Commercial Law OZCO v Adelaide Electronic Security (AES)

The plaintiff (OZCO Ltd) will argue that:
Firstly, the clause 7A is an express term of the contract between OZCO and AES, because AES has read this clause, agreed and signed the written contract. This means AES agreed to be bound by this clause.

Secondly, this term is a condition because the term goes to the essence or heart of the contract. Furthermore, this term can also pass the test of essentiality as the innocent party would not have entered into the contract unless assured of a strict and literal performance of the promise. From the fact, it was appeared that OZCO would not sign the contract unless AES promises that the lights will flash and siren to be activated at the warehouse and will also cause a warning message to be sent to AES’s central monitoring facility if the electricity supply or telephone lines be interrupted for any reason.

Another few reasons also support the view of recognizing the clause 7A as a condition. In the contract, the way clause 7A expressed is similar as a promise. Moreover, the likely consequences of breaching this term is to be stolen again which will not fit the purpose of installing the electronic surveillance and the innocent party will be deprived from the benefit of signing the contract which is protecting of stolen. Furthermore, the term is so importance that the contract would not be signed without this term. Finally, it is not enough to be given damage only because the warehouse has been stolen in a short time, it implied that the warehouse will be stolen several times if the contract will not be discharge.

In conclusion, the clause 7A is a condition of the contract and AES breached the term. Therefore, OZCO Ltd has entitled to terminate the contract (Associated Newspapers Ltd v Bancks).
The defendant (AES) will argue that：
Adelaide Electronic