Case laws Flashcards
Intention to create legal relations; Whether reasonable person viewing all circumstances considers the relevant party intended his promise to have legal consequences
Eastern Resource Mgt Services v Chiu Teng Const.
Social/Domestic Contracts
Balfour v Balfour [No]
Merritt v Merritt [Yes]
Offer
Expression of willingness by offeror to enter into an agreement, intending to be bound to the terms upon acceptance by offeree
Unilateral Contracts; need not communicate acceptance, performance of offeree is construed as acceptance
Carlill v Carbolic Smoke Ball Co.
ITT
Partridge v Crittenden
Goods on display not offer
Pharmaceutical Society of Great Britain v Boots Cash Chemists
Internet Sales/Adv could be ITT/Offers depending on language and intention (Objectively ascertained)
Chwee Kin Keong v Digilandmall + S14 ETA
Mere provision of information is not offer
Harvey v Facey
Counter-offer terminates the initial offer
Hyde v Wrench
Reliable 3rd party may communicate revocation
Dickinson v Dodds
5 ways offer may be terminated
Rejection, Counter-offer, Lapse of reasonable time, death, failure of condition
Failure of condition terminates offer
Financings v Stimson
Acceptance
Unconditional assent to terms of offer
Acceptance must be communicated to the offeror in order to be valid
General Receipt Rule + Entores v Miles Far East
Postal Acceptance Rule
Adams v Lindsell
Time of Receipt…capable of being received at address designated
S13(2) ETA
Time of Receipt…when addressee is aware that it has been sent to that address
S13(3) ETA
Cross-offers; No contracts formed, no meeting of minds
Tinn v Hoffman
Consideration
Something of value in the eyes of the law given in exchange for another’s promise
Past consideration is no consideration, unless
Pao On v Lau Yiu Long
1) Act done at promisor’s request
2) Both parties understood that act will be compensated
3) Compensation is otherwise enforceable
Consideration must flow from promisee but need not flow to promisor
Tweedle v Atkinson
Privity of Contract; Only parties to a contract can enjoy the benefits of it, and suffer the burdens of it
Price v Easton, Tweedle v Atkinson
Consideration need not be adequate but must be sufficient
Chappell v Nestle
Insufficient consideration (4 types)
Moral obligation, Vague/Insubstantial, Existing public duty, Existing contractual duty owed to same party
Existing contractual duty owed to same party
Stilk v Myrick
Sufficient consideration (3 types)
Existing contractual duty owed to 3rd party, Doing over and beyond existing contractual duty, Promisor obtains practical benefit without fraud or duress
Doing over and beyond existing contractual duty
Hartley v Ponsonby
Promisor obtains practical benefit without fraud or duress
Williams v Roffey Bros
Part payment of debt is not good discharge of debt even on creditor’s assurance it is, UNLESS supported by additional consideration requested by creditor
Pinnel’s Case
Promissory Estoppel (4 conditions)
1) Parties have existing legal r/s
2) Promisor made clear and unequivocal promise
3) Promisee relied on promise and altered his position
4) Inequitable for promisor to go back on his promise
Promissory Estoppel can only be used as a shield, not sword
Combe v Combe
Contract Rights of Third Party Act (CRTA)
S2(1)(a) - Contract expressly states that 3rd party may do so
S2(1)(b) - Contract purports to confer benefit on 3rd party
S2(3) - 3rd party is identified in contract by name, description, or member of class
Differentiating terms and representation
Depends on whether at time of contract, parties intended for the statement to have contractual liability, objectively ascertained
5 factors that distinguish terms and representation
Time statement was made, Maker’s emphasis, Maker’s special knowledge, Invitation to confirm statement, Oral statement later reduced to writing
Parol Evidence Rule + S94 Evidence Act
Applies if written contract was objectively intended by parties to represent entire contract
Parol evidence cannot be introduced to add/amend/vary/contradict written contract, unless contract is ambiguous
Implied terms
By statute, By court, Customs and usage
Terms implied by court (Business efficacy and necessity to imply term due to intention of parties, albeit unexpressed)
The Moorcock, Sembcorp Marine v PPL Holdings
When may innocent party terminate contract
RDC Concrete v Sato Kogyo + Hongkong Fir Approach
1) When term expressly states that innocent party may terminate
2) Party in breach renounces contract
3) a) When a condition is breached
3) b) When the breach deprives the party of substantially the whole benefit
Refund
Total failure of consideration
4 requirements for Exclusion Clause (EC); assume/prove liability first
Incorporation, Construction, Unusual factors, UCTA
Incorporation of EC
By signature, By sufficient notice
A person who has signed a contract is bound by all terms regardless of whether he has read it
1) Giving notice at/before contract was made (Olley v Marlborough Court)
2) Adequacy of notice
3) On document reasonable person would expect to find contractual terms
4) Previous course of dealings (Consistency, frequency)
Construction of EC
Contra-Proferentum Rule (If the EC is ambiguous, it will be construed narrowly and against the party seeking to rely on it)
Zurich Insurance v B-Gold Interior (If the EC uses clear and unambiguous words, EC of liability for fundamental breach is effective)
Unusual factors of EC (Factors that may limit effectiveness of EC)
Curtis v Chemical Cleaning (Misrepresentation)
UCTA of EC
Seeks to help innocent party by excluding EC altogether, if it is unreasonable
Burden of proving reasonableness falls on party seeking to rely on it
Incapacity
S35 Civil Law Act; Contracts entered into by minors who have attained the age of 18 years shall have effect as if he were of full age
Valid contracts; Beneficial contracts for necessaries
Peters v Fleming
Valid contracts; As long as the contract is overall beneficial
Chaplin v Leslie Frewin
Remedies against protected minors
S3(1) Minors’ Contracts Act (MCA)
For voidable/ratifiable contracts, minor is compelled to return property acquired, even if the contract is unenforceable by defendant, provided it is equitable to do so
Voidable contracts
Steinberg v Scala
Illegality
Statutory illegality, Common Law illegality (Public Policy, Restraint of Trade Clause)
Illegal performance, contract is only unenforceable by the party who committed the illegal act
Archbold’s v Spanglett
3 requirements of ROTC
1) Covenantee must show ROTC is protecting a legitimate interest
2) ROTC is reasonable in scope (Geographical, duration, etc)
3) Not contrary to public interest (Burden of proof is on covenantor, else ROTC successful after first 2)
Blue pencil severance
Promises are severable, Can only subtract, contract must still make sense and basic nature is retained
Misrepresentation
False statement of fact that induced party to enter contract, thereafter suffering loss
(No issues if representee did not verify statement even when he could)
Fraudulent misrep
Derry v Peek
Court may order damages in lieu of rescission
S2(2) Misrepresentation Act
Representor may rely on EC to exclude liability for loss, provided it satisfies the requirements of reasonableness
(Burden of proof on representor/ the party seeking to rely on EC)
S3 Misrepresentation Act
Limits to right to rescind
1) Contract expressly/impliedly affirmed
2) Lapse of reasonable time after discovery (Runs from date of contract)
3) Unable to restore original position
4) 3P rights arose
5) Court ordered damages in lieu of rescission (for negligent and innocent misrep)
Discharge of contract
Performance, breach, agreement, frustration
Performance discharges a contract only when it is exact and precise
Cutter v Powell
6 Exceptions to Precise Performance Rule
> De Minimis Rule
Divisible contracts
Substantial Performance (Bolton v Mahadeva) (Hoenig v Isaacs)
Prevented Performance (Planche v Colburn)
Partial Performance Accepted (Sumpter v Hedges)
Apportionment Act
Anticipatory repudiatory breach can only be affirmed provided there is legitimate interest in continuing contract
White & Carter v McGregor
5 ways Agreement may discharge a contract
> Mutual release (Executory, both provide consideration and are released)
Unilateral release (By deed, no consideration, party that has done all releases the other)
Accord and satisfaction (One party purchases release by providing fresh, valuable consideration to other)
Variation of contract (Contract altered, consideration provided. MAY not amount to discharge)
Waiver (No consideration, one party voluntarily grants indulgence to the other)
Frustration
An unforeseen supervening event that due to no fault of the parties, renders the contract entered into radically different from originally contemplated
Instances of frustrating events
Impossibility (Taylor v Caldwell)
Frustration of common purpose
Government interference (Shenyin v Commerzbank)
Personal incapacities
Astronomical increase in expenses (Alliance Concrete v Sato Kogyo)
3 factors limiting frustration
Foreseeability, Force Majeure Clause, Self-induced frustration (Maritime National Fish v Ocean Trawlers)
For frustration,
Common Law: Losses lie where they fall
FCA:
S2(2) - Money paid before discharge recoverable, money payable no longer payable
S2(3) - Expenses incurred before discharge recoverable
S2(4) - Benefits conferred before discharge may be compensated if court believes it is just
Causation at law, test for remoteness
Hadley v Baxendale (2 limbed test)
Losses that arise naturally in usual course of things from breach (Imputed knowledge)
Losses reasonably contemplated by parties when contract was made (Actual knowledge)
Imputed or actual knowledge (Remoteness)
Victoria Laundry v Newman Industries
Knowledge of nature of damage (Remoteness)
Parsons v Uttley Ingham
Cost of mitigation claimable if reasonable actions are taken
Melachrino v Nicholl & Knight
Assessment
Injured party to be placed in a position as if contract had been properly performed, not to punish party that caused breach
ERCI
Expectation Loss - Amount which injured party would have expected to gain had the contract been performed properly
Reliance Loss - Wasted expenses incurred by party who relied on contract
Consequential, Incidental loss
Non-pecuniary losses are generally not recoverable
Haron v Singapore Amateur Athletic Association
Guidelines to help determine whether LDC is penalty or genuine pre-estimate of loss
Dunlop Pneumatic Tyres v New Garage
Likely to be penalty if amount is extravagant and unconscionable in comparison to greatest conceivable loss
Likely penalty if lump sum payable on occurrence of ANY breach
LDC can be genuine pre-estimate of loss even if losses are difficult to estimate
Equitable discretionary remedies
Specific performance, Prohibitory injunction, Mandatory injunction
Lumley v Wagner - SP failed since contract is for personal services. Prohibitory injunction OK.
Duties and rights of agent
Follow instructions, use care/skill/diligence, avoid conflict of interest, not to make secret profits, not to delegate
Remuneration, Indemnity, Lien
5 conditions for ostensible authority
1) Representation made to 3P that A has authority, when in reality he does not
2) Representation made by P or person with actual authority
3) 3P doesn’t know of A’s lack of authority
4) 3P induced by representation
5) P has capacity to enter into contract
Ostensible authority cases
Ostensible authority - Freeman & Lockyer v Buckhurst Park
No ostensible authority - Cavenagh Investment v Kaushik Rajiv
Ratification is a process by which P retrospectively confirms A’s unauthorized act
Ratification can be express or implied, and need not be communicated to 3P
4 conditions for ratification:
P must be identified (named, or ascertainable)
P exists at time of contract
P has legal capacity
P ratified within reasonable time
Retrospective in nature: Bolton Partners v Lambert
Agency may arise out of necessity, even without prior agreement between P and A
Couturier v Hastie
Cases where A is still liable even with actual authority
- UP who is never revealed
- UP who is revealed, but 3P still elects to sue A
- A agrees to be liable
- Non-existent P (Kelner v Baxter)
- Statute, Trade usage, Negotiable instrument
Cases where A does not have actual authority, ostensible authority, and act is not ratified
3P may sue A for Breach of Warranty of Authority
+ Tort of Deceit, or +Tort of Negligent Misstatement
Termination of agency
By acts of parties: full performance, expiry of appointment period, repudiatory breach, revocation by P
By operation of law: death, dissolution, incapacity of P/A, frustration
Effects of termination of agency
Actual authority ends, but ostensible authority may still continue, UNLESS notice of termination is given to 3P (May do so by publishing on newspapers, etc)
Actual v Constructive notice
