W202 Contract law cases
Chas Davis (Metal Brokers) Ltd v Gilyott & Scott Ltd [1975] 2 Lloyd's Rep 422,425
Battle of the forms. Offeree deemed to have accepted offeror's conditions.
Gore v Gibson (1845) 13 M & W 623
Capacity: drunkenness. A contract made by a person so intoxicated as not to know the consequences of his act is not binding on him (voidable) if his condition is known to the other party. Upon sobriety the contract was repudiated
Matthews v Baxter (1873) LR 8 Ex 132
Capacity: intoxication. Voidable if does not know consequences of his action and other party aware of this. D, while drunk, agreed at an auction to purchase a property. Once sobriety returned he decided that he wished to affirm the contract that had been made by him while drunk. Sometime later he had a change of mind and he sought to rescind the contract, arguing that he lacked capacity to enter the contract by reason of intoxication. The court held that because D had confirmed the contract it was no longer open to him to avoid the contract on the grounds of intoxication.
Chapple v Cooper (1844) 13 M & W 252
Capacity: Minors. A young widow was sued successfully for the funeral expenses for her late husband, as these services were regarded as necessaries. Point of law is that if a person orders a service that is required and suitable for their condition in life at the time of sale and deliver, they liable. (however the onus is on the party supplying the goods/service to prove they are necessaries)
Schroeder Music Publishing Co Ltd v Macaulay [1974] 3 All ER 616
D a novice songwriter aged 21, entered a standard form agreement C, whereby they would have the exclusive benefit of his compositions. C could terminate or assign the contract, but D could not, and C was under no obligation to publish or promote anything. D claimed the agreement was contrary to public policy. Held: the standard form agreement could not be justified as moulded under the pressures of negotiation, competition and public opinion. D had no bargaining power. C purported to be able to arbitrarily decline to exploit the D's work in which event the C remuneration under the agreement would be limited. C had failed to justify restrictions which appeared unnecessary and capable of oppressive enforcement.
Watton v Brinth (1400)] YB Mich 2 Hen IV
D promised to repair certain houses of C, and had neglected to do it. C was nonsuited, because he had shown no covenant. If the thing had been commenced, and by negligence, nothing done, it had been otherwise. Here the court at once took the distinction between nonfeasance and misfeasance. No consideration was stated and the court required a covenant to bind the party.
Errington v Errington and Woods [1952] 1 KB 290
Revocation of an offer once performance has begun. A father promised his daughter and son in law that if they paid off the mortgage on a house he owned he would give it to the couple, who paid the instalments but the offer was withdraw shortly before the whole debt was paid. Held there was an implied term in the offer that it was irrevocable once performance had begin. This was confirmed by dicta in Daulia v Four Millbank Nominees.
Routledge v Grant (1828) 3 C & P 267
Revocation of an offer. An offer to keep an offer open for a certain length of time can be withdrawn like any other unless an option (separate contract) has been purchased, for example consideration had been given to keep the offer open.
Miliangos v George Frank (Textiles) Ltd [1976] AC 443
Ruling that allows creditors under a contract to obtain judgment under a foreign currency. C was a Swiss textile producer who sold and delivered textiles to D in England. D refused to pay for the textiles. C sued D in England for the amount of the debt in the currency of the contract which was Swiss francs. Over the time of the litigation the exchange rate between the Swiss franc and the pound had dropped dramatically. The traditional rule required that the debt in Swiss francs be converted to pounds on the date of breach. C would lose a significant amount of the value of the money owed if paid in pounds due to the exchange rate. Held that the date of payment would be the date of conversion to the foreign currency. The case also represents a rare occasion where the Lords overturned previous precedent which has held that all debts were to be paid in sterling.
Printing & Numerical Registering Co v Sampson (1875) LR 19 Eq 462
A contract to sell all future rights on a patent was challenged as being contrary to public policy. Most notable for strong advocacy of the principle of freedom of contract which was mostly abandoned over the 20th century, as summarised by Lord Denning MR in George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd. "men of full age and competent understanding shall have the utmost liberty of contracting, and that their contracts when entered into freely and voluntarily shall be held sacred and shall be enforced by Courts of justice. "
Pickering v Thoroughgood (1532) 93 YB Sel Soc 4
A landmark case in which Spelman J expressed the opinion that an assumpsit, an undertaking, should be actionable not only for misfeasance, agreeing to do something and doing it badly, but also for nonfeasance, agreeing to do something and not doing it at all. This is really seen as the birth of contract law as it marks a general cause of action called an assumpsit, an undertaking. This basically amounts to being able to sue someone in court for a 'breach of promise'. Differences in approach to promises between older forms of action and assumpsit led to problems but these were eventually solved in Slade's case in 1602.
Fisher v Bell [1961]
A shopkeeper was prosecuted for the Offensive Weapons Act 1959 for offering for sale an offensive weapons: a flick knife with a price attached in the window. Held: the display was an invitation to treat, thus the shopkeeper not guilty of the offence.
Entores Ltd v Miles Far East Corp [1955] 2 QB 327
Acceptance of an offer. Rule 1) acceptance must be communicated. Sender must ensure message is communicated (ask to repeat on phone), but exception to this rule: if recipient has a problem receiving, failure of communication due to the fault of the offeror he is still bound (forgot to check the fax machine). 2) postal rule does not apply to instantaneous electronic communication: acceptance takes place and the contract is only complete when the acceptance is received by the offeror; and the contract is made at the place where the acceptance is received...During normal office hours, acceptance takes place when the message is printed out, not when it is read. Provides no direct authority on issue of when acceptance takes effect
Horton v Horton
Adequacy of consideration. Surrender of a claim to a right is good consideration, provided the claim is reasonable, there is a honest belief of success and there are no concealed facts affecting viability. Agreement ex-husband to increase maintenance payment to post-tax match originally agreed sum.
White & Carter (Councils) Ltd v McGregor [1962] AC 413
Anticipatory breach: occurs where one of the parties declares, before the due date for performance, that they have no intention of carrying out their contractual obligations. Innocent party is not bound to act on the breach by accepting and claiming damages - may wait and see how other party performs. C supplied bins to the Local Authority and were allowed to display adverts on these bins. D owned a garage. D's sales manager entered a contract with the C for them to place adverts on the bins for a period of 3 years. D had not authorised the sales manager to enter the contract and phoned C on the same day as the contract had been made telling them that he did not want the advertising. C ignored the D's communication and arranged for the advertising plates to be made up and placed on the bins. D refused to pay. Held: C was not obliged to accept the breach of contract and could continue with the contract; entitled to full payment.
McManus v Fortescue [1907] 2 KB 1
Auction, with reserve. Held that there is no contract if the auctioneer accepts a bid lower than the reserve price.
Warlow v Harrison (1859) 1 E & E 309
Auctions without reserve. Obiter dicta: the phrase "no reserve" constitutes a unilateral offer which can be accepted by showing up and submitting the highest bid. There is a collateral contract between the highest bona fide bidder and the auctioneer, and the bidder can sue for breach of contract.
Payne v Cave (1789) 3 D & E 148
Auctions. The common law rule: An auctioneer's request for bids is an invitation to treat. The offer is made by the bidder, which may be withdrawn before acceptance. Acceptance when the auctioneer brings down his hammer. Now codified in Sale of Goods Act 1979, s57(2).
Corpe v Overton (1833) 10 Bing 252
Capacity - minors, consideration: Minor agreed to enter into a partnership which would be formed in the future, he paid a £100 deposit which would be lost if he did not got through with it. He repudiated the contract. Held was entitled to have the £100 deposit returned because there was no consideration as he had received nothing in return.
Price v Easton (1833) 4 B & Ad 433
Consideration must move from the promisor. D made a contract with X that in return for X doing work for him, D would pay C. X did the work but D did not pay, so C sued. It was held that C's claim must fail, as he had not provided consideration.
Nash v Inman [1908] 2 KB 1
Capacity: Minors. Essentials up to adequate supply. C, a tailor on Savile Row, entered into a contract to supply D (a Cambridge undergraduate student) with, amongst other things, 11 fancy waistcoats. D was a minor who was already adequately supplied with clothes by his father. When C claimed the cost of these clothes D sought to rely on lack of capacity and succeeded at first instance. Held: in an action against an infant for necessaries the onus is on C to prove, not only that the goods supplied were suitable to the condition in life of the infant, but that he was not sufficiently supplied with goods of that class at the time of the sale and delivery.
Imperial Loan Co Ltd v Stone [1892] 1 QB 599
Capacity: mental illness. A person of unsound mind was sued on a promissory note. He had signed it as surety. The jury found that he was insane when he signed the note but there was no finding as to the creditor's knowledge of such insanity. Held: A contract made by a person who lacked the capacity to make it was not void, but could be avoided by that person provided that the other party to the contract knew (or, as is now generally accepted, ought to have known) of his incapacity.
Fawcett v Smethurst (1914) 84 LJKB 473
Capacity: minors. A contract which would otherwise be binding as a contract for necessaries is not so if it contains harsh and onerous terms. A minor had to move luggage and hired a car as was necessary. The terms made him absolutely liable for any damage whether or not caused by his neglect. The car was driven further than the specified location and crashed it through no fault of the minor. The contract was deemed harsh and onerous. It was held that there was no tort
Doyle v White City Stadium Ltd [1935] 1 KB 110
Capacity: minors. Beneficial contract of service, in the interest of the minor. A professional boxer, below the age for making a contract generally, was held to be bound by the terms of his licence from the British Boxing Board of Control, which allowed him to earn his living boxing but required him to keep the rules. It was said that 'Similarly, it has been held that an agreement between a minor and a publisher for the publication of the minor's biography which was to be written by a 'ghost writer', was binding on the minor.'
Proform Sports Management Ltd v Proactive Sports Management Ltd [2006] EWHC 2903 (Ch), [2007] 1 All ER 542
Capacity: minors. C football agent entered into a representation agreement with Wayne Rooney when he was 15 years old, who entered into a new agreement with D. C brought proceedings against the new agent for unlawful interference with and/or the procuring of a breach of contract. D applied for summary judgment on the grounds that as a matter of law there was no liability for inducing the breach of a voidable contract with a minor. Held: (1) There could be no liability for inducing the breach of a voidable contract with a minor who was entitled to lawfully terminate. (2) The only contracts which are binding on a minor are contracts for 'necessaries' and agents did not undertake matters essential to a player's training or livelihood. The agreement was a voidable contract and was not binding on the player who was a minor.
R Leslie Ltd v Sheill [1914] 3 KB 607
Capacity: minors. D obtained loans from C by fraudulently misrepresenting that he was of full age at the time of contract. D sued him to recover the money. Held: equitable doctrine of restitution: If an infant obtains property or goods by misrepresenting his age, he can be compelled to restore it so long as the same is traceable in his possession, but equity does not enforce against minor any contractual obligation, so no repayment of money already spent.
Steinberg v Scala (Leeds) Ltd [1923] 2 Ch 452
Capacity: minors. The minor cannot recover money which he has already paid unless there has been a total failure of consideration. A minor brought shares in D, the shares were not fully paid up, the issuing company could demand the rest of the payment latter. They didn't but C paid a further £250. She latter rejected the contract and wanted her £250 back. Held, termination meant free from future obligation but no restitution of the £250 because she had not been a total failure of consideration as she had received the shares in return for her money.
New Zealand Shipping Co v Satterthwaite & Co Ltd, The Eurymedon [1975]
Consideration, duties owed to a 3rd party. Where a duty is owed to a 3rd party, its performance can also be consideration for a promise to another. It is clear that the 3rd party is getting something more than he is entitled to. A stevedore, at the request of the consignee of certain goods, removed the goods from a ship. This was consideration for the promise by the consignee to give the stevedore the benefit of an exclusion clause, although the stevedore in removing the goods was performing contractual duties he owed to the carrier.
Shanklin Pier v Detel Products [1951] 2 KB 854
Collateral contracts. C were owners of a pier and were promised by the D paint manufacturers, that their paint has a life span of seven years. This was said in the attempt to induce C into buying D's paint. Due to this representation C instructed the decorators to purchase the paint and use it to decorate the pier. This was duly done, however the paint only lasted three months. During the inception of the case C did not appear to have a remedy as they had not provided D with any consideration for the promise. The only contract in force was between D and the decorators for the purchasing of the paint, this did not include the C. However, it was held that C could recover damages on the basis of a collateral contract. It was held that the consideration for the promise as to the life of the paint was sufficiently inductive to render it effective in the chain of purchase. The contract in existence in this case was to purchase paint in order to re-decorate the pier.
Dunmore v Alexander
Communication of Acceptance. Scottish case. Cancellation of acceptance by post. Tried to cancel an acceptance letter by post on a faster service, so it was retracted as that message received first. Used as an exception to revoking the postal rule but it has not been followed
Felthouse v Bindley (1862) 11 CBNS 869
Communication of acceptance - Silence. An offeror may not stipulate that silence of the offeree is to amount to acceptance. The C wrote to his nephew offering to but a horse, and adding "If I hear no more, I will take that the horse is mine". The nephew did not reply to this letter but told auctioneer D not sell the horse, D sold the horse at auction. To sue D, under tort law, C had to show he had contract for horse. Held: No acceptance. Acceptance had not been communicated to the offeror. Decision criticised: nephew was not unwilling offeree and had indicated acceptance by telling D not to sell, not been overruled. Note: if the offeree had relied on the offeror's statement that no communication is necessary, and wished to claim acceptance on the basis, the court could decide that the need for acceptance had been waived by the offeror - see unilateral offer.
Adams v Lindsell (1818) 1 B & Ald 681
Communication of acceptance - postal rule Wool dealer accepts a quantity of wool from manufacturer. Acceptance by post is binding once letter posted (provided properly stamped and addressed). Note: applies only to a letter properly stamped and posted, and where no particular mode of communication is prescribed by offeror.
Household Fire and Carriage Accident Insurance Co Ltd v Grant (1879) 4 Ex D 216
Communication of acceptance. Confirmed Adams c Landsell. Acceptance is effective on posting, even when the letter is lost in the post. The D offered to but shares in the C's company. A letter of allotment was posted to the defendant, but it never reached him. Held that the contract was completed when the letter was posted. Note: postal rule only applies to acceptance, not e.g to revocation.
Brinkibon Ltd v Stahag Stahl und Stahlwarenhandels GmbH [1983] 2 AC 34
Communication of acceptance. Confirms Entores. Instantaneous means of communication. Acceptance has no effect until communicated to the offeror. Sometimes acceptance to machine is sufficient. The contract is made when the acceptance is received and where communication of acceptance was received Wilberforce LJ: No universal rule can cover all such cases; they must be resolved by reference to the intentions of the parties, by sound business practice and in some cases by a judgment where the risks should lie ...
Tinn v Hoffman (1873) 29 LT 271
Communication of acceptance. Offeror may stipulate mode of communicating acceptance and offeree must comply or use equally effective method. Can be waved by offeror but waiver must not disadvantage offeree. D offered to sell C iron and requesting reply by return of post. HELD: "an equally expeditious method will suffice, eg. telegram or verbal message"
Ammons v Wilson (1936) 176 Miss 645
Communication of acceptance. Silence, previous course of dealings. US Case. Silence and inaction by an offeree can act as an acceptance in certain circumstances, wherein the offeror has every reason to believe the offeree will accept. A previous course of dealings (delivery of groceries) which make it reasonable that the offeree should inform the offeror if they are not going to accept.
Manchester Diocesan Council for Education v Commercial and General Investments Ltd [1969] 3 All ER 1593
Communication of acceptance. The offeror may require the acceptance to be made in a certain way. If the requirement in mandatory, it must be followed. Offeror can wave this requirement but this must not disadvantage offeree. An invitation to tender stated that the person whose bid was accepted would be informed by a letter to an address given in the tender, The acceptance was eventually sent not to this address but to the defendant's surveyor. Held that the statement in the tender was not mandatory; the tender had therefore been validly accepted.
Bunn, Executor of Bunn v Guy (1803) 4 East 190
Consideration defined as 'loss or inconvenience suffered by one party at the request of the other'
McEvoy v Belfast Banking Co. Ltd [1935] AC 24
Consideration must move from the promisee. Joint Promisees. Enforced Coulls v Bagot's Executor. A father opened an account for his son, despite son giving no consideration. Argument of no consideration rejected by court.
Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130
Consideration, part payment. ACCORD AND SATISFACTION: Where there is an agreement mutually to release the other form the obligations under the first agreement, there is an accord and satisfaction. Promissory estoppel. Lord Denning introduced P.E. in obiter dicta. Owners of a block of flat had reduced rents in 1939. There was no consideration for their promise, but Denning nevertheless stated that he would estop them from recovering any arrears. He based this decision on Hughes v Metropolitan Railway.
Pinnel's case
Consideration. Part payment of a debt. Unilateral release by accord and satisfaction. Case from 1602. It was decided that the debtor could hardly satisfy the requirement of consideration by performing or promising to perform no more of a part of what they already owed. Lord Coke: "the gift of a horse, a hawk or a robe etc, in satisfaction is good" consideration in part payment of debt
Pinnel's case (1602) 5 Co Rep 117a
Consideration. Partial payment of debt. C was owed X. The D paid less. C sued for the amount outstanding. Held: C was entitled to the full amount even if they agreed to accept less. Part payment of a debt is not valid consideration for a promise to forebear the balance unless at the promisor's request part payment is made either: a). before the due date or b). with a chattel or c). to a different destination
Eastwood v Kenyon (1840) 11 A & E 438
Consideration. Past. C was guardian to Sarah and borrowed money to pay for Sarah's education.Sarah promised to pay him back when she came of age and paid one year's interest to him. Sarah then married D who also promised to pay C back. D failed to do so and C sued. Held: No contract found to have existed. Promises are not sufficient to found a contract. Consideration made in the past is no consideration at all. Nothing more than a benefit voluntarily conferred by C and an express promise made by D to repay the money. Reasoning: If deliberately made promises would be enforced this would remove the necessity for consideration; enforce morality (not the role of the law) open the floodgates with everyone seeking to enforce promises
Richards v Bartlett (1584)
Consideration: Part payment of debt. Case preceding Pinnel's case. Must show consideration for a promise to discharge a debt.
Stilk v Myrick (1809) 2 Camp 317
Consideration: Performing an existing contractual duty. The captain promised the rest of the crew extra wages if they would sail the ship back home after two sailors had deserted. Held: the crew were unable to enforce the promise, as they were already bound by their contract to meet the normal emergencies of the voyage and were doing no more than their original duty in working the ship home.
Chappell Co Ltd v Nestle Co Ltd [1960]
Consideration: adequacy of consideration. Three chocolate wrappers were held to be good consideration. The question for the court was whether the chocolate bar wrappers formed part of the consideration. If they did it was impossible to ascertain the value they represented and therefore D would not have complied with their obligation to give notice of the ordinary retail selling price. If the wrappers were a mere token or condition of sale rather than constituting consideration, then the notice would be valid and D could sell the records.
Thomas v Thomas (1842) 2 QB 851
Consideration: adequacy. Executors of deceased's estate allowed his widow to live in one of his houses as long as she remained a widow, in consideration of the testator's wishes, subject to the widow paying $1 annually as ground rent and keeping the house in tenantable repair. Held: there was consideration which must have value in the eyes of the law; require value above a nominal amount; (widow agreeing to remain a widow is insufficient consideration)
Hartley v Ponsonby (1857) 7 E & B 872
Consideration: existing contractual duty. Where the promisor performs more than he had originally promised, there can be consideration. Nearly half the crew deserted on a voyage. This discharfed the contracts of the remaining crew as it was dangerous to sail the ship home with only half the crew. Held: the sailors were free to make a new bargain, so the captain's promise to pay them additional wages was enforceable.
Foakes v Beer (1884) 9 App Cas 605
Consideration: part payment of a debt. Confirmed Pinnel's case. C was indebted to D, who agreed that, of C paid in instalments, D would not take "any proceedings whatsoever". C paid as agreed, but D then proceeded to claim an addition sum as interest on the debt. C refused and when sued pleaded that his duty to pay interest had been discharged by the promise not to pay. Held: no ruling on whether the agreement was just to give C time, or whether is included interest as well. But: no consideration for the promise, still bound to pay the additional sum.
Re Selectmove Ltd [1995] 2 All ER 531
Consideration: part payment of a debt. No extension of principle in Williams v Roffrey Bros to cased involving part payment of debt. The company had offered to pay its arrears by instalments to the Inland Revenue who said that they would let them know if this was acceptable. They heard nothing further, but paid some instalments and then received a threat of being wound up if the full arrears were not paid immediately. The court was not prepared to allow Williams to overturn the rule in Foakes v Beer.
Thornton v Shoe Lane Parking [1971]
Exclusion clauses, unusual terms, unusually explicit warning needed. C was injured in a car park partly due to tD's negligence. C was given a ticket on entering the car park after putting money into a machine. The ticket stated the contract of parking was subject to terms and conditions which were displayed on the inside of the car park. One of the terms excluded liability for personal injuries arising through negligence. The question for the court was whether the term was incorporated into the contract ie had D brought it to the attention of C before or at the time the contract was made. This question depended upon where the offer and acceptance took place in relation to the machine. Held: Vending machines and automatic ticket machines themselves constitutes the offer. The acceptance was by putting the money into the machine, making the transaction is irrevocable. The ticket was dispensed after the acceptance took place and therefore the clause was not incorporated into the contract.
Walford v Miles
Good Faith. Future agreements. The common law does not recognise this as conduct as there is no guarantee of agreement or what will be agreed: lack certainty. D agrees to terminate negotiations with 3rd parties if C provides a 'letter of comfort'. C provides this but D sells to a third party. Court accepted that lock out provision was perfectly acceptable so long as a time limit was stipulated.
Petromec Inc v Petroleo Brasileiro SA Petrobas (No.3) [2005] EWCA Civ 891, [2006] 1 Lloyd's Rep 121
Good faith: In Walford v Miles stated that 'the concept of a duty to carry on negotiations in good faith is inherently repugnant to the adversarial position of the parties when involved in negotiations'. In this case, the Court enforced an obligation to negotiate in good faith the reasonable costs of upgrading a vessel. It did this on the basis that this obligation was sufficiently narrow in scope and there were objective criteria for assessing the agreement the parties were to have reached. It would be 'a strong thing to declare unenforceable a clause into which the parties have deliberately and expressly entered'
Skyrne v Butolf (1388) YB Pas 11 Ric II
In 1367, Assumpsit first appeared in this case when the plaintiff sued a doctor with whom he had contract with to cure ringworm. This breach of contract was known as 'assumpsit'.
Hawkes & Uxor v Saunders (1782) 1 Cowp 289
Lord Mansfield view of consideration, "when a man is under a moral obligation, which no court of Law or Equity can enforce, and promises, the honesty and rectitude of the thing is consideration... The ties of conscience upon an uptight mind are a sufficient consideration."
Williams v Roffey Bros & Nicholls (Contractors) Ltd [1990] 1 All ER 512
Insufficiency of Consideration: existing contractual duty., Exception to the Stilk v Myrick rule. Factual advantages obtained by the promisor. When a party can be seen to receive an extra benefit from the other party's agreement to carry out his existing obligations. D (main contractors) were refurbishing a block of flats, subcontracting carpentry out to C, who ran into financial difficulties. D agreed to pay C an additional sum if they completed the work on time. Held: consideration in new practical advantage: benefits to D including (a) making sure C continued his work, (b) avoiding payment under a damages clause of the main contract if C was late, and (c) avoiding the expense and trouble of getting someone else. Glidewell rules: 1) Obtain practical benefit, or avoid disbenefit. 2) no duress
Glasbrook Bros Ltd v Glamorgan County Council [1925] AC 270
Insufficiency of consideration, public duty. If a person does, or promises to do, more than he is required to do by law, then he is providing consideration. The council, as police authority, on the insistence of a colliery owner, and in return for a promise of payment, provided protection over and above that required by law. They were able to enforce the promise as their additional activities were deemed to constitute consideration for the promise of payment. Held there was an implied term in the offer that it was irrevocable once performance had begin.
Harris v Sheffield United Football Club Ltd [1988] QB 77
Insufficiency of consideration, public duty. The court was asked whether services provided by the police at Sheffield United Football Club for the club's home fixtures were 'special police services' so that if they were provided at the club's request the police could charge for them. The club argued that they were not and that the police were doing no more than carrying out their duty. Held: a chief constable has a discretion with regard to the resources available to him. Provided he acts within his discretion, the courts will not interfere;. . .The scope and extent of those services and their impact on the chief constable's manpower resources put them beyond what the club, in the circumstances, was entitled to have provided in pursuance of public duty.
Ward v Byham [1956]
Insufficiency of consideration. Public Duty. If a person does, or promises to do, more than he is required to do by law, then he is providing consideration. The father of an illegitimate child promised to pay the mother a weekly allowance if she proved that the child was well looked after and happy. Held that the mother was entitled to enforce the promise because in undertaking to see that the child was well looked after and happy (and by allowing child to decide who she lived with), she was doing more than legal obligation. Denning LJ (dissenting) argued that the factual benefit to the father was sufficient consideration: .. I have always thought that a promise to perform an existing duty, or the performance of it, should be regarded as good consideration because it is a benefit to the person to whom it is given...
England v Davidson (1840) 11 A & E 856
Insufficiency of consideration. Public duty. D offered £50 reward for information leading to conviction of offenders who broke into his house. C, a police officer, gave such information but D refused to pay. was performance of a public duty sufficient consideration? HELD: Contract was enforceable and reward should be paid. "I think there may be services which the constable is not bound to render and which he may therefore make the ground of a contract. We should not hold a contract to be against the policy of the law, unless the grounds for so deciding were very clear..."
Collins v Godefroy (1831) 1 B & Ad 950
Insufficiency of consideration: performing a duty imposed by law. A promise made by D to pay a fee to a witness who had been properly suboenaed to attend a trial. Held: the promise had been made without consideration. The witness had a public duty to attend.
Balfour v Balfour [1919] 2 KB 571
Intention to be legally bound. In social and domestic agreements there is a presumption against legal relations. Agreement between husband and wife. A husband worked overseas and agreed to send maintenance payments to his wife. At the time of the agreement the couple were happily married. The relationship later soured and the husband stopped making the payments. The wife sought to enforce the agreement. Held: The agreement was a purely social and domestic agreement and therefore it was presumed that the parties did not intend to be legally bound.
Merritt v Merritt [1970] 1 WLR 1211
Intention to be legally bound. In social and domestic agreements there is a presumption against legal relations. Agreement between husband and wife: a husband left his wife and went to live with another woman. The husband signed an agreement whereby he would pay the wife £40 per month to enable her to meet the mortgage payments and if she paid all the charges in connection with the mortgage until it was paid off he would transfer his share of the house to her. When the mortgage was fully paid she brought an action for a declaration that the house belonged to her. Held: The agreement was binding. The court did enforce a clear agreement where the parties were separating or separated and distinguished the case of Balfour v Balfour on the grounds that the parties were separated. Where spouses have separated it is generally considered that they do intend to be bound by their agreements. The written agreement signed was further evidence of an intention to be bound.
Jones v Padavatton [1969] 1 WLR 328
Intention to be legally bound. In social and domestic agreements there is a presumption against legal relations. C offered a monthly allowance to her daughter if she would come to England to read for the bar. The daughter agreed but was not successful. C stopped paying but allowed her daughter to live in the house and receive rent from other tenants. C later sued for possession. D counterclaimed for breach of the agreement to pay the allowance and provide accommodation. Held: the first agreement may have been made with intention to create legal relations, but was for a reasonable time and would have lapsed. The second agreement was a family arrangement without intention to create legal relations. It was also too uncertain.
Simpkins v Pays [1955] 3 All ER 10
Intention to create legal relations. A Grandmother, granddaughter and a lodger entered into a weekly competition run by the Sunday Empire News. The coupon was sent in the Grandmothers name each week and all three made forecasts and they took it in turns to pay. They had agreed that if any of them won they would share the winnings between them. The grandmother received £250 in prize money and refused to share it with the other two. The lodger brought the action to claim one third of the prize money. Held: There was a binding contract despite the family connection as the lodger was also party to the contract. This rebutted the presumption of no intention to create legal relations. The mutual arrangement was a joint enterprise to which cash was contributed in the expectation of sharing any prize.
Pettitt v Pettitt [1970] AC 777
Intention to create legal relations. D inherited a house in which her and her husband lived. C spent money on repairs and redecoration of the property. D sold the house in and purchased another property which was conveyed into her name alone. There was some money left from the sale which she gave to C to purchase a car. They lived in the new house for four years and then divorced. C claimed that he had a beneficial interest in the property based on improvements made to new house. Held: C had no interest in the property. The improvements were insufficient to create an equitable interest in the property. Diplock: "no other intention than to indulge in what is now a popular hobby and to make the home pleasanter for their common use and enjoyment"
Partridge v Crittenden [1968] 2 All ER 421
Invitation to treat. An advertisement in a newspaper or magazine will constitute an invitation to treat. The defendant was prosecuted under the Protection os Birds Act 1954 for offering a wild bird for sale. the advertisement was held to be an invitation to treat. If the ad was treated as an offer, this could lead to many action for breach of contract, as the stock was limited: could not have intended for the ad to be an offer. But: if the ad is unilateral in nature and there is no problem of limited stock, (ex: an reward) it may be an offer: see Carlill.
Gibson v Manchester City Council [1978] 1 WLR 520
Invitation to treat. An application form will usually be construed as an invitation to treat. Council D prepared to sell council properties to sitting tenants. The letter stated "may be prepared to sell you". C completed the application form which accompanied the letter. Held: the original letter was an invitation to treat, so no contract had been created.
Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953] 1 QB 401
Invitation to treat. The display of goods in a shop is an invitation to treat. The offer is made when the customer presents the goods to the shopkeeper at the checkout. Facts: D changed one of their shops to self-service. The Pharmacy and Poisons Act 1933 specified that certain drugs should not be sold other than under supervision os a registered pharmacist. The court had to decide whether a contract had been made and an offence committed. Held: the contract is formed when the article is presented at the desk, where a pharmacist was present to no offence committed.
Financings Ltd v Stimson [1962] 3 All ER 386
Lapse of an offer - termination by law. Failure of a condition. An implied condition. Held that an offer to buy a car lapsed when the car was badly damaged on the ground that the offer contained an implied term that the car would remain in the same condition as when the offer was made.
Stevenson, Jaques & Co v McLean (1880) 5 QBD 346
Offer and counteroffer. Distinguished Hyde v Wrench. Rule: A request for further information is not a counteroffer. D offered to sells iron. C telegraphed asking whether he could pay by instalments. D did not reply C telegraphed again to accept the offer, but D had already sold to a 3rd party. Held that it was a mere request for information. The original offer was therefore not rejected and still open for acceptance.
Barry v Davies (t/a Heathcote Ball & Co) [2000] 1 WLR 1962
Offer/acceptance. Auction 'without reserve'. Confirmed Warlow v Harrison. Auctioneer withdrew the items for sale as he felt the bids were too low. The phrase "no reserve" constitutes a unilateral offer which can be accepted by turning up and submitting the highest bid. Collateral contract with the bidders that the auctioneer will accept the highest bid, no matter how low. Auctioneer liable for damages if he refuses to sell to highest bidder.
Harris v Nicholson [1873]
Offer/acceptance. D placed an advertisement in London papers that certain items, including brewing equipment and office furniture, would be placed up for auction over three days in Bury St. Edmunds. C obtained a commission to buy the office furniture and expended time and expense to travel to Bury St. Edmunds to bid for the office furniture. Held that an advertisement that goods will be put up for auction is a statement of intention. It does not constitute an offer to any person that the goods will actually be put up, which then could be accepted by showing up. The advertiser is therefore free to withdraw the goods from the auction at any time prior to the auction.
Tenax Steamship Co Ltd v Owners of the Motor Vessel Brimnes (The Brimnes) [1975] QB 929
Revocation of a bilateral offer. Withdrawal sent during ordinary business hours could be regarded as communicated when received on the machine. D hired ship from C, who sent message by telex, withdrawing ship from service, during normal office hours, D did not read until next day. Held: offeree cannot rely on some failure of himself to act in a normal businesslike manner in respect of taking cognisance of the communication
Hyde v Wrench (1840) 3 Beav 334
Offer/acceptance. Rejection of an offer: termination by the offeree. Any attempt by the offeree to change the terms of an offer will amount to a counter offer and will reject/terminate/kill the original offer. Note: does not apply for mere request for information. D wanted to sell a farm for a stated asking price. C offered a lower sum, which was rejected by D. C later tried to accept the original offer. Held that the lower sum was a counter offer which terminated the original offer, which was therefore no longer open for acceptance.
Brogden v Metropolitan Railway Co (1877) 2 App Cas 666
Offer/acceptance. Supply of coal. (1) Draft agreement as an offer. It was the outcome of a series of previous negotiations between the parties and the key terms, such as the price and length were included. (2) agreement inferred from conduct. A contract came into existence (on last terms) either when the company ordered coal, or at least when the coal was supplied. Carrying out the terms of a contract implies acceptance. (3) Battle of the forms, last shot wins. Counter-offer rejects / 'kills off' original offer so it cannot be accepted at a later date. The counter-offer can then be accepted or rejected by the original offeror.
Storer v Manchester City Council [1974] 1 WLR 1403
Offer/invitation to treat. Council tenant's right to buy his property; document titled Agreement for Sale and a letter which stated: "If you will sign the Agreement and return it, I will send you the Agreement signed on behalf of the council in exchange." C signed and returned document. Change of policy, document not returned, refusing to sell the property. C sued for breach of contract. HELD: there was a binding obligation on D to sell. Lord Denning: In contracts you do not look into the actual intent in a man's mind. You look to what he said and did. A contract is formed when there is, to all outward appearances, contract. A man cannot get out of a contract by saying 'I did not intend to contract' if by his words he has done so... objectively, to a reasonable man D's letter appeared to commit to selling the property if C returned the documents
Lasky v Economy Grocery Stores (1946) 65 NE 2d 305
Offer/invitation to treat. US case: customer claims damages for breach of an implied warranty of a bottle breaking inside the shop. Goods on display are an offer, but there was no transfer of title nor contract for the sale of the goods he selected until he had accepted by taking them to a cashier's counter and had paid for them.
Shuey v USA [1875]
Revocation of a unilateral offer. US case. Communication of the revocation is difficult in a unilateral offer to the world. It was suggested that communication will be assumed if the offeror takes reasonable steps to inform the public. For example, places an advertisement in the same newspaper.
Byrne & Co v Leon Van Tienhoven & Co (1880) 5 CPD 344
Revocation of a bilateral offer. Revocation letter crosses with acceptance telegram and in received after acceptance (1) An uncommunicated revocation is no revocation at all. Revocation must be communicated to the offeree before acceptance. The postal rule did not apply to the withdrawal of offers: the withdrawal must be received by the offeree for it to take effect. (2) a letter which arrives on a normal working day should be treated as a communication even if left unopened.
Hawrish v Bank of Montreal
Parol evidence rule. Collateral agreements require evidence of a clear intention to create a second binding contract. Furthermore, they cannot stand if they contradict or are inconsistent with the written text. Solicitor signed a guarantee "all present and future debt" on account that the bank orally expressed that once another guarantee was established, he would be relieved of liability. However, ounce the other guarantee's were made, he was not relieved, and the written contract still held him accountable. He did not read the contract before signing. He argues that a collateral agreement existed, and for that reason, parol evidence would be allowed. Rejected.
Re Casey's Patent (1892)
Past consideration. Follows Lampleigh's tests. A and B owned a patent and C was the manager who had worked on it for two years. A and B then promised C a one-third share in the invention for his help in developing it. The patents were transferred to C but A and B then claimed their return. It was held that C could rely on the agreement. Even though C's consideration was in the past, it had been done in a business situation, at the request of A and B and it was understood by both sides that C would be paid and the subsequent promise to pay merely fixed the amount.
Lampleigh v Brathwait (1615) Hob 105
Past consideration: exception where a service is rendered at the request of the promisor. D had killed a man and was due to be hung for murder. He asked C to do everything in his power to obtain a pardon from the King. C went to great efforts and managed to get the pardon requested. D then promised to pay him £100 for his efforts but never paid up. Held: Whilst the promise to make payment came after the performance and was thus past consideration, the consideration was proceeded by a request from D which meant the consideration was valid. D was obliged to pay the claimant £100.
Tweddle v Atkinson (1861) 1 B & S 393
Privity of contract, consideration must move from the offeree. Couple were getting married. The father of the bride entered an agreement with the father of the groom that they would each pay the couple a sum of money. The father of the bride died without having paid. The father of the son also died so was unable to sue on the agreement. The groom made a claim against the executor of the will. Held: The claim failed: 1) Privity: The groom was not party to the agreement and 2) the consideration did not move from the offeree. Therefore he was not entitled to enforce the contract.
Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] AC 847
Privity: C sold tyres to a distributor, under the agreement that they would not be sold to consumers at a price below their list price. A retailer D, who purchased from the distributor, sold the tyres at a price below the list price. Issue: Could C enforce the selling at or above the list price with D? Held: No enforcement. C was a third party to the contract between D and the distributor, therefore there could be no enforcement. Issues: a) the doctrine of privity: only a party to a contract can sue in breach of the contract; b) the doctrine of consideration: promisee (C) to give consideration to D for the contract to be completed, and this did not occur c) the only way that a principal not named in a contract can be sued is if he acted as an agent on behalf of one of the parties privy to the contract.
Hughes v Metropolitan Railway
Promissory Estoppel. Tenant was obliged to repair the property on the giving of 6 months' notice by the landlord. After the notice was served, the parties negotiated unsuccessfully for purchase of the freehold. The tenant argued that during these negotiations the landlord implicitly indicated that the tenant would have more time to repair. After negotiations petered out, landlord attempt to forfeit the lease but was estopped from acting in this inconsistent, unfair, oppressive fashion. It was only fair that the tenant should be given more time to comply with the obligation.
Bowerman v Association of British Travel Agents Ltd [1996] CLC 451
Question whether D had made an offer that could be accepted with their widely publicised promise to refund holiday expenses fully if booking with D's members, in conflict with rules in its handbook. As in Carlill, it was judged that in certain circumstances adverts could be held to be offers capable of acceptance by members of the public; acceptance would be completed upon booking a holiday and a contract would be formed between D and the member of the public to fully reimburse holiday expenses in certain circumstances such as the insolvency of a member.
Soulsbury v Soulsbury
Revocation of a unilateral offer. Divorced couple, husband promises a payment in his will in lieu of monthly maintenance payments. He remarries, his will is provoked and he dies. Rules that promise was a binding unilateral contract. His wife had performed by not suing for payments. Longmore LJ- In unilateral contracts commencement of performance is preventing revocation of offer- it does not in itself constitute acceptance.
G Percy Trentham Ltd v Archital Luxfer Ltd [1993] 1 Lloyd's Rep 25
Steyn LJ on contract formation: 1) Objective theory .. ignores the subjective expectations and the unexpressed reservations of the parties: reasonable expectations of honest men. 2) Usually coincidence of offer and acceptance (exchange of correspondence). But not so if contract came into existence during and as a result of performance. 3) If executed (rather than executory) = performed on both sides: unrealistic to argue that there was no intention to enter into legal relations or that the contract is void for vagueness or uncertainty. Easier to imply a term resolving uncertainty, or treat an unresolved matter as inessential. 4) if a contract comes into existence during and as a result of performance it will frequently be possible to hold that the contract impliedly and retrospectively covers pre-contractual performance
Harvela Investments Ltd v Royal Trust Co of Canada (CI) Ltd [1986] AC 207
Tender. Rule: a invitation to tender is normally an invitation to treat. If the request is made to specified parties and it is stated that the contract will be awarded to the lowest or highest bidder, that this will be binding as an implied unilateral offer or collateral contract, which could lead to a breach of contract. It was also held that a referential bid, for example, the highest other bid plus 10%, is not a valid bid.
Blackpool & Fylde Aero Club Ltd v Blackpool Borough Council [1990] 3 All ER 25
Tenders. Invitation to Tender. Rule: If the request is addressed to specified parties and contains specific procedures, this amounts to a unilateral offer that will consider all applications which fall within the rules. This unilateral offer is accepted by all parties that submit a tender. D advertised invitation to tender to carry out pleasure flights, stating tenders must be submitted by a deadline or won't be considered. C submitted within deadline, but D didn't check letterbox; mistakenly assumed it had been submitted after the deadline - C sued for not considering their tender - got damages for breach (in tort).
Spencer v Harding (1870) LR 5 CP 561
Tenders. Rule: Unless the invitation to tender (advertisement) specifies that the highest tender would be accepted, it is an invitation to treat, each submitted tender is an offer, which the tenderer can choose to accept or not. D advertised a sale by tender specifying where the goods could be viewed, the time of opening for tenders and that the goods must be paid for in cash. No reserve was stated. C submitted the highest tender but D refused to sell to him. Held: there was no obligation to sell to the person submitting the highest tender.
Dickinson v Dodds (1876) 2 Ch D 463
Termination of an offer, Revocation. Communication need not be made by the offeror; through a third party will suffice. The plaintiff was told by a neighbour that a property that had been offered to him had been sold to a third party. Held: the offer had been validly revoked.
Ramsgate Victoria Hotel Co Ltd v Montefiore (1866) LR 1 Ex 109
Termination of offer: Lapse of time. termination of an offer by law. An attempt to accept an offer to but shares after five months failed as the offer had clearly lapsed.
Coulthart v Clementson (1879) 5 QBD 42
Termination, lapse of offer by death. Obiter dictum. The offer automatically ends on the offeror's death, regardless of whether the offeree was aware of it. BUT: Most commentators appear to agree that a contract may still be capable of acceptance if it is one that can be satisfied by the offeror's estate but not if it is a contract for some form of personal service by the offeror.
Bradbury v Morgan (1862) 1 H & C 249
Termination/lapse of offer by death of offeror. Lapse can occur on offeror's death as long as notice is given to offeree before acceptance. Where the offeree is ignorant of the offeror's death, the offeree can still accept the offer. BUT commentators argue that contract had been accepted before death.
General Reinsurance Corporation and Ors v Forsakringsaktiebolaget Fennia Patria
Terms implied by custom or trade usage. Distinction between customs, considered by parties to be legally binding, and customs followed as a matter or grace and courtesy.
Walford v Miles [1992] 2 AC 128
The words "subject to contract" may be placed on top of a letter to indicate that an offer is not to be legally binding. The courts will not enforce imcomplete agreements. An agreement to make an agreement will be void. The court refused to enforce an agreement to negotiate in good faith. Lack of certainty.
Slade's Case (1602) 4 Co Rep 91
Under the medieval common law, claims seeking the repayment of a debt or other matters could only be pursued through a writ of debt in the Court of Common Pleas, a problematic and archaic process. By 1558 the lawyers had succeeded in creating another method, enforced by the Court of King's Bench, through the action of assumpsit, which was technically for deceit. The legal fiction used was that by failing to pay after promising to do so, a defendant had committed deceit, and was liable to the plaintiff. Held that assumpsit claims were valid, with archaic and outdated principles being overwritten by the modern and effective assumpsit, which soon became the main course of action in contract cases.
Daulia v Four Millbank Nominees
Unilateral offer. Revocation of an offer once performance has begun. Obiter dicta: there was an implied term in the offer that it was irrevocable once performance had begin. C wished to purchase some property from D. The terms had been agreed but no written contract had been completed. D promised C that if he arranged for a bankers draft for the deposit to be delivered to D before some deadline he would complete the written contract. C duly complied but D refused to complete. C brought an action stating that unilateral contract existed and D was thus bound by that contract to complete the written contract for the sale of the property. Held: A unilateral contract did exist.
