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Flashcards in Cases to Know Deck (6)
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1

Tilden Rent a Car v. Clendenning

Clendenning was handed a complicated rental contract for purchasing collision insurance for an additional modest fee, and in a hurry he signed the document without reading it. The rental agent neither asked him to read the contract nor mentioned that it included an unusual term that excluded insurance coverage if the driver had consumed any amount of alcohol. Clendenning got in an accident and claimed that he was covered, but there was small print on the back of the contract that said no alcohol.

The court of appeal held that Clendenning's signature did not represent a true acceptance of the terms because the relevant term was onerous and unusual. Tilden was required to provide Clendenning with reasonable notice of it as well as a reasonable opportunity to understand and appreciate what he was signing.

2

Lewis v. Averay

Lewis was hoping to sell his car. Richard Green, a famous actor, approached him with an offer to buy. The buyer, however was a fraudster simply pretending to be Green. He showed his pass to convince Lewis that he was indeed the famous actor. Lewis sold him the car, and because he was a famous actor, was willing to accept a non-certified cheque as payment for the car. The fraudster took the car and quickly resold it to Averay before disappearing. The cheque bounced when Lewis attempted to deposit it, so he brought an action against Averay claiming that the car still belonged to him because he had not been paid.

The court found that Lewis would not have released the car to the buyer had he not been under the mistaken impression that the buyer was a well-known actor. Therefore, the effect of this mistaken identity was to render the contract voidable. However, until Lewis communicated his repudiation, the contract remained valid. The fraudster sold the car to Averay before the contract was repudiated and while he still had a valid contractual right to the vehicle. The court therefore found that Averay was entitled to keep the car as an innocent purchaser under English legislation.

3

Hong Kong Fir Shipping Co v. Kawasaki Kisen Kaisha

Plaintiff owned a ship that they chartered to the defendant for 24 months. The defendant wanted the ship so that they could conduct a business of transporting goods to others. A term of the contract required the plaintiff to provide a "seaworthy vessel", and also said that the ship was out of service for repairs during the life of the agreement. The ship was being repaired for four months near the beginning of the contract. The defendant attempted to discharge the agreement on the basis of the plaintiff's breach of condition. The plaintiff, however, denied that they had breached a condition. Indeed, they claimed that the defendant had breached a condition of the contract when they tried to discharge the agreement.

The court of appeal held for the plaintiff. The disputed term was classified as an intermediate term, which would support a right of discharge only if its breach substantially deprived the defendant of the expected benefit of the agreement. The defendant still could have enjoyed 24 months of carrying services. As a result, the defendant became liable for a breach of contract when they wrongfully claimed to discharge the agreement

4

Groves v. John Wunder Co

Plaintiff rented a piece of land to the defendant for $105,000. The defendant was entitled to operate a sand and gravel mine on that property, but they were also required to level the ground at the end of the lease. They left huge craters on the property for economic reasons. It would cost $60,000, but even if the the land had been level, it would have been worth only $12,000. The plaintiff claimed that the expectation damages should be measured by the cost of cure. It argued that they expected to receive a level piece of land at the end of the lease and that they were therefore entitled to receive the amount of money that would be required to put the land into that condition. In response, the defendant claimed that expectation damages should be measured by the loss of value. They argued that what the plaintiff really expected to receive under the contract was land worth $12,000

The court agreed with the plaintiff and awarded $60,000 in expectation damages.

5

Attorney General v. Blake.

George Blake was a double agent during the Cold War. Was pretending to be a spy, but actually worked for Soviets. Was caught, but then escaped prison. He entered into a contract with an English publisher for the release of his memoirs, No Other Choice. The publisher agreed to pay him an advance of $150,000, and had already paid $60,000 of that amount when the British government began legal proceedings. Government sued for breach of contract. He broke his initial contract he signed for British during work, when writing his memoirs. It was difficult to determine remedy because it is impossible to put a monetary value on the protection of state secrets. Furthermore by the time of publication, the Cold war was over.

The House of the Lords held in favor of the government.Instead of awarding damages, he applied the equitable remedy of account of profits, and the government was entitled tot he profits that George Blake received as a result of breaking his contract.

Known as a landmark decision. Remedy for breach of contract may focus on either the plaintiff's loss or the defendant's gain.

6

Page One Records Ltd. v. Britton

The defendants, four young English musicians who played as The Troggs, had a hit song in 1966 with "Wild Thing." Several years earlier, they had signed a contract with the plaintiff. Under the terms of that agreement, the defendants gave a positive promise to employ the plaintiff as their manager and a negative promise to not employ anyone else in that capacity. Unfortunately the relationship between the parties deteriorated, and the group decided that could no longer work with the plaintiff. The plaintiff sought an injunction preventing The Troggs from hiring anyone else to act as their manager.

The court refused to gran an injunction for several reasons. Most significantly, the judge recognized that an injunction would effectively prevent the defendants from earning a living. Bette Davis could have made money by doing things other than acting in film. The Troggs, in contrast, had no skills outside of music. And they could work as musicians only if they had a manager. It therefore would have been unfair to make them choose between unemployment and working with the plaintiff.