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		Contract - From: 1980 To: 1984 This page lists 125 cases, and was prepared on 20 May 2019. Â Afovos Shipping Co SA v R Pagnan and Fratelli [1980] 2 Lloyds Rep 469 1980 ChD Lloyd J Contract Lloyd J regarded the fact that the breach of contract complained of involved the fault of the applicant as being a telling factor against the grant of relief. Wilful breaches will only exceptionally be relieved against. 1 Citers Â Â Salvation Army Trustee Co Ltd v West Yorkshire Metropolitan County Council; 1980 - (1980) 41 P and CR 179 Â In Re Bond Worth Ltd [1980] Ch 228 1980 Slade J Contract The parties disputed the property in goods which had been sold and then gone through successive manufacturing processes. The contract included a retention of title clause. Fibres were converted into manufactured carpets and thus lost their identity and thus, from the seller's perspective, the seller lost any relevant right of property. The issues included whether there was a creation of a trust of some kind or a charge and the relevant clause producing the result that the contractual intent appeared to be that there should be a beneficial entitlement attaching in the seller's favour in respect to the proceeds of sale of manufactured items, that is to say, the carpets which had emerged as a result of the application of the processes to the yarn. Slade J saw the case as posing a choice between either a trust of which the supplier "was the sole beneficiary" or "by way of a trust under which Monsanto", which was the supplier, "had a charge in equity". Slade J discussed the nature of a retention of title clause: "[A]ny contract which, by way of security for the payment of a debt, confers an interest in property defeasible or destructible upon payment of such debt, or appropriate such property for the discharge of the debt, must necessarily be regarded as creating a mortgage or charge, as the case may be". And "The technical difference between a `mortgage' or `charge', though in practice the phrases are often used interchangeably, is that a mortgage involves a conveyance of property subject to a right of redemption, whereas a charge conveys nothing and merely gives the chargee certain rights over the property as security for the loan." 1 Citers Â Â CIA Barca de Panama SA v George Wimpey and Co Ltd; CA 1980 - [1980] 1 Lloyds Rep 598 Â Sherbrooke v Dipple (1980) 41 P and CR 173 1980 Land, Contract Parties to a conveyancing context can get rid of the qualification "subject to contract" only if either they both expressly agree that it should be expunged or if such an agreement can be necessarily implied. 1 Citers Â Archer v Cutler [1980] 1 NZLR 386 1980 Commonwealth, Contract (New Zealand) The purchaser of land sought specific performance of the contract. The vendor and purchaser had been neighbours. The neighbour needed part of the vendor's land for access. Held: A contract made by a person of insufficient mental capacity was voidable at his option not only if the other party knew of or ought to have appreciated his unsoundness of mind, but also if the contract "was unfair to the person of unsound mind". There were no considerations of policy or principle precluding the court from holding that a contract entered into by a person of unsound mind is voidable at his option if it is proved either that the other party knew of his unsoundness of mind or, whether or not he had that knowledge, the bargain was unfair. The court considered the idea of an unfair cotract in English law: English law on the subject is ill-defined. The case of Imperial Loan Company v. Stone [ 1892] 1 Q.B. 599 widely accepted as being a statement of the law on avoidance of contracts made with persons of unsound mind would, save in the judgment of Lopes LJ, seem to regard unfairness of the contract as being of no moment. Proof of unsoundness of mind and the other party's knowledge of that unsoundness alone will avoid the contract. But the passage cited from the judgment of Lopes LJ. and the dicta of Pollock CB. in Molton v. Camroux (1848) 2 Exch 487 of Patteson J. on appeal in the same case, of Sir Ernest Pollock MR. in York Glass Company v. Jubb [1924] 131 L.T. Rep. 559 and of Sargant LJ. in the same case would suggest that proof of unfairness of a bargain entered into by a person of unsound mind, even though that unsoundness be not known to the other party, will suffice to avoid it." and "I find nothing in policy or principle to prevent me from holding that a contract entered into by a person of unsound mind is voidable at his option if it is proved either that the other party knew of his unsoundness of mind or, whether or not he had that knowledge, the contract was unfair to the person of unsound mind." 1 Cites 1 Citers Â Ealing London Borough Council v El Isaac [1980] 1 WLR 932 1980 CA Templeman LJ Contract, Litigation Practice Templeman LJ said: "I do not for myself understand how a debt payable with interest until actual repayment can be merged in a judgment without interest or with a different rate of interest payable thereafter." 1 Citers Â Joyce v Barker Bros (Builders) Ltd Times, 26 February 1980; (1980) 40 P and CR 512 1980 Vinelott J Contract The rule that where in a deed there are two contradictory provisions, the earlier provision prevails over the later is "an absolutely last resort in construction". 1 Citers Â N V Slavenburg's Bank v Intercontinental Natural Resources Ltd [1980] 1 WLR 1076 1980 ChD Lloyd J Contract, Company The Bermudan company defendant had assigned stocks as a security. The security was not registered, and nor did the company have any registration within the UK. It was not the practice of the Registrar of Companies to accept particulars of charges for registration from an overseas company with a place of business in England. Held: The absence of a file for a company at Companies House, through the failure of the oversea company to register its place of business, did not avoid the need to give particulars of any charge to the Registrar. The Bills of Exchange Acts apply to individuals only and not to corporations at all. Bills of Sale Act 1878 6 8 1 Cites 1 Citers Â Â Overseas Buyers v Granadex; 1980 - [1980] 2 Lloyd's Rep 608 Â Prosper Homes Ltd v Hambros Bank Executor and Trustee Co Ltd (1980) 39 P and CR 395; (1979) 39 P and CR 395 1980 Browne-Wilkinson J Contract, Land The court considered whether a contract had been validly rescinded. The validity of a completion notice was challenged on the ground that the vendors were not ready, able and willing to complete the sale when the notice was served because they were in breach of their fiduciary obligation to look after the subject property. Without informing the purchasers, the vendors had permitted a change in the lessee and user of part of the property. Held: It was completely uncommercial to require a vendor to be considered unable or unwilling or unready to complete merely because he may have failed in some respect to carry out his duty between contract and completion in looking after the property. That default would sound in damages. Browne-Wilkinson J said: "the fact that a vendor may have failed in some respect to carry out his duty between contract and completion in looking after the property does not mean that he is unable or unwilling or unready to complete . . If any damage has occurred in the interim the vendor would have to make it good in damages. It does not prevent a completion of the contract." 1 Citers Â Â IBM v Rockware Glass Ltd; CA 1980 - [1980] FSR 335 Â Porter v National Union of Journalists [1980] IRLR 404 1980 HL Lord Diplock Contract The House was asked to construe the rules of the defendant organisation. Lord Diplock said: "I turn to the interpretation of the relevant rules, bearing in mind that their purpose is to inform the members of the NUJ of what rights they acquire and obligations they assume vis-a-vis the union and their fellow members, by becoming and remaining members of it. The readership to which the rules are addressed consists of ordinary working journalists, not judges or lawyers versed in the semantic technicalities of statutory draftsmanship." 1 Citers Â Â Federated Homes Ltd v Mill Lodge Properties Ltd; CA 1980 - [1980] 1 WLR 594; [1980] 1 All ER 371; [1979] EWCA Civ 3 Â Bunge Corporation v Tradax [1980] 1 Lloyds Rep 294 1980 CA Contract 1 Citers Â Hyundai Heavy Industries Co Ltd v Papadopoulos [1980] 1 WLR 1129; [1980] 2 All ER 29; [1980] 2 Lloyds Rep 1 1980 HL Lord Edmund-Davies, Lord Fraser of Tullybelton Contract A shipbuilding contract provided that the second instalment of the contract price should be payable on a day certain. It gave the builders the right to rescind the contract in the event of non-payment. The buyers failed to pay the second instalment, and the builders rescinded. Two questions arose for decision, namely, whether the effect of the rescission was to deprive the builders of their right to claim the second instalment, and whether, if not, the second instalment could be recovered by the buyers on the ground of total failure of consideration. Held: The defendant's liability as guarantor continued despite the termination of the contract to build the ships. The instalment of the price in question remained due notwithstanding the termination of the contract: "save in the case of sales of land and goods and where there has been a total failure of consideration . . cancellation or rescission of a contract in consequence of a repudiation did not affect accrued rights to the payment of instalments of the contract price unless the contract provided that it was to do so." Lord Fraser of Tullybelton: "Much of the plausibility of the argument on behalf of the guarantor seemed to me to be derived from the assumption that the contract price was simply a purchase price. That is not so, and once that misconception has been removed I think it is clear that the shipbuilding contract has little similarity with a contract of sale and much more similarity, so far as the present issues are concerned, with contracts in which the party entitled to be paid had either performed work or provided services for which payment is due by the date of cancellation. In contracts of the latter class, which of course includes building and construction contracts, accrued rights to payment are not (in the absence of express provisions) destroyed by cancellation of the contract." 1 Cites 1 Citers Â Â Port Jackson Stevedoring Pty Ltd v Salmond and Spraggon (Australia) Pty Ltd; The New York Star; PC 1980 - [1981] 1 WLR 138; [1980] 3 All ER 257 Â Koch Marine Inc v D'Amica Societa Di Navigazione ARL (The Elena d'Amico) [1980] 1 Lloyd's Rep 75 1980 QBD Robert Goff J Damages, Contract The ship owners wrongfully repudiated a charterparty in March 1973, 14 months after its inception. The charterers did not hire a substitute but claimed damages for the loss of profits they would have made between January and April 1974, during which period there was a substantial rise in market rates. Held: The standard measure in an available market, was for damages to be assessed on the difference between the contract and market rates for the remaining charter period; but a plaintiff could recover damages beyond the normal measure if those damages fell within "the principle in Hadley v Baxendale". In this case there was no causative link between the owners' breach of contract and the charterers' decision not to take advantage of the available market. The owners' decision was independent of the wrongdoing that had taken place, and, for that reason, there was no warrant for departing from the prima facie measure. The court set out three heads of mitigation of damages, namely non-recovery for avoidable loss; recovery for loss incurred in reasonable attempts to avoid loss; and non-recovery for avoided loss. Goff said: "these three aspects of mitigation are all really aspects of a wider principle which is that, subject to the rules of remoteness, the plaintiff can recover, but can only recover, in respect of damage suffered by him which has been caused by the defendant's legal wrong. In other words, they are aspects of the principle of causation". 1 Citers Â Pritchard v Briggs [1980] CLY 1563; [1980] Ch 338 1980 CA Goff LJ, Templeman LJ, Stephenson LJ Land, Contract A conveyance of part in 1944 gave a right of pre-emption over retained land. The vendor's successors the let the retained land to the plaintiff with an option to buy the freehold reversion. The retained land was sold to the defendants in purported compliance with the right of pre-emption. A year later the plaintiff purported to exercise his option and claimed to be entitled to the retained land in priority to the defendants. Walton J dismissed the claim. Held: The appeal succeeded. The grant of the right of pre-emption did not confer an interest in land and the grant of the option did not trigger the right of pre-emption. The grantee of the right of pre-emption had a right to call for a conveyance of the land if the conditions on which the right is exercisable are fulfilled. Section 186 appeared to have been drafted under a misconception of the law. Goff LJ said: A party does not avoid liability simply because through ignorance of the law he does not realise that his conduct is tortious. Goff LJ drew no distinction between the criminal and the civil law, and applied the criminal test in the civil context. Stephenson LJ expressly agreed with the judgment of Goff LJ. Templeman LJ said: "Thus the relationship of vendor and purchaser could not be established unless the [vendors] chose to offer the retained lands to the holder of the right of pre-emption or, in breach of covenant, contracted to sell the retained lands to a third party without first offering the lands to the option-holder... If and when these conditions were fulfilled, the holder of the right of pre-emption would be entitled to buy and therefore entitled to an equitable interest." Stephenson LJ: "...what is granted is a right of pre-emption, [and] the true construction of the grant is only properly called an option when the will of the grantor turns it into an option by deciding to sell and thereby binding the grantor to offer it for sale to the grantee. That it thereby becomes an interest in land is a change in the nature of the right...to which I see no insuperable objection in logic or in principle." Law of Property Act 1925 186 1 Cites 1 Citers Â The Olympic Pride (Etablissements Georges et Paul Levy v Adderley Navigation Co Panama SA [1980] 2 Lloyd's Rep 67 1980 Mustill J Equity, Contract In the case of a bilateral transaction, there must be convincing proof that the concluded instrument does not represent the common intention of the parties to allow rectification. The policy reason for the need for convincing proof is that certainty and ready enforceability of transactions would otherwise be hindered by constant attempts to cloud the issue. Mustill J said: "The prior transaction may consist either of a concluded agreement or of a continuing common intention. In the latter event, the intention must have been objectively manifested. It is the words and acts of the parties demonstrating their intention, not the inward thoughts of the parties, which matter." 1 Citers Â Â Young and Woods Ltd v West; CA 11-Feb-1980 - [1980] IRLR 201; [1980] EWCA Civ 6 Â Â Woodar Investment Development Ltd v Wimpey Construction UK Ltd; HL 14-Feb-1980 - [1980] 1 WLR 277; [1980] UKHL 11; [1980] 1 All ER 571 Â Â Photo Production Ltd v Securicor Transport Ltd; HL 14-Feb-1980 - [1980] AC 827; [1980] UKHL 2; [1980] 1 All ER 556 Â Richard Pool v Council of the European Communities (Rec 1980,P 569) (Gr80-I 0295) (Judgment) C-49/79; [1980] EUECJ C-49/79 4 Mar 1980 ECJ European, Contract, Agriculture Europa 1. Non-contractual liability - conditions - illegality - damage - chain of causality (EEC Treaty, art. 215, second paragraph) 2. Agriculture - common organization of the markets - beef and veal - price system - right of producers to precise price levels of community rules - none (regulation no 805/68 of the council) 1. The non-contractual liability of the community under the second paragraph of article 215 of the EEC Treaty depends on the coincidence of a set of conditions as regards the unlawfulness of the acts alleged against the institution, the fact of damage, and the existence of a direct link in the chain of causality between the wrongful act and the damage complained of. 2. The price system which is an integral part of the common organization of the market in beef and veal - established by regulation no 805/68 - does not have the effect of guaranteeing to individual traders that their produce will be disposed of at the precise price level determined by community rules. That level, expressed in units of account, does not therefore constitute a value which could be used as a basis for comparison with the prices obtained by a producer on the market with a view to demonstrating that certain damage has been caused. [ Bailii ] Â Adcock v Blue Sky Holidays Ltd Unreported, 13/05/1980 13 May 1980 CA Bridge LJ, Cumming-Bruce LJ Damages, Contract The plaintiffs sought damages after their holiday was disappointing. The cost of the holiday for five people was £98 per person. The county court judge had allowed damages separately for the five holiday makers, having regard to how the breaches of contract affected each of them. He felt inhibited by Jarvis and Jackson and "would have approached the damages on a higher scale than [was] revealed by [those cases] "as appropriate". Held. The Court of Appeal disagreed. Bridge LJ said: "I wholly fail to understand how the learned judge was able to extract anything from either of those case which prevented him from awarding the higher scale of damages which he said he was minded to award." Cumming-Bruce LJ: "Contracts for holidays vary on their facts very greatly. The facilities offered by the tour company vary enormously from case to case. It would be a grave mistake to look at the facts in, for example, the Jackson case or the Jarvis case and compare those facts with the facts in another case as a means of establishing the measure of damages." 1 Citers Â Bournemouth and Boscombe FC Limited v Manchester United FC Limited Unreported 21 May 1980; Times, 22 May 1980 21 May 1980 CA Donaldson LJ, Brightman LJ Contract Donaldson LJ said: "I have on occasion found it a useful test notionally to write into the contract under consideration a declaratory clause expressing the fact that the parties are not subject to the obligations which would flow from the clause which it is urged should be implied. I think it is useful in this case. We then get a contract reading: "It is further agreed that Manchester United Football Club will pay a further sum of £27,770 to Bournemouth & Boscombe Football Club when Edward MacDougall has scored 20 goals in first team competitive football for Manchester United . . provided always that Manchester United shall be under no obligation to afford MacDougall any reasonable opportunity of scoring 20 goals." It at once becomes clear that the inclusion of the proviso renders this part of the contract 'inefficacious, futile and absurd', to use the words that Lord Salmon used in Liverpool City Council v Irwin [1976] 2 All ER 39 at 50, [1977] AC 239 at 262." Brightman LJ, dissenting, said that the position would be different where there had been an allegation and finding of bad faith. 1 Cites Â John Hudson v Oaten Unreported, 19 June 1980 19 Jun 1980 CA Oliver LJ Contract, Vicarious Liability, Torts - Other The plaintiff sought to avoid the 1828 Act (Lord Tenterden's Act). Lakeview, had agreed to buy a substantial quantity of oil from them but was never in a position to do so. The plaintiffs sought their loss from the defendant, Mr. Oaten, and not Lakeview. Held: The mere fact of entering into a contract imports an implied representation of a genuine intention to pay the contract price and, secondly the entry into the contract having been procured by the defendant, he is liable for the representation thus employed. Both propositions are true. The second proposition, while it may be an adequate description of the consequences of procurement, contains in itself no analysis of the grounds upon which the assumed liability rests. Apart from the tort of conspiracy--and there is no question of that in this case--there is no separate tort of procuring as such. A man who procures the commission by another person of a tortious act becomes liable because he then becomes a principal in the commission of the act. It is his tort but once one gets to that it seems to me that the fallacy of Mr. Crawford's argument becomes apparent. The tort alleged here is the implied false representation of Lakeview's intention to pay, and when one seeks to fasten that onto the defendant as a principal it is at once clear that it is not, so far as he is concerned, a representation as to his own intention, for he made none. The representation for which he is assumed to be liable is the representation of Lakeview's intention. Oliver LJ: "Every promisor impliedly represents that he has at the moment of making the promise the intention of fulfilling the obligations that he has undertaken and if it can be shown that no such intention existed in his mind, at that moment he is guilty of a misrepresentation." Statute of Frauds (Amendment) Act 1828 6 1 Citers Â Â Port Jackson Stevedoring Pty. Limited v Salmond and Spraggon (Australia) Pty. Limited; PC 10-Jul-1980 - [1981] 1 WLR 138; [1980] UKPC 23; [1980] 3 All ER 257; [1980] 2 Lloyd's Rep 317 Â Â Thomas Bates and Sons Ltd v Wyndham's Lingerie Ltd; CA 21-Nov-1980 - [1981] 1 WLR 505; [1980] EWCA Civ 3; [1981] 1 All ER 1077 Â National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675; [1981] 1 All ER 161; [1980] UKHL 8 11 Dec 1980 HL Lord Hailsham of St Marylebone LC, Lord Wilberforce, Lord Simon of Glaisdale, Lord Russell of Killowen, Lord Roskill Contract, Landlord and Tenant The tenant's access to the premises was closed by the local authority because it passed by a derelict and dangerous building. The tenant argued that its tenancy was frustrated. Held: The lease was not frustrated. The lease had a term of ten years, and the interruption was temporary. The doctrine of frustration was developed as an expedient to escape from injustice and is a modern and flexible doctrine not constricted by any arbitrary formula. "Frustration of a contract takes place where there supervenes an event (without default of either party and for which the contract makes no sufficient provision) which so significantly changes the nature (not merely the expense or onerousness) of the outstanding contractual rights and/or obligations from what the parties could reasonably have contemplated at the time of its execution that it would be unjust to hold them to the literal sense of its stipulations in the new circumstances; in such case the law declares both parties to be discharged from further performance." 1 Cites 1 Citers [ Bailii ] Â Â Lambert v Lewis; HL 1981 - [1982] AC 225; [1981] 1 All ER 1185; [1981] RTR 346; [1981] 2 Lloyds Rep 17; [1981] 2 WLR 713 Â Â Newland v Simons and Willer (Hairdressers) Ltd; 1981 - [1981] IRLR 359; [1981] ICR 521 Â Intraco Limited v Notis Shipping Corporation [1981] 2 Lloyd's Rep 256 1981 CA Donaldson LJ Contract, Banking "Demand bonds" are a specialised form of irrevocable instrument, developed by the banking world for its commercial customers. They have been accepted by the courts as the equivalent of irrevocable letters of credit, and have been described as part of "the lifeblood of commerce" Donaldson LJ: "Thrombosis will occur if, unless fraud is involved, the courts intervene and thereby disturb the mercantile practice of treating rights thereunder as being the equivalent of cash in hand." 1 Citers Â The "Pegase" [1981] I Ll Rep 175 1981 Goff J Contract, Damages The court considered the measure of damages for breach of contract in the light of the cases in the Heron II and Victoria Laundry: "the principle in Hadley v Baxendale is now no longer stated in terms of two rules, but rather in terms of a single principle – though it is recognised that the application of the principle may depend on the degree of relevant knowledge held by the defendant at the time of the contract in the particular case". 1 Cites 1 Citers Â Â Coral Leisure Group Ltd v Barnett; EAT 1981 - [1981] ICR 503 Â Sotiros Shipping Inc v Sameiet: The Solholt [1981] 2 Lloyd's Rep 574 1981 Staughton J Contract, Damages The seller did not deliver the vessel by the contractual date for delivery. The buyer exercised his right to cancel and to recover his deposit. He also claimed damages because the vessel was worth $500,000 more on the delivery date than she had been when the contract was made. Held: A reasonable buyer would have offered, after cancellation, to take the vessel after all and that his loss was attributable to his own unreasonable conduct in failing to make such an offer (which would have been accepted by the seller). The expression that a vessel had been "fixed subject to details" means that "the main terms were agreed, but until the subsidiary terms and the details had also been agreed no contract existed". 1 Citers Â Â McCrone v Boots Farm Sales Limited; 1981 - [1981] SLT 103 Â Scarfe v Adams [1981] 1 All ER 843 1981 CA Cumming-Bruce LJ, Griffith LJ Land, Contract Transfer deeds for a sale of land did not define the boundary but referred to a plan which was held to be too small to show a precise boundary. The only other element of the parcels clause was that it was land adjoining Pyle Manor and that it was part of the land comprised in the specified title). The coiurt had to identify what land was transferred. Held: The court criticised the use by solicitors of small scale plans on conveyances and set out the principles for deciding what criteria were to be applied in incorporating plans into conveyances or transfers. Extrinsic evidence was admissible because the Ordnance Survey map used in the conveyance to identify the relevant property had been wholly inadequate due to its small scale. However, if the terms of the transfer clearly define the land, extrinsic evidence is not admissible to contradict the transfer. Cumming-Bruce LJ: ". . . the question raised in these proceedings is only the proper construction to the Plaintiff’s Transfer Deed. And the starting point is that extrinsic evidence is not admissible as an aid to its construction unless the relevant provisions of the deed are uncertain, contradictory or ambiguous. Counsel for the Plaintiff submits that this deed is uncertain, contradictory and ambiguous. Counsel in the court below invited the judge to admit evidence as to facts and circumstances from which the common intention of the vendor and purchaser was to be collected in order to understand the true meaning of the deed which they made, and the true effect of the plan to which they referred as showing the land transferred. The judge admitted extrinsic evidence de bene esse but decided that there was no such uncertainty or ambiguity as to make it right to admit that evidence as an aid to construction. . . The learned deputy judge said that he had derived most assistance from the cases of Grigsby v Melville [1973] 3 All ER 455 and Neilson v Poole [1969] 20 P and CR 909. The judge was wrong in thinking that Grigsby was an action for rectification. The decision was founded on the determination that, as a matter of construction, the deed was clear, certain and unambiguous, so there was no room for extrinsic evidence about the inconvenient consequences. Neilsen v Poole was a case in which Megarry J as a matter of construction of the conveyance with plan attached, decided that it was uncertain and that therefore it was right to admit and consider extrinsic evidence. Having done so, Megarry J decided that the conveyance as a whole and the dividing line on the plan showed that the dividing line was along a line drawn on the plan, and the other conveyances supported the conclusion. I have difficulty in understanding how the decision of either case or the reasoning of Megarry J supported the deputy judge’s conclusion. . . . "The facts of the present case are really very simple, but I hope that this judgment will be understood by every conveyancing solicitor in the land as giving them warning, loud and clear, that a conveyancing technique which may been effective in the old days to convey large property from one vendor to one purchaser will lead to nothing but trouble, disputes and expensive litigation if applied to the sale to separate purchasers of a single house and its curtilage divided into separate parts. For such purposes it is absolutely essential that each parcel conveyed shall be described in the conveyance or transfer deed with such particularity and precision that there is no room for doubt about the boundaries of each, and for such purposes if a plan is intended to control the description, an Ordnance map on a scale of 1:2500 is worse than useless. The plan or other drawing bound up with the deed must be on such a large scale that it clearly shown with precision where each boundary runs. In my view the parties to this appeal are the victims of sloppy conveyancing for which the professional advisers of vendor and purchasers appear to bear the responsibility. We are not concerned in this appeal with determining or apportioning that responsibility. This court has to try to reduce to order the confusion created by the conveyancers." Griffiths LJ: “Although we have had the benefit of a fairly extensive citation of authority, I do not find it necessary to review these authorities, as I regard the legal principle to be applied in this appeal as well established and the cases cited as illustrations of the practical application of that principle. The principle may be stated thus: if the terms of the transfer clearly define the land or interest transferred extrinsic evidence is not admissible to contradict the transfer. In such a case, if the transfer does not truly express the bargain between vendor and purchaser, the only remedy is by way of rectification of the transfer. But, if the terms of the transfer do not clearly define the land or interests to transfer it, then extrinsic evidence is admissible so the court may (to use the words of Lord Parker in Eastwood v Ashton [l915] AC 900 at 913) ‘do the best it can to arrive at the true meaning of the parties upon a fair consideration of the language used.’ 1 Cites 1 Citers Â Â Satef-Huttenes Albertus SpA v Paloma Tercera Shipping Co SA (The Pegase); 1981 - [1981] Lloyd's Rep 175 Â East v Pantiles Plant Hire Ltd [1982] 2 EGLR 111; (1981) 263 EG 61 1981 CA Brightman, Lawton and Oliver LJJ Contract, Equity The court considered the circumstances under which rectification could properly be ordered in respect of a deed. Brightman LJ said: "It is clear on the authorities that a mistake in a written instrument can, in certain limited circumstances, be corrected as a matter of construction without obtaining a decree in an action for rectification. Two conditions must be satisfied: first, there must be a clear mistake on the face of the instrument; secondly, it must be clear what correction ought to be made in order to cure the mistake. If those conditions are satisfied, then the correction is made as a matter of construction. If they are not satisfied then either the claimant must pursue an action for rectification or he must leave it to a court of construction to reach what answer it can on the basis that the uncorrected wording represents the manner in which the parties decided to express their intention. In Snell's Principles of Equity 27th ed p 611 the principle of rectification by construction is said to apply only to obvious clerical blunders or grammatical mistakes. I agree with that approach. Perhaps it might be summarised by saying that the principle applies where a reader with sufficient experience of the sort of document in issue would inevitably say to himself, "Of course X is a mistake for Y"." 1 Citers Â Â Bremer Vulkan Schiffbau Und Maschinenfabrik v South India Shipping Corp Ltd; HL 1981 - [1981] AC 909; [1981] 1 Lloyds Rep 253 Â Â Spall v Owen; 1981 - (1981) 44 P and CR 36 Â Â Feuer Leather Corporation v Frank Jonstone and Sons; 1981 - (1981) Com LR 251 Â Bunge Corporation (New York) v Tradax Export Sa (Panama) [1981] UKHL 11; [1981] 2 All ER 513; [1981] 1 WLR 711; [1981] 2 Lloyds Rep 1 25 Feb 1981 HL Lord Wilberforce, Lord Fraser of Tullybelton, Lord Scarman, Lord Lowry, Lord Roskill Contract, Damages The FOB contract for the sale of goods required the buyers to give notice of the probable readiness of the ships on which the goods were to be carried. The notice was given four days too late. The sellers declared the buyers in default and claimed damages for default on the basis that the term as to notice was a condition. The damages claimed were the difference between the contract price and the market price. The sellers did not contend that, if the term was not a condition, the delay of four days amounted to a repudiation. The breach complained of consisted not of giving less than the requisite number of days' notice under the contract, but of giving notice after the last date on which it could legitimately be given because the required 15 days notice would have ended after the last possible date for shipment. The House considered the construction of clause 7 of GAFTA 119, and in particular whether it was a condition or warranty, and whether time was of the essence. Held: Whether a time limit is of the essence of a contractual provision is a question of interpretation. Lord Wilberforce said: "As to such a clause there is only one kind of breach possible, namely to be late, and the questions to be asked are: first what importance have the parties expressly ascribed to this consequence? And, second, in the absence of expressed agreement, what consequence ought to be attached to it having regard to the contract as a whole?" and "In conclusion, the statement of the law in Halsbury's Laws of England, 4th ed., vol. 9 (1974), paras. 481–482, including the footnotes to paragraph 482 (generally approved in the House in the United Scientific Holdings case), appears to me to be correct, in particular in asserting (1) that the court will require precise compliance with stipulations as to time wherever the circumstances of the case indicate that this would fulfil the intention of the parties, and (2) that broadly speaking time will be considered of the essence in "mercantile" contracts — with footnote reference to authorities which I have mentioned." Lord Lowry said: "It is by construing a contract (which can be done as soon as the contract is made) that one decides whether a term is, either expressly or by necessary implication, a condition, and not by considering the gravity of the breach of that term (which cannot be done until the breach is imminent or has occurred)." 1 Cites 1 Citers [ Bailii ] Â Â Lonrho Ltd v Shell Petroleum Co Ltd (No 2); CA 6-Mar-1981 - 51/1981; [1981] Com LR 74; Times, 07 March 1981 Â Â Universe Tankships Inc of Monrovia v International Transport Workers Federation; HL 1-Apr-1981 - [1983] 1 AC 366; [1981] UKHL 9; [1982] 2 WLR 803; [1982] 2 All ER 67; [1982] 1 Lloyds Rep 537; [1982] IRLR 200; [1982] ICR 262 Â Â Island Holdings Ltd v Birchington Engineering Co Ltd; 7-Jul-1981 - Unreported, 7 July 1981 Â Â Ailsa Craig Fishing Co Ltd v Malvern Fishing Co Ltd; HL 26-Nov-1981 - [1983] 1 WLR 964; [1981] UKHL 12; [1983] 1 All ER 101; 1982 SLT 377 Â Â China Pacific SA v Food Corpn of India (The Winson); HL 1982 - [1982] AC 939 Â Â M V Yorke Motors v Edwards; HL 1982 - [1982] 1 WLR 444; [1982] 1 All ER 1024 Â Â Hydro Electric Commission of Nepean v Ontario Hydro; 1982 - (1982) 132 DLR (3d) 193 Â Bank of India v Trans Continental Commodity Merchants [1982] 1 LR 427 1982 Bingham J Contract If a transaction is on its face, that is to say merely by looking at its terms and without additional evidence, manifestly illegal, the Court will refuse to enforce it, whether or not either party alleges illegality. If a transaction is not on its face manifestly illegal but there is before the Court persuasive and comprehensive evidence of illegality, the court may refuse to enforce it even if illegality has not been pleaded or alleged. The principle behind the court's intervention of its own notion in such a case is to ensure that its process is not being abused by inviting it to enforce sub silentio a contract whose enforcement is contrary to public policy. Â Italmare Shipping v Ocean Tanker Co [1982] 1 WLR 158 1982 CA Lord Denning MR Contract, Transport The clause disputed by the parties provided: "If hire not received when due, Owners to give Charterers 48 hours notice in order to rectify the cause for such delay before exercising their [withdrawal] rights . ." The owners withdrew the vessel after enquiring about whether hire had been paid, but without any prior warning. Application was made for leave to appeal. Held: Lord Denning MR said: "These clauses vary in detail, but for the most part they provide that, before giving a withdrawal notice, the owners must give 48 hours notice. The reason is obvious. It is to give the charterers an opportunity of remedying their breach before they are exposed to forfeiture of their charter. It is comparable to the statutory notice which a landlord has to give to a tenant before enforcing a forfeiture clause. The word 'final' means just that. Â Lamport and Holt Lines v Coubro, The Raphael [1982] 2 Lloyd's Rep 42 1982 CA May LJ Contract The court considered how it should treat the construction of a contractual clause claiming that one party should be exempt from liability for its own negligence: "Thus, if an exemption clause of the kind we are considering excludes liability for negligence expressly, then the Courts will give effect to the exemption. If it does not do so expressly, but its wording is clear and wide enough to do so by implication, then the question becomes whether the contracting parties so intended. If the only head of liability upon which the clause can bite in the circumstances of a given case is negligence, and the parties did or must be deemed to have applied their minds to this eventuality, then clearly it is not difficult for a Court to hold that this was what the parties intended – that this is its proper construction. Indeed to hold other wise would be contrary to commonsense. On the other hand if there is a head of liability upon which the clause could bite in addition to negligence then, because it is more unlikely than not that a party will be ready to excuse his other contracting party from the consequences of the latter's negligence, the clause will generally be construed as not covering negligence. If the parties did or must be deemed to have applied their minds to the potential alternative head of liability at the time the contract was made then, in the absence of any express reference to negligence, the Courts can sensibly only conclude that the relevant clause was not intended to cover negligence and will refuse so to construe it. In other words, the Court asks itself what in all the relevant circumstances the parties intended the alleged exemption clause to mean." 1 Citers Â Phonogram Ltd v Lane [1982] 1 QB 938; [1982] QB 938 1982 CA Oliver LJ, Lord Denning MR, Shaw LJ Contract, European A collateral contract was entered into with a company which had not then been incorporated under which an advance by Phonogram to support an intended new pop group was repayable by the company if a recording contract was not entered into within one month. The collateral contract was signed "for and on behalf of" the company by Mr. Lane. Both parties knew, at the time of the collateral contract, that the company had not been incorporated. Held: Lane's appeal failed. The Court expressly rejected the argument that section 9(2) should be construed solely by reference to the Directive. Lord Denning MR said: "Section 9(2) is in accordance with the spirit and intent of the directive. We should go by our own statute and not by the directive . ." #and "This is the first time the section has come before us. It will have much impact on the common law. I am afraid that before 1972 the common law had adopted some fine distinctions. As I understand Kelner v. Baxter (1866) L.R. 2 C.P. 174 it decided that, if a person contracted on behalf of a company which was nonexistent, he himself would be liable on the contract. Just as, if a man signs a contract for and on behalf "of his horses," he is personally liable. But, since that case was decided, a number of distinctions have been introduced by Hollman v. Pullin (1884) Cab. and Ell. 254; Newborne v. Sensolid (Great Britain) Ltd. [1954] 1 Q.B. 45 and Black v. Smallwood (1965) 117 C.L.R. 52 in the High Court of Australia. Those three cases seem to suggest that there is a distinction to be drawn according to the way in which an agent signs a contract. If he signs it as "agent for 'X' company" - or "for and on behalf of 'X' company" - and there is no such body as "X" company, then he himself can be sued upon it. On the other hand, if he signs it as "X" company per pro himself the managing director, then the position may be different: because he is not contracting personally as an agent. It is the company which is contracting. That distinction was disliked by Windeyer J. in Black v. Smallwood. It has been criticised by Professor Treitel in The Law of Contract, 5th ed. (1979), p.559. In my opinion, the distinction has been obliterated by section 9(2) of the European Communities Act 1972. We now have the clear words, "Where a contract purports to be made by a company, or by a person as agent for a company, at a time when the company has not been formed..." That applies whatever formula is adopted. The person who purports to contract for the company is personally liable." Oliver LJ said: "any such subtle distinctions which might have been raised are rendered now irrelevant by section 9(2) of the European Communities Act 1972 in a case where a contract is either with a company or with the agent of a company. It has been suggested that an agreement to the contrary may still be inferred by the fact that the contract was signed by a person acting as agent so as to exclude the section. That I am bound to say seems to me to be wholly unarguable when the section itself in terms provides "Where a contract purports to be made ... by a person as agent for a company," and to interpret it in the way suggested would defeat the whole purpose of the section." European Communities Act 1972 9(2) 1 Cites 1 Citers Â Pickering v Sojex Services UK [1982] 262 EG 770 1982 Kilner-Brown J Contract An agreement by a chartered surveyor to take payment for negotiating a reduction in rateable value conditional upon success was not champertous since no litigation was envisaged. 1 Citers Â Lamport and Holt Lines v Coubro and Scrutton (M and I) Ltd, (The Raphael) [1982] 2 Lloyd's Rep. 42 1982 May LJ Contract 1 Cites 1 Citers Â Â Millichamp v Jones; 1982 - [1982] 1 WLR 1422; [1983] 1 All ER 267 Â Â Legione v Hateley; 1982 - [1982-1983] 152 CLR 406 Â Â Elias v George Sahely and Co (Barbados) Ltd; PC 1982 - [1983] 1 AC 646; [1982] 3 All ER 801; [1982] 3 WLR 956; [1983-84] ANZ Conv R 104; [1982] UKPC 31 Â Â Pioneer Shipping Ltd v BTP Tioxide Ltd ('The Nema'); HL 1982 - [1981] 3 WLR 292; [1982] AC 724 Â Â Cohen v Nessdale Ltd; CA 1982 - [1982] 2 All ER 97 Â The Cape Hatteras [1982] 1 Lloyd's Reports 518 1982 Contract 1 Citers Â Â Chilean Nitrate Sales Corporation v Pansuiza Compania de Navegacion SA and Marine Transportation Co Ltd ('The Hermosa'); CA 1982 - [1982] 1 Lloyd's Rep 570 Â Â Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelsgesellschaft mbH; HL 1982 - [1983] 2 AC 34 Â Â North American and Continental Sales Inc v BEPI (Electronics) Limited; 1982 - 1982 SLT 47 Â Â Codelfa Construction v State Rail Authority of New South Wales; 1982 - (1982) 149 CLR 337 Â Lyus v Prowsa Developments Ltd [1982] 1 WLR 1044; [1982] 2 All ER 953 1982 ChD Dillon J Registered Land, Contract The plaintiffs contracted to buy a plot of registered land with a house to be built on it. The developer had charged the estate as a whole to a bank to secure the development finance. The developer became insolvent and the bank sold the estate as mortgagee to the first defendant "subject to and with the benefit of" the plaintiff's contract. Three months later the first defendant resold the estate to the second defendant subject to the plaintiffs' contract so far if at all as it might be enforceable as against the first defendant. The transfer to the second defendant, which was duly registered, did not refer to the plaintiffs' contract. It was common ground that if the provision in the contract for the sale by the bank to the first defendant was adequate to impose a constructive trust on the first defendant then the effect of the provision in the contract for sale by the first defendant to the second defendant was to impose a similar trust on him. Held: Both of them had that effect. Dillon J said: "Bearing in mind that there is no basis on which it could be suggested that the bank could be under any obligation to the plaintiffs to complete the house on Plot 29 for them, and bearing in mind the first defendant's solicitors' letter to Messrs Strutt and Parker, to which I have referred, I conclude that clause 11 was not inserted in the agreement of October 18, 1979, solely for the protection of the bank, like clause 7 of that agreement which sets out other matters subject to which the property was sold, and I conclude that it was a stipulation of the bargain between the bank and the first defendant that the first defendant would give effect in relation to Plot 29 to the contract which had been made between the vendor company and the plaintiffs." He went on to discuss the effect of the 1925 Act: "It seems to me that the fraud on the part of the defendants in the present case lies not just on relying on the legal rights conferred by an Act of Parliament, but in the first defendant reneging on a positive stipulation in favour of the plaintiffs in the bargain under which the first defendant acquired the land. That makes, as it seems to me, all the difference. It has long since been held for instance, in Rochefoucauld v. Boustead [1897] 1 Ch. 196, that the provisions of the Statute of Frauds 1677 (29 Car. 2 c.3), now incorporated in certain sections of the Law of Property Act 1925, cannot be used as an instrument of fraud, and that it is fraud for a person to whom land is agreed to be conveyed as trustee for another to deny the trust and relying on the terms of the statute to claim the land for himself. Rochefoucauld v. Boustead was one of the authorities on which the judgment in Bannister v. Bannister [1948] 2 All E.R. 133 was founded. It seems to me that the same considerations are applicable in relation to the Land Registration Act 1925. If for instance, the agreement of October 18, 1979, between the bank and the first defendant had expressly stated that the first defendant would hold Plot 29 upon trust to give effect for the benefit of the plaintiffs to the plaintiffs' agreement with the vendor company, it would be difficult to say that the express trust was over-reached and rendered nugatory by the Land Registration Act 1925. The Land Registration Act 1925 does not, therefore, effect the conclusion which I would otherwise had reached in reliance on Bannister v. Bannister and the judgment of Lord Denning M.R. in Binions v. Evans [1972] Ch. 359 had Plot 29 been unregistered land." Land Registration Act 1925 1 Citers Â Walker v Boyle [1982] 1 WLR 495; [1982] 1 All ER 634 1982 Dillon J Land, Contract A property was sold subject to the National Conditions of Sale (19th edition). Condition 17(1) of the conditions provided that "no error, the statement or omission in any preliminary answer concerning the property . . shall annul the sale". There had been a pre-existing boundary dispute with a neighbour which was not disclosed in the course of the preliminary enquiries before contract. Held: The vendor was not entitled in equity to rely on this condition. The National Conditions of sale do not exclude liability for fraud. As to the 1967 Act: "I do not regard condition 17 as satisfying that requirement in the circumstances of this case. Another way of putting it is that Mrs Boyle has not shown that it does satisfy that requirement." The court also refused relief for specific performance in view of the claimant's innocent misrepresentation, even if that mistake was unilateral and not induced by the claimant's misrepresentation: "It seems to me that the equitable barrier to specific performance extends not merely to matters of title where the vendor has failed to disclose defects known to him in his own title, but also to misrepresentation where the vendor has, albeit innocently, misdescribed the property or made some other misrepresentation about the property, when the true facts were within his own knowledge. A trifling misrepresentation where the truth would have had no effect on the purchaser and the purchaser would have nonetheless entered into the contract, rests in a different category because there the contract has not been induced by the misrepresentation, but here, as I find, the purchaser would reasonably have refused to contract unless the boundary dispute, if disclosed to him, had first been resolved. Therefore, it seems to me that on equitable principles and consistently with the authorities I have mentioned, and consistently also with the fairly recent decision of Walton J in Faruqi v English Real Estates Ltd [1979] 1 WLR 963, the vendor, Mrs Boyle, is not entitled in equity to rely on condition 17 in the circumstances of this case." Misrepresentation Act 1967 3 1 Citers Â Â George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd; CA 1982 - [1983] 1 All ER 108 Â Â Sudbrook Trading Estate Ltd v Eggleton; HL 1982 - [1983] 1 AC 444; [1982] 3 All ER 1; [1982] 3 WLR 315; 1982] ANZ Conv R 541 Â Aziz v Mayfair Casinos Ltd Times, 30 June 1982 30 Jun 1982 Hobhouse J Contract Cheques to buy gambling chips were drawn on a bank which, to the knowledge of the punter but not of the club, did not exist. The gambler said that the cheques amounted to the giving of credit under the Act and that the transactions were void. Held: The instruments were cheques and that the non-existence of the bank, unknown to the club, did not make them in breach of section 16. Gaming Act 1968 16 1 Citers Â British Petroleum Limited v Emile Abouritz [1982] UKPC 29 26 Jul 1982 PC Contract (Gambia) [ Bailii ] Â George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd [1982] EWCA Civ 5; [1983] 1 All ER 108; [1983] QB 284 29 Sep 1982 CA Lord Denning MR Contract The buyer bought 30lbs of cabbage seed, but the seed was not correct, and the crop was worthless. The seed cost Â£192, but the farmer lost Â£61,000. The seed supplier appealed the award of the larger amount and interest, saying that their contract limited their liability to the cost of the seed. Held: The appeal failed, it would not be fair or reasonable to allow the seed merchants to rely on the clause to limit their liability. Supply of Goods (Implied Terms) Act 1973 - Unfair Contract Terms Act 1977 1 Cites 1 Citers [ Bailii ] Â Â Industrie Chimiche v Nea Ninemia Shipping; 1983 - [1983] 1 All ER 686 Â Alec Lobb (Garages) Ltd v Total Oil Ltd [1983] 1 All ER 944; [1983] 1 WLR 87 1983 QBD Peter Millett QC J Contract To establish that a contract was unconscionable, a party had to have made an unconscientious use of its superior position or superior bargaining power to the detriment of someone suffering from some special disability or disadvantage. This weakness had to be exploited in some morally culpable manner, leading to an oppressive transaction. There must be some impropriety, both in the conduct of the stronger party and in the terms of the transaction itself, but "the former may often be inferred from the latter in the absence of an innocent explanation". Peter Millett QC J said: "It is probably not possible to reconcile all the authorities, some of which are of great antiquity, on this head of equitable relief, which came into greater prominence with the repeal of the usury laws in the 19th century. But if the cases are examined, it will be seen that three elements have almost invariably been present before the court has interfered. First, one party has been at a serious disadvantage to the other, whether through poverty, or ignorance, or lack of advice, or otherwise, so that circumstances existed of which unfair advantage could be taken: see, for example, Blomley v Ryan (1954) 99 CLR 362, where, to the knowledge of one party, the other was by reason of his intoxication in no condition to negotiate intelligently; secondly, this weakness of the one party has been exploited by the other in some morally culpable manner: see, for example, Clark v Malpas (1862) 4 De G.F. & J. 401, where a poor and illiterate man was induced to enter into a transaction of an unusual nature, without proper independent advice, and in great haste; and thirdly, the resulting transaction has been, not merely hard or improvident, but overreaching and oppressive. Where there has been a sale at an undervalue, the undervalue has almost always been substantial, so that it calls for an explanation, and is in itself indicative of the presence of some fraud, undue influence, or other such feature. In short, there must, in my judgment, be some impropriety, both in the conduct of the stronger party and in the terms of the transaction itself (though the former may often be inferred from the latter in the absence of an innocent explanation) which in the traditional phrase "shocks the conscience of the court," and makes it against equity and good conscience of the stronger party to retain the benefit of a transaction he has unfairly obtained." 1 Cites 1 Citers Â Resolute Maritime Inc v Nippon Kaiji Kyokai [1983] 1 WLR 857 1983 Contract, Agency, Torts - Other On its proper construction the section is concerned only with the liability of that other party to the contract and not with the liability of an agent. Misrepresentation Act 1967 2(1) 1 Citers Â Â George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd; HL 1983 - [1983] 2 AC 803; [1982] 1 All ER 108 Â Â Export Credits Guarantee Department v Universal Oil Products; HL 1983 - [1983] 1 WLR 399; [1983] 2 All ER 205 Â Sudbrook Trading Estate v Eggleston [1983] 1 AC 444; [1982] ANZ Conv R 541; [1982] 3 WLR 315; [1982] 3 All ER 1 1983 HL Lord Diplock Contract An option was granted to purchase the reversion conferred on the lessees under certain leases. The price was be not less than £12,000, and it was to be fixed by valuers appointed by each party and default of agreement it was to be fixed by an umpire. The lessors refused to appoint a valuer. Held: The price was on the true construction of the lease a fair and reasonable price, as judged by objective criteria. The provisions for the appointment of valuers by either party were mere machinery. The court could substitute its own machinery and direct specific performance of the option. That the price should be fair and reasonable followed by necessary implication from the fact that the price was to be fixed by valuers. In this particular case the House ordered an inquiry as to the what was a fair and reasonable price because there was a risk that if the court merely ordered a party to appoint a valuer the order might be disobeyed, leaving only a remedy in contempt. Lord Diplock said: "when honest parties to a contract for the sale of land or an option to enter into such a contract have in the past inserted provisions for the ascertainment of the purchase price . . they must have intended to create legal rights to have those provisions acted on by both parties and not flouted by either party at his own sweet will, otherwise there is no point in inserting them at all." 1 Citers Â Â British Steel Corporation v Cleveland Bridge and Engineering Co Ltd; 1983 - [1984] 1 All ER 504; (1983) BLR 94; [1984] 1 WLR 504 Â Western Electric Ltd v Welsh Development Agency [1983] QB 796 1983 Contract, Land An offer to grant a licence to occupy land may be accepted by taking up occupation. 1 Citers Â Â Merkur Island Corp v Laughton; HL 1983 - [1983] 2 AC 570 Â Â Dimbleby and Sons v National Union of Journalists; CA 1983 - [1984] 1 WLR 67 and 427 Â Â Empresa Exportadora de Azucar v Industria Azucarera Nacional S.A, The Playa Larga; CA 1983 - [1983] 2 Lloyds Rep 171 Â Paal Wilson and Co v Partenreederei Hannah Blumenthal (The Hannah Blumenthal) [1983] 1 AC 854; [1983] Com LR 20; [1983] 1 All ER 34; [1983] 1 Lloyds Rep 103; [1982] 3 WLR 1149 1983 HL Lord Brandon, Lord Diplock Contract, Arbitration The House was asked whether a contract to abandon an arbitration might be implied from conduct, or a lack of conduct. Held: The abandonment of a contract can be effected by the entry of the parties, expressly or by necessary inference from conduct, into a fresh contract for mutual release from their obligations under the contract said to be abandoned. An argument that mere inactivity of the parties could be construed as an implied agreement to rescind the agreement to arbitrate, failed. Lord Brandon of Oakbrook considered that an actual abandonment, as opposed to an estoppel precluding an assertion of continuance, required proof of conduct of each party, as evinced to the other party and acted on by him, as "leads necessarily to the inference of an implied agreement" between them to abandon the contract. Lord Roskill referred to "the only possible inference [being] that the agreement to arbitrate has been rescinded by mutual consent". Though Lord Diplock made no similar observation both Lords Keith of Kinkel and Brightman agreed with Lords Brandon and Roskill. Lord Brandon said: "there are two essential factors which must be present in order to frustrate a contract. The first essential factor is that there must be some outside event or extraneous change of situation, not foreseen or provided for by the parties at the time of contracting, which either makes it impossible for the contract to be performed at all, or at least renders its performance something radically different from what the parties contemplated when they entered into it. The second essential factor is that the outside event or extraneous change of situation concerned, and the consequences of either in relation to the performance of the contract, must have occurred without either the fault or the default of either party to the contract." 1 Citers Â Israel Discount Bank of New York v Hadjipateras [1984] 1 WLR 137; [1983] 3 All ER 129; [1983] 2 Lloyds Rep 490 1983 CA Contract, Undue Influence An application was made to enforce a judgment in England. The respondent alleged that he had signed a guarantee under the undue influence of his father. Held: The Court reversed the decision of the first instance judge. The substance of the decision is that the respondent had deliberately refrained from raising a defence in New York and was therefore not entitled to take the point in the English courts. However, in general, "The fact that an agreement was obtained by undue influence, duress or coercion was a reason for an English court to treat a foreign judgment based on that agreement as being invalid or to refuse to enforce the foreign judgment as being contrary to English public policy." 1 Citers Â Â Sotiros Shipping Inc v Sameiet; The Solholt; CA 1983 - [1983] 1 Lloyd's Rep 605 Â Scandinavian Trading Tanker Co AB v Flota Petrolera Ecuatoriana (The Scaptrade) [1983] QB 529 1983 CA Robert Goff LJ Damages, Contract Charterers of a ship sought refielf from forfeiture of the charterparty on equitable grounds. Held: No jurisdiction existed to grant such a rlief. In a commercial agreement between commercial parties, the court had no jurisdiction to relieve a party of the consequences of failure to pay or duly to perform some other contractual obligation. Robert Goff LJ said that “It is of the utmost importance in commercial transactions that, if any particular event occurs which may affect the parties’ respective rights under a commercial contract, they should know where they stand. The court should so far as possible desist from placing obstacles in the way of either party ascertaining his legal position, if necessary with the aid of advice from a qualified lawyer, because it may be commercially desirable for action to be taken without delay, action which may be irrevocable and which may have far reaching consequences. It is for this reason, of course, that the English courts have time and again asserted the need for certainty in commercial transactions - for the simple reason that parties to such transactions are entitled to know where they stand, and to act accordingly. In particular, when a ship owner becomes entitled under the terms of his contract, to withdraw a ship from the service of a time charterer, he may well wish to act swiftly and irrevocably. True, his problem may, in a particular case, prove to be capable of solution by entering into a without prejudice agreement with the original time charterer, under which the rate of hire will be made to depend upon a decision, by arbitrators or by a court, whether he was in law entitled to determine the charter. But this is not always possible. He may wish to refix his ship elsewhere as soon as possible, to take advantage of a favourable market. It is no answer to this difficulty that the ship may have cargo aboard at the time, so that her services cannot immediately be made available to another charterer" Robert Goff LJ continued: "For one thing, the ship may not have cargo on board, and for another she can be refixed immediately under a charter to commence at the end of her laden voyage. Nor is it an answer that the parties can immediately apply to arbitrators, or to a court, for a decision, and that both maritime arbitrators and the Commercial Court in this country are prepared to act very quickly at very short notice. For, quite apart from the fact that some delay is inherent in any legal process, if the question to be decided is whether the tribunal is to grant equitable relief, investigation of the relevant circumstances, and the collection of evidence for that purpose, cannot ordinarily be carried out in a very short period of time." and "The policy which favours certainty in commercial transactions is so antipathetic to the form of equitable intervention invoked by the charterers in the present case that we do not think it would be right to extend the jurisdiction to relieve charterers from the consequences of withdrawal. We consider that the mere existence of such a jurisdiction would constitute an undesirable fetter upon the exercise by parties of their contractual rights under a commercial transaction of this kind. It is not enough to say it will only be exercised in rare cases. For the mere possibility that it may be exercised can produce uncertainty, disputes and litigation, and so prevent parties from knowing where they stand, particularly as the jurisdiction, if available, would be discretionary and there may be doubt whether it could be successfully invoked in any particular case. For these reasons we hold that we have no equitable jurisidiction to grant equitable relief of the kind asked for by the charterers.” 1 Citers Â Â Dimsdale Developments (South East) Ltd v De Haan; 1983 - (1983) 47 PandCR 1 Â Â Atisa SA v Aztec AG; 1983 - [1983] 2 Lloyds Rep 579 Â Banque De L'Indochine v JH Rayner (Mincing Lane) Ltd [1983] QB 711 1983 Contract The compromise of a defence may amount to sufficient consideration for the formation of a contract. 1 Citers Â Â Robertson v British Gas Corporation; CA 1983 - [1983] ICR 351 Â Â Finelvet AG v Vinava Shipping Co Ltd ("The Chrysalis"); 1983 - [1983] 1 WLR 1469; [1983] 1 Lloyds Rep 503 Â Commercial Bank of Australia Ltd v Amadio (1983) 46 ALR 402 1983 Mason J, Deane J Commonwealth, Contract, Equity (Australia) "it is necessary for the plaintiff who seeks relief to establish unconscionable conduct, namely that unconscientious advantage has been taken of his disabling condition or circumstances" Deane J: "Unconscionable dealing looks to the conduct of the stronger party in attempting to enforce, or obtain the benefit of, a dealing with a person under a special disability in circumstances where it is not consistent with equity or good conscience that he should do so. The adverse circumstances which may constitute special disability for the purposes of the principles relating to relief against unconscionable conduct may take a wide variety of forms and are not susceptible to being comprehensively catalogued." 1 Citers Â Scandinavian Trading Tanker Co AB v Flota Petrolera Ecuatoriana (The Scaptrade) [1983] 2 AC 694; [1983] 2 AC 694; [1983] 2 All ER 763; [1983] 3 WLR 203 1983 HL Diplock, Keith of Kinkel, Scarman, Roskill and Bridge of Harwick LL Transport, Damages, Contract, Equity The House considered giving relief from forfeiture where an owner had justifiably withdrawn his vessel in accordance with the terms of the charter. Held: A withdrawal clause under a time charter, exercised on the ground of the charterer's failure to make punctual payment of an instalment of hire, was not subject to the equitable right to relief against forfeiture, even though it involved the loss of a valuable charter. Such rights of withdrawal are usually exercised where the market rate of hire is substantially above the charter rate. The remedy of relief from forfeiture was unavailable in part because a Court of Equity would not grant specific performance in respect of it. The House distinguished between merely contractual rights, and contracts concerning the transfer or creation of proprietary or possessory rights. The House warned against the wholesale importation into commercial law of equitable principles inconsistent with the certainty and speed which are essential requirements for the orderly conduct of business affairs. An injunction restraining the ship owner from exercising his right of withdrawal of the vessel (a contractual right given to him under the charter) was to be equated with an order for specific performance. Lord Diplock said: "A time charter, unless it is a charter by demise, with which your Lordships are not here concerned, transfers to the charterer no interest in or right to possession of the vessel; it is a contract for services to be rendered to the charterer by the shipowner through the use of the vessel by the shipowner's own servants, the master and the crew, acting in accordance with such directions as to the cargoes to be loaded and the voyages to be undertaken as by the terms of the charterparty the charterer is entitled to give to them. Being a contract for services it is thus the very prototype of a contract of which before the fusion of law and equity a court would never grant specific performance: Clarke v Price (1819) 2 Wils. 157; Lumley v Wagner (1852) 1 De G.M & G. 604. In the event of failure to render the promised services, the party to whom they were to be rendered would be left to pursue such remedies in damages for breach of contract as he might have at law. But as an unbroken line of uniform authority in this House, from Tankexpress [1949] A.C. 76 to A/S Awilco of Oslo v Fulvia S.p.A. di Navigazione of Cagliari (The Chikuma) [1981] 1 WLR 314, has held, if the withdrawal clause so provides, the shipowner is entitled to withdraw the services of the vessel from the charterer if the latter fails to pay an instalment of hire in precise compliance with the provisions of the charter. So the shipowner commits no breach of contract if he does so; and the charterer has no remedy in damages against him. To grant an injunction restraining the shipowner from exercising his right of withdrawal of the vessel from the service of the charterer, though negative in form, is pregnant with an affirmative order to the shipowner to perform the contract; juristically it is indistinguishable from a decree for specific performance of a contract to render services; and in respect of that category of contracts, even in the event of breach, this is a remedy that English courts have always disclaimed any jurisdiction to grant. This is, in my view, sufficient reason in itself to compel rejection of the suggestion that the equitable principle of relief from forfeiture is juristically capable of extension so as to grant to the court a discretion to prevent a shipowner from exercising his strict contractual rights under a withdrawal clause in a time charter which is not a charter by demise." Lord Diplock said that his judgment was concerned only with time charters that were not by demise: "the reasoning in my speech has been directed exclusively to time charters that are not by demise. Identical considerations would not be applicable to bareboat charters and it would in my view be unwise for your Lordships to express any views about them." . . And: "The classic form of penalty clause is one which provides that upon breach of a primary obligation under the contract a secondary obligation shall arise on the part of the party in breach to pay to the other party a sum of money which does not represent a genuine pre-estimate of any loss likely to be sustained by him as the result of the breach of primary obligation but is substantially in excess of that sum. The classic form of relief against such a penalty clause has been to refuse to give effect to it, but to award the common law measure of damages for the breach of primary obligation instead." 1 Cites 1 Citers Â Â Regina v Knightsbridge London Crown Court ex parte Marcrest Properties Ltd; CA 1983 - [1983] 1 WLR 300; [1983] 1 All ER 1148 Â O'Dea v Allstates Leasing System (WA) Pty Ltd 17 Feb 1983 Gibbs C.J.(1), Murphy(2), Wilson(3), Brennan(4) and Deane(5) JJ Contract High Court of Australia - Contract - Breach - Penalty - Hire of vehicle for term - Liability of lessee on repossession before end of term - Provision that entire rent for term due at commencement of term - Entire rent not payable if instalments duly paid - Provision entitling lessor to retain possession and sue for total rent - No credit for accelerated payment - No credit for proceeds of sale of vehicle - Whether penalty - Equitable relief against forfeiture. 1 Citers [ Austlii ] Â Centrovincial Estates Plc v Merchant Investors Assurance Co Ltd Times, 08 March 1983; [1983] Com LR 158 4 Mar 1983 CA Contract There cannot be a contract when the promisee knows or ought to know that the promisor does not intend to contract on the stated terms. The plaintiff might be able to negate any binding agreement by showing that the defendant ought to have known that the plaintiff's offer contained an error. In this case there was no proof ‘that the defendants either knew or ought reasonably to have known of the plaintiffs’ error. The non mistaken party need not show that as a result of entering into that contract he has suffered any actual detriment Â Hewitt v Court (1983) 149 CLR 639; [1983] HCA 7 15 Mar 1983 Commonwealth, Contract, Insolvency Austlii (High Court of Australia) Lien - Equitable - Contract for provision of work, labour and materials - Progress payments - Whether lien obtained over unfinished object - Whether dependent upon right to specific enforcement of contract. Contract - Character - Work, labour and materials or sale of goods. Bankruptcy - Preference - Contract for prefabrication of house - Risk with builder until practical completion - Property not to pass until full payment of price - Progress payments - Builder placed in liquidation before completion - Prior agreement for purchaser to pay for work done after last progress payment and take unfinished house - Whether preference - Companies Act 1961 (W.A.), section 293 - Bankruptcy Act 1966 (Cth), s. 122. 1 Citers [ Austlii ] Â Â Law v National Greyhound Racing Club Limited; CA 29-Jul-1983 - [1983] 1 WLR 1302; [1983] EWCA Civ 6; [1983] 3 All ER 300 Â Miramar Maritime Corporation v Holborn Oil Trading Limited ("The Miramar") [1984] AC 676; [1984] 3 WLR 1 1984 HL Lord Diplock Transport, Contract A bill of lading incorporated a charterparty. The question was whether clauses in the charterparty or bill of lading prevailed. The charter clause incorporated a demurrage clause making the charterer's laible for demurrage, and the owners asserted that the included demurrage clause made the cargo's consignee, as holders of the bill, directly responsible for the demurrage. Held: On its true construction, the contract the parties to the bill of lading intended that the charterer alone should carry responsibility. There is no general rule of construction that an incorporated clause which related directly to the issue operate in substitution for clauses on the same issue in the bill. 1 Cites 1 Citers Â Berger and Co Inc v Gill and Duffus SA (No 2) [1984] AC 382 1984 HL Lord Diplock Contract, Transport The sellers had agreed to sell 500 tonnes of bolita beans cif Le Havre. In the event only 445 tonnes were discharged at Le Havre and the remaining 55 tonnes were on-carried to Rotterdam. The documents in respect the 500 tonnes were presented but rejected on the ground that they did not contain a quality certificate. The documents were re-presented with a quality certificate in respect of the 445 tonnes. They were again rejected. The sellers accepted this as a repudiation of the contract and claimed damages. The 445 tonnes discharged at Le Havre were found not to correspond with their contractual description. Held: A buyer under a cif contract could not justify a refusal to accept conforming documents on the grounds that the goods in fact shipped did not conform with their contractual description. Thus the buyers' rejection of the documents was a repudiatory breach which the sellers had accepted as terminating the contract. Where, at the time of the buyers' repudiation the sellers had committed a breach by shipping non-conforming goods, the buyers could counterclaim for damages caused by that breach. Lord Diplock, said of s.13: "while 'description' itself is an ordinary English word, the Act contains no definition of what it means when it speaks in that section of a contract for the sale of goods being a sale 'by description'. One must look to the contract as a whole to identify the kind of goods that the seller was agreeing to sell and the buyer to buy. . . where, as in the instant case, the sale (to use the words of section 13) is 'by sample as well as by description', characteristics of the goods which would be apparent on reasonable examination of the sample are unlikely to have been intended by the parties to form part of the 'description' by which the goods were sold, even though such characteristics are mentioned in references in the contract to the goods that are its subject matter." and "[The termination of the contract] had the consequence in law that all primary obligations of the parties under the contract which had not yet been performed were terminated. This termination did not prejudice the right of the party so electing to claim damages from the party in repudiatory breach for any loss sustained in consequence of the non-performance by the latter of his primary obligations under the contract, future as well as past. Nor did the termination deprive the party in repudiatory breach of the right to claim or to set off, damages for any past non-performance by the other party of that other party's own primary obligations, due to be performed before the contract was rescinded" Sale of Goods Act 1893 13 1 Citers Â Clough Mill Ltd v Martin [1984] 1 WLR 1067; (1984) 128 SJ 564; [1984] 1 All ER 721; (1984) LS Gaz 2375 1984 Contract 1 Citers Â Clough Mill Ltd v Martin [1985] 1 WLR 111; (1984) 128 SJ 850; [1984] 3 All ER 962; (1985) 82 LS Gaz 116 1984 CA Sir John Donaldson MR, Oliver and Robert Goff LJJ Company, Contract The plaintiff had supplied yarn to a company H on terms that the goods were to remain its property until paid for in full, although H was granted the power to sell the goods or use them for the purpose of manufacturing products. The terms also provided that if any payment were overdue the plaintiff could recover or resell the goods and enter H's premises for that purpose. When the defendant was appointed receiver of H the plaintiff informed him that it wished to repossess the unused yarn and asked to be allowed to collect it. The defendant refused on the grounds that the retention of title clause amounted to a charge to secure payment and was void for non-registration. Held: Property in the yarn had not passed to H, which could not therefore have created a charge in favour of the plaintiff. Robert Goff LJ, and to a lesser extent Oliver LJ, assumed that the contract under which the yarn had been supplied was a contract for the sale of goods to which the Sale of Goods Act applied. 1 Cites 1 Citers Â Â Stevenson v Nationwide Building Society; 1984 - (1984) 272 EG 663 Â In Re Westminster Property Group plc [1984] 1 WLR 1117 1984 Nourse J Contract The court considered the meaning of the word 'sale' in the phrase 'sale or purchase' in Order 14A RSC. Nourse J said: "The authorities establish that in legislative usage and in the absence of a special context the word "sale" denotes an exchange of property for cash and not for other property." 1 Citers Â Â Agip SpA v Navigazione Alta Italia SpA, "The Nai Genova"; CA 1984 - [1984] 1 Lloyds Law Reports 353 Â Clea Shipping Corp v Bulk Oil International, The Alaskan Trader (No 2) [1984] 1 All ER 129; [1983] 2 Lloyds Rep 645 1984 Lloyd J Contract, Transport The 24 month charterparty vessel suffered a major engine breakdown after nearly a year. The repairs would take several months. The charterers said they had no further use for the vessel but the owner did the repairs and sought to hold the charterers liable for hire for the rest of the period of the charterparty, once the repairs had been completed - some seven months. On an arbitration, the award was that the owners had no legitimate interest in pursuing their claim for hire rather than asserting a claim for damages. The owners appealed. Held. The appeal was dismissed. Given the defendants' conduct when called on to honour their clear obligations and because of their policy of non-cooperation during the proceedings, including admitting liability only at the last moment, it would not be equitable to deny the claimants their statutory rights. Lloyd J reviewed the case law and said: "this court is bound to hold that there is some fetter [on the innocent party's right to elect to disregard the repudiation], if only in extreme cases; and for want of a better way of describing that fetter it is safest for this court to use the language of Lord Reid, which, as I have already said, was adopted by a majority of the Court of Appeal in The Puerto Buitrago." The correct analysis was that, the court, on equitable grounds, refused to allow the innocent party to enforce his full contractual rights. 1 Cites 1 Citers Â The Zephyr [1984] 1 Lloyds LR 58; [1985] 2 LLR 529 1984 Hobhouse J Insurance, Contract Whilst it is possible to make a contract which is partly oral and partly written, that is not the practice of the marine insurance market. The policy is the formal contractual document issued to the assured and unequivocally contains the terms of the contract. A contract of marine insurance is inadmissible in evidence unless contained in a policy signed by the insurer. 1 Citers Â The Iran Vojdan [1984] 2 Lloyds Rep 380 1984 Bingham J Transport, Contract Electric cable was carried on an Iranian flagged vessel from Hamburg to Dubai. The plaintiff consignees, alleging that the cargo was damaged, commenced proceedings against the shipowners in the English courts. The defendants sought a stay on saying that the bill of lading had an exclusive jurisdiction clause under which all disputes were to be tried in Hamburg. There was an issue as to the proper law of the bill of lading contract, the defendants contending for German law and the plaintiffs for Iranian law. The bill of lading contained a provision that the contract was, in the option of the carrier to be declared by him on the merchant’s request, to be governed either by Iranian law with the Tehran courts having exclusive jurisdiction or by German law with the exclusive jurisdiction of the Hamburg courts or by English law with the exclusive jurisdiction of the courts of London. Held. The proper law must be capable of determination when the contract was entered into. The bill was impliedly under German law since that had the closest and most real connection. Applying German law the jurisdiction clause was invalid because it was printed in such small print as to be insufficiently legible. There was therefore no valid exclusive jurisdiction agreement. Obiter he considered the position under Iranian law. There being no evidence of that law, it was assumed to be identical to English law. It was common ground that, having regard to the decision of the Court of Appeal in Armar Shipping Co v. Caisse Algerienne, supra, the jurisdiction clause was unenforceable at least in so far as it introduced a floating proper law. The question then was whether that invalidity also rendered the optional choice of forum invalid. Bingham J thought it did: “If the clause had confined itself to conferring three options for the choice of jurisdiction on the carrier alone that would seem to me a clause to which effect could properly and without difficulty be given. Moreover, it would seem to me that the plaintiff could well protect himself against abortive proceedings, if that were the effect of the clause, by requesting an exercise of the option before issuing proceedings in one jurisdiction or another. I very much doubt if there is any obligation on the merchant to request the exercise of the option. I do not, however, construing this clause as a whole, think that the choice of jurisdiction can be excised from each of these sub-clauses and given independent effect if the choice of law falls. They are intimately connected with the choice of law options and are not expressed in the clause as separate options. I think, as a matter of construction, that it is artificial and unreal to give effect to the ancillary provision while rejecting the main provision to which it is, as I think, parasitic. Accordingly, I reach the conclusion that this must be treated as a case in which there is no exclusive jurisdiction, applying the principles of English law on the assumption that that is the same as Iranian law.” 1 Citers Â CCC Films (London) Ltd v Impact Quadrant Films Ltd [1985] 1 QB 16; [1984] 3 WLR 245 1984 Hutchison J Contract, Damages The claimants purchased a licence to promote three films, but the defendant lost the film prints and CCC could not therefore promote them. After their claim for loss of profit failed in the absence of evidence, they claimed for the expenditure they had wasted. Held. The plaintiff has a full discretion to pursue either a loss of profit or for wasted expenditure after a breach of contract by the defendant. He need not provide evidence before making that election. Where the defendant prevented the fulfilment of the contract the onus lay on him to prove it if he asserted that the plaintiff would not have managed to recoup at least his expenditure from profits. It would be fair to impose the onus of proof on the defendant at least in the following cases: "where the plaintiff's decision to base his claim on abortive expenditure was dictated by the practical impossibility of proving loss of profit rather than by unfettered choice, any other rule would largely, if not entirely, defeat the object of allowing this alternative method of formulating the claim. This is because, notwithstanding the distinction to which I have drawn attention between proving a loss of net profit and proving in general terms the probability of sufficient returns to cover expenditure, in the majority of contested cases impossibility of proof of the first would probably involve like impossibility in the case of the second. It appears to me to be eminently fair that in such cases where the plaintiff has by the defendant's breach been prevented from exploiting the chattel or the right contracted for and, therefore, putting to the test the question of whether he would have recouped his expenditure, the general rule as to the onus of proof of damage should be modified in this manner". 1 Citers Â Archer v Brown [1985] QB 401; [1984] 2 All ER 267 1984 Peter Pain J Contract, Damages, Torts - Other The defendant sold shares in his company to the plaintiff. He had however already sold them elsewhere. The plaintiff sought both rescission and damages. The defendant argued that he could not be entitled to both. Held: The misrepresentation had been fraudulent and both rescission and damages might be available. In this case the loss, the cost of borrowing flowed directly from the fraud perpetrated by the defendant. Aggravated but not exemplary damages might also be awarded. Peter Pain J said: "But what seems to put the claim under this head out of court is the fact that exemplary damages are meant to punish and the defendant has been punished. Even if he wins his appeal he will have spent a considerable time in gaol. It is not surprising that there is no authority as to whether this provides a defence, since there is no direct authority as to whether exemplary damages can be given in deceit. I rest my decision on the basic principle that a man should not be punished twice for the same offence. Since he has undoubtedly been punished, I should not enrich the plaintiff by punishing the defendant again." Prevention of Fraud (Investments) Act 1958 1 Cites 1 Citers Â Bickel v Courtenay Investments (Nominees) Limited [1984] 1 All ER 657 1984 ChD Warner J Contract 1 Citers Â Â Davies v Sumner; HL 1984 - [1984] 1 WLR 1301 Â Tor Line AB v Alltrans Group of Canada (The 'TFL Prosperity') [1984] 1 WLR 48; [1984] 1 Ll R 123; [1984] 1 All ER 103 1984 HL Lord Roskill Transport, Contract A roll-on roll-off liner tendered under a charter party did not conform to the description in the contract and the owners relied on a widely drawn exclusion clause. Held: The owners' argument failed. A literal interpretation would have defeated the central objective of the charter contract and would have been commercially absurd. As a result, the exemption was read, not literally, but very restrictively and the owners were held to be liable, notwithstanding the exemption clause, for financial damage resulting from their breach of warranty. No more should be read into an exemption clause in an insurance policy than is necessary to make sense of it, particularly where to do more would relieve a party from any obligation at all. The repugnancy doctrine (even at its most extreme) only entitles a court to disregard an exception clause if the contract as a whole would otherwise be virtually reduced to a declaration of intent. Lord Roskill said: "Such a literal construction would mean that the owners would be under no liability if they never delivered the vessel at all for service under the charter or delivered a vessel with a totally different description from that stipulated in the preamble. My Lords I cannot think that this can be right." and “In truth if clause 13 were to be construed so as to allow a breach of the warranties as to description in clause 26 to be committed or a failure to deliver the vessel at all to take place without financial redress to the charterers, the charter virtually ceases to be a contract for the letting of the vessel and the performance of services by the owners, their master, officers and crew in consideration of the payment of time charter hire and becomes no more than a statement of intent by the owners in return for which the charterers are obliged to pay large sums by way of hire, though if the owners fail to carry out their promises as to description or delivery, are entitled to nothing in lieu. I find it difficult to believe that this can accord with the true common intention of the parties and I do not think that this conclusion can accord with the true construction of the charter in which the parties in the present case are supposed to have expressed that true common intention in writing.” and "I doubt whether the fourth sentence of clause 13 imposes greater liabilities than would in any event fall upon the charterers either under the charter or at common law." 1 Citers Â Sport Internationaal Bussum BV v Inter-Footwear Ltd [1984] 1 WLR 776 1984 CA Oliver LJ Contract, Equity There had been a contractual licence to use names and trademarks for sports shoes. An earlier action between the parties had been stayed on the terms scheduled to a Tomlin order, which provided for Inter-Footwear to pay £105,000 in three instalments and to have a licence (partly exclusive and partly non-exclusive) to use the names and marks. If any instalment was not paid on the due date, the whole unpaid balance became due at once and the licensor could determine the licence. There was a delay in payment of the second instalment and the licensor terminated the licence. Held: The court had no jurisdiction to grant relief from forfeiture. Oliver LJ said that taken at its narrowest The Scaptrade case "may be said to establish no more than this: that the equitable jurisdiction to relieve against forfeiture does not extend to a time charter not being a charter by demise. There is, however, the more general proposition to be derived from it, that, even where the primary object of the insertion of a forfeiture clause may be said to be to secure the payment of money or the performance of some other obligation, the equitable jurisdiction does not extend to contracts which do not involve the transfer or creation of proprietary or possessory rights." There is a need for certainty in commercial contracts and the court doubted whether the licensor's right to terminate the licence in the event of default could be primarily a security for the payment of money: "This is sufficient to dispose of the appeal, but, in fact, there appears to us to be another reason why the equitable jurisdiction to grant relief could not apply to a case such as this. The case is one of contract only and, in so far as there were any rights created or transferred which could be described as "proprietary", they were rights which rested only in contract and to that extent distinguishable from the legal estate created by the grant of a lease or a mortgage. Assuming that relief were capable of being granted, effectively it could be granted only by compelling the plaintiffs to re-grant the permission which had been revoked. An exclusive licence to use a trade mark creates no estate, although it enables the licensee to obtain an injunction if the licensor, in breach of contract, seeks to use the mark in competition with him. Thus, effectively, the licensee applying for relief from forfeiture is in exactly the same position as the charterer in [The Scaptrade]." 1 Cites 1 Citers Â Â Antaios Compania Naviera SA v Salen Rederierna AB ('the Antaios'); HL 1984 - [1985] AC 191; [1984] 3 WLR 592; [1984] 3 All ER 229; [1984] 2 Lloyds Rep 235 Â Whittaker v Campbell [1984] QB 318 1984 Robert Goff LJ Contract Where goods were obtained from the owner by fraud, but with the owner's consent, that fraud did not vitiate the consent given. 1 Citers Â Telfair Shipping Operation SA v Inersea Carriers SA, the Caroline P [1985] 1 WLR 553; [1984] 2 Lloyd's Rep 266 1984 Neill J Limitation, Contract A claim was made in contract based on an indemnity. Held: The claim was not time-barred. Time normally begins to run against a claim on a general indemnity only from the moment when the liability of the indemnified is accepted by him or determined against him by the court, because, in the absence of a provision to the contrary, an indemnity cannot be called on by the indemnified unless and until the indemnified has paid the money in respect of which he claims the indemnity. 1 Cites 1 Citers Â Sport International Bussum BV v Inter-Footwear Ltd [1984] 1 WLR 776; [1984] 2 All ER 321 2 Jan 1984 HL Lord Templeman Contract, Intellectual Property, Equity A contractual licence was granted to use names and trademarks for sports shoes. An earlier action between the parties had been stayed on the terms scheduled to a Tomlin order, which provided for Inter-Footwear to pay a sum in instalments and to have a licence (partly exclusive and partly non-exclusive) to use the names and marks. If any instalment was not paid on the due date, the whole unpaid balance became due at once and the licensor could determine the licence. There was a delay in payment of the second instalment and the licensor terminated the licence. Held: Relief was not available against the forfeiture of a mere contractual licences. As to the discussion of proprietoty or possessory right in Scaptrade: "Mr Wilson submitted that in the present case the licences to use the trade marks and names created proprietary and possessory rights in intellectual property. He admits, however, that so to hold would be to extend the boundaries of the authorities dealing with relief against forfeiture. I do not believe that the present is a suitable case in which to define the boundaries of the equitable doctrine of relief against forfeiture. It is sufficient that the appellants cannot bring themselves within the recognised boundaries and cannot establish an arguable case for the intervention of equity. The recognised boundaries do not include mere contractual licences and I can see no reason for the intervention of equity." 1 Cites 1 Citers Â The Span Terza [1984] 1 Lloyds Rep 119 10 Jan 1984 HL Lord Diplock Transport, Contract The parties, suppliers of goods and charterers, disputed the ownership of bunkers at the point of sale. Held: Lord Diplock said: "My Lords I agree with Lord Justice Kerr that cl.3 [which set out that Owners were to pay for bunkers on redelivery] and the latter half of cl.4 [which set out the means of redelivery] deal with the same subject-matter and are confined to it. The latter half of cl.4 deals with the redelivery of the vessel (i.e. its being put once more at the disposal of the shipowners by the charterers) on dropping last outward sea pilot at the port within the redelivery range at the end of the contract period; in casu, about two years, 45 days more/less, from the date of delivery. Clause 3 deals with what is to happen to the bunkers aboard the vessel at the time of that redelivery. I share the view of Lord Justice Kerr that as a matter of construction its express provisions are wholly inapt to apply to termination otherwise that pursuant to cl.4" 1 Cites 1 Citers Â Emeh v Kensington and Chelsea and Westminster Area Health Authority [1985] 1 QB 1012; [1984] 3 All ER 1044 1 Jul 1984 CA Waller LJ Damages, Contract, Professional Negligence A sterilisation operation had been performed negligently and failed and the claimant was born. Held: The birth of a child with congenital abnormalities was a foreseeable consequence of the surgeon's careless failure to clip a fallopian tube effectively. The authority could not expect her to terminate the pregnancy. The mother was entitled to recover damages, including damages for her future loss of earnings, following the birth of a child with congenital abnormalities who required constant medical and parental supervision. Waller LJ said: "In my view it is trite to say that if a woman becomes pregnant, it is certainly foreseeable that she will have a baby, but in my judgment, having regard to the fact that in a proportion of all births - between one in 200 and one in 400 were the figures given at the trial - congenital abnormalities might arise, makes the risk clearly one that is foreseeable, as the law of negligence understands it." On a claim in contract the court held that there was no rule of public policy which precluded recovery of damages for pain and suffering and for maintaining the child. The court took a multiplier of 8 for a child 5 years old at the time of the appeal. The total award in respect of pain, suffering and loss of amenities was £13,000. 1 Cites 1 Citers Â Chilton v Saga Holidays Plc [1984] EWCA Civ 1 3 Dec 1984 CA Sir John Donaldson MR, Slade, Lloyd LJJ Contract At a trial under the small claims procedure, the registrar had declined to allow the defendant company to dross examine the plaintiff, and the counr court judge had held that decision to be well within the registrar's discertion under the rules, on the basis that as acting without lawyers, they would be unable to achieve similar cross examinations of the dfenedants. Held: The appeal succeeded. "Informality is all important in these small claims cases provided that the rules of natural justice are observed; and while I have not actually invited Mr. Foskett to defend his application for further and better particulars in this case, they are virtually indefensible. It was an attempt to turn this arbitration into a High Court hearing with detailed requests for information of which there was not the slightest need since they were already set out in a document prepared by the claimant. That is the sort of formality which should be disapproved of without qualification; but cross-examination is quite different. I would set the award aside and reluctantly, because additional costs may be involved, would direct that it be re-heard by a different registrar. " County Court Rules 1981 1 Cites [ Bailii ] Â Griffin Coal Mining Company Limited v The State Energy Commission of Western Australia [1984] UKPC 52 10 Dec 1984 PC Commonwealth, Contract (Western Australia) [ Bailii ] Â
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