How to Research and Write Legal Advice
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Transcript How to Research and Write Legal Advice
Intention to Create Legal
Relations
Remember, if you smoke after sex you're doing it
too fast.
~ Woody Allen
Intention to Create
Legal Relations
Family, Social and Domestic Relations
Presumption: no intention to create legal
relations
Commercial Agreements
Presumption: intention to create legal
relations
Other Particular Situations
Government Transactions
Unincorporated Associations
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Family, Social and Domestic
Relations
Generally presumed that there is no
intention to be bound
Did the parties intend to be met with
legal consequences?
E.g. did they intend to sue one another
in the event of breach?
Presumption is weak and easily
rebutted with evidence to the
contrary
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Family, Social and Domestic
Relations
Balfour v Balfour [1919] 2 KB 571
Maintenance paid to wife whilst she
remained in England
Parties separated – issue was whether
the contract for maintenance could be
upheld?
No intention to create liability –
agreement was made in an amicable,
domestic environment
Floodgates issues
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Family, Social and Domestic
Relations
Cohen v Cohen (1929) 42 CLR 91
Husband promised to pay the wife a dress
allowance
Held that there was no intention to create legal
relations, following Balfour
Merritt v Merritt (1970) 2 All ER 760
Parties reached agreement after they had
divorced
Held that there was an intention to create legal
relations, as they were not in a domestic
situation
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Family, Social and Domestic
Relations
Jones v Padavatton [1969] 2 All ER 616
Mother promised to pay daughter and to give
her a house if she returned to England to study
at the bar and later practice in Trinidad
Daughter did not return to Trinidad, and did not
practice law
Mother sought possession of the house
Agreement found to be within a social / family
setting, and not intended to create legal
relations
“I didn’t open the door because a normal
mother doesn’t sue her daughter in court.
Anybody with normal feelings would feel upset
by what was happening”
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Family, Social and Domestic
Relations
Rebuttal of Presumption
Wakeling v Ripley (1951) 51 SR (NSW)
183
Significant personal/financial sacrifice was
made
This construed the agreement as
commercial
See also Riches v Hogben [1986] 1 Qd R
315; and Todd v Nicol [1957] SASR 72
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Family, Social and Domestic
Relations
Other issues - consideration
Dunton v Dunton (1892) 18 VLR 114
A promise by an estranged wife to conduct
herself “with sobriety, and in a respectable,
orderly and virtuous manner”
Just like Emily here...
Not only was intention an
issue, but there was also an
issue with consideration
being illusory
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Commercial Arrangements
Presumption that parties intend to be bound
This can in some circumstances be displaced
E.g. honour / ‘gentleman’s’ clauses
Rose and Frank Co v J R Crompton & Bros Ltd
Clause ousting court’s jurisdiction
Presumption was rebutted
"This agreement is not entered into…as a formal or
legal agreement…it will be carried through by each of
the three parties with mutual loyalty and friendly cooperation."
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Commercial Arrangements
Edwards v Skyways Ltd [1964] 1 All
ER 494
‘Ex gratia’ or voluntary payment
Was the promise to pay binding – e.g.
was it within a commercial scenario,
where the parties intended to be bound?
Held that the presumption of intention
was not rebutted – ex gratia payment
still made within a commercial setting
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Commercial Arrangements
Esso Petroleum Ltd v Commissioners of Customs
and Excise [1976] 1 All ER 117
Promotional goods and gifts with sale
Can the intention be rebutted even though it is still
within a commercial setting, and words like ‘free’
and ‘gift’ were used?
Presumption not rebutted – it was found that Esso
intended to enter a contract for the supply of the
coins to customers
Note also Carlill v Carbolic Smoke Ball, but
compare with Leonard v Pepsico Inc (2000) 210
F 3d 88
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Commercial Arrangements
Roufos v Brewster (1971) 2 SASR
218
Son-in-law and parents-in-law, arranged
transport of goods to their respective
businesses
Setting was commercial, not social or
domestic
“The whole setting of the arrangement is commercial
rather than social or domestic” per Bray CJ
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Particular Situations
Government Schemes
The government can enter into contracts, but what of
administrative schemes arising from policy e.g.
welfare?
The Administration of the Territory of Papua New
Guinea v Leahy (1961) 105 CLR 6
Tick eradication scheme that was carried out
poorly by the government
Landholder attempted to sue for breach of
contract
Held that the arrangement was of an
administrative rather than a contractual nature
See also Australian Woollen Mills case from last
week
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Particular Situations
Unincorporated Associations
Cameron v Hogan (1934) 51 CLR 358
No tangible or practical proprietary right
See also Finlayson v Carr [1978] 1 NSWLR 657
Voluntary Arrangements
Dietrich v Dare (1980) 54 ALJR 388 – a volunteer
employee was injured, held not to be an employee
(no contract) and could not claim workers’
compensation
Teen Ranch Pty Ltd v Brown (1995) 87 IR 308 –
voluntary work at a church camp did not create legal
relations
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Conclusion
Overlap between intention to be
bound, agreement and consideration
Dunton v Dunton (1892) 18 VLR 114
Horton v Jones (1935) 53 CLR 475
Lack of consideration (e.g. illusory)
Lack of intention
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Certainty
Completeness
An agreement must contain all the essential
terms
Certainty
Each term must be precise and clear enough
that a court can attribute a meaning to it
Not absolute concepts - is the agreement
complete and certain enough?
Courts have wide discretion - some
inconsistency in outcomes
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Certainty
Two competing principles at stake
1. Courts try to uphold agreements should adopt reasonable interpretation
or insert terms by implication
2. Only terms which parties voluntarily
agree to should be enforced - should not
impose terms on parties unless clearly
adopted by them
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Certainty
Completeness
1. The essentiality of terms that are
missing
2. Why any essential terms are missing
(did the parties forget to include them,
deliberately omit them? etc)
3. Whether the contract is wholly
executory
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Certainty
Completeness
Is the missing term essential?
Familiar contracts eg conveyance of land,
leases, sale of goods - essential terms
have been identified by courts
Sale of land - parties, land, price
Lease - commencement date, rental
Sale of goods - price not essential
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Certainty
Completeness
Unfamiliar contracts
The threshold question is not whether the
expressly agreed terms are sufficient in
themselves to constitute a contract, but
whether the parties have specifically agreed all
the terms that only they can decide. (my
emphasis)
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Certainty
Completeness
Why are the essential terms omitted?
Parties may attempt to ‘agree to agree’ Not enforceable
Parties may have overlooked an issue court may supply a term by implication, but
with reluctance
Parties may have failed to agree on the
issue - Not enforceable
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Certainty
Completeness
Is the contract wholly executory, partially
executed or wholly executed?
Executory - neither party has performed their
obligations ie the promises have not been fulfilled
yet
Partially executed - one party has performed their
obligations, but the other party has not - eg one
party has provided services but has not yet been
paid. eg goods have been paid for but not yet
delivered
Wholly executed - both parties have fulfilled their
obligations eg goods have been delivered and paid
for
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Certainty
Completeness
Wholly executory - courts will be more
reluctant to ‘read in’ missing terms
Partially executed - courts will be more
ready to ‘read in’ missing terms by
implication
Wholly executed - what’s the problem,
guys? The contract is finished.
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Certainty
Imprecise, vague or meaningless
terms eg;
Language is deficient in expression
Semantic or conceptual difficulties
Language is clear, but application to facts
doesn’t make sense
No facts fit the contract description
More than one set of facts fit the contract
description
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Certainty
Examples
‘subject to finance’ - Meehan v Jones
‘upon reasonable terms as commonly
govern such a lease’ - Whitlock v Brew
Value of land fixed but less depreciation Hall v Busst
Option to participate in company equity
sharing scheme but no such scheme
existed - Biotechnology v Pace
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Certainty
Terms upheld - promises to pay
‘handsomely’
‘a substantial sum’
‘a substantial cut on all work done’
‘a bonus’
‘a fair and equitable price’
‘current bank overdraft rates’
‘supplier’s costs’
Term not upheld - promise to
‘well reward’ employee
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Certainty
Reasonableness
Operates as a standard by which courts
can interpret vague or imprecise terms
Sale of Goods Act - implies promise to pay
a reasonable price
Can not help if there are several
‘reasonable’ interpretations of the term eg
Whitlock v Brew, Hall v Busst
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Certainty
Agreements to negotiate
UK - not enforceable if parties agree to
negotiation ‘in good faith’
Australia - Coal Cliff Collieries v Sijehama Court said agreement to negotiate could be
enforceable, though not in that case
Aiton v Transfield - NSW Supreme Court
enforced an agreement to negotiate and
mediate in good faith
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Certainty
Severance
If a contract contains an uncertain term
which is not essential, court may ‘sever’
the term from the contract, and enforce
the balance
Only available if severance does not
change the nature of the agreement
overall
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