David 2
29 Apr 1991
23 May 1996
03 Feb 2005
B.Com. (Hons), LLM.
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19thomas 600

Letters of Intent

Legalwise Seminar 3 September 2013

On Tuesday 3 September 2013 I presented a Legalwise seminar on letters of intent at the RACV club in Melbourne. I made two key points.

First, the most important thing solicitors have to do when drafting heads of agreement is state clearly whether the document represents a binding agreement or not. Solicitors should explain the 3 categories in Masters v Cameron  [1954] HCA 72; 91 CLR 353 to their clients and insist that they nominate which category they want their agreement to be in.

Second, the two most recent appeal cases of Strzelecki Holdings Pty Ltd v Cable Sands Pty Ltd [2010] WASCA 222, (2010) 41 WAR 318  and Factory 5 Pty Ltd (In Liq) v State of Victoria (No 2) [2012] FCAFC 150 illustrate the pitfalls that can occur in this area. In the former case, the point was not taken that you can’t have an obligation to negotiate but the case shows that even if you can, the very nature of negotiation anticipates that the negotiation may not be successful. In the latter case it was only on the invitation from the Full Court that the respondent took the point on which it ultimately succeeded: that there never was any concluded contract (see Factory 5 Pty Ltd (in liq) v State of Victoria [2011] FCAFC 77). And I should have mentioned this: both these cases were refused special leave to appeal by the High Court.

The other cases I mentioned in the presentation are available from my downloads link.