LAWS1015 Lecture 8

Question 1

(Liverpool City Council v Irwin)

Answer 1

Terms implied in law.

T: must show that the terms are a necessary incident of a definable category of contractual relationship.

P: Necessary: unless such a term is implied, the enjoyment of rights conferred would be rendered worthless, or serious undermined.

F: implied term in law that landlords are under an obligation to take reasonable care of the common areas

Question 2

(Reid v Rush Thompkins)

Answer 2

P: the mere fact that the implied term is reasonable and desirable does not equate to necessity

P: the courts cannot imply a term that should be governed by legislation. cannot assume a regulatory function

P: must be appropriate for it to be recognized as implied in all contracts of that class.

F: Ethiopia car crash. Sought to imply term that employer must take out insurance cover for him, or research and advise risks. Such an obligation would be too onerous on small scale employers with no resources available.

Question 3

(Scally v Southern Health Board)

Answer 3

F: Implied term to take reasonable steps to make employees aware of this contingent right.

Defined the category as relationship between employer and employee where, 1st: the terms of the employment contract were not negotiated with the individual employee, 2nd: a particular term makes available to the employee a valuable right contingent upon action being taken by him, 3rd: employee cannot reasonably be expected to be aware of this term unless it is drawn to his attention.

Question 4

(Commonwealth Bank v Barker)

Answer 4

F: Did not inform of alternative position at Bank, therefore employment terminated. No implied term of mutual trust and confidence. (good faith?)

Question 5

(University of WA v Gray)

Answer 5

P: necessity in the context of implying a term in law for the first time, is different from “business efficacy”. Considerations of policy and social consequences outside the commercial context are also relevant.

F: sought implied duty to invent. Significance of freedom of academic researchers to have discretion while researching without being encumbered by a duty to invent. Nature of universities and their public purposes.

Question 6

(BP refinery) approved by HCA in (Secured Income Real Estate v St Martins Investments)

Answer 6

T: for a term to be implied in fact into a formal contract:

• reasonable and equitable
• necessary to give business efficacy to the contract (the Moordock)
• so obvious that “it goes without saying” (Codelfa)
• capable of clear expression
• must not contradict any express terms of contract

F: Shire’s proposed term precluding assignment of preferential rates to BP’s subsidiaries was neither reasonable nor equitable.

Question 7

(the Moordock)

Answer 7

T: Whether the proposed term is necessary to enable the the contract to operate in a business like manner?

F: an implied term imposing an obligation to take reasonable care to ensure loading doc was safe is essential to give business efficacy to the contract

Question 8

(Codelfa)

Answer 8

F: implied term of compensation for increased costs would not be so obvious that “it goes without saying”

Question 9

(Guan Investments v Outback Health Screenings)

Answer 9

F: term that overall package of truck with mobile unit should be capable of being driven on public roads was so obvious that “it goes without saying”, therefore implied.

Question 10

(Hawkins v Clayton) approved by HCA in (Byrne v Australian Airlines)

Answer 10

P: where there is a less formal contracting arrangement, terms should be implied by reference to the imputed intentions of the parties

T: the question is whether the implication is necessary for the reasonable or effective operation of a contract of that nature in the circumstances of the case?

F: implied term that termination by employer shall not be harsh, unjust, unreasonable was not so obvious that “it goes without saying”, or necessary for the operation of the contract.

Question 11

(Renard Constructions v Minister for Public Works)

Answer 11

P: where there is a show cause provision, a duty to act in good faith will usually be implied.

F: implied term in fact was necessary to give business efficacy. principle was subject to an obligation to act reasonably in considering whether the contractor had shown cause to his satisfaction. Power was so wide that it had to be constrained by a requirement of reasonableness. (Meehan v Jones)

Question 12

(Burger King v Hungry Jacks)

Answer 12

D: increasing acceptance to imply terms of good faith and reasonableness in Australia

P: implied term in law: duty to act in good faith for standard form contracts, which contain a general power of termination.

F: BK refused to give development approvals for new restaurants, acting as part of a deliberate plan to prevent HJ from expanding. They were exercising their power for an extraneous purpose.

Question 13

(Secured Income Real Estate v St Martins Investments)

Answer 13

P: implied duty to cooperate to do such things as necessary to enable the other party to have the benefit of the contract. Or duty not to prevent other party from performing the contract.

Question 14

Sale of Goods Act s13

Answer 14

s13: where contract does not provide for price, buyer must pay a reasonable price

Question 15

Sales of Goods Act s18, s20

Answer 15

s18: where there is a contract for sale of goods by description, implied condition that the goods shall correspond with the description
s20: sale of goods by sample. implied condition that buyer will have reasonable opportunity to compare the bulk with the sample

Question 16

Sale of Goods Act s19

Answer 16

s19: implied condition that goods shall be of merchantable quality (i.e. fit for their purpose)
s19: if the buyer has examined the goods, there is no implied condition for defects which such examination ought to have revealed.

Question 17

Sale of Goods Act s32

Answer 17

s32: if no time for sending is fixed, the seller is bound to send within a resoanble time

Question 18

Sale of Goods Act s57

Answer 18

s57: any term implied by law may be negatived or varied by express agreement, course of dealings, or usage.

Question 19

(Con-Stan Industries v Norwich Insurance)

Answer 19

D: the existence of a custom that will justify the implication of a term is a question of fact.

T: There must be evidence that the custom is so “well known and acquiesced” that everyone making a contract can reasonably be presumed to have imported that term into the contract.

P: person may be bound regardless if they knew of the custom or not

P: will not be implied if it contradicts an express term

F: necessary to show a clear course of conduct under which insurers did not look to the insured for payment of premiums. not sufficient to show it was in the ordinary course of events.