Associated Newspapers Ltd v Bancks (1951) 83 CLR 322
Contract; contents; terms; conditions and warranties; breach of contract; remedies; termination of performance.
Facts: Bancks, a cartoonist, agreed to produce a weekly full-page drawing for Associated Newspapers. Associated Newspapers agreed to pay Bancks a salary and to publish the drawing on the front page of the newspaper's comic section. However, for three weeks, because of paper shortages and consequent production problems, Bancks' drawings appeared on page 3 of the comic section. Bancks protested but Associated Newspapers ignored him. Bancks then decided to terminate further performance of the contract.
Issue: Was the promise to publish Bancks' drawings on the front page of the comic section an essential term, such that a breach would justify terminating further performance of the contract?
Decision: The term was an essential one (a condition) and Bancks was therefore justified in terminating further performance of the contract.
Reason: The court said (at [7]):
"The test was succinctly stated by Jordan C.J. in Tramways Advertising Pty. Ltd. v. Luna Park (N.S.W.) Ltd…. The decision was reversed on appeal…, but his Honour's statement of the law is not affected. He said … : "The test of essentiality is whether it appears from the general nature of the contract considered as a whole, or from some particular term or terms, that the promise is of such importance to the promisee that he would not have entered into the contract unless he had been assured of a strict or a substantial performance of the promise, as the case may be, and that this ought to have been apparent to the promisor..."
In this case, it was clear that Bancks would not have agreed to the contract without the promise that his cartoons would be published on the front page of the comic section. That promise was therefore an essential term (condition) of the contract.