LAW OF CONTRACT - RECENT CASES2

CONTRACT LAW – RECENT CASES

Offer and Acceptance/Consideration

1) Northstar Land Ltd v Brooks (2006) ECWA Civ 756 - The CA of appeal rejected a claim that a promissory estoppel or agreement had arisen when the solicitor to the buyer contacted the solicitor to the seller on the day for the completion of the transaction and sought and extension. The solicitor for the seller said he would have to seek instructions from his clients and revert back to him. He never did. It was held that an agreement to extend time had not arisen, nor was there such a clear, unequivocal an unambiguous representation that was intended to affect the relation between the parties such that promissory estoppel arose.
2) Apple Corps Limited v Apple Computer Inc (2004) EWHC 768: CA held that in principle it was possible for a contract to be simultaneously formed in two or more places in considering whether a trade mark contract had been completed in a telephone conversation between and party in America and a party in London. (Apple Corps v Apple Computer 2006)The decisions in Brinkibon v Strabag (1993) and Entores v Miles Far East Corporation (1955) were considered.
3) Debenhans Retail Plc v Custom and Excise Commissioners (2004) EWHC 1570: Attempt by Debenhams to minimise the amount of VAT payable when customers used credit card. They introduced two contracts price paid for goods and the others for card handling charge with adequate notice to their customers. The CA held that there were no separate contracts and contract could not be made by assertion, because price displayed, singly till slip and difficulty in identifying any consideration passing from the card holding company to the customer. (Debenhams 2006).
4) South Caribbean Trading Ltd (SCT) v Trafigura Beeter BV (2004) EWHC 2676 Colman J doubted the correctness of decision in Williams v Roffrey Bros (1991) – He noted that the decision was inconsistent with the long standing tradition that consideration must move from the promisee. The reasoning in a tripartite agreement was used in a to a bipartite agreement.
5) West Bromwish Albion Football Club Ltd v El-Safty (2006) – CA declined to find any express contract between WBA and orthopaedic surgeon (E) regarding the medical treatment of one of WBA’s player (A). Any contract would be between A and E. FACT. WBA arranged a medical insurance for all its players and also arranged for A, an injured player, to have consultation with E. E negligently advised surgery. The surgery was performed and as a result A was never able to play again. WBA sued for damages under contract and tort for financial loss of not having the services of A due to E negligent conduct. (WBA 2005)
6) Sadler v Reynolds (2005) It was held that the onus was on the 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).

Terms of a Contract

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) CA held that there was no implied term by reason of s.14(2) and there was no breach. Had there been an implied term there would have been a 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. A caravan was 102 inch instead of the 100 inches permitted in UK. The claimant argued that there was an implied term that the vehicle must be of satisfactory quality. (Bramhill 2004).

9) Crossley v Faithfully & Gould Holdings Ltd (2004) ECWA Civ 293 The CA declined to find that there was an implied term with the contract of employment which provided that an employer ought to take care of an employee’s economic well-being. The introduction of such term would place an intolerable burden upon employer. 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 CA applied the decision in Paragon Finance Plc v Nash (2001) that there was an implied term in fact that interest rate were not to be set dishonestly, for an improper purpose, capriciously or arbitrarily) to a term which allowed the financed company to vary interest rates. On the fact of the case, there was no breach of the term so implied. (Paragon 20005)

The Regulation of Terms of Contract – UCTA 1977 & UTCCR 1999

11) Keen v Commerzbank AG (2006) EWCA Civ 1536 The CA held that a term of an employment contract relating to the payment of discretionary bonus did not fail within s.3 of the UCTA 1977. (Keen (2006)

12) Re. Cape Plc (2006) EWHC 1313 The Court held that a scheme of arrangement enter into under s.235(1)(a) of the Companies Act 1975 was not a contract or notice within s.2(1) of UCTA. (Re Cape 2006)

13) Balmord Group Ltd v Borealis (UK) Ltd (2006) EWHC The Court found that contract to supply first a Norwegian company and a Danish one were international contract and thus outside the ambit of UCTA 1977. (Balmord 2006)

14) Fleet Mobile Tyres Ltd v Stone (2006) EWHC) The Court held that the reasonable requirement s.11 of UCTA 1977 did not apply to entire agreement and waiver clauses as the section was only applicable where there had been actionable misrepresentation. Fleet Mobile Tyres (2006)

15) IFE Fund SA v Goldman Sachs International (2006) EWHC 2887 It was held that where a party had sent an information memorandum to another party stating that they had not verified the accuracy or completeness of the information in the information memorandum. This statement 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 CA observed that it was correct in the circumstances of the case , for the trial judge to phrase the implied terms in the contract to a prohibition of the forbidden positive acts. An implied term which prohibits negative act would be onerous as it would require a positive action by a party. It was not possible to conclude that a reasonable person would agree to be bound by a potentially onerous term (Taylor 2005)

18) Munkenbeck & Marshall v Harold (20005) Judge Harvey QC held that the terms were unfair (onerous and unusual) and 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) The CA found that 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) An agreement to pay estate agent commission of 3% was redudeced to 1.5% if paid within 10 days of completion. CA applied DG of Fair Trading v First National Bank 2001 and held that the clause 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) The CA held where a local council was statutorily obliged to provide accommodation UTCCR 1999 applied to the terms on which the council let the flats. European Court of Justice had ruled that only national court can determine whether a particular term was fair (Khatun & Ors 2004)

23) Commission of the European Communities v Kingdom of Spain (2004) The court considered whether Spain had implemented Art 5 by the directive that where there is a doubt as to the meaning of a term the most favourable term to the consumer will prevail. The court ruled that directive did not fully implement the regulation. It is restrictive E Fund SA 2006)

Contracts Made by Minor

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)

Mistake

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) Where one party made mistake, did not communicate the mistake to the other party, there was no common intention for reactivation, the mistake had not made the performance of the contract impossible, or radically different, rectification by the mistaken party was denied. (Kyle Bay 2006)

27) George Wimpey UK Ltd v VI Components Ltd (2005) Sale of land based on a complex formular. VIC redrafted the formular and ommited price for enhancement costing Wimpey £800,00. The court ruled that the mistake was not VICs who had no experience but corporate neglect by Wimpey for which VIC bore no legal responsibility and it was not inequitable to allow VIC to resist the claim of rectification. (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. It was a question of construction as to whether or not the mistake made the compromise impossible (Great Peace) 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)
Misrepresentation

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) The court found that 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) The court held that 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 Court of Appeal applied s.2(2) of the Misrepresentation Act 1967. The Court considered that the world ‘loss’ in the subsection 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 Court of Appeal [at paras.11–17] considered the possible measure of damages recoverable under s.2(1) of the Misrepresentation Act 1967. Having noted the academic and judicial criticism of Royscot v Rogerson (1991), the Court of Appeal stated that the decision had not been overruled and that there was nothing to indicate that it was. In this case, the difference between a measure of damages based upon negligence and a measure of damages based upon fraud amounted to only £28,500. This amount 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.

Duress and undue influence

35) Wadlow v Samuel (aka Seal) [2006] EWHC 1492: The Queen’s Bench was concerned with the issue of undue influence. A management agreement between the claimant and the defendant musician had been formed under undue influence. A settlement agreement between the two parties had been reached and was based, in part, upon the management agreement and allowed the claimant to continue to receive payments of commission. The settlement agreement had not been formed under undue influence. Royal Bank of Scotland v Etridge (no 2) was applied to determine the existence of undue influence; Yorkshire Bank v Tinsley was distinguished in that despite the voidability of the earlier management agreement, the settlement agreement was not voidable.

36) Yorkshire Bank Plc v Tinsley [2004] EWCA Civ 816, [2004] 1 WLR 2380, [2004] 3 All ER 463: was concerned with the voidability of a mortgage for undue influence. The Bank had provided a mortgage to T’s husband in 1988 to purchase business units. The mortgage was secured on the matrimonial home. Three years later, the mortgage was replaced by another. In 1994, as a part of divorce proceedings, the matrimonial home was exchanged for a flat for T. The Bank insisted on taking a charge over the flat to secure the husband’s business debts. When the husband failed to discharge the debt, the Bank sought a possession order against T. 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. If the subsequent replacement mortgage had been made with a different lender, the different lender could not be deemed to be aware of matters which the original lender was (see paras.20–21 and 35 of the judgment).

37) Leeder v Stevens [2005] EWCA Civ 50: the Court found that presumed (evidential) undue influence was established on the facts of the case. The Court stated, in response to the argument that undue influence could not be established where the party who signed the deed was aware of what they were doing, that the test was not whether the party knew what she was doing but why she did it.

Privity of contract

38) Offer-Hoar v Larkstore Ltd [2006] EWCA Civ 1079: the Court of Appeal was concerned with a case which appeared to present a ‘black hole’, where loss arises as a result of a breach of contract but no one is able to recover substantial damages from the contract breaker. The potential black hole arose in the following circumstances. S, the owner of a building site intended for residential development, obtained a soil inspection report from T which stated that the land was suitable for the proposed development. The report contained no prohibition against assignment. The report had been obtained to satisfy a condition of the planning permission for the site. The site was offered for sale with planning permission. S used T’s report to satisfy the planning condition and sold the site to L. L used T’s report without T’s permission. L never had a contract with T. When L undertook the development work a landslide occurred which caused substantial damage to the properties owned by the five claimants in the action. Subsequently, a deed of assignment was entered into between S and L whereby S assigned to L all of its rights in and under T’s report together with any right to sue T in respect of breaches of its rights and obligations. The issue of a black hole was present because when T prepared its report, it was in breach of contract with S but any damages would have been nominal (the landslide had yet to occur). When the landslide did occur, S no longer owned the land and would not be able to recover more than nominal damages as it had not suffered loss. L, who had suffered loss, had no contract with T. The Court held, after considering the underlying rationale in the relevant cases, that L was entitled to recover substantial damages from T as a result of the assignment from S 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: the Court of Appeal was concerned with the application of s.1(3) of the Contracts (Rights of Third Parties) Act 1999 to the following facts. B purchased a business run by A and, by agreement, accepted its outstanding liabilities. C was a dissatisfied customer of A’s and sued B on the basis of the A/B contract, C alleging that the contract conferred an enforceable benefit upon them. The Court held that s.1(3) of the 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 Contracts (Rights of Third Parties) Act 1999 was briefly considered by the Court of Appeal. In this case the owners of a vessel chartered it to the charterers by a charter-party. The cargo of sugar was loaded and consigned to the receivers. The cargo arrived before the bill of lading and the sugar was delivered to the receivers in exchange for letters of indemnity (‘LOIs’): one LOI was issued by the charterers in favour of the owners and the second LOI was issued by the receivers to the charterers. The owners and the receivers had no direct contractual relationship and the owners sought to enforce the LOI against the receivers by relying on the Contracts (Rights of Third Parties) Act 1999. The Court upheld the finding of Cooke J that the terms of the LOI conferred a benefit upon the owners within the meaning of s.1(1)(b) of the 1999 Act. The Court also rejected the argument of the receivers that the owners could not ‘jump’ the chain of contractual indemnity arrangements made by the LOIs and enforce the LOI given by the receivers. The receivers based their argument on para.7.18 of the Law Commission’s report on Privity of Contract where the point is made that the reform is not intended to cut across a chain of contractual arrangements so that parties must sue their immediate contracting party and thus maintain the chain of contracts. The Court of Appeal agreed with Cooke J that 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 Court of Appeal considered the application of the Contracts (Rights of Third Parties) Act 1999 in the following situation. P had considered making an offer for shares in SG. P and SG entered into a confidentiality agreement to allow P to acquire further information about SG. Pursuant to this agreement, SG provided P with an actuarial report prepared by WM on the state of SG’s pension fund. The report contained a discrepancy as to the state of SG’s pension fund deficit; the discrepancy was attributable to the negligent computational error of WM. Although the Court found that 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, it also found that had a duty been owed, WM could have relied upon the terms of the confidentiality agreement between SG and P by reason of the Contracts (Rights of Third Parties) Act 1999. The attempt of SG and P to later vary this agreement to prevent reliance by WM was of no effect because of s.2(1)(a) of the 1999 Act.

Illegality

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: Hill was an undischarged bankrupt who managed a company contrary to the provisions of the Company Directors Disqualification Act 1986. Hill’s company entered into contracts with the government body (DEFRA) to conduct foot and mouth disease cleaning and disinfections. DEFRA refused to pay the sums promised for this work on the ground that the contracts were tainted with illegality. Hart J held that the company was entitled to be remunerated on a quantum meruit basis for the work done. If the company could not sue on its contracts, the very persons the legislation was designed to protect would be prejudiced.

45) Wheeler v Qualitydeep Ltd [2004] EWCA Civ 1085 :an employee with limited English had received payments. from her employer from which no deductions had been made for tax or national insurance contributions. The employment tribunal had found that the employee must have known that something was wrong. The Court of Appeal held that in these circumstances, 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: the Court of Appeal held that Vakante was unable to maintain a complaint against the defendant for, inter alia, dismissal and detriment on racial grounds. Vakante was a Croatian national who had applied for asylum; while his application proceeded he was prohibited by law from taking work. Despite this, he obtained a position with the defendant as a graduate trainee teacher. He also made fraudulent statements about his employment status in order to obtain state benefits. The Court found that the employment appeals tribunal had not erred in finding that Vakante’s complaints of racial discrimination were so bound up with his illegal conduct that to entertain the complaints would be to condone his illegal conduct. Vakante was solely responsible for his own illegal conduct which went to the base of his employment situation. The employment situation was illegal from beginning to end.

Performance and breach

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. In particular, the time notification requirements upon the insured continued even when the insurer had repudiated the policy by denying the legitimacy of the putative claim.

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: the Court of Appeal was concerned with a claim brought by a father that the decision of an independent fee-paying school to remove his son from the school for unsatisfactory conduct was a breach of contract. The Court held that in such cases 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). In the instant case, however, there were no grounds to find that the parent had not been fully and fairly consulted about his son’s performance.

50) London Borough of Waltham Forest v Omilaju [2004] EWCA Civ 1493, [2005] 1 All ER 75: the Court of Appeal considered the possible breach of the implied duty of trust and confidence upon an employer under a contract of employment (Malik v BCCI (1998)). Where there have been a series of breaches of this term, the final breach, or the ‘final straw’ did not have to be characterised by unreasonable or blameworthy conduct. The ‘final straw’ did, however, have to contribute, even if only slightly, to a breach of the implied term of trust or confidence. 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.
Damages

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: concerned a clause in a claim settlement agreement between the two parties which stipulated that the payee would forfeit the entirety of his settlement in the event that the payee brought any legal action or even engaged in any derogatory or unfavourable communication with the payor. The Court of Appeal held that this 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: In breach of their obligation of confidence, the defendant, the claimant’s (an importer of goods into the UK) banker, released the amount of profit realised by the claimant to a principal customer of the claimant and the customer ceased doing business with the claimant and the claimant accordingly sued the defendant for damages arising from breach of contract. The House of Lords held that 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. In circumstances where no cut-off point for the trade with the principal customer was established, the House of Lords held that the decision of the trial judge to award 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 Parliament had established a statutory code for unfair dismissal and the employee’s remedy for unfair dismissal was dealt with in the statute. Exceptionally, however, an employee might suffer loss from the employer’s failure to act properly in seeking dismissal. Financial loss flowing from suspension was such an instance, as was financial loss caused by psychiatric or other illness caused by pre-dismissal unfair conduct. In such cases, the employee had a 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 in a situation in which a builder committed a number of defects in the building of a college for the owner. The owner did not attempt to correct the defects as he was selling the building. In this sale, no discount was given for these defects. In this circumstance, only nominal damages were allowed as it was unreasonable to award the cost of the cure since there was no intention to repair the defects and non financial loss had been suffered on the sale of the building. In addition, there was no loss of amenity as no effort had been made to correct the defects.

Equitable remedies

62) LauritzenCool AB v Lady Navigation Inc [2005] EWCA Civ 579 [2005] EWCA Civ 579: the Court of Appeal found that 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. Although the injunctive relief might compel performance, that would be irrelevant as long as the relief did not decree performance. In this instance, the contracts did not provide for very personal skills or talents and were commercial agreements between independent companies. The agreements did not specify named individuals.

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. The breach of not giving accurate information on the fact that the house valued for acquisition purposes is located on a flight path causes a physical consequence and this causes inconvenience and distress, the result distress is consequent on the physical inconvenience and is recoverable within the scope of the exception if it falls within the remoteness principle. If the distress results in physical consequences there is no recovery of damages for the distress within the exception. Lord Scott: Damages for distress are recoverable if the distress is caused by physical inconvenience of if the breach prevents the claimant from obtaining the peace of mind he contracted for.

Walts-boro

Victoria Laundry case – agreed to sell the claimant two large boilers. Lost a good deal of business it was held that he lost of business was not remote, but the loss of big contract was too remote.
Simpson and London West Railway – trade samples, hold responsible.
Farley & Skinner

Miller: Duty to act, he cause fire and moved on.

Consents

Candy: Ice cube coins. He slut it into a machine and used the coin to work. He left behind paddle of water. I thought it was alright and it was not a mistake.
Dica and Gonzani – HIV Case
Brown & Wilson – lovely tattoo on the bottom - principles
Savage and Pamenta – Her husband mistress. She dropped the glass and injured. She was guilty for assault occasional bodily harm.
s.47 is constructive offence – the mens rea of a smaller offence is constructed to serious offences.
Gosh Test – Did the reasonable considered the act to be dishonest