Darryll Cullen v ZLB Behring LLC [2006] NSWSC 265

Darryll Cullen v ZLB Behring LLC [2006] NSWSC 265

The Memorandum of Understanding was held to constitute a binding exclusive distributorship contract only for the initial 12 months, limited to the first three named products, and only where price and quantity were agreed. The contract was not binding beyond the first 12 months due to failure to reach further agreement on essential terms such as price and quantity, rendering it incomplete and unenforceable thereafter. The parties were responsible for the limited duration by failing to provide mechanisms to resolve uncertainty. Consequently, proceedings must be dismissed as the contract ceased to bind the parties after the initial term.

Parties
Plaintiff: Darryll Cullen; Defendant: ZLB Behring LLC
Jurisdiction
Australia
Judgment Date
12 April 2006
Procedural Posture
Civil / Final Judgment
Outcome
Proceedings dismissed
Legal Topics
Certainty and Incompleteness of Contract, Exclusive Distributorship Agreement, Failure to Agree Upon Product Price, Necessary Content of Exclusive Distributorship Agreement
Contract Law Commercial Law Certainty and Incompleteness of Contract Exclusive Distributorship Agreement Failure to Agree Upon Product Price Necessary Content of Exclusive Distributorship Agreement

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Parties

Darryll Cullen

Plaintiff

ZLB Behring LLC

Defendant

Procedural Posture

Civil / Final Judgment

Legal Issues

  1. 1 Whether the Memorandum of Understanding ('MOU') constituted a binding agreement at the time of execution and as to what terms
  2. 2 Whether the MOU ceased to operate as a binding agreement at a later point
  3. 3 Whether MDA's alleged representations breached s 52 Trade Practices Act 1974 and s 42 Fair Trading Act 1997

Ratio Decidendi

The Memorandum of Understanding was held to constitute a binding exclusive distributorship contract only for the initial 12 months, limited to the first three named products, and only where price and quantity were agreed. The contract was not binding beyond the first 12 months due to failure to reach further agreement on essential terms such as price and quantity, rendering it incomplete and unenforceable thereafter. The parties were responsible for the limited duration by failing to provide mechanisms to resolve uncertainty. Consequently, proceedings must be dismissed as the contract ceased to bind the parties after the initial term.

Court Disposition

Proceedings dismissed