LIEF INVESTMENTS PTY LTD v CONAGRA INTERNATIONAL FERTILISER CO [1998] NSWCA 284

LIEF INVESTMENTS PTY LTD v CONAGRA INTERNATIONAL FERTILISER CO

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

MASON P, SHELLER and BEAZLEY JJA

17 June 1998, 16 July 1998

CONTRACT — terms of contracts — rectification — incorporation of terms by reference

The appellant is an Australian company which is 70 percent owned by Sinochem, a public authority of the Government of the Peoples Republic of China. It was engaged in international trade in fertilisers and entered into an agreement with the respondent, an American company, for the supply of urea.

An issue at trial was whether the agreement was made by faxes exchanged by the parties on 21 February 1997 which contained a term that incorporated by reference the terms of Sinochem's standard contract or whether it was made by a written agreement signed by the parties on 24 February 1997 which did not contain the term.

The trial Judge held that the exchange of faxes by the parties constituted negotiations between the parties which did not merge into a contract until the written agreement was executed on 24 February 1997.

The issues on appeal were:

1. Whether the contract between the parties was concluded by the interchange of faxes and so included, by reference, the terms of Sinochem's standard contract.

2. If the contract was made upon the execution of the written agreement, whether the appellant was entitled to have the contract rectified.

3. Whether, in any event, the term including the terms of Sinochem's standard contract was in a form so uncertain that it did not enable the inclusion of other terms by reference.

4. Whether, even if the term enabled the incorporation of other terms and conditions of an identified Sinochem standard contract, an arbitration clause could be incorporated by general words and without express reference.

Held: