Offer negotiation Offers or invitations to ‘treat’ Acceptance 4

2. Sword

• 
  *Waltons Stores v Maher (1988): can apply even if no pre-existing contract. lease negotiations for department store if it building demolished and rebuilt. T lawyer said approval was oral and formal doc would be sent through later: ‘no instructions re amendment, we believe approval will be coming’ ‘we’ll let you know tomorrow if amendments not agreed to. Nothing. T changes mind and requests lawyer ‘go slow’ to keep options open. T learns of demolition. Nothing. Building 40% when T says no contract.
  
  • 
    Brennan J for equitable estoppel P must prove:
    

1. 
   P assumed that a particular legal relationship then existed between him and D or expected that a particular legal relationship would exist between them and, in the latter case, that D would not be free to withdraw from the expected legal relationship;
   
   • 
     Assumption by LL that T had duly completed the exchange: Gaurdron
     
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     Assumption of binding contract whether or not an exchange had been completed: Mason, Wilson and Brennan
     
2. 
   D induced P to adopt that assumption or expectation;
   
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     Does not have to be active inducement if there is knowledge of other parties reliance and detriment and fails correct
     
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     Silence will constitute equitable estoppel if it would be inequitable to assert a legal relationship different to what they knew the other party assumed or expected
     
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     Must be a clear and unambiguous promise: Legione v Hateley (1983): B requests time extension from S’s secretary who had previously signed letters, secretary says: “I think that’ll be all right. I’ll have to get instructions”. No clear representation
     
   • 
     EK Nominees v Woolworths: need some degree of certainty. Negotiations didn't progress as far as Walton
     
3. 
   P acts or abstains from acting in reliance on the assumption or expectation;
   
4. 
   D knew or intended him to do so;
   
5. 
   P's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and
   
6. 
   D has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise.
   
   • 
     silence induced LL continue, unconscionable for T to withdraw after substantial completion of work leaving LL to bear detriment without freedom to withdraw.
     

• 
  Unconscionability
  
  • 
    Waltons
    
    • 
      Equity attaches to the overall fairness of transaction, in consideration of both parties
      
    • 
      Failure to fulfil a promise of itself is not unconscionable (Mason/Wilson) more required:
      
      • 
        reasonable expectation that promise will induce action, urgency and refusal to start until agreement, inaction encouraging continued action, retaining lease and keeping quiet (Deane), failing to tell LL exchange might not occur,
        
  • 
    “he who comes to equity must come with clean hands” D & C Builders v. Rees
    
  • 
    Commonwealth v. Verwayen (1990): Member of navy was injured in combat practise. Groves defence provided cth wasn't liable for injuries during practice. Cth waived this and admitted liability. Then changed and relied. Deane J:
    
    • 
      Unconsionability determined using conduct in all circumstances (Mr V obtained benefit of limited costs, cth would be acting unconscionably if it disputed its liability at late stage)
      

1. 
   induced assumption by express or implied representation
   
2. 
   entered into contractual relations on conventional basis of assumption
   
3. 
   exercised against other party rights existing only if the assumption were correct
   
4. 
   knew other party laboured under the assumption and refrained from correction
   

• 
  not an independent cause of action but may be used defensively or aggressively
  
  • 
    equitable estoppel doctrine should be unified  common law and equity makes it more flexible
    
• 
  mason: should have prevented reliance. Pre-existing relationship and consideration not limitations
  
• 
  dawson: departure from assumption unconscionable
  
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  *Saleh v Romanous [2010]: “Trumps” common law doctrines. S said: “I’m taking responsibility for Eddie. If Eddie doesn’t want to build you’ll get your money back.” (pre-contract conduct allowed)
  

5. Suspension of Rights?

• 
  High Trees: landlord entitled to return to full rent on giving reasonable notice
  
• 
  Equity may require that D be held to promise
  
  • 
    Verwayen: Deane J: is departure from assumption unconscionable?
    
  • 
    EK Nominees v. Woolworths: initially revocable promise becomes irrevocable if inequitable
    

6. Remedies

• 
  flexibility: Riches v Hogben: remedy was order to transfer title, but subject to mother still living in flat
  
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  *Giumelli v Giumelli (1999): No order to transfer property, as: there were further proceedings on family partnership, residence by anther son on promised lot, improvements made by other family members and would cause a BREAKDOWN IN FAMILY RELATIONS
  
  • 
    Award sum of money to represent value of equitable claim to promised lot (plus interest)
    
  • 
    Valuation flexible (included R’s lost profits, less other sons improvements)
    
• 
  after Giumelli (recent NSW cases)
  
  • 
    EK Nominees v. Woolworths: Equitable compensation awarded for expenditure which Woolworths encouraged LL to incur prior to lease.
    
  • 
    Delaforce v Simpson-Cook: Minimum equity necessary and proportionality. Won’t grant relief that exceeds and is unjust to the estopped party.
    
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    Ronowska v Kus: Expectation and Proportionality. wont always be entitled to complete satisfaction of expectation but will quantify detriment. (life interest not legal interest)