Factory 5 Pty Ltd v State of Victoria

Factory 5 Pty Ltd v State of Victoria [2010] FCA 1229 is a complex case touching upon many aspects of contract law. The primary issues in the case were whether there was a legally binding contract between Factory 5 Pty Ltd and the State of Victoria and what the agreed terms of the concessionaire as manufacturer clause were. The Court found that a legally binding contract was made between the parties on 23 December 2004. The Court rejected the State of Victoria's argument that the contract was not binding until a formal contract was executed. The Court also rejected Factory 5's proposed construction of the concessionaire as manufacturer clause, finding that the clause gave the State of Victoria discretion to decide when Factory 5 could manufacture or an alternative manufacturer could be appointed. The Court found that the State of Victoria had not breached the clause. The Court held that Factory 5 had repudiated the contract by insisting on an incorrect interpretation of the clause and its refusal to execute a formal contract. However, the Court found that Factory 5 was not ready and willing to perform the contract and had not accepted the State of Victoria's repudiation. As a result, the contract was abandoned by mutual consensus and Factory 5 was not entitled to claim loss or damage.