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Mix of Contract Cases by Komilla Chadha - 2013

Case

Facts
Manchester Council City was being run by conservative party who were agreeing to buy land. Gibson wrote to them inquiring of price etc, the council wrote back suggesting at what price they may be able to buy the land. When Gibson responded Labour came into power and said that no contract had been formed and they are not willing to do this. Manchester Council City was being run by conservative party who were agreeing to buy land. Storer wrote to them accepting the price meanwhile Labour came into power and said that no contract had been formed and they are not willing to do this.

Judgement
The House of Lords ruled that no contract had been formed, Gibsons letter was an offer rather than an acceptance.

Why Care?
Where offer is established?

Topic
What constitutes an offer?

Gibson v Manchester City Council [1978]

Storer v Manchester City Council [1974]

The courts ruled that a Where offer is clear contract had established? been formed especially as it was written and signed.

What constitutes an offer?

Case

Facts
The plaintiff used the subcontractors (the defendants) to carry out some building work in another business contract. The defendants completed the work and were paid. However, for breach of of one of the terms of the contract the plaintiff looked to gain some compensations, the defendants argued there was no formal contract as they only spoke on the phone and exchanged different terms. The defendant placed an advert saying that a specic bird was available for 25s in a magazine. He was charged with breach of law, as under statutory legislation it was illegal to sell such a bird.

Judgement
Steyn LJ - O and A formation is an objective test and is usually sufcient but sometimes can be portrayed through performance thus a contract does exist.

Why Care?
Offer and Acceptance through performance.

Topic
Offer and Acceptance through performance .

Trentham v Archital Luxfer [1993]

Partridge v Crittenden [1968]

The High Court ruled that the defendant could not be punished as the advert was an ITT.

Establishes Invitations to that treat advertisements are invitations to treat.

Case

Facts

Judgement
Courts rules that technically this was a ITT so he could not be charged.

Why Care?
Case established that when goods are displayed with a price they are an ITT not offer. Case established that when goods are displayed with a price they are an ITT not offer.

Topic
Invitations to treat

Fisher v Bell Statutory law made it illegal to sell knives and the defendant [1961]
displayed a ick knife with a price on it in a shop window.

Pharmaceuti cal Society of Great Britain v Boots Cash Chemists (Southern) Ltd [1953]

Boots tried out a new layout that Courts ruled that this allowed customers to buy drugs was technically an ITT off the shelf, however, the thus was not unlawful. plaintiffs complained as under statutory law offering to sell drugs like that was unlawful.

Invitations to treat

Case

Facts
The defendants placed an advertisement offering to pay any person who caught inuenza after using the smoke ball as directed. The claimant still caught inuenza and claimed the 100. The defendants said that they are not obliged to as it is an ITT not an offer on 5 grounds: i. advert was a mere puff ii. offer was not directed at one particular person iii.no notication of acceptance iv.language to vague to be offer v.no consideration as offer did not ask individual to purchase smoke balle

Judgement
The courts held that actually this was an offer and rejected all 5 arguments:

Why Care?

Topic
Unilateral contracts ITT

Carlill v Carbolic Smoke Ball Co. [1893]

Dened the face of unilateral contracts and i. Given the statement that again showed 1000 was already difference deposited in bank showed between ITT intention and not just a and offer.
puff ii. possible to make offer to whole world iii.in unilateral contracts it is not required for the acceptance to be notied iv.vagueness not issue as you can use reasonable time principle v. defendants would still value people even if they had bought it directly and showed consideration.

- one of the reasons it wasnt a mere puff was because the promise was a term, an obligation.

Case

Facts

Judgement
The courts ruled that the term had been incorporated.

Why Care?
How are terms incorporated.

Topic
Incorporation of Terms

Mirror Newspaper printed too OBrien v MGN [2001] many scratch cards with

50,000 price and in that specic issue just wrote that normal newspaper rules applied. The claimant won two sums of 50,000 and the defendants said that however this was subject to their terms of as long as there is enough prize. The question was whether the normal rules apply incorporates the condition of as long as there is enough prize.

Case

Facts

Judgement

Why Care?
Application of Carlill

Topic
Unilateral contracts

Bowerman v The plaintiff booked a holiday Abta [1996] with the tour operators ABTA

The judges agreed with the claimant who shortly went bust. The saying that the notices defendant didnt fully reimburse were offers and the plaintiff. The plaintiff claimed acceptance was in the that the notices in the ofces business deal.This saying in nancial difculties the was application of full amount will be refunded Carlill were unilateral applied. contracts were said to apply to whole world

Case

Facts

Judgement

Why Care?

Topic
Postal rule, offer is accepted once posted.

Henthorn v The plaintiff received an offer for The court of appeal Fraser 1892 the sale of a property which was held that the
valid for 2 weeks over the phone. The next day the defendant posted an acceptance before the plaintiff received this, he posted a revocation.

It is an application of agreement was made Adams v as soon as the letter Linsell that the was posted whereas acceptance is revocation required made as soon notication of the other as the party. acceptance is posted if postage is a reasonable means and it was in this case as the two parties lived away from one another.

Case

Facts

Judgement
It was held by Lindley LJ that the revocation was not effective unless it had been directly communicated and the postal rule only applies to acceptance. This is because there is no legal principle to hold that the post can be sufcient as a revocation, in terms of acceptance it relying on third party to do and reasonable thus the disparity. Also, it is absurd that a person would have to wait to see if a withdrawal was sent if the postal rule was said to apply.

Why Care?
Postal rule does not apply in revocation.

Topic
Revocation of offer.

Byrne v Van The defendants sent a letter Tien Hoven making the offer for some goods to the plaintiff in New York. 1880
When the received the offer that same day a telegram and a letter accepting the offer was sent out. However, in between the price of goods went up so the defendant revoked the offer which the plaintiff claimed to be injust.

Saunders v Anglia Building Society 1971

A 78 year old woman agreed to give her property deed to her nephew on the basis that she could live there rent free and he could get his mortgage. At the time of signing the nephews business partner told her she was signing a gift deed of the property but she did not have her glasses to read the contract. As her nephew failed on the mortgage installments the bank sought to cease the house but she argued non est factum.

The house of Lords held that actually it was not non est factum, the contract was not radically different. Plea cannot be made for someone who made a mistake of the legal effect of the document rather than content.

non est factum non est factum

Case

Facts

Judgement
Not reading the contract is no excuse for being released from it.

Why Care?

Topic

Lestrange v Claimed purchased cigarette vending machine in a contract Gaucob that state that any express, 1934
implied or other terms are excluded. The machine broke and she wished to sue under Sale of Goods Act 1979.

- non est non est factum factum - how terms can be binding even if havent read - so power of term

Lewis v Clay A third party asked the defendant to witness some 1897

deeds for him and was told the papers were of a private matter, believing the third party the defendent signed not knowing they were promissary notes for 11,000 to the claiment. The claimant sought to receive that money.

The judges found the non est factum non est defendants mind was factum not alike with the contract and signed in misplaced condence and thus was not liable to pay.

Case
Barton v Armstrong [1976]

Facts
Armstrong was an aggressive chairman of a public company and Barton the MD. Along with others Barton hoped to have Armstrong removed so managed to take control of subsidiary companies etc. So when Armstrong released he sent death threats to Barton and told him to sign a contract buying Armstrongs share at an overprice. Shortly after Armstrong left, the company went bust and Barton sought contract to be se aside.

Judgement
The death threats were sufcient for contract to be set aside.

Why Care?
Duress of a person

Topic
Duress

Case
Occidental Worldwide Investment v Skibs
[1976]

Facts
The defendents chartered two vessells from plaintiffs and told them they would go bankrupt if contract was not set aside, of course untrue. The claimed in fear of losing valuable customer renegotiated terms of contract and now seeked to have new contract unenforceable.

Judgement
Commercial pressure was not sufciate for economic duress, there has to be the distorting of consent.

Why Care?
Economic duress

Topic
Duress

The Universe The defendant blacked a ship to Sentinel [1983] prevent it from leaving port and demanded the ship owners to pay substantial sums of money which they agreed in order to make the ship leave the port. They now sought damages

The money could be recovered under economic duress. The house of lords ruled prior cases were wrong at looking at the force of will - as it has already happened. Stronger bargaining power is important to. Also, was not a trade dispute because payment was unconnected to employment terms, more and more becomes duress.

Economic duress

Duress

Case
Huyton SA v Peter Cremer GmbH [1999]

Facts
Cremer sold wheat to H under a contract. When the defendant went to get their money they were rejected for a number of discrepancies. Claimants just offered to pay bank charges etc but discrepancies in documentation they held meant they would not give the money on the basis that C would remove their wish to arbitrate the matter. C said that while this is unreasonable they had to choice and so continued. One week later they said they do not agree to terms anymore and H sought injunctive relief. C argued they entered into the agreement under duress.

Judgement
The pressure could not be linked to decision taken and therefore duress did not apply and H should get their relief.

Why Care?
Illegitimate pressure must be signicant for duress.

Topic
duress

Case
R v Attorney General for England and Wales [2003]

Facts

Judgement

Why Care?
UI

Topic

Essentially R was forced to sign Did not amount to UI a document of condentionality illegitmate pressure as or leave his job which he signed R still had a choice. then some time after he left and looked to sue for duress and UI, he wasnt even allowed to get legal advice The defendant sought to buy a house under wifes name, husband was responsible for sorting out mortgage. They both went together and she signed the documents without reading. When repayments failed claimant sought to take over house. The judges ruled wife was not under UI of husband, should have read the document and taken separate legal advice. UI

Royal Bank of Scotland v Etridge (No 2) [2001]

UI

Case
Allcard v Skinner (1887)

Facts
The claiment became a sister and was introduced to the defendant a spiritual leader. Without taking advice she gave money to defendant for stocks. When she left she sought to recover that money. Couple was in nance trouble, plaintiff offered 5 week rescue package. They spoke on the phone and the bank manager even had 5 minutes alone with wife where he said her risks would be limited and did not advise her to seek legal advice so she signed the documents. As the repayments stalled she looked to save her house as she was under UI of bank manager.

Judgement
Even though she was entitled to the money because of UI, her delay in making the claim prevented her.

Why Care?
UI UI

Topic

National Westminster Bank v Morgan [1985]

No UI could arise as UI bank manager and customer was no relationship of trust and condence to give rise. Lloyds v Bundy not expressely overruled but conned to its facts.

UI

Case
Lloyds Bank v Bundy [1975]

Facts
Father secured debts of sons business on his farms even though debt worth more than farm, he guranteed. Bank allowed son to get in more debt and then seeked to get possession. The father was not given legal aid or a chance to think.

Judgement
Under Class 2B, there was presumed UI so gurantee set aside. Father had long relationship with bank manager and also had trusted them for only advice.

Why Care?
UI UI

Topic

Case
CICB v Pitt [1994]

Facts
Mr Pitt wished to buy some shares and he pressured his wife into signing a mortgage of the family house to purchase holiday house, even though shares were actually purchased. The wife never benetted from shares as the prots made were always used to purchase further shares. After doing well, even becoming a millionaire at one point, the stock market crashed and the bank sought to take possession of property and wife claimed undue inuence.

Judgement

Why Care?
UI

Topic

Overruling BBCI v UI Aboody, not necessary for claiment to demonstrate manifest disadvantage when claim based on actual ui. However, as the purpose was holiday the bank was not put on enquiry for constructive notice.

Case

Facts

Judgement

Why Care?
UI

Topic

BCCI v Aboody Husband used UI to get the wife [1990] to sign a mortgage for helping the company in which they held share , as company had debt. The bank now sought property but wife argued it was UI.

It was important for UI court to establish manifest disadvantage (now been overruled see CICB v Pitt case) which was not possible as wife had benetted from mortgagee as she owned shares and bank was allowed possession. The classes of UI were set out here: Class 1 - Actual UI(requires proof) Class 2a - presumed UI (relationship) Class 2b - requires proof of relation of trust and condence