Business Law

Offer
Specific Terms
- SCAMMEL V. OUSTON
- Scammel to supply van to Ouston
- Misunderstanding regarding payment terms
- No contract formed without specific terms
Statement of Intention
- RE FICKUS
- Man said to her daughter’s fiancé that he will benefit from his will if he marries his
daughter
- Didn’t give any money and was sued for his estate
- Court ruled that it was only a statement of intention by the father in law and not a legally
binding offer
Supply of Information
- HARVEY V. FACEY
- “Will you sell us Bumper Hall Pen”
- “Telegraph Lowest Cash Price”
- “Lowest price for Bumper Hall Pen £900”
- “We agree to buy Bumper Hall Pen for £900”
- This was not a valid offer
Invitation to Treat
- FISHER V. BELL
- Defendant argued that a flick knife with a price tag was not an offer but an invitation to
treat
- Not considered as an offer
Advertisement in Public
- PARTRIDGE V. CRITTENDEN
- Defendant charged for offering to sell wild birds after he advertised them for 25 shillings
each
- Selling wild birds was illegal
- Court ruled that an advertisement in public is a mere invitation to treat and not an offer
Unilateral Contract
- CARLIL V. CARBOLIC SMOKE BALL CO. LTD.
- Advertised in public that their drug would cure flu. If it fails, they were entitled to £100
- Opened up a bank account to pay people if they claimed money
 - People tried the drug and still had the flu
- When they tried to claim the money, Carbolic Smoke Ball Co. refused to pay
- Court ruled that it would appeal to a reasonable man as an offer and hence it was not an
invitation to treat but an offer
Counter Offer
- HYDE V. WRENCH
- Wrench offered to sell his farm for £1,200 but was declined by Hyde
- Wrench offered farm again at £1,000
- Hyde countered the offer with £950
- Wrench refused
- Hyde agreed to buy at £1,000 as it was previously offered to him
- Wrench refused
- Hyde sued Wrench
- Court ruled that a counter offer becomes the original offer and the last counter offer was
£950 by Hyde which Wrench was legally allowed to reject
Offer Revoked Before Acceptance
- ROUTLEDGE V. GRANT
- Grant offered to buy house from Routledge
- Offer was supposed to be open for 6 weeks
- Grant changed his mind of purchasing before 6 weeks ended
- Routledge sued Grant
- Court held that Grant was not legally obliged to keep offer open for 6 weeks
Acceptance
Acceptance Must Correspond with Terms of Offer
- NEALE V. MERETT
- One party offered to sell property for £280
- Offeree accepted and sent £80 while agreeing to pay the rest later
- Court ruled that the acceptance was ineffective as terms of offer did not mirror terms of
acceptance
Silence is not Acceptance
- FELTHOUSE V. BINDLEY
- Uncle had a conversation with his nephew about buying nephew’s horse
- Uncle replied by offering to buy and will consider it as acceptance as if the nephew fails
to respond
- Nephew did not respond as he was busy at auctions
- Uncle ended up selling nephew’s horse to someone by accident
- Court ruled that nephew’s silence did not amount to acceptance
Consideration
Past Consideration is not Good Consideration
- RE MCARDLE
- 5 children were entitled to mother’s house after her death
- Son & wife living their made costly improvements to house while mother was alive
- After the work was done, other 4 children signed a document agreeing to pay for it
- After mother died, the promise was not fulfilled, wife sued
- Court ruled that the work was done before wife asked for payment
- Past consideration is not good consideration so it was unenforceable
Sufficient but not Adequate
- CHAPELL V. NESTLE
- Nestle put a special offer where people could redeem a copy of ‘Rockin Shoes’ for 3
chocolate wrappers
- Record company that produced ‘Rockin Shoes’ demanded royalties from Nestle
- To calculate royalties, nestle had to calculate price of record
- Record company argued price of record should include price of wrappers
- Nestle argued wrappers were worthless to them and were disposed of immediately
- Court held that wrappers were included in the cost of record regardless of the fact that
they held no economic value
Promissory Estoppel
- CENTRAL LONDON PROPERTY TRUST LTD. V. HIGH TREES HOUSE LTD.
- High Trees leased a block of flat from Central London
- Property suffered from falling occupancy rates because of WW2
- Both parties agreed on lowered rent of £1,250 (originally £2,500)
- When occupancy rates started rising again, Central London demanded arrears from High
Trees
- Court ruled that the lowered price only applied for during the war
- Defendants were liable for full rent
Voluntary Promise
- D & C BUILDERS V. REES
- Builders worked on Rees’ shop
- Sought payment for work done but didn’t receive any
- Work continued
- Second bill was issued
- Builders found themselves in a financial crunch, Rees knew
- Rees offered to pay a lowered lump sum amount for full settlement
- Builders agreed fearing they would get nothing if they don’t agree
- Builders later sued Rees for rest of the money due
 - Court ruled in favor of builders and it was found that the agreement was made under
duress and hence invalid
Capacity
Minor
Contracts for necessity
- NASH V. INMAN
- Nash supplied 11 fancy waistcoats to Inman, a minor
- Inman failed to pay for them and Nash sued
- Court ruled that since Inman already had sufficient clothing, the purchase could not
amount to necessities
Beneficial Contracts for Service
- DOYLE V. WHITE CITY STADIUM
- Doyle was an infant boxer in contract with White City Stadium
- He was held bound by a clause in his contract that led to his disqualification and
forfeiture of the prize money

- PROFORM SPORTS MANAGEMENT V. PROACTIVE SPORTS MANAGEMENT

- Wayne Rooney was in agreement with a third party respondent company responsible for
his image rights
- Court held that since Rooney was a minor and this was not a necessity, there was no
enforceable contract

- STEINBERG V. SCALA (LEEDS) LTD.

- Minor bought shares but weren’t fully paid up
- After paying further £250, she wanted the £250 back
- Contract was terminated but she failed to get the money back
- She had not been a total failure of consideration as she received shares
Intentions to Create Legal Relations
Informal Gatherings Raise Doubts
- BLUE V. ASHLEY
- Ashley approached in a pub for business consultation
- In a conversation Ashley told Blue that if the price of his company’s share reached £8, he
could get a £15 million bonus
- Share price exceeded £8
- Blue tried to enforce the agreement
 - Court found it not legally binding after taking into account several factors e.g. informal
setting, under the influence, the tone of conversation etc.
Domestic & Social Agreements
- BALFOUR V. BALFOUR
- Husband promised to pay wife £30 for maintenance monthly
- Failed to comply after marriage ended
- Court held that it was not a legally binding contract because
(1) she provided no consideration for the promise
(2) agreements between husbands and wives are not contracts because both parties do not
intend them to be legally binding

- MERRITT V. MERRITT
- Presumption was Rebutted
- Husband left wife, met later to make arrangements for the future
- Husband agreed to pay £40 to wife monthly, out of which she would pay for mortgage
- House would be transferred to wife’s name from joint ownership after mortgage was paid
off
- Written down and signed
- Husband refused to transfer house later
- Court held that it was a legally enforceable contract as they were no longer living
together so they must have intended the agreement to be legally binding
Commercial Agreements
- EDWARD V. SKYWAYS
- Skyways, in financial difficulties, was making a number of its employees redundant
- It agreed with the British Airline Pilots Association to pay each pilot an ‘ex gratia
payment’ equivalent to the company’s contribution to the pension fund, upon being made
redundant
- Edward opted to leave the company and claimed the payments of his contributions to the
pension fund
- Skyways conceded that there was consideration but no legally enforceable obligation, but
a mere ethical one
- Court held that the agreement took place in business affairs so the presumption is that
there were legal intentions and thus it is a legally binding agreement

- ROSE & FRANK CO. V. CROMPTON BROS

- An American and British company came to agreement
- Written down
- Clause stated that it was not a legally binding agreement but only a honorable pledge
 - Court ruled that since it expressly states that there was no legal interest by both parties,
the agreement was not legally binding
Breach of Contract
Express
- Hochster v. De La Tour
- De La Tour employed Hochster
- Hochster’s services were required on June 1
- On May 11, De La Tour informed Hochster his services were no longer required
- Hochster sued for breach of contract
- Court found that when a contract provides a promise for future conduct, refusal to
perform the agreement, thus renouncing the contract, becomes liable for breach of
contract
- Court also held that Hochster did not have to wait for day of commencement before he
could file a lawsuit
Implied
- OMNIUM D’ENTERPRISES V. SUTHERLAND
- Sutherland agreed to hire a ship to Omnium D’Enterprises but sold it to someone else
before commencement of hire period
- Court held that sale of the ship amounted to a clear repudiation of the contract
- Plaintiff was in his powers to sue for breach of contract
Remoteness of Damages
- HADLEY V. BAXENDALE
- Hadley owned a mill featuring a broken crankshaft
- Hired Baxendale to fix it
- Baxendale returned the fixed crankshaft a week later than agreed
- The mill was out of operation in the meantime
- Hadley sued for the inactivity and loss of profit resulting from the delay
- Baxendale argued that he was not aware that the unexpected delay would cause the mill’s
closure
- Loss of profit failed to pass the test of remoteness
- Court held that as Baxendale had not reasonably foreseen the consequences of delay and
Hadley had not informed him of them either, he was not liable for the lost profits
Measure of damages
- OMAK MARITIME LTD. V. MAMOLA CHALLENGER
- Mamola (defendant) repudiated a charter party even though it was below market price
- Omak (Plaintiff) terminated contract and chartered ship out at higher price
- Plaintiff claimed for damages in regards to preparation of the ship even though they were
mitigated by the higher rate
 - Claim failed, only nominal damages could be awarded
Non-Pecuniary Loss
- Jarvis v. Swan Tours Ltd.
- Jarvis booked a Christmas vacation with Swan Tours Ltd.
- Vacation did not go as planned as many features offered in the brochure did not go ahead
or were not as described
- Jarvis sued for breach of contract and claimed damages for disappointment
- Court ruled that when a contract is entered only for enjoyment and entertainment,
damages may be provided for disappointment, frustration etc. to provide said enjoyment
and entertainment
Non-Repudiatory Breach
Condition
- POUSSARD V. SPIERS AND POND
- Poussard was hired as an opera singer to perform “on or about” the 14th November
- Launch performance subsequently scheduled for 28th November
- Poussard fell ill right before the show, hence failing to show up for the first 3 days
- Spiers hired someone else to perform instead
- When Poussard was well again, she wanted to take her position back but was refused by
Spiers
- Poussard sued for wrongful termination
- Court held that failure to show up for the first 3 days went to the heart of the contract and
Spiers were well within their rights to rescind the contract
Warranty
- BETTINI V. GYE
- Bettini entered in an agreement with Gye to perform opera
- Gye required Bettini to show up 6 days before rehearsal “without fail”
- Bettini arrived 2 days before rehearsal
- Gye declined to have him perform at his opera
- Court held that failure to show up 6 days before rehearsal was a breach of warranty not
condition
- Breach of this warranty did not amount to repudiation of contract
An Innominate Term
- HONG KONG FIR SHIPPING CO LTD. V. KAWASAKI KISEN KAISHA LTD.
- A ship was chartered for 2yrs
- Agreement included a clause that stated the ship would be seaworthy throughout the
period of hire
- Many engine problems arose with the passage of time, engine crew was incompetent
- Defendant treated this as a breach of condition and ended the contract
- Plaintiff filed a lawsuit for wrongful repudiation
- Court held that defendant was liable for wrongful termination
- Court looked at the effects caused by the breach
- 20 weeks out of a 2-year contract period did not substantially deprive the defendants of
whole benefit and therefore they were not entitled to repudiate the contract