Hearne & Anor v Street & Ors

The High Court of Australia heard an appeal concerning a dispute between the appellants, Hearne and another, and the respondents, Street and others. The core of the disagreement involved the enforceability of an alleged oral agreement for the sale of shares in a company. The appellants sought to enforce this agreement, while the respondents resisted, arguing that no binding contract had been formed.

The central legal issue before the High Court was whether the parties had reached a concluded agreement for the sale of shares, notwithstanding the absence of a formal written contract. This required the Court to consider the principles governing the formation of contracts, particularly in circumstances where parties intend to formalise their agreement in writing at a later stage. The Court also had to determine whether the conduct of the parties indicated an intention to be bound immediately, or if they considered themselves to be still in negotiation.

The High Court, in a joint judgment, found that the parties had not reached a concluded agreement. Their Honours applied the well-established principle that where parties intend to be bound by a contract, they must have reached agreement on all essential terms. In this instance, the Court determined that the parties had not finalised all essential terms and that their conduct indicated an intention to be bound only upon the execution of a formal written contract. The existence of outstanding matters and the parties' own communications suggested that they did not intend to be legally bound until such a formal document was signed.

The appeal was dismissed.