English Contract Law

• Legal Intention


  Parties must have the intention to create legal relations

  Domestic/Social Agreements

  Rebuttable presumption that a domestic agreement will lack legal intent - Balfour v Balfour (1919)

  Presumption can be overcome, for example, an agreement between husband and wife in non-amicable divorce will likely have legal intent - Merritt v Merritt (1970)

  
  

  Commercial Agreements

  ●Rebuttable presumption that a commercial agreements are intended to create legal relations- Esso v Custom and excise[1976]
• Part Payment of debt

  ● The general rule is part payment of a debt will not provide good consideration

  ○ Foakes v Beer (1884)

  EXCEPTIONS APPLY !!
• Performance of existing duties


  ●The general rule is that performance of an existing duty is not good consideration for a new promise

  Stilk v Myrick (1809)

  EXCEPTIONS APPLY !!
• Consideration must be sufficient but need not be adequate

  In order to be sufficient consideration must be

  Real, Tangible, Have some value Thomas v Thomas (1842)

  Consideration need not be for the actual value of the promise Chappell & Co Ltd v Nestle Co Ltd (1960)
• Consideration must not be past


  ● The general rule is that consideration for a promise must be given prior to the act. Consideration given after the act has been carried out is not good consideration

  ○ Re McArdle (1951)

  EXCEPTIONS APPLY !!
• Consideration must move from the promisee

  ○ Twedlle v Atkinson (1861)
• Consideration


  ●A benefit to one party or a detriment to the other, either can be present but only one need exist. Currie v. Misa (1875)

  ●A promise to act is good consideration. The act or promise of the promisor equates to the price the promises promise was bought for. Dunlop v Selfridge (1915)
• Postal Rule

  Exception to the general rule meaning acceptance is valid at the time of posting

  Adams v Lindsell (1818)

  Acceptance by post must be a reasonable method of acceptance

  The letter must be correctly stamped, addressed and posted

  The offeror must prove it was posted
• Silence


  ● Silence cannot constitute acceptance

  ○ Felthouse v Bindley (1862)
• Counter Offers


  If acceptance does not exactly match the offer it is a counter offer, destroying and replacing the original offer.

  Hyde v Wrench (1840)
• Termination of an Offer

  Offer may be terminated by revocation Routledge v Grant [(1828)

  , counteroffer, rejection, lapse of time,
• Offer can be revoked at any time before acceptance Payne v Cave
• Invitation to Treat


  an advertisement is an example of this... lets people know that you are ready to accept offers

  Article(Fisher v Bell), Advert (Partridge v Crittenden), Auction
• Offer


  ● A definite promise to specified terms, with the intention to be bound on acceptance by the offeree

  ○ Storer v Manchester City Council [1974]
• Exchange of mutual promises = Bilateral vs Unilateral contract = Makes promise in exchange for an act or service.
• Can ask for more information Harvey v Facey
• Terms must be certain - Gibson v Manchester City Council
• Offer to whole world case --- Carlill v Carbolic smoke ball co
• Ways in which an offer can end?

  Setting a time limit in the contract

  Counter offer (Hyde v Wrench)

  expiry of a reasonable time (Ramsgate Victoria Hotel Co Lt v Montefiore)

  publishing a revocation in the same way the offer was made

  (Carlill v Carbolic smoke Ball Co.)

  Death

  Acceptance
• Acceptance?

  Must agree to all terms of the offer or its a counter offer.

  Acceptance can also be done through conduct (Carlill)

  A specific way outlined in the contract (Eliason v Henshaw)
• Silence is not acceptance?

  Felthouse v Bindley
• Electronic form of communication?

  Sent outside of working hours means not accepted till the next working day (Brinkibon Ltd v Stahag Stahl)
• Privity of contract?

  Obligations cannot be imposed on someone who is not part of the contract. (Dunlop Pneumatic Tyre Co. Ltd v Selfridge)

  Court will try to avoid injustice (jackson v Horizon Holidays Ltd)
• Exceptions to privity?

  1. Third party that is part of contract is mentioned by name

  2. Contract says that they must enforce it

  3. Attempt to confer the benefit of the term on the third party

  
  

  S1 Contracts Act 1999
• Intention to create legal relations?

  Must be evidence there was an intention to create the contract

  Different rules based on whether it was a business or social agreement
• Business agreement intention?

  Companies can exempt themselves from an otherwise automatic legal agreement (Jones v Vernons Pools) can use phrase binding in honour only

  Burden of proof is on person establishing no legal connection (Edwards v Skyways Ltd)
• Courts must examine intent in social contract?

  Jones v Padavatton
• When money is involved social contract is binding?

  Simpkin v Pays

  or if financial security is at risk (Parker v Clarke)