pre requisites and formalities of contract Flashcards
rule for insanity of capacity
depends on whether at the time when the contract is entered into the insane person is of mind and capacity to understand the business in question.
case; insanity
John Loudon & Co v Elder’s Curator Bonis 1923 ; entered into a purchase of goods (elder), declared mental incapacitation, courts ruled contract was not valid as the insanity of elder he was in when he agreed the enter the contract
case; intoxication
Taylor v Provan (1864);
entered into contract for sale of shares with provan but after sobering refused to honour the agreement and claimed he was heavily intoxicated, for the contract to be voided provan would have to show evidence of being heavily intoxicated at the time the contract was entered into.
case; conduct of business ROWA
RBS v Carlyle);
- Mr. Carlyle was a property developer who sought loan funding from the Royal Bank of Scotland (RBS) for a property development project.
- RBS approved a loan for the purchase of land, and Carlyle also requested further funding for the actual development of the site.
- A bank manager orally assured Carlyle that the development funding would be provided.
- Relying on this assurance, Carlyle went ahead with the land purchase.
- Later, RBS refused to provide the development funding
The Court emphasised that under Scots law, a unilateral promise (obligation by one party) can be enforceable, even without acceptance by the other party
unilateral contract?
only one party makes a promise s
a type of agreement where one party makes a promise in exchange for the other party performing a specific action.
what’s a gratuitous unilateral obligation?
means a promise made by one person to do something without expecting anything in return
what is personal bar?
Personal bar is a legal principle that prevents a person from going back on something they previously agreed to or allowed, especially if it would be unfair to the other party.
terms of personal bar;
Party A must have taken action or avoided action based on the contract (s1(3)).
As a result of their actions or inactions, Party A must have been significantly affected (s1(4)(a)).
Party A would be seriously harmed if Party B withdraws or goes back on the contract (s1(4)(b)).
Party B must know that Party A has relied on the contract and agreed to it (s1(3)).
case; personal bar
Mortgages v McNicoll 2006 S.L.T. 591 – personal bar only applies to original parties, not to successors
Mrs. McNicoll had been contacted by The Advice Centre for Mortgages (ACM), which offered her financial advice and assistance with securing a loan. She agreed to proceed based on what she claimed were misleading representations about the terms of the loan and the purpose of her signing certain documents. Later, she argued that she did not fully understand what she had agreed to and that she had been misled
