Contract Law in Australia

Essay by hcho7024University, Bachelor's October 2011

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Part 1On 1 June the galley agreed to sell a Margaret Olley painting which would be collectable on 1 August to Client B in return for $100000. This is a commercial transaction therefore an intention to create legal intention is presumed.� With the presence of offer, acceptance, consideration and intention to create legal intention, a contract was validly formed.


In July, the gallery told Client B it would sell the painting to Client C if Client B refuses to increase the buying price. Here repudiation occurred as the galleries intended to perform the contract in a manner substantially inconsistent with the original agreement.� Accordingly, Client B had the right to elect to continue or terminate the contract immediately, and at the end Client B chose to do the former. On 1 August, Client B did not receive the painting as a result of the actual breach by the gallery.

The issue here is whether the gallery owes any liability to Client B.

It is an established common law principle that where a party sustains a loss by reason of breach of contract, he or she is to be placed in the same position as if the contracts had been performed.� This means the law protects the plaintiff's expectation of receiving the defendant's performance. Generally this approach will be reflected by awarding damages for lost expectation, that is, the expectation damages, by the court.

In fact Client B paid no money for the painting and no additional loss or damage was occasioned by the breach. In other words, Client B can prove no more than the gallery's breach. In this case the court may award Client B no substantial damages but only nominal damages, to indicate the 'infraction of legal right'.�

Sales of Goods Act 1923 (NSW)

On the other...