Contracts All Case Summary PDF

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Contracts All Case Summary...

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Lecture 2 – Contract Contractss Exception to Typical Formation Clarke v Dunraven [1897] AC 59 The parties each agreed with the yacht club secretary to be bound by the club’s rules of the conduct of yacht races. Dunraven damaged Clarke’s boat. HELD: Agreement had been achieved between Clarke and Dunraven, therefore Dunraven was liable for damage caused to Clarke’s boat, having broken the rules.

Verbal Contract Buckenara v Hawthorn Foo Football tball Club Ltd [1988] VR 39 Buckenara promised not to play for any competing club while contracted to play for Hawthorn. When it seemed that Buckenara intended to play for a competing club, Hawthorn sought an injunction to prevent the threatened breach of contract. HELD: The court issued an injunction to prevent a breach of contract. The court was prepared to issue the injunction sought because preventing Buckenara from playing for competing clubs would not indirectly force him to actually play football for Hawthorn - he could earn his living in some other way if he wished to.

Verbal Contract R v Clarke (1927) 40 CLR 227 This case considered the issue of acceptance of a contract and whether or not a person who gave evidence in relation to the conviction of a murderer was eligible for a reward offered by the police. HELD: When giving the information, Clarke did not act "in reliance upon the offer or with the intention of entering into any contract"Clarke's motive and intention in giving the evidence was to protect himself, to clear himself of the charge of murder. Only after arrest, conviction and appeal by the others, did Clarke think of claiming the reward. It wasn't that he didn't know of the existence of the reward before then - he clearly did - it was just that he stated clearly in his evidence that he did not think about the reward at that time so clearly could not have given his evidence, intending to obtain the reward, or to enter into a contract with those who offered it.

Cases on Intention - domestic agreements Balfour v Balfour [1919] 2 KB 571 Balfour promised to pay maintenance to his wife pending her return to Ceylon, where he worked with the UK diplomatic corps. He did not pay. After divorce, she sued. HELD: Agreements between spouses made while living together are domestic agreements not contracts. There is no intention to be legally bound. Cohen v Cohen (1929) 42 CLR 91 This case considered the intention to enter into legal relations and whether or not an agreement for a husband to give to his wife a dress allowance amounted to a legally enforceable contract. HELD: There is a problem in determining what the consideration would be. It might well be that the promise to marry was already existent therefore it would fail as consideration for this later promise as an existing obligation. But this would only be relevant if it were thought that this arrangement was one which was intended to give rise to legal obligations. I think that there was no such intention.

Cases on Intention – social agreements Coward v Motor Insurers Bureau [1962] 1 All ER 531 Agreement between two fellow workers for transport to and from work on a motor cycle. HELD: The court held that there was no intention to be legally bound and thus no contract Cameron v Hogan (1934) 51 CLR 358 (see also Murph Murphy y v Simpson [1957] VLR 598) Agreement between members of a political party. HELD: The court held that there was no intention to be legally bound and thus no contract

Presumptions Rebutted – domestic agreements Merritt v Mer Merritt ritt [1970] 1 WLR 1211 (see also McGregor v McGregor

(1888) 21 QBD 424) This case considered the issue of the intention to enter into legal relations and whether or not a husband intended to transfer a property into the name of his wife after their relationship had broken down and he had moved in with another woman. HELD: Precedent does not apply if the married couple are separated when the agreement is made.

Presumptions Rebutted – migration cases Wakeling v Rip Ripley ley (1951) SR (NSW) 183 HELD: Despite the brother/sister relationship between the parties, intention was held objectively to have existed, and there was a contract. Riches v Hogben [1986] 1 Add R 315 (see also Todd v Nichol [1957] SASR 72) A son agreed to emigrate, having been assured that the mother would buy a home and put it in the son's name. She bought the home but put it in her own name. After a time the son moved out under pressure from his mother, but brought an action to have the house put in his name. HELD: The son relied upon the existence of a contract with his mother. The court found was no problem with intention to create legal relations. However the mother invoked the Statute of Frauds and there was no sufficient act of part performance to overcome this.

Presumptions Rebutted – social agreements Parker v Clarke [1960] 1 All ER 93 Aged couple entered into agreement with neighbours to move in and provide care for them in exchange for property to be left to neighbours in will. HELD: That the Clarks were liable for damages to the Parkers given that the Parkers had relied to their detriment on the assurance of the Clarks that they would have a place to stay. Simkins vs Pays [1955] 1 WLR 975

D, her granddaughter & P, her lodger, lived together & entered a weekly newspaper competition entry coupon was sent in D's name & parties agreed winnings would be shared equally, D won £250 but refused to share it. HELD: Agreement was enforceable because there was a clear understanding of how winning would be divided, P entitled to a third

Presumptions Rebutted – domestic agreements Popiw v Popiw [1959] VLR 197 Wife returned to husband after separating due to mistreatment, in return for promise to transfer interest matrimonial home to her.Wife subsequently left again after further mistreatment from husband. Husband refused to transfer property. HELD: The promise here was not in the ordinary course of the matrimonial relationship. The intention to engage in legal relationships is evidenced by the husband's visit to the solicitor to get him to give effect to the promise. Argued that the return to cohabitation was the existing duty of a wife.

Commercial / Business agreements Carlill v Carbolic Smoke Ball Co Co. The defendants argued that a cash reward offered in a newspaper to promote product sales was merely an “advertising stunt”, with no intention to be legally bound. HELD: The advertisement stated that the defendants had deposited money in the bank for the purpose of paying the reward where their conditions were fulfilled. The court, reading the advertisement objectively, held that intention existed and there was therefore a contract. Edwards v Skyways Ltd Skyways Ltd offered its pilots, including Edwards, ‘ex gratia’ (voluntary) payments to cover entitlements that they would otherwise lose, due to being under retirement age, if they accepted redundancy packages. HELD

The presumption of intention applied, it was not rebutted by Skyways, despite the fact that the payments were described as ‘ex gratia’.

Express Exclusion of Intention Jones v Vernon’s Pools Ltd [1938] 2 All ER 626. A soccer pools competition entry form contained a clause expressly stating that it was not a contract between the company and competition entrants. HELD: The clause to be valid and claim by Jones failed..

Honour Clauses Rose & Frank Co v Crompton Bros Ltd. [1925] AC 445 There was clearly a written business agreement between the parties, who had had many previous contracts. The agreement contained an honour clause indicating that the parties were bound ‘in honour only’ (i.e., not legally). HELD: Even though the presumption of intention was raised by the type of agreement, the plaintiffs sufficiently demonstrated that their agreement was not intended to be legally binding.

Administrative Arrangements The Administration of the Territory of PNG v Leahy (1961) 105 CLR 5 Is an agreement between Government and a citizen or company a legal contract or not? HELD: The arrangements were of an administrative nature and not binding contracts (no intention to be legally bound).

Letter of Comfort Kleinwort Benson L Ltd td v Malaysian Mi Mining ning Corp Bhd [1988] 1 WLR 799 The bank approached MMC BHD asking if they would act as guarantor for the loan. MMC refused to act as guarantor but stated they it was their company policy to ensure that their subsidiaries are always in a position to meet their debts. In reliance of this letter of comfort the bank advanced money to MMC Metals. MMC Metals subsequently went into administration having not paid the loan. KB brought an action against MMC BHD to recover their loss based on the assurance

given in the comfort letter. HELD: The comfort letter had no legal effect. The fact that MMC BHD had refused to act as guarantor demonstrated they did not intend to be legally bound. The comfort letter referred to company policy at that time. There was nothing to stop the company changing its policy....