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CPE Revision Essence (Contract) 3 Elements of simple contracts Agreement (offer + acceptance), Consideration + Intention to create legal relations

s Court take objective approac to identif! "rent am v #u$fer 1. Offer and Acceptance

%ffers &eneral %ffer (e'g adverts) (nilateral contract Carlill unilateral contract is offer to ) ole )orld Partridge v Crittenden limited suppl! so cannot make contracts )it ever!one I"" %ffers vs Invitation to treat Fisher v Bell, Boots Auction sales * I"" Payne v Cave, +arris v ,ickerson, -arr! v +ealt cote -all .ispla! of goods * I"" /is er v -ell0 12&- v -oots Counter counters * destruction of original offer +!de v 3renc 4e5uest of info doesn6t destro! offer 2tevenson v 7c#ean .ispla! of notice at vending mac ine read! to receive 8 * %ffer Thornhill v Shoe Lane Parking %fferree must ave kno)ledge of t e offer or be advised ot er)ise Gibbons v Proctor Communication of %ffers failure to receive an offer doesn6t constitute acceptance "a!lor v #aird .uration of offer, i'e' ) et er offer is still open for offeree to accept ( Routledge v Grant) 4evocation ma! be an! time b9f acceptance A,. must be communicated Payne v Cave, 1ostal rule doesn6t appl! to revocation ( Byrne v van Tienhoven)0 communicate via reliable 3rd part!(Dickinson v Dodds) (nilateral offers :es (Luxor v Coo er)0 Daulia, !rrington (once performed cannot revoke)0 2 ue! (offer and revocation on same media) #apse of time Ra"sgate #ictoria $otel .eat of offeror if eard deat offer terminates0 if accepted before die t en valid (Dickinson v Dodds) /ailure of a condition precedent Financings v Sti"son Acceptance 7ust be final, unconditional and communicated to t e offeror Butler v !x%cell%o& Certaint! Sca""el v 'uston& British Steel v Cleveland ;ualified acceptance Acceptance )it condition imposed * rejection of original offer +!de v 3renc Accepting original offer A,. made a ne) offer (a collateral contract) as t e same time is valid acceptance Lloyds v T(inn %ffer can be accepted b! conduct Brodgen v )etro Rail 4e5uest of info doesn6t destro! offer Stevenson v )cLean Acceptance )it condition < Counter offer need to look at circumstances "rent am v #u$fer (objective approac , e$istence of contract, acceptance b! performance e$ecuted transaction, pre=agreement as implied conditions) -attle of 2tandard /orms >last s ot rule? -utler v E$=cell=o Acceptance need not present if performance as taken place affirmed b! conduct -rodgen v 7etro 4ail #ock=in not (3alford v 7iles) applies but lock=out (1itt v 1++) does' Communication of Acceptance must be communicated to t e offeror (!ntores) 1ostal 4ule *da"s v Lindsell

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rule valid provided it is a reasonable means of communication ($enthorn v Fraser0 Cole+s case) o E$press e$clusion $ol(ell Securities Instantaneous /orm ("ele$, fa$, e=mail) 4ecovation9%ffer must be received b! 1 and postal rule not applied ( !ntores)0 if fa$ received )it in office our is deemed to ave been communicated, outside )orking ours deem to be received ne$t business da! (The Bri"nes + )ondial Shi ing)0 fa$9e=mail acceptance deemed to be received ) en recipient able to access it (Brinkinbon)' 2ilence cannot be acceptance (unless conduct suggested ot er)ise, e'g' unilateral contract ) /elt ouse v -indle! Cross=offers not acceptance b! eit er part! (,- no consideration) but an! performance b! eit er part! constitute acceptance b! conduct "inn v +offmann "enders if bid mention ig est bid )in, t en it is valid +arvela v 4o!al "rust o Consideration + Economic Duress

Consideration .efinition >t e price for ) ic t e promise of t e ot er is boug t? or >some benefit accruing to one part! or some detriment suffered9undertaken b! t e ot er Currie v )isa E$ecutor! vs E$ecuted future vs o)ing Consideration must move from promise T(eddle v *tkinson Consideration must be sufficient but need not ade5uate ,hite v Bluett0 Cha ell v -estle 1ast consideration is no good consideration so contract unenforceable 4e 7cArdle -ut if act is done upon promissor6s re5uest and it )as understood t at pa!ment )ould be made, t e promise is enforceable if agreed in advance Pao 'n 1erformance of e$isting duties 1erformance of statutor!9pre=e$isting contractual dut! not good consideration Collins v Gode.roy/Stilk v )yrick 1erformance of more t an statutor! re5uirement9pre=e$isting contractual dut! (in t e absence of economic duress) good consideration due to practical benefits Glasbrook Bros v Gla"organ CC/,illia" v Ro..rey %4 $artley v Ponsonby 1erformance of e$isting contractual dut! o)ed to a 3 rd part! is good consideration (t oug 3rd part! not a part! to contract) The !ury"edon 1art=pa!ment of .ebt B 1romissor! estoppel 1a!ment of a lesser sum in t e satisfaction of a greater sum cannot be satisfaction of ) ole debt Pinnel+s Case, Foakes v Beer (,#E22 t ere is fres consideration (e'g' earl! pa!ment or practical benefits) Pinnel+s Case 1art=pa!ment b! a 3rd part! to settle ) ole debt I2 good consideration = $irachand 1romissor! Estoppel $igh Tree Case 3 ere A makes a promise to - ) ic is intended to be binding and to be acted upon A,. is in fact acted upon b! -, A is bound b! t e promise even provided no consideration' 1E need C re5uirements I' Clear and unambiguous statement Scandanavian Trading II' 1romisee acted in reliance of promise ,0 *lan III' Ine5uitable for promissor! to go back on promise D1C Builders/Re Select"ove

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ID' %nl! a s ield not a s)ord Co"be v Co"be 1E applies to continuing contracts )it suspensor! effect onl! A,. can be terminated b! reasonable notice Total )etal )anu.acturing .istinguis Re Select"ove and ot er 1E cases (F v B up eld unless t ere is fres consideration part=pa!ment cannot disc arge ) ole debt A,. not ine5uitable to go back on 1E) Economic .uress A coercion of )ill is economic duress and renders a contract voidable Pao 'n Illegitimate pressure e$erted vitiates t e consent to be bound in a contract 2 *tlas !x ress v 3a.co If t ere is E., t e rig t to set aside contract can be lost b! affirmation The *tlantic Baron 7ere commercial pressure doesn6t amount to E. as in arm6s lengt commercial dealing CT- Cash 1 Carry v Gallager 3. Intention to create e!a re ations

.omestic agreements not intention to create legal relations Applies to usband and )ife, and to relatives ) o live toget er -alfour v -alfour +o)ever, if person lives in t e same ouse not related, t en t ere is intention to be legall! bound 2impkins v 1a! If t ere is commercial relations ip bet)een famil! members, intention to be legall! bound is present = Commercial 4elations ip is intended to be legal binding !d(ard v Sky(ays (nless e$pressed )ords clearl! state t e absence of suc intention rose v Crompton #etter of comfort is not intention to be bound Elein)ort v 7ala!sian 7ining Advertisement could be mere puff or offer unilateral contract #ambert v #e)is ". Privit# of Contract

1rivit! of Contract If not a part! of t e contract, e cannot be sued or incurred benefits from it (because t ere is no consideration provided) E$ceptions Agenc!, trust, statutor! provisions Collateral Contracts enable a person ) o is not a part! to t e main contract to enforce t at contract' 4emed! of specific performance ma! enable a contract to be enforced for t e benefit of a 3rd part!' 4ig t to claim damages Common la) e$ception ( olida! Contract (3rd 1art! 4ig ts) Act FGGG must clearl! identified 3rd part! t en 3rd part! rig t is ensured' .oesn6t affect e$isting C# e$ceptions' $. E%emption C ause

Approac H = Common #a) principles Incorporation of e$emption clause before or at t e time ) en contract made o %nce signed is incorporated L+!strange v Graucob o 4eceipt is not a contract so e$clusion not incorporated Cha leton v Barry 4DC

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%nce contract concluded, it6s too late 'lley v )arlborough& Thornhill v Shoe Lane Parking o 1revious dealings of e$emption is sufficient S urling v Bradsha( o Inconsistent dealing is not incorporation )cCutcheon o If clause particularl! ars must take e$tra steps to alert 2 5nter.oto v Stilecto 1roper construction ot er)ise contra ro.erentu" o If terms ambiguous t en clause )ill be constructed against t e e$emptor *ndre(s v Singer (,-' Implied terms e$cluded so e$press terms notI) o Contra ro.erentu" applied not so strictl! in limitation clause *ilsa v )alvern " ird part!6s rig t for reliance o If properl! constructed to include 3rd part! it is valid even not a part! to contract The !ury"edon .octrine of /undamental -reac no longer applies o Court )ill look at t e intention ) et er parties as provided for suc e$mption Photo Productions v Securicor Appl! (C"AH 2F= define negligence (tort, occupiers + contractual) and t e act6s application to business liabilit! e$emption s@(F) cannot e$empt deat 9p !sical injur! due to negligence s@(@) ot er damages ma! be e$empted provided reasonable s(3) if consumers9business deal under terms in standard form, e$emption clause not valid unless reasonable s(3)(@) cannot e$clude9restrict liabilit! for breac , cannot render performance substantiall! different, cannot render no performance 23(@)(b) = 2C Indemnit! not permitted unless reasonable 2J + K 2&A FGKG sF@ cannot be e$cluded0 sF3=FL subject to reasonableness in b=@=b 2M E$emption of misrep subject to reasonableness 2FF define reasonableness (7itc ell v /inne! #ock + 2mit v -us ) %t er points to noteH = o 4easonablenessH (F) /ault6s on . (@) 1 as difficult! to insure ) ere . could (3) disproportionate of risk (C) clause not normall! relied upon (L) meaning of t e clause is unclear Finney Lock Seed o 4easonableness applies to clause at t e time of contract formation not t e time of breac $oratio )yer o #imitation clause is unreasonable if t e sum doesn6t justif! actual damage St *lbans v 5CL o 4easonableness is also assessed on ) et er t ere is alternative of suppl! to ot er part! 2 St *lbans v 5CL o If it is a conventional clause in t e trade t en more likel! to be reasonable 'verseas )edical Su lies v 'rient o E$clusion unreasonable if ot er part! as difficult! in seeking insurance Salvage v C*P o A clause transferring liabilit! to ot er part! is an e$clusion Philli s v $yland o .isclaimer of not assuming liabilit! is an subject to (C"A = S"ith v Bush o Compan! can deal as consumer R1B v 4nited Do"inion Appl! (CC"4H 4C %nl! to consumer contracts 4L if terms are not independentl! negotiated, it )ill be unfair if contrar! to good fait and po)er )as significantl! imbalance 4M "reat e$clusion as deleted if unfair o

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Court )ill construe narro)l! to unfairness Directors o. Fair Trading v First -ational Bank

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'ermination and (reac)

Contract can be terminated b!H = Agreement 1art=pa!ment of debt cannot be agreement to terminate Foakes v Beer 1erformance contract onl! terminates upon complete performance' If contract e$pressl! states pa!ment upon completion, no pa!ment if not full! performed Cutter v Po(ell& Su"ter v $edges Acceptance b! 1art=performance and 6uantu" "eruit o 3 en promisee as option to accept part=performance, t e! are bound to pa! on 6uantu" "eruit basis = Su" ter v $edges& SG* s78 o -ut if innocent part! as no alternative, ot er part! cannot claim pa!ment = Su" ter v $edges& SG* s78 1revention of performance b! ot er part! o If one part! is prevented b! t e ot er to perform e can claim for breac Planche v Colburn 2everable contracts o If contract can be divided into separate parts t en even c oose not to complete ) ole contract t e performed parts is recoverable unless e$pressl! e$cluded Roberts v $avelok 2ubstantial performance o If a part! substantial performed t e contract (e'g' GAN), ot er part! cannot refuse to pa! on contract price minus cost to fi$ defects unless contract e$pressl! sa! pa!ment on completion $oenig v 5ssacs o -ut on completion it is far from full performance (e'g' malfunctioning), innocent part! can disc arge and entitle to a free gift Bolton v )aheeva -reac -reac never automaticall! brings a contract to an end -reac of condition v )arrant! v innominate term o -reac of a condition (serious) enable rig t to repudiate contract, refuse furt er performance and claim damages' Can also elect to affirm contract )ihalis *ngelo& SG* s97 :Descri tion: o If less serious breac ()arrant!) t en onl! damages can be claimed b! cannot terminate' %t er)ise ot er part! itself is in breac 9)rongful repudiate Schuler v ,ick"an& Rice v Great ;ar"outh (,- Assess on !earl! performance) o Even e$pressl! stated as condition court )ill assess ) et er it is justified on intention of part! Schuler v ,ick"an&Bunge v Tradax o If term is innominate court )ill assess t e term on t e effects of breac ' Contract does not automaticall! terminate $ong 3ong Fir Case o Innominate term also applies to sales of goods contract 2 Cehave v Bre"er Actual -reac , i'e' no performance at a specific da! o Bolton v )aheeva Anticipator! -reac innocent part! as rig t to sue for damage immediatel! or affirm t e contract or >)ait and see? o 4ig t to sue immediatel! 2 $ochster v De la Tour o If breac is serious t en enable repudiation The *.ovos o Innocent part! c ose to affirm contract must continue )it performance of is part Ferco"etal o Can c ose to affirm and perform t e contract in full % ,hite 1 Carter v )cGregor o 3it out ot er part!6s cooperation, cannot c ose to affirm contract $ounslo( v T(ickenha"

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If innocent part! as no legitimate interest e cannot affirm = Clea v Bulk 'il o %nce election affirmed cannot c ange mind' If contract frustrated cannot t en claim for breac *very v Bo(den .amages (some) ,ominal damage9amenit! onl! ) en breac doesn6t affect value of end= product Ruxley !lectronics v Forsyth o +isrepresentation

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Common .efinitionH >A false statement of fact induces a representee in entering t e contract )it representor' Appl! (CC"4H 4emediesH = "ort Action .eceit or ,egligent misstatement 2@(F) action of 7isrepresentation Act FGJK damage a)arded as in deceit rescission + damage 2@(@) action if misrep not fraudulent or negligent court6s discretion to a)ard damage in lieu of rescission if e5uitable to do so' -ut mind bars to rescissionH= Affirmation E$cess lapse of time 4estitution impossible Innocent t ird part! rig t ac5uired title transferred is good ,. 'ermination and (reac)

Contract can be terminated b!H = Agreement 1art=pa!ment of debt cannot be agreement to terminate 1erformance contract onl! terminates upon complete performance' 1art=performance and 6uantu" "eruit 1revention of performance b! ot er part! 2everable contracts 2ubstantial performance -reac -reac of condition v )arrant! v innominate term Actual -reac Anticipator! -reac innocent part! as rig t to sue for damage immediatel! or affirm t e contract or >)ait and see? -. .rustration

Approac H = Common #a) .efinition = A contract is frustrated ) en )it out t e fault of bot parties, if its performance becomes impossible, illegal or radicall! different from t at contemplated b! t e parties, t en t e contract is disc arged automaticall! as to t e future (Davis v Fareha") Einds of /rustrating Events can it enable disc argeO = subject matter destro!ed or unavailable o 7usic all burned do)n and cannot old concert or concert venue unavailable Taylor v Cald(ell& Ga"erco v 5C- Fair ,arning o ,amed vessel to perform s ipment not available % -ickoll v *shton o Actor fell ill and unable to perform 2 Condor v Barron 3night Contract Essence 7a! @AA3

-ut designated route impossible to follo)ed causing a dela! cannot amount to frustration 2 Tsakiroglou = 4adical c ange of circumstances o 2ole purpose of t e contract is no longer available 2 3rell v $enry o -ut if c ange is not so radical, cannot frustrate $erne Bay Boat v $utton o +o)ever, s ortage of labour cannot be frustration 2 Davis v Fareha" = C ange of la) to become illegal as to future (e'g' limitation to engine siPe due to EC .irective t en contract frustrated) = Fibrosa #imitations to /rustration = E$press provision o If e$press provision dealing )it t e frustrating event in t e contract but court )ill construe narro)l! 2 )etro ,ater Board v Dick 3err = 2elf=induced onus of proof is on part! alleging ot ers self=induced o 2elf=induced frustrating event is no good 2 )ariti"e v 'cean Tra(lers o If part! as c oice to breac one contract not t e ot er t en even subject matter destro!ed cannot be frustration Su erservent T(o = Event foreseen o s ortage of skilled labour is foreseeable 2 Davis v Fareha" o If eit er part! can foresee event t en no frustration Tate" v Ga"boa& *"alga"ated 5nvest"ent v ,alker = #ease not usuall! frustrated o %nl! in e$ceptional circumstances 2 -ational v Panal ina .amages (C# + but no) FGC3 Act) C# /all ) ere it la!s C andler v 3ebsters 2F(@) All sums paid recoverable and all sums pa!able ceased to be so' 1art! to ) om sums )ere paid9pa!able ma! retain or recover an! e$penses incurred in performing t e contract upon court6s discretion if just9e5uitable to do so (but no more t an t e sum paid9pa!able)' o Court as discretion to order mone! retainable9recoverable 2 Ga"erco v 5C-/Fair ,arning 2F(3) if a valuable benefit is conferred to a part! (,-' After frustrating event), t en a just sum is ordered to be pa!able to ot er part!' o -enefit is valued A/"E4 frustration' If end=product is destro!ed, t en economic value of ) ic is Pero so no just sum is pa!able 2 BP v $unt& * leby v )yers o

If not frustration t en attempt breac (actual9anticipator!) 1/. Remedies ConsidersH = Causation 4emoteness Claim for distress possible or not (onl! contracts for leisure9peace of mind) 7easure of .amages Common la) rule innocent part! s ould be compensated in t e position e )ould ave been ad t e contract been fulfilled #oss of bargain (cost of reinstatement %4 difference in value) 4eliance loss (i'e' cost incurred in preparation9performance of contract) #i5uidated damage clause >penalt!? vs >best estimate of loss? 7arket rule if no alternative bu!er, innocent part! could recover loss of profit Innocent part! must mitigate loss due to breac Effect of ta$ation Application of contributor! neg'

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<uantu" "eruit E5uitable 4emedies A)ard is discretionar! + >clean ands doctrine? + >t ose seek e5uit! must do e5uit!? 2pecific 1erformance granted if damages is inade5uate' Injunction

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E0A+1 E11A2 P3A4 QQ Al)a!s tr! eit er )a! (,#E22 it is obvious t at t ere is onl! one outcome' I2A2 (Identif!, 2tate t e #a), Appl!, 2upport )it aut orit!) Offer 5 Acceptance Pro6 em .efine elements of contract .efine offer and distinguis from I"" .iscuss offer can be )it dra)n before acceptance (unless consideration given Roultledge v Grant) Communication of offer must be received b! offeree 4evocation of offer b! communication to offeree %4 b! entering into contract )it ot er .iscuss revocation is onl! valid ) en communicated .efine Acceptance (absolute, agree totall! to offer and communicated)' .istinguis rejection and re5uest for info' Communication of acceptance directl! received b! offerror %4 postal rule' .iscuss possible e$clusion to postal rule'

== *l(ays look .or clear o..er/acce tance> 5. not clear, argue 5TT/Counter '..er> Consideration Pro6 em /irst identified offer and acceptance briefl! .efine Consideration = C eck ) et er good or past consideration = "r! to appl! 1ao %n v #:# to see ) et er past consideration is absent promise is enforceable (F) at promisor6s re5uest (@) ma! be some re)ard (3) promise enforceable if agreed in advance = .efine sufficienc! and ade5uac! 1erformance of e$isting dut! or more t an dut! = define = generall! promise for e$tra re)ard not enforceable 2 v 7 = %nl! ) en more t an dut! is performed & v &CC or practical benefits 3 v 4 1art pa!ment of debt = 1innel6s case and /oakes v -eer = Argue 1E and see if applicable = C eck ) et er situation similar to 4e 2electmove (3illiams v 4offre! doesn6t appl! to part pa!ment of debt) C eck ) et er signs of economic duress present = ,ote bars to rescission affirmation, inabilit!, etc' #ast look for intention to create legal relation briefl!

E%emption C ause Pro6 em Common #a) principles Incorporation of e$emption clause before or at t e time ) en contract made C eck time of contract formation 1roper construction ot er)ise contra ro.erentu" 1revious dealings " ird part!6s rig t for reliance Appl! (C"AH 2F= define negligence (tort, occupiers + contractual) and t e act6s application to business liabilit! e$emption

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s@(F) cannot e$empt deat 9p !sical injur! due to negligence s@(@) ot er damages ma! be e$empted provided reasonable s(3) if consumers9business deal under terms in standard form, e$emption clause not valid unless reasonable s(3)(@) cannot e$clude9restrict liabilit! for breac , cannot render performance substantiall! different, cannot render no performance 23(@)(b) = 2C Indemnit! not permitted unless reasonable 2J + K 2&A FGKG sF@ cannot be e$cluded0 sF3=FL subject to reasonableness in b=@=b 2M E$emption of misrep subject to reasonableness 2FF define reasonableness (7itc ell v /inne! #ock + 2mit v -us ) Appl! (CC"4H 4C %nl! to consumer contracts 4L if terms are not independentl! negotiated, it )ill be unfair if contrar! to good fait and po)er )as significantl! imbalance 4M "reat e$clusion as deleted if unfair

'ermination7(reac) Pro6 em Evaluate nature of contract Entire contract or severable contract (4 v +) If entire, no completion no pa!ment (C v 1) If promisee as option to elect to accept part performance, need to pa! on 5uantum meruit If severable, pa!ment on stages on 5uantum meruit Argue if substantiall! completed, court ma! a)ard pa!ment of a reasonable sum less cost to fi$ defects (+ v I)' If o)ever, on completion it is far from full performance (e'g' malfunctioning), innocent part! can disc arge and entitle to a free gift' Evaluate effect of breac -reac of condition repudiate + damage %4 affirm + damage (c oice of innocent part!) -reac of )arrant! damages onl! Court )ill assess t e intention of t e part! and innominate terms ,ominal damages if breac doesn6t affect value of end=product (4 v /ors!t ) e'g' difference of lo)er grade materials Actual vs Anticipator! -reac

.rustration + (reac) .efine frustration = A contract is frustrated if its performance becomes impossible, illegal or radicall! different from t at contemplated b! t e parties, t en t e contract is disc arged automaticall! as to t e future (Davis v Fareha") Is event sufficient to cause frustrationO (2ubject matter destro!ed9unavailable, radical c ange of circumstances, illegal) #imitations to frustration (E$press provision, self=induced, Event foreseen) Al)a!s discuss remedies C# + FGC3 #a) 4eform (/rustration) Act 2F(@) paid mone! recoverable and 8 pa!able no longer so' 1arties could retain some to recover costs spent' 2F(3) a just sum to be a)arded on valuable benefit conferred If not frustration, t en breac Anticipator!9Actual "erms9Conditions9innominate 4epudiation9.amages

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