JJ Savage & Sons Pty Ltd v Blakney

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Citation: (1970) 119 CLR 435

This information can be found in the Casebook: Paterson, Robertson & Duke, Contract: Cases and Materials (Lawbook Co, 11th ed, 2009), pp. 346-7 [12.40].

Contents

Background facts

  • Blakney wanted to buy a boat from Savage.
  • A letter from Savage detailed fuel consumption, power, speed etc.
    • Specific mention of an 'estimated speed' of 15 mph
  • Blakney took Savage's advice on speed (whilst another expert told him differently) and placed an order for the boat.
  • Contract made and executed. No reference to the boat's speed.
  • Boat could only do 12 mph, Blakney sued.

Argument

  • The representation of the estimated speed of the boat was a condition or warranty of the contract, or that it was a collateral warranty to the contract for the sale of the boat.

Legal issues

Judgment

Trial Judge:

  • The representation was neither a term of the contract nor a collateral warranty. The statement was an estimate only, not an unequivocal promise of a future speed. It was only an approximate speed referred to dictionary.

Full Court:

  • Reversed the decision. Statement was a collateral warranty.

High Court:

Statements made during negotiations

  • "The words in themselves tend, in our opinion, against the inference of a promise that the boat would in fact the nominated speed[1]."
  • The words indicated ‘an expression of opinion’ only.
    • "So far from being a promissory expression, 'estimated speed 15 mph' indicates, in our opinion, an expression of opinion as the result 'of approximate calculation based on probability'[2]."
  • The question is "whether there was a promise given about the speed and the entry into the contract to purchase the boat providing the consideration to make the promise effective[3]".
  • There needed to be a condition in the in contract that the boat must reach that speed to show the promise.

Collateral contract

  • It is insufficient to use the idea that Blakney would not have ordered without the statement.
  • To establish a collateral contract, the statement needed to be promissory in nature, and made with intent to induce the entry of the other party.
  • This statement, as mentioned above, is not promissory in nature.
  • Full court decision reversed.

References

  1. (1970), 119 CLR 435, 442
  2. (1970), 119 CLR 435, 442
  3. (1970) 119 CLR 435, 442
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