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ACCA F4 A selection of popular cases

CONTRACT
Offer and acceptance Case Partridge v Crittenden Carlill v Carbolic Smoke Ball Co Fisher v Bell Pharmaceutical Society of GB v Boots Harvey v Facey Harris v Nickerson Errington v Errington Reminder Advert selling wild birds Newspaper ad Use smoke ball, catch flu, get 100 Flick knife in shop window Medicines on shop shelves Lowest price for Bumper Hall Pen 900 Auction cancelled sued for expenses Father bought house for couple. Promised to transfer if they paid mortgage. Widow refused Sale of farm buyer tried to get price reduction Trying to buy a horse. Assume its mine if I dont hear from you Acceptance faxed from Amsterdam to London Acceptance and revocation letters crossing in post Point of law Advert is an ITT not an offer Advert may be on offer to the world (rarely) Shop display an ITT not an offer. Display is an ITT. Point of sale is at counter Supply of information re selling price is not an offer Advert re auction was ITT to an offer hence no contract Unilateral offer could not be revoked while consideration was executory Counter offer revokes original offer Silence cannot be acceptance Valid when received and read in London Revocation of offer only effective when received and read. Acceptance valid when posted.

Hyde v Wrench Felthouse v Bindley Entores v Miles Far Eastern Byrne v Van Tienhoven

Consideration Case Re McArdle Collins v Godefroy Glasbrook Brothers v Glamorgan CC Stilk v Myrick Hartley v Ponsonby Williams v Roffey Brothers Foakes v Beer Central London Property Trust v High Trees House Intention Balfour v Balfour Jones v Vernon Pools Husband went to Ceylon promised to support wife Contract binding in honour only Domestic agreement presumed no intention to create legal relations Presumption in commercial contracts is that legal relations are intended but it can be rebutted. Reminder Tenant decorating house Witness promised money to give evidence already subpoenad Police requested to subdue picketing strikers Sailors mutinied others offered a rise to stay More sailors mutinied others offered a rise to stay Sub-contractor offered a bonus to finish on time Lender agreed delayed repayment schedule with no interest Landlord offered to reduce rent on high rise flats in WW2 Point of law Past consideration is no good No consideration promise was already legal obligation Police had done more than normal obligation consideration was supplied No consideration rise was not enforceable Extra duties were consideration rise was enforceable Avoidance of penalty for the main contractor was consideration for the bonus No consideration for variation of contract. Interest was due Promissory estoppel. Variation freely offered with no coercion could not go back on offer

Contract terms and exclusion clauses Poussard v Spiers & Pond Bettini v Gye Opera singer ill at start of run. Producers put in replacement Opera singer 3 days late for rehearsals Employee said exclusion clause only applied to beads and sequins Failing to attend was breach of condition gave right to rescind Attendance at all rehearsals was a warranty breach gives right to damages, not rescission Misrepresentation rendered the exclusion invalid

Curtis v Chemical Cleaning Co

Thompson v LMS Railway

Rail ticket referred to standard conditions. They excluded liability for everything. Train too long for platform woman fell off Notice in hotel bedroom denied liability for loss Securicor night watchman set fire to building

Exclusion clause was adequately communicated

Olley v Marlborough Court Photo Productions v Securicor

Not effective communicated after contract was made Exclusion clause was effective

Misrepresentation Leaf v International Gallery Sale of fake Constable Mistake was not operative. Misrepresentation was innocent so rescission was only possible remedy. Sale was 5 years ago too late delay defeats equity

Performance Cutter v Powell Sumpter v Hedges Sailor died part way into journey. Captain refused to pay wages House part built. Builder went bust. Asked for quantum meruit House refurb largely completed but not exactly to spec. Homeowner refused to pay No wages due part performance is no good No amount payable for building. Acceptance could not be freely given. Had to pay as performance substantially completed. Could deduct cost to finish to spec

Hoenig v Isaacs

Discharge by breach Sumpter v Hedges Hochster v de la Tour White and Carter (Councils) v McGregor Avery v Bowden Builder half built house. Asked for part of price Tour courier cancelled trip well in advance. Names on bins. Client cancelled order before work done Shipping contract cancelled in advance. Wronged party opted to continue and sue for full price. War broke out Ship chartered out then sold before start of charter No quantum meruit as customer had no choice about accepting Immediate action for anticipatory breach was allowed Injured party can carry on regardless and sue for full price War frustrated contract. Lost right to sue

Omnium DEnterprise v Sutherland

Anticipatory breach - not frustration. The events were avoidable by the owner

Remedies for breach of contract Case Hadley v Baxendale Victoria Laundry v Newman Industries Chaplin v Hicks Cellulose Acetate Silk v Widnes Foundry Ford Motor Co v Armstrong Jarvis v Swan Tours Warner Bros v Nelson Reminder Broken mill shaft. Delay in fixing lead to great loss of business Delay in completing contract led to huge cost from lost business Beauty contestant wrongly excluded from contest Loss much bigger than contract allowed for Contract proscribed fixed damages for trivial breaches Holiday not as good as described in brochure Contract stopped Bette Davis working for other film companies Point of law Remoteness of damage not foreseeable couldnt sue. Only liable for reasonably foreseeable damages Difficult to assess damages but plaintiff still entitled Damages fixed at level proscribed in contract. Penalty clauses not upheld. Only sue for actual loss Could sue for disappointment and distress Injunction illustration

AGENCY
Watteau v Fenwick Pub manager ordered cigars despite specific orders not to. Pub owner refused to pay Lonely, unaccompanied horse in station. GNR arranged stabling. Owner refused to pay Promoters bought wine on behalf of company not yet formed. Solicitors acted for client who had gone insane. Implied agency. Owner bound on contract. Agency by necessity. Owner had to pay. Company not liable on contract as did not exist when contract made. Promoters personally liable Insanity ended agency. Solicitors liable for breach of warranty of authority.

GNR v Swaffield

Kelner v Baxter

Yonge v Toynbee

TORT
Donoghue v Stevenson Bourhill v Young Decomposed snail in ginger beer. Duty of care despite no contract. Great upset after drinking Case established negligence. Woman heard crash looked out at messy accident - miscarried No duty of care; too remote.

Hedley Byrne v Heller

Ad agency gets positive reference Negligent mis-statement. Liable if from banker of potential client. reasonably expect others to rely on Client then goes bust owing money your statement Caparo took over Fidelity relying Auditors normally only liable to on info in audited accounts. These those to whom their opinion is turned out to be in error directly communicated. Blind person falling down marked hole in road LEB negligent. Must take into account potential susceptibility.

Caparo Inds v Dickman

Haley v LEB Watt v Herts CC Paris v Stepney BC Bolton v Stone ADT v Binder Hamlyn

Fireman injured while dashing off Less care required if urgent to blaze. objective. Authority not liable One eyed mechanic no goggles Employer liable. More care supplied. Blinded by freak shard. required given potential seriousness Freak cricket shot hit ball out of Club not liable. Highly unlikely ground injuring passer by. accident. Partner gave verbal assurance to Firm liable for negligent misbuyer that accounts were OK. statement due to direct comment. Bought and lost money. Explosive brothers. Willingly Volenti non fit injuria. Employer playing with explosives blown up not liable.

ICI v Shatwell

EMPLOYMENT
Pepper v Hart Teacher sent child to school at reduced fee. Revenue tried to assess benefit at average cost Vision mixer worked for many employers for short time Cost in legislation interpreted as average cost. House of Lords used Hansard to help Self employed

Hall v Lorimer

COMPANY
Salomon v Salomon Company financed by owner mainly by secured debt. Company insolvent. Owner claimed security Group company traded from premises owned by other group company. Compulsorily demolished Allowed. Company separate legal person. Shareholder could also be secured creditor Compensation payable both for building and loss of trade. Whole group viewed as owner

DHN Food Distributors v Tower Hamlets

Gilford Motor Co v Horne

Mechanics contract banned approaches to old customers after leaving job. Wrote out from new limited company instead 1916 contract between 2 British companies one with German shareholders. English company withdrew 2 shareholders (60%) expelled other shareholder as director Articles said disputes must go to arbitration. Shareholder sued company over dispute Articles allowed 1 vote per share up to max of 100. Large holder passed some shares to nominee. Chairman wouldnt count votes Articles said that selling shareholders must offer to directors who would buy at fair price. Articles said Eley Co solicitor for life. Sacked. Sued for breach Articles stated directors to be paid 1,000pa. Not paid

Not allowed. Company a sham merely to avoid contract obligation

Daimler v Continental Tyre and Rubber

No breach. Veil lifted to reveal other company as enemy

Ebrahimi v Westbourne Galleries Hickman v Kent Sheepbreeders Pender v Lushington

Court agreed just and equitable winding up as quasi partnership Articles binding on shareholder. Had to go to arbitration Articles binding on company. Had to count votes

Rayfield v Hands

Articles binding shareholder v shareholder. Directors obliged to buy Articles dont make contracts between company and 3rd party. Could not sue Articles can be used to flesh out existing contract. 1,000 binding Not allowed. Not for benefit for company as whole Allowed. Although bad for 1 shareholder, would benefit co as a whole Couldnt sack him. Any vote would fail 2:3 Director held out as MD has apparent authority to bind co. Co must pay. Secretary has apparent authority to bind co in admin contracts. Co had to pay.

Eley v Positive Life

Re New British Iron

Dafen Tinplate v Llanelli Proposed change of articles to Steel allow directors to buy out any shareholder Sidebottom v Kershaw Leese Bushell v Faith Proposed change of articles to allow directors to buy out any shareholder competing with co 3 equal shareholder / directors. Articles said attacked director got treble votes. 2 tried to sack 3rd Director described himself as MD. Made contract. Co refused to pay. Co secretary hired cars claiming for co use. Used them personally. Co refused to pay

Freeman & Lockyer v Buckhurst Park Panorama Developments v Fidelis Furnishings

Dorchester Finance v Stebbing Percival v Wright

Experienced accountant / director signed blank cheques. Colleague stole large sum. Shareholder selling. Directors bought knowing share price would rise soon Minority shareholders bringing action against director / majority shareholder who defrauded co

Liable for breach of duty to use skill and care. Accountant should have known better. Directors OK. Duty owed to co as whole not to individual shareholders They failed. If wrong is done to a co, the proper plaintiff is the co

Foss v Harbottle