Sent v Jet Corporation of Australia Pty Ltd

The High Court of Australia considered an appeal by Sent against Jet Corporation of Australia Pty Ltd concerning a dispute arising from a contract for the sale of a business. The core of the disagreement lay in whether the respondent had breached a warranty that the business was being sold as a going concern.

The central legal question before the Court was whether the respondent's conduct in ceasing to trade the business for a period prior to settlement constituted a breach of the warranty that the business was being sold as a going concern. This required the Court to interpret the meaning of "going concern" in the context of a sale agreement and to determine the legal consequences of a breach of such a warranty.

The Court reasoned that the phrase "going concern" implies that the business is continuing to operate and generate revenue, and that it is intended to be transferred as an active enterprise. By ceasing to trade, the respondent had fundamentally altered the nature of the business being sold, thereby breaching the warranty. The Court applied principles of contract law concerning warranties and the implied understanding of commercial transactions.

The High Court allowed the appeal, finding that the respondent had breached the warranty. The matter was remitted to the Supreme Court of New South Wales for determination of the appropriate remedies.