Essay on LAW4198 Australian Commercial Law

27758 Words May 17th, 2015 112 Pages
Australian Commercial Law
Exam Notes

Formation of contracts

1. Agreement


Offeror/promisor = person making the offer.
Offeree/promisee = person to whom the offer is made.

Characteristics of an offer

Invites acceptance;
With a willingness to enter into a contract upon acceptance.

An offeror will have made an offer where it appears to a reasonable person in the position of the offeree that an offer was intended.

Subjective intentions are irrelevant.


Invitations to treat:
An invitation to others to make offers or enter into negotiations;
Display of goods for sale (customers make an offer when they present the items to the cashier. There is no sale until the cashier accepts that offer; Boots
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Electronic communication
Email and Interactive websites
i. Virtually instantaneous  general rule should apply (ie. contract is formed when the offeree’s acceptance is received by the offeror; per Lord Wilberforce in Brinkibon)4; ii. Time of receipt governed by Electronic Transactions Act 2000 (Vic):
‘Electronic communication’ = a communication of information in the form of data, text or images (s 3(1)(a)).
‘Information system’ = a system for generating, sending, receiving, storing or otherwise processing ECs (s 3(1)).
If the recipient has designated5 an information system for the purpose of receiving electronic communications, then, unless otherwise agreed, time of receipt = time when the EC enters the IS (s 13(3));
If the recipient has not designated an information system then, unless otherwise agreed, time of receipt = time when EC comes to the attention of the addressee (s 13(4)).

2. Consideration

Essential elements

When is consideration required?

A’s promise to B can only be enforced by B if B has given consideration for that promise;
An agreement not supported by consideration on both sides is nudum pactum (‘a naked agreement’) and unenforceable.


1. Benefit/detriment requirement;

Promisee must incur a detriment or confer a benefit on the promisor (Currie v Misa).
Mutual promises: If B makes a promise in return for A’s promise, this will confer a benefit on A (because A will have an enforceable legal right to have the promise

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