MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Week 2 Law of Contract Revision

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Transcript of MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Week 2 Law of Contract Revision

  • Slide 1
  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Week 2 Law of Contract Revision
  • Slide 2
  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision Sources of Law Separation of Powers Division of Powers Court Hierarchy
  • Slide 3
  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Sources of Law ParliamentThe Courts EquityCommon Law Contract LawUnconscionable Conduct Promissory estoppel Trade Practices Act Fair Trading Act FederalState
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  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE High Court Federal CourtFamily Court Federal Magistrates Service Court of Appeal County Court Magistrates Court Supreme Court FEDERAL COURTSVICTORIAN COURTS Privy Council Appeals Abolished
  • Slide 5
  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision (cont.) Precedent 2 types Describe 2 parts of a decision Rule of Law Citing decisions Smith v Jones (2001) 145 CLR 203, 207 Smith v Jones [1945] 2 All ER 203, 207 Smith v Jones (2001) HCA 203, [20]
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  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Revision (cont.) Statutory Interpretation 3 approaches Current approach Why Aids to interpretation Rules of interpretation Proof Burden of proof Presumptions
  • Slide 7
  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Week 2 Law of Contract Development, Intention & Offer
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  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Development of Contract Law Developed in England pre 1900 Laissez faire economic environment Underlying common law principles Freedom of Contract Equality of bargaining power Courts reluctant to interfere unless Duress Illegal
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  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Recent Developments Equal bargaining power is a myth Courts developed equitable principles Unconscionable conduct Unjust enrichment Economic Duress Promissory estoppel
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  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Recent Developments (Cont.) Consumer protection legislation Trade Practices Act 1975 Fair Trading Acts Insurance Contracts Act 1987 Credit Codes Licensing Acts (e.g. Builders Licensing Act) Amendments to Sale of Goods Act
  • Slide 11
  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Contract An agreement between two or more persons that will be enforced by law May be In writing Oral Partly in writing and partly oral
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  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Writing Contracts need not be in writing Exceptions Sale of Land Guarantees Credit contracts Other statutory requirements
  • Slide 13
  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Analysing a Contract Is there a contract? What are the terms? Is it valid & enforceable? Has it been discharged? Has there been a breach?
  • Slide 14
  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Six Elements 1.Contractual Capacity 2.Offer 3.Acceptance 4.Intention to create a contract 5.Consideration 6.Certainty The elements are not always clear
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  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Intention to Contract Parties must intend their agreement to be legally binding i.e. enforceable by a court An intention to be morally binding is not enough Objective test Distinction between Social/domestic agreements Commercial agreements
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  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Intention Subjective intention The persons actual state of mind Objective intention Concludes, on the basis of what a person said and did, what a reasonable person in the same circumstances would have intended Contract law uses objective tests
  • Slide 17
  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Domestic Agreements Court presumes that parties did not intend to contract Presumption may be rebutted Todd v Nicholls (S&O p94) Roufos v Brewster (S&O p94)
  • Slide 18
  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Domestic Agreements (cont.) Court will look at Terms of agreement Circumstances surrounding the agreement Effect of the agreement on the parties Parties conduct subsequent to agreement
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  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Commercial Agreements Courts presume that the parties intended to contract Clear words are needed to rebut the presumption Onus is on party seeking to disprove the contract Rose & Frank v J R Crompton (S&O p95) Edwards v Skyways (S&O p95)
  • Slide 20
  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Commercial Agreements (Cont.) Contrast with Clauses excluding courts jurisdiction which are are invalid Letters of Comfort Kleinworth Benson v Malaysia Mining (S&O p96) Banque Brussels Lambert v Australian National Industries (S&O p97)
  • Slide 21
  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Commercial Agreements (Cont.) Heads of Agreement/Letters of Intent Air Great Lakes v K S Easter (S&O p98) Coal Cliff Collieries v Sijehama (S&O p98) Without prejudice documents
  • Slide 22
  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Offer Specific legal meaning An offer exists only where a reasonable person would conclude on the facts that the person was willing to be bound in a court of law Distinguish Indication of future conduct Invitation to treat Negotiations
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  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Indication of Future Conduct A mere statement of a present intention to do something in the future is not an offer Harvey v Facey (S&O p 70) Australian Woollen Mills v Commonwealth (S&O p71) Harris v Nickerson (S&O p71) Kelly v Caledonian Coal Co (S&O p71)
  • Slide 24
  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Invitation to Treat An invitation to Negotiate Make an offer is not an offer but an Invitation to Treat The distinction lies in the objective intention of the person making the offer or invitation to treat.
  • Slide 25
  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Invitation to Treat Retail Displays Catalogues Advertisements Auctions Tenders
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  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Retail Displays Fisher v Bell (S&O p72) Pharmaceutical Society v Boots (S&O p73) In most circumstances the retailer does not make an offer by displaying goods for sale, even where the goods are marked with a price
  • Slide 27
  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Catalogues Grainger v Gough (S&O p73) If the catalogue publisher was making an offer then it would be bound by every acceptance even if their stock was exhausted.
  • Slide 28
  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Advertisements Depends on circumstances Carlill v Carbolic Smoke Ball Co (S&O p74) But note legislative restrictions e.g. Trade Practices Act
  • Slide 29
  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Auctions Bidder makes the offer Auctioneer accepts S64 Sale of Goods Act (Vic) Auctioneer announces terms at start Anyone who bids then accepts the auctioneers offer as to terms
  • Slide 30
  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Tenders Person submitting the tender makes the offer Body calling for tenders accepts any tender Not bound to accept lowest BUT, the request for tenders may be an offer to deal with tenders in a certain manner Hughes Aircraft v Aeroservices Australia (S&O p76) Harvela Investments v Royal Trust Co of Canada (S&O p76)
  • Slide 31
  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Negotiations An offer will not arise merely because parties have reached agreement on one aspect of the deal Implied (or express) understanding that parties not bound until formal contract executed Heads of Agreement
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  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Fate of An Offer Withdrawn by offeror Accepted by offeree Rejected by offeree Lapse due to passing of time Lapse due to death of offeror or offeree Lapse due to failure of condition precedent
  • Slide 33
  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Withdrawing an Offer Cannot be withdrawn after accepted A contract is made when the offer is accepted The withdrawal of the offer must be communicated to the offeree Special cases: Unilateral offers Options cannot be withdrawn
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  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Withdrawing an Offer Before Acceptance Generally, an offeror may withdraw an offer at any time before acceptance Routledge v Grant (S&OR p78) But, options cannot be withdrawn an option is a separate enforcable obligation and cannot be withdrawn Exists where the offeree has given consideration to keep an offer open Goldborough Mort v Quinn (S&OR p 80)
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  • MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE Withdrawal Must be Communicated Offeror must let the offeree know that the offer is withdrawn Byrne & Co v Tienhoven & Co S&OR p79) Offeror does not have to communicate withdrawal personally Would a