Business Law Case Summaries

Clarke v Earl of Dunraven and Mount-Earl 64

The court decided that a contract existed between two yachts owners who both entered a regatta and agreed to be bound by the rules of the yacht club conducting the regatta. The rules made a boat owner breaking the rules and fouling another boat causing its damage liable for the cost of repairs despite the absence of any direct offer and acceptance between the two boat owners.

Regent v Millett 70

A verbal agreement to transfer ownership of a house where the Milletts would occupy the property and pay out the mortgage on the property which they have performed. They also completed some repairs and renovations to the house. When Regent refused to transfer the property, they sued for specific performance and succeeded. The court relied upon the doctrine of part performance.

Balfour v Balfour 75

A married couple lived in Sri Lanka with the husband being a civil servant of the British government. They returned to England where the wife took ill and remained while the husband returned to Sri Lanka. He promised to pay her 30 pounds per month until she was well enough to return to Sri Lanka but later wrote to his wife asking her not to return and she divorced him. She later sued for the promised payments arguing that a contract existed between them. The court held that intention to be legally bound could not be proved as the contract was formed as husband and wife and is not intended to carry legal consequences and thus there was no contract.

Cohen v Cohen 75

Prior to marriage, Cohen promised his intended wife a dress allowance paid by quarterly instalments in which later, after an unhappy marriage, they separated and payments ceased. The wife sued for the payments arguing that is it was a contract. The court held that is was a domestic agreement and had no intention to be legally binding.

Murphy v Simpson 75

Matthew Simpson died and his house was then occupied by his family in which his daughter became the administrator of the estate and tried to evict her brother from the house. He claimed he could continue as a tenant pursuant to an agreement between them that he would maintain the property in return for free accommodation. The court held that it was a domestic agreement and had no intention to be legally binding.

Coward v Motor Insurers Bureau 76

Coward was injured while a pillion passenger on a friend’s motor cycle who drove him to work daily and whose negligence caused his death. He was uninsured and his could not claim for his wrongful death in which she instead claimed that there a contract existed between the rider and her husband given that her husband has contributed to the motor cycle operating costs. The court held that despite the sharing of expenses, it was a social arrangement and had no evidence of intention to create a legally binding contract.

Ermogenous v Greek Orthodox 77

Archbishop Ermogenous claimed payment for unused annual leave and long service leave after his termination of employment by the defendant in which he argued that the employment contract contained terms that entitled him to these benefits. The defendant argued no intention to create legal relations and thus no contract. The court held that despite their spiritual relationship, intention to be legally bound did exist and the Archbishop succeeded in his claim.

Edward v Skyways Ltd 77

An airline company offered its surplus pilots who retire prematurely the same amount of money as the superannuation contribution that the retirement would normally disentitle them to. In the documentation of the offer the payments were referred as “ex gratia” payments or payments of a voluntary nature without any legal obligation. When Edwards took early retirement, the company refused to make the payment in which he sued arguing that a contract existed between them. The company argued that the use of the words “ex gratia” to describe the payments rebutted the presumption of intention in commercial agreements. The court held that company’s argument was insufficient to rebut the presumption and the agreement was a commercial agreement.

McGregor v McGregor 78

A husband and wife separated and the husband agreed to pay the wife money for maintenance of herself and their children in which she agreed not to incur any debts that he would be liable. When he failed to make the payments, she sued. The court held that they intended the agreement to be legally binding due to its serious nature and a reasonable person would conclude that they intended it to have legal consequences.

Merritt v Merritt 78

A husband left his wife and agreed to transfer property to her if she paid off the mortgage but later refused to sign the property transfer in which she sued arguing the existence of a contract that he had breached. The court held that intention did exist and there was a contract.

Wakeling v Ripley 79

Wakeling was living along in Australia and induced his sister and her husband to leave England and live with him promising to leave property to them in his will and give them a home and an income during his lifetime. They sold their England property and migrated to Australia but sometime later an argument ensued between the parties and Wakeling sold his home and reneged his promise in which his sister sued arguing a contract between them that had been breached. Wakeling argued that it was a domestic arrangement and there was no contract. The court held that there was an intention to be legally bound and an enforceable contract because of the detriment to the sister and her husband in relinquishing their property and employment in England.

Riches v Hogben 79

A man moved from England to Australia following his mother’s promise to purchase a house in his name. They moved to Australia and the mother bought a house in own name and evicted the son after 7 days in which he sued arguing the existence of a contract between them. She argued that it was a domestic arrangement and there was no intention to be legally bound and therefore no contract. The court held that there was a binding contract and an intention to create a legal relationship.

Todd v Nicol 80

A South Australian resident arranged for his sister-in-law and niece to move from Scotland to live with her in which they moved with considerable personal inconvenience. When the arrangement failed, they sued for breach of contract. The court held that there was a contract despite their relationship given the disruption to the migrating parties in disposing of their property and employment in Scotland.

Popiw v Popiw 80

A wife returned to live with her estranged husband due to his promise to transfer the matrimonial home from his sole to a joint ownership. When he was cruel to her, she again left him and sued for half interest of the house arguing a contract between them. The court held that there was a contract given that she was not compelled to return to her husband and by doing so had put herself at risk of physical violence.

Carlill v Carbolic Smoke Ball Co 81

The company advertised its product in a newspaper offering to pay any purchase a reward of one hundred pounds if they used it as directed and still contracted influenza which the product claimed to provide immunity. The advertisement also said that one thousand pounds had been lodged into an account to show sincerity. When Mrs Carlill sued for the payment, they argued that it was merely an “advertising puff” and not to be taken seriously. The court held that intention to be legally bound did exist.

Keller v Holdermann 81

One part in jest gave another a large cheque for a watch of little value and the recipient tried to enforce the contract. The court held that there was no contract since there was no intention to be legally bound. Despite being a commercial transaction, it was done it jest, rebutting the presumption of intention.

Nyulasy v Rowan 82

A party made an offer to sell shares which was take up by an offeree which the offeror then claimed that the offer was just a joke and refused to sell the shares. The buyer sued. The court held that there was a contract given that the offeree believed it to be a serious offer and that the transaction was commercial with the presumption of intention.

Simpkins v Pays 82

Three people regularly entered a fashion competition in which the entries were always submitted in the name of Pays with irregular contributions by the three parties towards postage and other expenses. When one of their entries were successful, Pays kept the prize in which the other two sued. Pays argued that there was no contract. The court held that the agreement was enforceable given that a reasonable person would consider the contributions towards the expenses to entitle them to the share of the prize.

Trevey v Grubb 82

Four members contributed 50 cents each for a $2 ticket which won in the party who lodged the ticket claimed the price. The court held that there was a contract and the plaintiff was entitled to her proportion of the winnings.

Jones v Vernons Pools 83

Jones sent a winning entry in a soccer pools competition that he claimed were lost by the organizer in which he sued for breach of contract. The court held that the company could rely on the clause included in their competition entry form which states that they had no intention for the arrangement to form any legal relationship.

Rose and Frank Co v Crompton & Bros Ltd 83

The parties dealt with each other for many years and in the agreement considered, there was an honour clause which referred to their previous commercial history, their mutual trust and loyalty and concluded that no legal consequences are intended by the contract. Dispute arose when one party intended to terminate the agreement. The court held that despite being a commercial transaction and there is a presumption of intention, the honour clause was sufficient to rebut the presumption.

Kleinwort Benson Ltd v Malaysian Mining Corporation Bhd 84

Malaysia Mining Corporation Metals Ltd was a subsidiary of the defendant. The plaintiff is a bank which loaned to the subsidiary and in the letter to the bank the defendant said that it would ensure the subsidiary’s business is always able to meet it liability under the arrangements. When the subsidiary company collapsed financially, the plaintiff sued the defendant for repayment of the subsidiary’s loan. The court held that the letter of comfort was only a representation as to the defendant policy and not a promise to future conduct and there was no contractual obligation on the defendant to repay.

Administration of the Territory of Papua and New Guinea v Leahy 86

Leahy leased a cattle property from the Administration. The Department of Agriculture established a program to eradicate cattle tick under which they provided the chemical spray and staff. Leahy had to muster the cattle for spraying and provide necessary labour. The staff was not satisfactory and the tick infestation increased. Following the loss of some cattle, Leahy sued the Administration for breach of contract. The court held that he could not prove an intention to create legal relations and that the arrangement was only a social service to assist farmers and did not intended to constitute a legal relationship.

Australian Wollen Mills Pty Ltd. V The Commonwealth of Australia 86

The Commonwealth government paid a subsidy to local manufacturers of woollen products who used Australian wool in their manufacturing process. When the subsidy was cancelled after some time, the company sued for some accrued but unpaid subsidy arguing that it was entitled in contract. The court held that there was no intention to create legal obligation given that if it was a contractual obligation, an appropriation act would be constitutionally necessary and no such act was passed.