week seven

Question 1

what was decided in Scammel v Ousten

Answer 1

the terms were too uncertain to be enforced

Question 2

what was the problem in Nicolene v Simmonds

Answer 2

one of the terms in their contract for the sale of steel bars was ‘we are in agreement that the usual conditions of acceptance apply’

there were no usual conditions so this didn’t have any meaning

Question 3

what did the court decide in Nicolene v Simmonds

Answer 3

this term was meaningless and could be ignored

Question 4

what provision in the heads of agreement between fletcher challenge energy v ECNZ brought up a question of whether it was sufficiently certain

Answer 4

FCE will deliver gas only if economic

Question 5

what did the court decide regarding the ‘FCE will deliver gas only if economic’ term in the HOA between fletcher challenge energy v ecnz and whether it was sufficiently certain

Answer 5

the provision could be objectively determined and applied to any particular situation if necessary

Question 6

what is contractual machinery

Answer 6

e.g. where the contract terms don’t specify the price but they do specify the way of working out what the price is e.g. by referencing another source or a certain process

Question 7

what were each of the clauses in Attorney-General v Barker Bros 1976 regarding the lease of land for an airstrip in the Chatham Islands

Answer 7

Clause 2: option for renewal of the lease and the rent shall not be less than the amount payable hereunder

Clause 18: arbitration clause

Question 8

what was the issue in Attorney-General v Barker Bros

Answer 8

the Crown wanted to renew the lease but the cost was going to be over double so they objected and wanted to engage the arbitration clause. Barker Bros disagreed and said clause 2 was not a binding right of renewal because it is uncertain about price. the crown said it is uncertain but there is a process to fix it - the arbitration clause

Question 9

what was Richmond P’s decision in Attorney-General v Barker Bros

Answer 9

the arbitration clause fixes the uncertainty issue. clause 2 gives minimum renewal rent price and if it wasn’t a binding right of renewal they would just be free to not accept and wouldn’t need this

Question 10

what was the problem in Money v Ven-Lu-Ree

Answer 10

money’s shares were to be purchased by other shareholders. both sides valued the shares but didn’t decide on a process which would apply if the valuations were differed.

the valuations did differ so it was argued there was no contract for lack of certainty.

Question 11

what did the CA hold in Money v Ven-Lu-Ree and which of the two aspects was not upheld by the Privy Council

Answer 11

1. it was a sale by valuation and this is an objective standard which the court can determine (a fair valuation)
2. the CA were willing to imply an arbitration clause into the contract, even though there wasn’t one in the oral agreement

the 2nd one wasn’t included

Question 12

what is an agreement to agree

Answer 12

not an agreement itself, just a non bininding agreement to agree

Question 13

why are agreements to agree not binding

Answer 13

because they are not sufficiently certain as to who would be at fault if they didn’t agree

Question 14

what term was in the Fletcher Challenge Energy v ECNZ 2002 heads of agreement which concerned agreements to agree

Answer 14

FCE/ECNZ to use all reasonable endeavours to agree a full sale and purchase agreement within three months of the date of this agreement

Question 15

what did the court find regarding the agreement to agree term in Fletcher Challenge Energy v ECNZ

Answer 15

it was unenforceable because it wasn’t sufficiently certain what this would require the parties to do

Question 16

what was the agreement to agree term in Wellington City Council v Body Corporate 51702

Answer 16

Council officers will negotiate, in good faith, sales of Council’s leasehold interests to exisiting lessees at not less than the current market value of those interests

Question 17

could the statement in Wellington City Council v Body Corporate 51702 be enforced?

Answer 17

it was an agreement to agree so there was no contract on its basis because the statement could not be contractually enforced because it was too uncertain as to what it would entail - Tipping J

Question 18

what is consideration historically

Answer 18

in order to enforce a promise there had to be consideration for the promise

Question 19

what is the benefit detriment approach to consideration

Answer 19

the consideration must consist in a benefit to the promisor or a detriment to the promisee

Question 20

what is the bargain approach to consideration

Answer 20

the price for which a promise is bought - one sided where one party is the promisor and the other is giving something in exchange

Question 21

what is barber’s mutuality symmetrical approach to consideration

Answer 21

that everyone has to give something and assume some obligation

Question 22

what was the situation in Thomas v Thomas

Answer 22

Mr Thomas died and said his wife should have his house for life.

His executor made an agreement with Mrs Thomas that she would have use of the house for life if she paid 1 pound rent per year and kept the house in good repair.

The executor later refused to go ahead with the agreement.

Question 23

what was the result of Thomas v Thomas

Answer 23

The arrangement appeared to be a gift but Patterson J said consideration means something which is of some value in the eye of the law

Question 24

what is the key takeaway from Thomas v Thomas

Answer 24

there needs to be some consideration, but it doesn’t matter how much - the court is not concerned with the adequacy of consideration