Flashcards in Case Studies Deck (8)
PSGB v Boots
Boots introduced the then new self service system into their shops whereby customers would pick up goods from the shelf put them in their basket and then take them to the cash till to pay. The Pharmaceutical Society of Great Britain brought an action to determine the legality of the system with regard to the sale of pharmaceutical products which were required by law to be sold in the presence of a pharmacist. The court thus needed to determine where the contract came into existence.
Goods on the shelf constitute an invitation to treat not an offer. A customer takes the goods to the till and makes an offer to purchase. The shop assistant then chooses whether to accept the offer. The contract is therefore concluded at the till in the presence of a pharmacist.
Jackson v Horizon Holidays
Mr Jackson booked a 28 day holiday in Ceylon for himself and his family through Horizon Holidays. The hotel turned out to be unsatisfactory for various reasons relating to cleanliness and provision of services. The trial judge made an award for the disappointment suffered by Mr Jackson, but stated he could not take into account the disappointment suffered by his wife and children since they were not party to the contract. Mr Jackson appealed.
Mr Jackson was able to recover for the disappointment suffered by his wife and children. This amounts to an exception to the rule of privity of contract based on the decision in Beswick v Beswick (1968) AC 88.
Dick Bentley v Harold smith
Dick Bentley knew the defendant, who was a car trader specialising in the prestige market, for some time. He had asked him to look out for a well vetted Bentley car. The defendant obtained a Bentley and recommended it to the claimant. He told him that the car had been owned by a German Baron and had been fitted with a replacement engine and gearbox and had only done 20,000 miles since the replacement. Mr Bentley Purchased the car but it developed faults. The defendant had done some work under the warranty but then more faults developed. It transpired that the car had done nearer 100,000 miles since the refit. The question for the court was whether the statement amounted to a term in which case damages would payable for breach of contract, or whether the statement was a representation, in which case no damages would be payable since it was an innocent misrepresentation and the claimant has also lost his right to rescind due to lapse of time.
The statement was a term. Mr Smith as a car dealer had greater expertise and the claimant relied upon that expertise.
Hartley v Ponsonby
Half of a ship's crew deserted on a voyage. The captain promised the remaining crew members extra money if they worked the ship and completed the voyage. The captain then refused to pay up.
The crew were entitled to the extra payment promised on the grounds that either they had gone beyond their existing contractual duty or that the voyage had become too dangerous frustrating the original contract and leaving the crew free to negotiate a new contract.
Bisset v Wilkinson
The claimant purchased a piece of farm land to use as a sheep farm. He asked the seller how many sheep the land would hold. The seller had not used it as a sheep farm but estimated that it would carry 2,000 sheep. In reliance of this statement the claimant purchased the land. The estimate turned out to be wrong and the claimant brought an action for misrepresentation.
The Privy Council held that the statement was only a statement of opinion and not a statement of fact and therefore not an actionable misrepresentation. The claimant's action was therefore unsuccessful.
Parker v Clarke
The Clarks were an elderly married couple. Mrs Parker was Mrs Clark’s niece, and Mr Clark suggested she and her husband move into their home with them. Mr Parker supported the idea but expressed concern that it would mean their selling their own house. Mr Clark wrote to Mr Parker stating the Clarks would bequeath their home to Mrs Parker, her sister and her daughter on their death. The Parkers sold their home and moved in with the Clarks. The Clarks told the Parkers the arrangement was not working, and they would have to move out. The Parkers brought an action for breach of contract.
Held - The Parkers were successful in their claim. The language used in the letters and the surrounding circumstances indicated that both parties intended the agreement to have legal force. Mr Clark’s letter was sufficient to satisfy s40(1) Law of Property Act 1925 and amounted to a contractual offer. The Parkers were entitled to damages for the loss of the prospect of inheritance and the loss of the value of the benefit of living in the house
Bell v Lever Bro
Lever bros appointed Mr Bell and Mr Snelling (the two defendants) as Chairman and Vice Chairman to run a subsidiary company called Niger. Under the contract of employment the appointments were to run 5 years. However, due to poor performance of the Niger company, Lever bros decided to merge Niger with another subsidiary and make the defendants redundant. Lever bros drew up a contract providing for substantial payments to each if they agreed to terminate their employment. The defendants accepted the offer and received the payments. However, it later transpired that the two defendants had committed serious breaches of duty which would have entitled Lever bros to end their employment without notice and without compensation. Lever bros brought an action based on mistake in that they entered the agreement thinking they were under a legal obligation to pay compensation.
The House of Lords held that this was only a mistake as to quality and did not render the contract essentially different from that which it was believed to be. The action therefore failed.