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Topic Guide

LLAW1214
CONTRACT – Semester 1, 2019

Topic Coordinator: Mark Rankin


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Introduction

Welcome to Contract LLAW1214 for 2019. Please read this Topic Guide carefully. It contains
essential information, which will help you not only to pass this topic but also hopefully to enjoy
it. You should refer back to this Topic Guide at any time during the semester when you need
information about the topic.

Academic Staff
Mark Rankin
Room 2.31 Law and Commerce Building
Phone 8201 3796
Consultation Times: Wednesday 12-2pm
mark.rankin@flinders.edu.au

Franco Camatta
Phone: TBA
Consultation time: TBA
FCamatta@camattalempens.com.au

Mark Ferraretto
Room 2.16 Law and Commerce Building
Phone: TBA
Consultation time: TBA
mark.ferraretto@flinders.edu.au

Educational Aims

This topic aims to:

 provide students with a sound knowledge and understanding of the basic principles on the
nature, formation, content and enforcement of contracts
 introduce students to the development of equity as a body of law distinct from the
remainder of common law
 highlight to students the modern role of equitable principles and remedies in the law of
contract
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Expected Learning Outcomes

It is expected that on completion of this topic students will:

1. Have a good understanding of some of the basic common law and equitable principles on
formation, performance and discharge of contracts and the nature of contractual terms
and their interpretation, as well as legal and equitable remedies for breach of contracts.

2. Be able to examine and evaluate these legal principles within the commercial, social and
historical context.

3. Be able to recognise and identify the correct contractual issues and related ethical
dilemmas within a factual scenario.

4. Be able to use appropriate forms of legal reasoning and analysis to explain, in clear and
persuasive style, reasoned solutions to issues arising from such scenarios.

5. Be able to explain and provide a critical evaluation of some of the theoretical and policy
frameworks used by courts and writers in relation to the facilitation and regulation of
contractual relations.

Relationship between Expected Learning Outcomes and Assessment

Expected learning outcome Assessment

Have a good understanding of some of the Research Essay, Examination, and


basic common law and equitable principles Tutorials
on formation, performance and discharge
of contracts and the nature of contractual
terms and their interpretation, as well as
legal and equitable remedies for breach of
contracts
Be able to examine and evaluate these legal Research Essay, Examination, and
principles within the commercial, social Tutorials
and historical context
Be able to recognise and identify the Examination and Tutorials
correct contractual issues and related
ethical dilemmas within a factual scenario
Be able to use appropriate forms of legal Examination and Tutorials
reasoning and analysis to explain, in clear
and persuasive style, reasoned solutions to
issues arising from such scenarios
Be able to explain and provide a critical Research Essay and Tutorials
evaluation of some of the theoretical and
policy frameworks used by courts and
writers in relation to the facilitation and
regulation of contractual relations
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Graduate Qualities
Graduate Qualities and Graduate Attributes have been identified by most Australian Universities
to characterise their graduates. Flinders University has adopted seven Graduate Qualities.

Here is a brief statement of how this topic supports your acquisition of the relevant graduate
qualities:
Flinders Law aims to In Contract you will develop and be assessed (where appropriate) on:
produce graduates:
who are knowledgeable 1. your ability to state the key principles of certain areas of contract law as
detailed in the guide
2. your understanding of those principles and their interrelationship, and
your capacity to predict future trends in law
who can apply their 1. your ability to apply those principles to a hypothetical fact scenario,
knowledge identifying and reflecting on relevant legal issues
2. your skill in assessing the relative importance of issues, identifying
assumptions and perspectives
who communicate 1. your preparation of problem question answers and research essays using
effectively plain English vocabulary, legal terminology and conventions as
appropriate to the situation
2. your productive participation in class/small group discussion
3. your active listening and note taking skills

who work independently 1. your professionalism and self-reliance in your learning - including the
completion of readings in advance of class contact and the preparation of
your own notes and summaries
2. your basic goal setting, understanding of the factors impacting on your
personal performance and ability to meet ongoing deadlines
3. your reflection skills and establishment of goals and strategies
who are collaborative 1. your understanding of what teamwork involves and cooperative attitude
towards other group members
2. your acceptance of responsibility for some aspects of a group task,
developing an outline of argument cooperatively, providing feedback on
drafts, and devising means to liaise with other group members
3. your self-control in dealing with conflict situations and communicating
with team members regarding issues affecting team performance to reach
agreement on solutions
who value ethical 1. your awareness of the philosophy and the social and global contexts of
behaviour law
2. your recognition of ethical issues in various legal contexts and study
situations
3. your compliance with rules for student conduct within Flinders Law and
the University
who connect across 1. your positive engagement with people and ideas beyond the limit of your
boundaries own geographical, disciplinary, social, economic, and cultural background
2. your application of legal knowledge and skills to simulated situations
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How to succeed in this Topic

Study Tips
Prepare for and attend as many lectures and tutorials as you can. Neither are compulsory, but
both will present examinable information that will be difficult to access elsewhere.

Lectures are to provide an overview of the topic, basic principles, an analytic framework, some
explanation of especially difficult matters and/or critical perspectives. Reading key material
mentioned in the lectures will be essential to understanding the issues covered. The pedagogical
approach adopted in this topic is one of self-directed learning. Consistent with this approach,
there are no required reading lists, and no prescribed textbook. However, that is not to say that
there is no reading in this topic. Each student is expected to take the initiative in terms of
formulating their own learning goals, identifying appropriate material resources for learning, and
utilising the lectures and tutorials to best suit their own learning needs (within the broad
parameters outlined in this Topic Guide).

As stated, there is no prescribed textbook for this topic. However, it is highly recommended
that you acquire a textbook on contract law. Your choice should be guided by your learning
goals and needs. Below is a (non-exhaustive) list of textbooks that would be appropriate choices
in this respect:

J W Carter, Contract Law in Australia (LexisNexis, 7th ed, 2018)


Stephen Graw, An Introduction to the Law of Contract (Lawbook Co, 9th ed, 2017)
Jeannie Paterson, Andrew Robertson, and Arlen Duke, Principles of Contract Law (Lawbook
Co, 5th ed, 2016)
Jeannie Paterson, Andrew Robertson, and Arlen Duke, Contract: Cases and Materials (Lawbook
Co, 13th ed, 2016)
It will be obvious how lectures and tutorials correspond with particular chapters in whatever
textbook you choose.

Tutorial Participation
There are eleven tutorials. The tutorials will be led by Franco Camatta and Mark Ferraretto.
Tutorials will begin in the second week of the semester. Tutorial participation is assessed, so it
is important that students attend the same tutorial on a regular basis, so that the mark received
will accurately reflect performances over the semester. Do not simply appear at another group;
you may not be allowed to attend.

We want to make the tutorials a worthwhile and interesting learning experience for all students
and to recognise students who contribute effectively to successful classes. We have allocated a
proportion of assessment to the tutorial program, to reflect its importance. The assessment
criteria are preparation, quality of content, and contribution to group processes. This means that
students will need to be well prepared for tutorials and be willing to contribute. Mere
attendance, without preparation or contribution, will not earn marks. The criteria for Tutorial
Participation are:
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Preparation: this involves planning and managing your time to read material for each tutorial,
making an effort to understand those materials and to respond to the questions raised, and to
prepare any written material or presentations as required.
Quality of content: means your ability to ask or answer questions sensibly and in an informed
way, to apply ideas and principles gained from your preparation to the issues raised in the
tutorial and to offer ideas or opinions which develop from your reading and participation in the
tutorial.
Contribution to Group Processes: this refers to your interaction with others in the tutorial - both
students and teachers. It involves listening to others, responding appropriately, being
constructive in your dealings with them, and assisting in their learning. It also reflects your
willingness to participate to the best of your ability and your level of interest and engagement in
the class and the material.

Tutors will assign a mark for each student. Students who attend more tutorials will be recognised
as making a greater contribution to the group’s learning, and showing more willingness to
participate, and this will be reflected in the mark. Marks will be awarded on the same scale used
for other assessment: that is, 50-64% is a pass, and so on.

FLO
Essential information about this topic will be posted on Flinders Learning Online (FLO).
Powerpoints from lectures, and other documents, such as this Topic Guide, will be posted on
FLO as they become available. You should check FLO regularly for updates. Discussions are
encouraged and the topic coordinator will check such discussions regularly.

New in Law Essential Guide

You must read the important and essential information in New in Law Essential Guide for First
Year Students 2019 about the following:

 Academic Integrity
 Using the Australian Guide to Legal Citation
 How to answer Hypothetical Legal Problem Questions
 How to answer Law Essays
 Problem Question Performance Indicators
 Essay Question Performance Indicators
 How to improve your writing skills
 How to improve your study skills
 Student related policies and procedures
 Word count and penalties
 How to apply for extensions
 Late penalties
 Tutorial attendance

This information applies to all first year law topics.

You will need to refer to this information throughout Semester 1 and Semester 2.
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Class Schedule

LECTURES

Day Time Venue Teaching Staff

Tuesday 3-5pm Nth 5, Law/Commerce Mark Rankin

TUTORIALS

Class No. Day Time Venue Teaching Staff

1 Friday 12-1 SSN r 201 Mark Ferraretto

2 Thursday 9-10 LWCM r 2.43 Franco Camatta

3 Thursday 11-12 Humanities r 133 Franco Camatta

4 Friday 11-12 Education r 2.10 Mark Ferraretto

5 Thursday 10-11 LWCM r 2.43 Franco Camatta


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Teaching programme

Week Lecture Date Lecture Subject Tutorial Subject

1 05/03/19 General Introduction/SAM discussion


Expectations and Overview No Tutorials
The Civil Justice System and
Contract Law Basics

2 12/03/19 Formation: Offer and Acceptance The Theory of Contract and


Contract Basics

3 19/03/19 Formation: Consideration and Estoppel Offer and Acceptance

4 26/03/19 Formation: Intention to Create Legal Relations Consideration and Estoppel

5 02/04/19 Terms: Express and Implied and Consumer Guarantees No Tutorials

6 09/04/19 Terms: Construction/Interpretation Intention to Create Legal


Relations

Mid-Semester Break

7 30/04/19 Terms: Exemption and Limitation Clauses Defining the Terms

8 07/05/19 Performance and Termination (Part 1) Exemption and Limitation


Clauses

9 14/05/19 Performance and Termination (Part 2) Termination for Breach

10 21/05/19 Remedies (Part 1) Remedies (Part 1)

11 28/05/19 Remedies (Part 2) Remedies (Part 2)

12 04/06/19 Examination Revision Revision (Part 1)

13 11/06/19 No Lecture Revision (Part 2)


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Tutorials

Introduction. There are eleven tutorials and tutorials will commence in the second week of the
semester. The tutorials exist to provide a further opportunity for students to engage with the
content of this topic. If you have any questions concerning the topic itself, or any topic subject
matter, the tutorial is an ideal setting to raise such questions. Preparing for and attending tutorials
is also probably the best exam preparation you can do.

Tutorial participation is assessed in this topic. Generally, each week the tutorial will raise
specific issues on topics covered in lectures in the preceding week(s), so as to deepen your
understanding of that area. However, in some instances, we will use the tutorials to cover
significant topics that are not discussed in lectures. Hence, it is very important for you to
regularly attend and participate.

Revision questions. Many of the tutorials will start with brief questions that revisit points that
have previously been covered in the lectures, so as both to reinforce them and to allow you to
check how your understanding of this complex area of law is progressing. You should prepare
by looking over your lecture notes and the relevant sections of a textbook of your choice, and at
least jotting down some suggested answers.

Problem-solving. Most of the tutorials in this topic will involve problem-solving exercises
where a set of facts are given and you are asked to discuss the legal implications arising as if
your professional advice were being sought by one or more clients who have found themselves
in difficulties. Essentially every legal problem-solving exercise requires the given facts to be
ascertained and analysed. The legal issues raised by the facts must then be identified, followed
by the stating of the rules of law which are relevant to those issues. Those rules should be
supported by the authority of a statute or a case. If the issues involve a point on which the law or
its interpretation is unclear, or on which there are differing judicial views, or which has not been
decided, then you should present the alternatives. The relevant law must then be applied to the
facts and a tentative conclusion reached. The conclusion you reach is really no more than your
prediction of how a sensible decision-maker would apply the relevant law to the facts and hence
often there is no ‘right’ answer.

The exam in this topic will be a problem question, so engagement in tutorials is excellent exam
preparation. Also, the final two tutorials will deal exclusively with past exams as further
preparation for the final examination.
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Tutorial 1

The Theory of Contract and Contract Basics

1. What is a contract?

2. What is the classical theory of contract?

3. What ideology underpins the classical theory of contract?

4. What does it mean to voluntarily assume legal obligations?

5. Do you have any criticism of the classical theory of contract?

6. What is the most important contract you have ever entered into, and to what
extent did you negotiate its terms?

7. How are the contracting parties’ respective intentions ascertained in contract


law?

8. What is the difference between equity and the common law?

Many of the above questions seek your personal, yet informed, opinion. Do not be
afraid of providing it within tutorials.
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Tutorial 2

Offer and Acceptance

1. What is an offer?

2. What is acceptance?

3. What is an ‘invitation to treat’?

4. Must there always be an offer and acceptance for a contract to be formed?

5. What is the postal acceptance rule and when does it apply?

6. When may an offer be terminated?

7. What is the difference between a unilateral and a bilateral contract?

Problem Question

Louise, a law professor at Flinders University, advertises for a research assistant by means of a
notice placed on the law school’s noticeboard. Thelma, a final year student, sees the notice and
telephones Louise from the offices of the law firm where she is working part-time and gives
Louise a quick rundown on her qualifications and experience. Louise tells her: ‘You sound just
the person I’m after, but I’ll need to see a formal application in writing before I make any final
decision.’

That afternoon, Thelma posts her application together with her resume to Louise by express post
which Louise receives the following day. Liking what she sees, Louise sends a letter to Thelma’s
home address informing her that she has the job. She adds that Thelma will need to be available
to work every Monday.

The following day Louise decides that on, reflection, Thelma would not be suitable after all. She
immediately telephones her at work and leaves a message to that effect on her answering
machine. When Thelma checks her messages later that day she is extremely disappointed —
even more so when she receives Louise’s letter the following day.

Thelma wants to know whether she has a binding agreement with Louise. Advise her.
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Tutorial 3

Consideration and Estoppel

1. What is consideration? Does it matter whether the contract is unilateral or bilateral?

2. Explain the difference between adequacy and sufficiency of consideration.

3. What are the basic elements that must be established to raise promissory estoppel?

Problem Question

Sybil 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 is to be distributed amongst the family, except for her jewelry and wine.

The jewelry is to go to the first of her grandchildren ‘who brings a member of the Richards
family to justice and hands him over to the police.’ The Richards have been sworn enemies of
Sybil’s family since one of them killed her fourth husband in a squabble over mining rights, and
the present members are believed to be engaged in various criminal activities. 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.

Sybil has now undergone a change of heart and wishes to revoke these arrangements. However,
one of her grandsons, Terry, has already succeeded in apprehending a member of the Richards
family. He was mugged while walking down Hindley Street, and in self-defence he overcame his
attacker and handed him over to the authorities. The assailant turned out to be a Richards and is
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.

Terry comes to you for advice. He wishes to know whether he is entitled to the jewelry and,
specifically, what arguments he might use to overcome any perceived difficulty with his
claim. Also, Basil wants to know whether he is entitled to the wine promised to him by
Sybil.
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Tutorial 4

Intention to Create Legal Relations

1. ‘Intention to create legal relations’ is one of three essential elements that must be present
for there to be a contract and the test for determining whether such an ‘intention’ exists is
objective. In the case of commercial/business agreements the law has traditionally
presumed that the parties intend to create legal relations, in which case the onus of
proving that there was no such intention rests on the party arguing there was no contract.
On the other hand, in cases of agreements between family members/friends the courts
have in the past presumed that the parties had no such intention, so the onus of proving
that there was such an intention rests on the party asserting there was a contract. What is
the current legal status of these presumptions?

2. When an agreement is made between family members, what factors would make it more
likely for a court to find that it was intended to be legally binding?

3. What is a memorandum of understanding, and how do you know if it is legally binding?

4. Under which of the three categories of preliminary agreement listed in Masters v


Cameron (1954) 91 CLR 353 will there not be a binding contract?

Problem Question

Tomkins Pty Ltd is a company which manufactures boats. It purchases certain components from
Ginn Pty Ltd under an agreement which was originally negotiated in 2016 and which is due to
expire next year (January 2020).

Tomkins and Ginn had been discussing some changes to the 2016 agreement. The negotiations
had become bogged down, until senior managers from the two firms met in January 2019 to
thrash out a deal. The outcome was a short document:

MEMORANDUM OF UNDERSTANDING

Tomkins Pty Ltd and Ginn Pty Ltd agree as follows:

The 2016 agreement will be renewed when it expires next year.

Until then, the parties will continue to comply with the 2016 agreement, except that as from
March, the prices set in that agreement will be decreased by 5%.

This agreement will be formalized by Tomkins’ legal representatives as soon as possible.

The document was signed by senior representatives from each company.

Is this agreement legally binding? What are the arguments for and against?
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Tutorial 5

Defining the Terms

1. What are the rules of ‘contractual intention’?

2. What is ‘the parol evidence rule’?

3. What is the ‘factual matrix’ concept?

4. What is an ‘entire agreement clause’?

5. In what circumstances will courts imply terms?

6. How are terms classified, and what significance does this classification have?

7. What is a ‘collateral contract’?

8. What is a ‘mere representation’?

9. How may evidence of subsequent conduct be utilised to define terms?

10. What is the ACL, and in what manner does it impact upon contract law?
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Tutorial 6

Exemption and Limitation Clauses

1. If a party has signed but not read a document containing contractual terms, are they
bound by those terms?

2. If a party is given access to a document containing contractual terms, which they neither
sign nor read, are they bound by those terms?

3. What is the contra proferentem rule?

Problem Question

Scratchy Taxi Co operates a business in Adelaide. Clause 4 in their advertising brochure reads:

In respect of any damage, Scratchy Taxi Co limit their liability to a maximum of 10


percent of the true market value of any loss or damage of whatsoever kind, howsoever
occasioned.

Mrs Thompson, an elderly lady, is a regular customer. She owned a Siamese cat called Fiddler.

Mrs Thompson had a great affection for Fiddler and she liked to keep him in the best of health.
Hence, on the first day of each month, over the past eighteen months, she has sent Fiddler to the
local veterinary clinic for health checks.

As she has never owned a car, Mrs Thompson always rang Scratchy Taxi Co and had them take
Fiddler to the vet and back home again.

Each time the driver returned from the vet, he would give Mrs Thompson a single document to
sign. She would always sign it, but never bothered to read it. At the top of this document was
written in large capitals:

RECEIPT

At the bottom of the document, and written in much smaller letters, were the words:

Please see over for conditions of carriage.

These conditions incorporated clause 4.

On 1 November last year, Mrs Thompson rang up Scratchy Taxi Co, and, as usual, the driver
came and took Fiddler away. He brought Fiddler back later in the day but did not, unlike all
previous occasions, ask Mrs Thompson to sign any document.
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Later that evening, Mrs Thompson noticed that Fiddler had not moved a muscle since returning
home from the vet. Worried by this, she rang the vet, who immediately called round to see her.
Upon inspecting Fiddler, the vet turned to Mrs Thompson, and with a solemn expression said:
‘Quite frankly, Mrs Thompson, it would appear that your Fiddler is stuffed.’

The grieving Mrs Thompson phoned Scratchy Taxi Co, telling them of her plight. As it
transpired, on the final occasion of taking Fiddler away, the driver used his cab to carry two cats
at once. He had confused Fiddler for another cat, and had taken Fiddler to Ted’s Taxidermy
Parlour, right next door to the veterinary clinic. There Fiddler had been given a lethal injection
and stuffed. Outraged by this, Mrs Thompson wrote to Scratchy Taxi Co, claiming the market
value of her cat, which was $500.

Scratchy Taxi Co wrote back saying that they would pay no more than $50 for their ‘little vanilla
mix-up’. They directed Mrs Thompson to clause 4 on the back of one of the documents she had
signed.

A very tearful Mrs Thompson arrives at your office seeking your advice. Advise her.
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Tutorial 7

Termination for Breach

1. What is the significance of a term being essential?

2. If a term that is not an essential term is breached by one party, can the other party
terminate the contract?

3. When is time ‘of the essence’, and what does that mean?

4. Explain the concept of election.

Problem Question

Alex, a very talented football player, has signed up to play in the AFLW for Collingwood for
three years beginning January 1, 2019. The contract between Alex and Collingwood includes the
following clauses:

cl 1 The club agrees to pay Alex $80,000 per annum.

cl 2 In addition to the payment under clause 1, the club agrees to pay Alex a bonus of $1,000 for
each game in which she plays and which is won by the club.

cl 3 Alex agrees to play in all games that the club may require.

cl 4 The club agrees that she will attend all training sessions if she is fit enough to play.

cl 5 In the event that Alex breaches any term of this agreement, the club must first give her
written notice of the default, warning that a repetition of the default may result in termination of
this agreement. Upon service of such notice, the club shall be entitled to terminate this contract
for any repetition of the conduct.

After playing for six games Alex misses the fifth game, despite being selected to play, because
she missed the plane due to a heavy traffic jam in Sydney, and because her partner was having a
baby. She then played regularly for another four games, but then missed three training sessions
in a row because of family commitments. Alex complained to the club that they were not family
friendly. Two weeks later she told the club that she had had enough and was going to join
another club for next season.

Advise Collingwood whether they have grounds for immediately terminating their contract
with Alex.
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Tutorial 8

Remedies (Part 1): Damages

1. What is the basic purpose of an award of damages?

2. What is the doctrine of mitigation?

3. If a vendor of goods fails to deliver them in breach of contract, how is the purchaser’s
loss assessed?

4. In what circumstances, in a breach of contract claim, can damages be recovered for shock
or distress?

5. What is a liquidated damages clause?

6. What is an action in debt?

7. What is a penalty clause?

8. How do courts distinguish between liquidated damages clauses and penalty clauses?

Problem Question

Ajax Building Pty Ltd contracted on 19th January 2018 with the retailer Toys Galore Pty Ltd to
construct a large toy warehouse adjacent to the retailer’s existing store in Marion. The work was
to be completed by 10th July 2018. Ajax did not finish the building until 10th October 2018.

Toys Galore Pty Ltd claims damages of $200,000 from Ajax Building Pty Ltd in respect of a
large shipload of Japanese toys ordered on 28th February 2018. Toys Galore Pty Ltd was unable
to accept the shipload on 31st July 2018 due to a lack of storage space, and was forced to pay
$80,000 in compensation to the supplier. It also asserts that it would have been able to sell those
toys at a profit of $120,000. You can assume that these figures are reasonable in the
circumstances.

Ajax Building Pty Ltd argues that Toys Galore Pty Ltd should have stored the toys in one of the
other large warehouses available for rental in Adelaide

Consider what arguments each party might be able to make in relation to these claims.
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Tutorial 9

Remedies (Part 2): Equity

1. What is an ‘entire’ contract obligation?

2. What is an action for quantum meruit, and in what circumstances will be awarded?

3. In what circumstances will a court order specific performance of a contractual obligation?

4. What is restitution, and in what circumstances will it be ordered?

Problem Question

Maria agrees to construct an air conditioning system and install it in Con’s home. The work is to
be completed by 30th June 2018, and Con agrees to pay $10,000 upon final installation.

Advise the parties in each of the following alternative situations, paying particular
attention to any remedies that might be available:

1. The system is installed but it is not working properly. When in operation fumes were
coming into other parts of the house and in hot weather it did not cool the house down at
all. The cost of remedying defects is $3,500. On discovering this, Con refuses to pay
Maria for the work;

2. Maria delivers the system and partially installs it, before abandoning the job on the
ground that she has found a more lucrative contract on which to work. Con engages
another contractor, who completes the job using the parts which Maria has left lying
around at Con’s house;

3. Would it make any difference to your answer to ‘2’ if Maria’s reason for abandoning the
work had been Con’s stated refusal to pay for it upon completion?; and

4. Maria fails to finish the installation by 30th June 2018, but tells Con she should have it
finished within the week.
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Tutorial 10

Examination Revision (Part 1)

The following is a past exam for this topic. The 2019 exam will follow a similar structure. For
this tutorial students are expected to have attempted the below exam and come prepared to
discuss your answers with the class.

Problem Question:
WOMADelaide (the Australian version of WOMAD, the World of Music, Arts & Dance
Festival) is held annually in March at Adelaide’s Botanic Park. For the last 10 years Sylvie, a
music buff, has travelled from Melbourne to attend the 4 day event. This year she was
particularly keen to attend the Festival as this year’s WOMADelaide brochure prominently
featured performances by one of the leading performers in contemporary Jazz, The Joshua
Redman Quartet.

As she has previously done, Sylvie booked online through BASS. The instructions on how to do
so were unchanged from previous years:

To book tickets bring up details about the event you wish to book for and follow the prompts to
select a performance, number of tickets and type of tickets required. All tickets must be paid for
at the time of booking using a valid credit card. BASS currently accepts Mastercard, Visa and
American Express.

It further went to say that: All tickets are sold subject to the Conditions of Sale as set out below.
Under ‘Conditions of Sale’ clause 1 stated:

No exchange or refund will be permitted following purchase of tickets unless instructed to do so


by the Promoter who reserves the right to add, withdraw or substitute artists and/or vary
advertised programs, ticket prices, seating arrangements and audience capacity. If a
performance or event is cancelled for any reason, no obligation is assumed by the Promoter for
arranging of a substitute service, event, or performance.

Further down, but in much smaller print, were clauses 2 and 3 setting out information about
collecting tickets:

Collecting tickets: You can collect your tickets from your nearest BASS outlet until close of
business on the last working day prior to performance. The owner of the credit card used here
must present that card (and any proof of concession entitlement) at the outlet when collecting
tickets.

Uncollected tickets: If you cannot collect your tickets before the event, we will have the tickets
available at the venue, usually from one hour before the event. The credit card used for this
purchase must be brought to collect your ticket(s) otherwise to gain entry another ticket will
have to be purchased at the gate.
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Sylvie booked using her American Express credit card (having previously registered it with the
website) but did not bother reading any of the information relating to ‘conditions of sale’. She
paid $328 for a 4 day pass (plus a credit card fee) and on the same day booked her
accommodation at the Warwick Inn, in the city. She had never stayed there before but it was
quite reasonably priced and was fairly close to the venue.

Sylvie flew from Melbourne on the day of the Festival, picked up a rental car from Ertz, and
drove straight to the venue to pick up her ticket. However, when she was asked to produce the
American Express credit card used to purchase the ticket, she couldn’t find it. What’s more the
attendant refused to accept any other form of ID, such as her driver’s license, pointing to the sign
at the gate stating the conditions of entry. The attendant made it clear to her that the credit card
used to purchase the ticket had to be produced when collecting tickets otherwise a new ticket had
to be purchased. For an instant Sylvie thought about walking away, but having come all this way
she did not want to miss the Jazz segment, and in particular the Joshua Redman Quartet.
Fortunately, she was able to access a nearby ATM machine and take cash out to purchase a new
ticket, which incidentally cost her an additional $20 more at the gate. However, soon after she
was admitted inside the festival grounds an announcement was made that the Jazz segment of the
festival had been cancelled. No reason was given for the cancellation.

Advise Sylvie as to what contractual rights she may have against the Promoters of
WOMADelaide for both having to buy another ticket, as well as the cancellation of the Jazz
segment.

That evening Sylvie checked into her hotel, the Warwick Inn. Prior to the check in she took
advantage of valet parking which the hotel provided free of charge. She handed the parking
attendant the car keys and he gave her a piece of paper which she slipped into her pocket unread
assuming it to be an acknowledgement of their possession of her car. Had she read it she would
have found that one side stated ‘for conditions see ticket’ while the other read:

Entry and use of car park is subject to parking conditions displayed at entrance and throughout
the car park and that Warwick Inn accepts no responsibility for loss or damage sustained to
motor vehicles, accessories, contents or for death or injury suffered to any person.

When Sylvie returned to unload the car boot after checking in, she noticed there was a slight
scratch on the bumper bar which wasn’t there before and some of her personal effects, namely
her prized Nikon camera and Ipod, were missing. Significantly the car door was open suggesting
that the parking attendant had not locked it when he parked the car, having left the car keys in the
ignition. She was particularly concerned about the scratch on the bumper bar. Being in a hurry
when she landed at Adelaide Airport, she had signed the rental agreement with Ertz without
reading it. The rental agreement stated the rental payable per day ($55), the rental period (4 days)
and the refundable deposit payable ($2000) should there be ‘any loss or damage to the vehicle
during the rental period’.

Advise Sylvie as to her contractual rights and obligations in relation to the loss of her
Nikon camera, her Ipod, and the ‘damage’ to the rental car for which Ertz has since
charged to her credit card account the sum of $2000 on a permanent basis.
P a g e | 22

Tutorial 11

Examination Revision (Part 2)

The following is a past exam for this topic. The 2019 exam will follow a similar structure. For
this tutorial students are expected to have attempted the below exam and come prepared to
discuss your answers with the class.

Problem Question:
Having completed her Law degree at Flinders University Maxine has decided to travel overseas
for a year before settling down to a full time job at her uncle’s law firm in the city. So, at the
beginning of November she placed an advertisement in the local newspaper in the following
terms:

House sitter wanted in the Adelaide CBD for 12 months: Applications are invited from
experienced house sitters to look after house, dog and car while the owner is overseas. The dog
(a cocker spaniel called Primrose) is to be looked after in accordance with the owner’s strict
instructions. In return, the successful applicant will receive rent free accommodation (gas and
electricity included). Prior experience in housesitting dogs essential. All applications must be
received no later than 30 November 2014.

Keen to get the rent free accommodation in the CBD, Joseph, a part time law student applied for
the position of house sitter on the terms specified in the advertisement. He sent a covering letter
to that effect along with a brochure in which past clients lauded his house sitting skills,
particularly when it came to dogs and cats. More specifically still Joseph claimed in that
brochure that ‘pets are looked after in accordance with the owner’s strict instructions, that
smoking is banned on the premises and drinking only allowed in moderation (no wild parties),
and that the house was kept spotlessly clean for the duration of the stay.’ In that brochure, Joseph
further claimed ‘that as proof of my sincerity I am prepared to pay a full month’s rent at market
prices should any of this turn out to be untrue. For further terms and conditions see
Joseph.housesitter.com.au. The website reiterated what Joseph said in the brochure and further
stated in small print: ‘In respect of any damage Joseph’s liability is limited to a maximum of 10
percent of the true market value of any loss or damage of whatsoever kind, howsoever
occasioned.’

While Maxine did not bother checking Joseph.housesitter.com.au, she was impressed by the
brochure and telephoned Joseph on the 3 December 2014 to tell him that he had the job. In so
doing she ignored an application from Ethel which arrived late, on the 1 December, because it
was initially delivered to the wrong address. On 1 January, the date of her departure for overseas,
Maxine gave Joseph a sheet of paper with a long list of instructions on how to look after
Primrose. In particular, she was to be bathed twice a week with the soap provided by the vet.
And Joseph did just that, followed her instructions to the letter – until he ran out of that soap.
Thinking it was no big deal he used ordinary soap to which Primrose was allergic. He
subsequently found this out when he took her to the vet. Fortunately, the loss was reversible, but
the treatment would be very expensive ($20,000), using a special cream imported from America
and even then it would take at least a year for Primrose’s hair to grow back.
P a g e | 23

The other calamity that befell Joseph during his first three months as house sitter related to a
‘small party’ that he threw for a group of friends to celebrate the fact that he had inherited a
small fortune from his grandfather who had just passed away. Unfortunately, the party was
publicized on Facebook and people turned up who were not invited. Damage was caused to
Maxine’s property due to some inebriated gatecrashers swinging from chandeliers (before being
ejected by the police). When Maxine learnt what happened to Primrose and the damage to her
antique chandeliers (that she had inherited from her grandmother), she was horrified. The final
straw was seeing Primrose without her hair on Facebook. There and then Maxine decided to cut
her overseas trip short and return to her house in Adelaide. Upon arrival she took custody of
Primrose and demanded that Joseph leave the house immediately. When he refused, she had him
ejected by the police for trespassing.

Maxine seeks your advice regarding her contractual rights in relation to three matters. First, she
wants to know whether she can be compensated by Joseph for the losses she has sustained,
particularly in relation to the cost of the treatment for Primrose, the damage to the chandeliers,
and the distress she has suffered as a result. Secondly, she wants to know if she was entitled to
eject Joseph from her house as he is threatening to sue her, claiming she had no right to tell him
to leave her house for another nine months. Thirdly, Ethel is threatening to sue her, claiming that
she has a contract to house sit Maxine’s house.

Advise Maxine in relation to each of those matters.

When Maxine returned to Adelaide, she decided to do something with the dilapidated mess that
was her backyard. She entered into a contract with Pools Ltd to install a pool and to landscape
the surrounds as a palm rockery. The contract provided for a total price of $30,000 for the job as
follows:
• $20,000 to be paid on completion of the pool, due 31 March 2015.
• $10, 000 to be paid on completion of the landscaping, due 30 April 2015.

Maxine told Pools Ltd how important it was to have the work done on time since it was her
birthday on 1 May, and she wanted to invite her friends around for a pool party to celebrate the
event.

By 31 March, the pool itself had been completed but, due to overwork, the filter system had been
installed but not yet properly hooked up. On that day she found an invoice from Pools Ltd for
$20,000, ‘as agreed payable by’, stuck in her letterbox.

By 30 April the pool surrounds had been cleared but no palm trees had been planted and the only
rocks on the site had been thrown over the fence by the neighbor’s kids. On that day she found a
note from Pools Ltd that ‘we will have the job finished by the end of the month’, stuck in her
letterbox.

Maxine has been advised by a reputable contractor that the filter will take no more than 5 hours
to finally hook up and would cost $300, while the surrounds will take at least another month and
will cost $5000 to bring up to the standard she wants.

Advise Maxine what, if anything, of the $30,000 account she is obliged to pay Pools Ltd.