IBL Cases

Costa v ENEL Scenario

Costa refused to pay ENEL, arguing Italy’s electricity nationalization violated EU law.

Costa v ENEL Resolution

The ECJ ruled EU law overrides conflicting national laws, even if passed later.

Costa v ENEL Principle

Supremacy of EU Law. EU law has supremacy—member states cannot pass laws that undermine it.

Guthing v Lynn Scenario

Buyer promised to pay 5£ extra if the horse was “lucky.”

Guthing v Lynn Resolution

The court refused to enforce it — the term “lucky” was too vague.

Guthing v Lynn Principle

Certainty of Offer,  An offer must be clear and certain to be enforceable.

Bloom v American Swiss Watch Co Scenario

Bloom gave information about a theft but didn’t know a reward existed.

Bloom v American Swiss Watch Co Resolution

The court denied Bloom’s claim because he didn’t know about the reward offer when acting—communication of the offer is essential for acceptance

Bloom v American Swiss Watch Co Principle

Communication of Offer. You must know of an offer to accept it.

Harvey v Facey Scenario

 Harvey asked Facey for the lowest price for a property. Facey just stated the price but didn’t agree to sell.

Harvey v Facey Resolution

 The court said giving the lowest price was not an offer — it was just information.

Harvey v Facey Principle

Statements of Information vs. Offer. A statement of price or other information alone doesn't constitute a valid offer - there must be clear intent to be legally bound.

Pharmaceutical Society of GB v Boots Cash Chemists Scenario

Boots let customers pick medicines (including regulated ones) from shelves, paying at a supervised till

Pharmaceutical Society of GB v Boots Cash Chemists Resolution

Court ruled shelf displays were invitations to treat, not offers - contract formed only at checkout.

Pharmaceutical Society of GB v Boots Cash Chemists Principle

Display of Goods. Goods on display ≠ offers; real offer happens when customer presents items for purchase

Fisher v Bell Scenario

A flick knife was displayed in a shop window. It was illegal to “offer” such knives for sale.

Fisher v Bell Resolution

 The display was only an invitation to treat — so the shopkeeper didn’t “offer” it in the legal sense.

Fisher v Bell Principle

Display of Goods.Displaying goods in a shop window is not an offer.

Partridge v Crittenden Scenario

Partridge advertised protected birds for sale. It was illegal to offer them for sale.

Partridge v Crittenden Resolution

The advert was just an invitation to treat — so he hadn’t technically made an “offer” in law

Partridge v Crittenden Principle

Adverstisements. Adverts are invitations to treat, not offers.

Blackpool & Fylde Aero Club v Blackpool BC Scenario

The council invited tenders and said all valid tenders would be considered. The Aero Club submitted one on time but it was wrongly left out.

Blackpool & Fylde Aero Club v Blackpool BC Resolution

The court held there was a duty (a collateral contract) to consider valid tenders, so Aero Club won damages.

Blackpool & Fylde Aero Club v Blackpool BC Principle

Tenders (Obligation to Consider) Inviting tenders can create an obligation to consider bids properly.

Barry v Davies Scenario

Two machines were auctioned “without reserve.” The highest bid was well below market value so the auctioneer refused to sell.

Barry v Davies Resolution

The court held the auctioneer was bound to accept the highest genuine bid — so Barry was awarded damages equal to the difference in value.

Barry v Davies Principle

Auctions without reserve. In an auction without reserve, there’s an enforceable promise to sell to the highest bidder.

Routledge v Grant Scenario

Grant offered to buy a house and said the offer would stay open for six weeks, but he withdrew it before six weeks were up.

Routledge v Grant Resolution

The court held Grant could revoke his offer at any time before acceptance, even though he had said it would stay open.

Routledge v Grant Principle

Revocation of Offer. An offer can generally be revoked any time before it is accepted — unless there is a binding option contract. An offeror cannot be forced to keep an offer open

Byrne v Van Tienhoven Scenario

Van Tienhoven sent an offer by post, then sent a revocation letter a few days later. Byrne accepted the original offer before receiving the revocation.

Byrne v Van Tienhoven Resolution

The revocation was ineffective because it was not communicated before acceptance — so a valid contract existed.

Byrne v Van Tienhoven Principle

Communication of Revocation. Revocation must be communicated to be effective; postal revocation is only valid once received.

Errington v Errington and Woods Scenario

A father promised his son and daughter-in-law that if they paid the mortgage instalments, the house would be theirs. He died before it was fully paid off; his widow tried to revoke the promise.

Errington v Errington and Woods Resolution

The court held that once performance of a unilateral offer has begun, the offeror cannot revoke it.

Errington v Errington and Woods Principle

A unilateral offer cannot be revoked once the offeree has begun the required act, as long as they keep performing.

Ramsgate Victoria Hotel v Montefiore Scenario

Montefiore applied to buy shares in June but was only allotted them in November. By then he no longer wanted them.

Ramsgate Victoria Hotel v Montefiore Resolution

The court held the offer had lapsed due to unreasonable delay.

Ramsgate Victoria Hotel v Montefiore Principle

Lapse of Time. An offer will lapse after a reasonable time if not accepted.

Hyde v Wrench Scenario

Wrench offered to sell his farm for £1,000. Hyde offered £950 instead (a counter-offer), which Wrench rejected. Hyde then tried to accept the original £1,000 offer.

Hyde v Wrench Resolution

The original offer was no longer available — the counter-offer had destroyed it.

Hyde v Wrench Principle

Counter-Offer as Rejection. A counter-offer rejects and terminates the original offer.

Stevenson v McLean Scenario

Stevenson asked if the iron seller would accept a payment plan instead of outright payment — the seller treated this as a counter-offer and sold to someone else.

Stevenson v McLean Resolution

The court held it was only a request for information, not a counter-offer — so the original offer still stood.

Stevenson v McLean Principle

Requests for Information vs. Counter-Offer Asking for clarification or more information is not a counter-offer and does not reject the original offer.

Carlill v Carbolic Smoke Ball Co Scenario

The company advertised it would pay £100 to anyone who used their smoke ball as instructed and still caught the flu. Mrs. Carlill did so and claimed the money; the company argued there was no contract.

Carlill v Carbolic Smoke Ball Co Resolution

The court held this was a unilateral offer accepted by performing the condition (using the smoke ball and still getting the flu).

Carlill v Carbolic Smoke Ball Co Principle

Unilateral Offers / Advertisements (Offer & Acceptance by Performance) An advertisement can be a unilateral offer to the world; acceptance occurs by performing the required act.

Butler Machine Tool Ltd v Ex-Cell-O Corp Ltd Scenario

A Butler and Ex Cell exchanged standard forms with conflicting terms (price variation clause). The last form (from Ex Cell) did not have the price variation clause. The seller(Butler) claimed extra payment.

Butler Machine Tool Ltd v Ex-Cell-O Corp Ltd Resolution

 The court held the last counter-offer governed the contract — so no price variation clause applied.

Butler Machine Tool Ltd v Ex-Cell-O Corp Ltd Principle

In a “battle of the forms,” the last form sent and accepted determines the contract terms.

Entores v Miles Far East Corp Scenario

Entores (London) sent a telex offer to Miles Far East (Amsterdam) to buy copper cathodes; Miles replied with a telex acceptance, but the contract was breached, raising jurisdiction issues (English vs. Dutch law)

Entores v Miles Far East Corp Resolution

The Court of Appeal ruled the postal rule (acceptance on posting) did not apply to instantaneous communication (e.g., telex); acceptance was effective only when received in London, making English law applicable

Entores v Miles Far East Corp Principle

Instantaneous Communication of Acceptance. For instant communications (e.g., phone, telex), acceptance is valid only when received by the offeror.

Brinkibon Ltd v Stahag Stahl Scenario

Brinkibon (London) sent a telex acceptance of Stahag’s (Vienna) steel offer, but later sued for breach in England, requiring proof the contract was formed there

Brinkibon Ltd v Stahag Stahl Resolution

The House of Lords ruled the contract formed in Vienna (where acceptance was received), rejecting the postal rule for telex and affirming Entores v Miles: instantaneous communication binds only upon receipt

Brinkibon Ltd v Stahag Stahl Principle

Instantaneous Communication of Acceptance (Telex). Instantaneous acceptances take effect when received, not sent, unless parties intend otherwise (e.g., out-of-hours messages)

Yates Building Co Ltd v Pulleyn & Sons Scenario

An option contract said acceptance should be sent by “registered or recorded delivery.” Yates sent acceptance by ordinary post instead.

Yates Building Co Ltd v Pulleyn & Sons Resolution

The court held the specified method was for the benefit of the offeree — so Yates could waive it. Acceptance by ordinary post was valid.

Yates Building Co Ltd v Pulleyn & Sons Principle

Prescribed Method of Acceptance. If a method of acceptance is prescribed for the offeree’s benefit, they may use an equally effective method. If an offer specifies how acceptance must be communicated, it is only binding if the terms are mandatory (e.g., "must be by post"). Mere directions (e.g., "to be sent by post") can be deviated from if the purpose (e.g., timely receipt) is met

Felthouse v Bindley Scenario

Paul Felthouse offered to buy his nephew’s horse, stating in a letter: "If I hear no more about him, I consider the horse mine at £30 15s." The nephew did not reply but later instructed an auctioneer (Bindley) to exclude the horse from sale—yet it was accidentally sold

Felthouse v Bindley Resolution

The court held silence cannot constitute acceptance.

Felthouse v Bindley Principle

Silence as Acceptance. Silence is not acceptance — an offer cannot bind someone unless they clearly accept.

Adams v Lindsell Scenario

Lindsell offered wool to Adams by post, misdirecting the letter. Adams posted acceptance late due to the delay.

Adams v Lindsell Resolution

The court held acceptance was valid when posted, not when received.

Adams v Lindsell Principle

Postal Rule. Under the postal rule, acceptance takes effect when the letter is posted, not when received — unless otherwise stated.

Household Fire Insurance v Grant (1879) Scenario

Grant applied for shares. The company posted a letter of acceptance, but it never reached Grant. Later, the company went bankrupt and Grant was asked to pay for the shares.

Household Fire Insurance v Grant Resolution

The court held there was still a binding contract because the acceptance was complete when the letter was posted, even though it never arrived.

Household Fire Insurance v Grant Principle

Postal Rule (Letter Never Arrives) Under the postal rule, acceptance is valid when posted, even if it is delayed or lost in the post.

Holwell Securities v Hughes Scenario

Hughes granted Holwell Securities an option to purchase property, exercisable by "notice in writing" within six months

Holwell posted a letter exercising the option, but it was lost in the mail and never received by Hughes

Holwell Securities v Hughes Resolution

The court held the postal rule did not apply because the wording required actual notice — so posting alone was not enough.

Holwell Securities v Hughes Principle

Excluding the Postal Rule. The postal rule does not apply if the offer clearly requires actual receipt of acceptance. Clear contractual language

Greenclose Ltd v National Westminster Bank Scenario

The bank attempted to extend an interest rate collar by sending an email notice to Greenclose before a contractual deadline, but Greenclose’s offices were closed, and the email was not read until after the deadline The bank argued the acceptance was ineffective because it arrived outside business hours.

Greenclose Ltd v National Westminster Bank Resolution

The court held that for emails, the principles for instantaneous communications apply: the notice was not effective until received within business hours.

Greenclose Ltd v National Westminster Bank Principle

Electronic Contracts / Email Acceptance. For email and modern electronic communications, acceptance is only effective when received during normal business hours — no automatic “postal rule.”

L'Estrange v Graucob Scenario

L’Estrange bought a cigarette machine and signed a sales agreement without reading it. The contract excluded all warranties. The machine turned out to be faulty.

L'Estrange v Graucob Resolution

The court held that by signing the document, she was bound by all its terms — even if she didn’t read them.

L'Estrange v Graucob Principle

Incorporation by Signature. If you sign a contractual document, you are bound by its terms, unless you were misled or there is fraud.

Chapelton v Barry UDC Scenario

Chapelton hired a deckchair and got a ticket, which contained an exclusion clause for injury. He was injured when the chair collapsed.

Chapelton v Barry UDC Resolution

The court ruled the ticket was just a receipt, not a contractual document — so the clause was not incorporated.

Chapelton v Barry UDC Principle

Incorporation by Notice (Ticket Cases). The ticket was a receipt, not part of the contract. The notice by the chairs (without the clause) constituted the offer, accepted when Chapelton took the chair. The exclusion clause was not incorporated as it wasn’t brought to his attention before the contract formed

Thornton v Shoe Lane Parking Scenario

Thornton used an automatic car park. Terms excluding liability were inside the car park, but he had already taken the ticket and driven in.

Thornton v Shoe Lane Parking Resolution

The court held the contract was formed when he took the ticket — so the exclusion clause was introduced too late to be incorporated.

Thornton v Shoe Lane Parking Principle

Incorporation by Notice (Timing)

An exclusion clause must be brought to the customer’s attention before or at the time the contract is made.

Olley v Marlborough Court Scenario

Mrs Olley booked into a hotel at the reception desk; a notice in the hotel room excluded liability for theft. The guest’s fur coat was stolen.

Olley v Marlborough Court Resolution

The court held the notice was ineffective because it was given after the contract had been made at the front desk.

Olley v Marlborough Court Principle

Incorporation by Notice (Timing) Terms must be communicated before or at the time of contracting — not afterward.

Spurling v Bradshaw Scenario

Bradshaw used a warehouse regularly. The warehouse slip included an exclusion clause for loss or damage. Goods were damaged, and Bradshaw claimed the clause didn’t apply.

Spurling v Bradshaw Resolution

The court held the clause was validly incorporated because of consistent previous dealings.

Spurling v Bradshaw Principle

Incorporation by Previous Dealings. An exclusion clause can be incorporated through a course of consistent prior dealings.

Andrews Bros v Singer Scenario

A contract to buy “new Singer cars” included an exclusion clause for “all conditions, warranties, and guarantees.” One car was not new.

Andrews Bros v Singer Resolution

 The court held the exclusion clause did not cover this breach because it was interpreted strictly against the party relying on it.

Andrews Bros v Singer Principle

Contra Proferentem Rule. Ambiguous exclusion clauses are construed narrowly and against the party who drafted them

Hollier v Rambler Motors Scenario

Hollier took his car to Rambler Motors for repairs four times over five years, signing invoices with a clause excluding liability for "damage caused by fire" on two occasions .

This time, he made an oral contract (no signed form). A fire caused by the garage’s negligent wiring destroyed his car. The garage’s standard terms tried to exclude liability for damage.

Hollier v Rambler Motors Resolution

No Binding Clause: 4 transactions over 5 years weren’t enough to make the term part of this oral contract (unlike Spurling v Bradshaw). The court held the clause did not clearly cover negligence — so it did not protect the garage from liability. To exclude negligence, the clause must be "so plain that it clearly bears that meaning"—vague language won’t suffice

Hollier v Rambler Motors Principle

Contra Proferentem Rule (Negligence). : Exclusion clauses must be clear and explicit to cover negligence; if ambiguous, the contra proferentem rule applies.

Taylor v Caldwell Scenario

Taylor rented Surrey Gardens Music Hall from Caldwell for four concerts, but the hall burned down before the first event

Taylor v Caldwell Resolution

The contract was frustrated because performance was impossible.

Taylor v Caldwell Principle

Destruction of Subject Matter. If the subject matter of the contract is destroyed, the contract is discharged by frustration.

Condor v Barron Knights Scenario

A 17-year-old drummer (Condor) signed a 5-year contract with Barron Knights pop group, requiring him to perform 7 nights/week.

After 9 months, he suffered a nervous breakdown, reducing his capacity to 4-5 nights/week due to medical advice