Sales Contracts

The company make an advertisement on newspaper about the carbolic smoke ball and the customer will be able to claim $100 if they still get flu after using it for 14 days. To show their sincerity, they deposited $1000 in a bank. Mrs Carlill still get flu after she used the smoke ball and she claimed for $100 but the company refused to pay.

HELD: the contract is an unilateral offer, it is a contract with the people in the whole world. They also deposited $1000 in the bank, this shows that they were liable.

b) Invitation to treat

Fisher v Bell-displaying of gds is not an offer

The shopkeeper display some flick-knife in the shop window, it was held that it is against the act by offering to sell an offensive weapon.

HELD: displaying of goods is not an offer but an ITT.

Pharmaceutical Society of Great Britain v Boots Cash Chemist (Southern) Ltd

Boots apply a self-service system in one of his branch. He place a merchandise which is under the Poison List on an open shelves. The customer choose and placed their purchases item into the basket n make payment on the cash desk which supervised by a qualified pharmacist.

The society claimed that it is against the act, because the sale of drugs under Poison List should take place with the presence of a qualified pharmacist. The society stated that the sale took place when customer place their chosen gds into the basket.

HELD: displaying of drugs in the open shelves is ITT n the sales only completed when the customer paid at the cash desk. Since the cash desk is supervised by a pharmacist, it had fulfill the Act requirement.

c) Advertisement-ITT

Patridge v Crittenden

Patridge placed an advertisement in magazine about Bramblefinch cocks and hens, 25s each. Mr Thompson replied and the hens was sent. Patridge was charge with offering for sale a wild bird which is against the law.

HELD: the advertisement is consider as ITT.

*Harvey v Facey

Harvey telegraphed Facey to ask about lowest price of the Bumper Hall Pen. Facey replied $900. Harvey replied we agree to buy it at $900 as u stated n ask him to send the title deeds. Facey was then no respond.

HELD: there was no contract, because Facey only reply the lowest price but doesn’t offer to sell.

d) Auction Sales

Payne v Cave-auction sales/revoke b4 the acceptance

Cave make the highest bid for Payne’s goods in an auction sales but Cave withdrew his bid b4 the fall of the auctioneer’s hammer.

HELD: Cave have the right to withdrew the bid any time he want b4 the acceptance which is the fall of auctioneer’s hammer.

B) Acceptance

Brogden v Metropolitan Railway Co-contract will b valid when receive/supply gds

Brogdan had supplied coal to Co for many years without a formal agreement. Later they decide to put their relationships into an agreement. Co agent send a draft agreement to Brogden, he fill in some blanks including the name as the approved n return to them. The coal was order n the amount was sent according to the agreement. However, a dispute arose between them n Brogden refuse to supply coal.

HELD: the draft agreement was a contract when Brogden supply n Co receive the amount according to the agreement.

a) Counter Offer

*Tinn v Hoffman-if both parties make offer at the same times, no offer valid

Hyde v Wrench-counter offer will reject original offer

Wrench offered to sell his farm to Hyde at $1000. Hyde make a counter offer of $950, which was refused. Hyde is then accept the original offer.

HELD: no contract because the counter offer will reject the original offer.

Stevenson v McLean-further info doesn’t mean counter offer

McLean offered to sell iron to Stevenson in cash terms. Stevenson then asked whether could he get in credit terms. When McLean doesn’t reply, Stevenson accepted the ori offer. But the McLean sold it.

HELD: the enquiry was a request for further info but not a rejection/counter offer.

b) Silent doesn’t lead to an acceptance

Felthouse v Bindley

Felthouse want to buy his nephew’s horse, he wrote that if I hear no more from u i’ll assume that the horse is mine at $30.15s. Although the nephew didn’t reply the letter but he tell the auctioneer to keep the horse out of sale because is sold to his uncle. The auctioneer by mistakes sold the horse.

HELD: although the uncle claimed that the auctioneer sold his property but there were no claim. Because there were no valid acceptance, it just mentally accepted by the nephew.

c) Postal Rule

Adams v Lindsell

Lindsell wrote a letter offering to sell the wool to Adams at 2 Sept and asking for an answer in course of post. This letter were wrongly addressed, therefore only reach Adams in 5 Sept. At the same day, Adams reply the acceptance and it receive at 9 Sept. If there were no misdirection, the letter of acceptance should b receive in 7 Sept. On 8 Sept, Lindsell sold the wool.

HELD: according to postal rule, the acceptance done when Adams reply the letter on 5 Sept. It is also because the misdirection of Lindsell.

Household Fire Insurance Co v Grant

Grant offer to buy the shares of Household Fire Insurance Co. a letter of allotment were sent to Grant but Grant never receive. When company went into financial problem, they question Grant n ask for the outstanding payments.

HELD: the contract formed when the allotment letter were sent.

d) Revocation

Byrne v Van Tienhoven-communication must b done b4 revocation

on 1 Oct, Van sent an offer letter to Byrne offering to sell them 1000 boxes of tinplates. But on 8 Oct, Van posted a revocation letter to Byrne which only received on 20 Oct. Unfortunately, Byrne reply the acceptance through telegraph in 11 Oct which received at 15 Oct.

HELD: the revocation only take place after communication to the offeree. Since the letter come after the acceptance letter, it is invalid.

Dickinson v Dodds-if heard bout it, revocation is done

On Wed, Dodds offer to sell some property to Dickinson and he promise to keep the offer open until 9am Fri. On Thurs, Dickinson heard from Mr Berry that Dodds sold his property to another pp. Dickinson then handed the letter of acceptance to Dodds on 7am Fri.

HELD: since Dickinson heard bout it from Mr Berry,reliable 3rd part, the offer were no longer available.

Routledge v Grant-revocation can b done anytime b4 end of time limit

Grant offer to buy Routledge house n giving him 6 weeks time to prepare the proposal.

HELD: Grant have the right to revoke at anytime b4 the deadline.

Errington v Errington & Wood-Unilateral

Father bought a house for his son and daughter-in-law. He paid $250 as a down-payment, and put the title of the house in his name. He told his daughter-in-law that if they paid off the remaining mortgage in weekly installments, he would transfer the title to them. He died before they complete the payment. The late Father’s widow then sued for the house.

HELD: the promise can’t revoke once performance has commenced. The contract remain binding if they fulfill the agreement.

e) Lapse of time

Ramsgate Victoria Hotel Co v Montefiore

Montefiore offer to buy shares in Ramsgate Hotel in June. But the share only allotted in Nov, she then refused to take them up.

HELD: since the allotment had late for half years it is a lapse of time, invalid acceptance.

f) Conditional Offer

Financial Ltd v Stimson-dissatisfied on certain condition

Stimson saw a car at the premise of a dealer on 16 March, he wish to obtain the car on hire-purchase. He signed a form provided by the Financing Ltd which state the agreement will b binding when signed by the Financing Ltd. Stimson then paid the installment n drive the car on 18 March. Being dissatisfaction on the car, he returns the car after 2 days. On the night of 24-25 March the car were stolen but recovered badly damage. On 25 March, Financing Ltd signed the form unaware that Stimson had return the car.

HELD: the form were not binding because the return of the car shows revocation and the car were damaged b4 the acceptance therefore it is lapse.

C) Consideration

*Currie v Misa-explain bout consideration

Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd-a person who is not the party of a contract, can’t be bound or take advantages.

Dunlop sold tyres to Dew & Co, dealers of motor accessories, with an agreement that not to sale below the list price. Dew then sell the tyres to Selfridge & Co under a condition that if Selfridge sell lower then the list price he will pay Dunlop $5/tyre sold. Selfridge sell below the list price and Dunlop sue him for breach of contract.

HELD: the contract only valid between Dunlop and Dew since Selfridge bought from Dew so he is not bind with the contract and there is no consideration between them.

a) Consideration must move from the promisee

Tweddle v Atkinson-promisee that provide consideration only can sue.

John Tweddle and William Guy agreed to pay a sum of money to Tweddle’s son, William Tweddle, who married Guy’s daughter. Guy died without paying and Tweeddle suing him.

HELD: claimed failed because Tweddle doesn’t provide any consideration.

Thomas v Thomas-consideration doesn’t mean have to go to promisor, as long as it consideration.

-must be sufficient, but not adequate

After the death of her husband, Mrs Thomas agreed to pay rent of $1/yr in order to continue living in the house, but then the executor refused and Mrs Thomas sued them.

HELD: $1 paid by her is a consideration.

b) Consideration must not be past

Re McArdle-consideration come b4 promise then it is invalid

Mr McArdle death and left a house for his wife and children. While Mrs Mc Ardle still alive, one of her child and wife moved into the house to stay together n daughter in law makes improvement for the hse amount of $488. After the improvement, all the children signed and promise her to pay back $488.

HELD: the promise was made after the consideration, therefore no binding.

Roscorla v Thomas

Roscorla bought a horse from Thomas. After the sale, Thomas promise that the horse was sound but it’s not

HELD: the promise made by Thomas was after the consideration of selling the horse therefore invalid.

Eastwood v Kenyon

Eastwood as an executor of Sarah’s late father, he act as the guardian and spent money on Sarah in education and daily life. When Sarah growth, she get married with Kenyon who promise to pay back him the amount he spent on Sarah. After married, he refuse to pay.

HELD: the promise is unenforceable.

Exception:if the consideration is request fr the promisor then it is valid

Lampleigh v Braithwaite

Braithwaite had killed some1 and is goin to b hung, he asked Lampleigh to get him a pardon from the King. Finally Lampleigh get the pardon and Braithwaite promise to gv him $100, but he refused to pay.

HELD: although the consideration is past but it still consider valid because it is the request of the promisor.

Re Casey’s Patents, Stewart v Casey

The owners of certain patent rights promise their manager, Casey a one-third share of the patents in consideration of his services on their business. They then refuse to pay him because Casey services was a past consideration.

HELD: since the services of Casey is part of the benefit and request of the promisor, therefore it is a consideration.

c) Consideration must b sufficient need not b adequate

Chappell & Co Ltd v Nestle & Co Ltd

Nestle was running special offer whereby public could obtain a copy of the record by sending three chocolate wrappers plus 1s6d. The copyrights of the record was owned by Chappell, which claimed that there had been breaches of copyrights. Nestle stated that the wrappers was no value since it being thrown.

HELD: even though the wrappers were thrown away when received but since the buyers used it to exchange the record, it is a consideration. Therefore, Nestle needed to pay the 6.25% royalty.

White v Bluett

Bluett had received his son a promise whereby if he stop complaining about the distribution of his property, he no need to return the money that he owed his father. When the father pass away, his executor sued his son for the liability.

HELD: his son doesn’t provide any consideration. He don’t even have the right to question about his father’s distribution of property.

*Midland Bank v Green

A father granted his son the right to purchase his farm, but the son did not registered it. Later both of them fell out and the father sell the farm to his wife at a lower price.

*Tanner v Tanner

d) performance of existing duties-if bound by law, can’t state as consideration

Collins v Godefroy

Collins was subpoenaed to give evidence on a case which Godefroy was the party. Godefroy promises to pay if Collins attends but Godefroy din pay him.

HELD: Godefroy didn’t need to pay because subpoena is under legal duty therefore it is not a consideration.

Glasbrook Bros Ltd v Glamorgan County Council

Glasbrook Bros ask for the police protection during a strike of the employees. The police offered 70 policemen to protect them but they were unhappy and asked for more. The police is then charged the cost on extra men power but Glasbrook Bros refused to pay.

HELD: since the police provided more protection than necessary, therefore Glasbrook need to pay.

Stilk v Myrick

During course of voyage, two of the sheep’s crew deserted. To prevent other crew from deserted, the captain promise to share the wages of the deserters among the remaining crew.

HELD: the claimant was under an existing duty to work. There are no consideration for extra money.

Hartley v Ponsonby-Exception

When almost half of the crew deserted. The captain promise to pay them extra to sail back. But he then refused to pay.

HELD: since half of the crew was deserted, they had done more than what they contractually bound to do and the journey become more hazardous so they were entitled to the money.

Williams v Roffey Bros & Nicholls (Contractors) Ltd-No forcing=valid

Roffey had a contract to refurbish a block of flats with Williams. After the work began, Williams was underestimate the cost and was in financial problem. Roffey concerned bout it and to prevent from breaking the contract with the flat’s owner, he promise Williams to pay them extra payment per flat. After Williams complete more flats, he still didn’t receive the payment and he stopped and bring damage to the flats. Roffey argue that they were just performing the existing duties.

HELD: Williams stated that Roffey can obtain a benefits which is avoid the penalty for late completion. Therefore, Williams was entitled to the extra payments.

e) Part payment

Pinnel’s Case

the claimants owed $8.10s. The defendants paid $5.6d and 2p instead of full amount.

HELD: part payments of a debt is not valid consideration or satisfactory for the whole.

Foakes v Beer

Dr Foakes owed Mrs Beer $2090 and he couldn’t paid it. Mrs Beer agreed to let him paid $500 immediately and the rest paid on installment. Interest is usually payable but they din mention it in their agreement. After Dr Foakes complete the debt, Mrs Beer ask for the interest but he refused to pay.

HELD: part payment of the debt is not a consideration for Mrs Beer to forgo the interest.

Promissory Estoppel

Central London Property Trust Ltd v High Trees House Ltd

The claimants let a 99-yrs lease on a block of flat to the defendants at $2500/yr. In 1940, owing the war time, it was very hard to get tenants and the defendants ask the claimants to reduce the rent to $1250/yr. By 1945, the flats were full again, claimants wish to increase the rental to the normal price.

HELD: it is possible to pay back the original rental price because the reduction of rental is due to the difficulties in war time. But claimants was unable to claimed back the full payment during war time.

D & C Builders v Rees-blackmail

Mr Rees owed D&C builders $482. After few months D&C went into financial problems and Mrs Rees found out this. Mrs Rees contacted the company to offered them to pay $300 as the full settlement, if the company refused to accept the cheque then they will get nothing. The company being forced to accept it and later they sued for the balance.

HELD:since Mrs Rees taken an advantage on the company and put in pressure, she have to pay full.

D) Intention to create legal relationships

Belfour v Belfour-domestic/social agreement

Both of them come to England from Ceylon, the wife is then lived in England on her doctor’s advice while her husband back to Ceylon. The husband orally agreed to give an allowance of $30/month to her wife. They then decided to live apart and the wife claimed for the payments.

HELD: it was a domestic agreement between husband and wife, it was invalid.

Merritt v Merritt-Exception where there is a proven

Mr Merritt had left his wife to live with another women. He stated that he would pay her $40/month, and if she complete the mortgage of the house, he will transfer the house to her. Finally Mrs Merritt had complete the mortgage but the husband refused to transfer the house to her. Mrs Merritt proved that they have sign an agreement.

HELD: the written agreement was intended to create the legal relationships. Since they were living apart, the agreement was valid.

Edwards v Skyways

Mr Edwards, a pilot, was made redundant by Skyways. As part of the redundancy arrangements he was offered the opportunity to withdraw his contribution to the company pension scheme, or to allow it to mature and claim at 50. It was in the interests of the company that he withdraw, and they offered an ex-gratia payment to do so. In the end, however, the company refused to honour the arrangement. In its defense Skyway claimed that the use of the term ex-gratia implied that it was not intended to create legal relations.

HELD: this was not a strong enough argument to overturn the assumption that commercial dealings are contractual.