Contract Flashcards
Agreement
Offer + acceptance - do not have to be in any particular form
Offer
A definite promise to be bound by specific items An expression of willingness to contract on certain terms made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed
Smith v Hughes (1871)
Intention is based on the perspective of a reasonable person
Allied marine transport v Vale do Rio Navegacao SA (The Leonidas) [1985]
Conduct -objectively considered - constitutes an offer -> accepted when offeror believes intention and accepts offer -> contract
Invitation to treat
Inviting negotiation -> eg goods on display or ads Sometimes display is offer (eg special sale) where clear intent to be bound
Pharmaceutical Society of GB v Boots Cash Chemists [1953]
Goods on display at supermarket generally regarded as invitation to treat (customer unable to change mind if display was an offer) Offer to buy is customer & acceptance at payment point
Fisher v Bell 1961
Display of knife was invitation to treat
Partridge v Crittenden 1968
Held ad was invitation to treat -> if not when stock runs out could be problem
Williams v Carwardine (1833)
Ads for rewards treated as offer, as there is intent to be bound -> encourages act for reward Other motive does not preclude a valid acceptance of offer (still entitled)
Carlill v Carbolic smoke ball co 1893
D gave evidence of sincerity for ad condition by depositing money, so did not matter they made the offer to the world. Did not matter that C did not notify of acceptance -> like reward cases For unilateral contract communication of acceptance impliedly waived
Bilateral contract
One party makes promise in return for a promise from another party Both parties have consideration
Unilateral contract
Promise in return for act (if and only if) Consideration is act given in return for promise
Auction
s57(2) Sale of Goods Act 1979 - bids are offers (can be withdrawn before acceptance) - fall of hammer acceptance - call for bids are invitation to treat (bilateral contract) s57(3) SGA1979 - reserve price is the price agreed between auctioneer and seller as being minimum allowed to be accepted (unilateral contract if without reserve Barry v Davies/Carlill)
Barry v Davies (Healthcare Ball & Co) 2000
Without reserve price sale to highest bidder
Harvela investments ltd v royal trust co of Canada ltd 1986
Shares to highest bidder -> unilateral contract if intent to be bound
Blackpool & Flyde aero club ltd v Blackpool borough council 1990
Late tender due to error by council. Council should have specified terms of submission
Termination of offer
Revocation (withdrawal) of offer; rejection of offer; lapse of time
Revocation
Anytime before acceptance (Routledge v Grant, except Mountford v Scott); Must be given/communicated to be effective (Byrne v Van Tienhoven) -> notice sent to last known address still effective or if offeree chooses not to read
Routledge v Grant (1828)
If promised to keep open for certain amount of time -> not binding as long as gratuitous (nothing given/promised in return for keeping open)
Mountford v Scott
If consideration given for promise to leave offer open (£1 for option for 6 months), offeror is bound
Byrne & Co v Van Tienhoven & Co (1880)
Withdrawal by telegram only effective upon receipt
Shuey v US (1975)
For offers to the public, revocation should be published in the same method as originally published
The Brimnes 1975
Notice of revocation to business: During business hours, notice effective on receipt - reasonable to expect staff available to read - communicated on arrival -> even of not actually read til next day - may still depend!ust be reasonable
Dickinson v Dodds (1876)
Revocation can be communicated by a reliable 3rd party
Errington v errington & Woods 1952
Partial performance is sufficient to prevent revocation (implied promise not to revoke if specified act started within reasonable time)
Rejection of offer
- expressly or impliedly - acceptance must match exactly terms of offer (otherwise counter offer) -> Hyde v Wrench
Hyde v Wrench (1840)
Counter offer rejected then tried to accept original price -> no longer valid as it was rejected
Stevenson Jacques & Co v McLean (1880)
Inquiries (not counter offer) which help with decision making does not imply rejection of offer
Lapse of time of offer
- express condition - otherwise ‘reasonable time’ which depends on circumstances
Acceptance
An offer must be in a form whereby a simple assent is enough to lead to agreement Acceptance must be a complete unqualified acceptance of all terms of offer and the offeree must know of offer to accept (acceptance with request for more info is still acceptance) Terms must be certain Must be communicated by offeree or authorised agent (Entores/Powell) - General rule - must be received - exceptions, eg postal rule
R v Clarke
Offeree must know of offer to accept (cannot be ignorant of offer)
Butler Machine Tool Co Ltd v Ex Cello Corp 1979
Between 2 business last signed terms/conditions prevailed as counter offer
Brogden v Metro Railway Co (1877)
Acceptance by conduct of last set of std terms to be proffered
Scammell v Ouston 1941
Contract not enforceable if it is uncertain what has been agreed or something is left to be determined (eg too vague)
Hillas v Arcos (1932)
No uncertainty if phrase means something to both parties
Entores Ltd v Miles Far East Corp 1955
Acceptance must be communicated If no postal rule, retraction possible til post received For electronic communication, acceptance is when it would be reasonable to expect the recipient to have read it
Powell v Lee (1908)
Acceptance must be communicated by offeree or authorised agent (can’t just be reliable 3rd party)
Felthouse v Bindley (1862)
Silence can’t amount to acceptance (tried to buy horse with implicit acceptance)
Re Selectmove Ltd 1995
Offeree can bind himself by silence (no communication of acceptance) -> eg ‘if you don’t hear from me …’ Argued Roffey principles should be extended to part payment (if practical benefit and no duress/fraud part payment should be accepted) but this was not accepted due to precedent in Foakes v Beer, which was HoL case. Representative of creditor had no authority to bind creditor to arrangement to pay debt by installment (agent had no authority)
Adams v Lindsell (1818)
Postal Rule: Acceptance is complete on posting & contract formed at that point (if it applies retraction rule unclear)
Household Fire & Carriage Accident Insurance Co v Grant (1879)
Acceptance posted but didn’t arrive -> still acceptance upon posting & contract form (otherwise could lead to fraud or delays)
Limitations to postal rule
- only for acceptance - only when reasonable to send by post - must be properly stamped, addressed & posted - rule can be excluded by offeror either expressly or impliedly (then only effective upon receipt) - notice words
Holwell Securities Ltd v Hughes 1974
Acceptance to buy house was exerciseable by notice in writing to D but letter never arrived -> ‘notice’ excluded postal rule impliedly (words may imply agreement must reach person, eg ‘must know’ or ‘call me by’)
Brinkibon Ltd v stahag stahl und stahlwarenhandelgesellschaft GmbH 1983
Electronic communication -> no universal rule: based on intent, business practice and judgement of risk
Intention
Contract must have intent to create legal relations or not legally binding
Parker v Clarke 1960
Young couple sold house on promise of relative’s house of they took care of him -> held intent of contract, thus legally binding
Simpkins v Pays 1955
Intent of Informal syndicate binding (a group takes turns buying lottery ticket with intent that if one wins they all share)
Balfour v Balfour 1919
Lack of intent between spouses for contract
Merritt v Merritt 1970
If couple separated at time of agreement, could have intent
Domestic Agreement intent rebut
- consideration (benefit/detriment; the greater the value more like legal) - parties not on good terms when agreement made - formal, in writing
Commercial agreement v domestic agreement
Commercial - presumption that parties intend to be legal (skyways) - difficult to rebut Domestic - presumption that parties do not intend to be legal (Balfour)
Edwards v Skyways 1964
Ex gratia (no pre-existing liability) payment offered/accepted and was legally binding - commercial agreement
Rose & Frank Co v Crompton Bros 1925
Rebutted commercial agreement presumption using a clause specifically stating not formal or legal - requires clear words
Contract question
Binding contract? - offer - acceptance (agreement) - intention - consideration What are terms? Any terms breached? What are remedies? (law, authority, application)
Currie v Misa (1875)
A valuable consideration may consist either in some right, interest, profit or benefit accruing to the party or some forbearance, detriment, loss or responsibility, given, suffered or undertaken by the other (benefit and/ or detriment)
Consideration
-Currie v Misa - the price one party pays for the other’s promise (Pollock) - promise of payment is enough -> need not be adequate but must be sufficient (some value but can be nominal) -> past consideration is not sufficient
Chappell & Co Ltd v Nestlé Co Ltd 1960
Party can stipulate what consideration he chooses (chocolate wrappers)
White v Bluett (1853)
Promise to stop moaning not consideration (public policy reason -> floodgate)
Hamer v Sidway (1891 - USA)
Promise to stop smoking, drinking, swearing was consideration, as party gave up legal rights
Roscorla v Thomas 1842
Past consideration not sufficient C bought horse, after which D assured that horse was sound, which was not true. However, horse was already bought and no consideration had been given based on this promise
Exception for past consideration
- Act must have been done at promisor’s request (Lampleigh v Brathwait) 2. Parties must have understood at outset that act was to be rewarded in some way (Re Casey’s Patents) 3. The payment or other benefit must have been legally enforceable if promised in advance
Lampleigh v Brathwait (1615)
Asked party to seek royal pardon; made considerable effort to no avail; D promised £100 for effort -> held as enforceable
Re Casey’s Patents, Stewart v Casey 1892
Promised 1/3 share of patent proceeds for managing them -> understood at outset act was to be rewarded
Collins v Godefroy (1831)
If existing duty imposed by law -> not sufficient consideration Testifying in court not sufficient consideration because it is already a legal duty (against public interest otherwise)
Ward v Byham 1956
A child was well looked after and happy and an allowance was given to the mother -> it was beyond legal duty thus it was sufficient consideration
Williams v Williams 1957
Promise to perform existing duty is sufficient consideration as long as not against public policy
Glasbrook Bros Ltd v Glamorgan County Council 1925
Police protected mine w agreement to pay council for police services. Co denied payment arguing pice had duty to protect. HoL held police did above what was reasonably necessary thus sufficient consideration
Scotson v Pegg (1861)
Person in contract to perform act, act is sufficient consideration for a separate contract with someone else Delivered cargo of coal was consideration though already contractually bound by 3rd party to make the delivery
Stilk v Myrick (1809)
Simply performing an existing contractual duty is not sufficient consideration for the other party to pay more money Seamen’s wages -> captain promised extra wages to work ship home but didn’t pay. He didn’t have to bc seamen already were under duty to do this -> unenforceable for want of consideration
Hartley v ponsonby (1857)
Continuation of voyage hazardous for crew thus not obliged to carry on -> held good consideration
Harris v Watson (1791)
Extra wages for seamen against public policy -> crew may hold ship hostage or damage unless they get extra wages
Williams v Roffey Bros & Nicholls (contractors) Ltd 1991
Exception to consideration for additional wages of existing contractual duty -must be goods & services contract Extra money ok, as long as practical benefit and no economic duress or fraud i. A enters into contract with B in return for B’s payment & ii. Before A completes, B has reason to doubt A will complete & iii. B promises A additional payment in return for A’s promise to complete on time & iv. As a result, B obtains in practice a benefit or obviates a disbenefit & v. B’s promise is not given as a result or economic duress or fraud on the part of A, then vi. The benefit to B is capable of being consideration for B’s promise, so that it is legally binding
Foakes v Beer (1884)
Part payment of debt is usually not consideration for a promise to forgo balance due Can’t use promissory estoppel as defence
Pinnel’s Case (1602)
Obiter Exception to Foakes v Beer If debtor can show that he gave something different for creditor’s agreement to accept a lesser sum (eg paid early) possibly consideration (another exception is part payment by 3rd party who could try to claim full payment by original debtor)
Central London Property Trust Ltd v High Trees House Ltd 1947
Promissory Estoppel: -Equitable doctrine -> party has made promise to forgo legal right, once other acts upon promise, party is bound & other can bring claim if inconsistent with promise - defense only (shield not sword) - landlord agreed to lower rent during wartime -> only temporary, after war higher rent For continuing obligations, reasonable notice must be given that full amount expected in future.
Hughes v Metro Railway Co (1877)
C had impliedly agreed to suspend repairs til end of negotiations; only after negotiations to sell would time start again, thus inequitable to allow landlord (C) to end lease (promissory estoppel)
Promissory Estoppel
Equitable doctrine 1. Must be promise to waive legal right (expressly or impliedly - Hughes) 2. Promisee must act on promise (enough that it alters position - WJ Alan v El Nasr) 3. Only a defence; can’t give rise to cause of action (Combe) 4. Must be inequitable for priomisor to go back on promise (D&C Builders v Rees). All circumstances considered For continuing obligations, notice does not have specific form (Tool Metal) as long as reasonable (High Trees); also no notice necessary if based on event or lapse of reasonable period of time. (Tool Metal) If promisee can’t go back to original position promisor rights may be extinguished (Ajayi) Unclear with one-off debts (D&C Builders if debtor equitable vs Foakes v Beer - no promissory estoppel). Maybe High Trees/Ajayi would apply?
WJ Alan & Co v El Nasr 1972
Obiter Promissory estoppel- promisee must act on belief induced. Not necessary to be detriment, only alteration
Combe v Combe 1951
Wife tried to sue husband for promise of alimony payments but held that can’t use promissory estoppel as a cause of action, only as a defence.
D&C Builders v Rees 1966
D owed C £482 and offered £300 in full settlement indicating that id C did not accept, they would get nothing. D could not rely on promissory estoppel as it was not inequitable for C to go back on promise since it had not been given freely (if, for one off debts, debtor acts equitably, possible maybe to use promissory estoppel)
Tool Metal Mfg Co v Tungsten Electric Co Ltd 1955
For promissory estoppel, notice not always necessary if period of suspension clearly terminates based on an event or lapse of reasonable period after situation ends Notice need not be in a particular form
Ajayi (Emanual) v RT Briscoe (Nigeria) Ltd 1964
If promisee can’t go back to original position then promisor’s rights may be extinguished
Pay more money for same contractual duty allowed?
- If contract bw A & B and A agrees to pay more if B will still complete obligations -> Stilk v Myrick - performance of existing duty NOT sufficient consideration 2. Has B done something extra? -> Hartley v Ponsonby - extra could be sufficient consideration 3. Has not done something extra -> is it an exception -> Williams v Roffey
Pay less money than originally contractually agreed?
- If contract bw A & B and A performed obligation & agrees to accept reduced payment from B -> Foakes v Beer -> not sufficient consideration 2. Is it a common law exception? -> A given different consideration from B - Pinnel’s Case 3. If not, is promissory estoppel relevant? (High Trees)
Privity
Only parties to contract can acquire rights and be subject to liabilities under it Contracts (Rights of third parties) Act 1999 - for contracts after 1 May 2000 - section 1 allows 3rd party to enforce contract term if : - contract expressly provides he may; or - term purports to confer a benefit on him (unless parties didn’t intend the term to be enforceable by a third party) - party must be identified by name, a member of class or answering to a particular description
Agency
Relationship which arises where one person (agent) acts on behalf of another (principal), and has power to affect principal’s legal position in regards to a 3rd party Agent must have authority - express authority - actual auth for specific things - apparent/ostensible authority - distinct/false impression of authority -> agency by estoppel: - at some stage principal represented agent as authority - 3rd party relied on this representation - 3rd party altered position due to reliance Obligations made thru agent are binding on principal (agent drops out). If agent has no authority: - 3rd party can’t sue principal but may sue agent in tort of deceit but not in contract - Re Selectmove
Contract question -undisputed debt/variation with no consideration
- definition of contract (detriment/benefit) - original contract: - agreement (offer/acceptance) - intent - consideration - undisputed debt? - variation? - agreement - intent - consideration? - Foakes v Beer - Pinnel’s Case exception? - if not, define promissory estoppel (equity) - defence only (Combe) - acted on promise (alteration) - acted equitably (D&C Builders) - waived rights (suspended or extinguished?) - Conclude
Reverse
Offer + acceptance - do not have to be in any particular form
Agreement
Reverse
A definite promise to be bound by specific items An expression of willingness to contract on certain terms made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed
Offer
Reverse
Intention is based on the perspective of a reasonable person
Smith v Hughes (1871)
Reverse
Conduct -objectively considered - constitutes an offer -> accepted when offeror believes intention and accepts offer -> contract
Allied marine transport v Vale do Rio Navegacao SA (The Leonidas) [1985]
Reverse
Inviting negotiation -> eg goods on display or ads Sometimes display is offer (eg special sale) where clear intent to be bound
Invitation to treat
Reverse
Goods on display at supermarket generally regarded as invitation to treat (customer unable to change mind if display was an offer) Offer to buy is customer & acceptance at payment point
Pharmaceutical Society of GB v Boots Cash Chemists [1953]
Reverse
Display of knife was invitation to treat
Fisher v Bell 1961
Reverse
Held ad was invitation to treat -> if not when stock runs out could be problem
Partridge v Crittenden 1968
Reverse
Ads for rewards treated as offer, as there is intent to be bound -> encourages act for reward Other motive does not preclude a valid acceptance of offer (still entitled)
Williams v Carwardine (1833)
Reverse
D gave evidence of sincerity for ad condition by depositing money, so did not matter they made the offer to the world. Did not matter that C did not notify of acceptance -> like reward cases For unilateral contract communication of acceptance impliedly waived
Carlill v Carbolic smoke ball co 1893
Reverse
One party makes promise in return for a promise from another party Both parties have consideration
Bilateral contract
Reverse
Promise in return for act (if and only if) Consideration is act given in return for promise
Unilateral contract
Reverse
s57(2) Sale of Goods Act 1979 - bids are offers (can be withdrawn before acceptance) - fall of hammer acceptance - call for bids are invitation to treat (bilateral contract) s57(3) SGA1979 - reserve price is the price agreed between auctioneer and seller as being minimum allowed to be accepted (unilateral contract if without reserve Barry v Davies/Carlill)
Auction
Reverse
Without reserve price sale to highest bidder
Barry v Davies (Healthcare Ball & Co) 2000
Reverse
Shares to highest bidder -> unilateral contract if intent to be bound
Harvela investments ltd v royal trust co of Canada ltd 1986
Reverse
Late tender due to error by council. Council should have specified terms of submission
Blackpool & Flyde aero club ltd v Blackpool borough council 1990
Reverse
Revocation (withdrawal) of offer; rejection of offer; lapse of time
Termination of offer
Reverse
Anytime before acceptance (Routledge v Grant, except Mountford v Scott); Must be given/communicated to be effective (Byrne v Van Tienhoven) -> notice sent to last known address still effective or if offeree chooses not to read
Revocation
Reverse
If promised to keep open for certain amount of time -> not binding as long as gratuitous (nothing given/promised in return for keeping open)
Routledge v Grant (1828)
Reverse
If consideration given for promise to leave offer open (£1 for option for 6 months), offeror is bound
Mountford v Scott
Reverse
Withdrawal by telegram only effective upon receipt
Byrne & Co v Van Tienhoven & Co (1880)
Reverse
For offers to the public, revocation should be published in the same method as originally published
Shuey v US (1975)
Reverse
Notice of revocation to business: During business hours, notice effective on receipt - reasonable to expect staff available to read - communicated on arrival -> even of not actually read til next day - may still depend!ust be reasonable
The Brimnes 1975
Reverse
Revocation can be communicated by a reliable 3rd party
Dickinson v Dodds (1876)
Reverse
Partial performance is sufficient to prevent revocation (implied promise not to revoke if specified act started within reasonable time)
Errington v errington & Woods 1952
Reverse
- expressly or impliedly - acceptance must match exactly terms of offer (otherwise counter offer) -> Hyde v Wrench
Rejection of offer
Reverse
Counter offer rejected then tried to accept original price -> no longer valid as it was rejected
Hyde v Wrench (1840)
Reverse
Inquiries (not counter offer) which help with decision making does not imply rejection of offer
Stevenson Jacques & Co v McLean (1880)
Reverse
- express condition - otherwise ‘reasonable time’ which depends on circumstances
Lapse of time of offer
Reverse
An offer must be in a form whereby a simple assent is enough to lead to agreement Acceptance must be a complete unqualified acceptance of all terms of offer and the offeree must know of offer to accept (acceptance with request for more info is still acceptance) Terms must be certain Must be communicated by offeree or authorised agent (Entores/Powell) - General rule - must be received - exceptions, eg postal rule
Acceptance
Reverse
Offeree must know of offer to accept (cannot be ignorant of offer)
R v Clarke
Reverse
Between 2 business last signed terms/conditions prevailed as counter offer
Butler Machine Tool Co Ltd v Ex Cello Corp 1979
Reverse
Acceptance by conduct of last set of std terms to be proffered
Brogden v Metro Railway Co (1877)
Reverse
Contract not enforceable if it is uncertain what has been agreed or something is left to be determined (eg too vague)
Scammell v Ouston 1941
Reverse
No uncertainty if phrase means something to both parties
Hillas v Arcos (1932)
Reverse
Acceptance must be communicated If no postal rule, retraction possible til post received For electronic communication, acceptance is when it would be reasonable to expect the recipient to have read it
Entores Ltd v Miles Far East Corp 1955
Reverse
Acceptance must be communicated by offeree or authorised agent (can’t just be reliable 3rd party)
Powell v Lee (1908)
Reverse
Silence can’t amount to acceptance (tried to buy horse with implicit acceptance)
Felthouse v Bindley (1862)
Reverse
Offeree can bind himself by silence (no communication of acceptance) -> eg ‘if you don’t hear from me …’ Argued Roffey principles should be extended to part payment (if practical benefit and no duress/fraud part payment should be accepted) but this was not accepted due to precedent in Foakes v Beer, which was HoL case. Representative of creditor had no authority to bind creditor to arrangement to pay debt by installment (agent had no authority)
Re Selectmove Ltd 1995
Reverse
Postal Rule: Acceptance is complete on posting & contract formed at that point (if it applies retraction rule unclear)
Adams v Lindsell (1818)
Reverse
Acceptance posted but didn’t arrive -> still acceptance upon posting & contract form (otherwise could lead to fraud or delays)
Household Fire & Carriage Accident Insurance Co v Grant (1879)
Reverse
- only for acceptance - only when reasonable to send by post - must be properly stamped, addressed & posted - rule can be excluded by offeror either expressly or impliedly (then only effective upon receipt) - notice words
Limitations to postal rule
Reverse
Acceptance to buy house was exerciseable by notice in writing to D but letter never arrived -> ‘notice’ excluded postal rule impliedly (words may imply agreement must reach person, eg ‘must know’ or ‘call me by’)
Holwell Securities Ltd v Hughes 1974
Reverse
Electronic communication -> no universal rule: based on intent, business practice and judgement of risk
Brinkibon Ltd v stahag stahl und stahlwarenhandelgesellschaft GmbH 1983
Reverse
Contract must have intent to create legal relations or not legally binding
Intention
Reverse
Young couple sold house on promise of relative’s house of they took care of him -> held intent of contract, thus legally binding
Parker v Clarke 1960
Reverse
Intent of Informal syndicate binding (a group takes turns buying lottery ticket with intent that if one wins they all share)
Simpkins v Pays 1955
Reverse
Lack of intent between spouses for contract
Balfour v Balfour 1919
Reverse
If couple separated at time of agreement, could have intent
Merritt v Merritt 1970
Reverse
- consideration (benefit/detriment; the greater the value more like legal) - parties not on good terms when agreement made - formal, in writing
Domestic Agreement intent rebut
Reverse
Commercial - presumption that parties intend to be legal (skyways) - difficult to rebut Domestic - presumption that parties do not intend to be legal (Balfour)
Commercial agreement v domestic agreement
Reverse
Ex gratia (no pre-existing liability) payment offered/accepted and was legally binding - commercial agreement
Edwards v Skyways 1964
Reverse
Rebutted commercial agreement presumption using a clause specifically stating not formal or legal - requires clear words
Rose & Frank Co v Crompton Bros 1925
Reverse
Binding contract? - offer - acceptance (agreement) - intention - consideration What are terms? Any terms breached? What are remedies? (law, authority, application)
Contract question
Reverse
A valuable consideration may consist either in some right, interest, profit or benefit accruing to the party or some forbearance, detriment, loss or responsibility, given, suffered or undertaken by the other (benefit and/ or detriment)
Currie v Misa (1875)
Reverse
-Currie v Misa - the price one party pays for the other’s promise (Pollock) - promise of payment is enough -> need not be adequate but must be sufficient (some value but can be nominal) -> past consideration is not sufficient
Consideration
Reverse
Party can stipulate what consideration he chooses (chocolate wrappers)
Chappell & Co Ltd v Nestlé Co Ltd 1960
Reverse
Promise to stop moaning not consideration (public policy reason -> floodgate)
White v Bluett (1853)
Reverse
Promise to stop smoking, drinking, swearing was consideration, as party gave up legal rights
Hamer v Sidway (1891 - USA)
Reverse
Past consideration not sufficient C bought horse, after which D assured that horse was sound, which was not true. However, horse was already bought and no consideration had been given based on this promise
Roscorla v Thomas 1842
Reverse
- Act must have been done at promisor’s request (Lampleigh v Brathwait) 2. Parties must have understood at outset that act was to be rewarded in some way (Re Casey’s Patents) 3. The payment or other benefit must have been legally enforceable if promised in advance
Exception for past consideration
Reverse
Asked party to seek royal pardon; made considerable effort to no avail; D promised £100 for effort -> held as enforceable
Lampleigh v Brathwait (1615)
Reverse
Promised 1/3 share of patent proceeds for managing them -> understood at outset act was to be rewarded
Re Casey’s Patents, Stewart v Casey 1892
Reverse
If existing duty imposed by law -> not sufficient consideration Testifying in court not sufficient consideration because it is already a legal duty (against public interest otherwise)
Collins v Godefroy (1831)
Reverse
A child was well looked after and happy and an allowance was given to the mother -> it was beyond legal duty thus it was sufficient consideration
Ward v Byham 1956
Reverse
Promise to perform existing duty is sufficient consideration as long as not against public policy
Williams v Williams 1957
Reverse
Police protected mine w agreement to pay council for police services. Co denied payment arguing pice had duty to protect. HoL held police did above what was reasonably necessary thus sufficient consideration
Glasbrook Bros Ltd v Glamorgan County Council 1925
Reverse
Person in contract to perform act, act is sufficient consideration for a separate contract with someone else Delivered cargo of coal was consideration though already contractually bound by 3rd party to make the delivery
Scotson v Pegg (1861)
Reverse
Simply performing an existing contractual duty is not sufficient consideration for the other party to pay more money Seamen’s wages -> captain promised extra wages to work ship home but didn’t pay. He didn’t have to bc seamen already were under duty to do this -> unenforceable for want of consideration
Stilk v Myrick (1809)
Reverse
Continuation of voyage hazardous for crew thus not obliged to carry on -> held good consideration
Hartley v ponsonby (1857)
Reverse
Extra wages for seamen against public policy -> crew may hold ship hostage or damage unless they get extra wages
Harris v Watson (1791)
Reverse
Exception to consideration for additional wages of existing contractual duty -must be goods & services contract Extra money ok, as long as practical benefit and no economic duress or fraud i. A enters into contract with B in return for B’s payment & ii. Before A completes, B has reason to doubt A will complete & iii. B promises A additional payment in return for A’s promise to complete on time & iv. As a result, B obtains in practice a benefit or obviates a disbenefit & v. B’s promise is not given as a result or economic duress or fraud on the part of A, then vi. The benefit to B is capable of being consideration for B’s promise, so that it is legally binding
Williams v Roffey Bros & Nicholls (contractors) Ltd 1991
Reverse
Part payment of debt is usually not consideration for a promise to forgo balance due Can’t use promissory estoppel as defence
Foakes v Beer (1884)
Reverse
Obiter Exception to Foakes v Beer If debtor can show that he gave something different for creditor’s agreement to accept a lesser sum (eg paid early) possibly consideration (another exception is part payment by 3rd party who could try to claim full payment by original debtor)
Pinnel’s Case (1602)
Reverse
Promissory Estoppel: -Equitable doctrine -> party has made promise to forgo legal right, once other acts upon promise, party is bound & other can bring claim if inconsistent with promise - defense only (shield not sword) - landlord agreed to lower rent during wartime -> only temporary, after war higher rent For continuing obligations, reasonable notice must be given that full amount expected in future.
Central London Property Trust Ltd v High Trees House Ltd 1947
Reverse
C had impliedly agreed to suspend repairs til end of negotiations; only after negotiations to sell would time start again, thus inequitable to allow landlord (C) to end lease (promissory estoppel)
Hughes v Metro Railway Co (1877)
Reverse
Equitable doctrine 1. Must be promise to waive legal right (expressly or impliedly - Hughes) 2. Promisee must act on promise (enough that it alters position - WJ Alan v El Nasr) 3. Only a defence; can’t give rise to cause of action (Combe) 4. Must be inequitable for priomisor to go back on promise (D&C Builders v Rees). All circumstances considered For continuing obligations, notice does not have specific form (Tool Metal) as long as reasonable (High Trees); also no notice necessary if based on event or lapse of reasonable period of time. (Tool Metal) If promisee can’t go back to original position promisor rights may be extinguished (Ajayi) Unclear with one-off debts (D&C Builders if debtor equitable vs Foakes v Beer - no promissory estoppel). Maybe High Trees/Ajayi would apply?
Promissory Estoppel
Reverse
Obiter Promissory estoppel- promisee must act on belief induced. Not necessary to be detriment, only alteration
WJ Alan & Co v El Nasr 1972
Reverse
Wife tried to sue husband for promise of alimony payments but held that can’t use promissory estoppel as a cause of action, only as a defence.
Combe v Combe 1951
Reverse
D owed C £482 and offered £300 in full settlement indicating that id C did not accept, they would get nothing. D could not rely on promissory estoppel as it was not inequitable for C to go back on promise since it had not been given freely (if, for one off debts, debtor acts equitably, possible maybe to use promissory estoppel)
D&C Builders v Rees 1966
Reverse
For promissory estoppel, notice not always necessary if period of suspension clearly terminates based on an event or lapse of reasonable period after situation ends Notice need not be in a particular form
Tool Metal Mfg Co v Tungsten Electric Co Ltd 1955
Reverse
If promisee can’t go back to original position then promisor’s rights may be extinguished
Ajayi (Emanual) v RT Briscoe (Nigeria) Ltd 1964
Reverse
- If contract bw A & B and A agrees to pay more if B will still complete obligations -> Stilk v Myrick - performance of existing duty NOT sufficient consideration 2. Has B done something extra? -> Hartley v Ponsonby - extra could be sufficient consideration 3. Has not done something extra -> is it an exception -> Williams v Roffey
Pay more money for same contractual duty allowed?
Reverse
- If contract bw A & B and A performed obligation & agrees to accept reduced payment from B -> Foakes v Beer -> not sufficient consideration 2. Is it a common law exception? -> A given different consideration from B - Pinnel’s Case 3. If not, is promissory estoppel relevant? (High Trees)
Pay less money than originally contractually agreed?
Reverse
Only parties to contract can acquire rights and be subject to liabilities under it Contracts (Rights of third parties) Act 1999 - for contracts after 1 May 2000 - section 1 allows 3rd party to enforce contract term if : - contract expressly provides he may; or - term purports to confer a benefit on him (unless parties didn’t intend the term to be enforceable by a third party) - party must be identified by name, a member of class or answering to a particular description
Privity
Reverse
Relationship which arises where one person (agent) acts on behalf of another (principal), and has power to affect principal’s legal position in regards to a 3rd party Agent must have authority - express authority - actual auth for specific things - apparent/ostensible authority - distinct/false impression of authority -> agency by estoppel: - at some stage principal represented agent as authority - 3rd party relied on this representation - 3rd party altered position due to reliance Obligations made thru agent are binding on principal (agent drops out). If agent has no authority: - 3rd party can’t sue principal but may sue agent in tort of deceit but not in contract - Re Selectmove
Agency
Reverse
- definition of contract (detriment/benefit) - original contract: - agreement (offer/acceptance) - intent - consideration - undisputed debt? - variation? - agreement - intent - consideration? - Foakes v Beer - Pinnel’s Case exception? - if not, define promissory estoppel (equity) - defence only (Combe) - acted on promise (alteration) - acted equitably (D&C Builders) - waived rights (suspended or extinguished?) - Conclude
Contract question -undisputed debt/variation with no consideration
