Def Contract
agreement leading to obligations which are enforced or recognized by law.
Printing and Numerical registering co v Sampson
One party wanted to cancel a patent contract, saying it was unfair.
Court: people should be free to make their own contract, court shouldn’t protect someone just because they made a bad choice
Office of Fair Trading v Ashbourne Management Services:
gym contract were considered unfair because they pressured consumers into paying even after they quit and damaged their credit.
How can contracts be judged?
Objectively: Look at the objective meanings of the words and conducts of signatories
=> Approach generally used in the UK
If there are two possible interpretations the case will be decided for the benefit of the party who is not responsible of the ambiguity.
Looking at what a reasonable person would have assumed in this situation.
Subjectively: In case of doubts look at the state of mind of the signatories
=> Approach used in civil law and exceptionally in the UK
Destiny V Lloyds TSB Bank
D wanted to move their accounts to L, the talk broke down but D claimed that they already made an binding agreement.
Court: Looked at what a reasonable person would have understood in this situation. They wouldn’t have assumed that a contract has been made because negotiations were still ongoing.
Tamplin v James
At an auction the seller sold brewhouse. The buyer believed the sale included extra land behind the building. The auction document clearly showed that he got mistaken
Court: the buyer must go through with the purchase even if he misunderstood. The mistake was his own fault.
Raffles V Wichelhaus
The seller agreed to sell cotton to the buyer. There were two ships with the same name the buyer was talking about one and the seller about the other
Court: No contract existed because both sides meant different things, it was impossible to tell which ships they agreed on.
L’Estrange v F Graucob
The buyer bought a slot machine and signed a written contract. In small print it was stated that the seller wouldn’t be responsible for any defects.
Court: Even if the machine has defects the buyer must pay because it was written in the contract.
Bilateral contract
two way exchange, they have mutual obligations.
Unilateral contract
one way exchange. It is only when the full performance is done that there is a contract.
Offer
Expression of willingness to enter in contract within certain terms. Want it to be legally binding as soon as the other person accepts.
