Certainty and Intention in Contracts

Question 1

If the terms of the agreement are so vague as to make what has been agreed uncertain, there is no contract.

Answer 1

Scammell Ltd. v Ouston [1941] 1 All ER 14

May & Butcher v R [1934] 2 KB 17

Question 2

Court will look to see whether there has been any performance.

Answer 2

Hillas & Co. Ltd. v Arcos Ltd [1932] 38 Com Cas 23
Foley v Classique Coaches [1934] 2 KB 1
British Steel Corporation v Cleveland Bridge and Engineering Co. Ltd [1984] 1 All ER 504
RTS Flexible Systems Ltd v Molkerei Alois Muller GmbH & Co. [2010] UKSC 14

Question 3

Meaningless terms may be severed from the agreement.

Answer 3

Nicolene Ltd. v Simmonds [1953] 1 All ER 822

Question 4

“If, whatever a man’s real intention may be, he so conducts himself that a reasonable man would believe that he was assenting to the terms proposed by the other party, and that other party upon that belief enters into the contract with him, the man thus conducting himself would be equally bound as if he has intended to agree to the other party’s terms…” (Blackburn J)

Answer 4

Smith v Hughes [1871] LJ QB 221

Question 5

“In contracts you do not look into the actual intent of a man’s mind “ (Lord Denning)

Answer 5

Storer v Manchester City council 1974 1WLR 1403 (CA)

Question 6

if one party (O) so acts that his conduct, objectively considered, constituted an offer, and the other party (A), believing that he conduct of O represents his actual intention, accepts O’s offer, then a contract will come into existence, and on those facts it will make no difference if O did not in fact intend to make an offer, or if he understood A’s acceptance

Answer 6

The Leonidas [1985] 1WLR 925

Question 7

In social and domestic arrangements, there is a presumption that there is no intention to create legal relations. But open to rebuttal – burden of proof on party claiming contract exists.

Answer 7

Balfour v Balfour [1919] 2KB 571
Merritt v Merritt [1970] 2All ER 760
Jones v Padavatton [1969] 1 WLR 328
Simpkins v Pays [1955] 3 All ER 10
Peck v Lateu [1973] 117 SJ 185

Question 8

In commercial agreements, presumption that there is intention to create legal relations. Open to rebuttal – burden of proof on party claiming no contract exists.
Intention to exclude may be expressly excluded in the agreement itself.

Answer 8

Jones v Vernon’s Pools Ltd [1938] 2 All ER 626
Rose & Frank Co. v Compton Bros Ltd [1925] AC 445
Edwards v Skyways [1964] 1 All ER 494

Question 9

Exceptions – advertisements are not usually seen as intentions to be legally bound. But NB:-

Answer 9

Carlill v Carbolic Smoke Ball Co. Ltd.

Question 10

Exceptions - “comfort letters”

Answer 10

Kleinwort Benson Ltd. v Malaysia Mining Corporation [1989] 1 All ER 785