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These cases are from the lawindexpro database. They are now being transferred to the swarb.co.uk website in a better form. As a case is published there, an entry here will link to it. The swarb.co.uk site includes many later cases.  















Contract - From: 1985 To: 1989

This page lists 132 cases, and was prepared on 20 May 2019.

 
In Re Westminster Property Group PLC [1985] 1 WLR 676
1985
CA

Contract
The Court was asked whether what was said to be a sale was in truth a sale. The court looked at the ordinary meaning of the word sale and then asked whether the context requires an extension of that meaning: "[Counsel] accepted that in ordinary legislative usage and in the absence of a special context the word "sale" or equivalent words such as "sold" denote an exchange of property for cash and not for any other form of property. They therefore accepted that a special context must be shown if some wider meaning is to be attributed to the phrase "are to be sold" in section 174 (3A)(b). In our judgement this concession is plainly right."
1 Cites



 
 Allied Marine Ltd v Vale do Rio Doce SA (The Leonidas D); CA 1985 - [1985] 1 WLR 925; [1985] 2 Lloyds Rep 18; [1985] 2 All ER 796
 
Four Point Garage v Carter [1985] 3 All ER 12
1985

Simon Brown J
Contract
A simple retention of title clause was argued to have the effect of preserving title, despite the sale to an ultimate customer. The plaintiff had sold a car to a garage who in turn, it thought was leasing it to the defendant. The defendant was in fact purchasing it. The plaintiff delivered it direct to the defendant. On the failure of the garage to pay, it sought recovery of the car from the defendant. Held: The claim failed. Where goods were delivered directly by the seller to the sub-purchaser, the purchaser was deemed to take constructive delivery of goods and the seller was deemed to act as the buyer's agent when making delivery to the sub-purchaser.
1 Citers


 
Insurance Co of Africa v SCOR (UK) Reinsurance Co Ltd [1985] 1 Lloyd's Rep 312
1985
CA
Robert Goff LJ, Fox LJ
Insurance, Contract
An underlying insurance policy covered a warehouse in Liberia against fire, including $500,000 for buildings and $3 million for contents. The warehouse became a total loss. The owners of the warehouse brought proceedings in the Liberian courts. The insurers unsuccessfully defended, and as well as the sum insured, they had to pay general damages of $600,000 and $58,000 costs. The insurers could recover a proportion of the damages and costs from the re-insurers under an implied term of the re-insurance contract. Held: There was no basis to imply a term that the re-insurers should bear a proportion of the costs of defending the claim on the ground of business efficacy. The contract worked effectively without any such implication, and if such a term was implied, the re-insurers' potential liability would be increased beyond, and possibly far beyond, the sum insured under the contract of re-insurance. The effect of the words in the policy "to pay as may be paid thereon" was to bind reinsurers to a compromise by the insurers of the question of the amount of a claim so that, provided that the insurers could establish a loss of the kind insured and reinsured, and that the reinsured had acted honestly and had taken all proper and businesslike steps to have the amount of the loss fairly and carefully ascertained, reinsurers were obliged to indemnify the insurers in respect of that amount.
1 Citers



 
 Carreras Rothmans Ltd v Freeman Mathews Treasure Ltd; 1985 - [1985] Ch 207; [1985] 1 All ER 155; [1984] 3 WLR 1016
 
Southern Water Authority v Carey [1985] 2 All ER 1077
1985


Contract


 
Damon Compania Naviera SA v Hapag-Lloyd International SA 'The Blankenstein' [1985] 1 Lloyd's Reports 93
1985
CA
Robert Goff LJ, Fox LJ, Stephenson LJ
Contract
The buyers sought to rely on their own failure to pay a deposit to escape from a contract. Held: They failed. A contract had been entered into by the 'principals', though the intention was that upon nomination by them there should be a novation of the contract with the nominee. A provision for payment of the deposit was not a condition precedent to formation of a sale contract but "was a fundamental term of a concluded contract".
1 Cites

1 Citers



 
 American Express International Banking Corporation v Hurley; ChD 1985 - [1985] 3 All ER 564; [1986] BCLC 52
 
Gebr. van Weelde Scheepvaartkantor B.V. v Cia. Naviera Sea Orient S.A. [1985] Lloyds LR 496
1985
ChD
Evans J
Contract
Evans J considered the significance of silence in acceptance of a contractual offer: "The significance of silence, as a matter of law, may also be different when there is an express undertaking or an implied obligation to speak, in the special circumstances of the particular case".
1 Citers



 
 Ilyssia Compania Naviera SA v Bamaodah "The Elli 2"; CA 1985 - [1985] 1 Lloyd's Rep 107
 
The Kelo [1985] 2 Lloyd's Rep 85
1985


Contract
A notice of assignment of a debt under the section need not be by deed.
Law of Property Act 1925 136
1 Citers


 
Alghussein Establishment v Eton College [1988] 1 WLR 587
1985
HL
Lord Jauncey of Tullichettle
Contract, Damages
A literal construction of the relevant provision of a lease would have led to an absurd result that a contractor who failed to complete a development without fault could not call for a lease, whereas a contractor who wilfully defaulted could do so. Held: The implication of a term into a contract is a matter of law. A party may be prevented from enforcing a contractual provision where he is in breach of another contractual provision designed to avoid the situation sought to be achieved coming about, or to cast onto him responsibility for the matter in question.
Lord Jauncey of Tullichettle said: "Although the authorities to which I have already referred involved cases of avoidments a clear theme running through them is that no man can take advantage of his own wrong. There was nothing in any of them to suggest the foregoing proposition was limited to cases where the parties in breach were seeking to avoid the contract and I can see no reason for so limiting it. A party who seeks to obtain a benefit under a continuing contract is just as much taking advantage of his own wrong as a party who relies on his breach to avoid a contract and thereby escape his obligations".
1 Citers


 
The Ypatia Halcoussi [1985] 2 Lloyds Rep 364
1985


Contract, Equity
Rectification is not available where the written agreement fails to deal with an issue because the parties have overlooked it.
1 Citers


 
Alpenstow Ltd v Regalian Properties plc [1985] 1 WLR 721
1985
ChD
Nourse J
Contract, Land
The parties agreed in writing for the sale of land, the agreement contained a right of pre-emption. In the event of the owner wishing to sell it was to offer to sell a share in the property by notice. Within 28 days of the notice, the grantee was to accept the offer "subject to contract". Within seven days thereafter a draft contract was to be submitted; the draft was to be approved within 28 days, subject to any amendment reasonably required, and contracts were to be exchanged seven days thereafter. Held: The agreement was binding. There was an incompatibility between the freedom to withdraw from the transaction which the words "subject to contract" suggested, and the duty to submit a contract and to exchange it within a particular timetable.
1 Citers


 
Collin v Duke of Westminster [1985] 1 QB 581
1985
CA
Oliver LJ, May LJ and Sir Roger Ormrod
Landlord and Tenant, Contract, Limitation
In 1975 the tenant sought to exercise his right to purchase the freehold reversion of his property. The landlord argued that the rent payable precluded any such entitlement. Under the law as then understood, the landlord's contention appeared correct. The leaseholder proceeded no further. In 1980 the law was clarified so as to indicate that he was so entitled, and in 1981 he sought to proceed with his claim. The landlord's contention that he had abandoned it failed at first instance. Held: The tenant's appeal failed. Oliver LJ: "As regards abandonment [the judge] held – and in my judgment he was clearly right in this – that in order to succeed the trustees had to show either some reliance and change of position amounting to an estoppel (of which there was no suggestion) or what amounted in effect to a contract for mutual release. Quite clearly there was no question of an express contract and what he had, therefore, to look for was whether there was material from which mutual promises could be implied. On the facts, he found himself unable to find any mutual release but, perhaps even more importantly, he held that the Act of 1967 and the regulations provided, as it were, a complete statutory code which regulated exclusively how the statutory contract of sale was to be either completed or discharged and that there was no room for the application of the common law concept of inferred abandonment by mutual consent.
With respect to the judge, I doubt whether this latter conclusion can be right. . . As he rightly pointed out there is, in the law of contract, no room for a concept of unilateral abandonment. What the court has to look for is . . . material from which there can be inferred mutual releases or mutual promises not to proceed. In other words…there has to be established, if only by inference, a fresh contract which has the effect of dissolving the relationship originally entered into by the parties and upon which one party still seeks to rely. Now tenants who are entitled to enfranchise under the Act of 1967 are not permitted to contract out of their entitlement, but there is nothing in the Act which prevents them, once their right of enfranchisement has accrued, from releasing contractually the immediate right of enfranchisement which they have acquired by serving a notice under the Act." The court agreed with the judge's alternative conclusion that on the facts of the case there was no material from which mutual releases could be inferred.
The essence of a specialty is a covenant under seal or an obligation imposed by statute.
Leasehold Reform Act 1967 - Limitation Act 1980
1 Citers



 
 O'Sullivan v Management Agency and Music Limited; CA 1985 - [1985] QB 428; (1984) 2 IPR 499; [1984] 3 WLR 448; [1985] 3 All ER 351

 
 The Leonidas D; 1985 - [1985] 1 WLR 925

 
 Bentray Investments Limited v Venner Time Switches Limited; ChD 1985 - [1985] 1 EGLR 39
 
Samick Lines Co Ltd v Owners of The Antonis P Lemos [1985] 1 AC 711
1985
CA
Parker LJ
Contract, Litigation Practice
Parker LJ said: "a domestic statute designed to give effect to an international convention should, in general, be given a broad and liberal construction"
1 Citers


 
Nunes v Davies Laing and Dick Limited [1985] 51 PandCR 310
1985

Sir Nicolas Browne-Wilkinson V-C
Contract
The court set out the test for a valid counter-notice: "namely that the counternotice should be in terms which are sufficiently clear to bring home to the ordinary landlord that the tenant is purporting to exercise his right …"
1 Citers


 
Alec Lobb (Garages) Ltd v Total Oil Ltd [1985] 1 WLR 173; [1984] EWCA Civ 2; [1985] 1 All ER 303
1985
CA
Dillon LJ
Contract
The court was asked whether the terms of a mortgage amounted to an unconscionable bargain and was unenforceable. The court affirmed the decision at first instance, but emphasising the need for unconscientious behaviour rather than a mere disparity of bargaining power. Unequal bargaining power or objectively unreasonable terms provide no basis for equitable interference in the absence of unconscientious or extortionate abuse of power where exceptionally, and as a matter of common fairness, "it was not right that the strong should be allowed to push the weak to the wall".
1 Cites

1 Citers

[ Bailii ]

 
 National Westminster Bank plc v Morgan; HL 7-Mar-1985 - [1985] AC 686; [1985] UKHL 2; [1985] 1 All ER 821; [1985] ANZ Conv R 251; [1985] 2 WLR 588
 
Keeton Sons and Co Ltd v Carl Prior Ltd Unreported, 14 March 1985
14 Mar 1985
CA
Ackner LJ
Contract
The test of whether a clause has been incorporated into a contract is “Has reasonable notice of the terms been given?”.
1 Citers


 
Hart v O'Connor and O'Connor [1985] 1 AC 1004; [1985] UKPC 1
22 Apr 1985
PC
Lord Brightman, Lord Scarman, Lord Bridge of Harwich, Sir Denys Buckley
Contract, Commonwealth, Health
(New Zealand) The parties disputed the effect in law of an agreement for the sale of land. The transferor had proved not to be of sound mind. Held: The validity of a contract entered into by a lunatic who is ostensibly sane is to be judged by the same standards as a contract by a person of sound mind, and is not voidable by the lunatic or his representatives by reason of "unfairness" unless such unfairness amounts to equitable fraud which would have enabled the complaining party to avoid the contract even if he had been sane.
Lord Brightman: "In the opinion of their Lordships it is perfectly plain that historically a court of equity did not restrain a suit at law on the ground of "unfairness" unless the conscience of the plaintiff was in some way affected. An unconscionable bargain in this context would be a bargain of an improvident character made by a poor or ignorant person acting without independent advice which cannot be shown to be a fair and reasonable transaction. "Fraud" in its equitable context does not mean, or is not confined to, deceit; "it means an unconscientious use of power arising out of the circumstances and conditions" of the contracting parties; Earl of Aylesford v Morris (1873) L.R. 8 Ch. App. 484, 491. It is victimisation, which can consist either of the active extortion of a benefit or the passive acceptance of a benefit in unconscionable circumstances." To accept the proposition enunciated in Archer v. Cutler that a contract with a person ostensibly sane but actually of unsound mind can be set aside because it is "unfair" to the person of unsound mind in the sense of contractual imbalance, is unsupported by authority, is illogical.
1 Cites

1 Citers

[ Bailii ]
 
Leigh and Sillavan Ltd v Aliakmon Shipping Co Ltd (The Aliakmon) [1986] AC 785; [1985] UKHL 10; [1986] 2 Lloyd's Rep 1; [1986] 2 WLR 902
24 Apr 1985
HL
Lord Brandon of Oakbrook
Transport, Contract, Negligence
The plaintiff contracted to buy a cargo to be shipped on the defendant's vessel. Because of poor stowage, the cargo was damaged. At the time of the damage the claimant was neither the owner nor possessor of the cargo, but under the terms of the purchase contract he had assumed the risk of damage to the cargo. Held: For a person to claim in negligence for loss caused to him by reason of loss of or damage to property, he must have had either the legal ownership of or a possessory title to the property concerned at the time when the loss or damage occurred. It is not enough for him to have only had contractual rights in relation to such property which have been adversely affected by the loss of or damage to it. The House (obiter) rejected the argument that the duty of care owed by a party could be excluded by a contract between claimant and a third party.
Lord Brandon said: "In order to enable a person to claim in negligence for loss caused to him by reason of loss of or damage to property, he must have had either the legal ownership of or a possessory title to the property concerned at the time when the loss or damage occurred."
1 Citers

[ Bailii ]
 
In re Regent Hotels (UK) Ltd v Pageguide Ltd Times, 13 May 1985; Unreported, 10 May 1985
10 May 1985
CA

Litigation Practice, Contract
The court was concerned with a long-term management contract for the Dorchester Hotel between Regent as managers and Pageguide. When Regent sold the hotel to Pageguide the management contract would continue and be novated (with some amendment) as between Regent and Pageguide. Pageguide sought to cancel the management contract alleging serious and fundamental breach. Injunctive relief was granted restraining Pageguide "from taking any steps to prevent or hinder [Regent] from performing their function of the management and operation of the Dorchester Hotel in accordance with the management agreement". It was conceded that there was no rule of law precluding specific performance, but counsel for Regent identified principles based on public policy, fairness and practical convenience which militated against the relief sought. Under the heading of public policy, he identified both moral and economic grounds, referring in each context to the breakdown of trust and confidence which Pageguide was asserting. Held: The Court of Appeal refused to accept counsel's argument that no injunction was appropriate because there had been a breakdown of trust and confidence was that this was in issue. Regent's case was the Pageguide was acting cynically and in bad faith, for pure financial or business motives. But the court also said this: "Leaving aside the factual issue as to whether Pageguide would be able to establish that they have lost confidence in the Regent companies, in regard to which there is, in my judgment, a serious question to be tried, this action raises the further serious question, as yet unresolved by English authority, as to the extent to which a commercial arrangement of this kind between two independent companies, which does not provide for the employment of any named individuals and is part of a larger package including the sale of the hotel itself, can be properly treated as analogous to a contract of personal service. There are, however, two commonwealth decisions, one from Canada and one from Singapore, both of which were concerned with attempts by hotel owners to terminate long-term management contracts and in both cases the courts granted interlocutory relief. The Canadian case went to the Court of Appeal of Montreal which affirmed the decision: Loewess Hotel Montreal v Concordia City Properties [1979]. In the Singapore case, Holiday Inns v Holiday Enterprises [1975] the court expressly contemplated that specific performance was available."
1 Citers


 
Ladup Ltd v Yazbeck Unreported, 14 May 1985
14 May 1985
QBD
Mr Patrick Bennett QC
Contract
The Defendant had gambled and lost money at the Claimant's clubs. £29,000 was due on cheques drawn by him which had not been honoured. An agreement was reached under which he would pay £13,500 in cash, and would reduce the rest of the balance by stages out of winnings. Held: That was an illegal agreement under section 16, and it was not complied with except as to the £13,500. However, the admitted illegality of the later agreement did not affect the Claimant's existing right to reimbursement for the cheques which had been dishonoured. The court said: "I see no reason why that illegality in April 1977, as it were, should cast a shadow backwards on to the activities – lawful and legal activities – which had occurred before then."
Gaming Act 1968 16
1 Citers


 
Pagnan SpA v Tradax Ocean Transportation SA [1987] 1 All ER 81; [1986] 2 Lloyd's Rep 646
1986

Steyn J
Contract
When asked to interpret a contract with apparently conflicting provisions, the duty of the court is "to reconcile seemingly inconsistent provisions if that result can conscientiously and fairly be achieved".
1 Citers


 
Armour v Thyssen Edelstahlwerke AG 1986 SLT 452
1986
OHCS

Contract

1 Citers


 
Lusograin v Bunge [1986] 2 Lloyds Rep 654
1986
ChD
Staughton J.
Contract
An innocent party cannot "obtain the benefit of a later date by pointing to a later default which has occurred before the acceptance of the repudiation". This is precisely what he is entitled to do at common law for the good reason that that is his choice (and risk). In so far as it is suggested that such an approach is justified where "one default is followed inevitably by a number of others" that is to introduce unnecessary and undesirable factual uncertainties. In so far as it is suggested that such an approach is justified if the first default is the "main obligation under the contract".that too is to introduce uncertainty. In any event the seller's main obligation under a sale of goods contract is delivery.

 
Thackwell v Barclays Bank plc [1986] 1 All ER 676
1986

Hutchison J
Contract
The plaintiff was party to a fraudulent scheme under which a cheque had been made payable to him. The plaintiff's signature endorsing the cheque to a third party was forged and in reliance on the forgery the bank credited the third party. The plaintiff sued the bank for conversion. In defence the bank relied on the maxim ex turpi causa non oritur actio. Held: Hutchison J said that the maxim: "involved the court looking at the quality of the illegality relied on by the defendant and all the surrounding circumstances, without fine distinctions, and seeking to answer two questions: first, whether there had been illegality of which the court should take notice and, second, whether in all the circumstances it would be an affront to the public conscience if by affording him the relief sought the court was seen to be indirectly assisting or encouraging the plaintiff in his criminal act".
1 Citers


 
Watson-Towers Ltd v McPhail 1986 SLT 617
1986

Lord Wylie
Scotland, Contract, Limitation
The pursuer submitted a motion for summary judgment for the value of goods which had been supplied subject to a reservation of title clause. The pursuer's evidence consisted of a letter from the defender making an offer expressed to be without prejudice but which attached a schedule listing the goods in its possession. Held: The schedule was admissible because it was, on the true construction of the letter, not a "hypothetical admission or concession for the purpose of securing a settlement" but a statement of fact.
1 Citers


 
F C Shepherd and Co Ltd v Jerrom [1986] ICR 802
1986


Contract
A party alleging frustration should not be allowed to rely upon the frustrating event if that event was caused by that party.
1 Citers


 
The Magnavox Electronics Company Limited v Hall (HM Inspector of Taxes) (1986) 59 TC 610
1986


Contract

1 Citers



 
 Mansouri v Singh; CA 1986 - [1986] 1 WLR 1393

 
 Mitsui Construction Co Ltd v Attorney General of Hong Kong; 1986 - (1986) 33 BLR 14
 
Price v Bouch (1986) 53 P and CR 257; [1986] 2 EGLR 179
1986

Millett J
Land, Contract
The power to approve building plans on an estate had been passed to a committee of all estate owners. The plaintiff said that a term should be implied to say that approval should not be unreasonably withheld. Held: A term that consent would not unreasonably be withheld should be implied when necessary to uphold the purpose (or efficacy) of the contract under which a requirement for consent arose according to the circumstances. The court court not review the reasonableness of the committee's decision. However: "It was conceded that the committee had a duty to inspect and consider any application submitted to them, to reach a decision themselves and not to delegate it to others, and to act honestly and in good faith and not for some improper or ulterior purpose. It was also accepted that, if the committee took into account irrelevant considerations or failed to take into account relevant considerations, or reached a perverse decision such that no reasonable committee could possibly reach, then their decision could be impugned, for it would be ultra vires. This, however, was not enough for the plaintiffs. They insisted that the committee must act reasonably and that they must give reasons for their decision, so that it could, if necessary, be challenged, when the court would adjudicate and decide, in the light of the evidence, whether those reasons were justified.
. . . In my judgment, the mutual covenantors are equally bound by the decision of the committee, whether it be a decision to grant or refuse approval, and they are so bound, provided only that it is given honestly and in good faith and not for some improper purposes. Where the required consent is that of an individual who is free to consult his own interests exclusively, a provision that such consent must not be unreasonably refused is often included in order to prevent consent being withheld arbitrarily, or capriciously, or from improper motives. If that is the only effect of including such a provision, its implication in the present case is unnecessary . . ."
1 Citers


 
The Nefeli [1986] 1 Lloyds Rep 339
1986


Banking, Contract

1 Citers


 
AMEV-UDC Finance Ltd v Austin [1986] 162 CLR 1770; (1986) 162 CLR 170; [1986] HCA 63
1986

Gibbs CJ(1), Mason(2), Wilson(2), Deane(3) and Dawson(4) JJ.
Contract, Damages, Equity
High Court of Australia - Contract - Damages - Penalty - Agreement for hire of chattel - Failure to pay instalments of hire - Termination by owner pursuant to contractual power - Damages - Instalments due but unpaid - Damages for loss of contract.
The court discussed the doctrine against penalties in contracts: "But equity and the common law have long maintained a supervisory jurisdiction, not to rewrite contracts imprudently made, but to relieve against provisions which are so unconscionable or oppressive that their nature is penal rather than compensatory. The test to be applied in drawing that distinction is one of degree and will depend on a number of circumstances, including (1) the degree of disproportion between the stipulated sum and the loss likely to be suffered by the plaintiff, a factor relevant to the oppressiveness of the term to the defendant, and (2) the nature of the relationship between the contracting parties, a factor relevant to the unconscionability of the plaintiff's conduct in seeking to enforce the term. The courts should not, however, be too ready to find the requisite degree of disproportion lest they impinge on the parties' freedom to settle for themselves the rights and liabilities following a breach of contract. The doctrine of penalties answers, in situations of the present kind, an important aspect of the criticism often levelled against unqualified freedom of contract, namely the possible inequality of bargaining power. In this way the courts strike a balance between the competing interests of freedom of contract and protection of weak contracting parties: see generally Atiya, The rise and Fall of Freedom of Contract (1979), especially Chapter 22."
"the equitable jurisdiction to relieve against penalties withered on the vine".
1 Citers

[ Austlii ]
 
Continental Illinois National Bank and Trust Company of Chicago v John Paul Papanicolaou (The Fedora) [1986] 2 Ll Rep 441; [1986] 2 Lloyds Rep 441
1986
CA
Parker LJ
Contract
The court considered the effect of a guarantee clause. Held: The provisions of the guarantee went to timing and cash flow rather than liability. A term excluding a right of set-off is not to be treated in the same way as an exclusion clause. The court declined to construe the provision relied upon by the creditor as if it were an exclusion clause because it did not affect the liability of the creditor, which the guarantor was free to pursue once he had paid the sum demanded by the creditor: "It would defeat the whole commercial purpose of the transaction, would be out of touch with the business realities and would keep the bank waiting for a payment, which both the borrowers and the guarantors intended that it should have, whilst protracted proceedings on the alleged counterclaim were litigated. We do not doubt that the court has a discretion to grant a stay but it should in our view be 'rarely if ever' exercised, as Lord Dilhorne said in relation to claims on bills of exchange (in Nova (Jersey) Knit Ltd. v Kammgarn Spinnerei G.m.b.H [l977] 1 WLR 713, 722)."
1 Citers


 
29 Equities Ltd v- Bank Leumi (UK) Ltd [1986] 1 WLR 1490
1986
CA
Dillon LJ
Contract
The court considered a clause requiring a party to use reasonable endeavours. Held: Dillon LJ: "As Goff J pointed out in Lipmnas Wallpaper Ltd v Mason & Hodghton Ltd [1969] 1 Ch. 20, the vendor could not escape the clause by rescinding on the ground that consent was not obtainable without first using the vendor's best endeavours to get it; but that is not in question here. As Goff J equally pointed out, if the facts are that there has been a categorical refusal of consent by the landlord, then it is not incumbent on the vendor to make further or yet further attempts to persuade the landlord to change his mind or to give the purchaser an opportunity of trying his powers of persuasion on the landlord or taking various other steps which hypothetically might equally well, or might not, have any effect in persuading the landlord to change his mind. But the question is a simple question of fact to be decided in the light of common sense".
1 Citers


 
Cryer v Scott Brothers Sunbury Ltd (1986) P and CR 183
1986

Waite J
Land, Contract
A covenant had been taken on the sale of building land to require all building plans to be submitted to the transferors for their approval before building work was commenced. Held: There was an implication that the transferors would not withhold approval unreasonably, in which context the members of the court referred to withholding approval arbitrarily or capriciously.
1 Citers


 
Notcutt v Universal Equipment Company (London) Ltd [1986] EWCA Civ 3; [1986] 1WLR 641; [1986] IRLR 218
14 Mar 1986
CA
Dillon LJ, Shedlon J
Contract
The Court was asked to consider the application of the doctrine of frustration to a periodic contract of employment, which is determinable by short or relatively short notice where the contract is said to have been frustrated by the illness or incapacity of the employee.
1 Cites

1 Citers

[ Bailii ]
 
Saunders v Edwards [1987] 1 WLR 1116; [1987] 2 All ER 651; [1986] Ch 638; [1986] EWCA Civ 4
24 Mar 1986
CA
Bingham LJ, Kerr LJ, Nicholls LJ
Litigation Practice, Contract
The parties had agreed for the sale and purchase of land and chattels, but had deliberately misdescribed the apportionment so as to reduce tax liability. The purchasers then brought an action for misrepresentation. The vendor replied that the action shoud fail since the contract was tainted with the fraud. Held: The defence failed. The misrepresentation was not part of the contract itself, and was therefore not affected by the plea of ex turpi causa non oritur actio. The purchasers' dishonest apportionment of the price was wholly unconnected with their cause of action and that their moral culpability in that regard was greatly outweighed by that of the vendor in making the fraudulent representation.
Bingham LJ said: "Where issues of illegality are raised, the courts have … to steer a middle course between two unacceptable positions. On the one hand it is unacceptable that any court should aid or lend its authority to a party seeking to pursue or enforce an object or agreement which the law prohibits. On the other hand, it is unacceptable that the court should, on the first indication of unlawfulness affecting any aspect of a transaction, draw up its skirts and refuse all assistance to the plaintiff, no matter how serious his loss nor how disproportionate his loss to the unlawfulness of his conduct." and "the courts have tended to adopt a pragmatic approach to these problems, seeking where possible to see that genuine wrongs are righted so long as the court does not thereby promote or countenance a nefarious object or bargain which it is bound to condemn. Where the plaintiff’s action in truth arises directly ex turpi causa he is likely to fail . . . Where the plaintiff has suffered a genuine wrong, to which the allegedly unlawful conduct is incidental, he is likely to succeed."
Kerr LJ:- "However, the present action, unlike Alexander -v- Rayson, is not brought on the contract, but on the tort of deceit based on the defendant's fraudulent misrepresentation. I therefore do not propose to consider what would have been the position if, for instance, the defendant had declined to complete in this case and the plaintiffs had sought to sue on the contract, either for specific performance or for damages." but "But the full picture is more complex, as shown by two more recent cases to which we were also referred. I will not analyse them in detail, but they show that there are no rigid rules for or against the application of the ex turpi causa defence. This is not surprising, since it involves issues of public policy. To some extent these must depend on the circumstances of each case." and
". . . the conduct and relative moral culpability of the parties may be relevant in determining whether or not the ex turpi causa defence falls to be applied as a matter of public policy."
1 Citers

[ Bailii ]
 
Cowley v Heartley Times, 24 July 1986
24 Jul 1986

Sir Nicolas Browne-Wilkinson V-C
Natural Justice, Contract
It is the courts' function to control illegality and make sure that a body does not act outside its powers.
1 Cites

1 Citers


 
Lombard North Central v Butterworth [1986] EWCA Civ 5; [1987] QB 527; [1987] 1 All ER 267; [1987] 2 WLR 7
31 Jul 1986
CA
Lawton, Mustill, Nicholls LJJ
Financial Services, Contract
The defendant entered into a hire-purchase contract for a computer, time being stipulated to be "of the essence" in relation to the payment obligations. He defendant defaulted, and the plaintiff took possession of the goods, and and sought payment of the balance due. Held: Time is of the essence where the parties have expressly stipulated in their contract that time is to be of the essence. The same result will follow if the contract contains a clause to the effect that any breach of such a clause will entitle the innocent party to terminate (or cancel) the agreement. The injured party is relieved of any obligation that remains unperformed on his part. In addition the injured party may claim for damages on the basis that upon termination of the contract the obligations of both parties remaining unperformed are brought to an end.
Mustill LJ said: "A stipulation that time is of the essence in relation to a particular contractual term, denotes that timely performance is a condition of the contract. The consequence is that delay in performance is treated as going to the root of the contract, without regard to the magnitude of the breach. It follows that where a promisor fails to give timely performance of an obligation in respect of which time is expressly stated to be of the essence, the injured party may elect to terminate and recover damages in respect of the promisor's outstanding obligations, without regard to the magnitude of the breach."
1 Cites

1 Citers

[ Bailii ]
 
The Antares [1987] 1 Lloyds Rep 24
1987
CA
Lloyd LJ, Glidewell and O'Connor LJJ
Contract, Transport
The time limit of one year contained in Article III rule 6 applied to a claim for failure to carry under deck; the package limit in Article IV rule 5 was not inherently different. Whatever may be the position with regard to deviation clauses strictly so called, which should be assimilated into the ordinary law of contract, there was no reason for regarding the unauthorised loading of deck cargo as a special case.
Hague Rules


 
 Jacques v AUEW; 1987 - [1987] 1 All ER 621
 
Pagnan SpA v Feed Products Ltd [1987] 2 Lloyd's Rep 601
1987
ChD
Bingham J
Contract
An agreement can be enforceable as an agreement on main terms only, with the detailed terms to be agreed later. Bingham J said: "The Court's task is to review what the parties said and did and from that material to infer whether the parties' objective intentions as expressed to each other were to enter into a mutually binding contract. The Court is not of course concerned with what the parties may subjectively have intended." and "The judicial task is not to discover the actual intentions of each party; it is to decide what each was reasonably entitled to conclude from the attitude of the other." The parties are to be regarded "as masters of their contractual fate. It is their intentions which matter and to which the Court must strive to give effect".
1 Citers


 
Bernstein v Pamson Motors (Golders Green) Ltd [1987] 2 All ER 220; [1987] BTLC 37
1987
QBD
Rougier J
Contract, Consumer
A car had been delivered to the buyer three weeks before the purported rejection. In the interval the purchaser had driven it 140 miles. Held: The nature of the particular defect, discovered ex post facto, and the speed with which it might have been discovered, are irrelevant to the concept of reasonable time in s35 which is directed solely to what is a reasonable practical interval in commercial terms between a buyer receiving the goods and his ability to send them back, taking into consideration from his point of view the nature of the goods and their function, and from the point of view of the seller the commercial desirability of being able to close his ledger reasonably soon after the transaction is complete. The complexity of the intended function of the goods is clearly of prime consideration. What is a reasonable time in relation to a bicycle would hardly suffice for a nuclear submarine.
Rougier J: "In my judgment, the nature of the particular defect, discovered ex post facto, and the speed with which it might have been discovered, are irrelevant to the concept of reasonable time in s 35 as drafted. That section seems to me to be directed solely to what is a reasonable practical interval in commercial terms between a buyer receiving the goods and his ability to send them back, taking into consideration from his point of view the nature of the goods and their function, and from the point of view of the seller the commercial desirability of being able to close his ledger reasonably soon after the transaction is complete. The complexity of the intended function of the goods is clearly of prime consideration here. What is a reasonable time in relation to a bicycle would hardly suffice for a nuclear submarine."
Sale of Goods Act 1979 35
1 Citers


 
Phillips Products Ltd v Hyland [1987] 1 WLR 659; [1984] EWCA Civ 5; [1987] 2 All ER 620
1987
CA
Slade LJ
Contract
To decide whether a clause is an exclusion clause it is necessary to look at the effect of the clause and not its form. "There is no mystique about `exclusion' or `restriction' clauses. To decide whether a person `excludes' liability by reference to a contract term, you look at the effect of the term. You look at its substance." Where the time available to sign a contract is very limited, the availability of alternate terms may not be significant to indicate reasonableness.
Unfair Contract Terms Act 1977 2(2)
1 Citers

[ Bailii ]
 
The "Nukila" [1987] 2 Lloyd's Rep 146
1987
CA
Hobhouse LJ
Contract, Damages
Hobhouse LJ said: "Turning to the authorities it must at the outset be recognised that, whether or not they are strictly binding on us, they must, insofar as they represent the existing authoritative statements of the law only be departed from if they are clearly wrong. This principle has been stated on a number of occasions in the field of commercial law where it is recognised that the parties enter into contracts on the basis of the law as it has been stated in the applicable authorities. For a Court, in deciding a dispute under a commercial contract, later to depart from those authorities risks a failure to give effect to a contractual intention of those parties as evidenced by their contract entered into on a certain understanding of the law. "
1 Cites

1 Citers



 
 Rogers v Parish (Scarborough) Ltd; CA 1987 - [1987] QB 933
 
The Anemone [1987] 1 Lloyds Rep 546
1987

Staughton J
Transport, Contract
Owners wished to let their vessel on time charter to Afram Line Limited but were unwilling to do so without a guarantee. The negotiations were conducted by Centre Shipping on behalf of owners and Dipgrove Holdings on behalf of charterers. It was agreed at an early stage of the negotiations that there would be a guarantee. Main terms but not the details were agreed by noon on 23 December 1983. The terms of a proposed guarantee were sent by telex to Shirlstar, the proposed guarantor, by Centre, soon after 12 noon on 23 December. Later in the afternoon in the course of a telephone conversation Mr Bott of Dipgrove confirmed to Mr Sorensen of Centre that Shirlstar was willing to give a guarantee in the terms proposed. Held: The effect of the conversation was that Mr Bott on behalf of Shirlstar offered to guarantee the obligations of charterers if the owners entered into a charterparty with the main terms that had by then been agreed by Mr Bott and Mr Sorensen. That offer was one which could be accepted by the conclusion of such a charterparty. Before that happened, it might of course have been revoked. Thereafter negotiations continued on the details, with agreement being reached shortly after midnight on 23/24 December.
The typing of an alleged guarantor’s signature on a telex was "in writing and signed by the parties to be charged" for the purposes of section 4: "I reached a provisional view in the course of the argument that the answerback of the sender of a telex would constitute a signature, whilst that of the receiver would not since it only authenticates the document and does not convey approval of the contents. But in the event the point does not arise."
Statute of Frauds 1677 4
1 Cites

1 Citers


 
Decouvreur v Jordan Times, 25 May 1987
1987
CA
Nourse LJ
Contract
The essential characteristics of a signature are that it indicates recognition and approval of the contents of a document.
Nourse LJ said: "Any writing by the party to be charged by which he identifies himself or by which he can be identified by others and which shows, objectively, an intention to adopt the note or memorandum will suffice."
Statute of Frauds 1677 4
1 Citers



 
 Ashville Investments Ltd v Elmer Contractors Ltd; CA 1987 - [1989] 1 QB 488; [1988] 2 All ER 577; (1987) 37 BLR 55; [1988] 3 WLR 867
 
Scott v Martin [1987] 1 WLR 841
1987


Land, Contract
When construing a land contract, the parties should not readily be assumed to have intended to act in breach of planning requirements
1 Citers


 
The Rio Claro [1987] 2 Lloyd's Rep 173
1987

Staughton J
Damages, Contract
For a loss arising from a breach of contract to be recoverable, Staughton J said: "It must be such as the contract breaker should reasonably have contemplated as not unlikely to result. To that direction must be added the point that the precise nature of the loss does not have to be in his contemplation, It is sufficient that he should have contemplated loss of the same type or kind as that which in fact occurred. There is no need to contemplate the precise concatenation of circumstances which brought it about".
1 Citers


 
Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 54
1987

Mason ACJ, Wilson, Brennan and Dawson JJ
Commonwealth, Contract
(High Court of Australia) The court consdered the situation where a surety was called after alteration of the contract secured: "to hold the surety to its bargain, the creditor must show that the nature of the alteration can be beneficial to the surety only or that by its nature it cannot in any circumstances increase the surety's risk."
1 Citers


 
Obestain Inc v National Mineral Development Corporation ('The Sanix Ace') [1987] 1 Lloyd's Rep 465
1987

Hobhouse J
Contract
Hobhouse J affirmed an owner's right to recover damages (in full) in respect of loss or damage to goods, subject to the one qualification that "his claim may be defeated if his right is a bare proprietary one and did not include any right to possession of the goods"
1 Citers


 
Stroud v Weir Associates [1987] 1 EGLR 190; (1987) 19 HLR 151
1987
CA
Glidewell LJ, O'Connor LJ, Lloyd LJ
Landlord and Tenant, Contract
The court was asked to set pitch fees on a registered mobile home site. The site owner had sought to rely upon the fact of the order which cut from 15 per cent to 10 per cent the maximum commission chargeable by a site owner on an occupier's assignment of his mobile home that reduction in his commission entitlement as a relevant factor on the pitch fee review. The court asked whether evidence of the pitch fees or rents charged at other sites was a relevant factor. Held: Evidence of pitch fees at other caravan sites did not fall within the review clause, because the phrase "applicable to the operation of the park" qualified the term "any other relevant factor". Thus the court favoured a fairly narrow interpretation of sub-paragraph (iii) in that case. The phrase "applicable to the operation of the park" applied equally to "any other relevant factors" as to "the effect of legislation".
Glidewell LJ said, however, that "Grammatically there is no break, no comma or any other indication to show that the phrase 'applicable to the operation of the park' is intended only to include the effect of legislation. The words make sense read as a whole, and for myself I would so interpret them." and "In my view the Court cannot merely decide whether relevant factors have been taken into account but it can also decide the figures themselves: in other words, in this respect the Court is acting as an arbitrator would do" The judge had been right to hold that the loss of commission was a relevant factor applicable to the operation of the site. Evidence as to the rent charged on a new letting of a pitch on the same site "could be considered to be relevant".
Mobile Homes Act 1983 - Mobile Homes (Commissions) Order 1983
1 Citers



 
 Aktion Maritime Corporation of Liberia v S Kasmas and Brothers Ltd; 1987 - [1987] 1 Lloyds Rep 283

 
 Bank of Boston Connecticut v European Grain and Shipping Ltd ('The Dominique'); CA 1987 - [1987] 1 Lloyd's Reports 239
 
The Kapetan Markos N.L. (No 2) [1987] 2 LI 321
1987
CA
Mustill LJ
Contract
A party seeking to establish the existence of a contract must at least able to answer the question "What was the mechanism for offer and acceptance?"
1 Citers


 
Wood (John D) and Co v Dantata; Beauchamp Estates v Dantata [1987] 2 EGLR 23
1987
CA
Nourse LJ
Agency, Contract
The purchaser liked inspecting houses and the vendor had appointed ten firms to act for him as estate agents. Each of the estate agents was approached by this purchaser and each of the estate agents took the would be purchaser over the property of the vendor. An estate agency's clients resisted payment of his fees. Two agents were saying they were entitled to commission. The result depended upon whether the agent had introduced the purchaser. The parties had accepted that “in order to succeed one or other of the two firms had to show that they introduced the ultimate purchaser and that such introduction was the (my emphasis) effective cause of the purchase.” Held: The familiar meaning of the word introduction was the bringing together of two people who have not previously met, and the phrase "introduction of a purchaser" could only mean the "introduction of the person who ultimately purchases, not to the property, but to the purchase, or, if you look at it from the vendors angle, to the sale; in either case to the transaction that takes place". The fact that one agent introduces a person who ultimately purchases after a later introduction by another agent will not necessarily entitle the first agent to commission. In such a case the court must determine which of the two agents was the effective cause of the transaction taking place.
Nourse LJ: "As I have said, the learned judge recorded an acceptance by all three counsel that in order to succeed one or other of the two firms had to show that they introduced the ultimate purchaser and that such introduction was the effective cause of the purchase. That would seem to suggest that there are two questions to be answered, and it would certainly explain the importance which the learned judge attached to the chief’s retention of a lively interest in the property when he went there again on September 9. In truth I think that there is but a single question to be answered: which of the two firms introduced the chief to the sale? Both language and authority establish that that question must be answered by answering this further question: which of the two firms was the effective cause of the sale? Here I would gratefully adopt the following statement of the law in Bowstead on Agency , 15th ed, at p230, to which the learned judge referred:
... the fact that one agent introduces a person who ultimately purchases after a later introduction by another agent will not necessarily entitle the first agent to commission. In such a case the court must determine which of the two agents was the effective cause of the transaction taking place.
The difficulties in clarifying the mind on this question are, I think, caused by the familiar meaning of the word “introduction” as the bringing together of two people who have not previously met. Thus it is natural, when looking at the word in its present context, to attach significance to the first bringing together of the property and the person who ultimately purchases it. But the full phrase is “the introduction of a purchaser” and I think that that can only mean the introduction of the person who ultimately purchases, not to the property, but to the purchase or, if you look at it from the vendor’s angle, to the sale: in either case to the transaction which ultimately takes place. And if you then apply the primary dictionary meaning of “introduction”, you find that what you are looking for is the leading or bringing in of the purchaser to that transaction. That makes it clear that first acquaintance is not paramount and it explains why the test is expressed by reference to the effective cause of the transaction.
Which of the two firms was the effective cause of the sale to the chief?"
1 Citers


 
Shamsher Jute Mills Ltd v Sethia (London) Ltd [1987] 1 Lloyd's Rep 388
1987

Bingham J
Contract
The plaintiff sold goods to the defendant under the protection of a letter of credit. The plaintiff did not himself provide approriate documentation to claim under the letter of credit, and the banker did not pay. Held: The plaintiffs were the cause of their own misfortune, and could not visit it on the defendant. The court considered the connection between between the doctrine of waiver and the alteration of the terms of a contact.
1 Citers


 
Atkins International HA v Islamic Republic of Iran Shipping Lines (The APJ Priti) [1987] 2 Lloyd's Rep 37
1987
CA
Bingham LJ
Contract
The APJ Priti was chartered but on the voyage, was struck by a missile, towed to port, and discharged. The ships owners argued for a breach of warranty, saying that the nominated port was unsafe. The arbitrator had found that there was no warranty from the charterers that the approach to the port was safe. Held: The owner's appeal failed. A warranty to nominate a safe port cannot be broken before the duty to nominate has arisen. Moreover the warranty was as to the port only, and not its approach.
Bingham LJ rejected an argument that a warranty, to the effect that the port declared was prospectively safe, could be implied into a voyage charter-party: "because the omission of an express warranty may well have been deliberate, because such an implied term is not necessary for the business efficacy of the charter and because such an implied term would at best lie uneasily beside the express terms of the charter".
1 Citers



 
 Transworld Oil Ltd v North Bay Shipping Corpn (The Rio Claro); 1987 - [1987] Lloyd's Rep 173

 
 Lipkin Gorman (a Firm) v Karpnale Ltd; 1987 - [1987] 1 WLR 987; [1992] 4 All ER 313
 
Thompson v T Lohan (Plant Hire) Ltd [1987] 1 WLR 649; [1987] 2 All ER 631
1987
CA

Contract, Personal Injury
The plaintiff's husband had been killed as the result of the driver's negligence in operating an excavator which had been hired by the second defendants for work at their quarry. The contract was subject to the CPA (Contractors' Plant Association conditions of hire) terms which provided that drivers be regarded as the servants or agents of the hirer who, alone, should be responsible for all claims arising in connection with the operation of the plant. Held: Terms and conditions may be incorporated by reference to specific terms and conditions in common use in the relevant industry. Condition 8 was not caught by UCTA 1977 and was effective to transfer liability to the hirers. Section 2(1) had no effect because liability was not excluded towards the victim of the negligent act, Mr Thompson. It only excluded liability towards T Lohan themselves. It transferred liability.
Fox LJ said: "As to the position of the two individuals principally concerned, Mr. Pinder was the quarry manager of the third party, and Mr. Danby was a director of Lohan. Mr. Pinder had previously hired from Lohan and knew that Lohan traded on the C.P.A. model terms - and the judge so found.", "As to the position of the two individuals principally concerned, Mr. Pinder was the quarry manager of the third party, and Mr. Danby was a director of Lohan. Mr. Pinder had previously hired from Lohan and knew that Lohan traded on the C.P.A. model terms - and the judge so found." and of the CPA agreement: "The purpose of clause 8 was that, as between Lohan and the third party, Mr Hill should be regarded as the servant of the third party, who would be liable for his negligence accordingly. In my view, therefore, clause 8 is effective, at common law, as between the parties according to its tenor."
Unfair Contract Terms Act 1977

 
Pagnan SpA v Feed Products Ltd [1987] 2 Lloyd's Rep 615
2 Jan 1987
CA
Lloyd LJ, Stocker LJ, O'Connor LJ
Contract
The parties had gone ahead with performance of the arrangement between them, but without a formal agreement being in place. Held: Parties may intend to be bound forthwith even though there are further terms still to be agreed. If they then failed to reach agreement on the further terms, the existing contract is not invalidated unless the failure to reach agreement renders the contract as a whole "unworkable" or void for uncertainty.
The court was asked how it could establish whether the essential terms of a contract had been agreed so as to create a binding agreement. Lloyd LJ identified six applicable principles: "(1) In order to determine whether a contract has been concluded in the course of correspondence, one must first look to the correspondence as a whole.
(2) Even if the parties have reached agreement on all the terms of the proposed contract, nevertheless they may intend that the contract shall not become binding until some further condition has been fulfilled. This is the ordinary "subject to contract" case.
(3) Alternatively, they may intend that the contract shall not become binding until some further term or terms have been agreed;
(4) Conversely, the parties may intend to be bound forthwith even though there are further terms still to be agreed or some further formality to be fulfilled.
(5) If the parties fail to reach agreement on such further terms, the existing contract is not invalidated unless the failure to reach agreement on such further terms renders the contract as a whole unworkable or void for uncertainty.
(6) It is sometimes said that the parties must agree on the essential terms and that it is only matters of detail that can be left over. This may be misleading, since the word 'essential' in that context is ambiguous. If by 'essential' one means a term without which the contract cannot be enforced then the statement is true; the law cannot enforce an incomplete contract. If by 'essential' one means a term which the parties have agreed to be essential for the formation of a binding contract, then the statement is tautologous. If by 'essential' one means only a term which the Court regards as important as opposed to a term which the Court regards as less important or a matter of detail, the statement is untrue. It is for the parties to decide whether they wish to be bound and, if so, by what terms, whether important or unimportant. It is the parties who are, in the memorable phrase coined by the Judge, 'the masters of their contractual fate'. Of course, the more important the term is the less likely it is that the parties will have left it for future decision. But there is no legal obstacle which stands in the way of the parties agreeing to be bound now while deferring important matters to be agreed later. It happens everyday when parties enter into so-called "heads of agreement"."
1 Cites

1 Citers


 
Pagnan SpA v Tradax Ocean Transportation S.A. [1987] 3 All ER 565
2 Jan 1987
CA
Dillon LJ
Contract
When looking at different clauses in a contract, there would obviously be an inconsistency if two clauses cannot "sensibly" be read together.
1 Cites

1 Citers


 
Corner v Munday (1987) CLY 479
7 Jan 1987

Hewitt J
Contract
(Middlesborough County Court) The seller had left the house before marketing it. The buyer made an offer. In answer to the pre-contract enquiries, the seller told the buyer that the central heating was in good order, which was true at the time. Contracts were not exchanged until three months later when the water froze, cracking the pipes. The defendant was unaware of this. No further enquiry was made. The buyer sought damages in misrepresentation. Held: The answer given was a continuing representation, and the defendant was liable under section 2(1) of the 1968 Act. If the representation was not true at the time of exchange, the defendant was liable unless he could avail himself of a statutory defence.
Misrepresentation Act 1967 2(1)

 
Brian Cooper and Co v Fairview Estates (Investments) Ltd [1987] EGLR 18
13 Mar 1987
CA
Woolf LJ
Agency, Contract
A substantial property developer sought a tenant for its office block and agreed with his selling agent to pay "a full scale letting fee . . should you introduce a tenant by whom you are unable to be retained and with whom we have not been in previous communication and who subsequently completes a lease." There was an introduction but, after a number of months, a lease was completed by a company in respect of whose introduction the personnel in Fairview had no recollection, the tenant having been procured by other means. Held: The agent was not an effective cause of the tenancy but the fee was payable. The court refused to imply the usual term requiring that the agent play an effective part was that an introduction was all that Fairview wanted; they had their own employers and lawyers who could do all the subsequent work and no further work after the introduction was expected of the agent. Woolf LJ thought the implied term would avoid the possibility of the client paying commission to more than one agent each of whom might be said to have "introduced" a purchaser or lessee but only one of whom could be said to be the effective cause of the transaction, and said: "In a case where there are no express qualifications to be fulfilled other than that a purchaser should be introduced by the estate agent, then the need to imply a term as to effective cause can be readily appreciated, since otherwise if the vendor engages more than one agent there will be no way in which he can avoid being faced with an obligation to meet the claim for commission of more than one agent who each introduced the tenant. However, in this case there is virtually no danger of this happening because of the words "with whom we have not been in previous communication."
1 Citers



 
 Comex Houlder Diving Ltd v Colne Fishing Co Ltd; HL 19-Mar-1987 - [1987] UKHL 19; 1987 SLT 443; SC (HL) 85

 
 Gamer's Motor Centre (Newcastle) Proprietary Limited v Natwest Wholesale Australia Proprietary Limited; 24-Jul-1987 - (1987) 163 CLR 236; [1987] HCA 30

 
 Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd; CA 12-Nov-1987 - [1989] QB 433; [1998] 1 All ER 348; [1987] EWCA Civ 6

 
 Gubisch Maschinenfabrik KG v Giulio Palumbo; ECJ 8-Dec-1987 - C-144/86; [1987] ECR 4861; R-144/86; [1987] EUECJ R-144/86; [1989] ECC 420,
 
Hollingsworth v Humphrey Unreported, 10-Dec-87
10 Dec 1987
CA
Fox LJ
Litigation Practice, Contract
The parties disputed the effect of a Tomlin order, an order made by the court that stayed the proceedings on the terms of a compromise "except for the purpose of carrying the said terms into effect". The defendant had failed to honour the contract and the judge awarded damages against him. Held: The defendant's appel succeeded. Fox LJ: "It was not open to the judge to make an award of damages
It seems to me that under the terms of the Tomlin order the only jurisdiction that he had in this action to make an order for the purpose of carrying into effect the terms of the compromise. An award of damages is not carrying the terms into effect. It is granting a remedy for breach of contract. In my view any claim by Mrs Hollingsworth for breach of contract must be pursued in a separate action."
1 Citers


 
Oresundsvarvet AB v Marcos Diamantis Lemos (The 'Angelic Star') [1988] 1 LlR 122
1988
CA
Neill LJ, Ralph Gibson LJ
Contract
As part of a contract for ship-building, a delivery credit was made available to the purchaser as an "option", in default of exercise of which the full price was payable in cash. The option was taken. The loan was to be repaid by bills of exchange accepted by the vessel's purchaser, and was to be secured by mortgage of the vessel. On default, the contract provided for repayment of the loan and enforcement of the security. The vessel was duly arrested and sold, and her proceeds credited against the accelerated obligation to repay the loan. Held: There was nothing penal about providing for payment of the capital to be accelerated on any default, provided that the interest which would have been payable for deferring payment under the credit was not also payable. The court rejected an argument that if the clause included a penalty element that also invalidated the provision accelerating the payment of the outstanding loan, saying that the doctrine relating to penalties is not a rule of illegality but of public policy: "The rule is, in my judgment, not designed to strike down any more of a lawful contract than is necessary to give effect to the Court's purpose of applying public policy; and, moreover, the rule should be applied so as to interfere as little as possible with the proper enforcement of a lawful contract according to its terms. "
1 Cites

1 Citers


 
Johnston and Sons Ltd v Holland [1988] 1 EGLR 264
1988
CA
Nicholls LJ
Contract
The test for whether there had been a derogation from a grant was whether there had been a substantial deprivation of benefit, rather than a total deprivation. The principle of non-derogation from grant is "not based on some ancient technicality of real property. As Younger LJ observed in Harmer v Jumbil (Nigeria) Tin Areas Ltd [1921] Ch 200 at pp 225, it is a principle which merely embodies in a legal maxim a rule of common honesty. It was imposed in the interest of fair dealing."
1 Citers



 
 Circle Freight International Ltd v Medeast Gulf Imports Ltd; CA 1988 - [1988] 2 Lloyds Reports 427
 
Forsikringsaktieselskapt Vesta v Butcher [1988] CLY 413; [1989] AC 852; [1989] UKHL 5; (1988) 2 All ER 43; [1989] 1 Lloyds Rep 331; [1989] Fin LR 223; [1989] 2 WLR 290
1988
HL
Lord Bridge of Harwich, Lord Templeman, Lord Griffiths, Lord Ackner, Lord Lowry
Damages, Insurance, Contract
A contract of insurance and a facultative reinsurance, under which part of the original risk was reinsured, contained warranties in identical terms. Held: The warranty in the reinsurance policy, which was governed by English law, should be construed so that it had the same effect as the warranty in the insurance which was governed by Norwegian law which required the breach to be causative of the loss.
A defendant to an allegation of breach of contract was entitled to a defence of contributory negligence if his position as a contract breaker was, by reason of the agreement between the parties, the same as his position as a common law tortfeasor. The definition of fault in the 1945 Act comprises two limbs. The first, referable to the defendant's conduct, comprises various acts or omissions which give rise to a liability in tort. The second limb, is referable to the plaintiff's conduct, and deals with acts or omissions which would, but for the Act, have given rise to the defence of contributory negligence.
Law Reform (Contributory Negligence) Act 1945 4
1 Citers

[ Bailii ]
 
Euro-Diam Ltd v Bathurst [1990] 1 QB 1; [1988] 2 WLR 517
1988
CA
Kerr LJ
Contract
The court had found that securities had been registered misleadingly in the US. The court held that it could not aid illegality. The court considered the defence of 'ex turpi cause non oritur actio'. Kerr L.J: "The ex turpi causa defence ultimately rests on a principle of public policy that the courts will not assist a plaintiff who has been guilty of illegal (or immoral) conduct of which the courts should take notice. It applies if in all the circumstances it would be an affront to the public conscience to grant the plaintiff the relief which he seeks because the court would thereby appear to assist or encourage the plaintiff in his illegal conduct or to encourage others in similar acts." and "it makes no difference whether the illegality is raised in the plaintiff's claim or by way of reply to a ground of defence" and "To grant relief in our case does not assist or encourage [the deceased] or others in his situation to continue in their disapproved conduct."
1 Citers


 
Hector v Lyons (1988) 58 PandCR 156
1988

Sir Nicolas Browne-Wilkinson V-C
Land, Equity, Contract
The appellant contracted to buy a house but used his under-aged son's name. He sought specific performance when the vendor failed to complete. Held: Since he was neither the purchaser nor the purchaser's agent, specific performance was refused. In unilateral mistake case goods are sold by V, to P, believing P to be X. P may fraudulently represent that he is X. In a face to face sale, the fact that V mistakes the identity of X does not render the contract void for mistake. It is a unilateral mistake as to a quality of the purchaser; only in cases where the identity of the purchaser is of direct and important materiality in inducing the vendor to enter into the contract is a mistake of that kind capable of avoiding the contract. Those principles have no application where the contract is wholly in writing. The identity of the parties is established by the names put in the contract. Once there, the court's only task is to identify who they are. "In the present case the deputy judge has found as a fact that the party named in the written contract was Mr. Hector junior. It follows, in my judgment, that in the absence of rectification, which has not been claimed, or Mr. Cogley's alternative argument based on agency the only person who can enforce that contract is the party to it, namely Mr. Hector junior."
1 Cites

1 Citers


 
Kemp v Neptune Concrete Ltd [1988] 2 EGLR 87
1988

Lord Justice Purchas
Equity, Contract
In a lease, the parties had agreed in negotiations that the six year term should be extended to 12 years, but had failed altogether to address the issue of a second rent review. Held: The court would not manufacture an agreement on that point. The court explained the first criterion for rectification: "First, there must be a mistake by the party seeking relief in executing the deed which does not translate that party's subjective intention at the time of the execution of the deed. I distinguish this from an intention which the party would have formed if either he or she had been properly advised, or had even applied their minds to the problem. In those circumstances it is clear that, from the passages I have already cited, the moment of time at which the subjective intention of the party seeking relief must be determined is at, or immediately before, executing the deed. Thus, no ex post facto intention can be admitted in such circumstances."
1 Citers


 
Didymi Corporation v Atlantic Lines and Navigation Co Inc 'The Didymi' [1988] 2 Lloyds Rep 108
1988
CA
Bingham LJ
Contract, Transport
A contract contained a clause covering the rate of hire of a 5 year time charter: "30(1) The ... speed and fuel consumption of the vessel as stipulated in this charter-party are representations by the owners. Should the actual performance of the vessel taken on an average basis throughout the duration of this charter-party show any failure to satisfy one or more of such representations, the hire shall be equitably decreased by an amount to be mutually agreed between owners and charterers ..." The Court asked whether this provided sufficient certainty to give rise to a binding obligation, a substantive obligation of the parties, rather than a procedural question of how the substantive right might be determined. It was argued that the clause was not enforceable, because it was an agreement to agree. Held: The substantive obligation was sufficiently spelt out by the reference to "equitably" and that the provision for mutual agreement was no more than procedural mechanics.
1 Cites

1 Citers



 
 McAndrew v Prestwick Circuits Ltd; EAT 1988 - [1988] IRLR 514
 
Norwegian American Cruises A/S (formerly Norwegian American Lines A/S) v Paul Munday Ltd (The "Vistafjord") [1988] 2 Lloyds Rep 343
1988


Contract, Estoppel
A party may be precluded by an estoppel by convention from raising a contention contrary to a common assumption of fact or law (which could include the validity of a notice) upon which they have acted.
1 Cites

1 Citers


 
Singer Co (UK) Ltd v Tees and Hartlepool Port Authority [1988] 2 Lloyds Rep 164
1988

Steyn J
Contract
The court upheld under the 1977 Act a clause which limited a port authority’s liability to £800 per ton of consignment. Other factors were relevant but “The way in which the port authority’s general conditions came into being seems to me to be relevant. The conditions were approved, apparently without objection, by the port authority’s board of directors, on which users of the port were well represented. That is a significant factor. And so is the fact that the general conditions were widely distributed, and were readily available to users of the port”. The availability to a purchaser of alternate terms without the exclusion or limitation is relevant.
Unfair Contract Terms Act 1977 11
1 Citers



 
 Associated Japanese Bank (International) Ltd v Credit du Nord SA; 1988 - [1989] 1 WLR 255; [1988] 3 All ER 902
 
R and B Customs Brokers Co Ltd v United Dominions Trust Ltd [1988] 1 WLR 321; [1987] EWCA Civ 3
1988
CA
Dillon LJ, Neill LJ
Contract, Consumer
There was an issue whether or not the purchase by the plaintiff of a second-hand car was made “in the course of a business” so as to preclude the plaintiff from relying upon the provisions of the 1977 Act. Held: Speaking of Lord Keith's description of the Act in Davies v Sumner: "Lord Keith emphasised the need for some degree of regularity, and he found pointers to this in the primary purpose and long title of the Trade Descriptions Act 1968. I find pointers to a similar need for regularity under the Act of 1977, where matters merely incidental to the carrying on of a business are concerned, both in the words which I would emphasise, "in the course of" in the phrase "in the course of a business" and in the concept, or legislative purpose, which must underlie the dichotomy under the Act of 1977 between those who deal as consumers and those who deal otherwise than as consumers.
This reasoning leads to the conclusion that, in the Act of 1977 also, the words “in the course of business”, are not used in what Lord Keith called “the broadest sense”. I also find helpful the phrase used by Lord Parker C.J. and quoted by Lord Keith, "an integral part of the business carried on." The reconciliation between that phrase and the need for some degree of regularity is, as I see it, as follows: there are some transactions which are clearly integral parts of the businesses concerned, and these should be held to have been carried out in the course of those businesses; this would cover, apart from much else, the instance of a one-off adventure in the nature of trade, where the transaction itself would constitute a trade or business. There are other transactions, however, such as the purchase of a car in the present case, which are at highest only incidental to the carrying on of the relevant business; here a degree of regularity is required before it can be said that they are an integral part of the business carried on, and so entered into in the course of that business.”
Neill L.J noted that expression similar to "in the course of a business", were used in statutes such as the Sale of Goods Act 1979, the Trade Descriptions Act 1968 and the Supply of Goods and Services Act 1982. He noted that section 1(1) of the Trade Descriptions Act creates a criminal offence, but nonetheless thought that it would be unsatisfactory if, when dealing with broadly similar legislation, the courts were not to adopt a consistent construction of the same or similar phrases. For that reason he thought that the court should follow the guidance given in Davies v Sumner when construing section 12(1) of the Unfair Contract Terms Act.
Unfair Contract Terms Act 1977 12(1) - Sale of Goods Act 1979
1 Cites

1 Citers

[ Bailii ]
 
Thompson v Asda MFI Group Plc [1988] Ch 231
1988

Scott J
Contract
The court considered the implication of a term which would prevent an employer selling a subsidiary so that employees of the subsidiary who had rights under the group share option scheme ceased to be employees for the purpose of that agreement. It rejected an argument of such an implied term as it was not necessary to give business efficacy to the option and lacked commercial reality. There was no general principle of English law that parties to a contract could not take advantage of their own acts to avoid their obligations unless the party was in breach of a duty owed to the other contracting party. The fictional fulfilment of conditions precedent is no part of English law.
1 Cites

1 Citers


 
Harry and Garry Ltd v Jariwalla [1988] WL 1608652
1988
CA
Kerr LJ
Contract
English buyers, Harry and Garry, had under contracts of sale received a quantity of sarees which they found defective and in respect of which they had not yet accepted the relevant bills of exchange, by reference to which, it appeared, the Indian sellers, the Jariwallas, had however already succeeded in raising some monies in India. Harry and Garry agreed to accept the bills, so acquiring property in the sarees, while the Jariwallas agreed either to arrange the cancellation of the bills or to take back and pay for the sarees. Under this agreement, 2,494 sarees were then selected as sarees which the Jariwallas would, as they did, take back physically, and it was agreed that the Jariwallas would pay pounds 46,763.45 for such sarees, with property being retained by Harry and Garry until this full amount was paid. Through a Mr Shah, the Jariwallas sold some 411 of these sarees, evidently with the consent of Harry and Garry despite the reservation of title. Harry and Garry sued for the full pounds 46,763.45 agreed to be paid.
In the court below, Judge Harris had seen the contract as being one of sale, and on that basis held that, since the circumstances did not fall within section 49(2), a claim for the price was precluded. Held: Harry and Garry's appeal was allowed. Kerr LJ noted that section 49(1) was in terms inapplicable, because of the reservation of title, but the judge's approach: ""It would be ironical if that were the correct analysis. One would be driven to the conclusion that although these goods had been delivered and had been accepted, the only remedy open to the plaintiffs, if indeed they were sellers of these goods, would apparently have been a claim for damages for non-acceptance under section 50, there being no other provision of the Act which would have given the plaintiffs any remedy. With all due respect to the judge, no doubt influenced as he was by the complexity of this case and the arguments which were addressed to him, I cannot agree with that analysis for two reasons. First, in my view this was not a contract for the sale of goods within the terms of the 1979 Act. It was not, to quote section 2(1) of the Act, 'a contract by which the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration, called the price'. Like many other contracts in complex situations, this was a sui generis transaction. In effect, what the Jariwallas agreed was that if the bills of exchange were accepted, which was their great concern, they would either have them cancelled or they would take the goods back and pay for them.

When it then came to the specific agreement about the 2,494 selected sarees, I think the nature of the agreement was that in consideration of the plaintiffs' allowing them to take that consignment away and seeking to dispose of it as agents for the plaintiffs, who remained the owners of it, they agreed again either to perform the first part of the option, to have the bills of exchange cancelled at any rate to the extent of the value of those selected goods, or to pay the sum of pounds 46,763.45p. That was the nature of the agreement. Taking it on its own or taking it, as I think one should, as part of the agreement made on 23 December, I do not think it was a contract for the sale of goods to which the Act applied."
1 Citers


 
Overseas Union v AA Mutual International Insurance Co Ltd [1988] 2 Lloyds Rep 62
1988

Evans J
Contract
Evans J said that there was a broad distinction between clauses which referred "only those disputes which may arise regarding the rights and obligations which are created by the contract itself" and those which "show an intention to refer some wider class or classes of disputes." The former may be said to arise "under" the contract while the latter would arise "in relation to" or "in connection with" the contract. If a contract is invalid, so is any arbitration clause included within it. This rule "owes as much to logic as it does to authority".
1 Citers


 
Fercometal v Mediterranean Shipping Co SA, The Simona [1989] AC 788; [1988] 2 All ER 742; [1988] 3 WLR 200; [1988] 2 Lloyds Rep 199
1988
HL
Lord Ackner
Contract
The House considered the options available to a party faced with an anticipatory repudiation of a contract. Held: Affirmation or election requires an unequivocal choice between two inconsistent causes of action.
Lord Ackner said: "When A wrongfully repudiates his contractual obligations in anticipation of the time for their performance, he presents the innocent party B with two choices. He may either affirm the contract by treating it as still in force or he may treat it as finally and conclusively discharged. There is no third choice, as a sort of via media to affirm the contract and yet to be absolved from tendering further performance unless and until A gives reasonable notice that he is once again able and willing to perform. Such a choice would negate the contract being kept alive for the benefit of both parties and would deny the party who unsuccessfully sought to rescind the right to take advantage of any supervening circumstance which would justify him in declining to complete."
1 Citers


 
Kleinwort Benson Ltd v Malaysia Mining Corporation [1988] 1 All ER 714
1988

Hirst J
Contract
The bank sought to enforce "letters of comfort" provided by the parent company of the bank's debtor. Held. The bank succeeded.
1 Citers


 
Suleman v Shahisavari [1989] 3 All ER 460; [1988] 1 WLR 1181
1988


Contract, Legal Professions
A solicitor signing a contract on behalf of his client should do so only with his client's express authority. A failure would leave him liable for breach of warranty of authority. The authority should preferably be written either by a power of attorney or by an express authority.

 
Halvanon Insurance Co Ltd v Central Reinsurance Corporation [1988] 1 WLR 1122; [1988] 1 QB 216
1988
CA
Kerr LJ, Parker, Balcombe LJJ
Insurance, Contract
The fact that a contract was made by an unauthorised insurer contrary to the 1974 Act, which was silent as to the effect of a breach of this statute, did not render the contracts made by the unauthorised insurer void. Rendering transactions void affects both the guilty and the innocent parties. Kerr LJ said: "Where a statute prohibits both parties from concluding or performing a contract when both or either of them have no authority to do so, the contract is impliedly prohibited . . But where a statute merely prohibits one party from entering into a contract without authority, and/or imposes a penalty upon him if he does so (i.e. a unilateral prohibition) it does not follow that the contract itself is impliedly prohibited so as to render it illegal and void. Whether or not the statute has this effect depends upon considerations of public policy in the light of the mischief which the statute is designed to prevent, its language, scope and purpose, the consequences for the innocent party, and any other relevant considerations. The statutes considered in Cope v Rowlands, 2 M & W 149 and Cornelius Phillips [1918] AC 199 fell on one side of the line; the Food Acts 1984 would clearly fall on the other."
Insurance Act 1974
1 Citers



 
 Simaan General Contracting Co v Pilkington Glass Ltd; CA 17-Feb-1988 - [1988] EWCA Civ 15; [1988] QB 758
 
Anthony McNicholl Ltd And Others v Minister For Agriculture R-296/86; [1988] EUECJ R-296/86
8 Mar 1988
ECJ

European, Contract
ECJ Whilst the concept of force majeure does not presuppose absolute impossibility, it nevertheless requires the non-performance of the act in question to be due to circumstances beyond the control of the person claiming force majeure, which are abnormal and unforeseeable and of which the consequences could not have been avoided despite the exercise of all due care.
The failure of a purchaser of beef held in intervention storage and intended for exportation to fulfil his obligations to export it, as a result of fraud or negligence or a combination of fraud and negligence on the part of an independent carrier to whom the transport of the goods was subcontracted, does not constitute a case of force majeure within the meaning of article 11 of commission regulation (eec) no 1687/76 laying down common detailed rules for verifying the use and/or destination of products from intervention.
Where the fulfilment of an obligation to export a quantity of beef purchased from an intervention agency is guaranteed by the security referred to in regulation no 1687/76, the principle of proportionality is properly applied in the case of a failure to observe this principal obligation if the intervention agency determines the amount of the security to be declared forfeit by reference to the tonnage which was not exported. Except in the case of force majeure, that principle does not require the intervention agency to take into consideration other circumstances such as the moral blame attaching to the exporter, the loss suffered by community funds or the profit which might have been made on a resale within the community.
[ Bailii ]
 
A G Securities v Vaughan; Antoniades v Villiers and Bridger [1988] 1 EGLR 36; [1990] 1 AC 417; [1988] 3 WLR 1205; [1988] UKHL 8; [1988] 3 All ER 1058
10 Nov 1988
HL
Lord Bridge of Harwich, Lord Templeman, Lord Ackner, Lord Oliver of Aylmerton, Lord Jauncey of Tullichettle
Housing, Landlord and Tenant, Contract
In Antoniades, the two tenants occupied an attic, living together. Each had at the same time signed identical agreements purporting to create licences. The landlord had reserved to himself the right to occupy the property and to allow others to occupy it so as to create no more than a licence. Held: Behaviour by the parties after a tenancy areement was not relevant in construing the tenancy agreement, but can be used to see whether the document properly reflected what the parties intended. Such surrounding circumstances include 'any relationship between the prospective occupiers, the course of negotiations and the nature and extent of the accommodation and the intended and actual mode of occupation.' The documents were interdependent, and in fact the tenants had enjoyed exclusive occupation. The clause allowing additional occupiers was a sham. The two agreements had to be read together. The parties could not contract out of the Rent Acts, and clause 16 did not reflect the true position and that accordingly clause 16 should be struck out.
In A G Securities, four tenants of a property had signed separate documents at different times. They now claimed to have one joint tenancy rather than licence agreements as claimed by the landlord. Held: The court will look to the substance and reality of the transaction entered into by the parties, not just the apparent form. Nevertheless, in this case the rigts and duties having been created originally as several obligations, could not become joint.
Lord Templeman said: "Where a landlord creates a tenancy of a flat and reserves the right to go into exclusive occupation at any time of the whole or part of the flat with or without notice, that reservation is inconsistent with the provisions of the Rent Acts and cannot be enforced without an order of the court under section 98. Where a landlord creates a tenancy of a flat and reserves the right to go into occupation of the whole or part of the flat with or without notice, jointly with the existing tenants, that reservation also is inconsistent with the provisions of the Acts. Were it otherwise every tenancy agreement would be labelled a licence and would contract out of the Rent Acts by reserving power to the landlord to share possession with the tenant at any time after the commencement of the term.
Clause 16 is a reservation to Mr Antoniades of the right to go into occupation or to nominate others to enjoy occupation of the whole of the flat jointly with Mr Villiers and Miss Bridger. Until that power is exercised Mr Villiers and Miss Bridger are jointly in exclusive occupation of the whole flat making periodical payments and they are therefore tenants. The Rent Acts prevents the exercise of a power which would destroy the tenancy of Mr Villiers and Miss Bridger and would deprive them of the exclusive occupation of the flat which they are now enjoying. Clause 16 is inconsistent with the provisions of the Rent Acts.
There is separate and alternative reason why clause 16 must be ignored. Clause 16 was not a genuine reservation to Mr Antoniades of the power to share the flat and a power to authorise other persons to share the flat. Mr Antoniades did not genuinely intend to exercise the powers save possibly to bring pressure to bear to obtain possession. Clause 16 was only intended to deprive Mr Villiers and Miss Bridger of the protection of the Rent Acts. Mr Villiers and Miss Bridger had no choice in the matter."
Lord Bridge said: "Here the artificiality was in the pretence that two contemporaneous and identical agreements entered into by a man and a woman who were going to live together in a one-bedroom flat and share a double bed created rights and obligations which were several rather than joint. As to the nature of those rights and obligations, the provisions of the joint agreement purporting to retain the right in the respondent to share the occupation of the flat with the young couple himself or to introduce an indefinite number of third parties to do so could be seen, in the relevant circumstances, to be repugnant to the true purpose of the agreement. No one could have supposed that those provisions were ever intended to be acted on. They were introduced into the agreement for no other purpose than as an attempt to disguise the true character of the agreement which it was hoped would deceive the court and prevent the appellants enjoying the protection of the Rent Acts. As your Lordships all agree, the attempt fails."
Rent Act 1977 1
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[ Bailii ]

 
 British Commonwealth Holdings plc v Quadrex Holdings Inc; 1989 - [1989] 1 QB 842

 
 The Aramis; CA 1989 - [1989] 1 Lloyd's 213

 
 State Trading Corporation of India Ltd v M Golodetz Ltd; CA 1989 - [1989] 2 Lloyd's Rep 277
 
Seashell Shipping Corporation v Mutualidad de Seguros del Instituto Nacional de Industria ("The Magnum" ex "Tarraco Augusta") [1989] 1 Lloyds Rep 47
1989
CA
Parker LJ
Jurisdiction, Contract
Where the decision as to forum depends upon the construction of the document or documents in one language and the rival courts are, on the one hand, courts whose native language is that of the document and on the other hand, courts whose native language is not that of the document, it is in the interests of the parties and the ends of justice that the true meaning should be ascertained and be decided by the courts whose native language is that of the document.
Parker LJ said: "In my view it would be unjust to the plaintiff to prevent him from proceeding in Courts where the result of his bargain would be to produce success and to force him to proceed in Courts where the result would or might be that the defendants escaped from their bargain."
1 Citers


 
JH Rayner (Mincing Lane) Ltd v Department of Trade and Industry [1989] Ch 72
1989


International, Contract

1 Citers


 
Wiluszynski v Tower Hamlets LBC [1989] ICR 493
1989


Employment, Contract
Where a contract expressly provides for fixed remuneration on specified events, the court cannot award any other remuneration on those events, nor can it awarded any remuneration if they do not occur.
1 Citers


 
The Chanda [1989] 2 Lloyds Rep 494
1989
ChD
Hirst J
Transport, Contract
Part of an asphalt drying and mixing plant had been shipped on deck in breach of contract. The court asked whether the shipment on deck disentitled the shipowner from relying on Article IV rule 5. Held: A carrier by sea, who carries cargo on deck in breach of a contract of carriage which is governed by the Rules, can not take advantage of Article IV rule 5 to limit his liability for loss or damage to that cargo.
Hague-Visby Rules
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Armour v Thyssen Edelstahlwerke AG 1989 SLT 182
1989


Contract

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 In re A Company (No 005009 of 1987); Ex parte Copp; 1989 - [1989] BCLC 13
 
Atlas Express Ltd v Kafco (Importers and Distributors) Ltd [1989] 1 QB 833; [1989] 1 All ER 641
1989

Tucker J
Contract
The parties contracted to transport the goods of the defendant. A rate was agreed, but the plaintiff then insisted on minimum quantities. The defendant now said that its agreement to the new term had been obtained by economic duress. Held. A promise to perform an enforceable obligation under a pre-existing contract between the same parties is incapable of amounting to sufficient consideration. The defendant would have been put out of business by a refusal of the plaintiff to carry its goods, and economic duress was established. Where an agreement is induced by illegitimate pressure, the pressure is not legitimised because the party yielding to the pressure obtains some concession which ameliorates to some extent the impact of the benefit demanded by the other party.


 
 Dobson v General Accident Fire and Life Assurance Corporation Plc; CA 1989 - [1989] 3 All ER 927; [1989] 3 WLR 1066; [1990] 1 QB 274

 
 Lipkin Gorman v Karpnale Ltd; CA 1989 - [1989] 1 WLR 1340
 
Venetian Glass Gallery Ltd v Next Properties Ltd. [1989] 2 EGLR 42
1989

Harman J
Landlord and Tenant, Contract
The court considered the significance of a reservation that a letter was sent “subject to licence”. After considering case law: “All three go to show that there is a distinction recognised by the law between the relationships, such as those between landlord and tenant, where there is an existing set of legal obligations between the parties and there is sought within those obligations a consent, and relations between strangers in law, as between prospective purchaser and prospective vendor, where there is no present tie and the parties are in their negotiations. I accept that there is such a distinction and I agree that one does not regard the need for a formal licence, probably under seal, as being the essential step without which there can be no effective licence, whereas of course in the case of a contract for the sale of land, apart from the difficulties created by section 40 of the Law of Property Act 1925, if there is no written note or memorandum of the contract, it is plainly the normal expectation of the law that until a normal contract has been signed, either by both parties or in two parts, and exchanged between the parties, there will be no legal relationship. Nonetheless, accepting that principle, it is still a question, in my view, of construction of the various letters and reading the correspondence as a whole.”
1 Citers


 
"The Alev" [1989] 1 Lloyds Rep 138
1989


Contract
The plaintiffs had chartered a vessel to hirers to carry the defendants goods. The hirers defaulted and the plaintiffs were in turn obliged to carry the goods but at extra costs which they passed on to the defendants who agreed to pay extra costs and not to detain or arrest the vessel while in port. This agreement was secured through threats, including a statement that unless the defendants paid the extra costs they would not get their cargo. When the ship was in port and had commenced unloading the defendants ignored the agreement and arrested the ship. They pleaded duress to any breach of contract and claimed damages. Held. The agreement had been made under economic duress. The plaintiffs had issued an unlawful threat against the goods, and they knew that, since they were legally obliged to carry the cargo, even if at a loss of profit to themselves, such a threat would be unlawful.

 
Esanda Finance Corporation Ltd v Plessnig [1989] ALJ 238
1989


Contract
(Australia)
1 Citers



 
 JH Rayner (Mincing Lane) Ltd v Department of Trade and Industry; HL 1989 - [1990] 2 AC 418; [1989] 3 WLR 969; [1989] Ch 72; [1989] 3 All ER 523
 
Gallemos (In Receivership) Ltd v Barratt Falkirk Ltd 1989 SC 248
1989


Contract, Scotland

1 Citers


 
Yien Yieh Commercial Bank Ltd v Kwai Chung Cold Storage Co Ltd [1989] 2 HKLR 639
1989
PC
Lord Goff of Chieveley
Contract
The Board was asked as to how conflicting provisions within a contract should be read and reconciled: "Their Lordships wish to stress that to reject one clause in a contract as inconsistent with another involves a rewriting of the contract which can only be justified in circumstances where the two clauses are in truth inconsistent. In point of fact, this is likely to occur only where there has been some defect of draftsmanship. The usual case is where a standard form is taken and then adapted for a special need, as is frequently done in, for example, the case of standard forms of charterparty adapted by brokers for particular contracts. From time to time, it is discovered that the typed additions cannot live with the printed form, in which event the typed additions will be held to prevail as more likely to represent the intentions of the parties. But where the document has been drafted as a coherent whole, repugnancy is extremely unlikely to occur. The contract has, after all, to be read as a whole; and the overwhelming probability is that, on examination, an apparent inconsistency will be resolved by the ordinary processes of construction."
1 Citers


 
Kleinwort Benson Ltd v Malaysia Mining Corporation [1989] 1 All ER 785
1989
CA
Ralph Gibson LJ, Nicholls and Fox LJJ
Contract
The court at first instance had found enforceable a letter of comfort provided by the parent company of the bank's client. Held. The appeal succeeded. Ralph Gibson LJ said: "The court would not, merely because the parties had referred to the document as a comfort letter, refuse to give effect to the meaning of the words used. But in this case it is clear, in my judgment, that the concept of a comfort letter, to which the parties had resort when the defendants refused to assume joint and several liability or to give a guarantee, was known by both sides at least to extend to or to include a document under which the defendants would give comfort to the plaintiffs by assuming, not a legal liability to ensure repayment of the liabilities of its subsidiary, but a moral responsibility only."
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Bank of Boston Connecticut v European Grain and Shipping Ltd ('The Dominique') [1989] AC 1056
1989
HL
Lord Brandon of Oakbrook
Contract
A shipping company and a shipper responsible for the freight disputed the effect of their contract. The ship was duly loaded with its cargo and set out for the voyage from India to Europe. The bills of lading were signed. When the ship called at Colombo it was arrested for debt. The signed bills of lading had not yet been delivered to the shippers. The question for decision was whether the shipping company was entitled to be paid the freight, in spite of the fact that the arrest of the ship brought the voyage to a halt and the shippers were forced to incur the expense of unloading the cargo and shipping it to Europe by another vessel. Held. The contract term meant that the right to receive the freight accrued upon the signing of the bills of lading, but that the right to receive payment was postponed until 5 days after delivery of the bills of lading to the shippers. An equitable set-off may occur if there is a cross-claim "flowing out of and inseparably connected with the dealings and transactions which also give rise" to the claim. The historical rule of no set-off against voyage-charter freight extended to a counterclaim for damages for repudiation of the charterparty. There was no good reason to distinguish between the case of a counterclaim for mere breach and the case of a counterclaim for repudiatory breach, and the historical rule prevailed.
Lord Brandon of Oakbrook cites the Dennys Lascelles case and said: "Applying those principles to the facts of the present case it is necessary to consider whether the owner’s right to the freight had been ‘unconditionally acquired’ by them before the termination of the charterparty. The circumstance that, by reason of the first phrase of clause 16, the (shipper’s) obligation to pay the freight was postponed until after the termination of the charterparty does not, in my view, mean that the owner’s prior acquisition of the right to the freight was conditional only. The postponement of payment was an incident attaching to the right acquired, but it was not a condition of its acquisition. It follows that, in accordance with the principles of law referred to above, the owner’s right to the freight, having been unconditionally acquired before the termination . . was not divested or discharged by such termination."
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 A and B v D and C; CA 1989 - [1989] 1 QB 488
 
Picton Jones and Co v Arcadia Developments [1989] 03 EG 85
1989

Judge J
Contract
The plaintiff chartered surveyors agreed to act in the purchase of amusement arcades, on the basis that their fees would be payable ‘in the event of ultimate success.’ The work involved applications for gaming licences and planning permissions. The work was successful, but the defendants would not pay the bill, saying the agreement was champertous and therefore unenforceable. Held: The rule against champertous contracts applies only to work involving litigation, and so the agreement was not champertous. The fact that a professional rule prohibits certain actions does not of itself make such actions unlawful outside that professional context.
1 Cites



 
 Warren v Mendy; CA 1989 - [1989] 1 WLR 853
 
Marston Construction C Ltd v Kigass Ltd [1989] 15 Con L 116
1989


Contract

1 Citers



 
 The Suwalki; 1989 - [1989] 1 Lloyd's Rep 511

 
 Smith v Eric S Bush, a firm etc; HL 20-Apr-1989 - [1989] 2 WLR 790; [1990] 1 AC 831; [1989] 17 EG 68; [1989] 2 All ER 514; [1990] UKHL 1
 
Cannon Screen Entertainment Ltd v Handmade Films (Distributors) Ltd July 11, 1989 unreported
11 Jul 1989


Contract
It is a matter of construing the words of a contract used in accordance with their natural meaning and in the light of the surrounding circumstances in which the contract was made
1 Citers



 
 Lauritzen A/A v Wijsmuller BV;( 'The Super Servant Two'); CA 12-Oct-1989 - [1989] EWCA Civ 6; [1990] 1 Lloyds Rep 1

 
 Williams v Roffey Brothers and Nicholls (Contractors) Ltd; CA 23-Nov-1989 - [1989] EWCA Civ 5; [1991] 1 QB 1; 10 Tr LR 12; [1990] 2 WLR 1153; (1991) 48 BLR 69; [1990] 1 All ER 512
 
Harlingdon and Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd [1991] 1 QB 564; [1989] 3 WLR 13; [1990] 1 All ER 737; Times, 22 December 1989; [1989] EWCA Civ 4
15 Dec 1989
CA
Slade, Nourse, Stuart-Smith LJJ
Consumer, Contract
The defendant auctioneer sold a painting to the plaintiff which turned out to be a forgery. The plaintiff appealed against a finding that it had not relied upon the attribution, saying that there had been a breach of the requirement that the paintig fit the description given. Held: The appeal failed (Slade LJ dissenting).
Nourse LJ said: "many dealers habitually deal with each other on the principle caveat emptor. For my part, being confident that that principle would receive general acceptance amongst dealers, I would say that the astuteness of lawyers ought to be directed towards facilitating, rather than impeding, the efficient working of the market. The court ought to be exceedingly wary in giving a seller's attribution any contractual effect. To put it in lawyers' language, the potential arguability of almost any attribution, being part of the common experience of the contracting parties, is part of the factual background against which the effect if any, of an attribution must be judged.
Sale of Goods Act 1979 13
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[ Bailii ]
 
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