Cumnock No 1 Colliery P/L v Pacific Power & Anor

[2002] NSWCA 278

NSW Court of Appeal

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Interrogate

Catchwords

1. Contract
2. › Formation
3. › Intention to create legal relations
4. › Whether parties content to be bound immediately by terms agreed
5. › Whether expectation of further formal contract negated binding agreement
6. › Masters v Cameron categories
1. Contract
2. › Variation
3. › Formal requirements for variation
4. › Clause requiring variation by deed
5. › Whether parties may contract out of formal variation clause by subsequent informal agreement
1. Contract
2. › Variation
3. › Variation by exchange of letters
4. › Whether acceptance 'in principle' with proposal to redraft constituted binding variation

Quick Take

A contractual clause requiring that variations be effected by deed does not prevent the parties from subsequently agreeing informally to vary the contract; such a clause cannot deprive parties of their liberty to contract. Where parties act in accordance with terms agreed in correspondence while expecting formal documentation, they may be held immediately bound by those terms.