THEORY OF CONTRACT

Question 1

What are the main theories of contract? (11)

Answer 1

-freedom of contract
-sanctity of contract
-enforcing promises and exchanging them
-floodgates
-reliance
-certainty
-subjective v objective
-balancing conflicting interests
-fault
-morality
-good faith

Question 2

what is the theory of freedom of contract? (1)

Answer 2

individuals are free and able to get into any contract they wish, they are also free to not make a contract.

Question 3

what is the theory of sanctity of contract? (2)

Answer 3

contracts are sacred and valuable, meaning that if any prove a threat, individuals involved must continue it. if the court can interpret a contract they will, but can allow dispersal.

Question 4

what is the theory of enforcing promises and exchanging them? (1)

Answer 4

if an individual is reliant on the others end of the contract, the court can choose to enforce it.

Question 5

what is the theory of floodgates? (1)

Answer 5

lots of cases of similar nature may overwhelm courts, interpretation of contracts must be scrutinised to ensure this happens rarely.

Question 6

what is the theory of reliance? (1)

Answer 6

people rely on contracts, they might be promoted to ensure it continuation.

Question 7

what is the theory of certainty? (1)

Answer 7

law is certain, contracts are continuous and must be reinstated.

Question 8

what is the theory of subjective v objective? (2)

Answer 8

subjective is what the person themselves think, objective is the remaining individuals viewpoints. contract is usually subjective for certainty.

Question 9

what is the theory of balancing conflicting interests? (1)

Answer 9

when parties disagree they cause conflict, the interests of the courts must be taken into account as well.

Question 10

what is the theory of fault? (1)

Answer 10

the party in the contract who has breached or has caused liability, within contract it is often they balance this fault to ensure fairness.

Question 11

what is the theory of morality? (1)

Answer 11

contracts are historically known to have moral relevance, contracts exchange gods for others, this is a promise, these promises are morally relevant.

Question 12

what is the theory of good faith? (1)

Answer 12

‘coming to court with clean hands’ the individual has done everything within their ability to keep the contract going, disclosure is also very important.

Question 13

what cases relate to the theory of the floodgates? (2)

Answer 13

Re McArdle (1951)
Lampleigh v Braithwait (1615)

Question 14

what cases relate to the theory of certainty? (4)

Answer 14

Guthing v Lynn (1831)
Butler machine tool co. ltd v excell-o corporation (1977)
Reveille independent LLC v Anotech international (UK) ltd (2016)
Marks and spencers plc v BNP paribas securities services trust company (jersey) ltd (2015)

Question 15

What cases are used to back up the idea that implied terms are default terms? (3)

Answer 15

Liverpool city council v Irwin (1977)
Marks and spencer plc v BNP paribas securities services trust company (jersey) ltd (2015) - in relation to attorney general of Belize v Belize telecom (2009)

Question 16

What cases can be used for the rule of consideration in which it is sufficient? (1)

Answer 16

Chappell v Nestle co ltd (1960)

Question 17

What cases back up the idea of incorporation in terms of terms in a contract, in terms of exclusion clauses? (2)

Answer 17

Hollier v Ramler Motors (1972)
McCutcheon v David MacBrayne ltd (1964)

Question 18

What cases illustrate the ability to curb the worst excesses of exclusion clauses? (2)

Answer 18

Curtis v Chemical cleaning and dyeing co ltd (1951)
L’Estrange v Graucob (1934)

Question 19

What cases relate to social arrangements in terms of contracts? (2)

Answer 19

Tweddle v Atkinson (1861)
Beswick v Beswick (1967)

Question 20

what cases relate to the theory of good faith? (2)

Answer 20

Victoria laundry v Newman (1949)
Wellesley partners LLP v Withers LLP (2015)

Question 21

what cases relate to balancing interests and justice? (2)

Answer 21

Olley v Marlborough court hotel (1949)
Thompson v LMS railway (1930)

Question 22

what case relates to misrepresentation? (1)

Answer 22

smith v Land and house property (1884)

Question 23

What cases relate to void because of illegality? (2)

Answer 23

Parkinson v the college of ambulance (1925)
Dann v Curzon (1910)

Question 24

what cases relate to void because of economic duress? (2)

Answer 24

central London propoerty trust ltd v high trees house ltd (1947)
D and C builders v Rees (1965)

Question 25

what occurred in the Lampleigh v braithwait case and give the date. (4)

Answer 25

involves implied promises to pay. He asked the claimant to do everything in his power to obtain a pardon from the King. The claimant went to great efforts and managed to get the pardon requested. The defendant then promised to pay him £100 for his efforts but never paid up, held that the defendant needed to hold up his end of the contract. (1615)

Question 26

what occurred in the Re McArdle case and give the date.

Answer 26

1951

Question 27

what occurred in the Guthing v Lynn case and give the date. (2)

Answer 27

An offer to pay money for a horse if it was lucky was too vague and not an offer. (1831)

Question 28

what occurred in the Butler machine tool co ltd v ex-cello corporation case and give the date. (3)

Answer 28

highlighted problems where two businesses try to deal with each other, but both businesses have their own conditions of trading, if there is no certainty then there would appear to be no contract but the parties have gone on with the deal without formally agreeing whose terms are the contract terms. (1977)

Question 29

what occurred in the LLC v Anotech international (UK) ltd case and give the date. (5)

Answer 29

A dispute arose between the parties as to whether a binding contract had arisen. The parties had been negotiating a long-form agreement which they never completed. A memo passed between the parties stated that Reveille would not be bound by any agreement they had not signed. However, Anotech later produced and signed a short amended agreement. After Anotech sent Reveille the short agreement, Reveille began including Anotech products in Master Chef. held that LLC was benefited for the signature requirement, they held in his favour. (2016)

Question 30

what occurred in the case marks and spencer plc v BNP paribas securities service trust company (jersey) ltd and give the date. (5)

Answer 30

emphasised that constructing the express words of a contract is a different exercise from implying words which are there to be constructed, so reasonableness is to be judged objectively - in considering what the parties would have agreed. - moves away from freedom of contract theory. (2015)

Question 31

what occurred in the case Liverpool city council v Irwin and give the date. (3)

Answer 31

House of lords placed emphasis on the courts only implying a term by law into contract when it is necessary to do so, however, ‘necessary’ here is not the same as ‘necessary to give business efficacy’ to the contract. (1977)

Question 32

what occurred in the case attorney general of Belize v Belize telegram and give the date. (3)

Answer 32

suggested that in the process of implying terms, the only question was whether s reasonable reader of the contract, with the relevant background knowledge would understand the term to be implied. Reasonableness could now be seen as a sufficient ground for implying a term. (2009)

Question 33

what are the two approaches to the purpose of exclusion clauses? (2)

Answer 33

-use the whole of the contract to define the obligations set out.
-define the obligations set out in the contract without reference to the exclusion clauses.

Question 34

what occurred in the case Central London property trust Ltd v high trees house Ltd and give the date. (5)

Answer 34

High Trees leased a block of flats from CLP at a ground rent of £2,500. It was a new block of flats at the time the lease was taken out in 1937. The defendant had difficulty in getting tenants for all the flats and the ground rent left High Trees with no profit.CLP agreed to reduce the rent to £1,250 during the war years. The agreement was put in writing and High Trees paid the reduced rent from 1941. When the war was over the flats became fully occupied and the claimant sought to return to the originally agreed rent. HT could claim back the lost money during war years. (1947)

Question 35

what occurred in the case Olley v Marlborough court hotel and give the date. (2)

Answer 35

the exclusion clause was invalid as it had not been brought to Olley’s attention when she made contract. (1949)

Question 36

what occurred in the case Thompson v LMS railway and give the date. (2)

Answer 36

an exclusion clause was implied even though she could not read the printed terms which referred to another document she would have had to locate. (1930)

Question 37

what occurred in the case Smith v land and house property and give the date. (3)

Answer 37

A tenant was described by the defendant as the most desirable, but the tenant was very unreliable. this misrepresentation was relied upon by the other party, the maker of this statement could be sued. they are at fault for the statement and the loss it caused. (1884)