusion clause, and the claimant was entitled to claim for injuries.

Olley v Marlborough Court Ltd [1949] 1 KB 532, Incorporation of Terms

 Legal Issue: Can an exclusion clause be incorporated into a contract if it is

displayed after the contract has already been formed?
 Relevant Law: An exclusion clause must be brought to the attention of the party
before or at the time the contract is formed in order to be valid.
 Facts: The plaintiff and her husband rented a room at the defendant's hotel. A
notice excluding liability for items left in the room was posted on the back of the
door. After the room was burgled, the defendant attempted to rely on this
exclusion clause to avoid liability.
  Conclusion: The exclusion clause was not part of the contract because the
contract had already been formed before the plaintiff entered the room and saw
the notice. Therefore, the notice could not affect her rights under the contract, and
the defendant was liable for the loss.

Causer v Browne [1952] VLR 1, Terms of the Contract (non-contractual doc)

 Legal Issue: Can an exemption clause be enforced if it was not clearly

communicated to the customer at the time of contract formation?
 Relevant Law: Exemption Clauses, Terms of the Contract
 Facts: Causer left a dress with Browne for dry cleaning and received a docket with
an exemption clause printed on it. The docket was understood to be merely a
voucher for picking up the goods, not something that communicated terms
exempting liability for damage.
 Conclusion: Browne was liable for the damage to the dress because the
exemption clause was not properly communicated as part of the contract. The
docket was considered just a voucher and not a document conveying terms that
would limit Browne's liability.

Balmain New Ferry Co v Robertson (1906) 4 CLR 379, Implied Terms (previous
dealings)

 Legal Issue: Is a passenger bound by terms displayed on a notice, even if the

terms are not explicitly agreed upon at the time of entering the premises?
 Relevant Law: Implied Terms, Incorporation of Terms into Contract
 Facts: Robertson, a regular ferry passenger, paid a fare to enter the wharf but was
asked to pay an additional fare when attempting to leave after missing the ferry.
There was a notice stating that a fare must be paid to enter or leave the wharf,
regardless of whether the passenger used the ferry service.
 Conclusion: Robertson was bound by the terms displayed on the notice, as he had
previous experience using the ferry service and was aware of the fare
requirement. The court held that the terms were incorporated into the contract,
and Robertson was required to pay the fare to leave the wharf.

Council of the City of Sydney v West (1965) 114 CLR 481, Negligence

 Legal Issue: Can an exemption clause protect a party from liability for unauthorized actions that fall outside
the scope of the contract?
 Relevant Law: Exemption Clauses, Scope of Liability, Negligence
 Facts: West parked his car at a car park operated by the defendant, and was issued a ticket that contained an
exemption clause protecting the defendant from liability for loss or damage to the car. The ticket also stated it
must be presented when leaving. Later, someone claiming to be "Robinson" was issued a duplicate ticket and
used it to remove West’s car without any further inquiry. West sued the defendant for the loss of his car.
 Conclusion: The exemption clause was part of the contract, but it did not protect the defendant from liability
for the unauthorized action of issuing a duplicate ticket to “Robinson” and allowing them to take the car. The
court held that the clause only applied to situations involving negligence in authorized actions, not
unauthorized acts like the one that occurred here. Therefore, the defendant could not rely on the exemption
clause to avoid liability.

Insight Vacations Pty Ltd v Young (2011) 243 CLR 149, Negligence

 Legal Issue: Whether an exclusion clause that applies to injuries occurring while seated with a safety belt is enforceable
when the passenger is injured while out of her seat.
 Relevant Law: Exclusion clauses must be interpreted according to the specific circumstances outlined in the contract. The
exclusion does not apply if the incident falls outside the terms set by the clause.
  Facts: The plaintiff, a passenger on the defendant's tour bus, was injured when the driver braked suddenly while the plaintiff
was out of her seat. The contract contained an exclusion clause that exempted the operator from liability if the injury
occurred while the passenger was not wearing a safety belt while seated.
 Conclusion: The exclusion clause did not apply because the plaintiff was not seated at the time of the injury. The clause
specifically covered injuries while seated with a safety belt, so the defendant could not rely on the clause to avoid liability for
the injury. The defendant was found liable for the plaintiff's injury.

TORT LAW
DAMAGEs & tort of negligence

Bolton v Stone [1951] AC 850 – Negligence, Foreseeability, probability of risk of injury

(standard of care)

 Legal Issue: Whether a cricket club was negligent for not taking precautions
against the remote risk of a cricket ball hitting a passerby on a street outside the
ground.
 Relevant Law: In negligence cases, the defendant may not be required to take
precautions against a risk that is highly unlikely to occur.
 Facts: The plaintiff was injured when a cricket ball, hit by a player, landed on a
street outside the cricket ground. Over a period of 30 years, only 6-10 balls had
been hit onto the street. The ground was surrounded by a 12-foot fence.
 Conclusion: The court ruled that the risk of injury was so remote that the cricket
club was not negligent. The chance of injury was considered too small to justify
further action, and the defendant was not required to take additional precautions.

Paris v Stepney Borough Council [1951] AC 367, Negligence, Duty of Care,

Vulnerability of Plaintiff

 Legal Issue: Whether an employer breached its duty of care by failing to provide
safety goggles for a worker who was blind in one eye.
 Relevant Law: A higher degree of care may be required if the plaintiff has
increased vulnerability to harm, as the risk of injury is greater for them than for
others.
 Facts: The plaintiff, blind in one eye, worked as a garage hand and was injured
when a piece of metal struck his good eye. The defendant did not provide safety
goggles, which were standard for other workers with normal vision.
 Conclusion: The court ruled that the defendant breached its duty of care. Given
the plaintiff’s vulnerability (blind in one eye), the defendant should have provided
goggles. The risk of harm was greater for the plaintiff than for workers with normal
vision.

Latimer v AEC Ltd [1953] AC 643 – Negligence, Reasonable Precautions (Burden of

eliminating risk)

 Legal Issue: Whether an employer was negligent for not closing down a factory
after a flood, despite taking reasonable steps to make the floor safe.
 Relevant Law: An employer is not necessarily negligent if they take reasonable
steps to mitigate a risk, and shutting down the entire operation may be excessive
if the risk is low.
  Facts: Latimer slipped on a slippery factory floor after a flood. The employer had
mopped the floor, placed warning signs, and added sawdust to reduce the risk. No
other workers had slipped.
 Conclusion: The court ruled that the defendant was not negligent. The factory had
taken reasonable steps to make the floor safe, and closing the factory entirely
would have been an excessive response given the low risk of harm.

Strong v Woolworths Ltd (2012) 246 CLR 182– Negligence, Duty of Care

 Legal Issue: Whether Woolworths was negligent in failing to clean a sidewalk

sales area regularly, leading to the plaintiff's injury.
 Relevant Law: A business has a duty of care to maintain safe premises, and
reasonable steps must be taken to inspect and clean areas to prevent foreseeable
risks.
 Facts: Ms. Strong, an amputee, fell and suffered a serious injury when the tip of
her crutch slipped on a greasy potato chip in a Woolworths sidewalk sales area.
The area had not been cleaned within the required time frame.
 Conclusion: The court found Woolworths liable for negligence, as they failed to
meet the required standard of care by not cleaning the area regularly. The
plaintiff’s injury was directly caused by their failure to inspect and clean the area.

Overseas Tankship (UK) Ltd v Morts Docks & Engineering Co Ltd (The Wagon
Mound No 1) [1961] AC 388, Negligence, Foreseeability, Remoteness of Damage

 Legal Issue: Whether the damage caused by a fire was too remote to be
recoverable, even though the oil leakage was reasonably foreseeable.
 Relevant Law: In negligence cases, a defendant may not be liable for
consequences that are not reasonably foreseeable, even if the initial act of
negligence was.
 Facts: The defendant's ship leaked furnace oil at a wharf, and sparks from nearby
welding ignited the oil, causing a fire. The plaintiff’s wharf was destroyed. The fire
was not foreseeable from the initial oil spill.
 Conclusion: The court ruled that while the oil spill was reasonably foreseeable,
the fire damage was not. The fire was too remote to be recoverable, and the
defendant was not liable for the damage caused by the fire.

Smith v Leech Brain [1962] 2 QB 405, Negligence, Causation, Egg-Shell Skull Rule

 Legal Issue: Whether the employer was liable for the plaintiff’s death, which was
caused by cancer triggered by a burn from the employer's negligence.
 Relevant Law: The egg-shell skull rule applies, meaning that a defendant is liable
for all consequences of their negligent act, even if the injury is more severe than
expected due to the plaintiff’s pre-existing condition.
 Facts: Mr. Smith was burned at work due to his employer’s negligence. The burn
triggered pre-cancerous cells that eventually led to his death three years later.
 Conclusion: The court held that the employer was liable for the death. The type of
injury (burn) was foreseeable, and the defendant must take the plaintiff as they
find them under the egg-shell skull rule. The employer was liable for the death,
even though the cancer was not foreseeable.
The egg-shell skull rule is a legal principle in tort law that holds a defendant fully liable for the plaintiff's
injury, even if the injury is more severe than what could have been reasonably anticipated. It means that the
 defendant must take the plaintiff as they find them, including any pre-existing conditions or vulnerabilities,
and is responsible for the full extent of the harm caused.

Tort of negligence

Smith v Baker & Sons [1891] AC 325 – Defense of Volente Non Fit Injuria

 Legal Issue: Can the defence of volenti non fit injuria be raised when the plaintiff
was aware of the risk but did not fully consent to it?
 Relevant Law: The defence of volenti non fit injuria can only succeed if the
defendant proves that the plaintiff knowingly and voluntarily accepted the risk of
harm.
 Facts: The plaintiff, employed as a building worker, was injured when a stone fell
from a steam crane while he was working below. The defendant argued that the
plaintiff had knowledge of the risk, as stones frequently fell near his work area, but
continued working despite this.
 Conclusion: The court held that the plaintiff was entitled to damages, despite
knowing the risk. The defence of volenti non fit injuria failed because the plaintiff
did not voluntarily consent to the risk; rather, he had complained about the
danger. The defendant failed to show that the plaintiff had freely accepted the risk,
and therefore, the defence did not apply.

Contributory Negligence – Legal Framework

Type of Law: Tort Law – Contributory Negligence
Legal Issue: How does contributory negligence affect the apportionment of damages
when the plaintiff's own actions contribute to the injury or loss?
Relevant Law: The Law Reform (Contributory Negligence And Tortfeasors'
Contribution) Act 1947 (WA) allows for the apportionment of damages based on the
plaintiff's degree of contributory negligence.
Definition: Contributory negligence refers to a situation where the plaintiff's own
failure to take reasonable precautions for their own safety contributes to the harm or
loss they have suffered.

Relevant Law Examples:

 Offer: There is an intention of creating a binding contract as an offer is clearly proposed to the other
party by one – Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256.
 Acceptance: If the terms of an offer are altered, then it’s a counter-offer, not an acceptance. So,
acceptance must be an undeniable agreement of the offer – Felthouse v Bindley (1862) 142 ER 1037
 Counter Offer: A counter offer made on the offer also terminates the original offer – Hyde v Wrench
(1840) 49 ER 132.
 Revocation of Offer: An offeror has the right to revoke an offer at any time before it gets accepted –
Byrne & Co v Leon van Tienhoven & Co [1880] 5 CPD 334.
 Lapse of Offer: When the offeree does not respond back within the time limit set by the offeror, the
offer expires – Stevenson Jacques & Co. v McLean [1880] 5 QBD 346.
  Intention to Create Legal Obligations: There must be mutual intention between both parties to create
a legal binding agreement – Todd v Nicol [1957] SASR 72.
 Consideration: There must be an exchange of something valuable between parties.

Reference List Examples:

Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256
Felthouse v Bindley (1862) 142 ER 1037
Hyde v Wrench (1840) 49 ER 132
Byrne & Co v Leon van Tienhoven & Co [1880] 5 CPD 334
Stevenson Jacques & Co. v McLean [1880] 5 QBD 346
Todd v Nicol [1957] SASR 72

Vocab:
Offer: expression made between parties to enter into a legal binding
Invitation to treat: prepared to make a deal/accept an offer being made
Revocation must be communicated before offer acceptance
Lapse of offer: if offer is not accepted in time stated or if its rejected be offeree
Acceptance must be absolute and unqualified, SILENCE is not acceptance
Presumption that commercial agreements intend to create legal enforceable obligations
Consideration: something of value exchanged between parties in a contract;
Executed: where one party performs an act in exchange for a promise(reward for finding
pets)
Executory: a promise to do something in future
Past: already completed before making promise(generally not valid as consideration)
Common law: must have consideration
Equity: may be binding without consideration
Promissory estoppel: can be enforced if promise given was not supported by
consideration/pre-contractual statements are made/promise made to someone who is
already in a contract
Void: A contract or action that is legally unenforceable and has no legal effect from the
start. Voidable: A contract or action that is initially valid but can be canceled by one
party due to specific legal reasons (e.g., coercion or fraud). Valid: A contract or action
that meets all legal requirements and is enforceable in a court of law.
Beneficial contract of services provide minors with a livelihood or other means of support
Genuine consent: Agreement given freely, without coercion, misrepresentation, or
mistake.
Misrepresentation: False statement made that induces another party to enter into a
contract.
Unconditional conduct: Behaviors that are not subject to conditions or limitations; fully
committed.
Duress: Coercion or threats used to force someone into a contract against their will
Undue influence: one exerts pressure on another, undermining their free will in making a
decision.
Terms: statement that form contracts, untrue statements could constitute breach of
contract
Representation: pre-negotiation statements and they don’t form contracts.
Innominate terms: different method of a remedy for breach, not easy to classify as
condition/warranty
termination of offer by bankruptcy or mergers(operation of law)
Frustration: unforeseen event making performance impossible
Breach: failing to perform obligations of condition or a repudiatory breach; unwillingness
or inability to perform a substantial part of the contract.
Anticipatory breach: repudiating obligations under contract prior to time set for
performance
Contributory negligence: plaintiffs failure to take precautions for their own safety
Negligence: failure to take reasonable care or precautions, resulting in harm or damage
to another