Contract Law

Biggs v Boyd Gibbons

Seller made an announcement in respect of his property that: “for a quick sale, I will accept £26,000”. The Court decided that this was an offer which could be accepted to form a contract.

Gibson v Manchester City Council

He completed the application for the council house. But the council later changed its mind about the sale. The Court decided that the council’s letter was not an offer. His formal application was the offer that the council could accept or reject. The initial letter was only an ITT (Invitation To Treat)

Fisher v Bell

Goods in a shop window or on a shelf are invitations to treat, not offers. Flick knife on display in a shop window was not being “offered for sale” contrary to the Restriction of Offensive Weapons Act 2019

Pharmaceutical Society of GB v Boots

Goods in a shop window or on a shelf are invitations to treat, not offers

Partridge v Crittenden

Advertisements and brochures are usually ITTs. Protected wild birds were being advertised for sale, but the Court decided that they were not, at this stage, being “offered” in breach of the law

Harvey v Facey

A general enquiry or an indication of the price of goods by itself is not an offer. A sent a message asking for the price of a farm. B replied, “Lowest cash price is £900.” A tried to buy the farm for £900 but could not as the reply was merely a reply to a request for information, not an offer

British Car Auctions v Wright

At an auction the bidder makes the offer that the auctioneer then accepts by banging his or her hammer. This means that the lots available at an auction are an invitation to treat

Carlill v Carbolic Smoke Ball Co

The Court decided that the advert was an offer, owing to the clear wording used, and that it could be anyone who bought the smoke ball. The deposit of £1,000 demonstrated a willingness to be bound by the promise. In business dealings, the courts will presume that any agreement made was intended to be a contract

Thornton v Shoe Lane Parking

An offer can be made by anyone, an individual, business or other organisation. It could also be made through a notice or a machine. A parking meter was deemed to be making an offer to anyone who wanted to park. It could be accepted by inserting the correct amount of money

Inland Revenue Commission v Fry

A owed the Inland Revenue (now HMRC) over £100,000. A sent a cheque for £10,000 along with a letter which said the cheque should only be cashed if they were happy to accept it “in full and final settlement” of the whole debt. The cheque was cashed before the letter was read. The Court decided that the Inland Revenue had no knowledge of the offer and so did not accept it by cashing her cheque.

Routledge v Grant

A offered his house for sale, stating that the offer would remain open for 6 weeks. 3 weeks later A told B that he had changed his mind and no longer wished to sell the house. This was an effective revocation of the offer even though it was within the 6-week period. B could no longer accept the offer as it has ended

Dickinson v Dodds

Communication can come from another “reliable source” instead of from the offeror directly. A heard of the sale via a reliable person known to both of them, this was effective revocation. The test is whether a reasonable person would consider the information accurate.

Hyde v Wrench

A offered a lower price but B refused. A later tried to accept the original offer. The Court decided that A’s counter offer (of the lower price) had ended the original offer so that A could no longer accept it

Stevenson v McLean

A mere enquiry during negotiations will not be treated as a counter-offer. The Court decided that a letter sent by A asking whether payment could be in instalments was not a counter-offer but a mere enquiry. The offer was therefore still open to accept later

Ramsgate Victoria Hotel v Montefiore

There is no exact definition of a reasonable time for the offer to be available for. In this case, the Court decided that 5 months was too long for A’s offer to buy shares to remain open

Bradbury v Morgan

If the offeree dies then the offer ends and those dealing with his or her estate cannot accept the offer

Felthouse v Bindley

A said to B, “If I hear no more from you, I shall consider the horse mine at £30.” B did not reply. The Court held that there was no contract as silence or inactivity is not acceptance

Brogden v Metropolitan Railway

The railway company filed the document and never communicated their acceptance of the terms, yet both parties continued to carry out the contract. When a dispute arose, the court said that acceptance had taken place by conduct - through continuing to perform the contract without any objection to the terms

Reveille v Anotech (2016)

The Court of Appeal found acceptance by conduct despite one party having not signed the document outlining the terms of the contract

Yates v Pulleyn

If the offeror asks for acceptance in a particular way (e.g. in writing), then acceptance must usually be by that method in order for it to be valid. In this case, acceptance was to be made in writing by registered delivery. A sent it by ordinary post. The Court decided that the acceptance was effective. The requirement of registered delivery was for the benefit of the offeree so YAcould take the risk of ordinary post if he wished

Adams v Lindsell

The letter of acceptance was delayed in the post. Because of the delay, A assumed B didn’t want it and sold it to someone else. However, the Court decided that there was a valid contract because acceptance took place as soon as the letter was placed in the post box and there had been no communication about revoking the offer

Household Fire Insurance v Grant

It was held that the postal rule applies even where the letter is never received, rather than merely delayed

Holwell Securities v Hughes

The postal rule can be avoided by stating in the offer that there will be no contract unless the acceptance is actually received. An attempt to rely on the postal rule failed where the acceptance was required to be “by notice in writing”. The fact that actual notice was required meant that the postal rule did not apply

Entores v Miles Far East

The postal rule does not apply to electronic methods of communication. The Court of Appeal in this case decided that acceptance by telex took place when and where it was received. The telex machine was in the office of the party and the message was received inside normal working hours so that communication to the machine was actual communication

Brinkibon v Stahag Stahl

The telex machine was in the office of the party and the message was received inside normal working hours so that communication to the machine was actual communication

Thomas v BPE Solicitors

The High Court decided that the email took effect at 6pm Friday - this was a transaction that could have been completed that evening and 6pm was not seen by the court as out of hours. The email was available to be read on a mobile device within working hours so the solicitor could reasonably be expected to have read it

Balfour v Balfour

The Court decided that this was a. Domestic arrangement, and as the agreement had been made at an amicable point in their relationship, there was no intention to create a contract. A did not have to pay her this allowance

Merritt v Merritt

A had left his wife. An agreement to send her some money and sign over the house if she paid off the outstanding mortgage was held to create legally binding obligations, as the parties were separated and about to get divorced. The agreement could be enforced by the Court.

Snelling v Snelling

Three brothers were directors of a family business which had run into financial difficulty. They loaned money to the business on the agreement that if any of them resigned as director, they would forfeit their loaned money. The Court decided that the agreement was intended to be legally binding given the context in which the agreement between the brothers had been made

Jones v Padavatton

A mother persuaded her daughter to move from USA to UK and train as a barrister in exchange for financial help and a house to live in. They later fell out and the mother tried to evict her daughter from the house. At the time when the arrangement was made, the mother and daughter were very close and so the Court was satisfied that neither party at that time intended to enter a legally binding contract. This was a mere domestic agreement and the mother was therefore entitled to take the house back

Simpkins v Pays

If money has exchanged hands or a third party (non-family member) is involved, then even if the arrangement is made socially, then this may provide evidence to rebut the presumption of no ICLR. The Court decided that the inclusion of the lodger, a non-family member, meant the relatives must have intended to create legal relations. The lodger had also paid for the entry ticket

Wilson v Burnett

The suggestion of a prior agreement was undermined when while waiting for the results of the competition, the others repeatedly asked if she was “going to share”. This suggested that an intention to create a legal relationship did not exist at that time, so the claim for a share failed

Parker v Clark

The young couple successfully argued that they had a legally binding agreement with the older couple that if they sold their house and moved in with them then they would inherit the property. Selling their house and sharing the running costs of the shared home indicated that the agreement was intended to be legally binding

Granatino v Radmacher (2010)

Since the Supreme Court decision in this case, the courts have been prepared to attach “significant weight” to pre-nuptial agreements that are freely entered into with a full appreciation of its implications for the couple

Edwards v Skyways

An airline pilot was promised a payment by his company on being made redundant, but the company did not pay it. The Court decided that the promise was intended to be legally binding. The company therefore owed him the money

McGowan v Radio Buxton

The Court decided that this was an enforceable contract as “there was not even a hint that this would be a toy”. The competition was to promote the radio station and there was a reasonable expectation that the prize would be a real car

Jones v Vernon Pools

A completed a football pools entry form, entered a competition and won. B refused to pay, stating that on the back of the form were printed the words: “This agreement is binding in honour only”. The Court decided that the words used meant the agreement was not intended to create legal relations. There was no contract and A could not enforce his win

Kleinwort Benson v Malaysia Mining

The Malaysian company wrote the bank a “comfort letter” asserting that its “policy is to ensure that the subsidiary company is in a position to meet its liabilities” to the bank. The bank granted a £10 million loan. When the subsidiary company went into liquidation, the bankers relied upon the letter to order the company to repay the loan. The Malaysian company claimed that the letters were not intended to create legal obligations. The Court decided that the “comfort letter” was designed only to reassure the recipient - not to create legal relations. It could not be enforced by the bank

Dunlop v Slefridge

Definition of consideration. “An act or forbearance of one party, or the promise thereof, is the price for which the promise of the other is bought, and the promise thus given for value is enforceable.” Simply put, consideration is an exchange of promises for value in a contract, made in return for the each other

Thomas v Thomas

The Court held that the payment of £1 was good consideration, even though it was clearly not a commercial rent

Chappell & Co v Nestlé

The Court decided that the used sweet wrappers were sufficient consideration, even though it was not of the same value as the records

White v Bluett

The Court decided that the son’s promise was too vague and lacked value - it was not sufficient consideration as he had no legal right to complain. The son still owed the money

Re McArdle

One son and his wife pairs for repairs and improvements to the house. When these were finished, the other 4 sons agreed to contribute towards the repairs. The Court decided that the consideration was past as the work had been done before the promise was made. The promise to contribute towards the costs was not a valid contract

Lampleigh v Braithwaite

The Court decided that although the promise to pay came after A had performed the service, there was good consideration so B had to pay. The actions taken by A were at B’s request and we’re so important that a fee must have been implied

Re Casey’s Patents

A worked on obtaining certain legal rights (patents) for a company. The company later promised him a one-third share in those rights. The company then refused to handover the share of the patents. The Court decided that A was entitled to the share as it was implied that when he worked on the patents he would receive some payment. The subsequent promise merely fixed the form of payment

Pao On v Lau Yiu Long

The Court emphasised the requirement that the consideration would need to have been enforceable if it was not past

Still v Myrick

The Court decided that the promise was not binding. No consideration was given in return for the promise of extra pay because the sailors were under a contractual duty to sail the ship home anyway

Collins v Godefroy

A police officer was ordered to attend court and give evidence at D’s trial. D promised to pay the police officer to make sure he did attend. There was no consideration in the agreement as the police officer was already under a public duty to give evidence

Hartley v Ponsonby

The Court decided that the sailors were owed the extra wages of the deserters because the few sailors remaining had gone beyond their contractual duty - undertaking a dangerous and risky voyage - and so had provided consideration

Glasbrook Bros v Glamorgan CC

As the police had provided more officers and in a different way than they would normally have done, they had gone beyond their public duty and there was consideration for the promise

Williams v Roffey

The Court of Appeal decided that A was owed the extra money, as B freely chose to offer them more and B had gained a benefit by avoiding the delay and paying penalty payments to the flat owners

Scotson v Pegg

The Court held that performing an existing contractual duty owed to a third party to the contract can amount to good consideration for a new promise by the third party

Tweddle v Atkinson

Although the promise had been made for the couple’s benefit, the Court held they had no right to enforce it because they had not given any consideration and were not part of the contract between the 2 fathers

Beswick v Beswick

The Court decided that a party can only sue to recover their losses. The widow could not claim herself as she was not a party to the contract. However, she was able to claim in her capacity as administrator of her late husband’s estate

Contracts (Rights of Third Parties) Act 1999

Rules on privity were substantially reformed. This provides a statutory exception to the common law doctrine of privity

s.7 Contracts (Rights of Third Partied) Act 1999

The Act does not affect the common law rules

s.1(1)(a) Contracts (Rights of Third Partied) Act 1999

The Act allows a person who is not a party to a contract to enforce a term of that contract provided the contract expressly states that the party may do so (OR…)

s.1(1)(b) Contracts (Rights of Third Parties) Act 1999

The Act allows a person who is not a party to a contract to enforce a term of that contract provided the term clearly confers a benefit on the third party (OR…)

s.1(3) Contracts (Rights of Third Parties) Act 1999

The third party must be expressly identified in the contract by name, or described as a member of a particular class *(group)

s.1(2) Contracts (Rights of Third Partied) Act 1999

s.1(1)(b) does not apply if it appears the parties did not intend the term to be enforceable by a third party (the parties can exclude the effect of the 1999 Act if they wish)

Nisshin Shipping Co v Cleaves

The contract did not expressly provide that the third party could enforce a term of the contract, so s.1(1)(a) did not apply. However, the contract did confer a benefit on the third party (s.1(1)(b))(requirement to pay commission to A the third party), so the question for the court was whether, on a proper construction of the contract, the parties intended the term to be enforceable by the third party (s.1(2)). The judge held that B was unable to show that the parties didn’t intend the term to be enforceable by the third party. Therefore A was entitled to rely on the Act and enforce the commission clause

s.2 Contracts (Rights on Third Parties) Act 1999

Where a third party has a right to enforce the contract under s.1, the original parties to the contract cannot subsequently vary or remove the third party’s rights without their consent unless there is an express term in the contract to this effect

Jackson v Horizon Holidays

A bought himself and his family a holiday to Sri Lanka from B. The holiday was a disaster, but B refused to pay compensation for the rest of his family. The Court decided that A could recover compensation for his loss and that of his family as they had all suffered from the experience

Linden Gardens v Lenesta Sludge

The Court decided the original property developer could sue the asbestos removal company for the new owner’s loss and recover substantial damages. The asbestos removal contract was deemed to be a service which had been contracted for the benefit of all future owners

Tull v Moxhay

A house was sold with a restrictive covenant that the gardens were not to be built on. The house was later sold to another who intended to build on the gardens. Because the covenant ran with the land, the original seller could enforce it with the new purchaser

Shanklin Pier v Detel Products

A represented to the painter company that their paint would last 7 years. On this basis B instructed the painters to buy and use A paint. When the paint lasted only 3 months, B tried to sue A. B found a collateral contract between B and A to the effect that the paint would last 7 years, the consideration for which was the instruction given by B to the painters to order the paint from A

Gordon v Selico

a false statement can be in any form - spoken, written or by conduct. Painting over dry rot immediately before selling a property was a fruadulent misrepresentation

Spice Girls v Aprilia

The Court held that, by participating in the advertising campaign, the group respresented that none of them intended to leave, and none of them was aware that one member intended to. Their conduct in attending was a misrepresentation

Fletcher v Krell

The court decided that there was no misrepresentation as she was under no duty to disclose her marital status and she had not been asked about it

With v O’Flanagan

By the time the contract was signed, there was almost no income from the medical practice. The Court held that the failure of the seller to tell the buyer what had happened (the change in circumstances) amounted to a misrepresentation

Dimmock v Hallett

The seller told the prospective buyer that farms on the land were let to tenants, but did not mention both tenants had given notice to quit. Omitting this fact presented such a distorted picture of the true situation that the Court held there had been a misrepresentation

Consumer Insurance (Disclosure and Representations) Act 2012

under this Act, an aplicant for a consumer insurance policy has a statutory duty to take reasonable care not to make a misrepresentation. The consumer must answer honestly and reasonably to questions asked

Consumer Protection Regulations 2008 (as amended)

under these regulations, a misleading omission occurs where a trader misses out key information that the consumer might need to make an informed decision about the purchase of goods or services