Contract Law Cases Overview

A legal principle where courts refuse to enforce contracts involving illegal activities, even if the contract itself is valid.

This case established that managing agents in financial situations owe a duty of care to their clients, regardless of a formal contract.

A situation where a party is liable under both a contract and a tortious act.

This case upholds the idea that exclusion clauses in contracts can protect a party from liability for negligence, even if the consequences are severe.

This legislation aims to protect minors from unfair contracts while allowing them to enter necessary agreements.

A legal principle that allows people to freely enter into contracts, but also limits the use of unfair terms.

This law regulates exclusion and limitation clauses in contracts, aiming to prevent unfair terms, especially in standardized agreements.

A term in a contract that limits or excludes liability for certain events.

A legally binding agreement formed when one party makes an offer with clear terms and the other party accepts it by performing the requested action.

An advertisement that does not constitute a legally binding offer.

An offer must be clear and definite.

An offer is binding as soon as it is accepted. The acceptance must be communicated to the offeror.

An advertisement can constitute an offer if it is clear, definite, and leaves no room for negotiation.

A contract is formed when a clear offer is accepted through the actions of the other party, even if the offeror has not formally agreed.

Acceptance of a unilateral offer is made by performing the requested action.

An advertisement is typically an invitation to treat, not a binding offer.

An advertisement can be considered a binding offer in some cases, particularly if it is clear and specific.

A person cannot claim a reward for providing information if they were not aware of the reward offer at the time.

A statement or promise that is made in a way that shows a clear intention to be bound.

A legal rule that states only parties directly involved in a contract can enforce its terms.

The legal obligation to take reasonable care to prevent harm to others who could be affected by one's actions.

The case that established the modern duty of care in negligence law. A woman drank contaminated ginger beer and sued the manufacturer, even though she didn't buy it directly.

The principle that a party's actions, objectively considered, determine whether a contract exists, regardless of their subjective intentions.

A case that illustrated the privity of contract rule. A tire manufacturer couldn't enforce a pricing agreement with a retailer because they had no direct contract.

The case that established the validity of unilateral contracts. A company offered a reward for using their product and avoiding sickness. A woman used the product and got sick, successfully claiming the reward.

A case where the court ruled that a letter from a council expressing a willingness to sell a house was not a definite offer, therefore no binding contract formed.

A legal act that allows granting enforceable rights to third parties (those not directly involved) in a contract, creating an exception to the privity rule.

The case that involved a shipowner failing to pay damages to a third party (cargo owner) for a damaged ship, as the cargo owner wasn't directly involved in the shipping contract.

The act or process of accepting an offer, which creates a binding contract.

A proposal made by one party to another, intending to create a legally binding agreement.

The principle that a contract must contain an exchange of value. Each party must give something of value in return for the promises made.

A term used to describe a party's behavior that is clearly intended to indicate their acceptance of an offer, even if they do not explicitly communicate their acceptance.

An offer is only valid if the acceptor knows about it when they perform the action. If someone acts without knowing about the reward, they cannot claim it.

In a unilateral contract, the acceptor's motive doesn't matter as long as they perform the required action. They can act out of duty, fear, or self-interest, and still be entitled to the reward.

Displaying an item for sale is not an offer to sell, but an invitation to customers to make an offer. This means the seller is not legally bound to sell the item at that price.

The display of goods in a self-service shop is an invitation to treat. The contract is formed at the checkout when the cashier accepts the customer's offer to buy.

Terms in automated transactions, such as parking tickets, must be clear before the contract is formed. Any terms presented after the contract is already made are not binding.

Advertisements for auctions are not binding offers. They are invitations to treat, and the auction itself is where the offers are made.

An advertisement for an auction is not a binding offer, but merely an invitation to treat.

The act of displaying an item in a shop window or on a shelf is not an offer to sell, but an invitation to treat.

When a customer puts goods in their basket in a self-service shop, this is not a sale, but an invitation to treat.

In a vending machine, once the machine is activated, the offer is made, and the contract is formed before the customer can change their mind or negotiate.

A 2015 UK law that protects consumers by setting standards for goods, services, and digital content, ensuring fair practices in contracts.

A court case where the Office of Fair Trading (OFT) challenged unfair terms in gym membership contracts, emphasizing consumer protection against one-sided, unreasonable terms that restrict cancellation rights.

A legal principle where the intention behind an agreement is judged based on the actions of the parties involved, regardless of their true intentions.

This case concerns a misunderstanding during a sale of oats. The buyer mistakenly assumed the oats were old, but they were new. The court ruled that the contract was valid because the seller did not misrepresent the oats.

A case highlighting how clear, agreed-upon terms are binding, even if one party makes a mistake, as long as the other party was unaware of the mistake.

A court case where the buyer purchased beans using a specific name but received a different type than they intended. The court held that the specific words used in the contract determined the outcome, even if there were misunderstandings about those terms.

A case involving an agreement to ship cotton on a vessel named 'Peerless'. The problem was that there were two ships with the same name sailing at different times. The court ruled that there was no true agreement because the parties had different ships in mind.

This case concerned a seller who made a mistake while offering to sell hare skins at a much lower price than intended. The court ruled in favor of the seller because the buyer knew, or should have known, that the price was too low.

An expression of willingness to enter into a contract on specific terms, creating an opportunity for the other party to accept and form a binding agreement.

The act of agreeing to the terms of an offer, signifying acceptance of the contract's terms and creating a binding agreement.

Something of value exchanged between parties in a contract, which is essential for the contract to be legally binding.

A legal doctrine that allows a court to void a contract if there was a fundamental misunderstanding between the parties about the terms of the agreement.

A circumstance where one party takes advantage of another's mistake, knowing it's a mistake. This can lead to a contract being deemed unenforceable.

An auction where the item is sold to the highest bidder, regardless of the price.

In an auction without reserve, the highest bidder must receive the item.

Confirmed Warlow v Harrison, meaning the auctioneer must sell to the highest bidder.

A request to submit offers or bids, but not a binding commitment to buy.

An invitation to tender is not a promise to sell, just an invitation to negotiate.

In sealed bids, only fixed bids are valid, and the seller must accept the highest fixed bid.

When inviting tenders, the inviter must consider all valid bids submitted by the deadline.

Performing an action doesn't create a contract without a clear agreement or acceptance.

Two identical offers don't automatically form a contract, an acceptance is needed.

In a unilateral contract, once the offeree starts performing the required action, the offeror cannot withdraw the offer. This means the offeror is bound to keep the offer open and allow the offeree to finish the required performance.

The revocation of an offer must be communicated to the offeree before the offer is accepted. A mere intention to revoke is not enough to revoke an offer until it is communicated to the offeree.

An offer can be revoked before acceptance even without formally communicating revocation. If the offeree learns from a reliable source that the offer has been withdrawn, the offer is effectively revoked.

An offer can be revoked at any time before acceptance, as long as the offeree is aware of the revocation. This means that if the offeree is informed of the offeror's intent to revoke, the contract is not formed.

An offer will lapse after a reasonable time if no specific period is provided in the offer. The time needed is judged based on the nature of the contract.

Unilateral contract offers can be revoked before the performance is completed. However, the revocation must be communicated in the same manner as the original offer. If the initial offer was public, the revocation must also be public.

When an offeree dies before accepting the offer, the offer becomes void. This means the offer is no longer open and cannot be accepted.

If an offeree is unaware of the offeror's death when they accept the offer, the offer is still valid and the offeror's estate is bound by the resulting contract.

A counter-offer occurs when the offeree responds to an offer with a different proposal, effectively rejecting the original offer.

A counter-offer rejects the original offer, making it impossible to accept later.

A request for further information about an offer is not a counter-offer; it simply seeks clarification without rejecting the original offer.

Stevenson, Jacques & Co. v McLean (1880) clarifies that requests for information do not constitute counter-offers, as they don't inherently reject the original offer.

When two parties exchange conflicting terms in their contracts, the 'battle of the forms' arises.

The last set of terms agreed upon by both parties usually prevails in a 'battle of the forms' situation.

Tekdata Interconnections Ltd v Amphenol Ltd (2009) confirms that the 'last shot' principle prevails when conflicting terms are exchanged through conduct, unless explicitly agreed otherwise.

In the case of instantaneous communication, like telex or email, acceptance takes effect when the offeror receives it.

Entores v Miles Far East Corporation (1955) established that acceptance by instantaneous communication takes effect when and where the offeror receives it.

Silence cannot constitute acceptance in a bilateral contract.

Felthouse v Bindley (1862) ruled that silence cannot be considered acceptance in a contract; clear, explicit acceptance is essential for a binding agreement.

Re Selectmove Ltd (1995) emphasizes that silence cannot be considered acceptance unless both parties have expressly agreed to it beforehand or it's a well-established practice between them.

An offer is considered accepted if the offeree does not indicate otherwise by a reasonable time.

Manchester Diocesan Council of Education v Commercial & General Investments (1970) shows that acceptance must be communicated effectively through the agreed-upon method.

Instantaneous communications like telexes form a contract when the recipient receives the acceptance, not when the acceptance is sent.

Emails are considered instantaneous communication, so acceptance is valid when the email is received by the offeror, not when it's read.

In cases like telexes and emails, acceptance occurs when the message arrives at the recipient's system, regardless of when it's read.

When the offeree changes the terms of an offer, it creates a counter-offer, not an acceptance. A contract only forms if both sides agree on the same terms.

To determine if a contract exists, courts look at what was communicated objectively, not just the parties' internal beliefs.

Agreements between husbands and wives are often presumed not to be legally binding contracts, unless proven otherwise.

When a couple separates, agreements made during this time are more likely to be considered legally binding contracts.

In a contract, each party must provide something of value for the agreement to be legally binding.

A person's actions can show acceptance of an offer, even if there is no explicit agreement.

When both parties simultaneously propose the same offer, but neither accepts the other's offer, no contract is formed. This emphasizes the need for mutual agreement in contract formation.

An offer to sell at an auction can be withdrawn before the auctioneer accepts the highest bid, even if it was the highest bid made. This demonstrates the importance of acceptance in creating a legally binding contract.

An offer can be revoked at any time before it is accepted, even if the offeror has stated a specific time for acceptance. This underscores the fact that acceptance is required to form a binding contract.

If the offeree has started performing under the contract, the offer cannot be revoked. Performing under the contract implies acceptance, even if it hasn't been communicated verbally or in writing.

An offer can be revoked anytime before acceptance, even if a specific time limit for acceptance was given. This emphasizes the power of the offeror to withdraw their offer before acceptance.

A promise to keep an offer open for a certain period can be revoked before acceptance unless it's supported by consideration (something of value). This highlights the importance of consideration to make a promise binding.

An agreement is binding when key terms are agreed upon and consideration is exchanged, even if formalities aren't complete. This shows that a handshake isn't always needed for a legally binding contract.

Payment for keeping an offer open makes the promise binding. This illustrates how consideration strengthens a promise to keep an offer open for a certain time.

Promises of future reward only become binding when the event actually occurs. This emphasizes the importance of performance in making a promise legally binding.

An offer is not binding until it is accepted by the offeree. Until then, the offeror can freely withdraw their offer. This highlights the fundamental principle that acceptance is crucial for a contract formation.

A contract made at an auction is formed only when the auctioneer accepts the bid, not when the highest bid is made. This emphasizes the importance of auctioneer acceptance in auction transactions.

An offeror cannot revoke an offer once it has been accepted by the offeree. This is a fundamental principle that confirms a contract is formed upon acceptance.

An offer can be communicated in various ways, including written, verbal, or even through conduct. This broadens the scope of acceptance and emphasizes that communication is key.

An offer must be definite and unambiguous, clearly stating the terms of the agreement. A vague offer is unlikely to be considered a valid offer.

An offer must be intended to create legal relations, meaning the offeror intends to be bound by the terms proposed. A casual statement or jest isn't considered an offer.

Offers can be made to a specific person, a group of people, or the world at large. This highlights the different ways offers can be targeted.

In contracts formed using instantaneous communication like emails or phone calls, acceptance happens when the offeror receives the acceptance message. However, the specific rules can vary based on the type of communication and business hours, so each case needs individual evaluation for fairness.

This principle recognizes that even agreements in written form, like contracts, may be subject to interpretation based on the actual actions and situations of the parties involved. This means the agreement's literal wording might not be the only deciding factor.

An advertisement can be seen as an offer if it's clear, definite, and leaves no room for negotiation. For example, a specific reward offer for something like finding a lost item. However, most ads are considered invitations to treat, meaning they're simply an invitation to make offers, not offers themselves.

This legal principle establishes that only those directly involved in a contract can enforce its terms. This means a third party, someone not originally part of the contract, cannot demand rights or benefits under that agreement.

The principle that a contract is only binding when acceptance is communicated to the offeror, not just thought about.

A contract can be formed through actions rather than formal written agreements.

Acceptance of an offer through postal mail is effective when the acceptance letter is sent, not received by the offeror.

The postal rule applies only if it was reasonable for the offeree to use mail.

For the postal rule to apply, the acceptance must be correctly addressed to the offeror.

When acceptance is communicated through instant methods like calls or fax, it's effective only when received by the offeror.

If a contract term requires specific written notice of acceptance, simply posting a letter is insufficient.

A contract can be formed even if the offeror doesn't receive the acceptance letter, as long as it was properly posted.

An offer can be withdrawn even after the acceptance letter is posted, but only before the offeror receives it.

When an acceptance letter is sent, it's effective as soon as it's posted, even if it's delayed or lost.

The postal rule applies mainly to mail. It doesn't apply to acceptance methods like instant messaging or email, where there's immediate feedback.

Despite the postal rule, the offeror cannot assume a contract was formed if the acceptance letter went missing, since it wasn't received.

The postal rule might seem arbitrary, but it's based on practical considerations of contract formation in the past.

A contract can be formed when an offer is accepted by telegraph, telex, or fax.

When using a telecommunication method like telex, the acceptance is only valid when it reaches the offeror. This is similar to instant communication.

A legal principle stating that collective agreements between trade unions and employers are not automatically legally binding contracts.

A case where the court ruled that employers can't refuse to recognize a trade union without a valid reason, emphasizing the importance of workers' rights to union representation.

A situation where parties specifically exclude legal enforceability from their agreement.

A case where a union's picketing activities were deemed illegal because they went beyond peaceful protest and disrupted public order.

A case where the court reinforced the postal rule, clarifying that it applies when using the post is reasonable, especially when parties are in different locations.

A case that limited the postal rule, stating that it doesn't apply if the acceptance is misaddressed or delayed due to the sender's mistake.

A case addressing the acceptance of offers through instant communication methods like telex, ruling that acceptance is only effective when received by the offeror.

A case highlighting the importance of evidence when proving an agreement, ruling that the claimant couldn't prove an agreement was reached during a phone call and email.

A case demonstrating that oral agreements can be considered legally binding if the promise is intended to be so and sufficiently specific.

A case that involved an agreement in a pub after a lot of alcohol consumption, demonstrating that the parties' serious intention and their understanding of the situation will be considered.

A case that highlights the importance of understanding the context and purpose of a meeting when determining whether parties intended to create legal relations.

In agreements involving family or close relationships, there is a presumption that parties don't intend to create legally binding contracts. This means courts are less likely to find that a contract exists in these cases, since it's often assumed that arrangements are based on trust and affection rather than formal obligation.

This presumption can be overturned if there is clear evidence showing intention to create a binding agreement. For example, if parties explicitly state their intention to be legally bound, or if their actions and circumstances indicate that they are taking the agreement very seriously.

In commercial arrangements, there is a strong presumption that parties intend to create a legal relationship. This means that courts are more likely to find an enforceable contract in these cases, since business transactions typically involve an expectation of legal obligations and consequences.

Advertisements, especially those with exaggerated claims, are generally not considered legally binding offers. They are often seen as mere 'puffery' or marketing hype, lacking serious intent to create a legal obligation.

The presumption against legal relations in advertisements can be overcome if there is clear evidence of intention to be bound. For instance, an ad that specifies specific terms, makes a specific promise, and involves a deposit or other action that demonstrates serious intent to be bound can be considered a legally binding offer.

Comfort letters are informal written statements from one party expressing support or assurance to another party. However, they are typically not considered legally binding promises, meaning they don't create a contractual obligation.

Letters of intent are preliminary agreements that outline the basic terms of a potential contract. While they don't usually bind parties to the final contract, they can be legally enforceable if they contain all essential terms and indicate a clear intention to be bound.

In cases where parties have engaged in significant actions, such as performing work or exchanging valuable consideration, even without a formal signed contract, a court may find that a binding agreement exists through their conduct. This indicates an intention to create a legally binding relationship based on their actions.

In order for an offer to be valid, the offeror must clearly intend to be bound and create a legally binding agreement. This means that the offer must be stated with definite terms and a clear intention to create a contract.

The courts will generally look at the objective circumstances and actions of the parties, rather than their subjective intentions, to determine whether a valid contract exists. This means that if a party acts in a way that reasonably suggests they have accepted an offer, they will be considered legally bound even if they claim they did not actually intend to be bound.

In deciding whether a contract exists, courts will examine the specific words used, the surrounding circumstances, and the parties' actions to determine if they intended to create a legally binding agreement.

In domestic agreements, such as household arrangements between family members, there is a presumption against finding an intention to create legal relations. This presumption reflects the understanding that family relationships are often informal and based on trust, not legal obligations.

In business transactions, the presumption is that parties intend to create legal relations. This means that courts are more likely to find that a contract exists in commercial contexts, as businesses typically have a clear expectation of binding agreements and legal accountability.

The presumption against intention to create legal relations in domestic agreements can be rebutted with clear evidence of intent. This evidence can include written agreements, the seriousness of the matter, or actions taken that demonstrate the parties intended to be legally bound.

Even though there is a strong presumption of legal relations in commercial agreements, it is still possible to rebut this presumption. However, this requires very strong evidence that clearly demonstrates the parties did not intend to be legally bound. This evidence might involve specific clauses in the agreement, clear statements of intent, or a clear understanding between the parties that their agreement was not intended to be legally enforceable.