Legal Relationships and Breach of Contract

Course Contract and Sale of Goods
Code Name
Question 1: The Legal Relationships
Blackboard Pty Ltd and PosetrPLUS Pty Ltd
The type of legal relationship created between this two parties, according to the fact pattern is a
contractual relationship. This is the kind of relationship that is created between parties in a
contract and is evidenced by an offer, acceptance thereof and valid consideration.1 The fact
pattern reveals that the parties entered into a contract for the supply of cast vinyl.
PosterPLUS Pty Ltd and SEASTORM Containers
According to the fact pattern, it is not mentioned that there was a contract between these two
parties. Rather, it is mentioned that PosterPLUS sold the cast vinyl to SEASTORM. Therefore,
the legal relationship created between these parties is the buyer and seller relationship.
Blackboard and SEASTORM Containers
From the fact pattern, it is not said that there was a contract or contractual relationship between
these two parties. The only factor that connects the two is PosterPLUS Pty Ltd – Blackboard
entered into a contract with it for supply of cast vinyl while SEASTORM bought the cast vinyl
from it. SEASTORM is therefore referred to as a third party. The relationship between these two
parties is not contractual but rather, a third party relationship.
Question 2:Party that Breached the Contract and Assessment of Damages
The issue in this fact patter is whether Blackboard Pty Ltd breached its contract with
PosterPLUS Pty Ltd when it supplied the cast vinyl which was degrading. The other issue is
1 MacMillan, Catharine, and Richard Stone, Elements of the law of contract (London: University
of London, The External Programme, 2004) 14, 18, 30.
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Course Contract and Sale of Goods
Code Name
whether PosterPLUS breached its duty to SEASTORM Containers in selling cast vinyl that
proved to be degradable.
The general rule in determining whether there is a breach of contract is asking whether a
promisor failed to perform a contractual obligation of where such a promisor committed
anticipatory breach of the contract. Entitlement to claim for damages by a promisee against a
promisor is the inevitable consequence in case there is a breach of contract.2 Specifically, a
promisee becomes entitled to liquidated damages. This right to claim for damages begins to
accrue at the time of the breach of contract by the promisor. Although the right to damages is not
dependent on proving loss and damage, where a party fails to furnish such proof, entitlement is
limited to nominal damages.3 The law provides that professionals providing professional services
breach their duty arising from the provision of those services if it is found that they conducted
themselves in a way that was not acceptable by the body of professional peers who practice the
craft or trade.4 In the same breadth, professionals under common law are required to conduct
themselves with a degree of due care, diligence and skill that members of the profession would
normally carry.5 With respect to design and build contracts, it is an express term in these
contracts that products supplied will be fit for their intended usage. The consequence is that this
imposes a warranty (an absolute obligation) that the items supplied will perform the task for
which they are required. Therefore, the fitness for purpose requirement is an absolute warranty.
Applying the law to the fact, the question to ask is whether it was a term in the contract to
provide cast vinyl that had sufficient ultraviolet stabilizer. According to the facts of the case, the
parties entered into a contract to supply cast vinyl. The contract did not expressly provide the
2 O'Connor v S P Bray Limited [1937] HCA 18.
3 Tramways Advertising Pty Ltd v Luna Park (N.S.W.) Ltd (1938) 61 CLR 286, 300-12.
4 Civil Liability Act 2002 (NSW), s 50(1).
5 Voli v Inglewood Shire Council (1963) HCA 15.
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