Group Assignment No.

01
Law of Contracts

Group no: 04

Course Code: - ENM 212 - 2

Course Title: - Business Law

Degree Program: - Entrepreneurship and Management

Year / Semester: - 2nd year 1st semester

Date: - 2021.11.27

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 ACKNOWLEDGEMENT
We would like to express our special thanks to Ms. P.G.M.S.K. Gamage who gave us the
excellent opportunity to do this report about Cases in Law of Contract. After doing this
report, we came to know about Law of Contract.
Secondly, we would also like to thank our friends and family members who helped us a lot
in finishing this report. Thanks again to all who helped us.

SUMMARY
This report presented on the law of contracts. This has been discussed some legal cases and
their decisions. It has also provided a clear understanding about that law case of contract.
We are confident that anyone can gain a clear understanding of the of the law of contracts
by studying this assignment.

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 TABLE OF CONTENTS

1. How to create a legal relation? ......................................................................................................... 5

1.1- Balfour v Balfour [1919] ............................................................................................................. 5
1.2- Merit v Merit .............................................................................................................................. 5
1.3- Simpkin v Jays ............................................................................................................................ 6
2. The offer ............................................................................................................................................. 6
2.1- Gunthing v Lynn ........................................................................................................................ 6
2.2- Gibson v Manchester City Council ........................................................................................... 7
2.3- Carlill v Carbolic Smokeboll Company ................................................................................... 7
2.4- Harvey v Facey ........................................................................................................................... 8
2.5- Harris v Nickerson ..................................................................................................................... 9
2.6- Fisher v Bell ................................................................................................................................ 9
2.7- Partridge v Crittenden ............................................................................................................... 9
2.8- Pharmaceutical society v Boots ............................................................................................... 10
2.9- Payne v Cave ............................................................................................................................. 10
2.10- Dickinson vs Dodd’s (Revocation) ........................................................................................ 11
2.11- Hyde v Wrench (Rejection) ................................................................................................... 11
3. The Acceptance ................................................................................................................................ 12
3.1- Felthouse vs Bindly................................................................................................................... 12
3.2- Household fire insurance co. v Grant ..................................................................................... 12
3.3- Adams vs Lindsell ..................................................................................................................... 13
3.4- Chillingworth v Esche .............................................................................................................. 13
4. Considerations ................................................................................................................................. 14
4.1- Eleanor Thomas v Benjamin Thomas .................................................................................... 14
4.2- Eastwood v Kenyon 1840 ......................................................................................................... 14
4.3- Glasbrook Brothers Ltd v Glamorgan governing body [1925] AC 270 .............................. 15
4.4- Stilk v Myrick (1809) 2 Camp. 317 ......................................................................................... 16
4.5- Foakes v Beer (1884) App Case 605 ........................................................................................ 16
4.6- Hartley v Ponsonby [1857] 7 EB 872 ...................................................................................... 17
4.7- Shadwell v Shadwell [1913] 2 IR 81 ........................................................................................ 17
4.8- Chapplli & Co. v Nestle Co. [1960] AC 87 ............................................................................. 17
4.9- Dunlop pneumatic tire Co Ltd v Selfridge & Co Ltd [1915] AC 847 .................................. 18
4.10- Tweddle v Atkinson [1861] EWHC QB J57 Queen's Bench Division ............................... 19

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5. Intention to create legal relation .................................................................................................... 19
5.1- Commercial Agreement ........................................................................................................... 19
5.1.1- Esso Petroleum v Mardon [1976] QB 801 Court of Appeal .......................................... 19
5.1.2- Appieson v Littekewood ................................................................................................... 20
5.2- Domestic Agreement ................................................................................................................ 20
5.2.1- Jones v Padavatton [1969] 1 WLR 328 Court of Appeal .............................................. 20
6. Contractual capacity ....................................................................................................................... 21
6.1- Nash v Imman ........................................................................................................................... 21
6.2- Davies v Beynon- Harries ........................................................................................................ 21
7. Legal Object ..................................................................................................................................... 22
7.1- Parkinson v college of ambulance ........................................................................................... 22
7.2- Beresford v Royal Insurance ................................................................................................... 22
7.3- Everet v Williams ..................................................................................................................... 23
8. Genuineness of the consent ............................................................................................................. 24
8.1- Misrepresentation ..................................................................................................................... 24
8.1.1- Bisset v Wilkinson ............................................................................................................. 24
8.1.2- Dimmock v Hallet ............................................................................................................. 24
8.2- Mistake ....................................................................................................................................... 25
8.2.1- Counturier vs Hastle......................................................................................................... 25
8.2.2- Raffles vs Wickhouse ........................................................................................................ 25
8.2.3- Counday v Lindsay ........................................................................................................... 26
8.3- Undue Influence ........................................................................................................................ 27
8.3.1- Allcard v Skinner .............................................................................................................. 27
8.4- Terms of the contracts ............................................................................................................. 27
8.4.1- Conditions.......................................................................................................................... 27
8.4.2- Warranties ......................................................................................................................... 28
8.4.3- Innominate Term .............................................................................................................. 28
8.4.4- Exemption Term ............................................................................................................... 29
8.5- Discharge of contracts............................................................................................................... 30
8.5.1- Cutter v Powell.................................................................................................................. 30
8.5.2- Hadley v Baxendale .......................................................................................................... 31

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1. How to create a legal relation?
An agreement by itself does not constitute a legally binding contract. The need for the parties to
intend to generate legally enforceable obligations is a fundamental aspect in the formation of a
contract. There will be no contract unless the parties want for it to be a legally binding
agreement. Examples of Law cases in which an agreement can be reached,
1.1- Balfour v Balfour [1919]
Case
Mr. and Mrs. Balfour are a married couple that lived in Ceylon together (now Sri Lanka). In
1915, they vacationed in England. Due to her sickness, Ms. Balfour was diagnosed with
rheumatoid arthritis and doctors recommended her not to leave the country. Mr. Balfour had
to return to Sri Lanka for office business, but she was unable to travel. Mr. Balfour agreed to
send her £30 per month until she returned to Sri Lanka, and they both agreed. For a few
months, he transferred the money to his wife, but their marriage worsened, and he stopped
paying maintenance to her. Ms. Balfour filed a lawsuit against her husband in order to have
the oral agreement he had made enforced.
Held
-The arrangement was solely social+ domestic in nature.
-There is no legally binding agreement.
-no desire to strike a deal
-Husband-and-wife agreements are not legally binding.

1.2- Merit v Merit

Case
Mr. Merritt and his wife shared a matrimonial residence. In favour of another woman, the
husband had abandoned his wife. As a result, Mr. Merritt and his wife decided that he would
send her £40 every month to help her pay off the mortgage on the house. "You will be paying the
mortgage charges, and I agree to transfer the house to you after you have done that," Mr. Merritt
signed the document. When the mortgage was completely paid off. Mr. Merritt was insistent
about the house not being transferred to her name. Mrs. Merritt filed a lawsuit against her
husband, claiming that the house is hers by contract.
Issue
Whether the agreement between the parties in the contact is binding?

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 Held
The agreement was found to be binding by the Court of Appeal. The presumption does not apply
where a husband and wife are separating or have separated because the parties 'bargain hard' or
do not rely on 'honourable understanding,' according to Denning. They were totally separated in
this case, functioning as two contractual parties, with adequate evidence of an intention to be
bound. The conventional presumption does not apply in this circumstance.

1.3- Simpkin v Jays

Case
The Sunday Empire News held a weekly competition in which a grandmother, granddaughter,
and lodger competed. Each week, the coupon was issued in the Grandmother's name, and the
three of them made forecasts and took turns paying. They had agreed that if one of them won,
they would split the prize money equally. The grandma was awarded £250 and refused to share it
with the other two winners. The lodger filed the lawsuit to recover a share of the reward money.

Held
The lodger was also a party to the deal, therefore there existed a binding contract
notwithstanding the family tie. This disproved the notion that there was no purpose to form legal
ties.

2. The offer
If you're preparing to get into a contract, you'll need to know what an offer in contract law is. An
offer is a promise made by one party in exchange for the performance of another. To put it
another way, it's an invitation to enter into a contract on specific terms. Examples of Law cases
to offer,
2.1- Gunthing v Lynn
Case
The plaintiff in this case was a horse buyer who promised the seller that if the horse was lucky,
they would pay £5 more for it or buy another horse from him. The horse was not in the condition
that the plaintiff thought it was, and the parties disagreed on whether the seller was owed the
conditional payment indicated by the buyer.
Issue
The court had to make decisions on a number of topics. The most pressing question was whether
the buyer's offer to pay more for the horse if it was lucky could be regarded a valid offer for the

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purposes of the transaction. This would indicate whether or not the seller could rely on the
previously indicated payment. The court was specifically asked to determine whether the
expressions 'lucky' and 'purchase another horse' could be defined and held legally enforceable on
the parties.
Held
The condition of paying £5 more for the horse if it was lucky was ruled too ambiguous by the
court to form a binding contract between the parties. The terms of an agreement must be explicit
so that both parties are aware of the terms on which they are agreeing. As a result, the court
determined that the only component of the transaction that was sufficient was the £63 horse
purchase, which constituted the great majority of the legal agreement between the parties.

2.2- Gibson v Manchester City Council

Case
Gibson filled out a paperwork from the council indicating that he ‘might' be able to secure a
mortgage to purchase his council house under a Conservative Party plan. Gibson asked the
council to go ahead with the purchase after more negotiations. Gibson was removed from the list
of tenants by the city council. The sale was delayed following a political shift to the Labour
Party.
Issue
The question on appeal was whether the defendant's February 1971 letter should be interpreted
as an offer or an invitation to treat.
Held
Because the council's letter did not indicate the price and was not an offer but an invitation to
treat, the House of Lords found that there was no concluded contract and the defendant was not
legally compelled to sell the property.

2.3- Carlill v Carbolic Smokeboll Company

On November 13, 1891, the Defendant, the Carbolic Smoke Ball Company of London
(Defendant), published an advertisement in many newspapers claiming that their product, "The
Carbolic Smoke Ball," would prevent colds and influenza if used three times daily for two
weeks. The smoke ball's creators also promised a 100£ prize to anyone who contracted influenza
after using their product, adding in their advertisement that they had placed 1000£ in the bank as

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proof of their sincerity. Lilli Carlill (Plaintiff) purchased a smoke ball and utilized it according to
the instructions. Plaintiff had the illness a few weeks after she started using the smoke ball.
Issue
Whether the advertisement in question was an invitation to treat or an offer.
Held
Plaintiff was entitled to 100 pounds when the Defendant's appeal was dismissed.
The Court recognizes that in the context of ambiguous advertisements, wording about payment
of a reward is usually a puff that has no legal meaning. Defendant, on the other hand, mentioned
a deposit of £1000 in their advertisement as a sign of their earnestness in this matter. The Court
determined that Defendant's commitment to award was a promise substantiated by their own
sincerity because they did so.

2.4- Harvey v Facey

Case
Mr. Harvey, the appellant, was interested in purchasing a piece of property owned by Mr. Facey
in Jamaica. Facey was also negotiating with the Mayor and Council of Kingston at the time.
"Will you sell us Bumper Hall Pen?" Harvey asked Facey in a telegraph. “Lowest cash price-
answer paid” in the Telegraph. Facey responded the next day, "Lowest price for Bumper Hall
Pen £900." "We accept to buy Bumper Hall Pen for the sum of nine hundred pounds requested
by you," Harvey responded. Please email us your title document so that we can take ownership
sooner." After then, Facey refused to sell. Facey was sued by Harvey.
Issue
Whether Harvey telegram stating that the lowest price is £900 is an offer subject to acceptance?
Held
The Privy Council ruled that the parties had not entered into a contract. Facey had not explicitly
responded to the initial question about whether they would sell, and the lowest price given was in
response to a request for information rather than an offer. As a result, there was no proof that
Facey intended the telegram to be an offer. Mr. Harvey and Mr. Facey did not have a contract,
according to the Privy Council. It was determined that Facey's initial telegraph was only a
request for information, and that Facey never made an express offer that could have been
accepted by Facey.

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2.5- Harris v Nickerson
Case
Nickerson was an auctioneer who advertised in the London papers that he would be selling
brewing ingredients, plants, and office furniture at auction in Bury St. Edmunds over the course
of three days. The complainant was a London-based commission broker who was present on the
auction's last day (on which it had been advertised that the office furniture, which he had
commission to purchase, would be sold). On the other side, Nickerson withdrew all of the
furniture lots on that particular day. Harris sought reimbursement from Nickerson for his
expenses and the time he wasted attending the auction, claiming that Nickerson's withdrawal of
the lots was a breach of contract formed by Nickerson's offer in the advertisement, which Harris
accepted by attending the auction.
Issue
The question was whether Nickerson's advertisement represented a legally binding offer of sale,
accepted by Harris's attendance at the auction and resulting in a concluded contract.
Held
No contract – held not liable

2.6- Fisher v Bell

Case
A shopkeeper placed a flick knife with a price tag in the window. The Restriction of Offensive
Weapons Act of 1959 made it unlawful to ‘sell for sale' a 'flick knife.'
Issue
The question is whether the shop owner might be held criminally accountable if an offer was
made.
Held
A store window display of goods is more of an invitation to a treat than an offer. Because no
contract was created, the shop owner could not be held criminally accountable.

2.7- Partridge v Crittenden

Case
Mr. Partridge (the defendant) advertised birds for sale at a fixed price on April 13, 1967.
"Quality British A.B.C.R.....Bramble finch cocks, Bramble finch hens, 25s. apiece," the
advertisement claimed, but it did not include the words "offer for sale." The sale of such live

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wild birds is illegal under s.6 of the Protection of Birds Act 1954. D was charged with the crime
and found guilty. D filed a rebuttal to his conviction.
Issue
Was the advertisement a "offer for sale"?
Held
D's conviction was overturned. Because the words "offer for sale" were not included in the
advertisement, it was just an invitation to treat rather than an offer.

2.8- Pharmaceutical society v Boots

Case
Boots Cash Chemists proposed a new way for customers to buy pharmaceuticals from their store:
the drugs would be on display, and customers would choose them from the shelves and pay for
them at the register. The Pharmaceutical Society of Great Britain argued that S.18(1) of the
Pharmacy and Poisons Act 1933 required the presence of a pharmacist during the sale of a
substance classified on the Act's schedule of poisons.

The Society claimed that the presentation of products constituted an offer, and that a customer
had accepted the offer by selecting a product/drug. According to the Pharmaceutical Society, the
Boots Cash Chemists had broken the terms of their contract due to a lack of pharmacist
supervision. (law of area- offer, invitation to treat)
Issue
Is it true that Boots made an offer?
Held
The point at which the sale occurs is evaluated by the court (point of contract formation). The
display of items on the shelves of a supermarket was essentially an encouragement to make
purchase offers. The customer makes the offer by bringing products up to the cash register (cash
register), not by picking an item off the shelf.

2.9- Payne v Cave

Case
Mr Cave had placed the highest offer at an auction for a commodity. But, before the auctioneer
could bring down his hammer, Mr Cave changed his mind and withdrew his bid. Mr. Cave, the
defendant, was found not to be obligated to purchase the products. His bid was an offer that he

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could withdraw at any point before the auctioneer knocked down the hammer, indicating
acceptance.
Issue
Under contract law, what was the lawful character of the defendant's proposal and retraction?
Held
The court ruled in the defendant's favour. The defendant's bid was an unsolicited offer that was
withdrawn before being accepted. As such, there was no contract.

2.10- Dickinson vs Dodd’s (Revocation)

Case
Mr Dodds delivered an offer to sell some houses for £800 to Mr Dickinson on Wednesday, June
10th, 1874. The offer was open until 9 a.m. on Friday, June 12th. Mr Dickinson was informed on
Thursday afternoon by another man named Mr Berry that the residences had already been sold to
a man named Mr Allan (who was the second defendant). Mr Dickinson met Mr Dodds in a train
carriage leaving Darlington Railway Station at 7 a.m. on Friday and accepted his offer there. Mr
Dodds, on the other hand, said it was too late. Mr. Dickinson filed a lawsuit for breach of
contract.
Issue
Whether the promise to keep the offer "left over till Friday 9 o'clock" without consideration and
before Plaintiff's entire acceptance was a binding contract.
Held
The offer had basically been cancelled. As a result, there was no contract between the parties.
Because the claimant had given no payment in exchange for the guarantee, there was no need to
keep the offer available until Friday.

2.11- Hyde v Wrench (Rejection)

Case
In return for a farm, Wrench gave Hyde £1000. Hyde countered with a £950 offer, which
Wrench turned down. After that, Hyde tried to accept the original £1000 offer. Hyde filed a
claim for particular performance after Wrench refused to sell to him.
Issue
Did Hyde construct a legitimate contract by accepting the original offer after making a counter
offer?

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 Hold
Lord Langdale ruled that there was no legitimate binding contract between Hyde and Wrench. If
Hyde had taken the original offer, it might have been a contract.

3. The Acceptance
Only if the offer is still valid may it be accepted. Acceptance must be given when the offer is still
valid, that is, before it has expired, been withdrawn, or been refused. The offer cannot be
cancelled after it has been accepted. It becomes unstoppable. Examples of law cases to the
acceptance,
3.1- Felthouse vs Bindly
Case
Paul Felthouse and his nephew, John Felthouse, discussed the purchase of his horse. Following
their talk, Paul Felthouse drafted a letter stating that if he didn't hear from his nephew regarding
the horse within two weeks, he would consider the purchase completed and the horse would be
his. Because he was engaged with auctions, his nephew did not answer to this letter. The
defendant, Mr Bindley, was an auctioneer, and his nephew advised him not to sell the horse. He
did, however, accidentally sell the horse to someone else.
Hold
There was no contract, thus it was held. Silence cannot be construed as acceptance.

3.2- Household fire insurance co. v Grant

Case
Mr Grant applied for shares in the complainant's company, Household Fire Insurance. The
complainants issued Mr Grant shares and completed the contract by sending him a letter with
notice of the allotment. This letter, on the other hand, was never delivered to Mr Grant and was
lost in the mail. Mr Grant never paid for the shares as a result. The liquidator claimed payment of
the shares from the defendant when the Household Fire Insurance Company went bankrupt. Mr
Grant refused to pay because he did not feel he was a shareholder and that the contract was not
legally binding.
Issue
Had the claimant successfully informed the defendant of their acceptance?

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Held
The claimant was found to be correct by the Court of Appeal. In this case, the postal rule applied,
which meant that the claimant indicated their acceptance at the time the letter was mailed. It
didn't make a difference that the letter was never delivered.

3.3- Adams vs Lindsell

Case
Adams sent Lindsell a letter promising to sell him 800 tons of wool. Adams asked for a response
within two weeks. Lindsell accepted the offer after a few days of consideration. However, the
mail was sent to the incorrect address. As a result, it took two days longer than intended to
arrive. In the meantime, Adams had sold the wool to a third party. Lindsell filed a contract
breach action against Adams.
Issue
The question is whether the acceptance letter that was posted constituted a legitimate contract.
Held
A legitimate contract has been formed. Mr. Adams accepted the offer when the letter was
mailed, not when it arrived.

3.4- Chillingworth v Esche

Case
The buyers agreed to acquire land "subject to a formal contract to be created by the vendors'
solicitors" and took £240 "as a deposit and in part payment of the abovementioned purchase
money" in writing. The attorneys for the vendor drafted a contract, which was approved by the
purchasers' solicitor, signed by the vendor, and then handed to the buyers for execution. The
buyers then refused to complete the transaction and demanded a refund of their funds.

Held
-No Contact
-The court ruled that Esche is entitled to his deposit back.
-No contract had been formally formed by Chillingworth's solicitors.

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4. Considerations
A bribe given in exchange for entering into a contract that is adequate to make the promise
enforceable in court. The technical criterion is either a disadvantage to the one who makes
the promise or a benefit to the other person.

4.1- Eleanor Thomas v Benjamin Thomas

Case
Defendant was the manager for the estate of the claimant Panna's deceased husband. Before
the death of the husband, he stated that the defendant had assigned the requirement of life
during a certain house to the claimant. After the death of the husband, the defendant offered
to tell the owner of a necessity for all times on her behalf if she agreed to keep up the house
and contribute to the rent. The claim was agreed.

Defendant later violated the deceased husband's proposal, and therefore the plaintiff filed a
lawsuit alleging breach of contract. Defendant argued that there was no agreement because
the claimant had no interest within the agreement. Defendant argued that the explanation for
this was that he was motivated to enter into the contract out of a way of ethical obligation to
the deceased husband.
Held
The supreme court ruled in favor of the claim. it's legally worthwhile for her to comply with
pay the rent and maintain the house. So, she took excellent care. Defendant's interest within
the home meant that he was also given excellent care. His intention to supply consideration is
irrelevant.

4.2- Eastwood v Kenyon 1840

Case
A was the guardian of a woman under 21 years old. He had taken a loan to take care of the
girl. When she reached the age of majority, the girl found a husband. The girl’s guardian
asked the girl’s husband to repay the loan taken to keep up the girl. initially the husband
agreed to that but later he rejected it. Then A who was the girl’s guardian, filed a lawsuit
against the girl’s husband for breach of contract.
According to this case, this tense for the promise has not been considered. The guardian
failed to take the loan at the request of the girl’s husband. Therefore, it's considered as a
voluntary benefit. In here, Claim failed.

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Issue
Past performance given before a promise is created isn't good consideration
Held
This case lays down the final rule that past performance isn't good consideration and so a
promise to purchase past performance is gratuitous.

4.3- Glasbrook Brothers Ltd v Glamorgan governing body [1925] AC 270

Case
Defendant's owners demanded police protection during a miners' strike. The mine owners
here are the defendant party. The defendants argued with the police about the protection
needed to stay the peace, but the police provided the defendants with the mandatory security
and manpower. At the tip of the strike, the police issued an invoice to hide the extra costs
incurred by the police in providing security to the mine owners. But the defendant refused to
pay money for the invoice. Defendant stated that it's the general public responsibility of the
police to produce security and maintain peace. Therefore, they refused to pay. But a judgment
of a good police authority made it clear that the police had gone beyond public duty and
provided services to the mine owners. Police have provided additional personnel to keep up
peace.
Issue
Where a public authority confers a benefit beyond what was obligated under statute that's
good consideration.
Held
• In this case, the police could lend their services if individuals were seeking special
services that weren't subject to police liability.
• The position during this case are often differentiated from Ward v Byham on the bottom
that here we are concerned with a public authority whereas in Ward v Byham we were
concerned with a personal individual
• It would be wrong for a public authority to charge for what they're already funded by the
general public to try to do.

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4.4- Stilk v Myrick (1809) 2 Camp. 317
Case
A seaman contracted with the ship's captain is paid $ 5 /mth to sail to the Baltic and return.
Two of the ship's crew left. A seaman also promised to perform the duties of the departed
employees. The ship captain promised the crew that he would distribute the total salaries of
the workers who left the service for the service. Upon returning home, the ship's captain
refused to pay the promised extra wages, and also the seaman sued for breach of contract.
Issue
A promise to pay more for the performance of an existing contractual obligation isn't binding
for want of consideration
Held
The claimant already was obligated to figure the ship back to London and promised to handle
any emergencies that arose. As a result, he had given no consideration to the offer of further
funds. As a result, he wasn't entitled to anything.

4.5- Foakes v Beer (1884) App Case 605

Case
Mrs Beer owed Dr Foakes £2,000 after obtaining a judgment against him during a previous
case. Mrs Beer agreed to Dr Foakes' promise to pay £500 immediately and also the rest in
instalments if he maintained the instalments; she also agreed that she wouldn't seek
enforcement of the payment if he well-kept the instalments. Interest wasn't mentioned during
this agreement, no matter the very fact that judgment debts usually carried interest. Mrs Beer
filed an action for interest after Dr Foakes paid all of the instalments as agreed.
Issue
A promise to simply accept but one is entitled to under a pre-existing contract isn't binding
for want of consideration.
Held
Dr. Foakes was in command of the interest. The compromise struck amounted to a partially
payment of a debt, which wasn't good consideration for a commitment to not enforce the total
amount due, in keeping with the decree Pinnel's case.

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4.6- Hartley v Ponsonby [1857] 7 EB 872
Case
During a cruise, half a ship's crew deserted. If the remaining crew members worked the ship
and completed the cruise, the captain promised them extra cash. After that, the captain
refused to pay.
Held
The crew was entitled to the promised extra payment because they'd gone beyond their
previous contractual duties or because the voyage had become too dangerous, causing the
initial contract to be frustrated and leaving the crew liberated to negotiate a replacement
contract.

4.7- Shadwell v Shadwell [1913] 2 IR 81

Case
The defendant sold a horse to the claimant. The claimant had gone to look at the horse and
informed the defendant that he intended to utilize it for stud purposes. The defendant assured
him that the horse was in great condition while he was inspecting it. He stated that if anything
was wrong with the horse, he would inform him, which he failed to need a veterinarian to
look at him. The claimant bought the horse supported these representations, but it clothed that
it had a hereditary eye problem and will not be used as a stud.
Held
The declaration was a part of a contract. The claimant had communicated the aim that the
horse was to be used, and therefore the defendant had informed him that he could believe
him. As a result, the defendant was in violation of contract.

4.8- Chapplli & Co. v Nestle Co. [1960] AC 87

Case
Nestle launches marketing campaign If someone sends a purchase order for 3 chocolate
candy wraps and 1 ceiling 6d, a report is going to be sent to them. Chappell claimed the
copyright on one in every of the reports submitted, arguing that Nestle had the proper to
submit the report, and sought an injunction restraining the sale of retail records, usually on
the ceiling. Under Section 8 of the Copyright Act, 1956, retailers are advised to tell
publishers of the typical retail asking price and pay 6.25% of this to guard infringement.

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Nestle said in a very statement that the typical price is 1 6d and three chocolate bars. The
court's question was whether the chocolate candy wrapping was a part of the consideration.
If they did, nestle wouldn't be able to determine the worth they represent, and thus wouldn't
believe their obligation to tell the common retail price. If the wrapper could be a mere token
or condition of sale instead of consideration, the ad is valid and Nestle can sell records.
Held
Wrapping was a part of the consideration because the goal was to extend sales. So, it had
been given value. This doesn't mean that the wrapper should simply be discarded. Chappell
was therefore granted an injunction. The sale of records to Nestle was prohibited under
Section 8 for non-compliance with notification requirements.

4.9- Dunlop pneumatic tire Co Ltd v Selfridge & Co Ltd [1915] AC 847
Case
Dunlop entered into an agreement to sell tires to Dew Selfridge, an intermediary in their
company. Under the agreement between Dunlop and Dew, Dew promised to pay Dunlop £ 5
per tire if the tire sale was but the listed price. Under the terms of the contract, Self-Fridge
promised to pay Dunlop £5 liquidated loss of tires if the tire sales were but the listed price.
Dunlop tried to say liquidated damages against Selfridge.
Issue
The contract rule is characterized as an extension of leadership when considering access to
privacy.
Held
Dunlop couldn't enforce the contract between Dew and Selfridge because it absolutely was
not attentive to it. There had been no consideration made by Dunlop and no consideration
given by Dew as an agent of Dunlop.
Contract law has three basic principles:
• A contract can only be sued by one in every of its parties.
• A principle not named within the contract may sue thereon if the promise actually
contracted as his agent, but he must have given consideration personally or through the
promise.

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 4.10- Tweddle v Atkinson [1861] EWHC QB J57 Queen's Bench Division
Case
A couple was getting ready to tie the knot. the daddy of the bride and also the daddy of the
groom agreed to every pay the couple a specific amount of cash. The bride's father died
without having made a payment. The son's father died additionally, thus he was unable to
litigate over the agreement. The groom submitted a lawsuit against the will's executor.
Held
The claim failed. The groom wasn't a participant to the deal, so no money was transferred to
him. As a result, he was also unable to enforce the contract.

5. Intention to create legal relation

The parties must intend to engage into a legally binding agreement in which the rights and
duties of the agreement are enforceable in order to create legal relations.

5.1- Commercial Agreement

A written agreement or contract between business entities that governs the business
connection between people who are engaged or involved in business with each other.

5.1.1- Esso Petroleum v Mardon [1976] QB 801 Court of Appeal

Case
Mr.Mardon signed a tenancy arrangement for a new Petrol station with Esso Petroleum.
Experts at Esso estimated that the gas station will sell 200,000 gallons of gasoline. This
estimate was based on numbers compiled prior to the submission of the planning application.
The petrol station's prominence was altered as a result of the building permission, which had a
negative impact on sales. Esso did not make any changes to the estimate. The tenancy's rent
was likewise based on an incorrect calculation. As a result, Mr Mardon's ability to run the petrol
station profitably became impossible.
Held
Despite his best efforts, the gas station only sold 78,000 gallons in its first year, leading to a
loss of £5,800.

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5.1.2- Appieson v Littekewood
Case
A group of football players tried to demand money for a victory they had won in a football
pool. They also filed a complaint accusing the organizers.
Held
Further in the case study, the word ‘binding only to honor’ was affixed on each coupon. Those
words were enough for the court to refute the assumption. The plaintiffs failed

5.2- Domestic Agreement

Domestic contracts, which include cohabitation agreements, marriage contracts, and
separation agreements, are legal agreements entered into by persons who want to determine
their own terms in their relationships with one another.

5.2.1- Jones v Padavatton [1969] 1 WLR 328 Court of Appeal

Case
If her daughter quit her job in Us and went to England to study for the bar, her mother promised
to pay her $200 per month. The daughter was first hesitant to do so because she had a well-
paid job with the Indian embassy in Washington and was content and settled, but her mother
persuaded her that it was in her best interests to do so. The mother's aim was for the daughter
to join her as a lawyer in Trinidad. This initial agreement didn't work out because the daughter
assumed the $200 was in US dollars, but the mother meant Trinidad dollars, which was less
than half of what she expected. As a result, the daughter could only afford to rent a single room
for herself and her son. After that, the Mother agreed to purchase a home for her daughter to
live in. She bought a large house so her daughter could rent out extra rooms and use the money
to pay her bills. After that, the daughter married and didn't finish her schooling. The mother
demanded that the house be returned to her. The court had to decide if the mother and daughter
had made a legally binding agreement or if it was just a familial arrangement that wasn't meant
to be legally binding.
Held
The agreement was a domestic agreement, assuming that the parties did not intend to be legally
bound by the agreement. There was no evidence to refute this assumption.

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6. Contractual capacity
Contractual capacity refers to a person's ability to enter into contracts, however it does not
apply to all people.
6.1- Nash v Imman
Case
A tailor supplied an infant with 11 fancy waistcoats, but the infant failed to pay. The child was
a student at a university. His father testified that the infant was suitably clothed for his station
in life.
Issue
Whether the goods so supplied fall into the category of necessary, If the answer is no, whether
the contract was enforceable at law? Who bears the burden of proving or disproving the need
for goods so supplied?
Held
The clothes were not necessary, and the infant was not responsible for their purchase. The fact
that minor has a sufficient allowance does not prevent him from contracting for necessaries on
credit.

6.2- Davies v Beynon- Harries

Case
x, an infant, leased a flat from the plaintiff two weeks before attaining majority age. Three
years later, his rent was an arrears and the plaintiff sued him.
Held
x, had failed to avoid the lease within a reasonable time after attaining majority age and He
could no longer avoid paying the rent arrears because it was too late.

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7. Legal Object
The thing that the party receiving the consideration has promised to do or not do is called the
contract's object.
7.1- Parkinson v college of ambulance
Case
Colonel Parkinson was approached by the secretary of the college of ambulance, who falsely
promised him that if he contributed to the college, he would be granted a kinghood. Parkinson
made contribution of $3000, but no kinghood was forthcoming. He brought an action to recover
his money.
Held
The contract was illegal since it was against public policy, and Parkinson couldn't continue
without reporting this, as well as his personal culpability. On its face, the donation was a gift,
and hence unrecoverable. It could only be explained as being part of a contract by disclosing
the consideration alleged to have been given for it, the promise of the kinghood. The plaintiffs
action could only have any force as being for breach of this contract, but since the contract was
illegal, the action had to fail. It was under such circumstance that the appellant became entitled
to the restitution of her deposit under section 66v of the contracts Act. On appeal, the Federal
Court said ‘An agreement discovered to be void’ does The contract is void upon discovery or
because of the revelation of an illegality. It signifies that the contract was void from the start
without the parties being aware of the exact legal situation at the time. The contract is only
afterwards discovered to be void.

7.2- Beresford v Royal Insurance

Case
In 1925 major Rowlandson took out five life insurance policies on his own life with the
defendants, Royal insurance Co Ltd, amounting to $500,000. Each policy contained the
condition. 'If one of the lives promised dies by his own hand within one year of the
commencement of the assurance, whether sane or insane, the insurance must be considered
void.' Major Rowlandson was hot in 1934. The claimant, major Rowlandson’s administration
sued the company claiming the amount of the insurance.
Issue
The defendants pleaded that as major Rowlandson had committed suicide, the policies had
become void.

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Held
The insurance company had pledged to pay the amount assured if Major Rowlandson
purposefully murdered himself while sane, according to the House of Lords' interpretation of
the contract. However, they then look at whether the contract was enforceable in law. Suicide
was established as a crime in English law at the time. The court referred to cases such as
Crippen’s case in which it was held that the estate of a man who murdered his wife could not
be benefit from his crime. Therefore, their Lordships refused to allow the administration to
claim the insurance on the grounds of public policy even though the contract was lawful.

7.3- Everet v Williams

Case
Everet and Williams were both highway robbers who formed a partnership to split the proceeds
of their heists. For some time, the two engaged in this pursuit on Hounslow Herath, as well as
at pagshot, Salisbury, Hampstead and elsewhere. When the proceeds of these activities were
sold, John Everet believed that Joseph Williams had maneuverer himself into receiving more
than his fair share of the profits. Everet chose to take his grievance to the courts for redress for
some unknown cause. He hired attorneys and counsel to sue Williams in court in balance he
though due, pleading ‘For discovery an account, and general relief' for the profits they made as
a result of their collaboration.
Held
On 30 October 1725 lawyers acting on behalf of John of Exchequer, setting out the details of
his claim. Less than two weeks later, on 13 November 1725, the court of Exchequer was less
than impressed with the idea of being asked to settle a dispute amongst highwaymen regarding
the devision of the spoils and considered the Bill both scandalous and impertinent. The case
was not only dismissed, but a warrant was issued for the arrest of the two lawyers who filed it.
Both solicitors, William White and William Wreathock, were arrested and hauled before the
court, where they were fined $50 each on December 6th.

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8. Genuineness of the consent
8.1- Misrepresentation
A misrepresentation occurs when one party makes a misleading statement of a material fact
that influences the other party's decision to enter into a contract.

8.1.1- Bisset v Wilkinson

Case
The defendant in this matter was the purchaser of land in New Zealand which was purchased
by the claimant for the purpose of sleep farming. The defendant's counterclaim is the subject
of the appeal to which this judgment refers. The claimant advised the defendant during the
buying process that the land was capable of supporting 2000 sheep. However, after purchasing
the farm, the defendant learned that this could only be accomplished with very careful land
management, and that the land as it was could not support this number of sheep.
Issue
The question in this case was whether the claimant's declaration could be deemed a statement
of fact in the sense of being a representation, or whether it was just the claimant's opinion.
Held
It The claimant's statement was found to be nothing more than an opinion about the land's
capacity, based on the claimant's knowledge of the current stock. As a result, the comment was
not deemed to be a representation. In any case, the evidence showed that the land could not
support the 2000 sheep that the claimant claimed, hence the claimant's appeal was granted and
the contract could not be cancelled.

8.1.2- Dimmock v Hallet

Case
The claimant was a mortgagee with a mortgaged farm on his hands. The court ordered that this
farm be auctioned. The amount of rent that could be generated from the land was grossly
exaggerated in the sale particulars. The defendant bid on the land, and the claimant's counter-
bids increased their bids by $4000. Later, the defendant claimed that the contract should be
terminated due to misrepresentation.
Issue
Was the contract capable of being rescinded for misrepresentation?

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Held
The defendant was found to be correct by the court of appeals. The fact that the claimant had
placed a bid on the property was insufficient to prevent the sale. This was due to the auctioneer
informing attendees that anyone who was interested in bidding was welcome to do so. The fact
that the defendant had not heard this was irrelevant. By contracts, the misrepresentation as to
the possible rent obtainable from the land was a substantial misrepresentation which include
the defendant to enter the contract. The contract could be avoided on these ground.

8.2- Mistake
A contractual mistake is an incorrect conviction that certain facts are true.

8.2.1- Counturier vs Hastle

Case
A cargo of maize was sent from Greece to London for the seller. He then hired an agent.
After that, he got an agent. Under a FOB contract, the agent promised to sell the maize to a
buyer. However, neither party was aware that the ship had overheated on the journey right
before they signed the contract. Because the maize was ruined, they had to ship it to a third
party. When the buyer learned about this, he cancelled the contract. The agency was sued by
the seller for the corn's purchasing price. Because he had never entered into a formal contract
with the buyer, the agent claimed he was not accountable. This was due to the fact that the
subject matter of the agent-buyer agreement did not exist at the time of contravention.
Issue
Did the agent enter into a valid contract with the buyer?
Held
The court held in favour of the agent. The agreement between the agent and the buyer presumed
that there was a cargo on board the relevant ship which still existed. Since the cargo had ceased
to existed prior to the agreement, there was no valid contract.

8.2.2- Raffles vs Wickhouse

Case
The complainant, Mr Raffles, offered to sell an amount of surat cotton to the defendant, Mr
Wichelhaus. A ship from Bombay, India would bring this Surat cotton to Liverpool. This ship
was called the peerless, but there were two ships that had this name the complainant and the
defendant were both thinking about a different peerless ships was due to leave Bombay in

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October, which was what the defendant had though for his Surat cotton delivery, but the
complainant was referring to the ship that was to leave in December. Mr Wichelhaus refused
to pay for the Surat cotton when it arrived in Liverpool, claiming it was months late.
Issue
The defendant was sued for breach of contract by the plaintiff. The question in this case was
whether the parties had entered into an enforceable contract.
Held
The contract between the complainant and the defendant was found to be unenforceable. There
was uncertainty in the peerless and what ship was being referred to while the contract was
being discussed, as well as no agreement on the conditions of the sale. There had been no ad
idem agreement or meeting of minds between the parties to constitute a legally enforceable
contract. The objective test made it clear that a reasonable person would not have been able to
identify with certainty what ship had been agrees on.

8.2.3- Counday v Lindsay

Case
Introducing the concept that concept that contracts could be automatically void for mistake as
to identity, where it is of crucial importance. Some lawyers believe that such a rule is
incompatible with subsequent cases of mistaken identity, such as phillis vs brooks, in which
parties contracting face to face are only voidable for fraud, shielding a third-party buyer.
However, the ultimate question is whether the identity of the other contracting party was crucial
to the contract. The problem for the courts was essentially which of the two innocent parties
should bear the lea of the goods.
Held
Lindsay was unable to reclaim the handkerchiefs from Cundy, according to the Divisional
Court.

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8.3- Undue Influence
When one person has the ability to persuade another's decisions because of their relationship,
this is known as undue influence.

8.3.1- Allcard v Skinner

Case
Allcard inherited her family’s wealth, became a member of a religious group the rules of which
demanded her obedience to the lady superior skinner. C gave her possessions to the sisterhood
in the idea that she would. C left the sisterhood, but it took her six years to get her property
back.
Held
Despite the fact that C had been improperly influenced, the move was approved due to time
and acquiescence.

8.4- Terms of the contracts

8.4.1- Conditions
The responsibility to perform responsibilities between contracting parties is spelled forth in
this clause.

8.4.1.1- Poussard v Spiers (1876) 1 QBD 410

Case
Madame Poussard signed a three-month contract with Spiers to perform as an opera singer.
She fell ill five days before the opening night. So, she couldn’t even perform the first four
nights. Spears later replaced her with another opera singer.
Held
Spiers had the right to terminate the contract because Madame Poussard had violated the terms.
As all the critics and publicity are based on this night, she also missed the most important
opening night.

8.4.1.2- Bowes v Shand

Case
The plaintiff (respondent before the House of Commons) brought an action against the
respondent for not accepting a consignment of rice. In particular, the seller and the buyer
entered into an agreement to sell 600 tons (8,200 bags) of Madras rice. According to the
contract, the goods were to be 'shipped in March and / or April 1874'. Most of the rice (8,150

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out of 8,200 bags) was shipped in February and the rest in March. As a result, buyers refused
the goods.
Issue
Do buyers have the right to refuse the goods?
Held
The board found that the terms of the shipping time were part of the item description. In the
present case, the shipment of goods is considered to be a shipment in February. Accordingly,
the buyer has the right to refuse the goods in violation of the shipping time conditions.

8.4.2- Warranties
A warranty is a promise that is not a contract condition.

8.4.2.1- Bettini v Gye (1876) QBD 183

Case
Bettini agreed with her employer on a contract to perform as an opera singer for three months.
Bettini missed a six-day rehearsal due to illness. The employer fired him and found another
opera singer.
Held
Bettini has breached its obligations and therefore the employer has no right to terminate the
contract. The agreement does not contain anything about rehearsal avoidance.

8.4.3- Innominate Term

Innominate terms, also known as intermediate terms, are contract terms that fall in between a
condition and a warranty.
8.4.3.1- Hong Kong Fire v Kawasaki
Case
Ship owners let the vessel, Hong Kong fir to charterers for a period of 24 months. Clause 1 of
the contract obliged the owners to deliver a seaworthy vessel and clause 3 future obliged them
to maintain the vessel’s seaworthiness and good condition. The vessel's machinery was
reported as being in reasonable shape when it was delivered, although it required continual
maintenance due to its age. The vessel's owner's chief engineer was ineffective and
inexperienced, resulting in many malfunctions and delays. The charterer declared the contract
void, claiming that the charterer had failed to produce and maintain a seaworthy vessel.

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Issue
the questions arose to whether the seaworthiness obligation constituted a condition of contract,
the breach of which entitles the party to repudiate. And whether the breach caused delays of a
sufficient degree so as to entitle the charterer to treat contract as repudiated.
Held
Firstly, the court held that in order to constitutes a condition precedent, the breach term, the
breach of which permits damages, depends on a holistic assessment of the contract’s
surrounding circumstance in determining the intention of the parties in their treatment of the
clause. On the facts, the court that the seaworthiness and maintenance clause was not viewed
as so fundamental so as to amount to a condition of the contract, but rather constitutes a term
allowing damages. Second, the court decided that an innocent party cannot treat a contract as
rejected because of a delay, no matter how serious, provided the breach does not result in the
contract being frustrated, rendering performance impossible. On the facts, the delays, albeit
serious and repeated, did not amount to a frustration of contract, but merely, a breach allowing
for damages.

8.4.4- Exemption Term

An exemption clause is a contractual condition included in a contract that aims to limit or
eliminate a party's liability to the other party.
8.4.4.1- Olley v Marlborough
Case
Olley was a guest in the defendant hotel. On arrival, olley paid for z week’s board in advance
and then went to the room in the room, a notice was displayed stating the proprietors would
not be responsible for any items for safe keeping. Before leaving the hotel, Olley exited her
room and deposited her key on the lobby board. The key was taken and several item were stolen
from her room. Olley sought damages in negligence.
Issue
Olley claimed that the hotel was negligent in failing to properly secure the keys to the guest
rooms. She future claimed there was an implied term within the contract between herself and
the hotel that they would take reasonable care of her property in her bedroom. Olley claimed
that failing to supervise the keys was a breach of contract. The hotel claimed that the provisions
placed on the notice in the rooms bonded the visitors, essentially excluding the hotel from
liability even if they were irresponsible. The notification was prominently displayed in the

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rooms, and the exclusion clause explicitly freed the hotel of all responsibility for stolen
property. Olley had also been contributorily negligent by leaving her key on the reception
board, according to the hotel.
Held
Olley's claim was successful, and she was able to recover the full amount of the stolen things.
The exclusion clause had not been successful incorporated into the contract because the
contract was concluded at reception, and When the guest entered the bedroom after the contract
was made, the notice purporting to disclaim liability was not visible.

8.5- Discharge of contracts

The term "discharge of contract" refers to the end of the parties' contractual connection.
8.5.1- Cutter v Powell
Case
Mr. Cutter, a sailor, was engaged for a voyage and handed a promissory letter from his
employer, promising to pay him a particular sum ten days after the ship arrived in Liverpool,
'provided he proceeds, continues, and executes his duty as second mate in said ship from hence
to the port of Liverpool.' Mr. Cutter served as second mate on the ship for roughly six weeks
before dying before it arrived in Liverpool. Mr. Cutter's wife sued for a proportionate share of
his earnings for the significant period of the cruise on which he served as second mate.
Issue
The issue arose as to whether the sailor was entitled to remuneration as an implicit payment for
his substantial fulfilment within the contract.
Held
The court stipulated that, where parties conclude an express contract, no terms can be implied
into the contract. On the facts, the contract between the parties expressly provided that the
payment was conditional upon the completion of the voyage and only payable after the ship’s
arrival. Thus, the sailor was entitled to payment if the entire contract duty was completed, but
not to any payment if the contract was only partially completed, according to the contract's
specific conditions.

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8.5.2- Hadley v Baxendale
Case
In the Claimant's mill, the crankshaft snapped. He hired the Defendant to deliver the crankshaft
to the shop where it would be fixed and then return it after it was finished. The crankshaft was
returned 7 days late due to the Defendant's negligence. During this time, the claimant was
unable to use the mill and filed a claim for lost profits. The defendant claimed that because he
was ignorant that the mill would have to close during the delay, the loss of earnings was
insignificant.
Held
The damages available for breach of contract include,
1. Those which may fairly and reasonably be considered arising naturally from the breach
of contract
2. Such damages as may reasonably be supposed to have been in the contemplation of
both the parties at the time contact was made.
If any unique conditions exist that were genuinely informed to the defendant, the claimant is
entitled to any damages that would normally result from a breach of contract under the special
circumstances notified.

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9. References
 Casebriefs.com. 2021. Balfour v. Balfour | Case Brief for Law Students. [online]
Available at: <https://www.casebriefs.com/blog/law/contracts/contracts-keyed-to-
calamari/the-agreement-process/balfour-v-balfour/> [Accessed 16 November 2021].

 IPSA LOQUITUR. 2021. Payne v Cave - Case Summary - IPSA LOQUITUR. [online]
Available at: <https://ipsaloquitur.com/contract-law/cases/payne-v-cave/> [Accessed 16
November 2021].

 Lawteacher.net. 2021. Shadwell v Shadwell. [online] Available at:

<https://www.lawteacher.net/cases/shadwell-v-shadwell.php> [Accessed 16 November
2021].

 En.m.wikipedia.org. 2021. Jones v Padavatton - Wikipedia. [online] Available at:

<https://en.m.wikipedia.org/wiki/Jones_v_Padavatton> [Accessed 16 November 2021].

 E-lawresources.co.uk. 2021. Bettini v Gye. [online] Available at: <http://www.e-

lawresources.co.uk/Bettini-v-Gye.php> [Accessed 16 November 2021].

 https://www.casebriefs.com/blog/law/contracts/contracts-keyed-to-farnsworth/remedies-
for-breach/hadley-v-baxendale/

10. Group members

ENROLLEMENT NO. NAME
UWU/ENM/19/013 D.M.K. Dananjani
UWU/ENM/19/038 U.D.D. Arunashantha
UWU/ENM/19/044 H.M.L. Tharangani

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