[1] Australian courts take the view that contract law arose in the actions of assumpsit,[2] and concepts of motive and reliance.
[3][4] The law of equity plays an important role in Australian contracts, and will affect which remedies may be available when a contractual promise is breached.
Doctrines of importance to contract law practitioners include negligent mis-statement,[5] promissory estoppel,[6] and misleading or deceptive conduct.
It may be restricted to certain classes of people;[21] or on the other hand be made to anyone who, before it is withdrawn, accepts the offer,[9] including unascertained persons,[22] or to the public at large.
[24] According to the New South Wales Supreme Court case of AGC (Advances) Ltd v McWhirter, withdrawing a properties reserve price during an auction does not obligate the sale.
[25] This is different to the British case, Barry v Davies which found that if an auctioneer removes the reserve, they are bound to sell to a bona fide purchaser.
[16][27][28] Although acceptance need not be express and may be implied from conduct, it must correspond with the offer;[29][30] be unequivocal;[31][32] and in general, be communicated to the offeror.
[34] A purported acceptance will also be ineffective if made at a time when the offer has lapsed by virtue of time; if it is made subject to a contingency and that contingency ceases to exist; if the offeror dies and the offeree has notice of this fact; by the revocation of the offeror or the rejection by the offeree.
[36] However, the postal acceptance rule does not extend to instantaneous telecommunication methods, such as telephone, facsimile, and, presumably, emails.
[42][43] In Australian law, the question of sufficiency of consideration does not refer to 'adequacy' as it is not the role of the judge to determine and value whether something is adequate or valuable or not.
[63] In Ermogenous v Greek Orthodox Community of SA, a case relating to the engagement of a minister of religion, the High Court was, however, critical of the utility of a language of presumptions in this context.
In Masters v Cameron the High Court held three possibilities to be available;[66] There is a prima facie presumption that this third category is evident where the phrase 'subject to contract' has been utilised.
[68][69] The topic of certainty encompasses three related and often overlapping problems:[70] The case law reflect the tension between, on the one hand, the desire to hold parties to their bargains in accordance with the principle pacta sunt servanda and, on the other hand, the courts' reluctance to make a bargain for the parties.
[citation needed] An express term is an enforceable, promissory statement, written or oral, that makes up part of a contract.
[83] For these terms to be incorporated into the present contract, the course of dealings between the parties needs to have been regular and uniform, contractual in nature, consistent, and sufficiently long.
Whether or not a statement made during negotiations is an enforceable term depends on whether or not the contract is one that is fully in writing, or one that contains an oral agreement.
This is sometimes made even more explicit by the inclusion of an entire agreement clause, which clarifies that no other statements or extrinsic materials may have any bearing on the terms.
[95][96][97] In formal contracts, in ascertaining a party's presumed intentions, reliance is placed on the rule handed down in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977)[96][97] where, for a term to be implied, the following conditions must be satisfied: These criteria have been approved by the High Court on numerous occasions.
[111] Where the terms of the contract are ambiguous or susceptible to more than one meaning, evidence of surrounding circumstances and context may be admissible to assist in its interpretation.
[95] The High Court has recently reiterated the Codelfa ruling regarding the use of existence evidence in the interpretation of contacts.
[118][119][120] Moreover, courts tend to favour an interpretation that produces a reasonable commercially accepted result and avoids unjust or inconvenient consequences to both parties.
The construction of contractual documents is determined by what a reasonable person in the position of the party would have understood the words to mean.
[133] There are a range of consequences of illegality: The common law rule against perpetuities means that every contract must come to an end in one way or an other.
That party may still be willing to perform the contract according to its tenor; to recognise its heresy; or to accept an authoritative exposition of the contract [165] Renunciation is an alternate term where the conduct of a party is no longer willing or able to perform see Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited.
[169][170][171] Examples of frustration include: Whether delay gives rise to a right to terminate will depend on the terms of the contract.
[184] The right to terminate for non-fulfilment of a contingent condition can also be restricted by doctrines of estoppel, good faith,[185] where one party falsely leads other party into believing they will not exercise their right to terminate contract on the basis of non fulfilment of contingent condition, misleading or deceptive conduct[186] or unconscionable conduct[187] in breach of the Australian Consumer Law.
For there to be an election the aggrieved party must be aware that they have the right to terminate and must display unequivocal conduct that is only consistent with the performance of the contract.
They are henceforth entitled to rely on subsequent events e.g. frustration or breach of term by the Aggrieved party to their own advantage.
[194] A number of decisions from Australian courts have also affected the circumstances where legal action can be taken regarding contracts, recognising factors that change contractual obligations.
[7] In general law, the remedy for vitiating factors is rescission and full restoration, even in cases of third party impropriety.