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C & P Haulage v Middleton [1983] -

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Facts: C&P granted Middleton a license to occupy premises from where he would conduct his business. The agreement expressly stated the license was renewable every six months and that fixtures at the premises were not to be removed at the end of the license. Middleton incurred expenses making the premises suitable for his work. Ten weeks prior to the expiry of a term, Middleton was unlawfully evicted and he sought damages from C&P. Issues: Middleton contended he had been wrongfully evicted as he had not been given the requisite notice period. He sought damages for the unlawful eviction, and also claimed compensation for the costs of the improvements he had made to the premises. C&P argued that removal of fixtures from the premises was in breach of contract and, therefore, Middleton could not claim for the value of the improvements. They argued that following the eviction, he had conducted his business from home, and, therefore, had not sustained any loss. C&P argued that in seeking to recover the cost of the improvements, Middleton was asking for damages to put him in the same position he would have been if the contract had never been made, and not as if the contract had been fulfilled, which was the appropriate measure of damages for breach of contract. Held: Middleton was awarded nominal damages for the wrongful eviction. Awarding him the cost of the improvements would place him in a better position than he would have been had the contract been fulfilled, and this was not the function of the courts. Had he been appropriately given notice, he would not have been able to recover these expenses and so he could not claim them as losses flowing from the breach.

Finlay (James) & Co Ltd v NV Kwik Hoo Tong Handel Maatschappij [1929] -

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Facts: The seller under a cif contract tendered to the buyer a bill of lading which stated, not fraudulently, but contrary to the fact, that the shipment had taken place in the contract month. Being unaware of this fact at the time of the tender, the buyer accepted the shipment, and entered into sub-contracts for the sale of a portion of the goods, those sub-contracts containing a clause that ‘the bill or bills of lading shall be conclusive evidence of the date of shipment.’ The sub-purchasers refused to take delivery, alleging that the shipment had not been made during the contract month. The buyer under the original contract having then ascertained that the goods had not been shipped during the contract month: Held: (1) he was entitled to damages for the breach by the seller of his obligation to deliver a bill of lading stating the date of shipment correctly, the measure of damages being the difference between the market price and the contract price of the goods;

(2) the buyer was not bound to enforce, for the purpose of minimising the damages, the contracts with the sub-purchasers, as to do so, after he knew that the shipment date was incorrect, might seriously injure his commercial reputation

Welsh Development Agency v Export Finance Co Ltd [1992] -

Facts: Parrot Corp Ltd (Parrot) carried on the business of exporting computer discs. Parrot received funding from the Export Finance Co Ltd (Exfinco) with respect to its overseas sales. The master agreement under which this funding was provided was somewhat complicated but it was broadly as follows. Where Parrot entered into a transaction for the sale of its goods to its overseas buyers, Exfinco made a standing offer, subject to some qualifications, to buy all such goods from it and Parrot would in turn sell these as Exfinco's agent to the overseas buyers, Exfinco to be an undisclosed principal. Title was not to pass to overseas buyers until the purchase price of the goods had been paid. The offer of Exfinco to purchase these goods was to be accepted by sending the requisite documents to Exfinco or by invoicing the overseas buyer. Payment by the overseas buyers was to be into a bank account in the name of Parrot but which was under the exclusive control of Exfinco. The financial arrangements between the parties also provided for Exfinco (i) to retain a portion of the purchase price which was not covered by an ECGD guarantee, (ii) to deduct a discount which reflected the speed with which the overseas buyers paid their debts, the discount not to be fixed once and for all but to vary with the promptness of the payment, (iii) to debit a number of items, for example for bank charges, against the account. The result of this was that at all times Exfinco had a fund of 10% of the price of the goods sold to meet future obligations of Parrot and could discharge out of this fund liabilities relating to the whole of its dealings with Parrot and consequently liabilities with respect to one transaction could be discharged out of proceeds relating to another. The agreement also contained a termination provision which provided in part that on the termination of the agreement Parrot would satisfy all claims owing to Exfinco by the overseas buyers and that when this payment had been made Exfinco would transfer all interests that it had in the goods to Parrot. Parrot created a charge over its book debts in favour of the Welsh Development Agency (WDA). The charge was duly registered. Parrot went into receivership and the WDA claimed that the moneys owed by the overseas buyers to Parrot were subject to its charge. Exfinco claimed to be entitled to these moneys as payment for the goods which it owned and which had been sold on its behalf by Parrot as its agent. Browne-Wilkinson V-C held that (a) since at the time of the alleged sale of goods by Parrot to Exfinco it was not certain whether the goods satisfied all the warranties provided for in the master agreement, it was accordingly unclear whether or not Parrot was

acting as the undisclosed agent or as principal. This uncertainty resulted in no contract between Exfinco and the buyers coming into being at the time the goods were sold by Parrot and accordingly Parrot must have been selling the goods as principal; (b) alternatively, the arrangement created a charge which was void for failure to register under s 395 of the Companies Act 1985. Exfinco appealed, and (c) counterclaimed against the receivers appointed by the WDA for damages for interfering with the contract between Parrot and the overseas buyers which had caused loss to Exfinco. - Held – Appeal allowed. (1) The difficulty of determining whether on the sale of goods Parrot was acting as principal or as agent could be resolved by applying the well-known maxim id certum est quod certum reddi potest. Whether or not there was a defect in the goods could be ascertained subsequently without further agreement between the parties and thus the uncertainty as to the status of Parrot at the time of sale did not affect the validity of the master agreement. (2) There was no one clear touchstone by which it was possible to say that a transaction was not a sale of goods but a charge or mortgage on the goods and what the court had to do was to examine the agreement as a whole to examine the nature of the legal relationship created by the parties. Taking the agreement as a whole, it was what it purported to be, namely a sale of goods by Parrot to Exfinco and not a loan by Exfinco to Parrot secured on the goods or the proceeds of the goods. (3) (per Dillon and Ralph Gibson LJJ dismissing the counterclaim of Exfinco). The receivers were not protected by s 234 of the Insolvency Act 1986 since this only applied where the receivers had seized property which was not the case here where what the receivers were accused of was not getting in moneys owed by the overseas buyers. A receiver was an agent of the company and therefore could not be liable for the tort of inducing a breach of contract since the contract being breached was Parrot's and Parrot as principal could not be liable for the tort of inducing the breach of its own contract. (4) (per Staughton LJ allowing the counterclaim of Exfinco). The receivers were not entitled to rely on s 234 of the 1986 Act. It was not necessary to decide whether there was a rule whereby an agent could not be held liable for the tort of inducing a breach of contract between his principal and a third party assuming that such a rule could apply to an administrative receiver. Since the contract which the receivers had allegedly caused the breach of was that between Exfinco and the overseas buyers there was no basis on which any such rule could apply.

Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] -

Facts: An advertising agency, the Stiletto Visual Programmes Ltd (SVP), ordered 47 photographic transparencies from the Interfoto

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Picture Library Ltd (IPL) for 1950s presentation. IPL successfully delivered the order. However, with the delivery note came a statement according to which if SVP did not return the transparencies in 14 days by March 19, IPL would charge them £5 per day after the deadline for each transparency. SVP did not use the transparencies, nor did they read the note. Consequently, they only returned it on April 2. Furthermore, the holding charge per transparency per day from March 19 to April 2 amounted to £3,783. Subsequently, they refused to pay the invoice. Issues: Firstly, was there sufficient communication between the parties about the clause so that it could be effective? Secondly, IPL was charging ten times more than other libraries, therefore, could such an onerous clause anyhow become a part of the contract? Held: Above all, the Court of Appeal held that when a clause is particularly unusual or onerous, the party which relies on it must make clear and reasonable efforts to bring it to other party’s notice. Dillion LJ held: ‘The defendants [SVP] are not to be relieved of that liability because they did not read the condition, although doubtless they did not. but in my judgment they are to be relieved because the plaintiffs [IPL] did not do what was necessary to draw this unreasonable and extortionate clause fairly to their attention.’ Applied: Thornton v Shoe Lane Parking [1971] 2 Q.B. 163

Yam Seng Pte Ltd v International Trade Corporation Ltd -

Facts: In May 2009, the parties entered into a written contract under which the defendant company granted the claimant company the exclusive rights to distribute certain fragrances and toiletries in specified territories (the contract). The rights were mostly limited to duty free sales, but also included 'domestic' sales in Hong Kong, Macau and two provinces of mainland China. The claimant subsequently informed the defendant that it was terminating the contract as the defendant was in breach. It claimed that the defendant had breached the contract by, inter alia: (i) signifying its intention to use another distributor for the toiletry products, after refusing to supply the toiletries to the claimant; and (ii) giving the claimant false information about the Singaporean domestic retail price. The claimant further sought damages on the alternative ground that it had been induced to enter into the contract by a misrepresentation under s 2 of the Misrepresentation Act 1967. It contended that the defendant had misrepresented that it had signed a licence agreement to manufacture and sell fragrances, which had included the toiletries. The claimant sought damages for loss of profits and as wasted expenditure for the loss it had sustained as a result of entering into the contract. It fell to be determined: (i) whether the claimant's termination of the contract had been lawful; (ii) whether the claimant was entitled to damages for loss of profits and wasted expenditure; (iii) whether the

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defendant had made misrepresentation; and (iv) whether the claimant was entitled to damages for misrepresentation. Held: The application would be allowed. (1) The defendant had been in repudiatory breach of the contract in: (i) signifying its intention to use another distributor for the toiletry products in Hong Kong and Macau, in breach of the exclusivity granted to the claimant, having previously refused, in breach of its contractual obligation, to supply the toiletries to the claimant; and (ii) giving the claimant information about the Singaporean domestic retail price on which the defendant had known that the claimant had been likely to rely and which it had known to be false. Either of those breaches on its own would have justified the termination of the contract; in combination they had certainly done so (see [173], [174] of the judgment). (2) The claimant had failed to prove what profit it would have made or that it would have made a profit at all, if the defendant had fully performed its obligations under the contract. However, the claimant was entitled to recover its net expenditure incurred in performing the contract as damages for the defendant's breach of contract (see [185], [192] of the judgment). (3) To establish a right to recover damages under s 2 of the Act, it was necessary for a claimant to show that: (i) it had entered into a contract with the defendant; (ii) it had done so after a representation of fact had been made to it by the defendant (and in reliance on that representation); (iii) the representation had been false; and (iv) as a result of entering into the contract with the defendant, the claimant had suffered a loss (see [200] of the judgment). On the facts, the claimant had established the first three of the requirements for misrepresentation. The defendant had not believed, let alone had any reasonable ground to believe, when it had represented that it had signed a licence agreement to manufacture and sell fragrances that the fact represented had been true. Nor had it believed, let alone had any reasonable ground to believe, at the time when the contract had been made, that it had signed a licence (nor even agreed a deal subject to contract) which had included the toiletries (see [202] of the judgment). (4) The claimant would be entitled to recover as damages for misrepresentation its net loss incurred as a result of entering into the contract without any reduction on account of the possibility that, if no misrepresentation had been made, the claimant might still have entered into a similar agreement at a later date and lost money anyway (see [220] of the judgment).

Braganza v BP Shipping Ltd [2015] -

Facts: The case was about an employee of BP Shipping who committed a suicide. The company formed an opinion that the suicide was committed by his wilful act. The contract of employment

provided the following: ‘in the opinion of the Company or its insurers, the death…resulted from…the Officer’s wilful act, default or misconduct’. As a result, his widow could not be entitled to death benefits under his contract of employment. The issue in the appeal was to determine the proper test for the court to apply when deciding whether BP was entitled to have such an opinion. -

Held: appeal allowed. Lady Hale gave the key judgment. Her ladyship ruled: “the court will only imply a term that the decisionmaking process be lawful and rational in the public law sense, that the decision is made rationally (as well as in good faith) and consistently with its contractual purpose.” Her ladyship went on to argue that the contractual implied term is drawing closer and closer to the principles in judicial review. Thus, she argued that “Wednesbury reasonableness” (or GCHQ “rationality”) must be applied to consider the rationality of the decision-making process rather than to concentrate upon the outcome.

Golden Strait Corpn v Nippon Yusen Kubishika Kaisha, The Golden Victory -

Facts: The claimant owned the vessel ‘Golden Victory’. In 1998, it entered into a charterparty with the defendant for a period of seven years, plus or minus one month at the defendant’s option. The charterparty contained a clause that both parties had the right to cancel the charter in the event of a war between, inter alia, the United Kingdom and Iraq. The claimant maintained that the defendant had repudiated the charterparty in 2001 and the dispute was referred to an arbitrator. An issue arose as to whether, in the light of the second Gulf war in 2003, the claimant’s claim for damages ran for two years until the outbreak of war or for four years until the expiration of the charterparty. Having regard to previous authority, the arbitrator found that the claimant’s claim only ran until the outbreak of war. The claimant appealed to the High Court pursuant to s 69 of the Arbitration Act 1996.It submitted that, having regard to previous authority, the rule for the assessment of damages in the case of an accepted repudiation of a long-term charterparty where there was an available market at the date of repudiation was that damages were to be assessed at that date as the difference between the contract rate and the market rate for chartering a substitute ship for the balance of the charter period and that there was only one exception to that rule. The claimant contended that that exception arose where the contractual

rights that the innocent party had lost by reason of the repudiation were capable by the terms of the contract of being rendered less valuable or valueless in certain circumstances. In such circumstances, so it was argued, the law permitted damages to be diminished or extinguished, but only if it could be proved that those events were, at the date of the acceptance of the repudiation, ‘predestined’ to happen. The claimant maintained that the need for certainty and the fact that crystallisation of the loss at the date of acceptance of repudiation justified that rule. - Held: There was no compelling or persuasive reason why the existence of an available market at the date of the breach, and a principle of mitigation founded upon it, should result in a strict rule applicable to the assessment of damages only in such cases, which ignored normal considerations of actual loss and causation, and which was subject to a limited exception that itself did not find a parallel in any other field of law. Furthermore, there was no authority for such a rule. (i) The desirability of certainty and crystallisation of liability was accepted, but was no more obviously achievable with than without that rule and its supposed exception. The charterparty itself contained the uncertainty of the war clause, and, if there was such a rule, the claimant would recover more than the charterparty had been worth to it. (ii) Having regard to previous authority, although the normal measure of damages where there was an available market at the time of termination of a charter was generally the difference between the contract rate for the balance of the charter period and the market rate for chartering a substitute vessel for that period, that was a prima facie rule. The governing principle remained that the measure of loss was the loss directly and naturally resulting, in the ordinary course of events, from the breach of contract. References in previous authorities to the level to which the charterers had proved that the charterparty would have come to an end were limited to those particular cases. The question of proof was to be approached on the balance of probabilities. Accordingly, the arbitrator’s decision would stand.

Williams v Roffey Bros & Nicholls (Contractors) Ltd -

Facts: The defendant building contractors entered into a contract to refurbish a block of 27 flats and sub-contracted the carpentry work in the refurbishment to the plaintiff carpenter for a price of £20,000. It was an implied term of the sub-contract that the plaintiff would receive interim payments related to work completed. After completing the carpentry work on the roof and nine flats, and carrying out preliminary work on the remaining flats, for which work he received interim payments of £16,200, the plaintiff found that he was in financial difficulties because the price was too low and he had failed to supervise his workmen properly. Furthermore, he had

by then received over 80% of the sub-contr...