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Contract law

20 important questions on Contract law

Hughes v Metropolitan Railway (1876-77) - Promissory estoppel

Landlord gave tenant 6mths to carry out repairs failure would result in forfeiture of lease. Landlord and tenant entered into negotiations for tenant to purchase the property. Tenant had not carried out the repairs because wanted to purchase & repairs not essential to his use of property. Last minute negotiations broke down, landlord gave the tenant notice to quit for failure to carry out the repairs, time limit suspended during the negotiations.

What's a mutual mistake?

Where the parties are at cross purposes

Three categories of common mistake

1.Res extincta - the subject matter of the contract no longer exists - contract void
2. Res sua - where the goods already belong to the purchaser - void
3. Mistake as to quality - only available in very narrow limits
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Scott v Coulson [1903] - res extincta - mistake

At the time of entering a contract for life insurance both parties believed the person whose life was to be insured was living. When in fact he was dead. Contract was void

Cooper v Phibbs (1867) - res sua - mistake

nephew leased a fishery from his uncle, uncle died. The lease needed to be renewed, nephew renewed the lease from his aunt. It later transpired that the uncle had given the nephew a life tenancy in his will. The lease was held to be voidable, nephew was already had a beneficial ownership right in the fishery.

Inter absentes - mistake

Parties not physically present when the contract is made, eg through the post, telephone or over the internet, the courts will only make a finding of mistake if the claimant can demonstrate an identifiable person or business with whom they intended to deal with.

Inter praesentes - mistake

Where the parties contract in a face to face transaction the law raises a presumption that the parties intend to deal with the person in front of them

Incorporation of unfair terms - exemption clauses

General rule, term must be brought to the attention of the contracting party before or at the time the contract was made. If the term was not brought to their attention it cannot be said that they had accepted the term.

Olley v Marlborough Court [1949] - exemption clauses

Claimant booked into a hotel. The contract was made at the reception desk where there was no mention of an exclusion clause. In the hotel room on the back of the door a notice sought to exclude liability of the hotel proprietors for any lost, stolen or damaged property. The claimant had her fur coat stolen. notice was ineffective, not part of contract

Reasonable notice of unfair terms - exemption clauses

A party seeking to rely on an unfair term must demonstrate that they gave reasonable notice. ie they took reasonable steps to bring the term to the attention of a reasonable person

Thompson v London, Midland and Scotland Railway Co [1930] - exemption clauses

Claimant was injured whilst stepping off a train. The railway company displayed notices on platforms excluding liability personal injury and damage to property due to negligence. The tickets also stated they were subject to terms and conditions displayed on the platform. The claimant could not read the signs. argued the exclusion clause was not incorporated in contract as the railway company had not brought the clause to her attention at the time the contract was made. clause was incorporated

Red hand rule - exemption clauses

the more unusual a term, the greater the degree of notice required to incorporate it

Death - termination of offers

the death of either party may terminate an offer

Revocation - terminations of offers

when there's a counter offer, when a 2nd offer is made

Presumed undue influence

No automatic presumption arising as a matter of law. Must be established that there is a relationship that one party placed their trust and confidence in the other to safeguard their interest.

Damages - remedies in contract law

Available for breach of contract. An award of money to compensate the innocent party. Purpose of damages is to place the injured party in the position they would have been in had the contract been performed.

Harvey v Facey [1893] AC 552  Privy Council - offer

Telegram; "how much for farm?"; "lowest price £900"; HELD (Privy Council): merely responding to request for info - NOT an offer.

Condition in relation to breaches

condition - a major term of the contract which goes to the root of the contract.

Warranty in relation to breaches

Warranties are minor terms of a contract which are not central to the existence of the contract. If a warranty is breached the innocent party may claim damages but can not end the contract

innominate in relation of breaches

Can be minor, could have a serious effect & cause contract to end, allows innocent party to rescind contract &/or obtain damages

The question on the page originate from the summary of the following study material:

Contract law

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