CASE LAW Flashcards

Question

The Eurymedon [1975] AC 154

Answer 1

Here the facts were very similar The contract satisfied the first three steps of Lord Reid’ test, but there was difficulty showing consideration But the Court got creative: Privy Council: (i) held that when the consignor signed the contract they, simultaneous to contract with carriers, made a unilateral offer that anyone who unloaded their goods at the port of discharge would be entitled to the benefit of the exclusion clause (implied promise) (ii) this was accepted by the stevedores when they unloaded the goods at the port of discharge and at that moment a binding contract came into existence (iii) the consideration was the performance of a contractual duty owed to their the carrier i.e. the Shadwell v Shadwell (1860) 9 CB (NS) 159 approach. There a promise to man to marry by uncle in exchange for £150 rationalised as good consideration where went through with marriage to his wife. Here went through with unloading after contract formed. RC: this is tenuous, since the so-called unilateral offer was in the form of an implied offer

Answer 2

‘Now, it was said on the part of the Defendant, that such a contract as that which I have mentioned, a contract by which an inventor agrees to sell what he may invent, or acquire a patent for before he has invented it, is against public policy, and it was said to be against public policy, because it would discourage inventions… if there is one thing which more than another public policy requires it is that men of full age and competent understanding shall have the utmost liberty of contracting, and that their contracts when entered into freely and voluntarily shall be held sacred and shall be enforced by Courts of justice.’ LIMIT TO WHAT THE COURTS ACCEPT BOUNDARIES TO THE FREEDOM OF CONTRACT BUT WHERE IS THIS TWO ARGUMENTS BASED ON THIS 1. FUNDAMENTAL / NATURAL RIGHTS 2. POPULAR MORALITY - THE CONCEPTUALISATION OF HUMAN DIGNITY Not true, or an over-generalisation. Contract has boundaries: “No court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act.” Per Lord Mansfield in Holman v Johnson (1775) 1 Cowp 341, 343, How we determine those boundaries is a more difficult question, and requires a clear eyed view of our background philosophy (but that is also a thorny issue!)

Answer 3

Married, genetic mother in a case of gestational surrogacy made an application to the Ard Chlaraitheoir to recognise that she was the mother of twins Her husband was the genetic commissioning father Refused based mater semper certus est (motherhood is always certain), i.e. birth mother is ‘mother’, which is an irrebuttable presumption Her husband, and the surrogate mother, registered as parents* Not illegal, but neither are they enforceable as void contrary to public policy. The only route is adoption, but the law does not recognise ‘private’ adoption

Answer 4

Genetic, commissioning parents of twins attempted to enforce the agreement Surrogate and husband remained the legal parents; court refused to look behind legislation See, (UK) Law Commission published its detailed Consultation Paper, Building Families through Surrogacy: A New Law, 2019: proposal to make it a lot easier for commissioning parents to gain legal parentage + subject to stricter enforcement of informed consent.

Answer 5

Twins born pursuant to a surrogacy arrangement between an English couple and a Ukrainian woman Ukrainian law recognised intending parents (UK couple) as parents; English law recognised Ukrainian surrogate and her husband as parents Result: children were left stateless Court found a creative solution to grant a parental order to English intending parents, but it was ad hoc and had a very questionable legal basis RC: very unsatisfactory that courts must decide ad hoc given importance of child welfare; but, what also lots of problems of enforceability regarding contract terms: price, conditions, etc, not regulated

Answer 6

Facts Hollier had his car repaired by the defendant garage three or four times over a period of five years. On at least two of these occasions he had signed a form which stated the garage were exempted from liability for damage caused by fire on their premises. Hollier had not read the form. On this occasion there was an oral agreement for the repairs to be conducted, and Hollier had not signed a form. His car was damaged by fire and Hollier claimed in negligence. Issues Hollier claimed the garage had been negligent and in breach of the implied term that they would take reasonable care of his car. He also contended the garage could not rely on the exclusion clause because it could not be imported from previous written contracts into the oral contract made between himself and the garage. The garage sought to rely on the exemption clause on the basis that the term had been imported into the oral contract by virtue of the parties’ previous course of dealing. They argued three or four occasions within five years was sufficient to amount to a course of dealing such that the terms of the previous contract would be imported into the oral one, and, therefore they were exempted from liability. Decision/Outcome Hollier was successful in his claim. Three or four occasions in five years was insufficient to amount to a course of dealing and the exclusion clause had not, therefore, been imported into the oral contract. Even if the clause had been so imported, the language used was not so plain as to clearly exclude the garage from liability for its own negligence.

Answer 7

Doctrine of Fundamental Breach ``` Facts The Defendant (Mr Wallis) agreed to buy a used car if the vendor was able to find a company with which the Defendant could enter into a hire-purchase agreement. The vendor found such a company (the Claimant). Once the agreement was entered into, the Defendant inspected the vehicle he had agreed to purchase through the hire purchase agreement and found that it had been substantially altered from the version he had previously seen and agreed to buy. Namely, the radio was missing, as were the chrome strips around the body, the new tires had been replaced by old ones, the bumper was not held together with rope and perhaps most importantly, the car could not start. The Defendant therefore refused to pay for the car. The hire purchase agreement contained an exclusion clause which stated that ‘No condition or warranty that the vehicle is roadworthy or as to its age, condition or fitness for any purpose is given by the owner or implied herein.’ ``` Issues The issue in this case was whether the exclusion clause was valid even in cases where there was a fundamental breach of the contract. Decision/Outcome It was held that Karsales was under an obligation to provide a car which is in substantially the same condition as when Mr Wallis inspected it. This is particularly the case for hire purchase agreements where the purchaser had previously inspected the vehicle. More broadly, where there is a fundamental breach of a contract, a party cannot rely on an exemption clause. Not in the least, the Sale of Goods Act 1979 would still imply a term into the contract that the goods will be fit for purpose which cannot be excluded through such a clause.

Answer 8

Resp. entered into an agreement with appl. over two garages in return for loans (i) Garage 1: agreement that would sell only Esso Petroleum for 21 years (ii) Gargae 2: agreement that would only sell Esso Petroleum for 4 years and 5 months A year after agreements signed, resp. started buying petrol from competitor. ESSO sought an injunction pursuant to agreement. Granted in Hct; overturned in COA. Argued in HL that (a) not a restraint of trade, (b) if a restraint of trade it was reasonable Esso Petroleum Lord Reid: ‘The public has an interest in every person’s carrying on his trade freely: so has the individual. All interference with individual liberty of action in trading, and all restraints of trade of themselves, if there is nothing more, are contrary to public policy, and therefore void. ... they may be justified in special circumstances of a particular case. ...the only justification, if the restriction is reasonable – reasonable, that is, in reference to the interests of the parties concerned and reasonable in reference to the interests of the public, so framed and so guarded as to afford adequate protection to the party in whose favour it is imposed, while at the same time it is in no way injurious to the public.’ Developed a three-stage test:

Answer 9

Def managing director of company making machine guns. Business had a worldwide scope. Sold out of company to pl. on personal bankruptcy & sold subject to a restrictive covenant that period of 25 years would not engage, directly or indirectly, in the manufacture of guns anywhere in the world i.e. a non-compete clause. When sued, argued that an unreasonable restriction because of worldwide scope. Lower Ct. agreed void because of unlimited geographic scope.

Answer 10

Apprentice worked for solicitor in Mayo & subsequently set up a practice once qualified next door in Ballina. He had promised pl in contract that would not set up practice in a 30 mile radius of Ballina or Charlestown where pl had his practices. Supreme Court: ‘A restriction though unlimited as to space may be reasonable if confined to a period of reasonable duration.’ (175) And the corollary true also ‘...a restriction, though unlimited in point of time [may be] valid if limited to a reasonable area’ (175) Although pl pursuing a legitimate business interest because so wide and not delimited in time, void (contrary to public policy).

Answer 11

Pl owned a pharmacy in Celbridge Def a former employee took up employment with a rival pharmacy in the town Pl claimed that former employee in breach of a non-compete clause in the contract of employment Clause 15, the Def had agreed not to work in, manage, own or run a pharmacy or a business trading in similar goods within a two mile vicinity of the Plaintiff’s pharmacy. McGovern J.: The judge concluded that the restraint of trade clause was not enforceable. The Plaintiff had not demonstrated that the nature of the Def’s role and work was such that clause 15 was necessary to protect its goodwill. This case illustrates the high threshold that must be satisfied in order to enforce a restraint of trade clause in an employment contract. CT: in particular noted that drop in footfall more likely attributable to opening of three rival pharmacies in the town.

Answer 12

Def, a young man trained as a managing clerk by pl, a restriction of working as a managing clerk (solicitor) within a 7 mile radius of town of Tamworth for an unlimited period. (rest of his life) Lord Birkenhead LC: ‘What are the facts here? A boy of the age of 14 is taken from a humble employment in the office of the local co-operative society and he is trained in the office of a solicitor of position in this particular neighbourhood . . Indeed I am of the opinion that it is in the public interest that a proper restrictive agreement of this kind between an established solicitor, possibly an elderly man, and a younger man should be allowed. It is in the public interest because otherwise solicitors carrying on their business without a partner would be extremely chary of admitting competent young men to their offices and to the confidential knowledge to be derived by frequenting those offices.’ (163-64) Law: a business to which clients likely to return over a long period, so not unreasonable to restrict for an indefinite duration ie largely based on goodwill. Appears important to Lord Birkenhead that he was 27 and a solitictor when he entered the agreement ie decides on freedom of contract term. So, reasonable between parties and no countervailing public interest against upholding it. What appeared crucial: That the restriction in time can be balanced against the restriction in space (7 miles only). AND public interest in training new solicitors.

Answer 13

The defendant built up a business in Ireland, and sold it to one of the plaintiffs. He stayed on as a director, and entered into an agreement that he would not have any interest in or work for any firm manufacturing competing products, or solicit customers of the business, in both cases for one year from the date of sale. The defendant had, unknown to the plaintiffs, established a new business in England, selling the same line of products as the first business in the UK and USA. Were the non-compete clauses (subject matter) enforceable?

Answer 14

The plaintiff was a young and unknown songwriter who entered into a standard form agreement with music publishers (the defendants). At this time, he was an unpublished artist. The copyright in all the plaintiff’s compositions for the next five years was assigned to the defendants, with an automatic extension for a further five years if royalties exceeded £5,000. The defendants could terminate the agreement on one month’s notice, but there was no similar power for the plaintiff. The defendants were under no obligation to publish any of the plaintiff’s work or pay the pl. The plaintiff sought a declaration that the agreement was in restraint of trade and void.

Answer 15

Endorsement contract – company responsible for sourcing endorsements for use of Rooney’s image rights (intangible property), negotiated contract on commission of 20 percent. Rooney set up a company, Stoneygate, and signed contract when he was 17. February 2003. Covered media & publicity, product endorsements, personal appearances, opportunities re client’s IP, and contract negotiation regarding these. Obligations on client – during agreement, do not enter other contracts for endorsements based on image rights. 8 years in duration. Consideration – they pay Rooney £25,000 on turning 18; he pays them £1 and 20% commission on any subsequent contract for personal endorsement. If terminate prior to end of agreement, Rooney pays £25,000 plus £37,000 x term of agreement. And a right to commission, per contract, prior to termination and post-termination if contract negotiated during term. Proactive required to use best endeavours to obtain endorsement opportunities for Rooney. Law: Sole agency agreements not per se a restraint of trade, but is this one?

Answer 16

A restrictive covenant that def, COO of Ryanair, would not work with a any other airline for a period of 12 months subsequent to termination. Def signed contract to start employment with Easyjet from 1 Jan. 2020 without prior notice to Ryanair. Para. 135: Courts take a more restrictive approach to restraints in employment contexts than where restraints in a business context (where clear purpose to protect goodwill acquired) Only upheld in an employment context where necessary to protect trade connections or secrets acquired during employment. Not entitled to protection against ‘the employee’s use of his skill and manual or mental ability, which are the employee’s own property.’ (para. 152)

Answer 17

Teacher of 12-18 month shorthand course agreed not to teach within 7 miles of Belfast, Dublin and Cork for three years after he left employment. Court held: Deleted Dublin and Cork. Barton J dismissed the contention that three years was too long considering the length of the course. This is thought to be wrongly decided (Clark). If the employer has prescribed an unreasonably long period the court cannot substitute a reasonable period for the unreasonable period. The reason for this is it would give the employer two bites at the cherry – they could draft a very wide clause and then invite the court to change it if they find it unacceptable

Answer 18

Pl orally contracted with def for the repair of his car When in the def’s garage, a fire broke out destroying the pl’s car Pl brought an action in negligence claiming damages against def Def accepted the fire had been caused by negligence, but argued that the contract contained an exclusion clause for fire damage incorporated into the oral contract by a course of dealing between the parties At First Instance, the Court accepted that such a term was implied into the contract noting the several prior dealings on which pl signed an invoice that stated ''The Company is not responsible for damage caused by fire to customer's cars on the premises. Customer's cars are driven by staff at owner's risk." Hollier (i) Rejected the course of dealings implied terms argument because of insufficient course of dealings when compared to other decided cases (here 2-4, other cases up to 100) (ii) Contra proferens: ‘It is well settled that a clause excluding liability for negligence should make its meaning plain on its face to any ordinarily literate and sensible person. The easiest way of doing that, of course, is to state expressly that the garage, tradesman or merchant, as the case may be, will not be responsible for any damage caused by his own negligence.’ - on the facts, the word ‘negligence’ or some equally emphatic term, which would have directed the attention of the ‘literate and sensible’ person to the fact that the def was excluding liability not present.

Answer 19

Def took a used Buick car on hire purchase. Contractual clause: ‘no condition or warranty that the vehicle is roadworthy, or as to its age, condition or fitness for any purpose is given by the owner or implied herein.’ On delivery: the car was in a deplorable state and was totally incapable of propulsion. Def had inspected car prior to purchase, but the actual car delivered bore little or no resemblance to the car he had inspected. New tires had been removed, old ones put on car. The radio was missing, engine badly damaged etc. Only resemblance was same registration number and same chassis.

Answer 20

Pls contracted with the defs for the transport of quick-frozen scampi under refrigeration. In particular, it was a term of the contract that the goods would be loaded under refrigerated conditions. This was not done, with the consequence that the goods were rendered valueless. However, two clauses in the contract had the effect of limiting the liability of the defendants: the first entirely excluded any liability on the part of the defendants for damage to goods. While the second provided that any claims must be made within three days of arrival. The pl did not make a claim within three days.

CASE LAW Flashcards

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