Contract law

• Consideration p2


  A promise to accept part payment of a pre-existing date in place of a whole debt isn’t consideration

  • Came from Pinnell‘s case where judge said payment of a less sum of money on the day debt is due can’t be satisfaction of a greater debt, credit and claim remainder of debt even if they’ve agreed that part payment will clear the debt foakes V beer
• Consideration p2

  Pre-existing debt exception

  • Exception 1) accord and satisfaction, whether there is an agreement (accord) to end a contract and satisfaction (consid) that has been acted upon voluntry. Accepting something other than money for the whole debt is good consideration even if it’s not of equal value must be done at the request of the creditor not the debtor
• Consideration p2

  Pre-existing debt exception 2

  • Exception 2) doctrine of promissory estoppel if one party to an existing contract agrees to vary the contract and the other party relies on that promise the promise or can’t go back on the agreement or they stopped from going back on the promise
  • Central London property trust ltd V high treehouse ltd
• consideration


  Defined in Dunlop V Selfridge as ‘ an act of forbearance of one party of the promise there of is the price for which the promise of the other party is bought and thus given for the value enforceable’

  • Executed/executory consid- executed has already been performed, executory act is yet to be performed (it’s promised)
• Consideration

  Consideration need not be adequate, but must be sufficient

  • adequacy, the idea that parties to the contract themselves agree the value of things being exchanged is accessible Thomas V Thomas,
  • Chapel V nestle, sufficiency consideration must be real and have some value (white V bluet), complaining isn’t consideration (ward V byham)
• Consideration- past consideration is no consideration


  Consid has no value when it’s already been done at the time the agreement is made

  • Consid must be given in return for the promise Re mcardle
  • Exception- the promsors express/implied request for a particular task and must be an implied understanding that the task should be paid for re Casey’s patent (his work was worth something)
  • Lampleigh V Braithwaite (his actions were so important fee was implied)
• Consideration- past consideration is no consideration


  Criteria for it to apply

  • express/implied request to perform task, implied promise that the promisee will be paid, performance of the task, payment of money
• Consideration- performing a pre-existing duty is not consideration for a new contract


  Something you’re already legally required to do, in three ways

  • Duty imposed under a public duty to act (Collins V Godfroy)
  • Duty imposed under an existing contract, doing your job (silk V Myrick)
  • I promise to make payment of an existing debt
  • Exception- however, if there’s an extra element for new payment there is consideration
  • Glasgow Brothers Glamorgan County Council- police asked to live on site
  • Hartley V Ponsbury half ship crew left leaving remaining crew to do more work and more danger
• Consideration- performing a pre-existing duty is not consideration for a new contract


  Exception, case

  • Williams V Roffey, Roffey had to pay Williams for existing duty because he was gaining an extra benefit of not having to pay delay fee to clients
• Consumer rights at section 52

  Performance within reasonable time

  • Service must be performed within reasonable time where the contract doesn’t expressly fix the time for the service to be performed and doesn’t say how it’s to be fixed
  • Equivalent to the relevant sections of the supply of goods and services act 1982, which the CRA 2015 replaced
  • This term applies where the contract doesn’t have a term with respect to time and the service hasn’t been completed or is taken longer than expected
  • What’s considered reasonable time depending on circumstances
• discharge by frustration

  Actual breach- where the breach occurs at the time/during the course of employment,

  • either/both parties can be in breach
  • Victim can always claim damages
  • Whether the contracts terminated will depend on the type of term, it’s been breached
  • Breach of any term can give rise to breach of contract
  • Renunciation parties of their liabilities under e.g. not paying a bill due due date
  • Impossibility created by their own actions hairdresser going on holiday when they have clients
  • Total/partial failure of performance eg delivering defective goods
• Discharge by frustration extra stuff

  Anticipatory breach

  • When a party indicates in advance, they won’t be performing their obligations as agreed
  • Innocent party then has a choice: sue immediately for breach of condition, or wait for time agreed for performance of the contract and surf if it doesn’t take place in honchester v De la Tour
  • They can sue for the full amount that losses must be mitigated
• Discharge by frustration- extra stuf

  Repudiatory breach

  • Occurs when a party commits a breach sufficiently serious that entitles the innocent party to treat the contract as if it’s been terminated
  • Can occur in 2 ways:
  • Refusal to perform the contract or
  • As sufficiently serious breach of an anonymous term that would be considered a breach of condition
  • If this is established innocent party can terminate or continue the contracting claim damages
• Consumer rights act section 10


  Fitness for a particular purpose

  • If before the contract is made the consumer makes known (expressly/impliedly) the purpose which they are contracting the goods then there will be an implied understanding that the goods will be reasonably fit for that purpose
  • Even if it’s not a purpose for which the goods are normally supplied
  • If the Buyer is relying on skill and judgement of the seller and buying and has expressed a particular purpose for which the goods are required. The implied condition will be in the contract. Bauldry V Marshall.
• Consumer rights act section 10 p2


  Fitness for a particular purpose

  • There’s no need to state purpose when goods are used for ordinary remaining Grant V Australian knitting mills ltd
  • However, if the purchaser has a sensitivity not known to the seller then as long as the goods are fit for the normal purpose of most people there will be no breach Griffith V Peter Conway ltd
• Exclusion clauses- notice+ history of prior dealings

  Notice

  Has the clause been effectively notified when the contract is made, (olley V Maulbrough Court Hotel)

  • Has the clause been displayed where the contracts been made?
  • Has reasonable notice been given (Thornton V shoe lane parking)

  History of prior dealings

  • Where the clauses have been highlighted before, if parties have dealt with each other before on the same terms from the past Hollier V rambler motors
• Consumer rights act section 23


  Right to repair or replacement

  • If section 20 isn’t exercise, they have this right
  • A major factor and deciding if repair/ replacement is disproportionate as if it would impose unreasonable cost on the compare with an alternative remedy
  • If consumer requires trader to repair/replace goods must do so with reasonable time without significant interference to the consumer and bear any cost necessary in doing so
  • This includes cost of labour, materials or posted relating to the exercise of this right
• Consumer rights act section 23 p2

  Consumer can’t require the trader to repair/replace the goods if it’s impossible or disproportionate compared to other remedies

  • Trader must carry out repairs within reasonable time, but it takes into account the nature of goods and the purpose which they were acquired
  • The fault complained must’ve been present at the time of delivery
• consumer rights act section 11

  The right relating to description

  • Every contract supply goes by description is to be treated as including a tenant that will match the description
  • The description can be implied eg goods on display fisher v bell
  • The description includes relevant information that must be included in any statutory info relating to good set out in the consumer contracts regulations act 2013
  • Where the supply of goods by reference to a model seen/examined by the consumer supplied must match the model
  • This has been seen to include packaging Re Moore + co + lavender co arbitration
• Consumer rights act section 24


  Right to a price reduction or final right to reject

  • If section 23 doesn’t bring satisfaction, consumer has right to price reduction or final right to reject the goods and claim a refund under section 24
  • Trader can only only have one attempt at repairs/replacement for the consumer to have this right
  • Any refund is subjected deduction for use
  • During the first six months, any deduction for use is at present limited to motor vehicles
• Consumer rights act section 65

  Prohibs exc/rest death/pi

  • General faireness of terms under section 62 act defines unfair as ….
  • court takes into account specific circumstances existing when the term was agreed, other terms in the contract and nature of subject matter of the contract
  • Fairness test is supplemented by a so-called grey list of terms which may be unfair
  • Terms relating to subject matter of the contract or terms that set the price on subject to test of fairness if they’re both
  • Transparent (in plain writing)+ prominent( brought to Cs attention in an obvious way
• Consumer rights act section 55


  Right to repeat performance

  • this requires the trader to perform the serves again to the extent necessary to complete its performance in accordance with the contract
  • If the right is demanded and assuming that performance isn’t impossible, the trader Must then provide it within reasonable time and without significant inconvenience to the consumer
  • The trader must also bear any necessary costs incurred in doing so such as the cost of any labour/materials
• Consumer rights act section 56


  Right to a price reduction

  • The right is to reduce the price to the consumer by an appropriate amount for the traders failure to perform the contract
  • This may result in the giving a refund up to the full contract price
  • This remedy is only available in two situations:
  • Where completion by repeat performances impossible
  • If the consumer has asked for a repeat performance, but the trader is in breach of the requirement to do it within reasonable time/without significant interference
• consumer rights act section 49


  Reasonable care and skill

  • A contract supply service is to be treated as including a term the trader must perform the service with reasonable care and skill
  • Contracts to fix bikes/do building work often include both goods and services
  • This is equivalent to the supply of goods and services 1982 which the CRA 2015 replaced
  • Here the standard of care is equivalent to the standard of care expected in a claim of negligence
  • This is decided on a case by case basis and can be seen in the cases of thake V Maurice and Wilson V best travel
• Morality


  Definition-

  • How rules develop
  • Similarities r v r
  • Differences
  • Wolford and report- Professor Hart, Lord Devlin, John Austen, lon Fuller
  • contract law - Pearce V brooks
  • tort law- brb v harrington
  • criminal law- stone v Dobson
• Frustration

  Frustrating event occurs when

  • Impossibility- subject matters destroyed (Taylor V Cadwell), subject matters unavailable (Jackson V Maurice insurance), person required for performance becomes ill (Robinson V David), person required becomes unavailable for other good reason(Morgan V Manor), unavoidable excessive delay ( the Nemo)
• Frustration p2

  Frustration can’t occur if, self induced (maritime national Fish V ocean), more difficult/less beneficial (Davis contractors V Fareham)

  • Remedies, law reform frustration act 1943
• Exclusion clause

  Definition- controversial terms of a contract that seek to reduce/eliminate a parties liability in certain circumstances, its purpose is to remove/reduce financial liability if certain events occur during a contract olley V malbrough Court hotel

  • Limitation clause, attempts to restrict extent of liability rather than excluded entirely
• Exclusion clause

  Establish if term is part of contract, can be done in three ways 1) signature has the party signed the contract, if so it may be considered they are accepting all terms of the contract whether they’ve read it or not l’strange v gracoup

  • However Curtis V chemical cleaning, if a party relying on an exclusion clause in a written document ask the other party to sign it and in response to a question from the other party miss represents the effect of the clause it will be interpreted as misrepresentation and not in a written document
• exclusion clause

  CRA

  • Section 31
  • Section 57
  • Section 65
  • Section 62
• Acceptance


  Definition, a final and unconditional agreement to all terms of the offer, must be positive and unqualified and communicated to the offeror but acceptance can’t be through silence (felthouse V bindley)

  • When does acceptance occur, general rule is when it’s communicated to the offeror but there are three circumstances needing consideration:
  • Acceptance by conduct (carlil v carbolic smoke ball), business contracts, job proceeds before the formal contract is agreed in all of its detail with numerous offers/counter offers
• Acceptance p2

  Postal rules, acceptance takes place once it’s posted as long as Adams V lindsell rules apply:

  • Rules only apply post as usual/expected means of communication
  • Must be addressed in stamped
  • The offeree must be able to prove the letter was posted
  • Rules then apply even if the letter is never received (household fire insurance V Grant)
  • Electronic means of communication- acceptance occurs when the offeror is aware of the acceptance
• Sections which set out exclusion clauses- s31


  Prohibits a term excluding or limiting liability, including for the following sections of the act act with respect to the sale of goods:

  • s9 to be of satisfactory quality
  • s10, good to be fit for a particular purpose
  • s11, good to be as described
  • s14, good too match a model seen or examined
  • s15, installation as part of conformity of the goods with the contract
• Sections which set out exclusion clauses- s57 


  Prohibits atom excluding or limiting liability for the supply of services under the following sections of the act

  • s49, service to be performed with reasonable care and skill
  • s50, info about trader or service to be binding
  • s51, reasonable price
  • s52, reasonable time
• Intention to create legal relations


  Definition, parties to a contract expressly impliedly agreed that the contract is legally binding and therefore enforceable in court

  • Court colon enforce contract where there is an intention to be legally bound, which is obsessed objectively
  • Business agreements, Presumed to be legally binding, doesn’t take into account that presumption can be rebutted by showing the opposite is the case, can be seen in gentlemen agreements which is usually discovered by a term that states the contract is binding in honour as in (Jones V Vernon pools)
• Intention to create legal relations p2

  Intention can be negated by express wording, e.g. subject to contract (confetti records V Warner music)

  • Free gifts and prizes (mc gowen V radio burton) where this is to promote a business it can still be held as legally binding ( esso V customs and exercise)
  • Social and domestic agreements- presumed there’s no intention to be legally bound, Balfour V Balfour (not legally enforceable as the agreement was made at an amicable point of relationship), merit V merit (agreement made after divorce was held to create intention to create legal relations
• Intention to create legal relations p3


  Family being close usually doesn’t amount to itclr (Jones V padavaton)

  • If money is changed, hands, it’s more likely to be a business agreement (simpkins V pays)
• Economic duress

  Definition- where a party enters the contract as a result of financial threats

  • Coercion of will- in the case of pao on V lau yi long Lord scarman stated for coercion of will to apply the court must consider 4 criteria:
  • Did the person who claims to be coerced Protest at any time
  • Did they have any reasonable alternative open to them
  • Did they have access to independent advice
  • Did they take reasonable steps to avoid the contract
• Economic duress

  Illegitimate pressure- this is when a threaten party has no reasonable alternative open to them and they are being threatened by an unlawful action such as breaking the contract (CTN cash and carry V Gallaher)

  • Remedies- the effect of finding economic duress is to make the contract voidable, thus the contract remains valid until set aside by the injured party
  • Injured party can seek damages in contract but court at their discretion can award the equitable remedy of restitution and recision
• economic duress

  Restitution and rescission

  • Rescission - must be claimed asap after duress has stopped
  • Restitution seeks to put injured party back in the position they would’ve been in if not for the improper action