Contract Law Case Vocabulary

Vocabulary flashcards covering contract law cases, principles, and definitions.

Carlill v Carbolic Smoke Ball Co

An advertisement offering £100 to anyone who used a smoke ball three times daily for two weeks and caught influenza, with £1,000 deposited in a bank to show sincerity, constituted a unilateral offer to the world. Acceptance occurred through performance, communication was waived, and inconvenience suffered served as consideration.

Errington v Errington

Once performance of a unilateral offer has begun, the offeror cannot revoke the offer in a way that prevents completion, and the offerees acquire a right to continue and complete performance.

Lefkowitz v Great Minneapolis Surplus Store

Where an advertisement is clear, definite, and leaves nothing open for negotiation (e.g. 'first come, first served'), it constitutes a unilateral offer, accepted by performing the stated conditions.

Storer v Manchester City Council

A letter using clear and promissory language stating that a house would be sold if an agreement was signed and returned showed a clear intention to be bound, constituting an offer that was accepted upon returning the signed document.

Gibson v Manchester City Council

A letter stating the council 'may be prepared to sell' a house invited a formal application and showed no present intention to be bound, making it an invitation to treat rather than an offer.

Partridge v Crittenden

A newspaper advertisement offering bramblefinch birds for sale was held to be an invitation to treat, inviting customers to make offers, rather than an offer for sale.

Fisher v Bell

A shop window display of goods with a price tag (e.g. a flick knife) is an invitation to treat, not an offer; the customer makes the offer at the till.

Pharmaceutical Society v Boots

Displaying goods on shelves in a self-service store is an invitation to treat; the customer makes an offer at the till, and acceptance occurs when the cashier completes the sale.

Harris v Nickerson

An advertisement announcing an auction is an invitation to treat, creating no legal obligation to sell listed goods or recover expenses incurred by prospective buyers.

Barry v Davies

An auction held without reserve gives rise to a collateral unilateral contract obliging the auctioneer to sell to the highest bidder, making refusal to sell a breach.

Spencer v Harding

An invitation to tender by advertisement is generally an invitation to treat, with each submitted tender acting as an offer that the inviter may accept or reject.

Harvela Investments v Royal Trust

An invitation to submit sealed bids promising to accept the highest bid creates a binding unilateral obligation to accept the highest valid fixed bid; referential bids are invalid.

Blackpool & Fylde Aero Club v Blackpool BC

An invitation for tenders with a strict deadline creates a collateral unilateral contract requiring the inviting authority to consider all timely, compliant tenders.

Offord v Davies

A guarantee is a continuing offer which may be revoked at any time before acceptance or reliance unless consideration is given, with revocation effective for future transactions.

Ramsgate Victoria Hotel v Montefiore

An offer to purchase shares lapses if not accepted within a reasonable time, especially when share prices fluctuate.

Bradbury v Morgan

Death does not automatically terminate an offer unless the offeree is aware of the death or the offer involves personal services.

Tinn v Hoffman

Identical cross-offers sent simultaneously by post do not constitute acceptance, as acceptance must follow the communication of an offer.

Harvey v Facey

A statement specifying the lowest price for property is mere provision of information, not an offer capable of acceptance.

Stevenson v McLean

A mere enquiry regarding terms does not constitute a rejection of an offer, and the original offer remains open.

Hyde v Wrench

A counter-offer proposing different terms rejects and terminates the original offer, which cannot subsequently be accepted unless renewed.

Financings Ltd v Stimson

An offer subject to an implied condition (e.g. that a car remain undamaged) automatically terminates if that condition fails prior to acceptance.

Shuey v United States

A public unilateral offer may be revoked before performance if the withdrawal is communicated through the same medium and with the same publicity as the offer.

Luxor (Eastbourne) Ltd v Cooper

In unilateral contracts where commission is payable only upon completed sale, there is no right to reward until full completion and no general implied obligation preventing the seller's withdrawal.

Entores v Miles Far East Corp

In bilateral contracts using instantaneous communication, acceptance must be communicated and is effective only when received by the offeror.

Brogden v Metropolitan Railway Co

A binding contract may be formed by conduct where the actions of the parties objectively demonstrate mutual agreement.

Reveille Independent LLC v Anotech

Acceptance by conduct can override formal signature requirements where parties objectively demonstrate an intention to be bound by performing draft terms.

Claxton Engineering v TXM

Continuing performance and accepting benefits after alternative contractual terms are proposed without protest may amount to acceptance of a counter-offer by conduct.

Arcadis Consulting v AMEC

Mere acknowledgment or expressing thanks for instructions does not amount to contractual acceptance unless it objectively indicates assent to the proposed terms.

Felthouse v Bindley

Silence cannot amount to acceptance, as an offeror cannot unilaterally impose acceptance on an offeree.

Rust v Abbey Life

Silence may exceptionally constitute acceptance where prior dealings or conduct make silence objectively meaningful and neither party is prejudiced.

Butler Machine Tool v Ex-Cell-O

In a 'battle of the forms', traditional offer-and-acceptance analysis applies, meaning the contract is generally formed on the terms of the last offer accepted ('last-shot rule').

Tenax Steamship Co Ltd v Brimnes (The Brimnes)

A notice of withdrawal or communication is effectively communicated when it arrives at the recipient's office during ordinary business hours and could reasonably have been read.

Adams v Lindsell

Where post is the contemplated method of communication, acceptance is complete and effective at the moment of posting.

Household Fire Insurance v Grant

Under the postal rule, acceptance is effective upon posting even if the letter is delayed or lost in the post by the post office.

Henthorn v Fraser

The postal rule applies whenever the use of the post was within the reasonable contemplation of the parties, such as when they reside in different cities.

Holwell Securities v Hughes

The postal rule is excluded where an offer expressly specifies a mode of acceptance requiring notice 'in writing' to be given to the offeror, requiring actual receipt.

Korbetis v Transgrain Shipping

The postal rule does not apply to protect acceptance that is misaddressed due to the offeree's own carelessness.

R v Clarke

Acceptance requires knowledge of the offer at the time of performance; performing required acts while ignorant or completely forgetting the offer prevents claiming a reward.

Williams v Carwardine

If a party performs required conditions with full knowledge of an offer, their underlying motive is irrelevant to claiming the reward.

Countess of Dunmore v Alexander

Suggests an acceptance posted by mail may be revoked if a faster communication withdrawing it reaches the offeror prior to or simultaneously with the acceptance.

Smith v Hughes

Contract formation is determined by objective intention rather than subjective belief; if a reasonable person would infer agreement, a binding contract exists.

Centrovincial Estates v Merchant Investors

Acceptance is evaluated objectively, meaning an offeror is bound by an accepted mistake in terms unless the offeree knew of the mistake.

Balfour v Balfour

Agreements made between spouses living in amity are presumed not intended to create legal relations, as they rest on family trust rather than legal enforceability.

Merritt v Merritt

The presumption against legal relations in domestic arrangements is rebutted when separated spouses enter into a formal, written agreement.

Simpkins v Pays

A social arrangement involving regular contributions and shared expectations (e.g. entering competitions together) creates an intention to enter legal relations.

Rose & Frank v Crompton

Commercial agreements containing an explicit 'honour clause' stating the agreement is not legally binding exclude the intention to create legal relations.

Kleinwort Benson v Malaysia Mining

A parent company's 'comfort letter' using non-committal language does not create an intention to enter legal relations, rendering it unenforceable.

Joanne Properties v Moneything Capital

The inclusion of the phrase 'subject to contract' in negotiations negates contractual intention until formal execution occurs.

Blue v Ashley

An alleged agreement made in an informal pub setting lacks the requisite intention to create legally binding relations.

Weeks v Tybald

A broad statement offering £100 to anyone marrying the defendant's daughter was treated as an informal, vague expression of generosity rather than a legally binding offer.

Scammell v Ouston

An agreement to sell on 'hire-purchase terms' without settling essential financial details is void for uncertainty as a mere 'agreement to agree'.

Hillas v Arcos

Apparent uncertainty in contractual terms can be resolved by reference to trade usage, prior dealings, and context ('that which can be made certain is certain').

Walford v Miles

An agreement to negotiate exclusively or in good faith is unenforceable and void for uncertainty.

Pitt v PHH Asset Management

A 'lock-out' agreement promising not to negotiate with third parties for a fixed, limited duration is enforceable because the obligation is negative and certain.

Currie v Misa

Defines legal consideration as consisting either of some right, interest, profit, or benefit accruing to the promisor, or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the promisee.

Thomas v Thomas

Consideration must be sufficient but need not be economically adequate; paying £1 per year rent and maintaining property was valid consideration.

Chappell & Co v Nestlé

Chocolate bar wrappers requested as part of a promotional purchase constituted valid legal consideration despite lacking economic value.

Re McArdle

Work or services performed before a promise of payment is made constitute past consideration, which is not valid consideration to enforce the promise.

Lampleigh v Braithwaite

An act performed at the promisor's request with an implied understanding of remuneration forms valid consideration for a subsequent promise of payment.

Pao On v Lau Yiu Long

Past acts constitute valid consideration if done at the promisor's request, with an understanding of remuneration, and the promise would have been enforceable if made in advance.

Collins v Godefroy

Performance of an existing legal duty imposed by law (e.g. attending court under subpoena) does not constitute valid consideration.

Glasbrook Bros v Glamorgan CC

Providing services beyond the scope of an existing public or legal duty constitutes valid consideration for a promise of payment.

Stilk v Myrick

Performing an existing contractual duty owed to the promisor without undertaking extra obligations does not constitute fresh consideration.

Hartley v Ponsonby

Undergoing hazards or duties substantially beyond original contractual obligations constitutes fresh consideration for a promise of extra pay.

Williams v Roffey Bros

Obtaining a practical benefit (such as avoiding delay and penalties) can constitute valid consideration for a promise of extra payment, absent economic duress or fraud.

Pinnel's Case

Part payment of a debt does not satisfy the whole obligation unless accompanied by extra consideration, such as early payment or payment in a different form.

Foakes v Beer

An agreement to forgo interest on a judgment debt upon part payment by instalments is unenforceable for lack of fresh consideration.

Re Selectmove

The practical benefit rule from Williams v Roffey does not apply to part payment of debt cases; Foakes v Beer remains binding.

Hughes v Metropolitan Railway

If a party leads another to believe strict legal rights will not be enforced and the other relies on it, the rights are suspended under promissory estoppel until reasonable notice is given.

Central London Property v High Trees

Promissory estoppel prevents a party from enforcing strict contractual rights during a period where a reliance promise (e.g. reduced rent) remains active.

Combe v Combe

Promissory estoppel functions exclusively as a defense ('shield') and cannot be used as an independent cause of action ('sword') to enforce promises.

Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd

A statement made by a party with specialist knowledge or expertise is treated as a contractual term rather than a mere representation.

Oscar Chess Ltd v Williams

A statement made by a party lacking expertise to a knowledgeable party is a mere representation rather than a contractual term.

Bannerman v White

A pre-contractual statement that is expressly made a critical condition of contracting by the buyer is considered a term of the contract.

Jacobs v Batavia & General Plantations Trust Ltd

Under the parol evidence rule, extrinsic evidence cannot be used to add to, vary, or contradict a written contract intended to be the final record of the agreement.

City and Westminster Properties v Mudd

Parol evidence is admissible to prove an oral assurance that forms an enforceable collateral contract overriding a inconsistent term in the main written contract.

Liverpool City Council v Irwin

Terms may be implied in law into contracts where necessary for the contractual relationship to function, such as maintaining common areas in high-rise tenancies.

The Moorcock

Under the business efficacy test, a term will be implied if necessary to give the contract practical efficacy and operation as intended by the parties.

Marks & Spencer v BNP Paribas

Terms will only be implied into a detailed contract if strictly necessary or obvious, not simply because the outcome is harsh or fair.

Poussard v Spiers

A obligation going to the root of a contract (e.g. performing on opening night) is a condition, the breach of which entitles termination.

Hong Kong Fir Shipping

Innominate terms are terms whose breach entitles termination only if the consequences deprive the innocent party of substantially the whole benefit of the contract.

Schuler v Wickman

Expressly labelling a contractual term as a 'condition' is not conclusive if strictly enforcing it would lead to unreasonable outcomes.

L'Estrange v F Graucob Ltd

A party is bound by the terms of a written contract they sign, regardless of whether they have read them, absent fraud or misrepresentation.

Curtis v Chemical Cleaning & Dyeing Co

Misrepresenting the scope of an exclusion clause prevents the party relying on it from incorporating or enforcing the excluded terms.

Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd

Particularly onerous or unusual terms require explicit, clear, and prominent notice to be incorporated into an unsigned contract.

Olley v Marlborough Court Hotel

Terms or exclusion notices displayed after contract formation cannot be incorporated into the contract.

Thornton v Shoe Lane Parking Ltd

In automated transactions, terms must be brought to the customer's attention prior to or at the moment the contract is formed (e.g. before ticket issuance).

Chapelton v Barry Urban District Council

An exclusion clause printed on a document that appears to be a mere receipt (e.g. a deckchair ticket) is not incorporated into the contract.

Hollier v Rambler Motors (AMC) Ltd

A small number of transactions over several years (e.g. 3 or 4 times) does not establish a regular course of dealing sufficient to incorporate exclusion clauses.

Director General of Fair Trading v First National Bank

Unfairness in consumer contracts involves a lack of good faith and significant imbalance; core contract terms are interpreted narrowly.

Office of Fair Trading v Abbey National plc

Bank overdraft charges were classified as core price terms and were immune from fairness review under consumer legislation provided they were transparent.