1
Q
OFFER scenario (Carlill v Carbolic Smoke Ball (1893)): Clear advertisement with definite promise = offer. What is the legal result?
A
Clear advertisement with definite promise = offer; performance = acceptance. An advertisement can be an offer, not just an invitation to treat, if it shows clear intention to be bound. A unilateral contract is accepted by performing the conditions, not by communicating acceptance.
2
Q
OFFER twist (Carlill v Carbolic Smoke Ball (1893)): Change one key fact—what element is crucial for the rule in “Clear advertisement with definite promise = offer” to apply?
A
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
3
Q
ACCEPTANCE scenario (Brogden v Metropolitan Railway (1877)): Contract can arise by conduct, nor formal signature: where parties act upon the terms of a…. What is the legal result?
A
Contract can arise by conduct, nor formal signature: where parties act upon the terms of a draft agreement as though it were binding, their conduct constitutes acceptance, even without formal signature.
4
Q
ACCEPTANCE twist (Brogden v Metropolitan Railway (1877)): Change one key fact—what element is crucial for the rule in “Contract can arise by conduct, nor formal signature: where parties act upon the terms of a…” to apply?
A
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
5
Q
OFFER scenario (Household Fire Insurance Co v Grant (1879)): (Postal Rule) When post is an agreed or reasonable method of communication, acceptance takes effect on…. What is the legal result?
A
(Postal Rule) When post is an agreed or reasonable method of communication, acceptance takes effect on posting, not on receipt - unless the offer requires actual notice.
6
Q
OFFER twist (Household Fire Insurance Co v Grant (1879)): Change one key fact—what element is crucial for the rule in “(Postal Rule) When post is an agreed or reasonable method of communication, acceptance takes effect on…” to apply?
A
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
7
Q
OFFER scenario (Howell Securities v Hughes (1974)): The postal rule does not apply when: ○ The offer requires actual notice or ○ Using…. What is the legal result?
A
The postal rule does not apply when: ○ The offer requires actual notice or ○ Using post would be unreasonable. It Matters: Holwell doesn’t create a new exception - it returns to the default rule of actual communication. Offerors can exclude the postal rule with clear wording In modern communications, acceptance is effective on receipt.
8
Q
OFFER twist (Howell Securities v Hughes (1974)): Change one key fact—what element is crucial for the rule in “The postal rule does not apply when: ○ The offer requires actual notice or ○ Using…” to apply?
A
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
9
Q
OFFER scenario (Butler Machine Tool v Ex): [[PAGE 31]] “Last shot” rule applies in counter-offer situations: Where parties exchange forms with conflicting terms,…. What is the legal result?
A
[[PAGE 31]] “Last shot” rule applies in counter-offer situations: Where parties exchange forms with conflicting terms, the contract is formed on the terms of the last counter-offer accepted. A counter-offer destroys the original offer, and acceptance must be judged objectively.
10
Q
OFFER twist (Butler Machine Tool v Ex): Change one key fact—what element is crucial for the rule in “[[PAGE 31]] “Last shot” rule applies in counter-offer situations: Where parties exchange forms with conflicting terms,…” to apply?
A
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
11
Q
MISTAKE scenario (Raffles v Wichelhaus 1864): A valid contract requires agreement on the same thing on the same sense. What is the legal result?
A
A valid contract requires agreement on the same thing on the same sense. Where each side has a reasonable but different understanding, there is no true agreement.
12
Q
MISTAKE twist (Raffles v Wichelhaus 1864): Change one key fact—what element is crucial for the rule in “A valid contract requires agreement on the same thing on the same sense” to apply?
A
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
13
Q
MISTAKE scenario (Scriven Bros v Hindley 1913): (Rule): If both parties are mistaken about the subject of the contract, there is no “meeting…. What is the legal result?
A
(Rule): If both parties are mistaken about the subject of the contract, there is no “meeting of the minds” The contract is void - it never existed. Shows that even in business, a fundamental misunderstanding means no valid contract.
14
Q
MISTAKE twist (Scriven Bros v Hindley 1913): Change one key fact—what element is crucial for the rule in “(Rule): If both parties are mistaken about the subject of the contract, there is no “meeting…” to apply?
A
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
15
Q
MISTAKE scenario (Lewis v Averay 1972): In face-to-face dealings, a mistake as to identity usually makes the contract voidable, not void…. What is the legal result?
A
In face-to-face dealings, a mistake as to identity usually makes the contract voidable, not void. Title can therefore pass to an innocent third party unless the contract is rescinded in time.
16
Q
MISTAKE twist (Lewis v Averay 1972): Change one key fact—what element is crucial for the rule in “In face-to-face dealings, a mistake as to identity usually makes the contract voidable, not void…” to apply?
A
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
17
Q
MISTAKE scenario (Shogun Finance v Hudson 2003): Where a contract is made in writing with a specific named person, a mistake as to…. What is the legal result?
A
Where a contract is made in writing with a specific named person, a mistake as to identity can render the contract void, preventing title from passing. This contrasts with face-to-face contracts (e.g. Lewis v Averay), which are usually voidable, not void.
18
Q
MISTAKE twist (Shogun Finance v Hudson 2003): Change one key fact—what element is crucial for the rule in “Where a contract is made in writing with a specific named person, a mistake as to…” to apply?
A
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
19
Q
GENERAL PRINCIPLE scenario (Walford v Miles (1992)): Agreements to negotiate (even in good faith) are not enforceable under English law. What is the legal result?
A
Agreements to negotiate (even in good faith) are not enforceable under English law. However, a proper lock-out agreement (an agreement not to negotiate with others for a fixed period) can be enforceable if sufficiently certain.
20
Q
GENERAL PRINCIPLE twist (Walford v Miles (1992)): Change one key fact—what element is crucial for the rule in “Agreements to negotiate (even in good faith) are not enforceable under English law” to apply?
A
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
21
Q
GENERAL PRINCIPLE scenario (British Steel Corp v Cleveland Bridge & Engineering Co 1984): When work is done at another party’s request in anticipation of a contract that never materialises,…. What is the legal result?
A
When work is done at another party’s request in anticipation of a contract that never materialises, the performing party may recover a reasonable sum (quantum meruit), even though no contract existed.
22
Q
GENERAL PRINCIPLE twist (British Steel Corp v Cleveland Bridge & Engineering Co 1984): Change one key fact—what element is crucial for the rule in “When work is done at another party’s request in anticipation of a contract that never materialises,…” to apply?
A
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
23
Q
GENERAL PRINCIPLE scenario (RTS Flexible Systems v Muller 2010): A contract can be formed by conduct, even where parties originally intended a formal written contract,…. What is the legal result?
A
A contract can be formed by conduct, even where parties originally intended a formal written contract, if their actions objectively show agreement on essential terms. The absence of a signed document is not decisive.
24
Q
GENERAL PRINCIPLE twist (RTS Flexible Systems v Muller 2010): Change one key fact—what element is crucial for the rule in “A contract can be formed by conduct, even where parties originally intended a formal written contract,…” to apply?
A
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
25
ACCEPTANCE scenario (Blackpool & Fylde Aero Club v Blackpool Council 1990): An invitation to tender can give rise to a collateral contract obliging the inviter to consider…. What is the legal result?
An invitation to tender can give rise to a collateral contract obliging the inviter to consider all conforming tenders submitted on time, even if there is no obligation to accept any tender.
26
ACCEPTANCE twist (Blackpool & Fylde Aero Club v Blackpool Council 1990): Change one key fact—what element is crucial for the rule in “An invitation to tender can give rise to a collateral contract obliging the inviter to consider…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
27
GENERAL PRINCIPLE scenario (Hely): Actual authority may be expressed (formally given) or implied (arising from the company’s conduct and the…. What is the legal result?
Actual authority may be expressed (formally given) or implied (arising from the company’s conduct and the agent’s role) [[PAGE 38]] A person who acts as managing director, with the board’s knowledge and consent, has implied actual authority to make usual business decisions.
28
GENERAL PRINCIPLE twist (Hely): Change one key fact—what element is crucial for the rule in “Actual authority may be expressed (formally given) or implied (arising from the company’s conduct and the…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
29
GENERAL PRINCIPLE scenario (Watteau v Fenwick 1893): A principal is liable for acts that are usual for an agent’s role, even if: ○…. What is the legal result?
A principal is liable for acts that are usual for an agent’s role, even if: ○ The principal is undisclosed or ○ The agent disobeys private instructions Watteau’s ‘usual authority’ rule is rarely followed today. English law now requires representation by the principal before liability can arise (Freeman & Lockyer) Ratification - Meaning and Effect…
30
GENERAL PRINCIPLE twist (Watteau v Fenwick 1893): Change one key fact—what element is crucial for the rule in “A principal is liable for acts that are usual for an agent’s role, even if: ○…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
31
GENERAL PRINCIPLE scenario (Freeman & Lockyer v Buckhurst Park 1964): A company is bound if: ○ It represents or allows someone to appear authorised. What is the legal result?
A company is bound if: ○ It represents or allows someone to appear authorised; ○ A third party relies on that appearance; ○ The third party acts in good faith Actual vs Apparent Authority Business Takeaway Companies must control who acts on their behalf Third parties are protected if they deal with someone who appears…
32
GENERAL PRINCIPLE twist (Freeman & Lockyer v Buckhurst Park 1964): Change one key fact—what element is crucial for the rule in “A company is bound if: ○ It represents or allows someone to appear authorised” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
33
GENERAL PRINCIPLE scenario (Royal British Bank v Turquand 1856): People dealing in good faith with a company can assume regularity in internal management, unless there…. What is the legal result?
People dealing in good faith with a company can assume regularity in internal management, unless there is something obviously suspicious. Still fundamental in modern company and agency law. Types of Authority in Agency Law
34
GENERAL PRINCIPLE twist (Royal British Bank v Turquand 1856): Change one key fact—what element is crucial for the rule in “People dealing in good faith with a company can assume regularity in internal management, unless there…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
35
CONSIDERATION scenario (Chappel v Nestlé 1960): [[PAGE 47]] Consideration does not need to be adequate, but it must be sufficient. What is the legal result?
[[PAGE 47]] Consideration does not need to be adequate, but it must be sufficient. Something with no monetary value can still be valid consideration if it is bargained for. Consideration Must Move From the Promisee The promisee must provide value in exchange Case: Tweddle v Atkinson: Groom provided no consideration - no enforcement Also foundational…
36
CONSIDERATION twist (Chappel v Nestlé 1960): Change one key fact—what element is crucial for the rule in “[[PAGE 47]] Consideration does not need to be adequate, but it must be sufficient” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
37
CONSIDERATION scenario (Tweddle v Atkinson 1861): Only a party to a contract who has provided consideration can sue on it. What is the legal result?
Only a party to a contract who has provided consideration can sue on it. A third party cannot enforce a contract made for their benefit.
38
CONSIDERATION twist (Tweddle v Atkinson 1861): Change one key fact—what element is crucial for the rule in “Only a party to a contract who has provided consideration can sue on it” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
39
CONSIDERATION scenario (Pao On v Yiu Long 1980): An act done before a promise can be valid consideration if: It was done at the…. What is the legal result?
An act done before a promise can be valid consideration if: It was done at the promisor’s request There was an understanding it would be rewarded The promise would have been binding if made earlier Pre-Existing Duty - The Classical Rule Doing what you already must do does not equal new consideration. Case: Stilky v…
40
CONSIDERATION twist (Pao On v Yiu Long 1980): Change one key fact—what element is crucial for the rule in “An act done before a promise can be valid consideration if: It was done at the…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
41
CONSIDERATION scenario (Ward v Byham 1956): Performance of an existing legal duty can be valid consideration if the promisee goes beyond the…. What is the legal result?
Performance of an existing legal duty can be valid consideration if the promisee goes beyond the minimum required by law.
42
CONSIDERATION twist (Ward v Byham 1956): Change one key fact—what element is crucial for the rule in “Performance of an existing legal duty can be valid consideration if the promisee goes beyond the…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
43
CONSIDERATION scenario (Glasbrook Bros v Glamorgan 1925): Performance of a public duty can be valid consideration if the promisee does more than their…. What is the legal result?
Performance of a public duty can be valid consideration if the promisee does more than their legal obligation requires.
44
CONSIDERATION twist (Glasbrook Bros v Glamorgan 1925): Change one key fact—what element is crucial for the rule in “Performance of a public duty can be valid consideration if the promisee does more than their…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
45
CONSIDERATION scenario (Williams v Roffey Bros & Nicholls): Where a party promises extra payment to secure performance of an existing contractual duty, that promise…. What is the legal result?
Where a party promises extra payment to secure performance of an existing contractual duty, that promise is enforceable if: 1. The promisor obtains a practical benefit, and 2. The promise is not given under economic duress or fraud.
46
CONSIDERATION twist (Williams v Roffey Bros & Nicholls): Change one key fact—what element is crucial for the rule in “Where a party promises extra payment to secure performance of an existing contractual duty, that promise…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
47
CONSIDERATION scenario (Foakes v Beer 1884): Part-payment of a debt is not good consideration for a promise to forgo the balance, unless…. What is the legal result?
Part-payment of a debt is not good consideration for a promise to forgo the balance, unless fresh consideration is provided. Re Selectmove 1995 - Part-Payment of Debt & Practical Benefit
48
CONSIDERATION twist (Foakes v Beer 1884): Change one key fact—what element is crucial for the rule in “Part-payment of a debt is not good consideration for a promise to forgo the balance, unless…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
49
ACCEPTANCE scenario (Foakes v Beer 1884): The practical benefit doctrine does not apply to part-payment of debts. What is the legal result?
The practical benefit doctrine does not apply to part-payment of debts. Agreements to accept less than the full debt are unenforceable without fresh consideration, unless an established exception applies
50
ACCEPTANCE twist (Foakes v Beer 1884): Change one key fact—what element is crucial for the rule in “The practical benefit doctrine does not apply to part-payment of debts” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
51
CONSIDERATION scenario (sufficient consideration under Williams v Roffey Bros.): A No Oral Modification clause does not necessarily prevent oral variations. What is the legal result?
A No Oral Modification clause does not necessarily prevent oral variations. A contract may be orally varied if the parties clearly agree, and consideration exists. Practical benefit can amount to valid consideration in contract variations.
52
CONSIDERATION twist (sufficient consideration under Williams v Roffey Bros.): Change one key fact—what element is crucial for the rule in “A No Oral Modification clause does not necessarily prevent oral variations” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
53
ESTOPPEL scenario (MWB v Rock Advertising 2018): No Oral Modification clauses are generally enforceable. What is the legal result?
No Oral Modification clauses are generally enforceable. Contracts containing such clauses cannot be varied orally unless the required formalities are met. (Though estoppel may apply in exceptional cases.) Re selectmove - No Extension [[PAGE 53]] Court: cannot use Roffey to circumvent Foakes Only supreme court can change the rule.
54
ESTOPPEL twist (MWB v Rock Advertising 2018): Change one key fact—what element is crucial for the rule in “No Oral Modification clauses are generally enforceable” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
55
MISTAKE scenario (Woodhouse v Nigerian Produce Marketing 1972): Promissory estoppel cannot arise from a promise made under mistake. What is the legal result?
Promissory estoppel cannot arise from a promise made under mistake. The promise must be clear, deliberate, and intended to be relied upon.
56
MISTAKE twist (Woodhouse v Nigerian Produce Marketing 1972): Change one key fact—what element is crucial for the rule in “Promissory estoppel cannot arise from a promise made under mistake” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
57
ESTOPPEL scenario (Amalgamated Investment v Texas Commerce International Bank 1982): (Estoppel by Convention): Where parties to a transaction share and act upon a common assumption (of…. What is the legal result?
(Estoppel by Convention): Where parties to a transaction share and act upon a common assumption (of fact or law), neither may later deny that assumption if it would be unjust or unconscionable to do so.
58
ESTOPPEL twist (Amalgamated Investment v Texas Commerce International Bank 1982): Change one key fact—what element is crucial for the rule in “(Estoppel by Convention): Where parties to a transaction share and act upon a common assumption (of…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
59
ESTOPPEL scenario (Hughes v Metropolitan Railway 1877): (Promissory Estoppel): Where one party, by words or conduct, leads another to believe that strict contractual…. What is the legal result?
(Promissory Estoppel): Where one party, by words or conduct, leads another to believe that strict contractual rights will not be enforced, and the other party relies on that belief, the promisor may be estopped from enforcing those rights for that period. This case is the foundation of promissory estoppel, later developed in Central London
60
ESTOPPEL twist (Hughes v Metropolitan Railway 1877): Change one key fact—what element is crucial for the rule in “(Promissory Estoppel): Where one party, by words or conduct, leads another to believe that strict contractual…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
61
ESTOPPEL scenario (Central London Property Trust v High Trees House 1947): A party who promises not to enforce strict legal rights, intending the other to rely on…. What is the legal result?
A party who promises not to enforce strict legal rights, intending the other to rely on it, cannot later go back on that promise if it would be inequitable to do so. Promissory estoppel is a shield, not a sword (it cannot create a cause of action). Reliance Requirement Party must change their position Case;…
62
ESTOPPEL twist (Central London Property Trust v High Trees House 1947): Change one key fact—what element is crucial for the rule in “A party who promises not to enforce strict legal rights, intending the other to rely on…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
63
ACCEPTANCE scenario (D&C Builders v Rees 1966): Promissory estoppel cannot be used where the promise was obtained by duress or inequitable conduct…. What is the legal result?
Promissory estoppel cannot be used where the promise was obtained by duress or inequitable conduct. A debtor who pressures a creditor into accepting less cannot rely on estoppel to avoid paying the balance. The High Trees Principle Wartime rent reduction Tenant relied Landlord estopped from reclaiming arrears for that period Rights revived afterwards Demonstrates suspensory…
64
ACCEPTANCE twist (D&C Builders v Rees 1966): Change one key fact—what element is crucial for the rule in “Promissory estoppel cannot be used where the promise was obtained by duress or inequitable conduct…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
65
ACCEPTANCE scenario (Combe v Combe 1951): Promissory estoppel cannot create new rights or be used as a cause of action. What is the legal result?
Promissory estoppel cannot create new rights or be used as a cause of action. It can only operate as a defence to prevent enforcement of strict legal rights. Estoppel and Part-Payment of Debt Case: Collier v Wright Debtor relying on a promise to accept part payment may be protected Controversial: appears to soften Foakes v…
66
ACCEPTANCE twist (Combe v Combe 1951): Change one key fact—what element is crucial for the rule in “Promissory estoppel cannot create new rights or be used as a cause of action” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
67
ACCEPTANCE scenario (Collier v P & MJ Wright 2007): Promissory estoppel can operate to prevent a creditor from enforcing the balance of a debt where:…. What is the legal result?
Promissory estoppel can operate to prevent a creditor from enforcing the balance of a debt where: there is a clear promise to accept less, the debtor relies on that promise, and it would be inequitable to go back on it. Broader Estoppel Cases Crabb v Arun DC: Strong reliance - easement-like rights Baird v M&S:…
68
ACCEPTANCE twist (Collier v P & MJ Wright 2007): Change one key fact—what element is crucial for the rule in “Promissory estoppel can operate to prevent a creditor from enforcing the balance of a debt where:…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
69
ESTOPPEL scenario (Crabb v Arun District Council 1976): (Promissory / Proprietary Estoppel): Where one party makes a clear assurance intended to be relied upon,…. What is the legal result?
(Promissory / Proprietary Estoppel): Where one party makes a clear assurance intended to be relied upon, and the other relies on it to their detriment, the promisor may be estopped from acting inconsistently with that assurance. Estoppel can be used to defend or enforce equitable rights, particularly in land cases.
70
ESTOPPEL twist (Crabb v Arun District Council 1976): Change one key fact—what element is crucial for the rule in “(Promissory / Proprietary Estoppel): Where one party makes a clear assurance intended to be relied upon,…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
71
GENERAL PRINCIPLE scenario (Walford v Miles).): A long-standing commercial relationship does not automatically create an implied contract. What is the legal result?
A long-standing commercial relationship does not automatically create an implied contract. Courts will not imply contractual obligations that contradict the parties’ intention not to be bound. Agreements to negotiate in good faith are unenforceable unless clearly defined and certain.
72
GENERAL PRINCIPLE twist (Walford v Miles).): Change one key fact—what element is crucial for the rule in “A long-standing commercial relationship does not automatically create an implied contract” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
73
ESTOPPEL scenario (Waltons Stores v Maher 1988): Promissory estoppel can operate as a cause of action, not just a defence, where: One party…. What is the legal result?
Promissory estoppel can operate as a cause of action, not just a defence, where: One party induces or knowingly allows an assumption, The other party relies on it to their detriment, and It would be unconscionable to allow the first party to resile.
74
ESTOPPEL twist (Waltons Stores v Maher 1988): Change one key fact—what element is crucial for the rule in “Promissory estoppel can operate as a cause of action, not just a defence, where: One party…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
75
CONSIDERATION scenario (Commonwealth of Australia v Verwayen 1990): [[PAGE 60]] Promissory estoppel arises where: One party induces an assumption or expectation, The other party…. What is the legal result?
[[PAGE 60]] Promissory estoppel arises where: One party induces an assumption or expectation, The other party relies on it, Detriment would result if the promisor were allowed to go back, and It would be unconscionable to do so. Estoppel can restrain the exercise of legal rights, including by the state. Estoppel Summary Estoppel promotes fairness,…
76
CONSIDERATION twist (Commonwealth of Australia v Verwayen 1990): Change one key fact—what element is crucial for the rule in “[[PAGE 60]] Promissory estoppel arises where: One party induces an assumption or expectation, The other party…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
77
OFFER scenario (Principle #39): A properly drafted Himalaya clause can allow third parties to rely on contractual protections if: 1…. What is the legal result?
A properly drafted Himalaya clause can allow third parties to rely on contractual protections if: 1. The contract clearly intends to benefit the third party 2. The carrier acts as agent for the third party 3.
78
OFFER twist (Principle #39): Change one key fact—what element is crucial for the rule in “A properly drafted Himalaya clause can allow third parties to rely on contractual protections if: 1…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
79
THIRD-PARTY RIGHTS scenario (White v Jones): A professional (such as a solicitor) may owe a duty of care in negligence to a…. What is the legal result?
A professional (such as a solicitor) may owe a duty of care in negligence to a third party who is an intended beneficiary, even without a contract. This case creates a narrow exception to privity, based on tort rather than contract. [[PAGE 66]]
80
THIRD-PARTY RIGHTS twist (White v Jones): Change one key fact—what element is crucial for the rule in “A professional (such as a solicitor) may owe a duty of care in negligence to a…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
81
THIRD-PARTY RIGHTS scenario (Jackson v Horizon Holidays 1975): An exception to the privity rule allows a contracting party to recover damages for the loss…. What is the legal result?
An exception to the privity rule allows a contracting party to recover damages for the loss and distress of third parties where: the contract is made for the benefit of a group, and the loss is within the contemplation of the parties.
82
THIRD-PARTY RIGHTS twist (Jackson v Horizon Holidays 1975): Change one key fact—what element is crucial for the rule in “An exception to the privity rule allows a contracting party to recover damages for the loss…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
83
THIRD-PARTY RIGHTS scenario (Woodar v Wimpey 1980): A party to a contract cannot generally enforce contractual rights on behalf of a third party…. What is the legal result?
A party to a contract cannot generally enforce contractual rights on behalf of a third party. Any relaxation of privity (as in Jackson v Horizon Holidays) is narrow and exceptional.
84
THIRD-PARTY RIGHTS twist (Woodar v Wimpey 1980): Change one key fact—what element is crucial for the rule in “A party to a contract cannot generally enforce contractual rights on behalf of a third party…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
85
THIRD-PARTY RIGHTS scenario (Alfred McAlpine v Panatown 2001): A contracting party cannot recover substantial damages for loss suffered by a third party where that…. What is the legal result?
A contracting party cannot recover substantial damages for loss suffered by a third party where that third party has its own contractual right to claim against the defendant. The Albazero exception is limited and does not apply where an alternative remedy exists.
86
THIRD-PARTY RIGHTS twist (Alfred McAlpine v Panatown 2001): Change one key fact—what element is crucial for the rule in “A contracting party cannot recover substantial damages for loss suffered by a third party where that…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
87
CONSIDERATION scenario (Dunlop v Selfridge 1915): s: Privity of contract: only parties to a contract can enforce it. What is the legal result?
s: Privity of contract: only parties to a contract can enforce it. Consideration must move from the promisee. A third party cannot enforce a contract, even if the contract was intended to benefit them (at common law).
88
CONSIDERATION twist (Dunlop v Selfridge 1915): Change one key fact—what element is crucial for the rule in “s: Privity of contract: only parties to a contract can enforce it” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
89
THIRD-PARTY RIGHTS scenario (Beswick v Beswick 1968): The doctrine of privity prevents third parties from enforcing contracts. What is the legal result?
The doctrine of privity prevents third parties from enforcing contracts. A third party may enforce a contract only if acting in a representative capacity of a contracting party. This case highlighted the harshness of privity and helped prompt the Contracts (Rights of Third Parties) Act 1999.
90
THIRD-PARTY RIGHTS twist (Beswick v Beswick 1968): Change one key fact—what element is crucial for the rule in “The doctrine of privity prevents third parties from enforcing contracts” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
91
DAMAGES scenario (Sky Petroleum v VIP Petroleum 1974): Specific performance may be granted for contracts involving goods where damages are inadequate, especially where: the…. What is the legal result?
Specific performance may be granted for contracts involving goods where damages are inadequate, especially where: the goods cannot be readily obtained elsewhere, and refusal to perform would cause serious commercial harm.
92
DAMAGES twist (Sky Petroleum v VIP Petroleum 1974): Change one key fact—what element is crucial for the rule in “Specific performance may be granted for contracts involving goods where damages are inadequate, especially where: the…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
93
DAMAGES scenario (Co): Courts will not grant specific performance of contracts involving continuous obligations or requiring ongoing supervision…. What is the legal result?
Courts will not grant specific performance of contracts involving continuous obligations or requiring ongoing supervision. Specific performance is a discretionary remedy and will be refused where damages are adequate or enforcement would be oppressive. Contracts (Rights of Third Parties) Act 1999 Core Rule Third party may enforce a term if: 1.
94
DAMAGES twist (Co): Change one key fact—what element is crucial for the rule in “Courts will not grant specific performance of contracts involving continuous obligations or requiring ongoing supervision…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
95
GENERAL PRINCIPLE scenario (Nisshin Shipping Co v Cleaves & Co 2004): [[PAGE 73]] Under the Contracts (Rights of Third Parties) Act 1999, a third party may enforce…. What is the legal result?
[[PAGE 73]] Under the Contracts (Rights of Third Parties) Act 1999, a third party may enforce a contractual term where: the contract expressly provides, or the term purports to confer a benefit on the third party, unless the contract clearly excludes third-party rights. This case confirms that brokers can enforce commission clauses under the CRTPA.
96
GENERAL PRINCIPLE twist (Nisshin Shipping Co v Cleaves & Co 2004): Change one key fact—what element is crucial for the rule in “[[PAGE 73]] Under the Contracts (Rights of Third Parties) Act 1999, a third party may enforce…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
97
GENERAL PRINCIPLE scenario (Dolphin Maritime v Sveriges Ångfartygs Assurans Förening 2009): A third party can enforce a contract under the Contracts (Rights of Third Parties) Act 1999…. What is the legal result?
A third party can enforce a contract under the Contracts (Rights of Third Parties) Act 1999 only if: the contract expressly allows it, or the contract shows a clear intention to confer enforceable rights on that third party. Merely benefiting from a contract is not enough.
98
GENERAL PRINCIPLE twist (Dolphin Maritime v Sveriges Ångfartygs Assurans Förening 2009): Change one key fact—what element is crucial for the rule in “A third party can enforce a contract under the Contracts (Rights of Third Parties) Act 1999…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
99
CONSIDERATION scenario (Chudley v Clydesdale Bank 2019): Under the Contracts (Rights of Third Parties) Act 1999, a third party may enforce a contract…. What is the legal result?
Under the Contracts (Rights of Third Parties) Act 1999, a third party may enforce a contract if: the contract expressly provides they may do so, or the term purports to confer a benefit on them, provided the third party is identified by name, class, or description, even if not in existence at the time. Takeaways…
100
CONSIDERATION twist (Chudley v Clydesdale Bank 2019): Change one key fact—what element is crucial for the rule in “Under the Contracts (Rights of Third Parties) Act 1999, a third party may enforce a contract…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
101
MISREPRESENTATION scenario (L’Estrange v Graucob 1934): When a contract is signed, all terms are incorporated and binding, even if unread, unless there…. What is the legal result?
When a contract is signed, all terms are incorporated and binding, even if unread, unless there is: fraud, or misrepresentation.
102
MISREPRESENTATION twist (L’Estrange v Graucob 1934): Change one key fact—what element is crucial for the rule in “When a contract is signed, all terms are incorporated and binding, even if unread, unless there…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
103
MISREPRESENTATION scenario (Curtis v Chemical Cleaning Co 1951): An exclusion clause cannot be relied upon if it is misrepresented, even if the document is…. What is the legal result?
An exclusion clause cannot be relied upon if it is misrepresented, even if the document is signed. Incorporation by Notice [[PAGE 76]] Parker v South Eastern Railway 1877 - notice must be reasonably given. Olley v Marlborough Court 1949 - notice must be given before contract formation Thornton v Shoe Lane Parking 1971 - onerous…
104
MISREPRESENTATION twist (Curtis v Chemical Cleaning Co 1951): Change one key fact—what element is crucial for the rule in “An exclusion clause cannot be relied upon if it is misrepresented, even if the document is…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
105
EXEMPTION CLAUSE scenario (Parker v South Eastern Railway Co 1877): An exclusion clause is incorporated into a contract if: the party knew of the term, or…. What is the legal result?
An exclusion clause is incorporated into a contract if: the party knew of the term, or reasonable notice of the term was given before or at the time of contracting. This case establishes the reasonable notice test for incorporation by notice.
106
EXEMPTION CLAUSE twist (Parker v South Eastern Railway Co 1877): Change one key fact—what element is crucial for the rule in “An exclusion clause is incorporated into a contract if: the party knew of the term, or…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
107
EXEMPTION CLAUSE scenario (Olley v Marlborough Court 1949): A contractual term (including an exclusion clause) is not incorporated if notice of it is given…. What is the legal result?
A contractual term (including an exclusion clause) is not incorporated if notice of it is given after the contract has been made. [[PAGE 77]]
108
EXEMPTION CLAUSE twist (Olley v Marlborough Court 1949): Change one key fact—what element is crucial for the rule in “A contractual term (including an exclusion clause) is not incorporated if notice of it is given…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
109
EXEMPTION CLAUSE scenario (Thornton v Shoe Lane Parking 1971): In automatic transactions, the contract is formed at the point of payment. What is the legal result?
In automatic transactions, the contract is formed at the point of payment. Exclusion clauses must be brought to the customer’s attention before or at the time of contracting. The more onerous the clause, the greater the notice required.
110
EXEMPTION CLAUSE twist (Thornton v Shoe Lane Parking 1971): Change one key fact—what element is crucial for the rule in “In automatic transactions, the contract is formed at the point of payment” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
111
GENERAL PRINCIPLE scenario (Interfoto Picture Library v Stiletto Visual Programmes): The more onerous or unusual a term is, the more explicit, prominent and clear the notice…. What is the legal result?
The more onerous or unusual a term is, the more explicit, prominent and clear the notice must be. Principles Notice must be timely, reasonable and prominent The more unusual or burdensome a term, the greater the notice required [[PAGE 78]] Business Relevance: Standard-form contracts and tickets are only effective if properly communicated. Example: Rosetta Stone
112
GENERAL PRINCIPLE twist (Interfoto Picture Library v Stiletto Visual Programmes): Change one key fact—what element is crucial for the rule in “The more onerous or unusual a term is, the more explicit, prominent and clear the notice…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
113
ARBITRATION/ENFORCEMENT scenario (Interfoto Picture Library v Stiletto Visual Programmes): A click-wrap consumer contract can validly: require mandatory arbitration, exclude access to courts and juries, and…. What is the legal result?
A click-wrap consumer contract can validly: require mandatory arbitration, exclude access to courts and juries, and prohibit class actions, provided the terms are clearly incorporated and not unconscionable. Incorporation by Course of Dealing McCutcheon v MacBrayne 1964 - No incorporation if previous dealings inconsistent. Hollier v Rambler Motors 1972 - sporadic dealings insufficient British Crane…
114
ARBITRATION/ENFORCEMENT twist (Interfoto Picture Library v Stiletto Visual Programmes): Change one key fact—what element is crucial for the rule in “A click-wrap consumer contract can validly: require mandatory arbitration, exclude access to courts and juries, and…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
115
EXEMPTION CLAUSE scenario (McCutcheon v MacBrayne 1964): [[PAGE 79]] Contract terms can be incorporated by a course of dealing only if the dealings…. What is the legal result?
[[PAGE 79]] Contract terms can be incorporated by a course of dealing only if the dealings are consistent, regular, and on the same terms. Occasional or inconsistent prior transactions are not enough to incorporate exclusion clauses.
116
EXEMPTION CLAUSE twist (McCutcheon v MacBrayne 1964): Change one key fact—what element is crucial for the rule in “[[PAGE 79]] Contract terms can be incorporated by a course of dealing only if the dealings…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
117
GENERAL PRINCIPLE scenario (British Crane Hire v Ipswich Plant Hire 1975): Standard trade terms can be incorporated even without signature when both parties are experienced in the…. What is the legal result?
Standard trade terms can be incorporated even without signature when both parties are experienced in the same industry. Principle: Regular and consistent prior dealings can bring standard terms into a new contact Business Relevance: [[PAGE 80]] Trade practices as prior conduct can shape contractual obligations even without explicit consent.
118
GENERAL PRINCIPLE twist (British Crane Hire v Ipswich Plant Hire 1975): Change one key fact—what element is crucial for the rule in “Standard trade terms can be incorporated even without signature when both parties are experienced in the…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
119
GENERAL PRINCIPLE scenario (Rainy Sky v Kookmin Bank 2011): When a contractual provision is genuinely ambiguous, courts should prefer the interpretation that is most consistent…. What is the legal result?
When a contractual provision is genuinely ambiguous, courts should prefer the interpretation that is most consistent with commercial common sense, provided it is linguistically possible.
120
GENERAL PRINCIPLE twist (Rainy Sky v Kookmin Bank 2011): Change one key fact—what element is crucial for the rule in “When a contractual provision is genuinely ambiguous, courts should prefer the interpretation that is most consistent…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
121
GENERAL PRINCIPLE scenario (Arnold v Britton 2015): Where contractual language is clear and unambiguous, it must be given effect even if it leads…. What is the legal result?
Where contractual language is clear and unambiguous, it must be given effect even if it leads to an imprudent or harsh result. Commercial common sense is relevant only where the wording is ambiguous. Balancing Text and Context
122
GENERAL PRINCIPLE twist (Arnold v Britton 2015): Change one key fact—what element is crucial for the rule in “Where contractual language is clear and unambiguous, it must be given effect even if it leads…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
123
GENERAL PRINCIPLE scenario (Wood v Capita Insurance Services 2017): There is no hierarchy between textual analysis and contextual analysis. What is the legal result?
There is no hierarchy between textual analysis and contextual analysis. Courts must consider both language and context together, aiming to identify the meaning the contract would convey to a reasonable person with all the background knowledge.
124
GENERAL PRINCIPLE twist (Wood v Capita Insurance Services 2017): Change one key fact—what element is crucial for the rule in “There is no hierarchy between textual analysis and contextual analysis” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
125
MISTAKE scenario (Chartbrook v Persimmon Homes 2009): Courts prefer interpretations that reflect commercial common sense. What is the legal result?
Courts prefer interpretations that reflect commercial common sense. Rectification is available where: the parties had a common intention, [[PAGE 84]] that intention continued until execution, and the written contract failed to reflect it due to mistake. Mistakes as to legal effect can justify rectification.
126
MISTAKE twist (Chartbrook v Persimmon Homes 2009): Change one key fact—what element is crucial for the rule in “Courts prefer interpretations that reflect commercial common sense” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
127
IMPLIED TERMS scenario (Marks and Spencer plc v BNP Paribas 2015): [[PAGE 86]] A term will only be implied in fact if it is: Necessary for business…. What is the legal result?
[[PAGE 86]] A term will only be implied in fact if it is: Necessary for business efficacy, or So obvious that it goes without saying. Courts must not imply terms merely because they seem fair, reasonable, or improve the contract.
128
IMPLIED TERMS twist (Marks and Spencer plc v BNP Paribas 2015): Change one key fact—what element is crucial for the rule in “[[PAGE 86]] A term will only be implied in fact if it is: Necessary for business…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
129
IMPLIED TERMS scenario (Liverpool CC v Irwin 1977): Courts may imply terms by law where necessary to make a contract workable. What is the legal result?
Courts may imply terms by law where necessary to make a contract workable. The test is necessity, not reasonableness or justice. Implied terms are often limited and qualified, especially in standard contracts like tenancies.
130
IMPLIED TERMS twist (Liverpool CC v Irwin 1977): Change one key fact—what element is crucial for the rule in “Courts may imply terms by law where necessary to make a contract workable” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
131
IMPLIED TERMS scenario (AG of Belize v Belize Telecom 2009): A term will be implied if, read against the relevant background, it is necessary to give…. What is the legal result?
A term will be implied if, read against the relevant background, it is necessary to give effect to the reasonable meaning of the contract. Implied terms must be strictly necessary, not merely reasonable.
132
IMPLIED TERMS twist (AG of Belize v Belize Telecom 2009): Change one key fact—what element is crucial for the rule in “A term will be implied if, read against the relevant background, it is necessary to give…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
133
IMPLIED TERMS scenario (Wells v devani 2019): A contract will not fail for uncertainty if: the parties intended to be legally bound, and…. What is the legal result?
A contract will not fail for uncertainty if: the parties intended to be legally bound, and any missing term can be implied as necessary to give the agreement business efficacy. The case confirms a flexible, common-sense approach to implication of terms and limits over-technical arguments on uncertainty.
134
IMPLIED TERMS twist (Wells v devani 2019): Change one key fact—what element is crucial for the rule in “A contract will not fail for uncertainty if: the parties intended to be legally bound, and…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
135
IMPLIED TERMS scenario (Duval v 11): Where a landlord has covenanted to enforce lease obligations for the benefit of tenants, the landlord…. What is the legal result?
Where a landlord has covenanted to enforce lease obligations for the benefit of tenants, the landlord cannot grant consent for conduct that would breach those obligations. A party must not render its own contractual promises ineffective by its actions. Statutory Implied Terms Provisions: Sale of Goods Act 1979: title, correspondence with description, satisfactory quality, fitness…
136
IMPLIED TERMS twist (Duval v 11): Change one key fact—what element is crucial for the rule in “Where a landlord has covenanted to enforce lease obligations for the benefit of tenants, the landlord…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
137
EXEMPTION CLAUSE scenario (Alisa Craig Fishing v Malvern Fishing 1983): Limitation clauses are construed less strictly than exclusion clauses. What is the legal result?
Limitation clauses are construed less strictly than exclusion clauses. Clear limitation clauses can validly limit liability for negligence, even for serious loss, provided the wording and commercial context support this. Reasonableness and Statutory Control Legislation: Unfair Contract Terms Act (UCTA) 1977 - reasonableness test for exclusion clauses Consumer Rights Act 2015 - unfair terms in…
138
EXEMPTION CLAUSE twist (Alisa Craig Fishing v Malvern Fishing 1983): Change one key fact—what element is crucial for the rule in “Limitation clauses are construed less strictly than exclusion clauses” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
139
UCTA REASONABLENESS scenario (George Mtchell v Finnery Lock Seeds 1983): [[PAGE 93]] Under UCTA, limitation clauses must satisfy the reasonableness test. What is the legal result?
[[PAGE 93]] Under UCTA, limitation clauses must satisfy the reasonableness test. A clause is unlikely to be reasonable where: There is unequal bargaining power, The supplier can easily insure, and The clause limits liability to a trivial amount compared to foreseeable loss. Recent Case
140
UCTA REASONABLENESS twist (George Mtchell v Finnery Lock Seeds 1983): Change one key fact—what element is crucial for the rule in “[[PAGE 93]] Under UCTA, limitation clauses must satisfy the reasonableness test” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
141
DAMAGES scenario (Triple Point Technology v PTT 2021): Liquidated damages clauses apply only within the scope defined by the contract. What is the legal result?
Liquidated damages clauses apply only within the scope defined by the contract. If a contract is terminated before completion, LDs usually run only up to termination, unless the clause clearly provides otherwise. After termination, the innocent party must claim general damages for losses caused by non-completion.
142
DAMAGES twist (Triple Point Technology v PTT 2021): Change one key fact—what element is crucial for the rule in “Liquidated damages clauses apply only within the scope defined by the contract” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
143
GENERAL PRINCIPLE scenario (Yam Seng v ITC 2013): English law may imply a duty of good faith as a matter of fact where the…. What is the legal result?
English law may imply a duty of good faith as a matter of fact where the contract’s nature, context, and expectations require honest performance. This is not a general doctrine of good faith, but a contextual, fact-specific implication.
144
GENERAL PRINCIPLE twist (Yam Seng v ITC 2013): Change one key fact—what element is crucial for the rule in “English law may imply a duty of good faith as a matter of fact where the…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
145
GENERAL PRINCIPLE scenario (Mid Essex Hospital v Compass Group 2013): English law rejects a general doctrine of good faith in contract performance. What is the legal result?
English law rejects a general doctrine of good faith in contract performance. A duty of good faith may apply only where: the contract expressly provides for it, or the discretion is open-ended and requires honest, rational exercise. Detailed contractual machinery reduces the scope for implied good faith obligations.
146
GENERAL PRINCIPLE twist (Mid Essex Hospital v Compass Group 2013): Change one key fact—what element is crucial for the rule in “English law rejects a general doctrine of good faith in contract performance” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
147
EXEMPTION CLAUSE scenario (Philips Products v Hyland 1987): An exclusion clause will not protect a party where the breach goes to the root of…. What is the legal result?
An exclusion clause will not protect a party where the breach goes to the root of the contract, unless the clause clearly and unambiguously covers that breach. This case illustrates the construction approach to exclusion clauses following Photo
148
EXEMPTION CLAUSE twist (Philips Products v Hyland 1987): Change one key fact—what element is crucial for the rule in “An exclusion clause will not protect a party where the breach goes to the root of…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
149
GENERAL PRINCIPLE scenario (Thompson v Lohan (Plant Hire) 1987): A worker supplied with equipment remains the employee of the supplier unless control has fully passed…. What is the legal result?
A worker supplied with equipment remains the employee of the supplier unless control has fully passed to the hirer. Mere instructions on what to do are not enough—control over how the work is done is required to transfer liability.
150
GENERAL PRINCIPLE twist (Thompson v Lohan (Plant Hire) 1987): Change one key fact—what element is crucial for the rule in “A worker supplied with equipment remains the employee of the supplier unless control has fully passed…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
151
UCTA REASONABLENESS scenario (Smith v Eric S Bush 1989): s: A duty of care can arise where a professional knows a statement will be relied…. What is the legal result?
s: A duty of care can arise where a professional knows a statement will be relied upon by a specific person. Disclaimers excluding liability for negligence must satisfy the reasonableness test under UCTA. For low-value house purchases, it is reasonable for buyers to rely on a lender’s survey.
152
UCTA REASONABLENESS twist (Smith v Eric S Bush 1989): Change one key fact—what element is crucial for the rule in “s: A duty of care can arise where a professional knows a statement will be relied…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
153
EXEMPTION CLAUSE scenario (Stewart Gill v Horatio Myer & Co 1992): A clause excluding or restricting set-off can amount to an exclusion or limitation of liability under…. What is the legal result?
A clause excluding or restricting set-off can amount to an exclusion or limitation of liability under UCTA. Such clauses must satisfy the reasonableness test to be enforceable. [[PAGE 97]]
154
EXEMPTION CLAUSE twist (Stewart Gill v Horatio Myer & Co 1992): Change one key fact—what element is crucial for the rule in “A clause excluding or restricting set-off can amount to an exclusion or limitation of liability under…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
155
UCTA REASONABLENESS scenario (St Albans DC v International Computers 1996): Under UCTA, a limitation of liability clause must be reasonable. What is the legal result?
Under UCTA, a limitation of liability clause must be reasonable. In assessing reasonableness, courts consider bargaining power, availability of alternatives, foreseeability of loss, and the defendant’s ability to insure against the risk. Clauses that significantly underprotect the innocent party are likely to be struck down.
156
UCTA REASONABLENESS twist (St Albans DC v International Computers 1996): Change one key fact—what element is crucial for the rule in “Under UCTA, a limitation of liability clause must be reasonable” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
157
GENERAL PRINCIPLE scenario (Office of Fair Trading v Abbey National 2009): (Unfair terms /price exemption) Under UTCCR, courts cannot assess the fairness of core price terms if:…. What is the legal result?
(Unfair terms /price exemption) Under UTCCR, courts cannot assess the fairness of core price terms if: they form part of the price or remuneration, and they are expressed in plain and intelligible language. The case limits judicial control over pricing, even where charges appear harsh or disproportionate.
158
GENERAL PRINCIPLE twist (Office of Fair Trading v Abbey National 2009): Change one key fact—what element is crucial for the rule in “(Unfair terms /price exemption) Under UTCCR, courts cannot assess the fairness of core price terms if:…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
159
GENERAL PRINCIPLE scenario (Aziz v Caixa d’Estalvis de Catalunya): (Unfair terms and consumer protection): [[PAGE 99]] National courts must have the power to assess the…. What is the legal result?
(Unfair terms and consumer protection): [[PAGE 99]] National courts must have the power to assess the fairness of contractual terms and provide effective remedies. National procedural rules cannot deprive consumers of the protection guaranteed by EU law.
160
GENERAL PRINCIPLE twist (Aziz v Caixa d’Estalvis de Catalunya): Change one key fact—what element is crucial for the rule in “(Unfair terms and consumer protection): [[PAGE 99]] National courts must have the power to assess the…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
161
GENERAL PRINCIPLE scenario (Kásler v OTP Jelzálogbank): s: Transparency requirement has both: ○ a formal element (clear wording), and ○ a substantive element…. What is the legal result?
s: Transparency requirement has both: ○ a formal element (clear wording), and ○ a substantive element (consumer can understand financial impact). Core price terms can be reviewed for unfairness if they lack transparency. Courts may substitute an unfair term only to protect consumers, not to benefit traders.
162
GENERAL PRINCIPLE twist (Kásler v OTP Jelzálogbank): Change one key fact—what element is crucial for the rule in “s: Transparency requirement has both: ○ a formal element (clear wording), and ○ a substantive element…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
163
CONSIDERATION scenario (ParkingEye v Beavis 2015): s: Penalty Rule A clause is enforceable if it protects a legitimate interest and is not…. What is the legal result?
s: Penalty Rule A clause is enforceable if it protects a legitimate interest and is not out of proportion, even if it is not compensatory. Consumer Unfairness A term is not unfair merely because it is harsh. Transparency and legitimate commercial justification are key.
164
CONSIDERATION twist (ParkingEye v Beavis 2015): Change one key fact—what element is crucial for the rule in “s: Penalty Rule A clause is enforceable if it protects a legitimate interest and is not…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
165
DAMAGES scenario (Robinson v Harman): The standard measure of contractual damages is the expectation interest: Expectation measure of damages The innocent…. What is the legal result?
The standard measure of contractual damages is the expectation interest: Expectation measure of damages The innocent party should be put in the position they would have been in had the contract been performed, as far as money can achieve this. Contracts protect anticipated future value. Extending Expectation Loss Radford v de Froberville 1977 - cost…
166
DAMAGES twist (Robinson v Harman): Change one key fact—what element is crucial for the rule in “The standard measure of contractual damages is the expectation interest: Expectation measure of damages The innocent…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
167
DAMAGES scenario (Radford v de Froberville 1977): (Expectation Damages) Where a defendant breaches a contractual obligation, the claimant may recover cost of cure…. What is the legal result?
(Expectation Damages) Where a defendant breaches a contractual obligation, the claimant may recover cost of cure damages if they have a legitimate interest in performance, even if the economic loss is small. Loss of amenity or preference for performance can justify cost-based damages.
168
DAMAGES twist (Radford v de Froberville 1977): Change one key fact—what element is crucial for the rule in “(Expectation Damages) Where a defendant breaches a contractual obligation, the claimant may recover cost of cure…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
169
DAMAGES scenario (Chaplin v Hicks 1911): (loss of chance) Damages may be awarded for the loss of a chance, even where the…. What is the legal result?
(loss of chance) Damages may be awarded for the loss of a chance, even where the claimant cannot prove they would have obtained the benefit, provided the chance was real and not merely speculative. The Golden Victory 2007 - Damages & Subsequent Events
170
DAMAGES twist (Chaplin v Hicks 1911): Change one key fact—what element is crucial for the rule in “(loss of chance) Damages may be awarded for the loss of a chance, even where the…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
171
DAMAGES scenario (Principle #86): (Damages): When assessing contractual damages, the court may take into account subsequent events known at the…. What is the legal result?
(Damages): When assessing contractual damages, the court may take into account subsequent events known at the time of assessment if they affect the value or duration of the contractual rights. Damages should reflect the real loss, not a hypothetical one. [[PAGE 105]]
172
DAMAGES twist (Principle #86): Change one key fact—what element is crucial for the rule in “(Damages): When assessing contractual damages, the court may take into account subsequent events known at the…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
173
GENERAL PRINCIPLE scenario (Bunge v Nideria BV 2015 Conditions, Time Clauses & Termination): In commercial contracts, particularly in sale of goods and commodities, time clauses (including notice requirements) are…. What is the legal result?
In commercial contracts, particularly in sale of goods and commodities, time clauses (including notice requirements) are often construed as conditions, so that any breach gives a right to terminate, unless the contract indicates otherwise. Proportionality and Practicality Ruxley v Forsyth 1996 - pool shallower than specified Expensive rebuild disproportionate Court awarded loss of amenity Law…
174
GENERAL PRINCIPLE twist (Bunge v Nideria BV 2015 Conditions, Time Clauses & Termination): Change one key fact—what element is crucial for the rule in “In commercial contracts, particularly in sale of goods and commodities, time clauses (including notice requirements) are…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
175
IMPLIED TERMS scenario (Ruxley v Forsyth 1996): The cost of cure is not automatically recoverable. What is the legal result?
The cost of cure is not automatically recoverable; it must be reasonable and proportionate. Where reinstatement is unreasonable, the court may award damages for loss of amenity. Contract damages aim to compensate, not to punish or confer a windfall.
176
IMPLIED TERMS twist (Ruxley v Forsyth 1996): Change one key fact—what element is crucial for the rule in “The cost of cure is not automatically recoverable” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
177
IMPLIED TERMS scenario (Principle #89): Employment contracts contain an implied term of mutual trust and confidence. What is the legal result?
Employment contracts contain an implied term of mutual trust and confidence. Breach of this term can give rise to damages for financial loss, including stigma affecting future employability, provided normal rules of causation and remoteness are satisfied.
178
IMPLIED TERMS twist (Principle #89): Change one key fact—what element is crucial for the rule in “Employment contracts contain an implied term of mutual trust and confidence” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
179
GENERAL PRINCIPLE scenario (Johnson v Gore Wood 2001): Reflective loss rule: A shareholder cannot recover losses that merely reflect loss suffered by the company…. What is the legal result?
Reflective loss rule: A shareholder cannot recover losses that merely reflect loss suffered by the company. The proper claimant for wrongs done to a company is the company itself. Courts will prevent claims that amount to an abuse of process, particularly where they duplicate earlier proceedings.
180
GENERAL PRINCIPLE twist (Johnson v Gore Wood 2001): Change one key fact—what element is crucial for the rule in “Reflective loss rule: A shareholder cannot recover losses that merely reflect loss suffered by the company…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
181
DAMAGES scenario (Farley v Skinner 2002): Damages for distress, inconvenience, or discomfort are recoverable for breach of contract where: An important object…. What is the legal result?
Damages for distress, inconvenience, or discomfort are recoverable for breach of contract where: An important object of the contract is to provide peace of mind or freedom from distress, even if it is not the sole purpose.
182
DAMAGES twist (Farley v Skinner 2002): Change one key fact—what element is crucial for the rule in “Damages for distress, inconvenience, or discomfort are recoverable for breach of contract where: An important object…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
183
REMOTENESS scenario (Hamilton Jones v David & Snape 2004): Damages for distress may be recovered where: The contract or duty is intended to protect a…. What is the legal result?
Damages for distress may be recovered where: The contract or duty is intended to protect a client from distress, anxiety, or loss of privacy, or Such distress is a foreseeable consequence of the breach within the scope of the retainer. Limits on Damages Remoteness - Was loss foreseeable? Mitigation - Did the claimant act reasonably…
184
REMOTENESS twist (Hamilton Jones v David & Snape 2004): Change one key fact—what element is crucial for the rule in “Damages for distress may be recovered where: The contract or duty is intended to protect a…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
185
REMOTENESS scenario (Hadley v Baxendale 1854: Classical Remoteness Rule): (Remoteness of Damages) Damages For breach of contract are recoverable only if they: 1. What is the legal result?
(Remoteness of Damages) Damages For breach of contract are recoverable only if they: 1. Arise naturally from the breach (according to the usual course of things), or 2. Were within the reasonable contemplation of both parties at the time the contract was made as a probable result of the breach.
186
REMOTENESS twist (Hadley v Baxendale 1854: Classical Remoteness Rule): Change one key fact—what element is crucial for the rule in “(Remoteness of Damages) Damages For breach of contract are recoverable only if they: 1” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
187
GENERAL PRINCIPLE scenario (contemplation of the parties at the time of contracting (from Hadley v Baxendale).): A claimant may recover losses that were reasonably foreseeable at the time of contract formation…. What is the legal result?
A claimant may recover losses that were reasonably foreseeable at the time of contract formation. Special or unusually high losses are only recoverable if the defendant had actual knowledge of the special circumstances. The Heron II 1969 - Contract vs Tort Standard
188
GENERAL PRINCIPLE twist (contemplation of the parties at the time of contracting (from Hadley v Baxendale).): Change one key fact—what element is crucial for the rule in “A claimant may recover losses that were reasonably foreseeable at the time of contract formation…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
189
REMOTENESS scenario (contemplation of the parties at the time of contracting (from Hadley v Baxendale).): (Remoteness in Contract) The test for remoteness in contract is whether the loss was not unlikely…. What is the legal result?
(Remoteness in Contract) The test for remoteness in contract is whether the loss was not unlikely (i.e. a real possibility) to result from the breach. This is stricter than tort, but less strict than requiring probability.
190
REMOTENESS twist (contemplation of the parties at the time of contracting (from Hadley v Baxendale).): Change one key fact—what element is crucial for the rule in “(Remoteness in Contract) The test for remoteness in contract is whether the loss was not unlikely…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
191
REMOTENESS scenario (Parsons v Uttley Ingham 1978): (Remoteness) In contract, damage is recoverable if it is of a kind that was reasonably foreseeable…. What is the legal result?
(Remoteness) In contract, damage is recoverable if it is of a kind that was reasonably foreseeable at the time of contracting. The defendant need not foresee the exact manner or seriousness of the loss — only its general nature. The Achilleas 2008 - Remoteness of Damage & Assumption of Responsibility
192
REMOTENESS twist (Parsons v Uttley Ingham 1978): Change one key fact—what element is crucial for the rule in “(Remoteness) In contract, damage is recoverable if it is of a kind that was reasonably foreseeable…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
193
DAMAGES scenario (Principle #97): Damages are recoverable only for losses that the defendant can reasonably be taken to have assumed…. What is the legal result?
Damages are recoverable only for losses that the defendant can reasonably be taken to have assumed responsibility for. [[PAGE 114]] In some cases, this qualifies or limits the traditional Hadley v Baxendale test. Foreseeability is important, but commercial context and risk allocation may be decisive.
194
DAMAGES twist (Principle #97): Change one key fact—what element is crucial for the rule in “Damages are recoverable only for losses that the defendant can reasonably be taken to have assumed…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
195
REMOTENESS scenario (Supershield v Siemens 2010): Loss is recoverable if: It is of a kind foreseeable at the time of contracting (Hadley…. What is the legal result?
Loss is recoverable if: It is of a kind foreseeable at the time of contracting (Hadley v Baxendale), and It is a type of loss the defendant can reasonably be taken to have assumed responsibility for (The Achilleas). Supershield shows that Achilleas does not replace Hadley, but qualifies it in exceptional cases.
196
REMOTENESS twist (Supershield v Siemens 2010): Change one key fact—what element is crucial for the rule in “Loss is recoverable if: It is of a kind foreseeable at the time of contracting (Hadley…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
197
REMOTENESS scenario (Wellesley Partners v Withers LLP 2015): (Scope of Duty/Assumption of Responsibility) In professional negligence, damages are recoverable only for losses within the…. What is the legal result?
(Scope of Duty/Assumption of Responsibility) In professional negligence, damages are recoverable only for losses within the scope of the defendant’s duty, i.e. the risks they undertook to guard against. Foreseeability alone is not sufficient.
198
REMOTENESS twist (Wellesley Partners v Withers LLP 2015): Change one key fact—what element is crucial for the rule in “(Scope of Duty/Assumption of Responsibility) In professional negligence, damages are recoverable only for losses within the…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
199
REMOTENESS scenario (Attorney): (Remoteness) The governing test for remoteness is whether the loss is of a kind for which…. What is the legal result?
(Remoteness) The governing test for remoteness is whether the loss is of a kind for which the contract-breaker can reasonably be taken to have assumed responsibility, applying
200
REMOTENESS twist (Attorney): Change one key fact—what element is crucial for the rule in “(Remoteness) The governing test for remoteness is whether the loss is of a kind for which…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
201
MITIGATION scenario (British Westinghouse v Underground Electric Railways 1912): (Mitigation) An innocent party must take reasonable steps to mitigate loss, and any benefits directly arising…. What is the legal result?
(Mitigation) An innocent party must take reasonable steps to mitigate loss, and any benefits directly arising from mitigation must be deducted from damages. Damages are assessed to put the claimant in the position they would have been in had the contract been properly performed, no more and no less.
202
MITIGATION twist (British Westinghouse v Underground Electric Railways 1912): Change one key fact—what element is crucial for the rule in “(Mitigation) An innocent party must take reasonable steps to mitigate loss, and any benefits directly arising…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
203
MITIGATION scenario (Globalia Business Travel v Fulton Shipping 2017): (mitigation and causation): A benefit will only be deducted from damages if it is legally caused…. What is the legal result?
(mitigation and causation): A benefit will only be deducted from damages if it is legally caused by the breach. Independent gains made by the innocent party, even if facilitated by the breach, are not automatically mitigation. When Do Benefits Reduce Damages?
204
MITIGATION twist (Globalia Business Travel v Fulton Shipping 2017): Change one key fact—what element is crucial for the rule in “(mitigation and causation): A benefit will only be deducted from damages if it is legally caused…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
205
MITIGATION scenario (Barclays Bank v Fairclough Building 1994): (Mitigation & Benefits) A claimant must give credit only for benefits that: are caused by the…. What is the legal result?
(Mitigation & Benefits) A claimant must give credit only for benefits that: are caused by the breach, and arise from reasonable mitigation. Independent or collateral benefits are not deducted from damages. When CN Cannot Apply and Why?
206
MITIGATION twist (Barclays Bank v Fairclough Building 1994): Change one key fact—what element is crucial for the rule in “(Mitigation & Benefits) A claimant must give credit only for benefits that: are caused by the…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
207
DAMAGES scenario (Addis v Gramophone Co 1909): Damages for breach of contract do not include compensation for mental distress, injured feelings, or damage…. What is the legal result?
Damages for breach of contract do not include compensation for mental distress, injured feelings, or damage to reputation, even if the breach was carried out in an oppressive or humiliating way. This remains the general rule, subject to limited exceptions (e.g. contracts whose purpose is to provide pleasure, peace of mind, or freedom from distress).
208
DAMAGES twist (Addis v Gramophone Co 1909): Change one key fact—what element is crucial for the rule in “Damages for breach of contract do not include compensation for mental distress, injured feelings, or damage…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
209
DAMAGES scenario (Jarvis v Swan’s Tours 1973): Damages for mental distress and disappointment are recoverable where the object of the contract is to…. What is the legal result?
Damages for mental distress and disappointment are recoverable where the object of the contract is to provide enjoyment, relaxation, or freedom from distress. This case qualifies the general rule in Addis v Gramophone, which excludes damages for injured feelings in ordinary commercial contracts. Physical Inconvenience Cases Compensation may be awarded for: Physical inconvenience Discomfort arising…
210
DAMAGES twist (Jarvis v Swan’s Tours 1973): Change one key fact—what element is crucial for the rule in “Damages for mental distress and disappointment are recoverable where the object of the contract is to…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
211
DAMAGES scenario (Watts v Morrow 1991): Damages for distress are not recoverable in ordinary commercial contracts. What is the legal result?
Damages for distress are not recoverable in ordinary commercial contracts. They are only available where: The contract’s purpose is pleasure or peace of mind, or The breach causes physical inconvenience, allowing limited recovery for that inconvenience (not emotional distress as such). Non-Pecuniary Loss: Business Takeaway Emotional loss is compensable only when it is the subject…
212
DAMAGES twist (Watts v Morrow 1991): Change one key fact—what element is crucial for the rule in “Damages for distress are not recoverable in ordinary commercial contracts” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
213
GENERAL PRINCIPLE scenario (Anglia TV v Reed 1972): A claimant may recover wasted expenditure incurred in reliance on a contract, including pre-contract costs, where:…. What is the legal result?
A claimant may recover wasted expenditure incurred in reliance on a contract, including pre-contract costs, where: expectation loss is hard to quantify, and the expenditure was within the contemplation of the parties at the time of contracting.
214
GENERAL PRINCIPLE twist (Anglia TV v Reed 1972): Change one key fact—what element is crucial for the rule in “A claimant may recover wasted expenditure incurred in reliance on a contract, including pre-contract costs, where:…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
215
DAMAGES scenario (C&P Haulage v Middleton 1983): Reliance damages are not recoverable where the defendant can show that the contract would have been…. What is the legal result?
Reliance damages are not recoverable where the defendant can show that the contract would have been loss-making. A claimant cannot recover expenditure if this would put them in a better position than full performance.
216
DAMAGES twist (C&P Haulage v Middleton 1983): Change one key fact—what element is crucial for the rule in “Reliance damages are not recoverable where the defendant can show that the contract would have been…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
217
DAMAGES scenario (Omak Maritime v Mamola Challenger Shipping 2010): Where a breach of contract causes the loss of a real and measurable commercial chance, damages…. What is the legal result?
Where a breach of contract causes the loss of a real and measurable commercial chance, damages may be awarded even if the outcome was uncertain. The court assesses damages by valuing the chance, not by applying an all-or-nothing approach. Limits on Reliance Damages Reliance damages cannot be used to escape a bad bargain Burden of…
218
DAMAGES twist (Omak Maritime v Mamola Challenger Shipping 2010): Change one key fact—what element is crucial for the rule in “Where a breach of contract causes the loss of a real and measurable commercial chance, damages…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
219
DAMAGES scenario (Attorney): Although damages for breach of contract are normally compensatory, the court may exceptionally award an account…. What is the legal result?
Although damages for breach of contract are normally compensatory, the court may exceptionally award an account of profits where: the claimant has a legitimate interest in preventing the breach, and ordinary damages are inadequate. This remedy is rare and exceptional, not a general alternative to damages.
220
DAMAGES twist (Attorney): Change one key fact—what element is crucial for the rule in “Although damages for breach of contract are normally compensatory, the court may exceptionally award an account…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
221
DAMAGES scenario (One Step (Support v Morris): Negotiating (Wrotham Park) damages are exceptional and are available only where: the breach involves the loss…. What is the legal result?
Negotiating (Wrotham Park) damages are exceptional and are available only where: the breach involves the loss of a valuable asset or right, and ordinary compensatory damages are inadequate to reflect that loss. [[PAGE 130]] They are not generally available for breach of restrictive covenants.
222
DAMAGES twist (One Step (Support v Morris): Change one key fact—what element is crucial for the rule in “Negotiating (Wrotham Park) damages are exceptional and are available only where: the breach involves the loss…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
223
DAMAGES scenario (Experience Hendrix v PPX Enterprises 2003): An account of profits for breach of contract is available only in exceptional circumstances, where: ordinary…. What is the legal result?
An account of profits for breach of contract is available only in exceptional circumstances, where: ordinary damages are inadequate, and the claimant has a legitimate interest in preventing the defendant from profiting from the breach. [[PAGE 131]] Business Takeaway Gain-based damages = rare, exceptional Used mainly for breaches of: confidentiality, loyalty, fiduciary-flavoured obligations Not a…
224
DAMAGES twist (Experience Hendrix v PPX Enterprises 2003): Change one key fact—what element is crucial for the rule in “An account of profits for breach of contract is available only in exceptional circumstances, where: ordinary…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
225
PENALTY CLAUSE scenario (Dunlop v New Garage 1915): A clause is a penalty if it is extravagant or disproportionate to the likely loss. What is the legal result?
A clause is a penalty if it is extravagant or disproportionate to the likely loss. A clause is liquidated damages if it represents a genuine pre-estimate of loss. The assessment is made at the time of contracting, not after breach.
226
PENALTY CLAUSE twist (Dunlop v New Garage 1915): Change one key fact—what element is crucial for the rule in “A clause is a penalty if it is extravagant or disproportionate to the likely loss” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
227
PENALTY CLAUSE scenario (Cavendishh Square v Makdessi; ParkingEye v Beavis 2015): A clause will be unenforceable as a penalty only if: It imposes a secondary obligation, and…. What is the legal result?
A clause will be unenforceable as a penalty only if: It imposes a secondary obligation, and The detriment is out of all proportion to the innocent party’s legitimate interest in performance. The test is not whether the clause is a genuine pre-estimate of loss. Legitimate Interests & Proportionality A clause is likely enforceable when: The…
228
PENALTY CLAUSE twist (Cavendishh Square v Makdessi; ParkingEye v Beavis 2015): Change one key fact—what element is crucial for the rule in “A clause will be unenforceable as a penalty only if: It imposes a secondary obligation, and…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
229
ACCEPTANCE scenario (White & Carter v McGregor 1962): An innocent party may affirm a contract after repudiation and claim the contract price, provided that:…. What is the legal result?
An innocent party may affirm a contract after repudiation and claim the contract price, provided that: performance does not require the other party’s cooperation, and the innocent party has a legitimate interest in performing rather than accepting damages.
230
ACCEPTANCE twist (White & Carter v McGregor 1962): Change one key fact—what element is crucial for the rule in “An innocent party may affirm a contract after repudiation and claim the contract price, provided that:…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
231
GENERAL PRINCIPLE scenario (Lumley v Wagner 1852): While courts will not enforce positive obligations to perform personal services, they may enforce negative covenants…. What is the legal result?
While courts will not enforce positive obligations to perform personal services, they may enforce negative covenants by injunction, provided this does not indirectly compel performance. This case is the foundation for modern law on injunctions in employment and personal service contracts. The Lumley Principle Courts won’t force personal services, but They can restrain someone from…
232
GENERAL PRINCIPLE twist (Lumley v Wagner 1852): Change one key fact—what element is crucial for the rule in “While courts will not enforce positive obligations to perform personal services, they may enforce negative covenants…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
233
GENERAL PRINCIPLE scenario (Warner Bros v Nelson 1937): While courts will not enforce positive obligations in personal service contracts, they may enforce negative obligations…. What is the legal result?
While courts will not enforce positive obligations in personal service contracts, they may enforce negative obligations by injunction, provided this does not amount to indirect compulsion to perform. This builds on Lumley v Wagner and confirms the enforceability of exclusive service clauses. [[PAGE 142]]
234
GENERAL PRINCIPLE twist (Warner Bros v Nelson 1937): Change one key fact—what element is crucial for the rule in “While courts will not enforce positive obligations in personal service contracts, they may enforce negative obligations…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
235
GENERAL PRINCIPLE scenario (Warren v Mendy 1989): Courts will not grant an injunction that effectively forces continued personal cooperation in a broken relationship…. What is the legal result?
Courts will not grant an injunction that effectively forces continued personal cooperation in a broken relationship. Even where a contract is valid, injunctive relief may be refused if it creates an unreasonable restraint of trade or amounts to indirect specific performance.
236
GENERAL PRINCIPLE twist (Warren v Mendy 1989): Change one key fact—what element is crucial for the rule in “Courts will not grant an injunction that effectively forces continued personal cooperation in a broken relationship…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
237
REPUDIATION/TERMINATION scenario (LauritzenCool AB v Lady Navigation 2005): Where a party, with knowledge of a repudiatory breach, continues performance or otherwise treats the contract…. What is the legal result?
Where a party, with knowledge of a repudiatory breach, continues performance or otherwise treats the contract as ongoing, this amounts to affirmation, and the right to terminate for that breach is lost. Business Takeaway [[PAGE 143]] Use specific remedies when the thing promised matters more than money Injunctions are the main tool for protecting key…
238
REPUDIATION/TERMINATION twist (LauritzenCool AB v Lady Navigation 2005): Change one key fact—what element is crucial for the rule in “Where a party, with knowledge of a repudiatory breach, continues performance or otherwise treats the contract…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
239
GENERAL PRINCIPLE scenario (Arcos v Ronaasen 1933): Where a contractual term is a condition, it must be strictly complied with. What is the legal result?
Where a contractual term is a condition, it must be strictly complied with. Any deviation, however minor, entitles the innocent party to reject the goods, even if the breach causes no practical disadvantage.
240
GENERAL PRINCIPLE twist (Arcos v Ronaasen 1933): Change one key fact—what element is crucial for the rule in “Where a contractual term is a condition, it must be strictly complied with” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
241
GENERAL PRINCIPLE scenario (Hong Kong Fir Shipping v Kawasaki 1962): [[PAGE 146]]. What is the legal result?
[[PAGE 146]]
242
GENERAL PRINCIPLE twist (Hong Kong Fir Shipping v Kawasaki 1962): Change one key fact—what element is crucial for the rule in “[[PAGE 146]]” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
243
GENERAL PRINCIPLE scenario (Schuler v Wickman 1974): Whether a term is a condition or warranty depends on its true construction and importance, not…. What is the legal result?
Whether a term is a condition or warranty depends on its true construction and importance, not merely the label used by the parties. Courts will avoid an interpretation that allows termination for trivial breaches unless clearly intended. The Hansa Nord 1976 - Conditions, Warranties & Intermediate Terms
244
GENERAL PRINCIPLE twist (Schuler v Wickman 1974): Change one key fact—what element is crucial for the rule in “Whether a term is a condition or warranty depends on its true construction and importance, not…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
245
GENERAL PRINCIPLE scenario (Principle #123): Where a contractual term is neither clearly a condition nor a warranty, it may be an…. What is the legal result?
Where a contractual term is neither clearly a condition nor a warranty, it may be an intermediate (innominate) term. The right to terminate depends on the seriousness of the breach, not the label of the term. Minor breaches of intermediate terms do not justify rejection or termination.
246
GENERAL PRINCIPLE twist (Principle #123): Change one key fact—what element is crucial for the rule in “Where a contractual term is neither clearly a condition nor a warranty, it may be an…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
247
GENERAL PRINCIPLE scenario (Bunge Corp v Tradax 1981): In mercantile contracts, time clauses are generally conditions, not warranties. What is the legal result?
In mercantile contracts, time clauses are generally conditions, not warranties. Breach of a condition entitles the innocent party to terminate immediately, even if the breach causes little or no loss.
248
GENERAL PRINCIPLE twist (Bunge Corp v Tradax 1981): Change one key fact—what element is crucial for the rule in “In mercantile contracts, time clauses are generally conditions, not warranties” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
249
DAMAGES scenario (Johnson v Agnew 1980): Termination (or “rescission” in this context) for breach is prospective, not retrospective. What is the legal result?
Termination (or “rescission” in this context) for breach is prospective, not retrospective. It releases parties from future obligations but does not wipe out accrued rights, including claims for damages. [[PAGE 148]]
250
DAMAGES twist (Johnson v Agnew 1980): Change one key fact—what element is crucial for the rule in “Termination (or “rescission” in this context) for breach is prospective, not retrospective” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
251
ACCEPTANCE scenario (Geys v Société Généraöe 2012): A repudiatory breach terminates a contract only when the innocent party accepts it. What is the legal result?
A repudiatory breach terminates a contract only when the innocent party accepts it. Until acceptance, the contract continues to exist, even if performance has stopped. Clear communication is required to bring a contract to an end.
252
ACCEPTANCE twist (Geys v Société Généraöe 2012): Change one key fact—what element is crucial for the rule in “A repudiatory breach terminates a contract only when the innocent party accepts it” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
253
ACCEPTANCE scenario (Hochster v De La Tour 1853): Where one party clearly repudiates a contract before performance is due, the innocent party may: accept…. What is the legal result?
Where one party clearly repudiates a contract before performance is due, the innocent party may: accept the repudiation and sue immediately, or affirm the contract and wait until the time for performance. This case establishes the doctrine of anticipatory breach of contract.
254
ACCEPTANCE twist (Hochster v De La Tour 1853): Change one key fact—what element is crucial for the rule in “Where one party clearly repudiates a contract before performance is due, the innocent party may: accept…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
255
MISTAKE scenario (Woodar v Wimpey 1980): A mistaken but honest termination of a contract does not necessarily amount to repudiation. What is the legal result?
A mistaken but honest termination of a contract does not necessarily amount to repudiation. Repudiatory breach depends on whether the party’s conduct objectively shows an intention not to perform the contract at all, not merely reliance on the wrong legal reason. Business Takeaway Only serious breaches justify termination Affirmation = binding decision - choose deliberately…
256
MISTAKE twist (Woodar v Wimpey 1980): Change one key fact—what element is crucial for the rule in “A mistaken but honest termination of a contract does not necessarily amount to repudiation” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
257
GENERAL PRINCIPLE scenario (Halsey v Milton Keynes NHS Trust 2004): A court may penalise a successful party in costs for unreasonably refusing ADR, but there is…. What is the legal result?
A court may penalise a successful party in costs for unreasonably refusing ADR, but there is no general duty to mediate. Unreasonableness is assessed case by case, considering all the circumstances.’ Relevant Factors: nature of dispute prospects of success in mediation costs timing Importance for Business: Cost sanctions possible for unreasonable refusal to mediate ADR…
258
GENERAL PRINCIPLE twist (Halsey v Milton Keynes NHS Trust 2004): Change one key fact—what element is crucial for the rule in “A court may penalise a successful party in costs for unreasonably refusing ADR, but there is…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
259
ARBITRATION/ENFORCEMENT scenario (PGF II SA v OMFS 2013): A party who unreasonably refuses or ignores an invitation to mediate may be deprived of costs,…. What is the legal result?
A party who unreasonably refuses or ignores an invitation to mediate may be deprived of costs, even if successful in the litigation. Silence ≠ reasonable refusal; parties must respond and justify any refusal to mediate. Benefits of Mediation Cost-effective compared to litigation/arbitration Faster and more flexible procedure Preserves commercial relations Useful for “future-looking” settlements Litigation…
260
ARBITRATION/ENFORCEMENT twist (PGF II SA v OMFS 2013): Change one key fact—what element is crucial for the rule in “A party who unreasonably refuses or ignores an invitation to mediate may be deprived of costs,…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
261
ARBITRATION/ENFORCEMENT scenario (Moses H Cone Memorial Hospital v Mercury Construction 1983): US federal courts must give substantial weight to the federal policy favouring arbitration. What is the legal result?
US federal courts must give substantial weight to the federal policy favouring arbitration. Parallel state proceedings are not a sufficient reason to refuse or delay enforcement of an arbitration agreement under the FAA. Separability in UK Fiona Trust 2007 Assumes rational parties intend one-stop arbitration [[PAGE 162]] Broad interpretation of arbitration clauses Promotes efficiency and…
262
ARBITRATION/ENFORCEMENT twist (Moses H Cone Memorial Hospital v Mercury Construction 1983): Change one key fact—what element is crucial for the rule in “US federal courts must give substantial weight to the federal policy favouring arbitration” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
263
GENERAL PRINCIPLE scenario (Harbour Assurance Co v Kansa General International Insurance Co 1993): Illegality does not automatically invalidate a contract. What is the legal result?
Illegality does not automatically invalidate a contract. Where a statutory breach is regulatory rather than fundamental, and the contract can be severed from the illegality, the contract may remain enforceable.
264
GENERAL PRINCIPLE twist (Harbour Assurance Co v Kansa General International Insurance Co 1993): Change one key fact—what element is crucial for the rule in “Illegality does not automatically invalidate a contract” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
265
ARBITRATION/ENFORCEMENT scenario (Lesotho Highlands Development Authority v Impregilo SpA 2005): (severability): An arbitration clause is severable from the main contract. What is the legal result?
(severability): An arbitration clause is severable from the main contract. Allegations that the main contract is void or voidable do not prevent arbitrators from determining their own jurisdiction, unless the arbitration agreement itself is specifically challenged. Kompetenz-Kompetenz: The Basic Idea Tribunal may rule on its own jurisdiction; covers: ○ existence of the arbitration agreement ○…
266
ARBITRATION/ENFORCEMENT twist (Lesotho Highlands Development Authority v Impregilo SpA 2005): Change one key fact—what element is crucial for the rule in “(severability): An arbitration clause is severable from the main contract” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
267
ARBITRATION/ENFORCEMENT scenario (Mitsubishi Motors Corp v Soler Chrysler): Statutory claims, including competition/antitrust claims, may be resolved by international arbitration unless there is a clear…. What is the legal result?
Statutory claims, including competition/antitrust claims, may be resolved by international arbitration unless there is a clear congressional intention to exclude them. Courts should show deference to arbitration agreements in international commercial contracts.
268
ARBITRATION/ENFORCEMENT twist (Mitsubishi Motors Corp v Soler Chrysler): Change one key fact—what element is crucial for the rule in “Statutory claims, including competition/antitrust claims, may be resolved by international arbitration unless there is a clear…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
269
ARBITRATION/ENFORCEMENT scenario (Enaka Insaat ve Sanayi v OOO Insurance Company Chubb 2020): Where an arbitration agreement contains no express or implied choice of law, the governing law will…. What is the legal result?
Where an arbitration agreement contains no express or implied choice of law, the governing law will generally be the law of the seat of arbitration, as the system with the closest connection. This promotes certainty, consistency, and effective arbitration. [[PAGE 169]]
270
ARBITRATION/ENFORCEMENT twist (Enaka Insaat ve Sanayi v OOO Insurance Company Chubb 2020): Change one key fact—what element is crucial for the rule in “Where an arbitration agreement contains no express or implied choice of law, the governing law will…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
271
GENERAL PRINCIPLE scenario (Principle #136): An express choice of law in a contract will be respected if it is bona fide,…. What is the legal result?
An express choice of law in a contract will be respected if it is bona fide, legal, and not contrary to public policy — even if the chosen law has no real connection to the transaction. Takeaway. Courts strongly uphold express choice of law clauses Party autonomy is the starting point
272
GENERAL PRINCIPLE twist (Principle #136): Change one key fact—what element is crucial for the rule in “An express choice of law in a contract will be respected if it is bona fide,…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
273
JURISDICTION scenario (Habib Bank v Central Bank of Sudan 2006): A foreign state or state entity cannot claim state immunity in respect of commercial transactions, particularly…. What is the legal result?
A foreign state or state entity cannot claim state immunity in respect of commercial transactions, particularly where it has submitted to English law and jurisdiction. Entering into ordinary commercial contracts amounts to a waiver of immunity for those disputes. When no clause exists, English courts look to where the contract is most closely connected.
274
JURISDICTION twist (Habib Bank v Central Bank of Sudan 2006): Change one key fact—what element is crucial for the rule in “A foreign state or state entity cannot claim state immunity in respect of commercial transactions, particularly…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
275
CHOICE OF LAW scenario (Principle #138): Although English law governed the contract, the place of performance was Spain. What is the legal result?
Although English law governed the contract, the place of performance was Spain. English courts will not enforce a contract requiring performance that is illegal under the law of the place of performance. Enforcing such a contract would indirectly require a party to commit an unlawful act abroad.
276
CHOICE OF LAW twist (Principle #138): Change one key fact—what element is crucial for the rule in “Although English law governed the contract, the place of performance was Spain” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
277
ACCEPTANCE scenario (Owusu v jackson 2005): Where a defendant is domiciled in an EU Member State, the court must accept jurisdiction under…. What is the legal result?
Where a defendant is domiciled in an EU Member State, the court must accept jurisdiction under Brussels I and cannot decline it on forum non conveniens grounds, even if a non-EU forum would be more appropriate. Owusu 2005: No FNC in the EU CJEU held that a court of an EU Member State may not…
278
ACCEPTANCE twist (Owusu v jackson 2005): Change one key fact—what element is crucial for the rule in “Where a defendant is domiciled in an EU Member State, the court must accept jurisdiction under…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
279
JURISDICTION scenario (Principle #140): An exclusive jurisdiction clause can cover non-contractual claims (including torts) if they are closely connected to…. What is the legal result?
An exclusive jurisdiction clause can cover non-contractual claims (including torts) if they are closely connected to the contractual relationship. Courts will prevent attempts to circumvent jurisdiction agreements by creative pleading. From the Slides: Strict enforcement of clauses.
280
JURISDICTION twist (Principle #140): Change one key fact—what element is crucial for the rule in “An exclusive jurisdiction clause can cover non-contractual claims (including torts) if they are closely connected to…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
281
GENERAL PRINCIPLE scenario (Spiliada Maritime Corp v Cansulex 1987): English courts may stay proceedings where another forum is clearly more appropriate, unless the claimant can…. What is the legal result?
English courts may stay proceedings where another forum is clearly more appropriate, unless the claimant can show that a stay would deny substantial justice. This case establishes the modern common law test for forum non conveniens. VTB Capital 2013 - Law Does Not Equal Forum
282
GENERAL PRINCIPLE twist (Spiliada Maritime Corp v Cansulex 1987): Change one key fact—what element is crucial for the rule in “English courts may stay proceedings where another forum is clearly more appropriate, unless the claimant can…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
283
JURISDICTION scenario (Principle #142): The corporate veil will be pierced only in exceptional cases, if at all. What is the legal result?
The corporate veil will be pierced only in exceptional cases, if at all. It cannot be used simply to rewrite contracts or impose liability on persons who were never contracting parties. Courts will not effectively rewrite the contract to force jurisdiction if it wasn’t agreed Allegations of control, impropriety, or economic reality are insufficient on…
284
JURISDICTION twist (Principle #142): Change one key fact—what element is crucial for the rule in “The corporate veil will be pierced only in exceptional cases, if at all” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
285
JURISDICTION scenario (Lungowe v Vedanta Resources 2019): A parent company may owe a direct duty of care for harm caused by a subsidiary…. What is the legal result?
A parent company may owe a direct duty of care for harm caused by a subsidiary where it has assumed responsibility or exercised significant control. English courts may take jurisdiction where the parent is domiciled in England and access to justice abroad is realistically unavailable. From slides: Even where foreign courts exist, English courts may…
286
JURISDICTION twist (Lungowe v Vedanta Resources 2019): Change one key fact—what element is crucial for the rule in “A parent company may owe a direct duty of care for harm caused by a subsidiary…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
287
ARBITRATION/ENFORCEMENT scenario (Commerzbank AG v Liquimar Tankers Management 2017): In the absence of an express choice, the law of the seat of arbitration will usually…. What is the legal result?
In the absence of an express choice, the law of the seat of arbitration will usually govern the arbitration agreement, as the system of law with the closest and most real connection.
288
ARBITRATION/ENFORCEMENT twist (Commerzbank AG v Liquimar Tankers Management 2017): Change one key fact—what element is crucial for the rule in “In the absence of an express choice, the law of the seat of arbitration will usually…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
289
MISREPRESENTATION scenario (UBS v HSH Nordbank 2009): An entire agreement clause alone does not exclude liability for misrepresentation. What is the legal result?
An entire agreement clause alone does not exclude liability for misrepresentation. Clear words are required to exclude misrepresentation, and such exclusions are subject to statutory reasonableness controls.
290
MISREPRESENTATION twist (UBS v HSH Nordbank 2009): Change one key fact—what element is crucial for the rule in “An entire agreement clause alone does not exclude liability for misrepresentation” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
291
JURISDICTION scenario (Godard v Gray 1870): A foreign judgment for a fixed sum of money is enforceable in England if it is…. What is the legal result?
A foreign judgment for a fixed sum of money is enforceable in England if it is final and conclusive and given by a court with proper jurisdiction, even if the defendant did not participate in the proceedings. Slides: Court cannot re-examine the underlying dispute It only checks: Was the foreign court competent? Was judgment final…
292
JURISDICTION twist (Godard v Gray 1870): Change one key fact—what element is crucial for the rule in “A foreign judgment for a fixed sum of money is enforceable in England if it is…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
293
GENERAL PRINCIPLE scenario (Société Eram v HSBC 2003): English courts will not enforce foreign judgments that are penal, coercive, or procedural in nature…. What is the legal result?
English courts will not enforce foreign judgments that are penal, coercive, or procedural in nature. Only final, conclusive, and compensatory money judgments are enforceable at common law. Slides: English House of Lords held that a foreign judgment did not permit extraterritorial orders (e.g freezing assets outside England) Reinforces the importance of where assets are located…
294
GENERAL PRINCIPLE twist (Société Eram v HSBC 2003): Change one key fact—what element is crucial for the rule in “English courts will not enforce foreign judgments that are penal, coercive, or procedural in nature…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
295
ARBITRATION/ENFORCEMENT scenario (Dallah v Pakistan 2010): An arbitral award cannot be enforced unless there is clear consent to arbitration. What is the legal result?
An arbitral award cannot be enforced unless there is clear consent to arbitration. National courts have the final say on whether an arbitration agreement exists when enforcement is sought, even if the tribunal has ruled on its own jurisdiction. Slides: Court re-examined whether Pakistan had consented to arbitration Held: no consent - no enforcement
296
ARBITRATION/ENFORCEMENT twist (Dallah v Pakistan 2010): Change one key fact—what element is crucial for the rule in “An arbitral award cannot be enforced unless there is clear consent to arbitration” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
297
GENERAL PRINCIPLE scenario (Hebei Import & Export v polytek Engineering 1999): Foreign arbitral awards will be enforced unless enforcement would violate fundamental public policy…. What is the legal result?
Foreign arbitral awards will be enforced unless enforcement would violate fundamental public policy. Public policy does not allow courts to revisit the correctness of the award; only serious injustice will justify refusal.
298
GENERAL PRINCIPLE twist (Hebei Import & Export v polytek Engineering 1999): Change one key fact—what element is crucial for the rule in “Foreign arbitral awards will be enforced unless enforcement would violate fundamental public policy…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
299
STATE IMMUNITY scenario (AIG Capital Partners v Republic of Kazakhstan 2005): A foreign state enjoys immunity from execution except in relation to assets used for commercial purposes…. What is the legal result?
A foreign state enjoys immunity from execution except in relation to assets used for commercial purposes. Arbitral awards may be enforced against state assets only where immunity has been lifted by statute or waiver.
300
STATE IMMUNITY twist (AIG Capital Partners v Republic of Kazakhstan 2005): Change one key fact—what element is crucial for the rule in “A foreign state enjoys immunity from execution except in relation to assets used for commercial purposes…” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
301
STATE IMMUNITY scenario (Trendtex Trading Corp v Central Bank of Nigeria 1977): A state or state entity cannot claim immunity in respect of commercial transactions. What is the legal result?
A state or state entity cannot claim immunity in respect of commercial transactions. Only sovereign or governmental acts attract immunity under the restrictive doctrine. Force Majeure in English Contract Law In English law, force majeure is not a general legal doctrine.
302
STATE IMMUNITY twist (Trendtex Trading Corp v Central Bank of Nigeria 1977): Change one key fact—what element is crucial for the rule in “A state or state entity cannot claim immunity in respect of commercial transactions” to apply?
The crucial element is any stated requirement in the principle (e.g., clear communication, valid consent, reasonable reliance, timeliness, or authority). If that requirement fails, the rule does not apply or the outcome changes.
Business Law
flashcards
Decks in class (30)
# Cards
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Lecture 124
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Lecture 2 examples24
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Lecture 2 PIL46
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Lecture 2 common law/equity31
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Lecture 2 EU and civil29
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Lecture 3 facts41
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Lecture 3 case like27
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Lecture 4 overall15
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Lecture 4 examples17
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Lecture 5 overall38
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Lecture 5 examples23
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Lecture 6 core theory23
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Lecture 6 examples23
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Lecture 7 core theory21
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Lecture 7 examples14
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Lecture 8 core theory21
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Lecture 8 examples14
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Force Majure16
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Lecture 4 extras21
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Session 3 all cases36
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Session 4 all cases18
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Session 5 all cases26
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Session 6 all cases37
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Chats missar26
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EU things10
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Last deck149
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DAY BEFORE EXAM151
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HEJ151
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De302
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H0
