D’s carried on business at 5 hotels

It was alleged they reached an agreement to reduce the selling base of beer from 15 to 14 bottles to the dozen

Quoting Willmer LJ in British Basic Slag, understanding ‘should be construed in its ordinary or popular sense.  Though it may not be easy to put it into words, everybody knows what is meant by an arrangement … the Act … clearly contemplates that there may be arrangements which are not enforceable by legal proceedings, but which create only moral obligations or obligations binding in honour …’

But, it is necessary for ‘each of the parties to have communicated with the other, for each to have raised an expectation in the mind of the other, and for each to have accepted an obligation qua the other. …’.

View full decision of Fisher J at AustLII

On appeal (Morphett Arms) the Full Court (while dismissing the appeal) stated that they did not consider that mutuality of obligation was required for an understanding. The appeal was dismissed

View decision of Full Court at AustLII