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Rose Janet Ayugi-Masinde – Contracts II Course Outline

UNIVERSITY OF NAIROBI SCHOOL OF LAW

GPR 108 CONTRACTS II

COURSE CONTENT

Vitiating factors, Contracts in Restraint of trade, Remedies, Discharge of contract, quasi-contract; interaction of tort and contract, and conflict of laws, Contracts I is a prerequisite.

POSSIBLE READING

1. Chitty on Contracts (2004), Volume I, General Principles Volume II, Specific Contracts Thomson, Sweet and Maxwell, London.

2. Richards, Paul (2002) Law of Contract, Dorset Press, Dorchester

3. J.C. Smith. (1998). The Law of Contract: Fundamental Principles of Law”, 3rd ed. London, Sweet and Maxwell.

4. Trietel G. H. (2003). The Law of Contract Thomson, Sweet and Maxwell.

5. Atiyah, P. S. (4995) An Introduction to the Law of Contract (5th ed.) Clarendon Law series, Oxford.

6. Beale, H. Bishop, W. et al (1990). Contract: Cases and Materials. (2nd e.d) Buttersworth, London.

7. Smith, J.C.& Thomas J (1982). A Case book on Contract 7th ed. London, Sweet and Maxwell.

8. Hodgin, R.W. (1975) Law of Contract in East Africa. Kenya Literature Bureau.

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TOPIC ONE: VITIATING FACTORS/FAULTS IN CONTRACTS

Effects of faults in Contracts Void – mistake, illegal contracts Voidable – misrepresentation and capacity Unenforceable – absence of some requirement,

e.g. written evidence.

Vitiating Factors1. Misrepresentation2. Mistake3. Duress4. Undue influence5. Illegal contracts

TOPIC 2: DISCHARGE OF CONTRACTSTOPIC 3: REMEDIES

TOPIC 1 : VITIATING FACTORS

A. DURESS

Introduction

Royal Bank of Scotland V Etridge (No.2) (2001) 4 All ER 499.

Threats to a person is obvious form of duress Economic duress

The siboen and The sibotre (occidental worldwide Investment Corp V Skibs A/S Avanti) 1976

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Atlas Express Ltd V Kafco (Importers and Distributors) Ltd ., 1989

Language of the courts “Voluntariness”, “Consent” and “Overborne will”

Truly unwilled action is not relevant. DPP for Northern Ireland V Lynch (1975)

Real question is whether decision was made in unacceptable circumstances, Dimskal shipping Co., S.A. V International Transport Workers Federation, The Evia Luck (1991) 4 All ER 871

The test for the Existence of duress Circumstances under which he decided to contract. Whether other party had introduced an

unacceptable element into those circumstances. Enimont Overseas AG V Rojugotanker Zadar, The Olib, (1991)2 Llyd’s Reg. 108

Illegitimacy of the threat, Universe Tankships Inc. of Monrovia V International Transport Workers Federation and Laughton (1983) 1 AC 366

Act is unlawful if criminal and or civil wrong e.g. branch of contract or tort.

> In principle it is possible for duress to be based in a lawful threat.

CTN cash and carry Ltd V Gallaher, (1994) 4 All ER. 714.

> Lack of reasonable alternative. Second requirement where threat is not a

criminal offence Pao On V Lau Yiu Long (1980) AC 614, Universe Tankships Inc of Monrovia

V International Transport workers Federation (1983) AC 366. B & S Contracts and Design Ltd V Victor

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green Publications Ltd. (1984) 1 CR 419

“reasonable alternative” Vantage Navigation Corp. V Suhail and Saud Bahwan Building materials, The Alev (1989) 1 Llyd rep. 138

practical alternatives” What constitutes a reasonable

alternative? Criticism of the reasonable alternative

test- an alternative?> Did the person make the threat out of malice or bad faith?

Why a two stage test when a legal wrong has been threatened?

- Security of transactions- Balancing of competing interests- In criminal offence alternatives test

inappropriate,- Barton V Armstong (1976)- Is the duress operative?- To what degree did the threat induce

the contract?, Barton V Armstong- Threat significant cause of the

contract. - The Evia luck (1992) 2 AC 152

RescissionRight to rescind may be lost by affirmationNorth Ocean shipping V Hyundai Construction Co. Ltd., (1978) 3 ALL ER. 1170

B. UNDUE INFLUENCE

Introduction4


Overlap between duress and undue influence Subtle difference based on relationship between the

parties. Royal Bank of Scotland V Eltridge (No.2) (2001)

4 ALL ER 449 Allcard v Skinner (1887) 36 Ch. D 15 Actual and presumed undue influence.Barclays Bank PLC v O’Brien (1963) 4 All ER 417 Modern context of use of undue influence (loan

guarantee by wife to husband) The right to rescind may be lost by affirmation

Allcard v Skinner (1887)

Actual undue influence Inappropriate exercise of influence arising out of the

relationship.Royal Bank of Scotland V Etridge (No.2) 2001 4

All ER 449 Bank of Credit and Commerce International

S.A. V. Aboody (1989) Fam. Law 435 Absence of malign intent to cause detriment

irrelevant.

Presumed Undue Influence The types of presumptions (Type 2A and Type 2B) Equity and the presumption of influence in special

category of relationships. Presumed as a mater of law not just evidentially second presumption that is, that influence was

exercised is an evidential presumption. Second must relate to the transaction and can be

rebutted. 2nd type: Relationship between the parties involved

relevant influence

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- relationship of trust and confidence – fiduciary relationship.

Transaction must be one that ‘calls for an explanation’

Relationship between banker and customer Lloyds Bank Ltd V Bundy (1974) 3 All ER. 757.National Westminister Bank PLC V Morgan (1985) 1 All ER 821

Transaction readily explicable as normal commercial loan

No requirement of ‘dominating influence’ Goldsworthy V Brickell (1987) 1 All ER 853

Transactions calling for an explanationAllcard V Skinner

Large gift Manifest Disadvantage National Westminister V

Morgan Husband guarantees

Difficulty in generating presumption of undue influence in husband and wife guarantee type of cases.Royal Bank V Etridge

Rebutting the presumption of undue influence Free, full informed choice Zamet V Hyman (1961) 3

All ER 933Inche Noriah V Shaik Allie Bin Omar (1929) AR 127

Weight to be attached to independent advice Royal Bank of Scotland V Etridge

Undue influence and third parties Examples from husband and wife situation, but not

limited to this. Barclays Bank PLC V O’Brien (1993) 4 All ER 417

“Agency relationship” 6


“Constructive Notice”

“Put on inquiry”o transaction not to financial advantage of wife.o Substantial risk in transactions.

Situations outside the husband and wife context and outside context

surety transactions. Massey V Midland Bank PLC (1995)

Where couples not cohabiting Where relationship between debtor and surety is

non-commercial Constructive notice CIBC Mortgages V Pitt (1993) What can third parties do to prevent itself being

fixed with constructive notice?Barclays Bank V O’Brien

Confirmation by solicitor UCB Corporate Services Ltd V Williams (2002)“appropriate advice”

Exceptional circumstances Credit Lyonnais Bank Nederland NV-V-Burch. (1997) 1 All ER 144.

Other relevant cases. Hodgins R. W. Law of Contract.

Hassanali Issa and Co. V Jeraj Produce Store !967 E.A. 55

H.C. Pater V Pankay 5 Thakora (1965) EA 629Ottoman Bank V K. S. (1965) EA. 464.

C. MISTAKE

Introduction Common mistake Mutual mistake

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Unilateral mistake

Are contractual obligations absolute or can a party escape liability?Narrow meaning of word “mistake” in contract law.

Clarion Ltd V National Provident Institution (2000) Law takes a predominantly objective of agreement

Controvincial Estates Plc V Merchant Investors Assurance Co. Ltd (1983) Com LR 158

A. Agreement Mistakes Mistakes as to identity(unilateral mistake)

Shogun Finance Ltd V Hudson (2003) All ER (D) 258

Identity or attributes? Cundy V Lindsay (1878)3 App. Cas. 459Kings Norton Metal Co. V Edridge, Merret & Co. (1897) 14 TLR 98“Is the distinction between identity and attributes not genuine”? Lewis V Avery (1972) IQB 198 Shegun Finance Ltd V Hudson

> Parties dealing face to facePhillips V Brooks Ltd. (1919) 2 ICB 243 Lake V Simmons (1927) AC. 487, IngramV Little (1961) 1 QB 31

Should the law permit some division of loss between two innocent parties? Lewis V Averay Shogun Finance V Hudson

> Mistake as to the terms or subject matter of a contract (mutual mistake)

> Objective principles in relation to parties at cross purposes Raffles V Wichelhaus (1864) 2

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H & C 906 Scriven Bros V Hindley & Co. (1913) 3 KB. 564. Smith V Hughes (1871) LR. 6. QB. 592

> Agreement mistake in equity- equitable jurisdiction permits a more flexible approach. Malins V Freemen (1837) Steward V Kennedy (1890) 15 App. Co. 75.

Patel V Ali (1984) Ch. 283 where the court refused to grant specific performance which is a discretienary remedy, on equitable grounds of hardship to the dependant. The vendor of the house had, since the sale, become disabled and heavily dependent for help on neighbours whom she would lose if she had to move. Goolding J. refused to grant specific performance, leaving the purchasers to their remedy in damages.

Court will not allow defendant to escape performance simply because he made a mistake. Tamplin V James (1879) 15 Ch. D. 215

Rectification is a another equitable remedy. Joscelyne V Nissen (1970) 2 QB 86 Riverside Properties Ltd., V Paul (1975) Ch. 133. Commission for the New Towns V Cooper (GB) Ltd. (1995) Oceanic Village V. Shirayama Shokusan Co. Ltd. (1999)

B Common Mistake

Performability Mistake or Initial impossibility. Mistake as to existence of subject matter.

Galloway V Galloway (1914) Couturier V Hastie (1856) 5 HL Case 673

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Assumption of risk of goods non-existent. McRae V Commonwealth Disposals Commission (1951) 84 CLR 377 Barrow, lane & Ballard Ltd V. Phillips & Co. Ltd. 1929 1 KB 574

Mistake as to quality of subject matterGreat peace shipping Ltd V Tsauliris salvage (International) Ltd 2003) QB. 679Bell V Lever Bros 1932 AC. 161

Mistake as to the existence of some quality which makes the thing without the quality essentially different. Associated Japanese Bank (International) V Credit du Nord Strict view of mistake at common Law. Leaf V

International Galleries (1950) 2 KB 86 but see Associated Japanese Bank (International) V Credit do Nord SA:

A doctrine of common mistake of common lawThe scope of common mistake. Great Peace Shipping Ltd. V Tsauliris Salvage (International) Ltd., (2002) EWCA AU. 1407 (2003) QB 679

Common Mistake in equity, William Sandall Plc V Cambridgeshire County Council (1994)

Contracts merely liable for setting aside in equity? Solle V Butcher (1950 1 KB 671 Bell V Lever Bros Great Peace Shipping

Further attempt to develop an equittable approach Grist V Bailey (1967) Ch. 532

Documents signed by Mistake – L’Estrange V Graucobs________(1934) KB 394

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Non Est Factum – not my deed. Thoroughgood’s Case (1582) Foster V Mackinnon (1869) LR. 4 CP. 704

Use of defence of non est factum strictly limited. Saunders V Anglia Building Society (Gallie V Lee) 1971) AC 1004

Party cannot rely on the defence where she acted carelessly. United Dominions Trust Ltd V Western (1976) QB 513

Where document radically different from what it was supposed to be. Lloyds Bank PlC V Waterhouse (1990)

D. MISREPRESENTATION

Introduction

Operative misrepresentation Who can one claim remedy for misrepresentation? Misrepresentation can be innocent, fraudulent and

negligent Remedies are found in common law, equity and

statute law (Trade Description Act CAP) No general duty to disclose relevant facts in pre-

contract negotiations Misrepresentation must be false statement of fact

not opinion or intention. Edginton v. Fitzmaurice (1885) 29 ch. D 459

statement of opinion Bisset v. Wilkinson (1927) AC 177

Statement of person in better position to know the truth Smith v. Land and House Property Corporation (1884) 28 ch. D 7

Brown V. Raphael (1958) 11


Statement of expert Esso Petroleum Co. Ltd. Marden (1976)

No general duty to disclose Turner v. Green (1895)

Partial non-disclosure Motts Patent Brick and Tile Co. (1886)

Change of circumstances with V O’Flanagan (1936) ch. 575

Change of intention Traill V Baring (1864) Fiduciary or confidential relationships (covered

under undue influence) – duty to disclose material facts

Misrepresentation by conduct Ray v. Sampers (1974) R V Charles (1977)

When is misrepresentation operative? Parties to the contract Reliance Smith v Chadwick (1884) Where reasonable person would have relied upon

misrepresentation County Natwest v. Barton (2002)

Where misrepresentation is not known about Horsfall v. Thomas (1862)

Where representee relies upon his own investigations Attwood v. small (1838)

Where opportunity to discover truth not taken. Redgrave v. Hurd (1881)

Degree of reliance Edginton v. Fitzmaurice (1885)

Atlantic lines and Navigation Co. Inc. v. Hallam Ltd “The Way” (1983)

Materiality

Types of misrepresentation

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Fraudulent misrepresentation Derry v. Deek (1889) 14 App Case 337Arkerhielm v. De Mark (1959) Ac 789

Jewson & Sons Ltd. v. Arcos Ltd (1933) Damages for fraudulent misrepresentation Negligent misstatements Hedley Byrne &

Co. Ltd. v. Heller & Partners Ltd (1964) Innocent misrepresentation Rescission Car and Finance Ltd v. Caldwell

(1965) Indemnity Whittington v. Seale –Hayne (1990) Trade Descriptions Act CAP 505 Laws of Kenya

E. ILLEGALITY

Introduction Illegal contracts divided on the basis on the legal

consequences of those contracts (e.g. void or illegal)

A. VOID CONTRACTS

Gaming or wagering contracts Gaming laws Ellesmere (Ear of v. Wallace (1929) 2 ch. I

1. Contracts in Restraint of Trade

Prima facie void unless justified as being reasonable between the parties and not inimical to the public interest

Examples of ‘goodwill’ and employment agreements Schroeder Music Publishing Co. Macaulay (1974) 3 All ER 616

Restraint may be reasonable and commercially necessary for protection of legitimate interest

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Nordenfelt v. Maxin Nordenfelt Guns and Ammunitions Co. Ltd.(1894) Ac 535

Sale of business Nordenfelt Vancouver Malt and Sake Brewing Co. Ltd v. Vancouver Breweries Co. Ltd. (1934) Ac 181

Court willing to sever parts which might be too wide in area or period Goldsoll v. Goldman (1915) 1 Ch 292

Restraints in a contract of employment

Protection of trade secrets and confidential information

Distinction between trade secret and confidential information Fss Travel & Leisure Systems Ltd v. Johnson (1998) I RLR 382 Herbert Morris Ltd v. Saxelby (1916) AC 688

What constitutes a trade secrets? Forsters & Sons Ltd v. Suggett (1918) 35 TLR 87

Faccanda Chicken Ltd v. Fowler (1987) Ch. 177 Peter Brooks v. Olyslager Oms (UK) Ltd (1998) 1 PLR 590

Commercial Plastics Ltd v. Vincent (1965) 1 QB 623

Littlewoods organization Ltd v. Harris (1978) 1 ALL ER 1026 Kores Manufacturing Co. Ltd v. Kolok Manufacturing (Ltd) (1958) Ch. 108

Clauses restraining soliciting of customers Distinction between different categories of

employees Fitch v. Dewes (1921) 2AC 158 Marion White Ltd v. Francis (1972) 3 ALL ER

857 The scope of restraint clause and severance

Fitch v. Suggett Mason v. Provident Clothing & Supply Co. Ltd. (1913) Ac. 724

Attwood v Lament (1920) 3 KB 57114


What are the requirements for severance? Goldsoll v. Goldman Littlewoods Organisation v. Harris 1 ALL ER 1026

Restraints protecting other interests Eastham v. Newcastle United Football Club Ltd. (1964) Ch 413

Schroeder Music Publishing co. Ltd v. Macaulay (1974) 13 ALL ER 616

Silverstone Records v. Mountfield (1993) EMLR 152

Are the categories of restraint closed? Esso Petroleum Co. Ltd v. Harpers Garage (Stouport) Ltd

Further regulation of Restraint of trade A third party might be seriously affected by a

restraint of trade but, has, until recently, been entirely without remedy. Mogul Steamship Co. Ltd v. McGreger, Gow & Co. Ltd. (1892)

In this case an association of shipowners took collective action to keep the plaintiff out of the shipping trade. At that time, the House of Lords was not even certain that the contract was in restraint of trade. However they were clear that even if it was, the plaintiff had no remedy

Restrictive Trade Practices, Monopolies and Price control Act CAP 504 Laws of Kenya

2. OTHER CONTRACTS VOID AT COMMON LAW ON GROUNDS OF

PUBLIC POLICY

Contracts to oust the jurisdiction of the courts Jones v. Vernons Pools Ltd (1938( 2 ALL ER 626

Scott v. Avery (1855) 5 HL Cas 8115


Baker v. Jones (1954) 1 WLR 1005 Hyman v. Hyman (1929) P1, 26 LGR 471 Contracts undermining the status of

marriage Love v. Peers (1768) 4 Burr 2225 Marriage brokerage Hermann v. Charles worth

(1905) 2 KB 123

B ILLEGAL CONTRACTS

Distinction between void and illegal contracts Contracts to commit an unlawful Act Where purpose to commit, a crime, or a tort or a

fraud it is illegal and unforceable. Brown Jenkinson & Co. Ltd. v. Percy Dalfen ltd (1957) 2 QB 621

A guilty person may be able to enforce the contract Shaw v. Groom (1970)

Re Mohmound and Isphani(1921) Contracts promoting sexual immorality

Pearce v. Brooks (1866) v. LR 1 Ex 213 Upfill v. Wright [1911] 1 KB 506

Tanner v. Tanner (1975) 3 ALL ER 776 Contracts prejudicial to the interests of the

state Trading contracts at war time Contracts prejudicial to the administration of

justice R v. Andrews (1973) QB 422 Contracts promoting corruption in Public life

Parkison v. College of Ambulance Ltd and Harrison (1925) 2 KB 1

EFFECTS OF IMPROPRIETY AND ILLEGALITY

Void Contracts Doctrine of severance

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Hermann v. Charles Worth (1905) 2 KB 123

Illegal ContractsRe Mohmound and Ispahani Archbold’s (Freightage) Ltd v. Spangett Ltd (1961) 1 Q3 374 Ashmore, Benson, Pease & Co. Ltd v. AV Dawson Ltd (1973) 2 ALL ER 856

Some general principles An illegal contract is unforceable by

either party Pearce v. Brooks Mohammed v. Alaga & Co. (1999) 3

ALL ER 699 Money or property transferred is not

recoverable Parkinson v. College of Ambulance Ltd & Harrison

Belvoir Finance Co. Ltd. v. Stapleton (1971) 1 QB 210

ExceptionsTinsley v. Milligan (1993) 3 ALL ER 65Whenever parties are not equally guilty Kiriri Cotton Ltd v. Dewani (1960) AC 192Green v. Portsmouth Stadium Ltd (1953) 2QB 190Bigos v. Bousted (1951) 1 All ER 92Kearly v. Thomson (1890) 24 QBD 742

Related transactions between the partiesFisher v. Bridges (1854) 18 JP 599 Strongman (1945) Ltd v. Sincock (1955) 2 QB 525

Illegal performance of lawful contractsArchbold’s (Freightage) Ltd v. Spanglett LtdMarle v. Philip Trant & Sons Ltd (1954)1 QB 29

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Proposals for reform

TOPIC TWO: DISCHARGE OF CONTRACT

1. PERFORMANCE

Performance depends on the express ad implied terms of the contract

Sale of Goods Act CAP 31 implied Terms – Sec 14-17 to title description, merchantability

Parties may agree to end upon the occurrence of certain circumstances. Financings Ltd. v. Baldock (1963) 2 QB 104 “Where hirer fails to pay the initial or any subsequent installments within 10 days…”

By new Agreements

Order of performance and independent obligationTaylor v. Webb (1937) 2KB 283Entire contracts Cutter v. Powell (1795) 6 Term

Rep. 320 Quantum Meruit Sumpter v. Hedges (1898) 1 QB

673 Substantial performance Hoening v. Isaacs (1952)

2 ALL ER 176

2. BREACH

TERMINATION FOR BREACH

Hong Kong for Shipping Co. Ltd. v. Kawasaki Kisen Kaisha Ltd (1962) 2 QB 26

Freeth v. Burr (1874) LR 9 CP 208

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Alfred C Toepfer International Gmbtt v. Itex Itagrani Export SA (1993) 1 Lloyd Rep. 360 Decro-wall International SA V Practitioner Marketing Ltd (1971) 2 ALL ER 216

Photo production Ltd. v. Securior Transport Ltd ( 1980) 1 Ailer 556

The Mihalis Angelos (1971) 1 QB 164 Anticipatory breach Freeth v. Burr (1874) LR

94208 Hashamu v. Zenab (1960) AC 316 Communication of repudiation Vitol SA v. Norelf

Ltd (1996) 3 ALL ER 193 Affirmation or termination Stocznia Gdanska SA V

Latuian Shipping (No.3) (2002) 2 ALL ER 768 Hochster v. De La Tour (1853) 2 E & B 678

Frost v. Knight (1872) 7 Exch. 111 Intention not to perform Federal Commerce and

Navigation Co. Ltd. v. Molena Alpha Inc (1979) 1 ALL ER 307 Woodwar Investment Development Ltd. v. Wimpey Construction UK Ltd. (1980) 1 ALL ER 571

Vaswani v. Italian motors (sales and services) ltd (1996_ 1 WLR 270

Keeping the contract alive Avery v. Bowden (1856) 6 E & B 953 Fercometal SARL v. MSC Meditterranean Shipping Cp. SA (1988) The Simona (1989) AC 788 The Mihalis Angelos

Anticipayory breach and duty to mitigate White and Carter (Councils ) Ltd v. McGregor (19662) AC 413

The Alaskan Trader (Clea shipping corpn v. Bulk oil International Ltd) (1984)

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3. DISCHARGE BY IMMPOSSIBILITY: THE DOCTRINE OF FRUSTRATION

Introduction: Initial & subsequent impossibility Amalgamated Investment & Property Co. Ltd.

v. John Walker & Sons Ltd (1976) 3 ALL ER 509 Development of the doctrine of frustration

Paradine v. Jane (1647) 26 Sty 47 Taylor v. Caldwell (1863) 3 B & S 826 Scope of doctrine Krell v. Henry (1903) 2 KB 70 A narrow interpretation of frustration Herne Bay

Steamboat Co. v. Hutton (1903) 2 KB 683 Tsakiroglou & Co. Ltd v. Noblee Thorl GmbH 1

(1962) Financial hardship no reason to allow reliance on

frustration Davis contractors Ltd v. Fareham UDC (1956) AC 696

Scope of the doctrine

Leases National carriers Ltd. v. Panalpina (Northern) Ltd [1981] 1 ALL ER 161

Illegality Impossibility: destruction of subject matter

Appleby v. Myers (1867) LR 2 CP 651 Asfar v. Blundell (1896) 1 QB 123 Impossibility: Sale of Goods Act Impossibility: death or illness whincup v. Hughes

(1871) LR 6 CP 78 Robinson v. Davison (1871) LR 6 Exch 269 Notcutt v. Universal Equipment Co. (London)

Ltd (1986) 3 ALL ER 582

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Impossibility: due to unavailability Jackson v. Union Marine Insurance Co. Ltd. (1874) LR 10 CP 125

Tamplin steamship co. Ltd Anglo-Mexican Petroleum Products co. (1916) 1 KB 485

Impossibility: Not just financial hardship Davis contractors Ltd v. Fareham UDC (1956) AC 696

Tsakiroglou & Co. Ltd v. Noble Thorl GmbH(1962)

Staffordshire Area Health Authority v. South Staffordshire Water Works Co. (1978 (3 ALL ER 769

Effects of express provisions for frustrating event Taylor v. Caldwell Jackson v. Union Marine Insurance Co. Ltd (1874) LR 10 CP 125

Frustration does not apply to forseeable events. Davis Contractors Ltd. v. Fareham UDC (1956) AC 696

Frustration cannot be self induced Ocean Tramp Tankers Corp v. V/O Sofracht, The Eugenia (1964) 2 QB 226

Paal Wilson Co. A/S v. Partenreederei Hannah Blumenthal, The Hannah Blumenthal (1983) 1 ALL ER 34

Joseph Constantine Steamship line Ltd. v. Imperial Smelting Corp Ltd. (1941) 2 ALL ER 165

Effects of the doctrine Hirji Mulji V Cheong Yue Steamship Co. Ltd. (1926) AC 497 Chandler v. Webster (1904) 1 KB 493 Fibrosa Spolka Akcyjna Fairbairn Lawson Combe Barbou

r Ltd, The Fibrosa case (1943) AC 32 The Law Reform (Frustrated Contracts) Act 1943 Main changes introduced by the Act.

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Gamerco SA V. ICM/ Fair Warning (Agency) Ltd (1995) 1 WLR 1226 Cutter v. Powell (1795) 6 Term rep 320

BP Exploration co (Libya) Ltd v. Hunt (no.2) (1982) 1 ALL ER 925

TOPIC 3 REMEDIES

INTRODUCTION

1. Damages Expectation loss Livingstone v. Rawyards Coal

(1880) 5 App/ Cas 25

Measure of damages Under Sale of Goods Act “Cost of cure” Radford v. De froberville (1977)

(WLR) 1262 Time of breach Johnson v. Agnew (1979) 1 ALL ER

883 Suleman v. Shahshavari (1989) 2 ALL ER 460

Reliance Loss (1971) 3 ALL ER 690 Anglia Television Ltd v Reed C and P Haulage v. Middleton (1983) 1 WLR

1461 Pre-contract expenditure Anglia Television v.

Reed (1972) 1 QB 60

Restitution

Enrichment by wrong Rowland v. Divall (1923) 2 KB 500

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Enrichment by substraction Wrotham Park Estate Co. v. Parkside Homes Ltd (1974) 1 WLR 798

Damages for mental distress Addis v.Gramophone co. Ltd (1909) AC 488 Watts v. Morrow (1991) 4 ALL ER 937 Farley v. Skinner (2001) Uktth 49 Perry v. Sidney Phillips & Sons(1982) 3 All ER

705 Watts v. Morrow (1991) 4 ALL ER 937 Heywood v. Wellers (1976) QB 446 Hayes v. James & Charles Dodd(1990) 2 ALL ER

815

Remoteness of Damage Test for Remoteness Hadley v. Baxendale (1854)

9 Exch. 34 Victoria Laundry (Windsor) Ltd v. Newman

Industries Ltd. (1949) 1 ALL ER 997 Reasonable forseeability Heron II (Koufos v.

(Zarnikow Ltd) (1960) 1 AC 350

Contract/Tort distinction and type of loss H Parsons (Livestock) Ltd. v. Ottley & Co. Ltd.

(1978) 1 ALL ER 525 Economic justification for remoteness rule Need for an additional requirement?

Causation and Liability Intervening acts and events Monarch steamship

co Ltd. v. A/B Karlshamns Olje Fabriker (1949) AC 196

London Joint Stock Bank v. MacMillan (1918) AC 777

Mitigation

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British Westinghouse Electric and Manufacturing Co. Ltd. v. Underground Electric Railways Co. of London (1912) AC 673

Sotiros Shipping Inc v. Sameiet Solholt, The Solholt 1 Lloyd’s Rep. 605

Reasonable steps to limit loss James Finlay & Co. v. NU Kwik Hoo Tong HM

(1029) 1 KB 400 Brace v. Calder (1895) 2 QB 253

Expenses Incurred Banco de Portugal v. Waterlow & Sons

Ltd(1932) AC 452 Benefit gained is taken into account British

Westing house Electric Taxation British Transport commission v.

Gourley (1956) 2 WLR 41

Penalties and Liquidated damages Dunlop pneumatic Tyre Co. Ltd. co. Ltd v.

Garage and Motor (1915) AC 79 Philips Hong Kong Ltd. v. A-G of Hong Kong

(1993) 61 BLR 41

Avoidance of the rule on penalties Alder v. Moore (1961) 1 ALL ER 1 Bridge v.

Campbell Discount Co. Ltd (1962) AC 600

2. Action for an agreed sum White and Carter (Councils Ltd. v. McGregor

3. Specific Performance

Adequacy of damages Harnett v. Yielding (1805) 2 Sch. & Let. 549)

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Beswick v. Beswick (1968) AC 58 Rainbow Estates Ltd. v. Tokenhold Ltd. (1998) 2

ALL ER 860 Cud v. Rutter (1720) 2 Eq. Cas Abr. 18 Harvela Investments Ltd. v. Royal Trust Co. of

Canada (1985) Ch. 103 Falcke v. Gray (1859) 4 Drew 651 Behnke v. Bede shipping Co. Ltd. (1927) 1 KB

649 Beswick v. Bewick (1968) AC 58

Supervision Ryan v. Mutual Tontine Westminster Chambers

Association (1893) 1 C. 116

Personal Services Hill v. C A Parsons & Co. Ltd. (1972) Ch. 305 Powell v. Brent London Borough Council (1988)

1 CR 176

Discretion of courts to award to specific performance

Hardship Patel v. Ali (1984) 1 ALL ER 978

Consideration

Party Claiming specific performance Walter v. Morgan (1861) 3 De. 9F & J 718

Mutuality Price v. Strange (1977) 3 ALL ER 371

4. Injunctions

25