Company and Business Law: Must-Know Case Law (Gist)

Carlill v Carbolic Smoke Ball Co [1893]

Advertisement promised £100 to anyone who used the smoke ball properly and still got influenza.
A clear and serious advertisement can be a binding unilateral offer accepted by performance.

Harvey v Facey [1893]

Reply to a telegram stated only the lowest price for the property.
A statement of the lowest price is not, by itself, an offer.

Pharmaceutical Society of Great Britain v Boots Cash Chemist [1953]

Customer selected goods from self-service shelves before going to the till.
Goods on display are usually invitations to treat, and the customer makes the offer at checkout.

Hyde v Wrench [1840]

Buyer responded to a £1000 offer for land by offering £950 instead.
A counter-offer terminates the original offer.

Stevenson v McLean [1880]

Buyer asked whether delivery terms could be adjusted before later accepting the original offer.
A mere enquiry does not amount to a counter-offer and does not end the offer.

Byrne v Van Tienhoven [1880]

Offeror posted a revocation, but the offeree accepted before the revocation arrived.
Revocation is effective only when communicated to the offeree.

Entores v Miles Far East [1955]

Acceptance was sent by telex between parties in different countries.
Acceptance by instantaneous communication is effective when received.

Adams v Lindsell [1818]

Acceptance letter was posted promptly but reached the offeror later than expected.
Postal acceptance is effective when posted rather than when received.

Butler Machine Tool v Ex-Cell-O [1979]

Buyer and seller exchanged conflicting standard forms during negotiations.
Battle of the forms disputes are resolved by ordinary offer-and-acceptance principles.

Roscorla v Thomas [1842]

Promise given that horse was free from vice after the sale.
Past consideration is not good consideration.

Chappell v Nestlé [1960]

Customers had to send chocolate wrappers along with money to obtain records.
Consideration need only be sufficient, not adequate.

Stilk v Myrick [1809]

Sailors were promised extra wages for completing duties they were already bound to perform.
Performing an existing contractual duty is generally not fresh consideration.

Williams v Roffey Bros [1990]

Contractor promised extra payment to a subcontractor to avoid delay and penalties.
A practical benefit can amount to consideration for a promise to pay more if there is no duress.

Balfour v Balfour [1919]

Husband promised to pay his wife a monthly allowance while they were living apart.
Domestic agreements are presumed not to be intended as legally binding.

Jones v Padavatton [1969]

Mother agreed to support her daughter while she studied for the Bar in England.
A family arrangement will not be enforceable where legal intention is absent.

Blue v Ashley [2017]

Alleged £15 million bonus promise was made during pub conversation and banter.
Even in a business context, objective intention to create legal relations may be absent.

Central London Property v High Trees [1947]

Landlord agreed during wartime to accept reduced rent from the tenant.
Promissory estoppel can prevent a party from insisting on strict legal rights after a clear relied-on promise.

Poussard v Spiers [1876]

Singer missed the opening performances of an opera production due to illness.
Breach of a condition entitles the innocent party to terminate the contract.

Bettini v Gye [1876]

Singer missed rehearsals but remained available for the main performances.
Breach of a warranty gives damages only and does not justify termination.

Hong Kong Fir Shipping v Kawasaki [1962]

Chartered ship was unavailable for months because of poor condition and incompetent crew.
An innominate term is classified by the seriousness of the consequences of breach.

The Moorcock [1889]

Ship was damaged when it rested on an unsafe riverbed beside the defendant’s jetty.
A term may be implied where necessary to give the contract business efficacy.

Chapelton v Barry UDC [1940]

Injured deckchair hirer was given a ticket containing an exclusion clause on the back.
An exclusion clause is not incorporated if it appears only on a non-contractual receipt-like document.

Thornton v Shoe Lane Parking [1971]

Driver received a ticket from an automatic machine before seeing detailed exclusion terms inside the car park.
Onerous terms must be brought to notice before or at the moment of contracting.

Interfoto v Stiletto [1989]

Delivery note imposed a very high holding fee in small print for overdue transparencies.
Especially onerous terms require especially clear notice to be incorporated.

White & Carter v McGregor [1962]

One party tried to cancel an advertising contract immediately after it was made.
Repudiation does not automatically end a contract because the innocent party may affirm it.

Hadley v Baxendale [1854]

Delay in delivering a broken mill shaft kept the mill out of operation longer than expected.
Contract damages are limited to losses arising naturally or within the parties’ reasonable contemplation.

Victoria Laundry v Newman Industries [1949]

Late delivery of a boiler caused ordinary profit loss and alleged exceptional profit loss.
Ordinary foreseeable profit loss is recoverable, but unusual profit loss may be too remote.

Ruxley Electronics v Forsyth [1996]

Swimming pool was built shallower than specified but was still usable.
Damages should reflect real loss and avoid disproportionate economic waste.

ParkingEye v Beavis [2015]

Motorist overstayed in a free car park and was charged £85 under posted terms.
A clause is not a penalty if it protects a legitimate interest and is not exorbitant.

The Achilleas [2008]

Late redelivery of a ship exposed owners to losses on a follow-on charter arrangement.
Remoteness may depend on the scope of liability the defendant can reasonably be taken to have assumed.

Donoghue v Stevenson [1932]

Consumer became ill after drinking ginger beer said to contain a decomposed snail.
Manufacturers owe a duty of care to consumers closely and directly affected by their products.

Bolton v Stone [1951]

Cricket ball was hit out of the ground and injured a passer-by.
A very small and unlikely risk may not amount to negligence.

Paris v Stepney Borough Council [1951]

One-eyed worker lost his remaining good eye after not being provided with goggles.
The greater the potential seriousness of harm, the greater the precautions reasonable care may require.

Barnett v Chelsea & Kensington Hospital [1969]

Patient was negligently sent away from hospital after drinking poisoned tea and later died.
Negligence is not actionable without factual causation under the but-for test.

The Wagon Mound No 1 [1961]

Oil spilled into a harbour later ignited and caused fire damage.
In negligence, only foreseeable kinds of damage are recoverable.

Hedley Byrne v Heller [1963]

Bank gave a careless credit reference that was relied on in business dealings.
A negligent statement can cause liability for pure economic loss where there is reliance and assumption of responsibility.

Law Society of Ireland v KPMG Peat Marwick

Accountants gave assurances on a solicitor’s accounts knowing the Law Society would rely on them.
Professionals may owe a duty where they know a specific person or body will rely on their statement.

Bolam v Friern Hospital [1957]

Patient alleged negligent medical treatment after suffering injury during therapy.
A professional is usually not negligent if acting in accordance with a responsible body of professional opinion.

Dunne v National Maternity Hospital [1989]

Irish medical negligence claim required the court to define the professional standard of care.
Irish professional negligence asks whether no similarly qualified professional using ordinary care would have acted that way.

Bolitho [1997]

Doctors argued their decision was supported by expert opinion after a child suffered catastrophic injury.
Professional opinion must also be logical and defensible before the court will accept it.

Reckitt & Colman v Borden [1990]

Defendant marketed lemon juice in packaging similar to the claimant’s distinctive lemon-shaped container.
Passing off requires goodwill, misrepresentation, and damage.

Falcon Travel v Owners Abroad [1991]

Two travel businesses used similar Falcon branding and caused public confusion.
Public confusion between traders can ground passing off even where direct loss is hard to prove.

Fenty v Arcadia Topshop [2015]

Retailer sold clothing using Rihanna’s image in a way said to imply endorsement.
Passing off can protect against false celebrity endorsement.

Irvine v Talksport [2002]

Radio station used Eddie Irvine’s image in a way suggesting commercial endorsement.
A false suggestion of celebrity endorsement can amount to passing off.

Cox v Hickman [1860]

Creditors received profits under a business arrangement and were said to be partners.
Sharing profits alone does not automatically make a person a partner.

Hudgell Yeates v Watson [1978]

Continuing the partnership business became unlawful because of one partner’s professional status problem.
A partnership may end where it becomes unlawful or impossible to continue the agreed business.

Salomon v A Salomon & Co Ltd [1897]

Business owner incorporated his company and creditors argued it was really just him.
A duly incorporated company is a separate legal person distinct from its members.

Macaura v Northern Assurance [1925]

Shareholder insured timber that was actually owned by his company.
Company assets belong to the company and not to its shareholders.

Gilford Motor v Horne [1933]

Former employee used a company to evade a restrictive covenant and solicit customers.
The corporate veil may be pierced where a company is used as a façade to evade an existing obligation.

Jones v Lipman [1962]

Seller transferred land to a company to avoid performing a prior sale contract.
A company used as a mask to avoid a pre-existing duty will not block relief.

Adams v Cape Industries [1990]

Claimant sought to treat a corporate group as one entity for liability purposes.
Courts rarely pierce the corporate veil merely because companies are part of the same group.

Lee v Lee’s Air Farming [1961]

Controller of a company also worked for it as a pilot and died in a crash.
Separate personality is real enough for a company to employ its own controller.

Borland’s Trustee v Steel Bros [1901]

Court had to explain the legal nature of a company share.
A share is a bundle of legal rights and obligations rather than just a sum of money.

Re Yorkshire Woolcombers [1903]

Security was taken over a shifting class of company assets used in day-to-day business.
A floating charge hovers over changing assets until crystallisation.

Illingworth v Houldsworth [1904]

Court examined whether security was floating where the company could keep dealing with the assets.
A charge is floating when the company remains free to deal with the assets until crystallisation.

Re Brumark Agnew v IRC [2001]

Security was labelled fixed even though the company retained significant control over the assets.
The real control over assets, not the label used, decides whether a charge is fixed or floating.

Hely-Hutchinson v Brayhead [1968]

Chairman acted for the company without formal board approval over a period of time.
Actual authority can be implied from a person’s role and the way the company lets them act.

Freeman & Lockyer v Buckhurst Park [1964]

Company allowed a person to act as managing director and third parties dealt with him on that basis.
A company may be bound where it holds someone out as having authority and a third party relies on that appearance.

Aberdeen Railway v Blaikie Bros [1854]

Same individual stood on both sides of a contract between two companies.
Directors must avoid conflicts of interest and cannot sit on both sides of a deal.

Cook v Deeks [1916]

Directors diverted a contract opportunity away from the company and took it for themselves.
Directors cannot divert company opportunities to themselves for personal profit.

Howard Smith v Ampol [1974]

Directors issued shares during a takeover struggle for control of the company.
Directors must use their powers for the proper purpose for which those powers were conferred.

Regal Hastings v Gulliver [1942]

Directors personally profited from an opportunity connected with company business.
Fiduciaries must account for profits made because of their office.

Re Tuskar Resources

Company sought examinership protection on the basis that it could be rescued.
Examinership requires a credible showing that the company has a reasonable prospect of survival.

Re Vantive Holdings

Company advanced rescue claims that lacked sufficient objective support.
Optimistic assertion is not enough for examinership without objective evidence of survival.

Ebrahimi v Westbourne Galleries [1973]

Breakdown in trust occurred in a small company run like a partnership.
A quasi-partnership company may be wound up where mutual confidence has broken down.

Re Vehicle Buildings & Insulations [1986]

Equal shareholders and directors were deadlocked in running the company.
Management deadlock can justify winding up on the just and equitable ground.

Re Traffic Group [2007]

Court considered whether a rescue proposal was realistic enough to justify protection.
Rescue protection depends on a workable and commercially credible plan.

Henry Denny v Minister for Social Welfare [1998]

Worker’s status was disputed for social welfare purposes.
Employment status is determined by the overall relationship rather than any single label or test.

Minister for Agriculture v Barry [2009]

Status of veterinary inspectors was disputed under Irish law.
Irish courts assess employment status by the total reality of the working arrangement.

Autoclenz v Belcher [2011]

Written contracts described workers as self-employed, but the reality of the work was different.
Courts look past written labels to the real working relationship in employment status disputes.

Aslam v Uber [2021]

Uber drivers were described contractually as independent contractors rather than workers.
Gig-economy status turns on control and dependency rather than contractual drafting.

Ready Mixed Concrete [1968]

Court had to decide whether drivers worked under contracts of service or not.
The classic indicators of employment are service, control, and terms consistent with a contract of service.