swarb.co.uk - law index

Contract - From: 1970 To: 1979

This page lists 208 cases, and was prepared on 20 May 2019.

"It is because the obligation of the guarantor is to see to it that the debtor performed his own obligations to the creditor that the guarantor is not entitled to notice from the creditor of the debtor's failure to perform an obligation which is the subject of the guarantee, and that the creditor's cause of action against the guarantor arises at the moment of the debtor's default and the limitation period then starts to run."

He continued: "It follows from the legal nature of the obligation of the guarantor to which a contract of guarantee gives rise that it is not an obligation himself to pay a sum of money to the creditor, but an obligation to see to it that another person, the debtor, does something; and that the creditor's remedy for the guarantor's failure to perform it lies in damages for breach of contract only. That this was so, even where the debtor's own obligation that was the subject of the guarantee was to pay a sum of money, is clear from the fact that formerly the form of action against the guarantor which was available to the creditor was in special assumpsit and not in indebitatus assumpsit... Mines v. Sculthorpe (1809) 2 Camp.215.

The legal consequence of this is that whenever the debtor has failed voluntarily to perform an obligation which is the subject of the guarantee the creditor can recover from the guarantor as damages for breach of his contract of guarantee whatever sum the creditor could have recovered from the debtor himself as a consequence of that failure. The debtor's liability to the creditor is also the measure of the guarantor's."
Lord Reid said: "With regard to making good to the creditor payments of instalments by the principal debtor there are at least two possible forms of agreement. A person might undertake no more than that if the principal debtor fails to pay any instalment he will pay it. That would be a conditional agreement. There would be no prestable obligation unless and until the debtor failed to pay. There would then on the debtor's failure arise an obligation to pay. If for any reason the debtor ceased to have any obligation to pay the instalment on the due date then he could not fail to pay it on that date. The condition attached to the undertaking would never be purified and the subsidiary obligation would never arise.
On the other hand, the guarantor's obligation might be of a different kind. He might undertake that the principal debtor will carry out his contract. Then if at any time and for any reason the principal debtor acts or fails to act as required by his contract, he not only breaks his own contract but he also puts the guarantor in breach of his contract of guarantee. Then the creditor can sue the guarantor, not for the unpaid instalment but for damages. His contract being that the principal debtor would carry out the principal contract, the damages payable by the guarantor must then be the loss suffered by the creditor due to the principal debtor having failed to do what the guarantor undertook that he would do."
1 Citers


 
Trollope and Colls Limited v North West Metropolitan Regional Hospital Board [1973] 1 WLR 601; [1973] 2 All ER 260
1973
HL
Lord Pearson, Lord Guest, Lord Diplock
Contract
The court was requested to imply a term into a building contract. Held: The term could not be implied, since at least four alternatives might also be implied.
Lord Pearson said: "[T]he court does not make a contract for the parties. The court will not even improve the contract which the parties have made for themselves, however desirable the improvement might be. The court's function is to interpret and apply the contract which the parties have made for themselves. If the express terms are perfectly clear and free from ambiguity, there is no choice to be made between different possible meanings: the clear terms must be applied even if the court thinks some other terms would have been more suitable. An unexpressed term can be implied if and only if the court finds that the parties must have intended that term to form part of their contract; it is not enough for the court to find that such a term would have been adopted by the parties as reasonable even if it had been suggested to them; it must have been a term that went without saying, a term necessary to give business efficacy to the contract, a term which, though tacit, formed part of the contract which the parties made for themselves."
Lord Cross of Chelsea stated: "[W]hat the respondents are asking the court to do is, in effect, to rectify the clause by the addition of some words which will make it accord not indeed with the actual intention of the parties but with the intention which the respondents say must be imputed to them. In such a case, as I have always understood the law, it is not enough for the party seeking to have the words varied to say to the court, 'We obviously did not mean what we have said, so please amend the clause so as to make it read in what you think is the most reasonable way.' He must establish not only that the parties obviously did not mean what they said but also that if they had directed their minds to the question they would obviously have framed the clause in the way for which he contends."
1 Citers


 
Brimnes, the Tenax Steamship Co v Brimnes, Owners of [1973] 1 WLR 386
1973

Brandon J
Transport, Contract

1 Citers


 
Mountford and Another v Scott [1974] 1 All ER 248; [1973] 3 WLR 884
1973

Brightman J
Contract
The plaintiff paid one pound for an option to buy property in London. The option allowed the plaintiff to acquire the property at the agreed price at any time within six months. Soon after the option was granted the defendant resiled, saying he was not now prepared to sell. After the purported withdrawal of his offer, the plaintiff accepted the offer in the option and sought specific performance of the contract constituted by the option agreement and the exercise of the option. The defendant argued that since the court would not grant specific performance if the option had been granted under seal, the court ought not to do so where the consideration was merely nominal. Held: The option should be specifically enforced, and the resultant contract enforced. The grant of the option created an equitable interest in the land from the moment it was created: "It is not the function of equity to protect only those equitable interests which have been created for valuable consideration. If it were not open to the holder of an option gratuitously created to obtain an order for specific performance, it would seem impossible to assert that an option creates, as it does, an equitable interest in the land".
1 Citers


 
Ashmore, Benson, Pease and Co v A V Dawson Ltd [1973] 1 WLR 828
1973
CA
Denning LJ, Scarman LJ
Contract
By acquiescing in the overloading of the hauliers' lorries, the consignors' assistant transport manager and his assistant made the haulage contract unenforceable at the instance of the consignors, who were unable to recover when a lorry toppled over damaging the goods being carried.
Whether a contract is unenforceable for illegal performance, depends upon whether the method of performance chosen and the degree of participation in that illegal performance is such as to "turn the contract into an illegal contract" Where illegality by virtue of the common law is concerned the question is whether the common law would say that a contract has by its illegal performance been turned into an illegal contract. A party may be prevented from enforcing it.
Denning LJ said: "Not only did [the plaintiff's transport manager] know of the illegality. He participated in it by sanctioning the loading of the vehicle with a load in excess of the regulations. That participation in the illegal performance of the contract debars [the plaintiff] from suing [the defendant] on it or suing [the defendant] for negligence." and per Scarman LJ "But knowledge by itself is not . . enough. There must be knowledge plus participation . . For these reasons I think the performance was illegal"."
1 Cites

1 Citers


 
Re Endricks' Conveyance [1973] 1 All ER 843
1973
ChD
Goulding J
Land, Contract
Goulding J remarked that redundant words in a contract may sometimes serve the useful purpose of increasing clarity.
1 Citers



 
 St Edmundsbury and Ipswich Diocesan Board of Finance v Clark (No.2); CA 1973 - [1975] 1 WLR 468; [1973] 3 All ER 902
 
F L Schuler AG v Wickman Machine Tools Sales Limited [1973] 2 All ER 39; [1973] 2 WLR 683; [1973] 2 Lloyds Rep 53; [1974] AC 235; [1973] UKHL 2
4 Apr 1973
HL
Lord Reid, Lord Wilberforce, Lord Morris of Borth-y-Gest, Lord Simon of Glaisdale, Lord Kilbrandon
Contract
The parties entered an agreement to distribute and sell goods in the UK. They disagreed as to the meaning of a term governing the termination of the distributorship. Held: The court can not take into account the post-contractual conduct or statements of the parties in order to determine the meaning and effect of the contract.
The more unreasonable the result of a particular interpretation of a contract, the more unlikely it is that the parties can have intended it, and if they do intend it the more necessary it is that they should make their meaning clear.
The fact that an agreement may be, or prove to be, a bad bargain is not a sufficient reason for supposing that the agreement does not mean what it says.
Lord Reid said: "The fact that a particular construction leads to a very unreasonable result must be a relevant consideration. The more unreasonable the result the more unlikely it is that the parties can have intended it, and if they do intend it the more necessary it is that they should make that intention abundantly clear."
Lord Wilberforce said: "The general rule is that extrinsic evidence is not admissible for the construction of a written contract; the parties' intentions must be ascertained, on legal principles of construction, from the words they have used."
Lord Diplock said: "If detailed and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business common sense it must yield to business common sense."
1 Cites

1 Citers

[ Bailii ]
 
Holwell Securities Ltd v Hughes [1973] EWCA Civ 5; [1974] 1 WLR 155; [1974] 1 All ER 161
5 Nov 1973
CA
Russell LJ, Buckley LJ, Lawton LJ
Contract
An option was to be exercised 'by notice in writing' before a certain date. The solicitors' letter doing so was addressed to the defendant at his residence and place of work, the house which was the subject of the option to purchase, was posted by ordinary post and enclosed a copy of the letter of the same date delivered by hand to the defendant's solicitors. The letter went astray, and the acceptance was not received before the date. Held. An acceptance had to be communicated to the seller before the relevant time.
1 Cites

1 Citers

[ Bailii ]
 
British Crane Hire v Ipswich Plant Hire [1973] EWCA Civ 6; [1975] QB 303; [1974] 1 All ER 1059
13 Nov 1973
CA
Lord Denning MR
Contract
Lord Denning MR said: "I would not put it so much on the course of dealing, but rather on the common understanding which is to be derived from the conduct of the parties, namely, that the hiring is to be on the terms of the plaintiff's usual conditions."
and "in view of the relationship between the parties, when the defendants requested this crane urgently and it was supplied at once-before the usual form was received-the plaintiffs were entitled to conclude that the defendants were accepting it on the terms of the plaintiffs' own printed conditions-which would follow in a day or two. It is just as if the plaintiffs had said: "We will supply it on our usual conditions" and the defendants had said "Of course, that is quite understood
1 Cites

1 Citers

[ Bailii ]
 
Barton v Armstrong [1976] AC 104; [1973] UKPC 2; [1973] UKPC 27
5 Dec 1973
PC
Lord Wilberforce, Lord Cross and Lord Simon of Glaisdale
Torts - Other, Contract
(New South Wales) The appellant had executed a deed on behalf of a company to sell shares to the respondent in the context of a long running boardroom battle. He said that the deed had been obtained by duress and was voidable. The respondent was said to have threatened the appellant with death. Held: The House considered the elements necessary to establish a defence of duress to a claim in tort.
Lord Cross said: "The scope of common law duress was very limited and at a comparatively early date equity began to grant relief in cases where the disposition in question had been procured by the exercise of pressure which the Chancellor considered to be illegitimate - although it did not amount to common law duress. " and "there is an obvious analogy between setting aside a disposition for duress or undue influence and setting it aside for fraud."
By way of analogy, he considered the treatment of contributing causes in fraud cases: "If it were established that Barton did not allow the representation to affect his judgment then he could not make it a ground for relief. . . If on the other hand Barton relied on the misrepresentation Armstrong could not have defeated his claim to relief by showing that there were other more weighty causes which contributed to his decision . . for in this field the court does not allow an examination into the relative importance of contributing causes . . "
Lord Wilberforce (dissenting) said: "The basis of the plaintiff's claim is, thus, that though there was apparent consent there was no true consent to the agreement; that the agreement was not voluntary. This involves consideration of what the law regards as voluntary, or its opposite; for in life, including the life of commerce and finance, many acts are done under pressure, sometimes overwhelming pressure, so that one can say that the actor had no choice but to act. Absence of choice in this sense does not negate consent in law: for this the pressure must be one of a kind which the law does not regard as legitimate. Thus, out of the various means by which consent may be obtained—advice, persuasion, influence, inducement, representation, commercial pressure—the law has come to select some which it will not accept as a reason for voluntary action: fraud, abuse of relation of confidence, undue influence, duress or coercion."
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[ Bailii ] - [ Bailii ]

 
 Wrotham Park Estate Ltd v Parkside Homes Ltd; ChD 1974 - [1974] 1 WLR 798; [1974] 2 All ER 321

 
 Harrison v Battye; 1974 - [1975] 1 WLR 58; [1974] 3 All ER 830

 
 Damm v Herrtage; ChD 1974 - (1974) 234 EG 365
 
Clearbrook Property Holdings Limited v Verrier [1974] 1 WLR 243
1974
ChD
Templeman J
Land, Contract
The issue was whether a caution registered in the Land Registry by a plaintiff purchaser who was claiming specific performance of an agreement for sale should be vacated. The effect of the vacation of the caution was that the plaintiff's claim for specific performance would have been put in a position in which it was bound to fail in limine. Held: To redress the unfairness to the defendant vendor, whose property was unsaleable while the caution remained registered, the caution should be vacated on the plaintiffs being given the opportunity to make an immediate application for an interlocutory injunction restraining the defendant from dealing with the land in any way inconsistent with the plaintiff's claim pending the trial, which would not be opposed by the defendant, and the defendant getting a cross undertaking in damages.
1 Citers


 
Gallagher v BRS [1974] 2 QB 440
1974


Evidence, Contract
Evidence was required to support an assertion of collateral contract.
1 Citers


 
Quadrangle Development and Construction Co Ltd v Jenner [1974] 1 ALL ER 729; [1974] 1 WLR 68
1974
CA
Russel LJ, Buckley LJ
Land, Contract
A Notice to Complete binds both parties to a land contract.
Buckley LJ said that the party giving the notice must be ready and willing at the time of the giving of the notice to fulfill his own outstanding obligations under the contract, and also at any time during the period of the notice up to and including the time set for completion.
1 Citers


 
Maurice Graham Ltd v Brunswick [1974] 16 KIR 158
1974


Contract, Employment

1 Citers


 
Toepfer v Continental Grain Co [1974] 1 Lloyds Reports 11
1974
CA
Lord Justice Cairns
Contract
Cairns LJ said: "When parties enter into a contract on terms that the certificate of some independent person is to be binding as between them, it is important that the Court should not lightly relieve one of them from being bound by a certificate which was honestly obtained and not vitiated by fraud or fundamental mistake on the part of the certifier. When, for instance, as in this case, the certificate called for by the contract is one relating to the quality of the goods sold, the business purpose is to avoid disputes about quality, and that purpose is defeated unless it is made difficult for a party to go behind a valid certificate."
1 Citers


 
Law v Jones [1974] Ch 112
1974


Contract, Land
A "subject to contract" document might be evidence of an antecedent or oral contract and satisfy section 40 of the Law of Property Act 1925 if the stipulation was later waived. A memorandum or note must, if it is to be effective, not only state the terms of the contract but also contain an acknowledgement or recognition by the signatory to the document that a contract had been entered into. The defendants lost because the alleged memorandum was expressly "subject to contract" and therefore did not satisfy section 40 because it did not recognise or admit the existence of a contract.
Law of Property Act 1925 40
1 Citers


 
Modern Engineering (Bristol) Ltd v Gilbert Ash (Northern) Ltd [1974] AC 689; [1973] 3 All ER 195
1974
HL
Lord Diplock, Lord Reid, Lord Morris of Borth-y-Gest, Lord Salmon
Contract
The court considered how to construe a clause in a contract which excluded a remedy provided by law. Lord Diplock said: "It is, of course, open to parties to a contract . . to exclude by express agreement a remedy for its breach which would otherwise arise by operation of law . . But in construing such a contract one starts with the presumption that neither party intends to abandon any remedies for its breach arising by operation of law, and clear express words must be used in order to rebut this presumption. Lord Diplock said: "in relation to the presumption that each party to a contract is entitled to all remedies which arise by operation of law: "To rebut that presumption one must be able to find in the contract clear unequivocal words in which the parties have expressed their agreement that this remedy shall not be available in respect of breaches of that particular contract."
An equitable set-off for defective work is not easily excluded even in building contracts where sums are payable under an architect's certificate.
1 Cites

1 Citers


 
Holiday Inns Inc v Broadhead (1974) 232 EG 951
1974

Goff J
Land, Contract
The parties negotiated for a lease, but never signed a contract. The plaintiff expended considerable sums to try to get planning, and once acquired it sought to buy the land, and claimed that Mr Broadhead had taken an unconscionable advantage, entitling the plaintiff to relief in equity. The defendant had repeatedly assured the plaintiffs that he would stand by his word. Held: Goff J said: "while they [i.e. the plaintiff] have never suggested that the understanding, arrangement or bargain was sufficiently precise to be enforceable as a contract, they claim to be entitled to relief in equity." and "In my judgment the authorities clearly establish that there is a head of equity under which relief will be given where the owner of property seeks to take an unconscionable advantage of another by allowing or encouraging him to spend money, whether or not on the owner's property, in the belief, known to the owner, that the person expending the money will enjoy some right or benefit over the owner's property which the owner then denies him. This arises where the person expending the money does so under a mistaken belief that the property is his own, that belief being known to the other, as in Ramsden v Dyson (1866) LR 1 HL 129, but mistake is not an essential element of a claim to relief of this nature. The authorities also establish, in my judgment, that this relief can be granted although the arrangement or understanding between the parties was not sufficiently certain to be enforceable as a contract, and that the court has a wide, albeit of course judicial, discretion to what extent relief should be given and what form it should take." and "Mr Waite [counsel for the defendants]… rested his case on what he described, and rightly described, as the crucial question whether there was present a belief on the part of the plaintiffs, induced by Mr Broadhead's words or silence, that they would receive a sufficient interest in the land to justify the expenditure. He said this was an arrangement between commercial men dealing with each other at arm's length with their eyes open, and so the plaintiffs must be taken to have elected as a matter of commercial judgment to run the risk that Mr Broadhead might, as I add he clearly did, have private reservations undisclosed at the date of the expenditure which might frustrate the conclusion of the anticipated bargain, and indeed they might have similar reservations themselves. I am wholly unable to draw any such inference or conclusion. Mr Wilson's [the head of the plaintiff] evidence, which I accept, was that he thought this was a gentleman's agreement which would be honoured. Mr Tigrett [the plaintiff's representative] in his evidence, which I also accept, said that no reservations or thought of backing our ever occurred to him, and the whole tenor of Mr Broadhead's conduct and letters was calculated to make the plaintiffs believe that if planning permission were obtained they would have a straight 3 and 1 lease on the standard terms. I am satisfied and find as a fact that both Mr Wilson and Mr Tigrett believed that and Mr Broadhead well knew that they did. His failure to inform them of his true state of mind was deceitful and unconscionable. " The plaintiff had made out a clear case for relief. The plaintiff's equity was best satisfied by a declaration that the site was held upon trust for sale, and, as to the proceeds of sale, after paying various costs and expenses, on trust for the plaintiff and defendants in equal shares.
1 Cites

1 Citers


 
British Eagle International Airlines Ltd v Compagnie National Air France [1974] 1 Lloyd's Rep 429
1974
CA
Russell LJ
Insolvency, Contract

1 Citers



 
 Laksmijt v Faiz Sherani; PC 1974 - [1974] AC 605
 
Pateman v Pay (1974) 232 EG 467
1974


Contract
A party who in fact knows that the other party does not intend to create legal relations cannot seek to contend otherwise by asserting that the evidence, objectively analysed, supports his case. He knows the truth and should not be allowed to deny it.
1 Citers



 
 Storer v Manchester City Council; CA 1974 - [1974] 1 WLR 1403
 
Alma Shipping Corpn of Monrovia v Mantovani (The Dione) [1975] 1 Lloyds Rep 115
1974
CA
Lord Denning MR
Contract
Lord Denning MR said that, in relation to a charterparty for a stated period such as "three months" or "six months", without any express margin or allowance: "the court will imply a reasonable margin or allowance. The reason is because it is not possible for anyone to calculate exactly the day on which the last voyage will end. It is legitimate for the charterer to send her on a last voyage which may exceed the stated period by a few days."
1 Citers


 
Jackson v Horizon Holidays Ltd [1975] 1 WLR 1468; [1974] EWCA Civ 12; [1975] 3 All ER 92
5 Feb 1974
CA
James LJ, Denning MR LJ
Contract, Damages
A family claimed damages for a disappointing holiday. The generous measure of damages given to the father was that the father was being fully compensated for his own mental distress, but the rule of privity of contract operated to bar the claim for damages by a person not party to the contract.
Denning MR LJ said: "In Jarvis . . it was held by this Court that damages for the loss of a holiday may include not only the difference in value between what was promised and what was obtained but also damages for mental distress, inconvenience, upset, disappointment and frustration caused by the loss of the holiday . . People look forward to a holiday. They expect the promises to be fulfilled. When it fails, they are greatly disappointed and upset. It is difficult to assess in terms of money; but it is the task of the judges to do the best they can. I see no reason to interfere with the total award of £1100."
1 Citers

[ Bailii ]
 
New Zealand Shipping Co Ltd v A M Satterthwaite and Co Ltd (The Eurymedon) [1975] AC 154; [1974] UKPC 1; [1974] UKPC 4
25 Feb 1974
PC
Lord Wilberforce
Contract, Transport, Commonwealth, Contract
The Board considered the extent to which an exclusion clause in a bill of lading could be relied on by the third party stevedore, an independent contractor employed by the carrier, who was sued by the consignees of goods for negligently damaging the goods while unloading them. Held: (Majority) The board gave effect to the clause by regarding the shipper as having made an offer of a unilateral contract to the stevedores to unload the goods on terms incorporating the exclusion clause. This offer was accepted by the stevedores by commencing work.
Lord Wilberforce said that the bill of lading: " brought into existence a bargain initially unilateral but capable of becoming mutual, between the shipper and the [stevedores], made through the carrier as agent. This became a full contract when the [stevedores] performed services by discharging the goods. The performance of these services for the benefit of the shipper was the consideration for the agreement by the shipper that the [stevedores] should have the benefit of the exemptions and limitations contained in the bill of lading." The exclusion clause was entered into by the carrier as agent for its servants, agents and independent contractors, and therefore "the exemption is designed to cover the whole carriage from loading to discharge, by whomsoever it is performed: the performance attracts the exemption or immunity in favour of whoever the performer turns out to be". Also "In the opinion of their Lordships, to give the appellant the benefit of the exemptions and limitations contained in the bill of lading is to give effect to the clear intentions of a commercial document, and can be given within existing principles. They see no reason to strain the law or the facts in order to defeat these intentions. It should not be overlooked that the effect of denying validity to the clause would be to encourage actions against servants, agents and independent contractors in order to get round exemptions... "
1 Citers

[ Bailii ] - [ Bailii ]
 
New Zealand Shipping Co Ltd v A M Satterthwaite and Co Ltd (The Eurymedon) [1975] AC 154; [1974] UKPC 1; [1974] UKPC 4
25 Feb 1974
PC
Lord Wilberforce
Contract, Transport, Commonwealth, Contract
The Board considered the extent to which an exclusion clause in a bill of lading could be relied on by the third party stevedore, an independent contractor employed by the carrier, who was sued by the consignees of goods for negligently damaging the goods while unloading them. Held: (Majority) The board gave effect to the clause by regarding the shipper as having made an offer of a unilateral contract to the stevedores to unload the goods on terms incorporating the exclusion clause. This offer was accepted by the stevedores by commencing work.
Lord Wilberforce said that the bill of lading: " brought into existence a bargain initially unilateral but capable of becoming mutual, between the shipper and the [stevedores], made through the carrier as agent. This became a full contract when the [stevedores] performed services by discharging the goods. The performance of these services for the benefit of the shipper was the consideration for the agreement by the shipper that the [stevedores] should have the benefit of the exemptions and limitations contained in the bill of lading." The exclusion clause was entered into by the carrier as agent for its servants, agents and independent contractors, and therefore "the exemption is designed to cover the whole carriage from loading to discharge, by whomsoever it is performed: the performance attracts the exemption or immunity in favour of whoever the performer turns out to be". Also "In the opinion of their Lordships, to give the appellant the benefit of the exemptions and limitations contained in the bill of lading is to give effect to the clear intentions of a commercial document, and can be given within existing principles. They see no reason to strain the law or the facts in order to defeat these intentions. It should not be overlooked that the effect of denying validity to the clause would be to encourage actions against servants, agents and independent contractors in order to get round exemptions... "
1 Citers

[ Bailii ] - [ Bailii ]
 
Brimnes, the Tenax Steamship Co v Brimnes, Owners of [1974] EWCA Civ 15; [1975] QB 929; [1974] 3 All ER 88
23 May 1974
CA
Edmund Davies LJ, Megaw LJ, Cairns LJ
Transport, Contract
The ship's owners sent a telex to the charterers at 5.45 pm on 2 April 1970 withdrawing the vessel for late payment of the hire charge. The charterers' normal business hours ended at 6.00 pm. The telex was not seen until the morning of 3 April, although it had arrived in the charterers' office at 5.45 pm on 2 April. Held: The charterer's appeal failed. It was deemed received before close of business on the 2nd. A contract may be terminated by one party without the other party being actually aware of the communication of the termination. The contract is terminated at the time when notice of the termination would "in the normal course of business" have come to the other party's attention on its arrival.
Megaw LJ said: "if a notice arrives at the address of the person to be notified, at such a time and by such a means of communication that it would in the normal course of business come to the attention of that person on its arrival, that person cannot rely on some failure of himself or his servants to act in a normal businesslike manner in respect of taking cognisance of the communication so as to postpone the effective time of the notice until some later time when it in fact came to his attention."
1 Cites

1 Citers

[ Bailii ]

 
 Mountford and Another v Scott; CA 17-Oct-1974 - [1974] EWCA Civ 10; [1975] Ch 258
 
Cudgen Rutile (No.2) Pty Ltd and Another v Gordon William Wesley Chalk (And Consolidated Appeals) [1974] UKPC 30; [1975] AC 520
13 Nov 1974
PC

Commonwealth, Contract
(Queensland) As a matter of general principle, the courts are readier in modern times to find a contract "even though apparent certainty may be lacking as regards some term such as the price, provided that some means or standard by which that term can be fixed can be found
[ Bailii ]

 
 Tiverton Estates Ltd v Wearwell Ltd; CA 1975 - [1975] Ch 146
 
Modern Building Wales Ltd v Limmer and Trinidad Co Ltd [1975] 1 WLR 1281
1975


Contract
Where a contract incorporates by reference the terms of another document, the incorporating contract will usually prevail over the terms of document incorporated.
1 Citers


 
Mottram Consultants Ltd v Bernard Sunley and Sons Ltd [1975] 2 Lloyd's Rep 197
1975
HL
Lord Cross of Chelsea, Lord Hodgson and Lord Wilberforce
Contract, Damages
Stone panels which had been fixed to the external walls of a school fell off, owing to defective fixing by the contractor. Held: The contractor was liable for the cost of reinstating the stone panels, calculated at the date when the defect was discovered.
The parties disputed the interpretation of a building contract. The issue was whether or not it was the common intention of the parties to deny the right to the defendant to set-off against the amount claimed in a certificate. The certificates were issued by an architect. The House considered whether there existed a general rule for construing a contract, "namely, that one should approach each case without any 'parti pris' in favour or against the existence of a right of set off, though one must bear in mind the principle established in Mondel v Steel." Held: Even if there was a magic formula, meaning that the words 'set-off' or equivalent had to be used in express terms, then the failure to use it does not necessarily mean that that was not what the parties intended in the particular case. Lord Cross referred to the fact that the contract showed clearly that the proprietor was not entitled to withhold payment because of some allegation that there was an error made, and: "It was for the architect to put that right if need be in a monthly certificate. I think therefore that the Master was right to give Sunley judgment for the full sum claimed. . "
Lord Cross of Chelsea said: "When the parties use a printed form and delete parts of it one can, in my opinion pay regard to what has been deleted as part of the surrounding circumstances in the light of which one must construe what they have chosen to leave in. The fact that they deleted (iii) shows that these parties directed their minds (inter alia) to the question of deductions under the principle of Mondel v Steel [(1841) 8 M. and W. 858] and decided that no such deductions should be allowed."
1 Citers


 
Molton Builders Ltd v City of Westminster London Borough Council [1975] 30 P
1975
CA
Lord Denning MR
Contract
Lord Denning MR said: "The doctrine of derogation from grant is usually applied to sales or leases of land, but it is of wider application. It is a general principle of law that, if a man agrees to confer a particular benefit on another, he must not do anything which substantially deprives the other of the employment of that benefit: because that would be to take away with one hand what is given with the other."
1 Citers


 
IS Mills (Yardley) Ltd v Curdworth Investments Ltd (1975) 235 EG 113
1975


Contract
A court interpreting a contract may look to other parts of a deed to inform itelf when the part to be interpreted has an expected word missing.

 
Union of India v Aaby's Rederi A/S, The Evje [1975] AC 797
1975
HL
Viscount Dilhorne, Lord Salmon
Contract, Arbitration
Lord Dilhorne said of the words "to be settled in London": "At first sight those words appear to me to mean no more and no less than that the contributions to be made have to be determined in London and paid there, and that implies determined in accordance with English law." The phrase "to be settled in London" did not to take the dispute out of the scope of an arbitration clause.
Neither Lord Salmond nor Lord Dilhorne could see a difference between clauses poviding for arbitration of disputes 'arising under' and 'arising out of' a contract.
1 Citers


 
Rightside Properties Ltd v Gray [1975] Ch 72
1975

Walton J
Contract, Land

1 Citers


 
Michael Richards Properties Ltd v Corporation of Wardens of St Saviour's Parish Southwark [1975] 2 All ER 416
1975

Goff J
Contract, Land
Property was offered for sale by tender. The tender documents contained all the detailed terms upon which the contract was to be based. The successful tender was accepted by letter, but by mistake the secretary who typed it typed in the words "subject to contract" at the bottom. The purchaser had refused to complete after discovering that the local authority intended to acquire the property compulsorily. Held: Since there was nothing left to negotiate, the words subject to contract could be rejected as meaningless. As to the request for the return of the deposit: "Section 49, however, was passed to remove the former hardship which existed where a defendant had a good defence in equity to a claim for specific performance but no defence in law, and, therefore, the deposit was forfeited. I am not prepared to say that the jurisdiction can only be exercised in such a case, but outside that ambit, it should only be exercised, if at all, sparingly and with caution.
Here the plaintiffs have advanced only two reasons why I should exercise my discretion in their favour. First, that if I do not, the defendants will have made a profit, and secondly, that the warning concerning the views of the local authority could have been communicated before the deposit was paid. The first element, however, is inherent in cases where a deposit is forfeited, and the second is not really significant because the contract was concluded before then by the letter of acceptance…."
Law of Property Act 1925 49(2)
1 Citers



 
 Kingston v Ambrian Investment Co Ltd; 1975 - [1975] 1 WLR 161
 
The Dione [1975] I LLR 117
1975

Lord Denning
Contract, Damages
Charterers should have redelivered the vessel by a certain date but failed to do so. Held: They were held liable in damages for the difference between the market and charterparty rate for the overrun period. Lord Denning said that where the charterer had an obligation to redeliver by a stated date: "If he does not do so - and the market rate has gone up – he will be bound to pay the extra. That is to say he will be bound to pay the charter rate up to the end of the stated period and the market rate thereafter, see Watson v Merryweather".
1 Citers


 
PJ Van der Zijden Wildhandel NV v Tucker [1975] 2 LLR 240
1975


Contract
The party seeking to be discharged from a contractual performance, and relying on the terms of the agreement, carries the burden of proving the facts necessary for such discharge.
1 Citers



 
 Schindler v Pigault; 1975 - [1975] 30 P and CR 328
 
Alfred C Toepfer v Peter Cremer [1975] 2 Lloyd's Rep 118
1975
CA
Lord Denning MR, Orr LJ, Scarman LJ
Estoppel, Contract
The court was asked as to the effect of a telex sent by the buyers to the sellers, notifying them that if a notice of appropriation was not received by the following day, then the buyers would treat the sellers as being in default, under clause 26 of the GAFTA Form 100. In fact the sellers had one more day before the last day of shipment under the contract. No notice of appropriation was received, so the buyers sent a further telex in which they claimed a "price fixing" by arbitration, nominated their arbitrator and invited the sellers to do likewise. It was argued that these actions of the buyers constituted a repudiation of the contract. Held: The argument failed. On the facts overall, the buyers were not repudiating the contract. The telex giving notice of default was a "misapprehension as to the date of default". He held that the actions of the buyers, taken as a whole, indicated that they were not repudiating the contract but "insisting on it and claiming damages under it."
Scarman LJ pointed out that the arbitrators had not found the action of the buyers to be repudiatory of the contract. He concluded that it was not possible to infer, from the telex, that had the sellers given notice of appropriation on the following day (ie. the last day for shipment), then the buyers would have rejected it. Therefore the telex was not a repudiation.
Lord Denning MR discussed estoppel: "When one person has led another to believe that a particular transaction is valid and correct, he cannot thereafter be allowed to say that it is invalid and incorrect where it would be unfair or unjust to allow him to do so. It is a kind of estoppel. He cannot blow hot and cold according as it suits his book."
The rule that a plaintiff cannot recover for a cause of action which only accrued after the writ was issued, was a rule of practice rather than a rule of law. Moreover, it was a rule of practice which could be departed from whenever the justice of the case required.
1 Citers



 
 Oceanic Freighters Corporation v MV Libyaville Reederei und Schiffahrts GmbH (The Libyaville); QBD 1975 - [1975] 1 Lloyds Rep 537
 
Greaves and Co (Contractors) Ltd v Baynham Meikle and Partners [1975] 3 All ER 99; [1975] 1 WLR 1095; [1975] 2 Lloyds Rep 325
1975
CA
Lord Denning MR
Contract
Consultant engineers were instructed to design a warehouse, the first floor of which, as they knew, was to be used for storing drums of oil that would be moved around by fork-lift trucks. The warehouse was built to the engineers' design but after a few months' use the first floor began to crack because it was not strong enough to bear the loads imposed on it. The main contractor, by whom the engineers had been employed, made a claim against them alleging that they had impliedly warranted that their design would produce a building fit for its intended use. Held: Despite recognising that a professional man does not normally undertake an unqualified obligation to produce the desired result, the exchanges between the parties were such as to give rise to an implied term that the warehouse as designed would be fit for the purpose for which it was required. Those who provide professional services do not generally give an unqualified undertaking to produce the desired result.
Lord Denning MR said: "Apply this to the employment of a professional man. The law does not usually imply a warranty that he will achieve the desired result, but only a term that he will use reasonable care and skill. The surgeon does not warrant that he will cure the patient. Nor does the solicitor warrant that he will win the case."
1 Cites

1 Citers


 
Strutt v Whitnell [1975] 1 WLR 870
1975
CA
Cairns LJ
Damages, Contract
The house sale contract provided for vacant possession on completion, notwithstanding that it was in fact occupied by a protected tenant who in the event declined to leave. The vendor offered to accept a reconveyance of the house, but that offer was refused by the purchaser who brought an action for breach of contract. The vendor contended that the purchaser had failed to mitigate by refusing his offer to accept a reconveyance. Held: The argument failed. Where the purchaser's only remedy was to recover damages for breach of contract he was not bound to take steps that would deprive him of his right to retain the property and recover damages for the breach of contract. It cannot be right that a refusal to accept a defendant's offer: "even if such refusal were wholly capricious, was something that deprived the plaintiff of his right to substantial damages altogether."
Cairns LJ said that the offer of buy-back was indistinguishable from an offer to pay damages of £1,900. The plaintiff was not bound to choose between his two remedies: "if [the defendant's] contentions were right it would logically follow that if the offer . . had been not 'We will take the house back' but 'We will pay you £1,900 damages' and the plaintiff had then, for some reason, refused that offer and had brought an action for damages it could be said that he ought to have accepted the offer and thereby mitigated his damage and therefore he was entitled to nothing at all. That cannot be. Clearly what would happen in those circumstances would be that the defendants, if they were wise, would make a payment into court of the £1,900 and the plaintiff would suffer in respect of costs. But it could not possibly be suggested that the refusal to accept the offer, even if such refusal were wholly capricious was something that deprived the plaintiff of his right to substantial damages altogether."
1 Citers


 
Aluminium Industrie Vaassen B V v Romalpa Aluminium Ltd [1976] 1 WLR 676
11 Feb 1975
ChD
Mocatta J
Company, Contract, Insolvency, Equity
The plaintiffs sold aluminium to the defendant and by a clause in the contract retained their title in the materials sold until payment was received. The purchaser went into insolvent receivership, and the seller sought recovery of the equipment and proceeds of sale of articles made from the materials. The defendants allowed that they had been bailees of the material supplied by the plaintiffs until all debts were paid, but claimed that this was overridden by sales to bona fide purchasers. Held: The clause showed an intention to create a fiduciary arrangement between seller and buyer, and the plaintiffs were entitled to recover the proceeds of sales to third parties.
1 Cites

[ lip ]
 
Conteh v Onslow Fane and another Times, 26 June 1975; Bar Library Transcript No. 291 of 1975
26 Jun 1975
CA

Contract, Administrative
Mr Conteh, a boxer, was accused of misconduct in breaking his contracts with his former manager and former promoter, and the High Court proceedings had been brought by him for declarations that these contracts were not binding on him. It was conceded by the Board that any finding that the contracts were binding on Mr Conteh would be provisional, and that a subsequent High Court judgment to a different effect would prevail.
1 Citers



 
 Esso Petroleum Limited v Commissioners of Customs and Excise; HL 10-Dec-1975 - [1976] 3 All ER 117; [1975] UKHL 4; [1976] 1 WLR 1

 
 Reardon Smith Line Ltd v Yngvar Hansen-Tangen (The "Diana Prosperity"); HL 1976 - [1976] 1 WLR 989; [1976] 2 Lloyd's Rep 621; [1976] 3 All ER 570

 
 GKN Centrax Gears Ltd v Matbro Ltd; CA 1976 - [1976] 2 Lloyd's Rep 555

 
 Evans and Son (Portsmouth) Ltd v Andrea Merzario Ltd; CA 1976 - [1976] 1 WLR 1078; [1976] 2 All ER 930

 
 BP Exploration Co (Libya) Ltd v Hunt; 1976 - [1976] 3 All ER 879; [1976] 1 WLR 788
 
Munton v Greater London Council [1976] 1 WLR 649
1976
CA
Lord Denning MR
Contract, Land
With respect to the words 'subject to contract', Lord Denning said, "It is of the greatest importance that no doubt should be thrown on the effect of those words". As to the difference netween the procedures of compulsory purchase and ordinary contracts: "First, when notice to treat is given, it binds the acquiring authority to purchase and the owner to sell at a price to be ascertained… Second, when there is an unconditional agreement fixing the price – whether in writing or by word of mouth – it is the equivalent of a binding contract between the parties…. Once, therefore a notice to treat has been served and there is an agreement on the price, a binding obligation is created which is equivalent to a contract between the parties."
Law of Property Act 1925 840
1 Cites

1 Citers


 
Shell UK Ltd v Lostock Garage Limited [1976] 1 WLR 1187
1976


Contract



 
 Occidental Worldwide Investment Corporation v Skibs A/S Avanti (The Siboen and Sibotre); 1976 - [1976] 1 Lloyds Rep 293

 
 British Airways Board v Taylor; HL 1976 - [1976] 1 WLR 13

 
 Heywood v Wellers; CA 1976 - [1976] QB 446; [1976] 2 WLR 101; [1976] 1 All ER 300; [1976] 2 Lloyd's Rep 88; (1976) 120 SJ 9; Times, 15 November 1975; [1975] EWCA Civ 11
 
Campbell v Edwards [1976] 1 WLR 403; [1976] 1 All ER 785
1976
CA
Lord Denning MR
Contract
The court looked at its ability to set aside an expert's certificate as to value. Held: If an expert valuer has undertaken his task honestly and in good faith, the outcome cannot be challenged simply because he has made a mistake or one side does not like the outcome.
Lord Denning MR said: "It is simply the law of contract. If two persons agree that the price of property should be fixed by a valuer on whom they agree, and he gives that valuation honestly and in good faith, they are bound by it. Even if he has made a mistake they are still bound by it. The reason is because they have agreed to be bound by it."
1 Citers



 
 Steadman v Steadman; HL 1976 - [1976] AC 536
 
Partenreedesei Karen Oltmann v Scarsdale Shipping Co Ltd (The Karen Oltmann) [1976] 2 Lloyds Rep 708
1976

Kerr J
Contract
The parties disputed the application of the word "after" in a break-clause in a charter party which provided that "Charterers to have the option to redeliver the vessel after 12 months' trading subject giving 3 months' notice". By their negotiations the parties had shown a clear intention to treat the word "after" in the sense of "on the expiry of" and not "at any time after the expiry of". Counsel for the owners had sought general liberty to refer to the parties' negotiations by reason of the ambiguity of the contract. Held: Applying Prenn v Simmonds the court rejected this argument, and also an attempt to make the same point by way of estoppel by representation. The court was unable to discern any distinct representation to that effect.
Kerr J said: " Take Prenn v Simmonds [1971] 1 WLR 1381 as an example. The issue in that case was whether the reference to profits in the contract meant the profits of the holding company only or the consolidated profits of the whole group. If in the course of the negotiations one party had made anything in the nature of a representation to the other to the effect that references to profits were to be taken in one of the senses and not in the other, and the other party had thereupon negotiated on this basis, then extrinsic evidence to establish this representation would in my view be clearly admissible. Similarly, if it had been contended that the parties had conducted their negotiations on an agreed basis that the word "profits" was used in one sense only, although in the contract it was capable of having two senses, and the contract had been executed on that basis, then I do not think that the court would be precluded by authority from admitting extrinsic evidence to see whether or not this agreed basis could be established. Both these situations would be a long way from the attempts made in Prenn v Simmonds and Arrale v Costain [1976] Lloyds Rep 98, to adduce extrinsic evidence to try to persuade the court that one interpretation of the contract was in all the circumstances to be preferred to the other. I think that in such cases the principle can be stated as follows. If the contract contains words which , in their context, are fairly capable of bearing more than one meaning, and if it is alleged that the parties have in effect negotiated on an agreed basis that the words bore only one of the two possible meanings, then it is permissible for the Court to examine the extrinsic evidence relied upon to see whether the parties have in fact used the words in question in one sense only, so that they have in effect given their own dictionary meaning to the words as the result of their common intention. Such cases would not support a claim for rectification of the contract, because the choice of words in the contract would not result from any mistake. The words used in the contract would ex hypothesi reflect the meaning which both parties intended." and "However, on the basis that the word "after" in cl.26 is capable of bearing two meanings as a matter of construction, I do not think that there is any authority precluding the Court from examining the pre- charter-party exchanges in order to see whether the owners can make good their contention that the parties were in agreement in using this word in only one of its two senses, and having in effect both given it the same dictionary meaning to the exclusion of the other meaning. Having then considered the pre-charter-party exchanges on this basis I fined that this contention is established. In these circumstances it seems to me that the charterers cannot now depart from this common meaning by asserting that this word has the opposite meaning in the charter-party."
1 Cites

1 Citers



 
 Re Butlin's Settlement Trusts; 1976 - [1976] Ch 251
 
Security Trust Co v The Royal Bank of Canada [1976] AC 503; [1975] UKPC 23
1976
PC
Lord Cross
Commonwealth, Land, Equity, Contract
(Bahamas) A company, Fisher agreed to buy land with part of the purchase price to be paid by a fixed date and the balance secured by a mortgage to the vendor. A conveyance and a mortgage were duly executed and held in escrow pending payment of the agreed proportion of the price. Fisher failed to pay the stipulated sum on the fixed date. Fisher then granted a debenture, creating a fixed charge on its existing property and a floating charge on future property. A receiver was subsequently appointed under the debenture. The contract was eventually completed. In the subsequent litigation, the question arose whether the charge over the property created by the debenture took priority over the vendor's mortgage. The Judicial Committee of the Privy Council, allowing the vendor's appeal, held that Fisher's interest in the land was merely an equity of redemption subject to the vendor's mortgage, and that the mortgage accordingly took priority over the charge created by the debenture. Lord Cross limited the extent of the law of escrow: "On fulfilment of the condition subject to which it was delivered as an escrow, a deed is not taken to relate back to the date of its delivery for all purposes, but only for such purposes as are necessary to give efficacy to the transaction - ut res magis valeat quam pereat (see Butler and Baker's case (1591) 3 CoRep 25a). Thus, the fact that the grantor has died before the condition of an escrow is fulfilled does not entail the consequence that the disposition fails. If and when the condition is fulfilled the doctrine of relation back will save it, but notwithstanding the relation back for that limited purpose the grantee is not entitled to the rents of the property during the period of suspense or to lease it or to serve notices to quit."
1 Citers

[ Bailii ]
 
Liverpool City Council v Irwin [1976] QB 319
1976
CA
Lord Denning MR, Roskill and Ormrod LJJ
Landlord and Tenant, Contract
The court considered the nature and extent of the obligations of landlords of a building in multiple occupation to repair essential means of access. Held: Lord Denning MR (dissenting) suggested that the court had power to imply a term if it was reasonable so to do, and held that the landlords were under an implied obligation to repair accordingly. Roskill and Ormrod LJJ held to the contrary. Roskill LJ said: "But I am afraid, with profound respect, I cannot agree with his view that it is open to us in this court at the present day to imply a term because subjectively or objectively we as individual judges think it will be reasonable so to do. It must be necessary, in order to make the contract work as well as reasonable so to do, before the court can write into a contract, as a matter of implication, some term which the parties have themselves, assumedly deliberately, omitted to do."
1 Citers


 
Attica Sea Carriers Corporation v Ferrostaal Poseidon Bulk Reederei GmbH, The Puerto Buitrago [1976] 1 Lloyds Reports 250
1976
CA
Lord Denning MR, Orr LJ
Contract, Transport
The parties entered into a charterparty by demise of a bulk carrier. It was in a state of disrepair. The owners required the charterers to repair it before redelivery, and claimed hire losses until it was returned repaired. The extensive repairs required would have cost far more than the repaired value of the vessel. Mocatta J had accepted this proposition. Held. The appeal succeeded. If the vessel was out of repair when redelivered, the charterers were liable in damages, but the redelivery without first repairing the vessel was nevertheless valid.
Lord Denning MR considered whether, if the redelivery had been a repudiation of the contract, the owners would have been entitled to refuse to accept it and sue for hire thereafter. The decision in White and Carter had no application "in a case in which the plaintiff ought, in all reason, to accept the repudiation and sue for damages, provided that damages would provide an adequate remedy for any loss suffered by him".
Orr LJ discussed the White and Carter point, saying that in this case, first, the owners could not perform the contract without the co-operation of the charterers and, secondly, the charterers had set out to prove that the owners had no legitimate interest in claiming the hire rather than damages.
Browne LJ agreed with Lord Denning on the principal point and with Orr LJ on the White and Carter point.
1 Citers


 
Terrapin International Ltd v Inland Revenue Commissioners [1976] 1 WLR 665
1976

Walton J
Contract, Stamp Duty
A deed had been delivered in escrow, but, before the condition was fulfilled, the rates of stamp duty changed. The parties disputed the effective date of the transaction. Held: Walton J considered what was the effect of a deed being held in escrow: "A document which is intended to take effect as a deed when conditions have been fulfilled may be executed as an escrow: that is to say, with all the formalities of a deed save that the vital unconditional delivery, which is essential for the proper execution of a true deed, is missing; it is replaced by a conditional delivery, usually express, but capable of being assumed. At this stage, the document is not a deed; and although of course it contains within itself the possibility of becoming an effective deed, a deed rising phoenix-like from the ashes of the escrow, at the stage before the condition is fulfilled it is of no effect whatsoever." and referring to Cory: "If I may repeat the crucial passage; - 'So long as it remains an escrow it is not executed as a deed; for delivery again as a deed is required before it becomes one'. It follows in my judgment that . . . the first date on which the deed of exchange which is the subject matter of the present appeal was executed was on the day on which the conditions were fulfilled and it was in the eye of the law for the first time delivered unconditionally and thus for the first time delivered as a deed."
1 Cites

1 Citers



 
 Regina v McFadden and Cunningham; 1976 - [1976] CLY 2196
 
Arrale v Costain [1976] Lloyds Rep 98
1976


Contract


 
Esso Petroleum Company Ltd v Mardon [1976] QB 801; [1976] EWCA Civ 4; [1976] 2 All ER 5
6 Feb 1976
CA
Lord Denning MR, Ormrod, Shaw LJJ
Torts - Other, Damages, Negligence, Contract
Statements had been made by employees of Esso in the course of pre-contractual negotiations with Mr Mardon, the prospective tenant of a petrol station. The statements related to the potential throughput of the station. Mr Mardon was persuaded by the statements to enter into the tenancy; but he suffered serious loss when the actual throughput proved to be much lower than had been predicted. Mr Marden did his best but he lost his capital and incurred a large bank overdraft as a result of his trading losses. Held: Mr. Mardon was entitled to recover damages from Esso, on the basis of either breach of warranty or (on this point affirming the decision of the judge below) negligent misrepresentation. A contractor is not free to carry on with a disastrous contract and then seek to recover any losses on the basis of fraud. A special relationship, giving rise to a duty of care, may arise between the parties negotiating a contract if information is given in connection with the contract.
Lord Denning MR held: "A professional man may give advice under a contract for reward; or without a contract, in pursuance of a voluntary assumption of responsibility, gratuitously without reward. In either case he is under one and the same duty to use reasonable care: see Cassidy v. Ministry of Health [1951] 2 K.B. 343, 359-360. In the one case it is by reason of a term implied by law. In the other, it is by reason of a duty imposed by law. For a breach of that duty he is liable in damages: and those damages should be, and are, the same, whether he is sued in contract or in tort." and: "He is only to be compensated for having been induced to enter into a contract which turned out to be disastrous for him. Whether it be called breach of warranty or negligent misrepresentation, its effect was not to warrant the throughput but only to induce him to enter the contract. So the damages in either case are to be measured by the loss he suffered. Just as in Doyle v Olby he can say: 'I would not have entered into this contract at all but for your representation. Owing to it, I have lost all the capital I put into it. I also incurred a large overdraft. I have spent four years of my life in wasted endeavour without reward: and it will take sometime to re-establish myself.' For all such loss he is entitled to recover damages."
Ormrod and Shaw LJJ agreed that Mr. Mardon was entitled to recover damages either for breach of warranty or for negligent misrepresentation.
1 Cites

1 Citers

[ Bailii ]
 
Chang v Registrar of Titles (1976) 137 CLR 177; (1976) 50 ALJR 404; (1976) 8 ALR 285; [1976] HCA 1
11 Feb 1976

Mason J, Jacob J
Land, Contract, Commonwealth
(High Court of Australia) The court discussed the trusteeship arising on a contract for the sale of land.
Mason J said: "It has long been established that a vendor of real estate under a valid contract of sale is a trustee of the property sold for the purchaser. However, there has been controversy as to the time when the trust relationship arises and as to the character of that relationship. Lord Eldon considered that a trust arose on execution of the contract (Paine v Meller; Broome v Monck). Plumer M.R. thought that until it is known whether the agreement will be performed the vendor 'is not even in the situation of a constructive trustee; he is only a trustee sub modo, and providing nothing happens to prevent it. It may turn out that the title is not good, or the purchaser may be unable to pay' (Wall v Bright). Lord Hatherley said that the vendor becomes a trustee for the purchaser when the contract is completed, as by payment of the purchase money (Shaw v Foster). Jessel M.R. held that a trust sub modo arises on execution of the contract but that the constructive trust comes into existence when title is made out by the vendor or is accepted by the purchaser (Lysaght v Edwards). Sir George Jessel's view was accepted by the Court of Appeal in Rayner v Preston.
It is accepted that the availability of the remedy of specific performance is essential to the existence of the constructive trust which arises from a contract of sale". Jacob J: "Where there are rights outstanding on both sides, the description of the vendor as a trustee tends to conceal the essentially contractual relationship which, rather than the relationship of trustee and beneficiary, governs the rights and duties of the respective parties".
1 Citers

[ Austlii ]
 
Alexander Stephen (Forth) Ltd v J J Riley (UK) Ltd [1976] ScotCS CSOH - 4; 1976 SLT 269; 1976 SC 151
2 Mar 1976
SCS
Lord Kincraig
Scotland, Contract
"The main submission for the defenders was that the pursuers could not rely on Condition 5 to avoid liability for breaches of contract because the particular circumstances averred by the defenders as justifying their actions were not expressly covered by the condition. It was said that as the defenders averred that the pursuers' failure in performance involved something wholly different from what the contract contemplated this was a situation not expressly covered by Condition 5 and therefore it could not be invoked."
[ Bailii ]

 
 Liverpool City Council v Irwin; HL 31-Mar-1976 - [1976] UKHL 1; [1977] AC 239; [1976] 2 All ER 39
 
Berkley v Poulett and others [1976] EWCA Civ 1; [1977] 1 EGLR 86; (1977) 241 EG 911
29 Oct 1976
CA
Stamp LJ, Scarman LJ, Goff LJ
Land, Contract
Lord Poulett sold the Hinton St George Estate to X, and X sub-sold the house and grounds to Y. Both transactions were subsequently completed. Y brought action against the executors of Lord Poulett, and the main question which subsequently arose was whether certain objets d'art were fixtures or chattels. Held: None of them was a fixture, but also by a majority (Goff LJ dissenting) that, even though Lord Poulett had notice of the sub-contract between X and Y, Lord Poulett was not under a duty to Y to take reasonable care of the house because Lord Poulett did not hold the house as trustee for the sub-purchaser Y.
The court was asked whether some pictures, prints, a statue, and a sundial, each affixed to the land, had become fixtures or had remained chattels. If fixtures, they passed on the conveyance of the land; if chattels they did not. Held: The modern answer to the question whether objects which were originally chattels have become fixtures, that is to say part of the freehold, depends upon the application of two tests: (1) the method and degree of annexation; (2) the object and purpose of the annexation. Here, the paintings had been hung for their better enjoyment, and were not fixtures. Neither the statue nor the sundial were physically attached to the realty, and remained chattels.
Lord Justice Scarman said: "If there is no physical annexation there is no fixture. Quicquid plantatur solo solo cedit. Nevertheless an object, resting on the ground by its own weight alone, can be a fixture, if it be so heavy that there is no need to tie it into a foundation, and if it were put in place to improve the realty. Prima facie, however, an object resting on the ground by its own weight alone is not a fixture. Conversely, an object affixed to realty but capable of being removed without much difficulty may yet be a fixture. Today so great are the technical skills of affixing and removing objects to land or buildings that the second test is more likely than the first to be decisive. Perhaps the enduring significance of the first test is a reminder that there must be some degree of physical annexation before a chattel can be treated as part of the realty. "
Stamp LJ said that the vendor "is said to be a trustee because of the duties which he has, and the duties do not arise because he is a trustee but because he has agreed to sell the land to the purchaser and the purchaser on tendering the price is entitled to have the contract specifically performed according to its terms. Nor does the relationship in the meantime have all the incidents of the relationship of trustee and cestui que trust."
1 Cites

1 Citers

[ Bailii ]
 
Nova (Jersey) Knit Ltd v Kammgarn Spinnerei GmbH [1977] 2 All ER 463; [1977] 1 WLR 713
1977
HL
Lord Wilberforce, Lord Dilhorne, Lord Salmon, Lord Russell of Killowen
Banking, Contract
English and German companies traded in partnership. They agreed that all disputes between them should be arbitrated in Germany. The English company sold machinery to the German company and by way of payment received some 24 bills of exchange. After the first six bills of exchange had been paid, the German company refused further payment on the ground that the English company had mismanaged the affairs of the partnership and that the machinery which it supplied was defective. The English company then began in England an action on the bills. The German company sought to stay the action under the provisions of the Arbitration Act.
Bristow J at first instance refused the stay but his decision was reversed by the Court of Appeal. Held: The appeal succeeded. The arbitration agreement did not extend to disputes on bills of exchange upon which, in any event, their Lordships pointed out, there was no dispute.
Lord Wilberforce said: "I take it to be clear law that unliquidated cross-claims cannot be relied upon by way of extinguishing set-off against a claim on a bill of exchange . . As between the immediate parties, a partial failure of consideration may be relied upon as a pro tanto defence, but only when the amount involved is ascertained and liquidated . . The amount claimed here in respect of the machines is certainly neither ascertained nor liquidated, and the claim in respect of the mismanagement is one for a wholly unrelated tort, so that there would seem to be no basis for denying the appellant's claim that, as regards the bills, there is no dispute."
Lord Salmon (dissenting but on a different point) said: "I agree that there is no defence to the bills, since the only possible defence (which is not relied upon by the respondents) could be that their acceptance had been procured by fraud, duress or for a consideration which had failed and because the damages claimed in the arbitration are unliquidated damages and such damages cannot be set off against a claim on the bills of exchange."
Lord Russell of Killowen said: "It is in my opinion well established that a claim for unliquidated damages under a contract for sale is no defence to a claim under a bill of exchange accepted by the purchaser: nor is it available as a set-off or counterclaim. This is a deep rooted concept of English commercial law. A vendor and purchaser who agree upon payment by acceptance of bills of exchange do so not simply upon the basis that credit is given to the purchaser so that the vendor must in due course sue for the price under the contract of sale. The bill is itself a contract separate from the contract of sale. It's purpose is not merely to serve as a negotiable instrument; it is also to avoid postponement of the purchaser's liability to the vendor himself, a postponement grounded upon some allegation of failure in some respect by the vendor under the underlying contract, unless it be total or quantified partial failure of consideration."


 
 Cremdean Properties Ltd v Nash; CA 1977 - (1977) 244 EG 547
 
The Arawa [1977] 2 Lloyd's Rep 416
1977

Brandon J
Transport, Contract

Hague-Visby Rules III r2
1 Cites

1 Citers


 
BP Refinery (Westernport) Pty Ltd v The Shire of Hastings (1978) 52 ALJR 20; (1977) 180 CLR 266; [1977] UKPC 13
1977
PC
Lord Simon of Glaisdale
Contract
(Victoria) The Board set out the necessary conditions for a clause to be implied into a contract. Held: Lord Simon of Glaisdale said: "Their Lordships do not think it necessary to review exhaustively the authorities on the implication of a term in a contract which the parties have not thought fit to express. In their view, for a term to be implied, the following conditions (which may overlap) must be satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that 'it goes without saying'; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract."
Lord Bingham: "The courts’ usual role in contractual interpretation is, by resolving ambiguities or reconciling apparent inconsistencies, to attribute the true meaning to the language in which the parties themselves have expressed their contract. The implication of contract terms involves a different and altogether more ambitious undertaking: the interpolation of terms to deal with matters for which, ex hypothesi, the parties themselves have made no provision. It is because the implication of terms is so potentially intrusive that the law imposes strict constrains on the exercise of this extraordinary power. . whether a term should be implied, and if so what, almost inevitably arises after a crisis has been reached in the performance of the contract. So the court comes to the task of implication with the benefit of hindsight, and it is tempting for the court then to fashion a term which will reflect the merits of the situation as they then appear. Tempting, but wrong."
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[ Bailii ] - [ Bailii ]
 
Aries Tanker Corp v Total Transport Ltd; The Aries [1977] 1 WLR 185; [1977] 1 All ER 398
1977
HL
Lord Wilberforce, Lord Simon of Glaisdale
Transport, Contract
Claims for freight charges are an exception to the general rule that all claims between parties must be resolved in one action. A claim for freight cannot be a claim "on the same grounds" as a counter-claim for loss or damage arising out of the carriage, for there is no set off against freight. The purpose of providing for discharge of claims under the rules after 12 months meets an obvious commercial need, namely to allow shipowners after that period to clear their books. The underlying cause of action was extinguished and could not be revived.
Lord Wilberforce said: "The contract contemplates the possibility of a cross-claim by the charterers in respect of loss or damage to the cargo and it expressly provides by incorporation of article III, r.6 of the Hague Rules that the carrier and the ship shall be discharged unless suit is brought within one year after the date of delivery or the date when delivery should have been made. This amounts to a time bar created by contract. But, and I do not think that sufficient recognition to this has been given in the courts below, it is a time bar of a special kind, viz., one which extinguishes the claim (cf. article 29 of the Warsaw Convention 1929) not one which, as most English statutes of limitation (e.g. the Limitation Act 1939, the Maritime Conventions Act 1911), and some international conventions (e.g. the Brussels Convention on Collisions 1910, article 7) do, bars the remedy while leaving the claim itself in existence." and
"One thing is certainly clear about the doctrine of equitable set-off – complicated though it may have become from its involvement with procedural matters – namely, that for it to apply, there must be some equity, some ground for equitable intervention, other than the mere existence of a cross-claim (see Rawson v. Samuel (1839) Cr. & Ph. 161, 178 per Lord Cottenham L.C., Best v. Hill (1872) L.R. 8 C.P. 10, 15, and the modern case of Hanak v. Green But in this case counsel could not suggest, and I cannot detect, any such equity sufficient to operate the mechanism, so as, in effect, to over-ride a clear rule of the common law on the basis of which the parties contracted."
Hague Visby Rules
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The Teno [1977] 2 Lloyds Rep 289
1977

Parker J
Contract, Equity
The court considered the circumstances necessary to establish a right to a set-off in equity: “where the cross-claim not only arises out of the same contract as the claim but is so directly connected with it that it would be manifestly unjust to allow the claimant to recover without taking into account the cross-claim there is a right of set off in equity of an unliquidated claim”.
1 Citers



 
 Harold Stephen and Co Ltd v Post Office; CA 1977 - [1977] 1 WLR 1172; [1978] ILJ Sep
 
Mardorf Peach and Co Ltd v Attica Sea Carriers Corporation of Liberi (The Laconia) [1977] AC 850
1977

Lord Wilberforce
Contract, Estoppel
A right of withdrawal had been granted to a shipowner under a time charterparty if the charterer failed to make a punctual monthly payment of hire. Held: If the monthly hire had not been punctually paid, the right of withdrawal remained even after the hire had been paid. The right to withdraw only ceased to exist, if it had been in some way waived, though the shipowner must exercise his right to withdraw the ship ‘within a reasonable time after default. Here, although the bank was an agent of the alleged waiving party, it did not have sufficient authority to waive a right of the principal.
Lord Wilberforce said that: "Although the word 'waiver', like 'estoppel', covers a variety of situations different in their legal nature, and tends to be indiscriminately used by the courts as a means of relieving parties from bargains or the consequences of bargains which are thought to be harsh or deserving of relief, in the present context what is relied on is clear enough. The charterers had failed to make a punctual payment but it was open to the owners to accept a late payment as if it were punctual, with the consequence that they could not thereafter rely on the default as entitling them to withdraw. All that is needed to establish waiver, in this sense, of the committed breach of contract, is evidence, clear and unequivocal, that such acceptance has taken place."
1 Citers


 
Berkely v Poulett [1977] 1 EGLR 86; [1977] 261 EG 911
1977
CA
Stamp LJ, Scarman LJ
Land, Contract
The court discussed the duties of a vendor to the property between exchange and completion: "These duties and rights [of a purchaser] arise from the contract of sale and it is because of their existence that the vendor is said to be a constructive trustee, or a trustee sub modo, of the estate for the purchaser from the time when the contract is constituted. But to say that it is the duty of the vendor as trustee for the purchaser to care for the property is to put the cart before the horse and may lead you into error. He is said to be a trustee because of the duties which he has, and the duties do not arise because he is a trustee but because he has agreed to sell the land to the purchaser and the purchaser on tendering the price is entitled to have the contract specifically performed according to its terms. Nor does the relationship in the meantime have all the incidents of the relationship of trustee and cestui que trust. That this is so is sufficiently illustrated by the fact that prima facie the vendor is until the date fixed for the completion entitled to receive and retain the rents and profits and that as from that date the purchaser is bound to pay interest. And you may search the Trustee Act 1925 without obtaining much that is relevant to the relationship of vendor and purchaser. Thus, although the vendor because of his duties to the purchaser is called a trustee, it is wrong to argue that because he is so called he has all the duties of or holds the land on a trust which has all the incidents associated with the relationship of a trustee and his cestui que trust."
Scarman LJ discussed what were the two tests for whether an item became affixed to the land: "(1) the method and degree of annexation; and (2) the object and purpose of the annexation. " and “In other words, a degree of annexation which in earlier time the law would have treated as conclusive may now prove nothing. If the purpose of the annexation be for the better enjoyment of the object itself, it may remain a chattel, not withstanding a high degree of physical annexation. Clearly, however, it remains significant to discover the extent of physical disturbance of the building or the land involved in the removal of the object. If an object cannot be removed without serious damage to, or destruction of, some part of the realty, the case for its having become a fixture is a strong one. The relationship of the two tests to each other requires consideration. If there is no physical annexation there is no fixture. Quicquid plantatur solo solo cedit. Nevertheless, an object, resting on the ground by its own weight alone, can be a fixture, if it is so heavy that there is no need to tie it into a foundation, and if it were put in place to improve the realty. Prima Facie, however, an object resting on the ground by its own weight alone is not a fixture: see Megarry and Wade , p 716. Conversely, an object affixed to realty but capable of being removed without much difficulty may yet be a fixture, if, for example, the purpose of its affixing be that “of creating a beautiful room as a whole” (Neville J in In Re Whaley [1908] 1 Ch 615 at p 619. An in the famous instance of Lord Chesterfield's Settled Estates [1911] 1 Ch 237 Grinling Gibbons carvings, which had been affixed to a suit of rooms 200 years earlier, were held to be fixtures. Today so great are the technical skills of affixing and removing objects to land or buildings that the second test is more likely than the first to be decisive. Perhaps the enduring significance of the first test is a reminder that there must be some degree of physical annexation before a chattel can be treated as part of the realty.”
. . . and the tests, in the case of an item which has been attached to the building in some way other than simply by its own weight, seem to be the purpose of the item and the purpose of the link between the item and the building. If the item viewed objectively, is, intended to be permanent and to afford a lasting improvement to the building, the thing will have become a fixture. If the attachment is temporary and is no more than is necessary for the item to be used and enjoyed, then it will remain a chattel. Some indicators can be identified. For example, if the item is ornamental and the attachment is simply to enable the item to be displayed and enjoyed as an adornment that will often indicate that this item is a chattel. Obvious examples are pictures. But this will not be the result in every case; for example ornamental tiles on the walls of kitchens and bathrooms. The ability to remove an item or its attachment from the building without damaging the fabric of the building is another indicator. The same item may in some areas be a chattel and in others a fixture. For example a cooker will, if free standing and connected to the building only by an electric flex, be a chattel But it may be otherwise if the cooker is a split level cooker with the hob set into a work surface and the oven forming part of one of the cabinets in the kitchen. It must be remembered that in many cases the item being considered may be one that has been bought by the mortgagor on hire purchase, where the ownership of the item remains in the supplier until the instalments have been paid. Holding such items to be fixtures simply because they are housed in a fitted cupboard and linked to the building by an electric cable, and, in cases of washing machines by the necessary plumbing would cause difficulties and such findings should only be made where the intent to effect a permanent improvement in the building is incontrovertible. The type of person who instals or attaches the item to the land can be a further indicator. Thus items installed by a builder, eg the wall tiles will probably be fixtures, whereas items installed by eg a carpet contractor or curtain supplier or by the occupier of the building himself or herself may well not be.
The judge's directions to himself on the law were these: that the primary test whether an item is or is not a fixture is the degree of annexation of the item to the building. He cited Megarry and Wade on Real Property at page 732:
“An article is prima facie a fixture if it has some substantial connection with the land or a building on it” and “A chattel attached to the land or a building on it, in some substantial manner, eg by nails or screws, were prima facie a fixture even if it would not be difficult to remove it. Examples in this category are a fireplace, panelling, wainscot and a conservatory on a brick foundation.”
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Derby and Co Ltd v ITC Pension Trust Ltd [1977] 2 All ER 890
1977

Oliver J
Contract, Land
The court considered a party resisting a claim to an estoppel: "where parties negotiate on a basis "subject to contract" everybody knows there is a risk that, at the end of the day, either side may back out of negotiations, up to the point where leases are exchanged."
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Nelson v British Broadcasting Corporation [1977] IRLR 148
1977
CA
Roskill LJ, bUxton LJ
Employment, Contract
Mr Nelson was employed as a producer but had in fact been engaged in the Caribbean Service of the BBC in terms of the work which he had actually been doing. The contract of employment expressly provided that he should serve wherever and however he might be required. Held: The closure of the BBC service in the Caribbean did not involve a redundancy since he was expressly not employed to perform his services there.
Roskill LJ said: "The corporation's case before the industrial tribunal was simplicity itself: 'This man was employed for the purpose of the Caribbean Service. The Caribbean Service was being shut down as a result of Treasury demands for economy. Therefore we could no longer keep him there; his services were not required; and therefore he became redundant; and because he became redundant he cannot claim to have been unfairly dismissed.' The industrial tribunal, as I said at the beginning of this judgment, accepted that argument and rejected the claim. They went into the matter with very great care. They held that Mr Nelson had become redundant. They reached that conclusion because of an argument that was apparently put forward that it was a term of Mr Nelson's employment that he should be employed for, and for all practical purposes only for, programmes for the Caribbean. That emerges very clearly from the industrial tribunal's reasons. It was said that, notwithstanding the very wide words of clause 8 of the agreement none the less: "We think it was a term of Mr Nelson's contract of employment, arising by necessary implication or inference from the primary facts, that he was employed for the purposes of broadcasts to the Caribbean." With great respect to the tribunal, that seems to me to be an impossible conclusion as a matter of law, for this reason: it is a basic principle of contract law that if a contract makes express provision (as clause 8 did) in almost unrestricted language, it is impossible in the same breath to imply into that contract a restriction of the kind that the industrial tribunal sought to do." The employers were not allowed to amend their pleadings to allege dismissal for some other reason, and they had failed to establish a potentially fair reason for dismissal, so that the employee was entitled to succeed.
1 Citers


 
Intertradex SA v Lesieur Tourteraux SARL [1977] 2 LI 146
1977
QBD
Donaldson J
Contract
The court held as frustrated a contract for the sale of Mali groundnuts, where interruptions in elecricity supplies and other faults prevented the sellers from delivering their promise.
1 Citers


 
Levison v Patent Steam Carpet Cleaning Co Ltd [1978] 1 QB 69; [1977] 3 All ER 498
1977
CA
Lord Denning MR, Orr LJ, Sir David Cairns
Contract, Agency
A valuable Chinese carpet had been taken for cleaning but was lost by the bailee. The bailee said that his liability was limited under the terms of the contract to a particular sum. A fundamental breach is "a breach going to the root of the contract". The claimant pleaded by way of reply that the carpet had been lost by reason of a fundamental breach. The question arose whether the burden lay upon the bailor to establish a fundamental breach of contract or upon the bailee to establish that there had been no fundamental breach of contract. Held: Whilst recognising that there had been conflicting decisions, the burden lay upon the bailee to establish that there been no fundamental breach.
Lord Denning MR said: "Upon principle, I should have thought that the burden was on the cleaners to prove that they were not guilty of a fundamental breach. After all, Mrs. Levison does not know what happened to it. The cleaners are the ones who know, or should know, what happened to the carpet, and the burden should be on them to say what it was . . It is, therefore, a moot point for decision. On it I am clearly of opinion that, in a contract of bailment, when a bailee seeks to escape liability on the ground that he was not negligent or that he was excused by an exception or limitation clause, then he must show what happened to the goods. He must prove all the circumstances known to him in which the loss or damage occurred. If it appears that the goods were lost or damaged by a slight breach - not going to the root of the contract- he may be protected by the exemption or limitation clause. But, if he leaves the cause of loss or damage undiscovered and unexplained - then I think he is liable: because it is then quite likely that the goods were stolen by one of his servants; or delivered by a servant to the wrong address; or damaged by reckless or wilful misconduct; all of which the offending servant will conceal and not make known to his employer. Such conduct would be a fundamental breach against which the exemption or limitation clause will not protect him."
Orr LJ said: "as a matter both of justice and of common sense the burden ought to rest on the bailee who, if the goods have been lost whilst in his possession, is both more likely to know the facts and in a better position to ascertain then than the bailor."
Sir David Cairns said: "however difficult it may sometimes be for a bailee to prove a negative, he is at least in a better position than the bailor to know what happened to the goods while in his possession."
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Albacruz (Cargo Owners) v Albazero 'The Albazero' [1977] AC 774
1977
HL
Lord Brandon, Lord Diplock
Transport, Contract
The House was asked as to the extent to which a consignor can claim damages against a carrier in circumstances where the consignor did not retain either property or risk. To the general principle that a person cannot recover substantial damages for breach of contract where he himself has suffered no loss by reason of the breach, there is an exception applicable to contracts of carriage: "that the consignor may recover substantial damages against the shipowner if there is privity of contract between him and the carrier for the carriage of goods; although, if the goods are not his property or at his risk, he will be accountable to the true owner for the proceeds of his judgment."
Lord Diplock rationalised the rule in Lambert to fit into the pattern of English law by treating it: "as an application of the principle, accepted also in relation to policies of insurance upon goods, that in a commercial contract concerning goods where it is in the contemplation of the parties that the proprietary interests in the goods may be transferred from one owner to another after the contract has been entered into and before the breach which causes loss or damage to the goods, an original party to the contract, if such be the intention of them both, is to be treated in law as having entered into the contract for the benefit of all persons who have or may acquire an interest in the goods before they are lost or damaged, and is entitled to recover by way of damages for breach of contract the actual loss sustained by those for whose benefit the contract is entered into."
He explained the common law approach underlying section 32 in terms of bailment: "The question who stood in relation of bailor to carrier and so was entitled to sue him for the full value of the goods lost or the full amount of the damage could only arise where the consignor and consignee were different persons. In such a case the presumption was that the bailor was the person named as consignee and that in delivering possession of the goods to the carrier the consignor was acting and purporting to act as agent only for a designated principal - the consignee."
Sale of Goods Act 1979 32
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1 Citers


 
David v New England College of Arundel [1977] 1 ICR 6
1977


Employment, Contract

1 Citers


 
British Airports Authority v Customs and Excise Commissioners [1977] STC 36
1977

Scarman LJ
Taxes - Other, Contract
The court adopted the test when interpreting the contract at issue of whether the substance and reality of the agreement was the grant of a license to occupy land.
1 Citers


 
Liverpool City Council v Irwin [1977] AC 239
1977
HL
Lord Wilberforce, Lord Cross of Chelsea
Contract
The House found it to be an implied term of a tenancy agreement that the lessor was to be responsible for repairing and lighting the common parts of the building of which the premises formed part. In analysing the different types of contract case in which a term might be implied the House preferred to describe the different categories identified as no more than shades on continuous spectrum. A court could not in law to imply a term into a contract simply because it thought it reasonable to do so, however one of the established situations for implication of terms is that it is necessary for business efficacy
Lord Cross of Chelsea: "When it implies a term in a contract the court is sometimes laying down a general rule that in all contracts of a certain type – sale of goods, master and servant, landlord and tenant and so on – some provision is to be implied unless the parties have expressly excluded it. In deciding whether or not to lay down such a prima facie rule the court will naturally ask itself whether in the general run of such cases the term in question would be one which it would be reasonable to insert. sometimes, however, there is no question of laying down any prima facie rule applicable to all cases of a defined type but what the court is being in effect asked to do is to rectify a particular – often a very detailed – contract by inserting in it a term which the parties have not expressed. Here it is not enough for the court to say that the suggested term is a reasonable one the presence of which would make the contract a better or fairer one; it must be able to say that the insertion of the term is necessary to give – as it is put – "business efficacy" to the contract and that if its absence had been pointed out at the time both parties – assuming them to have been reasonable men – would have agreed without hesitation to its insertion."
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Surrendra Overseas Ltd v Government of Sri Lanka [1977] 1 WLR 565
1977

Kerr J
Limitation, Contract
A debtor can only be held to have acknowledged the claim if he has in effect admitted his legal liability to pay that which the plaintiff seeks to recover. An acknowledgement of part only of a debt cannot operate to acknowledge more.
Kerr J said: "What I draw from these authorities, and from the ordinary meaning of "acknowledges the claim," is that the debtor must acknowledge his indebtedness and legal liability to pay the claim in question. There is now no need to go further to seek for any implied promise to pay it. That artificiality has been swept away. But, taking the debtor's statement as a whole, as it must be, he can only be held to have acknowledged the claim if he has in effect admitted his legal liability to pay that which the plaintiff seeks to recover. If he has denied liability, whether on the ground of what in pleader's language is called "avoidance", or on the ground of an alleged set off or cross-claim, then his statement does not amount to an acknowledgment of the creditor's claim. Alternatively, if he contends that some existing set off or cross-claim reduces the creditor's claim in part, then the statement, taken as a whole, can only amount to an acknowledgment of indebtedness for the balance. In effect, "acknowledges the claim" means that the statement in question must be an admission of that indebtedness which the plaintiff seeks to recover notwithstanding the expiry of the period of limitation."
1 Citers


 
Phoebus D Kyprianou Coy v Wm H Pim Jnr and Co Ltd [1977] 2 Lloyds Rep 570
1977

Kerr J
Contract
Buyers under a contract are entitled "to opt for clarity and certainty if they choose, by waiting until the end of the shipment period", even though it may be clear that the sellers are in default, rather than allowing themselves to have to declare default following an earlier and possibly curable breach. The sellers were entitled to damages in the ordinary way i.e. based on the difference between the contract prices and the appropriate market price because clause 17(a) contained no option in the sense of an irrevocable election but merely a choice of remedies. While the buyers were in breach before the end of each shipment period they were not entitled to have damages assessed by reference to such earlier dates because (i) the breaches were not breaches of condition and even if they were the sellers were entitled to treat the contract as subsisting; and (ii) the sellers were entitled to wait until the end of each shipment period when the buyers were certainly and irretrievably in default and have damages assessed by reference to that date.
1 Citers


 
Champtaloup v Thomas [1977] 2 NSWLR 264
1977

Mahoney JA, Street CJ
Contract, Landlord and Tenant
New South Wales - an election to terminate must generally occur within a reasonable time of the discovery of the circumstances giving rise to the right. If the lessee of a flat, on learning of the lessor's breach, communicated to the lessor that he or she desired to consider his or her position, and in the meantime continued to occupy the flat and ride up and down in the lift, the lessee may not be found to have affirmed the contract (at least until a reasonable time had passed) even though the right to occupy and ride arose only by virtue of the lease.
Glass JA said: 'To impose the further requirement that the donee [of a legal right] must be actuated by a legitimate purpose, thus forcing a judicial trek through the quagmire of mixed motives would be, in my opinion, a dangerous and needless innovation.'
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Butler Machine Tool Co Ltd v Ex-Cell-O Corporation [1979] 1 All ER 965; [1979] 1 WLR 401; [1977] EWCA Civ 9
25 Apr 1977
CA
Lord Denning MR, Lawton LJ, Bridge LJ
Contract
The plaintiff offered to sell a machine tool to the defendant. The offer said that its terms had precedence over any terms in the buyer's order, and contained a clause allowing a price variation. The defendant's order form allowed no variation, and said that its own terms applied. They refused to pay a varied price as requested by the plaintiffs. The defendant appealed a finding that the variation had been properly imposed. Held: The defendant's appeal succeeded. The multiple letters had to be read as a whole and single document.
Lord Denning MR said: "I have much sympathy with the judge's approach to this case. In many of these cases our traditional analysis of offer, counter-offer, rejection, acceptance and so forth is out-of-date. This was observed by Lord Wilberforce in New Zealand Shipping Co Ltd v AM Satterthwaite. The better way is to look at all the documents passing between the parties and glean from them, or from the conduct of the parties, whether they have reached agreement on all material points, even though there may be differences between the forms and conditions printed on the back of them. [Applying Brogden v Metropolitan Railway Co (1877)] it will be found that in most cases when there is a "battle of forms" there is a contract as soon as the last of the forms is sent and received without objection being taken to it. Therefore, judgment was entered for the buyers."
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[ Bailii ]
 
Tai Hing Cotton Mill Limited v Kamsing Knitting Factory (A Firm) [1977] UKPC 14; [1978] 1 All ER 515; [1978] 2 WLR 62; [1979] AC 91
27 Jul 1977
PC
Lord Keith
Contract
(Hong Kong) The buyer brought an action for damages for breach of a contract for the sale of goods. The measure of damages was the difference between the contract price and the market value of the goods at the relevant date. The evidence called at trial was all directed to the market value of the goods at 31 July 1973. However, it was held that the correct date for the comparison was December 1973, about which there was no specific evidence. The sellers argued that in those circumstances the buyers were entitled to no more than nominal damages. Held: The Board rejecte dthat argument.
Lord Keith said: "It is apparent on any view that the buyers suffered substantial loss, though the material to enable it to be precisely quantified is lacking.
Other possible courses canvassed in the course of the argument were (a) to order a retrial of the case on the matter of damages, (b) to restore the figure of damages fixed by Briggs C.J., and (c) to fix a new figure on the basis that the market price of yarn declined steadily and constantly between September 1973 and January 1975, and that therefore the point which the decline had reached at the end of December 1973 is capable of ascertainment. Their Lordships are not disposed to order a new trial. Amendment of the pleadings would be required and the delay, trouble and expense which would be involved in further proceedings do not appear to their Lordships to be consonant with the due administration of justice. The problem about the figure of damages fixed by Briggs C.J. is that it was plainly arrived at upon a wrong basis, and that is now common ground between the parties. In the result, their Lordships have come to the conclusion that the ends of justice would best be served if they were to fix a new figure of damages as best they can upon the available evidence, such as it is."
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[ Bailii ]

 
 Massey v Crown Life Insurance Company; CA 4-Nov-1977 - [1977] EWCA Civ 12; [1978] 1 WLR 676; [1978] ICR 590
 
Smith v UMB Chrysler (Scotland) Ltd [1978] 1 WLR 165; [1977] UKHL 7; 1978 SLT 21; [1978] 1 All ER 18; 8 BLR 1; 1978 SC (HL) 1
9 Nov 1977
HL
Lord Wilberforce, Viscount Dilhorne
Contract, Land
The principles set out in Canada Steamship apply to "clauses which purport to exempt one party to a contract from liability". The principles should be applied without 'mechanistic construction'.
Lord Keith of Kinkel said: The tests were guidelines, but "guidelines" but "the matter is essentially one of the ascertaining the intention of the contracting parties from the language they have used, considered in the light of surrounding circumstances which must be taken to have been within their knowledge."
1 Cites

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[ Bailii ]
 
Dahlia Ltd v Four Millbank Nominees Ltd and Another [1977] EWCA Civ 5; [1978] Ch 231
24 Nov 1977
CA
Buckley, Orr, Goff LJJ
Contract, Land
Appeal against strike out of statement of claim. They had negotiated with the defendants for the purchase of several properties. Though formal contracts were never exchanged, the plaintiffs said that they had the benefit of a unilateral contract to enter into a binding written contract.
1 Cites

[ Bailii ]
 
Howard Marine and Dredging Co Ltd v A Ogden and Sons (Excavations) Ltd [1977] EWCA Civ 3; [1978] QB 574
13 Dec 1977
CA
Lord Denning MR, Bridge, Shaw LJJ
Contract

[ Bailii ]
 
Howard Marine v Ogden [1978] 1 QB 574
1978
CA

Contract

Misrepresentation Act 1967 2(1)

 
Willis and Son v British Car Auctions Ltd [1978] 1 WLR 438
1978
CA
Lord Denning
Contract, Agency
A car on hire purchase was sold and delivered by auctioneers on the instructions of the hirer. The court was asked whether the auctioneers' liability was affected by the fact that the car had been sold under their provisional bid procedure. Held: The auctioneers were liable. Lord Denning:"It is now, I think, well established that if an auctioneer sells goods by knocking down with his hammer at an auction and thereafter delivers them to the purchaser - then although he is only an agent - then if the vendor has no title to the goods, both the auctioneer and the purchaser are liable in conversion to the true owner, no matter how innocent the auctioneer may have been in handling the goods or the purchaser in acquiring them: see Barker v Furlong . . and Consolidated Co. v Curtis & Son . . This state of law has been considered by the Law Reform Committee . . in its 18th Report (Conversion and Detinue) (1971), Cmnd. 4774 as to innocent handlers: paragraphs 46-50. But Parliament has made no change in it: no doubt it would have done so in the Torts (Interference with Goods) Act 1977 if it had thought fit to do so."
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Cresswell v Potter [1978] 1 WLR 255
1978
ChD
Megarry J
Contract
When looking at cases of unconscionable conduct, the modern equivalent of `poor and ignorant' might be `a member of the lower income group ... less highly educated'.
1 Citers


 
Penfold and Penfold v Cooke (1978) 128 NLJ 736
1978


Land, Contract
(New Zealand) There can be no boundary agreement unless it constitutes a genuine attempt to resolve a disputed boundary line. A boundary agreement gave one party as much as three quarters of an acre of land. The court thought that the judge was not justified in drawing an inference that the parties had agreed that the position where a fence was placed was the boundary between them.
1 Citers


 
Lawrence and Another v Lexcore Holdings Ltd [1978] 2 All ER 810
1978


Contract
Effect of a mistake in a document.
1 Citers


 
Federal Commerce Ltd v Molena Alpha Inc; (The "Nanfri") [1978] QB 927
1978
CA
Goff LJ, Lord Denning MR
Contract, Landlord and Tenant, Equity
The court considered whether claim as against a shipowner could be set off against sums due under a time charter hire. Held: Save for any contractual provision to the contrary a tenant is entitled to deduct from the rent payable, so as to extinguish or reduce an instalment of rent due, any cross claim arising out of the provisions of the lease and the operation of the lease. Equitable set-off is ultimately based on considerations of justice.
Lord Denning MR said: "It is now far too late to search through the old books and dig them out. Over 100 years have passed since the Judicature Act 1873. During that time the streams of common law and equity have flown together and combined so as to be indistinguishable the one from the other. We have no longer to ask ourselves what would the courts of common law or courts of equity have done before the Judicature Act? We have to ask ourselves: what should we do now so as to ensure fair dealing between the parties? See United Scientific Holdings Ltd. v. Burnley Borough Council [1978] A.C. 904 per Lord Diplock. This question must be asked in each case as it arises for decision: and then, from case to case, we shall build up a series of precedents to guide those who come after us. But one thing is clear: it is not every cross-claim which can be deducted. It is only cross-claims that arise out of the same transaction or are closely connected with it. And it is only cross-claims which go directly to impeach the plaintiff's demands, that is, so closely connected with his demands that it would be manifestly unjust to allow him to enforce payment without taking into account the cross-claim. Such was . . Hanak v. Green."
Judicature Act 1873
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Multiservice Bookbinding Ltd v Marden [1978] 2 All ER 489; [1979] Ch 84
1978
ChD
Browne-Wilkinson J
Contract
To have a transaction set aside as a harsh and unconscionable bargain, a party would have to show not only that the terms of the transaction were harsh or oppressive, but also moral unfairness. Browne-Wilkinson J said: "In my judgment a bargain cannot be unfair and unconscionable unless one of the parties to it has imposed the objectionable terms in a morally reprehensible manner, that is to say in a way which affects his conscience". The court may allow for the question of whether the borrower received independent advice.
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R W Green Ltd v Cade Bros Farms [1978] 1 Lloyds Rep 602
1978

Griffiths J
Contract
Seed potatoes were sold. They were infected with a virus which could not be detected by inspection. The buyers claimed to set off against the cost of the seed potatoes a counter-claim against the sellers for the defective seed. They relied on the 1893 Act. Held: "To my mind the contract in clear language places the risk insofar as damage may exceed the contract price, on the farmer. The contract had been in use for many years with the approval of the negotiating bodies acting on behalf of both seed potato merchants and farmers, and I can see no grounds upon which it would be right for the court to say in the circumstances of this case that such a term is not fair or reasonable.”
Supply of Goods (Implied Terms) Act 1973 4 - Sale of Goods Act 1893 65
1 Citers


 
Staffordshire Area Health Authority v South Staffordshire Waterworks Company [1978] 1 WLR 138; [1978] 3 All ER 769
1978
CA
Lord Denning MR, Goff LJ
Contract
There was no provision in the agreement, made in 1929, to supply water at all times hereafter, between the parties for a variation of the charges payable under the agreement, which had between 1929 and 1978 become derisory, being 1/20 of the current proper price. Held: The agreement was terminable by reasonable notice. The words of the agreement were capable of meaning at all times hereafter during subsistence of this agreement and that they did not conclusively and inevitably declare perpetuity. They therefore did not have the effect that the agreement was intended to persist in perpetuity, as the trial judge had held that it did.
1 Citers


 
Laurence v Lexcourt Holdings Ltd [1978] 1 WLR 1128; [1978] 2 All ER 810
1978
ChD
Dillon QC
Contract, Land
The purchasers sought rescission of a 15 year lease of business premises. Unknown to either party, the planning permission restricted their use as offices to a period of no more than two years. Held: There had been a misrepresentation by the lessors which entitled the lessees to rescind the agreement. Dealing with an alternative plea of common mistake, the court followed Solle v Butcher and Grist v Bailey in holding that the lease could be rescinded on the ground that it had been concluded under a mistake which was fundamental. The defendant's failure to make the search which would have disclosed the mistake did not disentitle them from relying on their mistake.
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Gibson v Manchester City Council [1978] 1 WLR 520; [1978] 2 All ER 583
1978
CA
Lord Denning MR, Ormrod LJ, Geoffrey Lane LJ
Contract
The parties disputed which terms of a contract applied. Held: Lord Denning MR rejected the conventional approach of looking to see whether upon the true construction of the documents relied upon there can be discerned an offer and acceptance: "I do not like detailed analysis on such a point. To my mind it is a mistake to think that all contracts can be analysed into the form of offer and acceptance. I know in some of the textbooks it has been the custom to do so: but, as I understand the law, there is no need to look for a strict offer and acceptance. You should look at the correspondence as a whole and at the conduct of the parties and see therefrom whether the parties have come to an agreement on everything that was material. If by their correspondence and their conduct you can see an agreement on all material terms - which was intended thenceforward to be binding - then there is a binding contract in law even though all the formalities have not been gone through."
1 Citers



 
 McInnes v Onslow-Fane; ChD 1978 - [1978] 3 All ER 211; [1978] 1 WLR 1520
 
Elsey v J G Collins Insurance Agencies Limited [1978] 83 DLR 15
1978

Dickson J
Contract
(Supreme Court of Canada) The court considered the power to strike down a clause as a penalty: "It is now evident that the power to strike down a penalty clause is a blatant interference with the freedom of contract and is designed for the sole purpose of providing relief against oppression for the party having to pay the stipulated sum. It has no place where there is no such oppression."
1 Citers


 
Toepfer v Warinco AG [1978] Lloyds Rep 569
1978

Brandon J
Contract, Arbitration
The buyer's representatives had failed to see that the cargo was coarse-ground meal rather than fine-ground meal. The seller defended pleading waiver, based on this omission. Held: The defence failed because the buyer's supervisor had failed to spot the discrepancy. The omission amounted to a failure to mitigate such that the buyers were only entitled to nominal damages. It is not necessary that an arbitration award should contain express findings of fact, provided that the necessary findings may be "spelled out".
1 Citers


 
Greig v Insole [1978] 1 WLR 302; [1978] 3 All ER 449
1978

Slade J
Torts - Other, Contract
The court was asked whether the Test and County Cricket Board had by passing resolutions, induced cricketers with contracts with World Series Cricket Pty Ltd, the plaintiff, to break those contracts. The TCCB had acted in good faith and under a mistake as to the legal position. They believed that their resolutions would only induce cricketers who could lawfully terminate their contracts to do so. Held: People are presumed to intend the reasonable consequences of their actions. Good faith as such is no defence if knowledge and intention are proved. The court applied an objective test to ascertain whether there was an intention to induce the cricketers to break their contracts and held that mistake and error as to the legal position were irrelevant. It identified 5 conditions to be established for the tort of wrongful interference with contractual relations, namely: "(1) either (a) direct interference or (b) indirect interference (if coupled with unlawful means); (2) knowledge of the contract; (3) intention to interfere with it; (4) damage which is more than nominal; (5) so far as necessary, the rebuttal of any defence based on justification for the interference."
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H Parsons (Livestock) Limited v Uttley Ingham and C. Limited [1978] QB 791; [1977] EWCA Civ 13
1978
CA
Lord Denning MR, Orr, Scarman LJJ
Damages, Contract
The defendants had installed a pig nut hopper for the plaintiffs, but failed to provide adequate ventilation, causing the nuts to go sour, and the pigs to be poisoned. Held: Remoteness of damage is a question of law. The death of the pigs would have been within the contemplation of the parties when they made their contract, and damages were not too remote and were payable. "The court's task, therefore, is to decide what loss to the plaintiffs it is reasonable to suppose would have been in the contemplation of the parties as a serious possibility had they had in mind the breach when they made their contract."
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[ Bailii ]
 
Bremer Handelsgesellschaft v Vanden Avenne-Izegem [1978] 2 Lloyds Rep 109
1978
HL
Lord Wilberforce
Contract
The House considered a contractual provision which provided for the cancellation of a contract for the sale of soya beans on the happening of various events Held: Lord Wilberforce said that there were three factors that determined whether a notice provision was a condition precedent: (i) the form of the clause itself; (ii) the relation of the clause to the contract as a whole; and (iii) general considerations of law; and "As to (i) the clause is not framed as a condition precedent. The "cancellation" effected by the first sentence is not expressed to be conditional upon the second sentence being complied with: it operates automatically upon the relevant event. Learned Counsel for the buyers invited your Lordships to read cl.21 as if the first sentence were linked with the second by such words as "provided that" – an argument which must surely support the view that without such words, the second sentence does not attain condition status. Moreover, the generality of the words "without delay" tells against the buyer's contention. If a condition were intended a definite time limit would be more likely to be set. Then, as to (ii), provisions elsewhere in the contract . . suggest that the second sentence is not intended as a condition. (iii) Automatic and invariable treatment of a clause such as this runs counter to the approach, which modern authorities recognise, of treating such a provision as having the force of a condition (giving rise to rescission or invalidity), or of a contractual term (giving rise to damages only) according to the nature and gravity of the breach. The clause is then categorised as an innominate term…In my opinion the clause may vary appropriately and should be regarded as such an intermediate term: to do so would recognise that while in many, possibly most, instances, breach of it can adequately be sanctioned by damages, cases may exist in which, in fairness to the buyer, it would be proper to treat the cancellation as not having effect. On the other hand, always so to treat it may often be unfair to the seller, and unnecessarily rigid."
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The Shackleford [1978] 1 Lloyds Rep 19
1978
ChD
Donaldson J
Contract
The charterers by the receivers had "accepted" a notice of readiness which was "premature" when given because customs entry had not been obtained as required by the relevant clause of the charterparty and so were estopped by their conduct from alleging that the notice was premature. The Notice of Rejection (NOR) might have been rejected for prematurity or it could have been ignored; however, it was formally accepted on no less than three occasions. Therefore the charterers could not subsequently be heard to assert that the notice was premature.
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Cole v Rose [1978] 3 All ER 1121
1978

Mervyn Davies QC J
Contract, Land
The vendor had purported to rescind the contract and retain the deposit, while selling to another purchaser at a higher price. Held: The purchaser was entitled to return of the deposit, because the notice to complete had been ineffective. After referring to Schindler, Mervin Davies J said: "With those observations in mind, it seems that one can contemplate an order under s 49(2) only if there are some special circumstances in the particular matter, being circumstances that suggest that it is perhaps unfair or inequitable that the purchaser should lose his deposit. I cannot see any special circumstances in the present case. It is a straightforward case of a contract for sale that was not completed because the purchaser could not find the purchase price in time."
Law of Property Act 1925 49(2)
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A and J Inglis v Buttery and Co (1878) 3 AC 552
1978
HL
Lord Blackburn
Contract, Evidence
The presumption is that a contract document expresses all the terms in the contract with the effect that the court will only look to the document 'in determining what the contract really was and what it really meant. Lord Blackburn preferred the dissenting opinion of Lord Gifford.
Lord Blackburn observed that: "Where parties agree to embody, and do actually embody, their contract in a formal written deed, then in determining what the contract really was and really meant, a court must look to the formal deed and to that deed alone. That is only carrying out the will of the parties"
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Intertradex SA v Lesieur Tourteraux SARL [1978] 2 Lloyds Rep 509
1978

Lord Denning MR
Contract
The parties contracted to sell a quantity of Mali groundnut expellers cif Rouen. The sellers intended to perform the contracts by appropriating a quantity of Mali groundnut expellers under a contract with suppliers who were the sole producers of the contract goods. Due to an electrical fault and to interruptions in the supply by rail of raw materials, the suppliers were unable to meet their commitments to the sellers who in turn were unable to supply the contract quantity to the buyers. Held: The appeal failed. The contracts had not been frustrated. It is the seller who can guard against the risk by protecting himself by making his promise conditional on the goods being available for delivery.
Lord Denning MR said: "The events were not sufficient to warrant any finding of frustration. There was the breakdown of the machinery at the factory. There was the difficulty in getting raw material down by rail. Such events are commonplace in the world of affairs. If a party desires to avoid such consequences, he must insert a stipulation to excuse him. He cannot avoid them by a plea of frustration."
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 United Scientific Holdings v Burnley Borough Council; HL 1978 - [1978] AC 904
 
Gator Shipping Corporation v Trans-Asiatic Oil Ltd, The Odenfeld [1978] 2 Lloyds Reports 357
1978

Kerr J
Contract
The parties entered into charter for a basic period of ten years. After the first two years the charter hire rate was to be assessed by the London Tanker Broker Panel, subject to a minimum. A side letter from the owners to the defendants contained a "funding arrangement" under which, if the hire fixed by the Panel was less than the minimum hire specified in the charter, the owners would pay the difference. The defendants knew the documents were written to help the owner raise a loan and that it was at least highly likely that the owner would not disclose to the lender the side letter. After the charter had been made, the owner approached the plaintiffs for a loan, disclosing only the charter and not the side letter. The plaintiffs made a loan of $6,660,000 repayable with interest in 16 instalments over eight years on the security of an assignment of the money due under the charter. They believed that the charter contained all the terms of the bargain. The freight market collapsed, and the Panel fixed a rate below the minimum level in the charter. The owner did not observe the funding arrangement, and the defendants said that they treated the charter as at an end due to the owner's wrongful repudiation. Held. The owners were entitled to refuse to accept the repudiation, because the funding arrangement was a separate matter. Neither the owner nor the plaintiffs were precluded or estopped from denying that the side letter and the charter represented one transaction. Alternatively, the defendants were estopped from denying that the charter represented the only material bargain between them and the owner which could affect the obligation to pay hire.
Kerr J said: "the defendants' conduct was at least careless, i.e. negligent in law if they were under a duty to potential lenders not to act in relation to the documents as they did". The law provided a remedy by the doctrine of estoppel, and the plaintiffs would also have a remedy in negligence.
Reviewing White and Carter and Attica Sea Carriers, Kerr J said that "any fetter on the innocent party's right of election whether or not to accept a repudiation will only be applied in extreme cases, viz. where damage would be an adequate remedy and where an election to keep the contract alive would be wholly unreasonable."
Reviewing earlier case law, "All three judgments proceeded on the basis that the owner's contention must fail because it amounted to an attempt to enforce the charter by a specific performance and because, on the extreme facts of that case, it was wholly unreasonable to the owners to seek to hold the Charterers to the charter instead of claiming such damages as they could establish. I emphasise the latter part of what I regard as the ratio of the judgments, because I do not regard the case as any authority for a general proposition to the effect that whenever the Charterer repudiates a time or demise charter for whatever reason and in whatever circumstances, the owners are always bound to take the vessel back, because a refusal to do so would be equivalent to seeking an order for specific performance. The consequences of such a proposition would be extremely serious in many cases, and no trace of such a doctrine is to be found in our shipping laws. No such general proposition was laid down. One only has to read the judgment of Lord Denning MR, with which Lord Justices Orr and Browne agreed, to see that his conclusion was based on the extreme facts of the case. In saying this I am in no way belittling the importance of the case in so far as it is a presently binding authority on this court in limiting or qualifying the generality of the principal of a virtually unfettered right of election in favour of the innocent party. This had been stated in the speech of Lord Hodson, and was evidently accepted, subject to the practicalities of the situation, by all three members of the Court of Appeal in the Decro-Wall case. It must be accepted in this court that the generality of this principal is qualified by the later Atticus Sea Carriers decision, since all three judgments deal with the White and Carter case and the Decro-Wall case is also expressly referred to in the judgments of Lords Justices Orr and Browne. However, what was decided in the Atticus Sea Carrier case, to use the language of Lord Justice Orr at the end of his judgment, was that the passages in the judgments in the Decro-Wall case did not apply "in the very different circumstances of this case". It follows that any fetter on the innocent party's right of election whether or not to accept a repudiation will only be applied in extreme cases, viz. where damages would be an adequate remedy and where an election to keep the contract alive would be wholly unreasonable."
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Bowlay Logging Limited v Domtar Limited [1978] 4 WWR 105
1978

Berger J
Commonwealth, Damages, Contract
(Canada) The parties contracted for the claimant to cut timber and the defendant to haul it. The plaintiff said that the defendant breached the contract by supplying insufficient trucks to haul the timber away, and claimed as damages his wasted expenditure. Held: Only nominal damages could be awarded. A plaintiff was not entitled to damages on a basis which would leave him better off than he would have been in had the contract been performed. The plaintiff would have made a loss on the contract as a whole. Noting that the issue had not been raised in either Cullinane Anglia Television said: "The law of contract compensates a plaintiff for damages resulting from the defendant's breach; it does not compensate a plaintiff for damages resulting from his making a bad bargain. Where it can be seen that the plaintiff would have incurred a loss on the contract as a whole, the expenses he has incurred are losses flowing from entering into the contract, not losses flowing from the Defendant's breach. In these circumstances, the true consequence of the defendant's breach is that the plaintiff is released from his obligation to complete the contract- or, in other words, he is saved from incurring further losses.
If the law of contract were to move from compensating for the consequences of breach to compensating for the consequences of entering into contracts, the law would run contrary to the normal expectations of the world of commerce. The burden of risk would be shifted from the plaintiff to the defendant. The defendant would become the insurer of the plaintiff's enterprise."
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Daulia Ltd v Four Millbank Nominees Ltd [1978] 1 Ch 231
1978


Land, Contract
In a contract the Defendants promised certain properties to whoever first arrived with the requisite draft contract and bankers drafts. The Plaintiffs did. Held: They failed in their claim. It involved a unilateral contract and the Defendants' oral promises was expressly made subject to contract, but the Court decided the dispute by reference to the central consideration that the contract concerned the disposition of an interest in land to which section 40 of the Law of Property Act applied.
Law of Property Act 1925 40
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North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd (The Atlantic Baron) [1978] 3 All ER 1170; [1979] QB 705
1978

Mocatta J
Contract
Mocatta J discussed the nature of consideration by a promise to perform an existing duty: "Counsel for the yard relied on what Denning L.J. said in two cases dealing with very different subject matters. The earlier was Ward v. Byham (1956) 2 All E.R. 318. There the father of an illegitimate child who had lived with her mother for some years turned the mother out of the house, retaining the child for a while for himself. Later he made an offer to let the mother have the child and pay an allowance of £ 1 a week, provided the child was well looked after and happy and was allowed to decide for herself where she wished to live. When the mother married, the father discontinued payment, but on being sued by the mother he was held liable. The mother was by statute bound to maintain her illegitimate child, but Denning L.J. said that he thought there was sufficient consideration in the promise to perform an existing duty or in its performance. Apart from the fact that the existing duty on the mother was imposed on her by statute law, which I think differentiates the case, the other two members of the Court of Appeal thought that compliance with the special terms of the father's letter, about keeping the child happy and leaving her freedom of choice constituted ample consideration. Again in Williams v. Williams (1957) 1 All E.R. 305 at 307, whilst Denning L.J. said that 'a promise to perform an existing duty is, I think, sufficient consideration to support a promise', nonetheless he went on to find two separate grounds for good consideration for the husband's promise. Similarly Hodson L.J. and Morris L.J. found good consideration for the husband's promise. I do not therefore think either of these cases successfully enables counsel for the yard to avoid the rule in Stilk v. Meyrick."

 
Joyce v Joyce [1978] 1 WLR 1170; [1979] 1 All ER 175
2 Jan 1978

Megarry V-C
Contract, Equity
A claim was made for specific performance of an oral agreement to sell shares. Held: The plaintiff had failed to show that if he issued another writ for the same relief, it would be not be defeated by the doctrine of laches. Payment of the purchase price is neither here nor there if the contract against which it is said to have been paid was in dispute. A plea of laches is available to a person against whom it is alleged that he holds the disputed asset as a bare trustee under an uncompleted contract: "In applying Birkett v James [1978] AC 297 to cases that are the subject to laches rather than any fixed period of limitation, I think that it is for the plaintiff to demonstrate the futility of striking out the earlier action; and to do this he must at least show that in the second action there is a prima facie case for his being able to overcome the difficulties resulting from the doctrine of laches. In this case the plaintiff has wholly failed to persuade me of this. Certainly the plaintiff has been very far from showing himself to be 'ready, desirous, prompt and eager.' The court therefore considered that " it would be futile to dismiss the first action for want of prosecution, for although the defendant would still be exposed to the claims in the second action, those claims face greater difficulties than did the claims in the first action. In other words, the defendant is better off in facing only the second action and not having to meet the first. "
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The Shackleford [1978] 2 Lloyds Rep 155
2 Jan 1978
CA
Sir David Cairns
Estoppel, Contract
The Notice of Readiness was to discharge at the port of Constanza and was required ‘vessel also having been entered at the Customs House and the laydays will then commence on the next business day, whether in berth or not, whether in port or not, whether in free pratique or not’. The vessel arrived in Constanza Roads, immediately giving NOR on 15 October, which notice was accepted by the receivers on the same day by endorsing ‘accepted’ upon it. Customs entry could not be obtained until the vessel berthed and this did not occur until 26 November. The arbitrator held that the charterers were estopped from denying that they had accepted the NOR and made a finding that the owners and/or Master relied upon the acceptance of the NOR by the receivers in that they made no attempt to procure an earlier berth, such as a bunkering or watering berth, so that Customs entry might be obtained at an earlier date. Sir David Cairns said: “Acceptance of a notice of any kind usually means acceptance of the notice as an effective notice. The experienced arbitrator and the experienced commercial judge interpreted this acceptance without any indication that it had occurred to them that it could have any other meaning. In my judgment they were right to do so.”
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Barclays Bank v WJ Simms and Cooke (Southern) Ltd [1979] 3 All ER 522; [1980] QB 677
1979
QBD
Robert Goff J
Banking, Contract
The customer made out a cheque to pay his builder, but countermanded it. The bank paid the cheque when it was presented by mistake, and now sought repayment from the builder. Held: The bank succeeded. The court discussed the extent of a banker's obligations to its customers.
Robert Goff J set out the defences to a claim in restitution: "(1) If a person pays money to another under a mistake of fact which causes him to make the payment, he is prima facie entitled to recover it as money paid under a mistake of fact. (2) His claim may however fail if (a) the payer intends that the payee shall have the money at all events, whether the fact be true or false, or is deemed in law so to intend; or (b) the payment is made for good consideration, in particular if the money is paid to discharge and does discharge a debt owed to the payee (or a principal on whose behalf he is authorised to receive the payment) by the payer or by a third party by whom he is authorised to discharge the debt; or (c) the payee has changed his position in good faith or is deemed in law to have done so."
"It is a basic obligation owed by a bank to its customers that it will honour on presentation cheques drawn by the customer on the bank, provided that there are sufficient funds in the customer’s account to meet the cheque, or the bank has agreed to provide the customer with overdraft facilities sufficient to meet the cheque. Where the bank honours such a cheque, it acts within its mandate, with the result that the bank is entitled to debit the customer’s account with the amount of the cheque, and further that the bank’s payment is effective to discharge the obligation of the customer to the payee on the cheque, because the bank has paid the cheque with the authority of the customer.
In other circumstances, the bank is under no obligation to honour its customer’s cheques. If however a customer draws a cheque on the bank without funds in his account or agreed overdraft facilities sufficient to meet it, the cheque on presentation constitutes a request to the bank to provide overdraft facilities sufficient to meet the cheque. The bank has an option whether or not to comply with that request. If it declines to do so, it acts entirely within its rights and no legal consequences follow as between the bank and its customer. If however the bank pays the cheque, it accepts the request and the payment has the same legal consequences as if the payment had been made pursuant to previously agreed overdraft facilities; the payment is made within the bank’s mandate, and in particular the bank is entitled to debit the customer’s account, and the bank’s payment discharges the customer’s obligation to the payee on the cheque.
In other cases, however, a bank which pays a cheque drawn or purported to be drawn by its customer pays without mandate. A bank does so if, for example, it overlooks or ignores notice of its customer’s death, or if it pays a cheque bearing the forged signature of its customer as drawer, but, more important for present purposes, a bank will pay without mandate if it overlooks or ignores notice of countermand of the customer who has drawn the cheque. In such cases the bank, if it pays the cheque, pays without mandate from its customer; and unless the customer is able to and does ratify the payment, the bank cannot debit the customer’s account, nor will its payment be effective to discharge the obligation (if any) of the customer on the cheque, because the bank had no authority to discharge such obligation.
It is against the background of these principles, which were not in dispute before me, that I have to consider the position of a bank which pays a cheque under a mistake of fact. In such a case, the crucial question is, in my judgment, whether the payment was with or without mandate. The two typical situations, which exemplify payment with or without mandate, arise first where the bank pays in the mistaken belief that there are sufficient funds or overdraft facilities to meet the cheque, and second where the bank overlooks notice of countermand given by the customer. In each case there is a mistake by the bank which causes the bank to make the payment. But in the first case, the effect of the bank’s payment is to accept the customer’s request for overdraft facilities; the payment is therefore within the bank’s mandate, with the result that not only is the bank entitled to have recourse to its customer, but the customer’s obligation to the payee is discharged. It follows that the payee has given consideration for the payment; with the consequence that, although the payment has been caused by the bank’s mistake, the money is irrecoverable from the payee unless the transaction of payment is itself set aside. Although the bank is unable to recover the money, it has a right of recourse to its customer. In the second case, however, the bank’s payment is without mandate. The bank has no recourse to its customer; and the debt of the customer to the payee on the cheque is not discharged. Prima facie, the bank is entitled to recover the money from the payee, unless the payee has changed his position in good faith, or is deemed in law to have done so."
1 Citers


 
Swiss Bank Corporation v Lloyds Bank Ltd [1979] Ch 548
1979


Contract
A subjective test was applied as to whether the court could find an intention to interfere with contractual relations.
1 Citers


 
China National Foreign Trade Transportation Corporation v Evlogia Shipping Co SA of Panama (The Mihalios Xilas) [1979] 1 WLR 1018
1979
HL
Scarman L, Lord Salmon
Equity, Contract, Transport
A hire clause was in bespoke terms providing for withdrawal "in default of payment". The payment of hire for the final instalment was deficient because, as the umpire held, the charterers' deductions for the length of the final voyage and bunkers on board at redelivery were unreasonable. There was no dispute that there was a default in payment of hire and the argument was addressed to whether owners had waived the right to withdraw in reliance on the withdrawal clause. Held: The House considered the doctrines of election between different courses of action, and affirmation of a contract.
Lord Salmon criticised said: "My Lords, it would seem that there are some members of the Court of Appeal who do not approve of the Baltime form of charter and other forms of charter such as the New York Produce Exchange and the Shelltime forms which closely resemble it. These forms of charter are undoubtedly very strict in relation to the due payment of hire: their meaning, however, is perfectly clear and it is not permissible to put a construction upon them which would depart from that meaning. Unless the full amount of hire is paid by its due date the owners have the undoubted right to withdraw their vessel providing they do so within a reasonable time of the charterers' default. The only exception is when the parties by their course of conduct (a) have as in the present case accepted that disbursements made by the charterers in respect of the owners' liabilities may be deducted from the hire subject to vouchers being produced, or e.g., (b) have accepted as in Tankexpress A/S v. Compagnie Financiere Belge des Petroles S.A. [1949] A.C. 76 that the amount of hire posted two days before it falls due shall be deemed to have been paid in time. Otherwise, unless the full hire is paid by the time it falls due the charterers are in default and the vessel may be withdrawn. On the appeal to your Lordships' House in The Laconia [1977] A.C. 850 I ventured to point out that the law relating to the owners' rights under a Baltime form of charter to withdraw their vessel should the charterers fail to pay the hire in time had been clearly stated by your Lordships' House in the Tankexpress case; but that a great deal of doubt on the subject had since been generated by the Court of Appeal in The Georgios C [1971] 1 Q.B. 488 and had troubled the waters ever since. I expressed the hope that those doubts might finally be dispelled by your Lordships' reversal of the Court of Appeal's decision in The Laconia and overruling its decision in The Georgios C. These doubts were, however, temporarily revivified by the decision of the Court of Appeal in the present case but will now, I think, permanently be laid to rest by your Lordships' decision allowing this appeal; Certainty of meaning is of primary importance in all commercial transactions. Commercial contracts all over the world, having nothing to do with the United Kingdom, have for generations provided that any dispute arising under the contract shall be decided in the English commercial court or by arbitration in London according to English law. This is because of the confidence which exists throughout the commercial world in the administration of English justice. I fear that this confidence will hardly be strengthened should there be any further decisions in the Court of Appeal similar to those in The Georgios C, The Laconia and the instant case."
1 Citers



 
 CVG Siderurgicia del Orinoco SA v London Steamship Owners' Mutual Insurance Association Limited 'The Vainqueur Jose'; 1979 - [1979] 1 Lloyds Rep 557

 
 BP Exploration Co (Libya) Ltd v Hunt (No 2); 1979 - [1979] 1 WLR 783
 
Universal Corporation v Five Ways Properties Limited [1979] All ER 552
1979
CA
Buckley LJ, Eveleigh LJ
Contract, Land
The purchaser had failed to complete, notwithstanding the service of a notice to complete. The purchaser a Nigerian company suffered a delay in obtaining funds. There was no attempt to exclude section 49(2) and the purchaser applied under that section for the repayment of the deposit. Held: The application for a strike out failed. The court considered the jurisdiction to order the return of a deposit paid under a contract for the sale of land.
Buckley LJ said: "a discretion which must, of course, be exercised judicially, and with regard to all relevant considerations, including the very important consideration of the terms of the contract into which the parties have chosen to enter . . . the jurisdiction is one to be exercised where the justice of case requires. In this connection I take the word "justice" to be used in a wide sense, indicating that repayment must be ordered in any circumstances which make this the fairest course between the two parties." and "I prefer to the judge's approach to the construction of this subsection the approach of Megarry V-C who has expressed the view that the jurisdiction is one to be exercised where the justice of the case requires: see what he said in Schindler v Pigault. In this connection I take the word 'justice' to be used in a wide sense, indicating that repayment must be ordered in any circumstances which makes this the fairest course between the two parties. It is, I think, relevant in the present case that condition 22 of the national conditions does not confer on the vendor an unqualified right to forfeit a deposit. The words in para 3 of the conditions are ". . the purchaser's deposit may be forfeited (unless the court otherwise directs)". This formula may well have been adopted with the terms of section 49(2) in mind. However that may be, in my view the language makes clear that the vendor does not have an absolute right to retain the deposit paid by a purchaser who is in default under the condition."
Eveleigh LJ said that the limitation applied by the judge was not "plain and obvious".
Law of Property Act 1925 49(2)
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Toprak Mansulleri Ofisi v Finagrain Compagnie Commerciale Agricole et Financiere S A [1979] 2 Lloyd's Rep 98
1979
ChD
Robert Goff J
Contract
As at the date of their failure to nominate loading places and silos, the sellers were in default of fulfilment of a contract and it was at that date that they failed to carry out the contract. Thereafter, the buyers were not obliged immediately to treat the sellers as being in default. They had the choice to keep the contract open and hold the sellers in default at a later date, but that did not mean that the date of default was changed; that date remained the day when time for performance came and went without due performance, namely when the sellers were obliged, but failed, to nominate load places and silos. Once the sellers were in default of their obligation to declare loading places, further defaults inevitably followed.
Sale of Goods Act 1979 51(3) - GAFTA
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General Produce Co v United Bank Ltd [1979] 2 Lloyd's Rep 255
1979


Contract
Lloyd J considered a term in a guarantee agreement as follows "if and whenever the company makes default in payment of any such principal money [to] pay the amount thereof on demand provided that the liability hereunder of the guarantor shall be as a primary obligor and not merely as a surety." Referring to Heald v Connor, he said: "I agree with Fisher J that it is common to find a provision such as is found here in par. 5 in guarantees, and I certainly do not hold that it automatically converts every guarantee into an indemnity. But equally its operation is not confined to the consequences of giving time or other indulgence to the principal debtor, and I very much doubt if Mr. Justice Fisher intended so to confine it. In the present case it is combined with a provision for the continuance of the bank's rights despite the release of the principal debtor's liability by operation of law. The release of the principal debtor normally discharges the guarantor as does a binding agreement to give time. The words in par. 5 seem to me equally apt to enable the guarantor's liability to continue as if he were the principal debtor in either case. That does not necessarily mean that he is to be regarded as the principal debtor for all purposes from the inception of the guarantee but only that the creditor is entitled to treat him as the principal debtor in certain events."
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Borden (UK) Ltd v Scottish Timber Products Ltd [1981] 1 Ch 25; [1979] 3 WLR 672; (1979) 123 SJ 688; [1979] 3 All ER 961; [1980] 1 Lloyds Rep 160
1979
CA

Contract
The plaintiff sold a quantity of resin to the defendant for use in the manufacture of chipboard. The contract contained a reservation of title clause, but both parties contemplated that the resin would be used in the process of production before it had been paid for, as indeed occurred. All those involved in that case treated the contract as one for the sale of goods and therefore as governed by the Sale of Goods Act. Held: Bridge LJ described the contract as "essentially one of sale and purchase, subject only to the reservation of title clause, whatever its effect may have been." However, he rejected the sellers' argument that the contract was simply one of bailment. The only question for decision was whether the supplier had obtained title to the chipboard into which the resin had been incorporated. The court held that it had not.
The resin ceased to exist when it was incorporated into the new product and property in it ceased to exist at the same time, because it is not possible to own something that does not exist
Sale of Goods Act 1979 2
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Rust v Abbey Life Assurance Co ltd [1979] 2 LLoyd's Rep 334
1979
CA
Brandon LJ
Contract
The court was asked whether a binding contract had been concluded between an applicant for an investment in property bonds and the insurance company offering such bonds when, in response to an application form submitted by the applicant, accompanied by a cheque in the appropriate amount, the insurance company allocated units in the relevant fund to her and sent her a policy of insurance. Held: A binding contract had been made in such circumstances. The failure by the proposed insured to reject the insurance policy offered to her for seven months, was enough to justify an inference that he had accepted the policy.
Brandon LJ said: "If I am wrong about that, however, it seems to me that the learned Deputy Judge's decision should in the alternative be upheld on the second basis relied on by him. The plaintiff held the policy in her possession at the end of October 1973. She raised no objection to it of any kind until some seven months later. While it may well be that in many cases silence or inactivity is not evidence of acceptance, having regard to the facts of this case and the history of the transaction between the parties as previously set out, it seems to me to be an inevitable inference from the conduct of the plaintiff in doing and saying nothing for seven months that she accepted the policy as a valid contract between herself and the first defendant."
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Federal Commerce Ltd v Molena Alpha Inc (The Nanfri) [1979] AC 757; [1979] 1 All ER 307; [1978] QB 949; [1979] 1 Lloyds Rep 201; [1978] 3 WLR 991
1979
HL
Lord Wilberforce, Lord Fraser of Tullybelton
Contract
The charterers of three ships on time charter had made deductions from time charter hire payments which the shipowners regarded as unjustified. In retaliation the shipowners purported to revoke the authority of the Charterers (to be implied under the time charters) to sign bills of lading on behalf of the masters of the three vessels. Moreover, the shipowners ordered their masters to refuse to issue "freight pre-paid" bills of lading if presented by the charterers. Held. The orders to the masters deprived the time-charterers of substantially the whole benefit of each of the three time-charters. Therefore, it was either an actual or an anticipatory repudiatory breach of the three charters.
A statement that a party will only perform something different from the contract is as capable of amounting to a renunciation as an express statement that a party will not perform the contract. To amount to a fundamental breach it must go to the root of the contract.
If a party's conduct is such as to amount to a threatened repudiatory breach, his subjective desire to maintain the contract cannot prevent the other party from drawing the consequences of his actions.
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Wigan Borough Council v Davies [1979] ICR 411
1979
EAT
Arnold J
Employment, Contract
The court considered that an employer owed a duty of care and under the contract of employment to employees to protect them against ill treatment or bullying. The plaintiff sued for breach of contract.
Arnold J said: "We do not think that it is an outrageous or inconvenient conclusion that where a party has an obligation to take reasonable steps to achieve something, and is found to have taken no step or no significant step at all, towards that end, the obligation of demonstrating that there was no reasonable step which could have been taken should be found to lie upon that party. And we do not think that in the circumstances of a case such as this it is possible to say that this industrial tribunal were wrong in the conclusion reached upon that topic: or to put it another way, that the absence of evidence would justify us in overturning the decision of the industrial tribunal."
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Thomas Marshall (Exports) Ltd v Guinle [1979] Ch 227; [1978] 3 All ER 193; [1978] ICR 950; [1978] 3 WLR 116
1979
ChD
Sir Robert Megarry VC
Torts - Other, Contract, Intellectual Property
The managing director defendant had resigned before the end of the contractual term. There was an express covenant in his contract against using or disclosing the company's confidential information during or after his employment. It was submitted that this was a repudiation which brought the contract to an end and with it any obligation to observe the restrictive covenants. Held: Sir Robert Megarry VC considered the power of a court to prevent a wrongdoer from benefiting from his wrong: "Above all, I think the courts must be astute to prevent a wrongdoer from profiting too greatly from his wrong. If without just cause a servant who has contracted to serve for a term of years refuses to do so, it is easy to see that the court is powerless to make him do what he has contracted to do: neither by decreeing specific performance nor by granting an injunction can the court make the servant perform loyally what he is refusing to do, however wrongfully . . But why should the court's inability to make a servant work for his employer mean that as soon as the servant refuses to do so the court is forthwith disabled from restraining him from committing any breach, however flagrant, of his other obligations during the period of his contract? I would wholly reject the doctrine of automatic determination, whether in its wide form or in its narrowed version."
As to whether information was confidential, Sir Robert Megarry VC said: "If one turns from the authorities and looks at the matter as a question of principle, I think (and I say this very tentatively, because the principle has not been argued out) that four elements may be discerned which may be of some assistance in identifying confidential information or trade secrets which the court will protect. I speak of such information or secrets only in an industrial or trade setting. First, I think that the information must be information the release of which the owner believes would be injurious to him or of advantage to his rivals or others. Second, I think the owner must believe that the information is confidential or secret, i.e., that it is not already in the public domain. It may be that some or all of his rivals already have the information: but as long as the owner believes it to be confidential I think he is entitled to try and protect it. Third, I think that the owner's belief under the two previous heads must be reasonable. Fourth, I think that the information must be judged in the light of the usage and practices of the particular industry or trade concerned. It may be that information which does not satisfy all these requirements may be entitled to protection as confidential information or trade secrets: but I think that any information which does satisfy them must be of a type which is entitled to protection."
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 Czarnikow Ltd v Centrala Handlu Zagranicznego Rolimpex; HL 1979 - [1979] AC 351

 
 Johnson v Agnew; HL 1979 - [1980] AC 367; [1979] 2 WLR 487; [1979] 1 All ER 883
 
Andre and Cie v Michel Blanc [1979] 2 Lloyd's Rep 427
1979
CA
Lord Denning
Contract
The court criticised the doctrine that a mistake as to the law, common to the parties, does not vitiate a contract.
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Jackson v Bishop (1979) 48 P and CR 57
1979
CA
Bridge LJ
Land, Contract
Where the definition of the parcels in a conveyance or transfer is not clear, then the court must have recourse to extrinsic evidence, and in particular to the physical features on the ground: "It seems to me that the question is one which must depend on the application of the plan to the physical features on the ground, to see which out of two possible constructions seems to give the more sensible result."
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Sciuriaga v Powell (1979) 123 Solicitors Journal 406
1979

Watkins J
Contract, Damages
The plaintiff made a claim for the breach of a contract to terminate pregnancy by abortion. Held: The sole reason for the continuation of the pregnancy was the doctor's breach of contract. Damages were awarded for pain and suffering and for actual and prospective loss of earnings and for diminution of marriage prospects but not for the maintenance of the child, which were not requested.
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Armia Ltd v Daejan Developments Ltd [1979] UKHL 8; 1979 SLT 147; 1979 SC (HL) 56
21 Feb 1979
HL
Diplock, Edmund-Davies, Fraser of Tullybelton LL
Contract, Land
The respondents had sought specific implement of an obligation under missives for the payment of the purchase price of land. Held: There can be no abandonment of a right by way of confession unless the party concerned is aware that he has the right in question and acts in such a way as to show that he has in fact abandoned it. Lord Keith of Kinkel he set out the definition of waiver and the courts approach thereto: "The word 'waiver' connotes the abandonment of a right. (See: Banning v Wright [1972] 1 WLR 972 per Lord Hailsham of St Marylebone LC at p. 979, Lord Reid at p. 981). The abandonment may be express, or it may be inferred from the facts and circumstances of the case . . I conclude from these cases that the question whether or not there has been a waiver of a right is a question of fact, to be determined objectively upon a consideration of all the relevant evidence."
[ Bailii ]

 
 Gibson v Manchester City Council; HL 8-Mar-1979 - [1979] 1 WLR 294; [1979] UKHL 6; [1979] 1 All ER 972
 
Pao On and Others v Lau Yiu Long and Others [1980] AC 614; [1979] UKPC 2; [1979] UKPC 17
9 Apr 1979
PC
Lord Wilberforces, Viscount Dilhorne, Lord Simon of Glaisdale, Lord Salmon, Lord Scarman
Contract, Commonwealth
(Hong Kong) The board was asked whether a contract of guarantee had been obtained by duress. Held: Lord Scarman said: "Duress, whatever form it takes, is a coercion of the will so as to vitiate consent. Their Lordships agree with the observation of Kerr J. in Occidental Worldwide Investment Corporation v. Skibs A/S Avanti [1976] 1 Lloyd’s Rep. 293, 336 that in a contractual situation commercial pressure is not enough. There must be present some factor ‘which could in law be regarded as a coercion of his will so as to vitiate his consent.’ This conception is in line with what was said in this Board’s decision in Barton v. Armstrong [1976] A.C. 104, 121 by Lord Wilberforce and Lord Simon of Glaisdale - observations with which the majority judgment appears to be in agreement. In determining whether there was a coercion of will such that there was no true consent, it is material to inquire whether the person alleged to have been coerced did or did not protest; whether, at the time he was allegedly coerced into making the contract, he did or did not have an alternative course open to him such as an adequate legal remedy; whether he was independently advised; and whether after entering the contract he took steps to avoid it. All these matters are, as was recognised in Maskell v. Horner [1915] 3 K.B. 106, relevant in determining whether he acted voluntarily or not."
The Board also considered (obiter) whether english law recognises 'economic duress' and said: "the pressure must be such that the victim's consent to the contract was not a voluntary act on his part. In their Lordships' view, there is nothing contrary to principle in recognising economic duress as a factor which may render a contract voidable, provided always that the basis of such recognition is that it must amount to a coercion of will, which vitiates consent. It must be shown that the payment made or the contract entered into was not a voluntary act."
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[ Bailii ] - [ Bailii ]
 
John Kenway Ltd v Orcantic Ltd [1979] ScotCS CSOH - 6; 1980 SLT 46; 1979 SC 422
8 Jun 1979
SCS

Scotland, Contract

[ Bailii ]
 
Wong Lai Ying and Others v Chinachem Investment Co Ltd [1979] UKPC 41
27 Nov 1979
PC

Contract
(Hong Kong)
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[ Bailii ]
 
Domb and Another v Isoz [1980] 2 WLR 565; [1980] Ch 548; [1980] 1 All ER 942
29 Nov 1979
CA
Buckley, Bridge and Templeman LJJ
Legal Professions, Contract, Land, Agency
In a chain of conveyancing transactions, a solicitor sent his contract and deposit to his vendor's solicitor, asking him to hold it to his order pending exchange. On the next day, that vendor's solicitors agreed to an exchange of contracts over the telephone on his own purchase, but his client then told him not to proceed. The solicitor did not deliver the contract on that purchase, and claimed that under the postal rule, exchange had not taken place. The purchaser appealed a finding that there was no contract. Held: A contract had been created. The solicitor had his client's authority to exchange in this manner, and the contract was made at the time of the agreement on the telephone. The contract could come into existence before the posting of the second part of the contract, which would be the normal rule for postal acceptance.
Buckley LJ: "the essential characteristic of exchange of contracts is that each party shall have such a document signed by the other party in his possession or control so that, at his own need, he can have the document available for his own use. Exchange of a written contract for sale is in my judgment effected so soon as each part of the contract, signed by the vendor or the purchaser as the case may be, is in the actual or constructive possession of the other party or of his solicitor. Such possession need not be actual or physical possession; possession by an agent of the party or of his solicitor, in such circumstances that the party or solicitor in question has control over the document and can at any time procure its actual physical possession will, in my opinion, suffice. In such a case the possession of the agent is the possession of the principal. A party's solicitor employed to act in respect of such a contract has, subject to express instructions, implied authority to effect exchange of contracts and so to make the bargain binding upon his client. This he can, in my judgment, do by any method which is effectual to constitute exchange."
BRIDGE LJ: "A solicitor acting for a vendor or a purchaser who holds his client's signed part of the contract has his client's ostensible authority to effect exchange of contracts."
Templeman LJ: "In my judgment a client impliedly authorises, and ostensibly authorises, his solicitor to effect exchange of contracts in such manner and by such agents as the solicitor may think fit. The client confers power to exchange, but is not interested in the machinery or method of exchange, which is a matter for the solicitor and the general law."
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