Masters v Cameron [1954]

Court: High Court of Australia

Facts: Masters and Cameron signed a memorandum for the sale of a farm "subject to contract." Masters later sought to withdraw, claiming no binding contract existed. Cameron argued that the memorandum was enforceable.

Issue: Does a "subject to contract" clause prevent an agreement from being binding?

Held: The court found that the "subject to contract" clause indicated that the parties did not intend to be bound until a formal contract was signed.

Key Judicial Statement: The court held that when parties intend the terms of an agreement to depend on a future contract, they are not legally bound until that contract is executed.

💡 Leveluplaw: Clauses like "subject to contract" signal that parties are not immediately bound and await a formal contract to enforce their agreement.