Law - Chapter 3 cases


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Law - Chapter 3 cases

  1. 1. Rose & Frank Co v JR Crompton & Bros Ltd - Intention<br />Facts: <br />Rose and Frank Co was the sole US distributor of JR Crompton’s carbon paper products. In 1913, the parties signed a new document which included this clause: <br />This arrangement is not entered into, nor is this memorandum written, as a formal or legal agreement and shall not be subject to legal jurisdiction in the law courts…, but it is only a definite expression and record of the purpose and intention of the three parties concerned to which they each honorably pledge themselves with the fullest confidence, based upon past business with each other, that it will be carried through by each of the three parties with mutual loyalty and friendly co-operation.<br />The relationship between the two parties broke down as JR Crompton refused to supply some of the orders of the plaintiff. Rose & Frank Co sued on enforcement of the agreement.<br />TCH: <br />There was no legal contract, it was a gentlemen’s agreement and therefore no contract enforceable in the <br />court.<br />Foakes v Beer - Consideration<br />Facts:<br />Dr Foakes owed Mrs. Beer a sum of money in relation to a judgment debt. Mrs. Beer agreed that Dr Foakes could pay this off in installments. When he had done so, Mrs. Beer sued to recover the interest on the debt, in relation to the delay in the completion of payment resulting from the payment by installments.<br />TCH:<br />Even if Mrs. Beer had promised to forego the interest, it was an unenforceable promise because Dr Foakes had provided no consideration for it. Part payment of a debt could not in itself distinguish the debt.<br />Spencer v Harding – Invitation to Treat<br />Facts:<br />Defendant issued a circular stating sale of Messers G. Eilbeck & Co, but refused to sell the goods to the highest tender.<br />TCH:<br />The circular was not an offer to enter into a contract. It was not a firm promise to sell to the person submitting the highest offer. The circular only called for offers to buy the goods. Since there was no offer, there was no contract and the plaintiffs could not demand the goods.<br />Thornton v Shoe Lane Parking<br />Facts: <br />Motorist took the pay and took the parking ticket, then see the notice on pillar when he entered the car park.<br />TCH:<br />Contract was made when motorist paid and took the ticket. Late coming notice is not enforceable.<br />Hyde v Wrench – Counter-offer<br />Facts:<br />Wrench offered to sell his farm in Luddenham to Hyde for £1200, an offer which Hyde declined. On 6 June 1840 Wrench wrote to Hyde’s agent offering to sell the farm for £1000, stating that it was the final offer and that he would not alter from it. Hyde offered £950 in his letter by 8 June, and after examining the offer Wrench refused to accept, and informed Hyde of this on 27 June. On the 29th Hyde agreed to buy the farm for £1000 without any additional agreement from Wrench, and after Wrench refused to sell the farm to him he sued for breach of contract.<br />TCH:<br />Under the circumstances stated in this bill, I think there exists no valid binding contract between the parties for the purchase of this property. The defendant offered to sell it for £1000, and if that had been at once unconditionally accepted there would undoubtedly have been a perfect binding contract; instead of that, the plaintiff made an offer to his own, to purchase the property for £950, and he thereby rejected the offer previously made by the defendant. I think that it was not afterwards competent for him to revive the proposal of the defendant, by tendering an acceptance of it; and that, therefore, there exists no obligation of any sort between the parties.<br />Scammell v Ouston – Agreement must be certain<br />Fact:<br />The respondents entered into negotiations with the appellants to acquire a lorry, giving an old lorry in part exchange. The parties were agreed as to the new lorry to be supplied, its price and the rebate in respect of the old lorry, and, further, they were agreed that the balance of the purchase price was to be had ‘on hire-purchase terms over a period of 2 years’. The precise terms of the hire-purchase agreement, however, were not settled. The appellants subsequently repudiated the transaction, on the ground that there never was any concluded agreement at all between the parties, because the terms of the proposed hire-purchase agreement had not been settle.<br />TCH:<br />No contract had come into existence.<br />Brogden v Metropolitan Railway Company – Fact of Acceptance<br />Facts:<br />The plaintiff supplied coal to the defendant for many years without an agreement. The defendant sent a draft agreement to the plaintiff who filled in the name of an arbitrator, signed it and returned it to the defendant’s agent who then put it in his desk. Coal was then ordered and supplied in accordance with the agreement but after a dispute arose the plaintiff said there was no binding agreement.<br />TCH:<br />Plaintiff’s returning of the amended document was not an acceptance but a counter-offer which could be regarded as accepted either when the defendant ordered coal or when the plaintiff actually supplied it.<br />By their conduct the parties had indicated their approval of the agreement.<br />Felthouse v Bindley - Communication<br />Facts:<br />An uncle was negotiating to buy a horse from his nephew. The uncle wrote to his nephew offering a particular sum and saying “if I hear no more about him, I consider the horse mine”. The nephew did not respond, but told an auctioneer to remove this horse from a forthcoming auction. The auctioneer omitted to do so, and the horse was sold to a third party. The uncle sued the auctioneer, and the question arose as to whether the uncle had made a binding contract for the purchase of the horse.<br />TCH:<br />Felthouse did not have ownership of the horse as there was no acceptance of the contract. Acceptance must be communicated clearly and cannot be imposed due to silence of one of the parties. The uncle had no right to impose a sale through silence whereby the contract would only fail by repudiation. Though the nephew expressed interest in completing the sale there was no communication of that intention.<br />Adams v Lindsell – Postal Acceptance Rule<br />Facts:<br />The defendant sent a letter to the plaintiffs offering wool for sale, and asking for a reply “in course of post”. The letter was misleading by the defendants, and arrived later than would normally have been the case. Then plaintiffs replied at once accepting, but the defendants, having decided that because of the delay the plaintiffs were not going to accept, had already sold the wool elsewhere. The plaintiffs sued for breach of contract.<br />TCH:<br />If that was true it would be impossible to complete any contract through the post; if the defendants were not bound by their offer until the answer was received, then the plaintiffs would not be bound until they had received word that the defendants had received their acceptance, and this could go on indefinitely. Instead it must be considered that the offerers were making the offer to the plaintiff during every moment that the letter was in the post.<br />Byrne v Van Tienhoven – Revocation of Offer<br />Facts:<br />Van Tienhoven & Co posted a letter from their office in Cardiff to Byrne & Co in New York, offering 1,000 boxes of tinplates for sale. Byrne and Co got the letter on 11 October. They telegraphed acceptance on the same day. But on 8 October Van had sent another letter withdrawing their offer, because tinplate prices had just risen 25%. They refused to go through with the sale.<br />TCH:<br />The withdrawal of the offer was not effective until it was communicated.<br />Entores Ltd v Miles Far East Corporation – International Contracts & Modern Techn<br />Facts:<br />Entores was a London-based trading company that sent an offer by telex for the purchase of copper cathodes from a company based in Amsterdam. The Dutch company sent an acceptance by telex. The contract was not fulfilled and so Entores attempted to sue to owner of the Dutch company for damages. The controlling company, Miles Far East Corp, was based in the US and under English law Entores could only bring the action in US (serve notice of writ outside the jurisdiction) if it could prove that the contract was formed within the jurisdiction, i.e. in London rather than Amsterdam.<br />TCH:<br />The postal rule could not apply to instantaneous communications, such as telephone or telex: if a phoneline “went dead” just before the offeree say “yes”, it would be absurd to assume that the contract was formed and the parties would have to call each other back. The same applied to telex. Since the contract was therefore only formed when and where the telex was received, the place of formation was London. <br />