QLD Contract Formation PRACTICE EXAM QUESTIONS AND ANSWERS ALREADY PASSED

British Steel Corporation v Cleveland Bridge and Engineering Company 1984 [British Steel case] - GOFF J - NO CONTRACT because there was a failure to prove offer and acceptance, i.e. a meeting of the minds, parties unresolved on 1) liability for consequential loss and 2) the price to be paid--court held that RESTITUTIONARY RELIEF was in order for the delivery of the steel nodes (mutual understudying for delivery though b/c one party requested and the other party complied) counter claims fails for slow and 'out of sequence' delivery b/c requires a contract to be in place RTS Flexible Systems Ltd v Molkerei Alois Muller GmbH 2010, SC [RTS case] - DISTINGUISHES British Steel case --parties had agreed on all the essential terms and simply failed to sign the formal contract-- SC held parities decision to carry our ~3/4 of the contemplated transaction could be objectively construed as a tacit joint waiver of the 'subject to contract' bar which had been early expressly imposed, but now implicitly lifted//// In regards to OFFER & ACCEPTANCE Lord Clarke summarized Steyn LJ's observations in the Trentham case 1993, Trentham (Percy) Ltd v Archital Luxfer 1993, CA --the analysis may be tweaked depending on the circumstance, i.e. where there is performance, namely where have performance on both sides Walford v Miles 1992, HL - Lord ACKNER, each party is entitled to pursue his or her own interest in negotiation which includes the ability to withdrawal from negotiation with impunity--FREEDOM of contract includes NOT TO CONTRACT-- CAN'T ENFORCE agreement to negotiate IN GOOD FAITH or reasonably b/c (main reasons given by the court) 1) bargaining in good faith is too vague a concept for English use 2)court should be embroiled in complicated inquiries into why negotiations broke down -- parties enter into a preliminary agreement to negotiate only with the claimant for consideration BUT NO TIME LIMIT SET--at firs instance the claim won on basis of 1) misrepresentation 2) loss of bargain -> CA & HL uphold point 1 and overturned point 2 Pitt v PHH Asset Management Ltd 1994, CA - CAN HAVE 'LOCK OUT' AGREEMENT with 1) CONSIDERATION and 2) FIXED PERIO, in this case 14 days, & Law of Property (Miscellaneous Provisions) Act 1989 does not apply, ergo no need formalities Little v Courage 1995, CA - English law gives no effect to undertaking to use best or reasonable endeavors to reach agreement on the MAIN parts of the proposed deal; Millett LJ states that this is no different then to agree, to try to agree which is uncertain & this statement was endorsed by the CA in London & Regional Investments Ltd v TBI plc 2002 (in EWCA at [39] & [40]) Queensland Electricity Generating Board v New Hope Collieries (1989), Privy Council - HARD TO RECONCILE with Little v Courage, 15-year supply contract where first 5 years had method in place to to determine escalation in price and after that time general agreement was to continue --NOTABLES = 1) it was renewal of commercial contact which had been running for 5 years 2) Sir Robin Cooke emphasized there was a arbitration clause 3) Sir Robin Cooke expressly distinguished subjective determination of fairness which = unacceptable and the arbitrator's capacity in this context to reach an 'objectively fair and reasonable' determination Cable & Wireless plc v IBM United Kingdom Ltd 2002 [Cable & Wireless case] - an obligation to have min. participation in negotiation --MEdIATION AGREEMENT--Colman J held that parties should not proceed to formal litigation if they have agreed to settle dispute before neutral mediator, if skip this then can (and in this case did ) order a stay that can be lifted --Cable & Wireless leap frog mediation step put in place in the contract-- Petromec Inc v Petroleo Brasileiro SA 2005, CA [Petromec case] - Gloss of Walford case, dicta of Longmore LJ states that if the court can discern objective and clear criterion to determine whether the obligation has been breached then can have 'bolt-on negotiation clause' -to say that agree to negotiate on a sub-contractual point this suggests that if it was express in the contract 2) the parties have not reserved to themselves to reach consensus on the negotiated point 3) have criteria that are clear for the courts to apply so IT IS NOT SUBJECTIVE determination of a fair result (for other cases on this point see pgs. 32 & 3