澳大利亚商法Lecture 5- Contracts - Legaility-Remedies

Legal Issues for Managers Lecture 5
Contract – Legality, Form, Rights & Remedies
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Element 7- Legality
• Is the purpose of the contract legal? • Contracts can be Illegal or Void at both statute and common law
• There is a protectable proprietary interest, e.g. intellectual property rights, customer connections
Forster & Sons Ltd v Suggett (1918)
• They are of reasonable length in time and area
– Void unless wholly in writing – Unenforceable unless evidenced in writing
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Privity, Assignment and the rights of the parties - (text p. 388-89)
• As a general rule, only the parties to the contract can acquire rights and incur liabilities under it
– Contracts to commit a crime, a tort or a fraud on a third party; – Contracts that are sexually immoral or which prejudice the status of marriage; – Contracts to the prejudice of public safety, or of good relations with other countries; – Contracts prejudicial to the administration of justice
Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co. Ltd (1894) (text p. 354)
• Restraints imposed upon the vendor of a business – Sale of a business assumes the parties are in a more equal bargaining position (than contracts of employment). – Question of fact as to whether the restraint is reasonable
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Illegal Contracts
– A ‘contract’ deemed illegal when it is formed is totally void – Illegality may arise either because the contract is of a kind prohibited by statute, or because it is of a class regarded as contrary to public policy – Neither party has any rights or remedies
• As a general rule assignment of liabilities cannot be transferred unless all the parties consent. Robson and Sharpe v. Drummond (1831))
– Assignment of rights
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Contracts – Illegal by Statute - text p. 350
• The parties may have no rights or remedies • The extent of the invalidity depends upon the terms of the statute - it may be possible to sever the void term out of the contract and leave the remainder of the contract still valid • Consequences of statutory illegality depend upon when the contract becomes illegal (cont.)
– Contracts to defraud the revenue; and – Contracts that involve a breach of duty
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Contracts – in Restraint of Trade
• Clauses in contracts in restraint of trade are prima facie void, as being contrary to public policy, unless the restraint is reasonable
– Actual Performance
• The parties must carry out as closely as practicable the terms of the contract
Re Moore & Co Ltd v Landauer (1921) ;but cf Shipton, Anderson & Co v Weil Brothers & Co (1912)
Anderson Ltd v Daniel (1924); but cf St John Shipping Corporation v Joseph Rank Ltd (1957)
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Contracts – Illegal at Common Law
• Contracts which would violate the social or moral attitudes of the community and are void ab initio:
• Assignment of rights is not possible at common law although it is possible to have an assignment by equity, statute and by operation of law.
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Discharge
Cutter v Powell (1795)
• Although there are exceptions:
– if there has been free and willing acceptance of partial performance by the party receiving the benefit – there has been substantial performance and the cost of rectification is small Hoenig v Iosaacs (1952) – if one party is prevented from performing 11
Atwood v Lamont (1920); and
• They are reasonable fair for both parties
Schroeder Music Publishing Co Ltd v Macauley (1974)
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Form
• Are there any statutory procedural requirements that need to be satisfied? • Certain simple contracts must satisfy statutory procedural requirements (‘Form”) to be valid:
• Void Contracts
– An agreement rendered void at common law by statute will not be enforced by the Courts – Any money paid or property transferred under such agreement may be irrecoverable
Public Service Employees Credit Union Co-operative Ltd v Campion (1984) (text p. 352)
– Contracts which tend to promote corruption in public life
Parkinson v College of Ambulance Ltd (1925)
Amoco Australia Pty Ltd v Rocca Brothers Motor Engineering Co Pty Ltd (1973)
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Contracts – in Restraint of Trade
• Contracts of employment (text p. 355-7) – As the parties are usually in an unequal bargaining position, restraint clauses are generally struck down by the courts unless: