Case: Masters v Cameron [1954] HCA 72 ; (1954) 91 CLR 353 
Outcome: considered
Two matters are not in dispute. First, Latitude and BreakFree were bound by the HofA, a final agreement within the first category of Masters v Cameron [1954] HCA 72 ; (1954) 91 CLR 353 at 360, namely a contract: "in which the parties [had] reached finality in arranging all the terms of their bargain and intend[ed] to be immediately bound to the performance of those terms, but at the same time propose[d] to have the terms restated in a form which [would] be fuller and more precise but not different in effect." Clause 3.1 of the HofA adopted this language. 107 The binding nature and effect of the HofA was repeatedly reinforced by counsel for BreakFree. As Senior Counsel for BreakFree submitted, it was a contract binding the parties at once to perform the agreed terms whether the completed formal document came into existence or not and: "in those circumstances, all you can say is that if there is the appropriate clause to require negotiation, or if there is the negotiation then, in those circumstances, there will be a long form agreement if the parties reach agreement." (Emphasis added) 108 One of the matters binding the parties on execution of the HofA was that cll 3.1 and 3.3 of the HofA imposed a mutual obligation on the parties to negotiate the terms of a long form contract and to conduct those negotiations in good faith. That is the second matter not in dispute. However, until execution of such a long form contract (if at all) and subject to any agreement to vary the terms of the HofA, the parties remained bound by the terms of the HofA to buy and sell the Developer's Assets. 169 BreakFree submitted that it was possible to read down cl 7.4.1 of the HofA and that the provision of additional security was consistent with the objective intention of the parties irrespective of whether finality, in the form of an Long Form Contract, was in fact reached by the 30 August 2006. This construction was said to be supported by considerations of business efficacy. Priority should be given, it was submitted, to preserving the parties' intention to be immediately bound even if the form of the arrangement was imperfect: Masters v Cameron at 360-361. 170 There are at least three reasons why these submissions should be rejected. Both relate to the terms of cl 7.4.1 of the HofA. First, cl 7.4.1 required that Latitude provide the charge or mortgage on the ' Possession Date' . This date was not defined by the HofA and must refer to the date on which Latitude took possession of the assets which it sought to acquire from BreakFree. Contrary to BreakFree's submission, the obligation to provide the charge was contingent on performance by BreakFree of its obligation to deliver these assets, defined in cl 1 as the assets of the Developer's Business. Latitude never took possession of these assets and could not be understood as undertaking, by cl 7.4.1, to confer on BreakFree a benefit unsupported by prior consideration. The second basis relates to the identification of the relevant consideration - the assets of the Developer's Business. Latitude could not provide security in respect of assets it did not possess. 171 Thirdly, the contention ignores the express terms of the HofA and the effect of it. The HofA was, as BreakFree submitted (see [105] above), a contract which, subject to the conditions precedent being satisfied, bound Latitude to purchase the Developer's Assets for $5.4 million. For the reasons set out above, the conditions precedent were satisfied. Latitude was bound to purchase those assets. The failure of Latitude to provide additional security pursuant to cl 7.4.1 of the HofA in relation to the long form contract did not constitute a breach of the HofA and, further, did not evince an intention on the part of Latitude no longer to be bound by the HofA.