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contract law case notes, Summaries of Contract Law

Oxford House CollegeContract Law

Case 4: Bisset v Wilkinson, 1927 (New Zealand). Subject Area: Misrepresentation: This is a New Zealand case, which is relevant because New Zealand also ...

Typology: Summaries

2021/2022

Uploaded on 09/12/2022

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COURSE'NOTES'1:'CONTRACT'LAW'CASE'NOTES'
'
The'following'case'notes'refer'to'contract'law'cases'that'were'described'in'
class'4.'Any'cases'discussed'in'that'class'that'are'not'included'here'will'
NOT'be'featured'in'the'exam.'
'
Additional'Note:'Some'of'the'case'descriptions'presume'a'basic'knowledge'
of'contract'law,'so'you'should'study'chapter'10'of'the'textbook'–'on'
contract'law'–'before'you'read'these'notes.'
'
Case'1:'Storer'v'Manchester'City'Council,'1974'
Subject'Area:'Offer'and'Acceptance'
!
Man!City!Council!wrote!to!Mr!Storer,!offering!to!sell!him!the!council!house!in!
which!he!currently!lived!as!a!tenant.!Mr!Storer!was!offered!an!“Agreement!for!
Sale”!to!sign,!and!he!duly!signed!it.!It!included!comprehensive!information!on!the!
prospective!purchase,!including!the!price,!mortgage!rate,!etc.!The!only!section!
left!blank!was!the!section!of!the!agreement!on!the!date!of!transfer.!
!
After!Mr!Storer!had!signed!and!returned!the!form!(but!before!Man!City!Council!
had!signed!it),!local!elections!took!place,!and!the!Conservative!party!–!the!party!
behind!the!policy!of!selling!council!houses!to!their!tenants!–!lost!their!majority!to!
the!Labour!party.!Now!under!the!control!of!the!Labour!party,!which!was!opposed!
to!selling!council!houses,!Man!City!Council!tried!to!block!the!sale!to!Mr!Storer,!
claiming!that!no!contract!existed!between!Mr!Storer!and!the!council,!because!the!
“Agreement!for!Sale”!had!yet!to!be!signed!by!a!representative!of!the!council.!
!
However,!when!the!case!ended!up!in!the!Court!of!Appeal,!the!court!held!that!the!
signature!of!a!representative!of!Man!City!Council!was!not!required,!and!that!a!
binding!contract!existed!from!the!moment!that!Mr!Storer!communicated!his!
acceptance!to!the!council!(and!more!specifically,!from!the!moment!that!he!SENT!
his!acceptance,!via!the!postal!system).!In!arriving!at!this!conclusion,!the!court!
was!sticking!to!the!traditional,!offer!and!acceptance!model!for!determining!
whether!and!when!a!contract!was!formed.!The!clarity!of!the!“Agreement!for!
Sale,”!and!its!indication!of!the!council’s!intent!to!sell!on!a!specific!set!of!material!
terms,!meant!that!the!contract!could!be!concluded!by!Mr!Storer’s!agreement,!i.e.!
with!no!further!action!required!from!the!council.!
!
Case'2:'Gibson'v'Manchester'City'Council,'1979'
Subject'Area:'Offer'and'Acceptance'
'
The!facts!of!the!Gibson!case!are!very!similar!to!the!facts!of!the!Storer,!but!with!a!
few!key!differences.!Once!again,!Man!City!Council!wrote!to!the!tenant!of!a!council!
house,!Mr!Gibson,!to!provide!information!on!the!terms!of!a!possible!sale.!This!
time,!though,!rather!than!providing!Mr!Gibson!with!an!“Agreement!for!Sale,”!the!
council!listed!the!price!at!which!the!house’s!owner!“may!be!prepared!to!sell!it,”!
and!provided!details!of!the!mortgage!that!would!likely!be!made!available.!
Moreover,!the!letter!stressed!that!it!was!not!an!offer!of!a!mortgage,!but!merely!
an!offer!to!submit!an!application!for!purchase.!
pf3

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Download contract law case notes and more Summaries Contract Law in PDF only on Docsity!

COURSE NOTES 1: CONTRACT LAW CASE NOTES

The following case notes refer to contract law cases that were described in class 4. Any cases discussed in that class that are not included here will NOT be featured in the exam. Additional Note: Some of the case descriptions presume a basic knowledge of contract law, so you should study chapter 10 of the textbook – on contract law – before you read these notes. Case 1: Storer v Manchester City Council, 1974 Subject Area: Offer and Acceptance Man City Council wrote to Mr Storer, offering to sell him the council house in which he currently lived as a tenant. Mr Storer was offered an “Agreement for Sale” to sign, and he duly signed it. It included comprehensive information on the prospective purchase, including the price, mortgage rate, etc. The only section left blank was the section of the agreement on the date of transfer. After Mr Storer had signed and returned the form (but before Man City Council had signed it), local elections took place, and the Conservative party – the party behind the policy of selling council houses to their tenants – lost their majority to the Labour party. Now under the control of the Labour party, which was opposed to selling council houses, Man City Council tried to block the sale to Mr Storer, claiming that no contract existed between Mr Storer and the council, because the “Agreement for Sale” had yet to be signed by a representative of the council. However, when the case ended up in the Court of Appeal, the court held that the signature of a representative of Man City Council was not required, and that a binding contract existed from the moment that Mr Storer communicated his acceptance to the council (and more specifically, from the moment that he SENT his acceptance, via the postal system). In arriving at this conclusion, the court was sticking to the traditional, offer and acceptance model for determining whether and when a contract was formed. The clarity of the “Agreement for Sale,” and its indication of the council’s intent to sell on a specific set of material terms, meant that the contract could be concluded by Mr Storer’s agreement, i.e. with no further action required from the council. Case 2: Gibson v Manchester City Council, 1979 Subject Area: Offer and Acceptance The facts of the Gibson case are very similar to the facts of the Storer, but with a few key differences. Once again, Man City Council wrote to the tenant of a council house, Mr Gibson, to provide information on the terms of a possible sale. This time, though, rather than providing Mr Gibson with an “Agreement for Sale,” the council listed the price at which the house’s owner “may be prepared to sell it,” and provided details of the mortgage that would likely be made available. Moreover, the letter stressed that it was not an offer of a mortgage, but merely an offer to submit an application for purchase.

Again, Man City Council changed hands, moving from the Conservatives to the Labour party, which reversed the sales policy. This time, though, when Mr Gibson tried to enforce the sale, the Court of Appeal rejected his claim. The language of the initial letter, described above, could not constitute an offer to contract, i.e. an offer capable of being accepted by Mr Gibson to form a binding contract. Even the subsequent behaviour of council – e.g. the placing of the house on their house purchase list – could not change the fact that the council’s statements in their letter to Mr Gibson did not indicate the required intention to be legally bound, pending his acceptance. There had been no offer, and without an offer, there can be no contract. Case 3: Carlill v Carbolic Smoke Ball Company, 1892 Subject Areas: Offer and Acceptance, Consideration The Carbolic Smoke Ball Company posted an advert, claiming that they would pay 100 pounds to anyone who purchased their product (a carbolic smoke ball, whatever that is), used it as prescribed, and caught the flu. Mrs Carlill did all of the above – including catching the flu – and claimed the 100 pound payment from the company, which they then refused to give on the grounds that they had not made a serious offer, i.e. one capable of giving rise to legally binding obligations if accepted. Generally, an advert will not constitute an offer to contract, but an INVITATION TO TREAT. This means that, if the Smoke Ball Company had indeed posted an advert, it would not be capable of simply being accepted by Mrs Carlill, and she would have no legal right to claim the money. However, the court found that, for several reasons, the document posted by the Smoke Ball Company was less like an advert – which again, is a mere invitation to treat (or in plain language, a proposal to initiate negotiations) – and more like a reward poster, e.g. where one party offers a specific reward to any person who performs a given set of actions (such as finding a lost dog or cat). Such posters are not invitations to treat, but are instead unilateral offers, capable of being accepted by anyone who knowingly performs the actions they request. One example of the evidence pointing to this conclusion was that the company had claimed that they would deposit funds in a bank account specifically for the purpose of paying anyone who met the listed criteria. It was therefore implausible for them to claim that they were not serious when they had taken steps to show, precisely, how serious they were! Moreover, the court claimed that consideration was only given, to make the contract binding, when Mrs Carlill actually got sick. To accept a unilateral offer, it is necessary to fulfil all of the specified criteria, and, since the Smoke Ball Company specifically offered the money only to people who got sick (after buying their product and using it as prescribed), this had to be the final step in Mrs Carlill’s consideration.