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Writer's pictureBrian AJ Newman LLB

What is the Masters v Cameron case principle?

The "Cameron case" typically refers to the principle established in the case of *Masters v Cameron* (1954) 91 CLR 353, a landmark decision by the High Court of Australia concerning contract formation. The case outlined the circumstances under which an agreement between parties can be considered binding or merely an agreement to agree.

Masters v Cameron* (1954) 91 CLR 353
Masters v Cameron* (1954) 91 CLR 353

The principle established in *Masters v Cameron* (1954):


The High Court in *Masters v Cameron* identified three distinct categories where parties may sign a written agreement:


1. Final and Binding Agreement: The parties intend to be immediately bound by their agreement, even though they plan to formalise it later. This is a binding contract, and the parties can be held to its terms even before the formal document is executed.


2. Agreement Subject to Formal Document: The parties have agreed on all the terms and intend to be bound only when a formal document is executed. In this case, no binding contract exists until the formal document is signed.


3. Binding Subject to Certain Terms: The parties are immediately bound by the agreed terms, but the agreement is conditional on certain terms being included or fulfilled in the formal document. The parties are bound by what they have agreed upon, but the contract's finality depends on the fulfilment of those conditions.


The case is often cited in contract law to determine whether an agreement is enforceable or whether the parties intended to create legal relations.


Later Development - Fourth Category: A fourth category was later recognised in cases such as *Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd* (1986) 40 NSWLR 622, where the parties are immediately bound by their agreement, but it is anticipated that a more detailed document will be agreed upon later. However, if the later agreement does not materialise, the initial agreement remains binding.


This case has been crucial in determining when an agreement has been legally formed, particularly in scenarios involving negotiations or preliminary agreements.

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