1. Can Basil successfully avoid his obligations under the contract?
(1) Whether the contract can be terminated by breach of a term of the contract?
(2) Whether the contract can be terminated by frustration?
(1) Formality of contract
In common law, a simple contract can take any form, it can be oral or in writing. But for some kinds of contract, there are legislative requirements that they have to be in writing.
Contracts concerning interest in land are one main type of contracts required to be in writing or evidenced in writing, this has been provided for in the Statute of Frauds 1677. The written evidence can be a memorandum, but it must contain all essential terms of the agreement, they are parties, property, price and commencement date (in some jurisdiction).
(2) Express terms and Parol Evidence Rule
Express terms are terms stipulated by the parties either orally or in writing, with the intention that they form part of the contracts. The verbal words the parties actually used in the negotiation process may be used as evidence to determine some express terms of the contract. (Derya Siva)
When we have a contract in writing, if the writing appears to represent the whole contract, then it would be presumed that the written document contains every term of the contract, and no evidence will be taken to determine other terms expressed orally (Mercantile Bank of Sydney v Taylor, 1891).
The Parol Evidence Rule would be applicable when the language of the written agreement is not clear enough. In such circumstances, according to Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982), oral evidence would be admissible to determine other terms of the contract.
According to case law, it is possible to vary the written terms by admitting oral evidences. But according to Abram v A V Jennings Ltd (2002), parol evidence will be admitted only to explain what the terms would be, rather than admissible as the terms themselves.
(3) To distinguish between representations and the terms of the contract.
Even if oral evidence may be admissible to determine the terms of the contract, it is noteworthy that not every statement from the parties in the negotiation would constitute a term of the contract. Those statements made only to induce the other party to enter into the contract are regarded as only representations rather than terms. And whether a particular statement is a term or a representation would depend on the intention of the parties (Derya Siva).
(4) Repudiation – termination by breach
Repudiation is a breach of condition of the contract which makes the performance of the rest of the contract impossible. A condition is an essential term of the contract which ‘goes to the root of the matter’ (Bettini v Gye). Therefore, repudiation is different from a mere breach of some of the terms of the contract. If there is repudiation by one party, the other party is terminated the contract and claim damage from the repudiating party.
A contract would be ‘frustrated’ when an ‘act of god’ occurs and makes the situation fundamentally different from what has been in the minds of the parties when concluding the agreement. In such a case, the parties may treat themselves as discharged from further performance of the contract.
According to Davis Contractors Ltd v Fareham UDC , for a contract to be frustrated, the supervening event has to be of a magnitude in making performing further obligation of the contract impossible, or fundamentally different from what the parties had contemplated.
(1) Whether the statement by Lora that the stilts had been checked for stability would be included as a term of the contract?
In our case, we have a contract regarding interest in land, therefore the contract must be in writing or evidenced in writing, and we did have a contract in writing, therefore, there is a legally enforceable contract between Basil and Lora.
Then the question come as to whether the writing document represent the entire contract between Basil and Lora, or oral evidence could be bring in to the effect that the contract include a warranty as to the stability of the stilts.
In this case, there is a clause stating that the writing contract represents the entire agreement, and no other terms outside those stated in this writing agreement would be enforceable. This term appears to be clear in stating the writing document as the entire contract and preclude the admission of oral evidence as to other term outside the contract.
In view of clause 7.1, the statement by Lora that the stilts have been checked for stability could not be included as a term of the contract.
Even if clause 7.1 was held to be not clear enough to preclude the introduction of parol evidence and the inclusion of the statement by Lora as to the stability of the stilts as a term, it would be a warranty rather than a condition. Because breach of warranty would normally not constitute repudiation which would entitle Basil to terminate the contract, and it could be argued for Lora that even if the stilts had not been checked for stability, substantial performance of the contract is still possible, and she does have the intention to perform her obligation under the contract.
Above all, even if the statement as to the stability of the stilts can be included as a term of the contract, the breach of this term may only entitle Basil to claim damages, but he could not be able to terminate the contract because of such breach, and he would not be able to avoid his obligation under the contract because of this breach.
(2) Whether the contract is frustrated therefore Basil is discharged from further performance of the contract?
Basil may argue that because there the flood is a supervening even which makes further performance of the contract impossible because the entire property collapsed after the stilts gave way. Also Basil may argue that the damage done to the property exceeds $150,000, therefore it would be fundamentally different from what he had contemplated that he was buying.
But Lora may argue that performance is still possible because the property is still there and is capable of being restored to it looks like before the flood.
The warranty as to the stilts had been checked for stability would not be included as an express term in the contract because of the effect of clause 7.1. Therefore there is no repudiation of the contract entitling Basil to terminate the contract
Arguably the contract is not frustrated by the flood because performance of the contract is still possible. Therefore Basil is not discharged from further performing the contract.
假释证据规则适用于书面协议语言不够清楚的情况。在这种情况下，根据Codelfa Construction Pty Ltd v State Rail Authority of NSW（1982），可以接受口头证据来确定合同的其他条款。
根据判例法，通过口头证据可以改变书面条款。但根据亚伯兰v A v詹宁斯Ltd（2002），假释证据将被接受，只解释将是什么条款，而不是作为条款本身接受。
拒绝履行是违反合同条件，使合同的其余部分无法履行的行为。条件是合同的一个基本条款，它“触及问题的根源”（Bettini v Gye）。因此，否认不同于仅仅违反合同的某些条款。如果一方拒绝，另一方终止合同并向拒绝方索赔。
根据Davis Contractors Ltd v Fareham UDC，要使合同受挫，随后发生的事件必须在很大程度上使履行合同的进一步义务成为不可能，或与双方当事人所设想的根本不同。