29.5.2000 HONK KONG CONTRACT Qu 1 Offer/Acceptance We are to adv !e " # an a! to $%et%er !%e %a! a contract to purc%a!e &o%n'!

co##ect on of (oo)! (* Arno#d +att%e$. ,ef ne contract and !tate n-red ent!. W%en %e $r te! to " # an &o%n .a* (e offer n- to !e## t%e (oo)! for /20000. ,ef ne offer. 1t cou#d (e d !t n-u !%ed fro. an nv tat on to treat0 (ut on t%e!e fact! t doe! #oo) a! f &o%n ! .a) n- an offer. He !ee.! !ett#ed a! to t%e pr ce %e $ant! for t%e (oo)!. " # an te#ep%one! to accept. ,ef ne acceptance and !tate ru#e!. " # an ! e2pre!! n- con!ent and co..un cat n- $ t% &o%n0 (ut %e $ ## not con! der % .!e#f (ound unt # %e rece ve! $r tten conf r.at on of acceptance. Acceptance .u!t (e co..un cated and t%e offeror can pre!cr (e t%e .ode of acceptance. T% ! can e t%er (e d rector* or .andator* 3 4ate! v 5u##e*n. Here &o%n $ ## not con! der % .!e#f (ound unt # %e rece ve! " # an'! #etter of acceptance. " # an ..ed ate#* po!t! a #etter of acceptance. 1t arr ve! 9.0 a. Tue!da*. 62p#a n t%e po!ta# ru#e 3 Ada.! v " nd!e##. 1t $ ## not app#* on t%e!e fact! a! &o%n n! !t! on rece v n- t%e #etter (efore %e $ ## (e (ound 3 Ho#$e## 7ecur t e! v Hu-%e!. Acceptance of &o%n'! offer cou#d t%en ta)e effect at 9.0 a. Tue!da*. 1n t%e .eant .e &o%n rece ved a (etter offer fro. 5eter. He $rote to " # an $ t%dra$ n- % ! offer. T% ! #etter arr ved at 8.90 a. Tue!da*. 62p#a n ru#e! of revocat on. 5a*ne v Cave: ;*rne v <an T en%oven. T%e #etter of revocat on ! rece ved (efore t%e #etter of acceptance reac%e! &o%n. 1t .a* depend upon $%en " # an read! %er .a #. 1f !%e read! t after 9.0 t%e co..un cat on of revocat on .a* (e too #ate. T%en t .a* (e =uer ed $%et%er t%e #etter of revocat on !%ou#d (e effect ve on rece pt0 or $%en read. A! #on- a! !%e read! %er .a # $ t% n a rea!ona(#e t .e0 co..un cat on of revocat on $ou#d pro(a(#* (e $%en " # an actua##* read! t%e #etter. T% ! .a* (e after t%e t .e t%at " # an'! #etter of acceptance reac%e! &o%n. 1f !o0 " # an $ou#d %ave a ( nd n- contract to (u* t%e (oo)!.

Qu. 2 Con! derat on T% ! ! =u te an nvo#ved =ue!t on re#at n- pr .ar #* to !uff c enc* of con! derat on. 5art >a? dea#! $ t% part3pa*.ent of de(t and t%e po!! (#e defence of pro. !!or* e!toppe#. 5art >(? dea#! $ t% t%e =ue!t on of $%et%er a pro. !e to pa* .ore t%an t%e contract pr ce can (e enforcea(#e. 1!!ue @ Can t%ere (e !uff c ent con! derat on for a pro. !e to pa* .ore t%an t%e contract pr ce (* t%e pro. !ee do n- or pro. ! n- to do t%at $% c% %e ! a#read* contractua##* (ound to do for t%e pro. !orA a? "ar)! B Co o$e & ## C500000 n re!pect of de# ver e! .ade. ;ecau!e t%e .ar)et n t%e product0 D7 #) n'0 %a! co##ap!ed0 "ar)! cannot !e## t%e r !toc)! and cannot pa* & ## t%e a.ount t%e* o$e. & ## a-ree! to accept C900000. "ater $%en t%e .ar)et recover!0 & ## !ee)! to recover t%e (a#ance of C200000 fro. "ar)!. At co..on #a$ !%e $ou#d !ucceed n %er c#a .. ;* pa* n- C900000 "ar)! %ave on#* !at !f ed part of t%e r o(# -at on and t%e* %ave not - ven an* con! derat on for & ##'! pro. !e to accept C900000 n !ett#e.ent 3 5 nne#'! ca!e a! !upported (* H" n Eoa)e! v ;eer. "ar)! .a* !ee) to re#* on pro. !!or* e!toppe# 1dent f* t%e or - n of t%e doctr ne fro. t%e H -% Tree! ca!e and "ord ,enn n-'! u!e of Hu-%e! v +etropo# tan R#* a! !upport. W%ere t%e doctr ne app# e! t cou#d .ean t%at a pro. !e to accept #e!! t%an t%e contract pr ce .a* (e enforcea(#e f t% ! ! con! dered e=u ta(#e. Content of t%e ,octr ne:3 1. C#ear pro. !e t%at e2 !t n- r -%t! $ ## not (e enforced 3 !at !f ed %ere 2. re# ance on t%at pro. !e 3 "ar)! pa* t%e C900000. Need t% ! re# ance (e to t%e pro. !or'! detr .entA T%ere cou#d (e !o.e d !cu!! on on t% !. Conc#u! on @ pro(a(#* not. 1f t%ere ! re# ance to t%e pro. !ee'! detr .ent n t%at "ar)! .a* %ave ta)en on furt%er # a( # t e! (e# ev n- t%at t%e de(t $a! e2t n-u !%ed0 t% ! $ou#d Fu!t (e re#evant to t%e =ue!t on of $%et%er t ! no$ e=u ta(#e to a##o$ t%e pro. !or to -o (ac) on %er pro. !e 9. 1t .u!t (e ne=u ta(#e for t%e pro. !or to -o (ac) on %er pro. !e. A## t%e c rcu.!tance! are to (e con! dered %ere0 nc#ud n- #oo) nat t%e (e%av our of t%e pro. !ee. "ar)! .u!t not %ave acted unfa r#* t%e.!e#ve! 3 , B C ;u #der! v Ree!: Ada.! v Hanna. & ## accept! C900000 to avo d %er o$n (an)ruptc*. 1f "ar)!0

)no$ n- t% !0 %ave pre!!ured & ## nto accept n- t%e part pa*.ent t%en t%e* .a* not %ave acted fa r#*. A#!o t%e fact t%at t%e .ar)et %a! .proved ! -n f cant#* $ ## (e re#evant n deter. n n- $%et%er t ! no$ not ne=u ta(#e for & ## to n! !t on fu## pa*.ent. 5o!! (#* not $%en "ar)! %ave !o#d t%e r !toc)! at -reat prof t. 6ffect of e!toppe# 3 1! t !u!pen!or* or e2t nt veA Too# +eta# v Tun-!ten 6#ectr c 3 -enera##* !u!pen!or*. R -%t! can (e re!u.ed on - v n- rea!ona(#e not ce. ,enn n- $ou#d %ave !a d t%at t%e #and#ord'! r -%t to recover t%e (ac) rent! n H -% Tree! $a! e2t n-u !%ed. "ord ,enn n- %a! con! !tent#* .a nta ned t%at e!toppe# can e2t n-u !% r -%t! f t%at ! $%at t%e part e! ntended 3 ;r )o. 1nve!t.ent! v Carr. T%ere ! !o.e H" !upport fro. "ord Hod!on n AFa* v R.T. ;r !coe. Reconc # at on of pro. !!or* e!toppe# $ t% t%e co..on #a$ and Eoa)e! v ;eerA Eoa)e! v ;eer repre!ent! t%e co..on #a$0 (ut pro. !!or* e!toppe# repre!ent! e=u t*. 1f t%ere ! a conf# ct e=u t* $ ## preva #. (? 7uff c enc* of con! derat on n re#at on to perfor.ance of e2 !t ncontractua# o(# -at on! o$ed to t%e pro. !or. Here "ar)! pro. !e & ## an e2tra C100000 f !%e $ ## en!ure t%at t%e* rece ve de# ver* on t .e. ,oe! & ## - ve !uff c ent con! derat on for t% ! pro. !e (* do n- !o.et% n- $% c% !%e $a! a#read* (ound to doA 7t #) v +*r c) 3 1f t% ! app# e! & ## cannot enforce t%e pro. !e of C100000 W ## a.! v Roffe* 3 perfor.ance of an e2 !t n- contractua# dut* o$ed to t%e pro. !or can (e re-arded a! !uff c ent con! derat on to !upport a pro. !e of e2tra pa*.ent0 f t%e pro. !or t%ere(* rece ve! a pract ca# (enef t a! #on- a! t%e ne$ pro. !e ! not procured (* t%e e2erc !e of econo. c dure!! or fraud. 5ract ca# (enef t $a! dent f ed n W ## a.! v Roffe* (ecau!e t%e .a n contractor d d not %ave to f nd ot%er carpenter! and $ou#d not (eco.e # a(#e upon pena#t* c#au!e! n t%e .a n contract. , d t%e CA overru#e 7t #) v +*r c)A No t%e* .ere#* ref ned t. ;enef t $a! re=u red and f t% ! cou#d not (e found t%e ne$ pro. !e cou#d not (e enforced.

;enef t ! a concept $% c% ! capa(#e of .an pu#at on. , d t%e capta n n 7t #) v +*r c) not rece ve t%e (enef t of %av n- t%e !% p $or)ed %o.eA 1t ! d ff cu#t to reconc #e $ t% 7t #) v +*r c) on t% ! po nt. 4et t $a! reco-n !ed t%at t%e contract var at on $a! co..erc a##* nece!!ar* and t%e po!! ( # t* of t%e pro. !ee %o#d n- t%e pro. !or to ran!o. n order to ac=u re t%e pro. !e ! no #on-er po!! (#e (ecau!e of t%e deve#op.ent of t%e concept of econo. c dure!!. T%e ne$ pro. !e .u!t not %ave (een .ade a! a re!u#t of econo. c dure!! T% ! re=u re! !o.e e2p#anat on. T%ere $a! no ev dence of !uc% n W ## a.! v Roffe*. Here t%ere ! no ev dence of dure!! app# ed (* & ## to nduce "ar) B Co'! pro. !e. " )e#* t%en t%at t $ ## (e enforcea(#e. "ar)! ac=u red t%e pract ca# (enef t of not %av n- to !ecure anot%er !upp# er and (e n- a(#e to .eet t%e r o$n co.. t.ent!. Qu 9 62e.pt on C#au!e! 1n >a? $e are to adv !e 5au#. He .a* $ !% to (r n- a c#a . a-a n!t Cr*!ta#c#ean for (reac% of contract or n t%e tort of ne-# -ence n re!pect of % ! #o!!. Cr*!ta#c#ean $ou#d !ee) to re#* on t%e e2e.pt on c#au!e pr nted on t%e (ac) of t%e t c)et to - ve t%e. a defence. 1n dea# n- $ t% t%e!e =ue!t on! *ou !%ou#d e2p#a n t%at e2e.pt on c#au!e! are !u(Fect to (ot% co..on #a$ contro#! and !tatutor* contro#! and eac% !%ou#d (e addre!!ed n turn. Co..on #a$ Te!t! of 1ncorporat on and Con!truct on 1ncorporat on 3 C cannot re#* on t%e c#au!e un#e!! t%e* can e!ta(# !% t%at t ! ncorporated nto t%e r contract. 1! t%e t c)et to (e re-arded a! a contractua# docu.ent or ! t .ere#* to (e re-arded a! a .ean! (* $% c% % ! coat .a* (e dent f ed $%en %e co.e! to co##ect tA 3 C%ape#ton v ;arr* G,C 1f t ! a contractua# docu.ent t%e =ue!t on ar !e! a! to $%et%er C %a! - ven 5au# not ce of t%e c#au!e (efore or at t%e t .e t%e contract $a! entered nto. No d ff cu#t* $ t% re-ard to t%e t . n- of t%e not ce a! t $a! - ven at t%e t .e t%e contract $a! entered nto and not after a! n O##e* v +ar#(orou-% Court Hote#. +ean n- of not ce 3 per +e## !% ".&. n 5ar)er . Have C done $%at $a! rea!ona(#e to (r n- t%e c#au!e to t%e not ce of 5au# or to t%e c#a!! of $% c% 5au# ! oneA. T%e* do not %ave to !%o$ t%at t%e* %ave actua##* (rou-%t t%e c#au!e to 5au#'! attent on0 on#* t%at t%e* %ave ta)en rea!ona(#e !tep! to do !o. An* d !a( # t* of 5au#A 3 none ev dent %ere.

Are t%e $ord! on t%e front or (ac) of t%e t c)etA Are t%e $ord! pro. nentA Here t%e c#au!e ! ver* $ de e2c#ud n- C fro. an* # a( # t* $%atever. A! t ! part cu#ar#* onerou! t .a* (e t%at e2tra !tep! .a* %ave to (e ta)en to (r n- t%e c#au!e to 5au#'! attent on 3 7pur# n- v ;rad!%a$: 1nterfoto v 7t #etto Te!t of con!truct on <er* c#ear $ord! .u!t (e u!ed (* t%e part* !ee) n- to avo d # a( # t* 3 Contra 5roferente. Ru#e 3 Hou-%ton v Trafa#-ar 1n!. 1f ne-# -ence ! to (e e2c#uded part cu#ar#* c#ear $ord! .u!t (e u!ed cf A#der!#ade v Hendon "aundr e!. Court! do not con!true e2e.pt on c#au!e! !o !tr ct#* no$ada*! (ecau!e of t%e e2 !tence of !tatutor* protect on. T%e $ord! u!ed %ere do !ee. to (e c#ear 7tatutor* Contro#! GCTA !1>9? (u! ne!! # a( # t* 3 !at !f ed %ere a! C ! a (u! ne!!. !.2 ne-# -ence # a( # t* 3 e2p#a n and app#*. W t% re!pect to 5au#'! per!ona# nFur* t%e c#au!e $ou#d (e neffect ve. W t% re-ard to ot%er #o!! t%e c#au!e $ou#d (e !u(Fect to t%e te!t of rea!ona(#ene!!. !.9 Contract # a( # t*. ,oe! t%e !ect on app#*A 4e! a! 5au# dea#! a! a con!u.er and on t%e ot%er part*'! !tandard ter.!. T% ! ! an atte.pt to e2e.pt # a( # t* for (reac% of contract and $ou#d (e !u(Fect to t%e te!t of rea!ona(#ene!!. !.11 3 Te!t of rea!ona(#ene!! 3 !tate t%e te!t Gu de# ne! n t%e Act !.11>H? (* ana#o-*I 7c%edu#e 11 -u de# ne! 3 - ve !o.e e2a.p#e!. 5art cu#ar#* re#evant %ere ! t%at 5au# doe! rece ve an nduce.ent to enter nto t% ! contract a! %e ! offered t%e !erv ce at %a#f pr ce. Ca!e #a$ on rea!ona(#ene!!I 7. t% v ;u!%I Geor-e + tc%e## v E nne* "oc) 7eed! A## t%e c rcu.!tance! .u!t (e ta)en nto account n a!!e!! nrea!ona(#ene!!. 1t .a* (e ! -n f cant %ere t%at 5au# )no$! t%at t% ! ! an e2per .enta# .et%od. A#ternat ve#* 5au# cou#d %ave contracted e#!e$%ere and .a* not %ave (een !u(Fect to !uc% a c#au!e. GTCCR 1999 3 app#* to (u! ne!! to con!u.er contract! and !o $ou#d app#* %ere a! 5au# ! a con!u.er. T%e Re-u#at on! app#* to a ter.0 $% c% ! not nd v dua##* ne-ot ated. T% ! ! !at !f ed. An* unfa r ter. $ ## not (e ( nd n- J Re- 8>1? T%e con!u.er .u!t prove t%at t%e ter. ! unfa r. T%e te!t ! conta ned n Re- 5>1? @ an* ter. $% c% contrar* to t%e re=u re.ent of -ood

fa t% cau!e! a ! -n f cant .(a#ance n t%e part e!' r -%t! and o(# -at on! under t%e contract to t%e detr .ent of t%e con!u.er. A## re#evant factor! and t%e ot%er ter.! are to (e con! dered n dec d n- f t%e ter. ! unfa r. T%ere ! an ##u!trat ve # !t of ter.! $% c% are unfa r n 7c%ed. 2 3 t%e!e are not e2%au!t ve. T%u! f 5au# can e!ta(# !% t%at t%e ter. ! unfa r t%en C $ ## not (e a(#e to re#* on t. (?1n adv ! n- Near#*c#ean .an* of t%e pr nc p#e! d !cu!!ed a(ove $ ## (e re#evant. T%e !a.e te!t! $ ## (e u!ed. Re: Te!t of 1ncorporat on 3 t% ! ! c#ear#* !at !f ed a! N %ave ! -ned a for. conta n n- t%e c#au!e 3 "'6!tran-e v Grauco(. T%ere ! no ev dence t%at t%e c#au!e .a* %ave (een . !repre!ented to t%e. J C%e. ca# C#ean n- B ,*e n- Co v Curt !. Con!truct on: a! $ t% part >a? t%e $ord! are =u te c#ear. 7tatutor* protect on GCTA .a* app#*. !. 2 3 c#au!e .a* (e !u(Fect to t%e te!t of rea!ona(#ene!! !.9 J app# e! f N %ave contracted on t%e ot%er'! $r tten !tandard ter.!. 3 !u(Fect to t%e te!t of rea!ona(#ene!! n !.11. T%e !a.e -u de# ne! are ava #a(#e. A-a n N %ave rece ved an nduce.ent to enter nto t%e contract (ecau!e t%e* are offered t%e !erv ce at %a#f pr ce. A! t%e* are n t%e (u! ne!! t%e* $ou#d )no$ t%e r !)! (etter0 and t .a* (e con! dered .ore rea!ona(#e to e2c#ude # a( # t* n t% ! contract t%an n t%e one n >a?. GTCCR 3 not ava #a(#e On#* (u! ne!! to con!u.er contract!. Con!u.er ! def ned a! an nd v dua# >not a co.pan*? act n- pr vate#* and not n t%e cour!e of % ! trade0 (u! ne!! or profe!! on. cf. GCTA $% c% can app#* a! (et$een 2 co..erc a# ent t e!. Qu.H 5r v t* An e!!a* =ue!t on focu!! n- on t%e doctr ne of pr v t* and t%e recent #e- !#at on 3 Contract! >R -%t! of T% rd 5art e!? Act 1999. ,octr ne @ A per!on $%o ! not a part* to a contract can ne t%er !ue nor (e !ued under t 3 ,un#op v 7e#fr d-e. W t% re-ard to atte.pt! to confer r -%t! or (enef t! on 9 rd part e! a nu.(er of e2cept on! deve#oped:3 a-enc*0 a!! -n.ent0 con!truct ve tru!t!0 n!urance0 co##atera# contract!.

T%e!e e2cept on! are rat%er # . ted and !o effort! $ere .ade to .an pu#ate t%e re.ed e! $% c% t%e pro. !ee %a! to ena(#e % . to en!ure t%at t%e 9rd part* -et! t%e de! red (enef t e-. 7pec f c 5erfor.ance 3 ;e!$ c) v ; 1nFunct on0 !ta* of proceed n-! 3 7ne## n- v &o%n 7ne## n-. W%ere t%e re.ed* of da.a-e! $ere !ou-%t t% ! proved !o.e$%at pro(#e.at ca#. 3 &ac)!on v Hor Kon Ho#!I Woodar 1nve!t.ent! v W .pe*. 1n con!truct on contract! t %a! proved po!! (#e for t%e pro. !ee to !ue and recover da.a-e! 3 " nden Garden! Tru!t v "ene!ta 7#ud-e , !po!a#!I +cA#p ne v 5anato$n 1n t% ! area t%e Act %a! a -reat .pact. 1t doe! not !uper!ede t%e co..on #a$0 (ut e2 !t! ! de (* ! de. T%u! t%e C" and !tatutor* e2cept on! re.a n. W%ere t%e Act ! app# ca(#e 9rd part e! $ ## %ave a r -%t to !ue n t%e r o$n na.e to c#a . a (enef t n a contract to $% c% t%e* are not a part*. ;* !.1 a 9rd part* .a* !ue to enforce a contractua# ter. f t%e contract e2pre!!#* !a*! %e can0 or f t purport! to confer a (enef t on % . and on a proper con!truct on of t%e contract t%e part e! ntended t%at %e !%ou#d (e a(#e to do !o. T%e 9 rd part* .u!t (e e2pre!!#* dent f ed e t%er (* na.e0 (* de!cr pt on or a! a .e.(er of a c#a!!. W%ere a 9rd part* %a! !uc% a r -%t !.2 prov de! t%at t%e contract npart e! .a* not re!c nd t%e contract or var* t !o a! to cau!e t%e 9 rd part* to #o!e % ! ent t#e.ent $ t%out t%e 9 rd part*'! con!ent f t%e 9rd part* %a! co..un cated % ! a!!ent of t%e ter. to t%e pro. !or0 t%e pro. !or ! a$are t%at t%e 9rd part* %a! re# ed on t%e ter.0 or t%e pro. !or can rea!ona(#* (e e2pected to %ave fore!een t%at t%e 9 rd part* $ou#d re#* on t%e ter.0 and t%e 9rd part* %a!0 n fact0 re# ed on t. T%e 9rd part*'! c#a . ! !u(Fect to a## t%e defence! and !et3off! t%at $ou#d %ave (een ava #a(#e to t%e pro. !or n an act on (* t%e pro. !ee. T%u! t%e r -%t! of 9rd part* (enef c ar e! n re#at on to a contract %ave (een ! -n f cant#* .proved. Of cour!e0 f t%e 9rd part* ! not - ven t%e r -%t to !ue e2pre!!#*0 t%en % ! r -%t $ou#d turn upon $%et%er t can (e !a d t%at t%e part e! ntended t%at %e !%ou#d %ave t%at r -%t. T% ! $ou#d (e a!certa ned (* app#* n- an o(Fect ve te!t. One area $%ere t%e 9rd part* $ou#d (enef t ! n re#at on to e2e.pt on c#au!e!0 $%ere a part* to a contract e2c#ude! # a( # t* (ot% for % .!e#f and for ot%er! e- !u(3contractor! or e.p#o*ee!.

T%e!e #atter per!on! $ou#d no$ (e a(#e to c#a . protect on of t%e c#au!e $ t%out %av n- to re!ort to t%e at f c a# e2cept on created (* t%e 6ur*.edon. T%e ne$ Act ! not concerned $ t% ! tuat on! $%ere a (urden ! .po!ed on a 9rd part* and t%u! t% ! area of t%e doctr ne $ou#d re.a n t%e !a.e. T%u! a contract (et$een 2 part e! cannot .po!e # a( # t e! on a 9rd part*. An e2cept on deve#oped re#at n- to re!tr ct ve covenant! n #and 3 Tu#) v +o2%a*. T%e =ue!t on aro!e a! to $%et%er t% ! cou#d app#* $%ere t%e !u(Fect .atter of t%e contract $a! propert* ot%er t%an #and. 1t $a! !o e2tended n t%e 7trat%cona ca!e0 $% c% re# ed on t%e $ord! of Kn -%t3;ruce ".&. n ,e +atto! v G (!on. ,e!p te !o.e cr t c !. t%e 7trat%cona ca!e and ,e +atto! v G (!on ca!e! %ave rece ved re#at ve#* recent approva# n 7$ !! ;an) Corp v "#o*d! ;an). ;ut !ee "a$ ,e(enture Tru!t v Gra# Ca!p an $% c% appeared to approve of Tu#) v +o2%a*/,e +atto! v G (!on0 (ut found rea!on to avo d t! app# cat on (* -reat#* # . t n- t%e ava #a(#e re.ed* 3 e. on#* a pro% ( tor* nFunct on cou#d (e o(ta ned. T%e 7trat%cona ca!e and ,e +atto! v G (!on .a* (e !een a! ear#* e2a.p#e! of $%at %a! no$ (eco.e t%e tort of nterfer n- $ t% a contract and an* atte.pt to .po!e a contractua# (urden on a 9 rd part* !%ou#d (e dec ded app#* n- t% ! pr nc p#e 3 6!!o v K n-!$ood +otor! >A tort ca!e? A#!o (etter re.ed e! are ava #a(#e. Qu. 5 Gndue 1nf#uence 3 not to (e e2a. ned n 2009 Qu L + !repre!entat on Re.e.(er t%e !tep! to (e ta)en:3 1. 1! t%ere . !repre!entat onA 2. 1! t%ere re# anceA 9. T*pe! of . !repre!entat on H. Re.ed e!. + !repre!entat on !%ou#d (e def ned. T%ere need! to (e a !tate.ent of fact. ;ot% t%e !tate.ent re-ard n- Anna'! ta(#e and t%e de!) !%e purc%a!ed n t%e !%op !ee. capa(#e of (e n- de!cr (ed a! !tate.ent! of fact and t%ere ! no rea# roo. for ar-u.ent t%at A#an ! .ere#* e2pre!! n- an op n on.

T%ere .u!t (e nduce.ent. 62p#a n $%at t% ! .ean!. 1t !ee.! c#ear t%at t%ere ! re# ance on t%e fact! - ven. T%en t%e t*pe! of . !repre!entat on need to (e con! dered a! t%e re.ed e! ava #a(#e to Anna .a* d ffer dependant on $% c% t*pe of . !repre!entat on %a! (een .ade to %er. 62p#a n fraudu#ent0 ne-# -ent and nnocent . !repre!entat on. Here f Anna $ !%e! to e!ta(# !% fraud t%en !%e $ou#d need to prove !o.e d !%one!t* on A#an'! part. T% ! .a* (e d ff cu#t to do and t .a* t%at Anna need not ta)e on t%e (urden of prov n- !uc% >7ee #ater $%en #oo) n- at t%e re.ed* of da.a-e!? " )e#* t%at t%ere .a* (e ne-# -ence on A#an'! part a! %e .a* not %ave rea!ona(#e -round! for % ! v e$ (ecau!e of % ! ne2per ence. Gn# )e#* to (e nnocent . !repre!entat on (ecau!e of t%e !a.e rea!on. 1t !ee.! t%at A#an cannot e!ta(# !% rea!ona(#e -round! for % ! !u!p c on. T%erefore0 f Anna $ !%e! to re#* on a ne-# -ent . !repre!entat on0 a#t%ou-% !%e .a* (e a(#e to (r n- act on for ne-# -ent . !!tate.ent app#* n- Hed#e* ;*rne v He##er0 !%e $ou#d (e (etter adv !ed to (r nact on under !.2>1? + !repre!entat on Act. T% ! ! (ecau!e t%en a## Anna %a! to do ! to e!ta(# !% t%at a fa#!e !tate.ent of fact %a! (een .ade to %er $% c% nduced %er to enter nto t%e contract and t%en !%e $ou#d (e ent t#e to da.a-e! un#e!! A#an cou#d prove rea!ona(#e -round! for % ! (e# ef. T% ! ! d ff cu#t to do a! ##u!trated (* Ho$ard +ar ne ,red- n- v O-den. Ne2t *ou !%ou#d out# ne t%e re.ed e! ava #a(#e to Anna. 1t ! pro(a(#* (e!t to dea# $ t% t%e re.ed* of re!c !! on f r!t a! t ! ava #a(#e for a## t*pe! of . !repre!entat on. 62p#a n t%e nature of t%e re.ed* .e. t ! e=u ta(#e and0 t%erefore0 d !cret onar*. " !t t%e (ar! to re!c !! on. W t% re-ard to Anna'! ta(#e t !ee.! t%at re!c !! on $ou#d not (e ava #a(#e a! t%e ta(#e %a! no$ (een !o#d on to anot%er per!on and t%u! 9rd part* r -%t! %ave ntervened. ,a.a-e! 3 a? Eraudu#ent 3 da.a-e! n t%e tort of dece t 3 a## d rect #o!!e! can (e recovered $%et%er fore!eea(#e or not 3 ,o*#e v O#(* 1ron.on-er! (? Ne-# -ent J da.a-e! ava #a(#e and ! nce Ro*!cott Tru!t v Ro-er!on da.a-e! under !.2>1? are a!!e!!ed n t%e !a.e $a* a! fraud. T% ! %a! (een cr t c !ed (ecau!e t%o!e $%o are fraudu#ent !%ou#d (e treated .ore %ar!%#* t%an t%o!e .a) n- a ne-# -ent . !repre!entat on. T% ! v e$ $a! e2pre!!ed n 7. t% Ne$ Court 7ecur t e! v

7cr .-eour0 (ut unt # overru#ed Ro*!cott Tru!t v Ro-er!on re.a n! t%e #a$ on t% ! po nt. T%u! Anna .a* (e a(#e to recover t%e true va#ue of %er ta(#e a! da.a-e! and .a* (e a(#e to return t%e de!) and recover t%e purc%a!e pr ce.

Qu.M ;reac% a? C%r ! $ !%e! to c#a . % ! fee of C100000 fro. t%e n -%t c#u(. He $ ## $ !% to c#a . t%at t%e n -%tc#u( are n (reac% of contract and t%at %e $a! ent t#ed to treat t%e contract a! at an end. T%e n -%tc#u( %ave not perfor.ed t%e contract accord n- to t! ter.! a! t%e co##ect on of C,! ava #a(#e ! nappropr ate0 and C%r ! under!tood t%at %e $a! to (e pu(# c !ed a! t%e !tar of t%e even n- and t%e n -%tc#u( %ave a#!o en-a-ed Ger 5o!%. Not ever* (reac% of contract $ ## cau!e t%e contract to (e ter. nated0 a#t%ou-% t%e re.ed* of da.a-e! $ ## (e ava #a(#e to t%e nFured part*. T%e nFured part* $ ## on#* (e a(#e to treat % .!e#f a! d !c%ar-ed n t$o t*pe! of ca!e:3 a? W%ere t%ere %a! (een a funda.enta# (reac%. A (reac% ! of t% ! nature f t%e pro. !e t%at %a! (een (ro)en ! of .aFor rat%er t%an . nor .portance (? W%ere t%e -u #t* part* %a! repud ated t%e contract (efore perfor.ance ! due0 or (efore t %a! (een fu##* perfor.ed. a? 1n order to deter. ne t%e !tatu! of t%e ter.! $% c% C%r ! c#a .! %ave (een (reac%ed $e $ou#d need to d !cover f t%e ter.! (reac%ed $ere e t%er cond t on! or $arrant e!0 or $ere !er ou! (reac%e! of nno. nate ter.!. 1f an* of t%e ter.! are de!cr (ed a! cond t on! t% ! $ ## (e ta)en a! a !tron- nd cat on t%at (reac% $ ## #ead to ter. nat on0 (ut t% ! ! not nece!!ar #* t%e ca!e n ca!e! $%ere t%e court fee#! t%at t%at cou#d not %ave (een t%e part e!' ntent on 3 7c%u#er v W c).an +ac% ne Too#!. 1f t%e part e! %ave dec#ared t%at (reac% of t%e re#evant ter.! $ ## cau!e t%e contract to (e ter. nated t%en t%e court! $ ## fo##o$ t%e $ !%e! of t%e part e! 3 T%e C% )u.a 1n t%e a(!ence of t% ! t%e court! u!e 2 approac%e! n a!!e!! n- t%e .portance of t%e (reac%ed ter.:3 ? Cond t on/$arrant* approac% ? nno. nate ter. approac%

? T% ! nvo#ve! #oo) n- at t%e contract $%en t $a! entered nto to dec de $%et%er a cond t on or $arrant* %a! (een (ro)en. T% ! %a! t%e advanta-e of certa nt* n t%at t%e con!e=uence! of (reac% can (e pred cted n advance. ? T% ! nvo#ve! #oo) n- to !ee $%at %appen! a! a re!u#t of t%e (reac%. 1f t%e con!e=uence! are !o !er ou! t%at t%e* depr ve t%e nnocent part* of !u(!tant a##* t%e $%o#e of t%e (enef t $% c% t $a! ntended %e !%ou#d %ave under t%e contract t%en and on#* t%en $ou#d t%e nnocent part* (e a(#e to ter. nate t%e a-ree.ent. T% ! approac% ! !a d to %ave t%e advanta-e of f#e2 ( # t*. 1t ! not ver* ea!* to !a* %o$ t%e ter.! (ro)en %ere $ou#d (e treated. T%e effect! of t%e (reac% n eac% ca!e .a* (e !a d to (e =u te !er ou! a! far a! C%r ! ! concerned and t% ! .a* Fu!t f* ter. nat on0 (ut f t%e c%o ce of .u! c0 or t%e ( ## n- of t%e even n- ! not .ade !pec f c $%en t%e contract $a! entered nto t%en t%e re#evant ter.! .a* (e treated on#* a! $arrant e! and t%e (reac% .a* not Fu!t f* ter. nat on. (? Repud at on occur! $%en a part* nd cate! (* $ord! or conduct t%at %e doe! not ntend to %onour % ! o(# -at on! $%en t%e* fa## due n t%e future. C%r ! .a* c#a . t%at (* t%e r conduct t%e n -%tc#u( %a! !%o$n t%at t%e* ntend to a(andon t%e contract0 (ut note t%at repud at on of a contract ! a !er ou! .atter and $ ## not (e # -%t#* nferred. A#ternat ve#* t .a* (e c#a .ed (* t%e n -%tc#u( t%at C%r ! %a! repud ated t%e contract (* dec#ar n- t%at %e $ ## not perfor.. 1f !o0 t%e c#u( $ou#d !ee) to recover a! da.a-e! t%e co!t of en-a- n- t%e foot(a##er a! a rep#ace.ent. Note: Woodar 1nve!t.ent! v W .pe* 3 no repud at on $%ere t%e nFured part* %one!t#* (ut erroneou!#* (e# eve! t%at a ter. of t%e contract - ve! % . t%e r -%t to end t%e contract. T% ! .a* (e app# ca(#e %ere. (? 1n t%e 2nd !cenar o t%e concept of ant c pator* (reac% need! to (e e2a. ned. T% ! occur! $%ere t%e -u #t* part* repud ate! t%e contract (efore perfor.ance ! due or ! co.p#ete. T%e nnocent part* t%en ac=u re! an ..ed ate cau!e of act on. He %a! a c%o ce. He can e t%er treat % .!e#f a! d !c%ar-ed fro. t%e contract and !ue for da.a-e! ..ed ate#* or %e can e#ect to $a t unt # t%e da* for perfor.ance. Here C%r ! .a* dec de to (r n- act on ..ed ate#* or %e .a* e#ect to aff r. t%e contract .a) n- % .!e#f ava #a(#e to perfor. % ! ! de of t%e (ar-a n. 1f C%r ! c%oo!e! t%e !econd opt on t%en t .ean! t%at t%e n -%tc#u( are co.pe##ed to accept a perfor.ance t%e* d d not $ant 3

W% te B Carter v +cGre-or. 6ven t%ou-% t%e contract %ad (een cance##ed (* t%e defendant! t%e da* after t %ad (een entered nto0 t%e p#a nt ff cont nued to perfor. % ! o(# -at on! under t%e contract for t%e a-reed per od of t%ree *ear!0 and t%en (rou-%t act on to recover t%e contract pr ce. ;* 9:2 .aFor t* %e $a! !ucce!!fu# n H". T%e . nor t* v e$ $a! e2pre!!ed (* "ord Ke t%. He ar-ued t%at t%e p#a nt ff !%ou#d (ear t%e #o!! created (* % ! o$n unrea!ona(#e conduct. Here t%e p#a nt ff! !pent .one* do n- !o.et% n-0 $% c% t%e* )ne$ t%e defendant d d not $ant. T%e* c%o!e to nf#ate t%e r #o!!0 and $% #!t t%e* .a* not (e under a dut* to . t -ate t%e* ou-%t not to a--ravate t%e da.a-e. T%e .aFor t* v e$ $a! e2pre!!ed (* "ord Hod!on 3 t $a! unfortunate t%at t%e defendant! %ad !add#ed t%e.!e#ve! $ t% an un$anted contract cau! n- an apparent $a!te of t .e and .one*0 (ut t%ere $a! no e=u t* to a!! !t t%e defendant. T%e p#a nt ff $a! under no dut* to var* t%e contract at t%e (e%e!t of t%e ot%er part* !o a! to depr ve % .!e#f of t%e (enef t - ven to % . (* t%e contract. 1f t% ! ca!e ! to (e app# ed t%en C%r ! cou#d turn up to %o!t t%e even n- and c#a . % ! fu## fee. T%e W% te B Carter pr nc p#e ! not a#$a*! to (e app# ed. 1t $ ## not app#* f t%e act ve co3operat on of t%e part* n (reac% ! needed (efore t%e nnocent part* can perfor. % ! o(# -at on! 3 Houn!#o$ ";C v T$ c)en%a. Garden ,eve#op.ent!. T% ! ca!e .a* app#* %ere. T%e co3operat on of t%e c#u( $ ## (e re=u red to ad. t C%r ! on t%e pre. !e! !o t%at %e can perfor.. A#!o t%e pr nc p#e ! not to (e app# ed f t%e nnocent part* act! $%o##* unrea!ona(#* 3 Att ca 7ea Carr er! v Eerro!taa# 5o!e don ;u#). 1f t ! fe#t t%at C%r !0 n a## rea!on0 !%ou#d %ave accepted t%e (reac% and !ued for da.a-e! t%en W% te B Carter .a* not app#*. T%e c#u( .a* %ave dec ded not to %o#d t%e funct on at a## on t%e re#evant even n-. ;* !u n- for t%e contract pr ce n t%e!e c rcu.!tance! t%e p#a nt ff ! !ee) n- to enforce !pec f c perfor.ance of t%e contract and %e !%ou#d not (e a##o$ed to do !o $%en da.a-e! $ou#d (e an ade=uate re.ed*. T% rd#* t%e W% te B Carter pr nc p#e ! not to app#* f t%e nnocent part* %a! no #e- t .ate ntere!t0 f nanc a# or ot%er$ !e0 n perfor. nt%e contract rat%er t%an c#a . n- da.a-e! 3 T%e A#a!)an Trader. T%e pr nc p#e n W% te B carter .a* !o.et .e! (e Fu!t f a(#e. T%e pro(#e. ! $%et%er an a$ard of t%e a-reed !u. !0 on t%e one %and0 nece!!ar* to protect t%e nFured part* and0 on t%e ot%er0 # )e#* to cau!e undue %ard!% p to t%e part* n (reac%. 1n !o.e ca!e! t $ou#d .a)e no d fference to t%e nFured part* f %e doe! not perfor. and !ee)! da.a-e!0 or f %e doe! perfor. and !ee)!

to recover t%e contract pr ce. 1f t% ! ! t%e po! t on t%en da.a-e! $ou#d (e a perfect#* ade=uate re.ed*. ;ut t%ere .a* (e ! tuat on! n $% c% t%e nFured part* $ou#d (e preFud ced (* d !cont nu n- perfor.ance and c#a . n- da.a-e!:3 1? W%ere t% ! $ou#d #ead to nFur* to % ! reputat on 2? W%ere t%e nFured part* %a! entered nto co.. t.ent! $ t% 9 rd part e!0 $% c% %ave to (e %onoured. 9? W%ere part of t%e #o!!0 $% c% t%e nnocent part* $ou#d actua##* !uffer ! #e-a##* rrecovera(#e (ecau!e t ! too re.ote. C%r ! .a* %ave (een %op n- t%at % ! appearance at t% ! pre!t - ou! event $ou#d en%ance % ! reputat on. A#!o %e .a* %ave entered nto contract! $ t% 9rd part e!0 $% c% %e $ou#d need to %onour 3 contract! $ t% !upport !taff for n!tance. On#* f t%e!e #atter 2 po nt! are !at !f ed $ou#d t%e pr nc p#e n W% te B Carter app#* !o a! to a##o$ C%r ! to aff r. t%e contract and recover t%e fu## contract pr ce.

Qu.8 Re.ed e! a? dea#! $ t% .ea!ure of da.a-e!. (? dea#! $ t% t%e ru#e! a! to re.otene!! of da.a-e. 8.a? T%e p#a nt ff ! ent t#ed to !ue for t%e #o!! of (ar-a n .e. for t%e #o!! of t%e part cu#ar (enef t0 $% c% %e e2pected to rece ve (* t%e contract $% c% %a! (een (ro)en. 1f t%e contract ! (reac%ed (* t%e ot%er part* da.a-e! $ ## (e a!!e!!ed (* reference to t%e c#a .ant'! e2pectat on #o!! con! !t n- of prof t! t%at $ou#d %ave (een rece ved f t%e contract %ad (een perfor.ed. 7o.et .e! t .a* (e d ff cu#t to .ea!ure t%e e2pectat on #o!! part cu#ar#* $%ere t% ! ! !pecu#at ve0 (ut t%e court $ ## atte.pt a!!e!!.ent even f t% ! ! d ff cu#t. ,a.a-e! $ ## (e recovered even $%en $%at ! #o!t ! no .ore t%an an opportun t* to ta)e t%e r !) of .a) n- a prof t 3 C%ap# n < H c)!. 7o.et .e! t%e court! $ ## opt to a!!e!! da.a-e! (* reference to t%e re# ance #o!! 3 f t $ou#d (e d ff cu#t to e!t .ate t%e prof t t%at $ou#d (e .ade. T%e o(Fect of da.a-e! for re# ance #o!! ! to p#ace t%e c#a .ant n t%e po! t on %e $ou#d %ave (een n f t%e contract %ad never (een .ade 3 +cRae v Co..on$ea#t% , !po!a#! Co.. !! on. T% ! approac% can a#!o nc#ude e2pend ture ncurred (efore t%e contract $a! .ade 3 An-# a T< v Reed

Re# ance #o!!e! .a* (e !een a! part of t%e e2pectanc*. Contract npart e! nor.a##* e2pect to recover t%e r re# ance e2pend ture p#u! an e#e.ent of prof t. 1f t%e fu## prof t cannot (e proved t%e re# ance .ea!ure can (e a##o$ed a! a !u(!t tute pr .a fac e .ea!ure0 ! nce t ! a!!u.ed t%at t%e contract $ou#d %ave (een !uff c ent#* prof ta(#e to at #ea!t recoup t%e e2pend ture0 (ut f t%e defendant prove! ot%er$ !e t%e re# ance .ea!ure $ ## not (e a$arded. A nu.(er of ru#e! %ave deve#oped $%en t%e court ! a!!e!! n- t%e c#a .ant'! co.pen!at on:3 T%e .ar)et ru#e 3 f t%ere ! a .ar)et for t%e -ood! t%en pr .a fac e t%e #o!! ! to (e =uant f ed (* reference to t%e .ar)et. + t -at on 3 once a (reac% occur! t%e c#a .ant ! not ent t#ed to ! t (ac) and do not% n- $% #e #o!!e! accu.u#ate. T%e c#a .ant .u!t ta)e an* rea!ona(#e !tep! t%at are ava #a(#e to % . to . t -ate t%e e2tent of t%e da.a-e cau!ed (* t%e (reac%. E na##* da.a-e! a$arded $ ## (e !u(Fect to t%e ru#e! on re.otene!! of da.a-e. T%e -enera# ru#e ! t%at t%e c#a .ant can on#* recover n re!pect of #o!!e!0 $% c% $ere n t%e rea!ona(#e conte.p#at on of t%e part e! at t%e t .e of entr* nto t%e contract. 8(? Re=u re! .ore deta #ed ana#*! ! of t%e ru#e! on re.otene!! of da.a-e. ;r an ; --! $ ## (e !ee) n- da.a-e! a! a re!u#t of t%e (reac% of contract (* t%e car % re f r.. He $ ## !ee) to recover an a.ount0 $% c% $ou#d p#ace % . n t%e po! t on %e $ou#d %ave (een n f t%e contract %ad (een proper#* perfor.ed. T% ! $ ## nc#ude da.a-e! for t%e #o!! of ; --'! contract $ t% Ro.an Ran-er!. 6ven t%ou-% t%e #o!! .a* (e t%ou-%t !pecu#at ve a! t%ere $a! no certa nt* t%at ; --! $ou#d ! -n $ t% t%e foot(a## tea.0 ; --! can (e co.pen!ated for t%e #ac) of t%e opportun t* to !ecure t%e contract $ t% t%e foot(a## tea. 3 C%ap# n v H c)!. Eurt%er t $ou#d need to (e !%o$n t%at t%e #o!! $a! not too re.ote. T%e ru#e! or - nate fro. Had#e* v ;a2enda#e. T%e defendant $ ## (e # a(#e for t%e natura# con!e=uence! of % ! (reac%. He .a* a#!o (e # a(#e for unu!ua# con!e=uence! $%ere %e )no$! of c rcu.!tance! .a) n- !uc% con!e=uence! # )e#*. T%e defendant e!caped # a( # t* n Had#e* v ;a2enda#e (ecau!e t%e tota# !%utdo$n of Had#e*'! . ## $a! unu!ua#. Nor d d ;a2enda#e )no$ of an* c rcu.!tance! .a) n- t%e !%utdo$n # )e#*. < ctor a "aundr e! v Ne$.an 1ndu!tr e! T%e re.otene!! te!t $a! re!tated (* A!=u t% ".&.0 NT%e a--r eved part* ! on#* ent t#ed to recover !uc% part of t%e #o!! a! $a! rea!ona(#* fore!eea(#e a! # a(#e to re!u#t fro. t%e (reac%O.

T%u! t%e #ate de# ver* of t%e (o #er cau!ed fore!eea(#e and %ence recovera(#e #o!! of prof t! ! nce t%e defendant )ne$ t%at t%e (o #er $a! re=u red for ..ed ate u!e0 (ut t%e #o!! of t%e D% -%#* #ucrat ve' d*e n- contract! $a! not fore!eea(#e ! nce t%e defendant! %ad no )no$#ed-e of t%e!e contract!. T% ! refor.u#at on of t%e re.otene!! te!t nd cated t%at t%e re.otene!! te!t for contract $a! ana#o-ou! to t%at for t%e tort of ne-# -ence. T% ! dea $a! reFected (* H" n T%e Heron 11 A % -%er de-ree of fore!eea( # t* ! re=u red n contract t%an tort. 1n tort t%e Wa-on +ound te!t ! app# ed. 1n contract t%e te!t ! not $%et%er t%e da.a-e !%ou#d %ave (een fore!een (* t%e defendant0 (ut $%et%er t%e pro(a( # t* of t! occurrence !%ou#d %ave (een $ t% n t%e rea!ona(#e conte.p#at on of t%e part e! at t%e t .e $%en t%e contract $a! .ade %av n- re-ard to t%e r )no$#ed-e at t%at t .e. , fferent te!t! n contract and tort are Fu!t f a(#e. A tortfea!or ! -enera##* a !tran-er to t%e nFured per!on and t ! up to t%e #a$ to def ne (ot% t%e per!on! to $%o. %e o$e! a dut* of care and t%e e2tent of t%at dut*. T%e Fu!t f cat on for t%e d fference ! t%at f a contract npart* $ant! -reater protect on a-a n!t po!! (#e con!e=uence! of a (reac% %e can prov de for t% ! n t%e contract and/or not f* t%e ot%er part* of factor! render n- a part cu#ar r !) .ore # )e#*. 1n 5ar!on! v Gtt#e* 1n-%a. t $a! %e#d t%at f a - ven Dt*pe' of #o!! ! $ t% n t%e rea!ona(#e conte.p#at on of t%e part e!0 t%e $%o#e a.ount of t%at t*pe of #o!! ! recovera(#e. T% ! concept .a* (e capa(#e of .an pu#at on. 1f t%e court $ant! to a##o$ recover* of a part cu#ar %ead of da.a-e t%e* can dent f* t a! a t*pe of #o!! $ t% n t%e part e!' rea!ona(#e conte.p#at on even f t%e e2tent of #o!! .a* not (e. 7ee too ;ro$n v K+R 7erv ce! $%ere Gtt#e* 1n-%a. $a! not app# ed0 and Kpo%aror v Woo#$ c% ;u #d n- 7oc et* $%ere t $a!. T%e .atter need! to (e re!o#ved (* a % -%er court. T%e car % re f r. .a* c#a . t%at t%e* are not # a(#e for t%e #o!! of t%e .u#t 3. ## on pound contract $ t% Ro.an Ran-er! a! t%e* $ere not a$are of t%e purpo!e of ; --'! Fourne*. 1t $ou#d need to (e !%o$n t%at t%e* $ere a$are t%at ; --! $a! trave## n- a(road to tr* out for a fore -n tea.. 1f t%e* d d )no$ t%at t%en t%e* $ou#d %ave n conte.p#at on t%e t*pe of #o!! !uffered and $ou#d (e # a(#e.