University of Charles Darwin: LAW514 Commercial Law Assignment 1

This assignment, prepared by a student at the University of Charles Darwin for the LAW514 Commercial Law course, delves into the intricacies of contract law, exploring various types of contract terms. The essay first defines contracts and agreements, differentiating them based on legal enforceability, and subsequently categorizes contract terms into express, implied, and statutory terms. It examines express terms as explicitly stated, implied terms derived from common sense, industry practices, and past performance, and statutory terms imposed by legislation, particularly the Sale of Goods Acts in the Northern Territory. The analysis is supported by relevant case law and legislation, including cases such as Associated Newspapers Ltd v Bancks and Alcatel Australia Limited v Scarcella. The second part of the essay discusses the importance of contract law in professional life, emphasizing key elements such as protection of parties, financial considerations, and procurement and insurance laws. The essay underscores the significance of clear, unambiguous contract terms, illustrating how contracts serve as a shield for legal agreements, facilitate financial arrangements, and govern procurement and insurance processes in a professional context. The student draws examples from the Northern Territory to support the discussions.

Running head: COMMERCIAL LAW
COMMERCIAL LAW
Name of the Student
Name of the University
Author Note

1COMMERCIAL LAW
Consider the types of terms of contracts – express, implied and statutory -
with references to cases and legislation
Contracts and agreement both are very familiar terms in cases of dealing. However,
both poses similar qualities but all contracts are agreement but it is not necessary that all
agreement will reach the stage of the contract. This is due to the fact that agreements that are
enforceable by law can be termed as a contract. Therefore, contracts can be classified as those
agreements upon which some legal obligation is imposed. In other words, agreements that are
valid in the eyes of law are those that comply with a few legal terms and exceptions. The
question in this regard is at the time an agreement can be considered to be legally binding,
that is when can an agreement can be termed as a contract. It can be said that an agreement to
be enforceable by law must fulfill the following requisites, they are: there should be an offer
made by the offeror to the offeree, the offeree must accept the same according to the terms of
acceptance and without modifying the actual offer, there must be an intention between the
parties to enter into a contract, and there must be adequate or sufficient consideration. It can
be seen that though the complexity of a contract might varies they are identical regarding
their structure and content. The fundamental purpose of a contract is to elaborate by using
unambiguous language the requirements of a contract which each party needs to comply with,
state about the type of consideration related to the contract and declares about any other terms
which are special in character and which is needed to comply with under the special
circumstances. .It can be said that those contracts can be termed as good contracts whose
parties have cautiously examine the entire event which might arise during the tenure of the
agreement and took passably steps for them. Those contracts were said to be comprised of
strict and widely spread terms and conditions which generally covers resolution for all the
issues or conflicts. Therefore, it can be said that the terms and conditions of a contract need to
be wide-ranging to cover all the aspects of a contract.

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The terms of a contract include each point in an agreement between the parties
referring exactly in which way and under what situations an agreement is said to be
performed. However, it is to be noted that contract law only specifies the guidelines regarding
the terms and conditions of a contract and it is upon the parties to determine and enclosed the
same in a contract as per their requirement in specific cases. The Law of Contract identifies
two types of terms: implied terms and express terms. However, there exists another type of
term in a contract referred to as statutory terms. They are discussed below;
The agreement comprises of express terms are said to be stated or instructed by the
parties to the contract. These terms might have been stated either through oral communication
or in writing. However, the contract altogether must imitate the intent of the parties. It is an
established fact that, if an express contract is contracted between two parties then an identical
contract concerning the same subject matter cannot be made between such parties concerning
implied terms (Treasury.gov.au, 2019). Similarly, the law generally will not entail an express
contract of similar parties, an alternate promise or contract. In the case of, Associated
Newspapers Ltd v Bancks, the court held that express condition can be stated in a contract
through images and logos.
On the other hand, some terms cannot be converted into writing, as well as cannot be
orally discussed. In such a case those terms existed in an implied form in a contract and
become legally binding upon the parties. Furthermore, they are implied because common
sense, standard industry observance, and past performance, generates an exception about the
way through which such agreement will be carried out and it must be clearly specified in a
contract that on the basis of such implied terms few actions of the contract will be carried out.
Common sense can be applied in case of an agreement where some matters specified in the
agreement are so obvious that they can be performed without specifically mention about the
same. I can be further stated that there are some standard agreement guidelines for each

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industry which remains the same unless the agreement engages a brand new concept, then the
terminology and quality of practice will such contract remain the same and implied. In the
case of past performance, past dealings create an exceptional situation where future
agreements relating to the contract will be carried out in the same way unless both the parties
choose to change the agreement. In the case of Alcatel Australia Limited v Scarcella and Ors
Matter Nos, the court held that the duty of good faith in both cases of performing obligations
and enforcing rights can be imposed upon the parties through implied terms in New South
Wales. In another case of Real Estate v St Martin's Investments Pty Ltd, the court held that
the implied terms in a contract must be such that give effect to the contract. In another case of
Astley v Austrust Limited, the court held that the duty of reasonable care can be imposed
through implied terms in a contract.
On the other hand, statutory terms are those terms that have been imposed by the State
and Territory Sale of Goods Acts regarding some crucial terms and conditions in a non-
consumer contract for services and goods. These terms include few mandatory conditions
such as; goods and services which are subject of selling must be in a good condition and
comply with the sample presented to the buyer before selling, description of goods and
services must be identical with the actual goods and services, the sold goods and services that
have been provided must comply with the purpose for which it was sold or provided
(legislation.nt.gov.au, 1999).
Therefore, it can be said that terms are an important cornerstone in any legally enforceable
contract.

4COMMERCIAL LAW
Consider and discuss what you believe are the main topics of contract law
which will be important for you in your professional life.
Once upon a time doing business was easy. During that point of time business used to
be based on oral agreements, where both the parties used to oblige and honored their words
and used to do business accordingly. But in the modern era, due to such dishonest dealing in
business, all the professions become very cautious about their business dealings. In the
business society it is impossible to predict about the thinking or planning, most of the time it
may be for the benefits but there is proof of cases where one a party to the business cause
detriment or loss to the other party simply by misusing the terms and conditions of the
business agreement they both have entered into previously. Therefore, it is advisable to be
cautious about business dealing. Further, this caution is also necessary due to the existence of
an immense number of a lawsuit that is instituting in the court of law on a daily basis.
Therefore, to avoid such uncertain situations, it necessary for both parties to abide by the
terms and conditions of a contract and perform their part of promises to the contract
depending on contractual obligation or statutory obligation such as procurement and
insurance law (Gorman and Vemuri 2017).
Contract law generally acts as a shield for each legal agreement and it further
authorizes the party to the agreement with the authority to compensate and acquire money in
case damage or any other type of loss caused to them due to the breach of contractual terms
by the other party. In case of a professional contract, it generally states out the details about
the work which is going to be performed under such a contract as well as it states vital dates
and information important for performing such contract like cost and so on (Bray et al 2014).
The terms of the contract need to be unambiguous and simple, which is necessary for the
performance of the contract. Therefore, the contract plays an essential role in professional
dealing. Few of the key elements of a binding and legally enforceable contract such as

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protection of the parties, financial lockdown and closure terms of the contracts, which can
influence a professional dealing between two parties are discussed below;
A contract is a reflection of a similar intention or meeting of the minds of both parties.
Therefore, the contract creates a shield and protect the right of both the parties which has
been ensuring through similar intention or the identical result of the contract. Further, it is
important to mention that a written contract not only protects the right of both the parties
through the words contained in it, but it further increases the chances of its enforceability. For
example; in case of agreements of vendor and service provider which involves various stages
of performance, both the party can track and monitor each other performance relating to the
contract from time to time. A written contract is also necessary to resolve the dispute if any
arises between the parties during the lifetime of the contract. In such a case, both the parties
can resolve the dispute complying with the dispute resolution method described in the terms
and conditions of the contract (smallbusiness.chron.com, 2019). Another important aspect of
the professional contract is it envisages some important information and required the
performance of both the parties in subjects like payment, costs, invoices, etc. Sometimes
there is some huge business dealing that requires part-payment or cost might be incurred in
different stages of such a project. A contract plays a very vital role in this regard. A contract
clearly stipulates the requisite amount that is required to be paid by one party to another at
different stages of the project.
Another important business or professional law is procurement law. Procurement law
comprises buying of goods, services generally by a large organization in both the private and
public service sector. To ensure the best monetary value of goods, these sectors use
procurement procedures. The court, while dealing with procurement law performs the role of
a watchdog to monitor fair practices by these various organizations while dealing with the
goods. In the professional aspect, procurement law is very much significant, especially on the

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ethical part. It is the duty of procurement professionals to ensure the ethical standard of the
business in order to comply with the guidelines of the law as well as it is required for the
growth of the business to ensure the ethical standard. Furthermore, procurement contracts are
generally made for a particular time period, that is it lifetime depends upon the performance
of the obligation of both the parties. Therefore, a procurement contract is not eternal or long-
term, and it gives a clear idea to the parties about the end date of the contract so that they
after performing their part can move to another project with another client (Loosemore, and
Reid, 2019).
On the other hand, insurance law is another important aspect for professionals This
can be said because insurance law protects the liability of the business owner as well as the
business. Therefore, insurance law grants the opportunity to business professionals to take the
risk of doing business on risky terms. However, its enforcement also depends on ethical and
lawful consideration of the business. Furthermore, business law covers business property or
inventories. Therefore, in cases of any kind of accident that falls within the purview of
insurance liability, the insurance policy covers the same. Further, in the case of employers,
they need a worker compensation policy every time such as professional liability or general
business liability policies can be required only by companies involved in specific industries
(Smallbusiness.chron.com, 2019).
Therefore, it can be concluded that business contract comprises contractual terms,
procurement terms and insurance liability terms are therefore a fundamental part of business
dealing between the two parties of a business, which further helps to create a good
professional bonding between two parties. Therefore, legal rules and principles envisaged
under these three types of laws play an important role in professional dealings as well as
creating transparency and trust regarding dealing between two parties.

7COMMERCIAL LAW
Reference:
Alcatel Australia Limited v Scarcella and Ors Matter Nos Ca 40797/97; Ca 40798/97 [1998]
NSWSC 483 (16 July 1998)
Associated Newspapers Ltd v Bancks (1951) 83 CLR 322
Astley v Austrust Limited(2000) 197 CLR 1; [1999] HCA 6 (4 March 1999)
Bray, J.R., Gray, M., Hand, K. and Katz, I., 2014. Evaluating new income management in the
Northern Territory: final evaluation report. Social Policy Research Centre, Sydney.
Gorman, J. and Vemuri, S., 2017. A precursor to entrepreneurialism on Aboriginal lands of
the Northern Territory of Australia. International Journal of Entrepreneurship.
legislation.nt.gov.au, 1999. Legislation Database. [online] Legislation.nt.gov.au. Available
at: <https://legislation.nt.gov.au/en/Legislation/SALE-OF-GOODS-ACT-1972> [Accessed
28 March 2020].
Loosemore, M. and Reid, S., 2019. The social procurement practices of tier-one construction
contractors in Australia. Construction management and economics, 37(4), pp.183-200.
Real Estate v St Martin's Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596
smallbusiness.chron.com, 2019. What Is The Importance Of Contracts To A Business?.
[online] Smallbusiness.chron.com. Available at:
<https://smallbusiness.chron.com/importance-contracts-business-906.html> [Accessed 28
March 2020].
Smallbusiness.chron.com, 2019. Advantage & Disadvantage Of Insurance. [online]
Smallbusiness.chron.com. Available at: <https://smallbusiness.chron.com/advantage-
disadvantage-insurance-39117.html> [Accessed 1 April 2020].

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Treasury.gov.au, 2019. [online] Treasury.gov.au. Available at:
<https://treasury.gov.au/sites/default/files/2019-03/WorkingWithContractsGuide.pdf>
[Accessed 28 March 2020].