construction contract low
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ContractBUIL12522020-1-1-161.pptxLecture Two
Equity.
Contract law
Email from the library in response that they got the enrolment number for BUIL1252 wrong
I have placed extracts from the prescribed textbook and from “ understanding Australian construction contracts by Bailey and Bell on canvass. See below
First question guide
The key to the assignment question is to decide how much time and effort you want to put into it.
Fundamental-a central or primary rule or principle on which something is based.
It is fundamental that in your text you refer to all relevant acts, sections of acts, case law (both the common law and the of equity) and journal articles. Worth 30% of marks allocated to the text
It is fundamental that you also attach copies of your primary sources.
Statutes
Caselaw
Journal articles
Textbooks
Dictionary definitions
Worth 3.5 marks allocated for presentation ( 28% of the ASSIGNMENT QUEUSTION
AS2124-1992
Standard form commercial building contract
4. Discuss who are the participants referred to in the quote. Please explain by the use of all relevant authority in the text of your answer and you can refer such as attachments (1.5 marks)
The formal part of the contract which is signed by the Principal and the Contractor and which will list all the documents that comprise the contract.
Superintendent (also known as Contract Administrator, Architect, Administration Manager
)
Description
The person generally engaged by the Principal to administer the building Contract. In some instances the Superintendent is referred to as the Contract Administrator (see PC-1). The Superintendent is not a party to the Contract. However, the Contract will define the role of the Superintendent in administering that Contract. The Superintendent may have a dual role: to issue directions to the Contractor on behalf of the Principal and to carry out certification tasks as a party independent to the Principal. This creates a tension between the Superintendent's role as the Principal's agent (and therefore clearly representing the Principal's interests) and as a certifier (which must be undertaken independently).
AS2124-1992
The contract is 41 pages and my reading of the contract I find that the superintendent is referred to on 30 of those pages.
Some of the more important clauses or some of the more relevant clauses to the assignment are_-
The superintendent is defined on page 6 of the contract.
Clause 23 deals with the appointment of the superintendent which lists the obligations of the superintendent and some of the powers of the superintendent.
Clause 8.1 empowers the superintendent to direct the contractor as to the interpretation of “any ambiguity or discrepancy in any document prepared for the purpose of executing the work under the contract.”
Clause 46.2 deals with the mechanism for disputing a direction given by the superintendent.
Superintendent Determination of the Superintendent
definition . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
disputes . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.2
dissatisfaction with ................... 47.1
extension of time .................... 35.5
generally . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
interpretation of discrepancy ............. 8.1
value of Daywork . . . . . . . . . . . . . . . . . . . . . 41
value of variation .................... 40.5
value of work ....................... 42.1
Directions of the Superintendent (see also Determination of the Superintendent
construction program .................. 33.2
covering up of work . . . . . . . . . . . . . . . . . . 31.2
Daywork ........................... 41
defective materials or work ..... 30.3, 30.4, 30.5
definition . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
dissatisfaction with decision ............. 47.2
examination and testing . . . . . . . . . . . . . . . . . 31
generally . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
oral ............................... 23
order of work ....................... 33.1
notice of tests . . . . . . . . . . . . . . . . . . . . . . . 31.4
relating to Contractor's employees . . . . . . . . . 26
relating to Subcontractors . . . . . . . . . . . . . . . 26
service of . . . . . . . . . . . . . . . . . . . . . . . . . 7, 25
suspension of the Work ................ 34.1
time for disputing . . . . . . . . . . . . . . . . . . . 46.2
written . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Superintendent
see also Directions of
Superintendent) . . . . . . . . . . . . . . . . . . 23
defined . . . . . . . . . . . . . . . . 2,
Annexure Part A Notice to in relation to dispute . . . . . . . . . . . 47.1
Superintendent's Representative ............. 24
PC-1 1998 the superintendent is called the contract administrator
In ABIC MW -2008 the superintendent is the architect.
If a party wishes to disputes a direction or certificate or notice of decision or assessment of the architect must do by written notice within 20 working days after.. See clauseA8
Comparative chart of some commercial standard from contracts form Understanding Australian Construction Contracts by Baily and Bell
3.Discuss the meaning of “controls and regulates their activities”. Please explain by the use of all relevant authority in the text of your answer and you can refer such as attachments (2.5 marks)
3.Discuss the meaning of “controls and regulates their activities”. Please explain by the use of all relevant authority in the text of your answer and you can refer such as attachments (2.5 marks)
In the first lecture in my power points and in my power points which I did the voice-over I suggested with regards to the way the law controls and regulates the construction industry you could look at.
1. Relevant common law cases.
Consider the liability of a constructor to a subsequent purchaser of a domestic building in a commercial building. Perhaps discuss the tort of nuisance
2. Relevant equitable cases.
Consider a relevant case in the cause of action of promissory estoppel.
3. A Commonwealth statute.
Considered the ACL
4. A Victorian statute.
Consider the Wrongs Act.
5. Relevant delegated legislation.
Consider the issue of a building permit
5. Any relevant clauses in the standard form building contracts.
ABIC MW-2008 Major Works Contract
R4 Entire contract .1 This contract contains everything the owner or the architect has agreed with the contractor in relation to the matters it deals with. Neither *party may rely on an earlier contract, or on anything else said or done by the other *party (or by an officer, agent or employee of the other *party) before this contract was entered into.
Clause R4 could be relevant if a party sought to rely upon section 18 of the ACL
Other clauses of AS2124-1992 that you can refer to when writing the first assignment question
Some relevant references to general law principles in the this standard form contract are
Negligence ( “ any negligent act or omission of the Principal, the Superintendent or the employees, consultants or agent of the Principal;”)
Nuisance ( “ prevent nuisance and unreasonable noise and disturbance.”)
Proportionate liability (but the Contractor’ liability to indemnify the Principal shall be reduced proportionally to the extent that the act or omission of the Principal or employees or agents of the Principal may have contributed to the loss, damage, death or injury”)
Arbitration ( “ Arbitration shall be affected by a single arbitrator who shall be appointed by the person named in the Annexure…”)
The quotation are from clauses from AS2124-1992
VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL CIVIL DIVISION BUILDING AND PROPERTY LIST VCAT REFERENCE NO. BP 350/2016
“The damages payable by LU Simon to the Owners are to be apportioned between each of the concurrent wrongdoers pursuant to Part IVAA of the Wrongs Act in the following proportions: ‒Gardner Group: 33% ‒Elenberg Fraser: 25% ‒Thomas Nicolas: 39% ‒Mr Gubitta: 3%”
file:///C:/Users/e67224/Downloads/Owners%20Corporation%20No.1%20of%20PS613436T,%20Owners%20Corporation%20No.%202%20of%20PS613436T,%20Owners%20Corporation%20No.%204%20PS613436T%20&%20Ors%20v%20Lu%20Simon%20Builders,%20Stasi%20Galanaos,%20Gardner%20Group%20&%20Ors%20[2019]%20VCAT.pdf
Judgment was delivered on 28 February 2019. Judge Woodward, Vice President of the Victorian Civil and Administrative Tribunal, found that:[10]
(1)
the builder had breached the warranties of suitability of materials, compliance with the law and fitness for purpose implied into its design and construct contract with the developer of the tower by(2019) 35 BCL 91 at 93
the Domestic Building Contracts Act 1995 (Vic),[11] and was primarily liable for the property damage caused by the fire;
(2)
however, although liable for breach of contract, noting that "not every error is negligent",[12] Judge Woodward found no evidence that the builder failed to take reasonable care in installing the cladding. An important aspect of this finding was the builder's engagement of an architect, building surveyor and fire engineer. Each consultant was found to be pivotal in the process of construction and compliance with the BCA;
(3)
each of those consultants failed to exercise due care and skill in the selection, approval and installation of the ACPs, in breach of its respective agreement with the builder, and, together with Mr Gubitta, was a concurrent wrongdoer within the meaning of s 24AH and pursuant to s 51 of the Wrongs Act 1958 (Vic);[13]
(4)
the $5.7 million in damages payable by the builder to the applicants be apportioned as follows:(a)
Building surveyor: 33%
(b)
Architect: 25%
(c)
Fire engineer: 39%
(d)
Mr Gubitta: 3%
On canvas
The reason for the next two slides
Some of the class, who have conferred, with me do not know the difference between binding and persuasive case law.
Some confuse the principles of case law with statutory law.
Separate Legal Jurisdictions
Legal systems of the world
Civil law-blue
Common law-red all of red is persuasive case law authority
Bijuridical/mixed (civil and common law)
Islamic law (Sharia)-yellow
The three basic systems: civil law, common law, and religious law – or combinations of these. However, the legal system of each country is shaped by its unique history and so incorporates individual variations.
Second question of the first assignment.
“ Discuss how a construction contract is interpenetrated if the is any alleged ambiguity".
Consideration has been given to the construction of contract documents generally. Construction of contracts is the process of legal analysis by which the meaning and effect of contractual terms is determined. Whilst it is used primarily as a means of resolving disputes over ambiguities in the contract, the principles of construction or should also be borne in mind by parties negotiating or drafting contracts as these are the principles upon which will apply in the event of the parties are subsequently unable to agree upon the meaning of the contract
Marking criteria.
1. Discuss aids provided in standard form building contracts.? ( "The contract itself may assist with the process of interpretation by any of all of the following types of provisions") ( 3 marks) Please explain by the use of all relevant authority in the text of your answer and you can refer such as attachments.
2. Discuss the key general principles applicable to construction of contracts .(3 marks) Please explain by the use of all relevant authority in the text of your answer and you can refer such as attachments.
3. What is the role played by the parol evidence rule and the entire contract clause in the construction of contracts? (3 marks) Please explain by the use of all relevant authority in the text of your answer and you can refer such as attachments.
4. Presentation.
Presentation consists of the use of secondary and primary sources as attachments. ( 3.5 marks out of 12.5)
Primary sources consist of
case law reports ( headnotes and judgement extracts)
statutory sections and
reference to clauses in standard form construction contracts.
Secondary sources are textbooks and journal articles.
This questions is worth 12.5 marks of the course assessment.
The first assignment task, is constituted by questions 1, 2, 3 and 4, is due on the 9th April 2019. However, any of the four questions can be submitted before the due date. Any questions submitted early I will mark within 5 working days. I will then be available to confer with students on the 6th working day.
All assignments must be submitted on canvas. If they are not submitted on canvas on or before 23.59, 8th April 2020 pursuant the School rule they cannot be assessed. If you have a basis to make an extension to the submission date you can do so to me up to one day before submission. After that date I have no authority to grant an extension and you will need to apply to RMIT for special consideration.
I only mark hard copy and as a courtesy to me could you please provide me with a hard copy of the assignment that you have lodged on canvas.
1. What documents generally constitute a building contract?
1. Look at domestic and commercial buildings.
2. State the law.
3. If a statute is relevant provide an attachment of the relevant section.
4. When discussing the law relevant to domestic and commercial buildings provide reference to an attachments of relevant parts/clauses of standard form contracts.
5. Discuss the documents that could constitute the contract and what precautions should be put in place to ensure those documents are considered part of the contract. ( Is signature relevant?)
6. Variations can be part of the contract
Effect of “ entire agreement” or merger clauses. See C& F page 418
“ Commercial contracts in writing commonly include a clause stating that document contains the entire agreement [of the] contract of the parties, and that all other terms are excluded.”
If the document is ostensibly complete the merger clause is accepted as excluding or other terms.
However. “It may be that such clauses should be subject to special scrutiny given to terms limiting excluding liability”
Best Supplementary book for Contract
You need to read and refer to the building contracts. ( I have given you four standard form contracts)
Clause or document not included in the contract!
Some reasons why it is essential you review the contract before signing it or entering into it
1. To ensure the documents you were relying upon a part of the contract.
2. To understand how on signature whether you are aware, whether you understand the terms of the contract you are bound by them.
3. Be aware of the weight that may be given to the terms of the contract. Parties are free to ensure any term of the contract is an essential term.
4. Contract may have a contractual dispute resolution regime embedded in.
5. Be aware of what risks you need to ensure against.
6. Be aware of notice requirements.
7. Be aware of what procedures you need to follow for such things as discovery of latent site conditions and contractual variations.
8. If there are any indemnity obligations.
9. What time requirements are imposed by the contract.
10. What quality obligations are imposed by the contract.
11. Other.
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“Disputes as to the existence of building contracts are comparatively rare. It is a more common occurrence to find parties agreeing upon the existence of a contract but differing as to its terms. A contractor might contend that a principal has breached a particular term of the contract. The conduct alleged to constitute the breach might be clearly established, but a question may nevertheless arise as to whether the statement which the contractor argues is an express term of the contract can properly be given that status.”
Contract law-Sources
1. The common law.
2. The law of equity.
3. Statutory law.
There is not say uniform contract code embodying the principles on contract.
A lot of the statutory law has been driven by the need to protect individuals and provide a level playing field.
( ACL and DBC Acts)
Equity steps in for considerations of fairness
Equity
Developed in 14 century.
Different to the common law in-
Different causes of action to the common law.
Different contract defences to the common law
Different contract remedies to the common law.
Different doctrines.
Different property concepts/doctrines/titles.
Prior to the 1870s
There were 2 different court systems.
One civil court devoted to the common law.
One civil court devoted to the law of equity
After the 1870s
By legislation enacted by Australian parliaments law and equity “were fused” and both the common law and the law of equity were administered in the one court.
What is equity
Equity like the common law developed in a piece meal fashion.
In broad outline
1. There are equitable causes of action.
Such as the cause of action which pleads the principles of promissory estoppel could find the parties have entered into a contract without consideration.
2. There are equitable defences where a party tries to enforce an unfair contract.
Such as the defences of undue influence ,unconscionable behaviour, undue influence ( could also be a cause of action) promissory estoppel can also be a defence and innocent misrepresentation.
3. There are equitable remedies where there has been a breach of contract.
Such as specific performance and an injunction.
4. In the law of property there is common law title and equitable title.
Such as when a contract to purchase land is signed until a transfer of land is registered at the titles office the purchaser has an equitable title and not a common law title.
Equity specifically
Rectification. p 103
Equitable Estoppel. Pp. 122 and 234
Unjust enrichment. P 129
Innocent misrepresentation. P 109
Unconscionable behaviour. P 110.
Undue influence. Pp. 110
Cause of action site
https://legaldictionary.net/cause-of-action/
https://www.hoganlovells.com/~/media/hogan-lovells/pdf/commercial_litigation_causes_of_action_checklist.pdf?la=en
Building contract not in writing
1. The contract
a)Domestic building contract. Was unenforceable under the statute but could be enforced in equity under the equitable remedy of unjust enrichment.
See TB pp. 104-105
b) While most commercial building contracts are in writing, and use standard form contracts there is no legal requirement for them to be in writing to be enforceable.
See p. 237 of the TB
2. Variations which are not in writing or in accordance with the contract procedure
a) Commercial contract again may be an equitable remedy of unjust enrichment. See pp. 253 to 257.
b) Domestic. Probably no way through an unjust enrichment claim but some claims could be made under the Act. See section 37 DBCA and
https://boutiquelawyer.com.au/avoiding-disputes-the-essential-guide-for-builders-in-victoria/all
But see the exceptions where in the Act section 37 ( 3) and 38 ( 6) where “the builder is entitled to recover the cost of carrying out the variation plus a reasonable profit.”
Domestic Building contract variations see sections 37 and 38.
DOMESTIC BUILDING CONTRACTS ACT 1995 - SECT 37 Variation of plans or specifications—by builder
DOMESTIC BUILDING CONTRACTS ACT 1995 - SECT 37
Variation of plans or specifications—by builder (1) A builder who wishes to vary the plans or specifications set out in a major domestic building contract must give the building owner a notice that—
(a) describes the variation the builder wishes to make; and
(b) states why the builder wishes to make the variation; and
(c) states what effect the variation will have on the work as a whole being carried out under the contract and whether a variation to any permit will be required; and
(d) if the variation will result in any delays, states the builder's reasonable estimate as to how long those delays will be; and
(e) states the cost of the variation and the effect it will have on the contract price.
(2) A builder must not give effect to any variation unless—
(a) the building owner gives the builder a signed consent to the variation attached to a copy of the notice required by subsection (1); or
(b) the following circumstances apply—
(i) a building surveyor or other authorised person under the Building Act 1993 requires in a buildingnotice or building order under that Act that the variation be made; and
(ii) the requirement arose as a result of circumstances beyond the builder's control; and
(iii) the builder included a copy of the building notice or building order in the notice required by subsection (1); and
(iv) the building owner does not advise the builder in writing within 5 business days of receiving the notice required by subsection (1) that the building owner wishes to dispute the building notice or building order.
(3) A builder is not entitled to recover any money in respect of a variation unless—
(a) the builder—
(i) has complied with this section; and
(ii) can establish that the variation is made necessary by circumstances that could not have been reasonably foreseen by the builder at the time the contract was entered into; or
S. 37(3)(b) amended by No. 15/2016 s. 10(1).
(b) VCAT is satisfied—
(i) that there are exceptional circumstances or that the builder would suffer a significant or exceptional hardship by the operation of paragraph (a); and
(ii) that it would not be unfair to the building owner for the builder to recover the money.
(4) If subsection (3) applies, the builder is entitled to recover the cost of carrying out the variation plus a reasonable profit.
(5) This section does not apply to contractual terms dealing with prime cost items or provisional sums.
D.B.C. Act -variations
(3) A builder is not entitled to recover any money in respect of a variation unless—
(a) the builder—
(i) has complied with this section; and
(ii) can establish that the variation is made necessary by circumstances that could not have been reasonably foreseen by the builder at the time the contract was entered into; or
(b) the Tribunal is satisfied—
(i) that there are exceptional circumstances or that the builder would suffer a significant or exceptional hardship by the operation of paragraph (a); and
(ii) that it would not be unfair to the building owner for the builder to recover the money.
(4) If subsection (3) applies, the builder is entitled to recover the cost of carrying out the variation plus a reasonable profit.
(5) This section does not apply to contractual terms dealing with prime cost items or provisional sums.
The route to success
50
All you need to do is make a start
Do a little bit at a time
Contract.
. An unconditional agreement
between two or more persons
which meets the required legal requirements.
CONTRACT
Starts with an agreement or mutual promises.
Meeting of minds.
Layers of a contract
1. An agreement.
2. Could need more than and agreement.
May need to display sufficient solemnity to make it a legal agreement.
3. One way of providing solemnity is to buy the promised offer.
In law called sufficient consideration.
4. Another way could be the law may require the contract to be in a particular form and have certain additional obligations inserted. Most formal is a deed the least formal is some of the terms to be in writing
Layers of contract continued
6. We have rules to decide what constitutes the agreement.
7. We have rules to decide what the agreement means.
8. We have rules to decide what terms are more important that others.
9. We have rules which allow for compensation if the contract is not performed.
10. Because some of the common law rules are harsh we have a parallel equitable rules to the common law.
Deed is treated exceptionally in contract Law
Inter alia
1. Gratuitous promise is treated as a contract.
2. The term in the Statute of Limitations in which to bring an action for breach of contract is significantly longer ( 15 years cf. 5 years)
THE ELEMENTS OF A DEED
A deed is a mechanism for creating a binding commitment or promise, with particular benefits in cases where the existence or passing of consideration is unclear and also for their obligations to be legally enforceable for an extended period. For example where A promises a gratuitous gift to B.
Deeds must be:
In writing.
Signed.
Witnessed by at least one person who is not a party to the deed.
Expressed to be a deed.
Delivered to the other party/parties.
Supported by evidence that the parties intended to execute the document as a deed and be legally bound by it.
See pp. 92 to 93
Building dispute legal action limitations
1. Contract- 6 years from the date of breach of contract.
2. Negligence- 6 years from the date aware or ought to be aware of the breach of duty of care.
3. 10 year limitation on negligence and contract from the date of final completion.
(See s 134 of the Building Act 1993 (Vic) (Act) for 10 year sunset clause).
See pp. 123 to 124 ( contract) and pp. 156 to 157 ( tort)
See the textbook page 130 where equity will step in where the contract is unenforceable at common law
“ The relevant principles are derived from the law of equity rather than the common law and therefore look primarily as to whether it is unjust for a party to retain money or benefit rather than compensating the other party for breach of contract. The circumstances in which such a claim might arise in construction contracting include where the construction contract has been undertaken and provided to the principal under an unenforceable contract, or without any contract in fact being entered into.”
Particularly see footnote 210.
Pavey’s case
Section 45 of the Builders Licensing Act 1971 (N.S.W.) provided: “A contract … under which the holder of a licence undertakes to carry out, by himself or by others, any building work or to vary any building work or the manner of carrying out any building work, specified in a building contract is not enforceable against the other party to the contract unless the contract is in writing signed by each of the parties or his agent in that behalf and sufficiently describes the building work the subject of the contract”.
Held, by Mason, Wilson, Deane and Dawson JJ., Brennan J. dissenting, that s. 45 did not prevent a licensed builder from bringing an action upon a quantum meruit for the value of work done and materials supplied under an oral building contract.
Per Mason, Wilson and Deane JJ. The right to recover on a quantum meruit does not depend on the existence of an implied contract but on a claim to restitution or one based on unjust enrichment.
Reason for Contract Formalities
1. Some agreements are so important they need to be recorded in a specified way.
2. Some agreements are open to abuse so we added protections. Link
3. Some agreements are difficult to ascertain so we have special rules to see if there is an agreement.
4. History
Source of law for Contract.
Founded principally on the common law.
Some law of equity and legislation.
Types of contract.
Entirely verbal.
Part verbal and part written.
Entirely written.
Conduct only.
Legal Formalities
Deed.
Essential parts written and signed.
All written and signed.
All written ,signed and exchanged.
All written and signed and exchanged and documents need to be provided.
Deed.
Entirely Written.
Usually named a deed.
Signed and witnessed.
Includes the phrase “signed sealed and delivered”.
Narrows the areas of legal dispute.
No need for consideration-gratuitous promises are legally enforceable
Extends the limitation period.
Essential part written
Dealings in land
Dealings in land
PROPERTY LAW ACT 1958 - SECT 53
Instruments required to be in writing (1) Subject to the provisions hereinafter contained with respect to the creation of interest in land by parol—
(a) no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by his agent thereunto lawfully authorized in writing, or by will, or by operation of law;
(b) a declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by his will;
(c) a disposition of an equitable interest or trust subsisting at the time of the disposition must be in writing signed by the person disposing of the same, or by his agent thereunto lawfully authorized in writing or by will.
(2) This section shall not affect the creation or operation of resulting, implied or constructive trusts.
No. 3754 s. 54.
All written ,contents specified and other
Domestic building contract. See D.B.C.Act s.31
Some mortgages.
Real estate authority. See Estate Agents Act Ss 49A and 50
Standard Form Commercial Building Contracts
1. AS 2142-1992. See clause 6 and the formal agreement page
2. ABIC MW -2008 See items 1 and schedules thereto.
3. PC-1 1998 See the formal agreement.
Note.
1. Does the formal agreement document provide for other document to be list in the formal page as contractual DOCUMENTS?
2. Does the contract set out an order of precedence of the contract documents ( either in the formal agreement page and or in the clauses of the contract?)
See the Textbook p. 82
“ This is often the case in a building contract with the execution of the formal document does not take place until well after the work is commenced.”
SEE CLAUSE 6 OF AS2124-1992
DOMESTIC BUILDING CONTRACTS ACT 1995 - SECT 31
General contents etc. of a contract (1) A builder must not enter into a major domestic building contract unless the contract—
(a) is in writing; and
(b) sets out in full all the terms of the contract; and
(c) has a detailed description of the work to be carried out under the contract; and
(d) includes the plans and specifications for the work and those plans and specifications contain enough information to enable the obtaining of a building permit; and
(e) states the names and addresses of the parties to the contract; and
(f) states the registration number (as it appears on the registration certificate under the Building Act 1993 ) of—
AND MUCH MORE
ESTATE AGENTS ACT 1980 - SECT 49A
ESTATE AGENTS ACT 1980 - SECT 49A
Offence not to give certain information about commission (1) An estate agent must not obtain, or seek to obtain, any payment from a person in respect of work done by, or on behalf of, the agent or in respect of any outgoings incurred by the agent unless—
(a) the agent holds a written engagement or appointment that is signed by the person (or the person's representative); and
(b) before obtaining the person's signature to the engagement or appointment, the agent (or an agents' representative employed by the agent) informed the person (or the person's agent or representative) that the commission to be paid to the agent under the engagement or appointment and any money to be paid by the person in respect of outgoings were subject to negotiation; and
(c) the engagement or appointment contains—
(i) details of the commission and outgoings that have been agreed; and
(ii) if a fee is to be calculated on a percentage basis, a statement of that fee expressed as both a percentage and as the dollar amount that would be payable on the reserve price or any other relevant amount set out in the engagement or appointment; and
S. 49A(1)(c)(iii) substituted by No. 41/2003 s. 9(1).
(iii) a rebate statement that complies with subsection (4); and
S. 49A(1)(c)(iv) amended by No. 52/1998 s. 92.
(iv) a statement in a form approved by the Director as to where a complaint concerning any commission or outgoings in the engagement or appointment can be made; and
S. 49A(1)(c)(v) amended by No. 52/1998 s. 92.
(v) anything else required by the Director; and
(d) the agent (or an agent's representative employed by the agent) gave the person a copy of the signed engagement or appointment.
Penalty: 100 penalty units.
Also see subsections 2,3 4and 5.
(
Cooling off periods.
Domestic building Contract.
Some mortgages.
Contract sale of land.
Cooling off period
DOMESTIC BUILDING CONTRACTS ACT 1995 - SECT 34
Building owner may end a contract within 5 days without penalty (1) A building owner may withdraw from a major domestic building contract at any time before the expiration of 5 clear business days after the building owner receives a copy of the signed contract.
(2) To do this, the building owner must within that time—
(a) give the builder; or
(b) leave at the address shown as the builder's address in the contract; or
(c) serve on the builder in accordance with any notice or service provision in the contract—
Contract main topics
Formation.
Vitiating factors.
Incorporation of terms.
Interpretation of terms.
What constitutes performance.
Breach .
Remedies
Lecture 4.
Assignment question 2
Discuss how a construction contract is formed and what constitutes the construction contract".
A significant number of construction contracts are about what documents constitute the contract and if parties verbal statements are part of the contract. Construction building contracts are generally domestic or commercial.
My first construction contract question is
Marking criteria.
1. What documents generally constitute a building contract?
2. How are terms incorporated into a contract?
3. What is the role played by the parol evidence rule and the entire contract clause?
4. Presentation.
a) Index.
b) Headings and sub headings.
c) Reference to primary and secondary sources.
Assignment question 3
Contract defences and when can a contract be terminated?
Marking criteria
1.Discuss the vitiating elements that provide a defence to the enforcement of a contract.
2. Look at AS 2124 and discuss what breaches of contract allow party to terminate the contract.
3. Discuss the general law principals that allow a party to terminate a contract.
4. Presentation.
a) Index.
b) Headings and sub headings.
c) Refer to primary and secondary sources.
Questions 1 to 3 are worth 3 marks. Presentation is worth 3.5 marks.
This question is worth 12.5 % of the total assessment.
Let me see if I can help you focus where the marks are.
Of the 12.5 marks 3.5 goes on presentation.
Presentation is mostly
Some headnotes of case law reports.
With some law reports you will go to the judgements and highlight relevant paragraphs or sentences in the judgements.
c) Attachments of relevant statutory sections.
Attachments of journal articles. You may attach summary of the article and perhaps go to the article itself and highlight relevant paragraphs or sentences in the journal article.
2.Of the remaining nine marks three marks are allocated to referring to the relevant authority for propositions or principles you put forward.
Rule of thumb-70/30 % rule.
The legal process is that if you put forward a proposition, the principal statement of law, you need to provide the case or the line of cases, or the statute or scholarly writing on which you base the principal or point of law.
So likewise, in your assignment writing, you will need to cite all relevant case law and statutory law and scholarly writings.
For your text I like to think of the split between the propositions you put forward and your authority for them as the 70/30% rule.. That is I award 70% of the marks for the statement of the law and 30% of the marks for the authorities you provide.
Rule of thumb
The English phrase rule of thumb refers to a principle with broad application that is not intended to be strictly accurate or reliable for every situation. It refers to an easily learned and easily applied procedure or standard, based on practical experience rather than theory
Assessment
1. 30% for the use of case authority in the text of your writing.
Just the same way as the textbook writers use authority.
The same way that judges use authority.
The same way away person putting forward a position uses some authority as support.
Page 96 of the textbook.
In reference to the Previous slide.
Let me say there are 10 lines of text.
The writer has 5 cases cited in the 10 lines
C & F p435. p. 3 of the extract place on canvas.
In the previous slide 1 case and 1 journal article.
C& F p. 440 p 7 of the extract ( say 7 cases below)
Cheshire & Fifoot N Seddon
Law of Contract R Bigwood
Ellinghaus
10TH AUSTRALIAN EDITION
— Cheshire and Fifoot Law of Contract —
However, evidence of post-contractual conduct may be admissible on the issue of implication, 177 or to prove the subject matter of the contract or find the terms of a contract not wholly in writing (even if such conduct is not admissible as an admission of an existing contract), at least where the contract is not wholly in writing. 178 It is uncontroversial that post-contractual evidence is admissible for deciding whether particular writing is or is not a contract. 179
C & F p 438
No comprehensive account of the nature of promise is to be found in the cases.203 A miscellany of criteria has been identified as relevant in determining whether a statement has a promissory character: see 10.22—10.25. Their application may depend 'on niceties of language in conversations recounted, often years afterwards by persons who would not have been conscious of the significance of the particular words used' 204
The Contract can be made up in different forms and in different combinations.
1. Entirely verbal.
2. Part verbal part written.
3. Entirely written but not signed.
4. Entirely written and signed.
If the contract is entirely in writing and signed.
Signing a document party knows to be ought to know it is a contract incorporates all the provisions in the document as contractual terms.
.
It is irrelevant that the party signing has failed to read that document.
It is irrelevant that the party has failed to understand the terms document.
It is irrelevant there has been no notice to the party signing the document as to the nature of what document comprises.
On signature party signing is bound what is written in the contract.
My opinion is that as this provision of the law is so draconian you ought to take two or three terms from AS 2124-1992 and discuss them in your answer. You may be surprised that you sign up to.
For example clauses 8.1, 12, 29.2 , 30.3, and 44.5
I think you should be genuinely surprised and disappointed with some of the terms in standard form commercial building contracts. It is recognised standard form contracts are written in favour of the proprietor and not the builder.
So let me be very clear
In your assignment I expect you to discuss some of the terms in AS 2124-1992 which automatically become contractual terms on signature.
Indeed where ever relevant I expect you to refer to provisions in the standard form contracts I have provided.
For instance clause R 4 in ABIC MW -2008 regarding an entire contract clause.
If the written contract is not signed
The contract is not signed in the party putting forward the contract needs to give the other party notice of the provisions of the contract.
If the contract is part written verbal or entirely verbal
1. If written and part verbal person avoids the parol evidence rule to the extent that verbal terms, can be added to the contract, but that the verbal terms cannot subtract from the written part of the contract or contradict or vary the written part of the contract.
With regards to the verbal part of the contract the tests for incorporation of verbal terms are applicable- see following slides
[2. If the contract is entirely verbal tests for incorporation of verbal terms are applicable.]
Nature of a verbal promise. Is it a contract term or a mere representation
1. The test is an objective approach. The court is required to determine what a reasonable person in their situation would have intended to assume.
( A subjective approach is what a person is thinking not manifesting such thoughts in words, conduct or writing.)
The objective approach is to look at a party’s words conduct or correspondence and determine their intention from that evidence.
What a reasonable person would decide observing conduct, what is said and all correspondence of the contracting parties.
https://www.law.nyu.edu/sites/default/files/upload_documents/The%20Many%20Faces%20of%20the%20Reasonable%20Person.pdf
Some of the considerations that a reasonable person would take into account
1. The nature of the words used.
a) Are they precise or imprecise.
b) Are the words used intended to induce the other party to enter into the contract.
c) Words of a serious nature such as I warrant or guarantee or even say they promise.
2. Does the maker of the statement have more expertise or information on the recipient.
3. Statement of fact or description of the subject matter of the contract such as the house is situated or the track is in good order and capable of specified work held to be contractual promises.
4. Statements of opinion, intention and desire are usually not of a promissory nature. They are considered to tentative big promissory.,
Is the statement contractual promise.
It is a contractual promise into term of the contract.
If it is not a contractual promise is not a term of the contract and is a representation.
The representation may give rise to a cause of action for compensation in
Statutory remedy of misleading and deceptive conduct.
The tortious remedy fraudulent misrepresentation.
The equitable remedy of innocent misrepresentation.
Tortious remedy of negligent misstatement
1. What documents generally constitute a building contract?
I have done this in the last lecture that you need to do is look at both domestic and commercial contracts.
The domestic building contract is found in section 31 of the domestic building contracts act.
There is a discussion in the textbook on page 273 to 278 event what constitutes the contract documents.
Pages 296 301 of the textbook there is a discussion of a brief outline of the standard forms in common use in the industry.
In the third edition at page 274 I think there is a better discussion of other standard forms than in the fourth edition.
The residential building contract (RBC-1) is such a contract.
You also need to look at variations because variations are ALSO contracts.
See pages 250 page 257 of the textbook regarding commercial building contract variations.
In your assignment you can find yourself to the variation clauses in AS 2124
See page 238
For this reason, it is essential that the contractual documents, read as a whole, tell a coherent story (see [5.220]). In any case, it is essential that the agreement states expressly which documents are incorporated (preferably, such documents should be physically bound in with and signed along with the other documents) and their exact contractual status, in order to prevent disagreement in the future as to the exact terms of the contract.
Also see clause 6.2 of AS 2124 regarding the signing of the Formal Instrument of Agreement
It is often necessary to determine precisely what documents and conditions are intended to apply due to a failure or refusal by one party to execute a printed or consolidated form of contract. Here, the court is required to determine from all of the circumstances of dealings between the parties what was their intention and whether a particular set of conditions was to apply, see Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd39 and PRA Electrical Pty Ltd v Perseverance Exploration Pty Ltd and Another.40
2. How are terms incorporated into a contract
He also dealt with this in the last lecture.
1. With regards to the terms implied into a domestic building contract see section 8 of the Domestic Building Contracts Act.
2. In both domestic and commercial building contracts the implied warranties with regards to goods and services will be implied.
3. See page 241 and to you 30 16126 all will of the textbook for” The following is a consideration of some of the specific terms that may be implied in construction contract”
“Materials and workmanship: In the absence of express terms to this effect, terms will be implied into contracts that the works be built in a good and workmanlike manner employing good and proper materials, … .
Also see AS 2will all will will124 clauses 30.1.30.2 and 30.6
DOMESTIC BUILDING CONTRACTS ACT 1995 - SECT 3 Definitions
"defective", in relation to domestic building work, includes—
(a) a breach of any warranty listed in section 8;
(b) a failure to maintain a standard or quality of building work specified in the contract;
Also see
https://www.domain.com.au/news/new-victorian-laws-to-get-tough-on-dodgy-developers-using-sunset-clauses-to-be-introduced-to-parliament-810753/?utm_campaign=strap-masthead&utm_source=the-age&utm_medium=link
1. See the building code of Australia discussed at page 50 and 51 textbook
See below page 54 the textbook
Consumer transactions – goods and services
[3.180]
Part 3-2 of the ACL deals with consumer transactions. Whilst these are more often likely to involve small business contracts, the statutory guarantees as to the supply of goods and the provision of services will apply to many agreements in the construction industry.
A general limitation occurs surrounding the definition of “consumer” which provides that the provisions only apply where the goods have a value of less than $40,000 or are of a kind usually acquired for personal domestic or household use. The exceptions to these limitations are when the person acquiring the goods does so for the purpose of re-supply or for the purpose of transforming them in trade or commerce.
There will clearly be application of these provisions of the ACL to supply contracts in the construction industry. Similar conditions apply to a consumer of services, and there is a presumption that persons acquiring goods or services are consumers.
Subdivision A of Division 1 of Part 3-2, dealing with the supply of goods, imposes statutory consumer guarantees as to:title of the supplier to the goods (s 51);
undisturbed possession of the goods (s 52);
the acceptable quality of the goods (s 54);
the fitness for purpose of the goods for any disclosed purpose (s 55);
the supply of goods by description (s 56); and
the supply of goods by sample or demonstration model (s 57).
There will be circumstances where contracts for supply of goods under construction contracts will involve issues as to the application of these statutory guarantees.
Subdivision B of Division 1 of Part 3-2, dealing with the supply of services, imposes consumer guarantees as to the:application of due care and skill (s 60);
fitness for purpose of the services (s 61); and
reasonable time for supply of the services (s 62).
The provision as to fitness for purpose of the services does not apply to architects and engineers (s 61(4)).
Formation.
Main Approaches are
1.Traditional approach.
2.Global approach.
3. Equitable estoppel.
The test applied is an objective test not a subjective one
Traditional Approach.
Unconditional offer.
Unconditional acceptance.
Consideration or the contract in deed form.
Intention to enter into a contract.
Global approach.
Objective approach.
Consider all the circumstances.
Parties prior contact and post contract conduct.
“ The man who said ‘ I never sign contracts’ may have been safe in the nineteenth century
But not so now”. ( see Empirnall’s case)
Cheshire and Extract from Fifoot “ Law of Contract” 10 th Ed p 97
Agreement in the absence of offer and acceptance
3.5 Alternative approaches. The rigidity of offer and acceptance is sometimes ill-suited to what people actually do, with the consequence that the law of contract may dictate that no agreement has been reached when the parties themselves would consider that they have entered into a contractual relationship. This is particularly evident with the 'battle of the forms'.25 There are many circumstances of modern commerce that do not easily fit the formal offer-acceptance model, as noted in 3.4 above.
From time to time attempts have been made to escape the strait jacket of offer and acceptance by adopting a 'global'' approach to negotiations between parties. On this approach the court's task is to ask whether, objectively and having regard to the totality of the dealings between the parties, they should be considered to have entered into a contractual relationship without inquiring too closely into the
Cheshire Fifoot “ Law of Contract
Another example of the global approach can be seen in the following passage taken from the judgment of Lord Denning MR in Gibson v Manchester City Council/.34
”To my mind it is a mistake to think that all contracts can be analysed into the form of offer and acceptance. I know in some of the text books it has been the custom to do so: but, as I understand the law, there is no need to look for a strict offer and acceptance. You should look at the correspondence as a whole and at the conduct of the parties and see there from whether the parties have come to an agreement on everything that was material.If by their correspondence and their conduct you can see an agreement on all material terms -which was intended thenceforward to be binding -then there is a . binding contract in law even though all the formalities have not been gone through ...35”
I , •
Ormiston J in Vroon BV v Foster's Brewing Group Ltd36 ( Victoria Supreme Court) was prepared to
conclude that the existence of a contract may'be 'evidenced otherwise than by offer
and acceptance',37 though stressing that offer and acceptance was the' primary mode of ascertaining the existence of agreement. His Honour drew particularly on the American Restatement of Contracts, Second § 22(2) which provides
'·
' “A manifestation of mutual assent may be made even though neither offer nor acceptance can be identified and even though the moment of formation cannot be determined. “
These approaches, as alternatives to the offer-acceptance model, to determining contract formation are well established in Australia. It is a beneficial development in the law, effecting what many commercial people actually do rather than artificially analysing their interactions by reference to the traditional offer and acceptance model.
Also see Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd ( NSW Supreme Court)
“ Law of Contract” 10 th Ed pp. 89 and 99
Equitable estoppel.
One party assumes a legal relationship exists.
Or expects it would come about.
The assumption or expectation was induced by unconscionable conduct.
The inducement was intended.
The innocent party would suffer to their detriment if the assumption or expectation was reversed.
See Walton’s case
Dominant document.
Head of agreement.
Objectively which document have the parties relied upon.
Last document
Offer one document.
Acceptance another.
“ Battle of the forms”
Court usually accepts the last document.
The agreement must be unconditional.
1. Assuming the other elements of contract formation are satisfied ( see p. 196 of the TB-Essential elements of a valid contract) –
2. For the contract to be unconditional is determined by an OBJECTIVE determination of the parties intention at the relevant time.
Subjective determination
The party cannot say what they thought they intended.
See C & F 10 Ed pp. 428 and 429.
“ But it [ the Court] cannot receive evidence form one party as to its intentions …uncommunicated intention, understanding or expectations… and construe the contract by reference to those intentions”
C & F p. 435
“Apart from inferred terms, the actual terms of the contract are determined by reference to the statements parties themselves adopted as an expression of their obligation. However, the law recognises not every statement made or adopted by the parties in connection with the contract is necessarily a term of the contract.”
C & F pp. 435 and 436
“ Even if evidence is admissible, the contract recorded in the document normally supersedes or overrides any prior all agreements not incorporated in it.”
“Insofar as the written contract is inconsistent with any prior terminally agreed to by the parties prior agreement is discharged.”
Refer to the case authorities cited in that textbook.
Objective determination.
1. Consider what the parties said at the time of the offer and acceptance.
2. Look at the parties correspondence ( letters, emails, faxes and other).
3. Look at the parties conduct ( did they shake hands, did they leave a meeting amicably, did they go and celebrate).
4. Look at the expertise of the party making the statement.
5. If the contract is part written and part verbal the verbal part must be consistent with the written part.
See C & F pp. 116 to 117
See C & F pp.116 to 117
“Whether or not there is acceptance is objectively by reference to the words or actions of the offeree. The law has the with a great variety of different ways people commit to contracts so no universal principle, apart from the objective test, can be put forward as the answer to the question: as a been acceptance.
The most obvious way in which such commitment is made by signature.”
See C & F p. 118
“The offer and acceptance model works satisfactorily in relation to formal contracting when the parties negotiate, draw up a formal contract and then sign it. It can also work satisfactorily in less formal dealings, where it is objectively clear, that the parties have reached agreement, such as ordering goods over the phone or shaking hands as a sign of final agreement.”
See footnote 186 for the authority of the significance of shaking hands.
The test was often stated as what a man on a London omnibus would think
Definition of Omnibus
Omnibus is Latin for "for all", and refers to a passenger-carrying vehicle, originally an enclosed horse-drawn one.
St Kilda Road Omnibus
Reasonable man. Reasonable judge Rat with a gold tooth
The acceptance must be unconditional.
The Court needs to determine if the parties when they write or express that the contract is “subject to…” demonstrates that the parties have not finished with their negotiations but intend further action to take place before there is a concluded contract
The High Court proposed that there could be three possibilities.
1. The parties intend to be immediately bound to a contract but some terms of the contract will be fuller or in more precisely restated at a later time.
2. No terms will be varied but make one or more of them is conditional on executing [ signing] a formal agreement.
3. The parties do not intend to make a contact until they execute a formal agree.
See Masters v Cameron 1954 TB p. 218. Link
1 and 2 are contracts.
3. there is no contract
Fourth Alternative Baulkham Hills Private Hospital Ltd v GR Securities Pty Ltd.( 1986) 40 NSWLR 662
The parties intend to be “ immediately and exclusively” bound by the terms of the agreement but that they expect to make a further contract containing additional terms in the future which they expect will replace the current agreement.
Distinguish a conditional agreement with a Counter offer
For there to be acceptance of an offer the acceptance must be unconditional.
The acceptance must agree with all that is proposed by the offer.
To respond with a variation of the subject matter of the offer is to make a counter offer.
The effect of a counter offer is a rejection of the offer and the original offer is extinguished.
The original offer needs to be made again for there to be a opportunity of acceptance.
See TB p 218
Another legal analysis of a conditional contract
Condition precedent. Some specified needs to occur before the contact comes into existence-subject to finance.
Condition subsequent. The contract runs for a period o f time but on the occurrence of a specified advent it comes to an end.
See TB pp. 292 and 311
139
Sale of Land Contracts
1 “ In land transactions, it has been said that there is a presumption that there is no intention to be bound until formal exchange of contracts; in other words the words ‘subject to contract’ are implied into the negotiating process” See Cheshire and Fifoot 10th Ed pp. 205 and 251.
2. It is also the common practice used by practitioners to use the words ‘ subject to contract’ to ensure that there is no contact until the execution of a formal agreement. See C & F p 250 10th Ed.
140
Contract sale of land.
The last formality of a contract of sale of land is the requirement that there be an exchange of contracts.
The Offeror has a contract.
The acceptor has a contract.
They have exchanged the contract between themselves.
Exchange.
1. Physically handed over the contract to the parties or their agents.
2. Faxing the contract.
3. Posting the contract in the mail.
4. Sending the contract by email.
5. By accepting over the phone that there has been an exchange.
See C & F pp.`102 to 103 and 127 to 128 and 153 to 154.
141
Contract of sale at auction
1. On the knocking down of the property to the successful bidder there is no contract of sale of land. The “purchaser or the vender can renege.
2. For the auction to be successful the parties need to sign written contracts that comply with section 53 of the Property law Act and the contracts are exchanged.
See C & F pp. 113 to 116 and 865.
142
See As2124 -1992
See Cl 6.1.
See Cl 6.2
Factors the Court will consider in Commercial “Agreements” to see if there is a contract
.
Objectively can the parties intention be determined.
1.Is the parties language clear and unambiguous?
2.Have they concluded a enough of the agreement to make it work?
3. The less complete the less likely an agreement.
4. How complex is the transaction?
5. Is there correspondence which helps?
6. Has there been part performance?
7. Has there been prior dealings?
8. What is the trade practice?
9. What has been the subsequent conduct of the parties?
Implied terms.
By statute. See Ss 8,9,10 of the DBC Act
By common law( Can become a precedent).
By custom.
DOMESTIC BUILDING CONTRACTS ACT 1995 - SECT 8
[Implied warranties concerning all domestic building work The following warranties about the work to be carried out under a domestic building contract are part of every domestic building contract—
(a) the builder warrants that the work will be carried out in a proper and workmanlike manner and in accordance with the plans and specifications set out in the contract;
(b) the builder warrants that all materials to be supplied by the builder for use in the work will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new;
(c) the builder warrants that the work will be carried out in accordance with, and will comply with, all laws and legal requirements including, without limiting the generality of this warranty, the Building Act 1993 and the regulations made under that Act [4] ;
(d) the builder warrants that the work will be carried out with reasonable care and skill and will be completed by the date (or within the period) specified by the contract;
(e) the builder warrants that if the work consists of the erection or construction of a home, or is work intended to renovate, alter, extend, improve or repair a home to a stage suitable for occupation, the home will be suitable for occupation at the time the work is completed;
(f) if the contract states the particular purpose for which the work is required, or the result which the building owner wishes the work to achieve, so as to show that the building owner relies on the builder's skill and judgement, the builder warrants that the work and any material used in carrying out the work will be reasonably fit for that purpose or will be of such a nature and quality that they might reasonably be expected to achieve that result.
DOMESTIC BUILDING CONTRACTS ACT 1995 - SECT 9
Warranties to run with the building In addition to the building owner who was a party to a domestic building contract, any person who is the owner for the time being of the building or land in respect of which the domestic building work was carried out under the contract may take proceedings for a breach of any of the warranties listed in section 8 as if that person was a party to the contract [5] .
DOMESTIC BUILDING CONTRACTS ACT 1995 - SECT 10
Person cannot sign away a right to take advantage of a warranty A provision of an agreement or instrument that purports to restrict or remove the right of a person to take proceedings for a breach of any of the warranties listed in section 8 is void to the extent that it applies to a breach other than a breach that was known, or ought reasonably to have been known, to the person to exist at the time the agreement or instrument was executed.
Supply of Goods or Services
See the Australian Consumer Law.
See pp. 52 and 53 of the textbook. Note.
The implied terms only apply to consumer goods or consumer services-less than $40,000 or goods of a kind normally acquired for personal or household use.
Contract terms
Condition
Warranty.
Intermediate term
The contractual parties are able to determine what the terms of the contract are to them.
See the textbook page 88
“ The legal process for determining whether term is essential or inessential depends primarily upon an objective assessment of how important determinants to the party stop this is a matter of construction of the contract rather than enquiry of the parties as to what they actually intended.”
See the rest of that page
Misrepresentation.
Three types of misrepresentation.
Fraudulent.
Innocent.
Negligent
Fraudulent.
Misstatement of fact
To induce.
And does induce to enter the contract.
Rescission and or damages.
Common law remedy
Innocent misrepresentation.
No intention to misstate a fact.
Misstate a fact.
And does induce the plaintiff to enter the contract.
Rescission.
Equitable remedy
When the right to rescind will be lost
1. The innocent party confirms the contract.
2. The innocent party does not act promptly to rescind the contract.
3.The innocent party has taken a benefit under the contract.
4. Where the innocent party fails to give notice of rescission either in the form and content as prescribed in the contract.
5. If no regime for rescission a notice which umagigously terminates the contract.
See C & F pp1051 to 1054 and the TB p102
Negligent misstatement
Misstatement of fact.
A reasonable person would not make.
Induced the Plaintiff to enter the contract.
Rescission and or damages.
Common law
Duress.
Illegitimate pressure.
To person, goods or economic interests.
Remedies rescission and or damages.
A common law remedy
Undue influence.
Exploitation of a relationship.
Some relationships it is presumed.
Other relationships needs to be proved.
An equitable remedy.
Rescission
Unconscionable dealings
Special disability.
Sufficiently evident.
Unfair to take advantage
Rescission.
Equitable remedy
Australian Consumer Law.
S. 18. Misleading and or deceptive conduct.
a) Conduct has a very wide definition.
Actions.
Silence.
Statements.
i) Fact present or future.
ii) Opinion.
iii) Silence.
b) Must be conduct in trade and commerce.
c) Misleading or likely to mislead-lead to error.
See Henjo v Collins.
Remedies –rescission and or damages.
Statutory remedy
Incorporation of Terms.
How was the contract formed?
Entirely written-see the parol evidence rule.
Entirely verbal
Or Part verbal and part written.
Or by conduct
Term or representation.
Relative expertise of the parties.
Nature of wording used.
Proximity of statement to finalising of the contract.
See my posting on canvas
Pp. 434 to 446 from Cheshire and Fifoot.
For how terms are incorporated into contracts
Term or representation
.
Relative expertise of the parties.
Nature of wording used.
Proximity of statement to finalising of the contract.
Importance of the statement to the parties.
See TB p. 86 also see V pp. 285 and 286.
Also see the C& F extract I have place on canvas for you. Essential you use this source!!!
Parol Evidence Rule. See C& F pp. 412 to 413
“ Where the parties have recorded the terms of the contract in a document {refer to the footnote} the so-called parole evidence rule{refer to the footnote} may apply. It excludes evidence of extrinsic terms that subtract from, add to, vary or contradict the language of the written instrument. {See footnote}
Footnote 42 is of considerable benefit
“ So-called because it extends not merely, as the word parole may suggest, to evidence of oral communications, but also to document extrinsic to the instrument records the contract. See… .
Also see page 415 of C & F
“On this view, even if a committee established the parties did not intend the document to record all the terms of the contract, evidence is admissible only of oral terms that add to rather than vary the document.”
See the case authorities that C & F refers to.
slippage
Latent site conditions
1. Water seepage.
2. Unstable land.
3. Asbestos.
4. Rock.
5. Soil contamination.
6. Other Geotechnical factors.
7. See the definition in AS 2124-1992 and ABIC MW-1 2003
Latent site conditions
1 Discuss the common law position.
2. Discuss the position in most standard form contracts.
3. Discuss AS2124-1992 clause 12.1.
a) What is the definition of a latent condition.
b) What must the contractor do if they discover a latent site condition.
c) What is the contractual compensation if any?
4. Is the clause a condition or a warranty
Written contract.
Parol evidence rule.
Cannot add vary contradict or subtract.
Entire contract term.
See the textbook
Pp 85,86 & 94
Express Terms
What the parties expressly agree upon. Objective test
Implied terms
By-
Statute.
Common law.
Custom.
See the textbook pp. 86 to 87
Implied terms.
By statute. See Ss 8,9,10 of the DBC Act
By common law( Can become a precedent).
By custom.
DOMESTIC BUILDING CONTRACTS ACT 1995 - SECT 8
[Implied warranties concerning all domestic building work The following warranties about the work to be carried out under a domestic building contract are part of every domestic building contract—
(a) the builder warrants that the work will be carried out in a proper and workmanlike manner and in accordance with the plans and specifications set out in the contract;
(b) the builder warrants that all materials to be supplied by the builder for use in the work will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new;
(c) the builder warrants that the work will be carried out in accordance with, and will comply with, all laws and legal requirements including, without limiting the generality of this warranty, the Building Act 1993 and the regulations made under that Act [4] ;
(d) the builder warrants that the work will be carried out with reasonable care and skill and will be completed by the date (or within the period) specified by the contract;
(e) the builder warrants that if the work consists of the erection or construction of a home, or is work intended to renovate, alter, extend, improve or repair a home to a stage suitable for occupation, the home will be suitable for occupation at the time the work is completed;
(f) if the contract states the particular purpose for which the work is required, or the result which the building owner wishes the work to achieve, so as to show that the building owner relies on the builder's skill and judgement, the builder warrants that the work and any material used in carrying out the work will be reasonably fit for that purpose or will be of such a nature and quality that they might reasonably be expected to achieve that result.
DOMESTIC BUILDING CONTRACTS ACT 1995 - SECT 9
Warranties to run with the building In addition to the building owner who was a party to a domestic building contract, any person who is the owner for the time being of the building or land in respect of which the domestic building work was carried out under the contract may take proceedings for a breach of any of the warranties listed in section 8 as if that person was a party to the contract [5] .
DOMESTIC BUILDING CONTRACTS ACT 1995 - SECT 10
Person cannot sign away a right to take advantage of a warranty A provision of an agreement or instrument that purports to restrict or remove the right of a person to take proceedings for a breach of any of the warranties listed in