Contract Cycle 5

  • Created by: CLC1802
  • Created on: 11-02-19 10:24

Smith v Hughes

When buying and selling oats, the buyer thought he was buying old oats but the seller thought he was selling new oats.

Court- took an objective approach to see what reaosnable person would like therefore doesn't matter what the actual parties thought they were buying. But can't be release from contract since ti is a mistake as to the quality of the oats (i.e. the age) not the terms on the contract.

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Tamplin v James

James bid on a brew house in an auction, he thought the garden was part of the property as it had been used by the brew house previously.

The garden wasn't sold with the property and it wasn't part of the plans but James didn't look at the plans when he bid on the property.

He wanted to get out of contract because he made a mistake as thought he was buying more land than he was- court held he can't get out of contract as it is a mistake as to quality (i.e. the amount of land) and not a mistake as to a term on the contract

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Hartog v Colin & Shields

Hare skins for offer, being sold per pound. However they should have been sold per piece, the way hare skins are usually sold.

Court held this was a mistake as to the terms of the contract

Plus the other party knew of the mistake and as a consequence snapped up the offer, court said this was wrong and therefore the contract is void

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Chwee Kin Keong v Pte Ltd

Singaporean Case

Laser printers advertised as $66 each online. These printers usually sold for $3000 upwards. Large number of these prinetrs were bought at the reduced price before Digilandmail realised.

Court- the mistake was a term of the contract (the price) and the buyers knew that there was a difference in price this is why they bought the priner therefore the contract can be voided

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BA Scandal

Recently BA sold tickets for hundreds instead of thousands. Ba argued that 40% below bottom price should mean that the consumer knows there is a mistake. No cases went to court but settled within BA. Just a PR scandal.

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Centrovincial Estates plc v Merchant Investors ***

Rent review clause in the contract. The landlord sent an offer of £65,000, which was lwoer than the current rent. He had actually meant to increase the rent.

Court held- if other party should've known there was an error this is sufficient for a contract to be rendered void (tenant should have known as rent usually goes up and the landlord's offer was the other way by being lower than his current rent)

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Ulster Bank v Lambe

In Northern Ireland, an offer was sent for €155,000 even though the offer was meant to be in pounds for £155,000. Due to the better offer with the exchnage rates the other party immediately snapped up the better offer.

Court held- the other party knew from previous correspondance that the offer was meant to be in pounds. Court said both parties know of the error so instead of voiding it, they ratified the contract for it to now be in euros.

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Olympia Sauna Shipping Co SA v Shinwa Kaiun Kaisha

Claimant sent an offer of £100,000 as a full and final settlement. They did not realise that £74,000 of the debt was still remaining.

The party accepted this offer knowing that the other party still owed £74,000

Court held- the offer may have surprised them but not put them on alert. Every time you get an extraordinary offer you should act in good faith and ask whether the right offer was in fact made.

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Statoil ASA v Louis Dreyfus Energy Services LP (Th

Agreement to settle the dispute over amount of demurrage (amoutn paid by ship owner when they haven't discharged the ship on time). Party B knew that Party A had made a mistake in their caluclution of the extra days that the ship was docked.

Court- other party admitted they knew of the mistake however court deemed an error in calculation to be a mistake as to quality therefore the contract stood

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Raffles v Wichelhaus

Two ships leaving Bombay called Peerless, one in October and one in December.

Claimant said he cwould buy cotton off the Peerless from Bombay thinking it was one ship and the other party thought it was the other ship.

Court held that there was no meeting of the minds (consensus ad idem) and therefore there is a mistake and the contract can be voided as the parties are at cross purposes

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McRae v Commonwealth Disposals Commission

The Commision invited bids for the purchase of an oil tanker lying on the sea floor which was said to contain oil. McRe secured the bid and went to the location that the commission said the vessel was, however the vessel was not there and it had never existed.

Court held- it was a common mistake as both parties believed the vessel to be in this location but court said there is a limit on common mistake when one party assumes the risk (in this instance the party who assumed the risk of the tanker being there- the commission)

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Cooper v Phibbs

Nephew was leasing a fishery from his Uncle, when the Uncle died the nephew renewed the lease with his aunt. Later found out that his uncle had given him a life tenancy (therefore didn't have to pay to keep leasing the fishery)

Court- this is a common mistake in equity therefore they can void the lease or nephew can choose whether to go back on the contract. Legally impossible to uphold the lease.

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Sheikh Brothers Ltd v Ochsner

Party agreed to manufacture and dleiver a certain average amount of sisal per month but later transpired that the land was never capable of producing those amounts.

Court- physically impossible as both parties thought it was possible for the land to yield that much

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Griffith v Brymer

Hotel room booked for the purpose of watching the coronation but the king became ill and the coronation was cancelled, unbeknown to both parties

Court- this was a common mistake as both parties didn't know therefore the contract can be voided.

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Bell v Lever Bros

As part of a restructuring of the company, Mr Bell and Mr Snelling were offered a gold parachute offer to leave (a pay out to leave). The both accepted the money. It later transpired that both men whilst working at the company had breached their contract as they were part of a cocoa cartel which at that point would have given the company the right to end their contract without paying them to leave.

Comapny argued if they would have known they would have got rid of them without payign them

Court held- this is a mistake as to quality therefore the two defendents keep the money.

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Solle v Butcher

The alndlord was charging £250, instead of the lawful maximum of £140 as both aprties were unaware that the flat was rent controlled.

Court- both parties were mistaken as to whether the flat were rent controlled therefoe like Bell in common law this is a mistake as to quality so the contract cannot be voided.

But equity can be used to make the contract void.

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The Great Peace

Ship suffered structual damage, so asked the dalvage company for help. They were told that the Great Peace was 35 miles away, however it was in fact 410 miles away. When the damaged ship foud out about the mistake they tried to cancel the contract with Great Piece and get saved by another ship which was closer.

Court held- It was held that this was not a common mistake that would void the contract between the complainant and defendant. It was a matter of quality of the performance of the contract. The miles did not matter and it did not make the contract impossible to perform. A common mistake requires an element to make contract performance impossible and mileage was not fundamental enough to render the contract void- could have still done the extra miles just would have taken them longer

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OFT v Abbey National Bank

Banks charge you when you go over how much you have in your bank account, in this instance it was £30.

Question is whether the £30 is a core term or money you are paying in order to ahve a bank account

HOL- sided with banks as many bank systems are free therefore one way to pay for it is through an over draft

overdraft fees were core terms relating to the remuneration (for providing services for overdrawn accounts) and fell outside the concern of the OFT. In effect, though the charges were deemed to be unfair, the OFT did not have the powers under legislation to do anything.

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DGFT v First National

Can the bank charge interest during the period that they are waiting for the court's judgement when you're not sure if you have a claim or not- argued that it created an imbalance between the parties.

court ruled that a term doesn't have to be fair but you do have to bring it fairly to the other party's attention

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