Case 1

Nash v Inman was a 1908 court case heard in the King's Bench. It concerned a minor's capacity to
make contracts under English law.

Introduction of the case[edit]

Nash was a tailor working in Saville Row. Inman was a minor studying at Cambridge University.
Nash sold some cloth on credit to Inman for what was approximately £145. Nash sued to recover the
money, and Inman pleaded infancy.
After hearing evidence, the trial judge held that Inman was actually a minor and that he already had
enough clothing at the time of sale. For this reason, the trial judge found that there was no evidence
that the clothing could possibly be considered to be in the class of necessaries, and directed the jury
to enter judgment in favour of Inman. Nash appealed, claiming that the judge had decided the issues
of fact, instead of letting the jury decide.
Each of the three members of the Court agreed that the trial judge was correct in ordering judgment
to be entered for the defendant, but each gave a separate opinion.

Court King's Bench

Decided 5 March 1908

Citation(s) [1908] 2 KB 1

Case history

Prior action(s) Trial before Ridley J., who found in favour

of the defendant

Subsequent None

action(s)

Mohori Bibee vs. Dharmodas Ghose

1. The respondent, Dharmodas Ghose, a minor, had mortgaged his

property in favor of the moneylender, Brahmo Dutt for securing a loan
amounting to INR 20,000/-.
2. Mr. Brahmo Dutt had authorized Kedar Nath to enter into the
transaction through a power of attorney. Mr. Kedar Nath was informed
of the fact that Dharmodas Ghose was a minor through a letter sent by
his mother.
 3. However, the deed of mortgage contained a declaration that
Dharmodas Ghose was of the age of majority.
4. The respondent’s mother brought a suit on the ground that the
mortgage executed by his son is void on the ground that her son is a
minor.
5. The relief sought by the respondent was granted and an appeal was
preferred by the executors of Brahmo Dutt before the Calcutta high
court. The same was dismissed.
6. An appeal was then made to the Privy council. The Privy council held
that-
a.  A contract with a minor is void-ab-initio.
b. Sec.7 of the Transfer of Property Act, 1882 states that a
person competent to contract is competent to transfer a
property.
c. Hence, the mortgage executed by the respondent is void.

However, if a minor enters into a contract and performs his part of obligations,
the other party can be compelled to perform and fulfill its obligations, and, in
such instances, the contract becomes legally enforceable.

https://blog.ipleaders.in/capacity-contract-ica-1872/

Suraj Narain Dube vs. Sukhu Ahir

1. Suraj Narain lent money to Sukhu Ahir who was a minor. The minor
executed a promissory note against the money borrowed.
2. After four years, when the minor attained majority, he and his mother
executed a second promissory note in favour of Suraj Narain in respect
of the original loan plus the interest accumulated over the years.
3. The court held-
1. The first agreement entered into by the parties is void as a
minor is incompetent to contract. The minor had no liability to
pay under this agreement. However, the minor made a
 promise and provided the promissory note, amounting to
consideration.
2. A minor has no power to ratify the contracts entered into by
him upon attaining the age of majority.
3. In the second agreement executed by the parties, there was
no consideration from the Plaintiff. The original advance was
no consideration for a second agreement. The second
agreement is void due to want of consideration.

In certain instances, a contract entered into by the minor or by the minor’s

guardian for his benefit is valid in the eyes of law-

1. A contract for marriage entered into by a minor/his guardian.

2. A partnership contract entered into with a minor admitting him to the
benefits of a partnership. However, the minor cannot be held
personally liable for the losses incurred.
3. A contract relating to the minor’s property entered into by his guardian
if it is for the benefit of the minor.
4. A contract of apprenticeship with a minor.
5. A contract supplying the minors with goods and services necessary for
life.

Websites such as YouTube expressly mention in their terms and conditions that
any minor while using its services represents that he has the permission of his
parent/ guardian to do so. Parents and guardians are held liable for the child’s
activity on such websites.

Intention to create a legal relationship.case 2

https://www.jstor.org/stable/4505359?seq=1

Masters v Cameron

(1954) 91 CLR 353, High Court

An agreement was reached to sell a property. This agreement is made subject to the

preparation of a formal contract of sale which shall be acceptable to my solicitors on
the above terms and conditions. On the same day a deposit was paid to the vendor's
agent. When the purchaser refused to proceed with the sale, both parties claimed the
deposit.
The purchaser said there was no contract and that the money paid should be returned.
The vendor said there was a contract and the failure to proceed meant that the money
was forfeited.
At trial, it was held there was a contract.
On appeal it was said there were 3 possibilities:

1. The parties have finalised their agreement and intend to be bound straight away -
just want to be more precise. An assent without power to vary the terms indicates a
completed contract.

2. They have agreed all the terms, but have made performance of one or more terms
conditional upon the execution of a formal document.

3. The parties do not want to be bound until they have completed the formal
document. Here, the parties may wish to retain the right to withdraw, if agreement
cannot be reached on outstanding matters.

In the first two cases we have a binding contract. In the third case we merely have a
record of the terms which are intended to form the basis of a contract to be finalised.
If subject to contract means there are terms to be agreed, or conditions to be fulfilled,
then there is no contract until those things have been done. When not expressly stated
to be so, then it is a matter of construction. We conclude that no contract has been
formed here.

Was the payment anticipatory, to become a deposit under the contract? Was it
intended to be an interim guarantee that the purchaser would enter a reasonable
contract? We conclude that the payment was merely anticipatory.

Edwards v Skyways Ltd [1964] 1 WLR 349 - Queen's Bench Division

The Company and Association reps met and agreed that payment would be made of
an ex gratia amount with regard to the pension payment, and a refund of
contributions. The decision was published in the newsletter. One redundant pilot was
told what his payment and refund would be. He received the refund, but then the
company rescinded its decision to make the ex gratia payments. When he sought to
recover it, he was told that there was no obligation to pay it.

The Co says the promise and agreement had no legal effect because there was no
intention to enter legal relations because ex gratia means not binding and the
background knowledge of the parties understood it as such. Ex gratia may mean
without admission of liability, or without there being any pre-existing legal right (may
be to avoid setting an awkward precedent). Settlements are often expressed in this
way. But this does not mean that such agreements are legally unenforceable.

It was understood at the meeting that if the payments were made without legal
obligation on the part of the company, then it would not be taxable. So the agreement,
it was argued, was intended to exclude legal sanctions. The evidence was not
sufficient to establish that this was the intention of all present. Judgment for the
plaintiff

See also Air Great Lakes

http://netk.net.au/Contract/05Intention.asp
Case 3

Boots v Pharmaceutical Society of Great Britain 1953

Facts Boots Chemists had changed the way their shops worked. Shoppers could choose medicine
off the shelves in the shop and then pay for them at the till. (Before then, all medicines were
stored behind a counter and an assistant had to get what was requested.)

The Pharmaceutical Society of Great Britain argued that under the Pharmacy and Poisons Act
1933 a pharmacist needed to supervise sales. The Society argued that displays of goods were an
“offer” and when a shopper selected and put the drugs into their shopping basket, that was an
“acceptance”. Therefore because no pharmacist had supervised the transaction at this point,
Boots was in breach of the Act.

Judgment There was no binding contract. They held that the display of goods was an invitation
to treat. The customer made an offer by placing the goods into the basket, and this offer could be
either accepted or rejected by the pharmacist at the cash desk. Therefore Boots did not breach the
act.

Partridge v Critendon 1964

Facts Partridge placed an advert in the magazine “Cage and Aviary Birds”, under “Classified
Advertisements”, which contained the words Quality British Bramblefinch cocks and hens 25
shillings each.

He was prosecuted for offering for sale a live wild bird against s. 6(1) of the Protection of Birds
Act 1954.

Judgment The court interpreted the words ‘offer for sale’ in the same way as the case Fisher v
Bell. An advert is the same as goods in a shop window and is an invitation to treat, not an offer.

Now do the test

https://contractlawworthing.wordpress.com/2017/05/25/cases-on-invitation-to-treat/
Case 4

Example

In the late 1900s, the owner of a significant amount of stock went on a three-month drinking binge. A local
bank that was aware of his consistent inebriation hired a third party to contract with him. The third party
succeeded in getting him to sell his stock for about 1.5% of the worth of its total value. When the duped seller
ended his binge a month later, he learned that the third party had sold the stock to the local bank behind the
deal. He then sued the third party. Ultimately, the case was decided by the U.S. Supreme Court, which found
that the agreement was void because both the bank and the third party knew that the plaintiff was unaware of
what he was doing when he entered the contract. The bank was required to return the shares to the plaintiff,
minus the 1.5% amount of real value that he had been paid for the shares.

https://openstax.org/books/business-law-i-essentials/pages/7-2-capacity-and-legality

Lucy v. Zehmer (1954)
Back in December of 1952, the Lucy's and Zehmer's enjoyed dinner and a few drinks when the
conversation turned to the sale of the Ferguson Farm. Zehmer propositioned Lucy to purchase it for
the sum of $50,000. Zehmer didn't really want to sell his farm. What he wanted was for Lucy to admit
that he did not have the $50,000 needed to make the purchase. In other words, it was a one-sided
joke, probably fueled by alcohol, on the part of Zehmer.

ucy v. Zehmer - 196 Va. 493, 84 S.E.2d 516 (1954)

RULE:

The mental assent of the parties is not requisite for the formation of a contract. If the
words or other acts of one of the parties have but one reasonable meaning, his
undisclosed intention is immaterial except when an unreasonable meaning which he
attaches to his manifestations is known to the other party.

FACTS:

Defendant husband wrote and signed a contract to sell his farm to plaintiffs and
persuaded defendant wife to sign by telling her the contract was a joke on plaintiffs.
When plaintiffs attempted to finalize sale, defendants attempted to deny contract on the
grounds that defendant husband was drunk when making the contract and the contract
was a joke on plaintiffs. Plaintiffs sued for specific performance. The trial court found for
defendants. 

ISSUE:

Was there a valid contract?

ANSWER:

Yes.

CONCLUSION:

The Court held that the Defendants' true intent in agreeing to sell their farm was not
determinative so long as their words and actions warranted a reasonable person's belief
that a contract was intended. Under the objective theory of contracts, plaintiffs
reasonably believed the sale contract was a serious business transaction. The evidence
suggested defendant husband was not too drunk to know what he was doing.

ucy v. Zehmer - 196 Va. 493, 84 S.E.2d 516 (1954)

RULE:

The mental assent of the parties is not requisite for the formation of a contract. If the
words or other acts of one of the parties have but one reasonable meaning, his
undisclosed intention is immaterial except when an unreasonable meaning which he
attaches to his manifestations is known to the other party.

FACTS:

Defendant husband wrote and signed a contract to sell his farm to plaintiffs and
persuaded defendant wife to sign by telling her the contract was a joke on plaintiffs.
When plaintiffs attempted to finalize sale, defendants attempted to deny contract on the
grounds that defendant husband was drunk when making the contract and the contract
was a joke on plaintiffs. Plaintiffs sued for specific performance. The trial court found for
defendants. 
ISSUE:

Was there a valid contract?

ANSWER:

Yes.

CONCLUSION:

The Court held that the Defendants' true intent in agreeing to sell their farm was not
determinative so long as their words and actions warranted a reasonable person's belief
that a contract was intended. Under the objective theory of contracts, plaintiffs
reasonably believed the sale contract was a serious business transaction. The evidence
suggested defendant husband was not too drunk to know what he was doing.

https://www.lexisnexis.com/community/casebrief/p/casebrief-lucy-v-zehmer