BULAW 1502 Fundamentals of Law-Contract Law

The Torrens system of land registration (embedded in state-based land registration legislation) provides for recording, notification, prioritisation and enforcement of interests and claims in and against real property. The Personal Property Securities Act (PPSA) provides for recording, notification, prioritisation and enforcement of claims against personal property.

Required: with reference to the above statement discuss the following (answer a AND b OR c):
a. The differences between real and personal property 
b. The differences in the nature and scope of claims supported under the land
registration system as opposed to the PPSA 
OR
c. Why the statement refers to and claims in and against real property but in relation to the PPSA refers only claims against personal property.

Issue

The issue in this case is whether jimmy can enforce any legal rights. The legal rights are going to be explained through a determination of whether there was a valid contract or agreement between Jimmy Henrick and Rollinstone Ltd, whether there was misrepresentation by Bob which Jimmy relied on and whether the clause in the contract will be effective and whether Rollinstone Ltd is liable.

Rule

The rule that governs an offer can be understood from defining an offer first. An offer is made by way expressing an intention to get into an enforceable contract under the law (Australian Woollen Mills Pty. Ltd. v. The Commonwealth, 1954). It was affirmed in Storer v Manchester City Council (1974) that the offer must be one that is certain and free from any ambiguities and is capable of acceptance. Acceptance of an offer, on the other hand will only be effective it is communicated to the Offeror or where the Oferee reasonably believe that the offer has been accepted (Day Morris Associates v Voyce, 2003).

justify;">It is important to note that the traditional postal rule in acceptance that was set in the case of Adams v Lindsell (1818) does not apply with respect to offer made by way of post. However, with respect to instantaneous mode of communication such as emails the rule that applies is that acceptance of the offer is valid if the email has been received. This rule was set in the case of Entores Ltd v Miles Far East Corporation (1955) in which the court decided that acceptance through instantaneous modes of communication is valid upon receipt and the contract is entered into at the place of receipt. It is paramount to note that consideration will only be accepted if it is in form of a profit, benefit or loss. It has been held in Chappell v Nestlé (1960) that it is legally acceptable if a consideration is only sufficient and the party has given it without inducement or any other vitiating factor.  

Conversely, a misrepresentation is a false statement of fact that is used to induce another party to the agreement to enter into contract (Philips Electronique Grand Publique SA v. British Sky Broadcasting Ltd, 1995). With regard to the application of the common law misrepresesantion, it is submitted that the assertions that were made before the contract is entered into were absolutely false statements of fact (Bisset v Wilkinson 1927). Further, it has been held that the party that incurs the liability in an action for misrepresentation must have been a party to the contract. It bears noting however that an agent or a representative of a company can legally be regarded as a party to the contract (Commercial Banking Co. of Sydney v RH Brown & Co, 1972).

The claimant must also show that there was actual inducement and that they did not enter into the contract based on their free will of judgment (Smith v. Chadwick, 1884). However, the terms of the contract will be binding and enforceable on the parties irrespective of whether they read the terms of the contract or whether they understood such terms (L'Estrange v F Graucob Ltd, 1934).This rule may be dispensed with to protect the consumer from unfair terms. The remedy that can be obtained in an action for misrepresentation is rescission and damages. With respect to damages as remedy, Lord Atkinson in Addis v Gramophone (1909) held that damages in such a case will be awarded to ensure that the claimant recovers the money that he would have earned if the terms of the contract were upheld.

In the law of agency an agent must act according to the authority that he has been given by the Principal. According to the case of Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd (1946) an agent may have express authority from the principal to act in a certain way on behalf of him. It is imperative to note that the express authority of an agent flows from the express consent given by the principal. There the principal will be liable for the legal liability of an agent as long as the civil wrong was committed while the agent was acting on behalf of the principle.

Application

It is submitted that the requirements for validity of a contract were satisfied because the Rollinstone Ltd made an offer to Jimmi because he made an expression of intention to enter into contract through a document sent by email and he agreed to the terms. Jimmi sent the acceptance through email which is an instantaneous mode of communication. The rule is that the contract is made where and the acceptance email has been received. A valid contract was made when Rollinstone Ltd received the email and not when it was actually read. Suffice to say, a sufficient consideration was also given by was of post. It may be argued that the contract is enforceable. However, Bob was not sufficiently competent and had made representation before Jimi signed the contract. Jimi relied on the representations that were made by Bob during his visit and they turned out to be false. It is worth noting that Bob was acting on behalf of the company since he was following an express authority that was given to him. Therefore, an action of misrepresentation will be brought against Rollistone Ltd which was the principal in this case.

Conclusion

It is can be concede that Jimi can succeed in bringing an action of Misrepresentation against Rollinstone because there was a valid contract and the clause in the contract could not be operative because Jimi relied was induced by the misrepresentation to enter into agreement. It can be concluded that Jimi can seek to enforce the terms of the agreement because of the fact that there was a valid contract however since there was misrepresentation of terms he may only seek damages an injunction or a rescission  of the contract.

Real property is property that cannot be moved. Ownership and title of real property is vested through an interest in land. The Australia law has recognized some certain interest in land such as grants and Mortgages as real property interests.  It is worth noting fixtures in land also can be defined as real property because of their immovable nature. Traditionally the real property in Australia is governed by the Real Property Act 1900 (NSW) and the Property Law Act 1974. On the other hand, Personal property is property that can be moved from one place to another. Under the common law rules personally property includes chattels. Rights on property that can not be touched such as Intellectual property rights are also referred to as personal property (Greville v Williams, 1906). In addition items such as stocks, livestock, furniture, money are refered to as personal property or personalities. In the Australian Personal property is governed by the Personal Property Securities Act 2009.

The idea inherent in the mirror principle is that the registration of a land title that is due must reflect all the fundamental details and facts of the land to be registered that the purchaser must know before the purchaser buys the land. The land that is the subject of the transaction must have been registered under the Real Property Act 1886 (South Australia). The Mirror principle is predicated on Torrens system of land registration which the registrar ensures that the owner of the title receives a clean tile to the land. This had the effect of curing the deficiencies of the deed registration system. An example of an interest in real property is Mortgages over real property. This is an interest in a real property that secures the payment of a debt.

The buyer of the real property in this case passes an interest on the real property such as land, to a facility such as a bank to secure the payment of a debt which was money that was advanced to the buyer to acquire the property. It is vital that the mortgages should be registered with the registrar of titles in the respective state. In Australia, mortgages are governed by the Property law Act which gives the Mortgagee the power of sale and dispose of the property incase of default in paying the debt (Section 83 Property Law Act 1974). The legislations that govern mortgages however vary from state to state. In New South Wales for instance, mortgages are governed by the Real Property Act which negates the requirement of a notice when the mortgagee want to take possession of the property after default by the mortgagor. ]

On the other hand, interests that are recognized as personal property interest include a security interest. This is an interest in personal property or any other assets that is made by an agreement to secure the performance of an obligation which in most instances is the payment of a debt (Section 12 Personal Property Securities Act 2009).  The Act creates a register referred to Personal Property Security Register that a secured party enters details of the perfect the security in register. Collateral is also an example of an interest in personal property. It is the personal property to which a security has attached and is sometimes referred as the personal property that has been described in the Personal Property Security Register. The law that guides the enforcements of collaterals in Australia is the Financial System Legislation Amendment (Resilience and Collateral Protection) Act 2016 which was recently brought to force. Additionally, the government has formulated the Financial System Legislation Amendment (Resilience and Collateral Protection) Regulation 2016 which also regulates the enforcement of Collaterals.

References

Australian Woollen Mills Pty. Ltd. v. The Commonwealth [1954] 92 CLR 424]

Chappell v Nestlé[1960] AC 87

Day Morris Associates v Voyce [2003] All ER (D) 368

Storer v Manchester City Council [1974] 3 All ER 824

Addis v Gramophone [1909] AC 488

Freeman and Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480

Entores Ltd v Miles Far East Corporation [1955] EWCA Civ 3

L'Estrange v F Graucob Ltd [1934] 2 KB 394

Philips Electronique Grand Publique SA v. British Sky Broadcasting Ltd [1995] EMLR 472

Commercial Banking Co of Sydney Ltd v RH Brown and Co - [1972] HCA 24

Bisset v Wilkinson [1927] AC 177

Smith v Chadwick (1884) 9 App Cas 187

Greville v Williams (1906) 4 CLR 694

Financial System Legislation Amendment (Resilience and Collateral Protection) Act 2016 (cth)

Personal Property Securities Act 2009(cth)

Property Law Act 1974 (cth)

Real Property Act 1900 (NSW)