Hartley v Ponsonby - Summary cases PDF

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Hartley v Ponsonby (1857) 7 El & Bl 872; 119 ER 1471 (consideration- prior legal obligation) Seventeen crew members deserted ship in Melbourne. To encourage the remaining 19 sailors to sail the ship back to Liverpool, the captain promised to pay them extra wages. When the ship made it back to Liverpool, the owners of the ship refused to pay the extra wages. The court decided that while sailing the ship was part of the crew’s existing contractual duty, returning the ship with only half a crew was not. The captain’s promise was legally enforceable because the crew had done more than what they were contractually obliged to do and therefore provided sufficient consideration. Masters v Cameron (1954) 91 CLR 353 (preliminary agreements) Cameron agreed to sell his farm to Masters. They signed a written agreement that contained the following clause: ‘This agreement is made subject to the preparation of a formal contract of sale, which shall be acceptable to my [Cameron’s] solicitors on the above terms and conditions . . .’. The court decided that the circumstances indicated that Cameron did not intend to be legally bound until a formal contract of sale was prepared because the agreement gave Cameron’s solicitors the power to considerably alter the terms of the agreement. Powell v Lee (1908) 24 TLR 606 (acceptance- communication) Powell applied for the position of headmaster with a school. The school board decided to appoint Powell, but did not immediately inform him of the decision. A member of the board, without the authority of the board, told Powell that the board had accepted his offer of employment. The board subsequently changed its decision and appointed another person as headmaster. Powell sued the board claiming that a contract had already been formed. The court decided that there was no agreement between Powell and the board. The board had not communicated its acceptance and an agreement is not formed until acceptance of the offer is communicated to the offeror. The communication by the board member acting without authority was invalid. Roscorla v Thomas [1842] 3 QB 234; 114 ER 496 (past consideration) Roscorla purchased a horse from Thomas at an auction. Immediately after the sale Roscorla asked Thomas about the condition of the horse. Thomas promised that the horse was ‘sound and free from vice’. When the horse turned out to be quite vicious, Roscorla sued Thomas for breach of contract. The court decided that Thomas’ promise was not legally enforceable because Roscorla had not provided sufficient consideration. Payment of the purchase price by Roscorla was not sufficient consideration because that had occurred before Thomas’ promise was made, and was therefore past consideration. Thomas v Thomas (1842) 2 QB 851; 114 ER 330 (consideration need not be adequate) The executors of Mr Thomas’s estate promised to let Mrs Thomas live in Mr Thomas’s house for the rest of her life in return for Mrs Thomas paying rent of £1 per year. When Mrs Thomas later sought to enforce the promise, the executors argued that there was no contract because Mrs Thomas had not provided adequate consideration. The court decided that there was a contract. The consideration of £1 per year in return for the right to occupy the house was clearly not adequate, but it was still of legal value and, therefore, sufficient. Wakeling v Ripley (1951) 51 SR (NSW) 183 (presumption – social or domestic agreements) Ripley was an elderly and wealthy widower who required domestic assistance in his large home in New South Wales. He sought to persuade his sister and her husband (the Wakelings) to move from England to Australia to look after him. The Wakelings made it clear to Ripley that moving to Australia would require them to make significant sacrifices, including Mr Wakeling abandoning his salaried position at Cambridge University and his pension. Mr Wakeling sought assurances from Ripley as to what Ripley could offer to his family for the future. In May 1945, Ripley wrote to the Wakelings urging them to come as soon as they could and giving the Wakelings information as to the contents of the house, which he referred to as theirs. He wrote again in October 1945 attaching a copy of his will in which he left the bulk of his estate to the Wakelings. On the basis of this correspondence, the Wakelings agreed to come to Australia. They sold their property in England and Mr Wakeling resigned

from his position at Cambridge. The Wakelings arrived in Australia in early 1947 and lived with Ripley throughout that year. A number of misunderstandings arose between the Wakelings and Ripley that resulted in Ripley selling the house and altering his will. The Wakelings commenced legal proceedings seeking to recover damages from Ripley for breach of the alleged contract between them. Was the agreement between Ripley and the Wakelings a legally binding contract? The court decided that there was a definite and binding contract. The correspondence between the parties regarding the arrangements as well as the seriousness of the move for the Wakelings demonstrated that the parties intended to be legally bound by the agreement....