Ratio Case Facts Held

Decidendi

A n Carlill v An advert placed for 'smoke she was entitled to recover as

advertisement Carbolic balls' to prevent influenza.
with element of Smoke offered to pay £100 if anyone
reward is a Ball Co contracted influenza after
public offer. [1893] using the ball. Deposited
£1,000 with the Alliance
Bank to show their sincerity
in the matter. The plaintiff
bought one of the balls but
contracted influenza
(a) The deposit of money showed an
intention to be bound, therefore the
advert was an offer;
(b) It was possible to make an offer
to the world at large, which is
accepted by anyone who buys a
smoke-ball;
(c) The offer of protection would
cover the period of use; and
(d) The buying and using of the
smoke-ball amounted to acceptance.

Acceptance of R v Clarke The Government offered a
offer has to be [1927] reward for information
communicated. leading to the arrest of certain
murderers and a pardon to an
accomplice who gave the
The court dismissed the case. There
cannot be assent without knowledge
of the offer; and ignorance of the
offer is the same thing whether it is
due to never hearing of it or
 information. Clarke saw the forgetting it after hearing."
proclamation. He gave
information which led to the
conviction of the murderers.
He admitted that his only
object in doing so was to clear
himself of a charge of murder
and that he had no intention
of claiming the reward at that
time. He sued the Crown for
the reward

Revocation has Byrne V An offer made on 1st October
to be Leon Van (In Cardiff). Claimant (in
communicated. [1880] New York) received it on
11th & send acceptance at
once. In the main time the
defendant change his mind
and sent a letter of revocation
on 8th Oct. Revocation letter
The revocation was not complete
until it had been communicated to
the offeree. This was on 15th
October. In the main time, however
the offer had been accepted. As a
result the revocation was ineffective
& the contract did exist. The
defendant was therefore liable under
the contract.
 reached on 15th Oct.
Revocation can Dickinson Dodds offered to sell his
be v Dodds house to Dickinson, the offer
communicated [1876] being open until 9am Friday.
by a reliable On Thursday, Dodds sold the
source. house to Allan. Dickinson
was told of the sale by Berry,
the estate agent, and he
delivered an acceptance
before 9am Friday.
Offer does not Errington A father bought a house on
laps with death v mortgage for his son and
of offeree and Errington daughter-in-law and promised
remains valid if [1952] them that if they paid off the
consideration is mortgage, they could have the
being made. house. They began to do this
but before they had finished
paying, the father died. His
As the Claimant knew that the
defendant was no longer in a position
to sell the property to him the
defendant had drawn his offer
validly. It was impossible, therefore,
to say there was ever that existence
of the same mind between the two
parties which is essential in point of
law to the making of an agreement.
The father's promise was a unilateral
contract - a promise of the house in
return for their act of paying the
installments. It could not be revoked
by him once the couple entered on
performance of the act. The couple
was entitled to continue paying the
installments and claim the house
widow claimed the house. when the mortgage has been fully
paid off.
A counter Hyde v .6 June W offered to sell his Held that if the defendant's offer
offer Wrench estate to H for £1000; H to sell for £1,000 had been
revokes the [1840] offered £950 27 June W unconditionally accepted, there
original rejected H's offer 29 June H would have been a binding
offer. offered £1000. W refused to contract; instead the plaintiff
sell and H sued for breach made an offer of his own of £950,
of contract and thereby rejected the offer
previously made by the defendant.
It was not afterwards competent
for the plaintiff to revive the
proposal of the defendant, by
tendering an acceptance of it; and
that, therefore, there existed no
obligation of any sort between the
parties.

Products on Fisher v A shopkeeper displayed a The knife had not, in law, been
display are Bell [1960] flick knife with a price tag 'offered for sale. According to the
only an in the window. The law of contract the display of an
invitation to Restriction of Offensive article with a price on it in a shop
treat and not Weapons Act 1959 made it window is merely an invitation to
an offer. an offence to 'offer for sale' treat. It is in no sense an offer for
a 'flick knife'. The sale the acceptance of which
shopkeeper was prosecuted constitutes a contract.
in the magistrates' court

An Offer Harvey v The plaintiff sent a telegram It was held that the defendant’s
must be Facey to the defendant to sell telegram was not an offer but
distinguished [1893] property. Telegraph lowest simply an indication of minimum
from a mere cash price. The defendant price the defendant would want.
supply of reply was “lowest cash price
information is £900”. The plaintiff
telegraphed “we agree to
buy ….. for £900 asked by
you”.

An Harris v Auction of sale of furniture It was not an offer as it was not

advertisemen Nickerson was advertised in a clear definite or unequivocal from
t is only an [1873] newspaper London broker the advertisement that the
invitation to saw the advertisement and auctioneer wanted to sell the items
treat and not travel to London to attend of furniture to the broker the
an offer. the sale the items had been auctioneer had no intention to be
withdrawn from the sale bound to this broker it was a mere
before he arrived he claimed statement of intention.
that his action of attending
the auction amounted to an
acceptance of an offer as
result he claimed that
contract has been breeched
and sued for damages.

Acceptance Yates Offeror asked for the offer The offeror had suffered no
is valid if buildings v to be accepted by registered disadvantage in a way that the
sent in time R J Pulleyn post the offeree accepted the offer had been accepted as the
by any more & Sons by an ordinary letter which offeror did not put a condition
unless [1975] arrived promptly specifying that the acceptance
exclusively could only be made by registered
specified. post the acceptance was valid.

Silence does Felthouse v F wrote to his nephew It was held that there was no
not amount Bindley offering to buy the nephews contract the uncle had no right to
to [1863] horse for £30.15 and adding impose upon the nephew to sell
acceptance. “if I hear no more about his horse. The nephew had not
him, I will consider the given any written proof.
horse mine. The nephew
never replied.

Acceptance Powell v The plaintiff applied for a There was no contract as there
must be Lee [1908] job as headmaster & the had been no authorised
communicat school managers decided communication of intention to
ed through to appoint him. One of contract on the part of the
authorized them, acting without body, that is, the managers,
person. authority, told the plaintiff alleged to be a party to the
he had been accepted. contract.
Later the managers
appointed someone else.
The plaintiff sued alleging
that by breach of a
contract to employ him

Postal Rule: Adams v 2 Sept. The defendant A binding contract was made
Lindsell wrote to the plaintiff when the plaintiff posted the letter
A letter of (1818) offering to sell goods of acceptance on 5 Sept, so the
acceptance asking for a reply "in the defendant was in breach of
once posted course of post" contract.
is deemed
accepted. 5 Sept. The plaintiff The Postal Rule – If
received acceptance by post has been
the letter and sent a letter
requested or where it is an
of acceptance. appropriate and reasonable
means of communication
9 Sept. The defendant between parties, acceptance is
received the plaintiff's complete as soon as the
acceptance but on 8 acceptance is posted,
Sept
even if the letter is delayed,
had sold the goods to a destroyed or lost in the post so
third party. that it never reaches the
offeror.

Consideratio
n:
Price paid by Currie v
each party to Misa [1875]
the contract
for the other
party’s
promise.

Consideratio Thomas v A promise to convey a house to a

n need not Thomas widow on her promise to pay
be adequate [1842] £1.00 rent p.a. and keep the house
(satisfactory) in repair was binding
but must be
valuable
(beneficial).

Performance Collins v A witness legally required He had not provided consideration

of existing Godefory to attend the court was as he was legally obliged to attend
legal [1831] promised payment if he under the summon (Written
obligation would attend the court and command to a person to appear in
does not give evidence. He attended court.)
amount to court and sued for the
consideratio promise
n.

Performance Stilk v Two out of eleven sailors As the sailors were already
of existing Myrick deserted a ship. The bound by their contract to sail
duty doest [1809] captain promised to pay back and to meet such
not amount the remaining crew extra emergencies of the voyage,
to money if they sailed the promising to sail back was not
consideratio ship back, but later valid consideration. Thus the
n. refused to pay captain did not have to pay the
extra money.

Contract Williams v Roffey had a contract to Held that where a party to an

holds if work Roffey refurbish a block of flats - existing contract later agrees
is done in (1990) sub-contracted the work to pay an extra "bonus" in
time and to Williams - work begun order to ensure that the other
both parties - Williams realized the party performs his obligations
take practical fact that he under the contract, then that
benefit from underestimated the cost agreement is binding if the
it. of the work and was in party agreeing to pay the
financial difficulties. bonus has thereby obtained
 Roffey (to avoid foul of a some new practical advantage
penalty clause in his main or avoided a disadvantage.
contract with the owner),
agreed to pay Williams
an extra payment per flat.
William did not receive
full payment – Work
stopped Roffey argued
that Williams was only
doing what he was
contractually bound to do
and so had not provided
consideration.

Performance Hartley v A high number of desertions The promise of extra money was
beyond Ponsonby from a merchant ship recoverable by seaman who
existing duty [1857] rendered the vessel remained loyal since they were
amounts to unseeworthy, undermanned now working in a dangerous
consideratio since extra pay was offer to situation (they were doing more
n. the crew if they remain than required in there original
loyal contract)
Past Re McArdle A wife and her three It was held that the promise
consideratio [1951] grown-up children lived was unenforceable as all the
n is no together in a house. The work had been done before
consideratio wife of one of the children the promise was made and
n. did some decorating and was therefore past
later the children consideration
promised to pay her £488
and they signed a
document to this effect.

Privity of Tweddle v The claimant’s father and Son-in-law could not sue because
contract: Atkinson father-in-law agreed with he had not provided
Only parties [1861] each other to pay the consideration.
to the claimant £100 and £200 in
contract can consideration of his then
sue each intended marriage and after
other. the marriage had taken
place they confirm their
agreement in writing. £200
was not paid and the
 claimant sued his
father-in-law

Performance Shadwell v C promised his nephew, A, The promise was binding, even
of an Shadwell an allowance if he would though A was already obliged to
existing [1860] marry his fiancée, B (In marry B. A had provided
contractual those days an agreement to consideration for the uncle’s
obligation is marry was legally binding). promise as he was initially under
sufficient a duty to fiancée not to uncle, but
consideratio by entering into the agreement
n to support with the uncle he had put himself
a promise under an obligation to him too.
from a third
party.

Pinnel’s Foakes v Mrs Beer had obtained The interest was recoverable.
case: Beer [1884] judgment for a debt of £ Payment & satisfaction of a
A lesser sum 2090/- against Dr Foakes smaller sum was not consideration
is not a good with interest, who for the promise to accept this
consideratio subsequently asked for time amount in satisfaction of a debt,
n for a to pay. She agreed that she interest and cost a greater sum.
higher sum. would take no further action Dr., Foakes had not provided any
in the matter provided that consideration.
Foakes paid £500
immediately and the rest by
half-yearly installments of
£150. After receiving £
2090/- she sued for £ 360/-
interest on the judgment
debt which the defendant
refused to pay.

Payment by D&C The Ps, a small building It was held that the company was
cheque gives Buildings v company, had completed entitled to succeed. The judge was
no benefit Rees some work for Mr. Rees for of the view that it was not unfair
over and [1965] which he owed the company for the creditors to go back on
above £482. For months the their word and claim the balance
payment in company, which was in as the debtor had acted unjustly
cash ( a severe financial difficulties, by exerting improper pressure.
lesser sum is pressed for payment.
not a good Eventually, Mrs. Rees, who
consideratio had become aware of the
n for a company's problems,
higher sum). contacted the company and
offered £300 in full
settlement. She added that if
the company refused this
offer they would get
nothing. The company
reluctantly accepted a
cheque for £300 "in
completion of the account"
and later sued for the
balance.

Doctrine of Central In 1937 the Ps granted a 99 It was held that they were entitled
promissory London year lease on a block of flats to recover this money as their
is estoppel: Property in London to the Ds at an promise to accept only half was
You cannot Trust Ltd. v annual rent of £2500. intended to apply during war
exploit the High Trees Because of the outbreak of conditions. Ps were estopped
situation by House Ltd war in 1939, the Ds could from going back on their promise
going back [1947] not get enough tenants and and could not claim the full rent
against your in 1940 the Ps agreed in for 1940-45.
own words writing to reduce the rent to
£1250. After the war in * Ps – Plaintiff , Ds – Defendant
1945 all the flats were
occupied and the Ps sued to
recover the arrears of rent as
fixed by the 1937 agreement
for the last two quarters of
1945.

The doctrice Combe v A husband entered into a The wife was not a in apposition
of Combe [ contract promising his wife to enforce the agreement as she
promissory 1951] to pay £ 100.00, free of lacked consideration on her part.
estoppel income tax, after their The equitable doctrine did not
does not divorce. The wife did not create a new cause of action
create a new apply to the court for a where none existed before.
cause of maintenance order, but
action where when the husband failed to
non existed implement his promise she
before. sued to enforce the
agreement relying on his
promise and the doctrine of
 promissory estoppel.

Agreements Merritt v A husband separated from Husband promise was enforceable

between Merritt his wife wrote and signed a
spouses [1970] document stating that in
about to or consideration of the wife
already paying off the outstanding
separated are mortgage debt of £180 on
legally their matrimonial home
binding. he would transfer the
house into her sole
ownership. The wife
implemented her promise
but husband did not. He
alleged that his promise
was a domestic relation
not giving rise to a legal
relation.
the agreement having been made
when the parties were not living
together courteously. A legal
relation is assumed where a
husband deserts his wife and an
agreement is concluded of the
ownership of the matrimonial
home occupied by the wife and
children.

A statement Bannerman A buyer of hops asked by The court decided that the sulphur
of quality v white the seller whether sulphur was a vital part of the contract.
based upon [1977] had been used in the Around which the whole deal
which a treatment and added that if revolved it was a term.
contract is it had he will not buy. The
made as far seller assured him that
as buyer is sulphur had not been used.
concerned, Sulphur had been used.
considered a
term.

An assertion Oscar William on selling a car to The statement was in innocent

made by Chess Ltd. the claimant company of car misrepresentation but not a term
person who v Williams dealers asserted that it was a of the contract. The seller who
is a layman [1957] 1948 model. The was not a car dealer with
for those registration book appeared experience knowledge did not
goods being to confirm this statement intend to be bound contractually
sold is not but it had been altered by by his statement concerning the
considered a some previous owner and age of the vehicle.
term. the car was infect a 1939
model

The A wharf (dock) owner made The court implied a term into the
 Moorcock an agreement to permit a
case [1889] ship owner to unload his
ship at the dock the ship
was damaged when at low
tied it was grounded at the
bottom of the river on a
hard ridge.
agreement that the river bottom
would be reasonably safe. Such
implied terms are based on the
presumed but unexpressed
intention of the parties.

Contract is Poussard v A soprano, Madame The obligation to appear on the

termed void Spiers Poussard agreed to sign a
on breach of [1876] series of opera for Spiers,
a condition. she failed to appear on the
opening night and was
refused for her services for
her subsequent nights she
sued for the breach of
contract.
opening night was a condition and
since madame Poussard was in
breach of this condition Spiers
was entitled to treat the contract
has at an end.

Breach of a Bitteni v A tanner Bitteni who added The obligation to appear in the
warranty Gye [1876] to sign in a series of rehearsal was a mere warranty and
does not concerts and to attend 6 Bitteni breach could not be treated
make the days of rehearsals as an end of the contract. Gye was
contract beforehand failed to appear accordingly in the breach of
void. for the first 4 days of contract when he refused Betteni
rehearsal Gye in services for the remainder of the
consequence refused Bitteni contract.
services for the balance of
the rehearsal and
performances Bitteni sued
for the breach of contract.

A non Hansa Nord

serious [1976]
breach of an
innominate
term can
only result in
claim for
damages.
An exclusion
clause Olley v A notice in a hotel room This was ineffective because the
cannot be Marlboroug excluded liability for loss or contract for accommodation had
introduced h court damage to guest property. been made at the reception desk.
into contract [1949]
after it has
been made.

Only natural Hadley v A carrier was given a He was not liable for the loss of
losses Baxendale mill-shaft to deliver to a profit and the rule was formulated
reasonably [1854] plant manufacturer as a as follows:
foreseeable model for making a new · The loss should be such as
by a shaft the carrier delayed in may fairly and reasonably be
bystander delivery and unknown to considered either arising
can be him the mill stood idle naturally, from the breach of
claimed for. during the period of delay. contract, or as may reasonably
be supposed to have been in
contemplation of both parties
at the time they made the
contract.
There are two types of loss for
which damages may be
recovered:
General damage - normal loss.
 Special damages - abnormal
loss.

A company Salmon v Salmon had been in the boot House of lord held that since there
is a separate Salmon & and leather business for was no fraud involved his
legal entity company some time together with debentures were valid the
having its Ltd. [1897] other family members he company was properly constituted
own assets sold the old business to his and therefore it was a separate
and newly formed Ltd. legal personality from Salmon.
liabilities. company. Payment was in
form of cash shares and
debentures when the
company was eventually
winded up it was agreed
that Salmon and the
company was the same and
he could not be the creditor
of his own so his debentures
would not have any effect.

A company Lee v Lee’s An aerial crops spraying Although he was majority share
is a separate Air farming business in which Mr. Lee
legal entity. Ltd. [1960] was a majority shareholder
and was the sole working
director was killed while
piloting the air craft.
holder and the sole working
director of the company he and
the company separate legal
persons and therefore he could
also be and employee of it for the
purpose of relevant statute with
rights against it when killed in an
accident in the course of his
employment.

A sham Jones v L agreed to sell some land The company was sham and
company is Lipman to J, L than changed his specific performance extended not
also liable [1962] mind and in order to evade only to L but also to the company.
along with specific performance sold
the related the land to a company of
violator. which he was a controlling
member.
Court is not
free to this Adams v Cape, an English registered It was unsuccessfully argued that
regard the Cape company was involved in the veil should be lifted between
principle of industries mining asbestos(a form of the companies so as to enabled the
Salomon v [1990] mineral) in south Africa and judgement to be enforced against
Salomon marketing it world wide to cape.
unless various subsidiaries one of
carefully its marketing subsidiaries,
watched. CPC, a company
incorporated and carrying
on business in the U.S had a
court judgment against it.

Fortnum & The claimant, a well known There was no evidence that any
Mason Ltd. store in Piccadilly, London costumer of the claimant store
v Fortnum bought an action in the tort would buy the defendants good
Ltd. [1995] of passing off, against the thinking they were the claimants
defendant. The defendant therefore the action failed.
carried on business as an
importer of low price to
goods from Hong Kong and
China and then exported to
Europe. The defendant did
not apply its name to the
goods themselves
Any contract Ashbury The objects clause of the The contract was ultra virus and
not Railways company set out purpose of beyond the capacity of the
authorized Carriage v the company as the making company.
by the Riche and selling of railway
objects [1875] carriages. The company
clause of a entered into a contract to
company is purchase a concession for
termed ultra constructing a railway.
virus.

Failure of German There was a failure to carry The company would be wound
substratum date coffee out the object of making up.
may result in Co. [1882] coffee from dates by means
winding up of a German patent
of company. (although the company did
manufacture it with a
Swedish patent).

The articles Hickman v The Co.’s articles included The proceedings were stayed. The
in all Kent [1920] a clause to the effect that all Company could enforce the
respects are disputes between the arbitration clause against a
enforceable company & its members member.
by company were to be referred to
against its arbitration. A member
members. brought court proceedings
against the Co.

An alteration Greenhalgh The issue was the removal The benefit to the company as
of articles of v Alderne from the articles of the whole held to be a benefit which
association Cinemas members’ right of first any individual hypothetical
can be made [1950] refusal of any shares which member of the company could
in the best a member might wish to enjoy directly or through the
interest of transfer; the majority wish company & not merely a benefit
the to make the change in order to the majority of the members
company. to admit an outsider to only.
membership in the interest
of the company.

An alteration Sidebottom The alteration was to expel The alteration was held valid.
of articles of b Kershaw a member who carried on a
association leese & Co. business completely with
to expel a [1920] the company.
member in
the best
interest of
the company
can be made
with
compensatio
n.

Company Aleen v Z held fully paid & partly It was held that the Co. had the
has the Gold Reefs paid-up capital in the power to alter its articles by
power to [1900] company. The Co.’s articles extending the lien to fully paid
alter its provided for a lien (a right shares. Alteration to the articles is
AOA with a over another’s property to only subject to the alteration by
retrospective protect a debt charged on S9 CA 1985. Rights in the articles
effect. that property.) for all debts are limited as to their duration by
& liabilities of any member the articles which confer them.
upon all partly paid shares
held by the member. The
 Co. by special resolution
altered its articles so that the
lien was available on fully
paid-up shares as well.

Claim can be South A managing director was The court awarded them damages
made on Foundries appointed under contract for wrongful dismissal since the
breach of a ltd. v with a company for ten alteration of the articles, although
service Shirlaw years but, after the articles effective, constituted a breach of
agreement [1940] had been changed their contract of service; it was
due to empowering his removal as contrary to the agreement that he
alteration of director, he was dismissed. should serve for ten years, which
the articles. became impossible when he lost
their directorship.

Raising Clemens v P held 45% of the shares, d The fact revealed that the director
Share Clemens held 55%. D along with with majority shareholders were
Capital to Bros. ltd other directors decided to raising share capital not with the
dilute a [1976] increase the nominal share intension to favour all but, the
shareholder’ capital. A general meeting reason was to dilute the minority
s voting right was held for the issue. D voting control. The directors were
is an favoured, P showed miss using their power.
improper deterrence 7 alleged that the
purpose & purpose of this was to dilute
shall not be her voting control below to
validated. 25% & therefore deprive of
her power to vote special
resolution.

The directors Percival v Some Shareholders asked

owe no Wright Co.’s secretary for any party The director owe a fiduciary duty
general duty [1902] interested to buy their to company but not to individual
to individual shares – Shareholders then shareholders, so under no duty
members. sold shares to Chairman. does the director is liable to act
Later it was revealed that at for the best interest of an
the time of negotiation, individual. Co. could have sued
directors were engaged with the director if any would have
a party for sale of shares at done.
a price which was
considered to be high of the
current deal. The
shareholders wished to
 return back.

Directors Cook v Shares of the railway Co. It was held that Directors could
cannot attain Deeks [ (T) were equally divided on not retain benefits of the Co. (T)
any benefit 1916] its directors. The company to themselves. The director could
from there got a contract. Three not use their voting control to
office by directors of (T) were not bring a loss to the minority.
breaching willing the Co. to have the
their contract. They formed
fiduciary another company (D) just
duties. because of getting a new
contract. These directors
later sold a plant by
majority voting to D. Others
directors sued.

Director Regal Regal (hasting) ltd. owed a It was held that Directors used
cannot make (hasting) cinema & wished to buy their special knowledge to gain
profit from ltd. v two more cinemas & later hidden profits. It was a breach of
there Gulliver sell them all as going duty. They were accountable for
position as [1942] concern. But regal was not the profit made.
directors in financial position to buy
regardless of the two cinemas. Some
their motives directors were not were not
or agree. Regal with some
consequence directors formed another
s to the company, real applied for
company. majority shares, managed
amount, sold cinemas as
going concerns, regal got
more profit portion where as
co. got less.

Fiduciary IDC v Colle was a director of IDC. He was in a breach of fiduciary

duties Cooley A company wanted to give duty as he preferred to earn profit
survive even [1972] a contract to Colle not to for his own sake and acted against
after the IDC. Colle because of the best interest of the company.
directors having interest in the Fiduciary duty exited even after
leave the contract, resigned & his resign from the company.
company. accepted the contract in his
own capacity.
A director Aberdeen Co. Contracted for chair Company was entitled for
should not Railway v from a claimant partnership. avoiding the contract. No question
be allowed Blaikie (of which the director was a should be raised for fairness /
to contract [1854] member). The director was unfairness of the contract.
with his own interested at both sides but
company. couldn’t bargain for the
company.

A director is Produce Company traded The court required the directors to

made Marketing successfully for 9 years, contribute for £ 75000/- in Co.’s
personally Consortium built up an overdraft, had a assets, because being aware of the
liable for Ltd. [ 1989] continuing loss – Liabilities going concern problem, trading
debts & exceeded assets (between was carried on. Wrongful attitude
liabilities if 1980 – 87). In Feb. 87, observed.
he has directors recognizing
committed expected liquidation carried
wrongful on trading. Suffered loss,
trading. directors were sued.

A Company Panorama Co.’s secretary of the The contract was binding, since
secretary Developme defendant ordered a hiring of cars was usual to the
within his nt v Fidelis Limousine & stated that it office of company’s secretary.
authority can Furnishing was to be used in business,
make [1971] but used personally.
contracts Secretary usually hired cars
with third in the past.
parties on
behalf of his
company.

End of Cases

Glossary of Legal terms:

Estoppel: Rule of evidence which prevents a person from relying on facts when, by deed, word
or action, he has led another person to act to his detriment on those facts. Estoppel is a defense,
not a cause of action. Anyone who wishes to rely on the defense of estoppel to defend an action
must request it.

Mens rea: (Latin: guilty mind) Most crimes require proof of guilty intention before a person can
be convicted. The prosecution must prove either that the accused knew his action was illegal or
that he was reckless or grossly negligent. Some offences (such as drunken driving) are matters of
strict liability, which means that the intention or state of mind of the person committing the
offence is irrelevant.

Obiter dicta: (Latin: sayings by the way) Observations by a judge on law or facts not specifically
before the court or not necessary to decide an issue.
Pari passu: (Latin: with equal step) Often used in bankruptcy proceedings where creditors are said
to rank pari passu, which means the assets are distributed without preference between them.

Plaintiff: Person who brings a case to court. (Also called the petitioner or applicant.) The person
being sued is generally called the defendant or respondent.
Quantum meruit: (Latin: as much as he has deserved) Principle stating that a person should not
be obliged to pay (nor another allowed to receive) more than the value of the goods or services
provided.

Quorum: (Latin: of whom) Minimum number of people necessarily present at a meeting for
business to be validly conducted. Without a quorum, decisions are invalid.

Rescission: Abrogation or cancellation of a contract, putting the parties in the same position they
would have been in, had there been no contract. Rescission can occur because of some defect in
the formation of the contract (such as misrepresentation, duress or undue influence) or by
agreement of the parties - for example where they reach a new agreement.

Sanction: To ratify, to approve or to punish.

Stare decisis: (Latin: to stand by decisions) Policy whereby, once a court has made a decision on
a certain set of facts, lower courts must apply that precedent in subsequent cases which embody
the same facts.

Subpoena: (Latin: under penalty) Court order requiring a witness to attend at a certain time and
place or suffer a penalty.
Ultra vires: (Latin: beyond the powers) an action which is invalid because it exceeds the
authority of the person or organisation which performs it. A company cannot normally be bound
by an act which it is not empowered to do by its memorandum of association.

Sham: A person or thing pretending or pretended to be what he or she or it is not.

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