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PGDL Contract A – Case law and
relevant statutes
Storer v Manchester City Council - correct answer Offer and acceptance, an offeror must show an intention to be legally bound; this intention is decided by an objective test, 'I will send you the agreement' Gibson v Manchester City Council - correct answer Offer and acceptance, offers must be clear and certain, tenant received a letter saying 'may be prepared to sell' but was not able to purchase his house Partridge v Crittenden - correct answer Offer and acceptance, advertisements are invitations to treat Carlill v Carbolic Smoke Ball Co - correct answer Offer and acceptance, a binding contract is formed when the offeror issues an unilateral offer with a clear prescribed act, and when they display a clear intent to be bound; the need for communication of acceptance by the offeree to the offeror with unilateral offers is waived, unilateral offer with influenza smoke balls Fisher v Bell - correct answer Offer and acceptance, price-marked goods displayed in a shop window are not an offer for sale but an invitation to treat Spencer v Harding - correct answer Offer and acceptance, invitations to tender are generally invitations to treat Harvela Investments v Royal Trust Co of Canada - correct answer Offer and acceptance, if an invitation to tender expressly contains an undertaking to accept the highest or lowest bid, it is an offer not an invitation to treat Blackpool & Fylde Aero Club v Blackpool Borough Council - correct answer Offer and acceptance, an invitation to tender contractually obliges the invitor to consider tenders where the tenders were solicited by specified parties known to the
requesting party; there was an absolute deadline for submission; the party requesting tenders had laid down absolute conditions for submission Payne v Cave - correct answer Offer and acceptance, the auctioneer's request for bids is an invitation to treat; the offeror may revoke his offer any time before acceptance Warlow v Harrison - correct answer Offer and acceptance, if there is no 'reserve price' in an auction, the auctioneer may be sued for breach of contract if he refuses to sell to the highest bona fide bidder (ober) Hyde v Wrench - correct answer Offer and acceptance, a counter offer terminates the original offer; acceptance must be unqualified and correspond exactly with the terms of the original offer (the mirror image rule) Stevenson, Jacques & Co v McLean - correct answer Offer and acceptance, questions or requests for clarifications concerning an offer are requests for further information and do not nullify the original offer Financings v Stimson - correct answer Offer and acceptance, failure by the offeree to fulfil the condition (express or implied, set by offeror) will prevent acceptance. There was an implied condition that the car would be in the same condition at the time of acceptance as at the time of the offer. Dickinson v Dodds - correct answer Offer and acceptance, if the offeror agrees to keep the offer open for a stipulated period, he is not bound by this unless the offeree gives something of value in return Great Northern Railway Company v Witham - correct answer Offer and acceptance, unilateral offers may be revoked at any time prior to the completion of the required act Errington v Errington & Woods - correct answer Offer and acceptance, if the offeree has partially performed the required act in a unilateral offer and is willing and able to complete, the unilateral offer may not be revoked
The Brimnes - correct answer Offer and acceptance, with instantaneous communication outside office hours, acceptance occurs when normal office hours return Thomas v BPE Solicitors - correct answer Offer and acceptance, for the purposes of acceptance, 'office hours' depends on the particular context of the communications Eastwood v Kenyon - correct answer Consideration, acts or forbearances that have taken place prior to any promise to pay cannot be exchanged for a promise as consideration Pao On v Lau Yiu Long - correct answer Consideration, exception to Eastwood v Kenyon where some past act or service was provided by the promisee at the promisor's request and it was always understood payment would be made for this; approval of The Eurymedon Tweddle v Atkinson - correct answer Consideration, consideration must move from the promisee, or a party that has not provided consideration may not bring an action to enforce a contract Chappell & Co v Nestle Co - correct answer Consideration, consideration need not be adequate, or it is not the court's duty to assess the relative value of each party's contribution to the bargain Thomas v Thomas - correct answer Consideration, consideration must be sufficient, or it must have some value in the eyes of the law, no matter how small that value is Stilk v Myrick - correct answer Consideration, general rule that if a party is contractually bound to Party A to do something, promising Party A again to do the same thing is not good consideration Williams v Roffey Bros - correct answer Consideration, a promise to pay more by Party A for Party B performing the same obligations may be good consideration provided that Party A gains a factual or practical benefit, plus other
concerns; economic duress, duress does not arise where both parties act in good faith, contractor carpenter for flats goes bankrupt England v Davidson - correct answer Consideration, carrying out a public duty imposed by the law is not good consideration The Eurymedon - correct answer Consideration, the performance of a pre-existing duty already owed to a third party is sufficient consideration for a promise given by the promisor Foakes v Beer - correct answer Consideration, general rule that a promise to pay part of an existing debt is not good consideration Pinnel's case - correct answer Consideration, Foakes v Beer may be distinguished if a new element is introduced at the creditor's request, for instance a longer timeline of debt repayments MWB Business Exchange Centres v Rock Advertising - correct answer Consideration, Court of Appeal applied Williams v Roffey Bros to part-payment of a debt, but the Supreme Court invalidated this judgment, suggesting Foakes v Beer may be overturned at a later date Hughes v Metropolitan Railway Co - correct answer Promissory estoppel, origin of the doctrine of promissory estoppel, dispute over lease of train station High Trees - correct answer Promissory estoppel, promises to demand less debt from creditors may be binding on equitable grounds for the duration that the original agreement applies Combe v Combe - correct answer Promissory estoppel, promissory estoppel may only be used as a defence to an action, not as a cause of action Woodhouse v Nigerian Produce Marketing - correct answer Promissory estoppel, there must be a clear and unequivocal promise or
Alpenstow v Regalian Properties - correct answer ICLR, agreements 'subject to contract' usually suggest the parties do not intend to be bound until the formal execution of a contract, but detailed, careful and professionally drawn agreements that have been acted upon may still be regarded as contracts Balfour v Balfour - correct answer ICLR, in domestic agreements there is a presumption against ICLR, but this can be rebutted Nash v Inman - correct answer Capacity, a minor is bound by a contract to supply necessaries for them if the contract is for their benefit Aylesbury Football Club v Watford Association Football Club - correct answer Capacity, a minor is bound by a contract of education, apprenticeship or employment (or an analogous contract) but only if it is for their benefit s3(3) SGA 1979 - correct answer Capacity, necessaries are 'goods suitable to the condition in life of the minor or other person concerned and to his actual requirements at the time of the sale and delivery' s2 Mental Capacity Act 2005 - correct answer Capacity, a person lacks capacity if he is 'unable to make a decision for himself in relation to the matter' at the time the contract is made Imperial Loan Co v Stone - correct answer Capacity, a contract is binding unless the person without capacity can establish he did not understand what he was doing and the other party knew that to be the case Matthews v Baxter - correct answer Capacity, a contract with a person inebriated by alcohol is binding unless the inebriated person can establish he did not understand what he was doing and the other party knew that to be the case Tool Metal v Tungsten - correct answer Promissory estoppel, legal rights waived under promissory estoppel may be resumed once the promisor gives 'reasonable notice of his intention to do so'
Bannerman v White - correct answer Terms, the more important the statement is to the parties, the more likely it is to be considered a term. Would not have bought hops if had known they had been treated with sulphur Routledge v McKay - correct answer Terms, statements made closer in time to the signing of a contract or which are put into writing are more likely to be considered terms, sale of a motorcycle Oscar Chess v Williams - correct answer Terms, special knowledge or expertise, buyer had the expertise so the statement was a representation, dispute over the age of a traded-in car Schawel v Rende - correct answer Terms, a statement may become a term where the vendor expressly accepts the responsibility for the soundness of the sale item in question, sale of a stud horse L'Estrange v Graucob - correct answer Terms, a signed contract almost always displays an intention to be bound, even if one or both parties have not read or do not understand the terms Grogan v Robin Meredith Plant Hire - correct answer Terms, if a signed document was not intended to have contractual effect, it does not constitute or will not form part of a contract Curtis v Chemical Cleaning and Dyeing - correct answer Terms, a party may be prevented from relying on a clause in a written contract if they have orally misrepresented the meaning of that clause to the other party Parker v South Eastern Railway - correct answer Terms, terms may be incorporated by notice if one party has taken reasonable steps to notify the other, ticket for a train cloakroom Interfoto Picture Library v Stiletto Visual Programmes - correct answer Terms, if the terms incorporated by notice are particularly adverse to one party,
Scancarriers v Aotearoa International - correct answer Terms, implied terms may only be found where there is a binding contract present British Crane Hire v Ipswich Plant Hire - correct answer Terms, where a term is implied on the grounds of a custom, the implication is based on the assumption that it was the intention of the parties to be bound by the custom, contract for hire of a crane The Moorcock - correct answer Terms, a term may be implied to give a contract 'business efficacy', or in other words to make the contract produce its intended objective, moored boat that was beached Liverpool City Council v Irwin - correct answer Terms, terms may be implied in common law where the nature of the contract implicitly requires that they be included, tenancy contract for a flat contains implied terms that the tenants can use the lift, stairs, and rubbish chutes Sale of Goods Act 1979 - correct answer Terms, Act that deems the presence of implied terms where there is a contract for sale of goods s12 SGA 1979 - correct answer Terms, contracts for sale have implied terms that -the seller has the right to sell the goods (condition); -the goods will be free from any undisclosed encumbrance; -the buyer will enjoy the right to quiet possession of the goods (warranties) s13 SGA 1979 - correct answer Terms, where there is a contract for the sale of goods by description, there is an implied term that the goods will correspond with the description s14(2) SGA 1979 - correct answer Terms, where the seller sells goods in the course of business there is an implied term that the goods supplied under the contract are of satisfactory quality s14(3) SGA 1979 - correct answer Terms, if the buyer makes known to the seller any particular purpose for which the goods are being bought, there is an implied term the goods supplied are reasonably fit for that purpose
s15 SGA 1979 - correct answer Terms, where goods are sold by sample, there are implied terms that the bulk will correspond with the sample in quality and that there are no defects with the bulk that could not be observed in the sample s15A SGA 1979 - correct answer Terms, modification of breach of ss 13, 14(2), 14(3), 15, if the breach is so slight that it would be unreasonable for the buyer to reject the goods and repudiate the contract, the breach should be treated as a breach of warranty Supply of Goods and Services Act 1982 - correct answer Terms, Act that deems the presence of implied terms in -certain contracts for the transfer of goods; -contracts for hire of goods; -contracts for the supply of services Consumer Rights Act 2015 - correct answer Terms, Act governing contracts for goods, digital content, and services, between 'traders' selling goods in their course of trade, business, craft or profession, and 'consumers', who are buying goods in their capacity outside their course of trade or business Poussard v Spiers - correct answer Terms, a condition is a term that goes to the root of a contract Hong Kong Fir Shipping v Kawasaki Kisen Kaisha - correct answer Terms, a term may be an innominate term if it falls between a condition and a warranty - if the breach of this term deprives one party of the substantial benefit of the contract, that party has right of election and damages, otherwise only damages are available, ship breakdown breaching terms of a charterparty The Hansa Nord - correct answer Terms, essential approach is to
- determine whether the term has been classified as a condition or warranty by the parties, statute or common law; 2. look at the contract subject matter and surrounding facts to determine whether the parties intended a breach to allow the injured party right of election; 3. treat the term as innominate s13 SGSA 1982 - correct answer Terms, for a contract for supply of a service, there is an implied term that the supplier will carry out the service with reasonable care and skill (innominate)
Huyton v Peter Cremer - correct answer Duress, economic duress, it must be shown that the agreement would not have been entered into but for the duress ITN Cash and Carry v Gallaher - correct answer Duress, economic duress, unlawfully applied pressure may not be duress if it is done in good faith, consignment of cigarettes goes missing RBS v Etridge - correct answer Undue influence, two types: overt acts of pressure, and situations where one party has influence/ascendency over the other and takes advantage of it, wife sought to have mortgage on matrimonial home as lender was not aware of the undue influence Barclays Bank v O'Brien - correct answer Undue influence: husband lied to wife when mortgaging family home to secure his company overdraft, court held that her interest took priority over bank's charge, wives should be advised by an independent solicitor to inform her of the risk of the transaction Dunlop v Selfridge - correct answer Consideration, definition of consideration Alisha Craig Fishing Co Ltd v Malvern Fishing - correct answer Unfair terms, when analysing exemption clauses, the contra proferentem rule is applied with less vigour when the clause merely limits liability Houghton v Trafalgar Insurance Co Ltd - correct answer Unfair terms, contra proferentem rule, if there is any ambiguity about an exemption clause, the ambiguity will be resolved against the party that sought to rely on it, defendants not excluded from liability as a car was designed to carry 5 but carried 6 instead Canada Steamship Lines v R - correct answer Unfair terms, if an exemption clause wishes to exclude liability for negligence, the following test applies: -does the clause expressly mention negligence? -are the words wide enough to cover negligence? -are the words too wide, and also cover a non- negligent wrong?
White v John Warwick - correct answer Unfair terms, Lord Denning, 'where there are two possible heads of liability on the part of the defendant, one for negligence and the other a strict liability, an exemption clause will be construed, so far as possible, as exempting the defendant only from his strict liability', hired bike injured the claimant Alderslade v Hendon Laundry Ltd - correct answer Unfair terms, a general clause exempts liability for negligence where there is no possibility of wrong except through negligence, 10 handkerchiefs lost in the laundry Persimmon Homes Ltd v Ove Arup & Partners Ltd - correct answer Unfair terms, the contra proferentem rule has a limited role in commercial contracts betwen parties with equal bargaining power Unfair Contract Terms Act 1977 - correct answer Unfair terms, Act limiting the extent to which liability for breach of contract, negligence or other breach of duty may be avoided by means of contractual terms s1(3) UCTA 1977 - correct answer Unfair terms, the operative provisions of the Act only apply to 'business liability', defined as a) liability from things done or to be done by a person in the course of a business or b) the occupation of premises used for business purposes by the occupier s2(1) UCTA 1977 - correct answer Unfair terms, a person cannot by reference to any contract term or to a notice given to persons generally or to particular persons exclude or restrict his liability for death or personal injury resulting from negligence s6(1) UCTA 1977 - correct answer Unfair terms, liability for breach of the obligations arising from section 12 of SGA 1979 cannot be excluded or restricted by any contract term s1(1) UCTA 1977 - correct answer Unfair terms, negligence includes breach of a) a term requiring a person to exercise reasonable care or skill; b) any common law duty to take reasonable care or skill; c) the common duty of care imposed by the Occupier's Liability Act 1957
as especially important, a clause was deemed reasonable as it was negotiated between two experienced businessmen of equal bargaining power Goodlife Foods Ltd v Hall Fire Protection Ltd - correct answer Unfair terms, where parties were of equal bargaining power, and the clause is a 'sensible allocation of the risk of loss and damage', an exemption clause may be reasonable, provision of a fire suppression system s65 CRA 2015 - correct answer Unfair terms, a trader cannot, by a term of a consumer contract or a consumer notice, exclude or restrict liability for death or personal injury resulting from negligence ss 31, 47 CRA 2015 - correct answer Unfair terms, any attempt to exclude liability for the following terms - ss 9-11, ss 34-36 respectively will not be binding on the consumer s64 CRA 2015 - correct answer Unfair terms, a term of a consumer contract that specifies the main subject matter or price payable may not be assessed for fairness under s62, provided it is transparent and prominent s57 CRA 2015 - correct answer Unfair terms, a contractual term may not limit liability under section 49 (service to be performed with reasonable care and skill) to the extent it would prevent the consumer from recovering the price paid for the service Bryne v Van Tienhoven - correct answer Offer and acceptance, an uncommunicated revocation of an offer is ineffective Schuler v Wickman Machine Tool Sales - correct answer Terms, a term is a warranty if the parties cannot have intended that it allow the revocation of the contract if it is breached, company employees must visit various companies s62 CRA 2015 - correct answer Unfair terms, an unfair term in a consumer contract is not binding on a consumer; Subsection (4), a term is unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations under the contract to the detriment of the consumer
Dick Bentley Productions v Harold Smith (Motors) - correct answer Terms, special knowledge or expertise, seller had the expertise so the statement was a term, dispute over the age of a traded-in car Petrocade Inc v Texaco Ltd - correct answer Terms, for a term to have been incorporated by a course of dealing, the course of dealing must have been regular, 5 instances over 13 months appeared sufficiently regular
