logo

Unison Finance Group Pty Ltd v Electric Life Pty Limited

   

Added on  2020-05-08

7 Pages1290 Words98 Views
Case 1Unison Finance Group Pty Ltd v Electric Life Pty Limited1Background In this case, the parties had the intent of entering into a hire-purchase agreement in which some electronic equipment had to become the renting party’s property once the initial four year term was expired. Though, the agreement terms failed to reflect the same and instead the agreement stated that the rental agreement would roll over once the initial term ended automatically. As a result of this, the rental payments were being deducted for every quarter from the bank account of the renting party for a period of 9 years, since the expiry of the initial term. These payments were attempted to be recovered based on these being made in error, though it was claimed upon by the hiring party that the contract had been renewed and was on foot when these payments had been made. As a result of this, the payments were deemed to have been made in a proper mannerand also been received properly2.The rental agreement covered a renewal clause where automatic renewal was provided for a twelve month period, once the initial term ended. The main issue of dispute here was that the renewal clause had to be read to mean that there had to be only a single renewal or whether each of the successive terms had to be subjected to their own twelve month auto renewal. It was statedin the agreement that there would be an automatic renewal once the initial term was brought to an end “upon the same terms and conditions as appear in this Agreement”. It was stated by the 1 [2015] NSWSC 1702 King & Wood Mallesons, Unison Finance Group Pty Ltd v Electric Life Pty Limited [2015] NSWSC 170 (02 July 2015) <http://www.kwm.com/en/au/knowledge/insights/unison-finance-group-electric-life-nsw-contract-law-20150702>

court that the clear wordings of this meant that the renewal clause had been incorporated into the agreement which was renewed, in addition to all of the other terms. This meant that the agreement had to be renewed automatically, in addition to all of the other term3. In short, the agreement had to be renewed again for a twelve months period, in succession, till the time the one of the parties took some action to terminate the contract. As a result of this, the renting party formed a view that with the end of initial term, the agreement had expired, where the reality was that the same had been renewed for an additional period of 9 years resulting in creating of additional liability for the next 9 year period, for the rental payments. Even though this result was deemed as quite harsh, it was deemed as just as the court could not depart from the clear wordings which gave a clear meaning to the agreement4. Question 1Whether the term “upon the same terms and conditions as appear in this Agreement” created a new (renewed) contract, with regards to offer and acceptance?Answer 1 The contract formation requires certain elements to be present for the contract to be binding in a legal manner. This includes the offer, the acceptance, the intention, consideration, capacity and clarity5. The agreement clauses are that of offer and acceptance. For a contract to be made, one party has to offer certain terms to the other party. This offer than has to be accepted by the party to which the offer had been made6. 3Austlii, Unison Finance Group Pty Ltd v Electric Life Pty Limited [2015] NSWSC 170 (10 March 2015) (20 March2015) <http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nsw/NSWSC/2015/170.html>4At 25Linda Mulcahy, Contract Law in Perspective (Routledge, 5th ed, 2008)6 Paul Latimer, Australian Business Law 2012 (CCH Australia Limited, 31st ed, 2012)

In this case, the original contract which had been formed covered offer and acceptance. And the term “upon the same terms and conditions as appear in this Agreement” meant that when the contract had to be renewed, it had to be done on the basis of the terms of the original contract. And this contract also covered the word automatically, which meant that in the original offer andacceptance, it was clearly stated that the new contract did not require new offer and acceptance and that the offer and acceptance of the original offer had to be rolled over in this contract, owing to the automatic renewal term. Hence, in the renewed contract, the offer and acceptance would be deemed to be present, resulting in a contract being formed.Question 2Whether the term “upon the same terms and conditions as appear in this Agreement” contained intention of the parties?Answer 2An important part of contract is the intention of the parties. The intention of the parties denotes that the parties have the intent of going forward with creation of legal terms7. In this case, the intent was clearly present, as the parties created the contract and even acted upon the same. The intention here would again be deemed to be present owing to the automatic renewal of the original terms, as was the case with the offer and acceptance. And so, the intention of parties can be clearly claimed in this case. 7 Brian A. Blum, Contracts: Examples & Explanations (Aspen Publishers Online, 4th ed, 2007)

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
(Solved) Business Law: Assignment
|6
|1433
|102

The Australian Business Law | Study
|6
|1344
|57

Assignment | Business and Corporate Law
|9
|2685
|31

Contract Law 2017 | Assignment
|8
|1596
|38

Contract Law Assignment - (Solved)
|15
|4552
|86