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Contract Law Cases

Terms in this set (92)

Carill v Carbolic Smoke Ball
Statement of material fact doesn't include trade puffs
Bissett v Wilkinson
Statement of material fact doesn't include opinions
Esso Petroleum v Mardon
Statement of material fact exception=expert opinion
Edgington v Fitzmaurice
Untrue statement about FI was misrepresentation of law
Spice Girls v Aprilia
Inferred misrepresentation by conduct
Keates v Cadogan
Silence/Non-disclosure general rule
Nottingham Patent Brick
Solicitor told client that no covenants on land but hadn't checked, held to be misrepresentation
With v O'Flanagan
Buyer of medical practice told value of practice but circumstances change and practice dropped income but seller failed to tell buyer about this. Court held actionable misrepresentation.
Roscorla v Thomas
Seller of horse told buyer that horse was 'sound and free from vice' BUT house neither sound nor free from vice. Court held no case to answer because statement was made after formation of contract
JEB Fasteners Ltd v Marks Bloom & Co
Reason why take-over planned was due to 2 directors not company itself (includes the accounts,) therefore accounts even if prepared negligently didn't play into decision and therefore NOT actionable misrepresentation
Redgrave v Hurd
Statement can still amount to misrepresentation even if innocent party given chance to discover truth:
Peekay Intermark Ltd v Australia & New Zealand Banking Group Ltd
Although misleading comments made over phone, contract signed was accurate, therefore no actionable misrepresentation.
Derry v Peek
Fraudulent misrepresentation- 1. Proof of fraud 2. False statement made knowingly, without belief in its truth or recklessly, carelessly as to whether it is true or false.
Akerhielm v De Mare
Reason behind why lied/acted dishonestly doesn't matter
Royscot v Rogerson
FFM- If established, allows parties to walk away from contracts + due for damages as if actual fraud committed
--> All loss regardless of foreseeability, assessed same as actual fraud
Yam Seng Pte Ltd v International Trade Corporation Ltd
FFM-1. They entered into a contract with the defendant 2.They did so in reliance and after a representation of fact had been made by the defendant 3.The representation was false 4.As a result of entering into the contract with the defendant, they suffered a loss.
Hedley Bryne & Co Ltd v Heller & Partners Ltd
Negligent Misrepresentation- 1. A defendant owed them a duty of care 2. There was sufficient proximity between them and the defendant (there was a "special relationship" between them 3. The defendant breached their duty of care, and did not exercise reasonable care and skill.
Leaf v International Galleries
Rescission- Lapse of Time
Crystal Palace v Dowie
Rescission- Third Party Rights
Clarke v Dickson
Rescission- RII
Doyle v Olby Irongmongers Ltd
Fraudulently induced into buying property + could claim for cost of business & consequential loss
Smith New Court Securities v Scrimgeour Vickers
HL held loss assessed at date of transaction BUT this rule should be applied flexibly especially if innocent party wouldn't be compensated + Innocent party has duty to mitigate own loss when find out about misrepresentation
Inntrepreneur Pub Co v East Crown Ltd
(Statement not incorporated in written document= representation
Routledge v McKay
Timing (Longer interval between statement and contract, more likely NOT a term
Bannerman v White
Importance of statement may point toward a term rather than a representation
Dick Bentley Production
Well vetted Bentley car, special knowledge/expert--> Term of contract
J. Evans & Son (Portsmouth) Ltd v Andrea Merzario Ltd
If the contract was intended to be partly written and party verbal, then the court will accept parol evidence
City and Westminster Properties (1934) Ltd v Mudd
Term not included in final contract and as M used it to sleep, tried to break contract. Collateral agreement overruled term in contract
Shirlaw v Southern Foundries ltd
OBT
Was there an implied term that S would stay as director. Succeeded in first interest, CA held Mr S would hold post for 10 year period and that this term was implied in the contract
The Moorcock
BET
D's implied undertaking to take reasonable care to ascertain that the riverbed was not in a dangerous condition. Business could not be carried on unless there was this term
AG of Belize v Belize Telecom
Offered different approach, single test of construction --> Doubted two tests
Marks & Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd
Traditional tests of incorporation (OBT + BET) were re-established
Liverpool City Council v Irwin
Council housing: implied terms in tenancy agreement re: repair of common areas and right to quiet enjoyment (Contract silent due to who responsible for common areas)
- Implied because: Lord Wilberforce: term necessary due to "the inherent nature of the contract and the relationship"
- Lord Cross asserted a reasonableness test
British Crane and Hire Corp Ltd v Ipswich Plant Hire Ltd
The party that relies on or claims the existence of a custom has to prove it (Need to be certain, reasonable and well-known in the sector)
+ Common Understanding: Both parties were in machinery hire industry, Dealt together x 2 before, Lord Denning - 'both parties knew quite well that this clause was a habitual part of the trade and were familiar with its contents'
L'Estrange v Graucob
Signed contract= Binding
Chapleton v Barry
Court held that ticket was not a contractual document but a receipt. Shows nature of document is important
Parker v South Eastern Railway
Back of ticket with an exclusion cause on. CA held no obligation by plaintiff to read ticket but what mattered was whether notice of the term had been given
Thompson v LMS Railway
Immaterial whether read, company has given reasonable notice to read terms. Objective test 'So irrelevant that the actual party affected by the term may be blind, illiterate or otherwise unable to understand'
Thorton v Shoe Lane Parking
RN
Ticket came too late. Held: Notice came too late
Oxley v Marlborough Court Hotel
otice of exemption in hotel bedroom. Reasonable notice? No- should have been at the reception as otherwise notice given too late
Interfoto v Stiletto
Clause binding? Not signed so question is reasonable notice -No steps taken to draw Stiletto's attention.
Spurling v Bradshaw
Notice came too late, after contract formed but because of previous course of dealings, clause had been effectively incorporated into the contract
Houghton v Trafalgar
Ambiguous clauses interpreted contra proferentum for B2B
Canada Steamship Lines v The King
1. Whether clause refers to negligence expressly, if so: Clause will include liability for negligence. If not & use more general terms, problematic 2. Whether words wide enough to cover negligence? 3. If words used are broad enough to cover negligence and negligence is only liability on facts, clause will work to exclude liability. If clause wide enough to cover other types, broad terms not effective to exclude negligence.
George Mitchell v Finney Lock Seeds
Where the person seeking to rely on the clause could easily have insured themselves against the liability, less likely the term will be reasonable + if, in a previous case, the defendant has settled out of court, rather than relying on their own exemption clause, it suggests the clause can be seen as unreasonable
Gill v Horatio Myer
If the term could apply to more than one type of claim, not just the one being brought, less likely that it is reasonable
Salvage Association v CAP Financial Services
the sum will have to be justified in order for the term to satisfy the reasonableness test
Woodman v Photo Trade Processing; Smith v Eric Bush
making entry into an alternative contract (without the exemption clause included) reasonably available means the term is more likely to be considered reasonable
Green v Cade Bros
if, to claim, the claimant has to adhere to a condition such as a time limit, the term is less likely to be reasonable
The Office of Fair Trading v Foxtons Ltd
Good Faith
"In drafting and using contract terms, a trader should not, whether deliberately or unconsciously, take advantage' of the consumers' circumstances to their detriment."
Paradine v Jane
Historically: Courts were not willing to allow a party to escape contractual obligations due to frustrating events
Davis Contractors v Fareham UDC
- Court said that 'frustration occurs where to require performance would be to require something radically different from what was undertaken'
- Not enough to argue that performance has turned out to be difficult or even extremely difficult
--> Courts will not regard an event as frustrating merely if and when performance of contract becomes onerous/expensive
National Carriers v Panalpina
- the court said that we must ask if there 'supervenes an event which significantly changes the nature of the outstanding contractual rights... then it would be unjust to hold the parties to them'
--> Courts use test of construction, whether event frustrated the contract + would be unfair to require performance
Taylor v Caldwell
Frustrating event: Destruction of subject matter
Condor v Barron Knights
Frustrating event: Death/incapacity -A contract that involves providing personal services to another party may be discharged by frustration on the death or incapacity of that party
Avery v Bowden
Frustrating event: Legal impossibility
Fa Tamplin Steamship Company Ltd v Anglo-Mexican Petroleum Products Co Ltd
Frustrating event: HL held contract not frustrated as possibility that steamship would be released before end of contract.
Krell v Henry
Frustrating event: Whole commercial purpose of the contract radically changed
Lauritzen AS v Wijsmuller BV (The Super Servant Two)
Limitation on frustration: Self-induced frustration
Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd (The Fibrosa case)
Limitation on frustration: Express provisions in contract
Edwinton Commercial Corp v Tsavliris Russ Ltd
Limitation on frustration: Foreseeability of frustrating event
Davis Contractors Ltd v Faveham UDC
Limitation on frustration: More difficult/costly to perform
Poussard v Spiers and Pond
Whole success of venture between parties depending on P turning up, meaning condition and had right to repudiate contract
Bettini v Gye
6 days not important, essential term, attendance at concert was, meant it was a warranty- termination of contract unlawful.
Hong Kong Fir Shipping
Term was ship should be seaworthy, breaches of this could be very serious or very trivial. Yes breach but breach not serious enough to terminate contract.
The Seaflower
How to identify term as a condition
Stocznia Gdynia SA v Gearbulk Ltd
Reasonable man test- term is a condition
Hochster v De La Tour
In anticipatory situations, the innocent party is entitled to terminate the contract here and now, at the time of announcement (no need to wait for the moment of breach)
White and Carter Councils v MacGregor
HL said sometimes the party can carry on, but ONLY if:
i) does not need the other party's cooperation, AND
ii) has a 'legitimate interest' in performing
Re Hall and Barker
"If a man engages to carry a box of cigars from London to Birmingham, it is an entire contract and he cannot throw the cigars out of the carriage half-way there and ask for half the money"
Hoenig v Isaacs
Doctrine of Substantial Performance - if the promisor has performed a 'substantial' part of the entire contract, he will be entitled to payment for it (contract price minus cost of work not done)
Payzu v Saunders
Innocent buyer had to recontract with seller in breach for same goods (shouldn't have gone somewhere else and paid money, should have recontracted)
British Westinghouse
Old and new turbines, more efficient new turbines reduced loss following old defective ones.
Hadley v Baxendale
Hadley Principle: Two "limbs": 1. D Liable for all ordinary losses ie those anyone entering contract could foresee without special knowledge --> Losses in this case not ordinarily foreseeable as carrier wouldn't have known that no spare shaft 2. D only liable for non-ordinary losses if they had knowledge of the circumstances when entering the contract
Victoria Laundry v Newman
Contract under which D sold C laundry boiler, delivered 5 months late. C suffered lost profit including lucrative laundry contract with government--> Type of loss had to be foreseeable, did not matter if extent was unforeseeably large (no knowledge of D re lucrative laundry contract so C couldn't recover these loses)
Achilleas
Losses have to be foreseeable (either in the ordinary course, or because D had special knowledge - ie the Hadley test), but: Applying Lord Hoffmann, even foreseeable losses will not attract liability if understanding in trade is that D is not responsible for such losses
Anglia TV v Reed
Claim for lost expenditure £2750, £1900 of which was before contract was made + Pre-contract spend is not really reliance loss
CCC Films v Impact Quadrant Films
If C cannot prove loss or profit, can claim lost expenditure unless D can show that expenditure would not. Have been covered
Ruxley Electronics
CC- judge awarded £2,500 for loss of amenity, CA - court allowed claim for £22k cost of replacing pool vs HL could not claim the cost of replacing pool - because the cost was out of all proportion to the benefit which would be obtained.
Tito v Waddell
Test of Megarry J - whether Cs intended to and would reinstate, weren't going to reinstate= no loss= no claim possible
Radford v De Froberville
C could claim cost of building wall - test was whether it was reasonable as well as intent
Addis v Gramophone Co
- P dismissed without proper notice from job as manager in Calcutta
- HL held could not claim damages for "injured feelings"
- Since treated as general rule for all kinds of contract
Jarvis v Swan Tours
- Brochure promise vs reality, didn't match
- Lord Denning: "I think that those limitations are out of date. In a proper case damages for mental distress can be recovered in contract, just as damages for shock can be recovered in tort".
--> C could claim damages equivalent to double the price of holiday
Bliss v South East Thames Regional Health Authority
- P wrongfully suspended from job as consultant surgeon
- CA - could not claim damages for mental distress "unless contract was one to provide peace of mind or freedom from distress" Dillon LJ
Hayes v Dodd
CA: Damages for non pecuniary loss not available for commercial contract
Watts v Morrow
Lord Bingham: Two kinds of loss 1. Exceptionally, where contract is for provision of peace of mind etc 2. Otherwise, claim for "physical inconvenience and discomfort caused by the breach" --> Watts: £750 each
Farley v Skinner
- HL: "very object" does not mean freedom from distress etc has to be only object: enough if it is an important object, even if not the only or major one ( Lord Steyn)
--> CC award reinstated
Teacher v Calder
Cs not suffered any loss, but awarded damages in lieu of injunction --> Basis was estimate of what Cs would have paid to release Ds from covenant (5% of developer's profit, £2,500)
Surrey County Council v Bredero Homes
- CA: No claim as no loss and could not claim D's profit on extra houses --> Distinguished from Wrotham Park as no prospect of injunction
AG v Blake
- Discussion of Wrotham Park case --> Lord Nicholl's speech widely criticised (thin end of wedge of damages based on gain by some commentators)
Blake: Led to greater willingness to use 'negotiating damages' as in Wrotham Park
Experience Hendrix v PPX
Difficult to estimate loss caused to C, C awarded damages based on hypothetical licence fee
One Step v Morris-Garner
What could C claim? C suffered loss of business, difficult to quantify. HC/CA: C could elected to claim damages based of hypothetical release fee (Negotiating fees) --> SC: Cs could not elected basis of damages. Court has to do best to assess loss from competition, hypothetical release fee might be helpful but not measure of damages
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