Tag: Contract Law

L’Estrange v Graucob (1934)

English Contract Law

L'Estrange
‘Expert Salesman’ by Norman Rockwell

‘Reading the small print’ is a phrase familiar to discerning consumers, and in so this instance the value of careful reading served to remind that contracts of all shapes and sizes require careful attention, especially when the text is not readily visible.

In 1933 two travelling salesmen paid a visit to a small community café in Wales in order to sell them an automatic cigarette vending machine, and so having spent a number of hours discussing the user benefits and attached payment terms, the respondent duly agreed to sign the partially completed ‘sales agreement’ in expectation of a new and fully working product.

Upon payment of the deposit the appellants returned a signed ‘order confirmation’ and accompanying eighteen-month guarantee, at which point the contract was well underway and instalments were regularly paid, however after a period of less than a few days the machine began malfunctioning and several engineer visits were arranged before at the point of exhaustion, the respondent requested the item be returned in forfeit of her deposit.

In spite of this the appellants refused to terminate the transaction, whereupon the respondent commenced litigation for return of the monies paid on grounds that the product had been unfit for purpose and thus contrary to the contract and guarantee, while the appellants counter-claimed their remaining costs owed for the purchase of the machine before the respondent amended her claim to include repayment for failure to provide full consideration, breach of implied condition that the vending machine was functioning at point of sale, and/or damages for breach of implied warranty that the product was fit for purpose.

The argument cited by the appellants relied upon an absence of failed consideration and non-existence of implied conditions as per s.11(c) of the Sale of Goods Act 1893  which read that:

“Where a contract of sale is not severable, and the buyer has accepted the goods, or part thereof, or where the contract is for specific goods, the property in which as passed to the buyer, the breach of any condition to be fulfilled by the seller can only be treated as a breach of warranty, and not as a ground for rejecting the goods and treating the contract as repudiated, unless there be a term of the contract, express or implied, to that effect.”

Thus no implied warranty existed on grounds that the signed sales agreement excluded both condition and warranty within the small print shown at the bottom, which read that:

“[T]his agreement contains all the terms and conditions under which I agree to purchase the machine specified above, and any express or implied condition, statement, or warranty, statutory or otherwise not stated herein is hereby excluded…”

Whereupon the respondent contended that she had been induced to sign the agreement through misrepresentation on grounds of never having her attention drawn to the exclusion notice beforehand.

In the first instance the Carnarvonshire County Court awarded a sum of 70l for the respondent in light of a perceived breach of the warranty despite her signature and no evidence of misrepresentation, and further allowed the appellants the sum of 71l for the monies unpaid.

Having appealed in the Court of the Kings Bench the appellants argued again that no misrepresentation had occurred, and that at any point the respondent was free to note and enquire as to the limitations of the contract, but had waived that right when signing to the terms expressed.

Here the Court relied upon the principles used in Parker v South Eastern Railway Co, in which the Court of Appeal had held that:

“In an ordinary case, where an action is brought on a written agreement which is signed by the defendant, the agreement is proved by proving his signature, and, in the absence of fraud, it is wholly immaterial that he has not read the agreement and does not know its contents.”

Which translated that despite recognition of the respondent’s misfortune the law could not enforce a claim for misrepresentation based upon the oversight of a party willing to contract, thus the court set aside the respondent’s award and upheld that of the appellants, while reminding both parties that:

“When a document containing contractual terms is signed, then, in the absence of fraud, or, I will add, misrepresentation, the party signing it is bound, and it is wholly immaterial whether he has read the document or not.”

Carlill v Carbolic Smoke Ball Co. (1893)

English Contract Law

Carlill

The primary ingredients to a valid and enforceable contract are (i) offer (ii) acceptance (iii) consideration and (iv) performance; and so on this occasion, the sale of medicinal apparatus proved the undoing of what may have at first blush appeared to be a lucrative use of marketing and false pretence.

In 1891 an advertisement was placed in the Pall Mall Gazette boasting the remedial powers of carbolic smoke balls, that when used in accordance with the manufacturers instructions could prevent users from the effects of influenza, while the exact words used stated that:

“100l reward will be paid by the Carbolic Smoke Ball Company to any person who contracts the increasing epidemic influenza, colds, or any disease caused by taking cold, after having used the ball three times daily for two weeks according to the printed directions supplied with each ball. 1000l is deposited with the Alliance Bank, Regent Street shewing our sincerity in the matter.”

Having decided to take the challenge, the respondent in this appeal purchased and used the product in full observation of the terms of the advert and yet still caught the virus, whereupon she sued for breach of contract.

Following a general examination of  the nature of her claim, the court awarded in favour of the respondent, before the appellants sought to challenge the existence of a contract on grounds that (i) the advert did not constitute a contract, (ii) that non-specificity of persons prevented any binding effect on consumers, (iii) that no acceptance had been notified so as to bind them, and (iv) that no consideration had been made by the respondent so as to warrant a claim of right.

After addressing each point sequentially the Court of Appeal unanimously held that while the advert did not amount to a contract, it did represent an offer to the world entire, therefore those who chose to purchase and use the product as prescribed within the published text were through their participation, demonstrating full and unconditional acceptance of the offer.

Similarly the money spent and time invested when using the smoke balls (an unpleasant experience in itself) further indicated that consideration had been sufficient enough to allow a claim.

In addition the Court upheld the appeal on grounds while noting how unlike arms-length contracts, the all-encompassing design of advertisements were not such that required acceptance for reasons of practicality and that reasonable application of the promises made prevented revocation by the advertisers on grounds that when drafting the advert, they did so upon the risk that profit may, or may not, have become certain, while reminding the parties that:

“Inconvenience sustained by one party at the request of the other is enough to create a consideration.”

Approved Cover Design

United States Law: A Case Study Collection

Approved Cover (Small)

Today I’m very pleased to share with you the approved cover design for the book, and as you can see I have utilised the red, white and blue of the American flag, which I hope compliments the overall aesthetic and inspires some degree of patriotism when looking at it first hand.

Naturally this is just the first step in several, however it does indicate that publication is not too far away, and needless to say that with two years in the making, it’s a body of work that I am incredibly proud of.

More posts will follow as things progress, but for now I hope you like the final product as it stands right now, and here’s to getting it out to market in the coming weeks…

University Moot

Contract Law Moot | 2014

Advocate
‘Three Lawyers’ by Honoré Daumier

I’m only too aware that many law undergraduates often feel somewhat lost and confused when drafting their debut law moot, and so I thought I would publish mine here for those who wish to draw reference, or at the very least guidance from it when preparing themselves for a public argument (albeit inside a university classroom).

Just to provide a little background, I represented the respondents in a contract law ‘frustration’ claim, and yes I won by a clear and wide margin, which instantly confirmed and validated my love for the subject and a deeply ingrained wish to advocate professionally.

Anyway without waffling on, by all means click here and read away, while I can only hope that this post helps somebody somewhere at some point.

 

Notes on the 2018 Carillion collapse

Insight | August 2019

Carillion
‘Le Chantier’ by Maximilien Luce

This is a twenty page report detailing the financial collapse of Carillion plc in 2018, and while this independent research explains much of the background leading up to their downfall, it also includes judicial insight into the rights of those left out of pocket when the hammer finally fell (click here to read it).

Happy 1st Birthday!

United States Law: A Collection of Case Studies

Birthday Cake

Today marks exactly one year to the day that I first started writing the ‘voluminous’ Case Law Compendium: United States Case Law, and its pretty incredible to think that so much time has already passed, particularly given that I’m not even midway through the book  yet!

Anyway, needless to say my hard work continues on undaunted, and I’m hoping to share the first half of the criminal law section here in the next couple of weeks, so watch this space if you’re interested to learn more…

Electronic Signatures Neil

 

Hospital Products Ltd v United States Surgical Corporation (1984)

Australian Equity & Trusts

Hospital Products Ltd v United States Surgical Corporation
‘Portrait of Niccolò Machiavelli’ by Santi di Tito

In a case embroiling both arms-length and personal agreements, the unavoidable overlapping of contract and equity are held to extensive scrutiny in a suit between corporations and individuals across two jurisdictions.

After an American surgical staple manufacturer entrusted their foreign sales to a New York salesman, the man whose reputation historically rested upon a handshake eventually used his informal approach to business to establish an overseas corporation, under which he manufactured his own version of the patented staples and promoted them to an Australian market via the prolific brand name used by his new business partners.

Upon discovery his underhand scheme, the now respondents sued for damages in the New South Wales Supreme Court under § 2-306(2) of the Uniform Commercial Code, which read that:

“A lawful agreement by either the seller or the buyer for exclusive dealing in the kind of goods concerned imposes unless otherwise agreed an obligation by the seller to use best efforts to supply the goods and by the buyer to use best efforts to promote their sale.”

While contesting that any sales accrued during the years accounted for were now held upon constructive trust for the respondents.

In the first instance, the court found that a fiduciary relationship had become evident when the respondents had entrusted their product in the appellant, therefore showing a unique vulnerability to his actions when working overseas, while under challenge before the Court of Appeal, the court supported the principle of a constructive trust and thus held accordingly.

Presented to the High Court of Australia, the question of trust relationships and contractual breach became central to the issue in hand, and so the court quickly noted that the contract rested upon verbal agreements and subsequent exchanges of correspondence, yet no legally binding agreements had been entered into; and so when examining the question of validity the court referred to Oscar Chess Ltd v Williams, in which the English Court of Appeal illustrated that a representation made during contractual negotiations could also be construed as a binding warranty, and so held that:

“The question whether a warranty was intended depends on the conduct of the parties, on their words and behaviour, rather than on their thoughts. If an intelligent bystander would reasonably infer that a warranty was intended, that will suffice.”

However the court also noted that in order for any implication of a warranty to sustain judicial scrutiny it must be:

  1. Reasonable and equitable
  2. Necessary so as to show that the contract would be useless without it
  3. So obvious to the bargain that it needs no expression
  4. Capable of clear expression if called upon
  5. Wholly supportive of the contract

And so moving on to the concept of fiduciary obligations arising from the heart of the working relationship, the court noted that in Reading v The King the English Court of Appeal held how:

“[A]‘fiduciary relation’ exists (a) whenever the plaintiff entrusts to the defendant property, including intangible property as, for instance, confidential information, and relies on the defendant to deal with such property for the benefit of the plaintiff or for purposes authorized by him, and not otherwise….and (b) whenever the plaintiff entrusts to the defendant a job to be performed, for instance, the negotiation of a contract on his behalf or for his benefit, and relies on the defendant to procure for the plaintiff the best terms available….”

Yet in vol. 25 of the University of Toronto Law Journal (1975) it also reads that in commercial dealings:

“[A] mere sub-contractor is not a fiduciary. Although his work may be described loosely as work which is to be carried out in the interests of the head contractor, the sub-contractor cannot in any meaningful sense be said to exercise a power or discretion which places the head contractor in a position of vulnerability.”

Therefore with little to warrant the existence of either a trust/trustee relationship or the presence of fiduciary duty with which to underline the machiavellian behaviour of the appellant, the court remitted the case back to the New South Wales Supreme Court with a view to an assessment of damages in favour of the respondents.

Moore v. Elmer (1901)

US Contract Law

Moore v. Elmer
‘Clairvoyant-Veritas’ by Gabriel Von Max

A promise to pay while absent of any consideration may at first blush appear to be enforceable, however the eyes of the law see things in quite a different light, as was found in this rather bizarre suit between a clairvoyant and the administrators of an estate.

For reasons best known to themselves, the plaintiff and former client had somehow entered into a bargain, whereby a written statement in January 1898 expressed that:

“In consideration of business and test sittings received from Madame Sesemore, the clairvoyant, otherwise known as Mrs. Josephene L. Moore on numerous occasions I the undersigned do hereby agree to give the above named Josephene or her heirs, if she is not alive, the balance of her mortgage note which is the Herman E. Bogardus mortgage note of Jan. 5, 1893, and the interest on same on or after the last day of Jan. 1900, if my death occurs before then which she has this day predicted and claims to be the truth, and which I the undersigned strongly doubt. 

Wherein if she is right I am willing to make a recompense to her as above stated, but not payable unless death occurs before 1900. Willard Elmer.”

And so upon his death, the plaintiff sued for recovery in the Hampden County Superior Court, while his various family members argued that the claim was void for want of consideration, after which the court dismissed the suit and the matter was argued again before the Massachusetts Supreme Court.

Here the court turned first to Chamberlain v. Whitford, wherein it had held that:

“An executed and past consideration is not sufficient to support a subsequent promise. It is not enough to show that a service has been rendered, and that it was beneficial to the party sought to be charged, unless it was rendered at his express request, or under such circumstances that the law would imply a request.”

While in Dearborn v. Brown the court had earlier held that:

“[T]he past performance of services constitutes no consideration even for an express promise, unless they were performed at the express or implied request of the defendant, or unless they were done in performance of some duty or obligation resting on the defendant.”

To which it had been evident that no money had been exchanged for the readings, nor any express terms set out during their meetings. And so when summarising the fruitlessness of the claim, the court finally relied upon Johnson v. Kimball in which it had later held that:

“An executed gift is neither consideration for an express contract nor a ground for implying one as a fiction of law.”

Thus the claim was one without merit and so the suit was again dismissed to the relief of the surviving parties and the dismay of a wanton clairvoyant, although one might have expected her to learn of the outcome prior to any litigation.

The contract law section is now finished!

United States Law: A Case Study Collection

Contract Law
‘Buttonwood Agreement’ by Unknown Artist

 July 20 2018

I am very pleased to announce that I have now completed the contract law chapter of the book, and so I can also share the contents here for those interested. There are a total of 47 cases available to read, and while it’s been a very insightful experience putting them all together, I genuinely hope they will help students get a quick grasp on the concept of contractual engagements, as well as the fundamental principles that frame them.

In all honesty contract law doesn’t have to feel like an overly complex field, and my conviction is that this section of the book (when it’s finished), will go a long way to dispelling the fears that many students doubtless carry into their Juris Doctor programs, and so without me droning on too much, below is the list of the historically notable contract-related cases included within the forthcoming Case Law Compendium: United States Law:

Contract Law

1. Alaska Packers Association v. Domenico

2. Allegheny College v. National Chautauqua County Bank of Jamestown

3. Ardente v. Horan

4. Austin Instrument Inc. v. Loral Corp.

5. Blatt v. University of So. California

6. Byers v. Federal Land Co.

7. Chicago Coliseum Club v. Dempsey

8. Embry v. Hargadine, McKittrick Dry Goods Co.

9. Feinberg v. Pfieffer Co.

10. Ferrera v. Nielsen

11. Globe Refining Co. v. Landa Cotton Oil Co.

12. Greiner v. Greiner

13. Groves v. John Wunder Co.

14. Halpert v. Rosenthal

15. Hamer v. Sidway

16. Hawkins v. McGee

17. Hill v. Gateway 2000 Inc.

18. Hobbs v. Massasoit Whip Co.

19. Hoffman v. Red Owl Stores Inc.

20. Hotchkiss v. National City Bank of New York

21. Jacob and Youngs v. Kent

22. Kirk La Shelle Co. v. Paul Armstrong Co.

23. Klocek v. Gateway Inc.

24. Leonard v. Pepsico Inc.

25. Lucy v. Zehmer

26. Mills v. Wyman

27. Murrow v. First National Bank of Hot Springs

28. Mutual Life Ins. Co. of New York v. Tailored Woman Inc.

29. Neri v. Retail Marine Corp.

30. Odorizzi v. Bloomfield School District

31. Ortelere v. Teachers Retirement Board of City of New York

32. Parker v. Twentieth Century-Fox Film Corp.

33. Peevyhouse v. Garland Coal & Mining Co.

34. ProCD Inc. v. Zeidenberg

35. Ricketts v. Scothorn

36. Rockingham County v. Luten Bridge Co.

37. Shaheen v. Knight

38. Sherwood v. Walker

39. Spooner v. Reserve Life Insurance Co.

40. Stop & Shop Inc. v. Ganen

41. Sullivan v. O’Connor

42. Sun Printing & Publishing Ass’n v. Remington Paper & Power Co.

43. U.S. for Use and Benefit of Crane Co. v. Progressive Enterprises Inc.

44. Vokes v. Arthur Murray Inc.

45. Williams v. Walker-Thomas Furniture Co.

46. Wood v. Boynton

47. Wood v. Lucy, Lady Duff-Gordon

 

The civil procedure section is now complete.

United States Law: A Case study Collection

United States
‘United States Flags Map’ by Inspirowl Design

April 18 2018

Having recently completed this preliminary chapter of the book, I have provided a list of the cases covered in the civil procedure section for those that might be mildly curious. I would also add that it’s been a genuine pleasure reading and analysing these cases, all of which have helped educate me as to the intricate nature of State and Federal legalities, and I can only hope the readers will take as much pleasure in their reading, as I have in their writing.

Civil Procedure

1. Adam v. Saenger

2. Aldinger v. Howard

3. Asahi Metal Industry Co. Ltd. v. Superior Court of California

4. Ashcroft v. Iqbal

5. Baldwin v. Iowa State Traveling Men’s Ass’n

6. Bell Atlantic Corp. v. Twombly

7. Bernhard v. Bank of America Nat. Trust & Savings Ass’n

8. Bernhardt v. Polygraphic Co. of America

9. Blonder-Tongue Laboratories Inc. v. University of Illinois Foundation

10. Burger King Corp. v. Rudzewicz

11. Burnham v. Superior Court of California, County of Marin

12. Byrd v. Blue Ridge Rural Electric Co-op. Inc.

13. Carnival Cruise Lines Inc. v. Shute

14. Celotex Corp. v. Catrett

15. Chicot County Drainage District v. Baxter State Bank

16. Clearfield Trust Co. v. U.S.

17. Cohen v. Beneficial Industrial Loan Corp.

18. Colgrove v. Battin

19. Conley v. Gibson

20. Connecticut v. Doehr

21. D.H. Overmeyer Co. Inc. of Ohio v. Frick Co.

22. Davis v. Farmers Co-op. Equity Co.

23. Durfee v. Duke

24. Erie. R. Co. v. Tompkins

25. Fuentes v. Shevin

26. Gasperini v. Center for Humanities Inc.

27. Gillespie v. United States Steel Corp.

28. Grable and Sons Metal Products Inc. v. Darue Engineering & Mfg.

29. Guaranty Trust Co. of N.Y. v. York

30. Gulf Oil Corp. v. Gilbert

31. Hanna v. Plumer

32. Hanson v. Denckla

33. Harris v. Balk

34. Henry L. Doherty and Co. v. Goodman

35. Hess v. Pawlowski

36. Hickman v. Taylor

37. Hilton v. Guyot

38. Hinderlider v. La Plata River & Cherry Creek Ditch Co.

39. Hurn v. Oursler

40. International Shoe Co. v. State of Washington

41. J. McIntyre Machinery Ltd. v. Nicastro

42. Kalb v. Feuerstein

43. Klaxon Co. v. Stentor Electric Manufacturing Co.

44. Kulko v. Superior Court of California

45. Livingston v. Jefferson

46. Louisville and Nashville Railroad Co. v. Mottley

47. McGee v. International Life Insurance Co.

48. Merrell Dow Pharmaceuticals Inc. v. Thompson

49. Mitchell v. W.T. Grant Co.

50. Moore v. New York Cotton Exchange

51. M/S Bremen v. Zapata Off-Shore Co.

52. Mullane v. Central Hanover Bank & Trust Co.

53. National Equipment Rental Limited v. Szukhent

54. North Georgia Finishing Inc. v. Di-Chem Inc.

55. Oregon ex rel. State Land Board v. Corvallis Sand & Gravel Co.

56. Owen Equipment & Erection Co. v. Kroger

57. Parklane Hosiery Co. Inc. v. Shore

58. Pennoyer v. Neff

59. Perkins v. Benguet Consolidated Mining Co.

60. Phillips Petroleum Co. v. Shutts

61. Piper Aircraft Co. v. Reyno

62. Ragan v. Merchants Transfer & Warehouse Co.

63. Shady Grove Orthopedic Associates v. Allstate Insurance Co.

64. Shaffer v. Heitner

65. Shoshone Mining Co. v. Rutter

66. Sibbach v. Wilson & Co.

67. Smith v. Kansas City Title & Trust Co.

68. Sniadach v. Family Finance Corp. of Bay View

69. Swift v. Tyson

70. United Mine Workers of America v. Gibbs

71. Woods v. Interstate Realty Co.

72. World-Wide Volkswagen Corp. v. Woodson

73. Zippo Manufacturing Co. v. Zippo Dot Com Inc.