Cases Flashcards
Carlill v Carbolic Smoke Ball co
Held
□ The advert was an OFFER made by the Co to the whole world
□ The offer was ACCEPTED when the consumer purchased the ball and used it as directed.
□ It was a unilateral contract so it was not necessary for Mrs C to notify the Co that she was accepting their offer.
□ The fact that the Co deposited £1,000 in the bank showed that the advert was intended to create legal relations. So the Co was liable to Mrs C.
Bloom v American Swiss Watch Co
The Def will only have to pay the reward if there is a legally binding contract between the 2 parties.
Held:
-The Def was not legally obliged to pay the reward as had no contract with the Claimant.
□ The offer of the reward had not been communicated to the Claimant before he gave the information to the police
□ So the Claimant’s actions could not be classed as acceptance of the offer.
Inland Revenue Commission v Fry
What happened?
The IRC claimed that Fry owed them £113,000.
She sent the IRC a cheque for £10,000 together with a letter stating that the cheque was ‘in full and final settlement’ and that if it was presented for payment then this would be acceptance of her offer by the IRC.
Inland Revenue Commission v Fry
Held:
While an offeree could accept a unilateral offer by carrying out the terms of the offer,
□ there had to be KNOWLEDGE of the offer when the act was done.
□ As the IRC were ignorant of the offer when they cashed the cheque, their actions did not amount to an acceptance of the offer.
Routledge v Grant 1828
what happened
□ The claimant owned a house which the def was interested in leasing.
□ The def put a letter through the claimant’s door offering to lease the house for a specified price and indicating that if the claimant wished to accept then he must do so within 6 weeks.
□ Three weeks later the def informed the claimant that he had found alternative accommodation and was no longer interested in leasing the house, but the following week (and well within the 6 week deadline) he received a letter from the claimant purporting to accept the original offer.
The claimant applied to court claiming that a binding contract had been made between the parties.
Routledge v Grant 1828
Held:
There was no binding contract between the parties.
The Def was entitled to withdraw the offer at any time before acceptance
Once the offer had been withdrawn it was too late for the Claimant to accept it.
It did not matter that the ‘acceptance’ was within the 6 week period, as there was no legal obligation on the Def to keep to that arrangement.
Dickinson v Dodds 1876
MONDAY: Def’s OFFER to sell house is made to Claimant (and said to be open until 9.00am Friday)
THURSDAY: third party informs Claimant that house has been sold
FRIDAY (7.00am): Claimant ‘ACCEPTS’ the Offer
Held:
- The claimant was unable to ‘accept’ the offer at 7.00am on Friday morning
- The offer had already been REVOKED by then, when the claimant heard, through a reliable source (Berry) that the house was no longer for sale.
- The def was under no legal obligation to keep the offer open until Friday morning and could withdraw it at any time BEFORE it was accepted.
- An offer can be revoked personally or through a reliable 3rd party.
FISHER V BELL 1961
The Def owned a corner shop. He placed a flick knife in the shop window with a label attached which stated ‘For Sale’.
Charge:
- Offering for sale an offensive weapon contrary to THE RESTRICTION OF OFFENSIVE WEAPONS ACT
Held:
- Not guilty of the offence charged
- Displaying goods in a shop window is NOT an offer for sale but an INVITATION TO TREAT.
British Car Auctions v Wright 1972
The Def put a car up for sale at a public auction. The car had defective stearing, defective brakes and bald tyres.
Charge:
- Offering for sale an unroadworthy vehicle contrary to THE ROAD TRAFFIC ACT
Held:
- Not guilty of the offence charged
- Putting goods on sale at an auction is NOT an offer for sale but an INVITATION TO TREAT.
In both cases it is the BUYER who makes the offer not the seller
E.g. Barry v Heathcote Ball
summary
◊ 2 Machines = valued at £14,000 each are put up for sale at an auction advertised as ‘WITHOUT RESERVE’
◊ Claimant bids £200 for each
◊ Machines are withdrawn from sale
Barry v Heathcote Ball
Held
- As the auction was advertised as being ‘without reserve’ the auctioneer had entered into a contract with the bidder to sell each machine for £200 since the machines were being OFFERED for sale and these offers were automatically ACCEPTED by whoever submitted the highest bids on the day, thereby creating a contract.
◊ Auctioneer sells machines privately for £750 each
◊ The auctioneer is in breach of contract for failing to sell the machines to the bidder and must pay him
DAMAGES – £27,600
Blackpool & Fylde Aero Club v Blackpool Council 1990
Summary
- The Club had an exclusive licence to run pleasure flights from the Council’s airport.
- When the licence was due to expire the Council invited tenders from interested parties to bid for the licence.
- Seven companies applied, including the Club, but due to an error the Club’s tender was never opened and considered.
- The licence was offered to another Co and the Club sued for breach of contract.
Blackpool & Fylde Aero Club v Blackpool Council 1990
Held
Although the Council was not under a duty to accept any of the bids,
◊ it was under a duty to CONSIDER all of the bids before reaching a decision.
◊ As it had not even looked at the Club’s bid, the council was in breach of contract and damages were awarded to the club.
Hyde v Wrench 1840
summary
- DEF: offers to sell his house to CLM for £1,000
- CLM replies: ‘I’ll give you £950 for it’
- DEF: refuses
- CLM: ‘OK I’ll pay the full price of £1,000’
- DEF: ‘Sorry, I’ve changed my mind, the house is no longer for sale’
- CLM sues for breach of contract
Hyde v Wrench 1840
Held:
When the claimant offered to pay £950 for the house, he was making a counter offer.
□ He was effectively rejecting the original offer and making a new offer to pay £950 for the house.
□ Once an offer has been rejected it is no longer open to be accepted
□ So the claimant could not later insist on buying the house for £1,000
E.g. Butler Machine Tools v Ex-Cell 1979
summary
CLM – offer to lease machinery to Def using standard form contract (includes price variation clause)
DEF – ‘accepts’ offer using own standard form contract with NO price variation clause
CLM – acknowledged the order and delivered the machine
Butler Machine Tools v Ex-Cell 1979
Held
The Def did not unconditionally accept the Claimant’s offer
In effect, he was making a counter offer.
This counter offer, which incorporated the Def’s own standard terms, was accepted by the Claimant when he acknowledged the order
So the Def’s terms prevailed (no price variation clause)
The Claimant could not therefore demand the additional payment.
Pickfords Ltd v Celestica Ltd
Summary
□ 13 Sept CLMS faxed OFFER (£890 per load + other costs)
□ 27 Sept CLMS faxed revised OFFER (fixed price £98,760 inclusive)
□ 15 Oct DEFS faxed ‘ACCEPTANCE’ stating price for the work must be capped at £100,000
The second offer made by the Clm was inconsistent with the first, so it effectively revoked the first offer
□ When the Def confirmed the order it was clear that he was referring to the first offer as it included a price cap
□ As this no longer existed, the Def made a counter offer based on the same terms as the original offer
□ The Clm accepted this counter offer by carrying out the work (acceptance by conduct)
□ So the contract price was to be calculated by reference to the first offer so the Clm was not entitled to any additional payment.
E.g. ADAMS v LINDSELL 1818
Summary
□ DEF= wool manufacturer who wrote to the CLM offering to sell wool at a special cheap price.
□ He stated in his offer letter ‘if you are interested in this deal please reply by return of post.’
□ By mistake he put the wrong address on the letter so the letter was delivered to ‘Z’ instead. ‘Z’ realised the error and redirected the letter to the CLM but this obviously caused some delay.
□ When the CLM received and read the letter he was very keen to accept the offer so he immediately posted an acceptance letter to the DEF.
□ In the meantime, the DEF, having had no reply from the CLM, assumed that the CLM was not interested and sold the wool to another buyer, ‘X’.
□ When the CLM discovered that the DEF had sold the wool, he sued for breach of contract.
The court had to determine whether a contract had been created between the CLM and DEF
ADAMS v LINDSELL 1818
Held
◊ A contract was created the moment that the Claimant put his letter of acceptance in the post box.
◊ The Def was therefore in breach of contract when he sold the wool to X as the Claimant had already posted his acceptance letter at that time.
So the Claimant was entitled to damages for breach of contract.
E.g. Household Fire Insurance Co v Grant 1879
Summary
® The DEF applied for 500 shares in the CLM’s company.
® The CLM received the letter and wrote back to the DEF agreeing to allott 500 shares to him and added his name and details to the Company register of shareholders.
® The DEF never received that letter.
- 9 mos later- CLM wnent into liquidation- wrote to Def for payment of shares
e
= DEF refused
Household Fire Insurance Co v Grant 1879
Held
the Def was obliged to pay for the shares
◊ A contract was made the moment that the CLM Co posted their letter accepting his offer to buy shares.
◊ There was no evidence to suggest that the letter had been incorrectly addressed or posted so the contract was valid
◊ It was irrelevant that the letter never arrived.
E.g. Holwell Securities v Hughes 1974
◊ There was no contract between the parties.
◊ The offer required the Claimant to accept by giving NOTICE in writing
- So the normal rule that posting a letter amounts to acceptance of an offer would not apply.
- As the Claimant did not give notice in writing within the specified time period, there was no acceptance of the offer
E.g. Felthouse v Bindley 1862
- Nephew selling 21 horses at auction sale- knew his uncle was interested in buying a stallion and wrote to his uncle, saying if he heard nothing, will assume its a yes
- uncle wanted the horse
- nephew told auctioneer not to sell the stallion
- auctioneer accidentally sold stallion
E.g. Felthouse v Bindley 1862
Held
§ There was no contract between the Uncle and Nephew because the Uncle did not communicate his acceptance of the offer.
§ Even if silence is agreed as a mode of acceptance this will NEVER be sufficient to give rise to a contract.
§ As there was no contract, the Uncle did not own the horse, so the auctioneer did not commit the tort of conversion.
§ So the Uncle’s claim failed.
E.g. Thomas v Thomas
Summary
§ A man died and under the terms of his will his house was inherited by his two brothers.
§ Knowing that their brother would have wanted his wife to remain in her home, the brothers agreed to allow her to live in the house for the rest of her life for an annual rent of £1.
§ A few years later, the brothers tried to increase the rent but the widow refused to pay claiming that they had a contract.
The brothers argued that it could not be a legally binding agreement as £1 was such a low sum of money and the true rental value was much greater than that.
Thomas v Thomas
Held
□ The £1 rent agreed at the outset was sufficient consideration to validate the contract …
□ even though it did not represent an adequate rent in economic terms.
- What mattered was that she gave something to the deal, however small.
E.g. Re McArdle
Summary
○ Mr & Mrs McArdle had 5 children who were all due to inherit their property equally under the parents will.
○ On the death of the father, Mr McArdle, the youngest child and his wife moved in with Mrs McArdle.
○ While living at the house the wife carried out certain improvements to the property and after she has done so, the 5 children signed a document stating that ‘in consideration for the works of improvement’ that she had carried out, she would be paid £488 out of the estate on the death of the mother.
- When Mrs McArdle died the children refused to authorise the payment so the case was referred to court to consider the validity of the wife’s claim.
E.g. Re McArdle
Held
□ The CLM was NOT entitled to the promised payment
□ She did not have a binding contract with the brothers and sisters because although they were giving consideration (the promise to pay)…
□ She was not giving anything in return
□ Her improvements to the house had been undertaken voluntarily, a long time BEFORE any promise to pay was made
So her consideration was PAST and therefore not valid
Stilk v Myrick and
Hartley v Ponsonby
the captain called the remaining crew together and promised to split the deserters wages between them if they successfully completed the voyage without the deserters.
On completion of the voyage, both captains went back on their word and only paid the sailors their original wages.
E.g. Hartley v Ponsonby
Held
® Here, the crew WERE providing consideration
® The number of deserters was so great that the remaining crew were required to do considerably more than was expected of them under their original contract.
So the captain was required to pay them the additional wages.
