Vellue Pty Ltd v American Foods Pty Ltd

Vellue Pty Ltd and anor (the appellants) appealed to the New South Wales Court of Appeal against a decision of the Supreme Court of New South Wales. The dispute concerned the interpretation and enforceability of a written agreement between the parties, which involved the sale of a business.

The primary legal issue before the Court of Appeal was whether the agreement, which contained a number of conditions precedent, had been validly terminated by American Foods Pty Ltd and anor (the respondents) due to the non-fulfilment of those conditions. Specifically, the court had to determine if the respondents had waived their right to rely on the non-fulfilment of certain conditions precedent.

The Court of Appeal found that the respondents had, through their conduct, waived their right to terminate the agreement. The court applied the legal principle that a party to a contract may waive a condition precedent for their benefit, and that such a waiver can be inferred from conduct. In this instance, the respondents' actions indicated an intention to proceed with the contract despite the non-fulfilment of the conditions, thereby estopping them from later relying on that non-fulfilment as a ground for termination. The appeal was accordingly allowed.