Formation Of Contract

Question 0

Household Fire Insurance v Grant 1879

Answer 0

FORMATION
D applied for shares in plaintiff company.
Plaintiff allotted shares, posted letter to inform.
Letter never received (Houses renumbered).
Plaintiff applied dividends to account.
Company later liquidated, claimed for payment of share value (Never received for D never received letter).
Held: Contract concluded upon posting of letter.
In doing so plaintiff did all that could reasonably be expected.
Notable dissent.
Judgement for plaintiff.

Question 1

Storer v Manchester City Council 1974

Answer 1

FORMATION
Government scheme to sell council houses.
Simple agreement of sale.
Plaintiff applied, received agreement.
Return of signed agreement would result in corporation doing the same.
Date omitted.
Change of government, reversal of scheme.
Contracts not exchanged.
Held: Exchange of contracts a legal formality, one the scheme was designed to dispense with.
Plaintiff accepted terms of offer, agreement concluded.
Omission of date merely administrative, not enough to void contract.

Question 2

Byrne v van Tiendhoven 1880

Answer 2

FORMATION
D wrote to plaintiffs, NYC to Cardiff, offering sale of goods.
Offer received Oct 11th, accepted by telegram same day, confirmation letter sent Oct 15th.
On Oct 8th D posted letter withdrawing offer, reached plaintiffs Oct 20th.
Held: Withdrawal inoperative.
Contract completed Oct 11th, plaintiffs had no reason to suppose withdrawal.

Question 3

Dunmore v Alexander 1830

Answer 3

FORMATION
D wrote to plaintiff to engage services of servant.
Wrote subsequent letter withdrawing offer.
Letters delivered together.
Plaintiff claimed for interim wages.
Held: As letters were delivered together no contract had been completed.
Dissent: Contract made through current employer, contract completed upon delivery to HER.
Order of letter opening? Too vague?

Question 4

Gibson v Manchester City Council 1979

Answer 4

FORMATION
Storer housing scheme.
Plaintiff completed form, returned it.
Received reply with price house may be sold at.
Plaintiff applied asking for reduction in price based on property condition.
Denied, proceeded with sale.
Change of government, reversal of scheme.
D ordered to sell house, affirmed on appeal.
House of Lords: No legal contract formed.
Plaintiff merely notified of price D MAY sell house at, to which formal application, not completed, may be made.
Diplock: Unfortunate that people, lose out on houses on favourable terms but this should not cloud the facts of the law.

Question 5

Re McArdle 1951

Answer 5

FORMATION
Plaintiff carried out work on home held on trust.
Later entered into contract to be reimbursed by trustees.
Upon death of testator claimed costs upon sale.
Held: Consideration wholly past upon entry to contract.
Contract invalid. No claim.

Question 6

Errington v Errington 1952

Answer 6

FORMATION
Father bought house for son and daughter in law.
Agreement to transfer deed upon payment of last mortgage payment (Paid by newlyweds).
Father died, leaving house to widow.
Couple separated.
Widow claimed for possession of the property.
Dismissed at first instance and appeal.
Couple entitled to possession of the house for as long as they kept up payments to the building society.
UNILATERAL CONTRACT:
Act: Mortgage payments
Promise: Transfer of deed

Question 7

Luxor v Cooper 1940

Answer 7

FORMATION
Plaintiff an agent who had provided two potential purchasers of cinemas for the defendants.
No sale took place, agent claimed defendants had prevented sale, claimed damages to tune of lost commission.
Held: No room for implied term that principle will not dispose of property himself or otherwise prevent commission by agent.
Dismissed.

Question 8

Partridge v Crittenden 1968

Answer 8

FORMATION
Defendant offered birds for sale in classifieds section of paper.
Listed as ‘closed ring’ specimens.
Plaintiff sent cheque requesting a hen.
Upon delivery, hen was not closed ring.
D charged with supplying illegal bird.
Appeal: Ad placed was invitation to treat, not offer of sale.
Held: Following Fisher v Bell, D was not offering sale.
Appeal allowed.
Obiter: Prosecution criticized for choosing the offer of sale, the only avenue destined to fail, over the completed sale or the possession of the bird for sale, both of which would have fared better in court.

Question 9

Carlill v Carbolic Smoke Ball Company 1893

Answer 9

FORMATION
Defendants had claimed that their product would prevent influenza if used three times daily, or they would reward £100.
Woman used the ball, contracted the flu.
Argued that the advertisement was not directed at a particular person, a contract cannot be made with the whole world.
Held: Advertisement was an offer taken up not by the whole world, but only those who performed the conditions specified in the advertisement.
V entitled to recover.

Question 10

Fisher v Bell 1960

Answer 10

FORMATION
Defendant had displayed a flick knife in window of shop with a price tag.
Officer inspected the knife, told shopkeeper it was illegal, met with ‘Why do suppliers keep bringing them around?’
Held: Display in shop window was invitation to treat, not formal offer (Though the judge admitted that the decision was made reluctantly).
Judges not in position to usurp legislation.
Plaintiff appealed. Denied.

Question 11

Pharmaceutical Society of Great Britain v Boots (1953)

Answer 11

Boots set up a self service shop.
Patrons selected goods from shelves that were required to be sold under supervision of a pharmacist under the Pharmacy and Poisons act.
Held: Goods on shelves were not an offer by the defendants to sell, rather an invitation to the customer to offer to buy.
Sale performed under supervision of pharmacist at cash register, brining action within the act.

Question 12

British Car Auctions v Wright 1972

Answer 12

FORMATION
Auctioneers conducted sale of car which was later deemed unroadworthy.
Convicted under road traffic act for the ‘Offer of sale’ of unroadworthy vehicle.
Held on appeal: Bidders make offers at auction, accepted by fall of hammer.
Auction was invitation to treat, not offer of sale.
Conviction quashed.

Question 13

Ramsgate Victoria Hotel Ltd. v Montefiore (1866)

Answer 13

FORMATION
Claimant offered to buy shares in hotel in June.
Paid a deposit, provision in contract of return in the event of non-issuance.
Company did not issue shares for sale until November.
Held: Reasonable time had lapsed, neither party under obligation to contract.

Question 14

Hyde v Wrench 1840

Answer 14

FORMATION
D offered to sell farm for £1200.
Plaintiff declined.
D offered at £1000.
Countered for £950.
£950 declined by D.
Plaintiff accepted previous offer of £1000, to which D responded that he would consult with solicitor.
Plaintiff filed for specific performance.
Held: Upon countering with £950, the offer of £1000 was rejected, putting an end to D’s offer.
Offer of £1000 can not be revived without D’s concurrence.
No contract.

Question 15

Felthouse v Brindley 1862

Answer 15

Nephew undertook to sell a horse to his uncle.
Nephew asked for 30 guineas, uncle offered thirty pounds (Less valuable at the time due to gold prices).
Nephew agreed to sale but under the impression that it was at his price.
Informed uncle, who agreed to split the difference, 30l 15s
No further correspondence.
Nephew came to sell his livestock, instructed D, the auctioneer, not to sell the horse.
D mistakenly sold the horse.
Held: No contract had been made, only a proposal that had not been accepted by the nephew and as such was not binding.
As such, he had no claim.

Question 16

Brogden v Metropolitan Railway Co. 1877

Answer 16

FORMATION
Brogden owned a colliery.
Contracted with railway company to supply coal, writing ‘Approved’ on the terms, then acting upon them, supplying coal in the quantities and price listed.
Later dispute lead to B claiming there was no contract as he had received no confirmation of the receipt of contract.
Held: Contract concluded by performance.
Intention inferred by both parties.
Specific performance required.

Question 17

Brinkibon v Stahag Stahl 1983

Answer 17

B accepted an offer from Vienna regarding purchase of steel by telex outside of office hours.
Part of agreement was provision of credit.
Credit line opened in name of hitherto unmentioned third party.
Sellers withdrew offer.
Buyers claimed for breach of contract.
Held: Telex exchange did not constitute concluded contract.
Buyers proposed alternative terms and was thus a counter offer.
Postal rule: Acceptance upon postage due to potential mischief of revocation prior to delivery.
Telex rule: Acceptance upon receipt of telex. Letter/telegram rules are exceptions due to interval between sending and receipt.

Question 18

Balfour v Balfour 1919

Answer 18

Couple married in 1900.
He was posted in Ceylon (Sri Lanka) and she accompanied him.
Both returned on his leave in 1915.
He returned to Ceylon alone as she was diagnosed with rheumatism and advised not to travel.
He agreed to pay her £30 per month maintenance until she could join him.
While away he told her he wished to remain separated.
She sued for the monthly payment.
HELD: The agreement was a domestic arrangement, not enforceable by the courts.
Claim dismissed.