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FRUSTRATION........................................................................................................................................................................... 22

Test ............................................................................................................................................................................................................... 22 Limitations on the Doctrine of Frustration ................................................................................................................................................... 22 Consequences ............................................................................................................................................................................................... 22

EXAMPLES- CASES ............................................................................................................................................................................. 22 Taylor v Caldwell (1863) ........................................................................................................................................................................... 22 Krell v Henry (1903) .................................................................................................................................................................................. 22 Brisbane City Council v Group Projects (1979) ......................................................................................................................................... 22 Codelfa v SRA (1982) ................................................................................................................................................................................ 23

TERMINATION .......................................................................................................................................................................... 24

TERMINATION BY AGREEMENT ................................................................................................................................................ 24

TERMINATION UNDER THE ORIGINAL CONTRACT ....................................................................................................................................... 24 Express powers to terminate ........................................................................................................................................................................ 24

Pan Foods v Aus & NZ Banking Group (2002) ........................................................................................................................................... 24 Implied right to terminate ............................................................................................................................................................................ 24

TERMINATION BY SUBSEQUENT AGREEMENT ........................................................................................................................................... 25 Express agreements ...................................................................................................................................................................................... 25

CASES ............................................................................................................................................................................................. 25 McDermott v Black (1940) ....................................................................................................................................................................... 25

Inferred agreements ..................................................................................................................................................................................... 25

TERMINATION BY ABANDONMENT .......................................................................................................................................... 27

GENERAL PRINCIPLES ......................................................................................................................................................................... 27 CASES ............................................................................................................................................................................................. 27

DTR Nominees v Mona Homes (1978) ...................................................................................................................................................... 27

TERMINATION BY FAILURE OF A CONTINGENT CONDITION ...................................................................................................... 28

General Principles ......................................................................................................................................................................................... 28 Types of Condition ........................................................................................................................................................................................ 28 Condition precedent to formation ................................................................................................................................................................ 28 Condition precedent to performance ........................................................................................................................................................... 28 Condition subsequent to performance ......................................................................................................................................................... 28

FULFILLMENT OF CONTINGENT CONDITIONS ............................................................................................................................................ 28 NON-FULFILLMENT OF CONTINGENT CONDITION ...................................................................................................................................... 28 CONSEQUENCES OF NON-FULFILLMENT .................................................................................................................................................. 29 WAIVER OF A CONTINGENT CONDITION .................................................................................................................................................. 29 CASES ............................................................................................................................................................................................. 29

Consequences of non-fulfillment .................................................................................................................................................................. 29 Suttor v Gundowda (1950) ....................................................................................................................................................................... 29

TERMINATION FOR BREACH ..................................................................................................................................................... 30

WHEN IS THERE A RIGHT TO TERMINATE? ............................................................................................................................................... 30 Classification of terms ................................................................................................................................................................................... 30 Test ............................................................................................................................................................................................................... 30

TERMINATION FOR BREACH OF A CONDITION ........................................................................................................................................... 30 Classifying a term as a condition ................................................................................................................................................................... 30

CASES ............................................................................................................................................................................................. 30 Tramways Advertising v Luna Park (NSW) (1938) .................................................................................................................................... 30

TERMINATION FOR BREACH OF AN INTERMEDIATE TERM ............................................................................................................................ 31 Test ............................................................................................................................................................................................................... 31

CASES ............................................................................................................................................................................................. 31 Hongkong Fir Shipping v Kawasaki Kisen Kaisha (1962) .......................................................................................................................... 31 Ankar v National Westminster Finance (1987) ......................................................................................................................................... 31 Koompahtoo v Sanpine (2007) ................................................................................................................................................................. 31

TERMINATION FOR REPUDIATION ............................................................................................................................................ 33

REPUDIATION/RENUNCIATION ............................................................................................................................................................. 33 Definition ...................................................................................................................................................................................................... 33 Test ............................................................................................................................................................................................................... 33 Whole K/Terms ............................................................................................................................................................................................. 33 Conduction Amounting to Repudiation ........................................................................................................................................................ 33

CASES ............................................................................................................................................................................................. 33 Carr v JA Berriman (1953) ........................................................................................................................................................................ 33

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Termination by failure of a contingent condition

General Principles

A term in a K which says that performance of the K is conditional upon the occurrence of a specified event that neither party promises to ensure will occur, is known as a contingent condition.

o E.g. Where a buyer contracts to purchase car subject to finance o If the event does not occur either party can terminate K, no breach

Parties may also make performance of their K conditional upon a particular event not occurring o E.g. the parties may provide that their contract for their sale of goods will come to an end if the

seller’s licence to import the goods is revoked

Types of Condition

3 types of condition: 1. Condition precedent to formation (DON’T REALLY HAVE A CONTRACT HERE) 2. Condition precedent to performance

a. The parties are bound but performance is not required until event X occurs (condition) 3. Condition subsequent to performance

a. Generally required to perform immediately b. Some event will trigger the events discharge c. Bound to perform until that event occurs

i. E.g widget prices considerably increase

Condition precedent to formation

Where a contingent condition qualifies formation of a K, the parties are not bound by the K unless and until the condition is fulfilled

The parties will have no contractual obligations until a formal K is prepared and executed; either party may withdraw from agreement prior to that time.

Condition precedent to performance

Where a contingent condition qualifies the performance of a K, the parties will not be obliged to perform the K until the condition is fulfilled

Even before the condition is fulfilled the parties will be bound to the K and may not do anything inconsistent with their relevant K obligations

Condition subsequent to performance

Condition subsequent is one where the parties obligation to perform is immediately binding, but will come to an end should the even specified in the condition occur: Suttor v Gundowda (1950)

Fulfillment of contingent conditions

In absence of an express obligation to ensure condition is fulfilled, the parties may be under an implied duty to cooperation: Butts v O’Dwyer (1952)

o This duty requires parties to do everything reasonably in their power to see that condition is fulfilled: Butts v O’Dwyer (1952)

o K may expressly require a level of effort from the parties in attempting to ensure condition is fulfilled, e.g. ‘best endeavour’ ‘best effort’: Hawkins v Pender Bros (1990)

If a contingent condition is not fulfilled due to a breach of implied duty to cooperate, the party in breach will not be entitled to rely on the failure of the condition as a reason for termination: Suttor v Gundowda (1950)

Non-fulfillment of contingent condition

Two situations: o A contingent condition will not be fulfilled where the events that occur are contrary to what was

contemplated in the condition o A contingent condition will also fail where the condition is not fulfilled within the period of time

required by the K Where no time is specified, it is a reasonable period of time: Perri v Coolangatta Investments

(1982)

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Whether fulfillment is judged by an objective or subjective test, is dependent upon the language of the condition. If it is the latter (eg requiring one party’s ‘approval’) that party must act honestly and reasonably: Perri v Coolangatta Investments (1982)

Consequences of non-fulfillment

Non fulfillment excuses performance, even where non-fulfillment of the condition may seem objectively unimportant

If a contingent condition which relates only to a particular obligation is not fulfilled, then generally the parties will be excused from performance of that particular obligation though generally the K will remain on foot.

If a contingent condition relating to performance of the whole K is not fulfilled, the K will generally be voidable: Perri v Coolangatta Investments (1982)

Where the event upon which the condition depends may be brought about by the default of one of the parties, the K is voidable at the option of the party not in default: Suttor v Gundowda (1950)

o This is a ‘guiding principle’ MK & JA Roh v Metro Edgley (2005); can be rebutted by parties’ true intentions

Waiver of a contingent condition

Both parties may agree to waive a contingent condition, in which case they will be bound by that agreement and may not terminate the K for non-fulfillment of the condition: Perri v Coolangatta (1982)

One party alone will have a right to waive compliance with a condition where the condition is for the benefit of that party: Perri v Coolangatta (1982)

Cases

Consequences of non-fulfillment

Suttor v Gundowda (1950) Facts

Contract for the sale of land – conditional upon treasurers consent to the transfer within 2 months If no consent the contract is cancelled (void or voidable) – clause 12 Condition precedent to performance

o Bound – transfer of property isn’t required until there is approval by the treasurer Parties agreed that upon non-fulfillment of contingent condition K would come to an end automatically (ie

void) Held

The contract was voidable (either party can terminate), not void Because the event upon which the condition depended was brought about by the default of one of the

parties (they failed to take reasonable steps to cooperate in fulfilling the condition) This case held to be a ‘guide to construction of contracts’ rather than ‘strict principle of law’: MK & JA Roh v

Metro Edgley (2005)