Contracts Law II_2nd Lecture.txt

I'm monitoring the deportation, so it's OK. OK. I'll show you the secondary way. Good morning again. Alright, so we're going to start on our semester 2 program by first looking at what's known as appreciating factors. What we want to do today is to go back again to semester 1 and to revisit again th...

I'm monitoring the deportation, so it's OK. OK. I'll show you the secondary way. Good morning again. Alright, so we're going to start on our semester 2 program by first looking at what's known as appreciating factors. What we want to do today is to go back again to semester 1 and to revisit again the meaning of a contract. A contract is an agreement between two or more parties, an agreement which confers rights, an agreement which imposes obligations, an agreement which confers mutual rights, an agreement which confers mutual obligations, which the legal system will enforce. We've had to do that because we will not understand what VTA in fact is about. and the operative word there is the word agreement. The parties are in agreement and then we revisit again what in Latin means when the parties are in agreement. So let's just say that again in Latin, and then, say it louder, again, consensus at item, and it's meaning in English, again, meeting of the minds. And in Pidgin, Laka is optional. Actually, only the New Guinea Islanders use that word, Laka. They've already said, give me one bell, and then they question it again, Laka. We, many members, don't use that word, and of course, in MOTU, just one word, Mao Ruo, and the effect of consensus item, the effect of the parties' minds having met, the effect Just the effect of the parties on one bill and the effect of the parties' moral means that the parties have freely entered into the contract. It means that the parties have freely agreed to be bound by the mutual rights and the mutual obligations. In other words, they have agreed to be freely bound by the terms of the contract. And so, what is? There is present a factor which has the effect of removing consensus item, which has the effect of the parties' minds not having met, which has the effect of the parties not having one bell, and which has the effect of maro la simonka, did I say that word correctly? Maro la simonka, so it has that effect. What if there is present a factor which has that effect? It removes an Ida, it removes a meeting of the minds, it removes one bell and it removes Maura. What if a factor exists which has that effect? That factor, all factors, is what's known as Vitiating Factors. And that's what we'll be looking at over the next couple of weeks. Vitiating Factors, and there are four types. The Vitiating Factor of Sick. The Vitiating Factor, secondly, Vitiating Factor of Misrepresentation. Then the visual factor of duress or cohesion and the visual factor of undue influence. Any of these factors present in a contract will have the effect of removing consensus an item will have the effect of rendering the minds of the parties as having not met and will have the effect of the parties all know one man and of course will have the effect of removing moral. So we're going to be spending some time looking at those, these factors, mistake, which is what we're going to begin with on today, misrepresentation, duress, coercion, and then finally, undue influence. So, let's begin with the first of those, which is mistake. And we want to begin, before we get to the more substantive part of this head, we want to begin by firstly revisiting the presumption that everyone knows the law. Ignorance of the law or mistake as to the law is not a defense in law. Everyone is presumed to know the law. So, in order for the vision factor to be legally operative, it must be a mistake of fact. It must not be a mistake about the law. It must not be a mistake about the law because of the operation of that presumption that everyone knows the law. And you cannot plead ignorance of the law as a valid defense in law. So, in order for the vision factor of mistake to be legally operative, it must be a mistake of fact, it must not be a mistake of law. For example, if someone makes a mistake as to their contractual obligations, if someone makes a mistake as to the nature of their contractual obligations, that is a mistake of law. and the presumption would work against them, right? A mistake as to the nature of their contractual obligations is not a question of fact. It's a mistake of law. And therefore, they will not be able to rely on the vitiating factor of mistake. Let's just recap that again. Everyone is presumed to know the law, and therefore, pleading ignorance of the law is no defense. And in order for the machine factor of mistake to be legally operative, it must be a mistake of fact, not a mistake of law. And an example that I'm giving you here, which is, was addressed at great length in the leading case of the fault of Makham. If someone, a part of your contract, makes a mistake as to the nature of his or her contractual obligations, that is not a mistake of fact. that is a mistake of law, and the presumption that everyone knows law will work against that person. There are three types of legally operative mistakes. First, there is what's known as the common or shared mistake. Secondly, there is what's known as the mutual mistake, and thirdly, there is what's known as the unilateral mistake. The presence of any of these types of legally operative mistakes will have the effect of removing consensus item, without the effect of removing a meeting of the minds, without the effect of the parties not being one bell anymore, and without the effect of removing Mauro altogether. Okay? Common or shared mistake, mutual mistake, and unilateral mistake. So We're going to spend the rest of our time together here this morning looking at the first of those common or shared mistakes, and when we come back tomorrow, we'll look at the second, and then next week we'll finish off by looking at the third. When parties to a contract make a common or shared mistake, it means that they've made the same fundamental mistake. For instance, either of them might be contracting for something that has never existed or something that has previously existed but no longer exists. If both parties are mistaken about the existence of the subject matter of the contract, then that is a common or shared mistake. And as I said, it happens, it's a common enough mistake in fact, that's what happens all the time in life. if people enter into a contract thinking that the thing they're contracting for exists, when in fact it does not. So the thing which they are contracting for is the subject matter of the contract. And if it doesn't exist, and either party does not know that it no longer exists, it could be that the thing that they contracted for has never actually existed, or it could be that the thing that they are contracted for has in fact existed, but at the time of the contract has ceased to exist. Whether the thing has never existed, or whether it has existed and has now ceased to exist, will have the same effect. The parties have made a common or shared mistake. And based on that mistake, it will render the agreement probably, I'm saying probably, we need to look at that later, it will probably render the contract void, void meaning that as far as the law is concerned, the contract has never come to being. The Latin term, which I'm sure by you used to void ab initio, meaning right from the start, the contract has never come to be. And in this case, if both parties are mistaken about the existence of the subject matter of the contract, both parties believe that the contract, sorry, the thing for which they are contracting exists, when in fact it doesn't exist, then the contract will be void at the initial, right? Because why? There's no consensus either, that there's no meeting of the minds, that both parties, although one bail, and that both parties, What's the idea, more or less? You see, I'm getting good at this. Yeah, I'm getting good at this. But I'm good at languages, you know. I went to a Dutch school, right? And I went to a French school. And then I went to an English school. So I speak all those languages. And then I went to a motor school, no I never went there. Okay. Well, the 79th contract has never existed, or has existed, but it seems to exist at the time of the contract. Those type of cases are called res extinga, rest extinct cases and you find that reflected in our Goods Act Section 8.1 which is basically codifying the common law principles Scott and Coulson where parties have entered on the contract about a thing which has never existed or about a thing that's existed but seems to exist at the time of the contract, it's referred to as rest extincta and the contract would be void. And our goods act at section eight one has qualified the common law position. But in order for reliance to be had on Section 8.1 of the Goods Act, the goods, the subject matter of the contract, must be specific. You cannot just say to the other party, we'd like to buy rice, please. Rice. You're not counting every single grain of rice, it's generic, right? Flour, flour too is generic. What else? Sugar, sugar too is generic. Has anyone ever attempted to count sugar grains? Well try it, do it this afternoon. It's got to be specific goods, right? And it's that specific goods that no longer exist. If for instance, the contract is about a particular vehicle, right? And how do you remove a vehicle from being generic to a specific vehicle? So you want to go to car? Mr. Tamer, I know you have a car. And I know you're going to give me a lift right after this lecture. So how do you remove your vehicle from being in the generic basket to one being specific? Yes, yes, yes, what else? It's your make? Model? But what I'm not doing is, all vehicles have a team number, that's the chassis model. Yeah, yeah. So, the vehicle is no longer in the generic basket. It's specific and it's identifiable by year of make and its chassis number. Right? And if that vehicle does not exist at the time of the contract, Section 8.1 will apply. It will render the contract void. And when a contract is void, it cannot be enforced by either party. However, and you know, I stressed this word however. However, if one contracting party promises the other that the goods are there, the goods are in existence, then that party making that promise will be responsible for their non-existence. One party tells the other, That's a promise actually, that the goods actually exist. And if it doesn't exist, then the person saying must be held responsible in law. And here is my favourite case. McRae, Commonwealth Disposal Commission, not the year, 1951, Commonwealth Law Reports. Now, this case, the facts of this case play out entirely in PNG. That's why I love this case. After the Second World War, you have to understand where the war takes place. When a war happens, what do you fight with in a war? Guns. Guns? And what? Explosives. Explosives, and what? Metal. Tanks. Tanks, aircraft, warships. Okay, those things, what do you make those things out of? Metal. Metal. So when a war happens, the first thing the government will do is requisition, that's the word, requisition everything that is metal. All the metal in the country belongs to the state. Because they need those metals to make the guns, they need those metals to make the aircraft, they need those metals to build the warships. And when the war is over, the thousands and thousands and thousands of ships underwater, aircraft that have been shot down, thousands, right? And so, after the war, there must be a recovery program to get all that metal back. And in PNG waters, there were hundreds and hundreds of warships under the sea. There were a lot of aircrafts on land and underwater that had been shot by the warring parties. And the Commonwealth Disposal Commission was established exactly for that purpose to recover all that metal that was lying in the bottom of the sea. And it was operating in PNG, TPNG as it was then known in 1951. And the Commonwealth Disposal Commission put out a tender In the papers in Sydney, it said there's a couple of warships that are sitting in this reef. Jemaun. Who's from Milan Bay? Is there such a reef as Jemaun in Milan Bay waters? Anyone from Milan Bay? Actually, I've always felt that Jemaun is an aboriginal name, it's not a popular Indian name. And I don't think many people would have a name like that anyway. But anyway, the Commonwealth Disposal Commission put out a public tender in all the papers in Australia, but more so in Sydney papers saying, inviting people to tender for the recovery of two warships, destroyers, that were sunk by the Japanese. and was sitting a hundred nautical miles north of Samurai. You know where Samurai is? Samurai is just down low island in Manus. No. Samurai is there, right at the tip. If you look at the entire map of the island of New Guinea, including West Papua, the West Papua Island is exactly the same as the PHEM, right? The West Papua Island is the equivalent of Samai Peninsula, equivalent to the Fafak Peninsula in West Papua. It's just kind of, I don't know how it was made, but that's how it is. So, summarized there, on this part of the PNG, and the Commonwealth Spatial Commission said there's a couple of warships there, Australian warships, probably a US warship too, that the Japanese sank on that reef. So they invited tenders for recovery. And McCrane here won the tender, so he went through a hell of a lot of trouble getting his people, equipment, and everything else. Moved from Sydney to Queensland, Brisbane, then to Townsville, and then to Port Moresby, and then to Samarang. It incurred a lot of expense. And then he sailed out 100 nautical miles, he had his bearing and all, so he went to the exact position where he was told the ships would be. And he sat down divers, didn't see any ship. So they moved a little bit to the right, they moved a little bit to the north, come back, but no ships there. They dived and dived and dived. So he went back all the way from to Samurai, to Mosby, and then to Cairns, and to Brisbane, and back to Sydney. And he told the disposal unit, there are no ships there. You told me there were ships, there's no ships there. Come on, I want my money. So he asked for compensation, right? So, the Commonwealth Government, having all those lawyers in there and joined in the Justice Department, And they came back and said, well, they said to McRae, well, that's too bad, that's too bad, because relying on that principle, that's too bad, because we thought the ship was there, and you thought the ship was there, so it's a common mistake. So you can't come and play competition from us. But no. The High Court of Australia said no. No. They said the Commonwealth Government, through its agents, had promised McRae that the ships do actually exist and they're at the bottom of the sea. All he's got to go and get with his crew and get them, recover them, and bring them back to Australia. And the ships were not there. So the High Court of Australia said to the the Commonwealth Government pay McCrae. And of course, the case is an exception to the general rule that where the both parties are mistaken about the existence of the subject matter of the contract, contract is void and neither party cannot take enforcement action against the other. but the McCrae and Commonwealth disposal case is an exception because I quote said where one party promises the other that the goods, the subject of the contract, exist and they did not exist, the person making promise must take responsibility under the law. And that's why it's an important exception to the general rule and it's our favorite case because all the facts in this case, an Australian case that's going all the way up to the High Court of Australia, all the facts played out in the end. Now the mistake must not be about the quality of the subject matter of the contract If it's a mistake about its quality or its value, that doesn't go far enough, doesn't go enough to render the contract void. And there's good authority on that, and that too, this aspect too has been qualified in our Goods Act, our Goods Act. It's not in Section 8.1, it's in some other provision nearby. I would invite you to go visit our Goods Act. That's a very important legislation that affects the livelihood of ordinary public individuals. Because all of us do shopping. All of us are shopping. Did I say shopping? You know, talking about goods. When you go to the shop, and your feet are size 10, and you try, they put size 10, it's actually not size 10, it's some other form of size 10, right? I don't know, my arm is size 10, but whenever I buy a size 10 shoe in the shops, it doesn't fit me. So I don't know whether that's a violation of the law. I think it is. All right, let's go on with our discussion. These are just notes that you have in your notes there, but which are not for the time being, for now, not important, but we'll come revisit those again. So when you have a contract that's come into being and is affected by common or shared mistake, you could, the parties could ask the court to set aside the contract. Set aside, setting aside the contract is an equitable remedy, and that's available solely at the discretion of the court. So, the court will not award that remedy if it's not possible to restore the parties to their original pre-contract positions, but we'll visit that when we get to it in due course. We'll visit these cases again in due course. Now, Mr. Brian Cockburn usually will take you on a Friday, but he's not available this semester. So, do you want me to come and lecture to you on Fridays? Come on! This is contract law. It's about consensus at item. Right? So, do our minds meet that I'll come back to you on Friday? Because, tell you the truth, I'd rather be elsewhere on Fridays. But if you say that you want me to be with you on Friday, I'll come. So do you want us to come back tomorrow? and cancel Tuesday actually I actually I haven't found the lady I think she's avoiding me this is the lady your civic genetics is the lady or me Tuesday, 3 to 4, what class is there? Huh? What? What class is there? And you're the ones that told me that you have a class there. Class with that class. Because if you have not been truthful to me, I'll come back to 3 and 4. And forget about 4 and 5. Huh? 3 and 4 is who? Huh? This person always seems to ring at this time. You know. These are less liable people, they know that this week is my fortnight week. Okay, so we'll just leave Tuesday as a result for today and this week, but we have to do something about it next week. Who's the lecturer again? What course? 3 to 4? Who? Peter Pinocchio. Who? Peter Pinocchio. It's a mister. Peter Pinocchio. I'll talk to him. He's an old buddy. I'll talk to him. Our history together goes back a long way. Peter Punoko and I, in fact, once upon a time, we were both training to become priests. And I was the first one that got kicked out. And then he stayed on, finished the course, but he never got the call, so he came here. You have to get a call to become, to be in the priesthood. Right? You have to get the call to be in the priesthood. Some people do get the call, but they don't. Some people do get the call, but they misinterpret it. I never got the call. I won't tell you what I did. Are there any questions? Should we come back tomorrow? Yes. Okay. And then we leave Tuesday until I speak to Peter. It's good, I mean it makes my job easier because Peter, you know how I talk to him, this bag here, I just got it, he didn't say he was wearing it last semester, but this semester I bought it, it's always full of guai, so when I go to Peter, I take my bag out and and I just gave it to him. When he looks inside, I have this, where is Tabea? That's how I will do it. You would induce people to agree to what you want. Okay, are there any questions? Yes, sir? Mr. Poko, you want to say something? About your tutorials? Okay, I have one for David. It looks like we have one lecture this week, so we can set up a tutorial next week, and we can have a tutorial after next week. Okay. And I think myself and the other people will have to organize those tutorials. So you might go in three and then take it. Like we did last week. Kostrom, do you have anything to say? So we're all happy? Okay. I'll see you tomorrow then.