Contracts
Classification of Contracts (7 – 1.30)
Simple and formal contracts
A formal contract is a written contract (such as a deed). A simple contract can be entirely orally or a combination of oral and written.
Bilateral Contract: exchange of promise – one promise for another (a promisee’s promise in return for the promisor’s promise or vice versa)
o Union Dominions Trust (Commercial) Ltd v Eagle Aircraft Services Ltd [1968] 1 All ER 104 at 108, Lord Diplock
Unilateral Contract: A one way contract. No counter promise, the contract is performed when both parties have performed i.e. “Wanted dog poster” – it is ultimately the exchange of a promise for an act
o Australian Woollen Mills Pty Ltd v The Commonwealth (1953) 92 CLR 424 at 456
o Carlill v Carbolic Smoke Ball Co [1892] 2 QB 484
o Mobil Oil Australia Ltd v Lyndel Nominees Pty Ltd (1998) 153 ALR 198 at 222
• Informal (simple contract): Oral and/or in writing
• Formal Contract: In writing, such as a deed.
Vitiating Factors
• Void: not a contract and the main effect of such an agreement is that neither party is able to sue each other pursuant to it - such as a mistake or restraint of trade.
• Voidable: A contract whose validity is called into question because of a defect in the quality of the consent given by one of the parties upon entering into it – misrepresentation, mistake, duress, undue influence and unconscionability – no right to rescind in certain circumstances.
• Rescinded contract: Treated as if it never had effect
o London Borough of Islington v Uckac [2006] EWCA Civ 340 at [26]
• Unenforceable contract: An entirely valid contract, but can not be enforced due to absence of requirement by a state issued statute – such as in sale of lands.
• Illegal contract: a prohibited contract.
The Fact of Agreement (35)
An offer
• Must be communicated to the offerree, or his or her agent.
Simple and formal contracts
A formal contract is a written contract (such as a deed). A simple contract can be entirely orally or a combination of oral and written.
Bilateral Contract: exchange of promise – one promise for another (a promisee’s promise in return for the promisor’s promise or vice versa)
o Union Dominions Trust (Commercial) Ltd v Eagle Aircraft Services Ltd [1968] 1 All ER 104 at 108, Lord Diplock
Unilateral Contract: A one way contract. No counter promise, the contract is performed when both parties have performed i.e. “Wanted dog poster” – it is ultimately the exchange of a promise for an act
o Australian Woollen Mills Pty Ltd v The Commonwealth (1953) 92 CLR 424 at 456
o Carlill v Carbolic Smoke Ball Co [1892] 2 QB 484
o Mobil Oil Australia Ltd v Lyndel Nominees Pty Ltd (1998) 153 ALR 198 at 222
• Informal (simple contract): Oral and/or in writing
• Formal Contract: In writing, such as a deed.
Vitiating Factors
• Void: not a contract and the main effect of such an agreement is that neither party is able to sue each other pursuant to it - such as a mistake or restraint of trade.
• Voidable: A contract whose validity is called into question because of a defect in the quality of the consent given by one of the parties upon entering into it – misrepresentation, mistake, duress, undue influence and unconscionability – no right to rescind in certain circumstances.
• Rescinded contract: Treated as if it never had effect
o London Borough of Islington v Uckac [2006] EWCA Civ 340 at [26]
• Unenforceable contract: An entirely valid contract, but can not be enforced due to absence of requirement by a state issued statute – such as in sale of lands.
• Illegal contract: a prohibited contract.
The Fact of Agreement (35)
An offer
• Must be communicated to the offerree, or his or her agent.