Contract Law Planner For LLB PDF

Module Planner
LLB (Hons)
Contract Law
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Produced in January 2008.
HOLBORN COLLEGE LLB
CONTRACT LAW
Module Title: Law of Contract
Pre-requisites: None
Level: Level 1
Total Learning Hours: 300 hours
Credits: 30
Teaching Method: Lectures and seminars (in term time). The teaching
element of the module will be delivered by means of
one one-and-a-half hour lecture and a one one- and-
a-half hour seminar each week. The lecture will set
out the general rules and principles concerning each
topic, perhaps making particular reference to any
especially problematic areas. Seminars will both
develop and test students’ understanding of each
topic. As well as their general research and reading,
students will be expected to prepare research and
reading, students will be expected to prepare specific
discursive and / or problem solving questions for
discussion in class.
Core Module: Yes
Aims
• To fulfil the Law Society and the Bar Council’s requirements for the ‘Foundation in
Contract Law’ element of a Qualifying Law Degree;
• To acquire a basic understanding of the basic principles of the English law of

Contract, including formation, privity, vitiating factors, terms, discharge and
remedies;
• To be stimulated into acquiring an enquiring and critical appreciation of the law;
• To acquire a willingness to accept responsibility for his or her own learning and to
learn independently using initiative and self discipline;
• To develop a range of graduate skills including transferable intellectual skills and key
skills;
• To apply their knowledge and understanding to unseen questions under examination

conditions;
• To research individually and report back upon matters of contract law;
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Content
The module considers the formation of a contract including offer, acceptance, consideration
& privity of contract. It goes on to consider the contents of the contract including conditions
& warranties, express and implied terms, standard form contracts and exclusion clauses. The
module then considers vitiating factors such as misrepresentation, mistake, undue influence,
duress, unconscionable bargains and inequality of bargaining power. The module also
examines the law relating to the discharge of contractual obligations (including performance,
agreement, frustration and breach) and remedies for breach of contract such as damages,
specific performance, recission and injunctions.
Learning Outcomes
Knowledge
At the end of this module students will be able to:-
demonstrate a knowledge of foundation concepts in Contract law
apply this knowledge to the solution of simple problems in contract law
Skills
As well as their knowledge and understanding of the syllabus students will be assessed upon
their ability to:-
retrieve up-to-date primary and secondary sources of legal information using both
paper and electronic sources;
Analyse primary legal materials
Use legal terminology concerning the law of contract with accuracy
Communicate effectively in writing
Develop time and management skills
Prioritise tasks effectively
Assessment Method(s):
Examination: 70% Unseen
Coursework 30%
Indicative Reading:
Core Texts (provided to students)

Poole, Jill, Textbook on Contract Law, 2006 8th ed OUP
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Further Reading:
Beatson Anson’s Law of Contract 28th ed. OUP

Furmston, Michael Cheshire Fifoot & Firmstone Law of Contract, 14th edn Butterworths
McKendrick E., Contract Law 5th ed. Palgrave Law Masters
Stone, Modern Contract law 5th edn Cavendish Press

Treitel GH, The Law of contract 11th ed Sweet and Maxwell
Websites
Increasingly the Internet is becoming a good source of information for law students. The
following may be of use, but bear in mind that URLs are subject to change.
(a) Law Reports
www.the-times.co.uk/news
This site has a searchable database going back to 1st January 1996. Law reports can be accessed
for printing or downloading to disk.
http://www.parliament.the-stationery-office.co.uk/pa/ld199697/ldjudgmt/ldjudgmt.htm
Excellent free site containing full text of recent House of Lords' decisions - fully downloadable to
print or disk.
http://www.smithbernal.com/casbase
Currently provides free transcripts of recent English cases – very useful
www.lawreports.co.uk
This is the official law reports site – has special student pages with case summaries. Also has 24
hour updated legal news pages – day by day decision reports.
http://www.courtservice.gov.uk/lexicon
Court Service homepage – has limited number of appeal case transcripts.
(b) Parliament
www.parlchan.co,uk/index.htm
Quick reference guide to the House of Commons and its business
www.parliament.uk
Gateway site for the House of Commons and House of Lords
(c) Legal referral sits
www.venables.co.uk/
Excellent free general resources site – provides a gateway to a host of other Web resources
related to law.

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http://www.ukc.ac.uk/library/lawlinks/default.htm
Currently one of the best gateway sites in the UK, maintained by the University of Kent.
Numerous useful links.
www.legal.net
Gateway site to huge database of USA law - useful for comparative research
www.findlaw.com/
Very comprehensive US searchable database – great for comparative studies
www.westlaw.com
excellent summaries of cases on all subjects
(d) Publishers
www.cavendishpublishing.com
Lots of useful information for students and good links – regular case updates and a virtual
classroom
www.butterworths.co.uk
Site for Butterworths the leading legal publishers - allows free access to a recent developments
archive that is useful for quick reference - fully downloadable to print or disk.
www.smlawpub.co.uk
Site for Sweet & Maxwell, leading law publishers
(e) Government sites
www.hmso.gov.uk/stat.htm
Very useful site providing full text of recent Acts of Parliament and some delegated legislation.
Fully downloadable to print or disk.
www.open.gov.uk/law.comm/hompage.htm
Site allows access to full text of Law Commission consultation papers and reports. Requires
Adobe Acrobat Reader for downloading to disk.
http://www.open.gov.uk/index.htm
Click on ‘What’s new’ to get a list of recent government publications – good for Law
Commission updates, Home Office statements etc

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Contents
Introduction
Description of Module
Brief Indicative lecture outline
Contract Law – A Brief Outline
Syllabus
How To Use This Planner
Reading List
Learning Outcomes
Part 1
Study Unit One
Offer
Study Unit Two
Acceptance
Study Unit Three
Consideration and Intention to Create Legal Relations
Study Unit Four
Promissory Estoppel
Study Unit Five
Privity of Contract
Study Unit Six
Certainty of Contract; Contents of Contracts – Express Terms
Study Unit Seven
Contents of Contracts – Implied Terms
Study Unit Eight
Relative Importance of Contractual Terms

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Study Unit Nine
Exclusion Clauses – Incorporation and Construction
Study Unit Ten
Exclusion Clauses – The Unfair Contract Terms Act 1977
Part 2
Study Unit Eleven
Misrepresentation
Study Unit Twelve
Mistake at Common Law
Study Unit Thirteen
Incapacity – Minors’ Liability
Study Unit Fourteen
Duress and Undue Influence
Study Unit Fifteen
Illegality
Study Unit Sixteen
Restraint of Trade
Study Unit Seventeen
Frustration
Study Unit Eighteen
Discharge of Contracts – Performance, Agreement and Breach
Study Unit Nineteen
Remedies for Breach of Contract – Damages (1)
Study Unit Twenty
Remedies for Breach of Contract – Damages (2)
Study Unit Twenty One
Remedies – Equitable Remedies and Restitution
Revision and Examination Technique

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Indicative lecture Outline
Lecture 1 Introduction to the law of contract. Brief overview and reference to

general ideas.
Lecture 2 Agreement – The concept of an offer
Lecture 3 Agreement – The concept of an offer and an invitation to treat
Lecture 3 Agreement – Acceptance in contract
Lecture 4 Offer and Acceptance – Recap and relationship between the two.
Lecture 5 Consideration 1
Lecture 6 Consideration 2
Lecture 7 Intention to create legal relations
Lecture 8 Part Payment/Promissory Estoppel
Lecture 9 Part Payment/Promissory Estoppel
Lecture 10 Problem solving skills – How to answer a problem question, with

reference to an examination type of question. How to answer an essay
question.
Lecture 11 Privity of Contract 1
Lecture 12 Privity of Contract 2
Lecture 13 Terms of contract – Express
Lecture 14 Terms of contract - Implied Terms
Lecture 15 Terms of a contract – Exclusion Clauses 1
Lecture 18 Vitiating factors – Misrepresentation 1
Lecture 21 Vitiating factors – Mistake 1
Lecture 20 Vitiating factors – Duress
Lecture 21 Vitiating factors - Economic Duress
Lecture 22 Vitiating factors – Undue influence 1

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Lecture 23 Vitiating factors – Undue influence 2
Lecture 24 Incapacity
Lecture 25 Illegality 1
Lecture 26 Illegality 2
Lecture 27 Contracts in restraint of trade 1
Lecture 28 Contracts in restraint of trade 2
Lecture 29 Discharge of Contracts – Discharge by breach and agreement
Lecture 30 Discharge of contracts – Discharge by performance
Lecture 31 Discharge of contracts – Discharge by frustration 1
Lecture 32 Discharge of contracts – Discharge by frustration 2
Lecture 33 Remedies for breach of contract – Generally
Lecture 34 Remedies for breach of contract – Damages 1
Lecture 35 Remedies for breach of contract – Damages 2
Lecture 36 Remedies for breach of contract – Equitable remedies
Lecture 37 Examination Technique – Skills relevant to examination success
Lecture 38 Exams preparation – A look at past problem papers and going through
them
Lecture 39 Exams preparation – A look at past essay questions and going through
them
Remaining lectures will focus on revision of the subjects covered throughout the year.
Students will be given the opportunity to ask for those subjects to be covered again
which they have found particularly problematic.
There will be an opportunity to look at the assessments at the end of the planner and go
through the steps of how to answer them.

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Introduction
Contract Law – A Brief Outline

Contract Law is usually taught in the first year of undergraduate study leading to the LLB
degree. It is fundamentally important as it lays down the foundations of the legal principles
which would also apply and/or overlap in other areas of study, for example, property law, tort
law, trusts law and employment law.
It is also one of the few areas of law with which almost everyone comes into day-to-day
contact. A simple examination of everyday activities would reveal the extent to which the law
of contract makes an impact. Basically it is concerned with the enforceability of promises.
The general body of contract law is immense, and this in fact creates one of the student’s
greatest problems – the sheer volume of information facing a student may seem, at least
initially, a daunting if not downright impossible task to grasp.
The general principles of contract law are of judge-made origin. That is to say, most of the
major principles are contained in judicial decisions rather than statute. Hence, case law is the
most important source of contract law, and as such it is very important that the student
becomes accustomed to reading and researching case reports and statutory implications on the
general principles of the law of contract.
For the purposes of this course planner, the syllabus has been distinctly divided into three
parts. The first tends to focus on preliminary issues pertaining to the formation of a legally
enforceable contractual relationship. The second part examines the factors that may have the
effect of vitiating a contract and analyses when a contract is void and when it is voidable. The
third part analyses concepts relating to the performance of the contract and the ramifications
of a breach. It also, within this context, assesses the remedies available.
It is vital that the student attains a good understanding of the subject as a whole in order to
perform well in the examinations. To this end, a good grasp or appreciation of the individual
topics is necessary, so as to appraise the subject as a whole collectively. Students SHOULD
NOT prepare individual topics for the examination, as examiners are looking for well-
rounded answers that exhibit a thorough understanding of the subject as a whole.
Hence, the following guidelines are suggested to aid the study of contract law.
a) What does it take to form a contract?

– offer; acceptance; consideration; intention to create legal relations; certainty and
privity of contract.
b) What becomes binding in a contract?
– contents of contract; contractual terms, implied and express terms; exclusion
clauses and restraint of trade clauses.
c) What can make a contract become void or voidable?

– vitiating factors such as misrepresentation, mistake, incapacity, duress and
undue influence, illegality and frustration.
d) When is a contract fully discharged?
UNDERGRADUATE PROGRAMME - 10 - CONTRACT LAW

HOLBORN COLLEGE LLB
– performance, and the consequences of non-performance and/or breach.

e) Remedies available
– common law and equitable remedies.
Students should learn to enjoy the subject. Once the interest is kindled, the rest of the task
becomes easy.
Syllabus
a) The formation of contracts
Offer and acceptance; consideration; certainty of agreement; intention to create legal
relations.
[Note: questions will not be set on requirements as to the form of contracts.]
b) The content of the contract

Conditions, warranties and intermediate terms; exemption clauses; implied terms at
common law; collateral contracts; statutory implied terms with regard to the quality of
goods sold and goods or services supplied.
c) Vitiating factors
Mistake; misrepresentation; duress and undue influence.
d) Illegality and public policy (excluding gaming and wagering)

Contracts illegal at common law; consequences of illegality; contracts in restraint of
trade.
e) Capacity to contract with particular reference to the capacity of minors.
f) Privity of contract (excluding agency and assignment).
g) Performance and breach

Substantial performance; repudiation and anticipatory breach; discharge by breach;
discharge under the doctrine of frustration.
h) Remedies for breach of contract

General principles governing the assessment of damages; remoteness of damage;
damages for non-financial loss; mitigation; restitutionary remedies; liquidated damages
and penalties; specific performance.
[Note:the subject will also take account of relevant European Union legislation and
how this is applied in the UK.]
[Note:students are permitted to bring into the examination hall the following specified
document: either one copy of Blackstone’s Statutes on Contract, Tort and Restitution
(OUP), or one copy of Butterworth’s Student Statutes: Contract, Tort and Restitution
or one copy of Sweet and Maxwell’s Contract, Tort & Restitution Statutes.]
How to Use this Planner

This Course Planner sets out in detail the full scope and extent of The Law of Contract. We
intend it to be the basis of your work on this module.

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There is an indicative lecture outline which will enable the students to follow the lecture
topics. This will assist them in preparation for the lecture, whether before or after the lecture
takes place. There are also Seminars which students are expected to prepare for. These
include interrograms and questions. Students are expected to prepare for each seminar and
they will be expected to contribute to the discussions that take place in the seminars.
The introduction will give you a brief overview of the subject areas to be studied. It is
important to remember, while you learn each individual topic, that the areas all relate to one
another and you should look at the subject as a whole, rather than as a series of isolated parts.
The Planner is divided into two Parts, each Part dealing with each semester of the year.
Reading List
a) You must obtain the following books
Obligations: Contract Law, Cracknell (4th edition) 2003 (Old Bailey Press)
A Casebook on Contract, Smith and Thomas (11th edition) 2000 (Sweet and Maxwell)
Contract Law, McKendrick (5th edition) 2003 (Macmillan)
b) You should obtain the following book

Contract, Cases and Materials, Beale, Bishop and Furmston (4th edition) 2001
(Butterworths)
c) It would be useful to obtain the following book

The Law of Contract, Treitel (11th edition) 2003 (Sweet and Maxwell)
Please note that externally produced books (ie those not published by Old Bailey Press) may
have new editions published during the life span of this Planner. This list is correct at the time
of going to press.
d) Reference to Journals
CLJ Cambridge Law Journal
JBL Journal of Business Law
KCLJ Kings College Law Journal
LMCLQ Lloyd’s Maritime and Commercial Law Quarterly
LQR Law Quarterly Review
LS Legal Studies
MLR Modern Law Review
NLJ New Law Journal
PL PublicLaw

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Learning Outcomes
Each seminar contains a number of learning outcomes which are intended to guide students in
their study of each topic. Once they have completed the reading for each study unit, students
should go back to the learning outcomes and ensure that they understand the topics to which
they refer. Remember that the subject must always be looked at as a whole: if you do not
understand what the learning outcomes refer to, you will need to repeat your reading. You
should not progress from one study unit to the next until you understand, and have reached,
the learning outcomes for that particular study unit.
Needless to say, if students have any problems of understanding key concepts, they can be
clarified in the seminars.

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Part 1: Study Unit One

Part 1: Study Unit One
Topic
Topic
Offer
Offer
Prologue
Prologue
The offer is the first ingredient in the formation of a contract. Without an offer no contract
can ever be formed. The distinction between an offer and an invitation to treat is important to
The offer is the first ingredient in the formation of a contract. Without an offer no contract
be understood.
can ever be formed. The distinction between an offer and an invitation to treat is important to
be understood.
Essential Reading
Essential Reading
Textbook on Contract Law – Relevant Chapter(s)
Other Reading
Other
Contract,Reading
Cases and Materials, Beale, Bishop and Furmston Relevant Chapter(s)
Contract,
The Law ofCases and Materials,
Contract, Beale, Bishop
Treitel Relevant and Furmston Relevant Chapter(s)
Chapter(s)
The Law Law,
Contract of Contract, Treitel–Relevant
McKendrick RelevantChapter(s)
Chapter(s)
Learning Outcomes
Learning Outcomes
Students will be expected:
a) To have understood what constitutes an offer.
b)
a) be able
To have to distinguish
understood whatan offer from
constitutes anan invitation to treat.
offer.
c)
b) To be able to distinguish aanunilateral
offer fromcontract from ato
an invitation bilateral
treat. contract.
d)
c) understand
To be the abovementioned
able to distinguish a unilateralprinciples by reference
contract from to contract.
a bilateral decided cases
d) To understand the abovementioned principles by reference to decided cases
Sources of Law
Sources
Case Lawof Law
Case Law
Offer
Bigg v Boyd-Gibbins Ltd [1971] 1 WLR 913; [1971] 2 All ER 183
Offer
Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256
Bigg v Boyd-Gibbins Ltd [1971] 1 WLR 913; [1971] 2 All ER 183

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INVITATIONS TO TREAT
a) Generally
Bigg v Boyd-Gibbins Ltd (above)
Clifton v Palumbo [1944] 2 All ER 497
Gibson v Manchester CC [1979] 1 WLR 294; [1979] 1 All ER 972 (HL)
Harvey v Facey [1893] AC 552
Spencer v Harding (1870) LR 5 CP 561
b) Display of goods
Fisher v Bell [1961] 1 QB 394
Pharmaceutical Society of GB v Boots [1953] 1 All ER 482
c) Advertisements
Carlill v Carbolic Smoke Ball Co (above)
Grainger v Gough [1896] AC 325
Partridge v Crittenden [1968] 1 WLR 1204; [1968] 2 All ER 421
d) Ticket cases
Chapelton v Barry UDC [1940] 1 KB 532
Thornton v Shoe Lane Parking [1971] 2 QB 163
e) Auctions
Barry v Davies [2001] 1 All ER 944
Payne v Cave (1789) 3 Term R 148
Warlow v Harrison (1859) 29 LJ QB; (1859) 1 E and E 309
f) Tenders
Blackpool and Fylde Aero Club v Blackpool BC [1990] 1 WLR 1195
Great Northern Railway v Witham (1873) LR 9 CP 16
Harvela v Royal Trust of Canada [1985] 2 All ER 966 (HL)
Spencer v Harding (above)
TERMINATION OF OFFER
a) Revocation
Byrne v Van Tienhoven (1880) 5 CPD 344
Daulia v Four Millbank Nominees [1978] 2 All ER 557
Dickenson v Dodds (1876) 2 Ch D 463
Errington v Errington and Woods [1952] 1 KB 290
Payne v Cave (above)
Routledge v Grant (1828) 4 Bing 653
b) Lapse of time
Ramsgate Victoria Hotel v Montefiore (1866) LR 1 Ex Ch 109
c) Terminating condition
Financings Ltd v Stimson [1962] 1 WLR 1184
d) Death
Bradbury v Morgan (1862) 1 H & C 249
Graves v Cohen (1929) 46 TLR 121

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Article
McMeel ‘Contractual Intention: The Smoke Ball Strikes Back’ (1997) 113 LQR 47
Interrograms
1. Define the word ‘offer’ used in its contractual sense.
2. What was the offer in Carlill v Carbolic Smoke Ball Co?
3. Explain the meaning of an invitation to treat?
4. Explain the decision in Partridge v Crittenden.
5. How does Partridge v Crittenden differ from Carlill?
6. Why is the display of goods in a shop window an invitation to treat?
7. Why is the display of goods on supermarket shelves an invitation to treat?
8. What is a ‘Notice for Reward’ in contractual terms?
9. Can an offer be made to the world at large?
10. Who or what makes the offer in Thornton v Shoe Lane Parking?
11. At an auction who or what makes the offer?
12. What is an auction advertised as being ‘without reserve’?
13. Must an acceptor have knowledge of the offer?
14. If services are rendered that coincidentally fulfil the terms of an offer but are
performed in ignorance of that offer do contractual obligations arise?
15. How long does an offer remain open?
16. Explain the decision in Routledge v Grant.
Questions
Past examination questions usually link the topic of offer and acceptance. See unit 2 for
questions covering offer and acceptance. Do not attempt those questions until you have
completed unit 2.

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Part 1: Study Unit Two

Part 1: Study Unit Two
Topic
Topic
Acceptance
Acceptance
Prologue
Prologue
Once an offer is made, an acceptance should/must follow for a valid contract to be formed.
This topic examines the conditions relating to acceptance.
Once an offer is made, an acceptance should/must follow for a valid contract to be formed.
This topic examines the conditions relating to acceptance.
Essential Reading
EssentialContract
Obligations: Reading
Law, Cracknell Relevant Chapter(s)
Textbook on
Obligations:
Contract Contract
Law,ContractLaw
Law,– Cracknell
McKendrick Relevant
RelevantChapter(s)
Chapter(s)
Relevant Chapter(s)
Contract Law, McKendrick Relevant Chapter(s)

Other Reading
Other Reading
Contract, Cases and Materials, Beale, Bishop and Furmston Relevant Chapter(s)
Contract,
Chapter(s)
The Law Law,

Chapter(s)
Learning Outcomes
Learning
Students Outcomes
will be expected:

a) To have understood what constitutes an acceptance.
b)
a) To have
To have understood
examined the battle
what of the forms.
constitutes an acceptance.
c)
b) To have learned the general rule on
To have examined the battle of the forms.communication of acceptance and its exceptions,
especially the postal rule.
c) To have learned the general rule on communication of acceptance and its exceptions,
d) To have examined
especially the postalrevocation
rule. of unilateral contracts.
e)
d) To
To have
have examined
examined the difficulties
revocation of Williams
of unilateral v Carwardine and R v Clarke.
contracts.
e) To have examined the difficulties of Williams v Carwardine and R v Clarke.
Sources of Law
Sources
Case Lawof Law
Acceptance
Case Law by conduct
Brogden v Metropolitan Railway (1877) 2 App Cas 666
Acceptance by conduct
Brogden v Metropolitan Railway
Daulia v 4 Millbank Nominees (1877)
[1978] Ch2231;
App [1978]
Cas 6662 All ER 557
Carlill vElectric
Wettern Carbolicv Smoke Ball Co [1893]
Welsh Development 1 QB 256
Agency [1983] 2 All ER 629
Daulia v 4 Millbank Nominees [1978] Ch 231; [1978] 2 All ER 557
Wettern Electric v Welsh Development Agency [1983] 2 All ER 629

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COUNTER-OFFERS
Butler Machine Tool Co v Ex-cell-o Corp [1979] 1 WLR 401
Hyde v Wrench (1840) 3 Beav 334
Society of Lloyds v Twinn (2000) The Times 4 April (CA)
REQUEST FOR INFORMATION

Stevenson v McLean (1880) 5 QBD 346
MOTIVE FOR ACCEPTANCE

R v Clarke (1927) 40 CLR 227
Williams v Carwardine (1833) 5 Car and P 566
CROSS-OFFERS
Tinn v Hoffman & Co (1873) 29 LT 271
COMMUNICATION
a) General rule
Entores v Miles Far East Corporation [1955] 2 QB 327; [1955] 3 WLR 48
b) Exceptions
Entores v Miles Far East Corporation (above)
Powell v Lee (1908) 99 LT 284
c) Instantaneous communications
Brinkibon v Stahag Stahl [1983] 2 AC 34; [1982] 1 All ER 293
Entores v Miles Far East Corporation (above)
d) Postal rule
Adams v Lindsell (1818) B & Ald 681
Henthorn v Fraser [1892] 2 Ch 27
Holwell Securities v Hughes [1974] 1 WLR 155
Household Fire Insurance v Grant (1879) 4 Ex D 216
e) Prescribed form of acceptance

Tinn v Hoffman & Co (above)
f) Silence
Felthouse v Bindley (1862) 11 CBNS 869
g) Revocation and the postal rule

A to Z Bazaars (Pty) Ltd v Minister of Agriculture [1974] (4) SA 392 (c)
Wenkheim v Arndt (1873) 1 JR 73 (NZ)
Articles
Goh-Loo Soen Yin ‘Construction of a Contract’ (1996) 30 L Teach 363

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Rawlings ‘The Battle of Forms’ (1979) 42 MLR 715
Woodward ‘Contracts and Communications’ [1982] CLJ 236
Interrograms
1. Would the words ‘I intend to take up your offer’ operate as an acceptance?
2. Can acceptance of an offer be by conduct?
3. Will a qualified acceptance be an acceptance, a counter-offer or a revocation?
4. What is the ‘last shot’ doctrine?
5. How would you advise a client to avoid losing the ‘battle of the forms’?
6. In a bilateral contract when is an oral acceptance effective?
7. In a bilateral contract when is a telephoned oral acceptance effective?
8. If the sound of an oral acceptance is drowned by a passing aircraft is there a contract?
9. If an offer is telexed to B from A’s office and the acceptance is telexed by B to A’s
office during office hours but A’s telex has run out of ink so no words appear, is there
a contract?
10. A writes to B offering to sell a certain property at a stated price. B writes to A offering
to buy the same property at the same price. The letters cross in the post. Is there a
contract?
11. A sent a written offer to B in the next town. B posted a letter of rejection but then sent
A a telegram accepting the offer, which reached A before B’s letter. Is there a contract?
12. A sent an offer to B in the next town by telegram. B posted a letter of acceptance but
then sent A a telegram rejecting the offer which reached A before B’s letter. Is there a
contract?
13. If the offeror expressly stipulates that he will not be bound until actual delivery of a
letter of acceptance will the rule in Adams v Lindsell apply?
14. If the written acceptance is lost in the post is there a contract?
15. If the written acceptance is lost in the post because it was wrongly addressed is there a
contract?
16. When can silence be an effective acceptance?
17. Can a unilateral offer be revoked when performance has commenced?
18. What is the effect of a counter-offer on the original offer?
19. If the parties describe their transactions as offer and acceptance, will that be
conclusive?
20. At an auction who or what makes the acceptance?
Questions
1. John places an advertisement in the local gazette advertising the sale of his BMW for
£6,500. Bill calls John and wishes to see the car. Bill sees the car and is deeply
impressed by the condition of the car. He offers John £5000. John replies, ‘On your
bike!’
Bill leaves and is deeply disappointed. Bill calls on John again and says he is willing
to pay £5,700. John maintains he will accept no less than £6,200 and Bill said he
would get back to John the following day.

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Margaret sees Bill before he contacts John and says that John has sold the car on to
somebody else.
Advise Bill
2. Jamil is trying to sell his computer and places a notice in his College. Rahul is
interested and meets Jamil offering him £650. Jamil accepts. An hour later, Jamil
meets up with Rahul and says he has changed his mind.
Discuss
3. Distinguish, by reference to decided cases, between unilateral and bilateral contracts.
4. Is it true to say that acceptance is the ‘unconditional assent to the terms of the offer’?
Discuss by reference to decided cases.
5. Akill offers in writing to sell his motorbike to Iftikhar. Iftikhar writes back saying that
he accepts at the price specified by Akill. Although Iftikhar duly posts the letter, it
gets lost in the post.
Akill is very angry and because he is in quick need of the money, sells the car onto
someone else.
Iftikhar is determined to sue Akill insisting that there was a legally binding
agreement.
Advise Akill

HOLBORN COLLEGE LLB
HOLBORN COLLEGE LLB
Part 1: Study Unit Three

Part 1: Study Unit Three
Topic
Consideration
Topic and Intention to Create Legal Relations
Consideration and Intention to Create Legal Relations

Prologue
This topic looks at the role and function of consideration (the price of the promise, or
Prologue
something of value) in the enforceability of contracts. It also looks at the traditional
This topic looks at
benefit/detriment the roleand
approach andthefunction of consideration
rules governing (the price
consideration. of theexamines
It further promise, the
or
something of value) in the enforceability of contracts. It also looks at the traditional
crucial element of an intention to create legal relations, without which the enforcement of a
benefit/detriment
contract would be aapproach
problem. and the rules governing consideration. It further examines the
crucial element of an intention to create legal relations, without which the enforcement of a
contract would be a problem.
Essential Reading
Obligations:
EssentialContract Law, Cracknell Relevant Chapter(s)
Reading
Textbook
Contract on Contract
Law,
Obligations: Law
Law,– Cracknell
McKendrick
Contract Relevant
RelevantChapter(s)
Chapter(s)
Relevant Chapter(s)

Other Reading
Other Reading
The Law ofCases
Contract, Contract, Treitel Relevant
and Materials, Chapter(s)
Beale, Bishop and Furmston Relevant Chapter(s)
Contract
The Law Law, McKendrick
of Contract, Treitel–Relevant
RelevantChapter(s)
Chapter(s)
Learning Outcomes
a) To haveOutcomes
Learning appreciated that consideration is the economic reason for enforcing contracts.
b) To have examined the traditional benefit/detriment approach.
a) To have appreciated that consideration is the economic reason for enforcing contracts.
c) To have learned the difficulties caused by so called past consideration.
b) To have examined the traditional benefit/detriment approach.
d) To have learned the difficulties surrounding performance of an existing duty as being
c) To have learned the difficulties caused by so called past consideration.
proper consideration.
d) To have learned the difficulties surrounding performance of an existing duty as being
e) To have considered the difference between agreements and contracts, especially the
proper consideration.
distinction between social arrangements and commercial dealings.
e) To have considered the difference between agreements and contracts, especially the
distinction between social arrangements and commercial dealings.
Sources of Law
Case Lawof Law
Sources
Case Law
CONSIDERATION
DEFINITION
CONSIDERATION
Currie v Misa (1875) LR 10 Ex 153
DEFINITION
Dunlop Pneumatic Tyre v Selfridge [1915] AC 847
Currie v Misa (1875) LR 10 Ex 153
Dunlop Pneumatic Tyre v Selfridge [1915] AC 847

HOLBORN COLLEGE LLB
MOVING FROM PROMISEE

Bolton v Madden (1873) LR 9 QB 55
De le Bere v Pearson [1908] 1 KB 280
Dickenson v Abel [1969] 1 WLR 295
Thomas v Thomas (1842) 11 LJ QB 104
NOT NECESSARILY TO PROMISOR

Tanner v Tanner [1975] 1 WLR 1346
PAST CONSIDERATION
Lampleigh v Braithwaite (1615) Hob 105
Pau On v Lau Yiu Long [1980] AC 614; [1979] 3 All ER 65 (PC)
Re Casey’s Patents [1892] 1 Ch 104
Re McArdle [1951] Ch 669
Roscorla v Thomas (1842) 3 QB 234
SUFFICIENT NOT NECESSARILY ADEQUATE

a) Adequacy
Arrale v Costain Civil Engineering Ltd [1976] 1 Lloyd’s Rep 98
Callisher v Bischoffsheim (1870) LR 5 QB 449
Chappell v Nestlé [1960] AC 87
Midland Bank v Green [1981] AC 513
Pitt v PHH Asset Management [1993] 4 All ER 961 (CA)
White v Bluett (1853) 23 LJ Ex 36
b) Duties owed by law

Collins v Godefroy (1831) 1 B & Ad 950
Glasbrook v Glamorgan CC [1925] AC 270
Ward v Byham [1956] 1 WLR 496
c) Duties owed by contract with promisor

Hartley v Ponsonby (1857) 2 El & B 872
North Ocean Shipping v Hyundai Construction (The Atlantic Baron) [1979] QB 705;
[1978] 3 All ER 1170
Re Selectmove [1995] 2 All ER 531 (CA)
Stilk v Myrick (1809) 2 Camp 317
Williams v Roffey Bros & Nicholls Ltd [1990] 1 All ER 512 (CA)
d) Duties owed to third parties

New Zealand Shipping v Satterthwaite (The Eurymedon) [1975] AC 154; [1974] 1 All
ER 1015
Pao On v Lau Yiu Long (above)
Scotson v Pegg (1861) 6 H and N 295
Shadwell v Shadwell (1860) 9 CBMS 159
INTENTION TO CREATE LEGAL RELATIONS

SOCIAL AND DOMESTIC AGREEMENTS
Balfour v Balfour [1919] 2 KB 571
Gould v Gould [1970] 1 QB 275

HOLBORN COLLEGE LLB
Hardwick v Johnson [1978] 1 WLR 683

Jones v Padavatton [1969] 1 WLR 328
Merritt v Merritt [1970] 1 WLR 1211
Pettit v Pettit [1970] AC 777
Ramnarace v Lutchman [2001] 1 WLR 1651
Simpkins v Pays [1955] 1 WLR 975
COMMERCIAL AGREEMENTS
Edwards v Skyways Ltd [1964] 1 WLR 349
Esso Petroleum v Customs & Excise Commissioners [1976] 1 WLR 1; [1976] 1 All ER 117
Evans v Merzario Ltd [1976] 1 WLR 1078
Kleinwort Benson Ltd v Malaysia Mining Corp Bhd [1989] 1 All ER 785
Percy Trentham Ltd v Archital Luxfer Ltd [1993] 1 Lloyd’s Rep 25
Walford v Miles [1992] 2 WLR 174; [1992] 1 All ER 453
HONOUR CLAUSES
Jones v Vernon Pools Ltd [1938] 2 All ER 626
Rose and Frank v Crompton [1925] AC 445
Article
Adams ‘Contract Law at Sea? North Ocean Shipping Co Ltd v Hyundai’ (1979) 42 MLR 557
Interrograms
CONSIDERATION
1. What is meant by ‘reciprocity’?
2. What was the consideration in Thomas v Thomas?
3. Who must offer a benefit for a promise to be enforceable?
4. Who must suffer a detriment for a promise to be enforceable?
5. For £100 A promises to deliver 100 plastic gnomes to B. What is the consideration for
such a promise?
6. What is the ratio of Chappell v Nestlé?
7. In 1997 A gives B his car. In 1998 B promises A £1,000. Is that promise enforceable?
8. Will there be consideration for a guarantee given after the goods were purchased?
9. Why could Lampleigh enforce the promise from Braithwaite (Lampleigh v Braithwaite
(1615)?
10. Has Lord Scarman’s obiter dicta in Pau On v Lau Yiu Long ever been applied?
11. Did Lord Scarman’s obiter dicta in Pau On v Lau Yiu Long change the law?
12. Is a promise not to sue on a valid claim consideration for any settlement of the claim?
13. If a person promises to do what he is already legally bound to do will that be good
consideration?
14. Do you think the mother was really providing something extra to provide consideration
in Ward v Byham?

HOLBORN COLLEGE LLB
15. Why was the promise to pay the police force good consideration in Glasbrook v
Glamorgan CC?
16. Explain the distinction between Stilk v Myrick and Hartley v Ponsonby.
17. Explain the difference between Stilk v Myrick and Williams v Roffey Bros & Nicholls.
18. If A is bound by an existing contract to B and B promises A something new in return
for the existing contractual duties can A enforce that promise?
19. If a person promises to do what he is already bound by contract with a third party to do
will that be good consideration?
20. What was the consideration in Scotson v Pegg?
INTENTION TO CREATE LEGAL RELATIONS

21. Does the law assume that mutual promises are intended to be enforceable?
22. What is a domestic agreement?
23. What is a commercial agreement?
24. How does the law determine whether or not the parties intended to make a legally-
binding contract?
25. Could two businessmen entering into an agreement to further their business interests
ensure it is binding in honour only?
26. What is meant by ‘a rebuttable presumption?
Questions
1. Champa is on trial for murder. Jan, a close friend of hers, visits her in prison one day.
Jan says that she has received a subpoena to attend court to give evidence. Jan does not
wish to give evidence because she is afraid of attending court.
Champa promises to pay her £1000 if she attends.
Jan duly attends and there is an acquittal.
Champa is now refusing to pay.
Advise Jan
2. a) With reference to case examples explain whether past consideration is valid

consideration?
b) Brian is a keen Chelsea supporter, but his son Wayne prefers West Ham United.
Brian told Wayne that he would give him £1,000 if he did not support West
Ham for a year. Wayne stopped going to West Ham’s home games and never
wore his scarf in the team colours for a whole year. Secretly, however, he
always hoped that West Ham would win their games. Wayne is now demanding
the £1,000 from Brian.
3. ‘Consideration need not be adequate but must be sufficient’
Discuss the validity of this assertion.
4. Which of the following is true of consideration?

(i) It must be adequate and of sufficient value;
(ii) It must move from the promise;
(iii) It must never be past;

HOLBORN COLLEGE LLB
(iv) It must be given in every binding agreement;

(v) It may be performance of an existing obligation
5. Anup organizes a Bhangra concert in a local field, and complies with all legal
requirements. He is informed by the police that there will be a charge for the
supervision of the crowds of people likely to be attracted to the event.
He goes ahead with the concert but, on the day of the event, the weather is
exceptionally cold and only a small crowd attend. The police are now claiming their
money for attending the concert, but Anup is reluctant to pay because he says the
police have only performed a public duty for which they are not entitled to payment.
Advise Anup
6. Critically analyse the main principles applicable in the law of consideration.
7. Explain whether or not an intention to create legal relations is an essential element in a
binding contract.
8. Javed and Monica have been married for 3 years’ now. Javed promises to pay Monica
£300 per month to cover her expenses and those of their 2 year old girl.
They then end up separating and Javed refuses to pay Monica any further.
Advise Monica.

HOLBORN COLLEGE LLB
HOLBORN COLLEGE LLB
Part 1: Study Unit Four

Part 1: Study Unit Four
Topic
Topic Estoppel
Promissory
Promissory Estoppel
Prologue
Prologue
This study unit analyses the evolution of the concept of promissory (or equitable) estoppel
and its impact on the doctrine of consideration.
This study unit analyses the evolution of the concept of promissory (or equitable) estoppel
and its impact on the doctrine of consideration.
Essential Reading
EssentialContract
Textbook
Law,
Obligations: Law
Law,– Cracknell
McKendrick
Contract Relevant
RelevantChapter(s)
Chapter(s)
Relevant Chapter(s)

Other Reading
Other Reading
The Law ofCases

The Law Law,

Chapter(s)
Learning Outcomes
Learning
a) To haveOutcomes
examined Lord Dennings judgment in the High Trees case.
b)
a) To have
To have examined
understoodLord
the scope of promissory
Dennings judgmentestoppel.
in the High Trees case.
c)
b) To have reconciled promissory estoppel to the doctrine of consideration.
To have understood the scope of promissory estoppel.
c) To have reconciled promissory estoppel to the doctrine of consideration.
Sources of Law
Sources
Case Lawof Law
C
Case Law
OMMON LAW POSITION
Foakes
COMMON v Beer (1884) 9 App Cas 605
LAW POSITION
Pinnels Case (1602) 5 Co Rep 117a
Foakes v Beer (1884) 9 App Cas 605
Pinnels Case (1602) 5 Co Rep 117a
BIRTH OF PROMISSORY ESTOPPEL
Central
BIRTH OFLondon Property Trust v High Trees House [1947] 1 KB 130
PROMISSORY ESTOPPEL
Hughes v Metropolitan Railway (1877) 2 App Cas 439
CentralvLondon
Jordan Money Property
(1854) 5 Trust
HL Casv High
185 Trees House [1947] 1 KB 130
Hughes v Metropolitan Railway (1877) 2 App Cas 439
Jordan v Money (1854) 5 HL Cas 185
SUBSEQUENT DEVELOPMENT
a)UBSEQUENT
S Nature DEVELOPMENT
of promise
a) HIH Casualty
Nature v AXA Corporate Solutions [2002] Lloyds Rep IR 325
of promise
HIH Casualty v AXA Corporate Solutions [2002] Lloyds Rep IR 325

HOLBORN COLLEGE LLB
Scaptrade, The [1983] 2 All ER 763

Taylor v Lancashire [2001] NPC 34
Woodhouse v Nigeria Produce [1972] AC 741
b) Shield not sword

Baird Textiles v Marks & Spencer [2002] 1 All ER (Comm) 737
Combe v Combe [1951] 2 KB 215
c) ‘Clean hands’ doctrine

D & C Builders v Rees [1966] 2 QB 617
d) Reliance
Ajayi v Briscoe (above)
Alan v El Nasr [1972] 2 WLR 109; [1972] 2 All ER 127
Central London Property Trust v High Trees House (above)
Goldsworthy v Brickell [1987] 1 All ER 853
Societe Italo-Belge v Palm Oils (The Post Chaser) [1982] 1 All ER 19
Tool Metal v Tungsten Electric [1955] 1 WLR 761; [1955] 2 All ER 657
e) Suspensive or extinctive
Ajayi v Briscoe (above)
Alan v El Nasr (above)
Central London Property Trust v High Trees House (above)
D & C Builders v Rees (above)
Tool Metal v Tungsten Electric (above)
f) Relationship with proprietary estoppel

Baird Textiles v Marks & Spencer (above)
Crabb v Arun DC [1976] Ch 179
ESTOPPEL BY CONVENTION
Amalgamated Investment and Property Co v Texas Commerce International Bank [1981] 3
All ER 577
Keen v Holland [1984] 1 All ER 75
Articles
Donaldson ‘Part-payment of Debt – Cheque – Principle of High Trees Case’ [1966] CLJ 14
Dugdale and Yates ‘Variation, Waiver and Estoppel – A Re-Appraisal’ (1976) 39 MLR 680
Halson ‘The Offensive Limits of Promissory Estoppel’ [1999] LMCLQ 256
Nolan ‘Following in their Footsteps: Equitable Estoppel in Australia and the United States’
(2000) KCLJ 202
O’Sullivan ‘In Defence of Foakes v Beer’ [1996] CLJ 219
Peel ‘Part Payment of a Debt is No Consideration’ (1994) 110 LQR 353
Thompson ‘From Representation to Expectation: Estoppel as a Cause of Action’ [1983] CLJ

257
Unger ‘The High Trees Case: Promise or Gift’ (1965) 28 MLR 231

HOLBORN COLLEGE LLB
Interrograms
1. What is the meaning of the word ‘estoppel’?
2. Is a creditor bound by an undertaking to accept part-payment in full settlement of a
debt?
3. A owes B £10 to be paid on June 1st. A pays B £5 on May 30th in full satisfaction of
the debt. Can B sue for the remainder?
4. Why did Mrs Beer succeed in her claim against Dr Foakes (Foakes v Beer (1884))?
5. Why could D & C Builders enforce the original contract price of £482 after accepting
£300 in full satisfaction?
6. Do the courts allow a cause of action of breach of an estoppel?
7. If the plaintiff in Foakes v Beer could go back on her promise not to ask for interest,
why could the plaintiffs not go back on their promise and ask for full rent during the
war years in High Trees?
8. What would have been the position if the landlord had given reasonable notice during
the war of the termination of the agreement for a reduced rent in the High Trees case?
9. Is it true to say that the landlord’s rights to full rent during the war years were
extinguished by the estoppel?
10. What is the concept of equitable forbearance mentioned by Lord Cairns in Hughes v
Metropolitan Railway?
11. How does Lord Denning deal with the conflicting case of Jordan v Money?
12. What is the ratio of Tool Metal Engineering v Tungsten?
13. What is meant by the description of estoppel in Combe v Combe as a shield and not a
sword?
14. Can a promissory estoppel create new rights?
15. Does the party hearing the representation not to insist on strict legal rights have to act
to his detriment in order to enable the estoppel to work?
16. Has High Trees, and in particular, Denning LJ’s obiter, ever been applied?
17. What is proprietary estoppel?
18. How is the decision in WJ Alan v El Nasr reconciled with that of D & C Builders?
19. How far is it true to say that a promise given without consideration has no effect in
law?
20. What are the disadvantages for the law of contract of the doctrine of promissory
estoppel?
21. What do you understand by ‘estoppel by convention’?

HOLBORN COLLEGE LLB
Questions
1. ‘The principle of promissory estoppel is a shield but not a sword’
2. John owes £600 to Matilda. Matilda has agreed to accept £500 from John in full
settlement of John’s debt.
Two weeks later when John is in a position to pay Matilda, she changes her mind and
insists on full payment of the outstanding amount.
Advise John.
3. To what extent is it possible to argue that the doctrine of promissory estoppel will
prevent a party to a contract from enforcing his or her legal rights?
4. William had asked Melissa, a garage proprietor and qualified mechanic, to do some
repairs on his Lamborghini insisting it needed to be completed within ‘4 months’.
When the time was drawing to a close Melissa called William saying that the car
would not be done in time, and William therefore agreed to give a further 2 months.
Melissa assured him the work would be complete.
Two months later the work still had not been done, and William gave Melissa notice
that if the work would not be done in 2 weeks he would cancel.
The work was still not done and William refued to accept the car.
Advise Melissa

HOLBORN COLLEGE LLB
HOLBORN COLLEGE LLB
Part 1: Study Unit Five

Part 1: Study Unit Five
Topic
Topicof Contract
Privity
Privity of Contract
Prologue
Prologue
This examines the traditional doctrine of privity which states that only the parties to a contract
can acquire rights and/or liabilities in respect of that contract. However, the new Contracts
This examines
(Rights of ThirdtheParties)
traditional
Actdoctrine of privity
1999 seeks whichbenefits
to confer states that
on only
thirdthe parties
parties whoto amay
contract
now
can acquire rights and/or liabilities in respect of that
enforce contracts to which they were not privy initially. contract. However, the new Contracts
(Rights of Third Parties) Act 1999 seeks to confer benefits on third parties who may now
enforce contracts to which they were not privy initially.
Essential Reading
EssentialContract
Contract
Textbook Law,
on
Obligations: McKendrick
Contract
Contract Law,– Cracknell
Law RelevantChapter(s)
Relevant Chapter(s)
Relevant Chapter(s)

Other Reading
Other Reading
The Law ofCases

Contract
RelevantChapter(s)
Chapter(s)
Learning Outcomes
Learning
a) To haveOutcomes
considered the doctrine of privity of contract.
b) To have understood the impact of the Contracts (Rights of Third Parties) Act 1999 on
a) To have considered the doctrine of privity of contract.
the doctrine of privity.
b) To have understood the impact of the Contracts (Rights of Third Parties) Act 1999 on
the doctrine of privity.
Sources of Law
Sources of Law
Statutes
Contracts
Statutes(Rights of Third Parties) Act 1999
Road Traffic
Contracts Act 1972:
(Rights s148(4)
of Third Parties) Act 1999
Law
RoadofTraffic
Property
ActAct 1925:
1972: s56
s148(4)
Married Womens
Law of Property Property
Act Act 1882 (s11)
1925: s56
Married Womens Property Act 1882 (s11)

Case Law
THE BASIC RULE
Case Law
Darlington BC v Wiltshire Ltd [1995] 1 WLR 68; [1995] 3 All ER 895 (CA)
THE BASIC RULE
Dunlop v Selfridge [1915] AC 847
Darlington BC v Wiltshire Ltd [1995] 1 WLR 68; [1995] 3 All ER 895 (CA)
Dunlop v Selfridge [1915] AC 847

HOLBORN COLLEGE LLB
New Zealand Shipping Co v Satterthwaite (The Eurymedon) [1975] AC 154; [1974] 1 All ER
1015
Port Jackson Stevedoring v Salmond and Spraggon (The New York Star) [1981] 1 WLR 138
Scruttons v Midland Silicones [1962] AC 446
Southern Water Authority v Carey [1985] 2 All ER 1077
Taddy v Sterious [1904] 1 Ch 354
Tweddle v Atkinson (1861) 1 B & S 393
RULE NOT APPLICABLE

a) Collateral contracts
Alicia Hosiery v Brown Shipley [1970] 1 QB 195
Shanklin Pier v Detel [1951] 2 KB 854
b) Multi-party agreements
Clarke v Earl of Dunraven [1897] AC 59
EQUITY IMPOSING LIABILITY

Bendall v McWhirter [1952] 2 QB 466
Port Line v Ben Line [1958] 2 QB 146
Tulk v Moxhay (1848) 2 Ph 774
EQUITY CREATING BENEFITS

Flavell, Re (1883) 25 Ch D 89
Schebsman, Re [1944] Ch 83
Vandepitte v Preferred Accident Insurance [1933] AC 70
SUING IN ANOTHER CAPACITY

Beswick v Beswick [1968] AC 58
DAMAGES
Jackson v Horizon Holidays [1975] 1 WLR 1468
Woodar Investments v Wimpey Construction [1980] 1 WLR 227; [1980] 1 All ER 571
Articles
Adams and Brownsword ‘Privity of Contract: The Pestilential Nuisance’ (1993) 56 MLR 722
Andrews ‘Reform of the Privity Rule in English Contract Law’ The Law Commission’s
Report No 242 [1997] CLJ 25
Davey ‘Privity of Contract and Leases – Reform at Last’ (1996) 59 MLR 78
Ramage ‘The Contract (Rights of Third Parties) Act 1999’ [2000] 14 April NLJ 540
Tettenbom ‘Symbolic but Sensible’ – the Contracts (Rights of Third Parties) Act 1999 –
‘Amicus Curiae’ (Journal of the Society for Advanced Legal Studies) Issue 25, 24
March 2000

HOLBORN COLLEGE LLB
Interrograms
1. Why could Dunlop not enforce the price clause with Selfridge (Dunlop v Selfridge
(1915))?
2. In Beswick v Beswick did the House of Lords mitigate the doctrine of privity?
3. Are there any statutory exceptions to the doctrine of privity of contract?
4. Privity of contract has been described as ‘a blot on our law and most unjust’. Do you
agree?
5. How has the Contracts (Rights of Third Parties) Act 1999 changed the previous law?
6. What are its main provisions?
Questions
1. Has the doctrine of privity of contract been amended by the Contract (Rights of Third
Parties) Act?
2. Frank is an internationally recognized architect. He was engaged by Global plc to act
as supervising architect for their prestigious new shopping centre development.
Global agreed to pay a fee of £30,000 to Holding’s Ltd, a company wholly owned by
Frank’s children, in return for Frank’s services, on the completion of the centre.
Immediately after the centre is completed, and before the fee is paid, Frank dies from
a heart attack. Gloabal are refusing to pay the £30,000 to Holdings Ltd.
Advise Holdings Ltd

HOLBORN COLLEGE LLB
HOLBORN COLLEGE LLB
Part 1: Study Unit Six

Part 1: Study Unit Six
Topic
Topic of Contract; Contents of Contracts Express Terms
Certainty
Certainty of Contract; Contents of Contracts Express Terms

Prologue
Prologue
Certainty of contracts examines and illustrates the need for contracts to be certain and
unambiguous. If contracts are too vague they cannot be enforced.
Certainty of contracts examines and illustrates the need for contracts to be certain and
unambiguous. If contracts are too vague they cannot be enforced.
Essential Reading
EssentialContract
Textbook
Law,
Obligations: Law
Law,– Cracknell
McKendrick
Contract Relevant
RelevantChapter(s)
Chapter(s)
Relevant Chapter(s)

Other Reading
Other Reading
The Law ofCases

The Law Law,

Chapter(s)
Learning Outcomes
Learning
a) To haveOutcomes
considered the need for certainty of contractual terms and ways of determining
certainty.
a) To have considered the need for certainty of contractual terms and ways of determining
b) To be able to classify a pre-contractual statement as a term or a representation.
certainty.
c) To have understood the guidelines for making the term/representation distinction.
b) To be able to classify a pre-contractual statement as a term or a representation.
d) To have examined the concept of a collateral contract.
c) To have understood the guidelines for making the term/representation distinction.
e) To have learned the parol evidence rule and its exceptions.
d) To have examined the concept of a collateral contract.
e) To have learned the parol evidence rule and its exceptions.
Sources of Law
Sources of Law
Statutes
Certainty
Statutes
Law of Property (Miscellaneous Provisions) Act 1989: s2
Certainty
Sale
Law of Goods Act
Property 1979: s8
(Miscellaneous Provisions) Act 1989: s2
Supply of Goods
Sale of Goods Actand Services
1979: s8 Act 1982: s15(1)
Sale andofSupply
Supply Goodsof Goods
and Act Act
Services 19941982: s15(1)
Sale and Supply of Goods Act 1994

HOLBORN COLLEGE LLB
Case Law
Certainty
Baird Textiles v Marks & Spencer [2002] 1 All ER (Comm) 737
Campbell v Edwards [1976] 1 WLR 403
Foley v Classique Coaches [1934] 2 KB 1
Forrester v UYCF Ltd [2000] NPC 141
Hillas v Arcos (1932) 147 LT 503
Mamidoil-Jetoil Greek Petroleum v Okta Crude Oil Refinery [2001] 2 All ER (Comm) 193
Manatee Towing Co v Oceanbulk Maritime SA [1999] 2 All ER (Comm) 306
May & Butcher v R [1934] 2 KB 17
Scammel v Ouston [1941] AC 251
Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC 444; [1982] 3 All ER 1
Walford v Miles [1992] 2 WLR 174; [1992] 1 All ER 453
INCORPORATION OF TERMS
a) Strength of statement
Schawel v Reade [1913] 1 IR 81
b) Importance of statement
Bannerman v White (1861) 10 CB (NS) 844
Couchman v Hill [1947] KB 54
c) Relative knowledge
Dick Bentley Productions Ltd v Harold Smith Motors [1965] 1 WLR 623; [1965] 2 All
ER 65
Harling v Eddy [1951] 2 KB 739
Oscar Chess v Williams [1957] 1 WLR 370
d) Reduction to writing
Routledge v McKay [1954] 1 WLR 615; [1954] 1 All ER 855
e) Lapse of time
Bannerman v White (1861) 10 CB (NS) 844
Routledge v McKay [1954] 1 All ER 855
f) Overall test
Heilbut, Symons v Buckleton [1913] AC 30
COLLATERAL CONTRACTS
City & Westminster Properties v Mudd [1959] Ch 129
De Lasalle v Guildford [1901] 2 KB 215
Esso Petroleum v Mardon [1976] QB 801; [1976] 2 All ER 5
Eyre v Measday [1986] 1 All ER 488
Heilbut, Symons v Buckleton (above)
Shanklin Pier v Detel Products [1951] 2 KB 854
Thake v Maurice [1986] 1 All ER 497

HOLBORN COLLEGE LLB
PAROL EVIDENCE RULE

Goss v Lord Nugent (1833) 5 B & Ad 58
EXCEPTIONS
City & Westminster Properties v Mudd (above)
Couchman v Hill (above)
Pym v Campbell (1856) 6 E & B 370
Articles
Milne ‘Trusts and Contracts for the Sale of Land’ [2000] NLJ (Easter Appeals), 23
Wilde ‘Contracts for the Sale of Disposition of Land’ (1993) 109 LQR 191
Interrograms
CERTAINTY OF CONTRACT
1. Distinguish May & Butcher v R from Foley v Classique Coaches.
2. Why was there no contract in Scammel v Ouston?
3. What does the expression ‘subject to contract’ mean?
4. Why is it so important to solicitors that their letters marked ‘subject to contract’ should
not be of legal effect?
5. Does the law recognise an agreement to agree something?
CONTENTS – EXPRESS TERMS

6. What is an express term of contract?
7. What is a ‘mere puff’?
8. Is a pre-contractual statement likely to be a term if the person making it expressly asks
the other party to verify its truth?
9. Is a pre-contractual statement likely to be a term where its importance is such that, if it
had not been made, there would have been no contract formed?
10. Distinguish Oscar Chess v Williams from Dick Bentley Productions v Harold Smith
Motors.
11. Why was the defendant’s statement as to the age of the motorcycle not a term of the
contract in Routledge v McKay?
12. What is the ratio of Heilbut Symons v Buckleton?
13. What is a collateral contract?
14. What is the consideration for a collateral contract?
15. What is the parol evidence rule?
16. Where a contract is written will extrinsic evidence be allowed to show when the
contract should begin to operate?
17. Where a contract is written will extrinsic evidence be allowed to show in what
capacities the parties contracted?
18. Is the parol evidence rule still good law at present?

HOLBORN COLLEGE LLB
19. Why did the Court of Appeal not allow the defendants to rely on their printed standard
terms for carrying the goods above deck in Evans v Merzario?
20. How does a mere representation become an express term?
Questions
See unit 8. Do not attempt those questions until you have completed units 7 and 8.

HOLBORN COLLEGE LLB
HOLBORN COLLEGE LLB
Part 1: Study Unit Seven

Part 1: Study Unit Seven
Topic
Topic of Contracts Implied Terms
Contents
Contents of Contracts Implied Terms

Prologue
Prologue
Contents of contracts looks at the terms and representations that form the contract. Implied
terms are one of two types of terms that are implied into contracts by either the courts, custom
Contents
or by the ofparties
contracts looks at Primarily
themselves. the terms these
and representations
terms give thethat form the
contract contract.
business Implied
efficacy or
terms are one of
commercial sense. two types of terms that are implied into contracts by either the courts, custom
or by the parties themselves. Primarily these terms give the contract business efficacy or
commercial sense.
Essential Reading
EssentialContract
Law, Cracknell Relevant Chapter(s
Textbook
Contract on
Obligations:Contract
Law,ContractLaw
Law,– Cracknell
McKendrick Relevant
RelevantChapter(s)
Chapter(s)
Relevant Chapter(s

Other Reading
Other Reading
The Law ofCases

Contract
RelevantChapter(s)
Chapter(s)
Learning Outcomes
Learning
a) To haveOutcomes
understood the principles a court considers when deciding to imply a term.
b)
a) To have understood
To have examined the officious abystander
the principles test as
court considers expressed
when imply a vterm.
decidingintoShirlaw Southern
Foundries.
b) To have examined the officious bystander test as expressed in Shirlaw v Southern
c) To have learnt the principal terms implied by law in a sale of goods contract and a
Foundries.
contract for the supply of goods and services.
c) To have learnt the principal terms implied by law in a sale of goods contract and a
d) To have examined under what circumstances a term can be implied by custom.
contract for the supply of goods and services.
d) To have examined under what circumstances a term can be implied by custom.
Sources of Law
Sources of Law
Statutes
Late Payment of Commercial Debts (Interest) Act 1998
Statutes
Sale
Late of Goods of
Payment Act 1979: ss1215
Commercial Debts (Interest) Act 1998
Sale of Goods (Amendment) Act 1995

Act 1979: ss1215
Supply of Goods
Sale of Goods & Services Act 1982:
(Amendment) 1995 ss210 and 1315
Supply of Goods (Implied Terms)

& Services Act 1973:
Act 1982: ss8and
ss210 111315
Sale andofSupply
Supply Goodsof Goods Act
(Implied 1994
Terms) Act 1973: ss8 11


HOLBORN COLLEGE LLB
Case Law
TERMS IMPLIED BY INTENTION OF PARTIES
Ali and Others v Christian Salvesan Food Services Ltd [1997] 1 All ER 721 (CA)
Equitable Life Assurance Society v Hyman [2002] 1 AC 408 (HL)
Eyre v Measday [1986] 1 All ER 488
Luxor v Cooper [1941] AC 108
Moorcock, The (1889) 14 PD 64
Reigate v Union Manufacturing Co [1918] 1 KB 592
Shell UK v Lostock Garages [1976] 1 WLR 1187
Shirlaw v Southern Foundries [1940] AC 701 (HL)
Times Newspapers v George Weidenfeld & Nicolson [2002] FSR 463
TERMS IMPLIED FROM RELATIONSHIP BETWEEN PARTIES

Alghussein Establishment v Eton College [1991] 1 WLR 587; [1991] 1 All ER 267 (HL)
Harvela v Royal Trust of Canada [1985] 2 All ER 966 (HL)
Lister v Romford Ice & Cold Storage [1957] AC 555
Liverpool CC v Irwin [1977] AC 236 (HL)
Malik v BCCI [1997] 3 WLR 95; [1997] 3 All ER 1 (HL)
Wettern Electric v Welsh Development Agency [1983] 2 All ER 629
TERMS IMPLIED BY CUSTOM

British Crane Hire v Ipswich Plant Hire [1975] QB 303
Hutton v Warren (1836) 1 M & W 466
TERMS IMPLIED UNDER SALE OF GOODS LEGISLATION

Marimpex Mineralöl Handelgesellschaft MbH v Louis Dreyfus GmbH [1995] 1 Lloyd’s Rep
167
Saphena Computing Ltd v Allied Collection Agencies Ltd [1995] FSR 616 (CA)
Wilson v Best Travel [1993] 1 All ER 353
Articles
Boon & Phang ‘Implied Terms in English Law – Some Recent Developments’ [1993] JBL
242
Smith ‘Contracts – Mistake, Frustration and Implied Terms’ (1994) 110 LQR 400
Interrograms
1. What is the ratio decidendi of The Moorcock?
2. What is the ‘officious bystander’ test?
3. What remedies are available for breach of an implied term?
4. Why is the decision in Shell UK v Lostock Garages of great importance?
5. Explain the decision in Lister v Romford Ice.
6. Is Lister v Romford Ice good law today?
7. Explain briefly the effect of s14 of Sale of Goods Act 1979, as amended by s1 Sale and
Supply of Goods Act 1994.

HOLBORN COLLEGE LLB
8. What term is implied by s12 of Sale of Goods Act 1979?

9. What term is implied by s13 of the Supply of Goods and Services Act 1982?
10. Part I of the Supply of Goods and Services Act 1982 is concerned with what?
11. How do the statutes mentioned above protect consumers? What are the effects of the
Sale and Supply of Goods Act 1994 and Sale of Goods (Amendment) Act 1995?
12. What is a custom?
13. Explain the decision in British Crane Hire v Ipswich Plant Hire.
14. How is a term implied into a contract?
15. Give a case where the courts have implied a term into a contract for reasons of public
policy.
16. Give a case where the courts have refused to imply a term into a contract for reasons of
public policy.
Questions
See unit 8. Do not attempt those questions until you have completed unit 8.

HOLBORN COLLEGE LLB
HOLBORN COLLEGE LLB
Part 1: Study Unit Eight

Part 1: Study Unit Eight
Topic
Topic Importance of Contractual Terms
Relative
Relative Importance of Contractual Terms

Prologue
Prologue
The relative importance of contractual terms looks at the nature of contractual terms and
distinguishes between mere representations and legally binding (contractual) terms. It also
The relative
examines theimportance of contractual
various situations terms
in which looks or
express at implied
the nature of contractual
terms terms in
may be present anda
distinguishes
contract. between mere representations and legally binding (contractual) terms. It also
examines the various situations in which express or implied terms may be present in a
contract.
Essential Reading
EssentialContract
Textbook
Contract on
Law,ContractLaw
Law,– Cracknell
McKendrick Relevant
RelevantChapter(s)
Chapter(s)
Relevant Chapter(s)

Other Reading
Other Reading
Contract,
Chapter(s)
Contract
RelevantChapter(s)
Chapter(s)
Learning Outcomes
Learning
a) To haveOutcomes
understood the threefold classification of contractual terms.
b)
a) To have
To have understood
learnt the remedies available
the threefold to the innocent
classification party forterms.
of contractual breach of a term.
c)
b) To
To have
have examined the importance
learnt the remedies of the
available development
to the of the
innocent party for innominate
breach of a term.
term.
d)
c) To have
To have examined
examined the
anyimportance
developments of the
of the law since theofHong
development Kong Fir case.
the innominate term.
d) To have examined any developments of the law since the Hong Kong Fir case.
Sources of Law
Sources
Statutes of Law
Statutes
Sale of Goods Act 1979
of Goods
Sale and Act
Supply of1979
Goods Act 1994

Case Law
Case
C Law
ONDITIONS
Barber v NSW Bank plc [1996] 1 All ER 906 (CA)
CONDITIONS
Behn v Burness (1863) 3 B and S 751
Barber v NSW
British & Bank plc [1996]
Commonwealth 1 Allv ER
Holdings 906 (CA)
Quadrex [1989] 3 WLR 723
Behn v Burness (1863) 3 B and S 751
Bunge v Tradax Export SA [1981] 1 WLR 711; [1981] 2 All ER 513
British & Commonwealth Holdings v Quadrex [1989] 3 WLR 723
Bunge v Tradax Export SA [1981] 1 WLR 711; [1981] 2 All ER 513

HOLBORN COLLEGE LLB
Head v Tattersall (1871) LR7 Ex7

Mihalis Angelos, The [1971] 1 QB 164
Poussard v Spiers (1876) 1 QBD 410
Pym v Campbell (1856) 6 E & B 370
WARRANTIES
Bettini v Gye (1876) 1 QBD 183
INNOMINATE TERMS
Cehave v Bremer Handelgesellschaft (The ‘Hansa Nord’) [1976] QB 44
Federal Commerce & Navigation Co v Molena Alpha Inc [1979] AC 757
Hong Kong Fir Shipping v Kawasaki Kisen Kaisha [1962] 2 QB 26
Reardon Smith v Hansen-Tangen [1976] 1 WLR 989; [1976] 3 All ER 570
INTERPRETATION
Lombard North Central plc v Butterworth [1987] 1 All ER 267
Schuler v Wickman Machine Tools [1974] AC 235 (HL)
Article
MacMillan ‘When Standard Terms are Terms of a Contract’ [1996] CLJ 427
Interrograms
1. What is a warranty?
2. What is a condition?
3. What remedy is available to the innocent party for breach of a warranty?
4. What remedy is available to the innocent party for breach of a condition?
5. Distinguish Poussard v Spiers from Bettini v Gye.
6. Why was the innocent party not entitled to terminate in the Hong Kong Fir case?
7. On the facts of Hong Kong Fir what would have been the decision if the voyage had
been delayed for 12 months?
8. What is an ‘intermediate stipulation’ in a contract?
9. What classification of terms is used in the Sale of Goods legislation?
10. Why did Lord Denning MR decide that the ‘expected ready to load clause’ in the
Mihalis Angelos was a condition?
11. Why did the court not give effect to the parties ‘intentions’ in Schuler v Wickman?
12. Why did the court not allow repudiation in Reardon Smith v Hansen-Tangen?
13. In Bunge v Tradax what was the underlying reason as far as the House of Lords was
concerned for allowing repudiation?
14. What was the ‘innominate term’ in the Hansa Nord case?
15. How has the law developed since the Hong Kong Fir case?
16. How can a party find out if his breach is such as to excuse all further performance?

HOLBORN COLLEGE LLB
Questions
1. ‘Whether a breach of contract discharges the contract or not depends upon the nature
of the term broken.’
Discuss.
2. ‘The remedies open to the innocent party for breach of a contractual stipulation no
longer depend upon the classification of the stipulation as a “condition” or a
“warranty”.’
Explain and comment.
3. ‘The attempt by some judges to define the provisions of a contract in terms other than
that of conditions and warranties is no more than a romantic exercise in semantics.’
Discuss.
4. ‘Not all contractual terms are treated as conditions or warranties. In the past few
decades it has been recognised that the classification of terms into conditions and
warranties is somewhat unsatisfactory.’
‘Commercial certainty requires that business people should know what risks they are
undertaking. This can only be achieved by classifying contractual terms at the time of
the contract.’
Consider how these views have been reflected in recent case law.
5. J made a contract with K, a builder, for K to build an extension to J’s house for a price
of £8,000 to be paid on completion. The contract stated: ‘It is a condition of this
contract that all work will be performed with proper skill and care and that the house
will remain habitable throughout the period of the works.’
The work was estimated to take six weeks to complete. Two weeks after work started J
learned that other local builders would have done the same job for £6,000. A week
after that L, a labourer employed by K, carelessly fractured a water pipe: the house was
flooded and J and his family were forced to leave it for three days.
J informed K that he regarded the contract as cancelled, but K wishes to complete the
job.
Advise K.
6. In January P appointed R as his personal assistant for three years at a salary of

£20,000. R’s service agreement included the following provisions:
a) R will work such hours as are required;
b) R will not consume alcohol when on duty;
c) it is strictly understood – and it is a condition of the agreement – that R will
maintain a credit balance in his bank account at all times.
P has just discovered that R occasionally drinks a can of light ale at the office when
working late at night and that R’s bank account was overdrawn by £10 for four days
last week.
Advise P, who thinks he could now find a suitable personal assistant at a salary of
£15,000.

HOLBORN COLLEGE LLB
HOLBORN COLLEGE LLB
Part 2: Study Unit Nine

Part 2: Study Unit Nine
Topic
Topic Clauses Incorporation and Construction
Exclusion
Exclusion Clauses Incorporation and Construction
Prologue
Prologue
Exclusion clauses, and their incorporation and construction, examines how a party can deny
or reduce liability by using exclusion or limitation clauses as a term in a contract. The
Exclusion
position at clauses,
commonandlaw their incorporation
is also analysed. and construction, examines how a party can deny
or reduce liability by using exclusion or limitation clauses as a term in a contract. The
position at common law is also analysed.
Essential Reading
EssentialContract
Textbook
Contract on
Law,ContractLaw
Law,– Cracknell
McKendrick Relevant
RelevantChapter(s)
Chapter(s)
Relevant Chapter(s)

Other Reading
Other Reading
Contract,
Chapter(s)
The Law Law,
Chapter(s)
Learning Outcomes
Learning
a) To haveOutcomes
learned the correct approach to an exclusion or limitation clause in a contract.
b)
a) To have
To have learned
understood the concept
the correct of incorporation
approach into
to an exclusion orthe contract.
limitation clause in a contract.
c)
b) To
To have
have learnt the case
understood the law illustrating
concept the various into
of incorporation methods of incorporation.
the contract.
d)
c) To have
To have learnt
understood the law
the case contra proferentem
illustrating rule when
the various construing
methods a term in a contract.
of incorporation.
d) To have understood the contra proferentem rule when construing a term in a contract.
Sources of Law
Sources
Case Lawof Law
Case Law of exclusion clauses
Incorporation
a) Reasonable notice
Incorporation of exclusion clauses
a) Geier v Kujawa
Reasonable [1970] 1 Lloyds Rep 364
notice
Parker v SE Railway (1877) 2 CPD 416
Sugar vv Kujawa
Geier London,[1970] 1 Lloyds
Midland RepRailway
& Scottish 364 [1941] 1 All ER 172
Parker v SE Railway (1877) 2 CPD 416
Thompson v LM & S Railway [1930] 1 KB 41
Sugarv vWaltham
Vine London,Forest
Midland & Scottish
Borough Railway
Council [1941]
[2000] 4 All1ER
All169
ER 172
Thompson v LM & S Railway [1930] 1 KB 41
b) Vine v Waltham
Unusual terms Forest Borough Council [2000] 4 All ER 169
b) Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1988] 1 All ER 348
Unusual terms
Spurling v Bradshaw [1956] 1 WLR 461; [1956] 2 All ER 121
Interfoto
ThorntonPicture Library
v Shoe Lane Ltd v Stiletto
Parking Visual
Ltd [1971] 2 QBProgrammes
163 Ltd [1988] 1 All ER 348
Spurling v Bradshaw [1956] 1 WLR 461; [1956] 2 All ER 121
Thornton v Shoe Lane Parking Ltd [1971] 2 QB 163

HOLBORN COLLEGE LLB
c) Time of notice
Olley v Marlborough Court Hotel [1949] 1 KB 532
d) Course of dealing
British Crane Hire Corporation v Ipswich Plant Hire [1975] QB 303; [1974] 1 All ER
1057
Henry Kendall v William Lillico [1968] 2 All ER 444
Hollier v Rambler Motors [1972] 2 QB 71; [1972] 2 WLR 401
McCutcheon v David MacBrayne [1964] 1 WLR 125; [1964] 1 All ER 430
e) Documents
Chapelton v Barry UDC [1940] 1 KB 532
f) Effect of signature and misrepresentation

Curtis v Chemical Cleaning Co [1951] 1 KB 805
L’Estrange v Graucob [1934] 2 KB 394
CONSTRUCTION OF EXCLUSION CLAUSES

a) Part written/part oral
Couchman v Hill [1947] KB 54
b) Contra proferentem rule

Wallis Son & Wells v Pratt & Haynes [1911] AC 394
c) Liability for negligence

Alderslade v Hendon Laundry Ltd [1945] KB 189
Smith v South Wales Switchgear [1978] 1 WLR 165
d) Fundamental breach
Ailsa Craig Fishing Co Ltd v Malvern Fishing Co [1983] 1 WLR 964; [1983] 1 All ER
101
George Mitchell Ltd v Finney Lock Seeds Ltd [1983] 2 AC 803; [1983] 2 All ER 737
Photo Productions v Securicor Transport [1980] AC 827; [1980] 1 All ER 556 (HL)
Suisse Atlantique [1967] 1 AC 361
Articles
Adams ‘Fundamental Breach – Positively Last Appearance’ (1983) 46 MLR 771
Coote ‘Pity the Poor Stevedore!’ [1981] CLJ 13
Palmer ‘Limiting Liability for Negligence’ (1982) 45 MLR 322
Sealy ‘Sale of Goods – “Reasonableness” of Exemption Clause Under Yesterday’s Law’

[1984] CLJ 29
Sealy ‘Contract – Farewell to the Doctrine of Fundamental Breach’ [1980] CLJ 252
Interrograms
1. What is a limitation clause?

HOLBORN COLLEGE LLB
2. What is an exclusion clause?

3. How many ways can an exclusion clause be incorporated into a contract?
4. Why was the exclusion clause not incorporated in Chapelton v Barry UDC?
5. Was the exclusion clause incorporated in McCutcheon v David MacBrayne?
6. Why were the exclusion clauses not incorporated in Thornton v Shoe Lane Parking?
7. Why was the exclusion clause not incorporated in Olley v Marlborough Court Hotel?
8. Does the nature of the document containing the exclusion clause determine
incorporation?
9. Would railway tickets be considered contractual documents today?
10. In Thornton v Shoe Lane Parking Denning MR said ‘some clauses I have seen would
need to be printed in red ink on the face of the document with a red hand pointing to it
before the notice could be held to be sufficient.’ Explain this comment.
11. What is the ‘contra proferentem’ rule?
12. Why did the clause not apply in Hollier v Rambler Motors?
13. Why are there special considerations for the exclusion of negligence liability?
14. What is the ratio decidendi of Suisse Atlantique?
15. Can liability for a very serious breach be excluded by a carefully worded clause?
16. Can liability for a fundamental breach be excluded by a carefully worded clause?
17. Why were Securicor protected by the limitation clause in Photo Productions v
Securicor?
18. Why were Malvern Fishing protected by the limitation clause in Ailsa Craig Fishing v
Malvern Fishing?
19. Is Suisse Atlantique still good law?
20. Why are limitation clauses in a contract between businessmen dealing at arm’s length
encouraged?
Questions
See next unit

HOLBORN COLLEGE LLB
HOLBORN COLLEGE LLB
Part 2: Study Unit Ten

Part 2: Study Unit Ten
Topic
Topic
Exclusion Clauses The Unfair Contract Terms Act 1977
Exclusion Clauses takes
Note: the syllabus The Unfair
accountContract Terms
of relevant Act 1977
European Union legislation in the field of unfair
contract terms.
Note: the syllabus takes account of relevant European Union legislation in the field of unfair
contract terms.
Prologue
Prologue
The position of exclusion clauses at statute is examined here. The effects of the recent Unfair
Terms in Consumer
The position Contracts
of exclusion Regulations
clauses at statute1999 will also here.
is examined be reviewed.
The effects of the recent Unfair
Terms in Consumer Contracts Regulations 1999 will also be reviewed.
Essential Reading
Essential Reading
Obligations: Contract Law, Cracknell Relevant Chapter(s)
Textbook
Contract on
Law,ContractLaw
Law,– Cracknell
McKendrick Relevant
RelevantChapter(s)
Chapter(s)
Relevant Chapter(s)

Other Reading
Other
Contract,Reading
Cases and Materials, Beale, Bishop and Furmston Relevant Chapter(s)
Contract,
Chapter(s)
The Law Law,
Chapter(s)
Learning Outcomes
Learning
a) To haveOutcomes
understood the scope of the Unfair Contract Terms Act 1977.
a)
b) To have understood theconcepts
examined the scope ofofthe Unfair Contract
business liabilityTerms Act 1977.
and dealing as a consumer.
c)
b) To have examined
learnt which
the clauses
conceptsare
of rendered
businesstotally ineffective
liability by the
and dealing as aAct and which are
consumer.
c) made subject to the requirement of reasonableness.
To have learnt which clauses are rendered totally ineffective by the Act and which are
d) To have
made examined
subject to thethe concept ofofreasonableness
requirement imposed by the Act.
reasonableness.
d)
e) To have
haveexamined
examinedthe
theconcept
impactofof
reasonableness imposed
European Union law by
in the
thisAct.
area, particularly the
e) Unfair Terms in Consumer Contracts Regulations 1999.
To have examined the impact of European Union law in this area, particularly the
Unfair Terms in Consumer Contracts Regulations 1999.
Sources of Law
Sources of Regulations
Statutes and Law
Statutes and Regulations
Misrepresentation Act 1967: s3
Misrepresentation
Occupiers LiabilityAct
Act1967:
1984s3
Occupiers Liability
Sale of Goods Act 1984
Act 1979: ss1215
Sale of Goods Act 1979: ss1215

HOLBORN COLLEGE LLB
Unfair Contract Terms Act (UCTA) 1977: Parts I and III
Unfair Terms in Consumer Contracts Regulations (1999)
Case Law
UNFAIR CONTRACT TERMS ACT 1977
a) Effect not form
Phillips Products Ltd v Hyland [1987] 2 All ER 620
Thompson v T Lohan Ltd [1987] 2 All ER 631
b) Dealing as a consumer
R & B Customs Brokers Co Ltd v United Dominion Trust Ltd [1988] 1 All ER 847
c) Reasonableness
George Mitchell (Chesterhall) Ltd v Finney Lock Seeds [1983] 2 AC 803; [1983] 2 All
ER 737 (HL)
RW Green Ltd v Cade Bros [1978] 1 Lloyd’s Rep 602
St Albans City and District Council v International Computers Ltd [1996] 4 All ER
482 (CA)
Stag Line v Tyne Ship Repair Group [1984] 2 Lloyd’s Rep 211
Smith v Eric S Bush [1989] 2 All ER 514
Stewart Gill Ltd v Horatio Myer [1992] 2 WLR 721; [1992] 2 All ER 257
UNFAIR TERMS IN CONSUMER CONTRACTS REGULATIONS 1999

Director General of Fair Trading v First National Bank [2001] 3 WLR 1297
Standard Bank v Apostolokis [2002] CLC 933
Articles
Beatson ‘European Law and Unfair Terms in Consumer Contracts’ [1995] CLJ 235
Bradgate ‘Unreasonable Standard Terms’ (1997) 60 MLR 582
Bright ‘Winning the Battle Against Unfair Contract Terms’ (2000) LS 331
Brown and Chandler ‘Unreasonableness and the Unfair Contract Terms Act’ (1993) 109 LQR
41
Dean ‘The EC Directive on Unfair Terms in Consumer Contracts’ (1993) 56 MLR 581
Hedley ‘Defective Software in the Court of Appeal’ [1997] CLJ 21
MacDonald ‘The Council, the Computer and the Unfair Contract Terms Act 1977: St Albans
DC v International Computers’ (1995) 58 MLR 585
Peel ‘Making More Use of UCTA 1977: Stewart Gill Ltd v Horatio Myer and Co’ (1993) 56
MLR 98
Peel ‘Reasonable Exemption Clauses’ (2001) 117 LQR 545
Reynolds ‘Unfair Contract Terms’ (1994) 110 LQR 1
Sealy ‘Unfair Contract Terms Act 1977’ [1978] CLJ 15

HOLBORN COLLEGE LLB
‘The Unfair Terms in Consumer Contracts Regulations 1999’ SLR Autumn 1999 (Vol 28) 8
(Student Law Review)
Report
Law Com No 166: Unfair Terms in Contracts
Interrograms
1. What is a contract on written standard terms?
2. What is a standard form contract?
3. For the purposes of ss2–7 UCTA what is meant by business liability?
4. Can a contracting party exclude liability for negligently injuring another party?
5. Can a contracting party exclude liability for negligently damaging property of another
party?
6. What is meant by ‘deals as a consumer’?
7. What section of UCTA defines ‘deals as a consumer’?
8. Will a person bidding at an auction ‘deal as a consumer’?
9. Will a child buying chocolate at a local shop ‘deal as a consumer’?
10. Can a businessman exclude liability with a consumer for breach of contract?
11. Can a contract on written standard terms ever exclude liability for breach?
12. Can s12 Sale of Goods Act obligations be excluded by a contract term?
13. As against a person dealing as a consumer, can ss13, 14 and 15 Sale of Goods Act
obligations be excluded?
14. Explain the effect of s8 UCTA on s3 of the Misrepresentation Act 1967.
15. What is the effect of s9 UCTA?
16. How does a court decide reasonableness?
17. Where are the ‘guidelines’ for application of the reasonableness test to be found?
18. If a company like Securicor enter into a negotiated contract with a company like Photo
Products will s3 UCTA apply?
19. Why was the clause not upheld by the House of Lords in George Mitchell v Finney
Lock Seeds?
20. In what ways, if any, do the Unfair Terms in Consumer Contracts Regulations 1994
and 1999 give consumers better protection than the Unfair Contract Terms Act 1977?
Questions
1. K advertised in a local newspaper that he had a Sumpter 1997 car for sale for £7,200.
The vehicle was described as in excellent condition. J went to the address which K had
given. After a test drive J agreed to buy the car. Two days later, when J’s wife was
driving the car, a wheel came off; the car crashed through the window of a police
station and J and his wife were injured. The agreement between K and J contained the
following clauses.
‘22. It is agreed that K has not made any statement which has induced the contract.

HOLBORN COLLEGE LLB
23. The parties agree that there is no undertaking of quality or fitness for purpose.
24. There is a limit of £500 for damages for breach of contract by K.
25. There is no liability for consequential loss.’
Advise J. What difference, if any, would it make to your advice if K had sold the car in
the course of his business?
2. R, a car dealer, agreed to sell a car to S for £5,000 after S had examined the car on the
garage forecourt. The document on the car windscreen indicated the price and in large
letters said, ‘All our cars are in tip top condition!’ Later in small print was a clause
which read, ‘we accept no legal responsibility for the condition of the vehicle. For
terms of sale see the notice in the office and the details in the sale agreement.’ In the
office, where there was a large notice on the wall indicating all the major provisions, S
signed the agreement to purchase the car. It contained the following provisions:
‘It is agreed that there is no warranty, condition, or statement about the condition of the
car and that no statement was made which persuaded the purchaser to enter into the
contract.
It is agreed that the maximum damages payable for breach of contract shall be £2,500.
There is no express term, implied term (statutory or otherwise) or warranty or

statement about the vehicle which is to have any legal effect. There is no promise
about the condition of the vehicle.’
Two days later, when S’s wife was driving the car which S had given to her as a
birthday present, the car crashed because the brakes were defective. Mrs S was injured
and off work for six months causing her to lose £14,000 in wages. The car was a write-
off.
Advise S.
3. Urban, a window cleaner, hired a ladder from Vitus Equipment Hire Ltd to use while
painting the outside of his house. He paid a deposit of £20 and was given a receipt on
which was stated: ‘Conditions of hire. Vitus accepts no responsibility for any loss or
damage suffered as a result of the use of the equipment. Hirers use the equipment at
their own risk.’ Because of a defective rung on the ladder, Urban fell off it and landed
on an expensive radio that he was listening to while he worked. Urban suffered a
broken and leg and the radio was badly damaged.
Advise Urban. How would your answer differ if he had hired the ladder for use in
cleaning windows and had been doing that when the accident happened?
4. Last May Gavin, an estate agent, bought a coffee machine for his office and a freezer
for his home from Omnivend Stores. Gavin placed the orders by telephone. When the
goods were delivered Gavin was in each case given a sales note, on which it was stated
that the goods were guaranteed by Omnivend against all defects notified in the first six
months from the date of delivery but that, apart from that, Omnivend accepted no
liability for any loss or damage, however caused.
In August the coffee machine overheated and exploded: Gavin was badly scalded and
was off work for three weeks. Soon afterwards the freezer developed a fault with the
result that £200 worth of frozen meat thawed out and had to be thrown away.
Advise Gavin.

HOLBORN COLLEGE LLB
5. K was a car dealer, who advertised his 1990 Sierra for sale for £5,500. He said that the
car had travelled 35,000 miles with only one owner. L, a mini cab driver, saw the car,
and K said to L, ‘It is a good little bus. I’d buy it if I were you.’ L agreed to purchase
the vehicle for £5,500. The agreement contained the following clauses.
‘(13) It is agreed that no statements made by K to L influenced the making of the
contract.
(14) There is no warranty, guarantee or undertaking about the fitness of the vehicle.
(15) No implied condition or warranty, statutory or otherwise, is to be implied into the

contract.
(16) There is no liability for breach of contract, fundamental or otherwise.’
Three days after L took the car the brake system failed and L and his fare paying
passenger were injured.
Advise K. What difference, if any, would it make to your advice if K had been a
private individual selling the car?
6. Sarah owned a small engineering business and recently bought a new Ford Mondeo.
She bought it from Mr Patels Garage, and she purchased it for both business and
private use. The contract of sale excluded the implied terms in the Sale of Goods Act
1979. Sarah went on a touring holiday in the car with her husband Adnan. The car kept
on breaking down.
Sarah then booked into The Shish Mahal Hotel, which was part of a national chain.
Whilst there Sarah’s laptop was stolen from their room which was locked. She
complained, and on doing so was referred to the booking conditions that she had been
given at reception. On the back it said, ‘… no liability is accepted for loss or damage to
items not deposited in the safe.’ Sarah had not read the conditions.
Adnan hired two deckchairs from the Council and was given a ticket which stipulated
on the front ‘no liability for injury’. When Adnan sat on his chair it collapsed due to a
defect and he was injured.
Advise Sarah and Adnan of any actions they may have in Civil Law

HOLBORN COLLEGE LLB
HOLBORN COLLEGE LLB
Part 2: Study Unit Eleven

Part 2: Study Unit Eleven
Topic
Topic
Misrepresentation
Misrepresentation
Prologue
Prologue
What constitutes an actionable misrepresentation in law? The different categories of
misrepresentation, and their respective remedies in both common law and statute will be
What constitutes
examined an actionable misrepresentation
in this unit. in law? The different categories of
misrepresentation, and their respective remedies in both common law and statute will be
examined in this unit.
Essential Reading
EssentialContract
Textbook
Law,
Obligations: Law
Law,– Cracknell
McKendrick
Contract Relevant
RelevantChapter(s)
Chapter(s)
Relevant Chapter(s)

Other Reading
Other Reading
The Law ofCases

The Law Law,

Chapter(s)
Learning Outcomes
Learning
a) To haveOutcomes
understood what constitutes an actionable misrepresentation in law.
b) To be able to differentiate between the different types of misrepresentation.
a) To have understood what constitutes an actionable misrepresentation in law.
c) To have learnt the equitable remedy of recission, the bars to recission and the concept
b) To be able to differentiate between the different types of misrepresentation.
of a voidable contract.
c) To have learnt the equitable remedy of recission, the bars to recission and the concept
d) To have examined the scope and operation of the Misrepresentation Act 1967.
of a voidable contract.
e) To have examined contracts uberrimae fidei (of the utmost good faith).
d) To have examined the scope and operation of the Misrepresentation Act 1967.
e) To have examined contracts uberrimae fidei (of the utmost good faith).
Sources of Law
Sources of Law
Statute
Misrepresentation
Statute Act 1967
Misrepresentation Act 1967

Case Law
N
Case Law
ATURE OF STATEMENT
a) Fact not law
NATURE OF STATEMENT
Andre et Cie v Ets Michel Blanc [1977] 2 Lloyds Rep 166
a) Fact not law
Pankhania v London Borough of Hackney [2002] NPC 123
Andre et Cie v Ets Michel Blanc [1977] 2 Lloyds Rep 166
Pankhania v London Borough of Hackney [2002] NPC 123

HOLBORN COLLEGE LLB
b) Fact not opinion

BG plc v Nelson Group Services (Maintenance Ltd) (unreported April 2002)
Bissett v Wilkinson [1927] AC 177
Brown v Raphael [1958] Ch 636
Dimmock v Hallett (1866) LR 2 Ch App 21
Smith v Land & House Property Corp (1884) 28 Ch D 7
c) Fact not intention

Edgington v Fitzmaurice (1885) 29 Ch D 459
d) Representation falsified by subsequent events

Spice Girls Ltd v Aprilla World Service BV [2000] EMLR 478
With v O’Flanagan [1936] Ch 575
INDUCEMENT TO CONTRACT
a) No reliance on own investigations
Attwood v Small (1838) 6 Cl and F 232
b) Means of verification irrelevant

Redgrave v Hurd (1881) 20 Ch D 1
c) Extent of reliance
Edgington v Fitzmaurice (above)
JEB Fasteners v Marks, Bloom and Co [1983] 1 All ER 583
d) Materiality
Museprime Properties v Adhill Properties [1990] 36 EG 114
FRAUDULENT MISREPRESENTATION
Derry v Peek (1889) 14 App Cas 337
Goose v Wilson Sandford (No 2) [2001] Lloyd’s Rep PN 189
NEGLIGENT MISREPRESENTATION AT COMMON LAW

Hedley Byrne v Heller Partners [1964] AC 465; [1963] 2 All ER 575 (HL)
MISREPRESENTATION ACT 1967

Howard Marine v Ogden & Sons [1978] QB 574
REMEDIES: DAMAGES
a) Fraudulent misrepresentation
Chef Aquitaine SARL v Laporte Materials (Barrow) Ltd [2000] 3 All ER 493 (CA)
Downs v Chappell [1996] 3 All ER 344 (CA)
Doyle v Olby (Ironmongers) [1969] 2 QB 158
East v Maurer [1991] 2 All ER 733
Smith New Court Securities Ltd v Citibank NA [1997] AC 254 (HL)
Standard Chartered Bank v Pakistan Shipping Corpn (No 2) [2002] 3 WLR 1547

HOLBORN COLLEGE LLB
b) Negligent misrepresentation at common law

Esso Petroleum Co Ltd v Mardon [1976] QB 801
c) Misrepresentation Act 1967

Floods of Queensferry v Shand Construction (No 3) [2000] BLR 81
Royscot Trust v Rogerson [1991] 3 WLR 57; [1991] 3 All ER 294
Sindall (William) v Cambridgeshire CC [1994] 1 WLR 1016; [1994] 3 All ER 932
(CA)
Zanzibar v British Aerospace [2000] 1 WLR 2333
REMEDIES: RESCISSION
Car & Universal Finance v Caldwell [1965] 1 QB 525
LIMITS TO RESCISSION
Leaf v International Galleries [1950] 2 KB 86
Lewis v Averay [1972] 1 QB 198
Long v Lloyd [1958] 1 WLR 753
Peyman v Lanjani [1985] Ch 457; [1984] 3 All ER 703
Vadasz v Pioneer Concrete Ltd (1995) 130 ALR 570 (Australia)
REMEDIES: INDEMNITY
Whittington v Seale Hayne (1900) 82 LT 49
MISREPRESENTATION AND EXCLUSION CLAUSES

EA Grimstead v McGarrigan [1998-99] Info TLR 384 (Noted (2002) NLJ 1898)
Thomas Witter v TBP Industries [1996] 2 All ER 573
Watford Electronics v Sanderson [2001] 1 All ER (Comm) 696
Articles
Beale ‘Points on Misrepresentation’ (1995) 111 LQR 385
Beale ‘Damages in Lieu of Rescission for Misrepresentation: Sindall (William) v

Cambridgeshire CC’ (1995) 111 LQR 61
Ferguson ‘Partial Rescission for Misrepresentation Rejected: TSB Bank plc v Camfield’
(1995) 111 LQR 555
Malet ‘Section 2(2) of the Misrepresentation Act 1967’ (2001) 117 LQR 545
Oakley ‘Rescission Ab Initio for Mistake and Misrepresentation: Sindall (William) v

Cambridgeshire CC’ [1995] CLJ 17
O’Sullivan ‘Partial Rescission for Misrepresentation in Australia’ (1997) 113 LQR 16
O’Sullivan ‘Remedies for Misrepresentation: Up in the Air Again’ [2001] CLJ 239
Payne ‘Measure of Damages for Fraudulent Misrepresentation’ [1997] CLJ 17

HOLBORN COLLEGE LLB
Interrograms
1. What is a representation?
2. What is a misrepresentation?
3. Is a statement of opinion a representation?
4. Is a misrepresentation of law actionable?
5. Can an action for misrepresentation be brought where the misrepresentation is one of
silence?
6. In what circumstances does English law impose a duty to disclose facts?
7. What does uberimae fidei mean?
8. Explain the case of Attwood v Small.
9. What is a fraudulent misrepresentation?
10. What is the liability created by s2(1) of the Misrepresentation Act?
11. Under s2(1) does the plaintiff have to prove negligence or does the defendant have to
disprove negligence?
12. What is the ‘fiction of fraud’ set up by s2(1)?
13. What change in the law was made by s2(2) of the Act?
14. What types of misrepresentation give rise to the possibility of rescinding the contract?
15. What are the bars to recission?
16. If damages are awarded under s2(1) of the Act, on what scale are they measured –
contractual or tortious?
17. Explain the ratio decidendi of Howard Marine v Ogden & Sons.
18. If the court decides to award damages under s2(2) of the Act, on what scale are they
measured?
Questions
1. Tom is the chairman of Macro Ltd a company which designs computer
software. Tom, who needs more staff, interviews Sadie. During the interview
Sadie asks Tom how the company is doing and Tome replies ‘In my opinion
we are doing phenomenally well and will be declaring huge dividends at the
next year end’. Sadie is offered the job and accepts. On the strength of Tom’s
comments Sadie invests her savings in Macro shares. Soon afterwards Macro
gets caught up in a copywright dispute which prevents it from launching its
latest software. Shortly after the company collapses.
Discuss
2. Ahmed and Co, who are auctioneers, auctioned an area of land described in
the particulars of sale as ‘A prime site in the middle of a rapidly growing
industrial zone’. Patel, who was looking for a new site for a factory, bid for
the site and his bid was accepted. After signing a document confirming the
sale, Patel discovered that the site was designated as one of outstanding
beauty for which planning permission waould not be available. He is now
refusing to go ahead with the purchase. The document signed by Patel
repeated a provision in the particulars of sale which he read prior to the
auction stating ‘no error, misstatement or omission in these particulars shall

HOLBORN COLLEGE LLB
annul the sale nor has the purchaser relied on any representation regarding
the subject matter of the contract’.
Advise Patel.
3. It is very difficult to distinguish between law, fact and opinion.

HOLBORN COLLEGE LLB
HOLBORN COLLEGE LLB
Part
Part 2:
2: Study
Study Unit
Unit Twelve
Twelve
Topic
Topic
Mistake
Mistake
Prologue
Prologue
Mistake at common law looks at how a mistake made by one or both parties will affect the
Mistake
contract. at
It common law looks
also analyses at howtypes
the different a mistake made by
of mistakes andone
theordistinction
both parties will affect
between the
void and
contract. It also analyses
voidable contracts. the different types of mistakes and the distinction between void and
voidable contracts.
Essential Reading
Essential Reading
Textbook on Contract
Obligations: ContractLaw
Law,– Cracknell
Relevant Chapter(s)
Relevant Chapter(s)
Other Reading
Other Reading
The Law of Contract, Treitel Relevant Chapter(s)
The Law of Contract, Treitel Relevant Chapter(s)
Contract Law, McKendrick – Relevant Chapter(s)
Learning Outcomes
Learning Outcomes
a) To have understood when a mistake made by one party or both parties will affect the
a) To have understood when a mistake made by one party or both parties will affect the
contract.
contract.
b) To have examined the case law on the common law effect of mistake.
b) To have examined the case law on the common law effect of mistake.
c) To have learned the effect of a mistake on a contract and to understand the concept of a
c) To have
void learned the effect of a mistake on a contract and to understand the concept of a
contract.
void contract.
d) To have analysed Lord Atkins judgment in Bell v Lever Bros.
d) To have analysed Lord Atkins judgment in Bell v Lever Bros.
e) To have examined the scope of the defence of non est factum.
e) To have examined the scope of the defence of non est factum.
Sources of Law
Sources of Law
Statute
Statute
Sale of Goods Act 1979: s6
Case Law
Case Law
UNILATERAL MISTAKE
UNILATERAL MISTAKE
a) Mistake as to person
a) Mistake as to person
Citibank v Brown Shipley [1991] 2 All ER 690
Citibank v Brown Shipley [1991] 2 All ER 690

HOLBORN COLLEGE LLB
Cundy v Lindsay (1878) 3 App Cas 459

Kings Norton Metal v Edridge Merritt & Co (1897) 14 TLR 98
b) Mistake as to person inter praesentes

Ingram v Little [1961] 1 QB 31
Lake v Simmons [1927] AC 487
Lewis v Averay [1972] 1 QB 198
Phillips v Brooks [1919] 2 KB 243
Shogun Finance v Hudson [2002] QB 834
c) Mistake as to subject matter

Raffles v Wichelhaus (1864) 2 H & C 906
Scriven v Hindley [1913] 3 KB 864
d) Mistake as to terms
Clarion Ltd v National Provident Institution [2000] 2 All ER 265
Hartog v Colin & Shields [1939] 3 All ER 506
e) Mistake as to quality
Smith v Hughes (1871) LR 6 QB 597
BILATERAL MISTAKE
a) Mistake as to quality
Associated Japanese Bank Ltd v Credit du Nord SA [1988] 3 All ER 902
Bell v Lever Bros [1932] AC 161
Great Peace Shipping v Tsavliris Salvage (International) [2002] 3 WLR 1617
Harrison & Jones v Bunten & Lancaster [1953] 1 QB 646
Leaf v International Galleries [1950] 2 KB 86
Nicholson & Venn v Smith Marriott (1947) 177 LT 189
b) Mistake as to existence of subject matter

Barrow Lane & Ballard v Phillips [1929] 1 KB 574
Couturier v Hastie (1856) 5 HL Cas 673
Galloway v Galloway (1914) 30 TLR 531
McRae v Commonwealth Disposals Commission (1950) 84 CLR 377
Scott v Coulson [1903] 2 Ch 249
c) Mistake as to title
Bell v Lever Bros (above)
Cooper v Phibbs (1867) LR 2 HL 149
d) Mistake as to the possibility of performing the contract

Sheik Bros v Ochsner [1957] AC 136
NON EST FACTUM

Gallie v Lee [1971] AC 1004 (HL)
Gillman v Gillman (1946) 174 LT 272
Lewis v Clay (1898) 67 LJQB 224
Norwich & Peterborough Building Society v Steed [1992] 3 WLR 669; [1993] 1 All ER 330
(CA)

HOLBORN COLLEGE LLB
Articles
Cartwright ‘Common Mistake in Common Law and in Equity’ (2002) 118 LQR 196
Interrograms
1. What is the difference between a void contract and a voidable contract?
2. Will a mistake as to quality generally have any effect on the contract?
3. What was the ‘mistake’ in Bell v Lever Bros?
4. Explain the ratio decidendi of Bell v Lever Bros.
5. Why did Leaf have no remedies open to him in Leaf v International Galleries?
6. Why was the contract in Nicholson & Venn v Smith Marriott void?
7. In Couturier v Hastie, did the House of Lords base their decision on the effect of the
mistake?
8. Why was the contract in McRae v Commonwealth Disposals Commission not void?
9. What is the effect of s6 of the Sale of Goods Act 1979?
10. Why was the contract void in Cundy v Lindsay?
11. Will a mistake as to credit worthiness generally affect the contract?
12. What is meant by a mistake ‘inter praesentes’?
13. What steps did Phillips take to establish the identity of Sir George Bullough (Phillips v
Brooks (1919))?
14. Distinguish Lewis v Averay from Ingram v Little.
15. Is Ingram v Little still good law today?
16. Why was there no contract between the parties in Raffles v Wichelhaus?
17. Why was there no contract in Boulton v Jones?
18. What is meant by the expression ‘the mistake must be operative’?
19. What is meant by the expression ‘fundamental’ in the context of mistake?
20. What was the ‘mistake of law rule’ and what is the effect on it of Kleinworth Benson v
Lincoln City Council (a point considered further in unit 22).
Questions
Note: some questions may raise issues involving misrepresentation (see unit 11).
1. ‘Where both parties enter into a contract in the belief that certain assumed facts are
true, and it turns out that they are not true, the contract is void for mistake.’
To what extent is this an accurate statement of the law?
2. a) X Ltd owned a disused warehouse which was built in the early nineteenth
century. X Ltd entered into a contract for the sale of the warehouse to Y Ltd,
knowing that Y Ltd intended to demolish the warehouse and build offices on
the site. Unknown to either X Ltd or Y Ltd, however, the warehouse was,
shortly before the conclusion of the contract, listed as being of outstanding
historic importance, so that it became unlawful to demolish it.
Advise Y Ltd.

HOLBORN COLLEGE LLB
b) S Ltd agreed to sell to T Ltd 500 tons of peanuts ‘now on board the SS City of
Plains en route from New York to London’. When the City of Plains docked in
London it was discovered that the peanuts had never been shipped. The market
price of peanuts has risen sharply since the contract was made.
Advise T Ltd, which has suffered heavy losses because of the non-delivery of
the peanuts.
3. ‘A common mistake has no effect whatsoever at common law unless it is such as to

eliminate the very subject-matter of the agreement, in other words, unless it empties
the agreement of all content.’ (Cheshire and Fifoot)
Discuss, with reference to decided cases.
4. a) Roger, who closely resembled the well known politician Mr Tony Benn, went
into a camera shop in London and selected a camera priced at £600. The
shopkeeper, Simon, said, ‘Hello, Mr Benn, I thought the press treated you
disgracefully during your election campaign. As it is you, I’ll let you have that
camera for £500.’
Roger smiled and said that he did not have his chequebook with him. Simon
said, ‘Don’t worry, I’ll send the bill to you at the House of Commons.’ Roger
took the camera away and later that day pawned it to Peter. Simon later
managed to trace it back to Peter.
Advise Simon.
b) Hammer, an auctioneer, sold a collection of paintings by auction. Each painting

was fully described in the catalogue. When Hammer invited bids for Lot 15 –
described as ‘Country Scene, artist unknown’ – his assistant Mallet
inadvertently held up Lot 16 instead for the bidders to see. Lot 16 was described
in the catalogue as ‘Village Life, (?) school of Brushman’, but Sickle, who was
sitting in the front row, immediately recognised it as a lost masterpiece by
Brushman himself. No other bidders noticed Mallet’s error and Sickle’s bid of
£25 was accepted by Hammer.
When Hammer realised what had happened he refused to let Sickle have the
painting, which is worth £5,000.
Advise Sickle.
5. a) ‘Mistake as to the attributes of the other contracting party does not make the
contract void.’
b) M walks into N’s art gallery and expresses interest in a painting for sale at
£10,000. M says she would like to have that painting and tells N that she is Lady
Cynthia Warburton and that she represents the well-known firm of Warburton &
Co Ltd. M produces a cheque book with Warburton & Co Ltd’s name on it
(which she had stolen earlier that day) and N allows her to take the painting
away in return for a cheque signed by her on behalf of Warburton & Co Ltd.
The cheque has now been dishonoured and M has disappeared, after selling the
painting to O for £9,500.
Advise N.

HOLBORN COLLEGE LLB
6. a) Mistake is said to negative consent when it leads to a misunderstanding

between the parties, so that they are at cross purposes … It cannot be too
strongly emphasised that in this type of case a mistake … will not normally
affect the validity of the contract at all … the mistake will only impair the
validity of the contract in a number of somewhat exceptional situations.’
(Treitel)
Explain and illustrate the above passage with reference to the relevant case law.
b) A computer firm with whom he has had previous dealings writes to ‘Professor A
Higgins, University of Life’, offering a consultancy contract worth £5,000. The
letter is forwarded to Professor Albert Higgins in the Faculty of Science. In fact
the firm had meant it to go to Professor Andrew Higgins in the Faculty of
Technology. Albert Higgins replies accepting the offer but the firm are now
refusing to honour it.
Advise him.

HOLBORN COLLEGE LLB
HOLBORN COLLEGE LLB
Part 2: Study Unit Thirteen

Part 2: Study Unit Thirteen
Topic
Topic
Incapacity Minors Liability
Incapacity Minors Liability
Prologue
Prologue
Incapacity minors liability examines the exceptions to the general rule that the law
presumes everyone has legal capacity to contract.
Incapacity minors liability examines the exceptions to the general rule that the law
presumes everyone has legal capacity to contract.
Essential Reading
EssentialContract
Textbook
Contract on
Law,ContractLaw
Law,– Cracknell
McKendrick Relevant
RelevantChapter(s)
Chapter(s)
Relevant Chapter(s)

Other Reading
Other Reading
Contract,
Chapter(s)
The Law Law,
Chapter(s)
Learning Outcomes
Learning
a) To haveOutcomes
examined the effect of the Minors Contracts Act 1987.
b)
a) understoodthe
To have examined theeffect
concept of necessaries.
of the Minors Contracts Act 1987.
c)
b) To have learnt the effect
understood of the law
the concept on minors contracts of employment.
of necessaries.
d)
c) group of the
To have learnt the effect contracts
law onvoidable at common
minors contracts law.
of employment.
d) To have learnt the group of contracts voidable at common law.
Sources of Law
Sources
Statutes of Law
StatutesContracts Act 1987
Minors
Minors
Sale Contracts
of Goods Act Act 1987
1979: s3
Sale of Goods
Family Act 1979:
Law Reform s3
Act 1969: s1
Family Law Reform Act 1969: s1
Case Law
Case
V ALID Law
CONTRACTS
a)
VALID Necessary
CONTRACTS goods
a) Fawcett v Smethurst
Necessary goods (1914) 84 LJ KB 473
Nash v Inman [1908] 2 KB 1
Fawcett v Smethurst (1914) 84 LJ KB 473
Nash v Inman [1908] 2 KB 1

HOLBORN COLLEGE LLB
b) Necessary services
Chapple v Cooper (1844) 13 M & W 252
Roberts v Gray [1913] 1 KB 520
c) Employment contracts
Chaplin v Leslie Frewin [1966] AC 71
Clements v L & NW Railway [1894] 2 QB 482
De Francesco v Barnum (1890) 45 Ch D 430
Doyle v White City Stadium [1935] 1 KB 110
d) Trading contracts
Cowern v Nield [1912] 2 KB 419
VOIDABLE CONTRACTS (IE: VALID UNTIL REPUDIATED)

Steinberg v Scala (Leeds) Ltd [1923] 2 Ch 452
LIABILITY IN TORT
Ballett v Mingay [1943] KB 286
Fawcett v Smethurst (above)
Interrograms
1. What is the present age of majority?
2. What two principles are involved in the legal intervention in minors’ contracts?
3. Is a contract for necessaries valid?
4. Explain the effect of the Minors’ Contracts Act 1987.
5. Can the purchase of a ring to give as a gift to a friend be a necessary?
6. Why did the tailor’s action fail in Nash v Inman?
7. What price must an infant pay for necessary items?
8. Explain the effect of s3(2) and s3(3) of the Sale of Goods Act 1979.
9. Can minors be sued on executory contracts?
10. Why was the contract in De Francesco v Barnum not binding?
11. Why was the contract in Doyle v White City Stadium binding?
12. Why was the contract in Chaplin v Leslie Frewin (Publishers) binding?
13. What are the four types of contract that are voidable when entered into with an infant?
14. Can an infant repudiate a contract to lease land?
15. Is a contract to own shares in a company binding on an infant?
16. What is the effect of repudiation before reaching full capacity?
17. On reaching full age when must a person decide to repudiate the contract?

HOLBORN COLLEGE LLB
Questions
1. In March Harvey promised his 17-year-old son Tim £500 if he obtained high grades in
his forthcoming A level examinations and was able to take up the place at medical
school which had been offered to him conditionally upon his attaining specified grades.
In May Tim felt that his revision was going badly, and he agreed with Swift Progress
Ltd to take a 20 week correspondence course in ‘How to Improve Your
Concentration’, paying a deposit of £50 and agreeing to pay a further £10 each week
for the duration of the course.
He also bought on credit an Encyclopaedia of Basic Medical Science worth £25 and a
second-hand motor cycle for £225, the price being payable in five equal instalments
over 10 months.
Tim is now dissatisfied with all these transactions. He has only made one weekly
payment to Swift Progress Ltd and only paid one instalment on the motor cycle. He has
not paid anything for the Encyclopaedia. He knows that his A levels have been
disappointing and that he will probably not obtain the necessary grades when the
results are announced in August.
Advise Tim.
2. Linda left school last year at the age of 16. She took a job as a trainee kitchen assistant
in an hotel. Her wages are £20 a week, and she is required to give three months’ notice
to terminate her employment.
She recently agreed to buy an ‘Osaka’ motorcycle so that she could spend more time
with her boyfriend Malcolm, who is mad about motorcycles. She also signed a written
agreement to buy a one quarter share in a racing greyhound called Dingo.
Linda has now been offered a job as a cook in a restaurant at £60 a week, provided she
can start immediately. She has failed to pay for the motorcycle or the share in Dingo.
Advise Linda.
3. Adam, who is seventeen years old, entered into the following contracts:
a) he bought a Maserati sports car – price £15,000;
b) he enrolled for an evening course in ‘How to be a racing driver’ (price £300);
c) he agreed to work for one year on Saturdays and Sundays as a waiter at the
Lotus Blossom Restaurant at a wage of £10 per week.
Adam gave up the course after three weeks and left the Lotus Blossom after a month.
He has not paid either for the car or the course.
Advise Adam as to his legal liabilities, if any.
4. Linda is seventeen years old and a first year student of fashion design. Believing it
would help her with her studies she enrolled for a series of lessons at a private
modelling school for a fee of £200. She also purchased a de luxe sewing machine for
£300 and, at the suggestion of her tutor Melvyn, bought 100 shares from Melvyn in a
company run by Melvyn’s wife, Norma, which manufactures handbags.
Linda has now given up the modelling lessons. She failed to pay the £200 and the
school is demanding payment. Linda would also like to cancel the transactions
concerning the sewing machine and the shares, and have her money back.
Advise Linda.

HOLBORN COLLEGE LLB
5. Referring to infants’ contracts it has been said that ‘The law on this topic is based on
two principles. The first, and more important, is that the law must protect the infant
against his own inexperience, … the second principle is that the law should not cause
unnecessary hardship to adults who deal fairly with infants.’ (Treitel)
Explain how the law gives effect to these principles and consider how, if necessary, the
law might usefully be reformed.

HOLBORN COLLEGE LLB
HOLBORN COLLEGE LLB
Part 2: Study Unit Fourteen

Part 2: Study Unit Fourteen
Topic
Topic
Prologue
Prologue
This topic examines the effects of duress and undue influence on the enforceability of
contracts.
This topic examines the effects of duress and undue influence on the enforceability of
contracts.
Essential Reading
EssentialContract
Textbook
Contract on
Law,ContractLaw
Law,– Cracknell
McKendrick Relevant
RelevantChapter(s)
Chapter(s)
Relevant Chapter(s)

Other Reading
Other Reading
Contract,
Chapter(s)
The Law Law,
Chapter(s)
Learning Outcomes
Learning
a) To haveOutcomes
examined the scope of duress at common law.
b)
a) undue influence
To have examined the scope of duress at commonin law.
equity.
b) To have examined the scope of undue influence in equity.
Sources of Law
Sources
Case Lawof Law
Case Law
Duress
Alf Vaughan & Co Ltd (In Receivership) v Royscot Trust plc [1999] 1 All ER (Comm) 856
Duress
Atlas Express v Kafco Ltd [1989] 1 All ER 641
Alf Vaughan & Co Ltd (In Receivership) v Royscot Trust plc [1999] 1 All ER (Comm) 856
B & S Contracts v Green [1984] ICR 419
Atlas Express v Kafco Ltd [1989] 1 All ER 641
CTN Cash & Carry Ltd v Gallaher Ltd [1994] 4 All ER 714 (CA)
B & S Contracts v Green [1984] ICR 419
Dimskal Shipping v ITF [1991] 4 All ER 871
CTN Cash & Carry Ltd v Gallaher Ltd [1994] 4 All ER 714 (CA)
DSND Subsea v Petroleum Geo Services ASA [2000] BLR 530
Dimskal Shipping v ITF [1991] 4 All ER 871
North Ocean Shipping v Hyundai Construction (The Atlantic Baron) [1979] QB 705
DSND Subsea v Petroleum Geo Services ASA [2000] BLR 530
Occidental Worldwide Investment Corp v Skibs A/S Avanti (The Sibeon and the Sibotre)
North Ocean Shipping v Hyundai Construction (The Atlantic Baron) [1979] QB 705
[1976] 1 Lloyds Rep 293
Occidental Worldwide Investment Corp v Skibs A/S Avanti (The Sibeon and the Sibotre)
Pao On v Lau Yiu Long [1980] AC 614; [1979] 3 All ER 65 (PC)
[1976] 1 Lloyds Rep 293
Universe Tankships v ITF [1982] 2 All ER 67
Pao On v Lau Yiu Long [1980] AC 614; [1979] 3 All ER 65 (PC)
Vantage Navigation v Suhail Saud & Bahwan [1989] 1 Lloyds Rep 138
Universe Tankships v ITF [1982] 2 All ER 67
Vantage Navigation v Suhail Saud & Bahwan [1989] 1 Lloyds Rep 138

HOLBORN COLLEGE LLB
UNDUE INFLUENCE
a) Express influence
Williams v Bayley (1886) LR 1 HL 200
b) Presumed influence
Barclays Bank v O’Brien [1994] 1 AC 180; [1993] 3 WLR 786; [1993] 4 All ER 417
(HL)
CIBC Mortgages v Pitt [1994] 1 AC 200; [1993] 3 WLR 802; [1993] 4 All ER 433
Coldunell v Gallon [1986] QB 1184
Goldsworthy v Brickell [1987] 1 All ER 853
Naidoo and Another v Naidu and Others (2000) The Times 1 November
National Westminster Bank v Amin [2002] 1 FLR 735
National Westminster Bank v Morgan [1985] 1 All ER 821
Royal Bank of Scotland plc v Etridge (No 2) [2002] 2 AC 773
c) Rebutting the presumption

Hammond v Osborn [2002] WTLR 1125
Inche Noriah v Shaik Allie bin Omar [1929] AC 127
HARSH AND UNCONSCIONABLE BARGAINS

Barclays Bank v Schwartz [1995] TLR 452 (CA)
Cresswell v Potter [1978] 1 WLR 255
INEQUALITY OF BARGAINING POWER

Avon Finance v Bridger [1985] 2 All ER 281 (CA)
Lloyd’s Bank v Bundy [1975] QB 326
National Westminister Bank v Morgan [1985] 1 All ER 821
Articles
Andrews ‘Undue Influence – Where’s the Disadvantage?’ [2002] Conv 456
Bigwood ‘Undue Influence in the House of Lords: Principles and Proof’ (2002) MLR 435
Capper ‘Undue Influence and Unconscionability: A Rationalisation’ (1998) 114 LQR 479
Dixon ‘Looking Up a Remedy for Inequitable Conduct’ [1993] CLJ 232
Heydon ‘Equitable Compensation for Undue Influence’ (1997) 113 LQR 8
Mee ‘Undue Influence, Misrepresentation and the Doctrine of Notice: O’Brien’ [1995] CLJ
536
O’Sullivan ‘Developing O’Brien’ (2002) 118 LQR 337
Smith ‘Contracting Under Pressure: A Theory of Duress’ [1997] CLJ 343
Thompson ‘Wives, Sureties and Banks’ [2002] Conv 174
Tiplady ‘The Limits of Undue Influence’ (1985) 48 MLR 579

HOLBORN COLLEGE LLB
Interrograms
1. If a contract was made under duress is it voidable, or void at common law?
2. What is now meant by duress?
3. What was the duress in The Atlantic Baron?
4. Why was relief not granted in The Atlantic Baron?
5. Was there duress in Pao On?
6. What is meant by undue influence?
7. Give examples of types of special relationship that would give rise to a presumption of
undue influence.
8. Why was the mortgage not enforceable in Lloyds Bank v Bundy?
9. What is meant by ‘inequality of bargaining power’? Is it per se a ground of challenge
to a contract?
10. What is the effect of the Court of Appeal decision in Goldsworthy v Brickell?
11. After Etridge (No 2) what must a claimant do in order to raise the presumption of
undue influence?
12. When will a bank be placed on notice of the potential existence of undue influence?
Questions
1. Millicent, who is a member of a modern sect known as ‘Liblib’ persuades her husband,
Claude, to join. Claude soon becomes dominated by Andronia, the leader of the sect,
part of whose teaching is that a husband is in all ways inferior to his wife. Andronia
persuades Claude to hand over his manor to the sect as their headquarters. Millicent
then persuades Claude to transfer to her all his stocks and shares. Six months after
these events, Millicent leaves Claude and at the same time Andronia tells Claude to
leave the manor, which he does. Now, one year later, Claude hears that Andronia has
put the manor up for sale. Advise Claude, who is penniless, as to his legal rights, if
any.
2. a) In what circumstances will the law permit contracts obtained by improper
pressure to be set aside?
b) Charles, intending to benefit his niece Claudia, offers to sell her his rare
collection of stamps for £15,000. Adam, Charles’ nephew, is furious when he
hears of this. Adam takes Charles a written contract of sale made out between
himself and Charles and tells Charles that it is the agreement between Charles
and Claudia. Charles, not feeling very well, and having forgotten his glasses,
signs the paper and accepts Adam’s offer to bank a cheque for £15,000, made
out by Adam, but which Charles believes to be Claudia’s payment for the
collection. Adam has since sold the collection for £40,000 and Charles and
Claudia have just discovered the truth.
Advise Charles as to his legal rights, if any.
3. a) ‘Economic pressure is what contractual negotiations are all about: it is futile for
the courts to try to intervene.’
Discuss.
b) R is a strong-willed and domineering woman. S, the man with whom she lived,
left all financial decisions to her. Last year S inherited a holiday apartment in

HOLBORN COLLEGE LLB
Spain from his aunt A. R insisted that S signed an agreement giving R the
exclusive use of the apartment and the right to receive all rent from lettings in
exchange for R’s shares in X & Y plc.
R and S have now separated. S wants to go and live in the apartment but R will
not permit him to use the apartment. The shares in X & Y plc have increased in
value.
Advise S.

HOLBORN COLLEGE LLB
HOLBORN COLLEGE LLB
Part 2: Study Unit Fifteen

Part 2: Study Unit Fifteen
Topic
Topic
Illegality
Illegality
Prologue
Prologue
Illegality examines another element that is capable of declaring a contract void. It also looks
at the circumstances in which a contract is declared illegal.
Illegality examines another element that is capable of declaring a contract void. It also looks
at the circumstances in which a contract is declared illegal.
Essential Reading
EssentialContract
Textbook on
Obligations:
Contract Contract
Law,ContractLaw
Law,– Cracknell
McKendrick Relevant
RelevantChapter(s)
Chapter(s)
Relevant Chapter(s)

Other Reading
Other Reading
Contract,
Chapter(s)
Contract
RelevantChapter(s)
Chapter(s)
Learning Outcomes
Learning
a) To haveOutcomes
learnt the various types of illegality that may affect a contract.
b)
a) To have
To have learnt
examined the effect
the various of public
types policythat
of illegality on this
mayarea of the
affect law.
a contract.
c)
b) To
To have
have understood
examined the theeffect
consequences
of public of illegality
policy onarea
on this a contract.
of the law.
d)
c) To have understood
To have examined thethe circumstances where
consequences of the court
illegality will allow recovery of property
on a contract.
passed under an illegal contract.
d) To have examined the circumstances where the court will allow recovery of property
passed under an illegal contract.
Sources of Law
Sources of Law
Statute
Statute
Law Reform (Miscellaneous Provisions Act) 1970: s1
Law Reform
Note: s1 Sale(Miscellaneous Provisions
of Goods (Amendment) Act)
Act 1970:
1994 s1 s22(1) Sale of Goods Act 1979 (sale
repeals
in market overt).
Note: s1 Sale of Goods (Amendment) Act 1994 repeals s22(1) Sale of Goods Act 1979 (sale
in market overt).
Case Law
ICase Law
LLEGALITY
a) Contracts illegal as formed
ILLEGALITY
a) Archbolds v Spanglett
Contracts illegal [1961] 1 QB 374; [1961] 1 All ER 417
as formed
Langton v Hughes (1813) 1 M and S 593
Archbolds v Spanglett [1961] 1 QB 374; [1961] 1 All ER 417
Langton v Hughes (1813) 1 M and S 593

HOLBORN COLLEGE LLB
Mahmoud & Ispahan, Re [1921] 2 KB 716; [1921] All ER Rep 217

Mohamed v Alaga & Co (A Firm) [1999] 3 All ER 699 (CA)
b) Contracts illegal as performed

Anderson v Daniel [1924] 1 KB 138
Ashmore, Benson, Pease & Co v A V Dawson [1973] 1 WLR 828
St John Shipping v Joseph Rank [1957] 1 QB 267
c) Contracts involving the deliberate commission of a civil wrong

Begbie v Phospate Sewage Co Ltd (1875) LR10 QB 491
d) Contracts involving the deliberate commission of a crime

Bigos v Boustead [1951] 1 All ER 92
e) Contracts contrary to public policy

i) The promotion of sexual immorality
Pearce v Brooks (1866) LR 1 Ex 213
ii) The promotion of corruption in public life

Parkinson v Royal College of Ambulance [1925] 2 KB 1
iii) Damaging to UK’s foreign relations

Regazzoni v Sethia [1958] AC 301
THE RECOVERY OF BENEFTIS TRANSFERRED UNDER ILLEGAL CONTRACTS

a) Generally
Shanshal v Al Kishtaini [2001] 2 All ER (Comm) 601 (at 610 per Mummery LJ)
b) Exceptions
i) Mistake of fact
Oom v Bruce (1810) 12 East 225
ii) Misrepresentation
Hughes v Liverpool Victoria Legal Friendly Society [1916] 2 KB 482
iii) Repudiation of illegal purpose

Taylor v Bowers (1876) 1 QBD 291
iv) Contract illegal for protection of claimant

Kiriri Cotton v Dewani [1960] AC 192
v) Tort
Bowmakers v Barnet Instruments [1945] KB 65
vi) Restitution
Mohamed v Alaga [1999] 3 All ER 699
vii) Quantum meruit

ACT Construction v E Clarke & Sons (Coaches) Ltd (unreported)

HOLBORN COLLEGE LLB
viii) Collateral contract

Strongman v Sincock [1955] 2 QB 525
Articles
Buckley ‘Illegal Transactions: Chaos or Discretion?’ (2000) LS 155
Enonchong ‘Title Claims and Illegal Transactions’ (1995) 111 LQR 135
Enonchong ‘Illegal Transactions: The Future?’ (2000) RLR 82
McBride ‘Restitution for Services Performed Under an Illegal Contract’ [1998] CLJ 449
Rose ‘Confining Illegality’ (1996) 112 LQR 545
Stone ‘The Unruly Horse Has Bolted’ (1994) 57 MLR 441
Virgo ‘Withdrawal from Illegal Transactions: A Matter for Consideration’ [1996] CLJ 23
Reports
Law Com Consultation Paper No 154 – Illegal Transactions: The Effect of Illegality on
Contracts and Trusts
Interrograms
1. Does the law of contract interfere with a person’s moral behaviour?
2. Is a contract to commit a deliberate civil wrong illegal?
3. A contract lawful in itself but performed unlawfully will be illegal. True or false?
4. Why was the contract upheld in St John Shipping v Joseph Rank?
5. What is the significance of ss1–2 Law Reform (Miscellaneous Provisions) Act 1970 in
this context?
6. What tests have the courts used to determine the effect of a statute on the illegality or
otherwise of a contract?
7. Explain the decision in Pearce v Brooks.
8. Will a court ever grant specific performance of an illegal contract?
9. Can a ‘guilty party’ to an illegal contract enforce the contract?
10. What is the meaning of ‘in pari delicto potior est conditio possidentis’?
11. Why did the plaintiff succeed in suing for the value of the whisky in Archbolds v
Spanglett?
12. How did the builders succeed in Strongman v Sincock?
13. If a person repents of the illegal contract will this alter the court’s attitude to the
available remedies?
14. Why did Bowmakers succeed in their action in conversion against Barnet Instruments
(Bowmakers Ltd v Barnet Instruments)?
15. Does title to property normally pass under an illegal contract of sale?
16. To what extent is it true to say that neither party to an illegal contract may recover any
property which has passed under that contract?

HOLBORN COLLEGE LLB
17. Can a person recover back money paid or property transferred under an illegal contract
if he entered into the contract as a result of the other party’s fraudulent
misrepresentation that the contract was legal?
Questions
1. Boots, wanting to win the first prize of £5,000 in the Muckie Bar Caber Tossing
Championships, approaches McEvil, a caber constructor. Boots asks McEvil to
construct for him a caber which, at the flick of a concealed switch, will weigh only half
as much as a proper caber. McEvil realises that this is impossible but nevertheless
agrees to do so for £500, demanding £70 as a down payment. On the day of the
Championships, Boots decides not to use the McEvil caber and instead uses an
ordinary one. Boots loses. Boots now wishes to return the special caber to McEvil and
recover his £70. McEvil is demanding payment of the outstanding £430.
Discuss.
2. C was a registered supplier of Welsh ink. A statute provides that, because it is

poisonous, the ink can be supplied only by registered suppliers and only to licensed
recipients. Each delivery has to be accompanied by a statutory invoice describing the
contents.
C supplied 20 gallons of ink to D, a licensed recipient, but C failed to deliver a
statutory invoice because D had said that he did not require one.
C sold and delivered 10 gallons of ink with a statutory invoice to E who was not a
licensed recipient.
C supplied 10 gallons of ink to F who was a licensed recipient. F knew that C had
failed to provide an invoice when the ink was delivered.
C sold and delivered 15 gallons of ink to G, a licensed recipient, when, unknown to C,

his registration had expired.
None of the recipients paid for the ink.
Advise C.
3. To what extent is it true to say that neither party to an illegal contract may recover any
property which has passed under that contract?
4. X is a licensed alligator dealer. On Monday 15 August Y telephoned X and expressed
an interest in buying two of X’s alligators. Under statutory regulations any sale of
alligators is illegal unless both buyer and seller have a licence. Y told X that he did not
have a licence at the moment but would buy one by Friday 19 August and the come
directly to X’s farm to negotiate a contract.
Y was so busy during the week that he forgot to buy a licence. Nevertheless he still
went to X’s farm on Friday to agree a contract. X offered to sell two alligators to Y for
£2,000 each. Y said he would pay this providing X undertook to deliver one of the
alligators to Y’s friend Z by 3 o’clock on Sunday 21 August. Y told X that he needed
the alligator to reach Z on Sunday because Z had already paid him £200 for the right to
display the alligator in Z’s zoo for a month. Y told X he did not need to deliver the
second alligator as he (Y) would arrange to pick up that alligator in his own time.
X agreed to Y’s terms and Y accordingly wrote X a cheque for £4,000. X delivered the
alligator to Z as arranged. Z was delighted to receive the animal because he believed

HOLBORN COLLEGE LLB
this extra attraction would enable him to raise the price of admission to the zoo from
£1.50 to £1.75 for adults.
X presented Y’s cheque on the following Monday to find that it would not be
honoured. Then on Wednesday X also found out that Y had bought the alligators
without a licence.
Advise X and Z of their rights against Y.
5. a) ‘English law allows plaintiffs to sue on illegal contracts if they can show just
cause why their claim should not be defeated by their illegality.’
Discuss.
b) S entered into a contract with Y in which Y agreed to transport 200 sheep by

road for S from Newcastle to Southampton for £3,000. S hoped to sell his sheep
in Southampton for £50 each.
Statutory regulations provide that no person may transport sheep by road in the UK
unless they have a licence from the Department of Health. S did not know that Y did
not have a licence. During the journey 100 sheep died because of the inhumane
conditions in which they were forced to travel. When the sheep arrived in Southampton
they were in such a poor state that S could only sell them for £30 each.
Advise S as to his rights and liabilities against Y.
6. Lemon was a supplier of antique clocks who was registered as required by the
(fictitious) Antique Clock Dealers Act 1996. Lemon supplied a Queen Anne clock to
Milter, without providing the statutory invoice describing the clock as required by the
Act, after Milter had said that as far as he was concerned none was necessary. The
agreed price was £2,000, but Milter subsequently refused to pay for the clock.
To Norma he delivered a grandmother clock for £1,300. Again Lemon failed to
provide a statutory invoice. Two weeks later the clock stopped and cost £500 to restore
to working condition.
Lemon supplied a French clock to Opren for £500. Opren ran a brothel though Lemon
did not know this. Opren refused to pay for the clock which she had put in the room
where she received clients.
Advise Lemon. What difference, if any, would it make to your advice if Lemon’s
licence had expired before the above transactions were entered into though Lemon was
unaware of this?

HOLBORN COLLEGE LLB
HOLBORN COLLEGE LLB
Part 2: Study Unit Sixteen

Part 2: Study Unit Sixteen
Topic
Topic of Trade
Restraint
Restraint of Trade
Prologue
Prologue
Restraint of trade examines a specific type of term in a contract that creates an obligation on a
party, even after the contract is discharged or terminated. These terms are particularly found
Restraint of of
in contracts trade examines a specific type of term in a contract that creates an obligation on a
employment.
party, even after the contract is discharged or terminated. These terms are particularly found
in contracts of employment.
Essential Reading
EssentialContract
Contract
Textbook Law,
on
Obligations: McKendrick
Contract
Contract Law,– Cracknell
Law RelevantChapter(s)
Relevant Chapter(s)
Relevant Chapter(s)

Other Reading
Other Reading
The Law ofCases

Contract
RelevantChapter(s)
Chapter(s)
Learning Outcomes
Learning
a) To haveOutcomes
examined the approach of the modern law in relation to covenants in restraint
of trade.
a) To have examined the approach of the modern law in relation to covenants in restraint
b) To have learnt the various interests that merit protection.
of trade.
c) To have understood the public interest elements in this area of law.
b) To have learnt the various interests that merit protection.
d) To have examined exclusive dealing contracts.
c) To have understood the public interest elements in this area of law.
d) To have examined exclusive dealing contracts.
Sources of Law
Sources of Law
Statute
Fair Trading Act 1973
Statute
Fair Trading Act 1973
Case Law
C
Case LawOF EMPLOYMENT
ONTRACT
a) Area of restraint
CONTRACT OF EMPLOYMENT
Hollis & Co v Stocks [2000] IRLR 712
a) Area of restraint
Mason v Provident Clothing & Supply Co Ltd [1913] AC 724
Hollis & Co v Stocks [2000] IRLR 712
Mason v Provident Clothing & Supply Co Ltd [1913] AC 724

HOLBORN COLLEGE LLB
b) Time
Fellows v Fisher [1976] QB 122
Fitch v Dewes [1921] AC 158
c) Trades forbidden
Attwood v Lamont [1920] 3 KB 571
d) Solicitation of customers
Bridge v Deacons [1984] 2 All ER 19
Lapthorne v Eurofi [2001] UKCLR 996
SALE OF A BUSINESS
British Reinforced Concrete v Schelff [1921] 2 Ch 563
Nordenfelt v Maxim Nordenfelt Guns & Ammunition Co (above)
FRANCHISES
Convenience Co v Roberts [2001] FSR 35
RESTRICTIVE TRADING AGREEMENTS

English Hop Growers v Dering [1928] 2 KB 174
Kores Manufacturing v Kolok Manufacturing [1959] Ch 108
TSC Europe (UK) Ltd v Massey [1999] IRLR 22
SOLUS TRADING AGREEMENTS

Alec Lobb (Garages) Ltd v Total Oil [1985] 1 All ER 303
Esso Petroleum v Harpers Garages (above)
SEVERANCE
Attwood v Lamont (above)
Goldsoll v Goldman [1915] 1 Ch 292
Wyatt v Kreglinger & Fernau [1933] 1 KB 793
Articles
Smith ‘Reconstructing Restraint of Trade’ [1995] OJLS 563
Spowart-Taylor and Hough ‘The Client and Restraint of Trade’ (1984) 47 MLR 745
Wynn-Evans ‘Restrictive Covenants, Reasonableness and Wrongful Dismissal’ (1997) 113

LQR 377
Interrograms
1. What is a covenant in restraint of trade?
2. Are such covenants prima facie valid or void?
3. What are the normal interests that merit protection between employer and former
employee?

HOLBORN COLLEGE LLB
4. What is the normal interest meriting protection between a vendor and a purchaser of a
business?
5. What was the interest in the Nordenfelt case?
6. When will a restraint of trade covenant be reasonable?
7. When will an ‘area covenant’ be unreasonable?
8. Why was the covenant in Mason v Provident Clothing Supply not enforceable?
9. How do the courts determine if the duration of the restraint is reasonable?
10. Was the covenant enforceable in Home Counties Dairies v Skilton?
11. In what way did the approach in Briggs v Oates differ from the traditional analysis of
restraint of trade clauses?
12. What was the alternative ground for the decision in Briggs v Oates?
13. What was the decision of the House of Lords in Esso v Harpers?
Questions
1. Bob and Ted were in partnership as surveyors and valuers. Each covenanted with the
other that he would not, during the time they were in partnership or within five years
thereafter, practise within eight miles of their present office or any other office in
which the other should thereafter practise. Bob later took Albert as an articled clerk
and Albert covenanted that he would not, whilst employed by Bob or within 10 years
of ceasing to be so employed, practise within eight miles of Bob’s office or any office
which Bob should thereafter practise as a surveyor, valuer or estate agent.
A year ago the partnership was dissolved and Albert ceased to be employed by Bob.
Both Ted and Albert are now practising within eight miles of Bob’s office.
Advise Bob.
2. ‘In administering the doctrine of restraint of trade, the courts try to maintain a balance
between the freedom of the individual and the protection of the employer.’
Discuss this statement in the light of decided cases.
3. Jenny, aged nineteen, entered into a contract with Slinks Ltd of London whereby she
was to be trained as a model for three years. The contract provided that on completion
of her training Jenny would not work in any other fashion house in the United
Kingdom for a period of ten years. Jenny has now completed her training and has been
offered a very good contract with the fashion house of Hoots Ltd in Scotland.
Advise Jenny as to her legal position.
4. ‘An employer is not permitted to protect himself by contract against competition as

such on the part of his former employees, but he may enforce any agreed restrictions
which are necessary to protect his legitimate interests.’
5. P Ltd carry on business as dry rot consultants, with branches throughout the United
Kingdom. Last year Q agreed to work for P Ltd for five years as head of their research
laboratory, and his contract contained a covenant that he would not be directly or
indirectly concerned in any business acting as dry rot consultants anywhere in England
or Wales for two years after leaving his employment with P Ltd.

HOLBORN COLLEGE LLB
Q has been approached by R Ltd, another firm of dry rot consultants, who have asked
him to become head of their research laboratory at twice his present salary.
Advise Q.
6. ‘The doctrine of restraint of trade is one to be applied to factual situations with a broad
and flexible rule of reason.’ (Per Lord Wilberforce)
Explain the factual situations to which the doctrine has been applied and the principles
upon which it operates.

HOLBORN COLLEGE LLB
HOLBORN COLLEGE LLB
Part 2: Study Unit Seventeen

Part 2: Study Unit Seventeen
Topic
Topic
Frustration
Frustration
Prologue
Prologue
This topic examines the doctrine of frustration which, when it materialises, has the effect of
bringing the performance of the contract to a complete halt. The ways in which frustration
This topic examines the doctrine of frustration which, when it materialises, has the effect of
may occur is also analysed.
bringing the performance of the contract to a complete halt. The ways in which frustration
may occur is also analysed.
Essential Reading
EssentialContract
Textbook
Contract on
Law,ContractLaw
Law,– Cracknell
McKendrick Relevant
RelevantChapter(s)
Chapter(s)
Relevant Chapter(s)

Other Reading
Other Reading
Contract,
Chapter(s)
The Law Law,
Chapter(s)
Learning Outcomes
Learning
a) To haveOutcomes
examined what amounts to frustration of a contract.
b)
a) understoodwhat
To have examined the development of the lawofofafrustration.
amounts to frustration contract.
c)
b) To have understood
examined the thethe effect of frustration
development of the lawatofcommon law, in particular the Fibrosa
frustration.
case.
c) To have examined the the effect of frustration at common law, in particular the Fibrosa
d) To have learnt the effect of the Law Reform (Frustrated Contracts) Act 1943.
case.
d) To have learnt the effect of the Law Reform (Frustrated Contracts) Act 1943.
Sources of Law
Sources
Statutes of Law
Statutes
Law Reform (Frustrated Contracts) Act 1943
Law Reform
Sale of Goods(Frustrated
Act 1979: Contracts)
s7 Act 1943

Case Law
Case
O Law
LD LAW
Paradine
OLD LAW v Jane (1647) Aleyn 26
Paradine v Jane (1647) Aleyn 26

HOLBORN COLLEGE LLB
DEVELOPMENT
Taylor v Caldwell (1863) 3 B and S 826
CURRENT FORMULATION
Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696
National Carriers v Panalpina (Northern) Ltd [1981] AC 675
Pioneer Shipping Ltd v BTP Tioxide [1982] AC 724
PERFORMANCE IMPOSSIBLE
a) Subject matter destroyed
Taylor v Caldwell (above)
b) Party dead
Graves v Cohen (1929) 46 TLR 121
c) Subject matter unavailable

Jackson v Union Marine Insurance (1873) LR 10 CP 125
PERFORMANCE ILLEGAL
Denny Mott & Dickson v James Fraser [1944] AC 265
OBLIGATIONS RADICALLY DIFFERENT

Herne Bay Steamboat v Hutton [1903] 2 KB 683
Krell v Henry [1903] 2 KB 740
LIMITS TO FRUSTRATION
a) Reduced profitability
Davis Contractors Ltd v Fareham UDC (above)
Tsakiroglou v Noblee Thorl [1962] AC 93; [1961] 2 All ER 179
b) Self-induced frustration
Joseph Constantine Steamship Line Ltd v Imperial Smelting Corp [1942] AC 154
Lauritzen AS v Wijsmuller BV [1990] 1 Lloyd’s Rep 1
Maritime National Fish v Ocean Trawlers Ltd [1935] AC 524
c) Contractual provision
Metropolitan Water Board v Dick Kerr [1918] AC 119
d) Leases
Cricklewood Properties v Leightons Investments [1945] AC 221
National Carriers v Panalpina (Northern) Ltd [1981] AC 675
EFFECTS OF FRUSTRATION
a) Common law
Fibrosa v Fairbairn Lawson Ltd [1943] AC 32

HOLBORN COLLEGE LLB
b) Statute
BP Exploration v Hunt [1982] 1 All ER 925
Articles
Clark ‘Frustration, Restitution and the Law Reform (Frustrated Contracts) Act 1943’ [1996]
LMCLQ 170
McKendrick ‘Self Induced Frustration and Force Majeure Clauses’ [1989] LMCLQ 3
Stewart and Carter ‘Frustrated Contracts and Statutory Adjustment: The Case for a
Reappraisal’ [1992] CLJ 66
Interrograms
1. Why was the defendant bound to pay the rent in Paradine v Jane?
2. Why was the hirer of the music hall not able to claim damages in Taylor v Caldwell?
3. Must a frustrating event be unforeseen by both parties?
4. What is meant by ‘impossible’ to perform in this context?
5. Explain the decision in Jackson v Union Marine.
6. Is there a distinction between Krell v Henry and Herne Bay Steamboat v Hutton?
7. Why was the contract frustrated in the Fibrosa case?
8. What is the effect of self-induced frustration?
9. Explain the decision in Maritime National Fish v Ocean Trawlers.
10. Does the doctrine of frustration apply to leases?
11. When a contract is frustrated what happens to the unperformed obligations of the
parties?
12. If a contract is frustrated is it void ab initio?
13. On what ground did the Polish company recover its money back in the Fibrosa case?
14. When does the Law Reform (Frustrated Contracts) Act 1943 apply?
15. In general what change in the law is made by s1(2) of the Act?
16. Explain the proviso to s1(2).
17. In general what change in the law is made by s1(3) of the Act?
18. Does the court have a discretion to award compensation for partial performance where
a contract has been frustrated?
19. Following BP v Hunt how do you assess the ‘valuable benefit’ for s1(3) of the Act?
20. Is reform of the 1943 Act long overdue?
Questions
1. Z, the manager of The Rocking Burps, a pop group, agreed with X, for a fee of
£15,000, that the group would perform two weeks later at a concert organised by X.
The lead singer of the group, Windy, took drugs on the day before the concert and as a
result was unable to perform properly as he was in a dazed state. Although he started to
perform he was booed off the stage. As a result X, who had paid £16,000 to hire the
venue, had to return £28,000 to dissatisfied fans.

HOLBORN COLLEGE LLB
Advise X. What difference, if any, would it make to your advice if Windy’s beer had
been laced with the drug by some unknown third party?
2. Donald contracted to take a group of children on a five day coach trip to Cornwall. He
hired a coach for £200 (and paid £50 in advance), and booked accommodation in his
name at a hotel. The parents of the children paid him the cost of the holiday. The day
before the party was due to depart all coach drivers came out on strike in sympathy
with the railwaymen who had been on strike for a month. Donald cancelled the
holiday. The hotel are claiming damages for loss of profit from him, and the parents
and children are extremely disappointed.
Advise Donald.
3. a) ‘Even if there is a radical change of circumstances a contract is not necessarily

frustrated.’
Comment.
b) Len, a retired law lecturer, arranged with Fred to give Fred’s son, Simon, a
course of two one hour lessons a week for ten weeks to prepare him for his Law
of Contract examination. It was agreed that Fred would pay Len £50 at the
beginning of the course and a further £150 at the end.
After five lessons Simon had a nervous breakdown and was obviously not going to be
able to take the examination. Fred therefore cancelled the rest of the course. Len had
spent a considerable amount of time preparing the classes and had bought the latest
edition of the set text books.
Advise Len.
4. Lord Blessers, who wishes to celebrate his daughter’s wedding in style, arranges an
open air pop concert in Blessers Park, in the county of Loamshire. On 1 February he
engages a famous group ‘The Wild Things’ to appear for £5,000. He is obliged to pay
them £1,000 immediately, the balance to be payable on 1 July, the day of the concert.
On 1 March he engages a catering firm ‘Eatwell’ to provide 500 lunches in the
marquee in Blessers Park for £10,000, payable on 1 July. On June 1 foot and mouth
disease, which has been affecting neighbouring counties for the previous six months,
breaks out in Loamshire. The disease cannot be contracted by human beings but can be
spread by them. The Minister of Agriculture appeals to residents of Loamshire, on a
‘voluntary basis’, to cancel any outdoor events.
Lord Blessers immediately cancels the celebrations and informs the group and the
caterers that their services are no longer required. The group has spent considerable
sums of money setting up an elaborate stage whilst the caterers have incurred
considerable expense in preparations.
Advise ‘The Wild Things’ and ‘Eatwell’.
How would your advice differ, if at all, if the bride had been killed in an accident a
week before her wedding day?
5. X owns a holiday cottage in a remote mountain area. In May he agreed to let it to Y

from 1–15 August. Y paid a deposit of £200. On the afternoon of 31 July, after Y and
his family had set off from their home near London, a landslide rendered the cottage
uninhabitable. X, who had recently spent £500 on redecoration in preparation for Y’s
visit, was unable to contact Y, and Y only found out what had happened when he
arrived at the cottage. Y spent £200 on hotel accommodation for the night before
returning home next day. Y and his family were very disappointed at not having the
holiday they had planned.

HOLBORN COLLEGE LLB
Y is now demanding that X should return his deposit and pay him compensation.
Advise X. What difference, if any, would it make if the damage to the cottage had been
caused by a fire carelessly started by X?
6. Xerxes Travel Ltd specialises in tours to Archaea. In March this year Fred booked a
two week tour for himself and his wife, Hilda, in August and paid a deposit of £250.
Archaea has always been a peaceful country with a stable government but a revolution
in nearby Agraria in April led to widespread rioting in Archaea. As a result of the
uncertain situation Xerxes took no more bookings for tours to Archaea. In July it
informed Fred that it was cancelling the August tour and would not be able to return
his deposit, as it had paid £1,000 in non-refundable charter fees for seats on flights to
Archaea.
Hilda was so disappointed and outraged at this ‘high-handed treatment’ that she
insisted that Fred should ask Xerxes to provide seats for them on a scheduled flight to
Archaea and two weeks hotel accommodation for the balance of the cost of the original
tour, which Fred tendered. Xerxes refused.
Advise Xerxes Travel Ltd. Would your answer be different if on 31 July the Archaean
government banned all tourists from entering the country until further notice?

HOLBORN COLLEGE LLB
HOLBORN COLLEGE LLB
Part 2: Study Unit Eighteen

Part 2: Study Unit Eighteen
Topic
Topic
Discharge of Contracts Performance, Agreement and Breach
Discharge of Contracts Performance, Agreement and Breach
Prologue
Prologue
This topic analyses the way in which contracts can be discharged or brought to an end.
Primarily,
This topic analyses the wayin in
it can be achieved three ways:
which performance,
contracts can beagreement and or
discharged breach.
brought to an end.
Primarily, it can be achieved in three ways: performance, agreement and breach.
Essential Reading
Essential Reading
Textbook on Contract Law
Obligations: Law,–Cracknell
Relevant Chapter(s)
Contract Law,Contract
Mckendrick Relevant Chapter(s)
Relevant Chapter(s)
Contract Law, Mckendrick Relevant Chapter(s)

Other Reading
Other Reading
Contract,
Chapter(s)
The Law Law,
Chapter(s)
Learning Outcomes
Learning
a) Outcomes
To have understood discharge of contracts by performance, by agreement and by
a) breach.
To have understood discharge of contracts by performance, by agreement and by
b) To have examined the distinction between entire and severable obligations.
breach.
b)
c) To have
have examined
examinedthethedistinction
distinctionbetween
betweenentire and severable
Woodar v Wimpeyobligations.
and Federal Commerce
c) & Navigation v Molena Alpha.
To have examined the distinction between Woodar v Wimpey and Federal Commerce
d) &
ToNavigation
have learntvthe
Molena Alpha.
concept and effects of an anticipatory breach.
d) To have learnt the concept and effects of an anticipatory breach.
Sources of Law
Sources
Case Lawof Law
Case
P Law
ERFORMANCE
PERFORMANCE
a) General rule
a) Generalv rule
Cutter Powell (1795) 6 Term Rep 320
Cutter v Powell (1795) 6Osterreich
Raiffeisen-Zentralbank Term RepAG 320v Cross-Seas Shipping Ltd & Others (2000) The
Times 1 FebruaryOsterreich
Raiffeisen-Zentralbank (CA) AG v Cross-Seas Shipping Ltd & Others (2000) The
b) Times 1 February
Performance prevented (CA)
b) Performance
Planché prevented
v Colburn (1831) 8 Bing 14
c) Planché v Colburn
Acceptance (1831)
of partial 8 Bing 14
performance
c) Acceptance
Sumpter of partial
v Hedges performance
[1898] 1 QB 673
Sumpter v Hedges [1898] 1 QB 673
HOLBORN COLLEGE LLB
d) Whether time is of the essence

Union Eagle Ltd v Golden Achievement Ltd [1997] 2 All ER 215 (JCPC)
AGREEMENT
Eodem modo quo oritur, eodem modor dissoluitur
BREACH
a) Actual breach
Bettini v Gye (1876) 1 QBD 183
Hong Kong Fir Shipping v Kawasaki Kisen Kaisha [1962] 2 QB 26
Modahl v British Athletic Federation Ltd (1999) The Times 23 July (CA)
Poussard v Spiers & Pond (1876) 1 QBD 410
b) Anticipatory breach
Afovos Shipping v Pagnan [1983] 1 All ER 449
Alfred C Toepfer International GmbH v Itex Itagrani Export SA [1993] 1 Lloyd’s Rep
360
Avery v Bowden (1855) 5 E and B 714
Clea v Bulk Oil [1984] 1 All ER 129
Federal Commerce & Navigation v Molena Alpha [1979] AC 757
Fercometal Sarl v Mediterranean Shipping Co SA [1988] 2 All ER 742
Frost v Knight (1872) LR 7 EX 111
Hochster v De la Tour (1853) 2 E & B 678
Mersey Steel & Iron v Naylor Benzon (1884) 9 App Cas 434
Vitol SA v Norelf Ltd (The Santa Clara) [1996] 3 WLR 107; [1996] 3 All ER 93 (HL)
White & Carter (Councils) v McGregor [1962] AC 413
Woodar v Wimpey [1980] 1 WLR 227; [1980] 1 All ER 571
Articles
Hedley ‘Acceptance of Anticipatory Breach’ [1996] CLJ 14
Hedley ‘Vitol SA v Norelf Ltd in the House of Lords’ [1996] CLJ 430
Treitel ‘Affirmation After Repudiatory Breach’ (1998) 114 LQR 22
Interrograms
1. If a party fully performs his obligations under a contract, is it discharged?
2. What is a condition precedent?
3. If A agrees to work for B at £50 per week payable in arrears, when does B’s liability
arise?
4. What is a concurrent condition?
5. Is there a general requirement of substantial failure to perform before the victim of the
breach can terminate?
6. What is meant by an entire obligation in contract law?
7. Explain the decision in Cutter v Powell.
8. Explain the decision in Sumpter v Hedges.

HOLBORN COLLEGE LLB
9. What are severable obligations?

10. What is the distinction between Woodar v Wimpey and Molena Alpha?
11. If one of the parties to a contract, before the time fixed for performance is fixed, states
he will not perform his obligations, what type of breach has he committed?
12. What choice has the victim of an anticipatory breach?
13. In Hochster v De la Tour did the plaintiff elect to affirm the contract?
14. Explain the decision in Avery v Bowden.
15. What are the disadvantages of affirming the contract after an anticipatory breach?
16. After termination by breach is the victim still bound to perform his obligations?
17. After an affirmation of a contract is the victim still bound to perform his obligations?
Questions
1. What remedies are available to the innocent party to a contract where, before the time
for its performance, the other party declares that he will refuse to perform the contract
at the due time?
2. John entered into a contract with Harry to hire Harry’s helicopter for a two month
survey of the Sahara desert, to take place in August of this year. John has just been told
by Harry that Harry will need the helicopter himself during that period. There is a
rumour that surveys such as that planned by John may shortly be banned.
Advise John as to his legal rights, if any.
3. In June Gareth entered into a contract to buy 10,000 rugby balls from Tries Ltd for
£200,000. The rugby balls were to be delivered on 18th October. Gareth immediately
agreed to resell the rugby balls to Richard in Peru for £250,000. On 16th August Tries
Ltd told Gareth that they would not be able to fulfil the order. Gareth knows that if
Tries Ltd continue to produce rugby balls at their present rate they will be able to meet
the commitment, but Gareth has also heard a rumour that the government might ban
the production of rugby balls in the United Kingdom as a result of the British Lions
losing the test series in South Africa. Gareth could probably obtain the rugby balls
from France but these would cost him £280,000.
Advise Gareth as to his legal position.
4. ‘A party who does not perform the whole of the contract is not entitled to any
payment.’
Discuss.

HOLBORN COLLEGE LLB
HOLBORN COLLEGE LLB
Part 2: Study Unit Nineteen

Part 2: Study Unit Nineteen
Topic
Topic for Breach of Contract Damages (1)
Remedies
Remedies for Breach of Contract Damages (1)
Prologue
Prologue
This topic examines the common law remedy of damages available in the event of a breach of
contract.
This topic examines the common law remedy of damages available in the event of a breach of
contract.
Essential Reading
EssentialContract
Textbook
Contract on
Law,ContractLaw
Law,– Cracknell
McKendrick Relevant
RelevantChapter(s)
Chapter(s)
Relevant Chapter(s)

Other Reading
Other Reading
Contract,
Chapter(s)
The Law Law,
Chapter(s)
Learning Outcomes
Learning
a) To haveOutcomes
understood the general basis of assessment of contractual damages.
b)
a) To have
To have understood
learnt that damages which
the general areoftoo
basis remote cannot
assessment be recovered.
of contractual damages.
c)
b) To
To have
have examined
learnt that the cases on
damages remoteness
which of damages.
are too remote cannot be recovered.
d)
c) To have
To have examined
learnt the principles of remoteness
the cases on mitigation of
ofdamage.
damages.
d) To have learnt the principles of mitigation of damage.
Sources of Law
Sources
Case Lawof Law
Case Law of damages
Assessment
Anglia TV v Reed [1972] 1 QB 60
Assessment of damages
Attorney-General v Blake, Jonathan Cape Ltd, third party [2000] 4 All ER 395
Anglia
Banque Bruxelles [1972]
TV v Reed 1 QBStar
SA v Eagle 60 Insurance Co Ltd [1996] 3 WLR 87 (also reported as South
Attorney-General v Blake, Jonathan
Australia Asset Management Corp CapevLtd,
Yorkthird party [2000]
Montague 4 All 3ER
Ltd [1996] All395
ER 365 (HL))
Banque Bruxelles SA v Eagle Star Insurance Co Ltd [1996]
Bence Graphics International Ltd v Fasson UK Ltd [1998] QB 87 3 WLR 87 (also reported as South
Australia Asset Management Corp
C & P Haulage v Middleton [1983] 1 WLR 1461 v York Montague Ltd [1996] 3 All ER 365 (HL))
Bence Graphics
CCC Films International
(London) Ltd vQuadrant
Ltd v Impact Fasson UK Ltd Ltd
Films [1998] QB 387WLR 245
[1984]
C & P Haulage v Middleton [1983] 1 WLR 1461
Panatown Ltd v Alfred McAlpine Construction Ltd [2000] 4 All ER 97
CCC
RuxleyFilms (London)and
Electronics Ltd Construction
v Impact Quadrant
Ltd v Films Ltd [1984]
Forsyth; 3 WLREnclosures
Laddingford 245 Ltd v Same
Panatown Ltd v Alfred McAlpine Construction
[1995] 3 WLR 118; [1995] 3 All ER 268 (HL) Ltd [2000] 4 All ER 97
Ruxley
Watts v Electronics and1Construction
Morrow [1991] WLR 1421 Ltd v Forsyth; Laddingford Enclosures Ltd v Same
White Arrow Express Ltd v [1995]
[1995] 3 WLR 118; Lameys3 All ER 268 (HL)
Distribution Ltd [1995] TLR 430 (CA)
Watts v Morrow [1991] 1 WLR 1421
White Arrow Express Ltd v Lameys Distribution Ltd [1995] TLR 430 (CA)

HOLBORN COLLEGE LLB
REMOTENESS OF DAMAGE
Chaplin v Hicks [1911] 2 KB 786
Cory v Thames Ironworks (1868) LR 3 QB 181
Hadley v Baxendale (1854) 9 Exch 341
Heron II, The [1969] 1 AC 350
Jackson v Royal Bank of Scotland [2000] CLC 1457
Parsons v Uttley Ingham [1978] 1 All ER 525; [1978] QB 791
Victoria Laundry v Newman Industries [1949] 2 KB 528
CAUSATION
County Ltd v Girozentrale Securities [1996] 3 All ER 834
Monarch, The [1949] AC 196
MITIGATION
Brace v Calder (1895) 2 QB 253
British Westinghouse v Underground Electric [1912] AC 673
CONTRIBUTORY NEGLIGENCE
Barclays Bank plc v Fairclough Building Ltd [1994] 3 WLR 1057; [1995] 1 All ER 289 (CA)
Gran Gelato Ltd v Richcliff Ltd [1992] 1 All ER 865
Articles
Beale ‘Damages for Poor Service’ (1996) 112 LQR 205
Cartwright ‘Remoteness of Damage in Contract and Tort: A Reconsideration’ [1996] CLJ 488
at 490 – 496, 504 – 507 and 513–514
Coote ‘Contract Damages, Ruxley and the Performance Interest’ [1997] CLJ 537
Enonchong ‘Contract Damages for Wrongful Dishonour of a Cheque’ (1997) 60 MLR 412
Hooley ‘Remedies for Wrongful Dishonour of a Cheque’ [1996] CLJ 189
Hopkins ‘Contributory Negligence and Strict Contractual Duties: Barclays Bank v Fairclough
Building’ [1995] CLJ 20
O’Sullivan ‘Contract Damages for Failed Fun – Taking the Plunge: Ruxley Electronics v
Forsyth’ [1995] CLJ 496
Poole ‘Damages for Breach of Contract’ (1996) 59 MLR 272
Porat ‘The Contributory Negligence Defence and the Ability to Rely on the Contract’ (1995)
111 LQR 228
Treitel ‘Damages for Breach of Warranty of Quality: Bence Graphics v Fasson Ltd’ (1997)
113 LQR 118
Interrograms
1. Is an action for damages available as of right to the victim of a breach of contract?
2. What are unliquidated damages?

HOLBORN COLLEGE LLB
3. What is the general traditional basis of assessment of contract damages?

4. Are punitive damages normally awarded for breach of contract?
5. What basis of assessment did the court use in Anglia TV v Reed?
6. Must the breach have caused the loss that is being claimed?
7. Can judges apportion the blame for breach of contract and make a party liable for 30
per cent of the damage only?
8. What is the test of remoteness laid down in Hadley v Baxendale?
9. Why did the mill owners not recover for the loss of profits suffered when the mill
stood idle (Hadley v Baxendale)?
10. Does Victoria Laundry add anything to the test laid down in Hadley v Baxendale?
11. Why were the boiler makers not liable for the loss of the lucrative contract with the
Ministry of Supply (Victoria Laundry)?
12. If the contract with the Ministry had been disclosed to the boiler makers would they
have been liable for its loss (Victoria Laundry)?
13. Is the test of remoteness of damages in tort the same as the test of remoteness in
contract?
14. In the Heron II were the shipowners liable for the loss resulting from the fall in price of
the sugar market?
15. Why did Scarman LJ and Orr LJ hold the defendants liable for the loss of the pigs in
Parsons v Uttley Ingham?
16. Can the victim recover damages for losses he could have avoided by taking reasonable
steps?
17. Explain the decision in Brace v Calder.
18. Must the plaintiff give credit for benefits accruing to him as a consequence of the
breach?
19. Is it correct to say that the victim of a breach is under a duty to mitigate his loss?
Questions
1. Fred, an insurance agent, joins the ‘Gornaway Hunt’ knowing that much business is
transacted at the hunt’s evening festivities. In order to be properly equipped, Fred
consults Snaffles, manager of Tantivy Ltd and explains the position to him. Snaffles
assures Fred that he understands the position perfectly and has Fred measured for the
proper clothes, which cost Fred £200. Snaffles tells Fred the clothes will be delivered
three days before the first hunt of the season. Snaffles also shows Fred a horse called
‘Sapwind’ which Snaffles tells Fred has been hunted with the ‘Banyon Majors’, one of
the best hunts in the country. Fred buys the horse, ‘warranted sound for the field’, for
£1,500. The clothes are not delivered until the morning of the hunt and are a very bad
fit; also the jacket is hunting pink whereas for a newcomer it should have been black.
The horse proves quite useless for hunting and Fred is thrown and rolled on at the first
hedge and ditch, breaking an arm and a leg. Due to his injuries Fred is off work for two
months, losing business worth £2,000. Because of his appearance and performance at
the hunt, many members of the hunt are very upset and Fred is asked to give up his
membership; this costs Fred an estimated £4,000–£5,000 in lost business.
Advise Fred as to his legal rights, if any.

HOLBORN COLLEGE LLB
2. F bought a house which needed complete redecoration before he could move in with
his family. F engaged G to redecorate the house and the contract provided that the
work would be finished in twelve weeks. G in fact took fifteen weeks to finish the
work. Advise F whether he may claim damages in respect of:
a) hotel bills for himself and his family for the additional three weeks (£500);
b) the rates and mortgage interest paid by him during the three weeks (£200);
c) the destruction of his furniture, during the additional three weeks, by a fire at the
warehouse in which it had to be stored because he was unable to move in to the
house (£5,000).
3. ‘The principle that the damage must not be too remote is difficult to apply and often
causes hardship to the plaintiff.’
Discuss.
4. In January, Olive, a successful business executive living and working in London, was
appointed manager of a firm in Manchester, commencing on April 1. Having found a
house she liked in Manchester, Olive engaged Paul, a builder, to do some renovation to
it, the contract providing that the work would be completed by March 31 at the latest.
In breach of contract Paul did not complete the renovation until May 31 and Olive was
unable to move into the house until June. During April and May, Olive continued to
live in London at the weekends, flying to Manchester and back each week, and stayed
in a five star hotel in Manchester during the week. She also engaged a nanny to look
after her two small children during her absence.
Olive is now claiming that Paul should pay her air fares between London and
Manchester, the hotel bills, the cost of the nanny and a ‘substantial sum’ to compensate
her for the emotional distress of being separated from her family.
Advise Paul.
Note: for compensation for emotional distress see unit 21.
5. a) ‘The rule of common law is that where a party sustains a loss by breach of
contract, he is, so far as money can do it, to be placed in the same position as if
the contract had been performed.’
Discuss.
b) Bill, a business tycoon, contacted a hire firm who provided chauffeured

executive cars and booked a car for 6 am the following day to take him to
Heathrow Airport from where he was booked to travel to New York with the
intention of signing a multi-million dollar contract. The driver lost his way and
arrived so late that Bill missed the flight and the opportunity of obtaining the
contract.
Advise Bill.
6. A Ltd employ B Ltd to build a multi-purpose sports complex. B Ltd engage sub-
contractors, C Ltd, who use cement which turns out to be highly unsuitable for the
purpose for which it is used. Soon after completion and occupation of the building
cracks begin to appear. The complex has to close for expensive repairs and a lot of
revenue is lost. A Ltd had also put in a bid, which has to be withdrawn, to host the
World Badminton Championships which would have produced large amounts of
revenue.
Advise A Ltd.

HOLBORN COLLEGE LLB
7. ‘The plaintiff must be compensated for all the damage flowing from the breach,
provided that it is not too remote.’
Explain.

HOLBORN COLLEGE LLB
HOLBORN COLLEGE LLB
Part 2: Study Unit Twenty

Part 2: Study Unit Twenty
Topic
Topic for Breach of Contract Damages (2)
Remedies
Remedies for Breach of Contract Damages (2)
Prologue
Prologue
This topic looks at various other remedies that are available under the other heads of loss.
This topic looks at various other remedies that are available under the other heads of loss.
Essential Reading
EssentialContract
Textbook
Contract on
Law,ContractLaw
Law,– Cracknell
McKendrick Relevant
RelevantChapter(s)
Chapter(s)
Relevant Chapter(s)

Other Reading
Other Reading
Contract,
Chapter(s)
Contract
RelevantChapter(s)
Chapter(s)
LearniOutcomes
LearniOutcomes
a) To have considered the cases where non-pecuniary loss has been recoverable.
b)
a) To haveconsidered
To have learnt the the
distinction between
cases where a liquidated
non-pecuniary damages
loss has clause and a penalty
been recoverable.
clause.
b) To have learnt the distinction between a liquidated damages clause and a penalty
c) To have examined the judgement in Dunlop Pneumatic Tyres v New Garage.
clause.
d)
c) To
To have
have considered thejudgement
examined the case of White & Carter
in Dunlop (Councils)
Pneumatic v McGregor.
Tyres v New Garage.
d) To have considered the case of White & Carter (Councils) v McGregor.
Sources of Law
Sources
Case Lawof Law
Case Law
Injury to reputation
a) Reputation of company
Injury to reputation
a) Anglo-Continental Holdings v Typaldos Lines [1967] 2 Lloyds Rep 61
Reputation of company
b) Anglo-Continental Holdings v Typaldos Lines [1967] 2 Lloyds Rep 61
Reputation of individual
b) Addis v Gramophone
Reputation Co [1909] AC 488
of individual
Addis v Gramophone Co [1909] AC 488
NON-PECUNIARY LOSS
a) Discomfort,LOSS
NON-PECUNIARY vexation, disappointment, injury to feelings
a) Addis v Gramophone
Discomfort, vexation, Co [1909] AC 488
disappointment, (HL)to feelings
injury
Alexander v Rolls Royce Motor Cars Ltd [1995] TLR 254 (CA)
Addis v Gramophone Co [1909] AC 488 (HL)
Alexander v Rolls Royce Motor Cars Ltd [1995] TLR 254 (CA)
HOLBORN COLLEGE LLB
Farley v Skinner [2001] 3 WLR 899 (HL)

Hayes v James and Charles Dodd [1990] 2 All ER 815
Jackson v Horizon Holidays [1975] 1 WLR 1468
Jarvis v Swan Tours [1973] 2 QB 233
Johnson v Unisys [2001] 2 WLR 1076 (HL)
Watts v Morrow [1991] 1 WLR 1421; [1991] 4 All ER 937
b) Lost future prospects

Dunk v George Waller [1970] 2 QB 163
c) Loss of a chance
Chaplin v Hicks [1911] 2 KB 786
LIQUIDATED DAMAGES/PENALTY CLAUSES

Cellulose Acetate Silk v Widnes Foundry [1933] AC 20
Cenargo v Empresa [2002] CLC 1151
Dunlop Pneumatic Tyres v New Garage [1915] AC 79
Jobson v Johnson [1989] 1 WLR 1026
Lordsvale Finance plc v Bank of Zambia [1996] 3 WLR 688; [1996] 3 All ER 156
Philips Hong Kong Ltd v AG of Hong Kong (1993) The Times 15 February
Articles
Burrows ‘Mental Distress Damages for Breach of Contract’ [1990] NLJ 596
Burrows ‘Recent Developments in the Law of Remedies’ [1990] NLJ 29
Capper ‘Damages for Distress and Disappointment – Problem Solved’ (2002) 118 LQR 193
Enonchong ‘Damages for Injury to Reputation’ (1996) 59 MLR 592
Hedley ‘What Price An Employee’s Reputation?’ [1997] CLJ 485
Interrograms
1. What is the object of an award of damages?
2. Where a breach of contract has caused injury, is that recoverable?
3. Where a breach of contract has caused mental distress, is that recoverable?
4. Explain the decision in Jarvis v Swan Tours. Why is it unusual?
5. What is a liquidated damages clause?
6. What is a penalty clause?
7. If the parties have made a genuine attempt to estimate the loss likely to flow from the
breach will their figure be upheld?
8. Do the rules of remoteness apply to a liquidated damages clause?
9. Do the rules of mitigation apply to a liquidated damages clause?
10. In Dunlop Pneumatic Tyre was the clause held to be penal?
11. If a clause stipulates a sum that is extravagant and unconscionable will it be a penalty
clause?
12. Why do the courts refuse to apply penalty clauses?

HOLBORN COLLEGE LLB
13. Why did the court not use an actual loss basis for assessing the damage in Cellulose
Acetate v Widnes Foundry?
14. Do the rules of remoteness apply on an action for an agreed sum?
15. Why did White and Carter (Councils) recover the full price of the contract from
McGregor?
Questions
1. ‘Damages for breach of contract can only be awarded in respect of loss of a financial
kind.’
Discuss.
2. In June, Robert agreed to sell Elpis an elephant called Matilda for £8,000. The date for
delivery was 19th July and it was agreed that if Robert failed to make delivery, then he
was to pay Elpis £5,000 damages. Robert failed to make delivery, but by good fortune
Elpis was able to purchase another elephant, Myrtle, for £9,000. Elpis is now claiming
the £5,000 from Robert.
Advise Robert as to his legal position.
3. ‘Damages for breach of contract do not include compensation for disappointment,

injured feelings or injury to reputation caused by the breach.’
Consider how far this is an accurate statement of the law.
4. E, an architect, was engaged to design building premises for F for F’s business. E was
to be paid a fee of £2,000 a month plus ‘reasonable expenses’. E worked on the design
for six months during which time E received only her fee payments from F. F then
wrote to E saying that, because of financial difficulties, he was postponing E’s
contract. In fact, F did not like the design which E had produced and used the financial
difficulties as an excuse for terminating E’s contract. F refused to pay the expenses
which E had incurred, arguing that they were not reasonable.
In the letter accepting appointment E had enclosed her ‘Standard terms’ which stated:
‘(18) It is agreed that in matters of judgment E’s decision shall be final;
(19) In the event of a client not paying expenses when due, that client shall pay
double the amount due as expenses’.
Advise E.
5. In March X engaged Miss Y for three years as his research assistant at a salary of
£25,000 under a written agreement which included the following clauses:
‘(6) The research assistant will dress smartly at all times. It is understood that
trousers are not an acceptable form of dress under any circumstances.
(7) The research assistant will work whatever hours are necessary to complete
the assignments given to her.’
On 1 June X asked Y to produce certain statistics for a meeting with an important

client at 9 am on 2 June. In spite of staying in the office until midnight, Y was not able
to complete the statistics on 1 June. She returned to the office at 6 am on 2 June but
had still not quite finished the work when X arrived at 8.30 am.

HOLBORN COLLEGE LLB
X was angry. He then noticed that Y was wearing trousers and told her, in front of
several colleagues, that her contract was terminated. Y was extremely upset and
humiliated; she is now receiving medical treatment for depression.
Advise Y.

HOLBORN COLLEGE LLB
HOLBORN COLLEGE LLB
Part 2: Study Unit Twenty One

Part 2: Study Unit Twenty One
Topic
Topic for Breach of Contract Equitable Remedies and Restitution
Remedies
Remedies for Breach of Contract Equitable Remedies and Restitution

Prologue
Prologue
This topic examines the remedies that are available in equity. These remedies are given at the
exclusive discretion of the courts.
This topic examines the remedies that are available in equity. These remedies are given at the
exclusive discretion of the courts.
Essential Reading
EssentialContract
Textbook on
Obligations:
Contract Contract
Law,ContractLaw
Law,– Cracknell
McKendrick Relevant
RelevantChapter(s)
Chapter(s)
Relevant Chapter(s)

Other Reading
Other Reading
Contract,
Chapter(s)
Contract
RelevantChapter(s)
Chapter(s)
Learning Outcomes
Learning
a) To haveOutcomes
considered the nature and availability of the remedy of specific performance.
b)
a) To have considered
To have examined cases whereand
the nature theavailability
court exercises
of theits discretion
remedy to award
of specific or refuse the
performance.
remedy.
b) To have examined cases where the court exercises its discretion to award or refuse the
c) To have considered the nature and availability of the remedy of injunction.
remedy.
d)
c) To haveconsidered
To have learnt the the
courts
naturepower to award damages
and availability in lieu
of the remedy of or in addition to an
of injunction.
equitable remedy.
d) To have learnt the courts power to award damages in lieu of or in addition to an
e) To have examined
equitable remedy. the law of quasi-contract (restitution).
e) To have examined the law of quasi-contract (restitution).
Sources of Law
Sources of Law
Statutes
Chancery
StatutesAmendment Act 1858: s2
Supreme
ChanceryCourt Act 1981:
Amendment Acts50
1858: s2
Supreme Court Act 1981: s50

Case Law
S
Case Law
PECIFIC PERFORMANCE
Beswick
SPECIFICvPERFORMANCE
Beswick [1968] AC 58
Co-op Insurance Co Ltd v Argyll Stores Ltd [1997] 2 WLR 898 (HL)
Beswick v Beswick
Patel v Ali [1984] 1[1968]
All ERAC
97858
Co-op Insurance Co Ltd v Argyll Stores Ltd [1997] 2 WLR 898 (HL)
Patel v Ali [1984] 1 All ER 978

HOLBORN COLLEGE LLB
Posner v Scott-Lewis (1987) The Times 12 December

Price v Strange [1978] Ch 337; [1977] 3 All ER 371
Quadrant Visual Communications v Hutchison Telephone (1991) The Times 4 December
Ryan v Mutual Tontine Assoc [1893] 1 Ch 116
Shell UK v Lostock Garages [1976] 1 WLR 1187
Walters v Morgan (1861) 3 De GF and J 718
INJUNCTIONS
Evening Standard v Henderson (1986) The Times 15 November
Page One Records v Britton [1968] 1 WLR 157
Warner Bros v Nelson [1937] 1 KB 209
Wolverhampton Corp v Emmons [1901] 1 QB 515
DAMAGES AND EQUITABLE REMEDIES

Johnson v Agnew [1980] AC 367
RESTITUTION
Aiken v Short (1856) 1 H & N 210
Barclays Bank v Simms and Cooke [1980] QB 677; [1979] 3 All ER 522
Butterworth v Kingsway Motors [1954] 1 WLR 1286
Fibrosa v Fairbairn Lawson [1943] AC 32
Foley v Classique Coaches [1934] 2 KB 1
Griffin v Weatherby (1868) LR 3 QB 753
Halifax Building Society v Thomas [1995] TLR 385 (CA)
Kerrison v Glyn, Mills, Currie & Co (1912) 81 LJKB 465
Kiriri Cotton Co v Dewani [1960] AC 192
Kleinwort Benson Ltd v Lincoln City Council and Other Appeals [1998] 4 All ER 513
Meates v Westpac (1990) The Times 5 July
Planché v Colburn (1831) 8 Bing 14
Portman Building Society v Hamlyn Taylor Neck (A Firm) [1998] 4 All ER 202
Regalian Properties plc v London Docklands Development Corporation [1995] 1 WLR 212;
[1995] 1 All ER 1005 (Ch D)
Westdeutsche Landesbank v Islington LBC [1996] 2 All ER 961 (HL)
Articles
Cope ‘Compound Interest and Restitution’ (1996) 112 LQR 521
Dickson ‘Unjust Enrichment Claims: a Comparative Overview’ [1995] CLJ 100
Hedley ‘Unjust Enrichment’ [1995] CLJ 578
Heydon ‘Equitable Aid to Purchasers in Breach of Time-Essential Conditions’ (1997) 113

LQR 385
Jones ‘Specific Performance: A Lessee’s Covenant to Keep Open a Retail Store’ [1997] CLJ
488
Jones ‘Ultra Vires Swaps’ [1996] CLJ 432
Key ‘Change of Position: Unjust Enrichment and Restitution’ (1995) 58 MLR 505

HOLBORN COLLEGE LLB
Key ‘Detrimental Reliance in Anticipation of a Contract: Regalian Properties v London

Docklands Development Corp’ (1995) 111 LQR 576
Key ‘Excising Estoppel by Representation as a Defence to Restitution’ [1995] CLJ 525
Mannolini ‘Restitution Where an Anticipated Contract Fails to Materialise’ (1996) 59 MLR

111
McInnes ‘“At the Plaintiff’s Expense”: Quantifying Restitutionary Relief’ [1998] CLJ 472
Stevens ‘Restitution and the Brussels Convention’ (1996) 112 LQR 391
Virgo ‘Anticipatory Contracts – Restitution Restrained: Regalian Properties v London

Docklands Development Corp’ [1995] CLJ 243
Interrograms
1. If a court orders specific performance of a contract, what happens to the contract?
2. Why are damages not normally considered an adequate remedy for a contract for the
sale of land?
3. Are building contracts specifically enforceable?
4. What is meant by saying a contract lacks mutuality?
5. Why was specific performance refused in Shell UK v Lostock?
6. Can a contract of employment be specifically enforced by the courts?
7. Why was specific performance refused in Ryan v Mutual Tontine Assoc?
8. What is a voluntary contract?
9. What is an interlocutory injunction?
10. What is a prohibitory injunction?
11. Can a breach of contract be prevented by an injunction?
12. If an injunction amounts to indirect specific performance will the court grant it?
13. What alternative employment was available to Bette Davis when the injunction was
granted to prevent her acting for anyone other than Warner Bros (Warner Bros v
Nelson)?
14. Why was the injunction not granted in Page One Records v Britton?
15. What was the principal change introduced by s2 Chancery (Amendment) Act 1858?
16. When would it be advantageous for a plaintiff to use the court’s jurisdiction to award
damages in lieu of/in addition to an equitable remedy?
17. What principles of assessment govern damages awarded in lieu of specific
performance?
18. What is the ratio decidendi of Johnson v Agnew?
19. In what circumstances may money paid under a mistake of fact be recovered?
20. Is money paid under duress recoverable?
21. Explain the concept of unjust enrichment.
22. Why did the common law traditionally refuse to allow recovery for mistake of law?
What is the present state of the law (see Kleinwort Benson v Lincoln City Council)?

HOLBORN COLLEGE LLB
23. Would it be desirable to enact statutory provisions setting out the general principles of
recovery for mistake of fact and mistake of law?
24. Is it a defence to a restitutionary claim that the defendant has changed his position in
reliance on the receipt of the mistaken payment?
25. In what circumstances may a quantum meruit action be brought? Explain the basis of
the decision in Planché v Colburn.
Questions
Note: question 2 may raise issues considered in earlier units.
1. When will a court order specific performance of a contract?

2. J, a dealer, agreed to hire a small tractor to K for £50 per week for eighteen months and
a miniature engine to M for £30 per week for 26 weeks.
After three months J sold the tractor for £10,000 to L, who required immediate
delivery. K refused to give it up as he needed it as an attraction for his circus.
M fell ill after six weeks and J agreed to accept half rent until M recovered. Six
weeks later M recovered and refused J’s demand for payment of the arrears of the rent.
Advise J. In relation to the tractor, what difference, if any, would it make to your
advice if the tractor was the only surviving example of a particular model, which L
wanted for his tractor museum?
3. What do you understand by the concept of unjust enrichment?

Illustrate your answer by reference to case law.

HOLBORN COLLEGE LLB
Revision and Examination Technique
Whole books have been written on how to study and this brief note makes no pretence at
being an infallible guide. In any case, skill in revision and examination techniques is an art
best acquired by actual practice.
The more you study, the more you devise your own short cuts for efficient preparation for
exams. Unfortunately, it is only when you actually sit the examination that you can see
whether your particular method of revision is successful. If it is not, it is an expensive and
frustrating way to find out.
While it is true that examination techniques are best learned actually sitting examinations, it is
not necessary to wait until the real thing. ‘Mock’ examinations, tackled under realistic
conditions, can be very helpful. For example, select a question and, without looking at the
skeleton answer (if there is one), write out your own. You can use the questions set
throughout this Planner to stage your own practice run.
Or, if you have time, tackle a full quota of four or five questions at once – as a mock
examination.
The short list of do’s and don’ts below attempts to set out some suggestions which it is hoped
most students will find of practical use in planning their revision and tackling examinations.
Do’s
Before the examination
a) Do plan ahead and make your plans increasingly detailed as you approach the
examination date.
Allocate enough time for each topic to be studied, bearing in mind the time actually
available to you before the exams.
b) Do exercise constant self-discipline, especially if studying at home.

c) Do, during your course of study, especially once revision starts, constantly test yourself
orally and in writing.
d) Do keep up-to-date. While examiners do not require familiarity with changes in the
law during the three months prior to the examination, it obviously creates a good
impression to show you are acquainted with any recent changes. Sources that you
might look at in order to be up to date include: leading journals such as Modern Law
Review, Law Quarterly Review and New Law Journal; cumulative indices to law
reports such as the All England Law Reports, and such sources as the Law Society’s
‘Gazette’ and the Legal Executive ‘Journal’.
e) Do familiarise yourself with past examination papers, and try at least one ‘mock
examination’ well before the date of the real thing.
In the examination room
f) Do read the instructions on the examination paper carefully. While any last minute
changes are unlikely – such as the introduction of a compulsory question – it has been
known to happen.

HOLBORN COLLEGE LLB
g) Do read the questions carefully. Analyse problem questions – work out what the
examiner wants. PLAN YOUR ANSWER before you start to write.
h) Do note mark allocations (if any) on the question paper. It is pointless to spend an
excessive amount of time in producing a perfect answer to a part of a problem that
carries only a tiny percentage of the marks.
i) Do allow enough time to re-read your answers. A misplaced word (a ‘not’ in the wrong
place, for example) may turn a good answer into gibberish.
Don’ts
a) Don’t finish the syllabus too early – constant revision of the same topic leads to
stagnation – but DON’T leave revision so late that you have to ‘cram’.
If you are the sort of person who works better to a deadline – make it a realistic one!
b) Don’t try to learn by rote. In particular, don’t try to reproduce model answers by heart.
Learn to express the basic concepts in your own words.
c) Don’t answer the question you expect to see! By all means ‘problem-spot’ before
examinations by going over old exam papers but make sure that what the examiner is
asking for really does match what you are preparing to write about.
and above all –
d) DON’T PANIC!
Finally, it may be useful at this juncture to say a few words about the structure of your
answers in the examination. Amost all examination problems raise more than one legal issue
that you are required to deal with. Your answer should do all of the following.
a) Identify the issues raised by the question

This is of crucial importance and gives shape to the whole answer. It indicates to the
examiner that you appreciate what he is asking you about. This is at least as important
as actually answering the questions of law raised by that issue. The issues should be
identified in the first paragraph of the answer.
b) Deal with those issues one by one as they arise in the course of the problem
This, of course, is the substance of the answer and where study and revision pays off.
c) If the answer to an issue turns on a provision of a statute, CITE that provision briefly,
but do not quote it in detail from any statute you may be permitted to bring into the
examination hall
Having cited the provision, show how it is relevant to the question.
d) If there is no statute, or the meaning of the statute has been interpreted by the courts,
CITE the relevant cases
‘Citing cases’ does not mean writing down the name of every case that happens to deal
with the general topic with which you are concerned and then detailing all the facts you
can think of.
You should cite only the most relevant cases – there may perhaps only be one. No
more facts should be stated than are absolutely essential to establish the relevance of
the case. If there is a relevant case, but you cannot remember its name, it is sufficient
to refer to it as ‘one decided case’.

HOLBORN COLLEGE LLB
e) Whenever a statute or case is cited, the title of the statute or the name of the case
should be underlined
This makes the examiner’s job much easier because he can see at a glance whether the
relevant material has been dealt with, and it will make him more disposed in your
favour.
f) Having dealt with the relevant issues, summarise your conclusions in such a way that
you answer the question
A question will often say at the end simply ‘Advise A’, or B, or C, etc. The advice will
usually turn on the individual answers to a number of issues. The point made here is
that the final paragraph should pull those individual answers together and actually give
the advice required. For example, it may begin something like: ‘The effect of the
answer to the issues raised by this question is that one’s advice to A is that …’
Make sure that you have answered the question completely. If the question says
‘Advise A, B, C and D’, don’t leave D out. Don’t get diverted into discussing advice to
parties whom you are not required to advise.
We at Holborn College wish you the very best.

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Module Planner

Module Title: Law of Contract

Total Learning Hours: 300 hours

Core Module: Yes

• To acquire a basic understanding of the basic principles of the English law of

• To be stimulated into acquiring an enquiring and critical appreciation of the law;

• To apply their knowledge and understanding to unseen questions under examination

• To research individually and report back upon matters of contract law;

UNDERGRADUATE PROGRAMME -2- CONTRACT LAW

At the end of this module students will be able to:-

 demonstrate a knowledge of foundation concepts in Contract law

 apply this knowledge to the solution of simple problems in contract law

 Analyse primary legal materials

 Use legal terminology concerning the law of contract with accuracy

 Communicate effectively in writing

 Develop time and management skills

 Prioritise tasks effectively

Examination: 70% Unseen

Core Texts (provided to students)

Beatson Anson’s Law of Contract 28th ed. OUP

Stone, Modern Contract law 5th edn Cavendish Press

(a) Law Reports

Currently provides free transcripts of recent English cases – very useful

Court Service homepage – has limited number of appeal case transcripts.

Quick reference guide to the House of Commons and its business

Gateway site for the House of Commons and House of Lords

(c) Legal referral sits

UNDERGRADUATE PROGRAMME -4- CONTRACT LAW

Very comprehensive US searchable database – great for comparative studies

excellent summaries of cases on all subjects

Site for Sweet & Maxwell, leading law publishers

(e) Government sites

UNDERGRADUATE PROGRAMME -5- CONTRACT LAW

Brief Indicative lecture outline

Contract Law – A Brief Outline

How To Use This Planner

Study Unit Two

Study Unit Three

Consideration and Intention to Create Legal Relations

Study Unit Four

Study Unit Five

Study Unit Six

Certainty of Contract; Contents of Contracts – Express Terms

Study Unit Seven

Contents of Contracts – Implied Terms

Study Unit Eight

Relative Importance of Contractual Terms

UNDERGRADUATE PROGRAMME -6- CONTRACT LAW

Study Unit Nine

Exclusion Clauses – Incorporation and Construction

Study Unit Ten

Exclusion Clauses – The Unfair Contract Terms Act 1977

Study Unit Eleven

Study Unit Twelve

Mistake at Common Law

Study Unit Thirteen

Incapacity – Minors’ Liability

Study Unit Fourteen

Duress and Undue Influence

Study Unit Fifteen

Study Unit Sixteen

Study Unit Seventeen

Study Unit Eighteen

demonstrate a knowledge of foundation concepts in Contract law

apply this knowledge to the solution of simple problems in contract law

Analyse primary legal materials

Use legal terminology concerning the law of contract with accuracy

Communicate effectively in writing

Develop time and management skills

Prioritise tasks effectively