Contract Law 1-3:LLB London

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1.

Offer and Acceptance enforcement of promises, what are criteria for a promise to be enforeceable as a contract?: offer and acceptance consideration intent to create legal relation certainty.

2.

offer: definition: offer:an intention of willingness to contract upon certain terms. intention communicated on the understanding that it will becoming binding on acceptance. it is important that nothing remains to be done.

3.

Storer v Manchester city council 1974, CA Gibson v Manchester city council 1979, HL why is there an offer in one case and not the other? An important distinction between the two cases is that in Storer's case there was an agreement as to price, but in Gibson's case there was not. In Gibson's case, important terms still needed to be determined.: Storer v MCC 1974 offering to sell his council house to him at a specific price on certain mortgage terms instructing him to sign and return the enclosed "agreement for sale" if he accepted. bound from the moment S completed and returned the "agreement for sale. Gibson v MCC 1979 Court of Appeal held that in the light of the correspondence as a whole and the conduct of the parties, there was a concluded contract, and ordered specific performances. On appeal to the House of Lords, held, allowing the appeal, that there never was an offer capable of acceptance, merely negotiations which never reached fruition. The words 'may be prepared to sell' are fatal... so is the invitation, not, be it noted, to accept the offer, but 'to make formal application to buy'

4.

Harris v Nickerson 1873, intention , advertisement and auction statement of intention<> offer: Harris v Nickerson 1873 The case established that an advertisement that goods will be put up for auction does not constitute an offer to any person that the goods will actually be put up, and that the advertiser is therefore free to withdraw the goods from the auction at any time prior to the auction.

5.

Supply of information Harvey v Facey 1893 selling of property: Harvey v Facey 1893: indication of lowest price which will be paid is NOT an offer. What is the difference between invitation to treat and an offer? NOTE: Auctioneer's request for bids is an invitation to treat. Bidders make offers, acceptance when hammer falls.: invitation to treat is an indication of a willingness to conduct business. invitation to treat has no intention to be bound on acceptance, but it is present in an offer. invitation to treat is inviting another or others to make offers.

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7.

Carlill v Smoke Ball Company 1893, why was advertisement considered an offer, normally advertisements are not offers Partridge v Crittenden (1968): advertised cocks and hens for sale charged with offering for sale against Protection of Birds Act: Carlill v Smoke Ball Company 1893 Partridge v Crittenden (1968): concluded that advertisement was invitation to treat not offer since else offeror might be contractually bound to sell more goods than he has in stock.

8. 9.

to be accepted an offer must be communicated.: Can be no meeting of minds if one mind is unaware of the other. is knowledge of the offer necessary? Gibbons v Proctor (1891) police awarded for information even though he does not know about reward. R v Clarke (1927): Gibbons v Proctor (1891): knowledge not needed R v Clarke (1927) : considered as the better view. The claimant gave the information. But he gave it while he was under investigation himself for murder. He told the police "exclusively in order to clear himself". It was uncertain whether he was thinking about the reward at the time he coughed up the information.Knowledge is necessary. In addition in this case it was concluded that Mr Clarke was not acting on the offer.

10.

Acceptance is required for offer to become binding. what are conditions?: Acceptance must be full. deviation from the offer impliedly destroys offer made. acceptance may be made by words or conduct. Acceptance occurs when offeree's words or conduct give rise to an objective inference that he assents to terms.

11.

Butler Machine Tool v Ex cell -0 (1979) : acceptance and battle of forms. Court must find existence of contract before if there is a breach. CA mirror image rule: need clear contract matched by equally clear acceptance. acceptance which does not accept all terms of original is a counter offer which kills off original. Traditional Approach. "Last Shot: wins, in battle of forms.: Butler Machine Tool v Ex cell -0 (1979): original offer which included a price variation was killed off by counter offer which stated a fixed price. The final acceptance from original offeror was to the counter offer. ADVANTAGE to approach: provides certainty , no separation between formation of contract and ascertainment of terms since offer/acceptance must mirror. failure to reach conclusion on ALL points may lead to invalid contract. Provides a standard.

12.

acceptance not effective until communicated through offeror, cannot be communicated by silence. In case of unilateral contract, performance is acceptance. Carlill and Carbolic Smoke Ball Co? why no need to communicate acceptance?: Carlill v Carbolic Smoke Ball Co 1893?

13.

Exceptions to commication of acceptance. Postal Acceptance Rule Household Fire Insurance v Grant 1879: operates as an exception to rule that acceptance must be communicated to be valid. Only operates when agreed on by parties or it is reasonable under circumstances to use it. Household Fire Insurance v Grant 1879: establishes postal acceptance rule.

14.

Holwell Security v Hughes 1974, differences with postal acceptance rule.: Holwell Security v Hughes 1974: does not apply to telephone, FAX, emails, When is a contract made by instand communication? Entores v Miles Far East Corp (1955) Brinkibon Ltd v Stahag Stahl 1982: Entores v Miles Far East Corp (1955) Brinkibon Ltd v Stahag Stahl 1982

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16.

Method of acceptance , can use another method than prescribed provided no less advantageous to offeror. Manchester Diocesan Council v Commercial and General Investments 1970: Manchester Diocesan Council v Commercial and General Investments 1970

17.

End of unaccepted offer conditions.: do not continue indefinitely. ends in various ways, once ended incapable of acceptance. Either party may withdraw at any time. Even of offer is open for a certain time, can be revoked. when offeree reject, offer cannot be later accepted. counter-offer impliedly rejects offer.

18.

Byrne v van Tiehoven (1880) communication of revocation must be made Dickinson v Dodds (1876) communication must be made by reliable source: Byrne v van Tiehoven (1880) Dickinson v Dodds (1876)

19.

Hyde v Wrench (1840) counter offer rejects offer: Hyde v Wrench (1840) Wrench wrote to Hyde's agent offering to sell the farm for 1000, stating that it was the final offer and that he would not alter from it.[1] Hyde offered 950 in his letter by 8 June, and after examining the offer Wrench refused to accept, and informed Hyde of this on 27 June.[2] On the 29th Hyde agreed to buy the farm for 1000 without any additional agreement from Wrench, and after Wrench refused to sell.

20.

Financings Ltd v Stimson (1962) if confition in offer not fulfilled offer terminated: Financings Ltd v Stimson (1962): required car to be returned in same condition however was returned damaged. Dickinson v Dodds 1876: death terminates contract.: Dickinson v Dodds 1876: death of either party terminates offer because there can be no agreement wi between parties.

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22.

Lapse of an offer: offeror may set time limit.: If there is no time limit set, the offer lapses after reasonable time depending on circumstances. Centrovincial Estates v Merchant Investors Assurance Company (1983): The plaintiffs wrote to their tenants inviting them to agree a figure of 65,000 per annum as the appropriate rental value of their property at a rent review date. The tenants wrote to the plaintiffs on the following day accepting that figure. Later owners claim they had made a mistake actual rent was much higher contract is invalid.: Centrovincial Estates v Merchant Investors Assurance Company 1983. CA: . In this case the original offer was quite clear and had been accepted. Accordingly a legally binding agreement had been made when the tenants accepted the original offer. OBJECTIVE TEST: what would have been intentions of a reasonable person. In this case mistake was NOT interpreted as mistake by offeree. cf Hartog

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Mannai Investments Co Ltd v Eagle Star Life Assurance Co Ltd [1997]: If the interpreter should have recognized the misdesign of the utterance then the otherwise apparent meaning is no longer reasonably apparent and the communicator cannot be held to it:: Mannai Investments Co Ltd v Eagle Star Life Assurance Co Ltd [1997] the interpreter is held responsible as if she had correctly understood the communication, and so if the interpreter accepts an offer that she misunderstood then she will be taken to have accepted the apparently intended offer. In that case, a tenant served a notice to quit, giving the required six months notice, but put the wrong break date in the notice--the date that the tenant wrote was xxx one day too early. Although the notice made good linguistic sense, it made so little sense of the purposes of a normal communicator in the tenant's position (since with the wrong break date the notice would serve no purpose) HL held that the presumption of optimal design had been rebutted and the interpreter should have known mistake Consequently, the reasonably apparent meaning of the notice was as a notice to quit with the correct break date.

25. 26.

steps in the negotiation process: a statement of intention, a supply of information or an invitation to treat. statement of intention: In this instance, one party states that he intends to do something. This differs from an offer in that he is not stating that he will do something. Harris v Nickerson (1873): Harris v Nickerson 1873 The auctioneer's advertisement was a statement that he intended to sell certain items; it was not an offer that he would sell the items.

27.

A supply of information In this instance, one party provides information to another party. He supplies the information to enlighten the other party. The statement is not one that is intended to be acted upon. See also the case of Harvey v Facey (1893) Will you sell us B. H. P? Telegraph lowest cash price," and the respondent telegraphed in reply, "Lowest price for B. H. P. 900," and then the appellants telegraphed, "We agree to buy B. H. P. for 900 asked by you.: Held: that there was no contract. The final telegram was not the acceptance of an offer to sell, for none had been made. It was itself an offer to buy, the acceptance to which must be expressed and could not be implied.

28.

invitations to treat: A display of goods: Pharmaceutical Society v Boots (1953),Thornton v Shoe Lane Parking (1971) (display made by machine=>offer) advertisement: Partridge v Crittenden (1968) - the advertisement of a bilateral contract. Carlill v Carbolic Smoke Ball Company (1893) decided that an advertisement was a unilateral offer. request for tenders: the tender is the offer. See Harvela Investments Ltd v Royal Trust Co of Canada Ltd (1985). auctioneer's request for bids:Warlow v Harrison (1859) and Barry v Davies (2000)

29.

How were the facts of Carlill v Carbolic Smoke Ball different from the usual situation involving an advertisement?: In Carlill's case the advertiser was advertising the offer of a unilateral contract and not a bilateral contract. Only one party would be bound from the outset.

30.

Pharmaceutical Society v Boots (1953) : pharmacy refused to sell products which the The taking of the articles from the shelves constituted an offer by the customer to buy and not the acceptance of an offer by the chemist to sell; the sale was not completed until the customer's offer to buy had been accepted by the defendants by their acceptance of the purchase price; and, therefore, the transaction took place "under the supervision of a registered pharmacist" as required customer had taken from the shelf: Pharmaceutical Society v Boots (1953): not logical that customer is committed to buying just because he puts item into his basket. He could never change his mind, ruled that sale took place at the cash desk and not when goods were taken from shelves.

31.

Fisher v Bell 1961 A shopkeeper displayed in his shop window a knife with a price ticket behind it. He was charged with offering for sale a flick knife,: the shopkeeper was not guilty of the offence with which he was charged because the displaying of the knife in the shop window was merely an invitation to treat and the shopkeeper had not thereby offered the knife for sale, within section 1 (1) of 1959 Act. QBD

32.

Thornton v Shoe Lane Parking HL: Moreover the contract was already concluded when the ticket came out of the machine, and so any condition on it could not be incorporated in the contract.Thorn invitation to treat, Request for Tenders: Harvela Investments Ltd v Royal Trust Co of Canada HLLtd (1985).: Harvela Investments Ltd v Royal Trust Co of Canada : Lord Bridge of Harwich considered that the decisive ground for deciding against the referential bidder was the fact that the invitation undertook to keep the bids confidential. The referential bid, however, could not be quantified without reading into it the amount of the fixed bid. It would have been a breach of the undertaking to do that before the deadline. To do it after the deadline would have been too late. HL held also that D were bound to accept the claimants'bid.

33.

34.

Blackpool and Fylde Aero Club Ltd v Blackpool Borough Council: 1 tender was not opened and not considered, even though the invitation to treat because it was anonymous impliedly would have considered all tenders.: Blackpool and Fylde Aero Club Ltd v Blackpool Borough Council: invitation to treat may contain an implied undertaking to consider all conforming tenders. if a tender was received by the deadline it would be considered and that the council had acted in breach of that warranty.CA rules that D were contractually obliged to consider claimant's tender. No automatic rule that invitation to tender triggers contractual obligation to consider all tenders.

35.

auctioneer: Barry v Davies (2000).: On a sale at auction without reserve the auctioneer was obliged by virtue of a collateral warranty to sell to the highest bidder. even if bid is low. explain what an offer is distinguish between an offer and other communications (e.g. an invitation to treat, a request for information, a statement of intention).: offer is an expression of willingness to contract on certain terms. It allows the other party to accept the offer and provides the basis of the agreement. An offer exists whenever the objective inference from the offeror's words or conduct is that she intends to commit herself legally to the terms she proposes. This commitment occurs without the necessity for further negotiations. Many communications will lack this necessary intention and thus will not be offers. They may be statements of intention, supplies of information or invitations to treat.

36.

37.

communication of the offer: R v Clarke (1927). First, Clarke would appear to be a more 'deserving' claimant and the court might have a harder time dismissing her claim.: R v Clarke (1927):cannot be assent without knowledge of the offer; and ignorance of the offer is the same thing whether it is due to never hearing.

38.

Hartog v Colin and Shields (1939): sale of skins at 10d per pound instead of 10per piece. Mistake by offeror.: Hartog v Colin and Shields 1939: objective test concluded that claimants could not have reasonably thought that intention was to sell at 10d per piece. NOTE: problem with subjective test is that a person who agrees to terms could escape by claiming the he had no real intention to agree.

39.

Fisher v Bell : display of goods in a shop window Pharmaceutical Society of GB v Boots Cash Chemists: application of the rule.: Fisher v Bell: display of goods in shop window Pharmaceutical Society of GB v Boots Cash Chemists:

40.

Warlow v Harrison: auction "without reserve" affirmed in CA in Barry v Davies: Warlow v Harrison: auction without reserve, then the usual auction rule applies, that a bid is an offer and it can be accepted or declined. However, there is a further, unilateral offer, by the auctioneer to whomever turns out to be the highest bidder. That offer is to accept the highest bid. Therefore, the auctioneer can be sued if he does not accept the highest bid. Barry v Davies affirmed

41.

Wilkie v London Transport Board 1947 Lord Greene stated that offer was made by the bus company and accepted when passenger puts himself on platform or inside the bus.: Problem: if there is an exclusion clause on ticket it is invalid since contract is concluded before ticket is given. If contract is concluded when passenger boards bus (protects passenger) however if passenger needs to leave bus because of a mistake, he is in principle bound.

42.

Communication of Acceptance: Entores v Miles Far East Corp. Entores was a London-based trading company that sent an offer by telex for the purchase of copper cathodes from a company based in Amsterdam. The Dutch company sent an acceptance by telex.: the postal rule could not apply to instantaneous communications, such as telephone or telex: if a phoneline "went dead" just before the offeree said "yes", it would be absurd to assume that the contract was formed and the parties would not have to call each other back. if a phoneline "went dead" just before the offeree said "yes", it would be absurd to assume that the contract was formed and the parties would not have to call each other back. The same applied to telex. Since the contract was therefore only formed when and where the telex was received, the place of formation was London. that the rule about instantaneous communications between the parties is different from the rule about the post. The contract is only complete when the acceptance is received by the offeror: and the contract is made at the place where the acceptance is received.

43.

Acceptance cannot be made through silence, Felthouse v Bindley : was a builder who lived in London. He wanted to buy the horse Sizing Europe off his nephew, John Felthouse. After a letter from the nephew about a previous discussion in buying the horse, the uncle replied saying, "If I hear no more about him, I consider the horse mine at 30 and 15s.": Felthouse v Bindley : cceptance must be communicated clearly and cannot be imposed due to silence of one of the parties.

44.

Acceptance : Brogden v Metropolitan Railway Company (1876-77), HL Brogden supplied. Metropolitan's agents drew up some terms of agreement and sent them to Brogden. Brogden wrote in some parts which had been left blank and inserted an arbitrator who would decide upon differences which might arise. He wrote "approved" at the end and sent back the agreement documents. Metropolitan's agent filed the documents and did nothing more. For a while, both acted according to the agreement document's terms. coal.: HL held that the onus of showing that both parties had acted on the terms of an agreement which had not been, in due form, executed by either, lies upon person alleging such facts. held that a contract had arisen by conduct and Brogden had been in clear breach, so he must be liable. The word "approved" on the document. I have always believed the law to be this, that when an offer is made to another party, and in that offer there is a request express or implied that he must signify his acceptance by doing some particular thing, then as soon as he does that thing, he is bound.

45.

Day Morris Associates v Voyce [2003] : CA acceptance by conduct: Day Morris Associates v Voyce [2003] : held that the defendant home-owner had, by her conduct in allowing the defendant estate agents to produce particulars for the sale of her property and market it, accepted the claimants' offer to market her property.

46.

Stevenson, Jacques & Co v McLean (1880): rules on communication of acceptance by telegraph. D offers to sell iron to P, offer was open till monday. P requests more information if there was flexibility to negotiate, then sends telegram to say he accepts original.: This case should be distinguished from Hyde v Wrench (1840). Where there was a counter offer which invalidated original. Here, not a counter-proposal, but a mere inquiry "which should have been answered" As stated in Byrne v Van Tienhoven (1880) "an uncommunicated revocation is, for all practical purposes and in point of law, no revocation at all"

47.

waived the requirement of communication: compare Carlill v Carbolic Smoke Ball Co. Felthouse v Bindley waiving is limited application: Carlill v Carbolic Smoke Ball Co.: waived requirement unilateral contract. Felthouse v Bindley: court held that communication of acceptance could not be waived.

48.

The postal acceptance rule: what are issues: exception of rule: acceptance is only good when the letter arrives. Adams v Lindsell (1818) and Household Fire Insurance v Grant (1879)This puts the risk of delay and loss on the offeror. It is important to understand that the rule is an exception to the general rule requiring communication.: At what point is the acceptance good? If one waits until the offeror receives the letter, how will the offeree know when this is? The offeree has known from the time she posted the letter that she has accepted the offer. There is also the occasional problem of the letter that never arrives at its destination.

49.

postal acceptance rule: Holwell Securities v Hughes (1974).grant to sell a property, It contained a clause stipulating that there must be notice in writing within six months in order to exercise the option. The claimants sent a letter exercising the option. It was lost in the mail: Holwell Securities v Hughes (1974). HL the postal acceptance rule cannot apply when there are express terms in the offer specifying that acceptance must reach the offeror. The Court also advances that the rule ought not to apply in cases where its application would produce manifest inconvenience and absurdity. provides basis for overriding postal rule.

50.

Manchester Diocesan Council for Education v Commercial and General Investments (1970): acceptance using another method. The problem that arises is this: if the offeree uses another method of acceptance, does this acceptance create a contract?: Manchester Diocesan Council for Education v Commercial and General Investments (1970): The answer is that if the other method used is no less advantageous to the offeror, the acceptance is good and a contract is formed. This is the result unless the offeror stipulates a certain method of acceptance and further stipulates that only this method of acceptance is good.

51.

Manchester Diocesan Council for Education v Commercial and General Investments (1970):: The tender stated that acceptance was to be notified to the person whose tender was accepted by letter sent 'by post addressed to the address given in his tender'. MD decided to accept C&G tender and sent their acceptance to the CG's solicitor, which was not the address given in the offer. C&G knew of this acceptance. Was there a contract?: Manchester Diocesan Council for Education v Commercial and General Investments (1970): The method of acceptance prescribed in the tender was not mandatory - here the offeror was made aware of the acceptance by an equally effective method and thus the acceptance was effective.

52.

Change of mind either party may change their mind and withdraw from negotiations. Byrne v van Tienhoven, 1880. also Offord v Davies Because there is no legal commitment until a contract has been formed, either party may change their mind and withdraw from negotiations.: Byrne v van Tienhoven, 1880.: D posts offer, received by P. P accepts but prior to acceptance D withdraws by post. held that the withdrawal of the offer was not effective until it was communicated. If the defendants' contention were to prevail no person who had received an offer by post and had accepted it would know his position until he had waited such a time as to be quite sure that a letter withdrawing the offer had not been posted before his acceptance of it.

53.

Dickinson v. Dodds The court stated that since Dickinson knew that Dodds' offer had been implicitly withdrawn when he learned that he had sold the property to someone else, there was no meeting of the minds at the time acceptance was made and therefore a binding contract was not formed.: An open offer to sell terminates when the offeree learns that the offeror has already agreed to sell to someone else.

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conditions for end of offer:: death of the offeror change of mind unfulfilled condition lapse of time

55.

Financings Ltd v Stimson (1962) unfulfilled condition.: In this case, the offeror purported to accept an offer to purchase a car after the car had been badly damaged Bradbury v Morgan (1862): death of offeror: Bradbury v Morgan (1862) held that the deceased offeror's estate was liable on the offer of a guarantee after the death of the offeror

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Offord v Davies (1862).: either party may change their made and withdraw from negotiations before a contract is formed. lapse of time: The offeror is entitled to assume that acceptance will be made within a reasonable time period or not at all. What a reasonable time period is will depend upon the circumstances of the case. Ramsgate Victoria Hotel v Montefiore (1866).: Ramsgate Victoria Hotel v Montefiore (1866). The defendant offered to purchase shares in the claimant company at a certain price. Six months later the claimant accepted this offer by which time the value of the shares had fallen. The defendant had not withdrawn the offer but refused to go through with the sale.held: The offer was no longer open as due to the nature of the subject matter of the contract the offer lapsed after a reasonable period of time.

59.

Currie v Misa (1875) consideration definition: A valuable consideration, in the sense of the law, may consist either in 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 Misa (1875): a 'benefit' to the person making the promise (the promisor), or a 'detriment' to the person to whom the promise is made (the promisee).

60.

Suppose that A arranges for B to clean A's Windows, and promises to pay B 30 for this work. B does the work. How does the analysis of 'benefit' and 'detriment' apply in identifying the consideration supplied by B for A's promises of payment?: You should have noted that cleaning the windows is a benefit to A. It is also a detriment to B (despite the fact that B will receive 30), in that B will be expending effort, and could be using the time to do other things. B's actions are therefore clearly consideration under the Currie v Misa definition.

61.

A pays the 30 immediately, and B promises to clean the windows next Tuesday. What is the consideration for B's promise?: detriment to A, benefit to B Lord Dunedin in Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd (1915): making of a promise (as distinct from its performance):: an act of forbearance of one party, or the promise thereof, is the price for which the promise of the other is bought, and the promise thus given for value is enforceable.

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Consideration must be 'sufficient' but need not be 'adequate' Thomas v Thomas (1842): Thomas v Thomas 1842 the promise to pay 1 per annum rent was clearly 'sufficient' to support the promise of a right to live. courts do not look at adequacy.

64.

Chappell v Nestl (1960): Lord Somervell justifies the courts' approach to the issue of 'adequacy' by reference to 'freedom of contract': 'A contracting party can stipulate for what consideration he chooses'.: The person may have other, undisclosed, reasons for accepting consideration that appears inadequate. In the case of Chappell v Nestl the reasoning was presumably that the requirement to send in the worthless wrappers would encourage more people to buy the company's chocolate.

65.

White v Bluett (1853) son refuses to return money his father had said the son need not repay if the son would stop complaining about how Mr Bluett would distribute his property in his will among the children.: court held that there is no consideration in this promise. sonny had 'no right to complain' anyway. Not complaining was therefore an entirely intangible benefit. complaining was a entirely intangible benefit. Suggests that there must be some economic value to consideration.

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Ward v Byham [1956] CA: consideration : D, the father of a child, promised the mother that he would pay 1 per week maintenance, provided that the mother could prove that the child was well looked after and happy. note same conclusion in Williams v Williams: Lord Denning attacks rule that a promise to perform an existing duty is not consideration. However case is decided on basis that there was consideration. "child was WELL looked after and happy" goes beyond duty. Can it be distinguished from White v Bluett? It is difficult to see how. This suggests that the requirement of economic value may no longer be part of the doctrine of consideration.

67.

Edmonds v Lawson (2000): Minimum wage; Pupillage D argued that C's acceptance of an unpaid pupillage was not a binding apprenticeship and that C was therefore not a worker entitled to the national minimum wage. D said the arrangement was educational in nature, not commercial, and that it was not enforceable due to a lack of consideration.: C was not an apprentice nor a "worker" within the meaning of the National Minimum Wage Act 1998, because there had been no expectation upon her to do any work for D or do anything other than further her own training. But a binding contract did exist. No conisderation (benefit to employer since no expectation of result) however should have argument detriment to C since cannot take job elsewhere.

68.

existing obligations as good consideration : 3 topics.: 1. Obligations which arise under the law, independently of any contract. 2. Obligations which are owed under a contract with a third party. 3. Obligations which exist under a contract with a person who has made a new promise, for which the existing obligation is alleged to provide good consideration.

69.

Glasbrook Bros Ltd v Glamorgan CC (1925). consideration is an obligation when more is promised than the original duty: requested police protection during a strike, in the form of a body of officers quartered on the premises. The police only had the resources to make visiting patrols, but offered to place constables at the site for a financial contribution: the action of the police was beyond statutory requirements, and payment could be claimed.

70.

Collins v Godefroy [1831]: key case for duty imposed by law cannot be taken as consideration to support a contract.: Godefroy promised Collins six guineas if he would attend court to testify on his behalf. At his agreement, Collins was subpeonaed. Godefroy refused to pay. In his defence, he claimed that there was no consideration moving from Collins, as he was obliged to attend court anyway. This view was upheld by the court.

71.

Lord Gildwell in William v Roffey Bros. summary conclusion on consideration, when it can apply to an existing duty.: (i) if A has entered into a contract with B to do work for, or to supply goods or services to, B in return for payment by B; and (ii) at some stage before A has completely performed his obligations under the contract B has reason to doubt whether A will, or will be able to, complete his side of the bargain; and (iii) B thereupon promises A an additional payment in return for A's promise to perform his contractual obligations on time; and (iv) as a result of giving his promise, B obtains in practice a benefit, or obviates a disbenefit; and (v) B's promise is not given as a result of economic duress or fraud on the part of A; then (vi) the benefit to B is capable of being consideration for B's promise, so that the promise will be legally binding.

72.

Obligations which are owed under a contract with a third party:The courts have consistently taken the view that this can provide good consideration for fresh promise, whether the context is 'domestic' or 'commercial'. Shadwell v Shadwell (1860): In Shadwell, Shadwell was under a contractual duty with a third party to marry. Shadwell's uncle promised to pay him 150 per year after he was married. It was held that Shadwell marrying was good consideration, notwithstanding that he was obliged by a contract with a third party to marry in any event.

73.

Pao On v Lau Yiu Long (1980). Privy Council Lord Scarman 4 coniditons for determing duress,: Pao on v Lau Yiu Long Privy Council Whether the party protested at the time, The availability of alternatives open to the party, The presence of independent advice, and Whether steps were taken after entering into the contract to avoid it.

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Pao : Lord Scarman's conditions for past consideration : The circumstances in which a promise made after the acts constituting the consideration will be enforceable: The act constituting the consideration must have been done at the promisor's request. (See, for example, Lampleigh v Braithwait (1615).) 2. The parties must have understood that the work was to be paid for in some way, either by money or some other benefit. (See, for example, Re Casey's Patents (1892).) 3. The promise would be legally enforceable had it been made prior to the acts constituting the consideration.

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past consideration: Re Casey's Patent [1892]: Re Casey's Patent [1892]: C offered 1/3 share in return for manager role. Claimed unenforceable for past consideration as offer was in respect of past services. Bowen LJ: Implied promise of payment, therefore enforceable. The third type of existing obligation - that owed under a contract with the party making the new promise: Stilk v Myrick (1809) and Williams v Roffey Bros & Nicholls (Contractors) Ltd (1991).: Stilk v Myrick: Two ship deserters, crew promised cut of wages if they got the ship back safely. Yet this task already in their contracts as crew. Williams v Roffey Bros & Nicholls (Contractors) Ltd R sub-contracted W carpenters to build flats for 20,000. W under quoted and had financial difficulties. R would have to pay clients for delay. R promised W 10,300 for on time completion. Failed to pay and W sued successfully. R gained benefit of not having to pay client.

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Williams decision of Glidwell: Glidewell LJ held Williams had provided good consideration even though he was merely performing a pre-existing duty. Williams got 3,500 (not full expectation damages). He said that the idea of promissory estoppel was not properly argued and 'not yet been fully developed'.[: The concept of economic duress provided an answer to Stilk's old problem. The test for understanding whether a contract could legitimately be varied was set out as follows. if A has a contract with B for work before it is done, A has reason to believe B may not be able to complete A promises B more to finish on time A 'obtains in practice a benefit, or obviates a disbenefit' from giving the promise there is no economic duress or fraud...

78.

Hartley v Ponsoby [1857] Stilk v Myrick (1809): The main basis for distinction is that in Hartley v Ponsonby the situation had become so perilous as a result of the reduction in the crew that the surviving members were,in continuing with the voyage, doing more than their original contract would have obliged them to do.

79.

Williams v Roffey raised the question of whether Stilk v Myrick could still be said to be good law. The plaintiff carpenters, in completing the work on the flats, appeared to be doing no more than they were already obliged to do under their contract with the defendants. Gildwell's conclusion in CA: additional benefits: ensuring that the plaintiffs continued work and did not leave the contract uncompleted avoiding a penalty clause which the defendants would have had to pay under their contract with the owners of the block of flats avoiding the trouble and expense of finding other carpenters to complete the work. ALSO note: no pressure was put on the defendants in Williams v Roffey to make the offer of additional payment. In other words, the alternative explanation for the decision in Stilk

80.

Foakes v Beer (1884) cf Williams v Roffey: Williams v Roffey has not affected the related rule that part payment of a debt can never discharge the debtor from the obligation to pay the balance. Foakes v Beer :Foakes paid back the principal but not the interest. Then Beer sued Foakes for the interest. The question was whether she was entitled to it, despite their agreement that he would not need to pay it.

81.

Foakes v Beer (1884): Lord Blackburn view: issue is that prompt payment of a part of their demand may be more beneficial to them than it would be to insist on their rights and enforce payment of the whole. Even where the debtor is perfectly solvent, and sure to pay at last, this often is so. Where the credit of the debtor is doubtful it must be more so.

82.

Pinnel's case conclusion: 1604 binds Lord Balckburn in 1884 Foakes v Beer: payment of a lesser sum on the day in satisfaction of a greater, cannot be any satisfaction for the whole, because it appears to the Judges that by no possibility, a lesser sum can be a satisfaction to the plaintiff for a greater sum:

83.

Re Selectmove (1995) Ferguson v Davies (1997).: Re Selectmove (1995) Ferguson v Davies (1997). both confirm Foakes

84.

Re McArdle (1951): Past consideration cannot be used. general rule.: The plaintiff had carried out work refurbishing a house in which his brothers and sister had a beneficial interest. He then asked them to contribute towards the costs, which they agreed to do. It was held that this agreement was unenforceable, because the promise to pay was unsupported by consideration. The only consideration that the plaintiff could point to was his work on the house, but this had been completed before any promise of payment was made.

85.

executory contract: executory contract is a contract which has not yet been fully performed, that is to say, fully executed. To put it another way, it's a contract under which both sides still have important performance remaining. Why was the approach taken in Re Casey's Patents not applied so as to allow the plaintiff to succeed in Re McArdle, since it was obvious that the improvement work would benefit all those with a beneficial interest in the house?: The problem for the plaintiff in Re McArdle was that he acted by himself, without any request, or even approval, from the rest of the family. By contrast in Re Casey's Patents the owners of the patents knew that the manager was doing the work. In Re McArdle it could not be said, looking at the events objectively, that all the parties anticipated that the work would be paid for, because at the time only the plaintiff knew that the work was being done. The same answer would be arrived at by applying Lord Scarman's test in Pao On v Lau Yiu Long, since neither of the first two of his conditions would be satisfied.

86.

87.

Jack works into the night to complete an important report for his boss, Lisa. Lisa is very pleased with the report and says 'I know you've worked very hard on this: I'll make sure there's an extra 200 in your pay at the end of the month'. Can Jack enforce this promise?: Apply Lord Scarman's 3 conditions for analysis: Pao On v Lau Yiu Long (1979). The act constituting the consideration must have been done at the promisor's request. The parties must have understood that the work was to be paid for in some way, either by money or some other benefit. -legally enforceable if promise made before?

88.

promissory estoppel: would normally need a new contract to modify without consideration, which is cumbersome. Defence to a creditor claim for the remainder of the debt where part payment has been accepted. quic: The doctrine of promissory estoppel is primarily concerned with the modification of existing contracts. The position under the classical common law of contract was that such modification would only be binding if consideration was supplied.

89.

Central London Property Trust Ltd v High Trees House Ltd (1947): the case concerned the modification of the rent payable on a block of flats during the Second World War. The importance of the case, however, lies in the statement of principle which Denning set out - to the effect that 'a promise intended to be binding, intended to be acted on, and in fact acted on, is binding so far as its terms properly apply'. Applying this principle, Denning held that a promise to accept a lower rent during the war years was binding on the landlord, despite the fact that the tenant had supplied no consideration for it.

90.

estoppel: Hickman v Haynes (1875) Rickards v Oppenhaim (1950) Hughes v Metropolitan Railway (1877): ...

91.

High Tree's Case [1949] : estoppel: H leased flats from CLP. War made it impossible to find tenants, H unable to pay rent. CLP agreed to accept half-rent. 1945 war over and CLP sued for 2 years full rent and wanted return to full rent. CLP successful, but obiter, Denning said they would have failed due to estoppel if they claimed for the full period.

92.

estoppel, Combe v Combe: shield not a sword: Husband gratuitously promised 2 a week. Lack of consideration but promissory estoppel allowed her to win. Denning: "made a promise, to be relied upon and is in fact relied upon, then he who gave the promise cannot afterwards revert to the previous legal relationship". Requirements: existing contract; claimant has agreed to waive; claimant knew defendant would rely; defendant has in fact acted on reliance.

93.

Hughes v Metropolitan Railway (1877) Hughes owned property leased to the Railway Company Under the lease, Hughes was entitled to compel the tenant to repair the building within six months of notice. Notice was given. meanwhile, the tenant railway company sent a letter proposing to purchase the building from Hughes. Negotiations began and continued until December 30th, at which point nothing was settled. Once the six months had elapsed the landlord sued the tenant for breach of contract and tried to evict the company.: Hughes v Metropolitan Railway (1877): promissory estoppel, later used by Denning in High Trees HL ruled that with the initiation of the negotiations there was an implied promise by the landlord not to enforce their strict legal rights with respect to the time limit on the repairs, and the tenant acted on this promise to their detriment.

94.

The limitations on promissory estoppel (6) Need for existing relationship: BUT Evenden v Guildford City FC (1975) Denning says could apply where there are none Need for reliance:The lessees of the property in High Trees had paid the reduced rent in reliance on the promise from the owners that this would be acceptable. A 'shield not a sword' This is related to the first: Combe v Combe: principal use was to provide protection for the promisee: 4: Must be inequitable for the promisor to go back on the promise: It will cover situations where the promisee has extracted the promise by taking advantage of the promisor. This was the case, for example, in D & C Builders v Rees (1966) where the promise of a firm of builders to accept part payment as fully discharging a debt owed for work done was held not to give rise to a promissory estoppel, because the debtor had taken advantage of the fact that she knew that the builders were desperate for cash. 5: Doctrine is generally suspensory : In both High Trees and the Tool Metal Manufacturing case it was accepted that the reduced payments made while the estoppel was in operation stood and the promisor could not recover the balance that would have been due under the original contract terms. 6: Where 'promise' is prohibited by legislation :Evans v Amicus Healthcare Ltd [2003] EWHC 2161, [2003] 4 All E.R. 903 concerned the use of embryos created by IVF prior to the breakdown of the couple's relationship the man had not given such assurances to the woman as to create a promissory estoppel because the relevant legislation allowed him to withdraw his consent to the storage of the embryos at any time.

95.

Why was Denning's statement of principle in High Trees seen as such a potentially radical development in the law?: First, if taken at face value, the principle seems to deny the need for consideration altogether. As we shall see, however, later cases have clarified that promissory estoppel only applies in a limited range of situations. Secondly, although Denning purported to be merely building on the concept of 'waiver', and Hughes v Metropolitan Railway (1877) in particular, that concept had never been applied to the part payment of debts (which was effectively the situation in High Trees). Prior to that it had always been thought that Foakes v Beer (which came after Hughes, and did not even refer to it) precluded the extension of the concept in this way.