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Henderson v Arthur [1907] 1 KB 10 Considers the ‘parole evidence rule’ and determines that a written agreement supersedes earlier additional oral agreements between parties. Facts The claimant, Henderson, was a seller who agreed to give a lease of a theatre to the defendant, Arthur, as a tenant. Per the agreement, the defendant promised to make rent payments within a specified timeframe, however prior to the agreement’s signing, the parties had verbally agreed that the claimant would accept debts as rent payments. The claimant subsequently attempted to bring an action against the defendant, contending he had failed to make the required rent payments, whilst the defendant retorted that the claimant had originally stated he would accept debts and was now reneging on this. Issue Whether the parties’ earlier oral agreement was binding, despite the contents of their later written agreement. Held The Court of Appeal found for the claimant, viewing that the written contract superseded all other agreements, and invalidated any differing prior agreements between the parties. Moreover, the Court viewed that the circumstances in which they ought reasonably consider extrinsic evidence when interpreting a contract was limited and as the defendant could have included the contents of the oral agreement in the written agreement, but failed to do so, they could not then attempt to rely upon the oral agreement at a later date. Further, the Court viewed that it was necessary to presume that the final written agreement between parties is the exclusive and finalized version for the sake of legal certainty and respect for the principle of sanctity of contract.

J Evans & Son (Portsmouth) Ltd v Andrea Merzario Ltd [1976] 1 WLR 1078 Oral promise overrode existing written contract conditions Facts The plaintiffs imported machines from Italy to England. The defendants were their forwarding agents. In terms of the contractual arrangements between the parties, the defendants had complete freedom regarding the transport of the goods to England. The defendants proposed a change in the method of transportation and gave the plaintiff an oral assurance that the machines would be shipped in containers carried under deck. No written provision was made for this change. One of the machines was packed on deck (rather than under deck) and was lost at sea. Issue The plaintiff sought damages. The defendants denied liability. At first instance, it was held that the oral assurance was not a legally binding warranty which could operate collaterally to the contract. Held The Court of Appeal held that the oral assurance to ship future goods under deck constituted an enforceable contractual promise. This oral promise overrode the standard contract conditions because the promise was made in order to induce the plaintiffs to agree to the goods being carried in containers. Furthermore, the defendants were unable to rely on any exemptions in the written contractual terms. The Court referred to numerous authorities in which oral promises had been held binding despite the existence of written exempting conditions (e.g. Mendelssohn v Normand [1970] 1 QB 177). Therefore, because the defendants had promised to ensure that the goods would be shipped in containers which were stored under deck and this promise was broken by shipping the goods in containers on deck, they were liable for the loss. The plaintiff’s appeal was accordingly allowed.

Heilbut, Symons and Co. v Buckleton [1913] AC 30 Emphasised the role of intent where one party makes a promise to another where one party may opt to rely upon that information in choosing to contract. Facts The defendants, Heilbut et al, were merchants during the rubber trade boom of the 1910’s who claimed to underwrite shares in a rubber trading corporation (‘Filisola Rubber and Produce Estates Ltd’). The claimant, Buckleton, contacted this corporation to enquire about shares purchasing, to which a manager at Hilbut et al responded positively, insinuating the creation of a new rubber company, which persuaded Buckleton to make a sizable purchase for shares in the organization. The subsequently formed rubber production company proved to have far fewer available resources than anticipated and thus suffered greatly in its initial performance, causing Buckleton to sue for breach of warranty as the company’s original representation had implicated far greater resources. Issue Whether the defendant’s agent’s remarks as to the new rubber company’s resource pool could be considered a simple representation or a binding contractual promise. Held At first instance, the Court contended that Heilbut et al had made an innocent misrepresentation, however, upon appeal it was determined that no fraudulent misrepresentation had occurred as the defending party had not been ‘reckless’ as to the truth of the statement regarding their resources pool and further there was no clear intent that their remarks regarding their resources should amount to a binding contractual promise to act in parallel to their written agreement.

L’Estrange v E. Graucob Ltd [1934] 2 KB 394 Affirmed that the clauses of a written contract are binding on the signatories, even where a party is unaware of the contract’s full contents. Facts The claimant, L’Estrange, contracted to purchase a slot machine for cigarettes from the defendant, Graucob, and the agreement included an express clause stating ‘This agreement contains all the terms and conditions under which I agree to purchase the machine specified above and any express or implied condition, statement, or warranty, statutory or otherwise not stated herein is hereby excluded’. The machine proved to be faulty and the claimant thus brought an action against the defendant, alleging that the machine breached the Sale of Goods Act by not being of merchantable quality. The defendant asserted that the statute was made irrelevant by the express clause, and that he was not in breach of the agreement they had made. The claimant responded she had been unaware of the clause as she had not properly read the agreement and it ought not apply. Issue Whether the clause excluding all terms not stated in the contract should be deemed effective and binding. Held The Court of Appeal found for the defendant, determining that the express provisions of the contract were binding and effectively excluded the relevance of statutory sales provisions. Furthermore, the fact that the claimant had not properly read the contract did not impact its validity, as in signing the contract she consented to be bound by its contents. Significantly this case emphasizes the Court’s respect for sanctity of contract....