Termination For An “Oily” Breach Of Contract

In the recent decision of Olivaylle Pty Ltd v Flottweg GMBH & Co KGAA (No 4) (2009) 255 ALR 632, a single judge of the Federal Court held that a purported termination of a contract for the sale of goods by the purchaser for an alleged breach of that contract was invalid. The judge also made an important observation about the acceptance of agreements in the age of email communications.

Background

Briefly, the facts of the case are as follows. The director and controlling mind of Olivaylle sought to establish a large olive grove and olive oil manufacturing plant in central western Victoria. While waiting for the first stage of the grove to reach maturity, the director of Olivaylle tendered for a number of international producers of equipment for the processing of olives and, on 8 February 2005, entered into a written contract with Flottweg, a large international manufacturer of such equipment. Prior to entering into the contract, Olivaylle paid a deposit