contract Flashcards
what is trietel’s definition of an offer
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
Harvey v Facey
in order to be valid offer must be exact and definite terms
Gibson v Manchester City Council
word ‘may’ means it was not an offer as it was too vague
fisher v bell
Display of goods is an invitation to treat not an offer
partridge v crittenden
print adverts almost always invitation to treat
Carlill v Carbolic Smoke Ball Co (offer)
reward posters are considered unilateral offers
payne v cave
auctions with reserve are an invitation to treat
Heathcote ball v Barry
auction without reserve is a unilateral offer
what is acceptance
a positive and unconditional agreement to the terms of an offer
what are the methods of accepting an offer
specified, verbal, conduct, post, electronic
Eliason v Henshaw
if method of accepting an offer is specified, must accept by this method
felt house v bindle
acceptance by conduct must be a positive act
Carlill v Carbolic Smoke Ball Co (acceptance)
using item can be positive conduct
Household fire insurance v grant
Acceptance complete on posting, even if lost and never arrives
Adams v linsell
Acceptance is complete on posting
Entores
electronic methods do not follow the postal rule
brinkibon
acceptance is valid once received in an email inbox the next working day
what did Electronic Commerce Regulations 2002 do?
set out email acceptance rule
Ramsgate Victoria Hotel v Montefire
offer can end due to lapse of time
stevenson v McClean
to end an offer there must be a clear rejection, not a request for more information
Hyde v Warren
counter offer rejects the original offer
when does a contract end due to death?
if the offeree in certain contracts (e.g. car sales) dies due to them not being able to take up offer
if offeror dies in a personal service contract
Routledge v Grant (revocation)
can revoke offer at any point of it being open
Byrne v Van TieHoven
revocation does not follow postal rule - must be received by offeree
Dickinson v Dodds
a third party can revoke an offer
what are the presumptions of intent to create legal relations based on different types of contract
business contracts - there is an intent
social agreement - no intent
Sadler v Reynold
burden is on claimant to show it is a business deal if it is not obvious
McGowan v Radio Buxton
business contract (radio competition) presumption of legal relations
Edwards v Skyways
surrounding employment - business contract - intent for legal relations
Rose and Frank v Crompton
wrote in contract that there was no intent to create legal relations - business contracts assumption rebutted
Appleton v Littlewoods
contract said it was ‘binding in honour only’ - rebuts presumption
Balfour v Balfour
no evidence there was intent to create legal relations - social contract between divorcing couple
Merritt v Merritt
there was evidence of an intent to create legal relations as they wrote down agreement (social contract)
Jones v Padvatton
purely domestic - presumption of not legal relations
what is consideration
an act or forebearance of one party or the promise thereof is the price for which the promise of the other is brought
what is executed consideration
one party has performed its part of the agreement
what is executory consideration
promise to do something in the future
Chappell v Nestle
consideration must have some economic value
White v Bluett
intangible matters are not consideration - promise not to complain
Ward v Bytham
Promise to keep child happy is consideration but keep child alive is not
keeping child alive is a pre-existing duty - not consideration
Re McArdle
Past consideration is not valid consideration
Lampleigh v Braithewaite
Past consideration is not valid consideration
Collins v Godefroy
policeman doing job is a pre-existing duty - not consideration
Glasbrook v Glamorgan
police exceeded a pre-existing duty - valid consideration
Williams v Roffey
consideration was avoiding penalty
Tweedle v Atkinson
consideration must come from parties involved in contract
what did contract (rights of 3rd parties) Act 1999 say about consideration
consideration can come from a 3rd party if they’re named in the contract
Shadwell v Shadwell
consideration can exist where contractual duties are owed to a 3rd party
Pinnel’s case
part payment is not consideration
High Trees
established promissory estoppel - lord denning
Re Selectmove
can ask for the rest of the money as aren’t under a duty to accept instalments
D and C builders v Rees
promissory estoppel not available to those who put pressure on the other party
Couchman v Hill
The more important the statement was, the more likely it will be binding - implied terms
Dick Bentley
term of contract as had specialist knowledge
Routledge v Mckay
a time lag between statement and contract is likely to mean it is not a term of contract
it is assumed that everything parties wanted to include is written in the contract
how are terms implied by common law?
business efficacy, officious bystander, custom, prior dealings
The Moorcock
term implied to make business sense - business efficacy
Shirlaw v Southern foundries
Officious bystander test - if an officious bystander were to suggest some express provision for it in their agreement they would
Shell v Lockstock
terms will not be implied if parties would never have agreed to them had they thought about them
Marks and Spencer plc v BNP
reasonableness of implied terms is judged objectively
Hutton v Warren
Terms implied by custom
Hillas v Arcos
terms implied by prior dealings
Re Moore
breach s.13 SGA 1979 - not enough tins
what did s13 SGA 1979 say
implied condition as to description
what did s14 SGA 1979 say
implied condition that the goods are of satisfactory quality
Baldry v Marshall
breach s14 - car sold was not fit for purpose
what is s13 Supply Of Goods and Services act?
implied term that service will be carried out with reasonable care and skill
Thake v Maurice
surgeon completes surgery to the best of their ability - doesn’t breach SGSA
Carlill v Carbolic Smoke Ball Co (implied terms)
trade puffs aren’t a term
business to business terms implied by statute
sale of goods act 1979
Sale of goods and services act 1982
business to consumer implied terms by statute
consumer rights act 2015
what did s9 CRA 2015 say
the term that goods are of satisfactory quality is implied
how does the officious bystander test show that courts implying terms can be negative?
shirlaw v southern foundries + Marks and Spencer v BNP says that reasonableness is judged objectively and isn’t concerned with parties opinions - contract is supposed to give the parties freedom to contract on terms they want so if their answer to the test is not taken into account then it limits the freedom
what was said in Marks and Spencer v BNP which shows that courts implying terms may be unfair
‘if the term satisfies the other requirements it is hard to think that it would not be reasonable’ - judging objectively means the parties are not contracting on terms they choose
how does the rule from hillas v acros limit freedom of contract as well as help it
rule = terms can be implied by prior dealings
limit - stops freedom to contract on new terms
help- it is likely that terms will be similar so it is more effective - allows for courts to accurately judge aim
How does the rule from Shell v Lockstock garage help and hinder freedom of contract
help - terms will not be implied unless the party would’ve agreed it had they thought about them - helps the party with less bargaining power that may have been forced into a contract
hinder - if it is written in the contract and they decided they don’t want to it may hinder the other party as they may have relied on it
how does schwel v reade show that implied terms by courts are actually a good thing
court can decide that a verbal statement is a term in business efficacy - helpful when the statement influenced a party to enter into the contract
how does the consumer rights act show implied terms have a positive impact
equalises bargaining power
what is the general rule regarding exclusion/limitation clauses + which case
L’estrange - if you signed the contract you are subject to the clause
curtis v chemical cleaning
if c signed due to an oral agreement and aren’t told about exclusion/limitation clauses it is invalid
Olley v Marlborough court
must be given reasonable notice of the exclusion/ limitation clause
why is the rule in L’estrange sometimes considered unfair?
could be subject to a clause you didn’t know about
why is the rule established in curtis v chemical cleaning good?
allows for people to not be bound by clauses they were unaware of even when asking
why is the L’estrange rule sometimes considered good?
protects defendants where c didn’t read contract - not their fault
Parker v South Eastern Railway
exclusion clause on back of ticket was considered insufficient notice so was invalid
why does the outcome of Parker v south eastern railway seem unfair
c should’ve read clause - notice was reasonable but not ‘sufficent’
McCutcheon v David MacBrayne
in order for exclusion/limitation clauses to be implied by prior dealings there must be consistent signing
what is the evaluation point raised in McCutcheon v David Macbyrne
had c been present with the contract on the day he would’ve signed it however it happened to not be presented that day - should imply from prior dealings even though he didn’t consistantly sign it as court decision goes against the intention of the contract
what is the contra proferentem rule
where there is doubt about the meaning of a term in a contract the words will be construed against the person who put them in the contract
which case shows the use of the contra proferentem rule
Transocean drilliing UK
why is the contra proferentem rule good?
created to remove doubt, not create it - so if the exclusion clause is clear it will not apply - protects party with lesser bargaining power
what are the s11 UCTA test for reasonableness
s11(1) reasonable in light of both parties knowledge
s11(2) bargaining power, inducements, special order goods, likelihood of compliance or term listed
s11(4) limitation clause only - resources d could expect to be available for meeting liability - should it arise - how fair is it for d to cover himself?
what is not allowed to be excluded according to UCTA 1977
s2(1) - personal injury/death
s2(2) - unreasonable negligence
s6(1) - implied condition as to title
how does the CRA 2015 provide adequate protection to contracting parties?
protects party with lesser bargaining power
cutter v Powell
discharge by performance - partial performance is not complete and exact (died on voyage)
Re Moore
not entire performance (24 tins not 30) so discharged
what are the exceptions to the need for complete and exact performance
divisible contracts, substantial performance, prevention of full performance , voluntary acceptance of part performance, late performance
Ritchie v Atkinson
paid per tonne so could claim damages for undone part but not discharge the entire contract (divisible contract)
Hoenig v Isaacs
can only claim damages for defect left as there was substantial performance
Bolton v Mahadeva
small jobs require full performance - doesn’t fall under substantial performance exception
planche v colburn
if one party prevents the other party from completion the innocent party can claim (got half payment as cancelled book writing half way through)
which exceptions can you get quantum merit payment from
prevention of full performance, voluntary acceptance of part performance
simpter v hedges
can’t claim if voluntarily accepted party performance
what is the remedy for late performance
always damages less it was a condition (can rescind)
Union Eagle
time expressly stated as essential in contract so could repudiate for later performance
Charles richards
even if time isn’t important - can repudiate if it is a condition and there is late performance
what are the two types of breach
actual, anticipatory
pilbrow v pearless co
actual breach = fails to perform or unsatisfactory performance
Hochester v De La Tour
indicated to him before contract took place it wouldn’t go ahead - anticipatory breach
Bulk Uruguay
can infer an anticipatory breach from conduct
when can you start claiming for damages in an anticipatory breach?
as soon as find out performance won’t occur
what is frustration
if after a contract is made, something happens through no fault of the parties to make it impossible to carry out the contract
Taylor v Cadwell
Set out doctrine of frustration
frustration through impossibility
what is a force majeure clause
means ‘superior forces’ - overrides doctrine of frustration
event will be determined according to the clause
when can a contract become frustrated
impossibility, illegality, radical change
Robinson v Davidson
getting ill can be a frustrating event (by impossibility)
shipton
frustrated by illegality - requisitioned by gov
Fibrosa
frustrated by illegality - port occupied by enemy WW2
what is frustration by radical change?
main purpose of contract is based on a particular event and event will not take place
krell
frustrated by radical change - hired hotel to go to coronation and it was cancelled due to king’s illness
Herne Bay
not accepted frustration by radical change as although king ill for coronation, celebration went ahead
when is frustration not accepted?
self - induced, less profitable, foreseeable
Maritime national fish
self induced so frustration not accepted - chose not to get licence
Super Servant II
self inflicted as chose to certain ships in order to avoid agreement - frustration not accepted
Davis contractors
less profitable/more difficult to complete is not a reason for contracts to be frustrated
Amalgamated investment
should’ve been aware of risk, foreseeable - not frustration
four seasons
should be paid during suspension as foreseeable staff may be suspended - no frustration
what does s1(2) Law reform (frustrated contracts) act 1943 say about the remedies of frustration
money already paid is recoverable and money due under contract is not payable
what does s1(3) law reform (frustrated contracts) act 1943 say about the remedies for frustration
court can use discretion to order compensation
what is the common law legal right regarding breaching of a contract
can repudiate if a condition
what are the two types of remedy
legal, equitable
what are the statutory legal rights in remedies?
CRA 2015 - if breached have a short term right to reject, to get a repair or a right to reduction in price
SGA 1979 - unpaid sellers have a legal interest over property until it is paid for
what is a prohibitory injunction
a court order instructing someone not to do something
AB v CD
interim injunction - temporary injunction
mandatory injunction
court order requiring someone to do something
Page one records
could only claim damages not order injunction as can’t force people to work together
specific performance
court order compelling someone to do something typically hand over property
Airport industrial GP
specific performance not ordered as would inevitably force a company into liquidation
what is the aim of damages
put claimant back into position they would be in if the contract had been properly performed
what duty does a claimant have if a contract is breached
mitigate their loss
white v McGregor
c shouldn’t have kept doing job after anticipatory breach - didn’t mitigate loss
British Westinghouse
got better turbines after breach. gain should be balanced against loss - no damages due as mitigation removed loss
what are nominal damages
awarded if there’s a breach but no actual loss
Stanforth v Lyall
boat rehired so no loss but could claim for breach
wrotham park damages
cost of permission to breach
2 stage test for consequential loss
causation (loss must be directly caused by breach) and remoteness (must be reasonably foreseeable)
Stansbie v Troman
decorator didn’t lock up - direct cause
Hadley v Baxendale
foreseeability test - cannot be held liable for consequences you could not have anticipated
what is direct/normal loss? is it recoverable?
type that would usually arise from a breach - recoverable
what is indirect/abnormal loss? is it recoverable?
loss that is out of the ordinary - only recoverable if when contract was made d knew it could happen
Hotel services Ltd v Hilton
loss of profit from defect minibars is a direct loss
Victoria Laundry
unknown gov. contract not recoverable - indirect loss
The Heron II
indirect loss but recoverable because had specialist knowledge so should have known
what is loss of bargain
difference it costs to get elsewhere
Charter v Sullivan
if demand from other consumers no loss of bargain
Bence Graphics v Fasson
got difference in value as lasted 3 years less than it should’ve
Angila TV
can claim for restitution and costs incurred (e.g. get damages for travel)
what did Victoria laundry show about claiming for loss of profit?
only businesses can claim
swan tours
damages for emotional distress available in enjoyment contracts
addis v gramophone
cannot claim for damages for mental distress in business contracts
Ruxley construction v Forsyth
can claim for loss of amenity (pool too shallow)
what does quantum meruit payment mean?
the amount someone deserves - In most cases it denotes a claim for a reasonable sum in respect of services or goods supplied to the defendant
