Australian Contact Law Contractual Creation

Question: Discuss about theAustralian Contact Lawfor Contractual Creation. Answer: Introduction Within the territories of Australia, contract law encompasses the scope to study and practice the following broad studies: contractual creation, capacity and substance of contract, evasion of contractual liability, recital and annihilation of contract and the cure for violation of contract[1]. Therefore, one can state that any promise rendered between two more parties, through written means comes under the classification of a contract law. In Australia, majorly the contract law is controlled by the common law, however, as time has passed by, various statutes have come into existence which are reflecting and resonating the provisions of the common law of contract[2]. It must be taken into account that the primary source of contract law in Australia comes from the common English Laws, with reflection from chronologically updated judgments in the courts of Australia. The history of change in application of contract law can be best explained through the radical approaches shown by majority of the English lawyers. I would like to quote one of the greatest English lawyers, Sir Frederick Pollock who wrote to Oliver Wendell Holmes in 1877, Laws do not subsist for the technical fulfillment of the legal intellect, but rather for the expediency of the common people who sue and are sued. Now, it can be said that law existing for practical purposes are more definite lacking an explicit code than with one appears to be steep paradox.[3] Termination of a contract can occur when one of the innocent parties claims foul play or violation of the terms of contract by the other party. In such cases, the right to terminate a contract may come into place either through the means of the provisions entered into the contract or by means of operation of law. In case the right to terminate a contract arises through the means of operation of law, the innocent party to contract holds the right to terminate the contract wherein the violation is repudiatory. Body What is Breach of Contract? One of the most important facets of the Australian contract law has become to be the deciding factors prima facie which takes into consideration that a contract has been breached by the one of the parties to contract. It is a phenomenon which provides the power to a contracting agent, the right to discharge himself from a particular contract owing to the allegiance of the other partys intention to breach a contract.[4] Judges in the past have faced immense difficulty in gauging when a breach to contract has taken place; however, after the historical judgment in the case of Photo Production Ltd v Securicor Transport Ltd, the grounds for breach of contract came into clear existence. When Can Breach of Contract Occur? One can take a wide look at the various situations where the breach of contract may occur. The following paragraph will explain these situations as well as take up examples which replicate the situations, thereby explaining to the readers whether termination of contract for breach of condition is important, even if it is a minor one. In the case law of Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd, grounds for breach of contract were established under three different manners. Firstly, a party must renounce the contract. This leads to a situation where in one of the parties to contract has restricted itself, intentionally or unintentionally, from following the different functions and deliverables it was entitled to provide to the other party. A simple example of this could be a contract law between a contract laborer and a construction company where the construction company has stopped paying the hourly wages to the laborer. In such a case, the construction company has renounced itself from the obligations of a contract, therefore, terming it into a case of renunciation from contractual law. Other situations where the contract is deemed to be terminated owing to breach of contract could either be a violation of an essential term or a serious violation of a non-essential term in the contract[5]. Termination for Breach of an Essential Term In the position of Australian law, one must notice that a contract can be terminated for the breach of an essential term. Now, one must notice that this essential term need not be a major part to the contract, however, could also represent a minor part to contract; which might lead to major change in the deliverable mentioned in the contact[6]. For instance, the contract could mention the payment of the wage in Australian Dollars; however, in case the manager pays the employee or contractual employee rather in a currency against which the value of Australian Dollars has decreased, it shall be considered a minor violation of the contractual law, should the manager disagree to pay him in Australian Dollars (however, leading to discharge of contract by the innocent party). Under this doctrine, it has been clearly mentioned that wherever in a contract, a term is expressed as a condition; the violation of such a condition leaves the innocent party with a right to terminate the contract, at his own discretion. The existence of such a legal policy clearly establishes the fact that the Australian contract law does not pay heed to whether the degree of breach is major or minor. A mere violation of the condition is deemed to be a violation of the contract; thereby empowering the innocent party to contract a right to terminate the contract altogether at his own will and discretion[7]. The condition herein could be termed as a condition by the relevant applicable statute, by either of the parties themselves, or as a facet of the contract. This position was summarized in Ankar Pty Ltd Arnick Holdings Ltd v National Westminster Finance (Australia) Ltd. Termination for Serious Breach of an Intermediate Term: The Hong Kong Fir Doctrine The Hongkong Fir Doctrine broadened the scope of termination of contract by the innocent party to contract. The issue raised herein was whether charterers under a time charter party had a right to cease the contract, against a breach found in Clause 1 of the charter party agreement. The Doctrine of Hong Kong Fir was responsible for the birth of the deciding factor whether a term was a condition or a warranty. In case it was a condition, the breach of the condition would always lead to the innocent party an upper hand in deciding whether they wanted to terminate the contract or not. By all means of legal provision, it was a terminated contract under such situations, even if the breach was considered to be a minor one. On the other hand, had the term been expressed as a warranty, it would have been impossible for the charterers to terminate the contract given the breach of the seaworthiness term, irrespective of how serious the breach was in the given scenario? Heres where the birth of a third way was given by Diplock LJ, who gave a preferenced judgment to performance of contract over its termination thereby initiating the system of adoption of such categorization. Conclusion The idea that a contract may be terminated for breach of condition is an important one because even a minor breach of such a term will justify termination of the whole contract. It is truly applicable under the Australian contract law, wherein the idea of judgment for assessing the termination of contract is not whether the breach of condition was minor or major. Given the degree of increase of law statutes associated with the contract law, supplemented by the court judgments passed since the late 1900s, it can be safely stated that the Australian contract law has evolved over a long period of law, and is still evolving. References Brownsword, Roger, Retrieving Reasons, Retrieving Rationality? A New Look at the Right to Withdraw for Breach of Contract (1992) 5Journal of Contract Law83 Carter, John W; Tolhurst, GJ and Peden, Elisabeth, Developing the Intermediate Term Concept (2006) 22 Journal of Contract Law 268; (https://www.lexisnexis.com.au/aus/academic/carter/documents/jcl_developingtheintermediatetermconcept_web.pdf) Carter, John W, Intermediate Terms arrive in Australia and Singapore (2008) 24 Journal of Contract Law226; Clarke, Julie, Australian Contract and Consumer Law (February 9, 2016) Australian Contract Law https://www.australiancontractlaw.com/ Gamble, Roger, Australia and the Intermediate Term-No country for old rules, 2008. Swanton, Jane, Discharge of Contracts for Breach" [1981] MelbULawRw 4; (1981) 13(1) Melbourne University Law Review 69 Wan, Alex, Corporation and Contract Law, Thomson Reuters 2015, 154 Wan, Alex, Corporation and Contract Law, Thomson Reuters 2015, 156 Wolfe Howe, Mark De (ed), The Pollock-Holmes Letters (Harvard University Press, 1942) vol 1, 8.