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Contract - From: 1960 To: 1969

This page lists 113 cases, and was prepared on 20 May 2019.

 
Enrico Furst and Co v W E Fischer Limited [1960] 2 Lloyd's Reports 340
1960

Diplock J
Contract
Diplock J discussed the effect of a waiver: "Waiver does not vary the terms of the contract . . Waiver is conduct on the part of a party to a contract which affects his remedies for a breach of contract by the other party."
1 Citers



 
 White v Elmdene Estates Ltd; CA 1960 - [1960] 1 QB 1
 
In re United Railways of the Havana v Regla Warehouses Ltd [1960] Ch 52
1960
CA
Jenkins LJ
Contract, Banking, Insolvency
There had been a financing transaction by way of a lease by a Pennsylvania corporation, as trustee for foreign bondholders, to an English company carrying on business in Cuba, of assets in Cuba. By a Cuban decree the assets were transferred to the Cuban government and the company was put into liquidation in England. The liquidators rejected a proof by the trustees for the payments due under the lease on the ground that the Cuban decree had transferred liability to the Cuban government. The court did not accept that the decree had this effect, but, for argument considered whether it would have been effective to discharge the company's liability. This depended on whether one applied the lex situs of the debt (Cuba) or the proper law of the lease (Pennsylvania). Held: The transaction was a statutory novation; the extinction of the liability of one debtor and its replacement by the liability of another. These two aspects of the transaction were not necessarily governed by the same law and that the question of whether the one debtor was discharged was governed by the proper law of the debt. The court rejected an analogy with the question of whether the benefit of a debt had been transferred to another person. "The contractual right to receive payment of a debt is an item of property, that is to say, a chose in action. It can be transferred by the creditor to a third party, but the validity of the transfer necessarily depends upon the lex situs, because the courts of the country where the debt is have jurisdiction over the title to it. Novation, on the other hand, does not involve the transfer of any property at all, for, as we have already pointed out, it comprises the annulment of one debt and the creation of another. Moreover, in novation a creditor may be vitally prejudiced, whereas it is immaterial to a debtor to whom he pays his debt provided that he gets a good discharge for it."
1 Cites

1 Citers


 
Parker v Clark [1960] 1 All ER 93; [1960] 1 WLR 286
1960

Devlin J
Contract
A written offer was accepted in writing by a letter that became lost. Although it was recognised that oral evidence of the written acceptance might provide an answer, the case was argued on the basis that the written offer was a sufficient memorandum. Held: The argument that the statute required a concluded agreement to be existing when the memorandum was signed was rejected. A written offer is capable of being a memorandum providing the language shows an intention to contract as opposed to being a mere statement of expectation.
1 Cites

1 Citers


 
Fawcett v Star Car Sales Limited [1960] NZLR 406
1960

Gresson P
Contract, Commonwealth
(New Zealand) "a void contract is a paradox; in truth there is no contract at all." and 'the difficulty in deciding whether a mistake of identity prevents the formation of a concluded contract is a proper assessment of the facts rather than the ascertainment of the law'.
1 Citers


 
Midland Silicones Ltd v Scruttons Ltd [1961] 1 QB 106
1960
CA
Hodson LJ
Contract, Agency

1 Cites

1 Citers


 
The Cheapside Syndicate Limited v Lewis [1960] UKPC 18
1 Jun 1960
PC

Contract, Employment
(West Indies)
[ Bailii ]
 
Ingram v Little [1961] 1 QB 31; [1960] EWCA Civ 1
27 Jul 1960

Pearce LJ and Devlin LJ
Contract
Two ladies had a car for sale. A buyer came along. He fooled them into believing him to be someone else, and they sold him the car, after checking the name in the telephone directory. Before the cheque bounced, the rogue sold the car to the defendant from whom the ladies now sought the return of the car. Held: Applying the rule nemo debt quod non habet, the car remained the property of original owners. Phillips v Brooke differed in that property had passed before the misrepresentation (majority). Devlin LJ dissenting: "The true spirit of the common law is to override theoretical distinctions when they stand in the way of doing practical justice. For the doing of justice, the relevant question in this sort of case is not whether the contract was void or voidable, but which of two innocent parties shall suffer for the fraud of a third. The plain answer is that the loss should be divided between them in such proportion as is just in all the circumstances. If it be pure misfortune, the loss should be borne equally; of the fault or imprudence of either party has caused or contributed to the loss, it should be borne by that party in the whole or in the greater part."
1 Cites

1 Citers

[ Bailii ]

 
 Fisher v Bell; QBD 10-Nov-1960 - [1961] 1 QB 394

 
 Bulpitt and Sons Ltd v S Bellman and Sons Ltd; 1961 - (1962) LR 3 RP 62

 
 Archbolds (Freightage) Ltd v S Spanglett Ltd (Randall, third party); CA 1961 - [1961] 1 All ER 417; [1961] 1 QB 374

 
 Adams v National Bank of Greece; HL 1961 - [1961] AC 255

 
 Re Stirrup's Contract; 1961 - [1961] 1 WLR 449
 
Campbell Discount Ltd v Gall [1961] 2 All ER 104; [1961] 1 QBD 431
1961


Contract, Estoppel

1 Citers



 
 Campbell Discount Company Ltd v Bridge; CA 1961 - [1961] 1 QB 445
 
Yeoman Credit Ltd v Latter [1961] 1 WLR 828
1961
CA
Harman LJ
Contract
The distinction between contracts of guarantee and indemnity are real and important and to be retained.
1 Citers


 
Yeoman Credit Ltd v Waragowski [1961] 1 WLR 1124
1961
CA

Contract
The defendant had paid the initial deposit for and took delivery on hire-purchase terms of a van, but made no monthly hire-purchase instalments. The plaintiff terminated, took possession of the van and sued for hire-purchase arrears and damages. Loss of bargain damages were awarded, Held: The appeal failed. There was not a mere failure of an obligation to pay money but a wholesale failure by the defendant to perform his contract. Plainly, the plaintiff had terminated for breach and clause 7 of the hire-purchase contract, as to remedies, obliged the defendant inter alia to pay damages for breach where the plaintiff terminated the hiring.
1 Citers


 
Niarchos (London) Ltd v Shell Tankers Ltd [1961] 2 Lloyd's Rep 496
1961

McNair J
Contract

1 Citers


 
Gardano and Giampieri v Greek Petroleum George Mamidakis and Co [1961] 2 Lloyds Rep 259
1961

McNair J
Contract, Transport, Commercial
The shipment was made under a c&f sale contract, a straight bill of lading, pursuant to a charterparty between the defendant and the claimant shipowner, Gardano. The bill named the Greek Ministry as consignee. The shipowner argued, relying on the 1855 Act that the shipper had lost its title to sue by the transfer of the bill of lading to the consignee. Held: That argument failed. The section did not operate where property had passed under the express terms of the sale contract not on or by reason of the consignment but ex the loading installation. In an ordinary contract of sale in the traditional c.i.f or c. & f. form, the seller discharges his obligations as regards delivery by tendering a bill of lading covering the goods. The contract is one which, though not a sale, is a sale of goods performed by delivery of documents, and the property passes when the documents are taken up.
Bills of Lading Act 1855 1
1 Citers


 
Tsakiroglou and Co Ltd v Noblee Thorl GmbH [1962] AC 93; [1961] 2 All ER 179
1961
HL
Lord Radcliffe
Contract, Arbitration
The arbitrator had determined a mixed question as to whether a c.i.f. contract had been frustrated. Held: A mixed finding of fact and law by an arbitrator is open to review by a court. Though in the ultimate analysis whether a contract was frustrated is a question of law, "that conclusion is almost completely determined by what is ascertained as to mercantile usage and the understanding of mercantile men."
1 Citers


 
A Roberts and Co Ltd v Leicestershire County Council [1961] Ch 555; [1961] 2 All ER 545
1961
ChD
Pennycuick J
Equity, Contract
The court considered the circumstances required for rectification of a contract after a unilateral mistake. Pennycuick J said: "a party is entitled to rectification of a contract upon proof that he believed a particular term to be included in the contract, and that the other party concluded the contract with the omission or a variation of that term in the knowledge that the first party believed the term to be included. . . The principle is stated in Snell on Equity, 25th edition (1960), p 569 as follows: 'By what appears to be a species of equitable estoppel, if one party to a transaction knows that the instrument contains a mistake in his favour but does nothing to correct it, he (and those claiming under him) will be precluded from resisting rectification on the ground that the mistake is unilateral and not common.'"
1 Citers



 
 White and Carter (Councils) Ltd v McGregor; HL 6-Dec-1961 - [1962] AC 413; [1961] UKHL 5; [1961] UKHL 7
 
Midland Silicones Ltd v Scruttons Ltd [1962] AC 446; [1961] UKHL 4
6 Dec 1961
HL
Viscount Simonds, Lord Reid
Agency, Contract
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 carriers and the cargo-owners. Held: The House was not prepared to hold that the principle of vicarious immunity was as in the ratio of Elder, Dempster. The court described four conditions for establishing that a contract was made as agent for a third party who could thus take benefit, namely: Was the third party intended to benefit from the contractual term, whether it was clear that the contracting party was also contracting as agent for the third party, whether he had authority so to do, and whether any difficulty with consideration was overcome.
As to the doctrine of privity of contract, Viscount Simonds said: "[H]eterodoxy, or, as some might say, heresy, is not the more attractive because it is dignified by the name of reform. . . . If the principle of jus quaesitum tertio is to be introduced into our law, it must be done by Parliament after a due consideration of its merits and demerits. I should not be prepared to give it my support without a greater knowledge than I at present possess of its operation in other systems of law."
1 Cites

1 Citers

[ Bailii ]
 
Hong Kong Fir Shipping Co v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26; [1961] EWCA Civ 7; [1962] 1 All ER 474
20 Dec 1961
CA
Sellers, Upjohn, Diplock LJJ
Contract, Transport
The plaintiffs had recently acquired the ship the 'Hong Kong Fir' and contracted to charter it to the defendants, but being late in delivering it, the defendants cancelled the charterparty contract. The plaintiffs said the repudiation was wrongful, and that the ship was fit to charter. Held: "authority over many decades and reason support the conclusion in this case that there was no breach of a condition which entitled the charterers to accept it as repudiation and to withdraw from the charter. It was not contended that the maintenance clause is so fundamental a matter as to amount to a condition of the contract. It is a warranty which sounds in damages." and "If what is done or not done in breach of the contractual obligation does not make the performance a totally different performance of the contract from that intended by the parties, it is not so fundamental as to undermine the whole contract." and . .
Diplock LJ set out the test for whether a breach is repudiatory: "Does the occurrence of the event deprive the party who has further undertakings to perform of substantially the whole benefit which it was the intention of the parties as expressed in the contract that he should obtain as the consideration for performing those undertakings?"
Upjohn LJ said: "the remedies open to the innocent party for breach of a stipulation which is not a condition strictly so called, depend entirely upon the nature of the breach and its foreseeable consequences. Breaches of stipulation fall, naturally, into two classes. First there is the case where the owner by his conduct indicates that he considers himself no longer bound to perform his part of the contract; in that case, of course, the charterer may accept the repudiation and treat the contract as at an end. The second class of case is, of course, the more usual one and that is where due to misfortune such as the perils of the sea, engine failures, incompetence of the crew and so on, the owner is unable to perform a particular stipulation precisely in accordance with the terms of the contract try he never so hard to remedy it. In that case the question to be answered is, does the breach of the stipulation go so much to the root of the contract that it makes further commercial performance of the contract impossible, or in other words is the whole contract frustrated? If yea, the innocent party may treat the contract as at an end. If nay, his claim sounds in damages only. This is a question of fact fit for the determination of a jury."
The test for whether there has been a repudiatory breach of a contract was set out. Diplock LJ said: "The test whether an event has this effect or not has been stated in a number of metaphors all of which I think amount to the same thing: does the occurrence of the event deprive the party who has further undertakings still to perform of substantially the whole benefit which it was the intention of the parties as expressed in the contract that he should obtain as the consideration for performing those undertakings?" Though a term (in this case a "seaworthiness" term) was not a "condition" in the technical sense, it might still be a term breach of which if sufficiently serious could go to the root of the contract.
1 Cites

1 Citers

[ Bailii ]

 
 Smith v Mansi; CA 1962 - [1963] 1 WLR 26; [1962] 3 All ER 857

 
 Campbell Discount Company Ltd v Bridge; HL 1962 - [1962] 2 WLR 439; [1962] 1 All ER 385; [1962] AC 600
 
Blohn v Desser [1962] 2 QB 116
1962

Diplock J
Jurisdiction, Contract
The plaintiff had obtained a default judgment in Austria against an Austrian partnership, and sought to enforce it in England against an English resident who was a sleeping partner in the firm. Her name was registered as a partner in the commercial register in Vienna. Held: The claim against her failed. Although the defendant, as a partner in the firm, must be regarded as having carried on business in Vienna through an agent resident there and that, having permitted those matters to be notified to persons dealing with the firm by registration in a public register, she had impliedly agreed with those persons to submit to the jurisdiction of the court of Vienna, and that, therefore, the English courts would recognise the judgment, in this case, the judgment against the partnership firm was not enforceable against the defendant as either it was not a judgment against her personally or, if it was, by reason of the defences which would be available to her in Vienna it was not a final and conclusive judgment.
Diplock J said that it was "clear law that the contract . . to submit to the forum in which the judgment was obtained, may be express or implied" and "It seems to me that, where a person becomes a partner in a foreign firm with a place of business within the jurisdiction of a foreign court, and appoints an agent resident in that jurisdiction to conduct business on behalf of the partnership at that place of business, and causes or permits, as in the present case, these matters to be notified to persons dealing with that firm by registration in a public register, he does impliedly agree with all persons to whom such a notification is made - that is to say, the public - to submit to the jurisdiction of the court of the country in which the business is carried on in respect of transactions conducted at that place of business by that agent."
1 Citers


 
In re Trepca Mines (No 2) [1962] CLY 2900; [1963] Ch 199
1962
CA
Lord Denning MR
Contract, Legal Professions
Champerty: Lord Denning MR said: "The reason why the common law condemns champerty is because of the abuses to which it may give rise. The common law fears that the champertous maintainer might be tempted, for his own personal gain, to inflame the damages, to suppress evidence, or even to suborn witnesses. These fears may be exaggerated, but, be that so or not, the law for centuries had declared champerty to be unlawful, and we cannot do otherwise than enforce the law, and I may observe that it has received statutory support, in the case of Solicitors, in Section 65 of the Solicitors Act 1957."
Solicitors Act 1957 65
1 Citers


 
Musselwhite v CH Musselwhite and Son Ltd [1962] Ch 964
1962


Contract, Company
Sale of shares - duty of vendor between exchange and completion - interim receipts.
1 Citers


 
Philip Bernstein (Successors) Ltd v Lydiate Textiles Ltd; orse Sterling Industrial Facilities v Lydiate Textiles Ltd [1962] CA Transcript 238; [1962] 106 SJ 669
26 Jun 1962
CA
Diplock LJ
Contract
Lord Justice Diplock: ". . the ordinary rule which the courts apply is that contracts should be enforced, pacta sunt servanda, unless they can be brought within that limited category of cases in which, for reasons of public policy, the court refuses to give effect to the agreement of the parties. . One limited and well-known class is the class of penalty". He described the principles: "In the ordinary way a penalty is a sum which, by the terms of a contract, a promisor agrees to pay to the promisee in the event of non-performance by the promisor of one or more of the obligations and which is excess of the damage caused by such non-performance."
1 Cites

1 Citers


 
Financings Ltd v Stimson [1962] EWCA Civ 1; [1962] 3 All ER 386; [1962] 1 WLR 1184
17 Jul 1962
CA
Lord Denning MR, Donovan, Pearson LJJ
Contract
A purchaser signed a hire purchase agreement for a motor vehicle in early March 1961. A clause in the agreement provided that when the form was signed by the purchaser it would become binding "upon acceptance by signature" of an officer of the finance company. An officer of the finance company did not sign the agreement until late March 1961 and in the intervening period the purchaser returned the vehicle due to dissatisfaction with its condition and performance and the vehicle was subsequently stolen resulting in damage. Held: The purchaser’s signature on the hire purchase agreement form was "in law not an agreement, but only an offer by [the purchaser] to enter into a hire purchase agreement with a . . Finance Company." There was implied a condition into the offer that the subject matter of the offer must remain in substantially the same condition it was in at the time of the offer, failing which the offer lapses.
Pearson LJ said: "The judge found in terms that this car suffered severe damage before the acceptance and that there was substantial depreciation as the result. On that basis it seems to me that we should by implication read into this offer, in order to give the transaction that business efficacy which the parties must have intended it to have, an implied condition that this offer was capable of acceptance only if the car remained in substantially the same condition with substantially the same value. That condition in this case was not fulfilled because the car was severely damaged and its value was substantially depreciated. Therefore, when the [plaintiffs] purported to accept it . . it was an offer which was no longer capable of acceptance, and therefore no agreement was concluded."
Donovan LJ agreed, and said: "Who would offer to purchase a car on terms that if it were severely damaged before the offer was accepted, he, the offeror, would pay the bill? . . The county court judge held that there must, therefore, be implied a term that until acceptance the goods would remain in substantially the same state as at the date of the offer; and I think that this is both good sense and good law."
Lord Denning MR held that it was not necessary for any particular action to be taken to manifest a revocation of an offer, so long as the intention is clear.
1 Citers

[ Bailii ]
 
Financings Ltd v Baldock [1963] 2 QBD 104; [1963] 1 All ER 443; [1963] 2 WLR 359
1963
CA
Lord denning MR, Diplock LJ
Contract, Consumer
The hirer took delivery of a vehicle under an HP contract. he plaintiff exercised a contractual right to terminate the hiring and take possession of the vehicle when the defendant failed to pay the first two monthly instalments. Held: Where an owner determines a hire purchase agreement in exercise of a right so to do given him by the agreement, in the absence of repudiation he can recover damages for any breaches up to the date of termination but not thereafter, and a "minimum payment" clause which purports to oblige the hirer to pay larger sums than this is unenforceable as a penalty.
Lord Denning MR said: "Undoubtedly the cases in the past give rise to some conflict, and therefore I will try to state the matter on principle. It seems to me that when an agreement of hiring is terminated by virtue of a power contained in it, and the owner retakes the vehicle, he can recover damages for any breach up to the date of termination but not for any breach thereafter, for the simple reason that there are no breaches thereafter". And "Seeing that they can no longer rely with any confidence on the 'minimum payment' clause, the owners have reverted recently to a claim for damages under the general law. But they can only do so, it seems to me, subject to the general principle which I have already stated, namely, that when they terminate the hiring and retake the vehicle, they can only get damages for any breaches up to the date of termination but not thereafter".
Diplock L.J said: "In the present contract clause 8 itself merely defines a number of events, the occurrence of any one of which gives the owners an option to bring the contract to an end. Clause 11 purports to confer upon the owners other rights upon exercising their option to bring the contract to an end, but this clause is void as a penalty clause, at any rate in so far as it purports to confer rights upon the owners in the events which in fact gave rise to their right to bring the contract to an end, namely the hirer's breach of contract in failing to pay two instalments of hire. The owners are, therefore, in my opinion, forced to rely upon their ordinary remedies for those breaches of contract which had accrued at the date when the contract was determined, viz., April 7, 1960.
I have already expressed my opinion that on that date the only causes of action which had accrued to the owners were for the two instalments due on February 25 and March 22, I960, then in arrear. There had on April 7, 1960, been no repudiation by the hirer of his contract and no fresh breach by him which went to the root of the contract so as to evince his intention no longer to be bound by it. The owners' remedy is accordingly limited to recovery of the two instalments, together with interest thereon at the agreed rate of 10 per cent per annum from the dates they respectively fell due".
1 Citers


 
Chapman v Honig [1963] 2 QB 502
1963
CA
Pearson LJ, Davies LJ
Contract, Landlord and Tenant
A landlord's notice to quit was held valid notwithstanding that the landlord seeking to uphold its validity had himself given it in contempt of court.
A contractual right may be exercised for any reason good, bad or indifferent and the motive with which it is exercised is irrelevant to its validity.
Pearson LJ: "There is a special difficulty in the present case. The act complained of, the service of the notice to quit, was on the face of it a lawful exercise of a contractual right, duly implemented in accordance with the provisions of the tenancy agreement and effective to terminate the tenant's estate and to convert the landlord's interest from an estate in reversion to an estate in possession. Common experience is that, when the validity of an act done in purported exercise of a right under a contract or other instrument is disputed, the inquiry is limited to ascertaining whether the act has been done in accordance with the provisions of the contract or other instrument. I cannot think of any case in which such an act might be invalidated by proof that it was prompted by some vindictive or other wrong motive. Motive is disregarded as irrelevant. A person who has a right under a contract or other instrument is entitled to exercise it and can effectively exercise it for a good reason or a bad reason or no reason at all. If the rule were different, if the exercise of such a right were liable to be overthrown, in an action brought at any time within the limitation period, by proof that the act was done with a wrong motive, there would be a great unsettlement of property titles and commercial transactions and relationships."
1 Citers



 
 Re Hewitt's Contract; 1963 - [1963] 1 WLR 1298

 
 Selkirk v Romar Investments Ltd; PC 1963 - [1963] 1 WLR 1415

 
 Reardon Smith Line Ltd v Minister of Agriculture, Fisheries and Food; HL 1963 - [1963] AC 691; [1963] 1 Lloyds Rep 12
 
Good v Parry [1963] 2 QB 418
1963
CA
Lord Denning MR, Danckwerts LJ, Davies LJ
Limitation, Contract
A letter discussed first the writer's proposed purchase of the house (offering £1,350 subject to contract), and continued: "The question of outstanding rent can be settled as a separate agreement as soon as you present your account." Held: The letter did not to constitute an acknowledgment of the landlord's claim for rent.
Lord Denning MR said that the sentence meant "there may be some rent outstanding and it can be made the subject of an agreement as soon as you present your account" and concluded: "Such being the meaning of it, I am quite satisfied there is no acknowledgment, because there is no admission of any rent of a defined amount due, or of any amount that can be ascertained by calculation. The amount is uncertain altogether. Nor can I regard it as a promise to pay whatever amount may be found due on taking an account. The tenant clearly reserves the right to examine it and not to be bound except by separate agreement."
Davies LJ thought that "the letter did not acknowledge the claim; it only acknowledged that there might be a claim."
Danckwerts LJ regarded the letter as "merely . . . an admission that there may be some possible justified claim but no admission that there is such a debt in fact."
1 Citers


 
J M Allan (Merchandising) Limited v Cloke [1963] 2 QB 340
1963
CA
Lord Denning MR
Contract
the plaintiff rented to the defendant a roulette table, together with copies of a book of rules, for use in a club. The rules stated that a charge of sixpence was payable on any bet before the croupier spun the wheel. Using a roulette table in a club in that way was an offence under the Betting and Gaming Act 1960, although neither of the parties appreciated that fact. The trial judge found that it was the intention of both parties when they made the contract that the table would be used in the way described in the rules. Accordingly the agreement was unlawful and the plaintiff was not entitled to recover hire under it. Held: The appeal failed.
Lord Denning MR set out the principle: "[Counsel for the plaintiff] argues before us that the parties to this letting were ignorant of its unlawfulness: and that, in these circumstances (as it is a contract which could lawfully be performed) it is not to be regarded as unlawful unless they had a "wicked intention to break the law." He relies on the well-known judgment of Blackburn J in Waugh v Morris (1873) LR 8 QB 202. Now I desire to say that where two people together have the common design to use a subject-matter for an unlawful purpose, so that each participates in the unlawful purpose, then that contract is illegal in its formation: and it is no answer for them to say that they did not know the law on the matter. I would take a comparable case where there is a common design to use a subject matter for an immoral purpose. If a landlord lets a flat to a prostitute at a rent beyond any normal commercial rent, or if he lets her a brougham of a specially intriguing nature [a reference to Pearce v Brooks (1866) LR 1 Exch 213] it may fairly be inferred that it was their common design that it should be used for an immoral purpose. The letting is unlawful and he cannot recover the rent or hire. It is different with the washerwoman who washes the clothes of the prostitute or the butcher who supplies her with meat. They may know of her trade but they charge her normal commercial prices. There is there no common design. There is no participation in the immoral purpose, but merely knowledge of it. And that is no bar to recovering the price. Likewise with an unlawful purpose, active participation debars, but knowledge by itself does not. As I read Waugh v Morris there was there no participation in any unlawful purpose and the plaintiff could recover. In this case, however, there was participation. The common design was that a game should be played which was in fact unlawful."
1 Cites


 
Muskham Finance Ltd v Howard [1963] 1 All ER 81; [1963] 1 QB 904
1963
CA
Donovan LJ
Contract
Donovan LJ said that: "The plea of non est factum is a plea which must necessarily be kept within narrow limits."
1 Citers


 
Car and Universal Finance Company Ltd v Caldwell [1963] EWCA Civ 4; [1964] 1 All ER 290; [1965] 1 QB 525; [1964] 2 WLR 600
19 Dec 1963
CA
Sellers, Upjohn, Davies LJJ
Contract
The defendant had sold a car, taking as payment a cheque which was dishonoured; the plaintiffs later bought the car in good faith. Held: The defendant was entitled to return of the car, even though the original purchaser had disappeared, and could not be notified. In these circumstances, communication to the police was sufficient. If it was impossible to communicate with the representor then then the representee rescinds by taking all necessary and reasonable steps to make it known that the contract is cancelled.
Sellers LJ said: "In such exceptional circumstances, it does not seem to me appropriate to hold that a party so acting can claim any right to have a decision to rescind communicated to him before the contract is terminated. (The other party) has to establish clearly and unequivocally that he terminates the contract and is no longer to be bound by it. If he cannot communicate his decision he may still satisfy a judge or jury that he had made a final and irrevocable decision and ended the contract." and "If one party by absconding deliberately puts it out of the power of the other to communicate his intention to rescind which he knows the other will almost certainly want to do, I do not think he can any longer insist on his right to be made aware of the election to determine the contract. In these circumstances communication is a useless formality. I think that the law must allow the innocent party to exercise his right of rescission otherwise than by communication or repossession. To hold otherwise would be to allow a fraudulent contracting party by his very fraud to prevent the innocent party from exercising his undoubted right. I would hold that in circumstances such as these the innocent party may evince his intention to disaffirm the contract by overt means falling short of communication or repossession."
1 Cites

[ Bailii ]
 
in re A and K Holdings Pty Ltd [1964] VR 257
1964

Sholl J
Contract
(Supreme Court of Victoria) A company ('Castley Brothers') in a group was in financial difficulties, and ten other companies in the group, one of which was A and K Holdings, executed a deed of guarantee which was expressed to be in favour of unsecured creditors of it. No unsecured creditors of Castley Brothers were parties to the deed, nor was an attempt made to establish a trustee for unsecured creditors and to join it as a party to the deed. Later a creditor of Castley Brothers sought to enforce the guarantee against A and K Holdings by petitioning for that company to be wound up. It was argued in opposition to the petition that the deed was ineffective, because it was addressed to no-one, nor could any intended beneficiary of the deed have been identified at the date when it was made. Held: The guarantee was enforceable by a creditor of Castley Brothers directly against A and K Holdings. The deed took effect as 'an immediately operative deed poll – a unilateral document made by each of the ten guarantor companies – but not intended to be executed by any other party'.
1 Citers


 
Hardy v Motor Insurers' Bureau [1964] 2 QB 745; [1964] 2 All ER 742
1964
CA
Diplock LJ, Lord Denning MR
Insurance, Personal Injury, Contract
The court was asked whether insurance pursuant to the Road Traffic Act 1960 would provide valid cover for the benefit of a third party injured by deliberately criminal conduct on the part of the driver. Held: Diplock LJ said: "The rule of law on which the major premise is based - ex turpi causa non oritur actio - is concerned not specifically with the lawfulness of contracts but generally with the enforcement of rights by the courts, whether or not such rights arise under contract. All that the rule means is that the courts will not enforce a right which would otherwise be enforceable if the right arises out of an act committed by the person asserting the right (or by someone who is regarded in law as his successor) which is regarded by the court as sufficiently anti-social to justify the court's refusing to enforce that right."
Diplock LJ said: "It is well settled that if a man commits murder or committed felo de se in the days when suicide was still a crime, neither he nor his personal representatives could be entitled to reap any financial benefit from such an act: In the Estate of Crippen [1911] P. 108; Beresford v. Royal Insurance Co. Ltd . [1938] A.C. 586. This was because the law recognised that, in the public interest, such acts should be deterred and moreover that it would shock the public conscience if a man could use the courts to enforce a money claim either under a contract or a will by reason of his having committed such acts...The court has to weigh the gravity of the anti-social act and the extent to which it will be encouraged by enforcing the right sought to be asserted against the social harm which will be caused if the right is not enforced." As to proposition that all contracts to indemnify a person against a liability which he may incur by committing an intentional crime are unlawful:- "The rule of law . . - ex turpi causa non oritur actio - is concerned not specifically with the lawfulness of contracts but generally with the enforcement of rights by the courts, whether or not such rights arise under the contract. All that the rule means is that the courts will not enforce a right which would otherwise be enforceable if the right arises out of an act committed by the person asserting the right ... which is regarded by the court as sufficiently anti-social to justify the court's refusing to enforce that right."
Lord Denning MR said: "no person can claim indemnity or reparation for his own wilful and culpable crime. He is under a disability precluding him from imposing a claim."
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1 Citers


 
Edwards v Skyways Ltd [1964] 1 All ER 494; [1964] 1 WLR 349
1964
QBD
Megaw J
Contract
There had been a negotiation between representatives of the British Airline Pilots Association and the airline company regarding pension rights of pilots who were made redundant. The company contended that the representation made by it in the course of negotiations was not intended to give rise to legal relations, and the plaintiff sought to enforce the (expressed to be) ex-gratia payment. The court was asked whether a contract had been made between the parties. Held: The promise and agreement made by the airline was made in the context of a business relationship and not in a domestic or social context, and therefore, the onus would be on the party denying that legal relations were intended to show that there was no intention to create legal relations.
Megaw LJ said: "In the present case, the subject matter of the agreement is business relations' not social or domestic matters. There was a meeting of minds - an intention to agree. There was admittedly, consideration for the company's promise. I accept the proposition of counsel for the plaintiff that in a case of this nature the onus is on the party who asserts that no legal effect was intended, and the onus is a heavy one."
The use of a phrase such as "without prejudice" should normally be interpreted as meaning that the party agreeing to pay "does not admit any pre-existing liability on his part"
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1 Citers


 
Snell v Unity Finance Company Ltd [1964] 2 QB 203
1964
CA

Contract
The court must not permit itself to be the instrument by which an illegal contract is enforced. Points such as to illegality should be taken by the court irrespective of the wishes of the parties; and if not taken by the judge at trial, should be taken of its own initiative by an appellate court.
1 Citers


 
Mercantile Credit Co Ltd v Hamblin [1965] 2 QB 242; [1964] 1 WLR 423
1964
CA
Pearson LJ
Contract, Agency
Pearson LJ said: "There is no rule of law that in a hire purchase transaction the dealer never is, or always is, acting as agent for the finance company or as agent for the customer.Nevertheless, the dealer is to some extent an intermediary between the customer and the finance company, and he may well have in a particular case some ad hoc agencies to do particular things on behalf of one or the other or, it may be, both of those two parties." and "In a typical hire purchase transaction the dealer is a party in his own right, selling his car to the finance company, and he is acting primarily on his own behalf and not as general agent for either of the other two parties. There is no need to attribute to him an agency in order to account for his participation in the transaction. Nevertheless the dealer is to some extent an intermediary between the customer and the finance company, and he may well have in a particular case some ad-hoc agencies to do particular things on behalf of one or other or it may be both of those two parties."
An advocate should draw the attention of the court to the fact that an act relied on by a party is unlawful, if that is the case.
1 Citers


 
Tappenden v Artus [1964] 2 QB 185
1964
CA
Diplock LJ
Contract
The owner of a van allowed a customer to use it pending completion of a hire-purchase agreement. The van broke down and was delivered to the defendant for repairs. The price of the repairs remained outstanding and a question arose whether the garage could exercise a lien over it against the owner. Held: Diplock LJ described the common law possessory lien: "The common law lien of an artificer is of very ancient origin, dating from a time when remedies by action upon contracts not under seal were still at an early and imperfect stage of development: see the old authorities cited by Lord Ellenborough C.J. in Chase v. Westmore (1816) 5 M. & S. 180. Because it arises in consequence of a contract, it is tempting to a twentieth-century lawyer to think of a common law lien as possessing the characteristics of a contractual right, express or implied, created by mutual agreement between the parties to the contract. But this would be to mistake its legal nature. Like a right of action for damages, it is a remedy for breach of contract which the common law confers upon an artificer to whom the possession of goods is lawfully given for the purpose of his doing work upon them in consideration of a money payment. If, pursuant to the contract, the artificer does his work, he is entitled to retain possession of the goods so long as his charges, whether agreed in advance or (if not so agreed) payable upon a quantum meruit, are satisfied. The remedy can be excluded by the terms of the contract made with the artificer either expressly or by necessary implication from other terms which are inconsistent with the exercise of a possessory lien; cf. Forth v. Simpson (1849) 13 Q.B. 680, in the same way as the common law remedy in damages for breach of contract may be excluded or modified by the terms of the contract itself. But this does not mean that the remedy of lien, any more than the remedy in damages, is the result of an implied term in the contract to which what we may conveniently call the Moorcock (1889) 14 P.D. 64 criteria relevant to implying terms in a contract apply. The test whether or not the remedy exists is not whether or not its existence is necessary to give business efficacy to the contract. Judged by this test there would in modern times never be an artificer's lien.
The common law remedy of a possessory lien, like other primitive remedies such as abatement of nuisance, self-defence or ejection of trespassers to land, is one of self-help. It is a remedy in rem exercisable upon the goods, and its exercise requires no intervention by the courts, for it is exercisable only by an artificer who has actual possession of the goods subject to the lien. Since, however, the remedy is the exercise of a right to continue an existing actual possession of the goods, it necessarily involves a right of possession adverse to the right of the person who, but for the lien, would be entitled to immediate possession of the goods. A common law lien, although not enforceable by action, thus affords a defence to an action for recovery of the goods by a person who, but for the lien, would be entitled to immediate possession.
Since a common law lien is a right to continue an existing actual possession of goods (that is to say, to refuse to put an end to a bailment) it can only be exercised by an artificer if his possession was lawful at the time at which the lien first attached."
1 Citers


 
UGS Finance Ltd v National Mortgage Bank of Greece [1964] 1 Lloyd's Rep 446
1964
CA
Pearson LJ
Contract
Pearson LJ said: "As to the question of 'fundamental breach', there is a rule of construction that normally an exemption or exclusion clause or similar provision in the contract should be construed as not applying to a situation created by a fundamental breach of contract . . it is a rule of construction based on the presumed intention of the contracting parties. It involves the implication of a term to give to the contract that business efficacy which the parties as reasonable men just have intended it to have. This rule of construction is not new in principle but it has become prominent in recent years in consequence of the tendency to have standard forms of contract containing exceptions clauses drawn in extravagantly wide terms, which would produce absurd results if applied literally."
1 Citers


 
Cory (Wm) and Son Ltd v Inland Revenue Commissioners [1964] 1 WLR 1332
1964
CA
Diplock LJ
Contract
Diplock LJ discussed the status of a deed delivered in escrow: "So long as it remains an escrow it is not yet executed as a deed; for delivery again as a deed is required before it becomes one. While an escrow it conveys nothing, it transfers nothing."
1 Citers


 
William Cory and Son Limited v Inland Revenue Commissioners [1964] 3 All ER 66
1964
CA
Lord Denning MR
Land, Contract, Stamp Duty
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."
1 Citers


 
In re Southern Livestock Producers Ltd [1964] 1 WLR 24
1964

Pennycuick J
Contract, Animals
In the absence of special agreement the agister has no lien upon the livestock as he merely takes care of them and supplies them with food. Pennycuick J referred to the distinction between improvement and repair. An obligation to take care of pigs was held to be no more than maintaining them and insufficient to found a worker's lien.
1 Citers



 
 McCutcheon v David MacBrayne Ltd; HL 21-Jan-1964 - [1964] 1 WLR 125; [1964] 1 All ER 430 HL (Sc); [1964] UKHL 4; [1964] UKHL 7
 
R and J Dempster Ltd v Motherwell Bridge and Engineering Co Ltd [1964] ScotCS CSIH - 1
3 Jul 1964
SCS

Contract
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 had agreed to supply.
1 Citers

[ Bailii ]
 
Mixnams Properties Ltd v Chertsey Urban District Council [1965] AC 735
1965
HL
Lord Upjohn, Viscount Dilhorne
Contract, Local Government, Licensing
The local authority was not entitled under the 1960 Act to lay down conditions relating to the licensee's powers of letting or licensing caravan spaces to its customers. The freedom to contract is a fundamental right, and that if Parliament intends to empower a third party to make conditions which regulate the terms of contracts to be made between others then, even where there is an appeal to a court of law against such conditions, it must do so in clear terms. Viscount Dilhorne: "In the present case there appears to me to be a fundamental difference between prescribing what must or must not be done on a site and restricting the site owner's ordinary freedom to contract with his licensees on matters which do not relate to the manner of use of the site. Conditions can make the site owner responsible for the proper use of the site and it is then for him to make such contracts with his licensees as the general law permits. I can find nothing in the Act of 1960 suggesting any intention to authorise local authorities to go beyond laying down conditions relating to the use of sites, and in my opinion the general words in section 5 cannot be read as entitling them to do so."
Caravan Sites and Control of Development Act 1960
1 Citers


 
Burnett v Westminster Bank Ltd [1966] 1 QB 742; [1965] 3 All ER 81
1965
ChD
Mocatta J
Banking, Contract
The plaintiff had a cheque account at the Borough Branch and drew a cheque on the cheque forms which had been provided. He crossed out the word `Borough' and put in `Bromley'. He altered the address and he initialled the cheque. Later he decided to stop payment on the cheque, telephoning the Bromley Branch and informing them of this decision. The cheque had passed through the computer system which could not read the alterations made by the plaintiff. The cheque itself was forwarded to the Borough Branch at which the employees were unaware of the stop-payment instructions. At the end of the suspense period, the amount of the cheque was debited to the plaintiff's account at the Borough Branch. Held: The bank was unsuccessful in its contention that a new practice utilising the introduction of magnetic ink characters seeking to restrict cheques to the particular account for which they had been prepared, had been consensually agreed to by the customer. Notice of a change in condition oin cheque book covers was ineffective. A stop instruction from a bank's customer applies to all accounts at the same branch if a specific account is not specified.
The bank is the debtor of the customer, whether the customer has a current or deposit account.

 
CHT Ltd v Ward [1965] 2 QB 63
1965

Davies LJ
Contract
Davies LJ discussed whether a casino gave good consideration when supplying gambling chips to customers: "People do not game in order to win chips; they game in order to win money. The chips are not money or money's worth; they are mere counters or symbols used for the convenience of all concerned in the gaming."
1 Citers


 
Cranleigh Precision Engineering Ltd v Bryant [1965] 1 WLR 1293
1965

Roskill J
Contract
The parties drew up heads of agreement. The heads of agreement provided for the assignment by Mr Bryant of certain patents and designs in return for a royalty. They also provided that Mr Bryant and the company would enter into a service agreement on terms set out in the heads of agreement. Mr Bryant argued that the agreement was not binding because it was "subject to contract", although that phrase did not actually appear in the heads of agreement. Held: The court applied the principle in Von Hatzfeldt-Wildenstein, and decided, as a matter of construction, that the document was an immediately binding agreement.
1 Cites


 
Dungate v Dungate [1965] 1 WLR 1477
1965
CA
Diplock LJ
Limitation, Contract
A claim was made against the widow and administratrix of the deceased's estate by his surviving brother. The widow wrote to the creditor: "Keep a check on totals and amounts I owe you and we will have account now and then . . .Sorry I cannot do you a cheque yet. Terribly short at the moment" The court was asked whether this operated as an admission to extend the limitation period. Held: An acknowledgment will be sufficient if the amount for which the debtor accepts legal liability can be ascertained by extrinsic evidence.
1 Cites

1 Citers


 
Stoneleigh Finance Ltd v Phillips [1965] 2 QB 537
1965
CA
Davies LJ
Contract
The court was asked whether what purported to be a contract for the hire purchase of certain trucks was in truth an unregistered bill of sale over the trucks thereby disentitling the finance company from taking possession of the vehicles upon the hirer going into liquidation.
Davies LJ stated: "No authority is needed for the proposition that it is the duty of the court in any given case to look behind the form of any transaction such as that at present under consideration and to ascertain its real substance."
Sellers LJ described it as "the duty of the court to discover the true nature of the transaction".
1 Citers


 
Bartlett v Sidney Marcus Ltd [1965] 1 WLR 1013
1965

Lord Denning MR
Contract
A dealer will be bound by the implied condition in section 14(3) that a vehicle sold will be reasonably fit for the purpose as a vehicle to drive along the road.
Sale of Goods Act 1979 14(3)
1 Citers


 
In Re Jones Will Trusts [1965] 1 Ch 1124
11 Jan 1965
ChD
Buckley J
Contract, Trusts
Buckley J said that the words "unless the contrary intention applies" mean "unless the contrary appears from any surrounding circumstances which carry conviction to the mind of the court". He also agreed with the submission "that the evidence indicating a contrary intention must be strong".
1 Citers



 
 Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd; CA 3-Mar-1965 - [1965] 1 WLR 623; [1965] EWCA Civ 2; [1965] 2 All ER 65
 
Hardwick Game Farm v Suffolk Agricultural Poultry Producers Association [1966] 1 WLR 287
1966
CA
Diplock LJ
Contract, International
Feedstuff was sold by some merchants to a farmer. It was found to be defective. The farmer sued the merchants. The merchants brought in as third party the persons from whom they had purchased the feeding-stuff; they in their turn brought in their suppliers, and there was a long list of many parties brought in right down the chain. As between two of these suppliers a point arose as to whether a term that the buyer under the contract took the responsibility of any latent defects was a term which had been imported into the contract in question by reason of the course of dealing between those parties. There had been more than a hundred prior dealings between the parties, of a similar character, over a period of three years, in which an oral contract for the sale of goods had been followed by a confirmatory 'Sold-Note', sent the next day, by the seller to the buyer containing, on the reverse, 'Conditions of Sale'. The buyer's agent knew that there were conditions on the reverse, but had never read them. Held:
Diplock LJ said: "Where . . the parties have not agreed to embody their contract in a written document but have entered into an oral contract with the intention of thereby creating legal rights and liabilities and it is sought to rely upon a term contained in some written document as modifying the respective rights and liabilities which would arise by implication of law from the nature of the contract, the only question is whether each party has led the other reasonably to believe that he intended that the rights and liabilities towards one another which would otherwise arise by implication of law from the nature of the contract, namely, a contract for the sale of goods, should be modified in the manner specified in the written document."
Diplock LJ discussed the applicable lex situs: " . . The proper law governing the transfer of corporeal moveable property is the lex situs. A contract made in England and governed by English law for the sale of specific goods situated in Germany, although it would be effective to pass the property in the goods at the moment the contract was made if the goods were situate in England, would not have that effect if under German law (as I believe to be the case) delivery of the goods was required in order to transfer the property in them."
1 Citers


 
Nagle v Fielden [1966] 2 QB 633; [1966] 2 WLR 1027
1966
CA
Lord Denning MR
Contract
The applicant, a lady jockey appealed refusal by the Jockey Club to issue to her a jockey's license based simply on the fact of her sex. Held: Her appeal succeeded. The refusal was against public policy. Where a man's right to work was in issue, a decision of a domestic body which affected that right could be the subject of a claim for a declaration and an injunction even where no contractual relationship could be established. Lord Denning: "We live in days when many trading or professional associations operate "closed shops". No person can work at his trade or profession except by their permission. They can deprive him of his livelihood, When a man is wrongly rejected or ousted by one of these associations, has he no remedy? I think he may well have, even though he can show no contract. The courts have power to grant him a declaration that his rejection and ouster was invalid and an injunction requiring the association to rectify their error. He may not be able to get damages unless he can show a contract or a tort. But he may get a declaration and injunction." If those having the governance of a trade or profession "make a rule which enables them to reject his application arbitrarily or capriciously, not reasonably, that rule is bad."
1 Citers


 
Barton, Thompson and Co v Stapling Machines Co [1966] 2 All ER 222
1966
CA

Contract

1 Citers


 
Robophone Facilities Ltd v Bank [1966] 3 All ER 128; [1966] 1 WLR 1428
1966
CA
Lord Justice Diplock
Contract
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.
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Hare v Nicoll [1966] 2 QB 130; [1966] 1 All ER 285
1966
CA
Danckwerts LJ
Landlord and Tenant, Contract
In an option for the renewal of a lease, or for the purchase or re-purchase of property, the contractual right must be exercised strictly within the time limited for the purpose, otherwise it will lapse. Danckwerts LJ said: "The authority cited for that proposition is a very striking case, Dibbins v. Dibbins, a decision of Chitty J. In that case an option for a surviving partner to purchase a deceased partner's share had to be exercised within three months of his death. A notice within the three months was given by solicitors on behalf of the surviving partner, but he was of unsound mind, and therefore the notice was not effective. Under an order in lunacy, a fresh notice was given, but it was too late in time, and equally ineffective. The rule really is long established, as Ranelagh (Lord) v. Melton (a decision of Kindersley V-C) and other cases show."
1 Citers


 
Grist v Bailey [1967] Ch 532; [1966] 2 All ER 875; [1967] 1 Ch 532
1966


Contract
The parties believed that the property to be sold was occupied by a "protected tenant". This was not so since the property could have been sold with vacant possession. It was argued that the contract could be set aside for common mistake. Held: It was a common mistake as to an ascertainable fact, not a matter of opinion as to value.
1 Citers


 
Condor v Baron Knights [1966] 1 WLR 87
1966


Contract
The plaintiff had contracted with the defendants, but became ill and was unable to complete the contract. Held: His defence of frustration succeeded.
Law Reform (Frustrated Contracts) Act 1943 1(3)
1 Citers


 
Chaplin v Leslie Frewin (Publishers) Ltd [1966] Ch 71
1966

Denning LJ, Dankwerts LJ
Contract, Intellectual Property
It had been agreed that the defendant publishers should during the legal term of the copyright have the exclusive right of producing, publishing and selling a work in volume form in any language throughout the world. The author warranted that he was the owner of the copyright. Application was made to set aside an interlocutory judgment. Held: The words used were an "ample and effective to constitute an assignment", though Danwerts LJ also thought they might constitute an exclusive licence. Winn LJ unequivocally thought the words "should . . be regarded as, and given the effect of, an assignment of copyright".
Lord Denning (dissenting) thought that the agreement . . was an assignment of copyright; . . or at any rate it was the grant of an interest in the copyright" and "The law of this country for centuries has been that if anyone under the age of 21 makes, or agrees to make, a disposition of his property by a deed or document in writing, he may avoid it at any time before he comes of full age or within a reasonable time thereafter."
1 Citers



 
 Suisse Atlantique Societe d'Armement Maritime SA v NV Rotterdamsche Kolen Centrale; HL 1966 - [1967] 1 AC 361; [1966] 2 All ER 61
 
Beswick v Beswick [1966] Ch 538
1966
CA
Lord Justice Denning
Contract, Damages
The court was asked as to breach of an agreement to pay a man’s widow an annuity for life. Held: A plaintiff is entitled to no more than nominal damages in respect of the defendant's breach of a contract where the plaintiff himself has suffered no loss.
Lord Justice Denning said: "Old Peter Beswick was a coal merchant in Eccles, Lancashire. He had no business premises. All he had was a lorry, scales, and weights. He used to take the lorry to the yard of the National Coal Board, where he bagged coal and took it round to his customers in the neighbourhood. His nephew, John Joseph Beswick, helped him in his business. In March 1962, old Peter Beswick and his wife were both over 70. He had had his leg amputated and was not in good health. The nephew was anxious to get hold of the business before the old man died. So they went to a solicitor, Mr. Ashcroft, who drew up an agreement for them."
1 Citers


 
Chaplin v Leslie Fewin (Publishers) Ltd [1966] Ch 71
1966


Contract, Children
The basis of a child being held to a contract is where the contract allows him to start to earn a living.
1 Citers


 
Morris v CW Martin Ltd [1966] 1 QB 716
1966
CA
Diplock LJ, Lord Denning MR
Contract, Agency
Diplock LJ said: "The legal relationship of bailor and bailee of a chattel can exist independently of any contract." Where goods are lost or damaged, the burden is on the bailee (or sub-bailee) to "show - that the loss or damage caused without any neglect or default or misconduct of himself or of any of the servants to whom he delegated his duty."
1 Citers


 
D and C Builders Ltd v Rees [1966] 2 QB 617; [1965] EWCA Civ 3; [1965] 3 All ER 837; [1966] 2 WLR 28
1966
CA
Lord Denning MR, Dankwerts LJ
Contract, Estoppel
The plaintiff builders had been chasing payment of their undisputed invoice. Knowing that the builders were in financial difficulties, the defendant offered rather less, saying that if it was not accepted, she would pay nothing. She made the payment in full and final satisfaction of the debt. Held: The claim for the balance succeeded. The pressure applied had been improper, and there was no ground in equity to disentitle the plantiff recovering the rest.
When a debtor offers to pay only that which he admits he is already due to pay, that is not something which can amount to good consideration for the creditor abandoning the rest, save possibly in certain special circumstances. The doctrine of promissory estoppel only applies when it is inequitable for the creditor (or other representor) to insist on his full rights.
Lord Denning MR said: "This principle [the principle of promissory estoppel] has been applied to cases where a creditor agrees to accept a lesser sum in discharge of a greater. So much so that we can now say that, when a creditor and a debtor enter upon a course of negotiation, which leads the debtor to suppose that, on payment of the lesser sum, the creditor will not enforce payment of the balance, and on the faith thereof the debtor pays the lesser sum and the creditor accepts it as satisfaction: then the creditor will not be allowed to enforce payment of the balance when it would be inequitable to do so. This was well illustrated during the last war. Tenants went away to escape the bombs and left their houses unoccupied. The landlords accepted a reduced rent for the time they were empty. It was held that the landlords could not afterwards turn round and sue for the balance, see Central London Property Trust Ltd. v. High Trees House Ltd. This caused at the time some eyebrows to be raised in high places. But they have been lowered since. The solution was so obviously just that no one could well gainsay it.
In applying this principle, however, we must note the qualification: The creditor is only barred from his legal rights when it would be inequitable for him to insist upon them. Where there has been a true accord, under which the creditor voluntarily agrees to accept a lesser sum in satisfaction, and the debtor acts upon that accord by paying the lesser sum and the creditor accepts it, then it is inequitable for the creditor afterwards to insist on the
Danckwerts LJ said that the case of Foakes v Beer: "settled definitely the rule of law that payment of a lesser sum than the amount of a debt due cannot be a satisfaction of the debt, unless there is some benefit to the creditor added so that there is an accord and satisfaction."
1 Cites

1 Citers

[ Bailii ]
 
Mackender v Feldia AG [1967] 2 QB 590; [1966] 3 All ER 847
1966
CA
Diplock LJ, Denning MR
Contract
A clause provided that an insurance policy should be governed by Belgian law and that "any disputes arising thereunder shall be exclusively subject to Belgian jurisdiction." The underwriters avoided the contract for non-disclosure of material facts and submitted that the jurisdiction clause could no longer apply because there "is no contract and there was no contract when the Belgian proceedings were started. So the relations between the parties are no longer governed by the contract at all" per Mr R A MacCrindle QC. Held: The argument was that: "owing to the non-disclosure there was no true contract - no real consent by the underwriters - and that, on this basis, the contract itself falls down, including even the jurisdiction clause." That argument was rejected because there was a contract until avoidance and that the case was not like a case of "non est factum" when the foreign jurisdiction clause might not apply at all. A claim for innocent misrepresentation would have also been regarded as falling within the words "any dispute arising thereunder".
A collateral agreement, such as a jurisdiction clause, may be capable of taking effect even though the validity of the primary contract is in dispute, and a clause in an insurance policy submitting disputes "arising thereunder" to a foreign jurisdiction was wide enough to cover the question of whether the contract could be avoided for non-disclosure.
1 Citers


 
Cowey v Liberian Operations Ltd [1966] 2 Lloyd's Reps 45
1966


Contract
A unilateral notification by one party to the other, in the absence of agreement, cannot constitute a variation of a contract.
1 Citers


 
Coast Brick and Tile Works Limited and Others v Premchand Raichand Limited and Another [1966] UKPC 3; [1966] 2 WLR 781; [1967] 2 AC 187; [1967] 2 WLR 676; [1966] 1 All ER 819
31 Jan 1966
PC

Contract
(Eastern Africa)
[ Bailii ]
 
Lavarack v Woods of Colchester Ltd [1966] 3 All ER 683; [1967] 1 QB 278; 1 KIR 312; [1966] 3 WLR 706; [1966] EWCA Civ 4
19 Jul 1966
CA
Lord Denning MR, Diplock LJ, Russell LJ
Employment, Contract, Damages
The plaintiff had been wrongly dismissed. He came to be employed by Martindale at a lower salary, and bought shares in Martindale and Ventilation which increased in value. Held: The new salary and the increase in the value of the Martindale shares were brought to account, but not the increase in the value of the Ventilation shares, on the ground that that benefit was not a direct result of the dismissal but was an "entirely collateral benefit".
When looking at the damages to be awarded on a breach of contract by an employer, "the first task is to estimate . . what the Plaintiff would have gained . . if the defendant had fulfilled his legal obligation and had done no more."
The employment relationship does not give rise to any promise that an employee will receive any salary increases or even be considered for salary increases.
Diplock LJ qualified the principle that where the defendant in breach has the option of performing a contract in alternative ways, damages for breach by him must be assessed on the assumption that he will perform in the way most beneficial to himself and not in that most beneficial to the plaintiff, by stating that one "must not assume that [the defendant] will cut off his nose to spite his face and to control events so as to reduce his legal obligations to the plaintiff by incurring greater loss in other respects".
1 Citers

[ Bailii ]
 
Sydall v Castings Ltd [1967] 1 QB 302
1967
CA
Diplock LJ
Contract
There is a presumption that the words in the contract are used in a sense that they bear as legal terms of art, if they are reasonably capable of bearing such meaning in their context.
1 Citers



 
 Lavarack v Woods of Colchester Ltd; CA 1967 - [1967] 1 QB 278; [1966] EWCA Civ 4; [1966] 3 All ER 683; [1966] 1 KIR 312; [1966] 3 WLR 706
 
Snook v London and West Riding Investments Ltd [1967] 2 QB 786; [1967] 1 All ER 518; [1967] 2 WLR 1020
1967
CA
Diplock LJ
Contract
The court considered a claim by a hire-purchase company for the return of a vehicle. The bailee said the agreement was a sham. Held: The word "sham" should only be used to describe an act or document where the parties have a common intention that the act or document is not to create the legal relations and obligations which it purports to create.
Diplock LJ said: "As regards the contention of the plaintiff that the transactions between himself, Auto-Finance Ltd and the defendants were a 'sham', it is, I think, necessary to consider what, if any, legal concept is involved in the use of this popular and pejorative word. I apprehend that, if it has any meaning in law, it means acts done or documents executed by the parties to the 'sham' which are intended by them to give to third parties or to the court the appearance of creating between the parties legal rights and obligations different from the actual legal rights and obligations (if any) which the parties intend to create. But one thing I think, however, is clear in legal principle, morality and the authorities . . that for acts or documents to be a “sham”, with whatever legal consequences follow from this, all the parties thereto must have a common intention that the acts or documents are not to create the legal rights and obligations which they give the appearance of creating. No unexpressed intentions of a 'shammer' affect the rights of a party whom he deceived."
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Ward v Bignall [1967] 1 QB 534
1967
CA
Diplock LJ
Contract
In modern times very little is required to give rise to the inference that the property in specific goods is to pass only on delivery.


 
 Marshall v Goulston Discount (Northern) Ltd; 1967 - [1967] Ch 72
 
F and G Sykes (Wessex) v Fine Fare Ltd [1967] 1 Lloyds Rep 53
1967
CA
Danckwerts LJ, Lord Denning MR
Contract
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 thereafter such other figures as may be agreed between the parties”. The agreement provided for a reference to an arbitrator in the event that there was a dispute between the parties. Held: The agreement was binding.
Danckwerts LJ contrasted a difference between the parties which was a mere failure to agree, with a dispute.
Lord Denning said of the contract: "The provision that figures were "to be agreed" does not nullify the contract". In a commercial agreement the further the parties have gone on with their contract, the more ready are the courts to imply any reasonable term so as to give effect to their intentions: "When much has been done the courts will do their best not to destroy the bargain."
1 Citers



 
 Lovelidge v Anselm Odling and Sons Ltd; 1967 - [1967] 2 QB 351
 
Sinclair v Neighbour [1967] 2 QB 279
1967
CA
Sellers LJ, Davies LJ, Sachs LJ
Contract, Employment
The manager of a betting shop took £15 from the shop till for the purpose of gambling; he knew that he would not have been given permission to do so if he had asked. He put an IOU in the till and repaid the money next day. He was summarily dismissed. The employer now appealed against his successful claim in the County Court his action having been found improper and reprehensible but not dishonest. Held: The appeal suceeded. Although the employer had pleaded dishonesty, it did not matter whether the conduct was labelled as dishonest or not; it was seriously inconsistent and incompatible with the employee's duty. Sellers LJ said: "The whole question is whether that conduct was of such a type that it was inconsistent, in a grave way – incompatible – with the employment in which he had been engaged as a manager."
Davies LJ said: "With the greatest respect to the judge, I think that he fell into error in attaching too much weight to the label and not enough to the facts. The facts were established. The fact that the manager took the money from his employer's till behind his back knowing that the employer would not consent was established; and it seems to me that it does not really matter very much whether that justifies the label "dishonest" or not The judge ought to have gone on to consider whether even if falling short of dishonesty the manager's conduct was nevertheless conduct of such a grave and weighty character as to amount to a breach of the confidential relationship between master and servant, such as would render the servant unfit for continuance in the master's employment and give the master the right to discharge him immediately."
Sachs LJ referred to the "well established law that a servant can be instantly dismissed when his conduct is such that it not only amounts to a wrongful act inconsistent with his duty towards his master but is also inconsistent with the continuance of confidence between them."
1 Citers



 
 Harlow and Jones v Panex (International) Ltd; ChD 1967 - [1967] 2 Lloyd's Rep 509
 
Coulls v Bagot's Executor and Trustee Co Ltd (1967) 119 CLR 460
21 Mar 1967

Barwick C.J.(1), McTiernan(2), Taylor(3), Windeyer(4) and Owen(3) JJ
Commonwealth, Contract, Damages
(High Court of Australia) The court considered an action for damages by a party to a contract to enforce an obligation intended to benefit another. Held: Windeyer J: " I can see no reason why in such cases the damages which A would suffer upon B's breach of his contract to pay C $500 would be merely nominal: I think that in accordance with the ordinary rules for the assessment of damages for breach of contract they could be substantial. They would not necessarily be $500; they could I think be less or more."
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[ Austlii ]
 
Beswick v Beswick [1968] AC 58; [1967] 3 WLR 932; [1967] 2 All ER 1197 HL(E); [1967] UKHL 2
29 Jun 1967
HL
Lord Reid, Lord Hodson, Lord Guest, Lord Pearce, Lord Upjohn
Damages, Contract
The deceased had assigned his coal merchant business to the respondent against a promise to pay £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 Act, the 1925 Act should not be read to change the common law. Held: The House ordered specific performance of the contract on behalf of the estate though it was to make payments of money to a third party, recognising that the innocent party to the breach of contract had a legitimate interest in having the contract performed even though he himself would suffer no financial loss from its breach.
Lord Guest: "as this is a consolidating Act, if the words are capable of more than one construction, then the Court will give effect to that construction which does not change the law. "
Law of Property Act 1925 56(1)
1 Cites

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[ Bailii ]

 
 Czarnikow (C ) Ltd v Koufos; The Heron II; HL 17-Oct-1967 - [1967] 3 All ER 686; [1969] 1 AC 350; [1967] 3 WLR 1491; [1967] UKHL 4

 
 Partridge v Crittenden; QBD 1968 - [1968] 2 All ER 421; [1968] 1 WLR 1204
 
Charnock v Liverpool Corporation and Kirbys (Commercial) Ltd [1968] 1 WLR 1498; [1968] 3 All ER 473
1968
CA
Salmon, Harmon LJJ
Insurance, Contract
When an insured Vehicle was sent for repairs with the assent of an insurer, there were two separate contracts which arose in respect of the repairs. The first contract was between the insurer and the repairer that the insurer would pay for the repairs. The second contract was between the insured and the repairer that the repairs would be carried out by the repairer with reasonable care and expedition. Where the contract does not specify the time within which works are to be completed a term will be implied which binds the contractor to complete within a reasonable time.
Harman LJ said: "the judge held that the repairers were liable because they had impliedly contracted with the plaintiff to do the work within a reasonable time and, not having done so, they were in breach of their contract in that respect.
The fact that the insurance company will indemnify the owner is well known in all insurance cases to both parties. The practice has grown up that the insurance company shall agree the sum for which they will stand surety and a contract is very often made by the repairer with the insurance company. Let it be so in this case. That does not in my view at all rule out the existence of a contract between the person who owns the car and the repairers. The owner takes the car in to the repairers and he asks them to repair it, at whatever cost the insurance company will be willing to go to, and everybody knows that the insurance company will within that limit pay. Whether there is any obligation on the owner himself to pay if the insurance company does not is another matter; but I cannot see why there is, as regards the owner, not a contract on which the repairers are liable first, if they do not do the work with reasonable skill and secondly, if they do notdo it within a reasonable time; and it is on that contract that the present case turns.
The court I think, was inclined to take the view that the judge, who held that there were two contracts, one between the insurers and the repairers and one between the plaintiff and the repairers, was clearly right.
It seems to me that it is quite reasonable to leave standing the view that there was a contract between the repairers and the insurance company and that the only person liable to pay on that was the insurance company."


 
 The Chaparral; CA 1968 - [1968] 2 Lloyds Rep 158
 
United Dominions Trust (Commercial) Ltd v Eagle Aircraft Services Ltd Ltd; United Dominions Trust (Commercial) Ltd v Eagle Aviation Ltd [1968] 1 All ER 194; [1968] 1 WLR 74
1968
CA
Denning MR, Diplock LJJ
Contract
An aircraft manufacturer was obliged under contract to buy back an aircraft from a hire purchase company on three conditions. (1) when the hire purchase company foreclosed on the purchasers, (2) where the manufacturer had been given notice of the purchasers’ defaults and (3) (implied by the Court of Appeal) where the buyback was called within a reasonable time. It was held that due to non-compliance with (2) and (3) the hire purchase company could not enforce the option. Held: Lord Denning MR said: "In point of legal analysis, the grant of an option in such cases is an irrevocable offer (being supported by consideration so that it cannot be revoked). In order to be turned into a binding contract, the offer must be accepted in exact compliance with its terms. The acceptance must correspond with the offer." Diplock LJ: "Accordingly, the event giving rise to Eagle’s unilateral obligation to buy the aircraft has not occurred and can never occur. There is no obligation: there can be no breach. The action must fail." A unilateral offer capable of acceptance so as to create a binding obligation was referred to as an “if” contract: I will do or refrain from doing x if you will do or refrain from doing y. It can be “accepted” and so become binding by the promisee doing or refraining from doing y. An offer by the defendant was open to acceptance by the claimant only if the acceptance was in exact compliance with the terms of the offer.
1 Cites

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Jaques v Lloyd D George and Partners [1968] CLY 35
1968


Contract

1 Citers


 
Wraight Limited v PH and T (Holdings) Limited (1968) 13 BLR 29
1968


Contract

1 Citers


 
In Re Spenborough Urban District Council's agreement; Spenborough Corporation v Cooke Sons and Company Ltd [1968] Ch 139
1968
ChD
Buckley J
Contract
A contract regulating the flow of industrial effluents into a public sewer contained no power of termination notwithstanding that the agreement it replaced did. Held: There is no presumption in law that a joint venture is not terminable.
Buckley J said: "Since ex hypothesi such an agreement contains no provision expressly dealing with determination by the party who asserts that this should be inferred, the question is not one of construction in the narrow sense of putting a meaning on language which the parties have used, but in the wider sense of ascertaining, in the light of all the admissible evidence and in the light of what the parties have said or omitted to say in the agreement, what the common intention of the parties was in the relevant respect when they entered into the agreement. It is of the nature of this problem that he who asserts that the parties intended something which they omitted to state expressly must demonstrate that this was so. Counsel for the Corporation accepts this. The court does not, however, in my judgment, lean one way or the other. Lord Selbourne in Llanelly Railway and Dock Company and London and North Western Railway Company and James LJ in the same case in the Court of Appeal said, I think, nothing inconsistent with this (see per Lord McDermott in Winter Garden Theatre (London) Ltd v. Millennium Productions Ltd). An agreement which is silent about determination will not be determinable unless the facts of the case, such as the subject-matter of the agreement, the nature of the contract or the circumstances in which the agreement was made, support a finding that the parties intended that it should be determinable, but there is, in my judgment, no presumption one way or the other."
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Ladyman v Wirral Estates Limited [1968] 2 All ER 197
1968

Fisher J
Contract
Though there was a presumption that "Where under a contract a period of time is expressed to run from a certain day, or to begin on a certain day, the day named is generally excluded in computing the period", that presumption was rebuttable.


 
 Walters v Whessoe; CA 1968 - [1968] 1 WLR 1056
 
Henry Kendall and Sons v William Lillico and Sons Ltd [1968] UKHL 3; [1969] 2 AC 31
8 May 1968
HL
Lord Reid, Lord Morris of Borth-y-Gest, Lord Guest, Lord Pearce, Lord Wilberforce
Contract
The plaintiff had purchased quantities of turkey feed from the defendant. It contained a poisonous element, spores of a fungus aspergillus flavus, which killed its flock. The House was asked as to the effect of section 14 of the 1893 Act on the contract.
Lord Pearce observed that the court's task is to decide what each party to an alleged contract "would reasonably conclude from the utterances, writings or conduct of the other", elaborating: "The question, therefore, is not what [the respondent] SAPPA themselves thought or knew about the matter but what they should be taken as representing to Grimsdale about it or leading Grimsdale to believe"
Sale of Goods Act 1893 14
1 Cites

[ Bailii ]

 
 Jones v Padavatton; CA 29-Nov-1968 - [1969] 1 WLR 328; [1969] 2 All ER 616; [1968] EWCA Civ 4
 
Margarine Union GmbH v Cambay Prince Steamship Co Ltd [1969] 1 QB 219
1969

Roskill J
Transport, Contract, Negligence
The practice of issuing delivery orders for parcels out of a bulk cargo were ineffective and the intended buyers were left without remedy against the carrier.
Roskill J said: "In my judgment, there is nothing in Hedley Byrne to affect the common law principle that a duty of care which arises from a risk of direct injury to person or property is owed only to those whose person or property may foreseeably be injured by a failure to take care. If the plaintiff can show that the duty was owed to him, he can recover both direct and consequential loss which is reasonably foreseeable, and for myself I see no reason for saying that proof of direct loss is an essential part of his claim. He must, however, show that he was within the scope of the defendant's duty to take care."
1 Citers


 
Whitworth Street Estates (Manchester) Ltd v James Miller and Partners Ltd [1969] 1 WLR 377
1969
CA
Lord Denning MR, Davies LJ
Contract
The parties, one in England and one in Scotland agreed to perform certain actions in Scotland. Any dispute was to be settled by arbitration, but it was not said whether this would be in England or Scotland. The curial law of arbitration would decide whether an appeal lay to the High court in England or the Court of Session In Scotland. Held: The crucial question in determining what was the law governing the contract was to ask: "what is the system of law with which the transaction has the closest and most real connection? "
Lord Denning MR: "I am confirmed in this view by the subsequent conduct of the parties. This is always available to aid the interpretation of a contract and to find out its closest connections. On two occasions the parties seem to have assumed that the transaction was governed by English law."
Widgery LJ agreed that English was the proper law of the contract: "To solve a problem such as arises in this case one looks first at the express terms of the contract to see whether that intention is there to be found. If it is not, then in my judgment the next step is to consider the conduct of the parties to see whether that conduct shows that a decision in regard to the proper law of the contract can be inferred from it. If the parties' conduct shows that they have adopted a particular view with regard to the proper law, then it may be inferred that they have agreed that that law shall govern the contract accordingly."
1 Citers



 
 Christopher Hill Ltd v Ashington Piggeries Ltd; CA 1969 - [1969] 3 All ER 1496
 
Blake and Co. v Sohn [1969] 3 All ER 123
1969

Nield J
Contract, Agency
The defendant had falsely represented to their estate agents that they had been in undisputed exclusive possession of part of the land to be sold for 20 years and were able to prove title for the land. In fact, there was a long running dispute about title to the land. Contracts were exchanged but the sale could not be completed because of the vendors' inability to complete the purchase. The purchaser successfully sued for rescission of the contract, whereupon the estate agents sued for their commission or damages. The estate agents contended, inter alia, that there was an implied term in the agreement between themselves and the vendors to the effect that the vendors had and would make out a good title to the property. Held: Nield J rejected the contention. There was no justification for implying such a term. The representation as to undisputed possession did not amount to fraud.
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Gallie v Lee [1969] 2 Ch 17 (CA)
1969
CA
Danning MR
Contract
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 had forged his signature. No one can claim title under it, not even an innocent purchaser who bought on the faith of it, nor an innocent lender who lent his money on the faith of it. No matter that this innocent person acted in the utmost good faith, without notice of anything wrong, yet he takes nothing by the document."
1 Citers



 
 Branwhite v Worcester Works Finance Ltd; HL 1969 - [1969] 1 AC 552
 
Denmark Productions Ltd v Boscobel Productions Ltd [1969] 1 QB 699
1969
CA
Salmon, Sachs, Winn LJJ
Contract, Damages
Where the award of damages at law may be inadequate, the court may order an account to be taken to determine precisely what is owing by one party to the other.
Salmon LJ doubted whether an unaccepted repudiation could bring an end to a contract of employment in law "although no doubt in practice it does". In law, he thought that the position was (i) that the contract continued in being, (ii) that it would not, however, be specifically enforced because the employee had not worked and had not therefore earned his remuneration; (iii) that the employee's only remedy was to sue for his lost wages as damages for the employer's breach in preventing him from earning them (presumably from time to time as they would have fallen due); and (iv) that the only thing that prevented the employee from sitting idle for the rest of the contractual term and collecting damages equal to his lost wages was the condition that he should have taken reasonable steps to mitigate his loss by finding alternative employment.
He descibed the docrine of frustration, saying: “This was a doctrine evolved by the Courts to meet the case in which a contract became impossible through some supervening event, not reasonably foreseeable when the contract was made and for which neither contracting party was in any way responsible”.
Sachs LJ agreed, observing that "In such cases it is the range of remedies that is limited, not the right to elect."
Winn LJ said: "Where A and B are parties to an executory contract, if A intimates by word or conduct that he no longer intends, or is unable, to perform it, or to perform it in a particular manner, he is, in effect, making an offer to B to treat the contract as dissolved or varied so far as it relates to the future. If B elects to treat the contract as thereby repudiated, he is deemed, according to the language of many decided cases, to ‘accept the repudiation’ and is thereupon entitled (a) to sue for damages in respect of any earlier breach committed by A and for damages in respect of the repudiation, (b) to refrain from himself performing the contract any further."
1 Citers


 
A/B Helsingfors Steamship Co Ltd v Rederiaktiebolaget Rex (The White Rose) [1969] 2 Lloyds Rep 52; [1969] 1 WLR 1098
1969

Donaldson J
Contract, Transport
A Finnish vessel had been ordered to load in Duluth, Minnesota, where Mr de Chambeau, an employee of charterers' stevedores was injured while on board. He had left his proper place for purposes unconnected with his work, but owners were liable to him under Minnesota law on the ground that the part of the ship where he had gone lacked fencing. The owners were, it seems, in breach of Finnish law in this respect, but that was expressly disregarded as being irrelevant. Donaldson J nonetheless agreed with the umpire that owners' indemnity claim failed because "what connected the accident with, and gave rise to, a potential liability and an actual loss was the provisions of Minnesota law". There was lacking "the necessary causal connection between the order to load and the loss"
Donaldson J said of clause 13 in the Baltime charter: "The indemnity afforded by this clause is clearly wide enough to cover loss incurred by reasonable settlement."
1 Citers


 
Van Lynn Developments Ltd v Pelvis Construction Co Ltd [1969] 1 QB 607
1969


Contract
A notice of an assignment of a debt need not state the date of the assignment.
Law of Property Act 1925 136
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United Dominions Corporation (Jamaica) Ltd v Shoucair [1969] 1 AC 340
1969
PC
Lord Devlin
Contract
(Jamaica) A moneylending law required, for the enforceability of a loan bearing interest at more than ten per cent, a written memorandum containing all the terms of the loan with the borrower's signature. A bank lent money at nine per cent secured by a mortgage which was enforceable. Later it sent a circular letter to borrowers raising the rate of interest to eleven per cent; the letter was unenforceable. The bank wanted to enforce the original mortgage at nine per cent. Held: the question whether an unenforceable agreement avoided the original mortgage depended upon the intention of the parties and, as there was no intention to rescind the original mortgage, it remained in force unamended.
Lord Devlin said: "the difficulty about enforcing the original mortgage in this case is that, although itself untouched by the statute, it is no longer the real contract between the parties. In reality, although the statute prevents reality from being proved, there is no longer a mortgage at 9% but one at 11%. Since, however, the real contract is not evidenced in the way required by the moneylending law, it cannot be enforced. This is the approach made by Douglas J in the Supreme Court and by Lewis J, who gave the leading judgment for the majority in the Court of Appeal.
Another way of arriving at the same result is to treat a variation of contract as something that necessarily requires the rescission of the old contract and the substitution of a new one. On this view the old contract cannot be enforced because it has been rescinded and the new contract cannot be enforced because it is not properly evidenced. This was the conclusion reached by the Divisional Court in Williams v Moss' Empires [1915] 3 KB 242 and adopted by the Court of Appeal in Morris v Baron [1918] AC 1. As Sankey J put it in the former case: "The result of varying the terms of an existing contract is to produce, not the original contract with a variation, but a new and different contract." The disadvantage of this view is that a minor variation may destroy the effect of the whole of the transaction between the parties. The alternative view, adopted by the House of Lords in Morris v Baron and again in British and Benningtons Limited v NW Cachar Tea Company Limited [1923] AC 48 (where Lord Sumner referred to the former view as possibly correct "as a matter of formal logic"), is based on the intention of the parties. They cannot have that which presumably they wanted, that is, the old agreement as amended; so the court has to make up its mind which comes nearer to their intention – to leave them with an unamended agreement or without any agreement at all. The House answered this question by rejecting the strict view propounded by Sankey J and distinguishing between rescission and variation. If the new agreement reveals an intention to rescind the old, the old goes; and if it does not, the old remains in force and unamended . . If the principle in Morris v Baron applies to this case, the mortgage of April 22 remains in force. The contrary has not been and could not be argued. It would be impossible to contend that a temporary variation in the rate of interest reveals any intention to extinguish the debt and the mortgage . . The choice before the board lies between solving the problem by means of what Lord Sumner called formal logic or solving it by giving effect as far as possible to the intention of the parties as was done in Morris v Baron."
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Fielding and Platt Ltd v Selim Najjar (1969) 113 Sol Jo 160; [1969] 1 WLR 357; [1969] 2 All ER 150
17 Jan 1969
CA
Lord Denning MR, Davies, Widgery LJJ
Contract, Banking
The plaintiff company had contracted to make and export to the defendant an aluminium extrusion press. The defendant re-assured the plaintiff that it would be lawful for him to import the plant, but asked that the plant be described falsely on the invoice as 'parts for rolling mill'. Payment was made by promissory notes. After the first two promissory notes had not been met, the plaintiff ceased production, and sued on the notes and succeeded summarily. The defendant appealed. Held: The plaintiff was entitled to payment under the first note, because it had performed its obligations under the contract, and there was no failure of consideration. However there was no such completed consideration for the second promissory note, and the defendant should be allowed to defend.
The request to mis-invoice the goods, if illegal, was severable, and did not undermine the contract as a whole. To succeed in their defence of illegality, the defendant had to show that the plaintiff was aware that performance by importing the plant would be illegal, and had agreed to go ahead notwithstanding that illegality. That had not been demonstrated in this case.
An innocent party who is ignorant of the facts or circumstances that would make performance of a contract illegal may be allowed to recover money paid by him under the illegal contract.
Only in exceptional circumstances should a court deprive a claimant of judgment on a claim based on a promissory note.
Lord Denning MR said: "The plaintiffs, Fielding and Platt Ltd are manufacturers of machinery. Their business is in Gloucester. In the middle of 1965 they entered into a contract with a Lebanese company called SCIALE Aluminium of Lebanon. They agreed to make and sell to the Lebanese company an aluminium extrusion press for a total sum of £235,000. The plant and equipment was to be delivered free on board at a British port. The time for delivery was 10 1/2 months from 19 June 1965. Payment was to be made by six promissory notes given by the defendant, the managing director of the Lebanese company, Mr Selim Najjar, personally; and he deposited shares, of his own, as security for the due payment of the promissory notes. The promissory notes were payable at intervals during the progress of the work. The first four were payable whilst the plaintiffs were making the machinery in England. Thus the first note was payable on 4 October 1965, for £23,500; the second on 4 December 1965, for £47,000, the third on 4 February 1966, for £47,000; and the fourth on 4 April 1966, for another £47,000. The fifth note was payable on 4 June 1966, for £47,000, which was just about the time when the machinery was to be delivered to the port. The sixth note, the final one, for £23,500, was payable on 4 August 1966.
On 4 October 1965, the first promissory note, for £23,500, fell due. It was not paid. The defendant apologised for not paying it. He asked for a few days' grace. He said that had been agreed. So be it. He was given a few days-indeed more than a few days. Still he did not pay. When the note was a fortnight overdue he wrote on 18 October 1965: "It is my estimate that by the middle of next month all will be arranged and I will be able to proceed with the payments." He realised that his non-payment might result in delays on the English side, for he added: "Please remember that any delays on your part due to delayed payments will be acceptable." When the note was more than three weeks overdue, the plaintiffs decided to suspend work on the contract. On 27 October 1965, they cabled to the Lebanese company:
"We have today suspended all work on your contract with us and this includes notification to all our material suppliers that they must do no further work on this contract. We have been forced to take this action to comply with the requirements of our authorities. Our current financial commitment to material and equipment suppliers plus design and stock material and labour charges, is extremely heavy. We trust you appreciate that this is your liability. As a result of suspending all work you will appreciate that our delivery date will be considerably extended and the amount of the delay will depend on the time taken for you to resolve your difficulties."
The defendant never paid the first promissory note or any of the others. He never paid anything. In consequence, the plaintiffs suspended work on the contract, and it remained suspended. No further work was done on it. There were negotiations for a revival of the contract, but they came to nothing.
Stopping there, it is quite plain to me that the defendant was liable to pay the first of the promissory notes. We have repeatedly said in this court that a bill of exchange or a promissory note is to be treated as cash. It is to be honoured unless there is some good reason to the contrary. It is suggested that, on the first note, there was a failure of consideration. That suggestion is quite unfounded. The plaintiffs were getting on with their part of the contract. They were, they say, ordering goods from their suppliers and getting on with the work. At any rate, there is no evidence to the contrary; and, unless they were themselves in default, they were clearly entitled to payment of the first note. The position as to the second note is different. Before it fell due, the defendant said: "I cannot pay"; and the plaintiffs replied: "We, therefore, suspend work." Seeing that the plaintiffs had suspended work, they could not claim payment in full, but at most damages. They could not sue on each note as it fell due-each of the six-when they had suspended all work on the contract. So there is an available defence on the second note. But not on the first note.
This brings me to the second point. In answer to the claim in both notes, the defendant raises a defence of illegality. He says that it was his intention to break the laws of the Lebanon and that the plaintiffs were parties to it. In order to import the extrusion press into the Lebanon, he had to get an import licence from the Lebanon authorities. He had already got a licence to import a two million pound rolling mill, but he had not got a licence to bring in an extrusion press. His intention was to import it without a licence, and he says that the plaintiffs agreed to help him to do so. The plaintiffs agreed, he says, to put in a false invoice. He says: "I asked you to invoice the press as part of a rolling mill, and you agreed to it, and, therefore, you cannot recover anything." That defence does not commend itself to me. Here is a man who prays in aid his own illegality-he admits he was trying to evade the laws of his own country-and he seeks to implicate the plaintiffs in it.
In order for this to be any kind of defence, he must show first of all that the contract contained a term that the plaintiffs were to give a false invoice; so that it could not lawfully be performed. For if it would be lawfully performed (by giving a correct invoice) the plaintiffs can certainly sue on it. I do not think there was any such term. During the negotiations the Lebanese company did ask the plaintiffs to invoice the press as "parts for rolling mill". But this request did not, as I read the correspondence, become a term of the contract. The contract was concluded on 13 July 1965. And the only subsequent reference was contained later in the confirmation which the plaintiffs sent to the Lebanese company. There was a long detailed description of the goods covering many pages and then, in brackets, were the words ("to be invoiced as 'parts for rolling mill'"). That was a mere notification by the Lebanese company of the way they wanted an invoice made out. It was not a term of the contract itself. The plaintiffs would therefore quite justifiably refuse to give such invoice, and insist on the contract being lawfully performed.
In the second place, even if it were a term, the defendant would have to show that the plaintiffs were implicated in this illegality, that is that they had knowledge of it and were actively participating in it, see Foster v Driscoll, Lindsay v Attfield, Lindsay v Driscoll ([1929] 1 KB 470 at p 518; [1928] All ER Rep 130 at pp 146, 147) per Sankey LJ. I can see no evidence worthy of the name to suggest that the plaintiffs knew of this illegality. The only evidence is contained in a cable about the import licence. On 16 June 19658 the plaintiffs stated that they were agreeable to the proposed contract "subject to evidence of satisfactory importing licence arrangements". The Lebanese company replied:
"Concerning our import licence, we have a regular import licence for a total amount of two million sterling, for a complete aluminium plant. This licence is more than what we require for an extrusion press, and since we don't want to lose our right for the remaining amount, we want the material to be invoiced as 'parts for rolling mill'. This of course is for local consumption. We discussed these details with your representative here, and will make sure that you do the correct thing when the time comes. Please bear in mind that few items (just any thing) of the total order should be in Beirut the first week of October the latest, because our licence is valid until October 24, 1965, and before that date something should have arrived."
I do not think that cable was enough to give the plaintiffs knowledge of the illegality. It only shows that the Lebanese company thought it convenient, for local consumption, to have the machines invoiced as parts for a rolling mill, instead of the more accurate description of an aluminium extrusion press.
I cannot help remarking that the defendant seems to have a special fondness for false invoices. At a later stage he suggested that the plaintiffs should give an invoice for only half the cost, instead of the whole; so as to save customs duties. He also suggested that the plaintiffs should write a false letter (which he drafted) to show the Lebanese customs authorities. The plaintiffs very properly did not agree to those suggestions. And when the matter finally came to a head, the plaintiffs firmly said: "We must invoice the goods correctly." I know there is a suggestion in the affidavit of the defendant that the plaintiffs were implicated, but, in the face of the documents, I see no substance in this suggestion.
There is another point: even if there was a term that these goods should be invoiced falsely in order to deceive the Lebanese authorities, I do not think it would render the whole contract void. That term would be void for illegality. But it can clearly be severed from the rest of the contract. It can be rejected, leaving the rest of the contract good and enforceable. The plaintiffs would be entitled, despite the illegal term, to deliver the goods FOB English port, and send a true and accurate invoice to the Lebanese buyer. The Lebanese buyer could not refuse the goods by saying "I stipulated for a false invoice". He could not rely on his own iniquity so as to refuse payment.
In my opinion, therefore, the defence of illegality is clearly bad. I would allow judgment to be entered on the first note and for the interest thereon; and give leave to defend as to the second."
Davies LJ said: "I agree with the result reached by Lord Denning MR and I do not propose to add anything."
Widgery LJ said: "I also agree. I find each of the main issues in this case one of some difficulty and I am much indebted to counsel for the defendant for his argument; but in the end I have concluded that they are sufficiently determined to justify judgment under RSC, Ord 14 in respect of the amount of the earlier promissory note. So far as the allegation of illegality is concerned, there are I think two independent and sufficient answers to it. First, in order to succeed on this question, the defendant must show that the plaintiffs were aware of the illegal purpose in the falsification of the invoice and that they agreed actively to participate in that purpose so that goods could be illegally imported into the Lebanon which would not otherwise be allowed to enter. The only basis on which it is said that the plaintiffs at any material time had knowledge of that illegal purpose is the telex message of 18 June from the Lebanese company, to which Lord Denning MR has referred. If I may just repeat again the essential words, they were replying to an enquiry from the plaintiffs as to their import licence, and they stated:
“We have a regular import licence for a total amount of two million sterling, and for a complete aluminium plant. This licence is more than what we require for an extrusion press and since we don't want to lose our right for the remaining amount, we want the material to be invoiced as' parts for rolling mill'. This, of course, is for local consumption . . “
When that was first read to us, for my part I found it quite incomprehensible, and it is not until one gets further in the correspondence that the real point of it becomes clear. The plaintiffs, of course, had to judge the legality or illegality of what was proposed, without the benefit of the correspondence which developed months later as to the terms of that telex message. I can see no reason whatever to suppose that the plaintiffs should see more in that message than that the invoice was to indicate that the goods were part of a larger matter, which in itself would not involve any illegality that I can see. It is only later that one appreciates that the character of the goods may be of some relevance, and if the plaintiffs did agree to invoice the goods as part of a larger whole, I cannot for my part see that that would involve them in any illegality sufficient to excuse the defendant from liability in this case. Alternatively, as Lord Denning MR has said, I am of the opinion that there was no term in this contract requiring the plaintiffs to invoice the goods as part of a rolling mill. The chief contractual document is a formal and lengthy quotation which the plaintiffs submitted to the defendant setting out details of the machine to be supplied; and on 13 July the Lebanese company accepted that quotation in these words:
“please consider this letter as an official order based on your quotation of July 5, 1965 and our different telexes to which you have given your agreement.”
At that point there was nothing in the contractual documents to imply an obligation on the plaintiffs to invoice the goods as part of a rolling mill. Counsel for the defendant has referred to the telexes mentioned in that letter, but there was no agreement by the plaintiffs to any telex involving a special form of invoicing. When the plaintiffs received that acceptance of their offer, they sent a formal and detailed confirmation; and it is to be observed that under the terms of their agreement no contract was to be binding on them until that confirmation had been given. In my judgment, that was no more than a confirmation of that which was already agreed, and it would be quite unreal to regard it as a counter-offer containing a new term whereby the goods were to be invoiced as part of a rolling mill.
On the second issue, namely, the failure of consideration, for which the notes were given, my opinion is that these notes were given by the defendant in consideration of the plaintiffs entering into the agreement with the Lebanese company and carrying out that agreement. It is arguable that if counsel for the defendant can sustain his contention that the plaintiffs repudiated the contract in November and that that repudiation was accepted by the Lebanese company, then perhaps it can be shown that liability on bills maturing after the date of the repudiation had itself been determined; but, like Lord Denning MR I can see no possible ground on which it can be said that the consideration for the first bill, which would mature in October 1965, at a time when the plaintiffs were in no way in default, can have been rendered wholly ineffective by virtue of that which followed.
I also would accordingly allow the appeal to the extent that judgment should be entered only in respect of the amount of the first bill and interest thereon."
1 Cites



 
 Lothian v Jenolite; SCS 6-Feb-1969 - 1969 SC 111; [1969] ScotCS CSIH - 1; [1970] SLT 31
 
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