Introduc)on to Common Law

INTRODUCTION AND METHODOLOGY

WHY STUDY ENGLISH LAW?

a. Foreign law is around us → We are bound by foreign law: Google (English law), Airbnb (Irish law),
Uber (Dutch law), F1 (English law).
b. English law is relevant in MANY areas → Finance, insurance, shipping (Port de Barcelona), etc.
• Eg. If you have a ship that leaves from Port de Barcelona to Amsterdam carrying “calçots de
Tarragona”, the sales contract will very frequently be subject to English law. Why? Because
English law offers a sophis)cated, developed and neutral legal system, to which the par)es
resort to voluntarily, even though they have nothing to do with the UK. It’s usually the law
of choice in interna)onal transac)ons.
c. Many interna)onal disputes are subject to the jurisdic)on of English courts or English arbitra)on.
d. Knowing English law makes you a BETTER lawyer under Catalan and Spanish Laws → Being aware
of a different way of regula)ng the same problems, when you able to look at them from a
different perspec)ve, you start looking at your own rules in a different way. You suddenly realize
that that’s not the only way of solving the same problems, and that makes you more versa)le
when it comes to interpre)ng the law, applying the law, deciding an strategy, etc.
STRUCTURE OF THE COURSE → Timeline of a contract:
• Forma)on (requirements) → Sessions 1 and 2
• Factors defea)ng liability (vices) → Session 2
• Content of the contract (interpreta)on and implica)on of terms) → Session 3
• Discharge of contract and remedies breach → Session 4
• Exercises and Assessment → Session 5

LESSON 1 - FORMATION OF CONTRACTS

1. THE ENGLISH APPROACH TO CONTRACT LAW

WHAT IS A CONTRACT?
DefiniKon: A set of promises for the breach of which the law provides a remedy.
• An agreement between 2 or more par)es → I agree to meet you at Plaça Catalunya at 5:00 pm
to have a beer. Is that a contract? NO, there won’t be any penalty if you’re late.
• An exchange of obliga)ons → My mother comes into my bedroom and tells me to )dy my
room, and that in exchange she’ll give me 5€ so I can go to the cinema. Is that a contract? NO
because it cannot be protected in Court, meaning that you cannot receive judicial protec)on.
A contract is something that you promise to the other party, and the other party promises something
in exchange. If either party doesn’t s)ck to the promise, you are enKtled to a remedy provided by
the law → The law, and therefore the Courts that enforce the law, will be able to provide a
mechanism where you can either be compensated for the damages that you have suffered as a
 Introduc)on to Common Law

consequence of the breach, or you can claim for that contract to be actually performed by the other
party.
WHY ARE CONTRACTS RELEVANT?
The rela)onship between contracts and the flow of trade → A mechanism for the allocaKon of risks.
With a contract what you do is to allocate the risks and an)cipate or allocate remedies in the event
of a breach or lack of performance by the other party.
So a contract is nothing but a framework where par)es know exactly what they have to do in
exchange of some value that they receive from the other party. It is also a toolbox as set of remedies
that are available in the event the other party does not comply with what they are bound to, or a
toolbox that the other party will have against you in the event you don’t comply with the obliga)ons
of the contract.
Being able to know what our rights and obliga)ons are, is a way of minimizing uncertainty, because
you know exactly where you stand, and that’s very important when nego)a)ng contracts.
• Eg.: Freixenet sells thousands of boeles of cava to a shop in the UK, and they need to know
what happens if the supermarket in the UK doesn’t pay the money. And the contract or the
legal rules that apply to that contract in the absence of express agreement in the contact, are
necessary for Freixenet to be able to calculate the risks of sending all those boeles of cava to
Southampton. That element of alloca)on and calcula)on of risks is necessary for the people in
charge in Freixenet to say OK, we are going to do it, we’ll send the boeles. Whereas maybe
they might not do it if they were dealing with a company in another country which is less
reliable that the UK because the contract remedies do not provide serviciant certainty.
So law, and contract law in par)cular, are mechanisms to facilitate trade → A very developed legal
system that protects par)es of a contract facilitates trade, and that’s why English Law is so developed.
The colonies of England over centuries trading with India, the Caribbean or Australia has been the
origin for centuries of a very solid tradi)on of regula)ng the legal implica)ons of interna)onal trade.

LEGAL CERTAINTY AND STRICT APPROACH TO CONTRACT LAW

Freedom of contract → Consent, but contract law is only concerned with demonstrable consent.
In order to facilitate this protec)on provided by English contract law, the approach of English law to
contracts has always been very strict: They want to make sure that they uphold the agreement of the
par)es, that they respect freedom of contract, but they do it looking exclusively at what the contract
says, and not what the par)es should have thought or probably had in their minds when they entered
into the contract.
SubjecKve vs ObjecKve approach: The objec)ve aproach is the prevailing approach in the English
contract law, to the extent that the subjec)ve element or the inten)on of a person is irrelevant. What
we need to obtain or ascertain is the objec)ve demonstra)on that any third party dealing with that
contrac)ng party would be able to receive (receive what loquito?). And it is that objec)ve
manifesta)on of a poten)al contract or inten)on that carries legal weight in English law.
↳ A person’s inten)on is subjec)ve BUT the test of a person’s inten)on is NOT subjec)ve; it’s
objec)ve.
 Introduc)on to Common Law

In English law we won’t have something as basic in civil systems as good faith principle → In English
law you don’t assume that par)es must act in good faith towards the other, because it’s inherently
contrary to the clash of commercial interest that par)es have. They have to act with honesty but they
don’t need to act in good faith towards the other party, which is a duty that exists in Spanish law.
And that is, among other things, because they don’t want to impose du)es that go beyond what the
par)es have actually agreed to. If you have an interest in having a right against the other party then
put it in wri)ng, make it into the contract, but don’t involve generic abstract principles that lead to
uncertainty, because you don’t know what actually good faith means in that par)cular contract.
So English law tries to avoid the uncertainty through a contract system that reduces risk (so you
reduce risk by reducing uncertainty).
The commercial usefulness of contract law has ended up shaping the rules that nego)ate contract, to
the extent that the rules nowadays are ridden by that pursuit of certainty and predictability that
maybe is not as acured in other systems, like Spanish law.

THE SOURCES OF ENGLISH CONTRACT LAW

a. The export of law and English law as a commodity
b. The threat of arbitra)on
Common Law is just one of the sources of law that we have in English Law. So if you are an English
lawyer, you have to be familiar we the fact that English law comes from different sources.
a. Common Law: It is the law that has been produced by Courts in resolving cases over the last
centuries, so that those cases might create what is called precedent, which will be binding or
persuading on later Courts that have to decide similar cases or cases where the same
principles of law are applicable.
• Crucial influence of powerful industries → Common Law is indeed the most important
source of law in many industries such as commercial, shipping, insurance, finance, etc.
• Courts of England and Wales: England and Wales High Court (EWHC), England and Wales
Court of Appeal (EWCA), United Kingdom Supreme Court (UKSC), Privy Council of the
United Kingdom (UKPC).
• Eg. Patel v Mirza (2016) UKSC 42 → How to cite a case? Patel (claimant), Mirza
(respondant), 2016 (year that the judgement is given), UKSC (the Court that gave the
judgement), 42 (judgement 42 of the year).
b. LegislaKon: There has been a growing process of codifica)on and influence of EU law.
c. Equity: Relevant in few areas (estoppel, specific performance and other equitable remedies).
Only when allowed by Common Law and legisla)on.
Equity is a level of discre)on that Courts have when Common Law and legisla)on do not
provide a solu)on. In those cases the Court can decide as it deems just and appropriate.

THE GENERAL APPLICATION OF CONTRACT LAW RULES: CONSUMER CONTRACTS, EMPLOYMENT

CONTRACTS
While in Spanish law we have Dret del Treball, Dret dels consumidors, etc.
 Introduc)on to Common Law

In English law all contracts are governed by the same contract law, whether they are employment
contracts or consumer contracts. It’s true that they will have some minor dis)nc)ons or du)es
because of the context, but the general rule is that the same contract law that you apply to a sales
contract, is the contract law that you apply to an employment contract.
Though that might sound surprising because in Spain we have ET i tal, that does not apply in England.

2. FORMATION OF THE CONTRACT

REQUIREMENTS
a. Offer
b. Acceptance
c. Inten)on to create legal rela)ons
d. [Form]
e. Considera)on
Offer and acceptance demonstrate the mee)ng of the minds between the par)es, the existence of
an agreement.
An intenKon to create legal relaKons means that the agreement is legally relevant, it’s enforceable.
It’s that part of the defini)on that we men)oned before that refers to the law providing a remedy
(not about my mum being angry because I didn’t )dy my room or my friend being angry because I
arrived late to Plaça Catalunya, it’s actually that you can go to Court, it’s a legal rela)onship).
ConsideraKon means that both par)es of the contract must exchange things, must provide a value to
the transac)on (reciprocal undertakings).
• Eg. I promise to give you my laptop and you don’t promise to give me anything in exchange. If I
finally don’t give you my laptop you cannot enforce that promise against me. Why? Because
you did not provide any reciprocal undertaking, you didn’t provide considera)on.

(a) OFFER
DEFINITION → “It is an in)ma)on, by words or conduct, of a willingness to enter a legally binding
contract, and which in its terms expressly or impliedly indicates that it is to become binding on the
offeror once accepted by the offeree.”
There are two parKes:
 Introduc)on to Common Law

a. Offeror: The party that makes the offer.

b. Offeree: The party who considers or receives the offer.

THE OFFER MUST BE:

a. Concrete: It needs to have sufficient detail for the offer to be clear as to what are the
commitments that I’m willing to undertake if you accept my offer.
Eg. If I say “I may be prepared to sell you my laptop” and you say “OK, I’m interested”, that is
not an offer and an acceptance, because it does not sa)sfy the requirement of concreteness
→ Gibson v Manchester City Council.
b. Communicated to the offeree: An offer will not be effec)ve un)l it is communicated to the
offeree → NO acceptance in ignorance.
Eg. If I’m thinking of selling you my laptop for 1.000€ and suddenly you turn up to me and say
“Hey Anna I want to buy your laptop for 1.000€”, you are clearly no accep)ng my offer
because my offer has not been communicated to you.

OFFER v INVITATION TO TREAT:

An invitaKon to treat is something that goes before an offer is made, it’s a mere invita)on to make
offers and do business in the future.
A: Will you sell me your laptop? Please text me minimum price.
B: Minimum price 1.000€
A: I accept your offer to sell me your laptop for 1.000€
OPEN QUESTION: Is there a contract? NO, just an invita)on to treat and an offer, but requires
acceptance by B (Harvey v Facey). B did not reply to A’s first ques)on, only to the second
request for informa)on.
The invitaKon to treat is when B says “Minimum price 1.000€” and then the offer is placed when A
says “I accept your offer to sell me your laptop for 1.000€” → So A is the person making the offer to
buy the laptop for 1.000€ and B would have to accept that offer for the offer to become legally
binding on both par)es.
Conclusion: Not every statement that appears to be an offer is actually an offer, it can some)mes be
an invita)on to treat.

INVITATION TO TREAT → Adverts and Sales by machine:

Usually when you see an advert that’s not an offer itself, it’s just an invita)on to treat. Or when you
see a machine that provides a Coca Cola on the sta)on, that’s not an offer itself either, it’s an
invita)on to treat.
OPEN QUESTION: When you go to the supermarket, who makes the offer? How does it work
when you go to the supermarket? You go to Mercadona, you put thing on the basket and
then you go to the checkout and pay for those products. In the end you conclude a contract,
 Introduc)on to Common Law

when you leave the shop there has been a contract. But from a legal point of view, when is
the contract formed? Who makes the offer and who accepts the offer?
An important point here, is that when you pay for something you are not necessarily accep)ng the
offer, usually the payment is the execuKon of an obligaKon already exisKng → If I go to the shop and
buy a car, I might not need to pay the car that day, I might have to pay the car in the future: The
payment is not the acceptance, the payment is simply a demonstra)on, a performance of an
obliga)on of a contract.
That means that when you in Mercadona pay for the products, that’s not necessarily acceptance →
Acceptance can take place before without payment (meaning that the payment is simply the
performance of the contract).
• Is the price tag the offer? If it were, would that mean that when I pick the breads)cks from the
shelf and I put them on the basket that would be the acceptance of the offer? If it were, that
would mean that we have a contract → NO, if the acceptance was the gesture of pumng
everything on the basket, then I wouldn’t be able to change my mind. If at the very last minute
I decide not to buy something that I had on the basket and I put it back on the shelf, I’m not
breaching a contract because there was no acceptance of the purchase.
• When you were liele and your mum gave you some bread while you were on the trolley, if as
we said there is no contract yet, was I eaKng someone else’s property? Yes, I was indeed ea)ng
someone else’s property, because the contract wasn’t formed.
What happens in English law is that the price tag is an invitaKon to treat by the supermarket. Then
the consumer makes the offer when they take the product and put it on the cashier (you are
implicitly saying that you agree to buy for the price that the supermarket presented the invita)on to
treat). And the acceptance is when the cashier scans the product. The payment of money that you do
anerwards is simply the performance of the obligaKon, the promise that was implicit on your act of
pumng the product on the cashier.
You make the offer to buy by taking the goods to the check out and the cashier accepts! → Boots v
Pharmaceu<cal Society (also for display in shop windows and catalogues).
Reasons:
• Limited stock
• Right to change your mind

HOW STRICT IS THIS RULE?

OPEN QUESTION: When you go the canteen/cafe at University and place a hot plate of food
in your tray, can you change your mind?
I ask for a plate of pasta → According to what we said on Pharmaceu<cal Society v Boots, my
request or gesture is the offer, and then the acceptance is when I go to the cashier and the
person accepts my offer. The reason for Pharmaceu<cal Society v Boots is that I can change
my mind, but how does it work in this situa)on? Can I revoke my offer?
What about if what I had on my tray was a yogurt? What about a pre-prepared salad?
We see that rules some)mes don’t adapt easily to every single scenario. In those cases a crucial
dis)nc)on will be whether the plate or the food can be reused in good condi)on or not → It is
 Introduc)on to Common Law

necessary to dis)nguish whether I can put it back and it can be resold in exactly the same condi)on,
or whether the food is affected by that process.
Here we are pushing the ideas of offer, acceptance and invita)on to treat, but the general rule is the
one that provides Pharmaceu)cal Society v Boots → Invita)on to treat by the shop, offer by the
consumer, acceptance by the shop.
TYPES OF CONTRACTS DEPENDING ON THE TYPE OF OFFER:
a. Ordinary contracts: Promise for a promise → Bilateral contracts
↳ Eg. Do you want to buy my laptop for 1.000€? OK, I’ll buy your laptop for 1.000€.
b. General offers: Promise for an act → Unilateral contracts
In these cases you have a general invita)on to the public to accept your offer → Eg. I have
lost my dog and I promise to give a reward of 500€ to anyone who brings back my dog.
That’s an offer, as soon as someone brings the dog to my house I’ll be bound to pay 500€.
• Offer: My advert
• Acceptance: The very act of bringing the dog to my house
What’s interes)ng about these cases is that when the contract is concluded (when the
contract is formed through the acceptance), one party has already done everything they had
to do under that contract, because by accep)ng (that is by bringing the dog to my house)
they are also performing their side of the contract. Which then means that only one party has
something to do: pay 500€ → That’s why they are called unilateral contracts, because they
are contratcs that when formed, only one party has outstanding obliga)ons.
General rule: An offer need not be made to an ascertained person; but no contract will arise
un)l the offer is accepted by an ascertained person.
• Offer expires once the act has taken place: Eg. Reward for lost property or informa)on
(if it produces the desired effect).
• Offer is open to various acceptances: Carlill v Carbolic Smoke Ball
↳ Communica)on of acceptance is waived.
[Carlill v Carbolic Smoke Ball and Pandemics]
The Times talked recently about how the COVID-19 outbreak will lead to legal upheaval. Ci)ng one of
the leading English contract law cases - Carlill v Carbolic Smoke Ball Company, the ar)cle described
how the 1892 case arose from the influenza epidemic that started in Central Asia in 1889 and then
spread throughout Europe.
“The pandemic s<mulated a thriving business in quackery and patent medicines. An example was the
Carbolic Smoke Ball, which its inventor, Frederick Roe, an American living in London, adver<sed in the
newspapers. He offered a £100 reward for anyone who used the Smoke Ball and then contracted
influenza.”
Louisa Carlill bought one of the smoke balls in 1891, but, aner using it “assiduously”, contracted the
disease and sued for the £100.
She won in the High Court and Court of Appeal and, “Mrs Carlill eventually did die of influenza - but
not un<l 1942, when she was 96.”
 Introduc)on to Common Law

• Smoke Ball Company allegated that she didn’t accept the offer, they said that they placed an offer
but that there was no acceptance.
• The Court said: No no lis)llos, the very act of complying with your requirements, that is, taking
Smoke Ball and the constraining Influenza, amounts to an acceptance of the offer and therefore
that party is en)tled to receive the other side of the contract (the reward).
TERMINATION OF THE OFFER
a. RejecKon of the offer: Once rejected, an offer cannot be accepted → Eg. I don’t want to buy
your laptop for 1.000€.
In general, a rejec)on kills the offer → The offer cannot be revived.
Suppose that A makes an offer to B by leeer. Immediately on receiving the leeer, B sends a
leeer back rejec)ng the offer. Before the rejec)on arrives, B changes his mind and
telephones A to communicate her acceptance.
OPEN QUESTION: Is the acceptance effec)ve? Yes, as acceptance reaches first.
OPEN QUESTION: Is the right to refuse an offer absolute? Can a company refuse to provide
goods or services on racial, religious, poli)cal etc grounds? No.
I’m in Mercadona with my queridas Rosquilletas that I want to buy (that’s the offer) and I’m
wearing a Real Madrid t-shirt, but when I go to the cashier he is a Barça fan and says “Sorry I
don’t want to accept your offer I don’t want to deal with people who supports Real Madrid”.
Can he reject my offer? Naino, ajo y agua me o vendes i que el Barça espavili que van fatal.
• [The gay cake row] → Case: A gay couple asked a bakery to make a cake with a gay flag,
and the bakery refused to do it. SC ruling: The baker’s objec)on was to the message, and
not to the man. It was not that Mr. Lee was being refused a job or accommoda)on or
baked goods in general, because of his poli)cal opinion. The evidence was that the bakers
were quite willing to employ and to serve gay people.
OPEN QUESTION: A white person comes into the bakery and asks for a cake that says that
back people should have the same rights as white people. In that case, could the bakery
refuse to make the cake on the grounds that they don’t believe that black people should have
the same rights as white people? Dunno no ha contestao.
Back to gay cake → The SC said that it wasn’t discrimina)on because the bakery did not have
anything against gay people itself, they did not have anything against employing or selling
products to gay people. They didn’t say I don’t want to sell you a muffin because you are gay,
they said that they didn’t want to use their produc)on structure to create a product that
endorsed a message with which they did not agree.
If they had said I don’t want to sell you a muffin because you are gay, that would have been
discrimina)on and therefore not allowed. But given that in this case the situa)on was
different, was about producing something from scratch using the professional exper)se of
the bakers, then that’s something where the bakers can decide where they operate.
Eg. During La Diada I want to wear a t-shirt that says “Catalunya should be part of Spain”. I go
to a shop and ask them to print the t-shirt, and the shop refuses to do it. Can they refuse my
offer? In English law yes, they can refuse to do it. Why? Because one thing is to refuse to deal
with me at all because of my ideology, and something different is to be forced to use their
equipment to produce something that supports a message with which they don’t agree.
 Introduc)on to Common Law

b. RevocaKon of the offer:

• Revocable before acceptance: Revoca)on must be communicated (by express revoca)on or
by changing the first offeror another offer).
• Irrevocable aner acceptance: The contract has been formed and binds the offeror.
c. Lapse of Kme: An offer can be revoked aner a lapse of )me → Eg. “My offer stands for 30
days and aner 30 days you need to answer. If there is no answer the offer will expire”.

(b) ACCEPTANCE
DEFINITION → “Acceptance is the expression, by words or conduct, of assent to the terms of the offer
in the manner prescribed by the offeror.”
↳ Eg. If the offeror tells me that I have to reply by email and I send a WhatsApp message, that
WhatsApp message might not be a valid acceptance because it’s not the prescribed method of
communica)on by the offeror.
Offer and acceptance must correspond → The “mirror image” rule:
a. Acceptance must reflect the terms of the offer → You can only accept in exactly the same
terms as the offer.
b. Acceptance must be absolute → A complete yes to the terms of the offer.
As soon as you want to alter the terms of the offer, we have something called a counter-offer.

ACCEPTANCE MUST BE ABSOLUTE:

If an offer does not adhere the terms or intends to change some terms, it is NOT an acceptance; it is a
counter-offer.
OPEN QUESTION: A makes an offer to sell to B her laptop for 1.000€. B replies that he is only
prepared to Pay 950€. A does not take the price. Is B able to change his mind and accept the
original offer of 1.000€? NO, a counter-offer rejects (“kills”) the original offer and introduces
a new offer (Hyde v Wrench).
B’s 950€ statement was a counter-offer, and a counter-offer has in the English law the effect
of killing the offer → The offer ceases to exist, it doesn’t exist anymore, meaning that then B
cannot say “OK, I’ll accept for 1.000€”. The 1.000€ offer is not there anymore, A has to make
the offer again. If A doesn’t make it again, B cannot accept the offer of 1.000€ because he has
killed it with the counter-offer of 950€.

ACCEPTANCE MUST BE COMMUNICATED:

a. Mental assent insufficient to amount to acceptance (Brodgen v Metropolitan Railway Co) →
Eg. If I see that you are offering me your laptop for 1.000€ and I want to buy it but you don’t
communicate that to me, I can’t accept it, because mental assent is insufficient.
b. CommunicaKon must be to the offeror → Eg. If I tell my friend “I’m going to buy Pepito his
laptop because he’s offered it to me for 1.000€”, but I don’t say that to Pepito, the fact that
 Introduc)on to Common Law

I’ve communicated my willingness to accept to another person is not effec)ve towards

Pepito, so the offer con)nues to stand and there is no acceptance yet.
c. In some cases, the offeror has waived the duty to communicate acceptance (Unilateral
contracts: Carlill v Carbolic Smoke Ball). In these cases, silence can amount to acceptance
(the performance of the required act is the acceptance) → Eg. I’ll give you 500€ if you Bring
my dog back. In those cases you don’t need to accept, you simply bring the dog and that’s an
acceptance and performance at the same )me. You don’t need to say I’m going to look for
your dog, make sure you have 500€ if I find it. That’s not necessary because I have waived the
duty to communicate acceptance → The very conduct amounts to the acceptance.
d. Postal rule: We need to dis)nguish between different methods of communica)on.
• Instantaneous methods of communica)on: Acceptance is sent and received at the same
)me. Acceptance is effec)ve from the moment you receive it. Eg. Face-to-face or phone.
• Non-instantaneous methods of communica)on: Sending ≠ Receipt. Eg. Post.
OPEN QUESTION: Is acceptance by post effec)ve when it is sent or received? When it is sent
(Adams v Linsell): The offeror bears the risk of the leeer of acceptance being delayed or lost.
↳ If the price changes anerwards or if some other event takes place during that gap, that
will not affect the acceptance, because the acceptance has produced effect from the
moment it’s sent.
OPEN QUESTION: When is the acceptance by email effec)ve? And WhatsApp? Email and
WhatsApp are simultaneous methods of communica)on, so receipt is necessary. But is actual
reading necessary? NO, receipt is sufficient (doble )ck ya vale no cal el )ck blau) BUT in
commercial contexts this is only applicable within business Hours (The Brimmes and
Brinckibon).

PRESCRIBED MODE OF ACCEPTANCE:

The offeror can request a specific mode of acceptance → Unless it is expressly mandatory, other
modes are accepted if they are not less advantageous (Manchester Diocesan v Commercial & General
Investments).
a. If the offeror has prescribed a mode of acceptance, that method is mandatory.
b. If there is no method of communicaKon prescribed by the offeror, in those cases the rule is
that you are only able provide acceptance as long as the method of communica)on does not
cause any disadvantage to the person that made the offer. That is that you use the same
method used by the offeror or something more beneficial → Eg. If he sends me an email, I
can reply with an email or even in person, but I cannot send a leeer because it is less
beneficial than an email (it takes 2-3 days to receive).
What about silence? Can it be imposed as equivalent to acceptance? NO.
• Unsolicited goods at home
• Windscreen wiper person
Silence cannot be imposed (Felthouse v Bindley) → [Unsolicited Goods and Services Act 1971 →
Uncondi)onal gins] → Eg. I cannot say “I want to sell you my laptop for 1.000€, and if you don’t reply
within 2 days I’ll deem your silence as acceptance”.
 Introduc)on to Common Law

(c) INTENTION TO CREATE LEGAL RELATIONS

Not every agreement is a contract → It is necessary that the par)es have reached the agreement in
the contempla)on of the legal consequences (Remember: A contract is a set of promises for the
breach of which the law provides a remedy).
• Eg. Your agreement to meet your friends at 5:00 in Plaça Catalunya or your agreement with
your parents to )dy your room are NOT contracts despite being agreements → There is no
inten)on, when you entered into that agreement, that the other party will have access to
legal remedies in the event that you breach your promise.
PRESUMPTIONS:
a. IntenKon to create legal relaKons is presumed in the business context → The presump)on is
that when par)es make a promise in the context of a commercial deal, that promise is
intended to be enforceable in the event of breach.
b. Absence of intenKon is presumed in → The presump)on is that there is no inten)on to
create legal rela)ons.
• Social engagements (Blue v Ashley [2017] EWHC 1928 (Comm))
The director of a chain of a sports shop called “Sports Direct” was having dinner with
his financial advisor, and the financial advisor was talking about the value of the
shares of the company and the director promised the financial advisor that if he
managed to increase the price of the shares of the company in the stock market, he
would give him a bonus of over 1M€ to reward him for that achievement.
A year later the value of those shares indeed reached that level of value in the stock
market, but when the financial advisor went to the CEO asking for the reward, the
director said that he didn’t remember such promise and that even if he remembered,
that was clearly a social engagement, so there was no inten)on to make an
enforceable promise.
The Court in the end concluded that even though those presump)ons can be
rebueed, in that case there was no sufficient inten)on to create legal rela)ons: There
was an element of drunkness (they had been drinking a lot of wine), the promise was
given in the midst of jokes and funny comments, among other arguments.
Important → A statement made in a social engagement does not carry any inten)on
to create legal rela)ons.
• Family arrangements (Barfour v Barfour) → When you make a promise to your
brother, the general understanding is that there is no inten)on to create legal
rela)ons.
BUT this can be rebuged (Parker v Clark), because these are just presump)ons.

REBUTTAL OF PRESUMPTIONS:
In these cases the claimant and the respondant have the same name, that’s because it’s the husband
against the wife (se viene divorcio).
 Introduc)on to Common Law

• A maintenance agreement reached upon breakdown of the marriage is likely to be enforceable:

Merri\ v Merri\ [1970] 1 WLR 1211.
There was an agreement between husband and wife just before they were going to get divorced → In
that context there is no family feeling which is what mo)vates the presump)on against the inten)on
to create legal rela)ons. In that context you really have a much more serious rela)on and therefore
the inten)on to create legal rela)ons, so the presump)on can be rebueed.
• A presump)on against legal inten)on would arise if the promise were to be made prior to
breakdown of the marriage: Balfour v Balfour [1919] 2 KB 571.
A husband and a wife from the US came to the UK, but aner some months there the husband decided
to go back to the US. He told the wife “don’t worry I’ll pay you a maintenance payment of 2 pounds a
month so you can survive”, so the wife stayed behind in the UK. Aner some months in the US the
husband stopped paying that maintenance and the wife claimed for that amount.
The Court found that was indeed a valid claim because the circumstances were so excep)onal, that
demonstrated a willingness to commit by the husband at the )me of making that promise, and
therefore the wife was en)tled to claim that amount.
OPEN QUESTION: What about loeery with friends or family? Contract! Simkins v Pays.
A group of 10 friends decide to share one loeery )cket. On of the members of the group pays
the full amount of the )cket and then the others have to pay 2€ each, so they all share a 10%
of the price in the event of a price wining.
The day of the loeery (25th of December) arrives but one of them has not payed the 2€.
What happens if the loeery actually is awarded to that )cket. Can that person who has not
payed the 2€ claim the 10% of the price? Was that a contractual promise that the holder of
the )cket would give a 10% to each of those 10 people? Was there an inten)on to create
legal rela)ons in that context?
There was a promise in exchange of a promise → You pay 10% of the cost of the )cket, and
then the other person has promised that he’ll share the price with those 10 people. If they
don’t pay well they haven’t complied with their part of the contract, but you s)ll have to
comply with your part of the contract.
The English law says that there is a contract, in the sense that there is inten)on to create
legal rela)ons. So when par)es make that implicit agreement that they’ll share the price as
well as the cost of the )cket, that is indeed a contract with an inten)on to create legal
rela)ons → The promise can be enforced.
Elisabeth says: If someone hasn’t payed, then that person cannot claim his share → But that point
goes aner a contract has been formed. We’ll see if the mere exchange of promises is sufficient to
create a contract.
You can have a contract if I say “I’ll give you my laptop next week for 1.000€, and you’ll give me
1.000€ for my laptop”. → We are exchanging promises that will take place in the future, but that is a
contract already (now it’s a contract, even though we are performing the obliga)ons of the contract
next week).
Payment itself is not a necessary requirement for the forma)on of the contract → Payment
some)mes is just the performance of an exis)ng validly concluded contract.
 Introduc)on to Common Law

What happens in the case of the loeery that we are discussing, is that if someone doesn’t pay the 2€
it might be that they are in complete breach of their obliga)on, because they haven’t done anything
at all that was asked from them under that contract. That complete breach of their obliga)ons can
amount what is called a repudiate rebreach → A breach where a party by lack of conduct repudiates
the contract.
So the other party (the person who bought the )cket) can terminate the contract. He can say
“because of your breach I terminate the contract, and therefore the contract will not con)nue to be
enforceable, so I don’t have to pay you the 10% of the price”.
What’s the problem? That this is a response to a breach of contract, but you can only breach a
contract when there is a contract, and what we are discussing now is wether the contract was formed
or not.
The answer is that YES, it is formed, but you can fill a claim for breach that leads to the termina)on
(ya lo veremos más tarde).

(d) FORM
English law is a very informal law when it comes to asking for a wrieen evidence on manifesta)on of
the contract. Generally, you don’t have to sign any document to enter into a valid contract.
• General rule → No requirement.
• ExcepKons (wri)ng requirement in form of a deed) → Sales of land and other deposi)ons;
consumer debit; contracts of guarantee.

(e) CONSIDERATION
Considera)on is NECESSARY for the forma)on of every contract. A promise (unless in a deed) made
without considera)on is not ac)onable as a contract in English law → Without considera)on you
cannot have an enforceable promise in the English law.
↳ Eg. If I promise to sell you my laptop but you haven’t promised to give me anything in
exchange (haven’t provided considera)on), my promise cannot be enforced → You cannot
enforce my promise if I don’t give you my laptop because you haven’t provided considera)on.

DEFINITION → “Some right, interest, profit, or benefit accruing to the one party, or some
forbearance, detriment, loss or responsibility given, suffered, or undertaken by the other” (Currie v
Missa).
i. In short: Either some benefit to the promisor or some detriment to the promisee which is
given in return for the promisee.
In exchange of my promise to sell you my laptop, you are promising either to confere a benefit to the
promisor (me, you are paying me 1.000€) or to at least suffer a detriment by you, the promisee. And
that detriment is that not only you might give me 1.000€, but actually you might give the 1.000€ to a
charity (to a third party).
And you are doing that in return of my promise. So the reason for your promise to either confere a
benefit to me or suffer a detriment, is that I’m making a promise to you to give the laptop.
 Introduc)on to Common Law

ii. It makes reciprocity/exchange the dis)nguishing mark of a contract → A gratuitous promise

is unenforceable in English law.
That element of reprocity, of exchange, is necessary for considera)on to exist, and for my promise to
be enforceable. Otherwise, if you don’t provide that considera)on in exchange, then my promise
would be free. And a gratuitous promise is unenforceable in the English law (if I don’t give you the
laptop you cannot do anything).

REQUIREMENTS:
a. A moral duty as support of an express, but gratuitous, promise is insufficient (unlike “causa”
in Spanish law, Art 1274 CC “ánimo de libertad”) → My own moral duty to s)ck to my
promise, is not sufficient if you haven’t provided the considera)on in exchange. So if my
promise was gratuitous, my moral duty to s)ck to it is insufficient.
If we compare this to Spanish law, the rules are different. In the Spanish law there are 4
requirements to have a valid contract: Consen)miento, forma, objeto y causa.
The idea of “causa” is regulated in Art 1274 CC, and it has some similarity with considera)on
but it’s not the same.
Art 1274 CC: “En los contratos onerosos se en<ende por causa, para cada parte contratante,
la prestación o promesa de una cosa o servicio por la otra parte.” → We understand, that in
the Spanish law the “causa” of my obliga)on is the fact that you are providing a prestación or
the promise of a prestación by the other party. So that exchange is also present in Spanish
law when it comes to causa.
But then de provision goes further: “En los contratos de pura beneficencia (the contracts
which are simply gratuitous promises), la causa (of that obliga)on) es la mera liberalidad del
bienhechor.” → That is, even though no one promises anything in exchange for your promise,
the reason why you are bound by that promise (you s)ll have that obliga)on) is “la mera
liberalidad del bienhechor”. You s)ll have that moral duty to comply with your promise,
whereas in the English law, that is simply not an enforceable promise.
In the Spanish CC you have a moral duty of integrity to s)ck to your own promises, whereas
in the English law, the approach is much more American, in the sense that you’re only bound
if someone gives you something in exchange. Otherwise you are free to change your mind →
Less moral or ethical weight in the regula)on of contracts int he English law than in the
Spanish law.
b. ConsideraKon must be present or future, but not past [Roscorla v Thomas], as it would not
be in exchange of a promise (unless the previous act was performed at the request of the
promisor).
If I promise to do something based on the fact that you have done something in my favour in
the past, that past considera)on that you provided is not good considera)on in the eyes of
English law.
And that’s because that previous conduct that you did )me ago, wasn’t done thinking of the
promise that I’m carrying now to you, so there’s no link of exchange between these two, and
therefore if I don’t comply with my promise now you cannot enforce it because you haven’t
 Introduc)on to Common Law

provided anything in exchange of my promise (because what you did before was not done in
the light of my current promise).
OPEN QUESTION: A saves B from drowning, and B later promises A a reward of 1.000€. Can A
enforce that promise if B does not pay? NO, it would be past consider.
Even though there has been an exchange of value, there’s no link of exchange between those
two: I did not save B because I was thinking of a reward of 1.000€, I did it for other reasons.
Whereas B is making that promise without any fresh considera)on which is a requirement in
English law.
• Eg. You lose your dog and someone finds it in the park and brings it to your house. You
are so grateful that you promise to make a payment to them. Then you change your
mind and don’t make the payment. They cannot enforce that promise against you
because when they brought the dog to your house they weren’t thinking of any reward
because you hadn’t make any promise at that stage.
c. ConsideraKon must come from the promisee → Privity of contract: You cannot impose an
obliga)on on a third party who is alien to the contract.
The promise in exchange of my promise, must come from you, you have to make the promise
of confering a benefit to me or suffering a detriment.
That fact that you have to be the one making the promise in exchange of my promise is called
privity of contract → You cannot impose an obliga)on on a third party who is alien to the
contract.
The fact that we cannot impose an obliga)on on a third party without that party’s inten)on,
is different from the fact that we can confer a benefit on a third party:
• Eg. In the example of my promise to give 1.000€ to a charity in exchange of your laptop,
if that charity is clearly iden)fied in the contract, under the English law that third can
enforce my promise if I receive the laptop but don’t pay them the 1.000€. The third
party can claim against me even though they were alien to the contract, because they
are the beneficiaries of the contract → They are not bound by it (I cannot impose
obliga)ons to the charity) but I can confer a benefit.
d. ConsideraKon need not be adequate → Courts are not concerned about the adequacy of the
considera)on. Nominal considera)on is sufficient. The relevant point is that there is an
exchange of value, as this shows the inten)on to assume a legal obliga)on.
The law is not gonna enter into wether the deal or contract is fair or not (wether I charge you
for my laptop 1.000€ or 2M €). The law doesn’t care about how fair our deal is. Why is it?
Because fairness in an exchange of value is a very subjec)ve maeer.
• Eg. If I decide to put my laptop in the rubbish I’m not gonna get any value for it, I get 0.
Whereas if someone comes and tells me “I’ll give you 1€”, actually 1€ is more than
nothing. So maybe for me 1€ is a valuable exchange for my laptop, whereas other
people might think that 1.000€ is necessary for them to give the laptop away.
The law is simply concerned with the fact that there is an exchange of value (wether it is
higher or lower is completely irrelevant).
 Introduc)on to Common Law

↳ BUT consideraKon must be real (something impossible or inexistent cannot cons)tute

valid considera)on) → That is that the promise concerns something possible, something
existent.
• Eg. If someone says “If you give me the laptop I’ll take you to a Michael Jackson
concert”. Well unfortunately Michael Jackson is dead and therefore he is not gonna
offer any concert, so your promise concerns something impossible and it’s not valid
considera)on in the eyes of the law.

PERFORMANCE OF AN EXISTING DUTY:

OPEN QUESTION: A contracts B to refurbish her house with a compe))on before Christmas.
Aner some weeks, B communicates to A that he believes he will not be able to finish on )me,
but if she pays another 5.000€ he will be able to do it. A agrees to the addi)onal amount and
B completes the work before Christmas. A does not pay the addi)onal 5.000€. Can B enforce
that promise?
In general, no. Performance of an exisKng duty is not good consideraKon (S<lk v Myrick).
If we look at the requirement in the English Law that there has to be a promise in exchange of
a promise for my promise to be enforceable, then this is a slightly different situa)on:
i. A and B had an original agreement: You’ll complete the work before Christmas and I’ll
pay you a certain amount of money.
ii. Then they have a second agreement: I’ll pay you 5.000€ and you’ll finish before
Christmas. But what are you providing in exchange of my new promise to add more
money? You are not adding anything new, you are just performing your exis)ng duty.
iii. So there is no fresh or new considera)on, you are just doing what you had to do
originally, and for that reason under English law you cannot enforce the promise to
pay 5.000€, because there is no considera)on given in exchange.
ExcepKon: When the promisor receives a pracKcal benefit or obviates a disbenefit, there will
be considera)on and the promise will be enforceable (Williams v Roffey).
If by performing what you had already commieed to do (that it your exis)ng duty) you are
providing me a prac)cal benefit or I’m saving a disbenefit (I avoid it), then my promise to pay
you 5.000€ more is enforceable.
Why? Because despite you are not doing anything different, I’m actually gemng something
more that I was not gemng before.
• Eg. If I had organised a Christmas party in my house and I had payed deposits for a
catering company, an adver)sing company, etc. and I had to cancel because the house
wasn’t going to be done on )me, and I would lose the deposits I had payed for those
services, if by paying 5.000€ more I can do the party and therefore I’m not losing those
deposits, I’m obtaining a prac)cal benefit or I’m avoiding the disbenefit of losing the
deposits. Therefore in that case, my promise to pay 5.000€ in exchange of you
comple)ng before Christmas is an enforceable promise, because I’m obtaining that
prac)cal benefit.
General rule → Performance of an exis)ng duty is not good considera)on (Stlk v Myrick)
 Introduc)on to Common Law

ExcepKon → Valid considera)on if prac)cal benefit (Williams v Roffey)

ExcepKon to the excepKon → The prac)cal benefit rule does not apply if the agreement is to
discharge a debt: When we are dealing with a promise to accept less money that what is originally
owed (Foakes v Beer, MWB Business Exchange v Rock Adver<sing Ltd and Re Selectmove).
• Eg. A owes B 5.000€ for work already done. A believes he will not be able to pay that amount. A
requests B to accept 50% (2.500€) in discharge of the whole debt. B accepts. Can B then claim
against A for the full amount? Yes. Even if having some money rather than nothing or having it
earlier could amount to prac)cal benefit, there is no considera)on in exchange for the
reduc)on of the debt, and hence it is not enforceable. The original amount remains.
Why? Because by accep)ng 2.500€ de facto you are giving the other party a clear benefit: Now he
only has to pay 50% of his debt. But is he giving me anything in exchange? No, because the work has
already been completed. So my promise doesn’t have considera)on coming from your side, it doesn’t
have any promise in exchange.
Therefore in the cases where work has already been completed, the law as a maeer of policy to make
sure that clients don’t have a abussive behaviour towards companies that have already performed
their obliga)on, the law doesn’t allow that conduct to take place.
But the company had voluntarily accepted 50% of that price, the company had promised to do
something: To take just the 50%. Why are they allowed to change their mind, to change their
promise? Is this fair? The law gives us an addi)onal solu)on → The promissory estoppel:
• REMEMBER → We have different sources in the English law, and when Common law doesn’t
provide a valid solu)on there’s another source that can give rise to the considera)on of
fairness, which says that Courts can deem or apply a solu)on based on what they find
appropriate and just? We are talking about equity. So equity kicks in through a doctrine called
promissory estoppel.

PROMISSORY ESTOPPEL (està dins del performance of an exi)ng duty):

What it does is allow A to claim that B, how promised to accept 50%, should be stopped from going
against his promise.
It is an equitable doctrine whereby par)es to a transac)on who have conducted their dealings in
reliance of an underlying assump)on (I assumed that you accepted 50% as a discharge of the debt) as
to a present, past or future (you won’t claim the full amount ever) state of affairs on a promise or
representa)on by words or conduct, will not be allowed to go back on that assump)on (you won’t be
allowed to go back on the fact that you promised that 50% fas full discharge of the debt), promise or
representa)on when it would be unfair or unjust to do so.
So in those cases the Court will step in to prevent that a person who has acted upon that assump)on,
promise or representa)on suffers from injus)ce (because the other person changes his mind).
In cases of new agreement in discharge of a debt, even if there is no considera)on and the new
agreement is not enforceable (I didn’t give you anything in exchange and you accepted 50%, so the
promise to accept 50% is not enforceable), the promisor will be stopped from enforcing the original
agreement in breach of the new one (accep<ng 50%). Central London Property Trust v High Trees → It
only applies in altera)on promises (Combe v Combe).
Requirements:
 Introduc)on to Common Law

a. A clear promise (Eg. Reduc)on of a debt: I accept 50% of the original price).
b. Inequitable to go back on the promise. How do we find if something is inequitable? By
looking at 2 ELEMENTS:
i. Genuine promise → The promise to accept 50% was a genuine promise, that is, you
agreed to take the 50% without any pressure on me, without any in)mida)on, it was a
good faith promise.
ii. Acted upon/Reliance → I acted upon that promise; I relied to it and I payed 2.500€
thinking that it was a full discharge.
So when there is a genuine promise, and it was acted upon, it will be inequitable to go against that
promise.
In those cases, what Promissory Estoppel does is that if you claim the full amount (5.000€), I can’t
defence against your claim c Promissory Estoppel is only a defence, not a cause of acKon (Combe v
Combe).
• It is not a reason why I can go to Court and ask them declare that in my rela)onship with B I
only owe B 2.5000, that I don’t owe him 5.000€. So I cannot use Promissory Estoppel as a cause
of ac)on, I can only use it as a defence if someone is coming aner me.

3. FACTORS TENDING TO DEFEAT CONTRACTUAL LIABILITY

Incapacity → Inability to exercise your freedom of contract.

MisrepresentaKon → When a party induces the other party to enter into error and also into the
contract (element of inducement).
Duress → Eg. Someone puts a gun in your head.
Undue influence → There’s an abuse of an exis)ng rela)onship of trust.
RESULT: The contract is either void or voidable depending on the case.
• Void (nulo) → The contract never existed, it never produced any effects. What the Court does
is a declara)on of what is already an exis)ng agreement.
• Voidable (anulable) → The contract was validly concluded, it produced effects, and it’s only
from that moment that that contract is brought to an end.
Out of the 5 factors, mistake is the only one that makes the contract void, whereas the other 4 if they
are proved and sa)sfied, they make the contract voidable.
The disKncKon between void and voidable is very relevant in some instances:
 Introduc)on to Common Law

• Eg. I agree to sell you a product, and then you sell that product to a third party. There are 2
transfers of )tle. If I claim later against you based on any of this vices in the forma)on of
consent, if the contract is void or voidable will have very direct impact on my ability to claim
from that third party:
- Void: Our contract never existed, our transfer of )tle was never a lawful transfer of )tle,
which means that the later transfer of )tle to a third party also lacked grounds to be a
valid one.
- Voidable: The first transfer of contract was valid (the contract produced effects), and the
second transfer of )tle was equally valid because it Took place before I claimed against you
and voided the contract.
This is important because very onen in those change of transac)ons what I really want is my object
back, and what happens in many cases is that maybe that person in the middle is insolvent or unable
to be located or whatever, so what I usually do is bring a claim directly against the third party.
But I don’t do it in contract, I bring a claim in tort (non-contractual rela)onships), because I don’t
have a contract with the third party. And what I say in that non-contractual claim is: “Because my
contract with B was void to start with, I never transfered valid )tle, so then B was never able to
transfer )tle to you third party either, and for that reason you are not the legi)mate owner of that
good, please give it back to me” → I use a contractual argument in the context of a non-contractual
claim.
Here the dis)nc)on between void and voidable is crucial: If it’s void I’ll get the good back, whereas if
it’s voidable I won’t be able to get my good back.

(a) INCAPACITY
English law in general allows par)es to enter into contracts, but it provides for some limitaKons to
the ability to contract. These concern:
i. Public authoriKes and the Crown.
ii. CorporaKons acKng ultra vires and unincorporated corporaKons → Companies might not be
able to enter into contracts when they are opera)ng outside of the facili)es granted by the
law (ultra vires).
iii. Minors or infants → Moved from 21 to 18 in 1970.
In general, a contract concluded by a minor is VOIDABLE (it can be voided) at the request of
the minor and unenforceable against the minor unless ra)fied within a reasonable )me aner
majority (the minor can only be bound by it if he confirms the contract).
• Except contracts for necessaries (Sec)on 3 SGA 1979).
iv. Persons lacking mental capacity (Mental capacity Act 2005) & drunken persons.
• The examina)on of capacity is made on a case by case basis, meaning that a person, in
general, is assumed to have capacity unless it is proved otherwise.
• Incapacity is not found in general but on a case by case basis (ie. The inability to make a
decision in rela)on to a concrete maeer). The Court will look at different factors, like was
the person UNABLE TO:
 Introduc)on to Common Law

i. Understand the informa)on relevant to the decision

ii. Retain that informa)on
iii. Use or weight that informa)on as part of the process to make a decision
iv. Communicate his decision
A contract concluded by a person lacking mental capacity or a drunken person is VOIDABLE
and is not binding on that person IF it can be shown that at the )me of making the contract
the other party was aware of, or ought to have known about the incapacity.

(b) MISTAKE
DEFINITION → “A situa)on in which one or both of the par)es to a contract enter into it under some
misapprehension or misunderstanding but would not have done so had they known the true
posi)on”.
In general, a contract entered under mistake is VOID ab ini)o → The contract never existed, it didn’t
produce any effects.
But because this outcome is so radical, it is only accepted in a very limited number of circumstances
→ English law adopts a very narrow aproach to mistake compared to many European legal Systems.

3 TYPES OF MISTAKE
Mistake can refer to:
a. The terms of the contract → What the contract is about.
b. The iden)ty of the other contrac)ng person → Who am I contrac)ng with.
c. The object or subject maeer of the contract → The element that cons)tutes the maeer upon
which we are contrac)ng.

MISTAKE AS TO THE TERMS OF THE CONTRACT:

a. Offer and acceptance not ad idem: They are not talking about the same things. Even though
both par)es are ac)ng genuine, well inten)oned, not negligent mistake, there’s s)ll a mistake
→ The contract is VOID.
↳ Raffles v Wichelhaus. The par)es were talking about the lease of a ship called The
Alexandros. The only problem was that one party was talking about one ship called the
Alexandros which was very close to where they needed that vessel, whereas the other
party was talking about a vessel that was one month sailing distance away, and therefore
was of no use to the party that needed the boat.
Both of them were talking on complete good faith with diligence, because they both had
legi)mate grounds to believe that The Alexandros was de vessel that they were thinking
about. The Court concluded in this case that there was no valid contract because both
par)es were not ad idem.
 Introduc)on to Common Law

b. A party is not bound to disclose all the facts and circumstances which might affect the
bargain (caveat emptor) but is not allowed to snap up the other party’s mistake (Smith v
Hughes).
- Eg. I sell you my laptop for 1.000€, and when you get home you realise that the screen is
cracked. The fact that I did not disclose that my screen was cracked, even though you had
the possibility to inspect the laptop before you bought it, means that I can not be held
liable for it; you cannot claim mistake (you cannot say “I thought the laptop was in
working condi)on”). Well you had the possibility to inspect the good, so I don’t have the
duty to disclose all those facts and circumstances which you could have checked.
- Excep)on: If I’m aware that you are mistaken and I’m abusing that situa)on of mistake
that you have, in those cases you can claim mistake. But that’s because in these cases
there’s an addi)onal element of almost bad faith on my side → It’s not that I’m not
disclosing facts (which is fine in general), it’s the fact that I know that you are wrong, and
I voluntarily omit those facts and circumstances to avoid you correc)ng the mistake. In
those cases you can claim valid mistake and the contract can be held void.
c. When we are dealing with wrigen contracts (it is reflected in a document), the ability to
claim mistake as to the terms of the contract, that is “oh I didn’t know that’s what I signed” is
very difficult to do. Why? Because in these cases the law expects that you were able to check
what the contract actually says, so the possibility to claim that type of mistake (non est
factum) is very limited. 2 REQUIREMENTS (both need to be sa)sfied):
ii. The contract contains an essen)ally different transac)on in substance → Eg. You thought
you were buying a house and actually the document is about the lease of a horse.
iii. There is no negligence of the party signing the contract (Saunders v Anglia Building
Society) → That’s very difficult to prove, because if there’s something so substan)ally
different in the contract you should have realised.
↳ The only cases were it has been accepted is when the person claiming mistake is
under some level of incapacity (they were not able to see, they were very old and
they had Limited ability to understand, they were unable to read).

MISTAKE AS TO THE IDENTITY OF THE OTHER CONTRACTING PARTY:

Mistake as to iden)ty makes the contract VOID, though it is very difficult to prove.
(a) The mistake must concern the idenKty of the other party iden)fied in the contract: Eg. A
contracts with B thinking that B is in fact C (Shogun Finance v Hudson) [this applied to a fraud
in a wrieen contract].
↳ I need to prove that B (the person I thought I was contac)ng with), is also a real person. In
these cases the law says, OK because they are two poten)ally contrac)ng par)es, you
have maybe some grounds to be confused. Mistake is accepted.
(b) It is insufficient if the mistake concerns an agribute of the party (Whi\aker v Campbell) and
if the party iden)fied in the correspondence is non-existent (King’s Norton Metal v Edridge).
↳ When my mistakes concerns either an aeribute of the party I’m contrac)ng with or the
fact that I thought I was contac)ng with a person that is non-existent (fic))ous), then in
those cases I cannot claim mistake.
 Introduc)on to Common Law

Eg. I contract with B thinking that he is very rich and wealthy, but in fact B is not, then that
mistake as to the aeribute of the party is not a reason to claim mistake and the contract void.
Whereas if I thought that B was someone who in fact does not exist, then I cannot claim
mistake as to iden)ty.
When the error in which I am has been caused by the other party, as the other party has put
themselves forward as someone else or someone with a different aeribute, although I won’t be able
to claim mistake, I can claim something different → MisrepresentaKon (we’ll see it later).
Mistake as to idenKty does not operate in general in contracts concluded face-to-face (Lewis v
Averay and Pillips v Brook): In these cases each party is assumed to have the inten)on to contract
with the person physically present [a contract over the phone or videoconference is analogous to a
face-to-face verbal contract].
• Why? Because in those cases the law thinks well you had the person in front of you, so we
assume that you wanted to contract with exactly the person that you had in front of you. You
were able to ask ques)ons, to check the iden)ty, etc. if you didn’t, bad luck, but you cannot
claim mistake.

MISTAKE AS TO THE SUBJECT MATTER OF THE CONTRACT:

a. Unilateral mistakes as to the subject maeer do NOT render the contract void → The mistake
that only one party cannot be a ground for mistake.
b. Common mistakes as to the subject maeer may render the contract VOID →
REQUIREMENTS:
i. Mistakes as to the existence of the subject maeer: VOID (Couturier v Has<e) → Par)es
concluded a contract about the lease of a balcony so they could see the parade for the
corona)on ceremony of the King in England. The par)es concluded the lease of the
balcony even though didn’t know that the corona)on was cancelled. Because of that
common mistake as to the very existence of the subject maeer that mo)vated the
contract, the party claimed the contract to be void and the Court agreed to it.
ii. Mistakes as to the “essence” (essen)al difference) of the subject maeer which renders
the contract “impossible to perform” (Bell v Lever Brothers and Great Peace Shipping Ltd
v Tsavliris (Interna<onal) Ltd) → Strict
- Caveat emptor (the risk is on the buyer) also applies to these cases.
iii. Mistakes as to a quality of the subject maeer: NOT VOID (Leaf v Na<onal Galleries). The
case of sleepers.

↳ Eg. One person is selling in a pubic auc)on a pain)ng by Picasso. And they think it is
a pain)ng by Picasso and someone pays 3M€ for it. But it turns out that 3 months
later through some authen)city checks it is demonstrated that the pain)ng was not
by Picasso, it was simply by a Picasso’s pupil, and as a consequence of that the value
of the pain)ng is not 3M€ but actually much lower. Can we claim that the contract
is void? Under English law, if the mistake concerns the quality or the aeribute of the
subject maeer, that’s not a valid mistake to render a contact void. Whereas if the
mistake concerns the essence of the subject maeer, you can claim the contract to
be void.
 Introduc)on to Common Law

↳ Leaf v Na)onal Galleries. Esto no lo he entendido pero vamos que no creo que sea
importante.
[Since Great Peace Shiping LTD the Court’s equitable jurisdic)on to declare a
contract voidable for common mistake has been denied].
(c) MISREPRESENTATION
DEFINITION → “A false representa)on of fact or law made by one party to the other party before or
at the )me of making the contract and which induces that party to enter into the contract”.
• I’m inducing by my false statement to you, your decision to enter into the contract → You can
claim that you have been misrepresented and that therefore the contract should be voidable.
Misrepresenta)on is regulated by both Common Law and legislaKon (the Misrepresenta)on Act
1967) → Depending on wether you base your claim of misrepresenta)on in Common Law or on the
Act of 1967, you’ll be able to get different remedies.
Misrepresenta)on renders the contract VOIDABLE, not void.

Features of an OPERATIVE MISREPRESENTATION:

a. PosiKve statement or representaKon by word or conduct (Aprilia v Spice Girls) → The Spice
Girls agreed to record a advert for Aprilia (a brand that makes motorbikes). What the Spice
Girls did not disclose when the decided to get 5M€ to record that advert, was that in the
following month they were going to separate. Aprilia was not aware of that, so they recorded
the advert. So when the advert was about to go live, there was an announcement by the
Spice Girls to the world that they had decided to separate. Aprilia was not happy with it, so
they brought a claim against the Spice Girls for misrepresenta)on, they said “By your conduct
to agree to film that advert, you were represen)ng that you were going to con)nue to be a
band at least for the dura)on of the advert”. As a consequence of that the Court concluded
that indeed there had been a misrepresenta)on and therefore the contract could be voided.
b. Statement of fact, not opinion (Bisset v Wilkinson) → When someone makes a statement
which is not actually a fact, it’s something of their own personal take (Eg. I think that you
should buy these trousers because next season they are going to be so fashionable. Next
season arrives and clearly they are not on fashion, and you want to claim misrepresenta)on
against the person who sold you the trousers). Well that statement was a predic)on based on
opinion, and therefore you cannot claim misrepresenta)on because it was not a statement of
fact.
Excep)on: When the vendor is in the best posi)on to know the true condi)ons of the item
and has special knowledge thereof what appears to be an opinion may be deemed a
misstatement of fact: (Smith v Land & House Property Corp) → In these cases there is a
legi)mate ground that you’ll believe or give some credibility to a statement of opinion given
by an expert on the field. So in those cases you indeed have the right to claim
misrepresenta)on, because it was not just an opinion, it was an opinion by an expert who
knew the facts.
• Eg. I’m a financial advisor and I recommend someone to buy shares of Company Z
because I think that next week they’ll increase value. It doesn’t happen and actually the
value of the shares crashes. You would be able to claim misrepresenta)on against me
 Introduc)on to Common Law

even though what I gave you and mo)vated your decision to get into the contract was
just an opinion.
An opinion made by an expert in her area is likely to be misrepresenta)on if it is made
negligently and with the inten)on that it be relied upon (Esso Petroleum Co Ltd v Mardon).
c. Must induce the party into the contract (relevant reason, not only the reason → Edgington v
Fitzmaurice). Without the inducement element you cannot claim misrepresenta)on.

TYPES OF MISREPRESENTATION → Depending on the severity of the falsehood:

a. Fraudulent → Inten)onal or reckless (derry v Peek). The essen)al ingredient for fraud is an
absence of belief in the truth of the statement made. They don’t care wether what they are
saying is true or false, they just say it because it’s in their personal interest.
b. Negligent → Belief in the truth of the statement made in honestly held but is unreasonable.
The person believes that what he is saying is true, however he doesn’t have grounds to
believe that that is true. He should have known beeer, he should have checked with
diligence. And if he had checked with diligence he would have known that that was a false
statement.
c. Innocent → A party believed and had grounds to believe that that was a true statement, but
in fact it was false.

REMEDIES:
Remedies might be influened depending on the type of misrepresenta)on and whether the claim is
brought in Common Law (based on cases in the past) or in Statute (MRA 1967).
a. Fraudulent → RESCISSION (the contract is voidable → Aim: Pre-contractual status) +
DAMAGES (tort of deceit)
a. Need to prove “fraud” → Prove that the other party had bad faith, that he was being
completely reckless about wether the statement was true or false.
b. Measure of damages → They cover everything that you have suffered, Bothe
foreseeable and unforeseeable (Aim: To put the misrepresentee into the posi)on it
would have been in had it not pentered into the contract).
• Eg. A taxi company says I’ll pick you up and take you to the airport, we are the
most on )me company and we’ll be able to take you to the airport on )me to
get your flight to Brazil. They know however that they are not going to be able
to get you there on )me because they have two other bookings at the same
)me and you’ll be late to the airport, but they are doing that because they want
the money. You are late and you lose that flight, and because of a very
important mee)ng that you had in Brazil but couldn’t aeend because you lost
the flight you lose a 2M€ deal. Evidently losing the 2M€ deal was an
unforeseeable lost from the Point of View of the taxi company. S)ll the law says
that you’ll be compensated for everything.
The right to rescind might be lost if: Affirma)on of the contract, lapse of )me, rights
of third par)es or inability to make res)tu)ons (això no ho ha explicat osea nose).
 Introduc)on to Common Law

b. Negligent → RESCISSION (but under s 2(2) MRA the Court can order damages in lieu of
rescission) + DAMAGES. 2 avenues for damages:
a. In common law (tort of negligence):
a. Need to prove duty of care (special relaKonship) + Breach thereof → You
have to prove that the party owed a duty of cared to you. That is that they
had a special rela)onship towards you and they owe you a level of diligence.
And they have breached that level of diligence, they have acted negligently.
b. Measure of damages: FORESEEABLE → If yo prove that duty of care and the
breach thereof, you are en)tled to damage. But only foreseeable damages,
predictable damages.
b. S 2(1) MRA: Easier and advantageous:
a. No need to prove duty of care + Breach thereof; only false statement → You
need to prove that the party made a false statement to you.
b. Shir of the burden of proof: Misrepresentor must disprove negligence →
The other party has to prove that they had grounds to Believe that what they
were saying was true, they have to prove that they were not being negligent
when they told you that false statement.
c. Measure of damages: Foreseeable and unforeseeable (= Fraud MR) → If
they don’t sa)sfy the burden of proof, then the damages that I as a vic)m am
en)tled to, is both foreseeable and unforeseeable damages.

↳ Conclusión: Obienes lo mismo que con la fraudulent misrepresenta)on y más que

con la opción del Common Law. Qué pasa? Que en la prac)ca nadie usa ni el
fraudulent MR ni el del Common Law, porque con el S2(1) MRA puedes obtener lo
mismo con un proceso más facil. Be clever my friends.
c. Innocent → RESCISSION (but under s 2(2) MRA as per previous slide) + INDEMNITY (NO
damages).
↳ Indemnity is NOT “indemnización”, it’s only an ability to claim for expenses that you have
entered into in prepara)on of the contract, but NOT a compensa)on for damages or
losses.

(d) DURESS
RULE → “A contract that has been induced by unlawful or other illegi)mate forms of pressure or
in)ma)on is voidable on the grounds of duress”.
• It’s when someone exercises a level of illegi)mate pressure towards you and you form your
inten)on to enter into the contract because of that illegi)mate pressure.
The key element is not absence of consent, but the EXISTENCE OF A VICE (illegiKmate pressure) in
the formaKon of that consent.
Duress requires ILLEGITIMATE PRESSURE. Legi)mate pressure in commercial dealings is allowed.
Illegi)mate pressure can be:
 Introduc)on to Common Law

• Unlawful (breach of contract, tort or crime) → Eg. If you don’t renego)ate this contract in
beeer terms for me, I’ll breach our contract, or i’ll kill you → The contract is VOID.
• Lawful (“morally or socially unacceptable” (CTN Cash &Carry)) → You exercise a pressure that in
principle you are allowed to exercise, however you do it in a certain way that it’s morally or
socially unacceptable.
- Eg. You have an orange juice shop, and you are higlly dependant on your oranges
provider. If your provided of oranges says “I won’t enter into any contract for the
provision of oranges for you unless we renego)ate the current contract and you pay me
the double amount of money”. You are so dependant on your provider that you are
going to accept doubling the price of the oranges for the current contract because you
don’t want to lose the ability to enter into future contracts with him. The decision for
them to enter into future contracts with you it’s a lawful conduct (no one is forced to
enter into new contracts with you in the future), but using that as a mechanism of
pressure to double the amount of the price payable in the current contract knowing
that you are highly dependent on them, is a type of lawful pressure which is deemed
illegi)mate. That’s called ECONOMIC DURESS.
So pressure can be: On the person, on the object or economic duress.
Result: VOIDABLE from the moment pressure has ceased → The vic)m can claim the Court to declare
the contract void from that moment.

(e) UNDUE INFLUENCE

DEFINITION → A pressure which is much less direct than in duress, but which is deemed unduly
exercised over the vic)m because of the rela)onship that exists between them.
• It’s a situa)on where a party exercises or uses the ability to influence because they have a trust
rela)onship with you, to induce you to enter into a contract that is not in your economic
interests.
• There’s a trust rela)onship between you and I, which means that because of that trust I can
influence you. And using that capacity to influence I abuse it or I unduly use it, and I suggest
that you enter into a contract which calls for an explana)on because it doesn’t make financial
sense.

TYPES OF UNDUE INFLUENCE:

• Actual undue influence: Cases of dominance
• Pressumed undue influence: 1) Trust rela)onship, 2) Influence, 3)Abuse/Undue
If 1 exists → 2 is presumed
If the transac)on “calls for an explana)on” → 3 is presumed.
Shin of the burden of proof to the allegedly influencing party: Royal Bank of Scotland Plc v
Etridge (no. 2).
• Remedy: The contract is VOIDABLE →Rescission.