If not stated then implied reasonable time per circumstances – Perri v Coolangatta Invest per Wilson J.
To be determined at time performance is alleged to be due rather than at the moment of contractual formation.
Duty to co-operate
Parties implicitly agree to do all necessary to allow each other to enjoy the benefit of the contract – Secure Income Real Estate v St Martins Investments per Mason J.
Also ACT Cross Country Club v Cudy; Peters v Petersville.
Expectation v Pinnacle VRB - “if performance of the contract is conditional on some event which is to any degree within the control of a party, that party must co-operate reasonably in bringing it about. Failure to co-operate in that way will generally disqualify the defaulting party from relying upon the non-fulfilment of the condition, or, to put it differently (as is sometimes done), courts will, in such cases, treat the condition as having been satisfied.“
“If non-compliance with a contractual obligation is to take away the defaulting party’s right to terminate, there must be a direct causal relationship between that non-compliance and the failure to complete the contract, with the onus of proof lying upon the non-defaulting party.”
Good faith (broader than duty to cooperate)
Can imply good faith term – Burger King v Hungry Jacks
Unsure if to imply into all or just commercial contracts – Vodafone v Mobile Innovations
Some judges are cautious- Trans Petroleum Australia v White Gum Petroleum - “The court should be cautious about implying a term which the parties have not agreed to in circumstances where the parties have expressly provided for termination for cause, but have chosen to express the term of the agreement as terminable on notice and without cause.“
Courts should be careful about intruding into commercial dealings – GSA Group v Siebe
HCA did not comment. Kirby J unhappy - Royal Botanic Gardens v South Sydney Council
Promise to negotiate in good faith
Promise to negotiate in good faith deemed unenforceable (pre-contractual) – Walford v Miles
But Coal Cliff Colieries
Performance provisions under ACL
Performance provisions under ss 20-22 ACL. Cannot breach these.
Entire and severable obligations
Entire obligation means that the entirety of the obligation must be performed before the consideration of the other party can be demanded – Baltic Shipping v Dillon. Useful - whether complete performance is condition precedent to liability.
Phillips v Ellingson Brothers – where a contract is entire, complete performance is required.
Severable obligation chopped wood right and wrong size got paid for the correctly chopped wood because considered a severable obligation – Steele v Tardiani. Matter of interpretation.
Partial performance sailor died halfway through journey and claim successfully rejected because he hadn’t finished journey – Cutter v Powell
Doctrine of substantial performance
To mitigate harshness of entire contract rule.
Promisee still liable to pay contract price; damages are set off in an award of the contract price.
Hoenig v Issacs per Cairns LJ - furniture defective in flat redecoration but held substantially performed so simply adjusted price.
Performance substantial unless failure goes to root of contract.
Bolton v Mahadeva - given amount of defects and significant cost of remedying water system, could not be said that P had substantially performed.
Apparent restriction of doctrine to situations where small expenditure can remedy error.
Inconsistency?
Part performance
Part performance (rather than exact or substantial) is not entitled to recover contract price.
Sumpter v Hedges – house abandoned after foundations and walls put up.
Connor v Stainton – fence posts wrong distance apart. Droppers could have fixed it. Not for D to decide this.
Agreement to terminate
Term in the original contract
Crawford Fitting v Sydney Valve & Fitting - whether a commercial agreement for an indefinite period may be terminated depends upon whether the agreement properly construed contains an implied term to that effect.
Check subject matter of agreement, circumstances in which it was made and the things that parties had or had not agreed on.
Was said that the courts have a presumption against implying termination agreement, but, particularly where the parties were commercial, the courts were allowed to imply that the contract should be brought to an end on notice otherwise it would continue forever.
Pan Foods v Australia and New Zealand Banking Group
Subsequent separate contract agreement – McDermott v Black
Abandonment
Lapse of time is not enough. Construe the contractual subject matter and the circumstances of the parties behaviour to determine intention – Fitzgerald v Masters – nothing for 16 years, but if abandoned seller could keep money and house.
No termination because followed false procedure. Subsequently nobody did anything. Intention to terminate clear from both parties behaviour – DTR Nominees v Mona Homes
