Contract - Agreement Cases

Question 1

Smith v Hughes

Answer 1

Oats case - intention to enter legal relations - objective test.
Regardless of a man’s real intentions, if he conducts himself in a way that a reasonable man would believe means acceptance, he is bound by it.

If a buyer has opportunity to inspect goods and purchases based on judgement, rule of caveat emptor applies

Question 2

Edwards v Skyways

Answer 2

Pilot made redundant, told he could receive ex-gratia payments.

For commercial agreements, there will be a presumption of intention to enter legal relations

Question 3

Balfour v Balfour

Answer 3

Family agreements - presumption that there is no intention to enter legal relations

Question 4

Rose and Frank Co v Compton Bros

Answer 4

The presumption re. intention to enter legal relations for commercial agreements can be rebutted.

Question 5

Merritt v Merritt

Answer 5

Presumption regarding family agreements can be rebutted based on whether any consideration has been given, parties are on good terms, and whether any agreement exists in writing.

Question 6

Scammell v Ouston

Answer 6

For an agreement, there must be certainty

Question 7

Allied Marine Transport v Vale do Rio Doce Navegaco SA (The Leonidas)

Answer 7

Offer - definition

“An offer is an expression of willingness to contract on certain terms, made with the intention to be bound by it as soon as accepted by the person to whom it is addressed”

Question 8

Pharmaceutical Society of GB v Boots Cash Chemists

Answer 8

Goods on sale at a self-service or on display in a shop will be invitations to treat, not offers.

Question 9

Fisher v Bell

Answer 9

Flick knife

Goods on display will be an invitation to treat

Question 10

Partridge v Crittenden

Answer 10

Advertisements will usually amount to invitations to treat

Question 11

Carlill v Carbolic Smoke Ball

Answer 11

advertisement of a reward will amount to a unilateral contract, in which case there is no need to communicate acceptance beyond taking the steps stipulated in the contract.

Question 12

Williams v Carwardine

Answer 12

When there is an advertisement of a reward, this will amount to a unilateral contract

Question 13

Barry v Davies

Answer 13

If there is no reserve price, object must be sold to the highest bidder

Question 14

Spencer v Harding

Answer 14

Tenders requests are invitations to treat and there is usually no obligation on the party requesting the tender.

Question 15

Blackpool & Fyld Aero Club v Blackpool Borough Council

Answer 15

A request for tenders may amount to a unilateral contract where there has been a commitment to consider all validly received tenders; in these instances failure to consider a valid tender will a,out to a breach

Question 16

Harvela Investments Ltd v Royal Trust of Canada

Answer 16

Where request for tender stipulates that the highest bidding tender will be accepted, this amounts to a unilateral contract and obliges the party requesting the tender to accept the higher bidder or be in breach.

Question 17

Entores v Miles East Corp.

Answer 17

Acceptance must be communicated by the offeree or by a duly authorised agent

Question 17

Powell v Lee

Answer 17

Headmaster job case

Offer must be communicated by the offeror or by duly authorised agent.

Question 18

Felthouse v Bindley

Answer 18

Offeror cannot impose that the offeree’ silence means acceptance

Question 19

Re Selectmove

Answer 19

Offeror cannot impose that silence is acceptance, except where there is no reason for the offeree not to bind themselves.

Principle from Roffey Bros does not apply to part repayment of a debt, only to cases where additional money is requested for a service

Question 20

Adams v Lindsell

Answer 20

Under the postal rule, acceptance will be deemed communicated upon posting. Postal rule will apply where:

1) It was reasonable to use post
2) the acceptance was properly posted
3) the postal rule was not expressly or impliedly excluded

Question 21

Household Fire Insurance v Grant

Answer 21

Even if acceptance never reaches recipient, acceptance will be deemed communicated as long as it is posted and the conditions laid out in Adams v Lindsell are satisfied

Question 22

Howell Securities v Hughes

Answer 22

The postal rule will not apply if it has been excluded by either party

Question 23

Stevenson, Jacques and Co v Maclean

Answer 23

Request for further info does not amount to a counter-offer and is therefore not a rejection of the offer

Question 24

Hyde v Wrench

Answer 24

Negotiating Farmers

Acceptance must match terms of offer; any counter offer is an implicit rejection and offeror is no longer bound by initial offer

Question 25

Routledge v Grant

Answer 25

An offer can be revoked at any time; promises are not binding if they are gratuitous

Question 26

Mountford v Scott

Answer 26

An offer cannot be revoked if consideration is given for that offer to remain open

Question 27

Byrne & Co v Van Tienhoven & Co

Answer 27

Notice of withdrawal must be given and communicated (by the offeror) to offeree to be effective.

Question 28

Byrne & Co v Van Tienhoven & Co

Answer 28

Notice of withdrawal must be given and communicated (by the offeror in this case) to offeree to be effective.

Question 29

Errington v Errington and Woods

Answer 29

An offer cannot be revoked once acceptance of a unilateral contract has begun

Question 30

The Brimnes

Answer 30

An exception to the rule that revocation must be communicated where it is reasonable to expect the revocation to have been read

Question 31

Butler Machine Tool Co Ltd v Ex-Cell-O Corporation

Answer 31

Battle of the forms - last shot wins

Question 32

Freeman and Lockyer v Buckhurst Park Properties

Answer 32

Agency is created either via actual authority or apparent authority where:

1) representation is made by principal that agent has authority
2) representation is relied on by third party and,
3) in reliance, the third party has altered their position.

An agreement made by an agent with apparent authority will be binding

Question 33

Chappel v Nestle

Answer 33

(Wrappers)

Consideration need not be adequate ( need not reflect true value), but must be sufficient (have some economic value)

Question 34

White v Bluett

Answer 34

(Father son debt)

Not doing something will not usually amount to consideration

Question 35

Ruscorla v Thomas

Answer 35

Past consideration is not good consideration

Question 36

Lampleigh v Braithwait

Answer 36

Past consideration can be good consideration if three conditions are satisfied - act was done at the promisor’s request.

Question 37

Re Casey’s Patients, Stewart v Casey

Answer 37

Past consideration can be good consideration if three conditions are satisfied - the parties understood from the outset that the act was to be rewarded in some way

Question 38

Collins v Godefroy

Answer 38

Performance of existing legal duty is not sufficient legal duty to receive money (unless one goes above and beyond legal duty e.g. Ward v Byham, Williams v Williams, Glasbroom Bros Ltd v Lamorgan County Council).

Question 39

Getreide Geselschaft v Contimar

Answer 39

Postal rule - wrong address

Acceptance upon receipt of wrongly addressed letter

Question 40

Shuey v US (US law)

Answer 40

Revocation of a unilateral offer must be communicated through the same channel as offer provided it has the same prominence.

Question 41

Daulia v Flour Mill Bank

Answer 41

There is an implied obligation for the offeror not to prevent offeree performance.