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Timberyard Pty Ltd placed an advertisement in the local newspaper: ‘Wanted: pine logs, 10 ft long, delivery within 4 weeks’. Assume the following occurs.

 

  • Forest Pty Ltd phoned Timberyard and inquired about its requirements.

 

  • Forest sent a letter by fax to Timberyard offering to supply the required number of pine timber logs for $10,000.

 

  • Timberyard replied by fax that this was too expensive; they would be prepared to pay only $8,000.

 

  • Forest sent a reply by post (advising that its fax machine had broken down) saying that the lowest price acceptable would be $9,000, but the order had to be placed by 6th June.

 

  • Timberyard thought this was actually a good deal and on 3rd June sent a letter to Forest accepting the offer and asking for delivery on 10th June.

 

  • Forest did not receive any response by 6th June, so sold their timber to Getsmart Pty Ltd on 8th June. 

 

  • On 11th June, Timberyard rang to find out why the timber had not been delivered to them.  

 

  • Forest said Timberyard had not replied in time, as Timberyard’s letter arrived too late i.e. on 9th June (apparently delayed in the post).  

 

  • Timberyard is furious because they haven’t got enough timber to fill existing orders, possibly making them in breach of their contracts.

 

TASK

 

Is Forest obliged to deliver the logs for $9,000?  That is, does a contract exist between Forest and Timberyard? In your answer you must state the principles of each element making up a contract and test to see if each is satisfied on the above facts. Include the arguments that both parties would make, cases that would support these arguments and conclude by saying which arguments you consider to be the most persuasive and why.

Question 2 – Exclusion Clauses

 

  1. Bradshaw sent some casks of orange juice to Joocy Froot Ltd, which operated a storage warehouse. Joocy Froot sent back a receipt called a ‘landing account’. The landing account contained conditions of storage including the following exemption clause:

 

“We will not in any circumstances when acting either as warehousemen, wharfingers … be liable for any loss, damage or detention, howsoever, whensoever or wheresoever occasioned in respect of any goods entrusted to or carried or handled by us in the course of our business, even when such loss, damage or detention may have been occasioned by the negligence, wrongful act or default of ourselves or our servants or agents or others for whose acts we would otherwise be responsible.”

 

 

Bradshaw had had numerous dealings with Joocy Froot and had received numerous landing accounts all of which contained the same exemption clause. Bradshaw had never bothered to read the clause. The orange juice was ruined as a result of Joocy Froot’s negligence.

Was the exemption clause a term of the contract? Is the clause enforceable?

Management

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