Australian Woollen Mills v The Commonwealth (1954) involved a wool subsidy scheme. The plaintiff claimed a contract existed for the Commonwealth to pay subsidies for wool purchases. The court found no binding contract, setting the principle that state policies are not automatically enforceable.
Distinction Between Policy and Contract: The High Court ruled that government policy statements or subsidies do not constitute binding contracts unless there is clear evidence of intent to create legal obligations. This ruling clarified the distinction between policy initiatives and enforceable contracts.
