Anna Nguyen

CONTRACT LAW

Contract = clear statement of terms, which offeror prepared to conduct

business with offeree.
OFFER

Expression of willingness to contract on certain terms, made with intention

that will become binding as soon as the offeree accepts it.

Clearly stated terms:

Guthing v Lynn
Buyer of horse promised to pay extra 5 if it was luck for me not clear
enough not a valid offer.
Hillas v Arcos
Issue over not clearly stated terms of an offer but court held that because
there have been previous dealings parties must have known what to do
cannot be not clearly stated.
Offer to the world:
Carlill v Carbolic Smoke Ball Company
100 if smoke ball not cure influenza, Mrs Carlill used as instructed but not
cured and tried to claim 100. Smoke Ball claimed that it was just an
advertising puff and there was no legal intent. But in the ad 1000 is
deposited with the Alliance serious legal intent. It was a unilateral offer
and Mrs Carlill did not have to inform them that she has accepted the offer
advert indicated the action was what required rather than an oral or a
written response.
Bowerman v ABTA
Notices on wall of travel agency offer any booking of holiday would be
covered by membership of the Association of British Travel Agents
Acceptance was the act of booking the holiday.
Invitation to treat:
Fisher v Bell
Seller accused of offering for sale a flick-knife knife was on display in
window but it was only an invitation to treat.
Pharmaceutical Society v Boots Cash Chemists
Goods displayed on the shelf in a self-service invitation to treat
customers make offers when presenting the goods at check-out.
Partridge v Crittenden
Magazine advertisement was an invitation to treat offers come from those
responding to it and asking to buy the birds.
Lefkowitz v Great Minneapolis Surplus Stores

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Saturday 9am sharp; 3 brand new fur coats worth $100. First come, first
served, $1
Cannot treat this as invitation to treat, must be an offer otherwise it would be
unfair.
Gibson v Manchester City Council
Council wrote The Corporation may be prepared to sell the house to you at
a certain price, Gibson completed forms and returned but election and policy
changed council refused to sell house councils proposal was an
invitation to treat, Gibson offered but got rejected.
Negotiations:
Harvey v Facey
Claimant interested in buying land that was not advertised asked for the
lowest price then defendant replied with a mere statement of price
Claimant accepted but it was just negotiation not an offer.
Counter-offer:
Hyde v Wrench
Offer was to sell farm for 1000 then claimant said would pay 950.
Claimant heard nothing from defendant. But there was no contract as
counter offer destroyed original offer and counter offer never got accepted.
Pickfords v Celestica
Offer made to carry out work using lorries at 890/lorry. Second offer
98,760 for the whole work second offer cancelled the first offer and
carrying out the work seen as an acceptance.
Stevenson v McLean
An offer to sell iron at curtained price not destroyed when offeree enquired
further information about delivery and payment method because it was not a
counter offer.
Lapse of time:
Ramsgate Hotel Co. Ltd v Montefiore
Applied to buy share in June heard nothing more till November when
share announced as his but delay has lapsed the offer nature of goods
prices of share fluctuate.
Revocation:
By 3rd party:
Dickinson v Dodds
Offer to sell property but sold to a third party before acceptance a third
party told the offeree enough to revoke offer.
Routledge v Grant
Offered to buy a house and kept offer open for 6 weeks but he could
withdraw the promise any time before it was accepted.
Revocation after process of acceptance:

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Errington v Errington & Woods
Father promised son and daughter the house if they finish paying for
mortgage. Father died and widow tried to revoke offer but offer irrevocable
once the process of acceptance has started.
Confetti Records v Warner Music UK
Warner produced an album from music sent to them by Confetti too late
for Confetti to revoke offer.
Revocation must before acceptance:
Byrne v Van Tienhoven
Defendant: Cardiff
Claimant: New York
MON: Offer sent
TUES: Revocation
THURS: Offer arrived
FRI: Acceptance sent
SAT: Revocation arrives
There was a binding contract, revocation must be communicated before
acceptance.
Revocation of offer to the world:
Shuey v USA
Offer made to the whole world must be revoked the same way as it was put
on offer.
Ignorance:
1. Death:
Bradbury v Morgan
General death of offeror may not cause an offer to lapse unless it was
because of a personal nature, especially if was accepted in ignorance of
death.
2. Of Offer:
Bloom v American Swiss Watch Co.
Claimant gave evidence for arrest of jewel thieves then found out an offer of
a reward but could not claim for reward because no contract existed due to
lack of communication before giving the information.
Battle of forms:
Butler Machine Tool Co Ltd v Ex-Cell-O Corp Ltd
Buyer and Seller had their own different standard terms, normally based on
who fired the last shot. But not enough in this case, Court had to base on the
whole picture. (Battle of forms).
Failure of precondition:
Financings Ltd v Stimson

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Between offer and acceptance, the car was stolen and damaged but offeree
did not know and accepted anyways this was not an acceptance as
precondition failed.

ACCEPTANCE

Acceptance by conduct:
Brogden v Metropolitan Rail Co
Parties have been dealing without a contract but railway created a written
contract, sent to Brogden who made amendments then sent back. Contract
arrived and Railway put in a drawer and supply of coal continued. There was
a counter-offer from Brogden but Railway accepted it by continuing with the
supply Acceptance by conduct.
Reasonable expectations:
Trentham Ltd v Archital Luxfer
Concerns of whether contract did exist and it did take into account the
reasonable expectations of sensible businessmen.
Prescribed method:
Yates Building v Pulleyn
Asked for acceptance to be by letter using registered or recorded delivery
letter was sent by normal delivery but delivered on time no difference for
offeror still binding.
Non-prescribed:
Entores Ltd v Miles Far East Corporation
Issue about where contract was formed England since it was where
contract was received Offerees responsibly to make sure acceptance is
communicated.
Waiver of communication:
Day Morris v Voyce
Seller of property must have accepted an estate agents offer to market the
property letting agent go ahead with advertising + show buyers around.
Carlill v Carbolic Smoke Ball Company
Implied no need of communication from offeree to offeror.
Silence:
Felthouse v Bindley
Uncle offer If hear no more about the horse, horse is mine nephew not
replied but told auctioneer that horse was sold but auctioneer mistakenly
sold the horse to s.o else But there was no contract between uncle +
nephew anyways Silence alone cannot be an acceptance.
Recipient of unsolicited goods can treat them as an unconditional gift if:
1. Goods unused for 28 days + seller informed that they are not wanted.
2. Goods are kept as new for 6 months unused.
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Ignorance of offer:
Williams v Carwardine
Defendant gave info that led to arrest of murderer knowing about the reward
for the info but did not give info because of rewards but for a different
reason. Court ruled still get rewards because she knew about it while giving
info valid acceptance.
R v Clarke (Australia but obiter)
Defendant knew of reward for info but admitted that he forgot about it while
giving the info not rewarded because not remembering = never having
known of the offer not valid acceptance.
Bloom v American Swiss Watch Co.
(Look in Offer).
Postal rule:
Henthorn v Fraser
Offer made in person but reasonable to accept by post one lived in
Liverpool but one lived in Birkenhead. Lord Herschell: "Where the
circumstances are such that it must have been within the contemplation of
the parties that, according to ordinary usage of mankind, the post must be
used as a means of communicating the acceptance of an offer, the
acceptance is complete as soon as it is posted."
Adams v Lindsell
Offer posted misdirected arrived late. Acceptance posted immediately
back once offer arrived but no reply heard from offeror on expected day
sold wool to someone else breached of contract Valid acceptance.
Household Fire Insurance v Grant
Letter of acceptance was lost in the post + never arrived still held binding.
Re London and Northern Bank
Letter is posted = correctly addressed + stamped + placed into an office
post-box/authorised person.
Holwell v Hughes
If offer request notice in writing Postal rule not applied communication
of acceptance must be in writing in front of him.
Pretty Pictures v Quixote Films
Parties required a signed written contract forming acceptance An email
was not enough.
The Brimmes (1974)
Recipients responsibly to look for message that are delivered during normal
office hours (business)
Outside office hours valid when read or wait until office hour.

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CONSIDERATIONS

Defined in Dunlop v Selfridge as an act, forbearance, or promise by one

party to a contract that constitutes the price for which he buys the promise of
the other, without consideration an agreement is not binding.

Past considerations:
Roscorla v Thomas
Horse sold then after sale, seller said horse was sound and free from vice
but horse was vicious and unmanageable buyer argued assurances
from seller went with price paid but Court assurances gave after the sale
not connected to price paid not a part of consideration.
Re McArdle
Alternation to house made then members of family were happy with it +
promised to pay who had done work. No money arrived workers sued but
work done before the promise was past consideration not valid.
Exceptions:
Lampleigh v Braithwait
Pardon obtained from the king for friend who killed someone friend
promised to pay 100 did not pay could be enforced in court
repayment of expenses has been expected all along.
Re Caseys Patents
Work was undertaken, when finished, some shares were promised but did
not hand over could be enforced by law payment was expected for
undertaking work.
Sufficient but not adequate:
Thomas v Thomas
Husband wanted wife to have right to live in his house when he died
formed contract she paid 1 a year sufficient consideration to enforce
clearly not adequate.
Bainbridge v Firmstone
Some boilers need weighing agreed that boilers taken for weighing +
returned in good condition. Came back damaged No payment should be
made considerations valid one side had benefit of weighing the boilers,
one entitled to having them returned good condition. Consideration
recognisable.
Chappell v Nestle

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Concerned whether Nestle should pay Chappel royalties on records in
exchange of chocolate wrappers + money (post +packaging) Valid
consideration chocolate wrappers for record not adequate but
sufficient.
Legal duty:
Collins v Godefroy
Lawyer obliged in court by witness order but agreed with one party they
would pay him for evidence not entitled to enforce payment as he was
obliged to do anyways by law.
Exceptions:
Glasbrook Bros v Glamorgan County Council
County council in charge of Police force had a legal duty to keep peace in
area. Due to recent strikes and disturbances mobile patrol of policemen.
Owners of a particular mine large patrol to be stationed at their mine
Council agreed but with money Enforceable Council went beyond duty.
Harris v Sheffield United
Request for a police presence hold match safely obligation to pay for
the service.
Ward v Byham
Single mother promised by father payment of 1 a week to keep child
well looked after and happy. Father defaulted on payment his
consideration was the payment but mother had no consideration as law
already obliged her to maintain the child but by well looked after + happy
was more than maintaining money was enforceable.
Contractual duty:
Stilk v Myrick
2 sailors deserted ship, 8 left agreed with captain to share wages of those 2.
No payment made but sailors done no more than their contractual duty
that owed captain in their initial contract.
Exceptions:
Hartley v Ponsonby
17/36 deserted ship, among who left, only few were experienced. Sailors +
Captain agreed that wages shared if ship was sailed on dangerously short-
handed. Payment not made but should be made because what happened
was so different to original contract original contract discharged + new
one made.
Williams v Roffey
Builders + Carpenters contracted to do carpentry work on some flats.
Builders found out that carpenters financial issues unable to obtain
materials + labour unable to finish builders offered extra money
work completed on time + builders also avoided penalty under a liquidated
damages clause with owner. Carpenters continued but no money paid
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Held that carpenters should succeed Builders made a choice to pay to
avoid their disadvantages.
Part-payment of debt:
Pinnels Case
Cole owed Pinnel money. Pinnel requested lesser sum earlier than due date
and said this would end debt. Then decided to sue. Although in general,
lesser sum did not satisfy whole debt but earlier payment, requested by
creditor would payment in different form.
D and C Builders v Rees
Payment of a lesser amount by cheque rather than cash is not great enough
difference in method of payment to discharge full debt.
Not vague:
White v Bluett
Son promised to stop complaining too vague + no material value.
Forbearance to sue:
Haigh v Brooks
Sum of money paid for agreement to abandon legal claim under a guarantee
enforceable.
LEGAL INTENT

Social and domestic arrangements:

General presumption social and domestic arrangements not intended
to be binding.
Commercial agreements:
General presumption parties do intend to create legal relations.

Domestic:
Balfour v Balfour
Agreement between parties but not result in contracts within the meaning of
that term.
Mr Balfour civil servant going to Bombay + wife unwell, decided to stay in
UK. He promised to pay 30/month to support herself stopped paying
wife claimed that he was bound but held that there was no legal binding
contract was just domestic arrangement not intended to create legal
relations.
Jones v Padvatton
Mother provided house for daughter while daughter studying for bar exams,
then Then they had a disagreement while Mrs Padvatton was still completing
her bar exams. The mother brought an action for possession of the house.
The daughter argued there was a binding contract that she could stay. Court
ruled that there was no binding contract.
Buckpitt v Oates
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Parties were friends + got habit of riding each others car one journey
where plaintiff paid 10 shillings to defendant and got injured. But despite the
contribution, this was still held no legally binding only was a gentlemens
agreement
Exceptions:
Merritt v Merritt
Husband + wife living apart + agreed if wife completed the mortgage,
husband would transfer house to her this was enforceable There was
changes in society more common for husband and wife to make this kind
of arrangement.
Darke v Strout
Letter of arrangement to child maintenance enough to rebut presumption
between family members.
Simpkin v Pays
Defendant, her grand-daughter + plaintiff, entered fashion competition each
week, filling in a line and sent in under defendants name. They won a prize
of 750, plaintiff sued for a share. Held that there was legal contract,
presence of the third party, plaintiff rebutted the presumption of domestic
matter.
Parker v Clark
The Clarks + Parkers were relatives and decide to live together in a large
house of the Clarks. They made clear details + arrangements who to pay
bills + what happen to the property when they die. When dispute arose, court
held that there was a binding contract Parkers had to take drastic +
irrevocable step of selling their own home.
Commercial:
Edwards v Skyways
Skyways claimed ex gratia = legally unenforceable would enabled
company to avoid paying a pilot who made redundant. Court did not agree
emphasised that it is very difficult to rebut presumption in commercial
contract.
Exceptions:
Rose and Frank Co v Crompton Bros
Parties were in business and one acted as an agent for the other to sell
paper. In their written negotiations included that they had not entered a
formal and legal agreement. Court then accepted this statement, concluded
that there was no intention to create legal relations parties had gone
down to write this down.

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TERMS AND REPRESENTATIONS

Important because:
Breach of terms breach of contract claimant wins.
Breach of representation could be sued by misrepresentation more
chance for defendant to get away with this.

Knowledge:
Oscar Chess v Williams
Morris car sold to a car dealer with document said that it was a 1948 model
but found to be 1939 car dealer paid more. But held that age was not a
term of a contract since car dealer (buyer) should have known the real
age.
Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd
Car dealer sold car to buyer stated car done 20,000 miles but 100,000
a term of a contract car dealer was in position to know if info was
accurate.
Importance:
Bannerman v White
Buyer particularly asked if hops treated with sulphur held that this was
term of contract when found that hops were not treated entitled to
repudiate contract.
Time:
Routledge v McKay
Statements made about motor-cycle over a week before sale were made
not a term of a contract.
Inducement:
Ecay v Godfrey
Defendant described boat he was selling sound but suggested that buyer
obtained a private survey held that his statement was not a term of a
contract.
Schawel v Reade

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Seller of horse claimed it was sound + buyer need not look for anything
if there was anything the matter with the horse, I would tell you Held that
this was a term of the contract of sale.

INCORPORATION OF TERMS

Notice:
Chapelton v Barry UDC (1940)
Receipt for hiring a deckchair on Barry beach had printing on the back not
the type of document that would be regarded as of contractual importance
words on it = not incorporated as terms.
Parker v South Eastern Railway (1877)
Receipt given when a luggage left at counter. Receipt needed to retrieve the
bag had to be kept more likely to be read claimant had notice of
term although not read.
Sugar v LMS Railway (1941)
Ticket given to passenger with see back for conditions but were covered by
stamps from booking-clerk put there to validate ticket these words were
not readable.
Previous dealings:
Hollier v Rambler Motors (AMC) Ltd
Car left at garage for service fire car was destroyed. Defendant
claimed exemption from paying damages relied on notice inside garage but
court ruled plaintiff only went to garage infrequently not been regular
enough to have read the terms.
McCutcheon v David MacBrayne Ltd
Claimant often use ferry service but bought tickets in different places
sometimes office, outside or on the ferry. Ferry sank defendant claimed
exemption relied on terms in his office but pattern of behaviour not
consistent enough to form a course of dealing.
Kendall v Lillico
Parties contracted 100 times on previous 3 years consistent terms had
adequate notice of an exemption clause in sold note included in every
delivery before issue arose.
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Common practice:
British Crane Hire Corporation Ltd v Ipswich Plant Hire Ltd
Common practice hirer of equipment responsible for returning goods to
place of hire even if the crane was stuck in mud.
Time:
Olley v Marlborough Court Ltd
Claimant stayed at hotel, booked at reception, and paid for room there.
Goods were stolen and hotel relied on exemption clause on the back of hotel
door but held that contract was made at reception, terms on back of door
came too late.
Thornton v Shoe Lane Parking Ltd
Claimant drove into defendants carpark, paid money. Took ticket contract
made. But when returning, there was a car accident + he was injured
partly because of negligence of defendants sued for compensations.
Defendant relied on exemption that defendant not liable for any damages or
injury causes but was held that this term was not a part of the contract:
Notice was inside car park contract made at entrance claimant
would not have seen it.
Exemption was wide include injury + damage to property should
have been brought to claimants attention in the most explicit way but
exemption was among other terms not likely to be seen.
Onerous:
Spurling v Bradshaw
Lord Denning: a particularly wide/ unusual clause need bringing to
someones notice more explicitly.
Interfoto v Stiletto
Defendant borrowed photographic slides from claimants library but late
returning. There was clause in contract 5/slide late amounted to over
3,700. But held that this was particularly onerous clause claimant should
have done something more positive to point it out. This case, there was
clearly some lateness Court ordered payment of 3.50/slide/week late.

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TYPES OF TERMS

More important terms/fundamental to contract conditions.

Less important = warranty.
Matter because remedies are different.
Condition = repudiate contract or claim damages confirmed in Vitol
SA v Norelf Ltd.
Warranty = only claim damages.

Root of the matter:

Poussard v Spiers and Pond
Claimant engaged to sing female part in anew open but was ill missed
final rehearsals + 4 performances. When recovered, tried to take up her
place but refused but defendant. Held that defendant entitled to repudiate
her action breached condition Blackburn J Failure of the plaintiffs part
went to the root of the matter and discharged the defendant.
Bettini v Gye
Plaintiff was a singer to perform with defendants opera company for fixed
period but ill and could not attend 3/6 rehearsals but recovered in good time
for performance. Held that breach of warranty, singer still performed
breach did not go to the root of the contract could settle by damages.
Terms specified by parties:
If parties specify terms as C or W Court will not intervene.
Certainty is essential in contract law.
Parham v F Parham Ltd
Court ruled that contract was given its ordinary and natural meaning,
even if salary increased from 10k to 410k.
Exceptions:
Schuler v Wickman Machine Tool Sales Ltd
Plaintiff agreed defendant rights of selling certain machinery, if defendant
visited 6 largest car manufacturers in UK, at least one a week to solicit
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orders. This was described as a condition. Defendant breach of clause first 8
months. Claimant knew but overlooked, only later decided to terminate
contract, claimed of breach of condition. Held that claimant not entitled to
repudiate. The use of the word condition is not conclusive because:
Not a business to business.
Neither party understood meaning of Conditions.
Breach was ignored so cannot be that important to be conditions.
Parties of equal commercial standing:
If parties of equal commercial standing interpret terms more strictly to
ensure certainty.
The Chikuma
Vessel hired out under a charterparty dispute over regularity of payments
owners claimed to withdraw ship Court ruled YES harsh but in
commercial agreements conditions strictly interpreted parties know
where they stand ensure certainty.
Lombard North Central v Butterworth
Claimant leased computer with clause punctual payment of hire
instalments + it was of the essence of the agreement. Defendant late
paying 3rd, 4th, 5th but when 6th claimant terminated agreement + claimed
damages Court ruled YES because made their intentions about this
term clearly.
Innominate Terms:
Court not determine a term is a C or W because if decide term as a W and
term is further breached only can claim damages treat as innominate
term different circumstances to be C or W 1st breach can be W but
further can be C.
Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd
Ship charted for ordinary cargo service said to be good condition but
engine was old + staff incompetent result = delayed for 20 weeks in total.
Defendant terminated charter party + claimant sued for wrongful repudiation
Court ruled no repudiation because 2 years contract = 104 weeks
20 weeks only a warranty but them the same term can be treated as a
condition if the contract was shorter (e.g. 21 weeks).
Hong Kong Fir approach:
Look at consequences of breach of innominate term.
Consider how serious.
Decide if term is C or W.
Apply appropriate remedy.
The Hansa Nord
Cargo of citrus pellets contract to shipped in good condition but some
was damaged but not seriously Held that breach not serious only food for
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animals cannot repudiate contract this term was treated as W but if it
was food for restaurants deliver to customers term could be treated as C.
Reardon Smith Line v Hansen Tangen
General original description fails no contract but Court treat this as an
innominate term because:
Tanker was ordered as Osaka 354 but subcontractor did some work
relabelled as Osaka 004 buyers tried to repudiate contract does not
match original description but ruled that only small technical breach Not
able to repudiate.
Statue Law:
If term covered by statue law Sale of Goods Act 1979 section 12-15
then court do not discuss its status all terms are treated as condition
not negotiable.
Case Law:
If statue law not applied + no labels on terms by parties Court compare
with other cases.
The Mihalis Angelos
Ship was charted for journey from North Vietnam to Hamburg + there was a
clause that ship ready to load on 1 July but on this date unable to meet
deadline Court ruled that this was a breach of condition in Ship world
must get on time.
But general especially driving delivery etc. depends on case Court
must look at back case law if terms not specified
Previous dealings:
If parties meet on equal terms + traded before should know which terms
are more important should be clear which type of terms breached.
British Crane Hire Corp v Ipswich Plant Hire Ltd

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EXEMPTION CLAUSE

3 steps to validify exemption clause:

1. Incorporation Is term a part of the contract?
2. Construction Can clause be interpreted to cover damage arisen.
3. Legislation Is term allowed within current statue law?
Construction:
1. The main purpose rule:
Glynn v Margetson
A clause allowed ship to pick up extra cargo any port in Europe or North
Africa once carry oranges from Malaga to Liverpool stopped to pick up
cargo oranges got damaged main purpose of contract.
2. The contra proferentem rule:
Ambiguity/doubt works against person tries to rely on it.
Houghton v Trafalgar Insurance
Word load in car insurance policy not to extend an excess of passengers.
3. Other common law principles:
Mendelssohn v Normand
Garage attendant advised customer to leave car open goods stolen
tried to rely on exemption clause not allowed because of oral
statement of attendant.
Curtis v Chemical Cleaning and Dyeing Co
Wedding dress to be cleaned plaintiff asked to sign document but also
told that cleaner not liable for damages made to beads + sequins dress
was stained cleaner tried to rely on clause but not allowed oral
statement overrode clause.
Legislation:
UNFAIR CONTRACT TERMS ACT 1977 (UCTA)
Applies to consumer transactions not agreements between businesses:
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Section 1(3) Business liability = duties arising (a) from things done or
to be done in the course of business or (b) from the occupation of
premises used for the business purposes of the occupier.
Section 12 Consumer defined as: a party to the contract deals as a
consumer in relation to another party if:
(a) He neither makes the contract in the course of business nor holds
himself out as doing so; and
(b) The other does make the contract in the course of a business; and
(c) the goods passing under or in pursuance of the contact are of a
type ordinarily supplied for private use or consumption.
R and B Customs Brokers Co Ltd v United Dominions Trust Ltd
Company bought a car party business partly private used by owners
did not buy cars regularly + not an integral part of business treated as a
Consumer.
Feldarol v Hermes Leasing
Company bought a Lamborghini sports car for managing director (sports car
enthusiast) car mainly used personally treated as consumer.
Section 2:
(1) Cannot exclude or restrict liability for death or personal injury.
(2) - Cannot exclude/restrict liability for negligence unless satisfy the
requirement of reasonableness.
Section 11:
(1) Term shall be fair + reasonable regarding circumstances.
(2) Reasonableness Test specified in Schedule 2.
(5) For businesses to prove term is reasonable not consumer to prove
term is not reasonable.
Schedule 2:
(a) Bargaining position Huge firm deals with consumer more
likely to be unreasonable if term is unfair Bargaining gap = too
big.
(b) Inducement If consumer induced and choose particular business
(Ryan Air) cannot expect terms to be too fair.
(c) Knowledge Business has to show consumer knows/should have
known the extent of term term more likely to be reasonable.
(d) Practicable The difficulty of task (Refund after certain days).
(e) Special order Exemption clause more likely to be reasonable if
goods were manufactured according consumers order.
Green v Cade
Seed potatoes supplied with clause to report any problems within 3 days
of delivery crop failed because seeds contained a virus this

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requirement not reasonable the defect could not be discovered on
inspection at time delivery.
George Mitchell v Finney Lock Seeds
In contract of supply of cabbage seed clause limited liability to 200
when crop failed this was held unreasonable because loss was
60,000 magnitude of loss was too big.
Smith v Bush (1) and Harris v Wyre Forest (2)
Each case: surveyor tried to rely on clause to exclude their liability in
valuing property.
(1) Chimneys has been removed + property not supported properly.
(2) Subsidence occurred cost more than value of property.
Held that surveyor cannot rely on those clauses house in each case
was usual case + not difficult they had the responsibility to carry out the
task with care.
OBrien v Mirror Group

MISREPRESENTATION

4 questions: Is it untrue? Is it made by one party to another? Is it a

term of the contract? Does it have an inducing effect?
Mere commendation:
Dimmock v Hallet
Estate agent described land as fertile + improvable held mere
commendation no legal meanings.
Opinion:
Bisset v Wilkinson
Seller of sheep farm said could prove 2000 sheep in NZ found untrue but
held not misrep because buyer knew seller never farmed sheep in NZ before
only statement of opinion.
Smith v Land and House property
Seller described tenant of property = most desirable tenant but found that
tenant paid rent erratically + under pressure held misrep because tenant
cannot be most desirable unreasonably held opinion.
Esso v Mardon
Defendant wanted open petrol station asked for advice from ESSO.
ESSO gave likely profit defendant relied on this went ahead with the
business. Local authority then insisted to relocate the petrol station off the
road profit became what ESSO stated Held misrep:
1. ESSO had more knowledge.
2. Change in circumstances.
3. Fiduciary relationship.
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Inntrepreneur v Hollard
Statement of takings for pub wrong held misrep only the person
made takings could have known it.
British Gas v Nelson
British Gas made forecasts of sales for Nelson Nelson relied on this then
installed appliances Figures were badly inaccurate Misrep British
Gas had more knowledge Should have known.
Future Intentions:
Edgington v Fitzmaurice
Shares in business sold said would be used to improve business but in
some letters found stated that money from shares used to pay debt
Held misrep clear proof that person never intended to do what he said.
He tried to claim future intention cannot be misrep.
Statements of law:
Statement of Law cannot be misrep everyone should have known the law.
Silence:
Fletcher v Krell
Governess appointed to post but sued for misrep when found out that she
was married Held not actionable silence not misrep, especially not
asked for the information.
Sykes v Taylor-Rose
Seller of property had no duty to disclose info that house was set for a
murder scene even buyer resold house at the loss of 25k.
Conduct:
St Marylebone Property v Payne
Misleading photo of property in auction held misrep overrode
exemption clause of this error bidders can rescind contract + returned
deposit.
Spice Girls v Aprilia World Service
Spice Girls took part in advert for Aprilia this action held misrep because
they knew they were breaking up nothing asked but action.
Schneider v Heath
Boat submerged in water to hide rotten hold misrep deliberately
conceal.
Half-truth:
Dimmock v Hallett
Said there were tenants on farm but didnt say tenants were leaving it was
true but became wrong as it goes with time.
Change in circumstances:
With v Oflanagan
Doctor was selling clinics told buyer number of clients then became ill
clients started to go to other clinics doctor did not inform buyer held
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misrep There was a change in circumstances but did not inform
representee.
Fiduciary relationship:
ESSO v Mardon
Hedley Byrne and Co v Heller & Partners Ltd
Heller bankers gave assurances on creditworthiness of mutual client
Easipower when defaulted on payment Bankers were only people
could know + they had a fiduciary relationship would have been held
Misrep if not because of small technical issue Obiter.
Uberrimae fidei:
Seaman v Fonereau
Ship was in difficulties out at sea but recovered. Later captured by
Spaniards Insurance company refused to pay didnt inform them about
difficulties Allowed to do so contract of uberrimae fidei had to
disclose absolutely everything.
Bufe v Turner
Insurance co refused to pay because they didnt report the fire of the
adjoining property.
Lambert v Cooperative Insurance Society
Insurance not paid for stolen jewellery didnt report about her husbands
conviction for conspiracy to steal.
Inducement:
Attwood v Small
Claim of misrep not allowed relied on private survey to find out about
mine not enough minerals.
Redgrave v Hurd
If representee tests for accuracy and failed to discover truth may still be
regarded as relying on untrue statement.
Barton v County NatWest
Claimant would rely on the inducing statement if a reasonable person would
do so.
Fraudulent:
Derry v Peek
Definition Fraudulent misrep = false statement made knowing or without
belief in its truth or recklessly to whether it be true or false.
Ahmed v Addy
Standard of proof for fraudulent = criminal cases beyond all reasonable
doubts.
Remedies:
Rescission If not barred.
Damages.
Non-Fraudulent:
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Innocent, negligent or where it is difficult to prove fraud.
Remedies:
Rescission if not barred.
Damages Misrep Act 1967 s.2(1) if representor unable to prove
innocence.
Bars to rescission:
1. Statutory bar:
Misrep Act 1967 s.2(2) court can award damages in lieu of
rescission (Only Non-Fraudulent)
2. Time:
Non-fraudulent Time starts from point of contract.
Leaf v International Galleries
Painting thought to be a Constable but found a copy 5 years after the
sale too late.
Fraudulent Time starts from when misrep discovered.
3. Affirmation:
Indication that misrepresentee willing to continue with contract.
Long v Lloyd
Statements made about lorry bought untrue lorry problematic
buyer phoned seller agreed to share the cost buyer continued
using lorry then problematic again claimed rescission not allowed
he showed affirmation shared cost out.
4. Impossible:
When claim rescission item returned original condition or as close
as original as possible.
Vigers v Pike
Rescission of mine not possible considerable extraction had taken
place.
5. Supervening third-party rights:
If 3rd party has goods rescission cannot take place.
White v Garden
Iron bars delivered, rescission not allowed because already sold to
third party.

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