02. CASES on Termination of contract.

Question 1

Planche v Colburn (1831)

Answer 1

An author began writing a children’s book on armour and cosumes, thereby partially performing part of a contract. When the publisher pulled the series he was able to succesfully bring an action for quantum meruit in respect of the work already done.

Question 2

Taylor v Caldwell (1863)

Answer 2

A contract involving the hire of a music hall and its grounds was deemed frustrated when it burned down.

Question 3

Condor v Barron Knights (1966)

Answer 3

A drummer’s contract of employment was deemed frustrated when he was advised by a doctor to restrict his performances due to a mental breakdown.

Question 4

Krell v Henry (1903)

Answer 4

The contract for the hire of chambers overlooking a coronation procession was deemed frustrated when that procession was postponed.

Question 5

BP Exploration Co (Libya) Ltd v Hunt (No. 2) 1982

Answer 5

A contract regarding the exploitation of an oil concession was frustrated due to a change in government.

The court awarded payment in respect of the ‘valuable benefit’ obtained by Hunt prior to the frustration of the contract.

Question 6

Poussard v Spiers (1876)

Answer 6

When an artist failed to perform on an opening night, the promoter was able to treat the contract as discharged and sue for damages.

Such a breach of condition went to the root of the contract.

Question 7

Bettini v Gye (1867)

Answer 7

When an artist failed to attend a rehearsal, the promoter was only able to sue for damages, not treat the contract as discharged.

Such a breach was only one of a warranty, it did not go to the root of the contract.

Question 8

Hochster v De La Tour (1853)

Answer 8

A tourist was able to sue a courier as soon as they became aware of that courier’s intention to breach a contract due to start in the future.

Anticipatory breach is actionable.

Question 9

Hadley v Baxendale (1854)

Answer 9

A delivery courier was NOT deemed liable for a miller’s losses due to the late transportation of a key component.

He had no idea that such loss was a natural result (the miller might have had a spare), and was not made aware of the fact at the time.

Question 10

Victoria Laundry (Windsor) v Newman Industries (1949)

Answer 10

A contract for the installation of a boiler ‘for immediate use’ was breached.

The claimants were only entitled to damages for their ordinary losses, not for consequential losses regarding their inability to bid for a lucrative dyeing contract.

The defendant had knoweldge of the loss of ordinary business but NOT of the potential additional profits.

Question 11

Borealis AB v Geogas Trading SA (2010)

Answer 11

A gas supplier supplied contaminated gas to an artificial fibre manufacturer. The manufacturer unknowingly fed it into their plant causing damage. The chain of causation was deemed NOT to be broken. In such cases only recklessness on the part of the plaintiff would cause a break in the chain of causation.

Question 12

Anglia Television v Reed (1972)

Answer 12

A TV production company were only able to claim in respect of preparatory work undertaken for a film, the principal actor having breached by refusing to perform. No damages were awardable in respect of potential lost profits.

Question 13

Omak Maritime Ltd v Mamola Challenger Shipping Co (2010)

Answer 13

A shiping company were not able to claim damages that would have put them in a better position than they would have been had the contract been performed.

This case rebutted the opinion that ‘reliance damages’ are qualitatively different from ‘expectation damages.’

Question 14

Jarvis v Swan Tours (1973)

Answer 14

A holidaymaker receiving less than acceptable service was awarded damages over and above his actual financial loss.

The mental distress caused by the holiday not being up to specification was deemed to be a direct result of the breach.

Question 15

Ruxley Electronics and Construction Ltd v Forsyth (1995)

Answer 15

A householder whose swimming pool was not as deep as the specifications of his contract with the builder required was only able to claim damages in respect of his ‘loss of amenity,’ NOT an amount sufficient to rebuild the pool to seven feet deep.

Question 16

Payzu v Saunders (1919)

Answer 16

A buyer failed to pay for goods on credit and was consequently required to pay on delivery. Instead he bought at a higher price from an alternative supplier and attempted to sue the original seller for the difference.

His claim failed since he had made no attempt to mitigate his loss.

Question 17

Cavendish Square Holding BV v Makdessi (2015)

Answer 17

A liquidated damages clause regarding breach of fiduciary duty via direct competition was deemed NOT to be a penalty clause.

Its provisions were deemed to be in proportion to the legitimate interests of the injured party.

Question 18

ParkingEye Limited v Beavis (2015)

Answer 18

A liquidated damages clause regarding overstaying at a car park was deemed NOT to be a penalty clause.

Its provisions were deemed to be in proportion to the legitimate interests of the injured party, in that it was a deterrent to prevent parking spaces becoming clogged.

Question 19

Photo Productions v Securicor Transport (1980)

Answer 19

A security company was able to rely on an exclusion clause within its contract despite an apparent ‘fundamental breach’ of the contract when an employee caused the premises he was guarding to burn down.

The doctrine of ‘fundamental breach’ was repudiated in this case.

Question 20

Suisse Atlantique Societe d’Armament SA v NV Rotterdamsche Kolen Centrale (1967)

Answer 20

A ship owner was held to the derisory damages agreed within an exclusion clause despite an apparent ‘fundamental breach’ by the other party in that the number of trips made was significantly and deliberately fewer than those originally contemplated.

The doctrine of ‘fundamental breach’ was repudiated.

Question 21

Thornton v Shoe Lane Parking Ltd (1970)

Answer 21

Contractual terms, here an exclusion clause, printed on the back of a ticket issued by an automatic machine were deemed invalid as they were only communicated after the contract was formed.

The machine being ready to issue was deemed an offer, Thornton putting coins into the machine and taking a ticket was his acceptance of that offer.

Question 22

Olley v Marlborough Court Hotel (1949)

Answer 22

An exclusion clause on the back of a hotel bedroom door was deemed not to have been effectively incorporated into a contract.

Question 23

L’Estrange v F Graucob Ltd (1934)

Answer 23

The signing of a contract for the supply of a cigarette machine was deemed an acceptance of all of its terms, including an exclusion clause.

Question 24

Chapelton v Barry UDC (1940)

Answer 24

A deckchair ticket issued after the acceptance of an offer, and therefore the agreement of a contract, could not contain new terms, in this case an exclusion clause.

Question 25

R & B Customs Brokers Ltd v United Dominions Trust Ltd (1988)

Answer 25

A customs broker’s purchase of a car was deemed to be a consumer purchase since it was neither an integral part of the business nor carried on with any degree of regularity.

Question 26

Maple Flock Co v Universal Furniture Products (Wembley) Ltd (1934)

Answer 26

A term requiring furniture padding to be of ‘satisfactory quality’ was innominate until the contract was underway. The court decided that the deliveries were so far through their course without complaint when a breach occured that it was only a breach of warranty, not of condition.

Question 27

Curtis v Chemical Cleaning Co (1951)

Answer 27

The contradiction of an exclusion clause by a dry cleaner’s assistant was deemed to overide an exclusion clause wthin the contract, thereby rendering it ineffective.

Question 28

Spurling v Bradshaw (1956)

Answer 28

An exclusion clause within the terms of a warehouse used to store orange juice was deemed effective despite its severity.

The course of trade between parties and the nature of the industry were deemed sufficient for the party to be considered aware of its existence.

Question 29

Hollier v Rambler (1972)

Answer 29

An exclusion clause regarding the liability of a garage for damage to cars by fire was deemed ineffective. Despite using the garage beore, the fact that the car was booked in over the telephone without attention being brought to the exclusion clause meant that it was not properly incorporated into the contract.

Question 30

Hardwick Game Farm v Suffolk Agricultural Poultry Producers Association (1969)

Answer 30

A game farm who ordered feed more than 100 times in a 3 year period were deemed to be sufficiently aware of an exclusion clause regarding potential toxins in game feed.

Question 31

Andrews Bros (Bournemouth) Ltd v Singer & Co Ltd (1934)

Answer 31

A term in a exclusion clause regarding ‘new’ Singer cars was interpreted against the party attempting to rely on it due to the car having done some run in mileage at the dealers.

Question 32

White and Carter Councils v MacGregor (1961)

Answer 32

An adverstising agency were able to affirm their contract despite repudiatory breach by their garage owner client. A subsequent action for price succeeded.

Question 33

Avery v Bowden (1856)

Answer 33

An injured party delayed suing for breach of contract in the hope that the other party relented and performed thier side.

The Crimean war broke out and frustrated the contract, thereby preventing him from suing.

Question 34

Thompson v Robinson (1955)

Answer 34

The purchaser of a car who refused to pay and take delivery was held liable for the lost profit of the vendor.

This was because the court deemed that the Vanguard car was in such plentiful supply that the vendor had been deprived of a sale.

Question 35

Alexander v Rolls Royce (1955)

Answer 35

The court made NO award for the claimed emotional distress caused by a delay in the servicing of his car.

Question 36

Hoenig V Isaacs (1952)

Answer 36

A decorator’s action for quantum meruit was successful in a situation where the householder was witholding payment despite substantial perforamance, on the excuse that there were still snags to rectify.

Question 37

Warnor Bros v Nelson (1937)

Answer 37

A rare case to the maxim that equity never acts in personam, in which the actress Bette Davis was required to return to the USA and complete her contract.

Question 38

Ford v Armstrong (1915)

Answer 38

A liquidated damages clause in which a retailer was required to pay £250 for every breach of a mininum retail price agreement was deemed to be a penalty clause.

The amount payable on breach was arbitrary and often disproportionate to the loss suffered by the company.

Question 39

Tsakiroglou Case

Answer 39

A contract for the shipping of nuts through the Suez canal was not deemed frustrated despite its closure.

An increase in the cost or complexity of fulfiling a contractual obligation can not of itself be sufficient for frustration.

Question 40

Herne Bay v Hutton (1903)

Answer 40

A contract for the hiring of a boat in order for a day out including a cancelled naval review was not demeed frustrated when that review was cancelled.

The cancelled event was not the SOLE purpose of the contract.