week six Flashcards
what did Edwards v Skyways argue the ‘ex gratia’ decision meant?
that it was a moral obligation rather than a legal one
what was the decision of the court in Edwards v Skyways
the court found ‘ex gratia’ doesn’t mean a moral obligation, rather it is supposed to indicate that the party promising to pay is not admitting liability
in the case of a commercial agreement, there is a ______ ______ on the party claiming that a commercial agreement is not intended to be legally binding
heavy burden
commercial agreements almost always have the intention to?
create legal relations
what happened in Rose and Frank v Crompton
Crompton was a UK based manufacturer of carbonising paper, which was sold in the US by Rose and Frank.
later they wanted to enter into a new agreement, which also included a third party. the agreement was an honour clause
what did the honour clause in Rose and Frank v Crompton expressly negate?
the intention to create legal relations
what did the court in Rose and Frank v Crompton decide about the honour clause
they said it was effective. the agreement was in honour only and not legally enforceable. the overall relationship was not contractual but certain sales could be e.g. if one party placed an order at a particular price and received the goods then they would still have to pay for it
what are the 3 situations where it might be argued that there is no intention to create legal relations in a commercial situation
- honour clauses
- free gifts
- mere puff
what happened in Esso Petroleum v Customs and Excise Commissioners
there was a promotion at service stations in the UK, giving out a football world cup commemorative coin if you purchased 4 gallons of petrol.
the coin was described as a gift - this was relevant for tax. If the coins were sold then a tax had to be paid on their value.
what did Esso Petroleum argue in Esso Petroleum v Customs and Excise Commissioners 1976
that there was no intention to create legal relations with respect to the coins because the coins were not part of the contract of selling the petrol - it was just a free extra, there was no contract to receive the coin
what did the majority hold in Esso Petroleum v Customs and Excise Commissioners 1976
the coins were part of the contract - there was an intention to create legal relations. this decision was reached because the coins represented a commercial advantage - they were designed to attract customers
what is the idea of ‘puffery’
in commercial activity, statements can be made that no reasonable person would believe/take seriously - they are therefore not intended to create legal relations and are not enforceable
what was argued by Carbolic Smoke Ball Co. relating to puffery in Carlill v Carbolic Smoke Ball Co. 1893 - was the court convinced?
they argued that their advertisement to give 1000 pounds to anyone who used the smoke ball correctly and contracted influenza was puffery. the court was not convinced by this argument, especially because they said in their ad a statement that encouraged people to take it seriously (1000 pounds is deposited in a bank to show our sincerity)
what is the idea behind certainty and completeness
it is not enough that the parties reach agreement and intended that agreement to be contractual, the actual content of that agreement has to be sufficiently certain and complete
what did Tipping J say about certainty and completeness in Wellington City Council v Body Corporate 51702
“The parties must have reached consensus on all essential terms
what term did Blanchard J give in Fletcher Challenge v ECNZ as an example of something which is generally legally essential for a contract to be certain and complete
the price - it must be agreed, expressly or impliedly or the contract must have the means of reaching an agreement
if the court finds that the parties were intending to be bound at that time, the court will adopt what kind of approach in regards to certainty and completeness
a robust approach - the court will try to make the contract work and give effect to the parties’ intention
