McGorlick v Palmer

In McGorlick v Palmer, the dispute involved the sale of land and a business between the parties. The matter was heard in the Supreme Court of New South Wales. The plaintiff, McGorlick, claimed that the defendant, Palmer, had entered into a binding agreement for the sale of land and a business. However, when it was time to sign the formal contract of sale, the defendant refused to do so. McGorlick subsequently resold the land and claimed damages for the loss incurred in that resale, as well as for the lost value of the business.

The court was required to determine whether the heads of agreement constituted a binding contract and whether the defendant was in breach of any such contract. Additionally, the court needed to decide whether the plaintiff was entitled to damages for the loss on resale of the land and the lost value of the business.

The court found that the heads of agreement did indeed constitute a binding contract. The court reasoned that the document contained all the essential terms necessary for a contract and the parties had demonstrated an intention to be legally bound by it. The court held that the defendant was in breach of this contract by refusing to sign the formal contract of sale. Regarding damages, the court awarded McGorlick the loss on resale of the land as well as compensation for the lost value of the business, finding that these losses were a direct result of the defendant's breach of contract.