Case Studies Flashcards
Henry v Facey 1983 case?
Request for information is not a contract
Supply of information
H asked lowest price, F responded and H said that was a contract
IT IS NOT
Pharmaceutical Society of GB v Boots 1952
Good on shelves merely invitations to treat so no contract until the customers offer was accepted at the till
Carlil v Carbolic Smoke Ball 1893?
Implied acceptance of offer by actions
Confident of properties so anyone who used it and caught flu got £100
Mrs C saw, used and got flu
Was entitled to £100 as wording amounted to offer
Mrs C accepted by purchasing and using
Wolf and Wolf v Forfar Potato Company 1984
Time limit for acceptance of offer
Acceptance with new conditions
Rejected new conditions
Tried to accepted original offer in time limit
Not supplied
No contract formed as original offer falls once counter offer made
Wylie and Lochhead v McElroy and Sons 1973
Offer not accepted for 5 weeks during which price increased
No acceptance within reasonable time so no contract
Fluctuating commodity; hours must suffice for a decision
Entores v Miles Far East Corporation 1955
Offer sent by telex
Acceptance by telex
Contract made in London or abroad?
Acceptance took effect when acceptance was printed out on claimants terminal in London
Adams v Lindsell 1818
Sold wool to someone else in time acceptance was in the post
Contract came into existence when claimants posted their acceptance
Thomson v James 1855
Was a contract as acceptance was effective when it was posted
Revocation could only take effect when reached
Acceptance happened first
The Countess of Dunmore v Alexander 1830
Acceptance and withdrawal of acceptance received and the same time so no contract
Re McArdle 1951
Work on house completed before docs signed
Past consideration so not binding
Chappell v Nestle 1960
Dispute over wrappers royalties
Wrappers were part of consideration as they had commercial value to the defendants
Earl of Orkney v Vinfra 1606
The earl threatened to stab V is did not sign
Not consented voluntarily so no valid contract
Merritt v Merritt 1971
Husband left wife signed note stating would transfer house when mortgage paid- refused.
Inferred that they intended their agreement to be legally binding so wife could sue for breach
Dunlop Pneumatic Tyre Co v Selfridge and Co 1915
Dunlop sells on terms that Mr X wouldn’t resell for less
X sold to S and S was to pay 5 if sold below retail price
Sold and D sued to recover 5 per tyre
Could not recover damages under contract between X and S to which he was not a party
Powell v Kempton Park Racecourse 1899
Offence to use a ‘house, office, room or other place for betting’
Used an outdoor ring
‘Other place’ had to refer to a place indoors as all listed words were indoors
Outdoors so not guilty of an offence
The Scottish Farmers Diary Co (Glasgow) v McGhee 1933
Restrictive covenant- business interests protected
Milkman bound not to carry on business as a milkman within 1 mile of former employer
Reasonable to preserve employers trading interest Popular milkman may have goodwill linked directly to him
Nordenfelt v Maxim Nordenfelt Guns and Ammunition 1894
Restrictive covenant- wider than necessary?
Not engage in trade of arms manufacturer for 25 years worldwide
Restrictive covenant was reasonable
Nature of business was such that former customers came from all over the world
Rentokil Ltd v Kramer 1986
Restrictive covenant appropriate target?
K prohibit for 2 years canvassing R customers
Restriction was not wider than necessary
Full access to customer list
Prevent K using to their prejudice and advantage of his new employers
Empire Meat Co v Patrick 1939
Restrictive covenant
Tried to impose a 5 mile restriction on manager
Likely radius of customers was only 2 miles
Restriction failed
Taylor v Glasgow Corporation 1952
Exclusion clause
T went to public baths and given a ticket
Knew had writing but not conditions
Said not responsible for loss or injury
T injured herself and tried to claim it was due to negligence
Ticket was not of a types a person could reasonable be expected to study for conditions
Entitled to assume just a voucher
Not sufficient notice so not part of contract
Olley v Marlborough Court Hotel 1949
Paid for room at hotel
Hotel notice disclaimed liability
Thief stole key and coat from room
Hotel couldn’t rely on notice because contract was formed at reception when room was paid for
L’Estrange v Graucob 1934
Signed a document but didn’t read it
Still binding on her
Curtis v Chemical Cleaning and Dyeing Co Ltd 1951
Misleading exclusion clause
Took wedding dress to be claimed
Sign conditions that restricted liability to damage to beads on dress
Dress stained
Cleaners couldn’t rely on exclusion clause as they had actively misled claimant
Assumed risked beads only
Interfoto Picture Library v Stiletto Visual 1988
Unusual or onerous term; for every day late returning Onerous term not sufficiently brought to attention of defendant
Court did not apply
Damages that more fairly reflect loss
Tsakiroglou and Co Lrd v Noblee Thorl 1962
Charter of ship to transport groundnuts
Suez Canal was closed after the contract was concluded
Not frustrated as ship could go alternate route
Greater cost not so fundamentally different
Hochster v De La Tour 1853
Contract to accompany on tour, then told no longer needed
Entitled to sue as soon as anticipatory breach took place
White and Carter Ltd v McGregor 1962
Continued to perform in anticipatory breach
Entitled to recover agreed price for advertising services
Repudiation does not bring contract to end but gives innocent party choice of affirming or rejecting
Anglia TV v Reed 1971
Actor broke contract last minute
Had incurred preparator costs
TV company able to recover these expenses
Wouldn’t have been able to recover lost profits as impossible to determine film would have made a profit
Sykes v Midland Bank Executor and Trustee Co Ltd 1971
Solicitors acting in breach failed to advise their client of a disadvantageous term in a lease
Would have entered into contract even if advised
Breach did not cause the loss and no compensation payable
Payzu Ltd v Saunders 1919
Mitigation may be reasonable to accept substitute performance- cost effective
Party claiming must take reasonable steps to minimise loss
Contract for goods in installments
Failed to pay 1st one
Refused to make further deliveries
Refused to accept terms
No more goods
Price rose and Payzu sued for breach
Payzu should have mitigated its loss by accepting offer of goods for cash in advance
Since it didn’t, limited damages to assumed loss had paid in advance
Hadley v Baxendale 1854
Flour mill had broken crankshaft Delayed replacement Mill owner not entitled to damages Not reasonably foreseeable to the carrier that the mill would be out of actions Expected mill would have spare Too remote
Victoria Laundry (Windsor) v Newman Industries 1949
5 months late in delivering boiler
Lost lucrative cleaning contract
Sued for ordinary profits
Only liable ton compensate for ordinary loss not exceptional loss
Would only be recoverable if has knowledge of the contract at the time
Balfour Beatty Construction v Scottish Power 1994
BB while constructing power failed at critical point
Sued SP for breach
Court ruled loss too remote
Appealed to Inner House of Court of Session and claim succeeded on basis that SP had sufficient technical knowledge to foresee damage of power failing
SP appealed and House of Lords agreed with first ruling
Walker v Crystal Palace FC 1910
Professional footballer an employee as under its control with regards to training, discipline and how he was paid
Cassidy v Ministry of Health 1951
Operation negligently carried out and hospital was sued, argued that it did not have control over the doctors work
Had employer appointed employee?
Hospital management had chosen the doctor and could dismiss so was vicariously liable
Ready Mixed Concrete v Ministry of Pensions and National Insurance 1968
Driver worked for a company and thought he owned the lorry, bought on hire purchase
Wore company uniform and lorry painted with logo
If unable to do a delivery appointed replacement driver
Ministry claimed he was an employee
Test whether working on his own account
Was a self employed contractor
Could decide to appoint replacement
Autoclenz v Belcher 2011
Contracts stated self employed, had to provide own materials and substitute workers
No obligation to provide them with work
Actual arrangements did not accord with these terms
Provided with work, provided materials
Bargaining strength of the parties and found it indicated employee relationship
Watteau v Fenwick 1893
Pub manager doesn’t have express authority to buy goods other than beer
Orders cigars but doesn’t pay
Pub owner was liable because buying cigars fell within the usual authority of a pub manager
Only if supplier told of limited nature of manager’s authority would pub not been bound
International Sponge Importers v Andrew Watt and Sons 1911
Ostensible authority of salesman
ISI knew cheques made out to salesman personally
Salesman kept cheque and ISI tried to claim payment from W
W did not have to pay
ISI failing to object allowed W to rely on ostensible authority of the salesman to accept cheques
Dudley v Barnet 1937
Estate agents found new tenants and arranged they’d take over lease
Existing tenants accepted different offer and refused to pay commission to estate agents
Estate agents entitled to be paid despite not going through principal
Remuneration if contract not carried out
Black v Cornelius
Architect had implied authority to delegate certain matters to a surveyor
Stewart v Buchanan 1903
B provides S capital, premises and fittings
Stewart alleged B and S were in partnership
Agreement between B and S expressly stated ‘not to be held a partner’
WAS a partnership
Agreement attempt to carry on business without risk of liability
Khan and Another v Miah 2000
At point of agreement that the partnership begins
Not when starts trading
Paterson Brothers v Gladstone 1891
Brother acting outwith his express authority when borrowing money
Firm did not have to pay
High interest so not ostensible authority
Should have been put on enquiry and checked with others
Mair v Wood 1948
5 individuals together as fisherman
One partner lifted floor boards, Mair suffered severe injuries and tried to sue firm
Partnership not liable to a partner injured by negligence of another partner
Only remedy lay against partner who failed to replace boards
Donoghue v Stevenson 1932
Duty of care
Gifted ginger beer with snail in
Manufacturer claim no contract as she didn’t buy
Manufacturer should have been able to foresee someone other than person buying would drink it
DUTY TO ULTIMATE CONSUMER
Neighbour principle
Hedley Byrne Ltd v Heller and Partners 1964
Heller provided credit reference that was a negligent misstatement but included disclaimer
Did avoid liability
Obiter dicta duty of care could be owed by parties in a SPECIAL RELATIONSHIP to take reasonable steps to minimise risk of pure economic loss
Would have been liable without disclaimer
Home Office v Dorset Yacht Co Ltd 1970
Officers supervising young offenders allowed to escape
Stole boat and crashed into other boats
Supervisors owed duty of care to owners of damaged boats
Caparo Industries v Dickman 1990
C takeover of F based on audit
Overvalued F
C sued for recovery of economic loss
Auditors owed duty of care to shareholders as a body not individually C
Established 3 criteria that should be satisfied before duty of care owed
Hughes v Lord Advocate 1963
Workmen left manhole open with shelter and warning lamps
Young children went in knocked lamp and was badly burned
Reasonably foreseeable that there was a risk of injury by burning
Bourhill v Young 1942
Y crashed car and died
B didn’t see it but heard and saw blood
Claimed suffered miscarriage
NO relationship of proximity so no duty of care
Didn’t see and nit at risk of physical injury
Hill v Chief Constable of West Yorkshire Police 1988
Mrs H mother of last victim of Yorkshire Ripper
Police had Sutcliffe and released him
Then he killed Mrs H daughter
Sued
Would result in police carrying out their ‘duties in a detrimentally defensive manner’
Not FAIR, JUST OR REASONABLE
Latimer v AEC Ltd 1952
Employee slipped on floor after flooded, sawdust down but not on that section
Not liable as had done all that was necessary to reduce risk
Only way to completely avoid is to close factory but that no reasonable
Scott v London and St Katherine Docks Co 1865
Hit by sugar that fell from window
Res ipsa loquitur
Facts spoke for themselves, negligent for allowing to fall from window
Wilsher v Essex Area Health Authority 1988
Premature baby became blind after birth
Argued doctor negligent by not noticing high dose of oxygen received
Number of possible causes of the blindness, only 1 was oxygen
Couldn’t identify which so no direct link shown
McKew v Holland, Hannen and Cubitts Ltd 1970
McKew injured leg due to negligence of employer
Tried to descend stairs with no help
Injured other leg
Not liable to injuries to other leg because his conduct was an NOVUS ACTUS INTERVENIENS
The Wagon Mound 1961
Ship docked and refuelled
Oil negligently leaked
Spark fell and started fire
Pollution was the foreseeable risk not fire
ADT Ltd v BDO Binder Hamlyn 1955
BDO joint auditor of BSG
Overvalued BSG and ADT paid more than should have
BDO responsible for statement that represent true and fair view
Audit negligent
BDO assumed duty of care to ADT
Sayers v Harlow UDC 1958
Locked in public toilet because of faulty lock
Tried to climb out and injured herself
Method used to climb out contributed to her injures so compensation reduced
Titchiner v British Railways Board 1983
Climbed through gap in fence and trespassed on railway
Hit by train
Sued BRB for failing to keep safe
Fencing adequate, she accepted risk of injury by breaking through gap
BRB not liable
Rose v Plenty 1976
Milkman employed 13 y/o R to help deliver milk
Contrary to instruction from employer
R injured
Milkman’s purpose was to further employer’s interests
Employer was vicariously liable
Kirkby v National Coal Board 1958
Miner went into adjoining field to smoke
Prohibited by employer and under statute
Caused explosion
Employer NOT vicariously liable as on ‘frolic of his own’ not what employed to do
Salomon v A Salomon and Co Ltd 1897
Separate personality principle
Initially sole trader
Registered as limited with wife and children who took a share
Allotted shares to himself- a secured creditor of the company AND a member
Wound up, owed money to unsecured creditors and to himself
Assets went first to paying off Salomon’s own secured debentures and other creditors received nothing
Lee v Lee’s Air Farming Ltd 1961
Separate personality principle
Governing director also chief pilot
He was a ‘worker’ so widow paid compensation after he was killed
Worker and employer
Him and company were separate legal personalities
Macaura v Northern Assurance Company 1925
Separate personality principle
Set up company and sold his timber business to it
Insurance remained in his own name
Timber destroyed in a fire
Could not claim for loss
Did not have insurable interest on timber as it belonged to company not to him
Prest v Petrodel Resources Ltd 2013
Lifting the veil to prevent evasion of legal obligations
Prest owned companies that owned houses in UK including his marriage home
Could be transferred in divorce to Mrs P because Mr P was the beneficial owner of the properties
What case clarified Lifting the veil to prevent evasion of legal obligations?
Prest v Petrodel Resources Ltd 2013
Gilford Motor Co v Horne 1933
Ex-employee tried to evade a restrictive covenant by forming a company
Lift the veil to prevent evasion of legal obligations
Jones v Lipman 1962
Lift the veil to prevent evasion of legal obligations
Sham company
Contract to sell a house to J but changed his mind
Specific performance ordered
To evade this set up company to transfer house to
Order against both L and company
Daimler Co Ltd v Continental Tyre and Rubber Co Ltd 1916
During the war, all members were German nationals
As enemy, company could not take action in English courts
Adams v Cape Industries 1990
Lifting the veil; group situations
Cape had WOS in US
US judgement could not be enforced against Cape in UK
Each company separate legal entity
Sidebottom v Kershaw, Leese and Co Ltd 1920
Articles altered to enable directors to purchase shareholding of members that competed
Justifiable alteration if made bona fide in the interests of the company of a whole
Was justifiable
Dafen Tinplate CO Ltd v Llanelly Steel Co Ltd 1920
D minority shareholder transferred its custom from L to another supplier
Majority L sought to protect its interests by altering articles to provide for compulsory acquisition of D’s shares
Aerators Ltd v Tollit 1902
Tollit proposed to form a company named Automatic Aerators Patents
Rejected Aerators application as word ‘aerator’ was in general use
Ewing v Buttercup Margarine 1917
Ewing sole trader as Buttercup Dairy Co in Scotland and north of England
Buttercup margarine registered since 1916 in London
Granted as Ewing planned to open shops in south and could be confusion
HFC Bank plc v Midland bank plc 2000
Action for passing off, Midland Bank rebranded as HSBC
Did not represent that they were connected
Failed
Hickman v Kent or Romney Marsh Sheepbreeders Association 1915
Constitution as contract between members and the company
Articles provided that any dispute referred to arbitration
Took case to high court
Bound to go to arbitration first
Pender v Lushington 1877
Constitution as contract between company and members
Not entitled to case more than 100 votes
Transferred shares to circumvent
Bound to recognised votes of members including this nominee
Eley v Positive Gov Security Life Assurance Co 1876
Contractual effect between company and member only where member acting in capacity as member
Solicitor E drafted articles that must always employ him
E member
E sued when ceased to employ
E couldn’t rely on articles as contract between company and members and he was not asserting in capacity of member
Rayfield v Hands 1960
Constitution as contract between members themselves
Every director should be shareholder and must dispose of shares of any member who gave notice
Directors claimed couldn’t enforce obligation to acquire
Contract between member and member so bound by its terms
Re New British Iron Co, ex parte Beckwith 1898
Incorporation of articles into contract with outsider
Directors pay divided
Liquidation, claimed owed fees, denied contract
Could not rely on articles they could refer to articles to establish amount payable
Bushell v Faith 1970
Weighted voting rights to remove director
House of lords upheld validity of provision to increase share vote from 1 to 3
F defeated
Ebrahimi v Westbourne Galleries 1973
E excluded from business when partner introduced his son Profits paid to salaries not dividends No share of profits Sought to wind up Granted Just and equitable winding up
Hogg v Cramphorn Ltd 1967
Directors acting in good faith issued special voting rights Breach? Improper use to issue shares Members did ratify in general meting Best interests Not use wrongly issued votes
Dorchester Finance Co Ltd v Stebbings 1989
Exec and 2 NEDs were accountants
NEDs signed blank checks the exec used for own purpose
Sued all three, NED argued no liability as NED
3 directors had been negligent
NED duties same as Exec
IDC v Cooley 1972
Cooley MD of IDC
C personally wanted contract IDC wouldn’t get
Told board ill and was allowed to leave board
IDC sued and successfully recovered profits he made
Multinational Gas 1983
If solvent don’t owe duty to creditors
Insolvent creditors may sure
Foss v Harbottle 1843
Company itself to bring proceedings
Shareholders can’t sue as company only proper claimant in action
In GM must decide whether to bring proceedings
Two key principles from Foss v Harbottle 1843?
Proper claimant rule
Majority rule
Kleanthous v Paphitis 2011
P majority shareholder in Ryman, La Senza looking for buyer
Ryman decided not to invest
P bought La Senza, Ryman agreed to lend him money
K wanted to claim against Ryman
K not granted permission to bring derivative claim as directors approved the loan
Wishart v Castlecroft Securities Ltd 2009
Bad faith
Petitioner entitled to start derivative claim
Upheld on Appeal
Claimant granted indemnity in relation to expenses for 1st time in Scotland
Tay Bok Choon v Tachansan Sdn Bhd 1987
Exclusion from management
Entitled to have company wound up
Re German Date Coffee Co 1882
Destruction of the company’s substratum
Company formed with sole objective of obtaining patent to manufacture coffee from dates
Couldn’t get it
Just and equitable to wind up company
Re Yenidje Tobacco Co Ltd 1916
Deadlock
Couldn’t agree on how to manage, equal number of shares
No provision for breaking deadlock
Petition to wind up on just and equitable grounds granted
Re Lundie Bros LTD 1965
Lack of probity of the directors
Ran company as if it were their own business
Hyndman v RC Hyndman Ltd 2004
Breakdown of trust and confidence
Accounts not kept properly and directors lifestyles
Winding up on just and equitable grounds
If voluntarily petitioners interests would be further prejudice
Greenhalgh v Ardene Cinemas 1951
No variation of class rights as each 10p carried one vote as before Subdivision of one class under a power which has effect of increasing voting rights
White v Bristol Aeroplane 1953
Made bonus issue of ordinary and preference shares to existing ordinary shareholders
Pref argued it reduced their proportionate holding
Altered their voting power but not their RIGHTS
Same number
Did not need their approval
Re Bede Shipping Co Ltd 1917
Refuse to register a transfer
Grounds that are personal to the proposed transferee
Re Hackney Pavilion Ltd 1924
Two directors divided on weather transfer should proceed
Asked to write to solicitors and indicate not go ahead
Must go ahead since board was equally divided so couldn’t exercise right to decline
Curtis v JJ Curtis and Co Ltd 1986
First had to offer to existing shareholders rather than to outsider
Not done
Prevented him from transferring other than in accordance with articles
Ooregum Gold Mining Co of India v Roper 1892
Issued shares at market values less than nominal
No-one would get more at par
Needed more money so made cheaper
Could not agree to take less
Purpose to render every shareholder liable to pay that amount for shares
Re Eddystone Marine Insurance Co 1893
Before offering shares E allotted 6000 £1 shares as fully paid to allottees as a reward for services
No such services given
Liquidation, liquidator argued £6000 was due on the share
No consideration had been given
Liquidators claim upheld
Flitchcroft’s Case 1882
Directors liable for wrongful payments and must reimburse the company the full amount of the dividend
Only if know circumstance of payment was wrongful
