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Contract is central to the legal regulation of most commercial and economic activity, and underlies many specialist areas of legal practice. As market costs and values move, many contracts become increasingly valuable to one party and burdensome to the other. One party’s ability to terminate, or to successfully resist the termination of, a commercial contract is frequently a matter of considerable financial importance. The complex interaction between common law termination rights and rights to terminate expressly conferred by clauses in the contract in question is seldom properly understood, as illustrated by many of the cases from which this subject is taught.
This subject is taught from selected cases rather than textbooks. Principal topics include:
- Breach of conditions, including what makes a promissory term a strict condition
- Non-fulfilment of conditions precedent, and associated promissory obligations
- Breaches of intermediate terms, and what makes them sufficiently serious to justify termination
- Repudiation in its different forms
- Breach of time obligations, and the use and consequences of Notices to Perform/Complete
- Express termination clauses—the different principles concerning their operation, and ‘compare and contrast’ the principles concerning termination at common law
- Possible limits on an aggrieved party’s right to terminate through:
- Breach or an absence of readiness, willingness and ability to perform on his/her own part
- Relief against forfeiture
- Remedies accompanying effective or attempted terminations, including:
- Principles of quantifying expectation damages at common law
- Limited rights to damages on termination pursuant to an express clause
- Contractual rights to remuneration accrued due prior to the termination
- Exceptional limitations on the recoverability of contractual remuneration.
Intended learning outcomes
A student who has successfully completed this subject will:
- Have an advanced and integrated understanding of the legal principles concerning the termination of contracts both at common law and pursuant to express termination clauses, and the complex interaction between them, including recent developments in this field
- Be able critically to examine, analyse, interpret and assess the operation and effectiveness of these principles
- Be an engaged participant in debate regarding the operation and effectiveness of these principles, both in terms of the legal structures of which they form part and commercially
- Have a sophisticated appreciation of the legal and commercial factors which have driven the development of the law of contract in this field
- Have an advanced understanding of the sort of situations in which the differing bases for and consequences of contract termination may make an important commercial difference to the parties affected
- Have a detailed understanding of respects in which Australian law in this field differs from that in other leading Commonwealth and common law jurisdictions
- Have the cognitive and technical skills independently to examine, research and analyse more complicated appellate decisions in the field of contract termination, and the existing and emerging legal issues in that field
- Have the cognitive and technical skills to generate critical and creative ideas relating to contract termination both at common law and pursuant to express termination clauses, and critically to evaluate existing legal principles and concepts with creativity and autonomy
- Have the communication skills clearly to articulate and convey complex information regarding contract termination to relevant specialist and non-specialist audiences
- Be able to demonstrate autonomy, expert judgment and responsibility as a practitioner and learner in the field of contract termination
- Have developed a heightened understanding of the role of the law of contract in facilitating the effective functioning and regulation of commercial activity in a market economy and, more generally, contemporary Australian society.
Last updated: 10 November 2023