Week 4 - Contract law (invalid contracts)

Shroeder Music v Macaulay

facts

• Unknown songwriter assigns full copyright to Music publishers for his musical

  compositions during a 5-year term

• Publisher no obligation to publicize + right to termination & assignment.

• Songwriter no payment unless published + no right to termination & assignment

question

• is this contract contrary to public policy?

decision

• Public policy = everyone free to earn a livelihood to the extent of his particular abilities and right to exercise any lawful activity he chooses

• contract is invalid bevause of public policy

• While some restrictions on trade are acceptable, oppressive and unnecessary restrictions that create a total imbalance of power must be justified

• Because this contract was completely one-sided, the future, unperformed part of the contract was struck down. (Past performance remained intact).

Surrogate motherhood

facts

• a contract where woman conceives a baby with view to abandon it on its birth

Issue

• violates public policy principles = inalianability of human body and personal status

• civil code = private agreements cannot contravene public orders and good morals

• surrogate contract not enforceable

• surrogate contract is seen as sales contract, but it could also be a service contract

what are the interests involved in the surrogate mother case?

• surrogate mother = right to physical integrity and self determination

• parents = rights to respect family and private life

• child = best interests of the child

Davis Contractors v Fareham

facts

• contract of construction entails 78 houses in 8 months

• however the construction company could not find enough workforce

• since this was after WW2, there was a national shortage of skilled labor and building materials

• therefore, instead of 8 months it took 22 months, which had built up more costs

question

• was the contract frustrated due to delay?

solution

• Frustration = when the law recognises there is a change of the fundamental basis of transaction (radically different).

• Not due to inconvenience hardship or material loss but change in significance of obligation

• Hence = not a case of frustration

Bad Harvest case

facts

• contract of sugar beet seeds sale

• 20kg per year

• 3rd year not the agreed upon amount because of drought

question

• does plaintiff have the right to performance and damages?

solution

• Supreme court denied the view that the defendant should get substitute seeds and provide it to seller

• Defendant cannot be required to do more than can reasonably perform, in accordance good faith principle & exceptional circumstances

• Outcome = seller released due to impossibility & no remedy for buyer

EDF strike

facts:

• Contract of electricity supply interrupted due to large-scale strike action

question:

• Is the strike a force majeure?

decision:

• Usually, strike of own workforce is internal event and not force majeure EXCEPT when it affects public as a whole

• EDF could not foresee or avert strikes of its employee, thus they could not overcome the problems associated with it

• Unable to forbid participation in strike

• Unable to decide measure (satisfy claim of workers due to government control wages)

• Unable to recruit well-qualified temporary staff sufficiently

• Outcome = Constitutes as force majeure