Chapter 3: Offer and Acceptance

 POSTAL ACCEPTANCE RULE

IRAC METHOD:
- Legal issue: Who will be entitled to buy the computer from A, B or C?
- Rules applied:

+ Postal acceptance rule: the rule states that where acceptance by post is contemplated by the parties the
acceptance is complete when a properly addressed letter of acceptance is properly posted by the offeree.
Therefore, where the postal acceptance rule applies, the letter of acceptance creates a binding contract at the
time of its posting and, significantly, thereafter the offeror cannot revoke the offer.

+ Counter offer: The essential criterion of a counteroffer is that it changes or seeks to change one or more of
the material or important terms of the offer

 Nếu còn thời gian nhớ thêm case trong sách liên quan vào, và giải thích sơ sơ chỗ lquan đến case đề cho

+ Method of acceptance
- Application:
On march 1, A offer to sell B a computer, and he also said that please accept by post, which
means that B has to send letter of acceptance by post and the postal acceptance rule will be
applied. In other words, the day B send the letter of acceptance to the post is the day the
contract is formed.
On march 2, B sends a letter but he also want the laptop be deliver to his office, which means
this is a conditional acceptance, which leads to the counter offer.
On march 5, A send another letter to C and on march 9, B sends a letter to A by bost with
unconditional acceptance. Thus, on march 9, the contract between A and C is formed.
On march 5, B telephone A to communicate is acceptance to A but because he phones, which
mean the contract is not binding
- Xong rồi thì nhớ lặp lại chỗ giống nhau giữa đề và case trong sách
- Conclusion:
+ C will be entitled to buy the computer from A
+ The contract is formed on March 9

Chapter 5: Consideration, promissory estoppel and formalities

  PRE-EXISTING DUTY
- Issue: Can Bill sue Nich for not paying him the extra payment that Nich agreed?
- Rules applied:

+ Pre-existing duty: a promise to perform an existing contractual obligation (eg to crew a boat or build a
house or supply goods or services) or a promise to perform a public duty that a person is already bound to
perform (eg police, paramedics, fireys) is not valuable.

- Application:
- Because Bill and Nich have a contract, thus, Bill have to perform the work base on his
existing contractual obligation.
- The important thing is that every revision of the contract need additional
considerations”
- Although Bill and Nich agreed on the revision of the contract, Bill did not perform
any additional exchange for Nich in return for the 50.000 do la. Thus, there are no
consideration here, and the contract cannot be revived.
- Conclusion: Bill cannot claim more money from Nich. The contract cannot be
revived, and the original contract still valid.

 Pre-existing duty of a police officer

  Past consideration- Exception rule

Legal issue: Whether there is a valid consideration in Alice’s promise?

Rules applied:

- Past consideration: acts that are done prior to the promise cannot generally amount to
consideration.
- Exceptions to the rule that past consideration will not support a simple contract: Where
the consideration amounts to some past act or forbearance that was done at the request of the person
making the present promise, and where “the parties must have understood that the act was to be
remunerated either by a payment or the conferment of some other benefit: and pay- ment, or the
conferment of a benefit, must have been legally enforceable had it been promised in advance”
- Promissory estoppel

Application: Firstly, because the bus driver deliver Alice the folder before Alice actually give
the promise os under the general rule of past consideration, Alice is under no obligation to
do the promise. However, we can apply exceptions to the rule of past consideration in
onder to stop alice to walk away from her promise.

In this case, we do not consider Alice’s promise to be past consideration due to 3 reasons:
1. The conductor deliver the folder at the request of Alice
2. There would have been an understanding that the bus druver will not work for
nothing( Why would he have to deliver the folder for Alice for no reward?). In this
case, because the bus driver deliver the folder to her school, we would consider that
there would be some compensation for the bus driver, and the bus driver actually
suffer a detriment.
3. The promise is enforcable because it was of valid and it was clear and certain.

Conclusion: We do not consider past consideration in this case. Alice have to pay the
money to the bus driver under the exception of past cónideration and promissory
estoppel principle.

Chapter 7: Genuin Consent

Unilateral mistake
 Legal issue: Who receive the title of the car, Jean or Emma?
Rules applied:

Unilateral mistake: Mistakes as to identity occur when one party is deceived by a “rogue”
and believes they are contracting with another (uninvolved) third party. In typical situations
of this kind, the contract will either be void for mistake or voidable for fraud. Much depends
on the manner in which the contract was made. When a seller deals with a person face to
face, the strong presumption is that they intend to contract with that person, even though the
latter fraudulently impersonates someone else. The significance of the distinction between a
void and voidable contract is that an innocent third party receives no title to the goods under a
void contract but may receive title under a voidable contract (depending on whether the seller
rescinds the contract before the rogue sells to an innocent third party).

- Refer to the case Phillips v Brooks Ltd [1919] 2 KB 243, when the Court decided that
the contract was voidable for fraudulent misrepresentaion but not void for mistake.
The result was that the dependent derived a good title to the good because the sale to
him occure before the plaintiff rescinded the contract.

Application:

- In this case, there was a unilateral mistake of Jean, as she intended only to deal with
the women looks like Kylie Monogue. However, the contract was voidable for
fraudulent misrepresentaion but not void for mistake. This is because the sale of the
car to Emma occurred before Jean rescined the contract, thus, Emma derived a good
title the the car.
- This is same to the case Phillips v Brooks Ltd [1919] 2 KB 243, The contract was
also voidable for fraudulent misrepresentation, not void for mistake. Phillips rescined
the contract after the sale of the jewellery, thus, the defedent-the innocent third pary
receive the title of the jewellery.

Conclusion: Jean cannot recover her car from Emma.

Chapter 14: Law of Tort

Y chang case Hedley Byrne trang 342 trong text book

Legal issue: Does Com-media’s banker owe a duty of care for negligent misstatement it
had given to Simpkins?
Rules applied: negligent misstatement

- Negligence: an action for negligence is about careless behaviour and can, therefore,
be applied to any form of human activity.
- The breakthrough came in 1964 with the decision of the House of Lords in Hedley
Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 where the Court
unanimously held that, in certain circumstances, the law will imply a duty of care in
the making of statements, and that a negligent, though honest, statement may give rise
to an action for damages.
- The High Court’s decision in Shaddock & Associates Pty Ltd v Parramatta City Council (1981) 150
CLR 225 establishes that the duty extends to the supply of information as well as the provision of
advice. The case also demonstrates that there is no necessity for the defendant to be in the business or
profession of giving advice. The High Court held that the Council committed the tort of negligence
causing pure economic loss and was liable to the plaintiff for its losses. The Council was under a duty
of care in relation to the provision of advice or information (the Court held that no distinction should be
drawn between “advice” and “giving of information”) because it was of a kind that called for skill and
 competence that the Council professed to possess. Further, the Council knew or ought to have known
that the plaintiff intended to act or rely on the information.

Application:

- Com-media’s banker-the defedant had noted in the heading “without responsibility on

the part of this bank or its officials”, which means the bank had effectively disclaimed
responsibility for the reference it had given to Simpkins. However, in Hedley Byrne
& Co Ltd v Heller & Partners Ltd [1964] AC 465, the house of lords rejected
earlier suggestions that liability for the negligent misstatement, apart from
contract, was limited to where there was a fiduciary relationship. A duty of care
in making statements could arise in circumstances where a “special relationship”
existed between the parties. The Court did not detail the precise nature of this relationship,
although it is clear that it would involve some element of reliance.

- In this case, Simpkins relied on the banker’s statement, which turned out to be false.
Like in Shaddock & Associates Pty Ltd v Parramatta City Council (1981) 150 CLR 225, the banker
knew or ought to have known that the recipient intended to act or rely on the information(reasonably
foreseeable).

- Conclusion: Simpkins is likely to be awared damages for the nrgligent misstatement.

Legal issue: Can the football legue argue voluntary assumption of risk as a defence?

Rules applied: a successful plea of voluntary assumption of risk is a complete

defence; however, it is rarely raised successfully. The defendant must prove that the
plantiff knew of the risk that the plaintiff fully appreciated the risk and accepted it
freely and willingly.

In cases involving an obvious risk, legislation applies to introduce a presumption of

awareness of the risk on the part of the plaintiff. The onus is placed on the plaintiff to
show that he or she was not aware of the risk: Wrong Acts 1958(Vic), s 54

Application:

- In this case, Gerard knows about his own physical characteristics, and he was
also awared of the risks in this high-risk game, it can be assumed that he fully
appreciated the risks and accepted it freely and willingly. The action that
Garard participated in the game shows he was willing to accept the risks.
Moreover, the football league also provide appropriate exercises during
traning, which shows they were carefull in traning the players, too.
- Therefore, the football league would be able to argue voluntary assumption of
risk as a defence

Conclusion: The football league can use voluntary assumption of risk as a defence to
protect them from Garard’s allegations

Chapter 15: Law of agency

Legal issue: Is the board bound to pay $25,000 or $35,000?

Rules applied: apparent authority is conceptually distinct from actual (express or

implied) authority. Apparent authority arises from the relationship between the principal and the third
party. The agent does not affect the extent of apparent authority. The extent of the authority depends on what the
principal represents to the third party (expressly or impliedly, by words or conduct) about the authority of the
agent. Once the principal relies on the representations by the principal, the principal cannot subsequently claim
the agent did not in fact have that authority.

It is, in fact, merely the appearance of authority:”the authority of an agent as it

appears to others “: Hely-Huchinson v Brayhead Ltd [1968] 1 QB 549

If a principal allows an agent to occupy a particular position, the agent will have
apparent authority to deal with third parties in a manner consistent with the functions
normally falling within the usual authority of the holder of that position. The
following case is the leading authority on this point.

Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480.

See also Panorama Developments (Guildford) Ltd v Fidelis Furnishing Fabrics Ltd
1971] 2 QB 711

Apply the law to the facts: A managing director is vested not only with implied
authority but also with apparent authority to do all such things as fall within the usual
scope of that office, including binding the board. Thus, while Michael has actual
authority to binf the board up to $25,000, his apparent authority will bind the board by
any acts which fall within his presented his authority, unless the board has specifically
notified the contractor of the restrictions on his authority.

Conclusion: As it does not appear that the board has notified the contractor of the
restrictions of Michael’s authority, the board will have to pay the full sum: $35,000.

Chapter 16: Law of partnership

Legal issue: whether there is a valid partnership between Peter and Fred?
Rules /Relevent law:
- Article 1 of Partnership Act 1892 (NSW)
 - Discuss group number, informality of formation, writtten partnership agreement all
are idications that a valid pernership exits
- Venture continued for 6 months only and was never commenced: chưa bắt đầu- see
Khan v Miah [2000] 1 WRL 2123 where the court decided that the partnership
commenced when the proposed partners took their first steps to implement their
business plan.
- The Courts now regconize that a single enterprise engaged in by a joint venture may
consitute a partnership particularly where there is profit sharing and a more
intergrayed business structure.

- Khan v Miah [2000] 1 WRL 2123 and Goudberg v Herniman Associates Pty Ltd [2007] VSCA
12

Application
- Even though the written partnership agreement may not been signed between Peter
and Fred, they were clearly acting “in common with a view of profit”. Pursusant to
article 1 of the Partnership Act 1982 (NSW), partnerships do not have to make
profits but they must be created with a view to profit.
- Also, Fred already secured office premises and furniture for their partnership
venture, the business have been commenced when the proposed partners took their
first steps to implement their business plan. This is similar to the court’s judgement
created under Khan v Miah
Conclusion: There is likely a valid partnership between Peter and Fred as such Fred do
not have to return the money to Peter.

Chapter 17: Corporation Law

Duty of care and diligence: s 180

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Legal issue: Which section of the Corporations Act he could likely breach and the
circumstances in which this protection/defence may apply
Rules applied: Corporation Act 2001

Rules applied:

Section 180(1) sets an objective standard of care and diligence that all directors and other officers of
corporations must meet when exercising a power or discharging a duty. The duty of care and diligence required
is determined by looking at the corporation’s circumstances and the responsibilities that the officer had within
the company and asking what a reasonable person would have done if they were a director with the same
responsibilities.

Section 181- In effect, the rule provides a “safe harbour” for directors when they make
informed and honest decisions but ones which ultimately are proved to be wrong. The duty to
act in good faith is a fiduciary obligation and is established in both the general law and under
statute. Directors must exercise their powers and discharge their duties in good faith in the
best interests of the corporation and for a proper purpose: s 181. A director will breach this
duty if they fail to give proper consideration to the separate interests of the company ahead of
other interests.

Refer to the case Australian Securities and Investments Commission v Adler (2009) 236 FLR
1. The Court decided that ASIC had failed to prove that the directors had breached their
duty of care and diligence. They met the requirements of the business judgment rule
because they held a rational belief that their actions were in the best interests of the
company

Application:
As David tries to make informed decisions when fulfilling his directional duties, by reading
the financial reports thoroughly and also sets monthly meetings with key managerial staffs
to stay abreast of the company’s business activities. He tries his best in making business
decisions and this is similar to the judgement in Australian Securities and Investments
Commission v Adler (2009) 236 FLR 1. The action of David shows that he had worked very
carefull with care and diligence, which means that he did not breach the duty of care and
diligence. Even if he might make mistakes when giving business decisions and breach
section 180 (1), he has section 181 to protect him because had worked in good faith in the
best interest of the company.
Conlusion: Because David may make mistakes in giving business decisions and breach
section 180(1), he has section 181 serve as his defence as he did his work honestly and
carefully.