Category: Contract

Southampton Cargo Handling Plc v Lotus Cars Limited and others Associated British Ports (the Rigoletto”): CA 31 Jul 2000″

References: [2000] EWCA Civ 252, [2000] 2 Lloyd’s Rep 532
Links: Bailii
Coram: Rix LJ
This case is cited by:

A Meredith Jones and Co Ltd v Vangemar Shipping Co Ltd (The Apostolis”): CA 11 Jul 2000″

References: [2000] EWCA Civ 213, [2000] 2 Lloyd’s Rep 337, [2000] CLC 1488
Links: Bailii
Coram: Waller LJ,
The proper construction of a contractual clause must not consider that clause in isolation, but must consider the clause in the context of the contract as a whole.
This case cites:

This case is cited by:

Kemble v Farren; 6 Jul 1829

References: [1829] EngR 590, (1829) 5 Bing 141, (1829) 130 ER 1234
Links: Commonlii
Coram: Tindall CJ
The manager of Covent Garden sought damages from an actor (a principal comedian) in the form of liquidated damages for breach of a contract. He had contracted to perform for four seasons, but had refused to continue after the first.
Held: Liquidated damages cannot be reserved on an agreement containing various stipuations, of various degrees of importance, unless the agreement specify the particular stipulation or stipulations to which the liquidated damages are to be confined.
Tindall CJ said: ‘We see nothing illegal or unreasonable in the parties, by their mutual agreement, settling the amount of damages, uncertain in their nature, at any sum upon which they may agree. In many cases, such an agreement fixes that which is almost impossible to be accurately ascertained; and in all cases, it saves the expense and difficulty of bringing witnesses to that point.’
If the terms had been limited to breaches which were of an uncertain nature and amount, it would have been good. But the provision extended to any term including the payment of small amounts of money, or other trivial non-money breaches: ‘But that a very large sum should become immediately payable, in consequence of the nonpayment of a very small sum, and that the former should not be considered as a penalty, appears to be a contradiction in terms; the case being precisely that in which courts of equity have always relieved, and against which courts of law have, in modern times, endeavoured to relieve, by directing juries to assess the real damages sustained by breach of the agreement.’
This case cites:

  • See Also – Kemble -v- Farren CCP (Commonlii, [1829] EngR 519, (1829) 3 Car & P 623, (1829) 172 ER 574 (A))
    Where it appeared on the record, that an agreement sued on was made by the plaintiff, on behalf of himself and the other proprietors of a theatre, evidence of the declarations of one of such other proprietors was held admissible on the part of the . .

(This list may be incomplete)
This case is cited by:

  • Cited – Dunlop Pneumatic Tyre Company Ltd -v- New Garage and Motor Company Ltd HL ([1915] AC 67, Bailii, [1914] UKHL 1, (1904) 12 SLT 498, (1904) 7 F (HL) 77)
    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, . .
  • Cited – Parkingeye Ltd -v- Beavis CA (Bailii, [2015] EWCA Civ 402)
    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. The judge had found that the appellant was in breach of a . .

(This list may be incomplete)
Last Update: 04-Feb-16 Ref: 322458

Davies v East; 8 Jan 1788

References: Times 08-Jan-1788
Ratio The plaintiff sold 13 mahogany logs to the defendant. The defendant was to use them for cabinet making and inspected a sample, declaring them not to be of the best but adequate for chairs. When the entire consignment was delivered, he refused to pay saying that they had holes ‘so big you could put your head in them’. Held; The plaintiff succeeded. The logs delivered were of the same quality as inspected, and so the buyer knew what he was getting.

Last Update: 25-Mar-16
Ref: 270278

Payne v Cave; 2 May 1789

References: (1789) 3 TR 148, [1789] EngR 2443, (1789) 100 ER 502 (B)
Links: Commonlii
Ratio The defendant’s bid for a worm-tub, and a pewter worm was highest at the auction, but he withdrew his bid before the hammer fell. The auction was under standard conditions.
Held: No contract had been made. The bid was an offer which could be withdrawn at any time before acceptance by the auctioneer’s hammer. The auctioneer’s request for bids is not an offer which can be accepted by the highest bidder.

Last Update: 25-Mar-16
Ref: 252546

Thomas v Thomas; 5 Feb 1842

References: [1842] EngR 260, (1842) 2 QB 851, (1842) 114 ER 330
Links: Commonlii
Coram: Patteson J, Lord Denman CJ
A promisee can only enforce a promise if in return for it he gave something of value in the eyes of the law. Consideration need not be ‘valuable’ for it to be valid or effective to form the basis for a contract. It merely needs to be ‘legally sufficient’; and this criterion may be met even by purely nominal consideration.
Lord Denman CJ said: ‘There is nothing in this case but a great deal of ingenuity, and a little wilful blindness to the actual terms of the instrument itself. This is in terms on express agreement, and shews a sufficient legal consideration quite independent of the moral feeling which disposed the (defendant) to enter into such a contract.’
Last Update: 11-Jan-16 Ref: 307215

Bilbie v Lumley and Others; 28 Jun 1802

References: (1802) 2 East 469, [1802] EngR 245, (1802) 102 ER 448
Links: Commonlii
Coram: Lord Ellenborough CJ
Ratio An underwriter paid a claim under a policy which he was entitled in law to repudiate for non-disclosure. Although he knew the relevant facts, he was not aware of their legal significance. He claimed back the money he had paid.
Held: A contract cannot be set aside on the grounds of a mistake as to the law. Whereas money paid under a mistake of fact is generally recoverable, as a general rule money is not recoverable on the ground that it was paid under a mistake of law.
Lord Ellenborough asked counsel for the plaintiff: ‘whether he could state any case where if a party paid money to another voluntarily with a full knowledge of all the facts of the case, he could recover it back again on account of his ignorance of the law.’ In the absence of an answer, judgment was given for the defendant: ‘Every man must be taken to be cognisant of the law; otherwise there is no saying to what extent the excuse of ignorance might not be carried. It would be urged in almost every case.’
This case cites:

  • Cited – Lowry -v- Boirdeau ((1780) 2 Doug KB 468)
    ‘ignorantia juris non excusat’ – ignorance of the law is no excuse. . .

(This list may be incomplete)
This case is cited by:

  • Overruled – Hazell -v- Hammersmith and Fulham London Borough Council HL ([1992] 2 AC 1, [1991] 2 WLR 372, [1991] 1 All ER 545)
    The authority entered into interest rate swap deals to protect itself against adverse money market movements. They began to lose substantial amounts when interest rates rose, and the district auditor sought a declaration that the contracts were . .
  • Cited – Andre & Cie -v- Michel Blanc CA ([1979] 2 Lloyd’s Rep 427)
    The court criticised the doctrine that a mistake as to the law, common to the parties, does not vitiate a contract. . .
  • Cited – The Amazonia CA ([1991] Lloyd’s Rep 236)
    The court rehearsed the doctrine that a common mistake as to the law would vitiate a contract, Though the rule was well established, the particular contract was void on the basis of a mistake as to foreign law because foreign law is to be treated by . .
  • Cited – Brennan -v- Bolt Burdon and Others, London Borough of Islington, Leigh Day & Co CA (Bailii, [2004] EWCA Civ 1017, Times 27-Aug-04, [2005] QB 303, [2004] 3 WLR 1321)
    The claimant sought damages for injury alleged to have been suffered as tenant of a house after being subjected to carbon monoxide poisoning, and also from her former solicitors for their delay in her claim. The effective question was whether the . .
  • Overruled – Kleinwort Benson Ltd -v- Lincoln City Council etc HL (Gazette 18-Nov-98, Gazette 10-Feb-99, Times 30-Oct-98, House of Lords, Bailii, [1998] UKHL 38, [1999] 2 AC 349, [1998] 4 All ER 513, [1998] 3 WLR 1095, [1998] Lloyds Rep Bank 387)
    Kleinwort Benson had made payments to a local authority under swap agreements which were thought to be legally enforceable. Subsequently, a decision of the House of Lords, (Hazell v. Hammersmith and Fulham) established that such swap agreements were . .
  • Cited – Woolwich Equitable Building Society -v- Inland Revenue Commissioners (2) HL ([1993] AC 70, [1992] 3 All ER 737, (1992) 3 WLR 366)
    The society had set out to assert that regulations were unlawful in creating a double taxation. It paid money on account of the tax demanded. It won and recovered the sums paid, but the revenue refused to pay any interest accrued on the sums paid. . .
  • Applied – Brisbane -v- Dacres ((1813) 5 Taunt. 143)
    The commander of a naval vessel, HMS Arethusa, had paid to the Admiral in command a proportion of freight received for the carriage of publicly owned bullion on board the Arethusa in the belief that this was due to the Admiral as a matter of usage. . .
  • Cited – Kelly -v- Solari CexC ((1841) 9 M & W 54)
    Recovery was sought of money (£200) paid an error of fact. There had been a life policy, but it had lapsed before the death of the life assured. The policy had been marked ‘lapsed’ but the marking had been overlooked.
    Held: Where money . .

(This list may be incomplete)

Last Update: 25-Mar-16
Ref: 199748

Reardon Smith Line Ltd v Yngvar Hansen-Tangen (The Diana Prosperity”): HL 1976″

References: [1976] 1 WLR 989, [1976] 2 Lloyd’s Rep 621, [1976] 3 All ER 570
Coram: Lord Wilberforce
In construing a contract, three principles can be found. The contextual scene is always relevant. Secondly, what is admissible as a matter of the rules of evidence under this heading is what is arguably relevant, but admissibility is not decisive. The real issue is what evidence of surrounding circumstances may ultimately be allowed to influence the question of interpretation. That depends on what meanings the language read against the objective contextual scene will let in. Thirdly, the enquiry is objective: the question is what reasonable persons, circumstanced as the actual parties were, would have had in mind.
Lord Wilberforce commented on the Wooler case saying: ‘I think that all of their Lordships are saying, in different words, the same thing — what the court must do must be to place itself in thought in the same factual matrix as that in which the parties were’.
Lord Wilberforce said: ‘No contracts are made in a vacuum: there is always a setting in which they have to be placed. The nature of what is legitimate to have regard to is usually described as ‘the surrounding circumstances’ but this phrase is imprecise: it can be illustrated but hardly defined. In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating.’
This case cites:

  • Explained – Charrington & Co Ltd -v- Wooler HL ([1914] AC 71)
    The court is entitled to know the surrounding circumstances which prevailed when the contract was made. A contract is not to be construed in a vacuum. The term ‘market’ did not have a ‘fixed legal significance’ .
    Lord Dunedin said: ‘in order to . .

This case is cited by:

  • Cited – Wilson -v- Secretary of State for Trade and Industry; Wilson -v- First County Trust Ltd (No 2) HL (House of Lords, Gazette 18-Sep-03, Times 11-Jul-03, Bailii, [2003] UKHL 40, [2003] 3 WLR 568, [2004] 1 AC 816, [2003] 2 All ER (Comm) 491, [2003] HRLR 33, [2003] UKHRR 1085, [2003] 4 All ER 97)
    The respondent appealed against a finding that the provision which made a loan agreement completely invalid for lack of compliance with the 1974 Act was itself invalid under the Human Rights Act since it deprived the respondent of its property . .
  • Cited – Mannai Investment Co Ltd -v- Eagle Star Assurance HL (Times 26-May-97, House of Lords, Bailii, [1997] 2 WLR 945, [1997] UKHL 19, [1997] AC 749, [1997] 3 All ER 352, [1997] 24 EG 122)
    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 – Westminster City Council -v- National Asylum Support Service HL (House of Lords, Times 18-Oct-02, Bailii, [2002] UKHL 38, [2002] 1 WLR 2956, [2002] 4 All ER 654, [2002] HLR 58, (2002) 5 CCL Rep 511, [2003] BLGR 23)
    The applicant sought assistance from the local authority. He suffered from spinal myeloma, was destitute and an asylum seeker.
    Held: Although the Act had withdrawn the obligation to provide assistance for many asylum seekers, those who were . .
  • Cited – Investors Compensation Scheme Ltd -v- West Bromwich Building Society HL (Times 24-Jun-97, House of Lords, Bailii, [1997] UKHL 28, [1998] 1 All ER 98, [1998] 1 WLR 896, [1998] AC 896)
    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 – Youell and Others -v- Bland Welch & Co Ltd and Others CA ([1992] 2 Lloyd’s Rep 127)
    The court considered whether an underwiter’s slip was admissible when construing the policy which followed.
    Held: Staughton LJ: ‘It is now, in my view, somewhat old-fashioned to approach such a problem armed with the parol evidence rule, that . .
  • Cited – Bruton -v- London and Quadrant Housing Trust HL (Gazette 14-Jul-99, Times 25-Jun-99, Gazette 21-Jul-99, House of Lords, Bailii, [1999] 3 All ER 481, [2000] 1 AC 406, [1999] UKHL 26, [1999] 2 EGLR 59, [1999] 3 WLR 150, [1999] EG 90, [1999] L & TR 469, (1999) 31 HLR 902, [1999] NPC 73, [1999] 30 EG 91, (1999) 78 P & CR D21)
    The claimant sought to oblige the respondent to repair his flat under the 1988 Act. The respondent replied that the arrangement was a licence only, and not protected under the Act.
    Held: The housing association had a temporary licence to . .
  • Cited – Catnic Components Ltd & Another -v- Hill & Smith Ltd HL ([1983] FSR 512, [1982] RPC 183)
    The plaintiffs had been established as market leaders with their patented construction, had ample production capacity and stocks, but had never granted any licence under their patent. The defendants had not been in business in this field at all, . .
  • Cited – Kirin-Amgen Inc and others -v- Hoechst Marion Roussel Limited and others etc HL (House of Lords, [2004] UKHL 46, Bailii, [2005] RPC 169, (2005) 28(7) IPD 28049, [2005] 1 All ER 667)
    The claims arose in connection with the validity and alleged infringement of a European Patent on erythropoietin (‘EPO’).
    Held: ‘Construction is objective in the sense that it is concerned with what a reasonable person to whom the utterance . .
  • Cited – McDowall -v- Inland Revenue SCIT (Bailii, [2003] UKSC SPC00382)
    Gifts had been made from an estate, purportedly under a power of attorney. During his lifetime, the deceased had made various gifts to his children. As he begand to suffer Alzheimers, he gave a power of attorney. He had substantial assets, well . .
  • Cited – Barclays Bank Plc -v- Weeks Legg & Dean (a Firm); Barclays Bank Plc -v- Lougher and Others; Barclays Bank Plc -v- Hopkin John & Co CA (Gazette 28-May-98, Gazette 24-Jun-98, Times 15-Jun-98, Bailii, [1998] EWCA Civ 868, [1998] 3 All ER 213, [1999] QB 309)
    The defendant solicitors had each acted for banks in completing charges over property. They had given the standard agreed form of undertaking to secure a good and marketable title, and the banks now alleged that they were in breach because . .
  • Cited – Crancour Ltd -v- Da Silvaesa and Another CA (Bailii, [1986] EWCA Civ 1, [1986] 1 EGLR 80, [1986] 52 P&CR 204, [1986] 18 HLR 265, [1986] 278 EG 618)
    The plaintiff sought possession of two rooms in a house occupied by the defendants separately. The agreements stated that they were licences. The agreements excluded the occupiers between 10:30am and noon on each day. The occupiers claimed to be . .
  • Cited – Persimmon Homes (South Coast) Ltd -v- Hall Aggregates (South Coast) Ltd and Another TCC (Bailii, [2008] EWHC 2379 (TCC))
    The parties had agreed for the sale of land under an option agreement. The builder purchasers now sought to exercise rights to adjust the price downwards.
    Held: The provisions had been intended and had achieved a prompt and binding settlement . .
  • Cited – Islam, Regina -v- HL (Bailii, [2009] UKHL 30, Times, [2009] 3 WLR 1)
    The defendant appealed against a confiscation order saying that it should not have been set at values which reflected the black market value of the drugs he had imported.
    Held: The appeal failed. The court could take account of the illegal . .
  • Cited – Berrisford -v- Mexfield Housing Co-Operative Ltd SC ([2011] NPC 115, [2011] 46 EG 105, [2011] 3 WLR 1091, Bailii, [2011] UKSC 32, Bailii Summary, UKSC 2010/0167, SC Summary, SC)
    The tenant appealed against an order granting possession. The tenancy, being of a mutual housing co-operative did not have security but was in a form restricting the landlord’s right to recover possession, and the tenant resisted saying that it was . .
  • Cited – Marley -v- Rawlings and Another SC (Bailii, [2014] UKSC 2, [2014] 2 WLR 213, [2014] WTLR 299, 16 ITELR 642, [2014] 1 All ER 807, [2014] WLR(D) 18, [2014] Fam Law 466, Bailii Summary, WLRD, UKSC 2012/0057, SC Summary, SC)
    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 . .