CLAW1001 Lecture Notes - Lecture 2: Australian Consumer Law, Goodman Fielder, Ei Group
22 May 2018
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Lecture 2
Collateral Contract
An oral contract subsidiary to the main written contract (the consideration for which is entry
int the main contract) — really just a way for court to give contractual effect to pre-
contractual oral statements when main contract is in writing. Breach = Damages only.
• Collateral promise must not be inconsistent with main contract: Hoyts Pty Ltd v Spencer
[1919] 27 CLR 133
• Case example of the collateral warranty that goods be shipped in a special place: J Evans
& Sons (Portsmouth) Ltd v Andrea Merzario Ltd [1976] WLR 1078
• A written contract may contain an “entire agreement” clause that seeks to displace the
relevance of anything said outside the document: Inntrepreneur Pub Co (GL) v East
Crown Ltd (2000) 2 Lloyds Rep 611
But anything said could still attract the misleading and deceptive conduct prohibition in the
Australian Consumer Law.
Implied Terms
Implied terms are terms that are deemed to be in a contract by courts (on the basis of
common law or statute).
When are terms implied into the contract?
1. Previous Consistent course of dealings: Hillas &Co Ltd v Arcos Ltd [1932] All ER 494
2. Business efficacy: The Moorcock [1886]
3. Custom / trade usage: Goodman Fielder Consumer Foods Ltd v Cospak International
Pty Ltd [2004] term implied regarding correction of initial installation faults
4. Statute: Sale of Goods Act 1923 (NSW), Australian Consumer Law (Cth)
• Past Dealings between the Parties
Usually happens in cases of incompleteness or uncertainty. Recall: an uncertain or
incomplete agreement is unenforceable. BUT if possible, court will enforce agreement by
reference to previous dealings between the parties: question of fact based on particular
circumstances of the parties. Need to identify previous terms + sufficient number of past
dealings to establish a “course of dealing”.
Case Studies: Hillas & Co Ltd v Arcos Ltd [1932] All ER 494
Issue about size of timber etc. in 1931 contract. But could relate 1931 contract to 1930
contract that was completed without problem. Previous dealings give rise to expectation that
the same terms should be included in the subsequent contract.
• Custom or trade usage: When will a court imply a term on the basis of custom or trade
usage？
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Breach = damages only: collateral promise must not be inconsistent with main contract: hoyts pty ltd v spencer. [1919] 27 clr 133: case example of the collateral warranty that goods be shipped in a special place: j evans. & sons (portsmouth) ltd v andrea merzario ltd [1976] wlr 1078: a written contract may contain an entire agreement clause that seeks to displace the relevance of anything said outside the document: inntrepreneur pub co (gl) v east. But anything said could still attract the misleading and deceptive conduct prohibition in the. Implied terms are terms that are deemed to be in a contract by courts (on the basis of common law or statute). Pty ltd [2004] term implied regarding correction of initial installation faults: statute: sale of goods act 1923 (nsw), australian consumer law (cth, past dealings between the parties. Usually happens in cases of incompleteness or uncertainty. Recall: an uncertain or incomplete agreement is unenforceable.
