intro to law 2 Flashcards
what are the sources of contract law
case law
legislation
define contract
agreement giving rise to obligation which are enforced or recognisable by law
what are the two principle when identifying a contract
is there an agreement
is it legally binding
define subjective
what meaning a party actually intended to convey by his words or conduct
define objective
what meaning a reasonable person in other parts position would have understood him to be conveying
what are the elements of a legally binding contract
agreement consideration intention to create legal relations compliance with required formalities where necessary capacity to contract
define offer
clear ststamene too terms which the offeror is prepared to do business with the offer
what are the types of offer and explain
bilateral - consists two promises
unilateral - consists of one promise
what makes an offer legally binding
clear
communicated
NOT statement of intent, supply of information, invitation to treat, or mere puff
explain guthing v Lynn 1831
buyer of a horse promised to pay seller and extra 5£ if horse if lucky for me - promise to pay extra fiver was too vague
offer wasn’t clear
explain hills v across 1932
contract to supply wood for one year had option permitting buyer to buy additional wood following year. option not specify type or quality - valid offer, details obtained from previous dealing and custom and practice in trade
offer must be clear
explain bloom v American Swiss watch co 1915
claimant gave information concerning jewel theif didn’t know at time reward, discovered after and tried to claim it - defendant legally obliged to pay claimant reward monies as no contract existed between partied to do so
what is an offer not
a statement expressing information
statement supplying information
an invitation to treat
mere puff or boast
explain re ficus 1900
a father informed future son in law daughter would inherit land under will - fathers words simply intention at time, not an offer so not bound by it
statement of intent
explain Harvery v Facey 1893
claimant asked defendant state lowest price would sell bumper hall pen for he said 900. claimant accepted + sued for breach of contract when defendant refused to sell - no contract had been formed defendants reply was offer but statement of minimum price
statement supplying information
define invitation to treat
not an offer that is capable of being accepted by other party
is an invitation to negotiate or pre offer
explain Gibson v Manchester City council 1979
city council adopted policy of selling council house to tenants. claiment requestsd details and received letter back stating council prepared to sell house complete form claimant applied before response local elections reversed policy and refused to sell - council not an offer invitation to treat
name key examples of invitation to treat
display of goods in shop window display of goods in self service shelves tenders auctions advertisements share prospectus menus
explain fisher v bell
flick knife display shop window charged restrictions of offensive weapons - not an offer for sale, invitation to treat
explain pharmaceutical society of Great Britain v boots cash chemists southern ltd 1953
boots introduced self service system customers put items in basket and pay at cash desk. prosecuted pharmacy and potions act as offence to sell drugs without presence of pharmacist - no offence committed customer made offer when handing over goods at cash desk where pharmacist was
what is a tender
w/ example
person seeking to have work carried out issue a statement inviting interest parties to submit terms which they are willing to carry out work
example Spencer v harding 1870
explain Blackpool & flayed aero flying club ltd v Blackpool borough council 1990
claimant and six other parties invited by defendant council to tender for concession to provide pleasure flights. Due to an oversight by council claimants tender overlooked even though submitted on time - tenders sought from specific parties and absolute conditions governing submission
examples of invitation to treat
auctions advertis window display self service display tenders share prospectus, catalogue
explain partied v crittenden 1968
mr partridge place advertisement magazine for wild birds sale, charged with unlawfully offering sale for a wild live bird - no offence committed advertisement was invitation to treat not offer for sale
what is the exception for advertisements
carlill v carbolic smoke ball company 1893
how can an offer be terminated
revocation or withdraws of the offer
lapse of time
death
rejection and counter offer
explain Rutledge v grant 1828
defendant offered to buy claimants house and gave 6 weeks to accept offer, defendant withdrew before expiration - defendant entitled to withdraw any time up until acceptance
explain Byrne v van tienhoven 1880
defendant wrote to claimants offering sell tinplates, then posted letter revoking offer but before tis was received accepted - so withdraws only effective when received so binding
explain Dickinson v Dodds 1880
defendant ordered sell his house to claimant before acceptance informed reliable third party defendant sold house to someone else - offer withdraw any time before acceptance
explain errington v errington and woods 1952
father bought a house with mortgage for son and daughter in law to live in, paid deposit and son paid mortgage father promised house would belong to couple as soon as paid off mortgage. father died widow claimed - father promise in return for instalments unilateral contract
explain Ramsgate Victoria hotel v monte fire 1866
defendant offered to buy shares in claimant company, in June attempted to accept in November. - unreasonable delay acceptance of offer so terminated through lapse of time
explain Hyde v wrench 1840
defendant offered to sell farm to claimant for 1000, claimant replied 950 defendant refused claimant tried to claim 1000 deal. heard nothing - no contract original offer no longer existed
explain Stevenson v clean 1880
defendant offered iron at certain price claimant asked about delivery and payment in instalments claimant received no reply and accepted doffer but defendant sold it - defendant in brach of contrcact as claimants question request for info not destroy original offer
what is acceptance
a final and unqualified expression of assent to terms of the offer
what makes an acceptance legally binding
mirror image of offer
unconditional
communicated to offeror
what is battle of the forms B
businesses often contract with other parties using pre printed forms - so this is the new form sent out each time with amended changes etc
each standard form is treat as a counter offer and the last form to be sent out is the offer
explain butler machine tool ltd v ex cell o corp ltd 1979
claimant sent out standard form contract to defendant offering to sell tools for name price, stating price could fluctuate defendant sent back order fixed price price claimant agreed and later tried to charge higher price - defendants order was a counter offer which claimant accepted
exceptions to the rule that acceptance must be communicated
unilateral contracts
contracts where postal rules apply
what is the postal rule
acceptance by post effective when letter posted and not when received
explain Adams v lindsell 1818
defendant posted offer to sell wool to claimant t seeking reply via post, letter arrived two days late because wrongly addressed. defendant had already sold wool to third party as delay - defendant in brach as claimants acceptance was affective when posted
explain household fire and carriage accident insurance company ltd v grant 1879
defendant applied for shares in company. posted letter of acceptance allowing shares to him but letter never arrived company went into liquidation - defendant still had to pay for hares
explain Howell securities v Hughes 1974
defendant granted claimant option to purchase land offer had to be accepted by giving notice in writing, claimant wrote to defendant to accept offer, letter never arrived. - postal rule didn’t apply offer made clear acceptance had to be received
explain Powell v lee 1908
claimant applied post headmaster, one manager from board told him he was successful he had no right to say this and later someone else got position. claimant sued for breach of contract - no contract as communication of acceptance not by an authorised agent
explain felt house v bindle 1862
claimant negotiations for horse stated £30 15s, ended saying if I hear no more then consider him mine for that much nephew didn’t reply but told auctioneer that don’t auction accidentally did to third party - no contract no communication of acceptance
how can acceptance be communicated
verbal communication
by conduct of the offeree
by fall of hammer at auction
in writing
explain entries v miles Far East corporation 1955
acceptance by telecom should be treated like acceptance by telephone instantaneous and effective on being received
brogden v metropolitan railway co 1977
mr brogden supplier railway company with coal no contract. company drafted contract and mr brogden sent back altered and they proceeded to supply coal - draft contract counter offer terms accepted by conduct of company continuing to order
what is the doctrine of consideration
essence of doctrine that a promisee can’t enforce a promise unless he has given or promised to do something in exchange ge
- bargain between parties
- price of the promise
what is executory vs executed consideration
executory - promise to do something in the future
executed - promise which has been performed
what are the key principles of consideration
past consideration isn’t good consideration
must be providing by promisee
need not be adequate value
must be sufficient
explain roscorla v Thomas 1842
bought a horse from Thomas for 30£ after sale Thomas gave roscorla a warranty sound and free from vice horse turned to be vicious - promise came after sale and so not enforceable
explain re mcardle 1951
mrs mcardle lived in house and was to sold and split proceeds to kids on her death. daughter in law payed for improvements and after children agreed shed pay repaid but this was disputed after death - no contract because home imporvents past considerstion
what is the exception to past considerartion
a request with an implied promise to pay
she performed original act at request of defendants
clearly understood or implied between parties when act requested and claimant paid for act
defendants promise of payment been one which had made prior at time at claimant performed act in questionable then enforceable
steward v Casey 1892
employee contributed many hours to invention for employer at request. work completed steward employer emplromised Casey share of invention profits - initial request implied promise would be paid reasonable sum so enforceable
pao on v lau you long 1980
defendants asked claimant to promise for a year wouldn’t sell shares in company major shareholder of. later gave guarantee saying they wouldn’t and would be reimbursed for losses for holding shares. during year shares felll in value - claimant recover losses as
what is the common law rule and exception to this
party can’t enforce a contract unless he’s contributes consideration
number of exceptions exist under common law and stature including contracts acts 1999
explain Thomas v Thomas 1842
owner of house promised window of previous owner occupy house for life in return for rent £1 per year and keeping house in good repair later owner tried to recover window - promise to pay £1 per year and keep house in good repair sufficient consideration
what is chapel v nestle co ltd 1959
ran promotion on particular chocolate bar anyone who sent three relevant wrappers entitled to vinyl records current song. issue arose necessary court to decide chocolate wrappers formed apart of the consideration - chocolate wrappers part of the consideration even thought nestle there them away as clear economic benefit from increase in sales
white v bluest 1853
promise by stop stop moaning about disinherited release him from debt he owed father. Farthers dath executors sued for money - son had no legal right to moan and so not giving up anything of material value
what are the pre existing duties
public
contractual
debts
explain collins v godefroy 1831
collins was witness in trial and legally bound under court order give evidence promise to pay collins attended court and gave evidence - godefroys promise to play unenforceable as collins had legal duty to court
explain glasbrook bros v glamorgan country council 1925
during miners strike pit owner wanted additional police officers guard mines. Owners agree to pay council additional policing later refused to do so stating police only carried out existing police duty - council provided more police officers than police consideration necessary for maintaining law and order
stilk v myrick 1809
two sailors deserted a ship course of voyage, captain promised there wages would be split between them all when they sailed back - promise not binding as completing voyage crew were performing existing contractual duties
explain Hartley v Ponsonby 1857
almost half crew of ship deserted master promised pay remaining sailors sum money in addition to wages, - binding as crew entitled to more money did more than contractual duty
explain Williams v roffey bros 1990
roffey builder had contract refurbish building for housing association, sub contracted capture who later ran into finance difficulties and couldn’t continue, roffey promised extra money for work to continue - binding as received a practical benefit from Williams continuing, avoid paying damages under delay clause with housing association wouldn’t have to incur cost and inconvience
explain pines case 1602
pines sued Cole for received of debt, he paidd harf and pinned accepted this if full satisfaction f full debt. - payment of lesser sum cannot be settlement for whole debt as wasn’t done at earlier date or a different place or some other item given
what are the exceptions to part payment of debt not sufficient consideration
composition agreement
payment of debt by third party
promissory estoppel
what is a composition agreement
legal agreement between a group or creditors and a debtor, each creditor agrees to accept portion of debt and can’t sue debtor for any outstanding balance owed
what is promissory estoppel
debtor being sued for retainer of debt, where lender had previously promised not to pursue him, debtor can ask court to use equitable powers to prevent lender going back on promise
explain central London property trust v high trees house ltd 1947
defendant owned a block of flats on leased land by claimant . during war difficult for tenants and claimant agreed they could pay reduce rent. after war end flats were all sublet again and claimant wanted rent returned to former amount requested 6 months back rent - claimant entitled to 6 months back rent and return amount to which it was before, wouldn’t have been successful if asked for all a promissory estoppel
what are the rules of promissory estoppel
arise in existing contractual agreement from promise made by one party to other party where other has given no consideration in return
can’t be used to create new rights but only to prevent enforcement of rights already held
can only be used as defence
normally suspends rights for period rather than extinguish them
its an equitable principle, defendant acted dishonourable then courts not award remedy
explain tool metal manufacturing v tungsten electric co ltd 1955
claimant owned a patent and licensed to defendants produce certain number of items, compensation was payable when they produced more items. decadied to forgo payments in national interest later sought compensation payments back - promise to forgo was binding but didn’t destroy right to them so could revive them
explain d & c builders v Rees 1965
mrs rees persuaded builders whom she knew to be in financial difficulties accept 300 in full settlement of debt 483 by saying otherwise get nothing , later sued for rest - pinnnels case shows no further consideration agreement to accept lesser sum didn’t cancel the debt
what is privity of contract
persons who aren’t part to agreement cant be bound by its contractual terms or take action if its terms are broken
explain dunlop pneumatic tyre co ltd v Selfridge 1915
dunlop supplied tyres at discount to dew & co agreed not to resell below list price to buyers unless those buyers agree not to resell below list price dew supplier to selfridge breached resale price agreement dunlop tried take action against selfridge - couldn’t sue no privity of contract
what are the exceptions to privity of contract
contracts where third party can sue
contracts where benefit held in trust for third party
assignment of contractual rights
agency
contrcacts of insurance , covenants relating to land and bills of exchange
contracts made for benefit of group of persons
collateral contracts
what are the two presumptions about intention to create legal relations
parties to a domestic or social agreement don’t intend to be legally bound
parties to a business agreement do intend to be legally bound
explain Balfour v Balfour 1919
defendant husband returned to Sri Lanka where he worked and wife remained in England. husband verbally agreed to pay his wife 30 month maintenance wife sued husband for maintenance he hadn’t paid - agreement domestic so not legally enforceable as not intended to be
explain simians v pays 1955
every week defendant mrs pays her granddaughter and lodger entered fashion competition all parties shared cost and agreed to share prize defendant won 750 but refused to share - binding contract as all contributed to competition with expectation prize money shared equally
explain Parker v Clarke 1960
younger couple persuaded by elderly relatives to sell own house and more in with elderly couple promised share in home when they died couples fell out and younger had to leave - sufficient intention to be legally bound evidence clear term agreement and the will change showed this as put in financial security for selling house
explain Esso petroleum v customs & excise 1976
esso had sales promotion whereby garage owners offered free World Cup coin every four gallon of petrol customs and excise wanted claim purchase tax on sale of coins had to show intention to create legal relations - using promotion to gain more business so intention to create legal relations
explain rose and frank v Compton bros ltd 1925
defendant appointed claimant sole distributor of carbon paper in USA agreement made between parties stated not legally binding and each party honourably pledge themselves tat carry out agreement defendant ended agreement without notice - no legally enforceable contract between parties
what is contractual capacity
some persons do or don’t have legal power to make contract or their power to make contracts is limited
give some examples of contractual capacity
I. persons intoxicated with alcohol or drugs
ii. persons who mentally impaired
iii. minors
what are terms of contract
the contents of the contract and state the parties legal duties and obligations to each other
explain express terms
terms that are actually states either orally or in writing by one of the parties making the contract
explain implied terms
terms deemed to be part of the contract even though they are not expressly mentioned by either party
how can terms be implied into a contract
statue
courts
custom
what can a statement be in regards to a contract
traders puff or boast representation
term of contract
define a traders puff or boast
parties not expected to take such statements as literally true
what is meant by a representation in regards to a statement
this is a pre contractual statement inducing a party to enter into contracts
what factors to consider when establishing between term or representation
importance of statement to parties
time between statement and contract
oral statements and written contracts
knowledge and skill of party making statement
explain Bannerman v white 1861
defendant wanted to buy hops, in negotiations asked if they were treated with sulphur claimant said no. so defendant bought later found out they are treated with sulphur, refused to accept delivery - defendant entitled to terminate contract, statement about sulphur as fundamental term of contract
explain Routledge v mckay 1954
discussing sale of motorbike model 1942 later signed contract which made no reference to age of motorbike, as was in fact 1930 model - bike being 1942 model a pre contractual statement and not a term of contract
what is the general rule oral statements
oral statement is usually a representation if contract is written
explain dick Bentley productions ltd v Harold smith ltd 1965
claimant asked defendant find Bentley in good condition, defendant stated car had only 20000 miles but it had 100000. - influenced claimant to purchase car, made by a specialist car trade and term of contract
explain Oscar chess ltd v Williams 1957
defendant informed claimant car dealers car was 1948 model later discovered 1939 model, worth less than claimants paid for it - defendants statement not term of contract, no specialist knowledge and made statement to car specialist who have better knowledge
how can terms be incorporated
signature
notice
course of dealing or trade custom
explain l’estrange v graucob ltd 1934
claimant purchased cigarette vending machine, signed contract without reading it contract implied warranties when machine broke down brought an action against defendants claiming machine not fit for purpose which it was sold - claimant signed contract, bound by exclusion clause regarding implied warranties
what are the exceptions to general rule about fund by signature
non es factum
misrepresentation
what is non es factum
a party may be able to invoke defence of this if unable through no fault of his own to have understanding of document signed. due to defective education illness or innate incapacity
what is misrepresentation
party not bound by contract they signed if they were induced to sign it as a result of a misrepresentation made to them
explain Curtis v chemical cleaning & dyeing co 1951
claimant took wedding dress to defendant cleaning company signed document excluded liability damage to dress. claiament asked what document was for and was told excluded liability if beads or sequins damaged. dress returned badly stained t- defendant couldn’t rely on exclusion clause as scope had been misrepresented
what is incorporation by notice
a party wished to incorporate terms into a contracts by giving the other party notice of them must satisfy 3 requirements:
i. notice given at or before time of contracting
ii. terms contained or referee in document that intended to have contractual effect
iii. reasonable steps taken to bring terms of attemntion to other party
explain Thornton v shoe lane parking 1949
claimant put money in automatic ticket barrier at entrance to defendants car park, ticket issue which purported to exclude liability for injury and claimant injured in car park - defendant couldn’t rely on exclusion clause contract concluded before ticket issued
explain Thompson v lms railway 1930
claimant illiterate handed a ticket stated ticket subject to conditions stated on companies timetable clause excluding liability for injury claimant injured on journey - company not liable as reasonable notice of exemption clause
what is the red hand test
the more unusual the clause the more attention to be brought to them
explain mc cutcheon v David macbrayne ltd 1964
claimant brother in law arranged shipment of claimants car on defendants fairy brother in law signed risk note exempting ferry from liability to damage. ferry actually sank from defendants negligence and claimants car was lost - couldn’t rely on exclusion clause as not incorporated
explain Kendall v lillico 1968
three or four transactions between parties per month over three year period delivery of animal feed included sales note which contained exemption clause one occasion delivery defective not accompanied by sales note - defendants could still rely on exemption clause as buyer had adequate still rely on exemption clause as buyer adequate notice and notification been consistently supplied
explain British crane hire corporation v Ipswich plant hire ltd 1975
defendants urgent need of crane and hired one from claimants over telephone claimant did send their conditions of hire but before signed sank in marsh grounds - defendants liable meet cost of recovery as defendant knew standard use in trade
explain Hutton v warren 1836
claimant farmer given notice to quit his tenancy but defendant landlord insisted farmed land during period notice claimant requested allowance for seed and labour during this time - trade custom permits farmer claim fair allowance for seed and labour during notice period right became implied term of contract so claimant could recover his cost
what is the types of terms implied and how they differ
matter of fact
court concludes parties would have intended terms to apply had they considered issues at time of making contract
matter of law
terms that generally present certain types of contract, usually implied to protect against exploitation of more vulnerable parties
explain the moorcock 1889
claimant hired docking space for his ship at defendants wharf ship damaged when it hit ridge of rock at low tide - court stated there was an implied term in contract moorings provided by defendants be reasonable safe for ship
explain attorney general of Belize v Belize telecom 2009
court had no power to improve on contract
court can’t introduce terms to make it fairer or more reasonable
term may be implied if necessary to spell out contract reasonably to be understood to mean
explain Liverpool city council v Irwin 1977
defendants tenants of council owned tower block, tenancy agreement imposed obligations council reagardong maintenance tenants withheld rent - house of lords concluded term should be impliedd requiring claimant to exercise reasonable care keep common parts of tower block in repair
what is the consumer rights act 2015
single piece of legislation designed to strengthen consumer rights and replace a hotch pitch of previous statutory provisions for consumer contracts addresses 4 main areas 1.digital content 2.goods 3.services 4. unfair terms
what is a consumer contract
made between trader and consumer which supply goods services and digital content
what is a trader
person acting for purposes relating to their business craft or profession
how does consumer rights act 2015 regulate unfair terms
- matters which traders cannot exclude liability under any circumstances
- other terms subject to test of fairness and if a contract term is found to be unfair it will not be binding on consumer
explain Watford electronics ltd v Sanderson 2001
contract for supply of computer goods contained a limitation clause limiting liability for direct loss to price paid under contract which was £104k goods didn’t perform and claimants lost 5.5million - limitation clause validd as contact been negotiated between experienced businessmen with equal bargaining powers court wouldn’t interfere
explain George Mitchell v finned lock seeds 1983
claimant ordered cabbage seed from defendant which was defective and claimant lost his entire crop valued at 61k defendants sought to rely on clause in standard written terms of business limiting liability for breach to replacement of seed - clause not reasonable as breach arose from defendants negligence and defendants could have insured against crop failure without significant increase cost of seed
what are the relative importance of contractual terms
conditions - major term
warranties - depends on seriousness of breach
innominate - minor term of contract
explain poussard v piers &pond 1876
madame poissard employed to play leading role in an operate ill for a week and missed opening night, contract terminated - defendant employer entitled to terminate eocntract failure to perform on crucial opening night breach for condition
explain Bettini v gye 1876
mr Bettini opera singer contracted by gye give series of performance attend six days of rehearsals missed first three days attempted to terminate contract - term relating to rehearsals was warranty gye could sue for damages for brach of warranty
explain Hong Kong fir shipping v Kawasaki kisses kaisha 1962
defendants charters a ship from claimants for 24 months contract stated ship would be in every way fitted for cargo service ship broke down and 20 weeks use lost defendants purport rated terminate contract - innominate term breach of it not sufficiently serious permit defendants terminate contract importance of term judge relation actual damages
explain behave nv v Bremer handelsgesellschaft 1975 (hans Nord)
contract for sale of citrus pulp animal feed provided they were delivered in good condition some were damages and buyer rejected whole cargo later bought at reduced price and used for original purpose - breach not sufficiently serious to permit termination
explain the hans Nord test
criteria courts may interpret status of innominate terms
- express intention of parties is paramount
- use of words condition and warranty describe terms evidential value only
- party statutory right to terminate
- consistently established commercial practice
- innocent party may terminate contract if damage resulting from brach extensive
explain Lombard north central plc v butterworts 1987
defendant late in paying instalments lease of computer so claimant terminated contract and sued for damages - late payment not normally be grounds for termination but contract stated prompt payment was of essence and failure to comply would entitle hire company terminate agreement
explain scholar AG v wick man machine tool sales 1974
wick man given sole selling rights for scholars panel presses use in car manufacturing contract stated a condition of contract send representative every week - term not a condition in sense that single breach entitle scholar to terminate contract
