Contract III notes 11-04-24

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Western Sydney University *

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May 4, 2024

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Pages 259-314 LAWS 1001Enterprise Law Contracts Law III Tutorial Questions: Terms, and Termination of contracts Please prepare answers before attending the class and receive immediate feedback on them by participating in the discussions and taking notes to correct your responses, if necessary. Concept Checks: 1. How does a statement become an express term of a contract? -reasonable notice, clear able to see, know the terms before entering the contract. How term will introduyce into contract. 3 cases for disclaimers., Extra effort to bring it in 2. When will a term be implied into a contract? -terms that are included/part in contract. Implied terms bridge 3. What is a disclaimer? How are disclaimers interpreted by the courts? -“Curtis v Chemical Cleaning & Dyeing Co (1951) 1 KB 805” 2 rules: 4. What is the parol evidence rule? -general rule cant be chal 5. What is a collateral contract and how does it relate to the parol evidence rule - 6. What is the difference between a ‘condition’ and a ‘warranty’? - 7. What does it mean to say that the plaintiff has a duty to ‘mitigate’ their loss? - 8. When will the plaintiff be entitled to compensation for (1) direct losses, and (2) consequential/indirect losses? - 9. When will a contract be frustrated? What is the effect of frustration? - **Thompson v Shoe lane parking Ltd (1971) 2QB 163- when you pay the money enter you in contract. ***Causer v Browne (1952) VLR 1 – bring the other parties attention, non- contructual docs ** Thompson v London,Midland & Scottish Railway Co (1930) 1 KB 41- its not in the ticket, go and check. She ** 1) Express terms in a contract are explicitly agreed upon by the parties before concluding the contract, whether written or oral, and must be clear and unambiguous. They set out the rights and responsibilities of each party but cannot override certain consumer rights guaranteed by law. The effectiveness of express terms depends on whether they are part of the legally binding contract, which can be formed not only by signing a document but also by an implied agreement based on the circumstances. 2) Implied terms, on the other hand, are those inferred by the law into a contract even if not explicitly discussed or written down. They may be implied at common law or by statute. Courts may imply terms based on necessity, custom, or as normal incidents of a particular type of contract. The objective approach is used to determine intention.
3) Disclaimers are statements aimed at limiting someone's liability in case of loss or damage, often found in contracts to exclude or restrict rights or obligations. Their effectiveness varies, with courts considering factors like ambiguity and reasonableness. 4) The parol evidence rule limits the evidence parties can introduce to determine contract terms, preventing the introduction of evidence outside the written document to show a different intent regarding the terms, though there are exceptions such as evidence of fraud or duress. 5) Collateral contracts are separate contracts that exist alongside the main contract, often arising when one party makes a promise to induce the other party to enter into the main contract. Breach of a collateral contract has its own distinct remedies. 6) Conditions and warranties are types of terms in contracts, with conditions being fundamental terms that allow termination and damages upon breach, while warranties are less critical terms that only entitle the innocent party to damages upon breach. 7) The duty to mitigate loss refers to the plaintiff's obligation to take reasonable steps to minimize their loss after a breach of contract, which may affect the damages awarded. 8) Regarding compensation for losses, the plaintiff is entitled to compensation for direct losses caused by the breach, while consequential or indirect losses may also be compensated if they were foreseeable at the time of contracting. 9) A contract is frustrated when unforeseen events make performance impossible or radically change the contract's purpose, leading to its termination, and relieving both parties from further obligations. Legal Hypotheticals (Please attempt the questions before attending the class) Question 1 Ash has purchased a first-class ticket for her flight to Sydney, entitling her to use the Kwantus Club lounge at the airport while waiting for a flight. When Ash reads through the written contract given to her by the travel agent, she sees that it has the price of the ticket, the date and time of the flight and the baggage allowance. However, she notices that while the recent advertisements guarantee a full refund in case of isolation due to COVID-19, the contract says nothing about whether such a refund will be made. Ash asks the agent about this, and the agent replies, ‘Of course, we will always provide a refund if you can’t travel because of COVID’. Ash signs the contract without changing it. While Ash is getting a drink from the bar located at Kwantus Club lounge, a waiter carelessly spills a tray of drinks onto Ash’s expensive laptop, which she left on her seat. When she complains to the club manager, he directs Ash’s attention to a sign on the wall that states, ‘The airline takes no responsibility whatsoever for goods lost, damaged or stolen while using these facilities’. Answer the following questions. 1. Would Ash be entitled to a refund if she had caught COVID – 19 and could not travel? 2. Does the sign form a part of the terms of the contract between Ash and the airline? 3. Can the sign be interpreted as applying to this particular breach by the airline staff?
Question 2 (past assessment task) Stephanie visits the Leura Miniature Railway Park, which is run by an association of amateur railway enthusiasts. She enters into two different contracts at the park: paying $10 to park her car in the park grounds, and paying $8 to hire a stroller for her small child. However, her day was a disaster. While she is walking in the park grounds, her child is injured when the hired stroller suddenly collapses. When she returns to her car she finds it has been damaged by one of the staff who was playing football. Stephanie has very clearly voiced her anger about these events in a letter to the association and has demanded compensation. You are an employee of the association and you have been handed Stephanie’s letter of complaint. You are aware that in the car park there is a notice stating that all cars are parked at owner’s risk. What you realise now is that that sign is partly hidden by some shrubs. Further, on the back of the ticket obtained from the stroller attendant is a notice which states: “No responsibility accepted for accidents to children”. You need to decide what the best course of action is for the association to take, within the law, in dealing with Stephanie. Question 1: Ash’s Refund and Contract Terms 1. Would Ash be entitled to a refund if she had caught COVID-19 and could not travel? o The Australian Consumer Law (ACL) provides guarantees for services, including that they will be rendered with due care and skill, fit for the intended purpose, and supplied within a reasonable time. o If Ash caught COVID-19 and couldn’t travel, her right to a refund would depend on the terms and conditions of her booking. o While the contract doesn’t explicitly mention COVID-19 refunds, recent advertisements guaranteeing full refunds could be relevant. o The agent’s verbal assurance that refunds would be provided due to COVID-19 may also impact Ash’s entitlement. o Ultimately, Ash should closely review the terms and conditions to determine her rights 1 . --Collateral and parol – its not written in contract. She will get damages and that’s it, no 2. Does the sign form a part of the terms of the contract between Ash and the airline? o Generally, parties are bound by all terms contained in a document they sign, regardless of whether they read or understood them 2 . o The sign in the Kwantus Club lounge may be considered an express term if it was visible and Ash had the opportunity to read it. o However, the sign’s effectiveness depends on whether it was adequa tely communicated to Ash and whether it was reasonable for her to notice it. o If the sign was prominently displayed and Ash had a chance to read it, it could form part of the contract.
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