Cedar Meats (Aust) Pty Ltd v Five Star Lamb Pty Ltd

(2014) 45 VR 79; [2014] VSCA 32

Victorian Court of Appeal

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Interrogate

Catchwords

1. Contract
2. › Discharge
3. › Abandonment
4. › Effect on accrued rights
5. › Whether abandonment of partly performed contract discharges accrued rights
6. › Whether clear indication required to infer abandonment of accrued rights
1. Contract
2. › Discharge
3. › Abandonment
4. › Accord and satisfaction
5. › Accord executory
6. › Whether conditional forbearance constituted accord executory or conditional accord and satisfaction
1. Contract
2. › Penalty
3. › Scope of penalty doctrine after Andrews v ANZ Banking Group Ltd
4. › Whether stipulation securing performance of condition (not contractual obligation) may be penalty
5. › Whether clause 8(a) extravagant and unconscionable
6. › Enforcement of penalty to extent of proved loss
1. Contract
2. › Construction
3. › Implied obligations
4. › Whether agreement to process lambs implied obligation on customer to deliver agreed daily volumes
5. › Churchward v The Queen considered

Quick Take

Abandonment of a partly performed contract operates prospectively and does not discharge accrued rights unless there is a clear indication that the parties intended to abandon those rights. Conditional forbearance from enforcing accrued rights (e.g., 'so long as' or 'on condition that' a future event occurs) does not constitute abandonment of those rights but may constitute an accord executory or conditional accord and satisfaction. Following Andrews, a clause requiring payment upon failure to meet a condition (not a contractual obligation) is capable of being penal, and if found to be extravagant and unconscionable, is enforceable only to the extent of the obligee's proved loss.