Commercial Law "Contents" Flow Chart- for Fpbl
Contents of Contract Flow Chart
Statements made during negotiations
Conditions and Warranties
Implied Terms Expressed Terms
Terms
Discharge of the Contract
Discharge of the Contract continued
Remedies available for breach of contract
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Express terms:
Whether any dispute arises as to meaning of a contract it becomes necessary to construe (interpret) the terms of contract in order to ascertain intention to parties.
Where contract is made orally, express terms of contract will be ascertained by determining the words actually used by the parties when contract was made. This is essentially a question of fact.
If the contract has been reduced to writing the general rule is that terms of the contract are to be found in the writing. The meaning of commercial documents is determined objectively that is by what a reasonable person in the position of the parties would have understood them to mean. The legal rights and obligations of the parties turn upon what their words and conduct would be reasonably understood to convey not upon actual beliefs are intentions: • LG Thorne & Co Pty Ltd v Thomas Borthwick & Sons (Australasia) Ltd (p220)
This requires consideration not only of the text documents but also the surrounding circumstances known to the parties and the purpose and object of the transaction. • Toll Pty Ltd v Alphapharm Pty Ltd. (p266)
There is an increasing tendency for commercial agreements to contain a provision to the effect that parties will negotiate in good faith. While there is some Australian authority tot he effect that a promise to negotiate in good faith may be enforceable in certain circumstances the position is currently shrouded in inconsiderable uncertainty: • Coal Cliff Collieries Pty Ltd v Sijehama Pty Ltd, • Australis Media Holdings Pty Ltd v Telstra Corporation Ltd • Aiton Australia Pty Ltd v Transfield Pty Ltd.
Parol Evidence
Statements made during negotiations
Conditions and Warranties
Implied Terms Expressed Terms
Terms
Discharge of the Contract
Discharge of the Contract continued
Remedies available for breach of contract
-----------------------
Express terms:
Whether any dispute arises as to meaning of a contract it becomes necessary to construe (interpret) the terms of contract in order to ascertain intention to parties.
Where contract is made orally, express terms of contract will be ascertained by determining the words actually used by the parties when contract was made. This is essentially a question of fact.
If the contract has been reduced to writing the general rule is that terms of the contract are to be found in the writing. The meaning of commercial documents is determined objectively that is by what a reasonable person in the position of the parties would have understood them to mean. The legal rights and obligations of the parties turn upon what their words and conduct would be reasonably understood to convey not upon actual beliefs are intentions: • LG Thorne & Co Pty Ltd v Thomas Borthwick & Sons (Australasia) Ltd (p220)
This requires consideration not only of the text documents but also the surrounding circumstances known to the parties and the purpose and object of the transaction. • Toll Pty Ltd v Alphapharm Pty Ltd. (p266)
There is an increasing tendency for commercial agreements to contain a provision to the effect that parties will negotiate in good faith. While there is some Australian authority tot he effect that a promise to negotiate in good faith may be enforceable in certain circumstances the position is currently shrouded in inconsiderable uncertainty: • Coal Cliff Collieries Pty Ltd v Sijehama Pty Ltd, • Australis Media Holdings Pty Ltd v Telstra Corporation Ltd • Aiton Australia Pty Ltd v Transfield Pty Ltd.
Parol Evidence