two issues of contractual interpretation

[2021] EWCA Civ 1407
Bailii
England and Wales

Contract

Updated: 11 November 2021; Ref: scu.668368

Wimpey agreed to buy land from Woodar for a sum of andpound;850,000 of which andpound;150,000 was to be paid to Transworld. A month later Wimpey sent a letter purporting to rescind the contract and Woodar sued for damages including the andpound;150,000 payable to Transworld. The parties, or at any rate one of them, honestly but mistakenly believed that they were entitled to act in a certain way by virtue of their understanding of the contract.
Held: Wimpey had not repudiated the contract but in view of the Court of Appeal’s decision that Wimpey were liable in damages for the andpound;150,000 certain observations were made. Lord Wilberforce referred to the proposition: ‘that if Woodar made a contract for a sum of money to be paid to Transworld, Woodar can, without showing that it has itself suffered loss or that Woodar was agent or trustee for Transworld, sue for damages for non payment of that sum. That would certainly not be an established rule of law.’ and
‘Whether in a situation such as the present – viz. where it is not shown that Woodar was agent or trustee for Transworld, or that Woodar itself sustained any loss, Woodar can recover any damages at all, or any but nominal damages, against Wimpey, and on what principle, is, in my opinion, a question of great doubt and difficulty – no doubt open in this House – but one on which I prefer to reserve my opinion.’ A party may recover damages for a third party where the contract was in effect held in trust for that third party, or he acted as agent. ‘there are many situations of daily life which do not fit neatly into conceptual analysis, but which require some flexibility in the law of contract.’ Lord Scarman said that it was open to the House to declare that: ‘in the absence of evidence to show that he has suffered no loss, A, who has contracted for a payment to be made to C, may rely on the fact that he required the payment to be made as prima facie evidence that the promise for which he contracted was a benefit to him and that the measure of his loss in the event of non-payment is the benefit which he intended for C but which has not been received.’
Lord Scarman said: ‘they honestly believed the contract did give them the right. When one examines the totality of their conduct and its impact upon Mr. Cornwell it is plain . . that the defendants, though claiming mistakenly to exercise a power given them by the contract to bring it to an end, were not evincing an intention not to be bound by the contract. On the contrary, they believed they were acting pursuant to the contract
It never occurred to Mr. Cornwell that the defendants, if held not to have been entitled to give notice of rescission, would refuse to perform the contract.’

Lord Wilberforce, Lord Salmon, Lord Russell of Killowen, Lord Keith of Kinkel, Lord Scarman
[1980] 1 WLR 277, [1980] UKHL 11, [1980] 1 All ER 571
Bailii
England and Wales
Citing:
Cited – Frost v Knight 1872
The doctrine of repudiatory breach is largely founded upon considerations of convenience and the opportunities which it affords for mitigating loss. It applies even where the obligation to be performed at a future date is a contingent obligation. . .
Cited – James Shaffer Ltd v Findlay Durham and Brodie CA 1953
The defendants were desirous of doing, and were in fact doing, their utmost to perform their contract, but remained in breach.
Held: A mere misconstruction of the obligations in a contract does not amount to repudiation. A party who takes . .

Cited by:
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 . .
Cited – Bridgen v Lancashire County Council CA 1987
The court considered a claim for constructive dismissal where the parties made a genuine mistake as to the test for anticipatory breach.
Held: Sir John Donaldson MR said: ‘But, for my part, I would not have thought it necessary to give any . .
Cited – Haberdasher’s Monmount School for Girls v Turner EAT 8-Mar-2004
EAT Unfair Dismissal
ET incorrectly applied Sir John Donaldson’s dictum in Bridgen [1987] IRLR 58 (based on Woodar v Wimpey): assertion of wrong interpretation of contract not enough for repudiation, which . .
Cited – Eminence Property Developments Ltd v Heaney CA 21-Oct-2010
The court was asked whether a vendor of land, who served a notice to complete making the time for completion of the essence of the sale contract, and then, mistakenly, treated the contract as at an end prior to the expiry of the notice, was thereby . .
Cited – Force India Formula One Team Ltd v Etihad Airways PJSC and Another QBD 4-Nov-2009
force_india_etihadQBD2009
The parties had entered into a sponsorship agreement, with the claimants undertaking to display the name of the defendants on their car. After the agreement, the claimant company had been taken over by parties with interests competing with those of . .
Cited – Lidl UK Gmbh v Hertford Foods Ltd and Another CA 20-Jun-2001
The respondent had contracted to supply tinned corned beef to the appellant, but had become unable to fulfil the orders because of industrial action in Brazil. The appellant had purchased supplies elsewhere and set off the cost of that against the . .

Lists of cited by and citing cases may be incomplete.

Contract

Leading Case

Updated: 10 November 2021; Ref: scu.218897

The House considered whether a written contract had been created in correspondence.
Held: Lord Hathersley said: ‘It has been established for far too long a time, and by some precedents in your Lordships’ House, that if you can find the true and important ingredients of an agreement in that which has taken place between two parties in the course of a correspondence, then, although the correspondence may not set forth, in a form which a solicitor would adopt if he were instructed to draw an agreement in writing, that which is the agreement between the parties, yet, if the parties to the agreement, the thing to be sold, a price to be paid, and all those matters, be clearly and distinctly stated, although only by letter, an acceptance clearly by letter will not the less constitute an agreement in the full sense between the parties, merely because that letter may say, ‘We will have this agreement put into due form by a solicitor.’
Lord O’Hagan said: ‘I think that the contract was complete. Everything essential to the completion of it appears on the written documents – the parties, the premises, the conditions, and the price. An offer is made; those who had full power to accept it, did accept it in terms.’

Lord Hatherley
[1878] HL 1125
England and Wales

Contract

Leading Case

Updated: 10 November 2021; Ref: scu.252314

Gift of Chattel to be Completed by Delivery

To create a gift, if it be a chattel capable of manual delivery the donor must deliver it to the donee by actually handing it over, or else do some act which in the eye of the law amounts to delivery of possession, as for example handing over some indicia of ownership or the means of obtaining possession.
There cannot be a gift without acceptance by the donee.
Lord Esher MR said as to a gift: ‘It is a transaction consisting of two contemporaneous acts, which at once complete the transaction, so that there is nothing more to be done by either party. The act done by the one is that he gives; the act done by the other is that he accepts. These contemporaneous acts being done, neither party has anything more to do.’

Lord Esher MR
(1890) 25 QBD 57, [1890] UKLawRpKQB 67
Commonlii
England and Wales
Cited by:
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.

Contract

Leading Case

Updated: 10 November 2021; Ref: scu.656365

The pursuers asserted a contract between themselves and the defenders for a consultancy, and that reasonable remuneration was due under it. The Lord Ordinary had found that no contract had been completed, the parties being, at all points, in dispute as to the level of remuneration.
Held: It does not always follow that there is no contract where something which affects the parties’ contractual relationship has not yet been agreed. It may be clear from the terms of the bargain that the parties were content that agreement on this matter should be deferred for the time being, because they have agreed upon all that was necessary for there to be a binding contract between them.
‘But there is an important difference between cases where nothing has been done by either party to implement the alleged contract and cases where a party to the alleged contract has already provided the goods or services for which he seeks payment. It is likely to be more difficult in the former case to enforce the contract if there is no agreement about the remuneration which is to be paid, because in the ordinary case the price is one of the essential matters upon which agreement is required. Where goods or services have been provided, however, the usual rule is that there is an obligation to pay for them unless they have been provided gratuitously. So it is easier in these cases, if there is no agreement about the price or remuneration, for an obligation to pay a reasonable sum to be implied.’

Lord President Hope
[1993] ScotCS CSIH – 10, 1994 SCLR 401, 1994 SLT 613, 1994 SC 270
Bailii
Scotland
Citing:
Cited – Neilson v Stewart HL 21-Mar-1991
The parties disputed whether a completed agreement existed between them.
Held: Lord Jauncey of Tullichettle said: ‘The fact that in the usual case a particular term will be considered essential to the existence of a concluded agreement does . .
Cited – Suisse Atlantique Societe d’Armement Maritime SA v NV Rotterdamsche Kolen Centrale HL 1966
No magic in the words “fundamental breach”
There is no rule of law which prevents parties to a contract agreeing to limit their respective liabilities. It is a question of the construction of the particular clause as to whether it applies to a fundamental breach or not. The court doubted the . .
Cited – R and J Dempster Ltd v Motherwell Bridge and Engineering Co Ltd SCS 3-Jul-1964
Although the parties had not agreed on the price which was to be mutually settled at a later date, it was held that there was a concluded contract by which the defenders were obliged to place orders with the pursuers for the steel which the pursuers . .

Lists of cited by and citing cases may be incomplete.

Contract

Leading Case

Updated: 10 November 2021; Ref: scu.279571

The House considered a contract for the construction by a Scottish shipbuilder of four torpedo boats for the Spanish government. The contract provided that: ‘The penalty for late delivery shall be at the rate of andpound;500 per week for each vessel’.
Held: Although described as a penalty, the sum in question was to be regarded as liquidated damages and therefore recoverable.
Lord Halsbury considered that the basis for interference by the courts in an agreement between the parties was whether the clause was unconscionable and extravagant. It was ‘obvious on the face of the contract that the very thing intended to be provided against by this pactional amount of damages is to avoid [the] kind of minute and somewhat difficult and complex system of examination that would be necessary if you were to attempt to prove the damage.’
Lord Davey applied a principle of interpretation of contracts in Scottish law: ‘My Lords, I therefore conceive that it may be taken as an established principle in the law of Scotland that, if you find a sum of money made payable for the breach, not of an agreement generally which might result in either a trifling or a serious breach, but a breach of one particular stipulation in an agreement, and when you find that the sum payable is proportioned to the amount if I may so call it, or the rate of the non-performance of the agreement – for instance, if you find that it is so much per acre for ground which has been spoilt by mining operations, or if you find, as in the present case, that it is so much per week during the whole time for which the non-delivery of vessels beyond the contract time is delayed – then you infer that prim? facie the parties intended the amount to be liquidate damages and not penalty. I say ‘prim? facie’ because it is always open to the parties to shew that the amount named in the clause is so exorbitant and extravagant that it could not possibly have been regarded as damages for any possible breach which was in the contemplation of the parties, and that is a reason for holding it to be a penalty and not liquidated damages notwithstanding the considerations to which I have alluded.’ Evidence as to the loss which the Spanish government had actually suffered was inadmissible, and that it would be contrary to the purpose of the clause to admit such evidence.

Lord Halsbury LC, Lord Davey
[1904] UKHL 3, (1904) 12 SLT 498, (1904) 7 F (HL) 77, [1905] AC 6
Bailii
Scotland
Cited by:
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 – Dunlop Pneumatic Tyre Company Ltd v New Garage and Motor Company Ltd HL 1-Jul-1914
The appellants contracted through an agent to supply tyres. The respondents contracted not to do certain things, and in case of breach concluded: ‘We agree to pay to the Dunlop Pneumatic Tyre Company, Ltd. the sum of 5 l. for each and every tyre, . .
Applied – Webster v Bosanquet PC 1912
(Ceylon) The Board was asked whether a clause in a contract amounted to a penalty: ‘whatever be . . the expression used in the contract in describing the payment, the question must always be whether the construction contended for rendered the . .
Explained – Commissioner of Public Works v Hills PC 24-May-1906
(Cape of Good Hope) A railway construction contract provided that in the event of a breach by the contractor he should forfeit ‘as and for liquidated damages’ certain percentages retained by the Government of the Cape of Good Hope of money payable . .
Cited – Parkingeye Ltd v Beavis CA 23-Apr-2015
The appellant had overstayed the permitted period of free parking in a retail park by nearly an hour. The parking was managed by the respondent who had imposed a charge of 85.00 pounds. The judge had found that the appellant was in breach of a . .
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.

Contract

Leading Case

Updated: 10 November 2021; Ref: scu.279658

Interpretation of Exclusion Clauses

The plaintiffs had contracted with the defendants for the provision of a night patrol service for their factory. The perils the parties had in mind were fire and theft. A patrol man deliberately lit a fire which burned down the factory. It was an unresolved issue whether the employee intended to cause only a small fire or burn down the whole factory. The contract purported to exempt the plaintiffs from liability.
Held: The appeal succeeded, and the order at first instance restored. The question of whether particular clauses applied to excuse or limit liability was solely a matter of construction of the contract. The doctrine of fundamental breach had no significant part to play. The court analysed the distinction between primary and secondary obligations. A fundamental breach, whilst bringing to an end primary obligations under the contract, does not necessarily bring to an end secondary obligations, such as exclusion clauses. There was no rule of law that liability could not be excluded, let alone limited in respect of deliberate breach.
Lord Diplock said: ‘My Lords, an exclusion clause is one which excludes or modifies an obligation, whether primary, general secondary or anticipatory secondary, that would otherwise arise under the contract by implication of law. Parties are free to agree to whatever exclusion or modification of all types of obligations as they please within the limits that the agreement must retain the legal characteristics of a contract; and must not offend against the equitable rule against penalties; that is to say, it must not impose upon the breaker of a primary obligation a general secondary obligation to pay to the other party a sum of money that is manifestly intended to be in excess of the amount which would fully compensate the other party for the loss sustained by him in consequence of the breach of primary obligation. Since the presumption is that the parties by entering into the contract intended to accept the implied obligations exclusion clauses are to be construed strictly and the degree of strictness appropriate to be applied to their construction may properly depend upon the extent to which they involve departure from the implied obligations. Since the obligations implied by law in a commercial contract are those which, by judicial consensus over the years or by Parliament in passing a statute, have been regarded as obligations which a reasonable businessmen would realise that he was accepting when he entered into a contract of a particular kind, the court’s view of the reasonableness of any departure from the implied obligations which would be involved in construing the express words of an exclusion clause in one sense that they are capable of bearing rather than another, is a relevant consideration in deciding what meaning the words were intended by the parties to bear. But this does not entitle the court to reject the exclusion clause, however unreasonable the court itself may think it is, if the words are clear and fairly susceptible of one meaning only.
My Lords, the reports are full of cases in which what would appear to be very strained constructions have been placed upon exclusion clauses, mainly in what today would be called consumer contracts and contracts of adhesion. As Lord Wilberforce has pointed out, any need for this kind of judicial distortion of the English language has been banished by Parliament’s having made these kinds of contracts subject to the Unfair Contract Terms Act 1977. In commercial contracts negotiated between businessmen capable of looking after their own interests and of deciding how risks inherent in the performance of various kinds of contract can be most economically borne (generally by insurance), it is, in my view, wrong to place a strained construction upon words in an exclusion clause which are clear and fairly susceptible of one meaning only even after due allowance has been made for the presumption in favour of the implied primary and secondary obligations.’
Lord Wilberforce said that the rescission of the supply agreement excuses the innocent party from further performance of his obligations (if any) under the supply agreement.

Lord Diplock, Lord Wilberforce, Lord Salmon, lord Keith of Kinkel, Lord Scarman
[1980] AC 827, [1980] UKHL 2, [1980] 1 All ER 556
Bailii
Unfair Contract Terms Act 1977
England and Wales
Citing:
Explained – Morris v C W Martin and Sons Ltd CA 1965
The plaintiff took her mink stole to the defendants for cleaning. An employee received and stole the fur. The judge had held that the defendants were not liable because the theft was not committed in the course of employment.
Held: The . .
Appeal from (CA) – Photo Production Ltd v Securicor Transport Ltd CA 1978
The Master of the Rolls considered the use of an exemption clause, saying that the Court was to consider first whether the breach was ‘fundamental’. If so, he said, the court itself deprives the party of the benefit of an exemption or limitation . .
Criticised – Karsales (Harrow) Ltd v Wallis CA 12-Jun-1956
The Court considered an exemption clause: ‘Notwithstanding earlier cases which might suggest the contrary, it is now settled that exempting clauses of this kind, no matter how widely they are expressed, only avail the party when he is carrying out . .
Cited – Harbutt’s Plasticine Ltd v Wayne Tank and Pump Co Ltd CA 1970
The plaintiffs’ factory in an old mill, burned down because Wayne Tank had installed a pipeline made of unsuitable and dangerous plastic material and wrapped in heating tape attached to a useless thermostat. It had been switched on and the plant . .
Cited – Suisse Atlantique Societe d’Armement Maritime SA v NV Rotterdamsche Kolen Centrale HL 1966
No magic in the words “fundamental breach”
There is no rule of law which prevents parties to a contract agreeing to limit their respective liabilities. It is a question of the construction of the particular clause as to whether it applies to a fundamental breach or not. The court doubted the . .

Cited by:
Cited – Campbell v Frisbee ChD 14-Mar-2002
The defendant appealed a summary judgement on the claimant’s claim with respect to her alleged disclosure of details Miss Campbell’s private life. The claimant sought an action for account of profits for breach of the terms of a contract of service. . .
Cited – Daewoo Heavy Industries Ltd and Another v Klipriver Shipping Ltd and Another CA 3-Apr-2003
The carrier had loaded the cargo on the ship’s deck, despite a clause requiring it to be stowed in a hold. The charterparty sought to use the breach to remove the carrier’s limit of liability. The older form of Hague rules applied.
Held: It . .
Cited – Manx Electricity Authority v J P Morgan Chase Bank CA 3-Oct-2003
The claimant sought to appeal an order striking out its claim against the defendant under a performance bond. The defendant denied that the demand was valid, saying it did not allege a current breach of the contract.
Held: The point upon which . .
Cited – Port Jackson Stevedoring Pty Ltd v Salmond and Spraggon (Australia) Pty Ltd; The New York Star PC 1980
A question arose, in the context of dispute between a consignee of goods and stevedores, whether the latter could rely on a time bar. It was argued that because of the fundamental nature of the breach, the stevedore had deprived itself of the . .
Cited – Super Chem Products Limited v American Life and General Insurance Company Limited and Others PC 12-Jan-2004
PC (Trinidad and Tobago) A fire occurred at premises in which the stock was insured under two policies. Both insurers denied the claims alleging arson, and that it was out of time. The claimant said that the . .
Cited – Associated Deliveries Ltd v Harrison CA 1984
A landlord, having forfeited the lease could not recover for damage to the property caused by third parties before possession was finally given. The election to forfeit was unequivocal, and damages were irrecoverable from the date of service of the . .
Cited – In Re Park Air Services Plc; Christopher Moran Holdings Ltd v Bairstow and Another HL 4-Feb-1999
The tenant company went into liquidation, the receiver disclaimed the lease, and the landlord claimed compensation under the Act. The question concerned how the compensation was to be calculated.
Held: Where a solvent tenant under an onerous . .
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 . .
Cited – Lister and Others v Hesley Hall Ltd HL 3-May-2001
A school board employed staff to manage a residential school for vulnerable children. The staff committed sexual abuse of the children. The school denied vicarious liability for the acts of the teachers.
Held: ‘Vicarious liability is legal . .
Cited – Harding v Wealands HL 5-Jul-2006
Claim in UK for Accident in Australia
The claimant had been a passenger in a car driven by his now partner. They had an accident in New South Wales. The car was insured in Australia. He sought leave to sue in England and Wales because Australian law would limit the damages.
Held: . .
Cited – 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 andpound;192, but the farmer lost andpound;61,000. The seed supplier appealed the award of the larger amount and interest, saying that . .
Cited – Rock Refrigeration Limited v Jones and Seward Refrigeration Limited CA 10-Oct-1996
The claimant sought to enforce a post employment restrictive covenant given by the defendant. The defendant replied that the clause was too widely framed and was unreasonable since it applied to a temination of his contract ‘howsoever occasioned’. . .
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 – Lombard North Central v Butterworth CA 31-Jul-1986
The defendant entered into a hire-purchase contract for a computer, time being stipulated to be ‘of the essence’ in relation to the payment obligations. He defendant defaulted, and the plaintiff took possession of the goods, and and sought payment . .
Cited – Woodland v Essex County Council SC 23-Oct-2013
The claimant had been seriously injured in an accident during a swimming lesson. She sought to claim against the local authority, and now appealed against a finding that it was not responsible, having contracted out the provision of swimming . .
Cited – Durkin v DSG Retail Ltd and Another SC 26-Mar-2014
Cancellation of Hire Finance Contract
The claimant had bought a PC with a finance agreement with the respondent. He rejected it a day later, but the respondent refused to cancel the credit agreement. The respondent had threatened to report his non-payment to credit reference companies, . .
Cited – Morris-Garner and Another v One Step (Support) Ltd SC 18-Apr-2018
The Court was asked in what circumstances can damages for breach of contract be assessed by reference to the sum that the claimant could hypothetically have received in return for releasing the defendant from the obligation which he failed to . .

Lists of cited by and citing cases may be incomplete.

Contract

Leading Case

Updated: 10 November 2021; Ref: scu.181083

The claimants asserted breach by the defendant of an exclusive distributor agreement. The defendants said that the claimants had failed, as required by the contract, to use all reasonable endeavours to promote the product.
Held: There was no one single failing which amounted to such a breach, but the court could treat several lesser such failings together and find a breach. In this case it failed in having only one person assigned to the obligation, and he was out on the road three days a week. The court set out what might be expected of a distributor: ‘1. to prepare and utilise a detailed written marketing or promotional plan to assist in its sales and promotion of the supplier’s products;
2. to monitor, and take timely steps to improve, the quality of its sales team;
3. to have in place a system in relation to information flows and procedures for forecasting future sales;
4. to engage in positive dialogue with the supplier, in order to maximise the promotion of sales of the supplier’s product; and
5. to make use of all the materials provided to it by the supplier in order to promote and market the sale of the supplier’s products.’

Gloster DBE J
[2009] EWHC 2447 (QB)
Bailii
England and Wales
Citing:
Cited – PJ Van der Zijden Wildhandel NV v Tucker 1975
The party seeking to be discharged from a contractual performance, and relying on the terms of the agreement, carries the burden of proving the facts necessary for such discharge. . .
Cited – Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd and Others; St. Martins Property Corporation Ltd v Sir Robert McAlpine HL 8-Dec-1993
A contractor had done defective work in breach of a building contract with the developer but the loss was suffered by a third party who had by then purchased the development. The developer recovered the loss suffered by the purchaser.
Held: . .

Lists of cited by and citing cases may be incomplete.

Contract

Updated: 09 November 2021; Ref: scu.376175

Contractor not bound to accept Renunciation

Mr McGregor contracted with the appellants for them to display advertisements for three years on litter bins. The contract was made on his behalf by an employee, without specific authority. On the day it was made, he sought to cancel the contract.
Held: Where a party is in renunciatory breach of contract, the other party is not bound to accept the breach and sue for damages, but may perform its own obligations under the contract and claim what is due under the contract. A party is not bound to enforce its contractual rights in a reasonable way.
Lord Reid: ‘The general rule cannot be in doubt. It was settled in Scotland at least as early as 1848 and it has been authoritatively stated time and again in both Scotland and in England. If one party to a contract repudiates it in the sense of making it clear to the other party that he refuses or will refuse to carry out his part of the contract, the other party, the innocent party, has an option. He may accept that repudiation and sue for damages for breach of contract, whether or not the time for performance has come; or he may if he chooses disregard or refuse to accept it and then the contract remains in full effect.’
As an exception: ‘It may well be that, if it can be shown that a person has no legitimate interest financial or otherwise, in performing the contract rather than claiming damages, he ought not to be allowed to saddle the other party with an additional burden with no benefit to himself. If a party has no interest to enforce a stipulation, he cannot in general enforce it: so it it might be said that, if a party has no interest to insist on a particular remedy, he ought not to insist on it. And just as party is not allowed to enforce a penalty, so he ought not to be allowed to penalise the other party by taking one course when another is equally advantageous to him.’ Here the contract-breaker could not take advantage of the exception: ‘Here the respondent did not set out to prove that the appellants have no legitimate interest in completing the contract and claiming the contract price rather than claiming damages; there is nothing in the findings of fact to support such a case and it seems improbable that any such case could have been proved. It is, in my judgment, impossible to say that the appellants should be deprived of their right to claim the contract price merely because the benefit to them as against claiming damages and reletting their advertising space, might be small in comparison with the loss to the respondent . . .’
Lord Keith said that absent express agreement, an action for the price arises only in two cases. First where the property in the goods has passed to the buyer, and: ‘The only other case is where parties have contracted for payment on a day certain, irrespective of delivery or the passing of property. This is a clear case of a contractual debt unconditioned by any question of performance by the other party.’

Lord Reid, Lord Morton of Henryton, Lord Tucker, Lord Keith of Avonholm, Lord Hodson
[1961] UKHL 5, [1962] AC 413, [1961] UKHL 7, 962 SLT 9, [1961] 3 All ER 1178, [1962] 2 WLR 17, 1962 SC (HL) 1
Bailii, Bailii
Sale of Goods Act 1893
Scotland
Citing:
Adopted – Grahame v Magistrates of Kirkcaldy HL 1882
Lord Watson said: ‘It appears to me that a superior Court, having equitable jurisdiction, must also have a discretion, in certain exceptional cases, to withhold from parties applying for it that remedy to which, in ordinary circumstances, they would . .

Cited by:
Cited – Stocznia Gdanska S A v Latvian Shipping Co and Others HL 22-Jan-1998
The parties had contracted to design, build, complete and deliver ships. The contract was rescinded after a part performance.
Held: It remained appropriate for payment to be made for the work already done in the design and construction stages: . .
Cited – Broadway Investments Hackney Ltd v Grant CA 20-Dec-2006
The respondent had taken a tenancy of premises from the local authority. The ground floor was for use as a shop, and the first was residential. He had previously taken a licence and had refurbished the premises. The authority sold the freehold to . .
Cited – Reichman and Another v Beveridge CA 13-Dec-2006
The defendants were tenants of the claimant. They vacated the premises and stopped paying the rent. The claimant sought payment of the arrears of rent. The defendants said that the claimants should have taken steps to reduce their damages by seeking . .
Cited – Blackpool and Fylde Aero Club Ltd v Blackpool Borough Council CA 25-May-1990
The club had enjoyed a concession from the council to operate pleasure flights from the airport operated by the council. They were invited to bid for a new concession subject to strict tender rules. They submitted the highest bid on time, but the . .
Cited – Reichman and Another v Beveridge CA 13-Dec-2006
The defendants were tenants of the claimant. They vacated the premises and stopped paying the rent. The claimant sought payment of the arrears of rent. The defendants said that the claimants should have taken steps to reduce their damages by seeking . .
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 . .
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.

Contract

Leading Case

Updated: 09 November 2021; Ref: scu.238536

The court warned against the over-ready application of any principle to justify the implication of terms into a contract. McKinnon LJ set out his ‘officious bystander’ test: ‘If I may quote from an essay which I wrote some years ago, I then said: ‘Prima facie that which in any contract is left to be implied and need not be expressed is something so obvious that it goes without saying; so that, if while the parties were making their bargain, an officious bystander were to suggest some express provision for it in their agreement, they would testily suppress him with a common ‘Oh, of course!” At least it is true, I think, that if a term were never implied by a judge unless it could pass that test, he could not be held to be wrong . . [Thus] a judge ought to be very cautious implying terms in contracts’.

McKinnon LJ
[1939] 2 KB 206, [1940] AC 701, [1940] 2 All ER 445, 55 The Times LR 611
England and Wales
Cited by:
Appeal from – Shirlaw v Southern Foundries (1926) Ltd HL 1940
Where a party enters into an arrangement which can only take effect by the continuance of an existing state of circumstances, there is an implied engagement on his part that he will do nothing of his own motion to put an end to that state of . .
Cited – Legal and General Assurance Society Ltd v Expeditors International (Uk) Ltd CA 24-Jan-2007
Leases contained break clauses which the tenant purported to exercise. The landlord replied that they were ineffective because the tenant had not complied with his repair covenants. The dispute appeared settled after negotiations, and the settlement . .
Cited – The County Homesearch Company (Thames and Chilterns) Ltd v Cowham CA 31-Jan-2008
The defendants contracted to pay estate agents to find them a house. They completed the purchase of a property mentioned to them three times by the agent, but now appealed from a finding that they were obliged to pay his commission. The judge found . .
Cited – Attorney General of Belize and others v Belize Telecom Ltd and Another PC 18-Mar-2009
(Belize) A company had been formed to manage telecommunications in Belize. The parties disputed the interpretation of its articles. Shares had been sold, but the company was structured so as to leave a degree of control with the government. It was . .
Cited – Garratt v Mirror Group Newspapers Ltd CA 13-Apr-2011
The claimant had been employed by the defendant. They made him redundant. He claimed and enhanced payment saying that his emloyment was covered by a collective agreement, but when he refused to sign a compromise agreement, the company paid him only . .
Cited – Marks and Spencer Plc v BNP Paribas Securities Services Trust Company (Jersey) Ltd and Another SC 2-Dec-2015
The Court considered whether, on exercising a break clause in a lease, the tenant was entitled to recover rent paid in advance.
Held: The appeal failed. The Court of Appeal had imposed what was established law. The test for whether a clause . .
Cited – British Movietone News Limited v London and District Cinemas Limited HL 26-Jul-1951
Film distributors contracted to supply newsreels at a cinematic theatre. The contract was for a minimum of 26 weeks, and after on termination by the distributors on four weeks notice thereafter, but by the cinema on four weeks after the first month. . .

Lists of cited by and citing cases may be incomplete.

Contract

Leading Case

Updated: 09 November 2021; Ref: scu.248230

The parties disputed whether they had a contract for the sale and purchase of shares.
Held: The parties had reached agreement, but both anticipated that this would be concluded by formal contracts. An email accepted the outstanding disputed term, and the purchaser had obtained all the practical benefits of owning the shares. It could not be said that the contract remained subject to formal signatures.

Bartley Jones QC HHJ
[2009] EWHC 74 (Ch), [2009] 1 All ER (Comm) 674
Bailii
England and Wales
Citing:
Cited – Whitehead Mann Ltd v Cheverny Consulting Ltd CA 11-Oct-2006
. .
Cited – Brogden v Metropolitan Railway Co HL 1877
The parties wished to contract to sell and buy coal. A draft was supplied by the railway company to the supplier once head terms were agreed. The draft was returned with minor additions and the proposed name of an arbitrator. The coal was then . .

Lists of cited by and citing cases may be incomplete.

Contract

Updated: 09 November 2021; Ref: scu.280428

Reference for a preliminary ruling – Judicial cooperation in civil matters – Jurisdiction and recognition of judgments in civil and commercial matters – Regulation (EU) No 1215/2012 – Concept of civil and commercial matters – Provisional, including protective, measures – Contract for the performance of public road building works

C-581/20, [2021] EUECJ C-581/20_O, ECLI:EU:C:2021:726
Bailii
European
Cited by:
Opinion – Toto (Judicial Cooperation In Civil Matters – Contract for The Performance of Public Road Building Works) ECJ 6-Oct-2021
Reference for a preliminary ruling – Judicial cooperation in civil matters – Regulation (EU) No 1215/2012 – Article 1, paragraph 1 – Civil and commercial matters – Article 35 – Provisional and protective measures – Action based on a contract for . .

Lists of cited by and citing cases may be incomplete.

Contract

Updated: 09 November 2021; Ref: scu.668528

Effect of Contract Frustration

The defendant appellants contended that their construction contract was frustrated because adequate supplies of labour were not available to it because of the war.
Held: The court considered how the frustration of the performance of a contract affected the obligations under it.
Lord Ratcliffe said: ‘frustration occurs whenever the law recognises that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract. Non haec in foedera veni. It was not this that I promised to do.’ and ‘it might seem that the parties (to the contract) themselves have become so far disembodied spirits that their actual persons should be allowed to rest in peace. In their place there rises the figure of the fair and reasonable man. And the spokesman of the fair and reasonable man, who represents after all no more than the anthropomorphic conception of justice, is and must be the court itself.’
Lord Reid said: ‘It appears to me that frustration depends, at least in most cases, not on adding any implied term, but on the true construction of the terms which are in the contract, read in light of the nature of the contract and of the relevant surrounding circumstances when the contract was made.’ and ” there is no need to consider what the parties thought or how they or reasonable men in their shoes would have dealt with the new situation if they had foreseen it. The question is whether the contract which they did make is, on its true construction, wide enough to apply to the new situation: if it is not, then it is at an end’.
Lord Somervell concluded that: ‘A party contracting in the light of expectations based on data of that or any other kind must make up his mind whether he is prepared to take the risk of those expectations being disappointed. If not, then he will refuse to contract unless protected by some specific provision. There is no such provision here. The appellants took the risk under the contract, and it seems to me impossible to maintain that the contract did not apply in this situation as it remained, the expectations on which the estimate was based not having been realised.’

Viscount Radcliffe, Lord Reid, Lord Somervell
[1956] AC 696, [1956] UKHL 3, [1956] 2 All ER 145
Bailii
England and Wales
Citing:
Cited – Bank Line Ltd v Arthur Capel and Co HL 12-Dec-1918
The defendant ship-owners contracted to lease the ship on charter to the plaintiffs. Before the term, the ship was requisitioned for the war effort. The plaintiffs did not exercise the contractual right given to them to cancel the charterparty. The . .
Cited – British Movietone News Limited v London and District Cinemas Limited HL 26-Jul-1951
Film distributors contracted to supply newsreels at a cinematic theatre. The contract was for a minimum of 26 weeks, and after on termination by the distributors on four weeks notice thereafter, but by the cinema on four weeks after the first month. . .

Cited by:
Cited – William Sindall Plc v Cambridgeshire County Council CA 21-May-1993
Land was bought for development, but the purchaser later discovered a sewage pipe which very substantially limited its development potential. The existence of the pipe had not been disclosed on the sale, being unknown to the seller.
Held: . .
Cited – Badger v The Ministry of Defence QBD 16-Dec-2005
The widow of the deceased sought damages after his exposure to asbestos whilst working for the defendant. He had contracted lung cancer. The defendant argued that the deceased had continued to smoke knowing of the risks, and that he had made a . .
Approved – National Carriers Ltd v Panalpina (Northern) Ltd HL 11-Dec-1980
No Frustration of Lease through loss of access
The tenant’s access to the premises was closed by the local authority because it passed by a derelict and dangerous building. The tenant argued that its tenancy was frustrated.
Held: The lease was not frustrated. The lease had a term of ten . .
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 . .
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 . .
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, . .
Cited – Healthcare at Home Ltd v The Common Services Agency SC 30-Jul-2014
The court asked how to apply the concept in European law of ‘The reasonably well-informed and diligent tenderer’. The pursuer had had a contract for the delivery of healthcare services, but had lost it when it was retendered.
Held: When an . .
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 . .
Cited – Gamerco Sa v ICM Fair Warning (Agency) Ltd and Another QBD 31-Mar-1995
The plaintiff Spanish concert promoter, and the defendant rock group, Guns ‘n’ Roses, agreed to provide a concert at the stadium of Atetico Madrid, but shortly before it was due to take place, the stadium was deemed unfit, and its licence withdrawn. . .

Lists of cited by and citing cases may be incomplete.

Contract

Leading Case

Updated: 09 November 2021; Ref: scu.185674

The Commercial Court had found the result of an arbitration award ‘obviously wrong’, and ineed bizarre.
Held: The appeal failed. The award was flawed, in failing to take account of the trading context between the parties: ‘The overall transaction here comprised the settlement of the original dispute. MRI’s claim against EMC was compromised in terms that three new contracts were entered into. EMC had derived the full benefit of the abandonment of MRI’s claim. Moreover, rather as in Foley . . the 2010 contract is part of a wider arrangement between the parties, which wider arrangement the parties had for some time, here for over one year, been acting upon.’ and ‘the use of the mandatory ‘shall’ in clauses 6.1, 9.1 and 9.2 is a strong indicator that the parties did not intend that a failure to agree should destroy their bargain. Given that they were contracting in January 2009 for delivery in 2010, it was no doubt sensible to leave open for future agreement in the conditions obtaining in 2010 the appropriate level of charges and the appropriate shipping schedule. In circumstances however where the parties had agreed every other aspect of the contract, including quality, specification and price, and where they had stipulated for the arbitration of disputes by a market tribunal, it is almost perverse to attribute to them an intention not to conclude a binding agreement, a fortiori where the agreement was an integral part of a wider overall transaction compromising an earlier dispute. ‘

Pill, Tomlinson, McCombe LJJ
[2013] EWCA Civ 156
Bailii
England and Wales
Citing:
Cited – Walford v Miles HL 1992
Agreement to Negotiate is Unworkable as a Contract
The buyers and sellers of a company agreed orally for the sellers to deal with the buyers exclusively and to terminate any negotiations between them and any other competing buyer. The sellers later decided not to proceed with their negotiations with . .
Mentioned – Sudbrook Trading Estate Ltd v Eggleton HL 1982
The grantors of an option, which contained a machinery for fixing the price, had refused to appoint a valuer and that made it impossible for the contractual machinery for the valuation of the option price to work. The House of Lords held that the . .
Cited – Mamidoil-Jetoil Greek Petroleum Company SA v Okta Crude Oil Refinery Ad Cross CA 22-Mar-2001
The court always leans against a conclusion which will leave parties who clearly intended to contract without a legally binding contract, and that this is the more so where they have acted as though they were bound. The court strains to supply . .
Cited – B J Aviation Ltd v Pool Aviation Ltd CA 18-Jan-2002
The parties disputed the effect of a clause in an option agreement, and as to whether it contained an agreement to negotiate and was therefore not binding.
Held: Chadwick LJ said: ‘First, each case must be decided on its own facts and on the . .
Cited – Foley v Classique Coaches Ltd CA 1934
The sellers had sold to the buyers a piece of land to use in the latter’s business as coach proprietors, and also contracted with them to supply all the petrol required for that business ‘at a price to be agreed by the parties in writing and from . .
Cited – F and G Sykes (Wessex) v Fine Fare Ltd CA 1967
There was an agreement by which the plaintiffs agreed to breed and provide chicks to nominated growers, the number of chicks to be provided to be ‘not less than 30,000 per week nor more than 80,000 per week during the first year of the agreement and . .

Lists of cited by and citing cases may be incomplete.

Contract

Leading Case

Updated: 09 November 2021; Ref: scu.471547

Commercial Sense Used to Interpret Contract

The Court was asked as to the role of commercial good sense in the construction of a term in a contract which was open to alternative interpretations.
Held: The appeal succeeded. In such a case the court should adopt the more, rather than the less, commercial construction, applying the principle that the ultimate aim in construing a contract is to determine what the parties meant by the language used, which involves ascertaining what a reasonable person would have understood the parties to have meant; the relevant reasonable person being one who has all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.
Lord Clarke said: ‘the ultimate aim of interpreting a provision in a contract, especially a commercial contract, is to determine what the parties meant by the language used, which involves ascertaining what a reasonable person would have understood the parties to have meant’ and particularly approved the dissenting opinion of Sir Simon Tucker in the CA.
Lord Clarke of Stone-cum-Ebony stated: ‘[T]he exercise of construction is essentially one unitary exercise in which the court must consider the language used and ascertain what a reasonable person, that is a person who has all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract, would have understood the parties to have meant. In doing so, the court must have regard to all the relevant surrounding circumstances. If there are two possible constructions, the court is entitled to prefer the construction which is consistent with business common sense and to reject the other.’ and ‘that the aim of interpreting a provision in a contract, especially a commercial contract, is to determine what the parties meant by the language used, which involves ascertaining what a reasonable person would have understood the parties to have meant.’

Lord Phillips, President, Lord Mance, Lord Kerr, Lord Clarke, Lord Wilson
[2011] UKSC 50, [2011] 1 WLR 2900, UKSC 2010/0127, [2011] CILL 3105, 138 Con LR 1, [2012] 1 All ER (Comm) 1, [2012] ICR 1
Bailii, Bailii Summary, SC Summary, SC
England and Wales
Citing:
At first instance – Rainy Sky SA and Others v Kookmin Bank ComC 29-Oct-2009
The claimants sought summary judgment under an advance payment bond issued by the defendants in connection with certain shipbuilding contracts. . .
Appeal from – Kookmin Bank v Rainy Sky Sa and Others CA 27-May-2010
The defendant bank appealed against summary judgment given on a claim on its obligations under an advance payment bond given to support ship-building contracts.
Sir Simon Tuckey (dissenting) said: ‘There is no dispute about the principles of . .
Cited – Pink Floyd Music Ltd and Another v EMI Records Ltd CA 14-Dec-2010
The defendant appealed against an order made on the claimant’s assertion that there were due to it substantial underpayments of royalties over many years. The issues were as to the construction of licensing agreements particularly in the context of . .
Cited – Mannai Investment Co Ltd v Eagle Star Assurance HL 21-May-1997
Minor Irregularity in Break Notice Not Fatal
Leases contained clauses allowing the tenant to break the lease by serving not less than six months notice to expire on the third anniversary of the commencement date of the term of the lease. The tenant gave notice to determine the leases on 12th . .
Cited – Investors Compensation Scheme Ltd v West Bromwich Building Society HL 19-Jun-1997
Account taken of circumstances wihout ambiguity
The respondent gave advice on home income plans. The individual claimants had assigned their initial claims to the scheme, but later sought also to have their mortgages in favour of the respondent set aside.
Held: Investors having once . .
Cited – Chartbrook Ltd v Persimmon Homes Ltd and Others HL 1-Jul-2009
Mutual Knowledge admissible to construe contract
The parties had entered into a development contract in respect of a site in Wandsworth, under which balancing compensation was to be paid. They disagreed as to its calculation. Persimmon sought rectification to reflect the negotiations.
Held: . .
Cited – Prenn v Simmonds HL 1971
Backgroun Used to Construe Commercial Contract
Commercial contracts are to be construed in the light of all the background information which could reasonably have been expected to have been available to the parties in order to ascertain what would objectively have been understood to be their . .
Cited – F L Schuler AG v Wickman Machine Tools Sales Limited HL 4-Apr-1973
The parties entered an agreement to distribute and sell goods in the UK. They disagreed as to the meaning of a term governing the termination of the distributorship.
Held: The court can not take into account the post-contractual conduct or . .
Cited – Antaios Compania Naviera SA v Salen Rederierna AB (‘the Antaios’) HL 1984
A ship charterer discovered that the bills of lading were incorrect, but delayed withdrawal from the charter for 13 days. They now sought leave to appeal the arbitration award against them.
Held: Though he deprecated extending the use of the . .
Cited – Co-operative Wholesale Society Ltd v National Westminster Bank plc CA 1995
The court considered the proper construction of rent review clauses in several cases. The underlying result which the landlords sought in each case was the same.
Held: It was a most improbable commercial result. Where the result, though . .
Cited – C Hole v Garnsey HL 1930
Under Rule 64 of a Society registered under the Act, rules could be amended ‘by resolution of a three-fourths majority at a special general meeting’. Various amendments were carried by a three-fourths majority of the shareholders. The effect of one . .
Cited – Mitsui Construction Co Ltd v Attorney General of Hong Kong PC 1986
Lord Bridge said that poor drafting in a contract itself provides: ‘no reason to depart from the fundamental rule of construction of contractual documents that the intention of the parties must be ascertained from the language that they have used . .
Cited – Society of Lloyd’s v Robinson and Another HL 25-Mar-1999
Damages awarded to a Lloyd’s ‘name’ compensating for negligent underwriting must be paid into the trust fund set up for this purpose on behalf of member names, even though the claim fell outside the strict ambit of the original fund because of valid . .
Cited – Gan Insurance Co Ltd v Tai Ping Insurance Co Ltd CA 3-Jul-2001
A reinsurance contract which contained a clause which provided that no settlement or compromise of a claim could be made or liability admitted by the insured without the prior approval of the reinsurers. The court considered how the discretion to . .
Cited – Sinochem International Oil (London) Co Ltd v Mobil Sales and Supply Corporaton and Another CA 17-Feb-2000
. .
Cited – Homburg Houtimport BV v Agrosin Private Ltd (the ‘Starsin’) HL 13-Mar-2003
Cargo owners sought damages for their cargo which had been damaged aboard the ship. The contract had been endorsed with additional terms. That variation may have changed the contract from a charterer’s to a shipowner’s bill.
Held: The specific . .
Cited – Sigma Finance Corporation, Re; (in administrative receivership) SC 29-Oct-2009
The court considered how the losses of the insolvent company were to be distributed as between secured creditors and preferential creditors, given the terms of the applicable trust deed.
Held: The court considered the interpretations of the . .
Cited – Golden Key Ltd (In receivership) CA 30-Jun-2009
. .
Approved – HHY Luxembourg Sarl and Another v Barclays Bank Plc and Others CA 22-Oct-2010
Longmore LJ said: ‘when alternative constructions are available one has to consider which is the more commercially sensible . . The judge said that it did not flout common sense to say that the clause provided for a very limited level of release, . .
Cited – Rainy Sky Sa and Others v Kookmin Bank SC 2-Nov-2011
Commercial Sense Used to Interpret Contract
The Court was asked as to the role of commercial good sense in the construction of a term in a contract which was open to alternative interpretations.
Held: The appeal succeeded. In such a case the court should adopt the more, rather than the . .

Cited by:
Cited – Aberdeen City Council v Stewart Milne Group Ltd SC 7-Dec-2011
The parties disputed the construction of a contract for land intended for a business park development. It provided for an uplift to be later payable in certain circumstances, and the uplift was now claimed. The question was as to whether the uplift . .
Cited – Quirkco Investments Ltd v Aspray Transport Ltd ChD 23-Nov-2011
The defendant tenant said that it had exercised a break clause in the lease held of the claimant. The claimant said the break notice was ineffective because the defendant was in breach of the lease, not having paid an iinsurance service charge, and . .
Cited – Unique Pub Properties Ltd v Broard Green Tavern Ltd and Another ChD 26-Jul-2012
The claimant freeholder sought to install in the tenant’s pub, equipment to monitor sales. It claimed a right for this in the lease. The tenant refused access, saying that the proposed system was inaccurate. The claimant now sought summary relief. . .
Cited – CGIS City Plaza Shares 1 Ltd and Another v Britel Fund Trustees Ltd ChD 13-Jun-2012
cgis_britelChD2012
The claimants asserted a right of light either by prescription or under lost modern grant. The defendants argued that alterations in the windows arrangements meant that any prescription period was restarted.
Held: ‘the Defendant is not correct . .
Cited – AJ Building and Plastering Ltd v Turner and Others QBD 11-Mar-2013
An insurance company had engaged a main contractor to handle repairs to houses insured under its policies. The contractor had engaged the claimant subcontractor to carry out the works at the defendants’ homes, but then went into insolvent . .
Cited – L Batley Pet Products Ltd v North Lanarkshire Council SC 8-May-2014
The appellant was mid-landlord and the respondent the sub-tenant under a now-expired lease. The appellant had wanted repairs to be executed but told the tenant informally. The tenant argued that the lease required formal notice to create an . .
Cited – BNY Corporate Trustee Services Ltd and Others v Neuberger SC 9-May-2013
Potential Insolvency effect under guarantee
The various parties had entered into complex and substantial financial arrangements incorporating guarantees. The guarantees were conditional upon the guaranteed party being solvent. The parties disputed whether a party which would otherwise be . .
Cited – Marley v Rawlings and Another SC 22-Jan-2014
A husband and wife had each executed the will which had been prepared for the other, owing to an oversight on the part of their solicitor; the question which arose was whether the will of the husband, who died after his wife, was valid. The parties . .
Cited – Sugarman and Others v CJS Investments Llp and Others CA 19-Sep-2014
The parties were apartment owners in a development, each owning shares in the management company. They disputed the interpreation of the Articles as to whether the owner of more than one apartment was still restricted to one vote at member meetings, . .
Cited – Teal Assurance Company Ltd v WR Berkley Insurance (Europe) Ltd SC 31-Jul-2013
An international engineering company had several layers of professional indemnity insurance. The top later did not cover claims originating in the US or Canada. The several insurers now disputed apportionment of liability between them. The . .
Cited – B4U Network (Europe) Ltd v Performing Right Society Ltd CA 16-Oct-2013
Composers had entered an agreement with the respondent, assigning all copyrights in their works to the respondent. The respondent asserted also an equitable assignment of all future works. The appellant asserted that the rights in the particular . .
Cited – Arnold v Britton and Others SC 10-Jun-2015
Absurdity did not defeat a clear clause
A standard lease of plots on a caravan park, contained a provision which appeared to increase the rent by 10% in each year. The tenants argued that such a substantial increase could not have been intended.
Held: The tenants’ appeal failed . .
Cited – Rainy Sky Sa and Others v Kookmin Bank SC 2-Nov-2011
Commercial Sense Used to Interpret Contract
The Court was asked as to the role of commercial good sense in the construction of a term in a contract which was open to alternative interpretations.
Held: The appeal succeeded. In such a case the court should adopt the more, rather than the . .
Cited – Wood v Capita Insurance Services Ltd SC 29-Mar-2017
Construction of term of contract for the sale and purchase of the entire issued share capital of a company.
Held: The appeal was dismissed: ‘the SPA may have become a poor bargain, as it appears that it did not notify the sellers of a warranty . .
Cited – Lehman Brothers International (Europe) v Exotix Partners Llp ChD 9-Sep-2019
The parties had contracted to trade global depository notes issued by the Peruvian government. Each made mistakes as to their true value, thinking them scraps worth a few thousand dollars, whereas their true value was over $8m. On the defendant . .
Cited – Windsor-Clive and Others v Rees and Another ChD 18-Apr-2019
Claim for injunction to prevent interference with certain claimed rights over land.
Held: Some of the activities that the landlord proposed to carry out were permitted under the terms of the tenancy agreements; but others were not. . .
Cited – Barnardo’s v Buckinghamshire and Others SC 7-Nov-2018
The Court considered the interpretation of a clause in a pension scheme trust deed which defines the phrase ‘Retail Prices Index’ and which allows the trustees of the pension scheme to adopt a ‘replacement’ of the officially published Retail Prices . .
Cited – The Financial Conduct Authority (FCA) v Arch Insurance (UK) Ltd and Others ComC 15-Sep-2020
Test case to determine issues of principle in relation to policy coverage under various specimen wordings underwritten by the defendants in respect of claims by policyholders to be indemnified for business interruption losses arising in the context . .
Cited – The Financial Conduct Authority and Others v Arch Insurance (UK) Ltd and Others SC 15-Jan-2021
Many businesses, having been ordered to suspend business during the Covid-19 epidemic, sought to claim under business interruption insurance. The claims were rejected by the insurers and the insurers now appealed from a finding that they had been . .

Lists of cited by and citing cases may be incomplete.

Contract

Leading Case

Updated: 09 November 2021; Ref: scu.448090

Claims for damages for breach of a contract of retainer or breach of an alleged duty of care in relation to the development of two high value properties in Central London.

HH Judge Pelling QC
[2021] EWHC 2400 (Comm)
Bailii
England and Wales

Contract

Updated: 09 November 2021; Ref: scu.668395

The plaintiff hired a hotel bedroom. It was found that the contract between the party hiring the bedroom and the hotel was made before the guest had access to the bedroom. In the hotel bedroom, there was a notice which sought to limit the hotel’s liability in respect of valuables that had not been deposited with the hotel. Mrs Olley found that furs and jewellery and other items were missing from her bedroom at a later stage during the course of her stay. The hotel tried to restrict its liability in respect of the loss by reliance on the notice in the plaintiff’s bedroom.
Held: She succeeded. A standard contract, which imposes terms on a party and purports to reduce liability on a contracting party, must be communicated to the other party and the circumstances must show an intention to be bound by it.
Denning LJ said: ‘Now people who rely on a contract to exempt themselves from their common law liability must prove that contract strictly. Not only must the terms of the contract be clearly proved, but also the intention to create legal relations – the intention to be legally bound – must also be clearly proved. The best way of proving it is by a written document signed by the party to be bound. Another way is by handing him before or at the time of the contract a written notice specifying its terms and making it clear to him that the contract is on those terms. A prominent public notice which is plain for him to see when he makes the contract or an express oral stipulation would, no doubt, have the same effect. But nothing short of one of these three ways will suffice . . So, also, in my opinion, notices put up in bedrooms do not of themselves make a contract. As a rule, the guest does not see them until after he has been accepted as a guest. The hotel company no doubt hope that the guest will be held bound by them, but the hope is vain unless they clearly show that he agreed to be bound by them, which is rarely the case.’
and ‘Ample content can be given to the notice by construing it as a warning that the hotel company is not liable, in the absence of negligence, As such it serves a useful purpose. It is a warning to the guest that he must do his part to take care of his things himself, and, if needs be, ensure them. It is unnecessary to go further and to construe the notice as a contractual exemption of the hotel company from their common law liability for negligence.’

Denning LJ
[1949] 1 KB 532, [1949] 1 All ER 127
England and Wales
Cited by:
Cited – Heythrop Zoological Gardens Ltd (T/A Amazing Animals) and Another v Captive Animals Protection Society ChD 20-May-2016
The claimant said that the defendant had, through its members visiting their premises, breached the licence under which they entered, by taking photographs and distributing them on the internet, and in so doing also infringing the performance rights . .
Cited – Hollier v Rambler Motors (AMC) Ltd CA 19-Nov-1971
The plaintiff left his car with the defendant garage for repair. Whilst there it was substantially damaged by fire. The defendant sought to rely upon their terms which would negative liability, saying that the terms had been incorporated by . .

Lists of cited by and citing cases may be incomplete.

Contract

Leading Case

Updated: 02 November 2021; Ref: scu.565566