Contract Law

What Makes a Valid Contract?

Freewill, informed agreement

The parties must be fully appraised of the terms, or at least have the opportunity to appraise themselves. If a party was not made aware of the terms on offer, then they cannot have agreed to the terms. This is dealt with in Oceanic Sun Line Special Shipping v Fay,[1] where a cruise ship ticket was issued subject to terms that sole jurisdiction would be with the courts of Greece. The plaintiff was injured on board and insisted on suing in New South Wales. The terms were written on the ticket and displayed at the company office, but the passenger had no reasonable opportunity to view them first...

 

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Standard Form Contracts

Standard form contracts follow the same rules as any other written contract, just as if it was fully negotiated. In practice issues sometimes arise with opaque wording and onerous terms which can compromise a claim as to free, informed agreement...

 

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[1] Oceanic Sun Line Special Shipping Company Inc v Fay (1988) 165 CLR 197.