[1914] AC 461
England and Wales
Explained – Edler v Auerbach ChD 1950
There is no implied condition of fitness for purpose in the grant of a lease.
Devlin J said: ‘It is the business of the tenant, if he does not protect himself by an express warranty, to satisfy himself that the premises are fit for the purpose . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.223978
The question was asked whether, as a defence to a shipper’s action in tort for negligently stowing cargo, shipowners could rely on an exclusion clause in the bills of lading, despite the fact that the contract of carriage was between the shipper and the charterer.
Held: They could do so. The House accepted the principle of vicarious immunity, underwhich a servant or agent performing a contract is entitled to any immunity from liability which his employer or principal would have had. Although the shipowners may not have been privy to the contract of carriage (between shipper and charterer) they took possession of the goods on behalf of, and as agents for, the charterers and so could claim the same protection as their principals.
[1924] AC 522
England and Wales
Cited – Midland Silicones Ltd v Scruttons Ltd HL 6-Dec-1961
The defendant stevedores, engaged by the carrier, negligently damaged a drum containing chemicals. When the cargo-owners sued in tort, the stevedores unsuccessfully attempted to rely on a limitation clause contained in the bill of lading between the . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.221975
ComC Contract of towage – whether hirer had actual or apparent authority to contract on behalf of owner – whether contract of towage involved bailment – whether tug owners entitled to rely on contractual lien against owner.
Toulson J
[1999] 1 Lloyd’s Rep 365
England and Wales
Appeal from – Lukoil-Kaliningradmorneft Plc v Tata Limited and Global Marine Transportation Inc CA 23-Apr-1999
. .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.220800
Long term contracts for sale and transportation of natural gas from the North Sea – construction. Validity to make, take or pay and send or vary payments
Langley J
Unreported 29 May 1997
England and Wales
Updated: 06 May 2022; Ref: scu.220778
The House confirmed a declaration granted as to validity of a rule of association notwithstanding the absence of any dispute. The House considered the nature of the threat required to establish a defence of duress.
Lord Wright observed that the word ‘menaces’ is to be liberally construed and is not limited to threats of violence, but includes threats of any action detrimental, or unpleasant, to the person addressed. It may also include a warning that in certain events such action is intended.
Lord Atkin said: ‘The ordinary blackmailer normally threatens to do what he has a perfect right to do – namely, communicate some compromising conduct to a person whose knowledge is likely to affect the person threatened. Often indeed he has not only the right but also the duty to make the disclosure, as of a felony, to the competent authorities. What he has to justify is not the threat, but the demand of money. The gravamen of the charge is the demand without reasonable or probable cause: and I cannot think that the mere fact that the threat is to do something a person is entitled to do either causes the threat not to be a ‘menace’ within the Act or in itself provides a reasonable or probable cause for the demand.’
and ‘It appears to me that if a man may lawfully, in the furtherance of business interests, do acts which will seriously injure another in his business he may also lawfully, if he is still acting in furtherance of his business interests, offer that other to accept a sum of money as an alternative to doing the injurious acts. He must no doubt be acting not for the mere purpose of putting money in his pocket, but for some legitimate purpose other than the mere acquisition of money.’
In this case ‘If the Council bona fide exercised this power with the bona fide intention only of carrying out this trade policy, in my opinion they would not be demanding the payment without reasonable and probable cause.’ but ‘It is plain that these rules and any similar rules of any other association in any other trade are capable of being abused: and if so nothing in this decision will prevent offenders from being subjected to criminal law. But if the rules were genuinely enforced I am satisfied that there would not be as in my opinion in Denyer’s case [1926] 2 KB 258 there was not, any evidence of an absence of reasonable or probable cause.’
Lord Atkin, Lord Wright
[1937] AC 797, [1937] 3 All ER 157
England and Wales
Cited – R v Her Majesty’s Attorney-General for England and Wales PC 17-Mar-2003
PC (From Court of Appeal of New Zealand) T had been a member of the British SAS. Other members had written books and the Army sought to impose confidentiality contracts or to impose a return to their unit. R . .
Cited – AMM v HXW QBD 7-Oct-2010
The claimant had sought and been granted an injunction to prevent the defendant publicising matters which had passed between them and which were he said private.
Held: The jurisdiction to grant such injunctions was now established. Publication . .
Cited – CTN Cash and Carry v Gallaher CA 15-Feb-1993
The buyer paid a sum demanded by the seller who threatened otherwise to withdraw the credit facilities it provided to the buyer. The sum was not in fact due, but the demand had been made honestly. The buyer said the agreement was voidable for . .
Cited – Progress Bulk Carriers Ltd v Tube City IMS Llc ComC 17-Feb-2012
The claimant sought to set aside an arbitration saying that the arbitrator had misapplied the test for economic duress. . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.220490
Void nature of gaming contract.
(1884) 15 QBD 363
Cited – Financial Services Authority v Fradley and Another ChD 21-Oct-2004
The authority sought an order restraining the defendants from operating a pool betting scheme whilst unauthorised. The defendant answered that it was not a collective investment scheme.
Held: Where any property was acquired which was distinct . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.219430
A clause in a building contract provided that the contractor should satisfy himself as to the dimensions, levels and nature of all existing works. Did this exclude an action based on alleged fraudulent misrepresentations by the council’s engineers as to the position of an existing wall.
Held: Lord Halsbury ‘The action is based on the allegation of fraud, and no subtilty of language, no craft or machinery in the form of contract, can estop a person who complains that he has been defrauded from having that question of fact submitted to a jury.’
Lord Loreburn said: ‘I will not say that a man himself innocent may not under any circumstances, however peculiar, guard himself by apt and express clauses from liability for the fraud of his own agents.’ but the clause as a matter of construction did not cover cases of fraudulent misrepresentation. General language will not be construed to relieve a principal of liability for the fraud of an agent. Of the exemption clauses ‘They contemplate honesty on both sides and protect only against honest mistakes.’
Lord Loreburn LC, Lord Ashbourne, Lord Atkinson, Lord Halsbury
[1907] AC 351
England and Wales
Cited – HIH Casualty and General Insurance Limited and others v Chase Manhattan Bank and others HL 20-Feb-2003
The insurance company had paid claims on policies used to underwrite the production of TV films. The re-insurers resisted the claims against them by the insurers on the grounds of non-disclosure by the insured, or in the alternative damages for . .
Cited – Six Continents Hotels Inc v Event Hotels Gmbh QBD 21-Sep-2006
The claimant had licensed the defendant to use its trademarks in connection with the naming of their hotels in Germany. The defendants failed to pay their fees as agreed, the claimants terminated the license and now sought payment under the . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.219298
Ireland – A separate contract between consignor and carrier may co-exist with the contract between the carrier and the consignee.
(1874) LR 7 HL 269
England and Wales
Cited – Alfred Mcalpine Construction Limited v Panatown Limited HL 17-Feb-2000
A main contractor who was building not on his own land, would only be free to claim damages from a sub-contractor for defects in the building where the actual owner of the land would not also have had a remedy. Here, the land owner was able to sue . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.218901
One party contracted to supply to the other ‘a steam navvy of novel construction’ on condition that it achieved a stipulated rate of excavation in stipulated circumstances. The purchaser did not make available the ‘opened up face’ that was necessary to enable the trial to be carried out.
Held: A term will be read into a contract as a matter of law to prevent one contracting party frustrating the performance of an obligation by the other contracting party where it was dependent on action being taken or not taken by the first party.
Lord Blackburn said: ‘Where in a written contract it appears that both parties have agreed that something shall be done, which cannot effectually be done unless both concur in doing it, the construction of the contract is that each agrees to do all that is necessary to be done on his part for the carrying out of that thing.’
Lord Blackburn
(1881) 6 App Cas 251
England and Wales
Cited – South West Trains Ltd v Wightman and Others ChD 14-Jan-1998
The trades’ union had agreed with the employer that what had been irregular and non-pensionable payments made to employees would, in future, be paid regularly, but that only certain parts of the payments become pensionable. The employer now sought . .
Cited – Inntrepreneur Pub Company (CPC) and others v Crehan HL 19-Jul-2006
The tenant had taken on pub leases with ties requiring him to buy beer from companies associated with the landlords. The European Commission had issued a decision and the House was asked whether this was binding on the parties.
Held: . .
Cited – Societe Generale, London Branch v Geys SC 19-Dec-2012
The claimant’s employment by the bank had been terminated. The parties disputed the sums due, and the date of the termination of the contract. The court was asked ‘Does a repudiation of a contract of employment by the employer which takes the form . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.214706
If there are conflicting provisions in a deed and they cannot be reconciled, the court may apply as a last resort the ancient rule of thumb that the earlier provision prevails over the later one.
[1922] 1 AC 256
England and Wales
Cited – Slingsby’s Case 1587
Where two inconsistent provisions in a deed cannot be reconciled, the earlier provision prevails over the later. . .
Cited – Taylor v Rive Droite Music Ltd ChD 6-Jul-2004
The claimant music producer and songwriter had entered into a publishers agreement with the defendant, agreeing to work for it. He now sought to be free to work for another company. The factual background was unclear, and the contract documentation . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.211397
Relief from forfeiture.
[1942] 2 KB 321
Cited – Goker (Ali) v NSW Bank CA 23-May-1990
In the case of a hire purchase agreement, the court has a power to grant relief from forfeiture, but will not normally exercise that power unless there is no real prejudice to the owner of the goods. . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.199785
Evidence was required to support an assertion of collateral contract.
[1974] 2 QB 440
Cited – Frans Maas (Uk) Ltd v Samsung Electronics (Uk) Ltd ComC 30-Jun-2004
A large volume of mobile phones were stolen from a warehouse. The owner claimed damages from the bailee. The defendant said that standard terms applied limiting their responsibility to value calculated by weight.
Held: There was a bailment . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.198909
(Australia)
[1989] ALJ 238
Australia
Cited – Philips (Hong Kong) Ltd v The Attorney General of Hong Kong PC 9-Feb-1993
After referring to two Australian cases on penalty clauses in contracts: ‘These statements assist by making it clear that the court should not adopt an approach to provisions as to liquidated damages which could, as indicated earlier, defeat their . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.197035
High Court of Australia – Contract – Damages – Penalty – Agreement for hire of chattel – Failure to pay instalments of hire – Termination by owner pursuant to contractual power – Damages – Instalments due but unpaid – Damages for loss of contract.
The court discussed the doctrine against penalties in contracts: ‘But equity and the common law have long maintained a supervisory jurisdiction, not to rewrite contracts imprudently made, but to relieve against provisions which are so unconscionable or oppressive that their nature is penal rather than compensatory. The test to be applied in drawing that distinction is one of degree and will depend on a number of circumstances, including (1) the degree of disproportion between the stipulated sum and the loss likely to be suffered by the plaintiff, a factor relevant to the oppressiveness of the term to the defendant, and (2) the nature of the relationship between the contracting parties, a factor relevant to the unconscionability of the plaintiff’s conduct in seeking to enforce the term. The courts should not, however, be too ready to find the requisite degree of disproportion lest they impinge on the parties’ freedom to settle for themselves the rights and liabilities following a breach of contract. The doctrine of penalties answers, in situations of the present kind, an important aspect of the criticism often levelled against unqualified freedom of contract, namely the possible inequality of bargaining power. In this way the courts strike a balance between the competing interests of freedom of contract and protection of weak contracting parties: see generally Atiya, The rise and Fall of Freedom of Contract (1979), especially Chapter 22.’
‘the equitable jurisdiction to relieve against penalties withered on the vine’.
Gibbs CJ(1), Mason(2), Wilson(2), Deane(3) and Dawson(4) JJ.
[1986] 162 CLR 1770, (1986) 162 CLR 170, [1986] HCA 63
Australia
Cited – Philips (Hong Kong) Ltd v The Attorney General of Hong Kong PC 9-Feb-1993
After referring to two Australian cases on penalty clauses in contracts: ‘These statements assist by making it clear that the court should not adopt an approach to provisions as to liquidated damages which could, as indicated earlier, defeat their . .
Cited – Jeancharm Ltd (T/A Beaver International) v Barnet Football Club Ltd CA 16-Jan-2002
The claimant contracted to supply football shirts to the defendant, but claimed that clauses in the contract with regards to late delivery and payment operated as penalties and so were void at common law.
Held: The sums set out were immodest . .
Cited – Cavendish Square Holding Bv v Talal El Makdessi; ParkingEye Ltd v Beavis SC 4-Nov-2015
The court reconsidered the law relating to penalty clauses in contracts. The first appeal, Cavendish Square Holding BV v Talal El Makdessi, raised the issue in relation to two clauses in a substantial commercial contract. The second appeal, . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.197034
The parties entered into an executory contract to sell and purchase a cargo of tea upon its arrival. The cargo arrived, but before it did so, the defendant had discharged the plaintiff from performance, and refused to perform the agreement.
Held: The plaintiff had not been bound to provide a response to the defendant’s purported discharge of the contract. The defendant’s refusal before the cargo arrived to complete the contract was not itself a breach, but was evidence of a continuing intention to break the contract, and operated as a waiver of the condition precedent and that in turn put the defendant in breach.
(1849) 4 Exch 345
England and Wales
Updated: 06 May 2022; Ref: scu.193598
(Australia) ‘Where a statute merely requires that a document shall be signed, the statute is satisfied by proof of the making of a mark upon the document by or by the authority of that signatory’.
Higinbotham J
(1884) 10 VLR 322
Cited – Edgell v Glover, Garnett (Returning Officer) QBD 4-Nov-2003
The constituency had adopted an all postal ballot, resulting in a counted majority of one. One ballot paper’s confirmation of identity had not been signed.
Held: The function of the court, exercising its jurisdiction under section 48(1), is . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.187491
Where a contract contained an exclusive jurisdiction clause providing for a case to be tried in the UK, it was relevant that the circumstances which might now suggest a trial elsewhere were perfectly foreseeable at the time of the contract. The new circumstances had to point to some factor which could not have been foreseen on which they can rely for displacing the bargain which they made, ie that they would not object to the jurisdiction of the English court. In those circumstances, inconvenience for witnesses, location of documents, the timing of a trial, and all similar matters were aspects which they were precluded from raising.
The proper approach was to consider the proceedings as equivalent to proceedings commenced as of right, and therefore it was right to consider only the matters which would not have been foreseeable when the bargain was struck.
Waller J
[1993] 1 Lloyds Rep 368
England and Wales
Cited – BAS Capital Funding Corporation, Deutsche Bank Ag London, Paine Webber Capital Inc, PW Exe Lp, Pw Partners 1999 Lp v Medfinco Limited, Abacus Holdings Limited, Andreas W Gerdes, HTC Inc, etc ChD 25-Jul-2003
The claimants wanted to bring actions in respect of various matters under shareholders agreements in complex international joint ventures. Leave was given to serve English proceedings in Malta, and the claim form and particulars of claim were faxed . .
Cited – 889457 Alberta Inc v Katanga Mining Ltd and others ComC 5-Nov-2008
The parties had set out on a joint venture with deeds providing for control of the shareholdings in each other. The claimant asserted a breach of the deed and sought a remedy. The first defendant company, incorporated in Bermuda argued that the . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.186476
Lord Wilberforce said that the principles of non est factum are designed to protect also innocent third parties who may rely upon a document signed apparently correctly.
Lord Wilberforce
[1971] AC 1004
England and Wales
Appeal from – Gallie v Lee CA 1969
A deed bearing a false signature is a forgery and creates no rights at all. ‘If the deed was not his deed at all (non est factum), he is not bound by his signature any more than he is bound by a forgery. The document is a nullity just as if a rogue . .
Criticised – Sowler v Potter 1939
The defendant had been convicted of an offence of permitting disorderly conduct in a cafe, under her proper name of Ann Robinson. She then assumed the name of Ann Potter. The plaintiff’s evidence was that, if he had known that she was Ann Robinson, . .
Cited – Carlisle and Cumberland Banking Company v Bragg 1911
A party wishing to establish a plea of non est factum in order to avoid liability under a deed, must show that he had taken care in signing the document.
Held: There could not be negligence in the execution of a document unless a duty was owed . .
Mentioned – Chagos Islanders v The Attorney General, Her Majesty’s British Indian Ocean Territory Commissioner QBD 9-Oct-2003
The Chagos Islands had been a British dependent territory since 1814. The British government repatriated the islanders in the 1960s, and the Ilois now sought damages for their wrongful displacement, misfeasance, deceit, negligence and to establish a . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.186673
The New Brighton Football Club (Rugby Union) sought to challenge the non-relegation in league of the Nuneaton Club. Nuneaton had employed a player who was subject to immigration control requirements in particular the obligation to inform the Home Office if he changed employments. He had moved to Nuneaton without giving notification. If the Union had subtracted the appropriate number of points, Nuneaton would have been relegated and New Brighton promoted.
Held: The relationship between clubs and the Union was contractual, and the court’s role was supervisory. Points could only be dedcuted within the disciplinary code. That code only allowed action on a complaint properly notified. New Brighton had failed to notify their complaint within the necessary time limit. A club’s entitlement to promotion became indefeasible at the end of a season. The need for finality in such arrangements overrode any jurisdiction of the court to the extent that such interference would be disproportionate.
Times 15-Sep-2003
England and Wales
Updated: 06 May 2022; Ref: scu.186083
It is for the person who has signed a document to show that the transaction which it effects is essentially different from the transaction intended so that the signatory can claim non est factum and say that he did not consent to it. But he also has to show, even if illiterate or lacking in understanding of the law, that he acted responsibly and carefully according to his circumstances, although the law is readier to relieve him against hardship.
[1993] Ch 116
England and Wales
See Also – Norwich and Peterborough Building Society v Steed CA 1991
The four factors to be taken into account when considering an application to extend the time for leave to appeal are (1) the length of the delay; (2) the reasons for the delay; (3) the chances of the appeal succeeding if an extension of time is . .
Cited – Chagos Islanders v The Attorney General, Her Majesty’s British Indian Ocean Territory Commissioner QBD 9-Oct-2003
The Chagos Islands had been a British dependent territory since 1814. The British government repatriated the islanders in the 1960s, and the Ilois now sought damages for their wrongful displacement, misfeasance, deceit, negligence and to establish a . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.186672
The plaintiff was a person whom the broker knew was to become the assignee of an insurance policy, and the plaintiff had actively participated in giving instructions to the broker for the purchase of the relevant policy.
Held: A duty of care was exceptionally owed by an insurance broker not only to his client but also to a specific person whom he knew was to become an assignee of the policy. However, in the absence of extraordinary circumstances, a broker owes no duty of care to prevent economic loss except in accordance with his or her contract of retainer.
the employees of underwriting firms who had been responsible for acts of nondisclosure and misrepresentation were themselves liable for those acts. The reasoning of the court in that case was that those individuals ‘were evidently entrusted with the whole or nearly the whole of the task which their employers undertook’.
Staughton LJ said: ‘if the parties to a concluded contract subsequently agree in express terms that some words in it are to be replaced by others, one can have regard to all aspects of the subsequent agreement in construing the contract, including the deletions, even in a case which is not, or is not wholly, concerned with a printed form.’
Staughton
[1992] 1 WLR 1138, [1992] 1 Lloyds Rep 7, [1992] 3 All ER 104
England and Wales
Cited – European International Reinsurance Co Ltd v Curzon Insurance Ltd and Others CA 22-Jul-2003
Re-insurers sought to repudiate liability under policies taken out to provide cover against asbestos claims. The primary insurers obtained oredrs joinging in the brokers who had arranged the re-insurance, and the brokers appealed those orders.
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.186036
Times 22-Jul-1996, [1997] Eu LR 63, [1996] CLC 1757
Consumer Arbitration Agreements Act 1988
England and Wales
Appeal from (Affirmed) – Philip Alexander Securities and Futures Ltd v Bamberger and Others ComC 8-May-1996
ComC Consumer contracts – arbitration provision – Consumer Arbitration Agreements Act 1988 – exceptions – sections 2(b), 4 : European Union – Consumer contracts – arbitration provision – Consumer Arbitration . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.186007
ComC Contract – construction – agreement to use reasonable endeavours – matter to be agreed – objective criteria – enforceability
Colman J
[1997] CLC 329
England and Wales
Updated: 06 May 2022; Ref: scu.186005
ComC Carriage of goods – carriage contract – bill of lading – stipulation for discharge on liner terms – failure to stipulate – rejection – justification.
Mance J
[1996] CLC 729, Lloyd’s List 21 February 1996
England and Wales
Updated: 06 May 2022; Ref: scu.186000
The claimants sought damages for the failure of the defendants, former directors of the RAC, to warn them of the impending re-organisation and demutualisation of the RAC. By resigning in ignorance they had lost the chance to participate in the de-mutualisation.
Held: The claim was struck out. The rules of the club did not form a contract with its members. A director does not owe a general fiduciary duty to shareholders of the company. A director of a company could owe a fiduciary duty to shareholders if he had, in relation to the sale of shares, special knowledge not possessed by the shareholders. There was no fiduciary duty in the circumstances of this case. Eight factors led to that conclusion: the absence of any special facts in the relationship of the directors and the members of RACL, which would make the existence of a fiduciary duty more likely; the claimants had resigned membership of their own motion, uninfluenced by any information provided by, or views expressed by, the directors; no specific transaction was in contemplation at the time of the resignations; the defendants did not, in their capacity as directors of RACL, benefit from the claimants ceasing to be members, either directly ( e.g. they did not acquire shares from the members or encourage them to part with their shares) or indirectly ( e.g. by minimising the number of members, so as to increase their share of the proceeds of sale) ; the alleged interest of the directors in profits from the sale in the form of ‘golden hellos and employment contracts’ did not impinge on the issue whether they were under a duty to disclose at an early stage the possibility of selling off the RACMS business; the investigation and promotion of proposals for the de-mutualisation of RACL (including the incurring of costs in relation to the amendments of the Memoranda of RACL and RACMS sanctioned by the court) did not involve the directors in the pursuit of an unauthorised and improper object; it was unreasonable for directors to be put in the sort of position which the claimants’ contentions would necessarily involve with regard to the disclosure of contemplated arrangements or transactions best kept confidential; and the claimants’ arguments would place directors in the unfortunate position of being ‘damned if they do and damned if they don’t’, if they were put under a duty to disclose to the members a contemplated sale which might, or might not, happen.
Neuberger J
[2000] 2 BCLC 1
England and Wales
Appeal from – Bruce Peskin; Kevin Milner v John Anderson and Others CA 14-Dec-2000
The Royal Automobile Club (RAC) had been demutualised. The claimants were former members who sought damages from former directors because they had received no benefit. They had ceased to be members before the re-organisation and claimed they should . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.185791
Seed potatoes were sold. They were infected with a virus which could not be detected by inspection. The buyers claimed to set off against the cost of the seed potatoes a counter-claim against the sellers for the defective seed. They relied on the 1893 Act.
Held: ‘To my mind the contract in clear language places the risk insofar as damage may exceed the contract price, on the farmer. The contract had been in use for many years with the approval of the negotiating bodies acting on behalf of both seed potato merchants and farmers, and I can see no grounds upon which it would be right for the court to say in the circumstances of this case that such a term is not fair or reasonable.’
Griffiths J
[1978] 1 Lloyds Rep 602
Supply of Goods (Implied Terms) Act 1973 4, Sale of Goods Act 1893 65
England and Wales
Cited – Schenkers Limited v Overland Shoes Limited and Schenkers International Deutschland Gmbh v Overland Shoes Limited CA 12-Feb-1998
A clause in a shipping freight contract using the standard British International Freight Association terms disallowing a set-off was not unreasonable. The clause read ‘The customer shall pay to the company in cash or as otherwise agreed all sums . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.185988
The ‘guidelines’ in Schedule 2 are usually regarded as of general application to the question of reasonableness under the 1977 Act. The effect of s13 which deals with exemption clauses, is to apply s3 inter alia to ‘no set off’ clauses. The reasonableness requirement must be satisfied in relation to the clause as a whole and not only to that part on which the party relies. Although not specifically applicable to cases falling within Section 3 of the 1977 Act, the five guidelines as to reasonableness set out in Schedule 2 are nonetheless relevant to the question of reasonableness, while bearing in mind that the court is dealing with a commercial and not a consumer transaction. They ought therefore to be taken into account.
Stuart-Smith LJ
[1992] QB 600, [1992] 2 All ER 257, [1992] 2 WLR 721
Unfair Contract Terms Act 1977 3 13 Sch 2
England and Wales
Cited – National Westminster Bank v Utrecht-America Finance Company CA 10-May-2001
An agreement between the parties for assignment or novation of a credit agreement, contained a ‘take out’ agreement (‘TOA’). The defendant began proceedings in California to rescind the agreement, and the claimants obtained summary judgement under . .
Cited – Schenkers Limited v Overland Shoes Limited and Schenkers International Deutschland Gmbh v Overland Shoes Limited CA 12-Feb-1998
A clause in a shipping freight contract using the standard British International Freight Association terms disallowing a set-off was not unreasonable. The clause read ‘The customer shall pay to the company in cash or as otherwise agreed all sums . .
Cited – Overseas Medical Supplies Limited v Orient Transport Services Limited CA 20-May-1999
The appellant challenged a finding that it was responsible for the loss of medical equipment being transported from Tehran to the UK, and of failing to insure it as required, the contractual term exempting it from responsibility being an . .
Cited – Pegler Ltd v Wang (UK) Ltd TCC 25-Feb-2000
Standard Conract – Wide Exclusions, Apply 1977 Act
The claimant had acquired a computer system from the defendant, which had failed. It was admitted that the contract had been broken, and the court set out to decide the issue of damages.
Held: Even though Wang had been ready to amend one or . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.185982
The court upheld under the 1977 Act a clause which limited a port authority’s liability to andpound;800 per ton of consignment. Other factors were relevant but ‘The way in which the port authority’s general conditions came into being seems to me to be relevant. The conditions were approved, apparently without objection, by the port authority’s board of directors, on which users of the port were well represented. That is a significant factor. And so is the fact that the general conditions were widely distributed, and were readily available to users of the port’. The availability to a purchaser of alternate terms without the exclusion or limitation is relevant.
Steyn J
[1988] 2 Lloyds Rep 164
Unfair Contract Terms Act 1977 11
England and Wales
Applied – Schenkers Limited v Overland Shoes Limited and Schenkers International Deutschland Gmbh v Overland Shoes Limited CA 12-Feb-1998
A clause in a shipping freight contract using the standard British International Freight Association terms disallowing a set-off was not unreasonable. The clause read ‘The customer shall pay to the company in cash or as otherwise agreed all sums . .
Cited – Overseas Medical Supplies Limited v Orient Transport Services Limited CA 20-May-1999
The appellant challenged a finding that it was responsible for the loss of medical equipment being transported from Tehran to the UK, and of failing to insure it as required, the contractual term exempting it from responsibility being an . .
Cited – Scheps v Fine Art Logistic Ltd QBD 16-Mar-2007
The claimant bought fine art sculptures by Anish Kapoor at auction. They were stored by the defendant who when called upon to deliver them, said they had possibly been thrown away as rubbish. The defendant sought to limit its liability to the sum . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.185992
(1843) 11 M and W 534
England and Wales
Updated: 06 May 2022; Ref: scu.185781
The court considered the circumstances necessary to establish a right to a set-off in equity: ‘where the cross-claim not only arises out of the same contract as the claim but is so directly connected with it that it would be manifestly unjust to allow the claimant to recover without taking into account the cross-claim there is a right of set off in equity of an unliquidated claim’.
Parker J
[1977] 2 Lloyds Rep 289
England and Wales
Approved – Federal Commerce Ltd v Molena Alpha Inc; (The ‘Nanfri’) CA 1978
The court considered whether claim as against a shipowner could be set off against sums due under a time charter hire.
Held: Save for any contractual provision to the contrary a tenant is entitled to deduct from the rent payable, so as to . .
Cited – Schenkers Limited v Overland Shoes Limited and Schenkers International Deutschland Gmbh v Overland Shoes Limited CA 12-Feb-1998
A clause in a shipping freight contract using the standard British International Freight Association terms disallowing a set-off was not unreasonable. The clause read ‘The customer shall pay to the company in cash or as otherwise agreed all sums . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.185989
There is no fetter on the judicial discretion to refuse leave under Section 1(3)(b) to appeal against an arbitration award.
Frustration of a contract is ‘not likely to be invoked to relieve contracting parties of the normal consequences of imprudent commercial bargains’.
Lord Diplock
[1981] 3 WLR 292, [1982] AC 724
England and Wales
Cited – CMA CGM S A v Beteiligungs-Kommanditgesellschaft ‘Northern Pioneer’ Schiffahrtgesellschaft Mbh and Co and others CA 18-Dec-2002
The Charterers appealed a refusal to allow an appeal from a decision in an arbitration.
Held: The 1979 Act changed the situation fundamentally. The test was not just whether the decision was probably wrong, but the wider test allowed an appeal . .
Cited – Penwith District Council v VP Developments Ltd TCC 2-Nov-2007
The council sought to appeal against an interim arbitration award.
Held: Leave to appeal was refused. The application was wholly unjustified. This was an appeal on the facts dressed up as an appeal on law. . .
Cited – Gold Group Properties Ltd v BDW Trading Ltd TCC 3-Mar-2010
The parties had contracted for the construction of an estate of houses and flats to be followed by the interim purchase by the defendants. The defendants argued that the slump in land prices frustrated the contract and that they should not be called . .
Considered – Geogas SA v Trammo Gas Ltd (The Baleares) CA 26-Nov-1990
Judge Wrong to Accept Appeal of Fact
The charterers had sought to appeal the arbitrators’ findings on foreseeability and remoteness. The judge had set aside the arbitration award. Though he certified that a point of law existed which was of general public importance, he had refused . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.183454
Parties to a contract should be free to stipulate not only primary obligations and rights but also the secondary rights and obligations, ie those which arise upon non-performance of any primary obligation by one of the parties to the contract, but (as to a penalty clause) whilst ‘The court should not be astute to descry a ‘penalty clause’ in every provision of a contract which stipulates a sum to be payable by one party to the other in the event of a breach by the former.’, ‘the right of parties to a contract to make such a stipulation is subject to the rule of public policy that the court will not enforce it against the party in breach if it is satisfied that the stipulated sum was not a genuine estimate of the loss likely to be sustained by the party not in breach, but was a sum in excess of such anticipated loss and thus, if exacted, would be in the nature of a penalty or punishment imposed upon the contract-breaker. Where the court refuses to enforce a ‘penalty clause’ of this nature, the injured party is relegated to his right to claim that lesser measure of damages to which he would have been entitled at common law for the breach actually committed if there had been no penalty clause in the contract.’
Diplock LJ, not a judge given to recognising defeat, declared that he could ‘make no attempt, where so many others have failed, to rationalise this common law rule’ as to penalties.
Lord Justice Diplock
[1966] 3 All ER 128, [1966] 1 WLR 1428
England and Wales
Cited – Carlill v Carbolic Smoke Ball Co CA 7-Dec-1892
Unilateral Contract Liability
The defendants advertised ‘The Carbolic Smoke Ball,’ in the Pall Mall Gazette, saying ‘pounds 100 reward will be paid by the Carbolic Smoke Ball Company to any person who contracts the increasing epidemic influenza, colds, or any disease caused by . .
Cited – Oresundsvarvet AB v Marcos Diamantis Lemos (The ‘Angelic Star’) CA 1988
As part of a contract for ship-building, a delivery credit was made available to the purchaser as an ‘option’, in default of exercise of which the full price was payable in cash. The option was taken. The loan was to be repaid by bills of exchange . .
Cited – Cine Bes Filmcilik Ve Yapimcilik and Another v United International Pictures and Others CA 21-Nov-2003
The parties entered into agreements licensing the exclusive distribution of encrypted television channels within Turkey. A clause provided a calculation of damages for a breach amounting to the balance of licence fees due, and other penalties, . .
Cited – Jeancharm Ltd (T/A Beaver International) v Barnet Football Club Ltd CA 16-Jan-2002
The claimant contracted to supply football shirts to the defendant, but claimed that clauses in the contract with regards to late delivery and payment operated as penalties and so were void at common law.
Held: The sums set out were immodest . .
Cited – Tullett Prebon Group Ltd v El-Hajjali QBD 31-Jul-2008
The defendant signed an employment contract to join the claimants as a senior broker. He changed his mind and decided to stay in his existing job. The new employers sued for breach of contract. The defendant said that the claimants had refused to . .
Cited – Cavendish Square Holding Bv v Talal El Makdessi; ParkingEye Ltd v Beavis SC 4-Nov-2015
The court reconsidered the law relating to penalty clauses in contracts. The first appeal, Cavendish Square Holding BV v Talal El Makdessi, raised the issue in relation to two clauses in a substantial commercial contract. The second appeal, . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.183118
A conveyance of part in 1944 gave a right of pre-emption over retained land. The vendor’s successors the let the retained land to the plaintiff with an option to buy the freehold reversion. The retained land was sold to the defendants in purported compliance with the right of pre-emption. A year later the plaintiff purported to exercise his option and claimed to be entitled to the retained land in priority to the defendants. Walton J dismissed the claim.
Held: The appeal succeeded. The grant of the right of pre-emption did not confer an interest in land and the grant of the option did not trigger the right of pre-emption. The grantee of the right of pre-emption had a right to call for a conveyance of the land if the conditions on which the right is exercisable are fulfilled. Section 186 appeared to have been drafted under a misconception of the law.
Goff LJ said: A party does not avoid liability simply because through ignorance of the law he does not realise that his conduct is tortious. Goff LJ drew no distinction between the criminal and the civil law, and applied the criminal test in the civil context. Stephenson LJ expressly agreed with the judgment of Goff LJ.
Templeman LJ said: ‘Thus the relationship of vendor and purchaser could not be established unless the [vendors] chose to offer the retained lands to the holder of the right of pre-emption or, in breach of covenant, contracted to sell the retained lands to a third party without first offering the lands to the option-holder… If and when these conditions were fulfilled, the holder of the right of pre-emption would be entitled to buy and therefore entitled to an equitable interest.’ Stephenson LJ: ‘…what is granted is a right of pre-emption, [and] the true construction of the grant is only properly called an option when the will of the grantor turns it into an option by deciding to sell and thereby binding the grantor to offer it for sale to the grantee. That it thereby becomes an interest in land is a change in the nature of the right…to which I see no insuperable objection in logic or in principle.’
Goff LJ, Templeman LJ, Stephenson LJ
[1980] CLY 1563, [1980] Ch 338
England and Wales
Cited – Kirkness v John Hudson and Co Ltd HL 1955
Viscount Simonds said: ‘the beliefs or assumptions of those who frame Acts of Parliament cannot make the law’. While subsequent legislation could resolve ambiguity in earlier legislation, it could only do so where the subject of the subsequent . .
Cited – London and Blenheim Estates v Ladbroke Retail Parks Ltd CA 1-Jun-1993
The land-owner sold part of his land, granting easements over the retained land, and an agreement that, if further plots were purchased, similar easements would be granted. The agreement stated that the purchaser should have the right to give notice . .
Distinguished – Merer v Fisher and Another CA 13-May-2003
A right of pre-emption had misdescribed the property when it was registered. The land was transferred without regard to the right of pre-emption. It was found as a fact that no money passed for the transfer, and the claimants said the unregistered . .
Cited – Bettison and others v Langton and others HL 17-May-2001
A right to pasture animals on a common had been levant and couchant, and as such was inalienable as a separate asset from the land where the animals were kept. The right was registered under the Act, and was thereby transformed into a right to graze . .
Cited – Tiffany Investments Ltd and Another v Bircham and Co Nominees (No 2) Limited and others CA 4-Dec-2003
The tenancy was a long lease at a low rent under the 1954 Act, and so had continuing protection under the 1977 Act whilst occupied by the original tenant. The lease was assigned and registered. It had been conditional upon an application to purchase . .
Cited – Bircham and Co, Nominees; Limited and Another v Worrell Holdings Ltd CA 22-May-2001
Whether an agreement is enforceable for the sale of the remainder of the term of a lease following the exercise (or purported exercise) of rights of pre-emption . .
Cited – University of East London Higher Education Corporation v London Borough of Barking and Dagenham and others ChD 9-Dec-2004
The University wanted to sell land for development free of restrictive covenants. It had previously been in the ownership of both the servient and dominant land in respect of a restrictive covenant. The Borough contended that the restrictive . .
Cited – Mainstream Properties Ltd v Young and others CA 13-Jul-2005
The claimant appealed refusal of his claim for inducing a breach of contract against the sixth defendant. It said that an intention to disturb a contract could be inferred.
Held: A mere recklessness as to whether contractual rights were . .
Cited – Taylor v Couch ChD 1-Mar-2012
The case raised the question of law involving the application of the rule against perpetuities to what, on the claimant’s case, is a right of pre-emption created before the coming into force in 2010 of the Perpetuities and Accumulations Act 2009.’ . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.183367
The vendor first instructed the plaintiffs to sell his residential home. They introduced several people, but no offers were made. The vendor went to another firm of agents. An extended planning consent was obtained, and one of the original enquirers returned and evetually bought the property. The vendor paid the second agent only. The first agent sued, and the defendant now appealed.
Held: The test of whether an estate agent can sue for having introduced a purchaser is whether he has introduced the purchaser to the purchase transaction, not merely to the property. The burden lay first on the agent to show that his introduction had been the effective cause of the purchase. The court might infer that causation from the introduction, but the defendant might show another effective casue of the sale. Here the first introduction had not produced a result, but the second did. The first agent was not the effective cause of the sale and was not to be paid.
Sir Donal Nicholls V-C, Staughton LJ
[1993] 1 EGLR 47, [1993] 39 EG 123
England and Wales
Considered – Wood (John D) and Co v Dantata; Beauchamp Estates v Dantata CA 1987
The purchaser liked inspecting houses and the vendor had appointed ten firms to act for him as estate agents. Each of the estate agents was approached by this purchaser and each of the estate agents took the would be purchaser over the property of . .
Considered – Chesterfield v Zahid 1989
. .
Cited – Christie Owen and Davies v Lampitt CA 28-Jul-1999
An estate agent sued for his commission. The eventual purchaser had previously shown interest in the property, and approached the defendant, who only then approached the claimants and instructed them.
Held: The defendants case was not . .
Cited – Standard Life Assurance Company (Incorporated Under Laws of Scotland By Act of Parliament) v Egan Lawson Limited CA 21-Nov-2000
The defendant appealed against judgment in favour of his (buyer’s) estate agent for his commission in finding the property for it. A previous offer was rejected by the seller, but a subsequent agent of the buyer obtained the acceptance of a further . .
Cited – Foxtons Ltd v Pelkey Bicknell and Another CA 23-Apr-2008
The defendant appealed against a finding that she was liable to pay her estate agent, appointed as sole agent, on the sale of her property. The eventual purchasers had visited but rejected the property. The agency was later terminated, and the . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.182507
The issue on this appeal is whether the parties entered into a binding contract of compromise contained in written communications passing between their respective solicitors.
Lord Justice Lewison
[2020] EWCA Civ 1541
England and Wales
Updated: 06 May 2022; Ref: scu.656219
[2019] EWCA Civ 335
England and Wales
Updated: 06 May 2022; Ref: scu.634140
Where a contract expressly provides for fixed remuneration on specified events, the court cannot award any other remuneration on those events, nor can it awarded any remuneration if they do not occur.
[1989] ICR 493
England and Wales
Cited – Spackman v London Metropolitan University Misc 13-Jul-2007
Shoreditch County Court – claim brought by an employee against her employer arising from non-payment of part of her salary. Normally such a claim would be made under the statutory jurisdiction of an Employment Tribunal. But it is agreed that access . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.567941
Court of Appeal of New Zealand
Held: ‘The court has an entirely neutral approach when determining whether the parties intended to enter into a contract. Having decided that they had that intention, however, the court’s attitude will change. It will then do its best to give effect to their intention and, if at all possible, to uphold the contract despite any omissions or ambiguities.’
Richardson P, Thomas J, Keith J, Blanchard J, McGrath J
[2002] 2 NZLR 433, (2001) 7 NZBLC 103, 477, [2001] NZCA 289
Approved – Carlyle (Scotland) v Royal Bank of Scotland Plc SC 11-Mar-2015
Assessing Whether 1st Judge was Plainly Wrong
The Court was asked whether, on an objective assessment of a what a developer and the bank had said to each other, the bank intended to enter into a legally binding promise to advance sums in the future to fund not only the developers purchase of . .
Cited – Santander (UK) Plc v Parker CANI 16-Jun-2015
Appeal by Mr Parker against the judgment dismissing Mr Parker’s appeal against the Order of Master Bell refusing a stay on possession by Santander (UK) PLC of the appellant’s dwelling house.
Held: A promissory note was equivalent to cash, but . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.550149
The Court was asked whether what was said to be a sale was in truth a sale. The court looked at the ordinary meaning of the word sale and then asked whether the context requires an extension of that meaning: ‘[Counsel] accepted that in ordinary legislative usage and in the absence of a special context the word ‘sale’ or equivalent words such as ‘sold’ denote an exchange of property for cash and not for any other form of property. They therefore accepted that a special context must be shown if some wider meaning is to be attributed to the phrase ‘are to be sold’ in section 174 (3A)(b). In our judgement this concession is plainly right.’
[1985] 1 WLR 676
England and Wales
Appeal from – In Re Westminster Property Group plc 1984
The court considered the meaning of the word ‘sale’ in the phrase ‘sale or purchase’ in Order 14A RSC. Nourse J said: ‘The authorities establish that in legislative usage and in the absence of a special context the word ‘sale’ denotes an exchange of . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.519970
The landlord negotiating a new lease proposed to the tenant that ‘the terms and conditions contained in the present lease to be embodied in the new lease where applicable.’ The tenant accepted this offer, but the new lease as executed made the tenant liable for repairs which under the old lease had been the responsibility of the landlord. In answer to a claim for rectification, the landlord said that the new lease was in accordance with what he had understood to be the effect of his offer.
Held: This was irrelevant. What mattered was the objective meaning of what the landlord had written.
Sir Raymond Evershed MR said: ‘If the defendants . . did misconstrue [the letter] that is unfortunate for them, but at least they cannot be heard to say that their letter was intended to mean anything other than that which the words convey to the reader as a piece of ordinary English.’
Sir Raymond Evershed MR
(1950) 84 Lloyds Rep 97
England and Wales
Cited – Daventry District Council v Daventry and District Housing Ltd CA 13-Oct-2011
The appellant challenged refusal of rectification of its agreement with the defendant. They asserted either mutual or unilateral mistake. The parties had agreed for the transfer of housing stock and management staff to the respondents. The claimant . .
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.472862
Denning LJ said: ‘Rectification is concerned with contracts and documents, not with intentions. In order to get rectification it is necessary to show that the parties were in complete agreement on the terms of their contract, but by an error wrote them down wrongly; and in this regard, in order to ascertain the terms of their contract, you do not look into the inner minds of the parties – into their intentions – any more than you do in the formation of any other contract. You look at their outward acts, that is, at what they said or wrote to one another in coming to their agreement, and then compare it with the document which they have signed. If you can predicate with certainty what their contract was, and that it is, by a common mistake, wrongly expressed in the document, then you rectify the document; but nothing less will suffice.’
Denning LJ
[1953] 2 QB 450
England and Wales
Cited – Daventry District Council v Daventry and District Housing Ltd CA 13-Oct-2011
The appellant challenged refusal of rectification of its agreement with the defendant. They asserted either mutual or unilateral mistake. The parties had agreed for the transfer of housing stock and management staff to the respondents. The claimant . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.472860
Silence cannot normally be held to import assent to a contract proposal.
Lord Neaves
(1873) 1 R 41
Updated: 06 May 2022; Ref: scu.461942
Because time begins to run from the date when a cause of action arises, it is necessary to consider what is the nature of an action for general average contribution.
Lord Denning MR said: ‘We so rarely have to consider the law of general average that it is as well to remind ourselves of it. It arises when a ship, laden with cargo, is in peril on the sea, such peril indeed that the whole adventure, both ship and cargo, is in danger of being lost. If the master then, for the sake of all, throws overboard some of the cargo, so as to lighten the ship, it is unjust that the owner of the goods so jettisoned should be left to bear all the loss of it himself. He is entitled to a contribution from the shipowner and the other cargo-owners in proportion to their interests: see the exposition by Lord Tenterden quoted by Cresswell J. in Hallett v Wigram (1850) 9 C.B. 580, 607-608 and Burton v English (1883) 12 Q.B.D. 218. Likewise, if the master, for the sake of all, at the height of a storm, cuts away part of the ship’s tackle (as in Birkley v Presqrave (1801) 1 East 218) or cuts away a mast (as in Attwood v Sellar and Co. (1880) 5 Q.B.D. 286), or, having sprung a leak, puts into a port of refuge for repairs and spends money on them (as in Svendsen v Wallace Bros. (1885) 10 App. Cas. 404), it is unfair that the loss should fall on the shipowner alone. He is entitled to contribution from the cargo owners for the loss or expenditure to which he has been put. In all such cases the act done by the master is called a ‘general average act’: and the loss incurred is called a ‘general average loss’.’
Lord Denning MR
[1971] 1 QB 456
Cited – Total Transport Corporation v Arcadia Petroleum Ltd (‘the Eurus’) CA 18-Nov-1997
Arcadia chartered the Eurus, and had succeeded in their application for an award in arbitration proceedings against Total. The award had been reversed, and they now appealed against that order. The parties disputed whether the amount was an award of . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.462289
English and German companies traded in partnership. They agreed that all disputes between them should be arbitrated in Germany. The English company sold machinery to the German company and by way of payment received some 24 bills of exchange. After the first six bills of exchange had been paid, the German company refused further payment on the ground that the English company had mismanaged the affairs of the partnership and that the machinery which it supplied was defective. The English company then began in England an action on the bills. The German company sought to stay the action under the provisions of the Arbitration Act.
Bristow J at first instance refused the stay but his decision was reversed by the Court of Appeal.
Held: The appeal succeeded. The arbitration agreement did not extend to disputes on bills of exchange upon which, in any event, their Lordships pointed out, there was no dispute.
Lord Wilberforce said: ‘I take it to be clear law that unliquidated cross-claims cannot be relied upon by way of extinguishing set-off against a claim on a bill of exchange . . As between the immediate parties, a partial failure of consideration may be relied upon as a pro tanto defence, but only when the amount involved is ascertained and liquidated . . The amount claimed here in respect of the machines is certainly neither ascertained nor liquidated, and the claim in respect of the mismanagement is one for a wholly unrelated tort, so that there would seem to be no basis for denying the appellant’s claim that, as regards the bills, there is no dispute.’
Lord Salmon (dissenting but on a different point) said: ‘I agree that there is no defence to the bills, since the only possible defence (which is not relied upon by the respondents) could be that their acceptance had been procured by fraud, duress or for a consideration which had failed and because the damages claimed in the arbitration are unliquidated damages and such damages cannot be set off against a claim on the bills of exchange.’
Lord Russell of Killowen said: ‘It is in my opinion well established that a claim for unliquidated damages under a contract for sale is no defence to a claim under a bill of exchange accepted by the purchaser: nor is it available as a set-off or counterclaim. This is a deep rooted concept of English commercial law. A vendor and purchaser who agree upon payment by acceptance of bills of exchange do so not simply upon the basis that credit is given to the purchaser so that the vendor must in due course sue for the price under the contract of sale. The bill is itself a contract separate from the contract of sale. It’s purpose is not merely to serve as a negotiable instrument; it is also to avoid postponement of the purchaser’s liability to the vendor himself, a postponement grounded upon some allegation of failure in some respect by the vendor under the underlying contract, unless it be total or quantified partial failure of consideration.’
Lord Wilberforce, Lord Dilhorne, Lord Salmon, Lord Russell of Killowen
[1977] 2 All ER 463, [1977] 1 WLR 713
England and Wales
Updated: 06 May 2022; Ref: scu.459795
Lord Simonds LC said: ‘Then it was said that even so the words are uncertain in content, for it is purely a question of degree what constitutes the ‘bulk’. I cannot accept this contention. I think that according to the ordinary use of language the bulk means the greater part, which may according to the subject-matter refer to area, number or value. And that I may not be thought guilty of a solution which is equally obscure, I will add that ‘greater part’ means anything over one-half.’
Lord Simonds LC
[1952] AC 265
Cited – Howard v Howard-Lawson Bt CA 18-Jan-2012
The parties disputed the effect of a names and arms clause in a will.
Held: The gift did not fail. ‘The submission that the testator would have been concerned to have the heir take up and use the Howard name as soon as possible is in my . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.450442
Mummery, Black LJJ, Sir John Chadwick
[2011] EWCA Civ 645
England and Wales
Updated: 06 May 2022; Ref: scu.440222
N agreed to sell to L certain premises in Chinnor for andpound; 590 and gave him a receipt for a andpound; 50 deposit. The receipt, which was regarded by both parties as their contract, was in the following terms: ‘Received of [L] the sum of andpound; 50 on the purchase price andpound; 590 for the house and premises and land . . The balance of the purchase price to be paid on or before March 25th 1918. Purchase price andpound; 590. Deposit andpound; 50. Balance andpound; 540.’ N signed the receipt. L sent the receipt to his solicitor with instructions to carry out (i.e. complete) the agreement which L had made. N’s solicitor sent to L’s solicitor a draft contract. L’s solicitor wrote back on 8th February: ‘I need not trouble you to send me another contract as the one which your client has signed is, I think quite sufficient’. The ‘one which your client has signed’ was a reference to the signed receipt.
Held: The letter of 8th February was authorised by L because instructions to complete impliedly authorised, when necessary, the affirmation on behalf of the client, of the contract made by him and, because the solicitors were so authorised, the receipt was a sufficient memorandum for the purposes of the Statute.
Younger J
[1919] 1 Ch 378
Cited – Golden Ocean Group Ltd v Salgaocar Mining Industries Pvt Ltd and Another ComC 21-Jan-2011
The defendants sought to set aside orders allowing the claimants to serve proceedings alleging repudiation of a charterparty in turn allowing a claim against the defendants under a guarantee. The defendant said the guarantee was unenforceable under . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.430069
A ‘subject to contract’ document might be evidence of an antecedent or oral contract and satisfy section 40 of the Law of Property Act 1925 if the stipulation was later waived. A memorandum or note must, if it is to be effective, not only state the terms of the contract but also contain an acknowledgement or recognition by the signatory to the document that a contract had been entered into. The defendants lost because the alleged memorandum was expressly ‘subject to contract’ and therefore did not satisfy section 40 because it did not recognise or admit the existence of a contract.
[1974] Ch 112
Incorrect – Tiverton Estates Ltd v Wearwell Ltd CA 1975
“Subject to Contract” not to be diluted
‘subject to contract’ proposals remain in negotiation until a formal contract is executed. Lord Denning MR said: ‘for over a hundred years, the courts have held that the effect of the words ‘subject to contract’ is that the matter remains in . .
Mentioned as incorrect – Golden Ocean Group Ltd v Salgaocar Mining Industries Pvt Ltd and Another ComC 21-Jan-2011
The defendants sought to set aside orders allowing the claimants to serve proceedings alleging repudiation of a charterparty in turn allowing a claim against the defendants under a guarantee. The defendant said the guarantee was unenforceable under . .
Has been overruled – Golden Ocean Group Ltd v Salgaocar Mining Industries Pvt Ltd and Another CA 9-Mar-2012
The court was asked ‘whether a contract of guarantee is enforceable where contained not in a single document signed by the guarantor but in a series of documents duly authenticated by the signature of the guarantor. It is common in commercial . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.430063
The plaintiff had contracted with the defendants, but became ill and was unable to complete the contract.
Held: His defence of frustration succeeded.
[1966] 1 WLR 87
Law Reform (Frustrated Contracts) Act 1943 1(3)
Cited – Atwal and Another v Rochester TCC 9-Jul-2010
The claimants had engaged the defendant to carry out building works. He became ill part way through and the works were not completed. They now said he was in repudiatory breach of the contract. The defendant said that the contract was frustrated, . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.427354
The obligation of a guarantor under a contract ‘is not an obligation himself to pay a sum of money to the creditor, but an obligation to see to it that another person, the debtor, does something.’ When a repudiatory breach is accepted by the injured party to discharge the contract, all primary obligations remaining for performance in the future are discharged and replaced in the case of the party in default by a secondary obligation to pay the damages imposed by law.
Whether a document is a guarantee or an indemnity, or whether it imposes a secondary or a primary liability, will always depend upon ‘the true construction of the actual words in which the promise is expressed.’
Lord Diplock said: ‘The debtor failed to perform voluntarily many of his obligations under the contract – both the obligation of which performance was guaranteed and other obligations. The cumulative effect of these failures by December 22 1967 was to deprive the creditor of substantially the whole benefit which it was the intention of the parties that he should obtain from the contract. The creditor accordingly became entitled although not bound to treat the contract as rescinded.’ and
‘It is because the obligation of the guarantor is to see to it that the debtor performed his own obligations to the creditor that the guarantor is not entitled to notice from the creditor of the debtor’s failure to perform an obligation which is the subject of the guarantee, and that the creditor’s cause of action against the guarantor arises at the moment of the debtor’s default and the limitation period then starts to run.’
He continued: ‘It follows from the legal nature of the obligation of the guarantor to which a contract of guarantee gives rise that it is not an obligation himself to pay a sum of money to the creditor, but an obligation to see to it that another person, the debtor, does something; and that the creditor’s remedy for the guarantor’s failure to perform it lies in damages for breach of contract only. That this was so, even where the debtor’s own obligation that was the subject of the guarantee was to pay a sum of money, is clear from the fact that formerly the form of action against the guarantor which was available to the creditor was in special assumpsit and not in indebitatus assumpsit… Mines v. Sculthorpe (1809) 2 Camp.215.
The legal consequence of this is that whenever the debtor has failed voluntarily to perform an obligation which is the subject of the guarantee the creditor can recover from the guarantor as damages for breach of his contract of guarantee whatever sum the creditor could have recovered from the debtor himself as a consequence of that failure. The debtor’s liability to the creditor is also the measure of the guarantor’s.’
Lord Reid said: ‘With regard to making good to the creditor payments of instalments by the principal debtor there are at least two possible forms of agreement. A person might undertake no more than that if the principal debtor fails to pay any instalment he will pay it. That would be a conditional agreement. There would be no prestable obligation unless and until the debtor failed to pay. There would then on the debtor’s failure arise an obligation to pay. If for any reason the debtor ceased to have any obligation to pay the instalment on the due date then he could not fail to pay it on that date. The condition attached to the undertaking would never be purified and the subsidiary obligation would never arise.
On the other hand, the guarantor’s obligation might be of a different kind. He might undertake that the principal debtor will carry out his contract. Then if at any time and for any reason the principal debtor acts or fails to act as required by his contract, he not only breaks his own contract but he also puts the guarantor in breach of his contract of guarantee. Then the creditor can sue the guarantor, not for the unpaid instalment but for damages. His contract being that the principal debtor would carry out the principal contract, the damages payable by the guarantor must then be the loss suffered by the creditor due to the principal debtor having failed to do what the guarantor undertook that he would do.’
Lord Diplock, Lord Reid
[1972] 2 All ER 393, [1973] AC 331
England and Wales
Cited – Marubeni Hong Kong and South China Ltd v Ministry of Finance of Mongolia CA 13-Apr-2005
A letter was written by the Mongolian Ministry of Finance guaranteeing payment for textile plant and machinery to be supplied to a Mongolian company. A letter from the justice minister confirmed the authority of the finance minister to sign the . .
Cited – In Re A Debtor (No 1594 of 1992) ChD 20-Nov-1992
A one-sided term inserted into a contract between solicitors and their clients by the solicitors was to be construed against the solicitors and in the client’s favour where any ambiguity allowed this. The contra preferentem rule was to be applied. . .
Cited – Anglo Group Plc, Winther Brown and Co Ltd v Winter Brown and Co Ltd, BML (Office Computers) Ltd, Anglo Group Plc, BML (Office Computers) Ltd TCC 8-Mar-2000
Contract – Contract for provision of computer services – purchaser contract with finance company – duty of co-operation to be implied in computer contracts – practice – responsibilities of expert witnesses generally – whether computer company liable . .
Cited – Tabarrok v E D C Lord and Co (A Firm) CA 14-Feb-1997
The appellant wanted to open a pizza restaurant. He and his partners acquired a company for the purpose, which was to take a lease of premises. They sought advice from the defendants who, they said, failed to advise them of the need to be aware of . .
Cited – Stocznia Gdynia Sa v Gearbulk Holdings Ltd CA 13-Feb-2009
Orders were placed for the construction of ships. They were not delivered. The buyer, the defendant, cancelled the orders. The defendants sought the loss of profit. The claimants said they were entitled only to the repayment of instalments. The . .
Cited – Associated British Ports v Ferryways Nv and Another CA 18-Mar-2009
The court considered whether a document was a guarantee requiring the formality of the 1677 Act, or an indemnity.
Held: The appeal failed. The letter agreement was properly a contract of guarantee which foundered on the subsequent variation. . .
Cited – Remblance v Octagon Assets Ltd CA 17-Jun-2009
A statutory demand was served against the guarantor of the lease after rent arrears arose. He applied for the demand to be set aside, and now appealed against its refusal. He said that the court would have set aside such a demand against the tenant, . .
Cited – McGuinness v Norwich and Peterborough Building Society ChD 23-Nov-2010
The claimant appealed against his bankruptcy saying that it had followed as statutory demand based upon his alleged default under a guarantee of his brothers mortgage borrowings. He said that such a claim was not a liquidated sum within the 1986 . .
Cited – McGuinness v Norwich and Peterborough Building Society CA 9-Nov-2011
The appellant had guaranteed his brother’s loan from the respondent, and the guarantee having been called in and unpaid, he had been made bankrupt. He now appealed saying that the guarantee debt, even though of a fixed amount could not form the . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 May 2022; Ref: scu.225900
A Notice to Complete binds both parties to a land contract.
Buckley LJ said that the party giving the notice must be ready and willing at the time of the giving of the notice to fulfill his own outstanding obligations under the contract, and also at any time during the period of the notice up to and including the time set for completion.
Russel LJ, Buckley LJ
[1974] 1 ALL ER 729, [1974] 1 WLR 68
Cited – Westvilla Properties Ltd v Dow Properties Ltd ChD 15-Jan-2010
The owner sought specific performance of its contract to sell land to the defendant. The land was subject to a proposed lease which the defendant had concluded was uncertain and unattractive, and claimed to have rescinded the contract.
Held: . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 May 2022; Ref: scu.393014
Correspondence preceding a contract could be looked at to determine the circumstances in which a provision in the contract was intended to apply.
Lord President Hope said: ‘In my opinion the issue which has arisen between the parties in this case requires that reference should be made to the previous correspondence in order to resolve it. This is because the essential point which is in dispute is not the meaning of the words and phrases used in the . . agreement but the circumstances in which it was intended to apply. The ordinary rules for the construction of written documents, including contracts such as that entered into in the present case, exclude reference to extrinsic evidence, unless there is an ambiguity in the words used which requires to be resolved by the use of such evidence. . But . . it is legitimate to look to the surrounding circumstances and see what was the intention of the parties, expressed in the words used, as they were with regard to the particular circumstances and facts with regard to which they were used . . We were referred by the pursuers’ counsel to a number of cases where it was recognised that extrinsic evidence was admissible to identify something mentioned in the contract, such as a person, thing or document referred to in it . . The purpose of such evidence is not to modify the contract but to apply it to the facts as explained by the extrinsic evidence.’
Lord President Hope
1994 SC 351
Appeal from – Bovis Construction (Scotland) Ltd v Whatlings Construction Ltd HL 19-Oct-1995
The managing contractors sought damages from a sub-contractor. The contract was on a printed form and in letters. A letter limited time related damages to pounds 100,000. The main contractors sought a much larger sum.
Held: A clause seeking to . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 May 2022; Ref: scu.381292
Merchants in London receive from a mere stranger residing abroad a bill of lading of certain goods, in a letter requesting them to effeet insurance, they declining to do business for the consignor, but acting bona fide with a view to his interest, indorse the bilil of lading to a friend of his, who receives the goods, and afterwards fails with the proceeds iri his hands Held, that the merchants, by indorsing the bill of ladiug were liable to the consignor for the amount
[1813] EngR 700, (1813) 3 Camp 472, (1813) 170 ER 1450 (A)
England and Wales
Updated: 05 May 2022; Ref: scu.338465
By a contract between the plaintiff and A and B, it was agreed that the plaintiff should serve A and B as foreman in their business for seven years, if A and B, or either of them, should so long live. – The plaintiff having subsequently discovered that, at the time of making the contract, C was a dormant partner with A and B, declared upon the contract as an agreement to serve A, B, and C, or the survivor of them, for the period therein named.
Held: That the contract was misdescribed. – Semble, that if it had been properly declared upon C would have been liable under the agreement.
[1840] EngR 758, (1840) 1 Man and G 738, (1840) 133 ER 530
See Also – Beckham v Knight And Drake 24-Jan-1838
K and S having entered into a written engagement to employ Plaintiff in their trade for seven years.
Held: The Plaintiff could not sue D, a dormant partner with K. and S., but not party to the agreement. . .
See Also – Beckham v Drake, Knight, And Surgey 10-Jul-1841
. .
See Also – Beckham v Drake, Knight, And Surgey 19-Nov-1841
. .
See Also – Drake And Others v Beckham 6-Feb-1843
. .
See Also – Beckham v Drake HL 11-Jul-1849
Non-property assets do not pass on bankruptcy
An action was brought on a contract for hiring and service, where the plaintiff was to serve for seven years, and the defendant to pay weekly wages during that time; and the breach was a dismissal during the seven years. The plaintiff, after this . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 May 2022; Ref: scu.310184
The Court declined to make an order which might oblige the defendant Post Office to discriminate against some categories of users.
[1977] 1 WLR 1172, [1978] ILJ Sep
England and Wales
Updated: 05 May 2022; Ref: scu.314288
One of the conditions at an attempted sale by auction under a decree provided that the purchase should be completed on a day named, and that, if from any cause whatever the purchase-money should not then be paid, interest should be paid from that date. The purchase was by private contract, subject to the conditions of sale, and also subject to the purchase being approved by the Court. The purchase-money was a fund in Court, and after a long delay the conveyancing counsel approved of the title for the purchasers.
Held: Neither party being to blame for the delay, the purchasers could not be relieved from their obligation to pay interest.
[1856] EngR 326, (1856) 3 Sm and G 307, (1856) 65 ER 671
Updated: 05 May 2022; Ref: scu.291081
[1859] EngR 924, (1859) 1 El and El 247, (1859) 120 ER 902
Cited – Societe Generale, London Branch v Geys SC 19-Dec-2012
The claimant’s employment by the bank had been terminated. The parties disputed the sums due, and the date of the termination of the contract. The court was asked ‘Does a repudiation of a contract of employment by the employer which takes the form . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 May 2022; Ref: scu.288276
Three parties including the defendant had drawn bills against each other, which bills came to the plaintiff as bona fide holder for value indorsee. Various sums had been paid on account, and the plaintiff sued the defendant but giving him credit only for the sums he had paid, saying that any excess would be held for the use of the drawers. The defendant offered to pay the sums he owed and the balance outsanding under all the bills, but no more, and paid that sum into court.
Held: Though the bills were not accomodation bills as such, the defendant could not be called on to pay the sum already paid again.
Willes J
[1863] EngR 154, (1863) 13 CB NS 543, (1863) 143 ER 215, (1863) 1 New Rep 280, (1863) LJCP 121, (1863) 7 LT 712
Cited – Hirachand Punamchand v Temple CA 1911
The defendant, a British army officer in India, had given a promissory note to the plaintiff moneylenders. Unable to pay, he suggested they apply to his father, Sir Richard Temple. In reply, Sir Richard Temple’s solicitors wrote saying they were . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 May 2022; Ref: scu.282809
A memorandum stamped as a receipt having been rejected, because requiring a stamp as an agreement, an agreement for the hire of goods of which the value was mentioned only by reference to the receipt, was held not to require a stamp, the value of the hire not appearing to exceed the amount of 20L, and the rejected receipt allowed to be looked at, with reference to the real date of the transaction, and in order to show fraud.
Trover by the plaintiff its assignee of one Grainger, an insolvent.
Pleas. Not gullty and not possessed.
[1860] EngR 34 (B), (1860) 2 F and F 77
Updated: 05 May 2022; Ref: scu.284873
(Trinidad and Tobago) The parties contracted for the sale of a half share of land to the co-owner for TT$2 million. A 10% deposit was paid. A notice to complete was not met. The vendor sold the share to others for more. Arguments as to the validity of the notice were not upheld. One ground of appeal was refusal to return the deposit under the equivalent of section 49(2).
Held: The refusal was upheld. Lord Nicholls noted that the gain represented by the retention of the deposit was offset by the amount of interest he would have received if the sale had been completed on time, and: ‘Even so, and having regard to the price of the resale to (the third party) he did not suffer a loss. This, of itself and without more, is not a sufficient reason for the court to exercise its discretion in favour of a defaulting buyer. The traditional deposit paid by a buyer when he enters into a contract is an earnest for the performance of the contract, and can be retained by the seller if the buyer defaults. Equity does not regard this as a penalty against which it granted relief: see Workers Trust and Merchant back Ltd v Dojap Investment Ltd [1993] A.C. 573 578-9. Section 49(2) has never been understood as intended to overrule this principle, and it should not be so interpreted or applied.
So the search is for something more. In the present case the money spent by the plaintiff on work done in connection with the land does not qualify under this head, for the lack of evidence of the effect of such expenditure on the value of the land. Nor does the first defendant’s profit on re-selling at a higher price to the (third parties). In the first place, against the uplift of $500,000 in the price must be set the loss of interest already mentioned. Secondly, and more generally, their Lordships simply do not know the reason for the higher price. This may be due to movements in land prices generally. Once again their Lordships are being asked to speculate. This is not a proper basis on which the court should exercise its discretion.’
Goff, Mustill, Slynn, Nicholls and Steyn
33 of 1993
Commonwealth
Cited – Workers Trust and Merchant Bank Ltd v Dojap Investments Ltd PC 22-Feb-1993
(Jamaica) The purchaser at an auction had been obliged under the terms of the auction contract to pay a deposit of 25%. He failed to complete, and the vendor took the deposit by way of forfeit. The standard deposit payable would be 10%. The Court of . .
Cited – MIDILL (97Pl) Ltd v Park Lane Estates Ltd and Another CA 11-Nov-2008
Refusal to return Land Contract Deposit
The court was asked as to whether a seller could retain a deposit paid by the claimant on a sale where contracts had been exchanged but the buyer had proved unable to go ahead.
Held: The appeal against refusal of return of the deposit failed. . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 May 2022; Ref: scu.279045
The parties contracted for the sale of a ship under the Norwegian sale form. The court considered whether the contract was properly cancelled and or novated and whether an anti-corrosion system forming part of the hull was machinery within a warranty clause.
[1987] 1 Lloyds Rep 283
England and Wales
Cited – Reilly v National Insurance and Guarantee Corporation Ltd CA 19-Dec-2008
The claimant sold fire extinguishers. Three failed, resulting in damage to the purchaser’s properties. His insurers refused to pay an indemnity saying that the failure was the failure of a piece of machinery (the switchgear) and was not covered by . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 May 2022; Ref: scu.279052
[1989] 15 Con L 116
England and Wales
Cited – Countrywide Communications Limited v ICL Pathway Ltd 1996
The court considered the authorities bearing on the question of whether or not a claim under a quantum meruit can successfully be made for work done in anticipation of a contract which does not materialise. Strauss J concluded: ‘I have found it . .
Mentioned – MSM Consulting Ltd v United Republic of Tanzania QBD 30-Jan-2009
The claimants sought commission or a quantum meruit for the part they had taken in finding a suitable site for the defendant’s High Commission in London.
Held: The works undertaken were consistent with the claimant seeking work from the . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 May 2022; Ref: scu.280271
The claimants purchased a licence to promote three films, but the defendant lost the film prints and CCC could not therefore promote them. After their claim for loss of profit failed in the absence of evidence, they claimed for the expenditure they had wasted.
Held: The plaintiff has a full discretion to pursue either a loss of profit or for wasted expenditure after a breach of contract by the defendant. He need not provide evidence before making that election. Where the defendant prevented the fulfilment of the contract the onus lay on him to prove it if he asserted that the plaintiff would not have managed to recoup at least his expenditure from profits. It would be fair to impose the onus of proof on the defendant at least in the following cases: ‘where the plaintiff’s decision to base his claim on abortive expenditure was dictated by the practical impossibility of proving loss of profit rather than by unfettered choice, any other rule would largely, if not entirely, defeat the object of allowing this alternative method of formulating the claim. This is because, notwithstanding the distinction to which I have drawn attention between proving a loss of net profit and proving in general terms the probability of sufficient returns to cover expenditure, in the majority of contested cases impossibility of proof of the first would probably involve like impossibility in the case of the second. It appears to me to be eminently fair that in such cases where the plaintiff has by the defendant’s breach been prevented from exploiting the chattel or the right contracted for and, therefore, putting to the test the question of whether he would have recouped his expenditure, the general rule as to the onus of proof of damage should be modified in this manner’.
Hutchison J
[1985] 1 QB 16, [1984] 3 WLR 245
England and Wales
Not applied – Parker and Another v SJ Berwin and Co and Another QBD 17-Dec-2008
The claimants sought damages from their former solicitors. They set out to purchase a football club, expending substantial sums for the purpose, relying on the defendants’ promised provision of service in finding and arranging the funding. They said . .
Cited – Omak Maritime Ltd v Mamola Challenger Shipping Co Ltd ComC 4-Aug-2010
Lost Expenses as Damages for Contract Breach
The court was asked as to the basis in law of the principle allowing a contracting party to claim, as damages for breach, expenditure which has been wasted as a result of a breach. The charterer had been in breach of the contract but the owner had . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 May 2022; Ref: scu.278874
The ship’s master had failed to endorse the bill of lading properly so as to reverse the liability for payment of freight to the time charterers. The arbitrator had found that the mistake had caused no loss since the shippers would probably have paid the bill in any event.
Held: The arbitrator had been entitled to find as he did, and the appeal failed.
Steyn J
[1990] 2 Lloyd’s Rep 323
England and Wales
Cited – Giles v Thompson, Devlin v Baslington (Conjoined Appeals) HL 1-Jun-1993
Car hire companies who pursued actions in motorists’ names to recover the costs of hiring a replacement vehicle after an accident, from negligent drivers, were not acting in a champertous and unlawful manner. Lord Mustill said: ‘there exists in . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 May 2022; Ref: scu.272903
Lord Denning MR said that, in relation to a charterparty for a stated period such as ‘three months’ or ‘six months’, without any express margin or allowance: ‘the court will imply a reasonable margin or allowance. The reason is because it is not possible for anyone to calculate exactly the day on which the last voyage will end. It is legitimate for the charterer to send her on a last voyage which may exceed the stated period by a few days.’
Lord Denning MR
[1975] 1 Lloyds Rep 115
England and Wales
Cited – Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas) HL 9-Jul-2008
The parties contracted to charter the Achileas. The charterer gave notice to terminate the hire, and the owner found a new charterer. Until the termination the charterers sub-chartered. That charter was not completed, delaying the ship for the . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 May 2022; Ref: scu.270748
Four parties were invited to tender for the supply of stone to a public authority. They agreed that one would buy stone from the others and submit the lowest tender, two parties were to submit a higher tender and the fourth party was to submit no tender. The defendants, in breach of the agreement, submitted a tender, which was accepted, and the party which was to supply under the agreement brought proceedings to restrain performance by the party which had broken ranks.
Held: The action succeeded.
Bacon V-C considered the plaintiff’s case as ‘very honest’. It was submitted that the plaintiff could not obtain equitable relief since the arrangement was a device to compel the authority, under the fiction of a public competition, to accept tenders not representing the real market price of the commodity, but this submission the vice-chancellor rejected, finding the agreement to be ‘perfectly lawful’, to contain ‘nothing illegal’, and not deserving to be characterised as a conspiracy.
Bacon V-C
(1888) 21 QBD 544
Cited – Norris v United States of America and others HL 12-Mar-2008
The detainee appealed an order for extradition to the USA, saying that the offence (price-fixing) was not one known to English common law. The USA sought his extradition under the provisions of the Sherman Act.
Held: It was not, and it would . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 May 2022; Ref: scu.270733
A valuable Chinese carpet had been taken for cleaning but was lost by the bailee. The bailee said that his liability was limited under the terms of the contract to a particular sum. A fundamental breach is ‘a breach going to the root of the contract’. The claimant pleaded by way of reply that the carpet had been lost by reason of a fundamental breach. The question arose whether the burden lay upon the bailor to establish a fundamental breach of contract or upon the bailee to establish that there had been no fundamental breach of contract.
Held: Whilst recognising that there had been conflicting decisions, the burden lay upon the bailee to establish that there been no fundamental breach.
Lord Denning MR said: ‘Upon principle, I should have thought that the burden was on the cleaners to prove that they were not guilty of a fundamental breach. After all, Mrs. Levison does not know what happened to it. The cleaners are the ones who know, or should know, what happened to the carpet, and the burden should be on them to say what it was . . It is, therefore, a moot point for decision. On it I am clearly of opinion that, in a contract of bailment, when a bailee seeks to escape liability on the ground that he was not negligent or that he was excused by an exception or limitation clause, then he must show what happened to the goods. He must prove all the circumstances known to him in which the loss or damage occurred. If it appears that the goods were lost or damaged by a slight breach – not going to the root of the contract- he may be protected by the exemption or limitation clause. But, if he leaves the cause of loss or damage undiscovered and unexplained – then I think he is liable: because it is then quite likely that the goods were stolen by one of his servants; or delivered by a servant to the wrong address; or damaged by reckless or wilful misconduct; all of which the offending servant will conceal and not make known to his employer. Such conduct would be a fundamental breach against which the exemption or limitation clause will not protect him.’
Orr LJ said: ‘as a matter both of justice and of common sense the burden ought to rest on the bailee who, if the goods have been lost whilst in his possession, is both more likely to know the facts and in a better position to ascertain then than the bailor.’
Sir David Cairns said: ‘however difficult it may sometimes be for a bailee to prove a negative, he is at least in a better position than the bailor to know what happened to the goods while in his possession.’
Lord Denning MR, Orr LJ, Sir David Cairns
[1978] 1 QB 69, [1977] 3 All ER 498
England and Wales
Mentioned – George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd CA 29-Sep-1982
The buyer bought 30lbs of cabbage seed, but the seed was not correct, and the crop was worthless. The seed cost pounds 192, but the farmer lost pounds 61,000. The seed supplier appealed the award of the larger amount and interest, saying that their . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 May 2022; Ref: scu.266867
Thompson had agreed to buy a tenanted property, had paid part of the purchase price, and had received a conveyance in escrow pending payment of the balance. He at that point gave McCullough notice to quit. Two months later Thompson paid the balance of the purchase money.
Held: The court considered what would constitute delivery of an agreement in escrow. Morton LJ said: ‘The question of whether a document is delivered as an escrow or as a deed is in general one of fact, and I think that the following passage from Norton on Deeds . . accurately states the law: ‘Whether the document was delivered as an escrow or as a deed is a question of what the parties intended, and that intention may appear either from their statements or the circumstances.’ The learned author then quotes the following observation of Parke B. in Bowker v Burdekin (1843) 11 MandW 128 at 147: ‘you are to look at all the facts attending the execution, to all that took place at the time, and to the result of the transaction; and therefore, though it is in form an absolute delivery, if it can reasonably be inferred that it was delivered not to take effect as a deed till a certain condition was performed, it will nevertheless operate as an escrow.’ The author goes on: ‘thus the delivery of a transfer of mortgage was held to be in escrow until the mortgage money had been paid . . and of a conveyance until the purchase money has been paid . . The circumstances relied upon to show delivery as an escrow must be prior to or contemporaneous with, not subsequent to, the delivery.
Evidence is, of course, admissible as to what were the circumstances attending the delivery . . and the question is in general one of fact for the jury.’
The notice to quit was invalid because the fee simple was not effectively vested in the giver of the notice: and satisfaction of the condition of the escrow could not retrospectively validate that notice.
Morton, Bucknill and Asquith LJJ
[1947] 1 KB 447
England and Wales
Cited – Bowker v Burdekin 1843
Parke B considered how a court identified whether a document had been delivered in escrow: ‘you are to look at all the facts attending the execution, to all that took place at the time, and to the result of the transaction; and therefore, though it . .
Cited – Bank of Scotland Plc v King and others ChD 23-Nov-2007
The parties contracted to buy and sell a property. The lending bank sought possession, saying that it had advanced the money which had been spent acquirng the property. The defendant purchasers said that completion had not taken place, the full . .
Cited – Stodday Land Ltd and Another v Pye ChD 7-Oct-2016
The agricultural landlord sold part of his land subject to the respondent’s tenancy to the appellant. Before the transfer was registered, notices to quit were served by both the landlord and his buyer. The tenant challenged both notices in the . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 May 2022; Ref: scu.261510
The compromise of a defence may amount to sufficient consideration for the formation of a contract.
[1983] QB 711
England and Wales
Cited – Haines v Hill and Another CA 5-Dec-2007
On the divorce, the husband was ordered to transfer his share in the house to the wife. On his bankruptcy shortly after, the order was confirmed. After the wife sold the property at a profit, the trustee in bankruptcy applied to set the transfer . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 May 2022; Ref: scu.261937
Where an instrument is delivered to the party who is to benefit under the instrument, any oral statement that the delivery is not an absolute delivery of the deed is of no effect. Where several persons are parties to a deed as grantees and one of them is also the solicitor of the other grantees and of the grantor, and the deed is delivered to him, evidence is admissible to prove that the instrument was delivered to him not as a grantee but in his capacity of solicitor to the grantor and as an escrow.
[1897] 2Ch 608
Qualified – Bank of Scotland Plc v King and others ChD 23-Nov-2007
The parties contracted to buy and sell a property. The lending bank sought possession, saying that it had advanced the money which had been spent acquirng the property. The defendant purchasers said that completion had not taken place, the full . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 May 2022; Ref: scu.261513
Lord Denning MR discussed what was meant by delivery of a document in escrow: ‘When an instrument is delivered in escrow, that only means that it is delivered on condition (which may be expressed or implied by conduct) that it is not to be operative until some condition is performed: see Norton on Deeds 2nd Edition page 18. A good instance is where, on a proposed sale of land, only part of the purchase price has been paid, but the vendor lets the purchaser into possession and delivers the deed to the purchaser’s solicitor, and tells him to hold it until the balance is paid. The deed is clearly delivered on condition that it is not to be operative until the price is paid. Whilst the condition remains unperformed, the sale is not complete and the purchaser does not get the legal title (see Watkins v Nash in 1875 and Thompson v McCullough in 1947); but as soon as the money is paid, the sale is complete. The instrument there may precede any binding contract. But when the sale is complete it is clearly a conveyance on sale and is liable to stamp duty.’
Lord Denning MR
[1964] 3 All ER 66
England and Wales
Cited – Bank of Scotland Plc v King and others ChD 23-Nov-2007
The parties contracted to buy and sell a property. The lending bank sought possession, saying that it had advanced the money which had been spent acquirng the property. The defendant purchasers said that completion had not taken place, the full . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 May 2022; Ref: scu.261514
It was alleged that the pursuers and the defender had clubbed together to buy a ticket in an Irish lottery. The ticket was bought in the name of the defender, and a sum of money was won. The action was brought to compel him to share the winnings with the pursuers. The parties were alive to the issue of sponsio ludicra, and it was conceded that the obligation to buy the ticket might have been unenforceable on that ground; but neither the parties nor the court raised any question as to whether the obligation to share the winnings might also be unenforceable on that ground.
1937 SC 619
Scotland
Cited – Robertson v Anderson IHCS 5-Dec-2002
The parties had agreed to share any winnings from their Bingo activities. One sought to reject the contract as an unenforceable gaming contract.
Held: The contention was rejected. It had been suggested that there had been no intention to . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 May 2022; Ref: scu.181876
When two parties talk about a matter which with commercial significance, a statement by one that he will do something will be construed as obligatory, or as an offer, rather than as a mere statement of intention, if the words and deeds of the other party indicate that the statement was so understood, and the obligation confirmed or the offer accepted so that parties appeared to regard the commercial ‘deal’ as concluded. But in considering whether there is indeed a contract between the parties, in any particular case, it will always be essential to look at the particular facts, with a view to discovering whether these facts, rather than some general rule of thumb, can be said to reveal consensus and an intention to conclude a contract.
Lord Prosser
1993 SLT 80
Scotland
Cited – Robertson v Anderson IHCS 5-Dec-2002
The parties had agreed to share any winnings from their Bingo activities. One sought to reject the contract as an unenforceable gaming contract.
Held: The contention was rejected. It had been suggested that there had been no intention to . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 May 2022; Ref: scu.181865
Mr Way (W), the plaintiff, was employed by Ariston, which had mining operations in Africa, as a consulting engineer and manager. He met the respondent (L) in England. He was asked to seek options to acquire concessions the respondent might acquire. In return, he was promised a share. W returned and acquired concessions. They agreed his reward would be decided on returning, and L promised W a substantial interest in his new Trust copany. They agreed no amount, but only that he should receive a share of the concessions. W now sought his remuneration. At trial he was awarded andpound;30,000 on the basis of a contract between the parties. The court of appeal disagreed and held that no contract was made.
Held: There was no concluded contract, and the court could not complete one for the parties but that W was entitled to remuneration on a quantum meruit. The question was the amount of the award. The CA said, applyig evidence from consulting mining engineers, that the proper award was a fee of andpound;600.
Lord Atkin said that the CA decision ignored the real business position, and that the award was to be fixed by reference to the approach to remuneration adopted by the parties: ‘My Lords, this decision appears to me to ignore the real business position. Services of this kind are no doubt usually the subject of an express contract as to remuneration, which may take the form of a fee, but may also take the form of a commission share of profits, or share of proceeds calculated at a percentage, or on some other basis. In the present case, there was no question of fee between the parties from beginning to end. On the contrary, the parties had discussed remuneration on the footing of what may loosely be called a ‘participation,’ and nothing else. The reference is analogous to the well known distinction between salary and commission. There are many employments the remuneration of which is, by trade usage, invariably fixed on a commission basis. In such cases, if the amount of the commission has not been finally agreed, the quantum meruit would be fixed after taking into account what would be a reasonable commission, in the circumstances, and fixing a sum accordingly. This has been an everyday practice in the courts for years. But, if no trade usage assists the court as to the amount of the commission, it appears to me clear that the court may take into account the bargainings between the parties, not with a view to completing the bargain for them, but as evidence of the value which each of them puts upon the services. If the discussion had ranged between 3 per cent on the one side and 5 per cent on the other, all else being agreed, the court would not be likely to depart from somewhere about those figures, and would be wrong in ignoring them altogether and fixing remuneration on an entirely different basis, upon which, possibly, the services would never have been rendered at all. That, in fixing a salary basis, the court may pay regard to the previous conversation of the parties was decided by the Court of Exchequer in 1869, in Scarisbrick v Parkinson, where the terms of an agreement, invalid under the Statute of Frauds, were held to be admissible as evidence in a quantum meruit. This seems to me to be good law, and to give effect to a principle which has been adopted regularly by the courts not only in fixing remuneration for services but also in fixing prices, sums due for use and occupation, and, indeed, in all cases where the court has to determine what is a reasonable reward for the consideration given by the claimant. As I have said, the rule applied in fixing the amount of the remuneration necessarily applies to the basis on which the amount is to be fixed. I have therefore no hesitation in saying that the basis of remuneration by fee should, in this case, on the evidence of the parties themselves, be rejected, and that Mr Way is entitled to a sum to be calculated on the basis of some reasonable participation.’ He fixed the award at andpound;5,000.
Lord Wright said that the court had to do its best to arrive at a figure which was fair and reasonable to both parties on all the facts of the case. He continued: ‘One aspect of the facts to be considered is found in the communings of the parties while the business was going on. Evidence of this nature is admissible to show what the parties had in mind, however indeterminately, with regard to the basis of remuneration. On those facts, the court may be able to infer, or attribute to the parties, an intention that a certain basis of payment should apply. This evidence seems to me to show quite clearly that the appellant was employed on the basis of receiving a remuneration depending on results. If he had been unsuccessful, he would have been entitled to no more than his expenses, but the respondent had led him to believe that, if the concessions he obtained were valuable, his remuneration would be on the basis of some proportion of their value.’ and ‘While it is not unknown that such services should be remunerated by a fee if it is expressly or impliedly so agreed, this is by no means necessarily, and would not generally be, the case. The idea of such a fee being excluded, it follows that the question of the amount to which the appellant is entitled is left at large, and the court must do the best it can to arrive at a figure which seems to it fair and reasonable to both parties, on all the facts of the case. One aspect of the facts to be considered is found in the communings of the parties while the business was going on. Evidence of this nature is admissible to show what the parties had in mind, however indeterminately, with regard to the basis of remuneration. On those facts, the court may be able to infer, or attribute to the parties, an intention that a certain basis of payment should apply.’
Lord Atkin, Lord Wright
[1937] 3 All ER 759
England and Wales
Cited – Vedatech Corporation v Crystal Decisions (UK) Limited ChD 21-May-2002
The defendant wanted to amend its software and introduce it to the Japanese market, and worked with the claimants for this purpose. The defendant suggested that a concluded agreement existed, the claimant that only no contract was concluded. There . .
Cited – Kenneth L Kellar Carib West Limited v Stanley A Williams PC 24-Jun-2004
(Turks and Caicos Islands) The appellant had failed in his action but argued that he should not be called upon to pay the costs of the respondent because there had been an unlawful conditional fee agreement. The bill had referred to one factor as . .
Cited – Hunt and Another v McLaren and others ChD 4-Oct-2006
Land had been given to a football club under a trust for its exclusive use as such. That land was sold and a new ground acquired and a stadium built, but the land was subject to restrictive covenenats limiting its use to sports, which considerably . .
Cited – Stack v AJAT-Tec Ltd EAT 8-Jul-2011
EAT JURISDICTIONAL POINTS – Worker, employee or neither
Employment Judge wrongly held that claimant could not as a matter of law be party to a contract, either of service or for services, in circumstances . .
Cited – BP Exploration Co (Libya) Ltd v Hunt (No. 2) 1982
The court considered the application of interest to damages: ‘the basic principle . . that interest will be awarded from the date of loss’ and ‘the mere fact that it is impossible for the defendant to quantify the sum due until judgment has been . .
Cited – Radford and Another v Frade and Others QBD 8-Jul-2016
The court was asked as to the terms on which solicitors and Counsel were retained to act for the defendants. The appeals did not raise any issues concerning costs practice, and were by way of review of the Costs Judge’s rulings, and not by way of . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 May 2022; Ref: scu.181805
Lord Wright, Lord Maugham
(1937) 43 Com Cas 1, (1937) 58 LLR 287
England and Wales
Cited – Wilsher v Essex Area Health Authority CA 1986
A prematurely-born baby was the subject of certain medical procedures, in the course of which a breach of duty occurred. to ensure that the correct amount was administered it was necessary to insert a catheter into an umbilical artery so that his . .
Mentioned – Laminates Acquisition Co v BTR Australia Ltd ComC 31-Oct-2003
The claimant sought damages for breach of a company share sale agreement. The seller had given a warranty that it was not involved in any undisclosed litigation. An anti-trust investigation had been begun in the US.
Held: In this case the . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 May 2022; Ref: scu.179820
In a contract for the purchase of airplanes, the plaintiff claimed misrepresentation, and as a result, rescission and damages. The issue was whether, once the right to rescind had been lost, any claim for damages had also lapsed under section 2(2).
Held: The power to award damages was properly an alternative to rescission, which a judge could award where he felt that it was a more equitable solution. As an alternative, it fell with the claim for rescission.
Stuart-Smith LJ
Times 31-Mar-2000, [1999] 1 Lloyd’s Rep 387
Misrepresentation Act 1967 2(2)
England and Wales
Not Followed – Thomas Witter v TBP Industries Ltd ChD 15-Jul-1994
An award of damages for misrepresentation required that there had at some time been a right of rescission, not necessarily a continuing right to rescind.
An acknowledgement of non-reliance clause has become a common part of modern commercial . .
See also – Government of Zanzibar v British Aerospace (Lancaster House) Ltd ComC 26-Jan-2000
The claimant had bought an airplane from the defendant in 1992. It brought an action in misrepresentation. The defendant asked that it be struck out as without chances of success for delay and breach of the court rules.
Held: The court asked . .
Cited – Six Continents Hotels Inc v Event Hotels Gmbh QBD 21-Sep-2006
The claimant had licensed the defendant to use its trademarks in connection with the naming of their hotels in Germany. The defendants failed to pay their fees as agreed, the claimants terminated the license and now sought payment under the . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 May 2022; Ref: scu.90686
Gazette 22-Sep-1999
England and Wales
Updated: 05 May 2022; Ref: scu.83100
Where a contract provided for its determination in the event of one party being convicted of a criminal offence, the fact that the acts underlying the conviction took place before the contract came into effect was not enough to prevent the clause being effective, provided only that as in this case the finding occurred after the contract, and the words of the clause were effective.
Times 17-Dec-1999
England and Wales
Updated: 05 May 2022; Ref: scu.78445
The Claimant sought pounds 226,711 for the unpaid charges for the hire of scaffolding plus accruing charges. The Claimant also claimed delivery up of the scaffolding in the Defendants’ possession with damages in the alternative. Originally the Claimant dealt with a company owned by the Third Defendant called Paul Durston Limited. The Third Defendant had entered into a personal guarantee and indemnity agreement in respect of PDL’s liability to the Claimant.
Martin Bowdery QC HHJ
[2020] EWHC 2738 (TCC)
England and Wales
Updated: 04 May 2022; Ref: scu.655940
Conditional Bond – Apparent Heir-
A bond was granted by a grandfather to his granddaughter, under the condition that it was not to be alterable, except in the event of her marrying without his consent, or the consent of parties named. She married, after her grandfather’s death, without the requisite consent. Held the bond still good, and binding on the heir taking his estate, though the grandfather only possessed on apparency.
[1765] UKHL 2 – Paton – 95, (1765) 2 Paton 95
England and Wales
Updated: 04 May 2022; Ref: scu.560605
Positive Prescription.- Title of possession. – Objections to testing of deed. – Circumstances which elided such objection.
[1772] UKHL 2 – Paton – 258, (1772) 2 Paton 258
Scotland
Updated: 04 May 2022; Ref: scu.561692
Lord Justice Lloyd
[2012] EWCA Civ 1911
England and Wales
Updated: 04 May 2022; Ref: scu.517243
The court held as frustrated a contract for the sale of Mali groundnuts, where interruptions in elecricity supplies and other faults prevented the sellers from delivering their promise.
Donaldson J
[1977] 2 LI 146
England and Wales
Appeal from – Intertradex SA v Lesieur Tourteraux SARL 1978
The parties contracted to sell a quantity of Mali groundnut expellers cif Rouen. The sellers intended to perform the contracts by appropriating a quantity of Mali groundnut expellers under a contract with suppliers who were the sole producers of the . .
Lists of cited by and citing cases may be incomplete.
Updated: 04 May 2022; Ref: scu.259372
The fact that there is a small element of personal service in a contract does not destroy the quality of mutuality want of which may in general terms properly be a ground for refusing a decree of specific performance.
[1894] 3 Ch 621
Cited – Beswick v Beswick HL 29-Jun-1967
The deceased had assigned his coal merchant business to the respondent against a promise to pay andpound;5.00 a week to his widow whilst she lived. The respondent appealed an order requiring him to make the payments, saying that as a consolidating . .
Lists of cited by and citing cases may be incomplete.
Updated: 04 May 2022; Ref: scu.251060
When a contract is frustrated, ‘the loss lies where it falls.’
[1904] 1 KB 493
England and Wales
Overruled – Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd HL 15-Jun-1942
A contract for the supply by the respondents of special machinery to be manufactured by them was treated as an ordinary contract for the sale of goods. It began valid, but suffered frustration by the outbreak of war.
Held: Lord Wright restated . .
Lists of cited by and citing cases may be incomplete.
Updated: 04 May 2022; Ref: scu.238539
The court was asked whether a payment of pounds 500 by their mother to one of two brothers who were the litigants was to be treated as a gift or as a loan. The evidence showed that the mother always intended it to be a gift, that the son wanted to receive it as a loan, but that he did not refuse to take it at all. The judge considered submissions about the need for the recipient to accept the thing as a gift, and therefore as to the relevance of the intention of the recipient as well as that of the payer or deliverer. He concluded that acceptance by the recipient of the thing given was necessary, but no more than that.
Held: The recipient can refuse to take it, or if it arrives without prior arrangement he can reject it or send it back when he becomes aware of it. For a transaction to have effect as a gift the donor must actually intend to immediately give legal or beneficial ownership of the property to the donee.
The question has to be determined with reference to the intention of the payer.
Goff J said: ‘where a person intends to make a gift and the donee receives the thing given, knows that he has got it and takes it, the fact that he says: ‘well, I will only accept it as a loan, and you can have it back when you want it’ does not prevented from being an effective gift. Of course, it does not turn it into a loan unless the donor says: ‘very well, let it be a loan.’ He could not force the donor to take it back, but the donor, having transferred it to him effectively and completely, intending to make a gift, and he – so far from repudiating it – having kept it, it seems to me that that is an effective gift . . ‘
Goff J
[1975] 1 WLR 1532, [1975] 2 All ER 728;
England and Wales
Cited – Meisels v Lichtman and Another QBD 9-Apr-2008
The court considered gifts to charity: ‘Where there is a dispute it seems to me that it is the intentions of the donor nor that will be crucial, rather than the more familiar exercise of ascertaining the intentions of both parties in construing the . .
Cited – Scott v Bridge and Others ChD 25-Nov-2020
Claim to recover money and property said to have been transferred by the claimant to the defendants or one or more of them. The money concerned came from a bank account belonging to the claimant. The property concerned consisted of two . .
Lists of cited by and citing cases may be incomplete.
Updated: 04 May 2022; Ref: scu.656368
Vice-Chancellor Stuart said: ‘In order to make a valid gift, there must be perfect knowledge in the mind of the person making the gift of the extent of the beneficial interest intended to be conferred, and of which it is intended to divest oneself in making it.’
Vice-Chancellor Stuart
(1853) 12 LTOS 12
England and Wales
Cited – Scott v Bridge and Others ChD 25-Nov-2020
Claim to recover money and property said to have been transferred by the claimant to the defendants or one or more of them. The money concerned came from a bank account belonging to the claimant. The property concerned consisted of two . .
Lists of cited by and citing cases may be incomplete.
Updated: 04 May 2022; Ref: scu.656366
The Plaintiff, a widow, in the year 1880 caused a sum of pounds 6000 Consols to be transferred into the joint names of herself and the Defendant, who was her godson, and in whose welfare she took great interest. This transfer was not made known to the Defendant. In 1882 the Plaintiff, then eighty eight years old, married a second husband, and soon afterwards applied to the Defendant to re-transfer the stock into her name alone.
Held: Upon the evidence, that the transfer was originally made with the deliberate intention of benefiting the Defendant, and not with a view to
the creation of a trust. The Court could not, therefore, compel the Defendant to re-transfer the stock.
Pearson J
[1884] UKLawRpCh 162, (1884) 27 ChD 341
England and Wales
At ChD – Standing v Bowring CA 18-Dec-1885
The Plaintiff, a widow, in the year 1880, caused pounds 6000 Consols to be transferred into the joint names of herself and the Defendant, who was her godson. She did so with the express intention that the Defendant, in the event of his surviving . .
Lists of cited by and citing cases may be incomplete.
Updated: 04 May 2022; Ref: scu.656367
Claim for unpaid commission and damages for alleged repudiatory breach of an Agency Agreement
Miss Julia Dias QC (sitting as a Deputy Judge of the High Court)
[2020] EWHC 105 (Comm), [2020] WLR(D) 152
England and Wales
Updated: 04 May 2022; Ref: scu.648573
Knowles J
[2019] EWHC 423 (QB)
England and Wales
Updated: 04 May 2022; Ref: scu.634229
Court of Session Inner House First Division
[1912] SLR 477
Scotland
See Also – British Glanzstoff Manufacturing Co, Ltd v General Accident, Fire, and Life Assurance Corporation, Ltd SCS 28-Oct-1912
. .
Lists of cited by and citing cases may be incomplete.
Updated: 04 May 2022; Ref: scu.615136
The parties disputed the effect of a shareholders agreement as to cross options for the sale of shares.
Lord Mance, Lord Clarke, Lord Carnwath, Lord Hughes,Lord Hodge
[2017] UKPC 24
England and Wales
Updated: 04 May 2022; Ref: scu.593585
A contract had been set up to provide compensation for oil pollution losses. It was between oil companies who contributed to the fund and its administrators, Cristalwho was to ‘be the sole judge in accordance with these terms of the validity of any claim made hereunder’. The claimant association made a claim which Cristal rejected. It was accepted that the association was to be treated as a party to the contract. The main argument was as to ouster of jurisdiction.
Held: The Court rejected the argument. It was not argued that the fact of Crystal being the sole judge vitiated the agreement.
Neill LJ stated: ‘it does not seem to me that any question arises as to the ouster of the jurisdiction of the court. The court clearly has a role to play. The problem is to define the extent of that role.
I see the force of the submission that it is unusual for one party to a contract to be constituted the sole arbiter of the validity of any claim made against it. There is therefore attraction in the argument that the determination under cl.IX is merely . . a first stage determination . . I have come to the conclusion, however, that this argument must be rejected.’
Neill LJ
[1996] CLC 240
England and Wales
Appeal from – West of England Shipowners Mutual Insurance Association (Luxembourg) v Cristal Ltd ComC 25-Jan-1995
cw Contract – contractual rights – fulfilment of conditions – freedom to fulfil bargain – court action precluded – ouster clauses – arbitration – term – construction – one party sole arbitrator of construction – . .
Cited – Charles Stanley and Co Ltd v Adams QBD 19-Jul-2013
The claimant stock broking firm sought to recover its uninsured losses after having paid out for what was said to have been negligent advice by the respondent, a self-employed broker working for them.
Held: The power to recover such losses . .
Lists of cited by and citing cases may be incomplete.
Updated: 04 May 2022; Ref: scu.570106
There was a dispute within an unincorporated weightlifting association about an alleged misuse of its funds.
Held: Words in an agreement are void to the extent that they seek to oust the jurisdiction of the court.
Lynsey J said: ‘The association, being an unincorporated body, could not be liable for the tortious acts either of its officials or council members. The members of the association, individually, would not be liable for such tortious acts, except in so far as they had individually authorized such acts.’
and ‘The common law does not approve of the intervention of any man in the litigation of another with which he had no lawful concern, whether that litigation is well founded or not’ However, as to the law prohibiting maintenance of an action the common law rules were ‘much modified and, as some say, almost atrophied’
It is contrary to the common law and contrary to public policy to attempt to oust the jurisdiction of the courts
Lynskey J
[1954] 1 WLR 1005
England and Wales
Cited – Foster v McNicol and Another QBD 28-Jul-2016
Incumbent Labour leader did not need nominations
The claimant challenged a decision of the National Executive Committee of the Labour Party to allow its present Leader to stand in the leadership election challenging his position without the need for him to submit first the otherwise standard . .
Lists of cited by and citing cases may be incomplete.
Updated: 04 May 2022; Ref: scu.567810
The bank customers, now appellants, redeemed a mortgage over their property, and the property was transferred to family members, who in turn borrowed from the same lender. A bank employee simply changed the name on the mortgage. This was ineffective to give the bank a charge, and the bank obtained a remedy through the law of unjust enrichment. The customers appealed.
Held: The appeal failed. The issue ws whether the landowner had been enriched at the expense of the bank, and the answer was plainly that she had. There had been only one overall schem, eand the causal connection between the loss suffered by the bank, and the benefit accruing to the original claimant was clear. Subrogation is a restitutionary remedy which reverses unjust enrichment, and to establish unjust enrichment four questions must be asked. Has the defendant been enriched? Was the enrichment at the claimant’s expense? Was the enrichment unjust? Are there any defences available to the defendant? The bank was to be subrogated to he unpaid seller’s lien which would have the effect of reinstating the charge. Subrogation is a broad and flexible remedy, and in this particular case, no more appropriate way forward was available.
Lord Neuberger, President, Lord Kerr, Lord Clarke, Lord Wilson, Lord Carnwath
[2015] UKSC 66, [2015] 3 WLR 1334, [2016] AC 176, [2015] WLR(D) 438, UKSC 2013/0171
Bailii, WLRD, Bailii Summary, SC, SC Summary
England and Wales
Cited – Banque Financiere De La Cite v Parc (Battersea) Ltd and Others HL 16-Apr-1998
The making of an order for restitution after finding an unjust enrichment by subrogation, is not dependant upon having found any common or unilateral intention of the parties. The House distinguished between contractual subrogation of the kind most . .
At First Instance – Menelaou v Bank of Cyprus Plc ChD 19-Jul-2012
On the sale of the claimant’s property, the solicitors received agreement by the defendant bank to the release of their charge over the property for a certainsum, being less than the loan outstanding. In the course of discharging the loan, a bank . .
Cited – Investment Trust Companies v HM Revenue and Customs ChD 2-Mar-2012
The claimant had properly accounted for VAT on its transactions for many years, but a decision of the European court had latterly ruled that the services were exempt. The claimant sought restitution from HMRC, who responded by arguing that . .
See Also – Menelaou v Bank of Cyprus UK Ltd CA 4-Jul-2013
The court set out answers to consequential questions raised by their judgment, and the form of declaration required. . .
Cited – Benedetti v Sawiris and Others SC 17-Jul-2013
The claimant appealed against reduction of the sum awarded on his claim for a quantum meruit after helping to facilitate a very substantial business deal for the defendants.
Held: The correct approach to the amount to be paid by way of a . .
Cited – Buhr v Barclays Bank plc CA 26-Jan-2001
The bank took a second charge over property, but failed to get it registered. The chargors fell into debt and bankruptcy, and the property was sold. The proceeds were used to discharge the first charge, and then repay unsecured creditors. The bank . .
Cited – Filby v Mortgage Express (No 2) Limited CA 22-Jun-2004
Mr and Mrs Filby’s matrimonial home was charged to the Halifax. They also had an unsecured loan with the Midland Bank. Mr Filby sought to remortgage the matrimonial home with Mortgage Express. The mortgage advance was paid to solicitors who used . .
Cited – Chetwynd v Allen 1899
A lender M advanced pounds 1,200 to pay off an existing mortgage held by T over a property owned by the plaintiff. M made the advance on the basis of certain misleading representations and non-disclosures by the plaintiff’s husband. M was told that . .
Cited – Butler v Rice 1910
The wife owned a Bristol property and a Cardiff property subject to a andpound;450 charge in favour of a bank with whom the title deeds had been deposited. The husband asked the plaintiff to lend him andpound;450 to pay off the mortgage. The . .
Cited – Filby v Mortgage Express (No 2) Limited CA 22-Jun-2004
Mr and Mrs Filby’s matrimonial home was charged to the Halifax. They also had an unsecured loan with the Midland Bank. Mr Filby sought to remortgage the matrimonial home with Mortgage Express. The mortgage advance was paid to solicitors who used . .
Cited – Burston Finance Ltd v Spierway Ltd ChD 1974
The lender took a charge over a property held by a company which subsequently became void because it was not registered within the required period at Companies House.
Held: A voidable charge is a valid charge unless and until set aside: . .
Cited – Orakpo v Manson Investments Ltd HL 1977
Transactions were entered into under which loans were made to enable the borrower to acquire and develop certain properties were held to be unenforceable under the 1927 Act. The effect was to enrich the borrower, who had fallen into arrears of . .
Cited – Boscawen and Others v Bajwa and Others; Abbey National Plc v Boscawen and Others CA 10-Apr-1995
The defendant had charged his property to the Halifax. Abbey supplied funds to secure its discharge, but its own charge was not registered. It sought to take advantage of the Halifax’s charge which had still not been removed.
Held: A mortgagee . .
Appeal from – Menelaou v Bank of Cyprus UK Ltd CA 19-Jun-2013
The Court was asked questions about the law of unjust enrichment, and one of the remedies which may be granted to reverse the effect of unjust enrichment, namely subrogation to an unpaid vendor’s lien. The bank had released its charges over property . .
Cited – Foskett v McKeown and Others HL 18-May-2000
A property developer using monies which he held on trust to carry out a development instead had mixed those monies with his own in his bank account, and subsequently used those mixed monies to pay premiums on a life assurance policy on his own life, . .
Cited – Barclays Bank Plc v Estates and Commercial Limited CA 20-Feb-1996
Millett LJ discussed the assertion of a vendor’s lien where a third party would be adversely affected: ‘A party with an equitable charge can be taken to agree to the postponement of his property against any party who was allowed to his knowledge to . .
Cited – Futter and Another v Revenue and Customs; Pitt v Same SC 9-May-2013
Application of Hastings-Bass Rule
F had created two settlements. Distributions were made, but overlooking the effect of section 2(4) of the 2002 Act, creating a large tax liability. P had taken advice on the investment of the proceeds of a damages claim and created a discretionary . .
Cited – Revenue and Customs v The Investment Trust Companies SC 11-Apr-2017
Certain investment trust companies (ITCs) sought refunds of VAT paid on the supply of investment management services. EU law however clarified that they were not due. Refunds were restricted by the Commissioners both as to the amounts and limitation . .
Cited – Lowick Rose Llp v Swynson Ltd and Another SC 11-Apr-2017
Losses arose from the misvaluation of a company before its purchase. The respondent had funded the purchase, relying upon a valuation by the predecessor of the appellant firm of accountants. Further advances had been made when the true situation was . .
Cited – Scott v Bridge and Others ChD 25-Nov-2020
Claim to recover money and property said to have been transferred by the claimant to the defendants or one or more of them. The money concerned came from a bank account belonging to the claimant. The property concerned consisted of two . .
Lists of cited by and citing cases may be incomplete.
Updated: 04 May 2022; Ref: scu.554249
Canlii (Supreme Court of Canada) Contracts – Validity – Breach – Agreement with religious aspect – Husband refusing to provide wife with Jewish religious divorce after civil divorce despite agreement to do so – Action in damages against husband for breach of contract – Whether matter justiciable – Whether agreement satisfies all requirements to make it valid and binding under Quebec law – Whether husband can rely on freedom of religion to avoid legal consequences of failing to comply with agreement – Civil Code of Quebec, S.Q. 1991, c. 64, arts. 1373, 1385, 1412, 1413 – Charter of human rights and freedoms, R.S.Q., c. C-12, ss. 3, 9.1.
Human rights – Freedom of conscience and religion – Agreement with religious aspect – Jewish religious divorce or ‘get’ – Husband refusing to provide wife with Jewish religious divorce after civil divorce despite agreement to do so – Action in damages against husband for breach of contract – Whether husband entitled to immunity from damages for his breach of contract by invoking freedom of religion – Charter of human rights and freedoms, R.S.Q., c. C-12, ss. 3, 9.1.
McLachlin CJ and Bastarache, Binnie, LeBel, Deschamps, Fish, Abella, Charron and Rothstein JJ
288 DLR (4th) 257, [2007] 3 SCR 607, 2007 SCC 54 (CanLII)
Cited – Shergill and Others v Khaira and Others SC 11-Jun-2014
The parties disputed the trusts upon which three Gurdwaras (Sikh Temples) were held. The Court of Appeal had held that the issues underlying the dispute were to be found in matters of the faith of the Sikh parties, and had ordered a permanent stay. . .
Lists of cited by and citing cases may be incomplete.
Updated: 04 May 2022; Ref: scu.543046
A short point of construction of the provisions for the ascertainment by calculation or expert determination of the deferred price payable under an agreement for the sale and purchase of shares
Lord Justice Briggs
[2015] EWCA Civ 116
England and Wales
Updated: 04 May 2022; Ref: scu.543032
The supervening mental incapacity of a principal has the effect of terminating the actual authority of his agent: ‘The actual authority of an agent whether conferred by deed or not and whether expressed to be irrevocable or not, is determined by the death or supervening mental incapacity of either the principal or the agent’. However, he may have continuing ostensible authority to bind the principal
Bramwell LJ expressed the view that only insanity amounting to dementia would suffice to annul the authority of an agent.
Brett, Bramwell LJJ
(1879) 4 QBD 661, (1879 40 LT 671, (1879 48 LJQB 59
England and Wales
Cited – Blankley v Central Manchester and Manchester Children’s University Hospitals NHS Trust CA 27-Jan-2015
This case concerns a claimant with fluctuating capacity to conduct legal proceedings. At a time when she had capacity, she retained a firm of solicitors under a conditional fee agreement. The issue was whether the CFA terminated automatically by . .
Lists of cited by and citing cases may be incomplete.
Updated: 04 May 2022; Ref: scu.542244
An offer to sell a public house with vacant possession for andpound;7,000 was accepted without qualification.
Held: There was a binding contract even though many important points e.g. the date for completion and question of paying a deposit, were left open: ‘Mere arrangements which in the ordinary course of business are left to the legal advisers to settle, such as the date for completion, are subsequent matters which do not prevent . . a concluded agreement.’
In the absence of a stipulation in the contract in that regard, a seller cannot require a deposit, or any part of the purchase money, to be paid prior to completion.
Cozens-Hardy MR said: ‘Though, when a contract is contained in letters, the whole correspondence should be looked at, yet if once a definite offer has been made and it has been accepted without qualification, and it appears that the letters of offer and acceptance contained all the terms agreed on between the parties, the complete contract thus arrived at cannot be affected by subsequent negotiation. When once it is shown that there is a complete contract, further negotiations between the parties cannot, without the consent of both, get rid of the contract already arrived at.’
. . And ‘It would seem clear that if the letters of proposal and acceptance in fact contain all the terms agreed on at the time, and were written with the intent of binding the writers, this complete contract could not be affected by subsequent negotiations not resulting in a new contract.’
Lord Cozens-Hardy MR
[1916] 2 Ch 187
Updated: 04 May 2022; Ref: scu.538774
Canlii Supreme Court of Canada – Torts – Negligence – Economic loss – Whether Canadian law recognizes duty of care on parties in commercial negotiations – Whether tort of negligence extends to damages for pure economic loss arising out of conduct of pre-contractual negotiations.
Torts – Negligence – Economic loss – Whether tender-calling authority owed duty of care to bidders in drafting tender specifications – Whether sphere of recovery for pure economic loss should be extended to cover circumstances surrounding preparation of tender specifications.
Contracts – Tenders – Obligation to treat all bidders fairly – Whether tender-calling authority breached its implied contractual duty to treat all bidders fairly and equally – If so, whether bidder’s loss caused by contractual breach.
The prospect of causing deprivation by economic loss is implicit in the negotiating environment
McLachlin CJ, Gonthier, Iacobucci, Major, Bastarache, Binnie and Arbour JJ
2000 SCC 60, [2000] 2 SCR 860
Cited – Cramaso Llp v Ogilvie-Grant, Earl of Seafield and Others SC 12-Feb-2014
The defenders owned a substantial grouse moor in Scotland. There had been difficulties with grouse stocks, and steps taken over years to allow stocks to recover. They had responded to enquiries from one Mr Erskine with misleading figures. Mr Erskine . .
Lists of cited by and citing cases may be incomplete.
Updated: 04 May 2022; Ref: scu.537023