Case name & citation: Beaton v McDivitt (1987) 13 NSWLR 162
- Court: New South Wales Court of Appeal – Supreme Court
- Judges: Kirby P, Mahoney JA, McHugh JA
- Date: 14 October 1987
- Areas of Law: Contract Law (Consideration, Frustration)
Beaton v McDivitt (1987) 13 NSWLR 162 is a notable Australian contract law case that examines the concept of consideration within contractual agreements.
Parties Involved: The appellant, Beaton, and the respondent, McDivitt.
Facts (Beaton v McDivitt)
McDivitt owned land and permitted Beaton to occupy a portion with the understanding that upon future rezoning, the land would be subdivided, and a portion transferred to Beaton. In the interim, Beaton was to work the land as specified, including building a house and maintaining a road. After seven years, a dispute arose, leading to Beaton being asked to vacate the land.
Legal Issues
1. Did Beaton provide valuable consideration to support McDivitt’s promise to transfer the land?
2. Was the contract frustrated due to the rezoning not occurring?
Court Findings in Beaton v McDivitt
Consideration: The Court of Appeal held that Beaton’s actions—occupying and working the land as agreed—constituted sufficient consideration. This was seen as a detriment to Beaton, fulfilling the requirement for consideration.
Frustration: Despite finding sufficient consideration, the court concluded that the contract was frustrated due to the rezoning not taking place as anticipated. This unforeseen event rendered the contract incapable of being performed as initially intended.
Judges’ Opinions
Kirby P (Dissenting in Part): Emphasized that consideration requires a bargain or exchange. He opined that Beaton’s actions were primarily for his own benefit and did not constitute a quid pro quo for McDivitt’s promise.
McHugh JA: Agreed that consideration necessitates a bargain but found that Beaton’s actions met this criterion, as they were performed at McDivitt’s request and constituted a detriment to Beaton.
Mahoney JA: Concurred with McHugh JA regarding the presence of consideration but agreed with Kirby P that the contract was frustrated due to the rezoning not occurring.
Significance
This case underscores the necessity of consideration in contract formation and illustrates how reliance on a promise does not suffice without a reciprocal exchange. It also highlights that contracts contingent on future events can be frustrated if those events do not materialize, thereby discharging the parties from their contractual obligations.
List of references:
- https://s3.studentvip.com.au/notes/27304-sample.pdf
- https://doylesconstructionlawyers.com/wp-content/uploads/2015/09/Beaton-v-McDivitt.pdf
- https://www.australiancontractlaw.info/cases/database/beaton-v-mcdivitt
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