LAWS1100 EXAM NOTES

CASUING HARM

1. Tort of NEGLIGENCE
ISSUE
Did the defendant owe a duty of care to the plaintiff?
LAW
The onus is on the plaintiff to establish they were owed a duty of
care. A duty of care will exist if the relationship between the parties
falls into an established category:
motorists owe a duty of care to other road users [Imbree v McNeilly],
doctors owe a duty of care to their patients [Rogers v Whitaker],
solicitors owe a duty of care to their clients [Hawkins v Clayton],
manufactures owe a duty of care to people who use their products [Donoghue
v Stevenson],
occupiers owe a duty of care to people who come onto their premises
[Australian Safeway Stores Pty Ltd v Zaluzna],
architects owe a duty of care to the people who occupy the buildings they
design [Voli v Inglewood Shire Council]
agents owe a duty of care to their principal [provincial Insurance Australia Pty
Ltd v Consolidated Wood Products Pty Ltd] [Chaudhry v Prabhakar] (must do
what a reasonable person/agent would do)
directors owe a duty of care to the company [corporations act 2001 (behave
like a reasonable person)]
employers owe a duty of care to their employees
If the relationship is not an established category, a duty of care will
exist if the plaintiff can establish that it was reasonably foreseeable
that the dependants act or omission could cause harm to someone
in the plaintiffs position and that the salient features of the case are
consistent with the existence of a duty of care.
Reasonably foreseeable
o neighbour principal discussed by Lord Atkins in Donoghue v
Stevenson owe a duty of care to people around them.
o Bourhill v Young: must be reasonably foreseeable that harm could
come to the plaintiff for there to be a duty of care (the motorcyclist and
the tram lady miles away that didnt even see the crash)
o only needs to be that a reasonable person in the defendants situation
would have foreseen the possibility of harm, and not that the particular
harm caused was foreseeable [chapman v hearse] it is reasonably
foreseeable that a driver might be involved in a car accident and that
someone else might stop to help them and that that person themselves
might be injured thus the driver owes someone who stops to help a
duty of care
Salient features
o The need for coherency in the law
o Conflicting duties of care

o The possibility of indeterminate liability

o The control the defendant has over the situation and the relative
vulnerability of the plaintiff [Modbury Traingle Shopping Centre Pty
Ltd v Anzil]
o The relative knowledge and experience of the parties
o The type of harm suffered by the plaintiff and any relevant moral or
ethical questions [Harriton v Stephens]
ISSUE
Was the duty of care breached?
LAW
To establish a breach of duty it must be shown that the defendant
failed to do what a reasonable person would have done in the
same circumstances.
The court will take into account:
the probability of harm: Bolton v Stone
the likely seriousness of the harm: Paris v Stepney Borough Council
the burden of taking precautions: Latimer v AEC
Note: An employer is vicariously liable for torts committed by their
employees in the course of their employment.
ISSUE
Was the harm caused by the breach of duty of care?
LAW
The plaintiff must establish:
the breach of duty was a necessary condition of the
occurrence of the harm (factual causation), and
it is appropriate for the scope of the liability of the defendant
to extend to the harm (scope of liability).
Apply the but for test, but for this action would the harm have
occurred?

2. TORT OF TRESPASS
Trespass is an actionable per se (by itself), it is not necessary to
establish loss or harm to bring action
Trespass to Land
ISSUE
Has the tort of trespass to land been committed?
LAW

The tort of trespass to land is committed if X interferes with Ys

exclusive possession of land, Xs interference is direct, Xs
interference is either intentional or negligent and there is no
consent by Y or lawful justification for the interference.
[kelsen v imperial tobacco co] [Bathurst city council v Saban]
Trespass to Goods
There are three torts of trespass of goods;
trespass to goods: a tort committed when one person interferes directly
with the personal property of another
Conversion: a tort committed when one person wrongfully deals with the
goods of another in a way that is inconsistent with their ownership or
rightful possession.
Detinue: a tort committed when one person wrongfully detains the goods
of another.
ISSUE
Has the tort of trespass to goods been committed?
LAW
The tort of trespass to goods is committed if X interferes with Ys
possession of goods, Xs interference is direct, Xs interference is
either intentional or negligent and there is no consent by Y or lawful
justification for the interference.
Trespass to the Person
BATTERY
ISSUE
Has the tort of battery been committed?
LAW
The tort of battery is committed if X causes some sort of physical
interference with the body of Y, Xs act is direct, Xs act is either
intentional or negligent and there is no consent by Y or lawful
justification for Xs act.
The plaintiff is not entitled to insist that no one ever touch them,
and that a certain minimal level of physical contact is an
unavoidable part of daily life [Collins v Wilcock]. [Rixon v Star City
Pty Ltd].
ASSULT
ISSUE
Has the tort of assault been committed?
LAW
The tort of assault is committed by X if, X causes Y to develop a
reasonable apprehension of imminent physical contact, Xs act is
direct. Xs act is either intentional or negligent and there is no
consent by Y or lawful justification for the act.
[stevens v Myers] [Tuberville v Savage] [ Rozsa v Samuels] [Hall v
Foncea]

FASLE IMPRISONMENT
ISSUE
Has the tort of false imprisonment been committed?
LAW
The tort of false imprisonment is committed if X causes Y to be
totally restrained, Xs act is direct. Xs act is either intentional or
negligent and there is no consent by Y or lawful justification for the
act.
DEFENCES TO THE TORT OF TRESPASS
Accident the interference was neither intentional nor negligent
[Stanley v Powell]
Consent the plaintiff has either expressly or by implication
voluntarily consented to the trespass [McNamara v Duncan]
Necessity the trespass was necessary to protect life, land or goods
from imminent and real harm [Wilson v Pringle]
Self-defence the trespass (usually to the person) was reasonably
necessary to protect the defendant or another from imminent
physical aggression by the plaintiff, and was proportional to the
threat [Fontin v Katapodis]
Defence of property the trespass (usually to the person) was
reasonably necessary to protect the defendants land or goods from
imminent harm by the plaintiff and was proportional to the threat
[Norton v Hoare].

3. TORT OF NUISANCE
PRIVATE
ISSUE
Has the tort of private nuisance been committed?
LAW
The tort of private nuisance has been committed by X if all of the
following requirements are satisfied; X interfers with Ys use and
enjoyment of private land, Y has an interest in that land (they are
the owner or the tenant), Y suffers actual harm or damage, Xs
interference is indirect, Xs interference is either intentional or
reckless and Xs interference is sustained and unreasonable.
Examples of private nuisance include:
Destruction of the plaintiffs vegetation by noxious fumes [St Helens Smelting
Co v Tipping]
Blocking of a watercourse causing flooding to the plaintiffs property [Thorpes
Ltd v Grant Pastoral Co Pty Ltd]
Excessive noise by the defendant [Andreae v Selfridge and Co Ltd]
Use of the defendants premesis for prostitution [Thompson-Schwab v Costaki]
Floodlights in the defendants backyard [Raciti v Hughes]

Vibration from the defendants factory [Sturges v Bridgman]

Factors taken in to account to assess if the interference is

unreadobable:
The severity of the interference [Andrae v Selfridge and Co Ltd]
The duration and time of day of the interference [Wherry v KB Hutcherson
Pty Ltd]
The location of the plaintiffs property (residential/industrial area) [Sturges v
Bridgman]
Whether the plaintiff is abnormally sensitive [Robinson v Kilvert]
Whether the interference is deliberate or malicious [Hollywood Silver Fox
Farm Ltd v Emmett]
Whether the defendant tool precautions to minimise the interference [Painter v
Reed]
PUBLIC
ISSUE
Has the tort of public nuisance been committed?
LAW
The tort of public nuisance is committed if X interferes with Ys use
and enjoyment of public land, Y suffers actual harm or damage over
and above that suffered by members of the public generally [Walsh
v Ervin], Xs interference is indirect, Xs interference is either
intentional or reckless and Xs interference is sustained and
unreasonable.
[Silservice v Supreme Bread Pty Ltd]
DEFENCES TO THE TORT OF NUISANCE
Consent by the plaintiff the plaintiff consented to the nuisance,
either expressly or by implication [Kiddle v City Business Properties
Ltd]
Statutory authority legislation exists that permits the defendant to
engage in the harmful conduct [Cohen v City of Perth]
Contributory negligence the harm suffered by the plaintiff was at
least partially the result of the plaintiffs own carelessness.

4. TORT OF DEFAMATION
ISSUE
Was the tort of defamation committed?
LAW
Civil Law (wrongs) Act s138: The plaintiff must establish that the
defendants statement about the plainfiff was defamatory [BjelkePeterson v Warburton], the defendants statement indetified the
plaintiff and the defendants statement was published to a third
party.
Published refers to merely communicated in any manner.

The plaintiff must be living (the dead cannot be defamed) and a

corporation can only sue for defamation if it is a not for profit
organisation or has fewer than 10 employees.
DEFENCES (all legislated, civil law (wrongs) act s135-139) pg 180
text
Justification
Contextual truth
Absolute privilege
Publication of public documents
Fair reporting of matters of public concern
Qualified privilege
Honest opinion
Innocent dissemination
Triviality
TORT OF DECEIT 209
TORT OF PASSING OFF 210
TORT OF INTIMIDATION 211
MAKING DEALS
CONTRACTS
ISSUE
Is the contract legally enforceable?
LAW
A contract will be legally enforceable if there is an agreement
between the parties, the parties intended to create legal relations
and each party has provided consideration.
An agreement will be formed if one person (the offeror) has made
an offer; another person (the offeree) has accepted the offer and the
offered have communicated their acceptance of the offer to the
offeror.
[Carlill v Carbloic Smoke Ball Co]
[Goldsborough Mort & Co Ltd v Quinn]
[Ramsgate Victoria Hotel Co Ltd v Montefiore]
invitation to treat: [Carlill v Carbloic Smoke Ball Co]
collateral contract: [Smythe v Thomas]
communication of acceptance: [powell v Lee] [R v Clarke]
postal rule: as soon as the letter is posted the agreement is formed
[Adams v Lindsell]
An offeror is entitled to revoke their offer at any time prior to
acceptance.
Intention
Social or domestic agreements are not usually intended to be legally
binding [Balfour v Balfour] [Wakeling v Ripley]

Commercial or business agreements are presumbed to be intended

to be legally enforced [Rose & Frank Co v JR Crompton & Brothers
Ltd]
Mere puff: not intended to be enforceable [Carlill v Carbloic Smoke
Ball Co]
An agreement is not a contract unless both parties to the agreement
have paid, or promised to pay, a price. The contribution of each
party to the agreement is called consideration. Consideration is the
price for which the promise of the other is bought.
Consideration need not be adequate: [Thomas v Thomas] pg 247
Consideration must be sufficient:
A vague promise is insuffieicent [white v Bluett] [Placer Develpmnet
Ltd v Commonwealth]
If a promise in a statement is given after an act has been
performed, this will be considered as past consideration. Past
consideration is generally not sufficient. Therefore a promise given
in exchange for past consideration is generally not enforceable:
Roscorla v. Thomas.
If the consideration was paid at the request of the person who
subsequently made the promise, the consideration is not past
consideration and is legally enforceable. [Ipex Software Services Pty
Ltd v Hosking]
A prior legal obligation: if the price paid was something the
promisee was already legally obliged to do it is insufficient
consideration [Stilk v Myrick]. If something is done beyond their
legal or contractual duty the consideration becomes sufficient
[Hartley v Ponsonby]. [Foakes v Beer].
However, if a statement is made by one party (the promisor) to the
other party (the promisee) before the promisee provides
consideration, the promisees subsequent consideration will be
considered as good consideration for the statement and the
statement is enforceable: Dunlop Pneumatic Tyre v. Selfridge.
Promissory estoppel
The principle that a promise will be legally enforceable even if the
promise has not provided consideration for the promise, as long as
certain requirements are satisfied. The promisor intended the
promisee to rely upon a clear and unambiguous promise, the
promise has in fact relied upon the promise by changing their
circumstances, and if the promisor does not keep their promise, the
promisee will suffer a material disadvantage, it would be
unconscionable (unfair) for the promisor to break their promise.
Preventing a party enforcing their contractual rights [central
London property Trust Ltd v High Trees House Ltd].
Prevent a party denying that a contract exists [Waltons Stores
(interstate) Ltd v Maher].
Unilateral mistake

A contract will be void due to a unilateral mistake if one of the

parties has made a mistake that refers to a fundamental aspect of
the contract and the other party has sought to take advantage of
the mistake.
[Taylor v Johnson] [Cundy & Lindsay]
Common mistake
A contract will be void due to common mistake if the agreement
between the parties is conditional upon the truth of a belief held by
both parties and at the time the agreement was formed, the belief
was incorrect [Leaf v International Galleries]
Mutual mistake
A contract will be void due to mutual mistake if the agreement
between the parties is conditional upon the truth of a belif held by
both parties and the belief held by each party is a different belief.
Other reasons a contract may be void:
Duress 260
Undue influence 262
Unconscionability 264
Lack of capacity 266
Lack of legality270
Enforcing Deals
Terms of contract = express terms + terms implied by the courts +
statutory terms
ISSUE
Is [it] an express term of the contract?
LAW
The term will be an express term if it is in a written contract signed
by the party [LEstrange v F Graucob Ltd] or the term was brought
to the attention of the party by reasonable notice before the
contract was formed [Thornton v Shoe Lane Parking Ltd] [Causer v
Browne]. Terms can be incorporated into a contract by referring to
them and telling the other party where they can be found. However,
if the term is particularly onerous, the party seeking to rely upon it
is obliged to make extra effort to bring it to the other partys
attention for it to be incorporated into the contract [Interfoto Picture
Library Ltd v Stiletto Visual Programmes Ltd]
According to the parol evidence rule, where the terms of an
agreement are contained in a written contract, there is a
presumption that the document contains all the terms of the
agreement, and neither party is allowed to introduce evidence of
oral statements that would add to, vary or contradict the written
contract [Mercantile Bank of Sydney v Taylor].

If the verbal representation or promise was intended to be a term of

the contract, it can be decided that the complete contract consists
of the written agreement plus the verbal representation or promise,
and the parol evidence rule will not apply [Van Den Esschert v
Chappell].
The court will also allow verbal evidence to be admitted in order to:
Establish that a written contract is invalid or unenforceable for some reason
Establish that one paert is an agent for someone else
Incorportat common trade usage not reffered to in the written contract or
Explain technical terms or an ambiguity in the contract.
If a representation or promise is not a term of the contract, it is not
a breach of the contract if the representation is false or the promise
is broken. However, the representation or promise may still be
enforceable od the party that has suffered harm can establish that
the false representation or broken promise was:
A breach od a collateral contract
A misrepresentation
A contravention of the Australian Consumer Law (ACL)
ISSUE
Is it an implied term?
LAW
The court will imply a particular term into a contract if the term is
fair and reasonable, the term is necessary to make the contract
viable, the term is so obvious that it goes without saying, the term
is able to be clearly expressed and the term is consistent with the
express terms.
Terms may be implied into a contract as a result of custom or trade
usage as the way things are usually done in a particular region,
trade, industry or profession [Hutton v Warren].
The term may be a universal implied term such as both parties will
cooperate in the performance of the agreement [Perri v Coolangatta
Investments Pty Ltd]. Good faith: both parties will exercise their
contractual rights honestly and reasonably rather than capriciously
or for extraneous purposes [Burger King Corp v Hungry Jacks Pty
Ltd]
Statutory terms
Contracts for the sale of goods Sale of Goods Act 1896
ISSUE
Is the contract for sale of goods?
LAW
A contract for the sale of goods is a contract where the seller
transfers, or agrees to transfer, the ownership of goods to a buyer in
return for monetary price [Sale of Goods Act (QLD) s4]. Goods are
tangible items of personal property and do not include land,
buildings and fixtures, intellectual property rights, shares and debts
or services [Robinson v Graves].

Ownership: if the ownership of the goods is not transferred it is not

a contract for the sale of goods.
Monetary price: if the goods are transferred for free or in return for
other goods (ie. Barter or exchange), it is not a sale of goods.
ISSUE
Is the contract for sale of goods void?
LAW
The sale of goods legislation implies into the contract statutory
terms relating to:
Title
Description
Quality
Fitness
Sample
Ownership
Payment
Delivery and
Acceptance
Title: three implied statutory terms [Sale of Goods Act QLD s15]:
The seller has the right to sell the goods
An implied warranty that the buyer shall have and enjoy quiet possession of
the goods
An implied warranty that the goods shall be free from charge or encumbrance
in favour of any third party not declared or known to the buyer before or at the
time when the contract is made.
If at the time of delivery the seller is not the owner of the goods (the
goods were stolen) the seller will have breached the statutory term
regarding title [Rowland v Divall].
Implied warranty of quiet possession means that the buyer will be
left alone to use and enjoy the goods, if this is interfered with
through the seller trying to take back the goods or by a third party
repossessing the goods the seller has breached the statutory term.
Description: A statutory term regarding the correspondence of the
goods with the description is implied into the contract. The
description may be in writing, made verbally by a salesperson or
may even be an image on the packaging or in the advertisement. If
the actual goods do not correspond with the description of the
goods, the seller will have breached that statutory term regarding
description [Reynolds v Taylor].
Quality: there is an implied condition that the goods shall be of
merchantable quality. Sale of Goods Act s16. The term is not
implied in relation to defects that the buyer should have noticed
when they inspected the goods.
The seller will have breached the statutory implied term regarding
merchantable quality if all of the following requirements are
satisfied:
The contract is a contract for the sale of goods

The buyer has relied upon a description of the goods

The seller normally sells goods of that description
The goods are not of merchantable quality
The buyer has not examined the goods or, if they have examined the goods,
the defect is not one that would have been revealed by the examination.
[David Jones Ltd v Willis]
Fitness: there is an implied promise by the seller that the goods will
be fit for their purpose, provided:
At the time the contract was formed, the buyer, expressly or by implication,
made the intended purpose known to the seller. If the intended purpose is
obvious, because the goods only have on purpose, the buyer does not have to
make the intended purpose explicit [Preist v Last].
The buyer relied upon the sellers skill and judgement. This is presumed if the
buyer is a consumer; if they are abother business that knows as much or more
than the seller this requirement is not satisfied [Gibbert v Forwood Products
Pty Ltd].
The seller normally deals in goods of this description.
A seller will have breached the statutory implied term regarding
fitness for purpose if:
The contract is a contract for the sale of goods
The seller normally sells goods of that description
The buyer has either expressely or by implication told the seller the purpose
for which they were buying the goods
The buyer has relied on the sellers skill and judgement
The goods are not fit fot the stated purpose
The buyer has not requested the particular goods by their patent or trade name
[Grant v Australian Knitting Mills Ltd]
Note: The statutory terms for fitness and quality are only implied if
the seller normally deals with these goods, otherwise caveat emptor
(let the buyer beware) is the guiding principle.
Sample: implied promise that
The bulk of the gods will correspond with the sample
The buyer will not be deemed to have accepted the goods until they have has
an opportunity to compare the bulk with the sample and
The bulk will not have any defects that are not apparent on an examination of
the sample.
Note: the statutory terms protescting the buywe implied byt eh sale
of goods legislation can be expressly overridden by the other terms
of the contract [LEstrange v F Graucob Ltd]. ACL cannot be
overridden or excluded.
Ownership: For specific goods owbership passes at the time the
contract is formed this car [Tarling v Baxter]. This is the general
rule.
Page 298 lists 4 excpetions to this ownership rule.

Importance of ownership transfer

Risk passes with ownership
o If one party causes the delivery to be delayed the goods are at the risk
of that party
o Is the goods belong to one party but are in the possession of another,
the party in possession must take reasobable care of them.
One cannot pass what one does not have; nemo dat rule or nemo dat quod non
habet. Page 299
Delivery: the act of handing the possession of goods to the buyer.
Unless otherwise agreeeded:
The seller bears the expense of putting the goods into a deliverable state
The place for delivery is the sellers place of business, or the sellers residence
When the seller is obliged to send the goods to the buyer, but no time for
sending them is fixed, the seller is obliged to send them within a reasonable
time
The seller must deliver the exact quantity of goods ordered by the buyer and
The buyer is not obliged to accept delivery in instalments.
Sale of goods act qld ss31-5
Payment: payment by the buyer and delivery from the seller are to
occur at the same time
Acceptance: the buyer will be deemed to have accepted the goods
if:
The buyer intimates to the seller that thwy buyer has accepted them
The goods hace been deliveredto the buyer and the buyer does any act in
relation to them that is inconsistent with the ownership of the seller or
After the lapse of a reasonable time, the buyer retains the goods withoit
intimating to the seller yhat the buyer has rejected them.
Once the buyer has accepted the goods, the buyer cannot then
terminate the contract for breach by the seller of any of the express
or implied terms of the contract.
ISSUE
Is the contract void under non est factum?
LAW
A written contract will be void and unenforceable against the person
who signed it if non est factum is satisfied: the person did not read
the contract because they are blind, or illiterate, or cannot read
English, or they were encouraged not to read the document as the
result of a misleading representation by the other party and they
were mistaken about the fundamental nature of the document they
were signing [Petelin v Cullen] [Le Mans Grand Prix Circuits Pty Ltd v
Iliadis].
ISSUE
Does the term form a collateral contract?
LAW

Although extrinsic evidence is not admissible under the parol

evidence rule to add to, vary or contradict the terms of a written
instrument, such evidence may be admitted to show the existence
of a collateral contract.
For a collateral contract to be enforceable there are two
requirements that must be satisfied (De Lassalle v Guildford):
1. There is no inconsistency between the collateral contract and
the main contract.
2. The main contract would not have been entered into in the
absence of the earlier statement, i.e. it has to be established
that the main contract was made in consideration of the
making of the promise in the collateral contract.
Since it is the collateral contract and not the main contract that has
been breached, the other party is not entitled to terminate the main
contract. They may be entitled to damages and equitable remedies
for breach of collateral contract.
ISSUE
Was the statement a misrepresentation?
LAW
A misrepresentation is a false statement of fact made by one person
to induce another to enter into a contract that does in fact induce
that person to enter the contract. It must be a statement of fact not
a promise as a promise is not a representation and thus cannot be a
misrepresentation if it is false [Edgington v Fitzmaurice]. Three
types of misrepresentation:
Fraudulent misrepresentation\
o Made knowingly
o Without belief in its truth, or
o Recklessly (the person did not care whether the statement was true or
false)
o [Derry v Peek]
Negligent misrepresentation
o Is negligent if made in a breach of duty of care
o Tort of negligence (and same damages)
o [Esso Petroleum Co Ltd v Mardon]
Note: the right to terminate the contract based on fraudulent or
negligent misrepresentation will be lost if the plaintiff does not act
promptly upon discovering the truth of the matter, or does anything
subsequent to discovering the truth that is inconsistent with an
intention to terminate the contract.
Innocent misrepresentation
o No damages entitled (except ACT and SA)
o Contract can be terminated [Whittington v Seale-Hayne]
DISCLAIMERS

NOTE: always first establish that the disclaimer is a term of the

contract before analysing how it will be interpreted.
ISSUE
Is the disclaimer a term of the contract?
LAW
A disclaimer is only a term of the contract if:
it is a term in a written and signed contract; or
it is brought to the attention of the other party by reasonable
notice before the contract is formed; or
it is implied into the contract as a result of prior dealing.
[Curtis v Chemical Cleaning & Dyeing Co]
ISSUE
Will the disclaimer be functional?/How will the disclaimer be
interpreted?
LAW
Disclaimers in consumer contracts are interpreted contra
proferentum, against the interests of the party that included the
disclaimer. Narrow interpretation selected where possible.
[White v John Warwick & Co Ltd]
[Sydney City Council v West]
If the disclaimer is contained in a contract between two businesses
the court will presume that the parties had equivalent bargaining
power and will interpret the disclaimer neutrally and without
favouring either party [Halton Pty Ltd v Stewart Bros Drilling
Contractors Pty Ltd].
Unenforceable terms
terms limiting the juristicttion of the courts
o a term that states that in the event of one party breaching the contract
the other party is not permitted to commence legal proceedings is
unlikely to be recognised or enforced [Scott v Avery]
terms imposing an unreasonable restraint on trade
o prohibiting the seller of a business starting another in competiton to the
one they have just sold (these are sometimes allowed due to the
necseeity of protecting a legitimate investment, confidential product or
consumer information, it cannot, however, be used merely to
discourage competition)
o prohibiting employees working for competitors (rarely enforced due to
difference in bargaining power)
o unreadonable is considered in terms of time, geographical area and
scope of business.
[Forster & Sons Ltd v Suggett]
[Nordenfelt v Maxim Nordenflet Guns and Ammunition Co Ltd]
REMEDIES [can be included in the conclusion] pg 312
Recission 312
Complete failure to preform

 Partial failure to preform

Condition v warranty
Intermediate terms
Loss of right to payment
Damages 317
direct and indirect loss
mitigation
Equitable remedies 319
specific performance
injunction
ISSUE
Is the contract frustrated?
LAW
A contract will be frustrated if:
a supervening event has made the performance of the contract either
completely impossible or at least impossible to preform in the way originally
envisaged by the parties
neither party caused the supervening event
the contract did not provide for the supervening event either expressly or by
implication
it would be unjust to compel either party to proceed with the contract.
Examples of supervening events:
Subject matter is unexpectedly destroyed [Taylor v Caldwell]
An unexpected change in the law makes the performance of the contract
illegal [Esposito v Bowden]
The anticipated event that gave rise to the contract in the first place does not
occur [Krell v Henry]
Dramatic change in conditions for one party [Codelfa Constructions Pty Ltd v
State Rail Authority (NSW)]
Note: it is necessary to show that due to the event the
performance will be substantially different, not just more
expensive or more difficult [Davis Contractors Ltd v Fareham
Urban District Council]

Dealing With Consumers and Competitors (Chapter

8)
Consumers
Issue
When is a person considered a consumer under the ACL?
Laws
A person is a consumer if they have acquired goods or services
Of a kind ordinarily acquired for personal, domestic or household use or
consumption and
That have not acquired for the purpose of re-supply or for use in a
manufacturing process
The Australian Consumer Law protects consumers by prohibiting
1. Misleading and deceptive conduct
2. Unconscionable conduct
3. Unfair terms
4. Various specific prohibitions
ACL is administered and enforced by the Australian Competition and
Consumer Commission
1. Misleading or Deceptive Conduct
Issue
Has the person engaged in misleading or deceptive conduct?
Laws
A person must not, in trade or commerce, engage in conduct that is
misleading or deceptive or is likely to mislead or deceive (ACL s18).
1: A business will engage in conduct if it makes a statement or a
claim or a promise, perform and action,, or refuse to do any of these
things.
Henjo Investments v. Collins Marrickville
2: in trade or commerce is defined in ACL s2 as meaning trade or
commerce within Australia or trade or commerce between Australia
and places outside Australia.
Durant v. Greiner
3: Mislead is usually interpreted as simply meaning to lead astray
or to lead into error and deceive; is interpreted as to cause to
believe what is false. In deciding whether the conduct is misleading
or deceptive the court will use an objective test.
Taco Company of Australia v. Taco Bell Pty Ltd
To establish a contravention of ACL s18 it need only be shown that a
small percentage of the target audience is likely to be misled or
deceived. However, a small amount of intelligence on the part of the
target audience can be assumed.
Note:

A statement that is literally true can still be misleading or deceptive

A statement that is not literally true is not necessarily misleading or
deceptive.
2. Unconscionable Conduct
Issue
Has a business engaged in unconscionable conduct?
Laws
A business will engage in unconscionable conduct if it unfairly takes
advantage of a superior bargaining position or of another persons
special weakness or disadvantage. There are two types of
unconscionable conduct prohibited by the ACL:
1. Unconscionable conduct generally (s20)
2. Unconscionable conduct when supplying goods or services to, or acquiring
goods or services from, a person other than a listed public company (s21)
1. A person must not, in trade or commerce, engage in conduct that
is unconscionable, within the meaning of the unwritten law from
time to time.
Unconscionable within the meaning of the unwritten law means
unconscionable conduct as defined under case law
2. Section 21 of the ACL states that a person must not, in trade or
commerce, in connection with
a) the supply or possible supply of goods or services to a person (other than a
listed public company) or
b) the acquisition or possible acquisition of goods or services from a person
(other than a listed public company)
engage in conduct that is, in all the circumstances, unconscionable.
3. Unfair Terms
Issue
Is a term of the consumer contract unfair?
Laws
A term of a contract will be unfair in contravention of ACL s23 and
therefore void if:
1. The contract is a consumer contract
2. The contract is a standard form contract
3. The term is unfair
1: A consumer contract is defined in ACL s23(3) as a contract for the
supply of goods, services or an interest in land to an individual
whose acquisition of the goods, services or interest is wholly or
predominantly for personal, domestic or household use or
consumption.
2: A standard form contract is usually understood to be a contract
the terms of which are not negotiated by the parties but are
provided by the business to the consumer on a take it or leave it
basis.
3: According to ACL s24(1), a term of a consumer contract is unfair
if

a) It causes a significant imbalance in the parties rights and obligations arising

under the contract
b) It is not reasonably necessary to protect the legitimate interests of the business
c) It would cause detriment to the consumer
Director of Consumer Affairs Victoria v. AAPT Limited
*Exemptions to Unfair Terms exist
4. Specific Prohibitions
A business must not make false representation:
That its goods are of a particular standard, quality, value, grade, composition,
style or model or have had a particular history or particular previous use
That its goods are new
That is has a sponsorship, approval or affiliation it does not have
With respect to the price of its goods or services
Concerning the availability of facilities for the repair of its goods or of spare
parts for its goods
Concerning the place of origin of its goods
Concerning the existence, exclusion or effect of any condition, warranty,
guarantee, right or remedy (s29)
A business must not engage in bait advertising (s35)
A business engages in bait advertising when it advertises a product at a price
that is likely to attract buyers to its premises when it knows or should know
that it is likely to run out of stock very quickly
A business must not accept payment from a buyer when it either
does not intend to supply the product or it knows or should know
that it will be unable to provide the product to provide the product
within the specific time or a reasonable time (s36).
Inertia Selling is sending an unsolicited product to a person and
then pressuring the person to pay for that product. A business must
not claim a right to payment unless it reasonably believes that it in
fact has a right to payment (s40).
If a business has sent an unsolicited product to a person, the
person:
Does not have to pay for it and
Is not liable for the loss of or damage to the product unless the loss of damage
results from a willful and unlawful act
After the expiry of a certain period, the product becomes the
property of the person, free of charge.
Supplied notice period is 1 month
No notice period is 3 months
A Pyramid Scheme is a type of product distribution scheme
whereby a participant makes a profit or receives a commission for
the sale of each product to a buyer; the participant is also rewarded
for the introduction of other participants to the scheme, usually by
receiving a commission for each new participant.

A business is prohibited from participating in, or inducing other to

participate in, a pyramid scheme (s44)

Consumer Guarantees
The ACL implies into contracts for the sale of goods to customers
guarantees that:
The seller has title (s51)
The consumer will have undisturbed possession (s52)
There are no undisclosed securities (s53)
The goods are of acceptable quality (s54)
The goods are fit for any disclosed purpose (s55)
The goods correspond with their description (s56)
The goods correspond with any sample or demonstration model in quality,
state or condition (s57)
The manufacturer will ensure that repair facilities and spare parts are
reasonably available (s58)
The manufacturer will comply with any express warranties given in relation to
the goods (s59)
The ACL implies into contracts for the supply of services to
consumers guarantees that:
The service will be rendered with due care and skill (s60)
The services, and any product resulting from the services, will be fit for any
disclosed purpose (s61)
The services will be supplied to the consumer within a reasonable time (s62)
Consequences
SEE LECTURE SLIDES
Competitors SEE LECTURE SLIDES

Starting a Business (Chapter 10)

Sole Traders Unlimited Personal Liability
Issue
Is the business as partnership?
Laws
A partnership is the relation which subsists between persons
carrying on a business in common with a view of profit. If each of
the elements of this definition is satisfied a partnership has been
formed.
Persons: At least 2 persons are required to form a partnership and there can be
no more than 20 partners (subject to certain exceptions)
Carrying on a business: There must be some continuity or repetition of
trading activities
o Smith v. Anderson
In common: Each person must be acting on behalf of the others as well as on
their own behalf
o Degiorgio v. Dunn
With a view of profit: The requirement is that they are seeking to make a
profit. They may make a loss in the beginning but they will still be considered
a partnership.
Mutual Liability each partner is both the principal and the agent
of the other partners. Each partner has unlimited personal liability
for the debts of the partnership.
Issue
Is the business a company?
Laws
A corporation is an artificial legal person separate from its owners
and able to make contracts, own property and be a party to
litigation in its own name. A company is a type of corporation; one
incorporated under and regulated by the Corporations Act 2001.

A company is created by registration by the Australia Securities and

Investments Commission. A company must have
At least one owner or member (shareholder)
At least one director, who is responsible for managing the companys business
It is possible for the director and the shareholder to be the same
person, although in larger companies there is a separation of
ownership and control.
Limited Liability the owners are not liable for any debts or other
obligations of the company beyond the subscription price of their
shares

Issue
Is the franchisor liable for the actions of the franchisee?
Laws
A Franchise is a contractual arrangement with a franchisor according
to which the franchisor permits the franchisee to,
Use the franchisors business name and trademark
Manufacture or sell the franchisors products
Use the franchisors business system
In return the franchisee pays to the franchisor a regular fixed fee
and/or a percentage of their income or profits.
The key feature of a franchise arrangement is that the franchisor
and the franchisee are not usually partners, employer and
employee, or principal and agent. Instead, they are separate
contracting parties who are generally nor responsible for each other
actions. A franchisor may be liable for harm caused by the
franchisee to another if:
The harm was a result of compliance with the franchisors system
The franchisor exercises such extensive control over the franchisee that the
franchisee is the franchisors agent
Leasing the Premises
A lease is a contract with the property owner according to which the
property owner grants the business owner exclusive possession of
the leased property in return for the payment of rent and
compliance with other obligations in the lease. The three most
important characteristics of a lease are:
1. Exclusive possession
2. Certainty of duration
3. Form and registration
Franchising Code of Conduct

The Franchising Code of Conduct seeks to ensure that a franchise is

sufficiently informed about a franchise before entering into it by:
Imposing significant disclosure obligations by the franchisor
Granting the franchisee a 7 day cooling off period
Prohibiting certain terms in the franchise agreement
The code also seeks to provide a cost effective dispute resolution
scheme.
Shop Trading Hours
Under the Trading (Allowable Hours) Act:
Monday to Saturday trading hours are restricted
Sunday trading is prohibited outside of major towns and tourist precincts
A shop may be exempt from restrictions due to its size, location or
goods it sells
Setting up a Website
The holder of a domain name must surrender that domain name if:
The domain name is identical or confusingly similar to a trade mark
The domain name holder has no legitimate interest in the name
The domain name has been registered and is being used in bad faith

Business Ownership and Employment (Chapter 12)

Issue
What are the rights and responsibilities of a partner?

Laws
A partnership is two or more persons carrying on a business in
common with a view of profit. In a partnership, the partners have
mutual liability. This means that each partner has:
1. Express authority
2. Implied authority
3. Apparent authority
to act on behalf of the other partners. Each partner has unlimited
personal liability for the debts and obligations of the business.
1. Express authority of each partner is the authority expressly granted by the
other partners.
2. Partners have implied authority to act on behalf of the other partners in doing
all the usual things that are necessary to carry on the business of the
partnership, including authority to
a. Buy and sell trading stock
b. Hire employees
c. Borrow money and charge the partnership assets
3. A particular party may have apparent authority to act on behalf of the other
partners. The other partners will be liable for the actions of a partner relating
to the partnership business, including debts incurred by a partner and torts
committed by a partner unless,
a. The partner was not actually authorized to undertake the action on the
other partners behalf

b. The person with whom the partner was dealing either knew that the
partner was not authorized or did not know that the person was a
partner
Construction Engineering (Aus) Pty Ltd v. Hexyl Pty Lt
In deciding whether or not a partner was engaged in the usual
business of the partnership the court will consider:
What the usual business of the partnership actually is
What transactions a partnership of that kind would usually engage in
Mercantile Credit Co Ltd v. Garrod
Even if the transaction in question falls within the business of the
kind carried on by the firm, the other partners will only be liable if
the business was carried on in the usual way.
Goldberg v. Jenkins & Law
Joint liability means that each partner is liable for the whole amount,
and that the partners must be sued collectively for the debt to be
recovered or the obligation enforced.
Kendall v. Hamilton
The relationship between partners is a fiduciary one in addition to
being a contractual one. This means that each partner is obliged to
act in good faith for the common good of the partnership. According
to common law, each partner must:
Not profit personally from their position or from information gained as a result
of that position
Not put themselves in a position where there will be a conflict of interest
without keeping their partners informed
Fully disclose to the other partners all matters likely to affect the partnership
Law v. Law
Account for any private profits made without the consent of the other partners
as a consequence of the above
Birtchnell v. Equity Trustees, Executors and Agency Co Ltd
Not compete with the partnership
Chan v. Zacharia
Directors and Shareholders
One of the distinguishing features of a large company is the division
of decision-making responsibilities between the board of directors
and the shareholders in general meeting.
The directors have the power to generally manage the business of
the company, and the shareholders are only entitled to vote on
limited matters.
Issue
Is the business managed and controlled appropriately?

Laws
Proprietary companies must have at least one director, and public
companies must have at least three directors. A director of a
company must:
Be an individual and not a company
Be at least 18 years old
Not be disqualified
Executive directors are involved in the full-time management of the
company and are employees of the company (eg. CEO, CFO)
Non-executive directors are not involved in the full-time
management of the company and are not employees of the
company
When the board acts collectively its decisions are the decisions of
the company. An individual director can have:
Express actual authority
Implied actual authority
Apparent actual authority
to act on behalf of the company.
Corporate contract pg. 617
Directors duties pg. 618-619
Issue
What is the role of shareholders in a business?
Laws
All companies must have at least one owner or member. Most
companies are limited by shares, therefore most company
members are shareholders. Each shareholder is a part-owner of the
company. Shareholders have
1. Voting rights
2. Distribution rights
3. Rights to receive information (eg. Financial reports)
1. Shareholders generally have the right to vote at general
meetings of the company
2. Distributions by companies to shareholders can be in the form of
dividends, a return of capital, or a share in the companys assets on
winding up, if there is a surplus
3. Rights to receive include:
the right to inspect the companys financial records
the right to inspect the minutes of meetings of the company
the right receive annual financial reports
Decision making power is exercised by shareholders at general
meetings. Public companies are required to hold an annual general
meeting at least once in every calendar year. Companies may also
hold extraordinary general meetings and class meetings.

The types of decisions on which shareholders are usually entitled to

vote include:
decisions relating to the structure or constitution of the company
decisions relating to the composition of the board of directors
decisions to veto certain transactions, including related party transactions by
public companies
the decision to initiate a shareholders voluntary winding up
A shareholder who is dissatisfied with the way the company is being
managed may be entitled to:
commence legal action against the company if they can establish oppressive
conduct
seek an injunction to stop a director, shareholder or other person breaching the
Corporations Act
bring a statutory derivative action in the event of a breach of duty by a director

Employing Workers
Issue
What is the contract with a particular worker?
Laws
It is very important to be clear about whether a contract with a
particular person is:
1. A contract of service the worker is an employee and the business is an
employer
2. A contract for services the worker is an independent contractor and the
business is a principal
The traditional test to determine this is the control test, where if the
person paying for the services has the right to tell the worker not
only what to do but how to do it, the worker is an employee.
Narich Pty Ltd v. Commissioner for Pay-roll Tax
However, today courts have acknowledged that while the degree of
control over the worker is an important factor to consider, it is not
the only factor.
Hollis v. Vabu Pty Ltd
The courts will consider:
The nature of the workers tasks

How the worker is paid

Who sets the hours of work
Who provides and maintains the tools
Whether the worker is authorized to delegate

Issue
What are the duties and obligations of employers and employees?
Laws
An employer owes an implied duty to their employees to provide for
their safety, i.e. to:
Employ content and qualified co-workers
Provide a safe place of work
Exercise reasonable acre in the supervision of the place of work
An employee owes the employer an implied duty to faithfully and
obediently carry out the tasks that are assigned to them, and must
not:
Disclose the employers trade secrets and other confidential information
Help the employers competitors
Conceal relevant information from the employer
Take advantage of information and opportunities for their personal benefit
Australian Telecommunications Commission v. Hart
National Employment Standards pg. 635
National Minimum Wage pg. 637
Awards pg. 636
Tax and Superannuation pg. 638
Issue
What are enterprise agreements?
Laws
Employers and employees are encouraged to negotiate agreements
collectively and enter into enterprise agreements. In most cases an
enterprise agreement will be made between an employer and some
or all of their employees. All enterprise agreements must be
approved by Fair Work Australia before the commence operation.
Fair Work Australia will apply the Better Off Overall Test to ensure
that each employee covered by the agreement is better off overall
in comparison to the relevant award.
Issue
Is the employer responsible for the health & safety of
employees/other people?
Laws
The employer must take all reasonably practicable steps to protect
the health and safety at work of their employees. They also owe a

duty to other people at or near the workplace such as suppliers,

visitors, members of the public, and trades people to ensure that
they are not exposed to risk to their health and safety.
The term reasonably practicable means that which is, or was at a
particular time, reasonably able to be done in relation to ensuring
health or safety, taking into account and weighing up all relevant
matters including:
The likelihood of the hazard or risk occurring
The seriousness of the risk
What the employer knows, or ought reasonably to know, about the hazard or
the risk, and ways of eliminating or minimizing the risk
The availability and suitability of ways to eliminate or minimize the risk
Issue
Is the employer liable to the employees?
Laws
Workers compensation legislation provides for the compensation
and rehabilitation of employees who suffer work-related injuries.
At common law, if an employee is injured in the course of their
employment they have a right to seek compensation from their
employer.
The workers compensation legislation requires each employer to
obtain workers compensation insurance from a licensed insurer
covering them for liability for such claims. If they fail to ensure all of
their employees, they will be fined.
An employer is strictly liable for any:
Mental of physical injury
Aggravation of an existing injury
Disease or illness
arising out of or in the course of employment. This includes:
Lunch and recreational breaks
The employees travel to and from work, between the place of work and
educational institutions, to receive medical services, or to collect wages
Issue
Has the employee been unlawfully discriminated or harassed?
Laws
Unlawful discrimination occurs when someone is treated less
favorably because of their:
Race, colour, natural or ethnic
Disability
origin
Religion
Sex, pregnancy or marital
Sexual preference
status
Membership of a trade union
Age

Ansett Transport Industries Pty Ltd v. Wardley

Unlawful harassment occurs when an employee is made to
feel intimidated, insulted or humiliated because of their:

Race, colour, national or ethnic

origin
Sex

Disability
Sexual preference

An employer will be vicariously liable for any discrimination or

harassment by others that takes place in the workplace unless
they can show that they have taken all reasonable steps too
prevent and to address such discrimination and harassment.

Hill v. Water Resources Commissions

Issue
Has the employee been unfairly or unlawfully dismissed?
Laws
As a general rule, an employer must give an employee notice
of termination. The employer may be entitled to terminate the
employment contract without notice if the employee is in
actual or anticipatory breach of a condition in the employment
contract, or the employee is neglectful or incompetent.

If the termination was harsh, unjust or unreasonable, the

employee may be entitled to lodge and unfair dismissal claim
with Fair Workers Australia within 14 days of the dismissal.
There may be exemptions including:
Employees who have been genuinely made redundant
Employees who have been employed for less than six months
Employees who have been employed by a small business for less than twelve
months
Casual employees
Highly paid employees

Termination of employment will be unlawful if it is because:

Of the employees race, colour, sexual preference, age, physical or mental
ability, marital status, family, responsibilities, pregnancy, religion, politics,
nationality, or social background
The employee was temporarily absent from work due to sickness or injury
The employee is or is not a member of a union
The employee is involved in legal proceedings against the employer