LAW OF CONTRACT - RECENT CASES

CONTRACT LAW – RECENT CASES

1) Northstar Land Ltd v Brooks (2006) ECWA Civ 756 – The Solicitors in land case. No promissory estoppel where there was no clear, unequivocal an unambiguous representation.

2) Apple Corps v Apple Computer Inc (2004) EWHC 768: Contracts cn be formed simultaneously formed in two or more places (over telephone). Brinkibon v Strabag (1993) and Entores v Miles Far East Corporation (1955) were relevant.

3) Debenhans (2004): The difficulty in identifying two contracts from a single transaction. (Debenhams 2006).

4) South Caribbean Trading Ltd (SCT) v Trafigura Beeter BV (2004) EWHC 2676 doubted Williams v Roffrey Bros (1991) – consideration did not move from the promisee. The reasoning in a tripartite agreement was used in a bipartite agreement.

5) West Bromwish Albion Football Club Ltd v El-Safty (2006) – no express contract for treatment agreement between WBA players and orthopaedic surgeon (E) regarding the medical treatment of one of WBA’s player (A).

6) Sadler v Reynolds (2005) claimant to establish an intention to create a legal relationship when agreement was reached to ghost write a book but the onus was no as heavy as in purely social relationship. (Sadler 2005).

7) Gow v Tui UK Ltd (t/a Crystal Holidays (2006) It was held that the industry practice was to hold that there was no contract when the agent provisionally accepted the customer’s offer and the agent’s invoice was the contractual document. Notice on the terms and conditions was sufficient to incorporate them into the contract as the customer was aware of them. (Gow 2006)

8) Bramhill v Edwards (2004) Caravan with extra two inches wide. There was no implied term by reason of s.14(2) and there was no breach and if there was defence under s.14(2c) as the vehicle was bough ‘as seen’. In addition, there would be no damages because the purchaser were unable to establish if the extra two inches made any difference in value. FACT.

9) Crossley v Faithfully & Gould Holdings Ltd (2004) ECWA Civ 293 No implied term that an employer ought to take care of an employee’s economic well-being of his employer due to intolerable burden of such term. The employer lost long-term sickness benefit when he retired on his own (Crossley 2004)

10) Paragon Finance Plc v Pender (2005) EWCA Civ 760 The implied term - interest rate should not be fair) (Paragon 20005)

11) Keen v Commerzbank AG (2006) EWCA Civ 1536 The CA - discretionary bonus did not fail within s.3 of the UCTA 1977. (Keen (2006)

12) Re. Cape Plc (2006) EWHC 1313 The scheme of arrangement under s.235(1)(a) of the Companies Act 1975 was not a contract within UCTA. (Re Cape 2006)

13) Balmord Group Ltd v Borealis (UK) Ltd (2006) EWHC Supply in Norway and Denmark were international contract and thus outside the ambit of UCTA 1977. (Balmord 2006)

14) Fleet Mobile Tyres Ltd v Stone (2006) EWHC) The reasonable requirement s.11 of UCTA 1977 is only applicable where there had been actionable misrepresentation and not the entire contract. Fleet Mobile Tyres (2006)

15) IFE Fund SA v Goldman Sachs International (2006) EWHC 2887 information memorandum went to the scope of misrepresentation and does not constitute exclusion of liability under Misrepresentation Act 1967. (IFE Fund SA 2006)

16) Baybul v Ecole Riggs County Park (2006) The court held that UTCCR 1999 did not apply to terms implied at common law (Baybul 2006).

17) Taylor v Rive Drorte Music Ltd (2005) EWCA 1200 it was correct to phrase the implied terms in the contract to a prohibition of the forbidden positive acts as a reasonable person would agree to be bound by a potentially onerous term (Taylor 2005)

18) Munkenbeck & Marshall v Harold (20005) Unfair terms are not enforceable despite the fact that they formed part of profession-wiide standard term (UTCCR 1999) (Munkenbeck 2005)

19) Bryen & Langley Ltd v Boston (2005) A consumer could not complain about the term of a building contractor when the consumer’s agent had asked the contract to tender on those very terms. Lack of openness, fair dealing and good faith made claim under Reg. 5 failed. (Bryen & Langley 2005)

20) Feldaroll Foundary Plc V Hernes Leasing London Ltd (2004) The CA held that R&B was concerned with meaning of ‘deals as a consumer’ with UCTA 1977 while Stevenson & Rogers was concerned with seller in the course of Business within the Sale of Goods Act 1979. The purpose of the Act was consumer protection and R&B was in harmony with the position because it sought to further the protection available to the buyers. (Feldaroll 2004)

21) Bairstow Eves London Central Ltd v Smith (2004): Agent fees (3% -1.5%) was not within Reg. 6 (2) of UTCCRR 1999 (the term deals with the core of a contract and not adequacy of price). The term could be scrutinised under reg. 5. Reg. 6 should be restrictive, while liberal interpretation would erode the interpretation (Bairstow 2004)

22) Khatun & Ors v Newham LBC (2004): Where a local council was statutorily obliged to provide accommodation UTCCR 1999 applied to the terms on which the council let the flats.

23) Commission of the European Communities v Kingdom of Spain (2004) Restrictive implementation is not compliance with Art 5 of ECHR (CEC - Spain)

24) Proform Sports Management Ltd v Proactive Sport Management Ltd (2001) It was footballer contract (minor) was not binding because it was not analogues to a contract of necessaries or employment contract of general benefits. (Proform Sports Management 2001)

25) Halpen v Halpern (2006) – A mistake in Jewish law was found to be capable of being that that would avoid a contract. (Halpen 2006)

26) Kyle Bay Ltd (t/a/ Aston Night Club) v Underwriters (2006): A party who made unilateral mistake cannot unilaterally rectify with agreement with the other part where such the mistake had not made the performance of the contract impossible, or radically different (Kyle Bay 2006)

27) George Wimpey UK Ltd v VI Components Ltd (2005) A party who had more experience cannot blame the party who rely on him for any mistake or achieve rectification if the junior party protested (George Wimpex 2005)

28) Brennan v Bolt Burdon (2004) CA held that the contractual promise of a legal claim could be void as a result of common mistake of law. Where there was a doubt as to the law concerned, there was no doubt as to the law sufficient to render the contract void. (Brennan 2004)

29) GMAC Commercial Credit Development Ltd v Sandhu (2004) The court held that a written guarantee rendered meaningless by a mistake could be rectified. (GMAC 2004)

30) Customs & Excise Commissioner v Barclays Bank Plc (2006): The HL considered the decisions in Hedly Byrne v Heller (1964) and Henderson v Merritt Syndicates (1995) and held that the presence or absence of a voluntary assumption of responsibility did not provide the answers in all such cases

31) Conlon v Simms (2006) Where there was a duty to disclose, as between prospective partner, and failure to disclose was fraudulent misrepresentation and damages would be available (Conlon 2006)

32) Six Continents Hotels Inc v Event Hotels GMBH (2006) Misrepresentation which were not fraudulent were defeated by contractual term baring claims or proceedings based on discussions and agreement which occurred before the contract had been entered into. Because it did not cover fraudulent misrepresentation, it did not fall foul of Misrepresentation Act 1967. (Six Continents Hotels Inc 2006)

33) UCB Corporate Services Ltd v Thomason [2005] EWCA Civ 225: The loss in s.2(2) of the Misrepresentation Act 1967 included financial loss and was capable of including ‘detriment’. Loss was thus capable, in this instance, of including the lost chance of obtaining more money if the injured party had been told the truth.

34) Forest International Gaskets Limited v Fosters Marketing Limited [2005] EWCA Civ 700: The decision in Royscot v Rogerson (1991) in respect of possible measure of damages recoverable under s.2(1) of the Misrepresentation Act 1967 had not been overruled and the difference between a measure of damages based upon negligence and a measure of damages based upon fraud amounted to only £28,500 was too small to justify granting permission to appeal the case to the House of Lords to consider the issue of the appropriate measure of damages.

35) Wadlow v Samuel (aka Seal) [2006] EWHC 1492: despite the voidability of the earlier management agreement (due to undue influence), the settlement agreement (without undue influence) was not voidable. Royal Bank of Scotland v Etridge (no 2) was applied to determine the existence of undue influence; Yorkshire Bank v Tinsley was distinguished.

36) Yorkshire Bank Plc v Tinsley [2004] EWCA Civ 816, [2004] 1 WLR 2380, [2004] 3 All ER 463: The Court held that since the earlier mortgage had been voidable against the husband and the Bank because of undue influence, the later mortgage replacing this earlier mortgage would also be voidable. This conclusion was not altered by the fact that there was no undue influence operative at the time of the subsequent mortgage. Subsequent mortgage would not have been tainted.

37) Leeder v Stevens [2005] EWCA Civ 50: In cases of undue influence, the test was not whether the parties knew what they were doing but why they did it.

38) Offer-Hoar v Larkstore Ltd [2006] EWCA Civ 1079: Soil test valuation. Where C relied on a report prepared by B for A and suffered loss, C was entitled to recover substantial damages from S as a result of the assignment of the report from A and its ownership of the site. The assignment was a delayed consequence of the earlier sale of the land.

39) Horn Linie GmbH & Co v Panamericana Formas e Impresos SA (The Hornbay) [2006] EWHC 373: the Court expressed some doubts about the application of the decision in The Mahkutai (1996) with regard to a jurisdiction clause.

40) Avraamides v Colwill [2006] EWCA Civ 1533: s.1(3) of the C(RoTP) Act required the contract to expressly identify the third party by name or class and that there had been no such identification here.

41) Laemthong International Lines Company Ltd v Artis and Others, (The Laemthong Glory) (No. 2) [2005] EWCA Civ 519: The Court upheld the finding of Cooke J that the terms of the LOI (between charterers and receivers) conferred a benefit upon the owners within the meaning of s.1(1)(b) of the 1999 Act. The letters of indemnity had to be considered on their own terms and that] they were not within the examples of the commercial backgrounds provided by the Law Commission in its report.

42) Precis Plc v William M Mercer Ltd [2005] EWCA Civ 114: The attempt of SG and P to later vary their confidentiality agreement to the detriment of WM (who prepared actuarial report with defect) was of no effect because of s.2(1)(a) of the 1999 Act. WM did not owe P a duty in circumstances where there was no pre-existing relationship between these two parties and the report had been drawn up for SG to review its contribution rate.

43) Maccaba v Lichtenstein [2006] BPIR 994: the Court held that a contract legal in England was enforceable even though illegal in another jurisdiction.

44) Hill v Secretary of State for the Environment, Food and Rural Affairs [2005] EWHC 696: a company J held that the company (undischarged bankrupt) was entitled to be remunerated on a quantum meruit basis for the work done (to protect the very persons the Director Act legislation was designed to protect would).

45) Wheeler v Qualitydeep Ltd [2004] EWCA Civ 1085: In the case of a wrong doing, it was necessary to establish not only that the employee was aware that something was wrong but also that she had actively participated in the illegal performance of the contract.

46) Vakante v Addey and Stanhope School [2004] EWCA Civ 1065, [2004] 4 All ER 1056: Entertaining racial complaints from an employee tainted with employment irregularity would be to condone illegality.

47) Diab v Regent Insurance Co Ltd [2006] UKPC 29 : the Privy Council was of the opinion that until the repudiation of a contract by one party is accepted by the other party, the contract continues and must be complied with in all its terms to facilitate a claim under a contract of insurance.

48) R (on the application of Supportways Community Services Ltd) v Hampshire CC [2006] EWCA Civ 1035: the Court of Appeal declined to impose extra duties of review on a public authority in performance of a contract because they were a public authority. A claimant, suing a public authority for breach of contract, could not invoke public law simply because he was dissatisfied with the remedy provided to him by private law.

49) Gray v Marlborough College [2006] EWCA Civ 1262: Where satisfied that there was a symmetry between a contractually implied obligation of fairness in these cases and that derived from statute or general public law (which could assist in the determination of fairness or consultation with the parent), the result of that disciplinary process is fair.
50) London Borough of Waltham Forest v Omilaju [2004] EWCA Civ 1493, [2005] 1 All ER 75: Where an employer had previously breached the implied term and an employee had affirmed the contract and soldiered on, it was not for the employee to subsequently rely on these acts to justify constructive dismissal unless there is a later act which allows him to do so.
51) Reichman v Gauntlett (CA, The Times 4 January 2007): the Court of Appeal found that the landlord had no duty to mitigate his loss where he sued in debt for arrears of rent which had come due. This was not changed by the decision in White & Carter Councils v McGregor (1962).

52) WWF World Wide Fund for Nature (formerly World Wildlife Fund) v World Wrestling [2006] EWHC 184: the Court held that damages awarded according to the principle in Wrotham Park Estate Co v Parkside Homes(1974) were similar to the remedy of account but were not the same. The Wrotham remedy was compensatory and not restitutionary.

53) Wiseman v Virgin Atlantic Airways Ltd [2006] EWHC1566 and Artis v MFI UK Ltd [2006] 11 CL 84: Courts declined to allow non-pecuniary losses in cases with some connection to contracts for pleasure or enjoyment.

54) CMC Group Plc v Zhang [2006] EWCA Civ 408: The Court of Appeal held that (forfeit the entirety of his settlement in the event that the any legal action or even engaged in any derogatory or unfavourable communication with the payor) was was a penalty within the description given by Lord Dunedin in Dunlop Tyre v New Garage and Motor Co (1915) because even a trivial breach resulted in the payment of the entire sum.

55) Jackson v Royal Bank of Scotland [2005] UKHL 3: Damages were available for the loss of repeat business with the principal customer and for the loss of opportunity to earn profits from their trade with the principal customer. Damages on a reducing basis over a four-year period was not too speculative and was as good an estimate on the effect of the breach of contract upon the claimant’s damages as could be made in the circumstances.

56) McAlpine Capital Projects Ltd v Tilebox Ltd [2005] EWHC 281: was concerned with the issue of whether a clause was a penalty clause or liquidated damages. The test in Dunlop Pneumatic Tyre v New Garage & Motor (1915) was applied. It was noted that the estimate did not have to be the actual loss suffered. The court was predisposed to enforce an agreed damages clause where the agreement was made in a commercial context between two parties of equal bargaining power.

57) Eastwood v Magnox Electric Plc And McCabe v Cornwall CC [2004] UKHL 35, [2004] 3 WLR 322, [2004] 3 All ER 991: the House of Lords followed the decision in Johnson v Unisys Ltd [2001] UKHL 13 in holding that the breach of the implied term of trust and confidence in the employment relationship could not be used as the foundation for a claim at common law because adequate statutory provisions Exception - loss from the employer’s failure to act properly in seeking dismissal and financial loss caused by psychiatric or other illness caused by pre-dismissal unfair conduct where common law claim which preceded and was independent of his statute-based unfair dismissal claim.

58) Dunnachie v Kingston upon Hull City Council [2004] UKHL 36, [2004] 3 WLR 310: the House of Lords found that the comments of Lord Hoffman in Johnson v Unisys which suggested a denial of damages in respect of the manner of dismissal were obiter.

59) Hamilton Jones v David & Snape (a firm) [2003] EWHC 3147 (Ch); [2004] 1 All ER 657: applied the principles developed in Farley v Skinner and allowed the claimant to recover damages for mental distress suffered when the defendant solicitors breached their duty to her in not taking reasonable steps to prevent the claimant’s husband from removing their children from the United Kingdom.

60) Rolls-Royce Power Engineering Plc v Ricardo Consulting Engineers Ltd [2003] EWHC 2871 (TCC), [2004] 2 All ER (Comm) 129: the Court considered the difficult issue of where one party could recover damages in respect of loss suffered by another. The exception in Dunlop v Lambert and Panatown v McAlpine (2000) were applied. The third party had to be within the contemplation of the contracting parties or it had to be known to both parties at the time of contracting that one party contracted as a trustee at the time the contract was entered into.

61) Birse Construction Ltd v Eastern Telegraph Co Ltd [2004] EWHC 2512: the principles of Ruxley Electronics v Forsyth were applied to award nominal damages where there was no intention to repair the defects and no financial loss had been suffered on the sale of the building. Building with defects by builders.

62) LauritzenCool AB v Lady Navigation Inc [2005] EWCA Civ 579 [2005] EWCA Civ 579: There was no general rule that injunctive relief would not be granted in respect of a contract for services if the practical effect would be to compel performance where did not provide for very personal skills or talents and were commercial agreements between independent companies. The agreements did not specify named individuals. Although the injunctive relief might compel performance, that would be irrelevant as long as the relief did not decree performance.

63) Gryf-Lowczowski v Hinchingbrooke Healthcare NHS Trust [2005] EWHC 2407: In this unusual case, Gray J held that injunctive relief would be available at the instance of the employee in a contract of employment in which the relationship of mutual trust and confidence had broken down. If the provisions of discipline proceedings were not upheld, the employee, a highly trained specialist, would never find work in the NHS.

64) Farley v Skinner (No. 2) 2001 UKHL 49 (2002) AC 732: The House Of Lord Awarded damages (distress) for ‘loss of amenity’ on the basis that that the major or important object of the contract was to provide pleasure, relaxation or peace of mind. Valuation of a property under plane route.