Contract Law Essay Plans PDF

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Contract Law Essay Plans Offer & Acceptance Arguments ●

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Offer - Offer puts offeree at risk of being bound on acceptance at the precise moment that there’s acceptance. After this, lose the ability to withdraw from the agreement or further negotiation. General principle no offer unless commitment to be bound on acceptance is portrayed, ITCLR (Harvey v Facey, 1893). If conduct demonstrates valid contract, treated as such as opposed to looking at the contract for intention - L  ord Denning in S  torer v MCC (1974). Contrast with Gibson v MCC (1979) where there was no intention. Invitation to Treat Displays and advertisements aren’t offers rather ITT. Established in P  harmaceutical v Boots (1953). Carlill v Carbolic Smoke Ball Co (1892) offer reflected sufficient ITCLR. Thornton v Shoe Lane Parking (1971) automatic machine held to be an offer, display can often amount to an offer. Auctions, putting up sale = ITT, bid = offer, fall of hammer = acceptance (H  arris v Nickerson, 1873). Offer Communicated - Williams v Cardawine (1833), contract accepted by whoever performs the conditions and thus eligible for reward. Neither mutual consent nor communication of assent is important in rewards. R v Clarke (1927) established can’t accept an offer that you aren’t aware of, need reliance. Gibbons v Proctor (1891) later aware of the offer and thus reward, eligible for reward. Acceptance - Unequivocal expression of consent to the proposal contained in the offer. Effect of immediately binding the parties. ○ Correspondence - A counter offer response deviates from the terms of an offer and thus terminates the original offer. Offeree losses power to accept original offer. (Hyde v Wrench, 1840). Can accept if the response was merely asking for more information or a clarification or renewed offer on original terms. Conduct can constitute agreement (Brogden v Metropolitan Railway Co, 1877). Tinn v Hoffman (1873) simultaneous offers in ignorance aren’t binding. ○ Methods of Acceptance - Signature (L’Estrange v Graucob, 1934). Accept of the method doesn’t disadvantage the offeree (Manchester DCE v Commercial and General Investments, 1970). Can’t accept by silence (F  elthouse v Bindley, 1862) ○ Communication - General rule, must communicate acceptance so that parties know its binding. Bilateral contracts acceptance needs to be communicated. Postal acceptance rule, when the letter is sent, offer cannot be rejected or revoked. Regarded as instantaneous (Byrne v van Tienhoven, 1880). Unilateral contracts, acceptance is via conduct (C  arlill). Two way instantaneous takes place where it is actually brought to the attention of the offeror Brinkibon (1983) unless communication failure (Entores v Miles Far East Corp, 1955). One way is flexible. When reasonable for the offeror to access the message. T  enax v Brimmers (1975) revocation effective immediately in business hours even if unread. Revocation - E  rrington v Errington (1952) no revocation on commencement of performance rule. L  uxor v Cooper (1941) denied an implied obligation barring revocation. Termination - Can revoke anytime before acceptance of offer communicated, apply Byrne. Exception is unilateral, once performance commences can’t revoke. Lapse of time: expiry of stipulated period, express/implied condition or passage of reasonable time. Death of offeree/offeror. ‘Ee (Reynolds v Atherton, 1921). ‘Or (Coulthard  v Clementson, 1879). Change of circumstances: offers lapses if not in substantially same condition (F  inancings v Stimson, 1962), fundamental change in the basis of the offer.

Intention to Create Legal Creation Arguments ●

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Social/Domestic Contract - Agreement won’t be enforced unless the parties intended to create legal relations. Balfour v Balfour (1919) gave general rule with respect to domestic arrangements. Spouse, parents or close family have the default presumption that agreements aren’t contractual. Not enforceable in court. Jones v Padavatton (1969) reiterated that the agreement didn’t rise to the level of a binding contract, no sufficient intention to be bound. Exception - reliance. P  arker v Clarke (1960) general rule overcome because relationship between aunt and niece wasn’t as close, took action in reliance of the promise. S  impkins v Pays (1955), court held that the mutual agreement, no matter how informal, constituted a legally binding agreement. Commercial Contract - General presumption that there is an intention to contract in commercial agreements. Esso Petroleum v Customs & Excise (1976) concluded that there was ITCLR because Esso advertised the coins in connection with their sales, advertised in a commercial context, reflecting an intention to be bound. Exception found in Rose & Frank Co. v JR Crompton & Bros (1925) court concluded there wasn’t an intention to be bound since both parties signed a contract that included a clause that said this isn’t a binding contract. Sufficient evidence from an objective perspective that the parties didn’t have an ITCLR. K  leinwort Benson v MMC (1989) court held in favour of MMC as the contract had no legal effect, letter of comfort merely set out the company policy which can change at any time. Comfort letter was merely an honest representation. Letters of intent, comfort letters and honour clauses lack ITCLR. Intention and Reasonable Expectation - If a reasonable person would consider that there was an intention to be bound. Consider C  arlill and Edmonds v Lawson (2000). Court held that the apprenticeship didn’t amount to employment and thus wasn’t entitled to minimum wage. Relationship lacked ITCLR - not an employment contract.

Consideration & Promissory Estoppel Arguments ●

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Definition - Currie v Misa (1875) “valuable consideration (...) may consist of soe right, interest, profit or beneficial accruing to the one party or some forbearance, detriment, loss or responsibility given suffered or undertaken by the other”. Consideration must move from the promisee but not necessarily to the promissor. Intangible Benefit - Bret v JS (1600) affection isn’t enough value in the eyes of the law, need something of value. Personal doesn’t amount to economic. W  hite v Bluett (1853) no consideration by son as not complaining isn’t of economic value and this had to pay money to father’s estate. T  homas v Thomas (1842) ‘in consideration of husband’s desires’ wasn't sufficient consideration however the peppercorn rent of £1 was recognised as good consideration. Regardless of the amount, had economic value. Sufficient v Adequate - Must be sufficient but not adequate. Thomas v Thomas (1842). Pitt v PHH Asset Management (1993) intangible benefit arisen from the promise to refrain from certain activity which amounted to valid consideration. Lock-out agreement wasn’t needed. Chappell v Nestle (1961) chocolate wrapper amounted to valid consideration since they represented something of value → sufficient. C  happell and Thomas are about nominal consideration since the £1 was well below the market value and he wrappers held no intrinsic value however they were still sufficient. Past Consideration - Past consideration isn’t good consideration, must be in response to promise. Roscorla v Thomas (1842) court held that no legal action can be taken place in respect of the promise as the transaction was complete. Only consideration was made was the past promise, no consideration for latter promise. Re McArdle (1951) promise wasn’t binding as the repairs were made before, can’t pay. Pao On v Lau Yiu Long (1980) past consideration can sometimes be good consideration if it meets the requirements by Lord Scarman. 1) past consideration is good if iots at the promisors request. 2) both parties have understood the act was to be paid or compensated in some way. 3) payment legally enforceable if promised in advance. This would fail if by family member (ITCLR). Forbearance - White v Bluett (1853) authority that there is no consideration unless forbearer can enforce a right. Complaining isn’t a right. Combe v Combe (1951) husband didn’t ask wife to refrain from taking the maintenance payment and therefore she can’t claim for the money. A  lliance Bank v Broom (1864) promise not to sue is valid consideration. Existing Obligation - Can’t constitute good consideration. S  tilk v Myrick (1809) promise to complete journey isn’t good consideration as Stilk owed labour to the captain already, no above and beyond. Contrast H  artley v Ponsonby (1857) where the hazardous journey meant that there was good consideration for a bonus payment. Williams v Roffey Bros (1990) refined Stilk v Myrick and said bonus payment in a certain time frame is enforceable as the promisor gains practical benefit. L  J Glidewell gave a test: 1) has to be good in services contract 2) A has reason to doubt Bs side of the bargain 3) additional payments for contractual obligations within a certain time frame 4) B obtains a practical benefit 5) no duress or fraud 6) benefit capable of amounting to valid consideration. Duty imposed by law usually isn't good consideration. C  ollins v Godefroy (1831) plaintiff supposed to attend the court hearing anyways, imposed by law. Exception Glasbrook Brothers v Glamorgan County Council (1925) court said police had valid consideration for payment as they went above and beyond their legal duty. Existing Obligation to Third Party - Pao On v Lau Yiu Long (1980) performance of existing contractual duty owed to third party generally regarded as good consideration. Part Payment - Part payment of a debt isn’t good consideration, creditor can sue if the full debt isn’t paid back. Protects clients from economic duress. Foakes v Beer (1884) no consideration for alleged promise to forego interest on judgement debt. Part payment + something else can be good consideration as seen in Pinnel’s case. Allowed claimant to hold that the agreement was binding thus allowing payment remaining ⅔ share.

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Applied Foakes v Beer (1884), part payment isn’t satisfactory. MWB v Rock Advertising (2016) creditor received practical benefit beyond merely supporting the debtor. Court held paying back debt amounted practical benefit. Exception is additional consideration, promissory estoppel, practical benefit or if promise is made to third party. Promissory Estoppel - Alternative to consideration. Question of whether or not the promise is legally binding eve in the lack of consideration. Estopped from promise as it would be unfair - doctrine in equity. Reliance based. High Trees (1947) party estopped from going back on promise to waive certain rights. In obiter held promise to accept less is binding regardless lack of consideration. PE requirements: promise needs to be clear and unequivocal, reliance, detrimental reliance (inequitable to go back) cannot create a course of action (merely a defence).

Misrepresentation Introduction ●

Decide if there’s a term or M. A term is a failure to comply to contract, breach. A term is within the contract, M is concerned with negotiations before the contract. Can use Heibult, Symons & Co v Buckleton (1913) to decide if term or M: timing, importance, if term reduced to writing and special knowledge. Layout

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Requirements for M - M If there was M in the first place (false statement, existing fact or law ( Dimmock v Hallett, 1866), made by representor, addressed to represnetee and intended to induce ( Dimmock v Hallett, 1866)). Inducement doesn’t have to be the only reason to enter a contract, can be one of the reasons. Seen in Edgington v Fitzmaurice (1885). This makes the contract voidable. Type of M - F  raudulent M requirements established in Derry v Peek (1889). In this, representor needs to make M, representation made fraudulently, representor intended that representee or someone in their position should act upon it, representee did act upon it and suffered a loss by so doing. Negligence M under common law requirements established under H  edley Byrne v Heller (1964). Person making statement must know the party will rely on it without further enquiry, person making statement is aware of the purpose for which the statement is required, reasonable for the representee to act without further enquiry, statement acted upon to innocent party’s detriment and reasonable person in that position wouldn’t have made that statement. Negligent M under statute law, requirements under s  2(1) of MA (1967). M must be made by other party in contract, actual loss. Triggers ‘fiction of fraud’ creates a shift in the burden of proof to representor. If representor can prove he had reasonable grounds to believe the statement was true. Seen in H  oward Marine v Ogden (1978). For contracts, consider the relationship between the two parties and if there is an intention to create legal relations, Balfour v Balfour (1919). If there is ITCLR, then there is M. IM, an individual made M in good faith and genuinely beloved the statement was true. Position stipulates that they didn’t have a d  uty of care. Independent Advice - Under Attwood v Small (1838), relying on the verification of an independent expert before a purchase doesn’t allow the contract to be rescinded since the victim relied on the verification rather than the M. However, can also argue that NM allows misrepresentee to be eligible for remedies if the advice is incorrect, stated above. Words - Consider if close to the time of the contract, it is likely to be M. However also consider if this was a statement or intention, Edgington v Fitzmaurice (1885). The affirmed distinction between M and puff, even half-truths can be M. Although actionable M and generally unactionable non-disclosure can be difficult to distinguish. Eg. simple reticence isn't actionable but ‘a nod or a wink, or a shake of the head, or a smile from the purchaser intended to induce the vendor into a non-existing fact’ would make the contract voidable. Change in Facts- If the fact was true at the time the statement was made. Only M if representor knows about the change of facts. With v O’Flanagan (1936) stipulated that statement that is later rendered false creates a duty of  MA (1967). disclosure. If neither aware of the change of facts, can claim under lieu of rescission under IM - s2(2) Remedies - If the M is actionable, misrepresentee can rescind the contract, affirm and seek damages from the contract, or claim both. Under FM, claim under the tort of deceit and can, therefore, claim damages for all losses whether or not they're foreseeable. Aims to put the victim in a position as if M didn't happen. To succeed in this, representee must show representor made M fraudulently, intention to induce, and actual loss. Under NM, can claim damages as long as they're reasonably foreseeable. Contributory negligence reduces the claim to damages. Seen in E  sso Petroleum v Mardon (1976). However in NM, can only pick damages or rescission, not both. Under SM, can claim both rescission of contract and damages. Since treated as fraudulent, claim all losses and can rescind. Seen in Royscott Trust Ltd v Rogerson (1991). Under IM, can usually claim only rescission of contract,

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however, under s2(2) of MA (1967), courts can award damages in lieu of recession. Discretion of the courts. Seen in William Sindall v Cambridgeshire County Council (1993). Bars to Rescission - In all types of M, rescission available, unless s2(2). Lose right to rescind the contract if either is true: affirmation of contract once misrepresentee knows of the truth, seen in Long v Lloyd (1958), 3rd party rights intervening, seen in Car & Finance v Caldwell (1965), lapse of time, impossibility of restitution or s2(2) MA (1967), seen in Salt v Stratstone (2015). If there is a bar to rescission in FM, can’t claim lieu of rescission.

Discuss the following two statements: a) A misrepresentation can be made by both words and conduct. b) A representee, who is given an opportunity to investigate the truth of a statement by the representor, but does not take it, may nevertheless be able to rescind the contract for misrepresentation if the statement proves to be false. Introduction ●

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Doctrine of M - False statement of fact or law made by another party, which whilst not being a term of the contract may be void, induces the other party to enter into a contract. Actionable M makes a contract voidable, an innocent party can therefore rescind, claim damages or receive both remedies under SM, if there isn't a bar to recession. Penalties of all types of M, IM = rescind, ‘lieu of recession’ can get damages, court decides, NM at common law (tort puts x into position he would have been if M didn’t happen), SM (‘fiction of fraud’ claim both damages and rescind, if s2(1), if s2(2), recession only) A

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Words - True statement. Can be seen in the case of Dimmock v Hallett (1866) whereby 2 statements were made ‘land fertile and improvable’ (regarded as puff) and can be rented to tenants for £200 p/y. Although true, tenants gave a notice to quit, half-truth, since the land wasn’t lt out to paying tenants and therefore, had to find tenants to pay rent. Regarded as M, calculated to mislead the purchaser. The affirmed distinction between M and puff, even half-truths can be M. Although actionable M and generally unactionable non-disclosure can be difficult to distinguish. Eg. simple reticence isn't actionable but ‘a nod or a wink, or a shake of the head, or a smile from the purchaser intended to induce the vendor into a non-existing fact’ would make the contract voidable. Conduct - True statement. Gordon v Selico (1986). S didn’t make a statement however they did paint over dry rot in order to conceal it. The raised issue if the act of painting (conduct) amounted to M. Court concluded that M can be by action, not always oral.

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General Principle & Exception - True statement, Redgrave v Hurd (1881) stipulated that it doesn’t matter if the truth of the statement was verified if induced into a contract can succeed in a claim for M. The contract was rescinded on the basis of IM. The court found that the defendant was not under a duty to inspect truth of the statement, only that there was reliance. Although, S  mith v Eric Bush (1990) cast doubt over this case. In obiter, it was stated that exception to this rule eg. commercial or high-value contracts, a reasonable person would make their own enquiries. This can be seen in P  eekay Intermark v New Zealand Banking Group (2006). In this, having a different term sheet to the final document doesn't amount to actionable M because the party involved had a duty to make further enquiries. The court doesn't’ want to have situations where people are encouraged not to read contracts. Section 2 (1) MA (1967) - NM under statute law. 2 requirements, M by the other party in the contract and actual loss. This enables the fiction of fraud, making the burden of proof shit to the representor. Through this, have the ability to rescind and claim all damages. Unlike NM under common law, damages for all losses, whether or not they’re foreseeable. Can be seen in R  oyscott

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Trust v Rogerson (1991) whereby claimant received damages for losses, even foreseeable ones. Confirmed same liability as fraudulent M. Bar to Rescission - Rescission can be removed if reach bar eg. affirmation of contract or third party rights. L  ong v Lloyd (1958), the initial contract was affirmed. Court declared can’t rescind the contract because the parties decided to carry on with the contract according to their performance. Car and Universal Finance v Caldwell (1965), declared because of the bad cheque, the ownership remained with Caldwell and thus can get the car back. However, if title legitimately passed to rogue, bar to recession means can’t claim back the car because of third party rights. Only because Caldwell complained to AA that the car was pur...