plading 1: Hobbs

1. Whether Mr. Shaw had failed to provide consideration in exchange for Mr. Hobbs'
promise to pay 1 million if he sold 100,000 wrenches:

The High Court did not make an error in distinguishing this case with William v Roffey
brothers and MWB v Rock advertising in concluding that Mr. Shaw did not provide
any practical benefit or consideration.
We submit that [i] variation to the existing contract was improperly formed because
there was no intent to create legal relations.[ii] there was no practical benefit to Mr.
Hobbs since Mr.Shaw had already committed to ‘best endeavors requirement’ and
also [iii] terms of the variation itself are not certain and ambiguous. (Iv) It was a mere
representation.

[i] Variation to the exciting contract is itself a contract and the formation of the
contract was inappropriate because there was no Intention to create legal
relation(ITCLR).

In the case of Rock Advertising Ltd v MWB Business Exchange Centers Ltd [2018] it is
stated that, for a variation to be contractually binding, the variation itself must
satisfy all of the legal requirements to form a valid contract, including through the
provision of valuable consideration by each party.
In the case of commercial and business agreements it is presumed that there is an
intention to create a legal relationship and that the agreement is legally enforceable.
The fact that the parties have reached agreement does not necessarily mean that
they have concluded a legally binding contract even where the agreement is
supported by consideration.
Where an agreement is made between businessmen in a social context, also in a
jocular context of a meeting and the vague terms of alleged agreement may
persuade a court that the parties did not intend to create legal relations.

In Blue v Ashle, the defendant made a statement in a pub that he would pay the
claimant 15 million id share to reach a specific price, but due to the jocular nature of
the pub conversation that evening, the statement was not a binding contractual
commitment. The Court held in favor of the defendant. Factors which tend to show
an agreement was not intended to be legally binding include that it was made in a
social context, expressed in vague language and the fact that the statement was
made in jest
The following factors indicated that Mr. Hobbs did not make an offer which he
intended to be legally bound by.
(a)The informality of the setting; (b) The ‘jocular’ and ‘mischievous’ tone of the
conversation.
(a) Firstly, Relationship between Mr.Shaw and Mr.Hobbs is that they are friends and
they have a long-standing friendship. The place they were discussing their business
relationship was a Pub named ‘Forks and Beer’ on New year’s eve. It was not a
formal place to make a commercial agreement. Lord Leggatt stated in Blue v Ashley
that no reasonable person present at the pub would have thought that the offer was
intended to create a contract. .

(b) The nature and tone of the agreement was vague and had a jocular context.
When Mr. Hobbs proposed an offer to Mr. Shaw of a 1 million pound bonus. Mr.
Shaw did not say anything that Mr.Hobbs can take it as an acceptance. After that,
Mr.Shaw wanted a guarantee of that contract and Mr.Hobbs laughed by saying “Of
course I bet my life on it’. Vagueness and uncertainty may be a ground for concluding
that the parties did not reach any agreement. The factors which tend to show an
agreement was not intended to be legally binding include that it was made in a social
context, expressed in vague language and the fact that the statement was made in
jest.

[ii] There was no practical benefit to Mr.Hobbs since Mr.Shaw had an existing duty to
exert “best endeavors” to sell as many wrenches as possible.

As a general rule, a promise to perform an existing obligation will not be a good

consideration (Stilk v Myrick). This means that the performance of existing
contractual obligations under the original contract will not be viewed as sufficient
consideration for any subsequent variation – that is, fresh consideration in addition
to that already owing will need to be provided for the variation to be binding.

best endeavours would require a party to “take all those steps in their power which
are capable of producing the desired results” In the case of Sheffield District Railway
Company v Greater Central Railway Company (1911), the court stated that best
endeavor means “a service provider is obligated to complete all the steps available to
try to achieve the objective”.
Here, Mr.Shaw had a obligation to exert ‘best endeavours’ to sell as many wrenches
as possible. But one year of their agreement there was a significant decline in wrench
sales. Mr. Hobbs was about to stop his wrench business for the low effort Mr. Shaw
provided in the wrench sell business.
Here, Mr. Shaw is bound to take all the necessary steps in his power to fulfill the
variation of the agreement. As a managing director Mr. Shaw is responsible for sales,
marketing and distribution, ensuring profitability and market expansion to sell
100,000 wrenches in a year.
Mr. Shaw dedicated all available resources to support the promotion and distribution
of wrench products, invested in marketing and hired a sizable team of salespersons.
Here,Mr. Shaw terminated his relationship with other supplier to promote Mr.Hobbs
business by making this decision Mr.Shaw gave up a specific interest or benefit. But
all of his performance was under the ‘best endeavours’ duties.
In the case of Jet2.com Ltd v Blackpool Airport Ltd, the defendant argued that its
duties to use best endeavours did not require it to act against its own commercial
interests. HHJ Mackie QC held that the defendant was in breach of contract in
refusing to handle flights outside of normal operating hours. He stated that a party
did not have the freedom to consider its own commercial interests in performing its
endeavours duties.

In this case, Moore-Bick LJ confirmed that generally:

“an obligation to use best endeavours, or all reasonable endeavours, is not in
itself regarded as too uncertain to be enforceable provided that the object of
the endeavours can be ascertained with sufficient certainty.”
Applying this principle to the facts, it is also clear that the object of the “best
endeavours” obligation to sell wrenches for Mr.Hobbs was not uncertain because
Mr.Shaw clearly mentioned to sell 100,000 wrenches and therefore placed a binding
obligation on Mr.Shaw.
Although Mr.Shaw reached the sell target to sell 100,000 wrenches but he has not
done anything over and above his obligation.

[iii] terms of the variation itself are not certain and ambiguous:

a contract variation won’t be recognized if the parties only intend to change part of
the contract temporarily. Contract variations can be recognized even if the parties
only intend to change part of the contract temporarily. Here, Several factors must be
considered to make the contract temporary, including the intention of the parties,
the clarity of the variation, and compliance with legal requirements such as
consideration, and formalities.
In the case of Rock Advertising Limited v MWB Business Exchange Centres Limited
[2018],the court emphasized the principle that parties to a contract are generally
free to agree to vary its terms, including temporarily, as long as there is mutual
consent, intention of the parties and consideration.

There was no clarity of the variation. By the fact it is not clear that Mr.Hobbs told Mr.
Shaw to sell 100,000 wrenches in one year or in 4 years. Because Mr.Hobbs wanted
to close his business and he mentioned his business will only be economically viable
in the next calendar year if Mr.Shaw could sell 100,000 wrenches. Here, Mr. Hobbs'
purpose is to be economically viable for the next calendar year.

The parties must agree whether the variation will be temporary or permanent. This
case highlights the principle that temporary variations to contracts can be legally
recognized if they are agreed upon by all parties involved and are consistent with the
overall purpose and intentions of the contract. It emphasizes the importance of clear
communication and documentation when making temporary changes to contractual
obligations.
Also, It did violate the 5.3 clause of the agreement which specified that any
variations must be agreed upon in writing and signed by both parties. There was no
write agreement for the variation.

There was no consideration given by Mr. Shaw and there was no intention to create
a legal relationship. Also, terms of the variation itself are not certain and ambiguous.
This means the contract variation won’t be recognized because the parties only
intend to change part of the contract temporarily without considering several key
factors such as the intention of the parties, the clarity of the variation, and
compliance with legal requirements such as consideration, and formalities.

(IV) The alleged variation was just a mere representation;

From the facts, it’s clear that there was no written agreement between Mr. Shaw and
Mr. Hobbs regarding the variation. According to Routledge v Mckay and MWB v Rock
Advertising , “ Where a agreement has been reduced to a written document
statements appearing, in the written contract will normally be regarded as terms. In
contract, excluded from contract are likely to be ‘mere representation’.

So, the alleged variation was just a mere representation thus can’t be considered for
the bonus.

Pleading 2 Hobbs

Mr. Hobbs is entitled to rely on the clause 5.3 to enforce that the variation
agreement was unenforceable as (a) the variation was not properly formulated (b)
No Oral Modification (NOM) clauses are enforceable and (c) Scope of Estoppel is not
so broad that it will destroy the whole advantage of certainty of a written contract.

(a) The variation to the agreement is not properly formulated;

(I) The variation in question had no intention to create legal relationships, no

certainty and no consideration to be formulated. From the facts, it’s clear that Mr.
Hobbs and Mr. Shaw met at pub which is a totally informal place and the kind of
conversation they had was just not informal but also seemed like they were making
jokes. On the other hand, Mr. Shaw were already bound to give best endeavours so
there were no new consideration and as it was not a written agreement there were
no certainty to the agreement and also there had been a No oral modification clause
which invalidates any oral modification in to the contract except written
modification. In Asher and others V Jaywing PLC-2022 that,1” A agreement won’t be

1
Asher & Others v Jaywing plc [2022] EWHC 893 (Ch).
valid if it includes a NOM clause and if it does not have any proper intention to create
legal relationships and isn’t supported by proper consideration and certainty, which
is also supported by Blue V Ashley”. So, it’s clear that the variation wasn’t properly
formed.

(II) Lack of written or formal documents;

From the fact’s it’s clear that the variation wasn’t written so it wasn’t just informal
but it also didn’t have any evidence of documentation. It’s also clear that the whole
situation was a discussion rather than agreement as there were no proper business
manner. According to the case of Asher and other v Jawying PLC-2022 ,2 “ if there is
a lack of contemporaneous documents which was intended to vary or override the
actual agreement than the agreement or variation won’t be formed” As there was no
real document and more of it was a discussion so the variation cannot be formed.

(III) They were just negotiating;

From the facts it’s sufficiently expressed that they were more of discussing how their
business is going and how their business will go in vein if they do not take necessary
steps. Then they were negotiating how they can make their business sustainable if
they are able to sell 100,000 wrenches. There is no single proof or document where
they made a formal contract or anyone offered or accepted anything new. According
to the case of Rock Advertising LTD V MWB Business Exchange Centres LTD -2018
3
and Brightman J in Tevanon V Norman Brett(Builders) LTD-19724 said that ,” the
parties only can get rid of the subject matter of the qualification of a contract if they
expressly agreed to do so. If they are only discussing under the subject matter
umbrella of the contract it’s really hopeless to say that an agreement has been
reached when one party wasn’t in any intention to do so.” As Mr. Hobbs had no
intention for a real contract and as they were just negotiating the agreement can not
be formed.

(IV) No agreement was reached to override the written contract;

From the facts it’s clear that Mr. Hobbs and Mr. Shaw had no new agreement to
override the actual agreement or the no oral modification clause. According to the
cases of Cohen V Nessdale LTD-1982,5 Sherbrooke V Dipple-1980 6and according to
Lord Sumption’s proposition that,” the parties who agree the terms of a variation
doesn’t implied my agree to dispense the NOM clause. Thereby, so no binding
obligations can arise until and unless a properly agreement has been formed to
override the NOM clause or actual agreement.” So, there is no contract to override
the NOM clause and form a new variation.

2
ibid
3
Rock Advertising Ltd v MWB Business Exchange Centres Ltd [2018] UKSC 24

4
Tevenan v. Norman Brett (Builders) Ltd (1972) 223 EG 1945
5
ibid
6
Sherbrooke v Dipple 1980 (255) E.G. 1203
(V) Oral variations were invalid;
Mr. Hobbs and Mr. Shaw by discussing an oral contract didn’t contravene the NOM
clause. For the actual matter these are the circumstances where the NOM clauses
gets applied. According to the case of Rock Advertising LTD v MWB Business
Exchange Centres LTD-2018 ,” The NOM clause doesn’t make the oral variations
forbidden but it makes those invalid.” As it’s not difficult to record a variation written
and it’s clear that they courted invalidity with open eyes , so, as there is a NOM
clause that’s why the variation is invalid.

(VI) The court will give effect to the written agreement;

There is no certain proof that Mr. Hobbs had any interest to vary the terms of the
contract with that contract being in writing. According to the case of Asher and
Others V Jawying PLC-20227 “if one party, in the presence of No Oral Modification
clause executes a agreement orally without the agreement being reduced to writing
then the court will give effect to the written agreement”. So, as the agreement
wasn’t portrayed in to writing the agreement can not stand.

(VII) A variation needs to be expressly written to be agreed;

From the statement of facts, it’s clear that there is no express written evidence of the
variation. According to Lord Hobhouse in Grobbelaar V News Group Newspaper
LTD-20028 and and UK Learning Academy Ltd v Secretary of State for Education-
2020,9” There must be an express offer in writing and acceptance for a variation to
be agreed.”
As there is no written offer and acceptance the alleged agreement can’t stand.

(VIII) The Parol Evidence Rule;

There was no written evidence or agreement. , According to the so-called parol

evidence rule, extrinsic evidence, oral or otherwise may not be adduced, which seeks
to add, vary, or contradict the terms of a written contract. It has been stated in
Jacobs v Bataviathat parol evidence will not be admitted to the same particular term
which had been verbally agreed upon, and had been omitted from a written
instrument, constituting a valid and operative contract between the parties.

So, according to the above mentioned discussion, the variation should be

unenforceable.

(b) No Oral Modification clauses are enforceable;

7
ibid
8
Grobbelaar v News Group Newspapers Ltd [2002] 1 WLR 3024
9
UK Learning Academy Ltd v The Secretary of State for Education [2018] EWHC 2915 (Comm)
(I) No Oral Modification clauses are binding;

The actual agreement between Mr. Shaw and Mr. Hobbs included a clause which
made it sure that any modification that happens with the agreement needs to be in
writing. According to the case of, Active Media Services Inc V Burmestet,Duncker
and Joly GmbH and Co. KG and others -2021,10 Calver J stated that, “ No Oral
Variation or modification clause is valid binding”.
So , as NOM clauses are valid and binding, so they can be enforced against the
alleged agreement.

(II) The court gives to the clauses according to it’s terms;

From the facts, it is clearly submitted that “the clause 5.3 specified that any variation
must be agreed upon writing and signed by both parties”. So any modification and
variation that the parties intends to happen should be in writing. The construction of
the agreement gives it to the supposed meaning. According to the cases of, McGrath
V Shah-1989,11 John Chadwick QC, Lightman J in the inntrepreneur case, Matchbet
LTD v Openbet retail LTD-2013,12 Mileform LTD v Interserve Security LTD-2013,13
Moran Yacht and Ship Inc v Pisarev-201614, First Towet Trustees LTD v
CDS( Superstores International) LTD,15 Adibe v National Westminster Bank PLC-
2017 ,16 Triple Point Technology Inc v PTT Public Co LTD -2017,17 Investments
Holding PLC v Konkola Copper Mines Plc-2017,18” The court will give effect to the
clauses according to its terms”
As the clauses should give effect according to its terms, thus the NOM clauses are
enforceable.

(III) The clause needs to be removed or suspended by the agreement;

From the facts, there no noticeable factor regarding where the parties agreed to
suspend or remove the NOM clause. To override a NOM clause it needs to be
amended in writing. According to the case of, Rock Advertising LTD v MWB Business
Exchange Centres LTD (above)-“ the NOM clauses will be remained in force until snd

10
Active Media Services Inc v Burmester, Duncker & Joly GmbH & Co Kg and others [2021] EWHC 232 (Comm)
McGrath v Shah (1989) 57 P & CR 452, 459,

11
McGrath v Shah (1989) 57 P & CR 452, 459,
12
Matchbet Ltd v Openbet Retail Ltd, [2013] EWHC 3067
13
Mileform Ltd v Interserve Security Ltd [2013] EWHC 3386 (QB)
14
Moran Yacht & Ship Inc v Pisarev [2016] 1 Lloyd's Rep 625 (CA)
15
First Tower Trustees Ltd v CDS (Superstores International) Ltd [2018] EWCA Civ 1396
16
adibe v national westminster bank 2017 EWHC chancery division
17
Triple Point Technology Inc (Triple Point) v PTT Public Company Ltd (PTT) [2021] UKSC 29
18
Investments Holdings plc v Konkola Copper Mines plc [2017] EWHC 3288 (Comm),
unless they have been agreed to to be removed or suspended by both of the parties”
.
As there is no existence of proof where both parties agreed to remove the clause,
the clause should be enforced.

(IV) The NOM clauses were relied upon to modify the contract,

Mr.Hobbs and Mr.Shaw relied on the NOM clause to further modify the agreement.
According to, Longmore LJ in the North Eastern Properties LTD case, 19“ if the parties
agreed that the whole contract should be in written, then the courts have no
business to tell them that they do not intend to do so” As the clause had been relied
upon the court should give effect to the actual contract according to it’s terms.

(c) The scope of Estoppel is not so broad that it will destroy the whole advantage of
certainty of a written contract;

There is no unequivocal representation of words or conduct that doesn’t stand with

the informality or there is nothing more than the informal promise. According to the
case of Actionstrenth Ltd V International Glass Engineering In Gl En SpA-2003, 20”
The scope of Estoppel can not be so broad as to destroy the whole certainty for
which the parties stipulated when they agreed upon terms including the No Oral
Modification clause if there is no word or representation except the informal
promise or representation”

So, thus the Estoppel can not override the written agreement.

Pleading : 3 Hobbs

Mr. Shaw has to pay damages to Mr. Hobbs in relation to breaching the exclusivity
clause by selling Coleman’s wrenches as (a) Exclusivity clause is a condition (b)
Mr.Shaw’s action breached the expectation interest of the contract (c) Mr. Shaw
made profits out of the breach and (d) Mr. Coleman induced the breach of contract

(a) The exclusivity clause is a term which in business contracts, an exclusivity clause
grants one party the exclusive right to provide certain goods or services to another
party with in a specified scope according to the case of Nordenfelt V Maxim,
Nordenfelt Guns and ammunition CO-1894.21 The exclusivity clause was a condition
19
North Eastern Properties Ltd v Coleman & Quinn Conveyancing [2010] EWCA Civ 277

20
Actionstrength Ltd v International Glass Engineering [2003] UKHL 17; [2003] 2 AC 541
21
Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535
of the contract. From the facts, it’s clear that the exclusivity clause where it’s clear
that Mr. Shaw can only take supplies from Mr. Hobbs is one of the core reasons why
Mr. Hobbs went in to a contract with him. From the judgment of Esso Petroleum Co
Ltd v Commissioners of Customs & Excise (1976)22, the judges hold that the
exclusivity clause hold great significance and was judged as a condition. According to
the cases of Bettini v Gye (1876 ),23 Bunge Corporation v Tradax Export SA (1981),24
Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd (1962), 25 Jackson v
Horizon Holidays Ltd (1975),26 Bunge SA v Kyla Shipping Co Ltd (The "Kyla") (1981),
27
“ Where there is a breach of a condition, the innocent party is entitled to elect to
treat the contract as discharged and sue for damages."

Distinguishing the situation where Esso was bound to sell products to the other party
and no one else and in the current case Mr. Shaw was bound to get supplies from
only Mr. Hobbs it’s clear that Mr. Hobbs is entitled to damages

(b) Mr. Shaw’s action breached the expectation interest of Mr. Hobbs;

(I) Mr. Shaw disappointed expectation of Mr. Hobbs. Expectation interest gets
breached where the claimants expectation, endangered by the promise of the
defendant that he will perform his contractual obligations, have not been fulfilled.
From the facts it’s clear that Mr. Shaw couldn’t fulfill his obligation to get sole
supplies from Mr. Hobbs. According to the judgment of Parke B in Robinson V
Harman (1848),”28 the rule of common law is that where a party sustains kiss by
reason of a breach of contract, he is, so far as money can do it, to be placed in the
same situation, with respect to damages, as if the contract has been performed”. If
the contract was accordingly performed Mr. Shaw could’ve sold more wrenches for
Mr. Hobbs as Mr. Shaw used his resources to sell Coleman’s wrenches which caused
loss to Mr. Hobbs as Mr. Shaw had obligations to give Best Endeavours to Mr.
Hobbs .

Thus, Mr. Hobbs is entitled to damages as the exclusivity clause was breached which
created the loss of expectation interest.

(II) Mr. Shaw was engaged in a breach of trust;

22
Esso Petroleum Co Ltd v Commissioners of Customs and Excise [1975] UKHL
23
Bettini v Gye 1 QBD 183
24
Bunge Corporation v Tradax Export SA [1981] UKHL 11
25
Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26 [1961] EWCA Civ 7
26
Jackson v Horizon Holidays Ltd [1975] 1 WLR 1468
27
Bunge S.A. v Kyla Shipping Company Limited [2012] EWHC 3522 (Comm)

28
Robinson v Harman 1 Ex Rep 850
Breach of trust" refers to a situation where a person who owes a fiduciary duty to
another party fails to fulfill that duty or acts in a manner that is contrary to the
interests of the beneficiary.
In legal terms, a fiduciary relationship is one in which one party (the fiduciary) has a
special duty of care, loyalty, and good faith towards another party (the beneficiary).
This relationship creates a high standard of trust and confidence, and the fiduciary is
expected to act in the best interests of the beneficiary, putting the beneficiary's
interests before their own. According to the facts, Mr. Shaw had a special duty
towards Mr. Hobbs to act according to the exclusivity clause and not to take any
other supplier. According to the case of, Boardman v Phipps (1967),29 Lord Upjohn
stated: "It is a rule of universal application that no one having such duties to
discharge shall be allowed to enter into engagements in which he has, or can have, a
personal interest conflicting or which possibly may conflict, with the interests of
those whom he is bound to protect.”

Thus Mr. Shaw was in a breach of trust and thus liable to damages.

(III) The breach raises anticipatory secondary obligations. A anticipatory secondary

obligation arises where there had been a breach of a warranty and the party in
breach needs to pay damages for the breach. According to Lord Diplock in Photo
Productions LTD v Securior transports LTD -1980,30 “ there is substituted by
implication of law for the primary obligations of the party in default which remain in
performed a secondary obligation to pay monetary compensation to the other party
for the loss sustained by him in consequence of their non performance.”

Because of the Breach, Mr. Shaw wouldn’t be able to further distribute Mr. Hobbs
wrenches and also due to selling Coleman’s wrenches Mr. Shaw act under the
circumstances of Best Endeavours which enables and entitles Mr. Hobbs for
damages.

(3) Even if Mr. Hobbs didn’t go through a financial loss he is entitled to damages;

(I) Mr. Hobbs didn’t get what he bargained for. From the facts it’s clear that Mr.
Hobbs wanted a distributor who solely distributed his wrenches. According to Lord
Goff in Alfred McAlpine Constructions Ltd V Panatown ltd(2001)31 and Lord Griffith
in Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1993]32 “even if one does not
face a financial loss due to the breach, they face a loss in a sense they didn’t what
they bargained for.”

So, as Mr. Hobbs didn’t get what he bargained for he is entitled to damages.
29
Boardman v Phipps [1966] UKHL 2
30
Photo Production Ltd v Securicor Transport Ltd [1980] UKHL 2
31
Alfred McAlpine Construction Ltd v Panatown Ltd [2001] 1 AC 518
32
Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1993] UKHL 4
(II) It was a breach of good faith. The breach of this rule happens when one party act
in ways that obviously undermine the benefits to the other party from the contract
or if one party attempts to sabotage another in performing their end of the
agreemen. Mr. Shaw undermined the contract terms and acted in a way which
undermined the benefits of Mr. Hobbs. According to the case of Yam Seng Pte Ltd v
International Trade Corporation Ltd (2013),33 "a serious breach of such an obligation
can give rise to a claim for damages “

Thus, as Mr. Shaw undermined good faith Mr. Hobbs is entitled to damages

Pleading 4 Hobbs

Mr. Hobbs is not liable for any warehouse damage and repairs as (a) There was no
agreement and No contract has been formed as there is no consideration (b) Mr.
Hobbs is also a consumer in the context (c) Mr. Shaw was aware of the risks

(a) No contract was formed;

(I) From the facts, it’s clear that Mr. Shaw just corresponded regarding his challenges
to Mr. Hobbs and requested him to complete the task of refurbishing and completing
the warehouse. There was no practical benefit as the warehouse wasn’t needed for
Mr. Hobbs. The warehouses was indeed needed because Mr. Shaw by breach of the
exclusivity clause wanted to sell Coleman’s wrenches. If there were only wrenches of
Mr. Hobbs there wasn’t any supposed need for the warehouse so there was no
practical benefit and as Mr. Shaw was already bound to give best endeavours to Mr.
Hobbs so it doesn’t create any benefit and consideration for Mr. Hobbs and on the
other hand Mr. Hobbs paid 3000 pounds on behalf of Mr. Shaw in regards for the
tasks.
In the case of Dunlop Pneumatic Tyre Co. LTD v Selfridge and Co. LTD (1915)34 Lord
Dunedin stated that, “ an act or forbearance of one party or the promise there of ,
being the price for which the promise of the other is bought.”

As there had been no price from the end of Mr. Shaw, there was no consideration
thus no contract formed and that’s why Mr. Hobbs is not liable for any damage or
payment.

(II) Mr. Shaw requested an act from Mr. Hobbs;

33
Yam Seng Pte Ltd v International Trade Corporation Ltd [2013] EWHC 111

34
Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] UKHL 1, [1915] AC 847
From the facts it’s clear that, Mr. Shaw requested Mr. Hobbs to help him refurbishing
the warehouse and to complete it. According to Lampheigh V Braithwaite (1615),35”
Where one party has requested a service, the law sensibly concludes that he is
prepared to pay for it.”

Not only Mr. Shaw didn’t pay anything to Mr. Hobbs but also Mr. Hobbs had pay
3000 pounds on behalf of Mr. Shaw. So even if any contract regarding the warehouse
exists between Mr. Shaw and Mr. Hobbs, Mr. Hobbs is entitled to damages due to
breach of contract.

(III) The flood was a frustrating event;

A contract is frustrated where, after the contract was concluded, event occur which
make performance of the contract impossible. From the facts it’s clear that the flood
happened after the contract was concluded and due to the flood the usage of
warehouse became impossible. According to the case of Hirji Muliji v Cheong Yue SS
Co 1926,36 “ A contract which is discharged on the ground of frustration is brought to
an end by the operation of the rule of law, irrespective of the wishes of the parties.”

As it was a frustrating event, even if there was a contract, the parties are out of the
obligations of the contract.

(b) Mr. Hobbs is a consumer in the context;

From the facts and above argument it’s clear that there was no contract in this
regard between Mr. Shaw and Mr. Hobbs. Even if there was Mr. Hobbs was a
consumer along with Mr. Shaw as Mr. Hobbs wasn’t repairing it by himself or had no
exchange with Mr. Shaw. But on the other hand Mr. Hobbs did not get what he
bargained from Precision Builders.
According to the cases of Alfred McAlpind Construction Ltd c Panatown Ltd-200137
and Lord Griffith in Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd -1994 38
that ,” one party suffered a loss in the sense that he did not receive the bargain for
which he contracted.”

35
Lampleigh v Brathwait [1615] EWHC KB J 17, (1615) Hobart 105, 80 ER 255

36
Hirji Mulji v Cheong Yue Steamship Co Ltd [1926] AC 497
37
Alfred McAlpine Construction Ltd v Panatown Ltd [2001] AC 518
38
Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1993] UKHL 4, [1994] 1 AC 85
So, even if there was a contract, the contract is between precision tilings and hobbs
with shaw. Mr. Hobbs is entitled to damages (from precision tilings being a consumer
to the contract.

(c) Mr. Shaw was aware of the risks ;

(I) From the facts, it’s clear that Mr. Shaw was aware of the risks. He knew
that the warehouse was incomplete and was situated in an extremely
humid town. Even after he noticed abrasions over the flooring relying on
his technician he didn’t take any step. It was negligence on his part.
According to the case of Gran Gelato Ltd V Richcliff (Group) Ltd ,
(section?)13.9 of the misrepresentation act and Taberna Europe CDO II plc
V Selskabet AF139 “ According the tort of negligence the representee will
also be in fault on the grounds of contributory negligence if the
consequence was foreseeable.”

Even if he is entitled to damages, he bought that warehouse from a third party and
he had his technician to provide him with knowledge. Even if he is entitled to
damages he is supposed to demand that from the other third parties and not from
Mr. Hobbs.

(II) Mr. Shaw was already aware of the damages when the technician informed him
regarding the abrasions of the floor. He didn’t take any step to repair or mitigate the
situation nor he informed Mr. Hobbs regarding the situation. According to the case
of Westinghouse Co V Underground Electric Ry Co-1912,” the injured party is
obliged to take all steps which a reasonable and prudent man will take .”
Also, . In the case of Vitol SA v Beta Renowablr Group SA [2017]40 Lord Steyn in his
judgment conveyed that the innocent party must communicate his decision to the
party in breach and the communication must clearly and unequivocally convey to the
repudiating party.”
As Mr. Shaw didn’t take any step to mitigate the damage and didn’t communicate he
is not entitled to any damage.

(IV) Mr. Shaw inspected the products;

According to the facts it’s clear that Mr. Shaw knew about the change of the
products and his technicians inspected it. According to the Sales Of Goods Act 1979
Section 14 (2CB) where the buyer examined the products and has failed to detect the
defects which ought to be have been revealed by that type of examination. In these
situations the good won’t be detected as unsatisfactory.

39
Taberna Europe CDO II Plc v Selskabet (formerly Roskilde Bank A/S) (In bankruptcy) [2016] EWCA Civ 1262
40
VItol SA v Beta Renowable SA [2017] EWHC 1734
So, as the goods are not unsatisfactory, Mr. Shaw isn’t entitled to any damage.