Cases - Lecture notes 1-12 PDF

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Commercial Law Cases Topic Two: Ratification Bolton Partners v Lambert (1889) 41 Ch D 295. Facts: Offer of purchase made by L (P) to A (A). Stratchley, acting as A for BP – not authorized to make any contract for sale. Lambert withdrew offer on ground that he had been misled by the statements, after withdrawal, P’s ratified the acceptance of the offer. Held: No misrepresentations on part of P. Binding contract by the two letters alone – rule of ratification is applicable. Keighley, Maxted and Co v Durant [1901] AC 240. Facts: K & Co authorized R to buy wheat on a joint account for himself and them at a certain price. R w/o authority brought wheat at a higher price from D. K agreed w. R to buy wheat at higher price but failed to do so. D resold and sued them for a loss. Facts: COA reversed decision as regards the appellants, ordered new trial on ground that there was evidence that R contracted on behalf of R and himself. Contract made by a man in his own name, intending to be on behalf of TP, can be ratified by TP so as to make himself able to sue/liable to be sued on contract. Lintrose Nominees Pty Ltd v King [1995] 1 VR 574. Facts: R purchaser had brought property from appellant vendor on advice of A. Purchaser paid for advice, A had been retained by vendor to sell property but P was unaware. Held: Purchaser entitled to rescind the contract – Vendor could not properly sell the property through A, knowing that A was retained to advise purchaser who didn’t know of their dual allegiance to vendor. Siu Yin Kwan v Eastern Insurance Co Ltd [1994] 2 AC 199. Facts: Insurers are liable to UP on an indemnity policy – it provided it was made w. the range of their authority. The claim arose out of the death of two seamen on their employers’ vessel but the employers were not named in the relevant policy. Held: Where the personal element is strikingly present in the contract made with the agent, the undisclosed principal may not intervene. Davison v Vickery’s Motors Ltd (in liq) (1925) 37 CLR 1 Facts: Managing director of R company purported to act for company and entered into agreement with A to buy car. A take 1000 shares in company, consideration paid and application for shares signed. Before notice of allotment A withdrew from agreement on grounds owner of car refused sale, company entered into liquidation and A applied to have name expunged from register. Held: MD’s authority to act on behalf of the company could not be questioned – there was a binding agreement by A to take shares and name was properly on register. Agreement was not one MD had authority to make on behalf of company, company did not ratify afterwards. Transaction merely revocable offer and A having withdrawn in due time, entitled to have name expunged. Kelner v Baxter (1866) LR 2CP 174; [1861–73] All ER Rep Ext 2009 Facts: The promoters of a hotel company entered into a contract on its behalf for the purchase of wine. When the company formally came into existence it ratified the

contract. The wine was consumed but before payment was made the company went into liquidation. The promoters, as agents, were sued on the contract. They argued that liability under the contract had passed, by ratification, to the company. Held: the company did not exist at the time of the agreement it would be wholly inoperative unless it was binding on the promoters personally and a stranger cannot by subsequent ratification relieve them from that responsibility Corporations Act 2001, ss 131-133. Contracts before registration (1) If a person enters into, or purports to enter into, a contract on behalf of, or for the benefit of, a company before it is registered, the company becomes bound by the contract and entitled to its benefit if the company, or a company that is reasonably identifiable with it, is registered and ratifies the contract: (a) within the time agreed to by the parties to the contract; or (b) if there is no agreed time--within a reasonable time after the contract is entered into. (2) The person is liable to pay damages to each other party to the pre-registration contract if the company is notregistered, or the company is registered but does not ratify the contract or enter into a substitute for it: (a) within the time agreed to by the parties to the contract; or (b) if there is no agreed time--within a reasonable time after the contract is entered into. The amount that the person is liable to pay to a party is the amount the company would be liable to pay to the party if the company had ratified the contract and then did not perform it at all. (3) If proceedings are brought to recover damages under subsection (2) because the company is registered but does not ratify the pre-registration contract or enter into a substitute for it, the court may do anything that it considers appropriate in the circumstances, including ordering the company to do 1 or more of the following: (a) Pay all or part of the damages that the person is liable to pay; (b) Transfer property that the company received because of the contract to a party to the contract; (c) Pay an amount to a party to the contract. (4) If the company ratifies the pre--registration contract but fails to perform all or part of it, the court may order theperson to pay all or part of the damages that the company is ordered to pay. Person may be released from liability but is not entitled to indemnity (1) A party to the pre--registration contract may release the person from all or part of their liability under section 131to the party by signing a release. (2) Despite any rule of law or equity, the person does not have any right of indemnity against the company in respect of the person's liability under this Part. This is so even if the person was acting, or purporting to act, as trustee for the company. This Part replaces other rights and liabilities This Part replaces any rights or liabilities anyone would otherwise have on the pre--registration contract. Mahesan v Malaysia Government Housing [1978] 2 All ER 405, 406–11. Facts: Appellant, director and employee of housing society bribed by Manickam. A sued for money had and received as well in tort. Appellant caused the society to buy land at overvalue. Held: Profit made by intermediate purchaser, awarded compensation on the basis

that the principal had lost the opportunity to purchase at the lower price. Fullwood v Hurley [1928] 1 KB 498, 500–504. Facts: Hotel broker instructed by owner of a hotel to sell his hotel from him, broker arranged to sell the hotel to buyer on the terms of a letter which concluded “if business is done, we shall act for you at the usual brokerage’. Sale made – owner paid broker a commission and in this action the broker claimed a second commission from buyer. Held: COA rejected the claim on the ground that the terms of the letter were not sufficient to establish a contract by buyer to pay broker a double commission and that since broker was acting as agent for the vendor he was not entitled to enter into such a contract w. the buyer w/o full disclosure to both parties. L J Hooker Ltd v W J Adams Estates Ltd (1977) 138 CLR 52; (1977) 13 ALR 161 Facts: Minimum amount of work that an agent must do so as to be entitled to his commission. Held: The commission isn’t fully earned unless there is a sale, which has resulted wholly or partially from the efforts of the agent. It was said that the mere introduction of a purchaser to property will entitle the agent to commission even though the vendor was unaware that the intro of the purchaser to property.

Topic 3: Contracts for the sale of goods Aristoc Industries v Werham [1965] NSWR 581 Facts: manufactured seating for lecture. Deliver but builder in financial difficultly. Assigned benefit to W, A not paid for seating. Held: intention (single agreement to supply, deliver and install) couldn’t take seats back. Method of installation was simple and inexpensive Brooks Robinson v Rothfield (1951) VLR 405. Facts: Appellant company had undertaken construction of cocktail cabinet w. blueprints. All material were to be supplied by A with exception of certain wrought iron doors and a pivot. Whole of work was carried out on A own’s premises and the cabinet, except for doors which R failed to supply, was assembled on the pivot ready for installation. R repudiated the contract and A sought to recover the sum of 91 for work done and materials supplied at D’s request. Held: Contract was not one of sale and A could recover sum claimed on quantum meruit – as much as he deserved/the actual value of services performed. Install completed cabinet in house, became a fixture – no property passed until it was so installed. Chapman Bros v Verco Bros and Company (1933) 49 CLR 306. Facts: Farmers delivered bags of wheat, delivered in unidentified bags and identical to those which other farmers delivered wheat to company. Terms of transaction required company to buy and pay for wheat or failing request, return an equal quantity of what of the same type – no obligation to return identical bags. Held: Transaction was necessary one of sale as the property passed to the company on delivery. Property must pass even if not at once. That is the nature of transaction and this transaction seems inconsistent w. the possibility of a bailment. Agreement of sale within section 2(1). Collins Trading v Maher [1969] VR 20. Facts: CT sued Maher for the cost of supplying and installing a ‘Wonder-Heart’ oil heater together w. service and interest charges. M argued that the contract was for SOG and there was an absence of a written memo, contract was unenforceable. CT...