Contract Law - Flash Cards PDF

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Flash Cards from the module Contract Law. Includes case summaries, year of cases, judgments, principles, and academic commentary....

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Hyde v Wrench [1840]

Felthouse v Bindley [1862]

Brogden v Metropolitan Rly [1877]

Household Fire and Carriage [1879]

AUS CASE: R v Clarke [1927]

Errington v Errington [1952]

COUNTER-OFFER: Wrench offered to sell his house for £1000; Hyde offered £950, which was declined. He then ‘accepted’ the £1000 price, but Wrench rejected. He took Wrench to court for specific performance. SILENCE: Claimant wanted to buy his nephew’s horse, and said if he didn’t hear anything back he would consider it his. But six weeks later, an auctioneer sold the horse, even though the nephew said it couldn’t be. The claimant brought an action for ‘conversion’. ACCEPTANCE BY CONDUCT: Claimant argued there was no contract after two years of supplying coal to the defendants and then stopping. POSTAL RULE: Defendant offered to buy shares in the claimant company; the letter telling him of the acceptance however was lost in the post. When company went bust, the liquidators sued the defendant for not paying. IGNORANCE OF CONTRACT: A claimant gave the police information which led to the conviction of a murderer. They had been offering a reward for this. Clarke demanded the money, but the police argued he gave them the information ‘exclusively in order to clear himself’, and it was uncertain whether he was thinking about the reward at the time. UNILATERAL CONTRACT: A father bought a house for his son and daughter-in-law, and promised them the house if they paid off the mortgage. They accepted. Later, the father died, the couple split up, and the mother wanted to eject the daughter-in-law.

Claim rejected: Hyde’s offer of £950 was a counter offer, and killed off the £1000 offer by Wrench.

Claim rejected: Silence of the nephew did not constitute an acceptance, and therefore the horse did not belong to the claimant.

Claim rejected: The act of fulfilling the contract constituted an acceptance of the offer.

Claim accepted: By sending the letter, the company had accepted his offer to buy shares, and therefore the contract stood. The Post Office was a mutual agent.

Claim rejected: He could not claim the money as it is necessary to act ‘in reliance’ on an offer to accept it.

Claim rejected: As soon as they had started performing the desired action, the father could not go back on his word and the contract stood. It would only cease if the couple stopped paying the mortgage.

Pharmaceutical Society v Boots [1953]

Butler Machine Tool v Ex-Cell-O Corp [1979]

Gibson v Manchester City Council [1979]

Brinkibon v Stahag Stahl [1983] (Made in Austria) (Entores Ltd v Miles Far East Corporation [1955] (Made in England))

INVITATION TO TREAT: Boots had placed drugs on the normal shelf that had to be sold by supervision of a pharmacist. It was argued that this contravened the Pharmacy and Poisons Act 1933. BATTLE OF THE FORMS: Claimants offered to sell a machine to the defendants, with conditions that would prevail over the conditions of the buyer. This included a price variation clause. The buyers replied with their own form and slip saying their conditions (no clause) applied. The sellers returned the slip; the buyers refused to pay the increase in price. The sellers sought breach of contract and damages. INVITATION TO TREAT: The claimant was seeking to buy his house at the time of the Tories. He applied for details, and council replied that they ‘may’ be willing to sell it, and asking him to make a ‘formal application’. He returned the slip without the price, as he wanted to haggle. Then Labour took over, and stopped any house selling. He went to court. INSTANTANEOUS COMMUNICATION: The appellants, an English company sent an acceptance by instantaneous communication to a company in Austria, who accepted. Later, the claimants wanted to issue a writ for breach of contract; for this, they needed to show the contract was made in England.

Claim rejected: The drug on the shelf was not an offer but merely an invitation to treat; it was at the till that the customer made the offer. (otherwise when you pick it up you have to buy it, e.g. bookshop) Claim rejected: The ‘battle of the forms’ had been won by the buyers; the sellers had agreed to their terms in the end.

Claim rejected: The council’s letter was merely an invitation to treat, rather than an offer. This was suggested by them ‘may’ be willing to sell, and asking for him to ‘make a formal application’.

Claim rejected: For instantaneous communication, the contract is made when the offeror is aware that the offeree has accepted the offer, i.e Austria.

NOT POSTAL RULE

Blackpool & Flyde Aeroclub v Blackpool CC [1990

RTS Flexible Systems v Muller [2010]

Stilk v Myrick [1809]

TENDERS: The council allowed clubs to submit tenders for the privilege of using the airport. The claimants gave their tender in before the closing date, but it was not considered with the others due to the Council’s mistake. The club sued them for breach of contract. INTENTION TO CREATE LEGAL RELATIONS: Both companies were very close to finalising all the terms of the contract, but the claimants started work early. The negotiations broke down and they both sued each other, the claimants for payment, and the defendants for losses due to the breakdown. SAILORS: Whilst sailing, two of the crew deserted, and the captain offered to share their wages between the crew if they returned home without them. However, the captain refused to pay when they returned. They claimed breach of contract.

Claim accepted: The invitation to tender contained a contract in itself to consider all the tenders given in by the deadline.

Claim accepted: It was necessary to look at the whole negotiations, and to take into account the commercial context. They had intended to create legal relations and had agreed on all the terms needed to make a contract.

Claim rejected: The contract they had initially signed covered their performance in ‘emergency situations’, and therefore they were only doing what they had promised to do.

Collins v Godefroy [1831]

PUBLIC DUTY: Claimant had been subpoenaed as a witness; defendant had promised him money; but refused to do so. Collins sued for breach of contract.

Claim rejected: A public duty does not constitute good consideration.

Eastwood v Kenyon [1840]

PAST CONSIDERATION: Eastwood took out loan to help educate and bring up a child. When she matured, her husband promised to pay back the loan, but didn’t. Eastwood sued.

Claim rejected: Past consideration does not constitute good consideration in the creation of a contract.

Foakes v Beer [1884]

PART PAYMENT: Dr Foakes owed Mrs Beer £2090 plus interest. He offered to pay her £500 initially, plus £150 biannually. He did this, but she sued for interest.

Claim accepted: Part payment for a debt is not good consideration. Lord Blackburn: thought it could be the case that prompt payment of a smaller sum could be more beneficial than waiting.

Scotson v Pegg [1861]

EXISTING CONTRACT TO 3RD PARTY: Pegg agreed to unload coal off of Scotson’s ship at a certain rate, which he was already under a duty to do under a contract with X. He failed to keep to the rate, and Scotson sued.

Claim accepted: A contract to do something with a 3rd party can constitute good consideration for another contract.

Glasbrook Brothers v Glamorgan CC [1925]

FURTHER THAN DUTY: Police had given a standing guard rather than a mobile unit, and Glasbrook offered them £2000, and then refused to pay. Council sued for breach. CONSIDERATION SUFFICIENT BUT NOT ADEQUATE: Nestle had a promotion, where you could send in 3 wrappers + 1s/6d and receive a record. Chappel, the copyright owners of the record, demanded more money as they argued that the wrappers were part of the consideration.

Claim accepted: The police had done more than was their public duty, and therefore Glasbrook had to pay.

Chappel v Nestle [1960]

Atlas Express v Kafco [1989]

ECONOMIC DURESS: Both parties had a contract for Atlas to transport Kafco’s baskets to Woolworths. But the baskets needed more lorries, and Atlas refused to transport unless more money was paid. Kafco had to pay as it was economic duress. They then sued Atlas for breach of contract.

Williams v Roffey [1991]

PRATCICAL BENEFIT: The defendants sub-contracted out the carpentry to Williams, but after a while the latter ran into difficulty as they had run out of money. Roffey were liable for a penalty clause, so offered more money to help finish the job; however, they only paid £1500 extra, rather than £10,300. Willaims sued for breach of contract, but Roffey said there had been no consideration given.

Claim accepted: It did not matter what value the wrappers had to Nestle; consideration must be sufficient be not adequate. Lord Summerville: ‘A peppercorn does not cease to be good consideration if it is established that the promise does not like pepper and will throw away the corn”. Claim accepted: There was no consideration for the new contract put forward by Atlas, and it was made under economic duress.

Claim accepted: The completion of the work was a ‘practical benefit’ to Roffey, which constituted good consideration. There was no ‘pressure’ placed on Roffey as Williams truly was in financeial difficulty.

Re Selectmove [1995]

PART PAYMENT: Selectmove asked tax collector if they could pay HMRC £1000 a month + current tax instead of one sum. He said he would get back to them if they couldn’t; he never did. However, later HMRC made a ‘winding-up’ petition for the company; however Selectmove argued that there was an agreement.

Pinnel’s Case [1602]

PROMISSORY ESTOPPEL: The defendant owed the claimant £8 10s; he had previously accepted £5 2s 6d, in full payment; however he changed his mind and wanted the full sum.

Hughes v Metropolitan Railway Company (1877)

Foakes v Beer (1884)

Claim rejected: There was no agreement: 1) the tax collector didn’t have authority and silence didn’t constitute a contract 2) ...and therefore promissory esstoppel could not be used 3) There had been no consideration from the HMRC 4) Selectmove had failed to pay the debt anyway, and therefore it was fair. 5) Part-payment is not full consideration Claim accepted: Part payment for a debt is not good consideration for the whole debt. (However, part payment + some other consideration will be good consideration)

PROMISSORY ESTOPPEL: Hughes had ordered the defendant to repair the houses within 6 months, unless he would forfeit the lease. They then entered negotiations for Hughes to buy the houses, but these collapsed. The houses were not repaired by the original six month deadline on reliance on Hughes’ implied promise to suspend the notice. By the end of the 6 months Hughes claimed to have forfeited the lease.

Claim rejected: The negotiations to buy the houses had suspended the notice, and therefore the rest of the time limit would restart from the collapse of the negotiations. It would be inequitable to go back on the implied promise.

PART PAYMENT: Dr Foakes owed Mrs Beer £2090 plus interest. He offered to pay her £500 initially, plus £150 biannually. He did this, but she sued for interest.

Claim accepted: Part payment for a debt is not good consideration.

- It is inequitable to act on your strict legal rights if you make a promise, and that promise is relied upon by the promise.

Lord Blackburn: thought it could be the case that prompt payment of a smaller sum could be more beneficial than waiting.

High Trees [1947]

PROMISSORY ESTOPPEL: Claimant allowed High Trees to pay only half rent during the wartime; the claimant then demanded full rent for the last 2 quarters of 1945 and onwards.

Claim accepted: This claim succeeded because the half rent was only allowed due to the wartime; now that the war had finished he was entitled to his full rent. Denning J: If the claimants had demanded the full rent for the whole of the war, then they would have been estopped from doing so.

Combe v Combe [1951]

NOT A CAUSE OF ACTION: A husband, on divorce, promised to pay his wife £100 a year. In reliance, she forbore maintenance. He failed to pay, and she sued.

D&C Builders v Rees [1966]

INTIMIDATION BY PROMISEE: Mr and Mrs Rees owed the claimants £482; they said they would only pay £300, knowing the builders were near bankruptcy. The builders reluctantly accepted. The builders sued for the rest.

Claim rejected: She had given no consideration for his promise, and promissory estoppels could not be use as a cause of action as an alternative. Denning: it is a ‘shield and not a sword...the doctrine of consideration is too firmly fixed to be overthrown by a side-wind’ Claim accepted: The Rees’ had taken advantage of the builders’ financial situation, and therefore it was not inequitable to go back on their promise to accept £300. Must come to court with ‘clean hands’

Crabb v Arun District Council [1976]

PROPRIETARY ESTOPPEL: Crabb wanted to sell some of his land, and wanted an access point at B as well as A. The council agreed to this and made the gate. Crabb sold the land with access point A. The council then blocked off access point B and demanded £3000 for access. Crabb sued.

Claim accepted: Crabb had a right to access point B, and the council could not stop this. Proprietary estoppel can be a cause of action.

Amalgamated Investment and Property v Texas Commerce International Bank [1982]

ESTOPPEL BY CONVENTION: AIP requested the defendants to give a loan to their subsidiary company ANPP, which they gave a guarantee for. No loan was made under that arrangement, but was made through a subsidiary company of the bank, Portsoken. When the bank tried to enforce the guarantee, AIP argued it only guaranteed for a loan directly from the bank. Bank sued.

Claim accepted: AIP was estopped from denying that the guarantee applied – where both parties are under a common mistake, it would be inequitable to use the strict law. Lord Denning: it could be the ‘connecting link’ – this is extremely close to being a ‘cause of action’.

Baird v M&S [2001]

REJECTION OF AUSTRALIA: Baird had sold clothes to M&S for 30 years, but M&S said they didn’t want them anymore. Baird argued that there needed to be reasonable notice to stop a ‘long term’ contract.

Claim rejected: The contract was seasonal and not long term and estoppel could not be a cause of action, even though Baird was only asking for reliance and not expectation.

Collier v Wright [2007]

PROMISSORY ESTOPPEL: Collier, and business partners, B and F, took out a loan of £46,800. Wright told Collier that he would treat him separately, and he paid off his share. B and F failed to pay their shares, and Wright demanded the rest from Collier.

Claim rejected: Even though there was no consideration from Collier, Wright was estopped by promissory estoppel. (This goes against Re Selectmove – Here because Collier had acted on the promise, it was inequitable to go back, unlike in Selectmove) Lady Harden (CoA): suggested it would always be inequitable to go back on a promise – this was incorrect (D&C Builders v Rees).

(AUSTRAILAI) Walton Stores v Maher (1988)

Waltons negotiated with Maher for them to demolish an existing building, and build a new one, which they would lease to Waltons. The defendant’s solicitors said they ‘believed approval would be forthcoming’, but then Waltons had second thoughts. Maher began work before the contract started, as it thought the contract would be signed. After demolition and the advancement of the replacement building, Waltons pulled out. Maher sued Waltons.

Claim accepted: Waltons were estopped from pulling out of the contract – they knew about the demolition and new building. Maher’s reliance was covered (cost of building, demolition), but not its expectations (money from lease). Therefore estoppel could be used as a cause of action. THIS IS NOT LAW IN THE UK.

Atwood v Small [1838]

RELIANCE: Small made several representations as to the capability of the mine he was selling to Atwood. The claimant used his own agent to check out the promises, which they verified.

Claim rejected: Atwood had relied on his agent’s misrepresentation and not Small’s.

Bannerman v White [1861]

TERM OF CONTRACT: Bannerman offered hops for sale to W; W asked if they had been grown with sulphur, and if they had he wouldn’t want them. B replied that they hadn’t, and W bought them on reliance. But they had and he refused to pay; Bannerman sought specific performance and W argued breach of contract.

Counter-claim accepted: It was a term of the contract as White had communicated its importance that they were not grown with sulphur.

Horsfall v Thomas [1862]

REPRESENTATION MUST INDUCE: Thomas bought a cannon from Horsfall, who had attempted to hide a defect. He did not examine the cannon, but sought action for misrepresentation.

Claim rejected: As he had not examined the cannon, the misrepresentation had not induced him to buy it.

Peek v Gurney [1873]

REPRESENTATION MUST BE TO MISLED PARTY: Peek purchased shares on the faith of false statements in a prospectus ; he had not been allocated these shares. He sought an indemnity.

Claim rejected: The prospectus had not been addressed to him; he had not been an allottee, but rather had bought the shares in the market.

Erlanger v New Sombrero [1878]

IMPOSSIBLE TO RESCIND: Defendants sold an island to claimants for £110,000, not mentioning they had bought it for £55,000 a few days before. The claimants wanted rescission. RELIANCE: Redgrave advertised for a solicitor to join his firm; he told Hurd that the business was worth £300/year, but it was actually worth £200/year. He offered to allow Hurd to check but Hurd relied on the statement. Before transaction Hurd found out and refused to pay; Redgrave sought payment and Hurd counter-claimed for rescission.

Claim accepted: As there was a fiduciary duty in this case rescission was allowed.

Redgrave v Hurd [1881]

LORD BLACKBURN ALSO TALKED IN OBITER ABOUT THE IMPOSSBILITY TO RESCIND. Counter-claim accepted (in part): Hurd had relied on the misstatement, and thus could rescind. He could not receive damages as Redgrave had not promised the facts to be true; thus it was innocent misrepresentation.

Smith v Land and House [1884]

OPINION IS SUFFICIENT: Land bought a house at auction which started it was occupied by ‘a most desirable tennant’. This was incorrect, as he had only just paid the rent, and later went on to fail completely. Smith sued for specific performance, and Land counterclaimed for rescission.

Counter-claim accepted: Even though it was an opinion, the seller had the facts to prove it incorrect.

Edgington v

STATEMENT OF INTENTION: The defendants

Claim accepted: The fraudulent

Fitzmaurice [1885]

sent a prospectus inviting subscriptions for bonds to extend the business. Actually, it was to pay off debt as it was in a poor financial situation. The claimant bought the bonds and the company liquidated. He sought to recover damages.

misrepresentation had been relied upon.

Adam v Newbigging [1886]

INDEMNITY: The plaintiff was induced to enter into a contract of partnership be...