Law: Contract, Act, 1872

Section: 10

Contract------Whether a scheme of subsidy by Government to manufacturers constitutes a contract-(Australia case)-Contact Act (IX of 1872), S. 10.   The appellant manufactured woollen and worsted goods for the Australian market. During the war years the respondent (Commonwealth Government) bought all the Australian wool clip. There was control by the respondent of prices for woollen and worsted goods. The sales by the respondent to the appellant and other manufacturers were at a price fixed with reference to the controlled prices of the manufactured articles.   Later, respondent ceased to buy all the wool clip and manufacturers had to buy wool not from respondent but in auctions in open market, but prices of woollen goods and worsted goods were still controlled and respondent Govern ment felt that manufacturers could not manufacture to sell at the controlled prices unless they got financial assistance. There was therefore a scheme of subsidies in respect of pur chases of wool by manufacturers to be manufactured into articles for the home market.   The appellant claimed that under this scheme the subsidy payments became due to it under a series of contracts. There was no contract form signed by each party. The appellant contended that the letters, some 36 in number, constituted offers, the terms of which were varied from time to time, to be accepted by a purchase by a manufacturer, and further contended that under these contracts it was entitled to subsidy on all purchases between June, 1946, and June, 1948.   The answer of the respondent to this claim was that there were no contracts; that the basis of the scheme was not contractual but administrative, and that the letters contained statements of policy and not contractual offers.   Held that the question whether there was contract or no contract turned on the construction of the letters.   That the suggestion that respondent had substantial stocks of wool of which it would be anxious to dispose and thus had an "interest" in the scheme was no ground for con struing the letters as constituting a contract.   That even if the respondent's wanting the manufacturers to…