Alan is the owner of a retail shopping centre in Sydney



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Tutorial 10 – Answer guide
Question one.
Alan is the owner of a retail shopping centre in Sydney. Bill, a florist, negotiated a lease of one of the shops for his business for a period of five years. These are pre-contractual negotiations – a lease is a contract. A comprehensive What does ‘comprehensive’ mean? Does it indicate that all the terms of the contract should be expected to be found in the written copy? What does this make you think about with respect to pre-contractual negotiations, not included in the written document? written document containing the negotiated terms of the lease was prepared by Alan and forwarded to Bill for signature. Prior to signing the written document Bill sought and obtained a written assurance from Alan that Alan would not, during the currency of the lease, permit any of the other shops in the shopping centre to be leased as a florist shop. Upon receiving Alan’s assurance, Bill signed the lease. However there was no term in the lease placing any limitations on Alan in relation to the leasing of other shops in the shopping centre.

In relation to the above facts:

Note that these are all separate factual scenarios, and need to be dealt with separately. They all have to be dealt with. If you are unsure about the answer to any consider doing another question.


  1. (a) If, two years later, Alan leased one of the shops in the shopping centre to Charlie, who opened up a florist shop, could Bill sue Alan for damages for breach of contract?

What is the issue?

Work out what the question is about. Bill can only claim damages if there is a contract which has been breached. What is the contract which Bill is alleging Alan has breached? Is it the lease? The question tells us that there was no term in the lease placing any limitations on Alan in relation to the leasing of other shops in the shopping centre.

What other contract could Bill be relying on?

The breach which Bill is complaining about is Alan’s leasing one of the shops to another florist. For this to be a breach of contract, Alan’s written assurance that he would not, during the currency of the lease, permit another shop to be leased to a florist, must have contractual force.



Is it part of the lease? (Issue One)

Or, more familiarly, is it a term of the contract?

What is the relevant law? Consider the parole evidence rule, and any exceptions.

How does the law apply to the present facts: The written contract/lease was stated to be “comprehensive”. What does this mean?

Draw a conclusion.

If it is not part of the lease, consider any other possible means by which this statement can have contractual force (Issue Two)

What is the relevant law? The statement was contained in a written assurance provided prior to signing the lease. Could this statement be a collateral contract?

What does the law tell us are the required elements of a collateral contract? (e.g. JJ Savage & Sons v Blakeney; Heilbut Symons v Buckleton; Hoyt’s v Spencer.) How does this law apply to the present facts?



  • Timing of statement – the written assurance was provided before the lease was signed

  • Promissory statement – the word assurance is used to describe the statement

  • Not inconsistent with the terms of the main contract – the lease is silent about the operation of other florists.

Draw a conclusion: is there a collateral contract? If so, has it been breached? Can Bill sue? Are damages available for breach of a collateral contract?

(b) How, if at all, would you advice in (a) differ, if the written lease had included a clause that stipulated that the lease expressed the entirety of the agreement between Alan and Bill and that neither of them had been influenced or induced to enter into the lease by any statements or assurances given by either of them before the lease was signed?

What is the issue?

Work out what the question is about. What is different between (a) and (b)? What is the nature of the clause which has been added in (b)? Is this an entire agreements clause?



How will the inclusion of an entire agreement clause change your advice in (a)? (Issue)

What is the relevant law?

What is the effect of an entire agreements clause? (e.g Nemeth v Bayswater). Are there any relevant exceptions?



How does the law apply to the present facts?

Was the written assurance, which you relied on in (a), given in pre-contractual negotiations? Will this still be effective?



Draw a conclusion.

  1. (c) If, two years later, Bill became aware that Alan was intending to lease a shop to Charlie to operate a florist business, would Bill be able to seek relief against Alan to prevent him leasing the shop to Charlie? (Note: The clause referred to in (b) above is not part of the facts for the purposes of this part of the question.)

What is the issue?

Work out what the question is about? You are directed by the note to ignore the facts in (b). Similarly, you should not be rewriting your answer in (a).



What relief is available to Bill, to prevent Alan’s intended actions? (Issue)

What is the relevant law?

Consider whether an injunction to prevent a breach of contract will lie? Which contract?



How does the law apply to the present facts?

Refer to your discussion in (a). Is Bill seeking to prevent a breach of the terms of the lease? Or is he seeking to prevent a breach of a term of the collateral contract? Which term? Is that term a restraint of trade? Does this raise any additional issues?



Draw a conclusion.

Question 2.
Sydney City Council owns premises in the central business district of Sydney from which

it operates a child care centre. Early in 2005 the Council resolved that, as from 1 April

2006, it would cease to run the child care centre but would, in the meantime, enter into a

contractual arrangement for five years with an appropriate private child care provider who would operate the centre pursuant to a lease of the premises from the Council. The

Council then sought expressions of interest from private child care providers interested in

operating a child care centre from the Council’s premises. Fifteen providers responded to

the Council’s call for expressions of interest.

What is the legal status of calling for expressions of interest? Note that Council was interested in a five year contract with a child care provider.
In June 2005 the Council invited five of the private providers to tender for the right to

operate a child care centre from Council’s premises. Council’s letter inviting tenders stipulated, inter alia, as follows:


Your tender must be submitted to Council by 5.00 p.m. on 30 November 2005.

It must also strictly comply with the presentation and format specifications set

out in the attachment to this letter. Council wishes to ensure that members of

the committee that selects the successful tenderer are unaware of which

tenderer submitted which tender when the committee makes its decision.
Is this an offer or an invitation to treat? Why? What is the status of the requirements in the tender document? If it is an offer, what are the terms of the offer?

Care For Kids Limited (CFK) and Trendy Child Care Limited (TCC) were two of the five

operators invited to submit tenders. All five operators submitted tenders.
CFK submitted a tender that complied with all of Council’s requirements. In preparing its

tender, CFK spent $20,000, and conservatively estimated that, if successful, it would reap

profits of $300,000 over the five year term of the contract. TCC, whilst preparing its

tender, sought and obtained a two day extension of time to submit the tender from the

Council officer administering the tender process, and submitted an otherwise compliant

tender at 4.00 p.m. on 2 December 2005. Its costs of tendering and expected profits

were the same as those of CFK.
Is the submission of tenders an offer or acceptance? Note that figures are provided and so amounts may need to be discussed in the answer. Consider any differences in the facts between CFK and TCC. Do they raise different issues for discussion?
When the selection committee met in February 2006, the tenders by CFK and TCC were

not included for consideration. CFK’s tender was not considered because it had been



inadvertently misplaced by Council staff that had received it, and Council thus assumed

that CFK had not submitted any tender at all. TCC’s tender was not considered because



it was not received by the date set out in Council’s letter in June 2005. Why was TCC’s tender late? The selection committee resolved that one of the other three operators should be awarded the contract.
Both CFK and TCC have indicated that they will be suing Council in relation to the

above events. The Council seeks your advice on the following:


(a) any breach of contract claim CFK has, or may have, against the Council;



What is the issue?
Work out what the question is about. Note this part deals only with CFK and is restricted to breach of contract claims, so only consider the facts relating to CFK and a breach of contract.
What do you need to establish before considering if there is a breach of contract claim?
Is there a contract between the Council and CFK? (Issue)
What is the relevant law? And how does it apply to the facts?
What was the status of Council’s call for expressions of interest?

What was the status of Council’s invitation to tender to the five parties?


An invitation to tender is generally an invitation to treat – e.g. Spencer v Harding- but do the words in this particular document show that Council is actually issuing an offer? If so, what contractual obligations will it give rise to? Is there a contract to award the tender, or to consider the tender documents in a particular way?

If the tender is in the required format etc, can the Council be required to consider it? e.g.Blackpool v Fylde.


If this is an offer, then submission of the tender is acceptance and so has Council breached this contract?
If yes,
What damages are available? (Second issue)
What is the relevant law? And how does it apply to the facts?

What types of loss has CFK suffered that may be recoverable?

Look at the actual loss by CFK, the amounts spent in preparing the tender;

Look at the expectation loss:

Look at the loss of chance – it was a 5 year contract offered by the Council
Draw a conclusion.

Was there a contract, which was breached by Council? Will damages lie? What damages?



and

(b) any claim, apart from one based on statute, that TCC has, or may have,



against the Council.
What is the issue?
Work out what the question is about. Note this part deals with TCC only and so you only need to consider the facts relating to TCC however, you can refer to your legal discussion, with respect to the legal status of the submission of tenders etc from (a). Note also that (a) was restricted to a breach of contract claim – this question is not. This should encourage you to think broadly – what else, other than contract – could the question be about.
What claims, other than statutory, could TCC have? Was Council’s invitation to tender – on the present facts – an offer, which was accepted by TCC when they submitted a tender? What were the terms of the contract with respect to time of submission? Did TCC comply with these terms? Why not?
What was the contractual status of TCC’s discussion with the Council officer administering the tendering process? Did TCC give any consideration for the two day extension of time? Is the Council contractually bound to consider TCC’s late tender?
Apart from contract, is there any other area – which operates in the absence of consideration – which could ground a claim by TCC that Council is required to consider its tender?
Is the Council – because of the promise (unsupported by consideration) of its agent - estopped from closing off the tender process before considering TCC’s late submission? (Issue)
What is the relevant law?

Consider Waltons v Maher (especially the formulation of Brennan J.) and any other relevant case law.



Consider the relevant law, and how it applies to the present facts. (Note: it is never enough just to set out the law. You must always look at how it applies to the particular facts of the question. Where possible, this is always best done in an integrated manner.)
Per Brennan J.


  1. What is the relationship between the parties? Legal or reasonable assumption of legal relationship? (What facts will you pull out of the question to address these legal issues?) What is the relationship between TCC and Council? Are they parties to a contract?

  2. Was there a clear and unambiguous promise made? Look at the statement made by the Council officer.

  3. Did the promisee rely on the statement? How did TCC act after their conversation with the Council officer.

  4. Did the promisor know that the promisee would act in reliance on the promise? The question describes the person making the statement as the Council officer in charge of the tender process. Should such a person know that a tenderer would act in reliance on a statement they made.

  5. Would the promisee suffer detriment if the promise on which they are relying is not fulfilled? Will TCC be harmed if their tender is not considered when it is submitted two days late?

  6. Did the promisee do anything to stop the promise being relied upon? Did they act in good conscience? Could the Council officer have rung TCC and told them to get their tender in?


Draw a conclusion.

Does the Council have to consider TCC’s tender? What remedies are available to TCC? Will they be the same as for breach of contract?


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