Offer & Invitation to TreatCanadian Dryer’s Association v. Burton

Defendant offered lowest price $1,650. Plaintiff agreed. Treated as offer and acceptance. $500 cheque was sent. Deed was drafted, ready to close the deal. Few days later, solicitor wrote to say no contract and returned $500

Was there a contract binding both parties? Mere quotation of price doesn’t constitute an offer (its an invitation to

treat)o In this case, the letter was more than a mere quotation, but

rather a statement of price at which Burton is willing to sell. This constitutes an offer + he drafted a deed & suggested closing date

Found for the plaintiff. Pharmaceutical Society v Boots

Store separated – meds with substances on the poison list & other with regular meds. This was monitored by a registered pharmacist who is to prevent a sale if they believed the customer was unfit.

Display of meds is an invitation to treat Customers are to take the meds to cash, which is an offer to the store

to purchase their invitation to treat. When cashier accepts their payment, this completes the offer.

o Customer offers what they want to buy, cashier accepts offer by taking their method of payment.

Carlill v Carbolic Smoke Ball

100£ reward to anyone who contracts and epidemic influenza after having used the smoke ball 3x daily for two weeks [unilateral contract]

Plaintiff met the requirements and wanted their reward. Defendant appealed.

Appeal dismissed, judgment in favour for plaintiff. Goldthorpe v Logan

Goldthorpe is suing for Logan being unable to clear the hair on her face the way they claimed they could. Hair removal company made a definite promise, did not say anything about any exceptions

There was an agreement between both parties, therefore forceable by plaintiff

Appeal allowed, plaintiff was awarded cost for damages

TendersHarvela Investments v Royal Trust

Invitation for tender was sent outlining to send highest bid. Harvela sent $2,175.00 and a competitor sent $2,100.00 + additional $101.00 as fixed.

According to Contract A they asked for your highest offer nothing about including a fixed additional price.

Court found for Harvela. Only this case identifies a tender as an invitation to treat. Considered

as an offer hereafter.

R v Ron Engineering

Contractor sent a tender w/deposit but withdrew after office closed. Paragraph 16 stated withdrawal should be a signed letter with seal to the commission secretary – telegrams & calls would be considered

They accepted the tenders offer cannot go back because their bid wasn’t enough

M.J.B Enterprises v Defence Construction

There was a privilege clause that stated they did NOT have to accept the lowest bid but it was implied that only compliant bids would be accepted.

The bid that was accepted was not compliant because they failed to mention how much the back fill would cost.

MJB was the second lowest, sued for breach of Contract A and won. Privilege clause can be satisfied but other conditions are still imposed

Double N Earthmovers v City of Edmonton

Among the four bidders, two were disqualified for not meeting requirements. The two highest bidders were left (they wanted lowest bidder) so the city asked them to lower their bids (Double was still higher.

But a requirement for this tender was that equipment was to be from after 1980. Double believed their competitor (S ltd) was using equipment before 1980. When stated this, city didn’t investigate far enough, in that time S Ltd. bought a machine made in 1980

Double says they breached contract A because they accepted a non-compliant bid, failed to investigate, awarding contract to S that differ from set terms within tender, allowing S to use equipment made prior to 1980.

Court held that there was no breach of contract A – they had no obligation to investigate further and everything else Double claimed was answered in the negative.

Communication of OfferBlair v Western Mutual Benefit

There was a meeting that talked about Ms. Blair receiving $800 upon retirement. She was not given this when she retired so she filed an action against the company.

However, she was not present when this was discussed & therefore judges ruled that there was no promise made, there also was no intention to change the relationship between both parties to create legal obligations.

Merely was a stenographer translating the meeting, no offer presented to her.

Appeal dismissed. Williams v Cowardine

Walter was murdered. William posted a sign saying anyone with info leading to Walters death will receive a 20£ reward.

M. Williams who was with Walter on the night of his death was beaten by her husband in fear that she was going to die; she made a statement, which led to her husband being convicted for Walters’s death.

Is she still entitled to the reward if she wasn’t motivated by it when she came forward?

Found in favour for plaintiff because she clearly performed the task mentioned in the offer, therefore there a contract is formed due to the conditions of the offer being performed.

R v Clarke

Clarke provided information after a reward for information was posted. He went to claim this. He stated that he acted with no faith in the offer. If he had proven that he came forward with reliance and in faith in the offer he could have claimed it but because he didn’t he cannot claim.

Also it was said the reward was for someone who brought info that lead to the arrest and conviction of the persons who committed the

murder, but Clarke’s info provided no help in this aspect. [Accused was arrested prior to the info]

No contract between the two parties – one cannot accept an offer that one does not know exists, or forgot exists.

o One also requires an expectation or reliance interest in the reward in order for it to be recoverable.

Termination of Offer

RevocationDickinson v Dodds

Dodd extended his offer until Friday; on Thursday Dickinson found Dodds had been offering to sell to others. He gave his acceptance to Dodds mother but she never gave it. On Friday Dickinson was told it’s already sold, too late.

Dodd isn’t binded by law or equity to keep the offer open until Friday 9am.

Case dismissed. Byrne v Van Tienhoven

Byrne bought 1,000 boxes from defendant. Offer was accepted on the 11th, was revoked on the 8th.

o An offer can be withdrawn before acceptance, BUT Does the withdrawal have any effect until the person has

received it? Is posting a letter of withdrawal a form of communication

[because an un-communicated revocation is not a revocation at all?

Contract is completed the moment a letter is posted. Even if it doesn’t reach its destination.

If the offeree accepts the offer and is unaware of the offer being revoked than this constitutes for a contract, binding both parties

Judgement for plaintiff.Errington v Errington and Woods

Father bought house for son & daughter in law. Said if she paid for building instalments, then when the mortgage is paid off, the father will transfer the names on the estate to theirs.

Unilateral – so once they begin to perform, contract cannot be revoked Dawson v Helicopter Exploration

Dawson and respondent agreed that he would show them where he stalked his minerals. Respondents had to find a pilot to take them. One day they told him they weren’t interested, which he later found out that they went without him.

Bilateral – cannot revoke because his promise = acceptance. Helicopter argued that they revoked by making a promise with other party, but offer already accepted.

RejectionLivingston v Evans

Evans offered $1800, Livingston asked for a reduced price of $1600, because Evans said no, Livingston said okay fine $1800.

o Does NO to the $1600 = revocation of offer? Making a counter offer is a rejection of the original offer

o Original offer cannot be accepted without consent of the offeror o Evans saying “cannot reduce price” does not clearly revoke the

offer Counter offer kills original offer, but original offer can be revived. Distinguish whether it’s a counter offer or an inquiry [makes huge

difference]

Lapse of TimeBarrick v Clark

Clark wanted to buy Barrik’s farmland, he proposed paying $14,750 + $2000 deposit. Barrick said no, $15K and if you can agree to this then the deal can be closed ASAP. Clark was away, so his wife asked to hold on for ten days till he was back. Barrick never replied to that. In that time, Barrick sold it to a third party who accepted for the full $15K

Because Barrick didn’t respond to Mrs. Clark’s letter, he was not bound to any particular period of offer

o Therefore, leaving the offer open for 13 days was reasonable

Manchester Diocesan v Commercial & General Investments

We get two theoretical bases fort he rule that an offer is open for acceptance only for a reasonable time.

1. If the offer is made on terms that if its not accepted within a reasonable time it must be treated as withdrawn.

2. If the offeree doesn’t accept the offer within reasonable time he must be treated as having refused it. [Used in Barrick v Clark]

AcceptanceLivingston v Evans

Found under rejection

Battle FormsButler Machine Tool v Ex-Cell-O Corp

Sellers were selling a machine, buyers replied by placing an order that was subject to a number of terms and conditions that differed from the ones put forth by the seller.

o Upon delivery, sellers claimed they were entitled to more money. A contract was concluded between both parties, but on whose terms? Sellers asked a question, buyers accepted the offer and added

different conditions o This by law is a rejection and constitutes a counter offer.

If the last set of term and conditions is not rejected by the other party it may be agreed to those new terms.

Judgement for buyers. Tywood Industries v St. Anne-Nackawic Paper and Pulp

A case between buyer and seller where there is a disagreement as to which contract is to be effect. The last modified contract included an arbitration clause in terms of dispute.

o The last one shot is the one to be implemented. When the arbitration clause was added, Pulp and Paper never accepted

therefore, the contract with the two parties have not been agreed on

Shrink WrapsPro-Cd v Matthew Zeinberg

Matthew bought the package of Select Phone, ignored the license and formed Silken Mountain to resell the information in Select Phone. ProCd filed for an injunction

Court found that the licenses were ineffectual because their terms do not appear on the outside of the package, as the buyer of the product cannot be held to the hidden terms

Buying the product does not import contract on buyer [they can still return]

o But by using it is equivalent to accepting the terms Court held that he knew because he used it, which is the same as

accepting the terms he then breached the contract. Shrink-wrap licenses are enforceable unless their terms are

objectionable on grounds applicable to contracts in general.

SilenceFelthouse v Bindley

Uncle was going to buy a horse from his nephew. Placed in offer saying that the horse would be his for 30.15, if he didn’t respond.

o Nephew never responded In an auction held by the nephew he told the auctioneer not to sell the

horse, but he accidently did. The uncle was notified of this and he brought this to court.

Even though the nephew agreed to this, because his acceptance was not communicated the contract between the two is not binding

Found for plaintiff, damages awarded to the uncleSaint John Tug Boat v Irving Refinery

Contract between both parties to be supplied with Tug Boats. There was an informal agreement to prolong tug usages, Saint John

kept tugs on call, Irving kept using them, and was silent which implied acceptance (acquiescence – accepts services without doing anything) therefore it was accepted through silence [silence can constitute acceptance when combined with conduct]

Carlill v Carbolic Smoke Ball

Found in Offer and Invitation to Treat

Dawson v Helicopter Exploration

Found in Revocation

Offeror’s ControlEliason v Henshaw

Action based on the non-performance of an agreement. The offeror agreed to purchase flour and seller required acceptance in

writing by wagon at a specific place. The wagoner told the buyer that he would not be returning to the said location [Harpers Ferry]

Seller decided to send by regular mail-by-mail carriage. Buyer replied to say he received his acceptance but its too late

because it was not returned by the method he specified [wagon] Contract not formed because:

o Wasn’t accepted in time, right place or by correct method No contract, no case in favour of Eliason

Communication of Acceptance: Mail & Instantaneous Modes

Household Fire v Grant

Grant made an offer to purchase shares in Household, specifying that by mail is the accepted mode of communicating the acceptance.

Household sends his acceptance through mail but this was never received by Grant, so he doesn’t pay the 5£ and this sum was credited to his account in their books and as time went on the company went into liquidation and are now suing the defendant for what he owes – he argues that he is not a shareholder.

Post office is a common agent between the two parties. o Once the letter of acceptance is delivered to the post office the

contract is made as complete and finally (absolutely binding) The letter posted in the mail was an acceptance therefore completing

the contract and making it binding. Holwell Securities v Hughes

Holwell posted a letter of acceptance in regards to a house that was being sold to Hughes but the acceptance letter never reached him.

Hughes wanted the acceptance to be a notice in writing therefore, when the acceptance posted in the mail wasn’t received this is not an

effective way of communicating the acceptance by the means requested by the offeror (Hughes)

Postal rule does not apply where the terms of the contact point to the necessity of actual communication and in this case it pointed to the communication being a notice in writing.

Brinkibon v Stahag Stahl

Buyers are suing sellers for an alleged breach in contract for supply of steel. Contract was formed through a number of telephone calls between London & Vienna.

The rule here is that once the message has been delivered to the offeror’s via telex, it is not unreasonable to treat it as delivered to the offeror. Also the person sending the message can tell when their message has not been received.

o General rule should apply, not postal rule. Conclusion the acceptance was delivered to offeror in Vienna, thus

Austria has jurisdiction over the issue. In instantaneous communication contract is complete when offeror

receives acceptance & contract made the place where acceptance is received.

Side note: if the mailing address is incorrect than the postal rule does not apply because of the mistake made by the person sending the acceptance.

Certainty of Terms no.1

VaguenessR v CAE Industries

Negotiations took place about the possibility of the respondent taking over & running an aircraft maintenance base no longer required by Air Canada.

In a letter they outlined a list of assurances. In 1971 there was a breach in the contract through the fact maintenance base diminished.

Appellant argues that the letter was not intended to be legal binding contract Onus is on the person who asserts that there is no legal effect intended.

o Based on the evidence there was an intention on the part of both parties to enter into a binding legal contract

CAE won because the language used and the conduct exercised result in determining the intentions of the parties. Also indicated an offer capable of acceptance and R let them run base for years.

Incompleteness & Agreements to AgreeMay v Butcher

There was an agreement for tentage between both parties, until a dispute arose.

Issue – whether the terms of the contract were sufficiently defined to constitute a legal binding contract between both parties.

o The concern with price was left undetermined and contract law says that there is no contract when there are things left undetermined.

Hillas v Acros

After entering into a contract, it was breached by not supplying 1000 standards of Russian timber

Clear they intended a contract, instalment contract (not everything can be delivered at once) – price, shipping and standard left open which court found was intentionally left open – so contract is enforceable. Acros must sell to Hillas.

Foley v Classique Coaches

Agreed to purchase land as long as they purchased all their gas from Foley. After three years they stopped and bought elsewhere. Foley said breach in contract

Foley said not binding because no price state, court applied reasonable price of oil & bound Classique Coaches to buy at price. Price was negotiated to be from time to time within the contract.

Certainty of Terms no.2

Agreement to NegotiateBhasin v Hyrnew

Empress v Bank of Nova Scotia

Parties had a contract, three months prior to its expiry they asked to renew, a month later bank proposed rental rate of $5400/month. Empress never replied, so Bank contacted them gain, which is when Empress’ solicitor said he was still reviewing it.

Finally Empress said they would allow their offer if they paid $15,000 (they were robbed $30,000, only $15,000 covered by insurance)

Requirement is to negotiate in good faith & not withhold agreement unreasonably.

o Empress (landlord) did not negotiate in good faith. Manpar Enterprises v Canada

Manpar under contract was to remove and sell gravel on Indian reserve. After five years they wanted to renew but a clause in the contract stated that their royalty rate should not be less that what they have been paying. They only have the option to renew if they provided ‘satisfactory performance’

There was no implied obligation to negotiate in good faith if there is no objective benchmark/standard

Wellington City Council v Body Corporate (Wellington)

Council and Alirae (Body Corporate) were entering into contract for 20 Brandon Street, Wellington – which Alirae was leasing. When negotiations broke down, she sued for Council not negotiating in good faith

There was an agreement to negotiate over sale of leasehold, since it was not defined what good faith neither was nor was there any obligation for each party in this case, therefore there is no standard to apply – as a result there is no breach.

Anticipation of FormalizationBawtiko Investments v Kernels Popcorn

Both parties had plans in regard to opening two popcorn stores. They had a meeting on April 18th to amend the franchise agreement. This meeting ended with a handshake and “you’ve got a deal”.

When Bawtiko got the papers from Kernel’s solicitor it was not based on what they’ve discussed. So when he asked for an extension they said no and returned his deposit. He sought for damages of breach

Oral agreement in contemplation of written formal agreement isn’t enforceable due to lack of certainty. [Oral agreement to make a contract is not binding]

o Indication of future written agreement was stated by parties, essential terms not agreed upon yet, therefore oral agreement as not binding.

Intention to Create Legal ObligationBalfour v Balfour

Husband promised to pay 30£/month to his wife while they were in two different countries. After a while they broke up and wife is suing for the money he promised.

Promises made between husband and wife (generally not enforceable) fails to have intention to create legal relations, they do not intend to be bound or able to sue one another.

Rose and Frank v JR Crompton Bros

Rose and Frank deliver paper for the defendants [they had an informal business relationship].

They signed an agreement to not be legally bound, so when the defendants stopped their performance they cannot be sued because intentions not to be bound expressed.

In commercial relationships its assumed the parties intended to be bound, unless it has been made clear that their intentions were not to be bound, such as in this case.

TD Bank v Leigh Instruments

TD was given “comfort notes” to say Leigh’s loan will be paid back and they it will be managed, but wasn’t. TD tries to enforce the letter

o Letters of comfort are not binding, serves as good faithCanadian Taxpayers Federation v Ontario (Ministry of Finance)

MOF made a campaign statement and did not follow through (this is not reasonable to do because it would upset political system)

Election promises do not amount to an offer to contract and doesn’t create legally enforceable obligations

o Therefore does not constitute a binding agreement.

Contracts Under Seal and the Requirement of WritingRoyal Bank v Kiska

There was no wafer seal on the document; rather the word “seal” was printed on the document.

It can be argued that there was consideration, but seals do not require consideration but Laskin’s dissenting says that the regulation of the seal as consideration is already gotten more flexible this would be too much and wanted to dismiss with costs.

Dynamic Transport v OK Detailing

Entered into an agreement for sale of land. The agreement was challenged not to meet the Statute of Frauds requirement – because

sale is contingent on the approval of a subdivision but there no specification on who gets the approval

Court constructed a contract including reference of conduct to the parties and that each party is under an obligation to do all that is necessary on their part to secure performance of the contract.

Delgman v Guaranty Trust Co.

An aunt told her nephew when he was taking care of her that if he did a good job with taking care of her by doing chores and entertaining her he would be given her house.

When she died Trust Co argued that he does not get the house because of part performance. Court did not recognize the claim of his ownership because there was no written document as needed by the Statute of Frauds. Also they could not see if there were other requirements for the agreement.

Court said that equity applied, compensation should be given for part-performance even though contract is not valid,

Nature of ConsiderationThomas v Thomas (Brothers)

Day before Thomas died; he orally made a wish to make provisions for his wife. Next morning with two witnesses said his wife is to have the house they live in and all that’s in it or a sum of 100£ instead.

Even though this was done orally and not written, defendants accepted it. Therefore she has the house until she dies/remarries.

When the defendant’s co-executor died, he took possession from the plaintiff.

Judge says because she was paying a sum yearly for the house it constitutes as consideration therefore he cannot take the house back.

Governors of Dalhousie College v The Estate of Arthur Boutiler

Defendant made promise in writing to pay $5000 to Dalhousie; no payment was made because shortly after he suffered some financial issues. He did send a letter informing them of this and said he will bounce back soon.

Court says nothing to show binding contractual obligation. Consideration must flow between both parties. His promise was gratuitous, no consideration flowed from Dalhousie

because he did not benefit from their building projects (no value in eyes of the law)

Dalhousie could not enforce because no consideration. Wood v Lucy, Lady Duff Gordon

Wood and Lucy have a deal that Wood would market Lucy’s products but there was no express promise by Wood to do anything other than market.

Court found consideration – that it is fair to say that there was an understood implication of consideration between the two parties. It is clear they intended for legal relations. There was an offer and acceptance – only need to determine where consideration lies.

o It’s not clear what she wanted in return because by him marketing her products, she would receive one half of all profits and revenues. When she placed her endorsement on fabrics, dresses and millinery without his knowledge & withheld the profits.

Past ConsiderationEastwood v Kenyon

Sarah’s guardian spent money on her education whens he was younger, by borrowing money from Blackburn. Eastwood give him a

promissory note. Sarah said that she would pay for the promissory note when she came of age [she did with interest]. Her husband also said that he would but made not payment so Eastwood is suing him.

This consideration is past consideration, the act was done before the consideration even took place therefore this is not valid consideration resulting in NO contract.

o There is no consideration flowing from Eastwood for the agreement Kenyon made to pay back, therefore Eastwood is unable to enforce contract with Kenyon.

Lampleigh v Brathwait

Brathwait killed someone and called on Lampleigh to go receive a pardon from the king for his felony. Once the pardon was received he said he would give 100£.

The promise was to pay 100£ and the consideration in order to get the money is to receive a pardon from the king

o Difficulty with using that as consideration is that the pardon was received before the promise to give 100£

Forbearance of SuitsDCB v Harold J Arkin v Zellers

DCB and his friend shoplifted from Zellers and Zeller told his parents they need to pay $225 so they did so they could forbear them bringing a suit, but later realized this was unreasonable when they only shoplifted $59.95.

o The parents weren’t liable because they were not negligent in their parenting.

Also Zellers made a serious threat for legal action if the $225 wasn’t paid.

Zellers is entitled to refund the money because plaintiffs paid under mistake/duress.

Pre-Existing DutiesPao On v Lau Yiu Long

Promise to do something for a third part, that you are already doing for another party is valid consideration (performance of a pre-existing obligation, just to a new part This is what makes this case special)

There are three contracts in this case but we’re looking at the third one between the guarantees.

o Pao (Shing) agrees to do something for Lau (Fu shareholders) that they were already going to do for Fu Corp in their first agreement.

o The consideration for the guarantee was the promise to perform according to the other contractual agreement

Stilk v Myrick

There were a bunch of seamen and two were lost. So the others made a deal that the two lost seamen’s’ pay would be spilt between the rest buy the defendants argue that this is contrary to the public policy and is utterly void.

o Argues that there is no consideration for the ulterior pay. In this case, unlike the previous – promise to preform a pre-existing

duty to the same part does not suffice as good consideration. The sailors are not doing anything different from what they would have

originally been doing. Gilbert Steel v University Construction Ltd.

Court looks at the fact that when the prices for steel went up, UCL doesn’t pay more because they were already entitled to deliver

steel under first agreement, therefore no consideration ... contract with the higher price is not enforceable.

o Was the original contract abandoned mutually? Court says no because all they did was increase the price no indication of a new contract.

Price is such a fundamental part in a contract with sales of good, that the substitution of a new price must connote a new contract and rescind the old one.

The courts were not convinced that they intended to rescind the original contract to replace with new one.

Williams v Roffey Bros

Roffey hired Williams as subcontractors when Williams suddenly encountered financial difficulties so Roffey said they would pay more to help them build their project (consideration). There was a mutual practical benefit from the project being done therefore there is consideration allowing this contract to be enforceable. When they stopped giving money, Williams stopped working.

Court concluded that they had an oral agreement to the new variation. Judge concludes that Roffey was in breach.

Benefits for Roffey to pay the rest – plaintiff finishes their work, avoid penalty for delay, and don’t need to look for new contractors

Under the new agreement, Williams didn’t undertake any additional work

Greater Fredericton Airport Authority v Nav Canada

AA promises to pay for the acquisition costs for equipment for DME and Nav installs it. But then AA refused to pay.

Nav’s pre-existing contractual obligation was to pay for DME [in other words, Nav did not promise anything in return for the AA’s promise to pay for navigational aid.

Found that the contract was not supported by consideration but may be enforceable as long as the variation wasn’t procured under economic duress.

If the contractual modification has mutual practical benefits for both parties then it was not likely made under duress.

Promises to Accept LessFoakes v Beer

Foakes was indebted to Beer. Beer agreed to give time as long as he would pay every July 1st and January 1st the amount of 150£ without interest until debt was paid off. She later claims she wants interest.

No consideration because nothing new was added to the deal, partial repayment of debt not consideration – therefore Beer successful in suing for interest

When you pay less you are not receiving any benefito Sometimes there is a benefit with part payment this does not

apply to this case because Beer gets no benefit from this lesser amount.

Re Selectmove

Selectmove owes a debt to the Crown, the Crown agreed to accept a lesser sum in the forma of payment instalments no other consideration.

o The crown is not bound to accept less Court was however persuaded that Crown got practical benefit

because payment of something back is better than nothing, but due to precedent (Foakes) court was bound.

Foot v Rawlings

Foot owed a lot of money through promissory notes. Rawlings proposed that he pay $300/month and his interested would be reduced from 8% to 5% but if the cheque bounces the monthly payments are $400 and interest is back at 8%.

After a little while Rawlings sued for the remaining amount in full. o However, through Rawlings proposed para 3 & 7 is consideration

for the respondents agreement to withhold action so long as they appellant continued to carry out the monthly payments (Rawlings right to sue is suspended)

Process Automation Inc. v Norstream Intertec

Defendant owes Process large amount of money and agreed to pay this promptly but give far less in a donut diner agreement – said take less or take nothing basically, resulting in economic duress

S.43 of Law and Equity does not apply if the contract was made under duress

Pinnel Ceaseland Doctrine: the payment for a lesser sum on the day in satisfaction of a greater sum cannot be any satisfaction for the whole

Promissory Estoppel

General PrinciplesHughes v Metropolitan Railway Company

Hughes told the Railway Company they had to make repairs and if this were not done within six months they would be evicted. The railway company tried to make negotiations, while they waited for Hughes to reply the repairs would be on hold.

Negotiations fell through in Dec. Repairs were completed by June. Hughes sued because they were not repaired by April when he told

them this in October. Found that the proposed time used for negotiations does not count fort

he six months and that it should not take effect until Dec.31st o Reached at this because the landlord was informed that the

repairs were suspended until the negotiation process was completed.

Representation here was that repairs would be taken care of after negotiations were discussed.

Central London Property v High Trees House

Landlord told the tenants that they would have to only pay £1250/year instead of the full £2500 because at that time it would be impossible for them to have all their flats rented out. Couple years all the flats were rented out so the landlord demanded that they pay the full price.

S.43 says that if the part payment is accepted, although the other party hasn’t shown any consideration that contract is distinguished – therefore you cannot come back for more. [Promissory estoppel works to suspend rights, no eliminate]

Clear promise here to reduce the rent – the representation here is as to the future therefore it’s a promise. In addition Hughes continuously accepted their reduced rent.

Judge found that the reduced rent was only temporary and is in full effect since the point in which all rents were rented out.

o The rent was reduced because of the war, therefore the reliance was on the war therefore, and when the war ended the reliance is no longer there.

Denning 4 Principles 1. Existing Legal Relationship2. Serious Promise3. Reliance 4. Unfair for Promisor to Go Back On Promise

Elucidation of PrinciplesJohn Burrows v Subsurface Surveys

Defendant had to pay $127,000. $42,000 was guaranteed in promissory note that provided for payments to be done on monthly instalments. There was an acceleration clause that said if the payment was ten days later he could collect for all of it. But on many occasions they accepted delayed payments. This resulted in no express representation that he would not enforce the acceleration clause. After a disagreement & late payment John wanted the entire payment

In order to apply estoppel, john’s conduct must amount to a promise/assurance intended to alter the legal relations between the two. [Friendly gesture is not a binding agreement]

To stop one from enforcing rights in contract representation much be serious in eyes of ROP

D&C Builders v Rees

The plaintiffs did work for the defendant without any complaints but they refused to pay. The wife said she would give £300, is that okay they said yes because otherwise their business would be bankrupt; when they went to collect they told her they’d come back within a year to get the rest. She said NO. Even for the receipt she forced them to say “in completion of the account” so that they couldn’t come back for more.

The acceptance of the £300 was under duress and threats induced by the defendant say “take this or nothing”

Promise to not enforce a right cannot be extracted under duress.

Saskatchewan River Bungalow v Maritime Life Assurance

Maritime issues policy to SRB. There is a clause to say policy lapses after 31 days. SRB was late, & tries to renew -> the reliance is not reasonable, they knew Maritime wanted to cancel but not estopped from cancelling.

W.J Alan & Co v El Nasr Export and Import Co.

Nasr bought coffee from WJ with agreement of payment in shillings. Nasr pays in sterling first time, second time WJ wants it in shilling. Estopped form doing do because acceptance of sterling results in waiver of obligation to pay in shilling because of bare reliance.

o Says that because WJ accepted the instalment in sterling’s and the redrafted agreement did not remove the change in currency all implies a promise that they would not revert to Kenyan shillings.

Post Chaser

P agreed to sell palm oil to D who subcontracted this to C – required notification of shipment ASAP, shipment notification comes late by D doesn’t complain. BUT C did reject the oil so D had to reject the offer. P received notice to hand over documents covering the consignment to C – this was rejected by sub buyers and buyers

Court found that due to the delay in declaration, the buyers could reject the seller’s tender of documents.

The other party has to suffer detriment to estop other part from enforcing rights, because not inequitable if no detriment.

Shield or SwordCombe v Combe

Wife relied on the promise made by the husband, but court found no consideration on behalf of the husband to pay her 100£/ year. After 7 years she brought action to sue for the money that would be due. This promise is not supported by consideration. Essentially she is trying to use promissory estoppel as a sword.

o Inequitable to do so because she suffered no detriment because no consideration.

Walton Stores v Maher

Walton negotiation land owned by Maher, Walton said you would have to demolish and replace the old building in order to move forward. Based on the reliance of representations a contract was completed.

o Maher began to demolish old and build new, but contract was never completed because Walton never signed the lease. [He had told the solicitors to slow down transaction so they can look into see whether this would be good business but let Maher be under the impression there was a contract]

Court found there is a contract – Maher was fulfilling a term of the contract therefore Walton breached by not preventing them from doing this

M(N) v A(T)

M promised to pay A’s mortgage if she moved to Canada. She came but he didn’t pay because they broke up. A (wife) wants M (husband) to pay off the rest of their mortgage because she relied on his promise and resigned her job. He loaned her $100,000 on a promissory note and she applied those funds to her mortgage. Week later he evicted her.

Counsel could not find any evidence to show that he intended to pay the balance on her mortgage, to have a binding effect

Estoppel cannot be used as a sword if not expectation of legal relations.

Privity of Contract

BasicsTweddle v Atkinson

The father and father in law made a contract to pay set amount of money to William Tweddle. It was mentioned that William T has the full power to sue the said parties in any court of law for the aforesaid payment. William A never paid the sum neither did the executor.

William T wanted to sue for the money, but the problem here is that he is merely a beneficiary under the contract; he provided no consideration for the contract.

Even though there is a clause to say that he can sue for failure to perform, this cannot be held because you cannot enforce the power to sue on someone.

Dunlop Pneumatic Tyre v Selfridge

Dunlop sold tires Dew with some conditions [not to sell for lesser value] but Dew did and sold it to Selfridge. When Dunlop found out he brought an action against S for an injunction and recovery of damages.

Problem here is Dunlop had contract with Dew. Dew had contract with S. Dunlop and S do no have a contact, therefore Dunlop cannot sue based on the actions between Dew and S, he is a third party to that.

Beswick v Beswick

Nephew made an agreement with his uncle that when he dies he would get his company and in return he was to pay his aunt £5 weekly and this money was to come from the business. Nephew paid his aunt once, and never again after that.

She cannot sue because she was not a party that was involved in the consideration. However, she can sue under the name of the party [under her husband]. She became the adminstraix of his will and through that she was able to sue because this is as if she is suing as a party of the contract.

Principled ExceptionLondon Drugs v Kuehne & Nagel International

Warehousemen benefit from a clause between LD and K&N because employer/employee relationship with close identity of interest.

There is a test for this (a) doing the work contemplated and (b) ROP would believed they were intended to benefit from it. [Implied intention]

Exception to Privity contractual right extended to third party ROP must see intention to apply.

When the contract was made, London Drugs knew that they were contracting with the employer but the employees would be the one performing it.

The exception applies when the third party performs the very activity that is contemplated by the parties within the contract.

Edgeworth Construction v ND Lea & Associates

E entered into a contract with the province, but claims they lost money on the project due to the errors in specifications made by the engineers (Lea). E is relying on the representation to their detriment.

The engineers has no contract, their information was simply to allow tenders to prepare a price to be submitted.

o No exception in this case because there was no intention to benefit in this contract [the intention must be assessed at he time of the contract, not before]. ROP would not see intention for third party to benefit because no close identity of interest, commercial reality does not support no implied intention.

Fraser River v Can-Dive Services

When Fraser’s ship sank they recovered through their insurance company, who in turn sued CD. However, there was a clause in the contract between F and the insurance company that they cannot bring actions against any charterers of F. F made an additional agreement to waive the right – makes sense because the Charters would not want to do business otherwise.

Can-Dive specified in charter – close identity of interest - they sink charter at this point the benefit of the clause is crystalized [occurs when it because a practical benefit to parties, when boat sank because needed protection of clause at this point]. So when FR tried to revoked he clause they couldn’t because it was a practical benefit to Can-Dive at the time. Even though they were not privy to the clause.

Clause expressly mentioned a type of third party doing the type of work contemplated – identity of interest less relevant outside employer/employee situation.