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Adams v Lindsell

Facts The case involved two parties in the sale of wool. On 2 September, the defendants wrote to the plaintiffs offering to sell them certain fleeces of wool and requiring an answer in the course of post. The defendants misdirected the letter so that the plaintiffs did not receive it until 5 September.[1] The plaintiffs posted their acceptance on the same day but it was not received until 9 September. Meanwhile, on 8 September, the defendants, not having received an answer by 7 September as they had expected, sold the wool to someone else. The defendants argued that there could not be a binding contract until the answer was actually received, and until then they were free to sell the wool to another buyer.[1] Judgment Law J said that if that was true it would be impossible to complete any contract through the post; if the defendants were not bound by their offer until the answer was received, then the plaintiffs would not be bound until they had received word that the defendants had received their acceptance, and this could go on indefinitely.[1] Instead it must be considered that the offerors were making the offer to the plaintiffs during every moment that the letter was in the post. Then when the Offeree has placed his acceptance in the post there is a fictional meeting of minds, which concludes the offer and gives effect to the acceptance.[2] The acceptance did not arrive in course of post strictly speaking (all parties understood in course of post to refer to 7 September). But because the delay was the default of the defendant it was taken that the acceptance did arrive in course of post.

Barry v Davies
Facts
The auctioneer withdrew goods from an auction (the goods had no reserve price) when a bona fide bid of 200 was effective. The court held that an auctioneer is bound to sell to the highest bidder where there is no reserve price, and can't withdraw the sale simply because the price is too low. A bid in an auction, the possibility of acceptance of the bid, unless the bid is withdrawn, and the benefit to the auctioneer of driving up the price bid is sufficient consideration. The contract in an auction is between the buyer and the seller, not the buyer and the auctioneer, although the buyer has a collateral agreement with the auctioneer.

Judgment: The remedy is the difference between the contract value, and the current market value of the goods under the Sale of Goods Act 1971 s51(3). The value in this case was 27,600.

Long v Lloyd
Facts
Lloyd advertised a lorry as being in exceptional condition. Mr Long went to Mr Lloyd's premises to see it. Mr Lloyd then said it could do 40 mph. On a trial run from Hampton Court to Sevenoaks, he said it did 11 miles to the gallon. Mr Long bought it for 750. Two days later, driving to Rochester and back the dynamo stopped working, the oil seal was defective, there was a crack in the wheel and it did only five miles to the gallon. Mr Lloyd then said he would repair for half price of a reconstructed dynamo. Mr Long accepted. Then on another journey, being used by his brother on a business trip to Middlesbrough, it broke down. Mr Long sued to rescind.

Judgment
Pearce LJ held that the contract had been affirmed when it was taken back after having been fixed. He emphasised that Mr Long chose not to have an expert examine the lorry. On fuel consumption he had a reasonable time to test it, so on any view he must have accepted the lorry before he purported to reject it.

Hartley v Ponsonby
Facts
Hartley was contracted to crew a ship owned by Ponsonby. After docking, seventeen of the thirty-six man crew deserted, and only six of the remaining men were competent seamen.[2] With so many crew members missing it was unsafe for the remaining crew to continue the voyage, but they agreed to do so after being promised extra pay once the ship docked. When the ship arrived at the home port, Ponsonby refused to pay the crewmen the extra wages he had promised.[2]

Judgment
The judge decided that although Stilk v Myrick [1809] EWHC KB J58 said that sailors were not entitled to additional pay for fulfilling a duty already required by an existing contract, they were in this case. The desertion of so many crewmen (compared to the desertion of two crewmen in Stilk v Myrick) changed the nature of the remaining sailors duties to the point where the contract could be considered discharged. As such the offer by Ponsonby to pay the crew to sail back and the acceptance by the crew could be considered an entirely new contract, providing valid consideration.[2]

Foakes v Beer
Facts
The appellant, Dr John Weston Foakes, owed the respondent, Julia Beer, a sum of 2,090 19s after a court judgment. Beer agreed that she would not take any action against Foakes for the amount owed if he would sign an agreement promising to pay an initial sum of 500 (52,615.38 in 2012 adjusted for inflation) and pay 150 twice yearly until the whole amount was paid back. Foakes was in financial difficulty and, with the help of his solicitor, drew up an agreement for Beer to waive any interest on the amount owed. She signed. Foakes paid back the principal but not the interest. Then Beer sued Foakes for the interest. The question was whether she was entitled to it, despite their agreement that he would not need to pay it.

Judgment
Queen's Bench

At trial, the court found in favour of Foakes. Watkin Williams J upheld this decision,[1] given the agreement between the two. Mathew J said,

It is material to notice that by the agreement the debtor shall not bind himself to pay the creditor's nominee. That stipulation renders the document available as a security. Upon the authority of the decisions, I think there was abundant consideration for the agreement.

Court of Appeal

On appeal, in a short judgment Brett MR instead held for Beer because there was no consideration for the agreement. Lindley LJ and Fry LJ concurred without giving considered opinions

Da Costa v Jones
Facts
A wager was made on the sex of a certain individual. The individual concerned was a French national known as Monsieur le Chevalier D'Eon. D'Eon was a captain in the Dragoons and had served France in diplomatic postings firstly in Russia and later in England. He had been awarded the Cross of Saint-Louis during the reign of Louis XV in recognition of his service in the Dragoons and his diplomatic work. In the reign of Louis XV, the king established a spy service

which was known as the Secret. The existence of Secret was not known to the king's ministers, it reported directly to him. During his time in England he fell out of favour with two of the kings ministers (a dispute having started over the level of his expenses), leading to his replacement by another diplomat, but he continued to serve his country as a spy and therefore reported indirectly to the king. He held concerns that if he were to return to France he could have been imprisoned on the Bastille. Over time he made comments which threw doubt on his true sex. Being well known in London comments about his sex became the subject of talk and comment in the press. In turn this led to numerous wagering contracts being entered into. The wager in the Da Costa v Jones was not the first to have come before the courts. In an earlier case (also before Lord Mansfield) it was held, on the evidence provided by witnesses (including two doctors) to a jury that Monsieur D'Eon was female. It was not until this case that the Court (Lord Mansfield) considered the public policy issues arising from this form of wager.

Judgment
Lord Mansfield held the contract was ineffective, on the basis that it was not in good faith.

Nash v Paragon Finance plc


Facts
Paragon (t/a National Home Loans Corporation plc until 1997) was claiming possession from Mr and Mrs Nash in South Norwood for late mortgage repayments. Paragons rate of interest was variable at its discretion. The Bank of England lowered its interest rate. Paragon did not pass on the lower rate. Nash claimed that they were being made to pay substantially over the market rate of interest for secured loans, and were unable to find another lender because they had fallen into arrears. Mr & Mrs Nash argued that the interest rates were extortionate under the Consumer Credit Act 1974 section 138 (grossly exorbitant, grossly contravenes principles of fair trading; regard had to prevailing interest rates and risk).

Judgment
Dyson LJ held that the power to vary the interest rate at its discretion had to be exercised in a rational and honest way. This implied term was necessary in order to give effect to the reasonable expectations of the parties. [36] and [42] However in this case the bank was acting reasonably in protecting its interests. It was not grossly exorbitant. Nor was the term unfair under UCTA 1977 section 3(2)(b)(i), because part of the contractual performance was the discretion and its exercise was what could be reasonably expected. Thorpe LJ and Astill J concurred.

Walker v Boyle
Facts
Mr Walker negotiated with Mrs Boyle to purchase Stall House in Stall House Lane, Pulborough, West Sussex for 105,000. During negotiations Mr Walker sent enquiries to Mr Boyle asking, Is the vendor aware of any disputes regarding the boundaries, easements, covenants or other matters relating to the property or its use? Mrs Boyle asked her husband who answered no. But really there had been a long running dispute with the neighbour, which Mr Boyle incorrectly thought had been settled. Condition 17(1) of the contract (which incorporated the National Conditions of Sale) said that, no error, misstatement or omission in any preliminary answer concerning the property shall annul the sale. Mr Walker brought an action for rescission based on misrepresentation. The question was whether Mr and Mrs Boyle could rely on the exclusion clause and whether it was reasonable under MA 1967 s 3.

Judgment
Dillon J held the condition fell foul of s 3 MA 1967. He held Mrs Boyle had not shown that the exclusion satisfied s 11 of the Unfair Contract Terms Act 1977 in this case. Neither parties solicitors directed their minds to condition 17, so it was not one which ought reasonably to have been known to or in the contemplation of the parties. He added that the National Conditions of Sale, though common, were not the product of negotiations between interested trade parties.