Commonwealth Bank of Australia v TLI Management Pty Ltd (1990)

Commonwealth Bank of Australia v TLI Management Pty Ltd V.R. 510 Case Facts: 

During the time TLI Management was taking over Hovertravel Australia the latter continued its business transactions and it applied for a loan at the Commonwealth Bank of Australia.

The application of Hovertravel was supplemented by a letter indicating that the Commonwealth Bank agrees to temporarily support Hovertravel financially by lending them AU$250,000.

The said money will be used for the operation of Hovertravel which will be paid by TLI Management right after it has complete control over the company. TLI will pay the loaned amount during the implementation of the takeover, or 30 days after the date of the letter.

Case Issue: 

 The issue of the case concerns whether or not the letter submitter by Hovertravel is a legally enforceable promise on behalf of TLI Management to Commonwealth Bank.

Case Decision:

The ruling of the court in Commonwealth Bank of Australia v TLI Management Pty Ltd was that the letter submitted by Hovertravel was not an enforceable contract.

The ruling of the court was anchored on the fact that the letter did not contain any language that represents a promise. Considering that the letter was stated ambiguous intention for the party to legally bound also caused it not to be enforceable.

Read more about the case here.