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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: 1990 To: 1990

This page lists 25 cases, and was prepared on 20 May 2019.

 
Gatewhite v Iberia Lineas Aereas de Espana SA [1990] 1 QB 326
1990

Gatehouse J
Damages, Contract, Damages
In a contract for the carriage of goods by air, the court considered whether the owner of goods who had not been named as the consignor or consignee on the air waybill was entitled to sue the carrier for damages to the goods while in transit. Held: In the absence of express provision in the Convention excluding the owner's right of action, the owner of goods damaged or lost by a carrier was entitled to sue in his own name in accordance with the lex fori and accordingly that the plaintiffs were entitled to damages to be assessed at common law.
1 Citers


 
Bank of Nova Scotia v Hellenic Mutual War Risks Association (Bermuda) Ltd (The Good Luck) [1990] 1 QB 818
1990
CA
May, Ralph Gibson and Bingham LJJ
Contract, Damages
When a contract is to be construed purposively, the court must look to the purposes of both parties, not just one of them. No apportionment was to be applied under the 1945 Act: "Similarly, we think that the facts and circumstances of the present case are such that it can and should be easily distinguished from those in [the Tennant case]. We merely add respectfully our view that the scope and extent of this last mentioned case would have to be a matter of substantial argument if the principle there applied were to arise for consideration in another case."
Law Reform (Contributory Negligence) Act 1945
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 The Flamar Pride; 1990 - [1990] 1 Lloyds Rep 434

 
 The Jordan Nicholev; 1990 - [1990] 2 Lloyds Rep 11

 
 Youell v Bland Welch and Co Ltd (No 1); QBD 1990 - [1990] 2 Lloyd's Rep 423
 
Dole Dried Fruit and Nut Co v Trustin Kerwood Ltd [1990] 2 Ll Rep 309; [1990] 2 Lloyd's Rep 309
1990
CA
Lloyd LJ
Contract, Equity
The defendant had an exclusive distributorship agency for the plaintiff in England. Under that agreement, the plaintiff sold its prunes and raisins to the defendant under separate contracts of sale. The plaintiff claimed the price of goods sold under the latest of such sale contracts. Three weeks later the plaintiffs commenced separate proceedings in which they claimed $735,000 for goods sold and delivered under several sales. The defendants did not dispute the plaintiff's claim but claimed in equity to set-off their counterclaim for unliquidated damages for repudiation by the plaintiff of the distributorship agreement. Held: The counterclaim could be set off, creating an arguable defence to the claim for the price of goods sold.
Lloyd LJ regarded the impeachment test and the Newfoundland Railway test as merely "the same test in different language". Referred to the exceptional rule about no set-off against freight, he continued: "But for all ordinary purposes, the modern law of equitable set-off is to be taken as accurately stated by the Court of Appeal in Hanak v. Green . . It is not enough that the counterclaim is "in some way related to the transaction which gives rise to the claim". It must be "so closely connected with the plaintiff's demand that it would be manifestly unjust to allow him to enforce payment without taking into account the crossclaim": see The Nanfri per Lord Denning . . The authority of these cases has not been diminished by The Dominique. They establish that the mere existence of a crossclaim is insufficient. The claim and crossclaim must arise out of the same contract or transaction, and must also be so inseparably connected that the one ought not to be enforced without taking into account the other."
and "The sale contracts were thus concluded in fulfilment of the agency agreement." and "In those circumstances the claim and the counterclaim are sufficiently closely connected to make it unjust to allow the plaintiffs to claim the price of goods sold and delivered without taking account of the defendants' counterclaim for damages for breach of the agency agreement. If that is right, then the defendants are entitled to rely on their counterclaim as a set-off. It follows that they have an arguable defence for the purposes of [Order 14]. Accordingly I would dismiss the plaintiffs' appeal."
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 Banque Keyser Ullmann SA v Skandia (UK) Insurance Co Ltd; CA 1990 - [1990] 1 QB 665
 
The Captain Gregos [1990] 1 Lloyds Rep 310
1990
CA
Bingham LJ
Transport, Contract
A cargo of oil had been carried under bills of lading incorporating the Hague-Visby Rules. There was an alleged theft of part of the cargo, and the question was whether article III rule 6 of the rules barred the claim on the ground that it had not been brought within one year. Held: The court could not finally determine the issue because it was not clear whether the claimants were parties to the bills. The Act and the rules make clear that the bill of lading is the bedrock of the mandatory code. A bill of lading is a contractual document with well-known consequences when endorsed and transferred. The code would not treat the existence of a bill of lading with overriding importance if the code applied with equal force as between those who are not parties to the contract which the bill contains or evidences.
Carriage of Goods by Sea Act 1971 1(4) - Hague-Visby Rules I(b) X
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Euro-Diam Ltd v Bathurst [1990] 1 QB 1
1990
CA
Kerr LJ
Contract, Torts - Other
The illegality defence was invoked in response to a claim on a property insurance. Held: The court noted the extension of the concept of ex turpi causa non oritur actio: "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." He expressed that principle at by saying that the test was whether "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." That question needed to be approached "pragmatically and with caution, depending on the circumstances."
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Armour v Thyssen Edelstahlwerke AG [1991] 2 AC 339; [1990] 3 WLR 810; [1990] 3 All ER 481; [1990] SLT 891
1990
HL
Lord Jauncey
Contract
The defendant supplied steel to a manufacturing company under a contract which contained a retention of title clause. The contract was governed by German law. The plaintiffs, who had been appointed as receivers, brought proceedings against the supplier seeking a declaration that property in the steel had passed to the company, despite the fact that payment had not been made. The suppliers argued that the retention of title clause, which was valid under German law, was effective to prevent title passing, either because the steel in question had been in Germany when the contract had been entered into so that German law was the lex situs, or because the passing of title was governed by German law as the proper law of the contract. The receivers agreed that the passing of property was governed by the lex situs, but argued that, once the goods reached Scotland, Scots law governed the question and that the retention of title clause was ineffective under Scots law. They also argued that cutting the steel into strips in preparation for use in manufacture had created a new species of goods, title to which vested in the company.

The House considered a retention of title clause in the context of whether a stock of steel was held as a security. Held: Clauses which provide that title to goods supplied does not pass to a buyer until monies on all account have been paid are effective to retain title. The decision was made despite the fact that such clauses do in a sense give the sell security for unpaid debts.
Lord Jauncey said: "a right in security is a right over property given by a debtor to a creditor whereby the latter in the event of the debtor's failure, acquires priority over the property against the general body of creditors of the debtor . . which right must be retransferred to him upon payment of the debt."
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Ethiopian Oil Fields v Rio del Mar [1990] 1 Lloyds Rep 86
1990

Hirst J
Contract
A dispute about rectification came within the words "any dispute arising out of or under this contract". The phrase "out of" must add something to "under", even though the words "out of " were in fact the words which appeared first in the clause. The words "arising out of" were virtually synonymous with the words "arising in connection with".
1 Citers


 
Cosemar SA v Marimarna Shipping Co; The Mathew [1990] 2 Lloyd's Rep 323
1990

Steyn J
Contract
The ship's master had failed to endorse the bill of lading properly so as to reverse the liability for payment of freight to the time charterers. The arbitrator had found that the mistake had caused no loss since the shippers would probably have paid the bill in any event. Held: The arbitrator had been entitled to find as he did, and the appeal failed.
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JT Developments v Quinn and Another [1991] 2 EGLR 257; (1990) 62 P and CR 33
1990
CA
Ralph Gibson LJ
Landlord and Tenant, Contract, Land
The plaintiff told the defendant it was willing to grant a lease on the same terms as those contained in a new tenancy that the plaintiff had recently granted to the tenant of a nearby shop, also owned by the plaintiff. The defendant carried out improvements in reliance on that assurance. Held: The plaintiff was bound to grant the lease in question. It is not open to the court to impose an agreement because it would have been reasonable for the parties to agree or because, if the importance of an immediate agreement had been more clearly understood at the time, the parties might well or probably have so agreed.
Referring to the AG of Hong Kong case, Ralph Gibson LJ said: "In that case, there was express use of the phrase 'subject to contract' and its effect was fully understood by both sides. In this case there were no such words. The right, however, not to proceed with negotiations for the contract exists independently of the use of that phrase, which is required, normally, in circumstances where an express agreement in writing is apparently reached which would constitute an enforceable agreement but for the use of that phrase."
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Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The Kanchenjunga) Times, 19 February 1990; [1990] CLY 4077; [1990] 1 Lloyd's Rep 391
1990
HL
Lord Goff of Chieveley
Insurance, Contract, Equity
A ship was caught in harbour when an air raid broke out. The master took the ship to sea where it suffered damage. Held: The shipowners were protected by a war risks clause in the charterparty agreement. As to waiver by election, Lord Goff of Chieveley said: "In the present case, we are concerned with an election which may arise in the context of a binding contract, when a state of affairs comes into existence in which one party becomes entitled, either under the terms of the contract or by the general law, to exercise a right, and he has to decide whether or not to do so. His decision, being a matter of choice for him, is called in law an election. Characteristically, this state of affairs arises where the other party has repudiated the contract or has otherwise committed a breach of the contract which entitles the innocent party to bring it to an end, or has made a tender of performance which does not conform to the terms of the contract. .
In all cases, he has in the end to make his election, not as a matter of obligation, but in the sense that, if he does not do so, the time may come when the law takes the decision out of his hands, either by holding him to have elected not to exercise the right which has become available to him, or sometimes by holding him to have elected to exercise it. Instances of this phenomenon are to be found in s. 35 of the Sale of Goods Act 1979. In particular, where with knowledge of the relevant facts a party has acted in a manner which is consistent only with his having chosen one of the two alternative and inconsistent courses of action then open to him - for example, to determine a contract or alternatively to affirm it - he is held to have made his election accordingly . . perhaps because a party who elects not to exercise a right which has become available to him is abandoning that right, he will only be held to have done so if he has so communicated his election to the other party in clear and unequivocal terms Moreover, it does not require consideration to support it, and so it is to be distinguished from an express or implied agreement, such as a variation of the relevant contract, which traditionally requires consideration to render it binding in English Law."
Sale of Goods Act 1979 35
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Wishart v National Association of Citizens Advice Bureaux Ltd [1990] ICR 794
1990
CA
Mustill LJ
Employment, Contract
Mustill LJ said: "Undeniably, it is possible for an employer to make an offer conditional on something to be objectively determined (for example, the passing of a medical examination)."
1 Citers


 
Howard v Shirlstar Container Transport Ltd [1990] 1 WLR 1292; [1990] 3 All ER 366
1990
CA
Staughton LJ
Contract
The parties contracted for the recovery from Nigeria of an aircraft owned by the defendants which was being detained by the Nigerian authorities at Lagos. Under the contract, the plaintiff was entitled to recover a fee of £25,000 if he "successfully" removed the aircraft from Nigerian airspace. He succeeded in so doing, in so far as he, at some risk to his life, flew the aircraft out of Lagos as far as the Ivory Coast, where however the aircraft was impounded by the authorities and returned by them to Nigeria. The plaintiffs claim for the balance of his fee was met by the defence of illegality, on the ground that he took off without obtaining the necessary clearance in breach of air traffic control regulations at Lagos; in fact he had left in a hurry, without obtaining clearance, because he had been warned that his and his wireless operator's lives were in danger and that he would not be given permission to take off. Held: The defence of illegality failed. The Court relied explicitly on the public conscience test, holding that the conscience of the court would not be affronted by enforcing the plaintiffs claim under the contract for the balance of his fee.
The presumption against surplusage is of little weight in the interpretation of commercial contracts.
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Pacific Associates v Baxter [1990] 1 QB 993
1990
CA
Purchas LJ
Contract
A clause excluding responsibility of one party to a third party should be taken into account where the contract in question was the basis for the creation of the duty of care.
1 Citers


 
Attorney-General ex rel. Scotland v Barratt Manchester Ltd Times, 02 January 1990
2 Jan 1990
CA
Nicholls LJ
Planning, Contract
Nicholls LJ discussed the nature and enforcement of agreements under section 106 of the 1990 Act, saying: "A section 106 agreement may be enforced against the original covenantor in contract, and against successors in title to the original convenantor by virtue of sub.(2). Enforcement is a matter solely for the local planning authority, and there is no right for the public at large, even through a relator action to bring enforcement proceedings; although the authority's decision to enforce or not to enforce is amenable to judicial review." and
"In the nature of things, many decisions of local authorities affect members of the public to a greater or lesser extent. These decisions affect the public and, in that loose sense, 'the public interest.' This is as much so in planning matters as in many other fields of activity of local authorities, such as education. But, despite this, there is no general 'public right' which entitles or enables the court to override a local authority's decision on a matter which by statute or otherwise has been entrusted to its decision. In exercise of its judicial review jurisdiction, the court is able to ensure that a local authority's decision has been arrived at properly, in the sense that the decision-making process was duly followed. The court will check that the decision-making body proceeded properly, and applied its collective mind properly to the matters entrusted to its decision. If the decision is flawed, the authority may be compelled to reconsider the matter, and this time to do so properly. But the end result is still a decision by the local authority on the relevant issue, not a decision of the court. All this is trite law, but its importance in the present case lies in noting that the public right for which the Attorney-General contends would have the consequence that a decision by the council on whether or not to enforce the covenant in the 1934 agreement, even if arrived at impeccably, could effectively be overridden, at any rate in some circumstances. If the council decided not to enforce the covenant, nevertheless, if the Attorney-General is correct, the covenant would still be enforceable pursuant to the 'public right' to have the covenant complied with."
Nichols LJ continued: a special type or degree of public interest such as to justify the conclusion that they give rise to a "public right" of enforcement. Mr Price [counsel for the Attorney-General], indeed, disclaimed any contention that all agreements to which section 34 applies, or to which its well-known successor section (s.52 of the 1971 Act) applies, give rise to such a right. He was wise to do so. A proposition that all section 52 agreements, irrespective of their content, create a 'public right' would be unsustainable. It would be far too wide.
This compelled the Attorney-General to adopt the position that there is to be found in the provisions of this particular agreement some special feature having the consequence that this agreement, unlike the generality of section 34 or section 52agreements, did create a "public right. Mr. Price contended that the special feature was that the land was intended to be preserved permanently as a private open space "for the benefit and amenity of the district." This is a promising starting point, but the route which Mr. Price was then obliged to negotiate led him into quicksand. He recognised that, notwithstanding the existence of the public right for which he contended, the council had power to vary or release the restrictions in the 1934 agreement, by agreement with the owner of Birtenshaw Farm. (Indeed, this power was exercised in this case. In 1955 the council and the executors of the two Ashworth brothers agreed to modify the user restrictions to enable a school to be built partly on Birtenshaw Farm and partly on Oaks Farm.) The public right, in other words, consisted only of a right to enforce the restrictions in the agreement as subsisting from time to time. Mr. Price contrasted a case (a) where the council had agreed to release or vary the restrictions, with a case (b) where there was no variation or release but the council declined to take steps to enforce the agreement for non-planning reasons: for example, because of a mistaken view of the enforceability of the agreement. He submitted that in the latter case, case (b), there was a residual public right which did not override the council's right to decide whether to vary or release the restrictions. Nor did it override the council's planning policies. In case (b) the public had a right to enforce the agreement in default of the council doing so. In such a case the public right would not be inconsistent with any relevant policy of the council.
I cannot accept this. By thus limiting its scope, one is left with a public right defined in terms which cannot stand scrutiny. On this formulation the 1934 agreement generated a right vested in the public to enforce the restrictions if, but only if, the reason for non-enforcement was unrelated to planning considerations: for example, financial constraints, or a mistaken view of the council's legal rights. I can see no sound basis for concluding that the agreement created a public right of such a curiously circumscribed nature. The agreement either operated to vest a right in the public in respect of the user restrictions, or it did not. If it did, the right must surely have been applicable, at the very least, in all circumstances where the agreement remained in force. But admittedly the right being claimed would not apply if it was for planning reasons that the council decided not to enforce the restrictions.
The difficulties do not end there. There is no practical distinction between a decision of the council not to enforce a restriction and a decision formally to vary or release a restriction. In each case the effect of the decision is the same: non-enforcement. For there to be a public right available in the one case but not the other would be unsatisfactory. If the public right is subordinate to and overridden by a formal variation decision, there can be no good reason why it should not equally be subordinate to and overridden by a decision not to enforce.
If that is correct, no scope is left for the operation of the novel public right being contended for. On analysis, the council's ability to 'override' the public right of enforcement by releasing the covenant is inconsistent with there being any public right to enforce the covenant. The custodian of the covenant was the council. Established procedures exist for those dissatisfied with the council's decisions. But there is no independent public right to enforce the covenant. In short; the categories of public right are not closed, but there is no scope for the existence of a public right in this case without doing unjustifiable violence to the contractual and local government framework in which the 1934 agreement rests."
Town and Country Planning Act 1990 106
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 Sandoz Prodotti Farmaceutici v Commission; ECJ 11-Jan-1990 - C-277/87; [1990] EUECJ C-277/87
 
Ariston SRL v Charly Records Ltd Independent, 13 April 1990
13 Apr 1990


Contract
Penalty Clauses
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Javad v Aqil [1991] 1 All ER 243; [1991] 1 WLR 1007; [1990] EWCA Civ 1; [1990] 61 P and CR 164; [1990] 41 EG 61
15 May 1990
CA
Nicholls LJ, Mustill LJ, Ralph Gibson LJ
Landlord and Tenant, Contract
A prospective tenant was allowed into possession and then made periodic payments of rent while negotiations proceeded on the terms of a lease to be granted to him. The negotiations broke down. Held: The tenant's appeal failed. It was inferred in the absence of any other material factors that the parties intended to create a tenancy at will rather than a periodic tenancy pending the outcome of the negotiations, since the parties could not be taken to have intended that the periodic payments of rent would create a periodic tenancy when they were not agreed as to the terms on which the prospective tenant would occupy. Accordingly, where the parties were unable to agree the terms of the lease and the vendor gave notice to quit, at that stage the prospective tenant only had a tenancy at will.
Nicholls LJ said: "A periodic tenancy is one which continues from period to period until determined by proper notice" and "When one party permits another to enter or remain upon his land on payment of a sum of money . . almost inevitably there will be some consensual relationship between them. It may be no more than a licence determinable at any time, or a tenancy at will. But when and so long as such parties are in the throes of negotiating larger terms, caution must be exercised before inferring or imputing to the parties an intention to give to the occupant more than a very limited interest, be it licence or tenancy. Otherwise the court will be in danger of inferring or imputing from conduct, such as payment of rent and the carrying out of repairs, whose explanation lies in the parties' expectation that they will be able to reach agreement on the larger terms, an intention to grant a lesser interest, such as a periodic tenancy, which the parties never had in contemplation at all."
Landlord and Tenant Act 1954 Part II
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[ Bailii ]
 
Goker (Ali) v NSW Bank Times, 23 May 1990
23 May 1990
CA

Contract
In the case of a hire purchase agreement, the court has a power to grant relief from forfeiture, but will not normally exercise that power unless there is no real prejudice to the owner of the goods.
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Blackpool and Fylde Aero Club Ltd v Blackpool Borough Council [1990] 3 All ER 25; [1990] 1 WLR 1195; [1990] EWCA Civ 13
25 May 1990
CA
Stocker, Bingham, Farquharson LJJ
Contract, Negligence
The club had enjoyed a concession from the council to operate pleasure flights from the airport operated by the council. They were invited to bid for a new concession subject to strict tender rules. They submitted the highest bid on time, but the council staff did not open the bid until after the time, and wrongly marked it 'late'. It was not considered, and the contract was awarded elsewhere. On learning of the mistake, the council sought to renew the bidding process, but the company awarded the contract claimed it had a binding contract. Held: "where, as here, tenders are solicited from selected parties all of them known to the invitor, and where a local authority's invitation prescribes a clear, orderly and familiar procedure (draft contract conditions available for inspection and plainly not open to negotiation, a prescribed common form of tender, the supply of envelopes designed to preserve the absolute anonymity of tenderers and clearly to identify the tender in question, and an absolute deadline) the invitee is in my judgment protected at least to this extent: if he submits a conforming tender before the deadline he is entitled, not as a matter of mere expectation but of contractual right, to be sure that his tender will after the deadline be opened and considered in conjunction with all other conforming tenders or at least that his tender will be considered if others are."
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[ Bailii ]
 
Hubbard v Middlebridge Scimitar Ltd [1990] EWHC 1 (QB)
27 Jul 1990

Otton J
Contract
The plaintiff had contracted to sell a vintage Bentley racing car 'Old Number One' for £10 million pounds. The buyer came to suspect its authenticity and refused to complete. The plaintiff sought specific performance. Held: During the course of its life any such car would have alterations and replacements made, and by 1930, only one or two parts of the original would remain. Included was a radiator on which had been inscribed a list of the car's racing successes. Even so, there was a continuous history of the car through the various events and repairs. The claim succeeded. Adopting the criteria suggested the car was the Old Number One: "The plaintiff has faithfully, sympathetically and accurately restored it to its last known racing form, i.e. the form it was in Brooklands in 1932 when it crashed. There has been no break in its historic continuity from the time when it first emerged from the racing shop in 1929 until today."
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[ Bailii ]
 
Record v Bell Times, 21 December 1991; [1991] 1 WLR 853
21 Dec 1990
ChD
Baker QC HHJ
Contract, Land
Contracts for the sale of a house were about to be exchanged but office copy entries of the vendor's title at the Land Registry had not yet been supplied. The solicitors agreed that contracts would be exchanged on the basis of a warranty that office copies, when available, would show that the vendor was the registered proprietor. Office copy entries were supplied before completion was due, and the vendor's title was established. But, in answer to a summons for a summary order for specific performance, the purchaser argued that the contract did not satisfy the requirements of section 2 of the 1989 Act. Held: The warranty was binding on the vendor even though not given in writing. It was collateral to the principle contract, and outside section 2. The warranty was intended to induce the purchaser to exchange contracts, but it was not itself a term of the sale, and the existence of the warranty did not lead to the conclusion that the requirements of section 2 of the 1989 Act were not satisfied in respect of the contract of sale.
Law of Property (Miscellaneous Provisions) Act 1989 2
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