English Legal System Study Guide
Revision Notes for the English Legal System
Introduction
These slides form the basis of revision notes for students.
Content will be examined during the assessment.
PowerPoint contains extensive information including slide content and notes section.
Additional notes are encouraged to facilitate understanding.
Learning Outcomes
Outcome 1: Demonstrate a clear understanding of the English Legal System.
Outcome 2: Identify the basic legal framework for:
Contract law
Law of negligence
Law on occupiers' liability
Employment law
Law on discrimination in the workplace.
Outcome 3: Conduct basic legal research and apply relevant legal principles in contractual and business-related scenarios.
Assessment format: MCQ exam comprising 50 questions on campus.
Students are encouraged to book a WASS appointment for academic support if needed.
Aston Business School
Location: Birmingham, UK
Week Four Focus: Contract Law
Topics include: Consideration, terms, exclusion, and limitation clauses.
Accreditation: EFMD, AACSB, EQUIS, AMBA.
Section One: Consideration
Objectives
Define consideration.
Recognize where valid consideration exists.
Appreciate the exceptions to the rules governing valid consideration.
Overview of Consideration
Definition: Consideration consists of something of value which is exchanged between parties; it can be a right, interest, profit, or benefit for one party, or a detriment, loss, or responsibility for the other (Currie v Misa, 1875).
Importance: It establishes the enforceability of a contract; without consideration, a contract may be unenforceable.
Examples of Consideration
Example Scenario:
John runs a car dealership.
Bert agrees to buy a car for £10,000, and John agrees to deliver the car by a specified date. This exchange forms valid consideration.
If John simply promises to give Bert the car with no exchange, there’s no consideration and thus, the promise is unenforceable (gratuitous promise).
Types of Consideration
Executory Consideration:
A binding contract formed through the exchange of promises in the future.
Example: John promises to deliver a car, and Bert promises to pay £10,000 at delivery.
Breach occurs if John fails to deliver.
Executed Consideration:
Arises when a party has completed their obligation under the contract before the other party's promise to pay becomes enforceable.
Rules Relating to Consideration
Consideration must not be past:
Defined as not permissible if it occurs prior to a promise.
Example: If you offer payment after a service was rendered (e.g., clearing snow), it’s unenforceable as no prior agreement existed.
Leading Case: Re McArdle (1951) demonstrated this rule where past work was not considered valid as consideration.
Consideration must move from the promisee:
Only parties who provided consideration can enforce the contract. Example:
If Andrew promises Ben £1,000 for giving Chris his car, Chris cannot enforce this promise as he has not contributed consideration.
Consideration must be sufficient but need not be adequate:
Meaning it must hold some value, but not necessarily equivalent value.
Example: In Thomas v Thomas (1842), a promise to pay £1 for lifetime occupancy was held to be sufficient consideration.
Rule in Pinnel’s Case:
Part payment of a debt is not good consideration; full payment is required unless something extra is given in satisfaction of the original debt.
Example: If Lucy owes Tilly £50 but offers only £25 as part payment, Tilly can still demand the other £25.
Section Two: Terms
Objectives
Differentiate between express and implied terms.
Distinguish between conditions, warranties, and innominate terms.
Types of Contractual Terms
Express Terms:
Terms agreed upon through spoken or written communication.
For example: "Molly offers her bicycle for £20."
Implied Terms:
Not explicitly stated but inferred from law, statute, or custom.
Sources include:
Common Law: Courts imply terms to protect parties; often seen in employment contracts.
Trade Custom and Practice: Courts recognize and enforce terms established by trade practices, illustrated in Hutton v Warren (1836).
Statutes: Certain contracts (e.g., Consumer Rights Act 2015) imply rights for consumers.
Importance of Classifying Terms
Conditions: Major terms that if breached allow the non-breaching party to terminate the contract and seek damages.
E.g., delivery of a specific car.
Warranties: Minor terms that, if breached, allow for damages but do not allow for termination.
E.g., a performer’s missed rehearsals not causing a cancellation of the show (Bettini v Gye, 1876).
Innominate Terms: Terms that are evaluated based on the breach's consequences.
For instance, a ship's relative downtime (Hong Kong Fir Shipping v Kawasaki Kisen Kaisha, 1962).
Section Three: Exclusion and Limitation Clauses
Objectives
Explain the purpose of exclusion and limitation clauses, along with the governing rules.
Exclusion vs. Limitation Clauses
Understanding how service providers (e.g., holiday firms, car parks) utilize these clauses in contracts.
Validity Criteria for Clauses
Incorporation of Clause:
Parties must have reasonable notice of clause inclusion prior to or at the contract time.
Case examples demonstrate improper incorporation due to timing issues.
Olley v Marlborough Court Hotel (1949): Exclusion clause held ineffective as notice was given after the contract was established.
Thornton v Shoe Lane Parking (1971): Contract made before the notice was dispensed therefore not incorporated.
Sufficiency of Notice:
Reasonable efforts must ensure clarity regarding onerous terms, e.g. Interfoto Picture Library v Stiletto Productions (1988).
Clarity of Clauses:
Clauses should be clear and unambiguous; otherwise, they may be construed against the offeror (contra proferentem rule).
Summary
Exemption clauses must be thoroughly articulated and cannot contain ambiguous language; otherwise, courts may limit their effectiveness against the claiming party.