Australian Commercial Law: Contracts, Property, and Case Law Analysis

This comprehensive report delves into the intricacies of Australian commercial law, offering a detailed analysis of property law's development and its significance within the legal framework. It examines key features of Australian commercial law relevant to business development, including clarity, flexibility, fairness, and accessibility, alongside protective measures like contract law and the Corporations Act 2001. The report also explores the significance of specific case law, such as Codelfa Construction Pty. Ltd. v State Rail Authority of NSW, applying the IRAC method to dissect issues, rules, application, and conclusions, particularly focusing on implied terms and the doctrine of frustration. Furthermore, the report assesses the case of ACCC v C.G. Berbatis Holdings Pty Ltd, evaluating unconscionable conduct and its implications under Australian Consumer Law. Finally, the report provides legal advice to Sam regarding common law contract principles, addressing potential liabilities in a dry cleaning scenario.

AUSTRALIAN COMMERCIAL
LAW

Table of Contents
PART A......................................................................................................................................3
Reason for development of property law and its development in Tribe’s constitution.........3
PART B......................................................................................................................................4
Features of Australian commercial law related to development of business.........................4
PART C......................................................................................................................................5
Significance of particular case law on Australian law of contracts.......................................5
PART D......................................................................................................................................7
Assessment of the case which was set aside on the grounds of unconscionable...................7
PART E......................................................................................................................................9
Advice to Sam regarding common law contract of legal principles......................................9
REFERENCES.........................................................................................................................11

PART A
Reason for development of property law and its development in Tribe’s constitution
The main reason for development of property law is to reduce the redundancy in the laws
being formed on one particular subject. There is requirement for the laws with the help of
which two parties can change their relationship. Hart stated that in case of property, it can be
in the form of entering into the new contracts, rules related to disposition of property or
granting interest in property. It can be in the form of lease as well. These rules can help the
parties to change their legal relationships. The main features of Australian Commercial law
with respect to development of business are as follows:
 Clarity and certainty: The legislations must be clear enough and certain that can be
understood by the people.
 Flexibility: The laws are flexible enough to be moulded according to the requirements
of the cases. Fairness: The legislations are true and fair. It helps in bridging the gap between the
common practices being followed by citizen and practices of tribe community. Accessibility: The laws are accessible to the citizens of Australia and there is no
discrimination have been made based on tribe to which the person belongs to.
Some features that can protect the businesses that are functioning in Australia are,
Contract law, Real Property Act, Corporation Act 2001, Competition, and Consumer Act
2010 etc1. These rules help in protecting the rights and interest of the parties that are involved
in dealing with land. Moreover, both the parties have right to move towards the court if they
are not satisfied with the judgement2. Moreover, equal rights have been given to the people
who belong to certain tribe but are Australian origin with respect to buying and selling of
properties.
PART B
Features of Australian commercial law related to development of business
Professor Hart was able to give three-part legal systems, which are, Rule of
recognition, Rule of change which is a remedy to old primary rules3 and Rules of
adjudication
1Hanrahan, P. F., Ramsay, I. and Stapledon, G.P., 2013. Commercial applications of company law.
2 Disch, L., 2016. Representation. In The Oxford Handbook of Feminist Theory.

Contract law for both individuals and business rely on certain agreements which in
turn includes Agreement of employment where all the legislations regarding employments
and employee relations are covered in it. Further, Agreement related to purchase of raw
material needs to be specified. Purchaser and seller have to comply with the rules. The
insurer has to comply all the rules for the client who is going under the insurance policies. It
helps in protecting the rights and interest of both the parties. Agreement related to purchase
of home or business covers the contract laws related to purchase of home and building are
recommended in this agreement. It states that the purchaser and seller is able to protect each
other’s interest through it. Moreover, Agreement related to appointment of any agent in
which one is appointed to cope up with the situation whose knowledge does not rely with the
core parties.
The Australian Constitution has been able to provide limited powers to federal
parliament which has major role in conducting business and business relationships. These
roles are played in the following manner:
 The corporation Act 2001 regulates companies.
 The securities law issued helps to regulate sale and trading of the shares
 The competition and consumer act 201 ensures delivering of uniform law with the
objective encourage fair trading in the country with respect to business in
Australia4.
PART C
Significance of particular case law on Australian law of contracts
It is important to use stated IRAC rules while analysing any case law. The steps of
IRAC involve, Issues, Rules, Application, and Conclusion.
Issue: The plaintiff in the case, which is Codelfa, are appointed to work for State Rail
Authority of New South Wales. The contract between the parties stated that the defendant is
not entitled to pay for the recovery of damages where the damage or delays have been made
3 Bedi, R., 2017. Leading cases in Australian law: A guide to the 200 most frequently cited judgments
[Book Review]. Ethos: Official Publication of the Law Society of the Australian Capital Territory. (243).
p.58.
4 Pearson, G., 2017. Further challenges for Australian consumer law. In Consumer Law and
Socioeconomic Development (pp. 287-305). Springer, Cham.

due to the events which are beyond the control of the defendant. The issue was plaintiff was
now asking for the compensation of the extra cot incurred in the project.
The argument of the scenario was either there is a presence of implied warranty based upon
which plaintiff can claim for damages or the contract can be considered as frustrated because
of injunctions.
Rules: In the case scenario of Codelfa Construction Pty. Ltd. V State Rail Authority of NSW
(1982) 149 CLR 3375.The contract was made under the section 11 of City and Suburban
Electric Railways Act 1967 of New South Wales.
Implied contract are the terms and conditions that are not stated clearly in the contract but
matches with the right intention of both the parties. The terms can be in the form of
following:
 In law: It is automatically applicable as per the stated law in one or the other act
and therefore known to both the parties.
 In fact: The intention is there to include but have not been included as a matter of
fact or reasonability6.
 By custom: The facts that are customary apply in any type of business or conduct.
However, it must be known to both the parties.
 By statute: These are the terms which are required for the sake of statute. These
terms are commonly excluded from the legislations of the contract.
Another important aspect of rule for the given scenario can be frustration. In this case,
the contract can be termed as frustrated when it losses the capability of being performed.
These are events that take place due to the fault of neither of the parties7. Hence, the future
discharge of obligations will be decided based upon the frustrated event occurred in the
scenario. As per the doctrine of frustration, the contract is automatically terminated and the
loss of termination of contract lies in the hands of one of the parties involved in the contract.
Same was applied in the case of Taylor v Caldwell (1863) 3 B & S 826. Further, the doctrine
of frustration states that, a promisor gets to relieved from any liability in case of any breach in
5Codelfa Construction Pty. Ltd. V State Rail Authority of NSW (1982) 149 CLR 337
6 Turner, M., 2016. Commercial Dealings with Government: The Cautionary Tale of Victoria v.
Tatts. Macquarie LJ, 16. p.155.
7Australasian Legal Information Institute. 2017. [Online]. Available through < http://www.austlii.edu.au/>

contractual agreement. It is due to some event, which were outside the sphere of control, that
one of the involved party in the contract is not able to perform its duties. In that condition, the
injured person is relived to fulfil its obligations being mentioned in the contract.
Application: Both the above-mentioned issues can be considered in the given scenario of
Codelfa Construction Pty. Ltd. V State Rail Authority of NSW (1982) 149 CLR 337. In the
given case scenario, the court looked upon the status where the rules of implied contract are
applicable where plaintiff is allowed to work for adequate number of hours. Hence, it was the
common assumption made by both the parties. However, the terms were not required to be
reasonable enough based on hi decision can be made by the court. In that case, the court is
more inclined towards the concept of frustration in order to take decisions rather than on the
rules and regulations of implied contracts.
Conclusion: From the case it can be concluded that court held the case which comes under
the periphery of frustration. Hence, the Codelfa was liable to be paid for the extra cost
incurred by it. Hence, Codelfa was paid for the work for value it worked n order to grant the
injunctions.
PART D
Assessment of the case which was set aside on the grounds of unconscionable
Issue: CG Berbatis leased out land to Mr and Mrs Robert who was the represented by
ACC in the case scenario. ACCC has to pay some extra fees to CG berbatis which was late
recovered from other respondent that is CG berbatis. ACCC was also planning to sell its
business. However, the duration to the lease was ending. The contract was signed to the new
purchaser with the hope that lease will get renewed. Now, ACCC was claiming for the extra
fees based upon the clause 14 with the help of unconscionable dealing. The argument
attached to the case is that CG Berbatis took advantage of ACCC’s disability and thus it is
required to come under the periphery of doctrine of equity where it is acting unconscionably.
ACCC is relying on prohibiting factor of section 51AA under the Trade Practices Act.
Unconscionable conduct has the transaction between dominant and weaker party which can
overlap with undue influence as well. It has been prohibited by the Australian consumer law
to get involved in unconscionable behaviour with respect to supply and acquisition of goods
and services. The contract can prove to be unconscionable if all the terms and conditions are
not being explained clearly in the contract. Other aspect can be not giving adequate time to
other party to go through the contract agreement thoroughly. The contract can be termed as

unconscionable if the individual was encouraged to sigh on blank paper. The court can then
take this into accounts as per the provisions being mentioned in section 22 of Australian
Consumer law.
Rule : Based on the grounds of unconscionable, the chosen case scenario from the periphery
of Australia can be ACCC v C.G. Berbatis Holdings Pty Ltd8.The legal rule that can be
applied on the given case scenario is statutory unconscionable conduct. There is a strong
opposition of unconscionable conduct under the Australian Commercial law. Moreover, any
dealing with respect to unconscionable conduct is also prohibited by the law of Australia.
Under section 20 of common law, unfair conduct also includes unfair practices by taking
special advantage of someone’s disability9. A little broader to this aspect, section 21 the
aggrieved party can be in the form of a consumer or a small business.
If the contract comes under unconscionable practices then the aggrieved party is entitled to
get remedies under Australian consumer law.
Application: In the present case scenario, statutory conscionable conduct is applicable. The
bargaining power given to the both the parties involved in the scenario arenot same.
However, only in the stated fact the scenario cannot be stated as a case of unconscionable
conduct. Moreover, the person has not been seen in any disadvantage simply on the base of
bargaining power as it can be entitled as hard bargaining and not unconscionable as well. The
respondent has not been able to renew it lease as well. Hence, based on these grounds, case
was dismissed by the court.
Conclusion: The verdict was taken in the favour of CG Berbatis after considering all the
important aspects of the case. Some of the remedies available under the Australian Consumer
Law are:
 Injunctions can be granted by the court under section 23210. It can be given only if
the court is satisfied with the person engaged in it.
8Australian Competition and Consumer Commission v CG Berbatis Holders Pty Ltd (2003) 214 CLR 51
9 Paterson, J. M. and Brody, G., 2015. “Safety Net” Consumer Protection: Using Prohibitions on Unfair
and Unconscionable Conduct to Respond to Predatory Business Models. Journal of consumer
policy. 38(3) pp.331-355.
10 Competition, A. and Consumer Commission, 2014. ACCC takes action against Coles for alleged
unconscionable conduct towards its suppliers. News Release NR. 102. p.14.

 The damages can be compensated by other party to the one who has suffered in
this scenario based upon the factors stated in section 236 of Australian
Commercial law
 Different orders can be given by the court by the name of compensation under
section 237 to 24511.
PART E
Advice to Sam regarding common law contract of legal principles
Issue: The issue related to the case is related where Sam who went to the drycleaners for the
first time named Rapid clean Pty ltd. The assistant stated that no responsibility of the cloth
will be taken if anything happens to the jacket during cleaning. However, the assistant wrote
on the back of the receipt that no responsibility for the removal of stains will be taken by the
drycleaners. However, the staff of Jane, who was not, trained enough torn the jacket during
dry cleaning. Sam noticed the damage and the note were read back by the assistant with the
human behaviour of hiding mistake.
Rules: In the given case scenario, the common law suggests that it comes under the periphery
of common mistake in Australian Commercial Law12. The rule states that the common
mistake can be about so fundamental that it has damaged the nature value of quality of the
substance unintentionally. However, in this case, the aggrieved party tens to get the
compensation from the other party as a relief where the written agreement is kept aside by the
court while reaching to any verdict13. One of the common case law in it is Taylor V. Johnson
where the decisions were taken under the periphery of common mistake. Other case law is
Rosewell State bank v. Lawrence Walker Cotton Co. The House of Lords case of Bell v Lever
Brothers Ltd.[Case 3] stated that common mistake can lead to void of a contract only if the
mistake of the subject-matter was sufficiently fundamental to render its identity different
11 Bainbridge, A., McGrath, P. and Janda, M., 2014. Coles admits unconscionable conduct in dealing with
suppliers; $10 million penalty agreed with ACCC. abc. net (December 15, 2014). Accessed Januar. 29,.
p.2015.
12 Newell, C., 2016. What to do in a multiple offer scenario. REIQ Journal, (Dec 2016-Jan 2017), p.36.
13 Baron, A., 2014. The Australian International Arbitration Act, the Fiction of Severability and Claims for
Restitution. Arbitration International. 16(2).s pp.159-188.

from what was contracted which further making the performance of the contract impossible.
It is quite related with the case stated in case of Sam.
Applicability: The rules mentioned above can thoroughly be applied on the scenario of Sam
and raid clean limited who are the drycleaners in the situation. Since, the jacket was damaged
by the dry cleaner. It was only stated that they are not taking any responsibility of the stains.
However, verbally it was intimated to Sam about not taking any responsibility of the cloth.
Hence, in the given scenario, it was the mistake of Jane that he gave jacket for dry-cleaning
to the unprofessional and untrained worker which destroyed Sam’s Jacket. Hence, it is the
common mistake conducted by the dry cleaners. Hence, remedies as per Australian
Commercial Law can be granted to Sam.
Conclusion: Hence, it can be concluded that the mistake comes under the periphery of
common mistake and Sam is aggrieved party in this case. Sam is liable to get compensation
from the drycleaners. In this case, if Sam approaches to the court, he will be provided
equitable remedy as per the damagesbeing performed by the drycleaner. Common mistake
can be remedied under the Australian Commercial law. Moreover, it can bring the arguments
into questions and announce the contract between the parties as void.

REFERENCES
Books and journals
Bainbridge, A., McGrath, P. and Janda, M., 2014. Coles admits unconscionable conduct in
dealing with suppliers; $10 million penalty agreed with ACCC. abc. net (December 15,
2014). Accessed Januar. 29,. p.2015.
Baron, A., 2014. The Australian International Arbitration Act, the Fiction of Severability and
Claims for Restitution. Arbitration International. 16(2).s pp.159-188.
Bedi, R., 2017. Leading cases in Australian law: A guide to the 200 most frequently cited
judgments [Book Review]. Ethos: Official Publication of the Law Society of the
Australian Capital Territory. (243). p.58.
Competition, A. and Consumer Commission, 2014. ACCC takes action against Coles for
alleged unconscionable conduct towards its suppliers. News Release NR. 102. p.14.
Disch, L., 2016. Representation. In The Oxford Handbook of Feminist Theory.
Hanrahan, P.F., Ramsay, I. and Stapledon, G.P., 2013. Commercial applications of company
law.
Newell, C., 2016. What to do in a multiple offer scenario. REIQ Journal, (Dec 2016-Jan
2017), p.36.
Paterson, J.M. and Brody, G., 2015. “Safety Net” Consumer Protection: Using Prohibitions
on Unfair and Unconscionable Conduct to Respond to Predatory Business
Models. Journal of consumer policy. 38(3) pp.331-355.
Pearson, G., 2017. Further challenges for Australian consumer law. In Consumer Law and
Socioeconomic Development (pp. 287-305). Springer, Cham.
Turner, M., 2016. Commercial Dealings with Government: The Cautionary Tale of Victoria
v. Tatts. Macquarie LJ, 16. p.155.
Online
Australasian Legal Information Institute. 2017. [Online]. Available through <
http://www.austlii.edu.au/>.