ACCA F4

A selection of popular cases

CONTRACT
Offer and acceptance

Case Reminder Point of law

Partridge v Crittenden Advert selling wild birds Advert is an ITT not an offer

Carlill v Carbolic Smoke Newspaper ad “Use smoke ball, Advert may be on offer to the
Ball Co catch flu, get £100 world (rarely)

Fisher v Bell Flick knife in shop window Shop display an ITT not an offer.

Pharmaceutical Society Medicines on shop shelves Display is an ITT. Point of sale is

of GB v Boots at counter

Harvey v Facey “Lowest price for Bumper Hall Pen Supply of information re selling
£900” price is not an offer

Harris v Nickerson Auction cancelled – sued for Advert re auction was ITT to an
expenses offer – hence no contract

Errington v Errington Father bought house for couple. Unilateral offer could not be
Promised to transfer if they revoked while
paid mortgage. Widow consideration was
refused executory

Hyde v Wrench Sale of farm – buyer tried to get Counter offer revokes original offer
price reduction

Felthouse v Bindley Trying to buy a horse. “Assume it’s Silence cannot be acceptance
mine if I don’t hear from
you”

Entores v Miles Far Acceptance faxed from Amsterdam Valid when received and read in
Eastern to London London

Byrne v Van Tienhoven Acceptance and revocation letters Revocation of offer only effective
crossing in post when received and read.
Acceptance valid when
posted.
Consideration

Case Reminder Point of law

Re McArdle Tenant decorating house Past consideration is no good

Collins v Godefroy Witness promised money to give No consideration – promise was

evidence – already already legal obligation
subpoena’d

Glasbrook Brothers v Police requested to subdue Police had done more than normal
Glamorgan CC picketing strikers obligation – consideration
was supplied
Stilk v Myrick Sailors mutinied – others offered a No consideration – rise was not
rise to stay enforceable

Hartley v Ponsonby More sailors mutinied – others Extra duties were consideration –
offered a rise to stay rise was enforceable

Williams v Roffey Sub-contractor offered a bonus to Avoidance of penalty for the main
Brothers finish on time contractor was
consideration for the bonus

Foakes v Beer Lender agreed delayed repayment No consideration for variation of

schedule with no interest contract. Interest was due

Central London Property Landlord offered to reduce rent on Promissory estoppel. Variation
Trust v High high rise flats in WW2 freely offered with no
Trees House coercion – could not go
back on offer

Intention

Balfour v Balfour Husband went to Ceylon – Domestic agreement – presumed no

promised to support wife intention to create legal
relations

Jones v Vernon Pools “Contract binding in honour only” Presumption in commercial

contracts is that legal
relations are intended – but
it can be rebutted.
Contract terms and exclusion clauses

Poussard v Spiers & Opera singer ill at start of run. Failing to attend was breach of
Pond Producers put in condition – gave right to
replacement rescind

Bettini v Gye Opera singer 3 days late for Attendance at all rehearsals was a
rehearsals warranty – breach gives
right to damages, not
rescission

Curtis v Chemical Employee said exclusion clause Misrepresentation rendered the

Cleaning Co only applied to beads and exclusion invalid
sequins

Thompson v LMS Rail ticket referred to standard Exclusion clause was adequately
Railway conditions. They excluded communicated
liability for everything.
Train too long for platform
– woman fell off

Olley v Marlborough Notice in hotel bedroom denied Not effective – communicated after
Court liability for loss contract was made

Photo Productions v Securicor night watchman set fire to Exclusion clause was effective
Securicor building

Misrepresentation

Leaf v International Sale of fake Constable Mistake was not operative.

Gallery Misrepresentation was
innocent so rescission was
only possible remedy. Sale
was 5 years ago – too late –
delay defeats equity

Performance

Cutter v Powell Sailor died part way into journey. No wages due – part performance is
Captain refused to pay no good
wages

Sumpter v Hedges House part built. Builder went bust. No amount payable for building.
Asked for quantum meruit Acceptance could not be
freely given.

Hoenig v Isaacs House refurb largely completed but Had to pay as performance
not exactly to spec. substantially completed.
Homeowner refused to pay Could deduct cost to finish
to spec
Discharge by breach

Sumpter v Hedges Builder half built house. Asked for No quantum meruit as customer
part of price had no choice about
accepting

Hochster v de la Tour Tour courier cancelled trip well in Immediate action for anticipatory
advance. breach was allowed

White and Carter Names on bins. Client cancelled Injured party can carry on
(Councils) v order before work done regardless and sue for full
McGregor price

Avery v Bowden Shipping contract cancelled in War frustrated contract. Lost right
advance. Wronged party to sue
opted to continue and sue
for full price. War broke
out

Omnium D’Enterprise v Ship chartered out then sold before Anticipatory breach - not
Sutherland start of charter frustration. The events
were avoidable by the
owner
Remedies for breach of contract

Case Reminder Point of law

Hadley v Baxendale Broken mill shaft. Delay in fixing Remoteness of damage – not
lead to great loss of foreseeable – couldn’t sue.
business

Victoria Laundry v Delay in completing contract led to Only liable for reasonably
Newman huge cost from lost foreseeable damages
Industries business

Chaplin v Hicks Beauty contestant wrongly Difficult to assess damages but

excluded from contest plaintiff still entitled

Cellulose Acetate Silk v Loss much bigger than contract Damages fixed at level proscribed
Widnes Foundry allowed for in contract.

Ford Motor Co v Contract proscribed fixed damages Penalty clauses not upheld. Only
Armstrong for trivial breaches sue for actual loss

Jarvis v Swan Tours Holiday not as good as described in Could sue for disappointment and
brochure distress

Warner Bros v Nelson Contract stopped Bette Davis Injunction illustration

working for other film
companies
AGENCY
Watteau v Fenwick Pub manager ordered cigars despite Implied agency. Owner bound on
specific orders not to. Pub contract.
owner refused to pay

GNR v Swaffield Lonely, unaccompanied horse in Agency by necessity. Owner had to

station. GNR arranged pay.
stabling. Owner refused to
pay

Kelner v Baxter Promoters bought wine on behalf Company not liable on contract as
of company not yet did not exist when contract
formed. made. Promoters personally
liable

Yonge v Toynbee Solicitors acted for client who had Insanity ended agency. Solicitors
gone insane. liable for breach of warranty
of authority.
TORT

Donoghue v Stevenson Decomposed snail in ginger beer. Duty of care despite no contract.
Great upset after drinking Case established
negligence.

Bourhill v Young Woman heard crash – looked out at No duty of care; too remote.
messy accident -
miscarried

Hedley Byrne v Heller Ad agency gets positive reference Negligent mis-statement. Liable if
from banker of potential reasonably expect others to
client. Client then goes rely on your statement
bust owing money

Caparo Inds v Dickman Caparo took over Fidelity relying Auditors normally only liable to
on info in audited accounts. those to whom their
These turned out to be in opinion is directly
error communicated.

Haley v LEB Blind person falling down marked LEB negligent. Must take into
hole in road account potential
susceptibility.
Watt v Herts CC Fireman injured while dashing off Less care required if urgent
to blaze. objective. Authority not
liable
Paris v Stepney BC One eyed mechanic – no goggles Employer liable. More care
supplied. Blinded by freak required given potential
shard. seriousness

Bolton v Stone Freak cricket shot hit ball out of Club not liable. Highly unlikely
ground injuring passer by. accident.

ADT v Binder Hamlyn Partner gave verbal assurance to Firm liable for negligent mis-
buyer that accounts were statement due to direct
OK. Bought and lost comment.
money.

ICI v Shatwell Explosive brothers. Willingly Volenti non fit injuria. Employer
playing with explosives – not liable.
blown up
EMPLOYMENT
Pepper v Hart Teacher sent child to school at
reduced fee. Revenue tried
to assess benefit at average
cost
Hall v Lorimer Vision mixer worked for many
employers for short time
COMPANY
Salomon v Salomon Company financed by owner
mainly by secured debt.
Company insolvent. Owner
claimed security
DHN Food Distributors Group company traded from
v Tower premises owned by other
Hamlets group company.
Compulsorily demolished
Gilford Motor Co v Mechanic’s contract banned
Horne approaches to old
customers after leaving job.
Wrote out from new
limited company instead
Daimler v Continental 1916 contract between 2 British
Tyre and Rubber companies – one with
German shareholders.
English company withdrew
Ebrahimi v Westbourne 2 shareholders (60%) expelled
Galleries other shareholder as
director
Hickman v Kent Articles said disputes must go to
Sheepbreeders arbitration. Shareholder
sued company over dispute
Pender v Lushington Articles allowed 1 vote per share
up to max of 100. Large
holder passed some shares
to nominee. Chairman
wouldn’t count votes
Rayfield v Hands Articles said that selling
shareholders must offer to
directors who would buy at
fair price.
“Cost” in legislation interpreted as
average cost. House of
Lords used Hansard to help
Self employed
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
Not allowed. Company a “sham”
merely to avoid contract
obligation
No breach. Veil lifted to reveal other
company as enemy
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
Articles binding shareholder v
shareholder. Directors
obliged to buy
Eley v Positive Life Articles said “Eley Co solicitor for
life”. Sacked. Sued for
breach
Re New British Iron Articles stated directors to be paid
£1,000pa. Not paid
Dafen Tinplate v Llanelli Proposed change of articles to
Steel allow directors to buy out
any shareholder
Sidebottom v Kershaw Proposed change of articles to
Leese allow directors to buy out
any shareholder competing
with co
Bushell v Faith 3 equal shareholder / directors.
Articles said attacked
director got treble votes. 2
tried to sack 3rd
Freeman & Lockyer v Director described himself as MD.
Buckhurst Park Made contract. Co refused
to pay.
Panorama Developments Co secretary hired cars claiming for
v Fidelis co use. Used them
Furnishings personally. Co refused to
pay
Dorchester Finance v Experienced accountant / director
Stebbing signed blank cheques.
Colleague stole large sum.
Percival v Wright Shareholder selling. Directors
bought knowing share
price would rise soon
Foss v Harbottle Minority shareholders bringing
action against director /
majority shareholder who
defrauded co
Articles don’t 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
Couldn’t 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.
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