On 1 Jan 2009 a V and P entered a standard form contract for sale of property in SYD, with special condition that the “sale is subject to P completing the sale of his existing home in Brisbane by 1 June 2009” but no time for completion is specified and clause 29 of 2005 Standard Form is deleted. (Standard Form: completed with in 42 days of existing contract/ exchange of contract? Hence the qtn scenario means it’ll be deleted. ) Is there a binding contract for SYD before this BNE condition is fulfilled?
(Can be condition BEFORE duty to perform obligation of the SYD sale, or the main obligation is conditional on the smaller obligation, condition precedent to the duty to PERFORM the actual contract) (1) Is the condition a condition precedent to the existence of a binding contract for the purchase of the Sydney property? No, intended to be binding before condition fulfilled, something to occur until the MAIN obligation’s due. It’s a condition precedent to PERFORMANCE of the main contract (also referred to as condition subsequent).
(2) When does the P come under a duty of immediate performance of his promise to pay the balance of the purchaser money in respect of the Sydney property? When BNE sold (contingent condition) and after a reasonable time/ tendering the price for the house (concurrent condition), duty of immediate performance that the other party tenders. (3) Would the P have given any promise concerning fulfilment of the condition regarding the Brisbane sale? YES, most contingent conditions are, to some degree, within the control of the party(-ies).
Business efficacy means one should imply the term in the contract that both parties, with reasonable expectations, would do what is necessary to allow the contract come to fruition. What is a reasonable effort: construed at the time of contract construction. (E. g. fulfilment of contingent condition could be fetching a reasonable price for BNE property) (4) Suppose that on 1 March 2009 although the BNE property had not been sold, the P decides to waive the need for such a sale, that is, he wants to say to the V “Both of us should proceed to complete the sale and purchase of the SYD property within a reasonable time from 1 Mar 2009.
What if the V says “no I don’t want to settle the SYD sale until the BNE property is sold? ” Can P (e. g. for the sole benefit of himself) unilaterally waive need for fulfilment of a condition precedent? Yes. But if condition is mainly for him and partly for V’s benefit, then cannot as P cannot negatively affect V/ another party’s benefit. Was this condition solely for the benefit of the P then? Condition not just the contingency occur, but by a certain time. So is the 1 June (time limit) a part of the condition? Yes, they are for the benefit of both parties (seller has an assured buyer, buyer has a secured a prospective house).
Premise: (1) Time limit for benefit of both, (2) condition not just BNE be sold, but that it also be sold by the time limit. So both conditions are for the benefit of both, can 1 party waive it then? No, has convinced some judges/ views. (If the V wants to, move out within a reasonable time/ have a completion date in mind, of the contingent condition happening, then the V should add in an express term. ) Reasonable time (taking into account contingent condition need be fulfilled): when P sold existing house, and reasonable time has elapsed.
A question of construction – at the time of the contract being made, was the condition inserted by both parties for the sole benefit of the P? If yes, then can unilaterally waive it, provided P does it before the time limit. If he didn’t do it within that time limit, then the V can get the right to terminate and can’t divested of the right to terminate by the P’s late waiver. Was condition inserted for sole benefit of the P? Need for contingency to be fulfilled at all Ways in which waiver can exist and what other requirements are there? Mason CJ: (3) waiver in the sense of election.
(To abandon right to rescind and instead affirm) Election exists quite apart from the existence of contract – gives party inconsistent legal rights (they’re mutually exclusive). Can’t change one’s mind if held themselves to it. Preconditions: (1) Has to have a right to know what right you had, (2) True election to abandon right: where facts give alternative inconsistent rights. (3) Actions must show party intends to abandon right altogether Alternative , inconsistent rights. (5) Suppose that 1 June passes without the BNE property being sold or the purchaser waiving the need for sale; would the contract automatically terminate?
If not, could either of the parties now terminate the contract of purchase? If the P terminated the purchase of the premises would he lose his deposit? Purchase terminates, he doesn’t lose his deposit. One circumstance when the purchaser will lose their deposit is when the conveyance doesn’t go ahead when the vendor has terminated for the purchaser’s serious breach. Deposit can be returned as compensation for not getting any part of the title. Foreign v White: entered into contract, V breached it and terminated it.
Function of a Deposit: (1) give the V a security against the contract going off for the P’s breach, (2) part payment of price, (3) (when deposit is normal 10% – agreed damages in event contract falls due to breach/ seen as penalty rather than liquidated damages). If contract prematurely terminated: (6) What would happen if after 1 June 2009 neither of the parties took any immediate step to communicate to the other their intention to terminate, and on 4 June 2009 the P completes a sale of the BNE property, but on the 5 June 2009 the SYD V wants to terminate the SYD sale due to the BNE property not being sold by 1 June?
YES, V can still terminate on 5 June 2009. Common law dictates, V can terminate for failure of fulfilling the contingent condition. Suttor v Gundowla Pty Ltd (1950) 81 CLR 418 – MF Treasurer (condition precedent) had to give consent before P could complete by 20 Dec and V wanted to terminate by 15 Jan/ didn’t exercise his right to terminate until then cos consent hadn’t been given. Time can be an essential part of the condition. If a condition isn’t fulfilled, the obligation dependent upon the fulfilment doesn’t arise (ie SYD sale), esp if there’s a time expressed in a condition precedent.
Late occurrence is not fulfilment of the contingent condition. Mere delay (of 4 days) is not, by itself, an election to abandon the right to terminate. It might attract the right to estoppel. Tanwar v Cauchi [2003] – all HC JJ say they don’t want to restrict V termination for sale and no relief against forfeiture was given (for breach from not paying money by a specific date/ contingent condition). Equity will only stop that common law right in the most exceptional circumstances, i. e. only where V’s conduct contributed to P’s breach OR breach by P came about in circumstances which were totally unforeseeable.
Here, probably not. Attitude displayed by HC wrt equity to restrain the V from exercising Commonwealth right to terminate if contingent condition not fulfilled is one of restraint. Hill v Terry [2003] – equity intervenes if V relies harshly/ unnecessarily on harsh, legalistic right, especially if it’s at the disadvantage of the P. Did V’s own conduct amount to WAIVER (between 1 and 5 June)? Cl 29 – right no exercised and contingent condition then occurred, it’s too late (but fact scenario, it’s deleted). Is there waiver in the form of estoppel?
This is the most flexible form of waiver. Test: Reasonable reliance is sufficiently detriment to the relying party if the initial representation is contradicted. The mere delay doesn’t make a reasonable person in the P’s position that an estoppel arose due to facts fitting into the evidentiary-laden test. (7) What would happen if for 1 month after 1 June 2009 neither party took any positive steps to terminate the SYD contract and the BNE property had still not been sold? Could either party still terminate or not?
Yes. Is the waiver in any of the 3 forms: unequivocal election (no, cts slow to infer one party will unilaterally waiver the right), estoppel (best argument, though evidence not really strong enough here, depends on actions of the parties during that month) or variation (no evidence of contractual promise in form of deed). (8) Suppose that the BNE property has not been sold by 1 June 2009 but it is clear that the P of the SYD property had not used reasonable efforts to effect a sale of the BNE property.
Could the P nevertheless terminate the SYD sale because the BNE sale had not been effected by 1 June 2009? Failed to use reasonable efforts to fulfil cc, then can’t terminate the contract (SYD) due to failure of the fulfilment of cc. Assumption (that P is disqualified from terminating the contract if cc is unfulfilled) that P’s failure has made a causative difference to the contract not being concluded (e. g. other factor preventing BNE being sold even if they gave their best efforts to fulfil it).
.Rationale: don’t want P to benefit from his own fault (Nina’s Bar Bistro, implied term that both will continue if there’s –no? – fulfilment). Frustration: Codelfa – grant of injunction frustrated the contract because the contract clauses (restricting working hours and noise/pollution reduction methods) were “quite consistent with the contemplated method of work being an essential element”. The provisions only operated in the context of the work proceeding as contemplated by the parties. Failure (making causative contribution) v prevent from satisfying cc.
Can V call to P even though existing house not sold (BNE)? (9) Assume that the P cannot terminate after 1 June 2009 because he is at fault in respect of the non-performance of the condition by 1 June 2009, and assume further that the V does not want to terminate unless he can keep the P’s deposit. (a) If the V were to communicate an intention to terminate for non-fulfilment of the 1 June 2009 condition, could he on this basis keep the P’s deposit? No. Not entirely clear if V decides to keep contract on foot. Is it a contract which the P doesn’t complete until BNE house sold?
(b) If the answer to (a) is “no”, could the V nevertheless terminate on the basis that the P is in breach of an implied vital term that he would use reasonable efforts to effect a sale of the BNE property by 1 June 2009? No, not a vital term and at most an intermediate term. If V is terminating for failure of cc and if V does that, it’s not a basis to keep the P’s deposit. Is it an implied condition? Lecturer doesn’t think so. HKG Fir Shipping (promises can fall into 3 categories: (1) Vital implied promises, (2) minor terms or warranties, no breach entitles innocent party to terminate, (3) intermediate (innominate) terms that is in between.
Depends on whether it deprives the innocent party of essential/ some benefits. HKG Fir Shipping: In absence of express words/ intention of the party, court doesn’t want to make a promise as a condition (otherwise promises can be made impliedly vital and seen as a way out for technical reasons, or just having made a bad bargain). Therefore, will have to do it expressly. (Exception: made expressly, as in Mercantile Contract and now: make strict compliance is an essence of the contract) If terminating, am terminating for failure to complete. (? ) V keep contract on foot, nothing deprives him of the substance of the bargain.
Once completed, then serve notice to complete. Double disqualifying view, keep contract on foot, V keeps contract on foot, and says gotta complete when I’m ready, if not, you’ll breach promise for completion. Significance of time in Contracts. Every contractual component contains a substantive and temporal component and execute exactly the substantive thing or any failure at the specified time (anything else is a breach and attracts necessary damages). (When circumstance suit) can be guilty of anticipatory breach and liable to terminate. When is the notice such that court can draw inference that the notice is effective to serve its purpose?
(Ongoing delay beyond the deadline has become so serious that it serves the notifying party to terminate) When does serving party have grounds to serve it? When recipient already in actual breach (of contractually promised time for performing reasonably important substantive obligation). Sufficient enough for the suffering party to say they were robbed of sufficient enough benefit (? ). Perri v Coolangatta V puts in a defence, seeking declaratory judgment and wants consequential orders. 8 Aug final date of notice to complete, 29 Sep end date for cc. 10 Aug wanted to terminate for P’s alleged serious breach in non-compliance.
Was V entitled to terminate? No, during that time there wasn’t an expired time for completion. (1) CC: The cc hasn’t been fulfilled, hence the P isn’t bound to complete the actual contract for sale of land and P is not yet in breach of cc!! Hence contract on foot until 29th September. Therefore cannot keep the deposit. (2) CC’s time limit is for the benefit of both parties, and if neither party is not at fault, V can terminate. (3) Unilaterial waiver is possible by a party who solely benefits, but only within the time limit. JJ: if no specific time (and within ‘reasonable time’ passes) stipulated in CC, party not yet in breach.
Decided for V (but no consequential orders). Toga Developments v Gibson determining whether a party has the sole benefit of the contingent condition distinguish the party(-ies) benefited by the substance of the condition FROM the party(s) benefited by the time limit on its fulfilment. Method of exercising a unilateral right of waiver of the need for fulfilment. MF: contract for sale of land, subject to development consent by 22 December, if not then afterwards either party can terminate the contract, a condition precedent to performance. P on 14 Dec, 8 days before time limit, realises consent hadn’t been, and will unlikely to be, given.
P allowed to terminate 24 Dec? Argues P had unilateral right to waive due to sole benefit. Marney J: Condition not for sole benefit of P because: (1) time for completion is determined by whether or not condition is fulfilled. If condition is fulfilled early, both parties come under obligation to fulfil the contract. Matters WHAT time the condition is due. The time due can be moved and isn’t relevant. (Lecturer doesn’t think it squares with, or is the same focus as, Perri) (2) and even if Marney J is wrong, waiver would have to be in the form of a deed or supported by consideration.
(But if decided today: could be an effective waiver, post 1973 lots of development in estoppel and more differentiation between election and estoppel) Brennan J: substance of condition is for the sole benefit of P, the time benefit is for the benefit of both. Perri: cc is explicit, Toga: cc is implicit. No inconsistency between unilateral right to waiver and this situation. Ratio: Terms Implied in Fact v Terms Implied in Law. law implies little, allows parties be in control. E. g. lease contract: implied term the landlord will enjoy quiet (undisturbed) possession.
Term implied in fact/ achieve business efficacy/ officious bystander/ Morecock: term can be implied in any contract to give it business efficacy, puts a particular party under responsibility to make the contract work in a way the parties would intend the contract to work. Principles of Contract Law Limits on the doctrine of Frustration (1) Express provision in the contract – Codelfa (2) Foreseen events (3) Fault and self-induced frustration – Joseph Constantine Steamship Lind Ltd v Imperial Smelting Corp Ltd: A alleging fault of B has to prove B’s fault, unless the B counters that A breached it. [15. 85] Fault and self-induced frustration
The frustrating event must arise without blame or fault by the party wanting to rely on the contract being frustrated. Rationale is that a party should not be able to rely on an event discharging them from performance when they had the means and opportunity of preventing it (J Lauritzen AS v Wijsmuller BV (The “Super Servant Two”) [1990] 1 Lloyd’s Rep 1,10). [15. 90] The Meaning of “fault” Not precisely defined, it is established that a party cannot rely on an event as frustrating a contract if it was caused by the party’s own breach of contract or by the deliberate act the party even if the act did not amount to a breach of contract.
Negligence may amount to fault, which disqualified a party from relying on frustration (shipper can’t rely on ship sinking to frustrate a contract when the ship was lost due to the shipper’s carelessness, Super Servant Two). The degree of negligence needed to conclude a contract had been frustrated has not been settled, particularly for contracts for personal performance. It is established that a contract for personal services may be frustrated when the employee becomes ill or dies, though it is unclear if this incapacity is caused by some want of care by the employee (Josephine Constantine v Imperial Smelting, Lord Simon). [20.
05] Contingent Conditions Contingent in the sense that performance of the actual contract is conditional upon the specified event taking/ not taking place; contingent in the sense that neither party undertakes to ensure that the event specified in the condition will occur. [20. 50] Who can elect to terminate? This depends on the construction of the contract, typically both parties can. If the condition was not fulfilled because of one party’s default – in failing to co-operate – the party cannot rely on the failure of the condition in terminating the contract (Suttor, Gange, Perri, Etna). [20. 55] Waiver of a Contingent Condition
In some cases fulfillment of a contingent condition may be waived by one party if the condition is for the benefit of that party. The extent of ‘for the benefit’ is uncertain (words ranging from primarily to wholly to solely) and is a matter of linguistic construction, ie Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 said the condition allowing the sale of land to be subject to selling the P’s property was for the sole benefit of the P and could hence be waived. Court suggested the condition protected the P from being committed to two properties but V has no interest in this provided the P could pay.
Gange v Sullivan (1966) 116 CLR 418 states the contingent condition of the contract being subject to P obtaining development approval was to their benefit and could be waived by P. The V wasn’t retaining any interest in the land or that they would be affected by the P’s use of the land. Gough Bay Holding Pty Ltd v Tyrwhitt-Drake [1976] VR 195 has the V benefitting from enhanced land by P’s successful subdivision of the land if the contingent condition was performed (that local authority approve P’s plan of subdivision) and hence the condition was incapable of unilateral waiver by the P.
If both parties waive the contingent condition, they will be bound by the agreement and cannot use this to terminate the contract for non-fulfilment of the condition. There wasn’t a distinction between substantive and contingent conditions. Restrictions on the Right to Terminate For Non-Fulfilment of a Contingent Condition [20. 57] Prevention A party can lose the right to terminate for not fulfilling a contingent condition if they have prevented its performance or intimated they do not intend to perform the contract. This result is sometimes explained in the terms of waiver or estoppel.
V’s repudiatory conduct stopped them from relying on the P’s failure to attempt finance by a specified date stated in the contingent condition, even though the P had not waived the condition (Grieve v Enge [2006] QSC 37). [20. 60] Other Restrictions Generally, restrictions for right to terminate for breach apply to right to terminate for non-fulfilment of a condition. Particularly, a party who waives the right to rely on non-fulfilment of a contingent condition and communicates this to the other side, is bound by this decision.
Termination for non-fulfilment of a contingent condition may be restricted by doctrines of estoppel and good faith (especially where one party leads the other to think they will not terminate, this may constitute misleading or deceptive conduct under s18, ACL an order of s237 ACL can be made to prevent the party from terminating the contract due to non-fulfilment of a cc). When will a contingent condition not be fulfilled? [11] A condition can be considered as not fulfilled if: The events that occur are opposite to the event specified in the condition (for example, the denial of finance) The event does not occur by the time limit.
The time limit for when the contingent condition must be fulfilled by can be determined through: An express term If a date is provided for the completion of the contract, the same is used for the fulfillment of the contingent condition. [12] A construction of the contract by the courts as requiring the condition to be filled within a reasonable time frame. [13] Reasonableness is determined according to the circumstances. Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537; 56 A. L. J. R. 445, High Court of Australia.
Issue of rescission and whether or not there was a condition in the contract that needed to be completed first (NO? ) in order for the subsequent contract to be binding. The issue was whether or not a contract could be rescinded where a condition precedent had not been fulfilled (YES? ) and what notice needed to be given in order to rescind the contract (NONE/ NOTICE WITHIN A REASONABLE TIME PERIOD? ). An agreement was reached in April 1978 for the sale of a property for $220,000 with a deposit of $22,000. No date was set for completion.
Clause 6 stated that “this contract is entered into subject to purchasers selling their property”. As time passed without the purchasers selling their property the vendors became increasingly concerned. In July they served a notice to complete by 8 August, and purported to terminate the contract on 10 August. On 29 September the vendor commenced proceedings for a declaration that the contract had been effectively terminated, the deposit forfeited and sought the removal of a caveat. The following February the purchasers had obtained finance and stated that they waived the benefit of Cl 6 and indicated they could complete.
They eventually sold their property in June, and sought specific performance. HELD Mason J There is a difference between a condition precedent and a condition subsequent. In the former case, the transaction creates no enforceable rights unless and until the condition is satisfied. In the latter case, there is a binding contract although certain obligations may not arise until the condition is satisfied. The courts tend towards the latter construction which sees the condition as precedent to performance rather than precedent to the contract.
It is artificial to say there is no contract when the parties have settled so many details. This construction also gives the courts greater scope in adjusting the rights of the parties. A condition will not be constructed as precedent to the contract unless the contract compels this conclusion. Here the wording of the contract suggests that the condition is of the former type. Nevertheless it is capable of the latter construction and the tradition of the court tends towards this interpretation. [It appears the tradition of the court is more important than the parties expressed intentions.
] Hence there is a contract, and Mason suggests that there is an implied obligation upon the purchasers to make all reasonable efforts to sell their property. The condition is precedent to the purchaser’s duty to perform the contract and they are entitled to terminate on its non-fulfilment. As the condition was inserted for the benefit of the purchasers, they are entitled to waive its benefit. Can the vendor also terminate for the non-fulfilment of the condition? From the phrasing of the term there are strong grounds for this interpretation.
However this may not be necessary as the vendor is sufficiently protected by the implied condition that the contract be completed within reasonable time. In this case however the contract was not validly terminated. HELD Brennan J HE considered the condition to be precedent to the parties’ obligations to complete the contract, and subsequent to the whole contract in that non-occurrence of the stipulation entitles the parties to avoid it. The stipulation specifies the relevant event (the contingency aspect) but contains no promise that it will occur (the promissory aspect).
The condition was for the benefit of the purchaser, who has the power to waive the term. However, both vendor and purchaser are under a contingent obligation to complete, so fulfilment is of equal interest to both. There must be a reasonable time within which the contingency should take place. In this case, as the trial judge found, a reasonable time for the occurrence of the stipulation had passed by the time the vendor commenced this action. However the vendor claims that the vendor failed to give notice (though they gave an earlier notice).
The purchaser displays a confusion between the promissory and contingent aspects of the clause. The vendor was not avoiding because of the failure of the purchaser to comply with their obligations, but on account of the non-occurrence of a contingency. In such a case, no notice for the purchaser to comply with their obligations was called for. In any case, the commencement of the action was adequate notice. The contract was avoided prior to the purchaser’s waiver of the condition. HELD Gibbs CJ, Stephen and Wilson JJ.
They agreed in separate judgments that contract terminated 29/9, and (Wilson dissenting) that on expiry of reasonable time, no notice to complete was necessary. Gibbs CJ put it succinctly when he said: “I consider that when the time elapsed for performance of a condition which is not a promissory condition, but a condition precedent to the obligation to complete a contract of sale, either party, if not in default, can elect to treat the contract as at an end if the condition has not been fulfilled or waived, and that it is not necessary first to give notice calling on the party in default to complete the contract or fulfil the condition.
What I have said is, of course, subject to any sufficient indication of a contrary intention in the words of the contract itself. ” [NB the increasing use of the courts of the consideration of who benefits by the term in its construction]. http://netk. net. au/Contract/Perri. asp Promissory condition e. g. Vendor made promise to load stuff onto party B’s vessel at a certain time, and B will tell A the time the vessel will come. Condition precedent: B will give A relevant notice, ie promissory condition precedent, not a “contingent” one. Waiver Types of waiver: (1) by variation, (2) estoppel, or (3) election.
Promise not binding unless given by consideration, under doctrine of estoppel, can also become binding w/o deed of consideration if it’s a valid election. Statement is a statement the statement maker intends to bind oneself to, viewed objectively. Is there an equitable or promissory estoppel here? Yes, if sufficiently reliance and the other party induced reasonable detrimental reliance and acts inconsistently/ will be detrimented, then yes. Is there a binding waiver in the form of an estoppel? How clear? Clear enough to allow reasonable person to act in reliance on it.
Situation Where Doctrine of Election Applies. http://www. slideshare. net/paultaylor243/promissory-estoppel-waiver-and-election-power-point-2 Background. A contract: provides for the enforcement of promises supported by consideration. No consideration then prima facie a person is free to retract from that position. What about a change of position, such as variation to a contract or conduct by A leading to a change in position by B where there is no consideration? No contract – no remedies. Doctrine of estoppel/ election or waiver may prevent such an unjust departure.
Estoppel, Election and Waiver Estoppel: protection against the detriment, which would flow from a party’s change of position if the assumption that led to it was deserted. Election: involves a party making a selection between inconsistent legal rights. Choosing one right necessarily involves abandoning the other. Waiver: ‘synonymous’ to or ‘overlapping’ with election and estoppel. A party has waived one of its legal rights in favour of another. Abandonment of Legal Rights The thread that links together the concepts of waiver, election and estoppel is the deliberate abandonment of legal rights.
“Any discussion of the principles governing the circumstances in which a party’s words or conduct may preclude him from exercising a legal right… have their origin in the differences to be found in the various doctrines (election, waiver and estoppel)” – Sargent v ASL Developments Ltd (1974) 131 CLR 634, Mason J at 273. Situations Where Estoppel May Arise (a) Where a promise or representation is made in the context of pre-existing contractual relationship. (b) Where a promise or representation is made in a situation where there is no pre-existing legal relationship.
(c) In respect of a promise which is not supported by consideration. Promissory Estoppel ‘Representations (or promises) as to future conduct’ – Legione v Hateley (1983) HC, see Mason and Deane JJ In Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 428-9, Brennan J set out the essential elements of promissory estoppel. Any promise or representation must be: (1) Unequivocal and unambiguous, (2) May be express or implied, Three elements, at least, are essential: (1) Promise (representation or assurance), (2) Reliance on the promise, (3) Inequity or unconscionable conduct.
Promissory Estoppel – Pre-existing Legal Relationship Usually in context of a contract between parties. Extended by Clth v Verwayen (1990) 170 CLR 394, pre-existing relation of plaintiff and defendant in the context of litigation. Example: where A promises B that they would not enforce his legal rights under the terms of a contract and B acted and relied on it without giving any consideration, equity would not allow A to renege on his promise to B. Promissory Estoppel – No Pre-existing Legal Relationship Up until Waltons v Maher, promissory estoppel could only be used in pre-existing legal relationships.
The doctrine can now operate in the absence of existing contractual relations. It can be used as a sword (offensively, as a cause of action) as well as a shield (defensively, only if someone else sues you first). Example: during the course of negotiations for a contract, A makes a promise or representation to B that the negotiations will be completed in accordance with the terms agreed, A may be estopped by B from denying it has agreed to complete the negotiations. Promissory Estoppel – Detriment, Reliance and Unconscionability Reliance: must be definite or substantial.
Detriment: the promise must have ‘placed himself in a position of material disadvantage if departure from the assumption be permitted. ’ Unconscionability: dishonest behaviour by promisor. Satisfied if promisor encourages the promisee to create assumptions that lead to reliance. All must be demonstrated to succeed either as a cause of action or a defence on the basis of promissory estoppel. Election Election consists in a choice between rights that the person making the election knows he possesses and which are alternative and inconsistent rights. Example: Party A to a contract is entitled to terminate by reason of breach by B.
Instead of terminating A (promisee) may elect to affirm the contract. The election by A in not terminating is to say the alternative right to terminate has been ‘waived’. Sometimes the abandonment of a right may be described as waiver. Waiver in the sense of election does not require consideration. Waiver There is no conclusive statement that waiver is a standalone principle and is unlikely to be favoured. Kirby J, minority judgment in Agricultural and Rural Finance Pty Ltd v Gardiner (2008) (HC) held that “waiver” constituted a stand-alone principle beyond.