Australian Contract Law Essay
Law of Contract II
Semester 2, 2011
Word Count: 1932
A party’s right to terminate a contract arises from a particular type of breach of contract by another party. The facts of the breach and the nature of the term breached in each case inform the party with whose contract has been terminated, as to whether it is lawful or not.
Common law rights to terminate arise in one or more of the following three ways: * Any breach of a condition of the contract; * A serious breach of an intermediate term of the contract; or * Conduct that shows that a party is unable or unwilling to comply with the contract.
Australian Courts have for sometime recognised a tripartite classification of terms in analysing whether or not a breach gives rise to a common law right to terminate. Australian courts have accepted that there is a category of term, known as a condition or essential term, for which strict performance is required, and that an aggrieved party is entitled to terminate for any breach of a condition, however slight.
Contractual rights to terminate are of two main types: * Termination of the contract in total; or * Termination of the engagement of a contractor, in both cases arising from actual conduct, as described in either the contract’s termination clause or a term arising under statute.
Frequently, the common law right to terminate is the most important consideration.
In classifying whether a term is seen as a condition of a contract; a term may be classified as a condition by statute, by the parties or by the courts on the basis of the construction of the contract. A term may be classified as a condition on the basis of the express words used by the parties. However, before courts will conclude a particular term is a condition, with the consequences that any breach will entitle the aggrieved party to terminate, the parties must clearly have expressed their intention for the term to have this status.
In assessing whether or not a term should be
Semester 2, 2011
Word Count: 1932
A party’s right to terminate a contract arises from a particular type of breach of contract by another party. The facts of the breach and the nature of the term breached in each case inform the party with whose contract has been terminated, as to whether it is lawful or not.
Common law rights to terminate arise in one or more of the following three ways: * Any breach of a condition of the contract; * A serious breach of an intermediate term of the contract; or * Conduct that shows that a party is unable or unwilling to comply with the contract.
Australian Courts have for sometime recognised a tripartite classification of terms in analysing whether or not a breach gives rise to a common law right to terminate. Australian courts have accepted that there is a category of term, known as a condition or essential term, for which strict performance is required, and that an aggrieved party is entitled to terminate for any breach of a condition, however slight.
Contractual rights to terminate are of two main types: * Termination of the contract in total; or * Termination of the engagement of a contractor, in both cases arising from actual conduct, as described in either the contract’s termination clause or a term arising under statute.
Frequently, the common law right to terminate is the most important consideration.
In classifying whether a term is seen as a condition of a contract; a term may be classified as a condition by statute, by the parties or by the courts on the basis of the construction of the contract. A term may be classified as a condition on the basis of the express words used by the parties. However, before courts will conclude a particular term is a condition, with the consequences that any breach will entitle the aggrieved party to terminate, the parties must clearly have expressed their intention for the term to have this status.
In assessing whether or not a term should be