Australian Woollen Mills v The Commonwealth (1954) 92 CLR 424

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  • On 30 June 1946, the Australian Government announced that it would offer a subsidy to those who bought wool, in an attempt to stimulate the sector.
  • The Government discontinued the policy in 1948.
  • AWM sued for breach of contract, because they had bought wool but not yet received the subsidy from the Government.


  • Was there a contract between AWM and the Commonwealth?
  • Was there an offer for AWM to accept?


  • There was no offer that AWM could have accepted in order to create a contract with the Commonwealth.
  • The wool subsidy was a policy, not a contractual offer. There was no intention by the Government to create legal relations; it was a Government scheme to promote the wool industry.
  • Therefore, there could be no breach.


“What is alleged to be an offer should have been intended to give rise, on the doing of an act, to an obligation… in the absence of such an intention, actual or imputed, the alleged “offer” cannot lead to a contract: there is indeed, in such a case no true “offer”.” (at 457)

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