Misrepresentation Cases in Law
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Questions and Answers

What does the rule regarding sufficiency of consideration imply?

  • Consideration must be equal in value to the promise.
  • Consideration must have some value recognized by law. (correct)
  • Consideration must benefit the promisor directly.
  • Consideration can only be monetary.

Which of the following statements about past consideration is true?

  • Past consideration can be valid under certain conditions. (correct)
  • Past consideration can form the basis of a valid promise.
  • Past consideration makes the promise voidable.
  • Consideration must always be in the future.

In which case was nominal payment deemed sufficient consideration?

  • White v Bluett
  • Hamer v Sidway
  • Chappell v Nestlé
  • Thomas v Thomas (correct)

What must consideration do in relation to the promisee?

<p>It must be provided by the promisee or at their request. (A)</p> Signup and view all the answers

Which type of duty does NOT qualify as valid consideration?

<p>Performance of a pre-existing contractual obligation. (D)</p> Signup and view all the answers

Which case illustrates the idea that consideration could be insufficient because it lacks economic value?

<p>White v Bluett (C)</p> Signup and view all the answers

What is one of the tests established by the case of Pao On v Lau Yiu Long?

<p>There must be a prior request for the act or service. (D)</p> Signup and view all the answers

What does the case of Combe v Combe illustrate regarding consideration?

<p>Forbearance must be requested by the promisor. (D)</p> Signup and view all the answers

In which situation would a promise made after the completion of a contract be unenforceable?

<p>If it concerns prior work done without a request. (C)</p> Signup and view all the answers

How does the court generally view the adequacy of consideration?

<p>The courts focus on whether the consideration has legal value. (A)</p> Signup and view all the answers

What was the result of the case Hamer v Sidway regarding consideration?

<p>The nephew's promise of forbearance was seen as valid consideration. (D)</p> Signup and view all the answers

What is a key aspect of the rule that consideration must move from the promisee?

<p>It reinforces the importance of privity of contract. (A)</p> Signup and view all the answers

Which of the following best describes the relationship between consideration and gratuitous promises?

<p>Consideration is required to make a gratuitous promise enforceable. (C)</p> Signup and view all the answers

What is required for economic duress to be established?

<p>Unconscionable conduct (A)</p> Signup and view all the answers

Which case highlighted that confusion, rather than duress, may lead to a settlement?

<p>Huyton SA v Peter Cremer (D)</p> Signup and view all the answers

Under what circumstances can a buyer cancel a contract for repudiatory breach?

<p>For significant breach (C)</p> Signup and view all the answers

In the context of undue influence, what must the benefiting party demonstrate?

<p>The decision was made freely and with full understanding (B)</p> Signup and view all the answers

What does the principle of laches imply in legal claims?

<p>Delay in asserting rights can bar a claim (D)</p> Signup and view all the answers

What defines a situation as involving undue influence in relation to relationships of trust?

<p>There is exploitation of the relationship for personal gain (C)</p> Signup and view all the answers

In the case of Lloyds Bank Ltd v Bundy, what was Bundy's position that led to the ruling of undue influence?

<p>He relied on trust and was vulnerable to financial ruin (D)</p> Signup and view all the answers

What was the ruling regarding the confidentiality agreement in R v Attorney General of England and Wales?

<p>It was enforceable with no duress found (A)</p> Signup and view all the answers

What is a key aspect of consideration in contracts?

<p>It establishes the enforceability of promises (D)</p> Signup and view all the answers

In Goodchild v Bradbury, what factor was crucial to finding undue influence?

<p>The lack of independent legal advice (D)</p> Signup and view all the answers

What was a significant factor in the case of North Ocean Shipping Co v Hyundai Construction Co regarding duress?

<p>The defendant's delay and continued performance of the contract (D)</p> Signup and view all the answers

What does the principle of constructive notice imply in relation to undue influence?

<p>A party may be liable if aware of undue influence or misrepresentation (C)</p> Signup and view all the answers

Which statement regarding the burden of proof in undue influence cases is correct?

<p>The benefiting party must prove the transaction was fair (B)</p> Signup and view all the answers

What constitutes economic duress according to the legal principles discussed?

<p>Illegitimate coercion or improper threats (A)</p> Signup and view all the answers

Which case illustrates that performing an existing contractual duty does not constitute valid consideration for a promise to pay more?

<p>Stilk v Myrick (A)</p> Signup and view all the answers

In which situation can performing a duty owed to a third party be considered valid consideration?

<p>When it constitutes additional benefits for the promisor. (D)</p> Signup and view all the answers

What is the general rule regarding promises to accept less in payment of a debt?

<p>Part-payment alone is not sufficient for a promise to discharge the debt. (C)</p> Signup and view all the answers

Which case is an example of a promise to pay more being enforceable due to fresh consideration?

<p>Hartley v Ponsonby (B)</p> Signup and view all the answers

Which of the following describes an essence of the doctrine of promissory estoppel?

<p>A party cannot go back on a promise if the other has relied on it. (A)</p> Signup and view all the answers

What was the result of the case Williams v Roffey Bros regarding practical benefits?

<p>Practical benefits can enforce promises under certain conditions. (B)</p> Signup and view all the answers

What did the case Collins v Godefroy determine about promises to pay witnesses?

<p>Payment for witness attendance was unenforceable due to existing legal obligation. (A)</p> Signup and view all the answers

Which case involved the principle that part-payment could be valid if different consideration was provided?

<p>Pinnel's Case (B)</p> Signup and view all the answers

How did the outcome of MWB v Rock Advertising influence the interpretation of practical benefit?

<p>It initially found practical benefit could be consideration, but was later overturned. (A)</p> Signup and view all the answers

What occurred in the case Foakes v Beer concerning the waiver of interest?

<p>The court allowed the creditor to claim back the interest due to lack of consideration. (C)</p> Signup and view all the answers

In the context of contract law, which of the following best describes 'fresh consideration'?

<p>An additional benefit or act that goes beyond existing duties. (A)</p> Signup and view all the answers

Which principle can be derived from the case Shadwell v Shadwell?

<p>Performance of a duty to a third party can constitute valid consideration. (D)</p> Signup and view all the answers

What does the term 'practical benefit' refer to in relation to contractual agreements?

<p>A benefit that materially advantages the promisor from an action performed. (A)</p> Signup and view all the answers

What distinguishes Hartley v Ponsonby from Stilk v Myrick in terms of enforceability of promises?

<p>Stilk was about additional pay for normal duties, while Hartley involved dangerous conditions. (C)</p> Signup and view all the answers

What is generally not considered a legally binding arrangement?

<p>Social events (B)</p> Signup and view all the answers

In which scenario can the presumption against intention to create legal relations be rebutted in a domestic context?

<p>Parties have acted to their detriment (D)</p> Signup and view all the answers

What was a significant factor in the case of Snelling v John Snelling Ltd that influenced the decision on intent to create legal relations?

<p>Commercial aspect of the agreement (A)</p> Signup and view all the answers

What does Parker v Clark illustrate about social or domestic agreements?

<p>They can be legally binding if executed (B)</p> Signup and view all the answers

Which case highlights the importance of clear language in avoiding legally binding obligations?

<p>Rose and Frank Co v JR Crompton and Bros Ltd (D)</p> Signup and view all the answers

What is a key characteristic of an Invitation to Treat (ITT)?

<p>It indicates willingness to negotiate (C)</p> Signup and view all the answers

What happens when a counter-offer is made?

<p>The original offer is rejected (A)</p> Signup and view all the answers

What must acceptance of an offer be in order to be valid?

<p>Unqualified and clear (D)</p> Signup and view all the answers

Which scenario illustrates a situation where there was no intention to create legal relations?

<p>A promise made in a pub in jest (C)</p> Signup and view all the answers

What principle does Simpkins v Pays support regarding social arrangements?

<p>Reliance and detriment can create binding agreements (A)</p> Signup and view all the answers

What does the case of Blue v Ashley emphasize regarding offers made in casual environments?

<p>Intention is crucial in establishing a contract (A)</p> Signup and view all the answers

Which of the following is NOT a requirement for a valid acceptance of an offer?

<p>Must be legally documented (C)</p> Signup and view all the answers

What is a distinguishing feature of an offer compared to an Invitation to Treat?

<p>An offer is a clear expression of willingness to contract (C)</p> Signup and view all the answers

Which case illustrates that informal promises can be enforceable under specific conditions?

<p>Simpkins v Pays (C)</p> Signup and view all the answers

What must occur for acceptance to be considered valid?

<p>Acceptance must be both communicated and received by the offeror. (A)</p> Signup and view all the answers

What happens if the offeror specifies a particular method of acceptance?

<p>The offeree should comply with the prescribed method. (A)</p> Signup and view all the answers

What does the contra proferentem rule imply regarding exemption clauses?

<p>Ambiguities should be interpreted against the party relying on the clause. (A)</p> Signup and view all the answers

When is acceptance by post considered valid?

<p>When the letter is posted. (B)</p> Signup and view all the answers

What is the significance of the case of Hyde v Wrench?

<p>It established that a counter-offer rejects the original offer. (D)</p> Signup and view all the answers

What requirement must be met for an exemption clause to effectively exclude liability for negligence?

<p>It requires clear and specific wording. (B)</p> Signup and view all the answers

Which case established that a person is bound by the terms of a signed contract, even if they have not read it?

<p>L'Estrange v F Graucob Ltd (B)</p> Signup and view all the answers

How does the postal rule apply to acceptance?

<p>It is valid if it was reasonable to use post and not excluded by the offeror. (C)</p> Signup and view all the answers

What does silence generally mean in contract acceptance?

<p>It indicates rejection of the offer. (A)</p> Signup and view all the answers

In which scenario would actual notice of an exemption clause no longer be required?

<p>If reasonable notice was previously provided. (A)</p> Signup and view all the answers

What did the case Pharmaceutical Society of GB v Boots establish?

<p>The customer makes the offer at the checkout. (A)</p> Signup and view all the answers

What does the 'red hand rule' relate to in contract law?

<p>The necessity of greater notice for onerous or unusual terms. (C)</p> Signup and view all the answers

In the context of communication of acceptance, what is crucial regarding third parties?

<p>The acceptance must be communicated by an authorized third party. (B)</p> Signup and view all the answers

Which of the following is NOT a principle established regarding exemption clauses?

<p>Ambiguities should be interpreted in favor of the party relying on it. (C)</p> Signup and view all the answers

Under UCTA 1977, what test is applied to determine the reasonableness of an exemption clause?

<p>The availability of insurance test. (C)</p> Signup and view all the answers

According to the case Manchester Diocesan Council for Education v Commercial & General Investments Ltd, what happens if an offeree deviates from the prescribed mode of acceptance?

<p>The acceptance is only valid if less advantageous. (D)</p> Signup and view all the answers

What is required for a contract to incorporate an exemption clause through consistent and regular use in past dealings?

<p>Demonstration of mutual consent in past actions. (D)</p> Signup and view all the answers

What principle does the case Fisher v Bell illustrate regarding invitations to treat?

<p>Shop displays are invitations to treat, not offers. (D)</p> Signup and view all the answers

Which of the following is specifically regulated by the Consumer Rights Act 2015?

<p>The use of exemption clauses. (D)</p> Signup and view all the answers

What does a counter-offer do in relation to the original offer?

<p>It rejects the original offer, making it invalid. (C)</p> Signup and view all the answers

Which scenario would imply that acceptance is not valid?

<p>The offeree's silence following an offer. (A)</p> Signup and view all the answers

In assessing the reasonableness of an exemption clause, which factor is considered according to George Mitchell Ltd v Finney Lock Seeds Ltd?

<p>The resources available to prevent liability. (D)</p> Signup and view all the answers

What is generally required for an offer to be irrevocable?

<p>Consideration must be given to keep the offer open. (B)</p> Signup and view all the answers

What does the term 'significant imbalance' refer to in relation to exemption clauses?

<p>A term that heavily favors one party at the expense of the other. (D)</p> Signup and view all the answers

How must clauses that tilt the balance of rights in favor of one party be expressed, according to the concept of good faith?

<p>Fully and clearly, without ambiguity. (B)</p> Signup and view all the answers

According to Canada Steamship Lines v The King, what is a requirement for an exemption clause to exclude liability for negligence?

<p>It must use clear and unambiguous language. (A)</p> Signup and view all the answers

What is the main legal principle illustrated by the case of Dimmock v Hallett?

<p>A half-truth can constitute misrepresentation. (C)</p> Signup and view all the answers

In With v O'Flanagan, what created the duty to disclose?

<p>Change in circumstances relevant to a previous statement. (C)</p> Signup and view all the answers

What was the key factor in the ruling of Horsfall v Thomas regarding fraudulent misrepresentation?

<p>The claimant's duty to inspect the object. (C)</p> Signup and view all the answers

In Peek v Gurney, why was the misrepresentation in the prospectus not actionable for the secondary market purchaser?

<p>The prospectus was not intended for secondary market investors. (A)</p> Signup and view all the answers

What liability principle does JEB Fasteners v Mark Bloom illustrate regarding reliance on professional work?

<p>Claimants must have acted differently to claim damages. (D)</p> Signup and view all the answers

Which case demonstrates that reliance on one's own investigation rather than seller's representations can negate claims of misrepresentation?

<p>Attwood v Small (A)</p> Signup and view all the answers

What characterizes sales talk or 'puffery' in terms of misrepresentation in legal terms?

<p>It often lacks legal consequences. (D)</p> Signup and view all the answers

Which statement correctly captures the outcome of Dimmock v Hallett regarding the importance of full disclosure?

<p>Partial truths can mislead and are actionable. (D)</p> Signup and view all the answers

What principle applies when a party conducts their own investigation and is deemed to rely on their judgment rather than the representation?

<p>Reliance on personal judgment is established (B)</p> Signup and view all the answers

In the case of Long v Lloyd, what does the failure to investigate a misrepresentation indicate about reliance?

<p>There is no duty to investigate representations (C)</p> Signup and view all the answers

What is the consequence of affirming a contract after discovering a misrepresentation?

<p>Right to rescind is lost (A)</p> Signup and view all the answers

What is the time limitation related to rescission for innocent misrepresentation as established in Leaf v International Galleries?

<p>Rescission barred due to unreasonable delay (C)</p> Signup and view all the answers

In Smith New Court Securities v Scrimgeour Vickers, what type of losses are recoverable due to fraudulent misrepresentation?

<p>Both direct and consequential losses (A)</p> Signup and view all the answers

What principle is established regarding economic duress in relation to a party's alternatives?

<p>Illegitimate pressure permits voiding of contracts (C)</p> Signup and view all the answers

Which case involves a situation where a payment made under threat can be deemed voidable?

<p>Universal Tankships Ltd v ITWF (A)</p> Signup and view all the answers

What defines the principle of economic duress regarding the legitimacy of the threat?

<p>The threat must exploit a party's lack of alternatives (B)</p> Signup and view all the answers

In CTN Cash and Carry Ltd v Gallaher Ltd, what key factor led to the court's decision regarding economic duress?

<p>The defendant believed the claim was owed (D)</p> Signup and view all the answers

Which of the following is correct about the damages for negligent misrepresentation according to section 2(1) of the Misrepresentation Act 1967?

<p>Damages are treated as if fraudulent (D)</p> Signup and view all the answers

Which of the following factors can lead to rescission being lost?

<p>Confirmation of the original agreement (A)</p> Signup and view all the answers

What is true about innocent misrepresentation according to section 2(2) of the Misrepresentation Act 1967?

<p>Damages may be awarded in lieu of rescission (D)</p> Signup and view all the answers

In Kolmar Group AG v Traxpo Enterprises, what was considered when determining the legitimacy of threats?

<p>The existence of realistic alternatives (D)</p> Signup and view all the answers

What is a key requirement for a promise to be actionable under promissory estoppel?

<p>The promisee must have relied on the promise. (D)</p> Signup and view all the answers

In the case of D & C Builders v Rees, what was the key finding regarding promissory estoppel?

<p>The builders were found to have acted in bad faith. (C)</p> Signup and view all the answers

What does promissory estoppel primarily act as in legal terms?

<p>A method to enforce promises without consideration. (A)</p> Signup and view all the answers

Which case exemplifies the principle that negotiations over a lease can lead to estoppel?

<p>Hughes v Metropolitan Railway Co (B)</p> Signup and view all the answers

What is a common outcome for exemption clauses in contracts?

<p>They require reasonable notice to be enforceable. (D)</p> Signup and view all the answers

Which principle did Lord Hoffmann emphasize regarding contractual interpretation?

<p>The reasonable person's understanding is paramount. (A)</p> Signup and view all the answers

Which case indicated that detrimental reliance is not essential for establishing estoppel?

<p>The Post Chaser (D)</p> Signup and view all the answers

What is a primary limitation of promissory estoppel?

<p>It can only serve as a defense against claims. (A)</p> Signup and view all the answers

What is a significant aspect in assessing exemption clauses?

<p>Their fairness must be scrutinized. (C)</p> Signup and view all the answers

Which of the following correctly describes a characteristic of consideration in contract modification?

<p>A practical benefit can sometimes satisfy consideration requirements. (A)</p> Signup and view all the answers

How does the modern approach to contractual interpretation differ from the old approach?

<p>It incorporates external factors and context. (D)</p> Signup and view all the answers

What does the 'red hand rule' pertain to in the context of exemption clauses?

<p>It suggests onerous clauses require more notice. (C)</p> Signup and view all the answers

Which principle suggests that wording in a contract should reflect its natural and ordinary meaning?

<p>Lord Hoffmann's Fifth Principle. (B)</p> Signup and view all the answers

Which of the following illustrates how prior dealings can affect the incorporation of exemption clauses?

<p>Regular terms can become standard in future contracts. (B)</p> Signup and view all the answers

What is the intention to create legal relations (ITCLR) in contract law?

<p>Parties must intend for their agreement to have legal consequences. (A)</p> Signup and view all the answers

Which presumption applies to agreements made in business or commercial contexts?

<p>Presumption that parties intended to create legal relations. (B)</p> Signup and view all the answers

What happens if a court determines that there was no intention to create legal relations?

<p>Parties cannot sue each other for breach of contract. (C)</p> Signup and view all the answers

In the Balfour v Balfour case, why did the court rule there was no enforceable contract?

<p>The arrangement was made in a social context without legal intention. (A)</p> Signup and view all the answers

What factor can help rebut the presumption against ITCLR in domestic agreements?

<p>Separation of the parties involved. (D)</p> Signup and view all the answers

In the case of Jones v Padavatton, why was the mother's promise not enforceable?

<p>The agreement was a family arrangement without legal intent. (D)</p> Signup and view all the answers

What distinguishes Merritt v Merritt from Balfour v Balfour?

<p>Parties had separated, indicating intent to create legal relations. (B)</p> Signup and view all the answers

What is one consequence of establishing ITCLR within an agreement?

<p>Parties can sue for breach of contract if not honored. (A)</p> Signup and view all the answers

Which factor would NOT typically be considered in assessing ITCLR?

<p>The market value of the subject matter. (D)</p> Signup and view all the answers

What did the case of Lens v Devonshire Club highlight regarding social agreements?

<p>Participants in social competitions cannot seek legal recognition. (A)</p> Signup and view all the answers

How can the objective assessment of ITCLR differ from subjective intent?

<p>Objective assessment examines all available evidence, including actions. (C)</p> Signup and view all the answers

Which of the following is a core principle regarding domestic agreements?

<p>Courts generally do not interfere in personal relationships. (D)</p> Signup and view all the answers

What is the main reason courts hesitate to treat domestic agreements as legally binding?

<p>They could lead to increased litigation over personal matters. (C)</p> Signup and view all the answers

What role do rebuttable presumptions serve in assessing ITCLR?

<p>They act as starting points that can be challenged with evidence. (B)</p> Signup and view all the answers

What was the ruling in the case of Selectmove concerning the promise of future tax payments?

<p>It was deemed to be an existing obligation. (B)</p> Signup and view all the answers

In the case of The Brimnes, when does acceptance take place according to the court's determination?

<p>When the message arrives during office hours. (B)</p> Signup and view all the answers

Which statement is true about the revocation of offers based on Routledge v Grant?

<p>An offer can be revoked at any time before acceptance. (D)</p> Signup and view all the answers

What principle was established in the case Adams v Lindsell regarding acceptance through post?

<p>Acceptance takes effect when posted if posting was expected. (D)</p> Signup and view all the answers

What did the court determine in Dickinson v Dodds regarding the effectiveness of revocation?

<p>Revocation is considered effective if received via a reliable third party. (C)</p> Signup and view all the answers

In the case of Byrne & Co v Van Tien Hoven & Co, what was the ruling regarding the revocation of an offer and its timing?

<p>The revocation is effective only once received. (D)</p> Signup and view all the answers

Which of the following is true regarding the concept of office hours in Thomas v BPE Solicitors?

<p>They vary based on the nature of the communication. (A)</p> Signup and view all the answers

In the case of Household Fire Insurance v Grant, why did the court rule in favor of the claimant?

<p>Acceptance was effective when the letter was posted. (D)</p> Signup and view all the answers

What conclusion did Brinkibon v Stahag Stahl reach regarding the jurisdiction of contract formation?

<p>Jurisdiction lies where the acceptance is received. (D)</p> Signup and view all the answers

Which principle does Henthorn v Fraser clarify about the postal rule?

<p>It applies based on the context of the communication. (B)</p> Signup and view all the answers

What does the term 'meeting of minds' refer to in contract law?

<p>The mutual agreement on the terms of the contract. (B)</p> Signup and view all the answers

What was the main finding in the case of Rust v Abbey Life Assurance?

<p>Breach of contract can occur without a binding agreement. (C)</p> Signup and view all the answers

Which aspect of the postal rule was significant in the case of Henthorn v Fraser?

<p>It applies if both parties anticipate postal communication. (A)</p> Signup and view all the answers

In Dickinson v Dodds, what led to the court's decision regarding revocation?

<p>Dickinson received credible information about the revocation. (C)</p> Signup and view all the answers

What confusion arose regarding the communications in the case of Brimnes?

<p>The case debated the responsibility for reading messages. (A)</p> Signup and view all the answers

Flashcards

Half-truth

A statement that is only partially true, deliberately omitting crucial facts, which can mislead the other party.

Puffery

Statements made during negotiations that are not considered legally binding promises or representations of fact. Examples include exaggerated claims or general opinions.

Duty to Disclose

A duty to disclose information arises when circumstances surrounding a previous statement change significantly, rendering it misleading.

Concealment of Patent Defects

Failure to disclose a patent defect, or something readily visible, does not constitute misrepresentation if the other party has the opportunity to inspect the object.

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Intended Audience

For a misrepresentation to be actionable, it must be made with the intention of inducing the specific party who suffered the loss to rely on it.

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Reliance on Professional Advice

A professional, such as an auditor, is only liable for misrepresentation if the claimant actually relied on their work in making a decision.

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Independent Investigation

When a buyer relies on their own independent investigation rather than the seller's representations, they cannot claim misrepresentation.

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Misrepresentation

A false statement made by a party that induces another party to enter into a contract, giving rise to legal consequences.

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Redgrave v Hurd Principle

If a party conducts their own investigation, they may be deemed to have relied on their judgment rather than the representation.

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Long v Lloyd Principle

There is no duty to investigate a representation, and failure to do so does not negate reliance.

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Affirmation of Contract

If a party continues with a contract after knowing about the misrepresentation, they affirm the contract and lose the right to rescind.

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Time Limit for Rescission

A claim for rescission based on innocent misrepresentation is barred if there is an unreasonable delay in seeking rescission after discovering the misrepresentation.

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Measure of Damages in Deceit

In deceit, damages aim to compensate for all losses directly resulting from the fraud, not just those that were foreseeable.

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Damages for Fraudulent Misrepresentation

Damages for fraudulent misrepresentation include all direct and consequential losses resulting from the misrepresentation, regardless of foreseeability.

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Damages under Misrepresentation Act 1967

When claiming damages under s2(1) of the Misrepresentation Act 1967, the rules for how much you can recover are the same as if you were suing for fraud.

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Economic Duress

Economic duress occurs when there is no reasonable alternative but to submit to the other party's demands.

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Requirement for Economic Duress

The threat must be illegitimate and not exploit the party under pressure.

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Voidable Contract Variation

Economic duress makes a contract variation voidable if it's made under illegitimate pressure with no reasonable alternative.

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Voidable Payment under Duress

A payment made under duress can be voidable.

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Trade Union Immunity

Unions are immune from liability only if actions are related to employment terms under s. 13 of the Trade Union and Labour Relations Act 1974.

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Illegitimate Threat to Breach Contract

Threats to breach a contract are illegitimate if no realistic alternatives exist.

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Elements of Economic Duress

Economic duress requires coercion and lack of choice.

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Lawful Pressure and Duress

Lawful pressure isn't always duress, especially if exercised in good faith.

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Consideration

Something of value exchanged for a promise, transforming a gratuitous promise into a legally binding obligation.

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Sufficient vs Adequate

The exchange in a contract is not judged on fairness, only that it has recognized legal value.

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Past Consideration

Consideration given before the promise is made is NOT valid. The action must be linked to the promise.

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Consideration Must Move From the Promisee

The person receiving the promise must provide the consideration, not a third party.

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Pre-Existing Duty

Performing an existing duty doesn't count as new consideration.

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Chappell v Nestlé

Nestlé accepted chocolate bar wrappers as consideration because it represented increased sales.

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Thomas v Thomas

A nominal payment of £1 was sufficient consideration for a promise to use a house.

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White v Bluett

A promise to stop complaining was deemed insufficient consideration as it had no legal value.

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Hamer v Sidway

Giving up legal rights (smoking, drinking) was deemed sufficient consideration.

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Horton v Horton

Forbearing from court action was deemed sufficient consideration.

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Re McArdle

A promise to reimburse for work already done is unenforceable because the work was done before the promise.

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Roscorla v Thomas

A guarantee after a sale (not a part of the original contract) was considered past consideration.

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Pao On v Lau Yiu Long

Past consideration is valid if there was a prior request and an implied promise for payment.

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Lampleigh v Braithwait

A promise to pay for a pardon was deemed enforceable because the request implied an obligation to pay.

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Re Casey's Patents

A promise to repay for work was enforceable due to an implied understanding of payment for services.

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Clear and Unequivocal Promise

A promise that is definite and clear, leaving no room for ambiguity.

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Reliance

The person who received the promise must have acted upon it, changing their position or incurring losses.

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Inequity

It would be unfair or unjust to allow the person who made the promise to go back on their word.

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Not a Sword

It can't be used to initiate a new claim, only to defend against an existing claim.

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Suspends Rights

Promissory estoppel usually suspends the original rights of the person who made the promise, rather than permanently removing them. They might be able to enforce these rights later with proper notice.

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Hughes v Metropolitan Railway Co

A court case where a landlord was stopped from enforcing the deadline for repairs because negotiations led the tenant to believe they had more time.

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Combe v Combe

Promissory estoppel cannot be used to create a new legal action.

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D & C Builders v Rees

A court case where a builder was unfairly pressured to accept less money. The court said promissory estoppel couldn't be used because the person who made the promise acted dishonestly.

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Collier v P & MJ Wright

A court case that initially suggested part-payment could be evidence of reliance for estoppel, but later changed its mind.

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The Post Chaser

This case highlights reliance is not always necessary for promissory estoppel, but it helps prove the unfairness of the situation.

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Objective Intention

Understanding the intentions of the parties, from the perspective of a reasonable person, is crucial.

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Old Approach

Historically, courts focused on the literal meaning of the words in a contract.

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Modern Approach

Modern courts consider the context, commercial sense, and surrounding circumstances in interpreting contracts.

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Investors Compensation Scheme Ltd. v West Bromwich Building Society

This case demonstrates how courts consider the context of a contract, even if it's complex.

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Lord Hoffmann's Five Principles

These principles guide the interpretation of contracts using a reasonable person approach.

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Collins v Godefroy (1831)

A promise to pay a witness for attending a trial is unenforceable, as the witness is already legally obligated to attend due to a subpoena.

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Glasbrook Brothers Ltd. v Glamorgan County Council (UKHL 3)

The provision of extra police presence during a miners' strike was deemed enforceable, as the police went beyond their existing legal duty, providing additional protection.

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Stilk v Myrick (1809)

A promise to pay extra wages to sailors who remained on the ship after others deserted was unenforceable, as they were already contractually obligated to sail the ship.

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Hartley v Ponsonby (1857)

A captain's promise of extra pay to the remaining crew after extensive desertions was enforceable, as the reduced crew numbers created a dangerous situation exceeding their initial obligations.

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Shadwell v Shadwell, Scotson v Pegg, Eurymedon

Performing a duty owed to a third party can constitute valid consideration when the duty goes beyond the original contractual obligations.

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Type A: Promises to Pay More

The general rule in contract modification: Performing an existing contractual duty is not valid consideration for a promise to pay more.

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Exception 1: Fresh Consideration

Provides something extra or goes beyond the existing contractual duty to receive extra payment.

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Exception 2: Practical Benefit

The promisor gains a practical benefit from the other party completing their existing duties, even without new consideration. The promisor benefits from avoiding late fees, finding a replacement, etc.

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Williams v Roffey Bros. (1989)

The promisor receives a practical benefit, there's no duress, and consideration is otherwise valid.

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Type B: Promises to Accept Less

Part-payment of a debt is not sufficient consideration for a promise to discharge the whole debt.

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Exception 1: Something Different

Providing something different alongside part-payment can be valid consideration.

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Exception 2: Practical Benefit (Unclear)

It's uncertain whether a practical benefit to the creditor from accepting less can be sufficient consideration. Some cases support expansion while others disagree with it.

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Promissory Estoppel

A legal doctrine that prevents a party from going back on a promise the other party relied on, even if that promise lacks formal consideration.

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Central London Property Trust v High Trees House (1947)

Established the principle of promissory estoppel, holding that a landlord who promised reduced rent during wartime could claim the full rent again, but not for the period when the reduced rent was promised.

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Exemption Clause

A clause in a contract that aims to limit or completely exclude one party's liability for breach of contract.

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Contra Proferentem Rule

A term in a contract that is interpreted against the party relying on it when there is ambiguity.

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Liability for Negligence

To effectively exclude liability for negligence, an exemption clause must be very clear and specific.

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L'Estrange v Graucob

Signing a contract means you agree to its terms, even if you haven't read them.

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Thornton v Shoe Lane Parking

Notice of exemption clauses must be given before or at the time of making the contract.

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Parker v South Eastern Railway

Notice of exemption clauses needs to be reasonable, but actual notice is not always required.

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Interfoto Picture Library v Stiletto

Very burdensome or unusual terms need extra effort to bring them to the other party's attention.

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McCutcheon v David MacBrayne

Repeated use of terms in previous dealings can incorporate those terms into a new contract.

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Incorporation

The process of including an exemption clause into a contract.

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Construction

Determining what an exemption clause means and how far it applies.

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Reasonableness Test

A test to check if an exemption clause is fair and reasonable in a business-to-business contract.

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UCTA 1977

Legislation that regulates exemption clauses in business-to-business contracts.

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CRA 2015

Legislation that regulates exemption clauses and unfair terms in consumer contracts.

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Trader

A person who acts for their trade, business, craft, or profession.

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Consumer

An individual who acts mainly outside their trade, business, craft, or profession.

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Repudiatory Breach

A significant breach of contract that gives the other party the right to cancel the contract. The breach must be so serious that it undermines the fundamental purpose or terms of the agreement.

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Pressure Based on Misunderstanding

A mistake that causes one party to agree to a deal due to misunderstanding or misinterpretation of information. Pressure arising from a mistake isn't considered illegitimate coercion.

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Undue Influence

An influence that is exerted on a vulnerable party to persuade them to act unfairly or against their best interests, often in a relationship of trust or dependence, creating a presumption of unfair advantage.

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Laches

A legal term that refers to the delay in asserting a legal right or claim, which can prevent the party from enforcing their rights if the delay is unreasonable and creates a disadvantage for the other party.

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Acquiescence

A legal principle where a party willingly accepts a situation or agreement, even if it's unfair, by their actions or silence. It can prevent them from later claiming they were pressured or unfairly influenced.

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Fiduciary Relationship

A relationship where one party owes a special duty of care and loyalty to another, like a lawyer to their client. This creates a presumption of undue influence if the fiduciary benefits from the relationship.

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Conflict of Interest

A conflict of interest arises when a person's personal interests clash with their professional duties, potentially compromising their judgment and fairness.

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Duress: Threat of Lawful Actions

The principle that threats of lawful actions, like reporting someone to the authorities, aren't considered duress unless they create excessive pressure to act unlawfully or against one's will.

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Rebutting the Presumption of Undue Influence

To prove undue influence in a relationship of trust, the recipient of an advantage must show that the transaction was fair, informed, and independent of any undue influence.

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Consideration (in Contracts)

In contract law, providing something of value in exchange for a promise or action. It is a key element for a valid contract, ensuring both parties gain something.

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Undue Influence: Spousal Consent

A legal principle that protects spouses from entering into contracts unfairly if they were influenced by the other spouse's misrepresentation or undue influence. Banks may be held liable for constructive notice if they knew or should have known about the situation.

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Presumption of Undue Influence: Vulnerable Donor

A presumption of undue influence arises when the donor is vulnerable, such as being elderly or mentally incapacitated, and the transaction is unusual, like giving away valuable assets for a small gain. This burden shifts to the recipient to prove the gift was freely made.

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Lack of Independent Legal Advice

Lack of independent legal advice when entering into a significant transaction can strengthen the presumption of undue influence. It suggests the party wasn't fully informed or protected in the decision-making process.

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Constructive Notice

A situation where a third party (like a bank) may be held liable for knowing or having reason to know about undue influence or misrepresentation, even if they didn't directly participate. This can extend liability to those who indirectly facilitate unfair contracts.

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Communication of Acceptance: General Rule

Acceptance must be both communicated and received by the offeror. This means the offeror must be aware of the acceptance.

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Acceptance: Prescribed Mode

If the offeror specifies a particular method of acceptance, the offeree must comply with that method for the acceptance to be valid.

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Acceptance: Silence

Silence generally cannot constitute acceptance. The offeree must actively communicate their acceptance.

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Acceptance: Authorised Third Party

Acceptance can be communicated by a reliable and authorized third party. This means the third party must be someone both parties trust.

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Instantaneous Communications: Receipt Rule

Acceptance is generally effective when received by the offeror. This means the offeror must actually receive the acceptance.

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Acceptance: Time of Receipt

The time of receipt depends on factors like office hours and the parties' conduct. For example, if the offeror is closed, acceptance might not be effective until they reopen.

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Acceptance: No Universal Rule

There is no universal rule for determining the time of receipt. Courts consider factors like the parties' intentions and sound business practice.

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Postal Rule

Acceptance by post is valid when the letter is posted, not when it is received by the offeror. This rule only applies if it was reasonable for the offeree to use the post and the offeror didn't exclude it.

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Ousting the Postal Rule

The offeror can specify that acceptance must be received or communicated in a particular way. This overrides the postal rule.

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Revocation of Offer

An offer can be revoked by the offeror any time before acceptance. This means the offeror can change their mind.

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Revocation Exceptions: Consideration for Option

If the offeree provides something of value (consideration) in exchange for keeping the offer open for a certain time, the offer cannot be revoked during that time.

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Revocation Exceptions: Revocation by a Reliable Third Party

A reliable third party can communicate the revocation to the offeree. This means the third party must be someone both parties trust.

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Invitation to Treat (ITT)

An invitation to treat is a request for an offer. This is not a binding offer to sell.

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Counter-Offer

A counter-offer is a new offer made in response to an existing offer. This rejects the original offer.

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Intention to Create Legal Relations (ITCLR)

A core principle in contract law, meaning that parties must have intended for their agreement to have legal consequences for it to be binding.

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Objective Assessment of ITCLR

Courts assess ITCLR objectively, looking at the words, actions, and context of the agreement to see what a reasonable person would conclude.

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Presumptions in ITCLR

Starting points in ITCLR analysis, which can be overturned by evidence.

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Social and Domestic Agreements in ITCLR

Presumption that individuals in a family or social setting don't intend their agreements to be legally binding.

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Commercial Agreements in ITCLR

Presumption that parties in a business context intend to create legal relations through their agreements.

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Rebutting Presumptions in ITCLR

The process of providing evidence to overturn a presumption in ITCLR.

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Factors Rebutting Presumptions in ITCLR

Factors that can help determine if a presumption in ITCLR has been rebutted.

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Consequences of ITCLR: Enforceable Agreement

If ITCLR exists, the agreement is legally binding and parties can sue for breach.

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Consequences of ITCLR: No Enforceable Agreement

If ITCLR is absent, the agreement is not enforceable as a contract.

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Balfour v Balfour

Leading case establishing the presumption against ITCLR in domestic agreements.

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Merritt v Merritt

Case demonstrating that the presumption against ITCLR in domestic agreements can be rebutted.

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Jones v Padavatton

Case reinforcing the presumption against ITCLR in social or family relationships, not just spouses.

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Lens v Devonshire Club

Illustrates how the context of an agreement can determine if ITCLR applies.

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Office of Fair Trading v Abbey National plc UKSC 6

Established that core terms defining the main subject matter or price of a contract are excluded from the fairness assessment under the CRA 2015.

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Presumption against ITCLR in Social/Domestic Settings

A general assumption in law that agreements made in social or domestic settings are not intended to be legally binding.

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Presumption in favor of ITCLR in Commercial Settings

A presumption in law that agreements made in commercial settings are intended to be legally binding.

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Family Business Agreements and ITCLR

When family members enter into business agreements, courts may be more likely to find the presence of ITCLR, as the commercial context suggests a binding agreement.

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Honourable Pledge Clause

A specific type of legal agreement where the parties clearly state their intention not to create legally binding obligations. This can rebut the presumption of ITCLR, even in commercial settings.

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Reliance and Detriment in Social Agreements

When one party acts to their detriment or incurs expenses relying on a promise in a social setting, courts may find ITCLR despite the usual presumption against it.

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ITCLR in Social Statements with Vague Language

In social settings, vague language, statements made in anger or jest, or an absence of clear intention do not usually form a legally binding contract.

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Offer

An offer is a clear expression of willingness to enter into a contract on specific terms, with the intention to be bound, certainty, and capacity for acceptance.

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Request for Information

A response to an offer seeking clarification or information without modifying the original offer. It doesn't reject the original offer and doesn't create a new one.

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Acceptance

Acceptance is the unqualified assent to the terms of an offer, agreeing to the offer without any changes or conditions. It must be unequivocal, communicated, and mirror the offer exactly.

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Snelling v John Snelling Ltd

This case illustrates how the presence of a commercial aspect, in a family business setting, can overcome the presumption against ITCLR in domestic settings and shift the analysis towards the presumption in favour of ITCLR in commercial settings.

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Parker v Clark

This case demonstrates that the presumption against ITCLR in social or domestic agreements can be rebutted where parties have acted to their detriment in reliance on the agreement, or where the agreement has already been acted upon (executed).

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Simpkins v Pays

This case demonstrates that rebutting factors, such as reliance and detriment, can also apply to social arrangements.

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Acceptance of Offer by Telex

Acceptance is effective when the acceptance is received by the offeror, not when the offeror reads it.

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Postal Rule Exceptions

The postal rule applies only if it is reasonable to use the postal route and is not excluded by the offer.

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The Postal Rule

Acceptance takes effect when the letter is sent, not when it is received, as long as using the post was expected by both parties.

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Revocation by Third Party

An offer can be revoked by a reliable third party, and the revocation is effective upon receipt.

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Promise to Pay Taxes as Consideration

A promise of future tax payments is not good consideration because it is an existing obligation under fiscal legislation.

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Determining Office Hours for Acceptance

The court will consider the specific circumstances of the parties and the transaction in question to determine when acceptance took place.

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Acceptance by Electronic Communication

Acceptance is effective when it arrives in the offeror's inbox, not when the offeror reads it.

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Contract Formation by Telex

The contract was formed in Vienna where the acceptance was received, not in London where the offer was sent.

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Sufficient vs Adequate Consideration

The exchange in a contract does not have to be fair, just of recognized legal value.

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Existing Duty Consideration

A promise to do something that is already a legal obligation is not good consideration.

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Study Notes

Misrepresentation Cases

  • Dimmock v Hallett (1866): A seller advertised land as "fertile and improvable," and currently let to tenants, implying income. However, they didn't disclose that tenants had given notice to leave. This is a half-truth, a form of misrepresentation. "Puffery" (sales talk) isn't usually a factual statement.

  • With v O'Flanagan: The income of a medical practice was accurately reported initially but drastically declined before the sale. The seller didn't disclose this change, creating a duty to disclose the changing circumstances.

  • Horsfall v Thomas (1862): A buyer didn't inspect a gun before purchase. If he had, he'd have discovered a fault. Concealing a patent defect doesn't amount to misrepresentation if the other party fails to inspect.

  • Peek v Gurney (1873): Company directors issued a misleading prospectus to attract initial investors for shares. The claimant bought shares later, but the misrepresentation wasn't intended for secondary market purchasers; therefore, the claimant couldn't sue.

  • JEB Fasteners v Mark Bloom: A professional's liability hinges on the claimant relying on the professional's work. If the claimant would have acted the same regardless, no claim exists. In this case, the audited accounts had errors, but JEB still used them, despite knowing.

  • Attwood v Small: A buyer conducted their own investigations and verified the accuracy of the seller's representations. This reliance on independent investigation diminishes reliance on the seller's statements.

  • Redgrave v Hurd: A solicitor selling his practice misrepresented his income. The buyer failed to examine documents. Failure to investigate does not negate reliance on the representation, and there's no duty to investigate.

  • Long v Lloyd: The buyer purchased a lorry with misrepresentations about its condition, speed, and fuel efficiency. The buyer accepted a repair at half price after the lorry broke down; by then, the buyer affirmed the contract and lost the right to rescind.

  • Leaf v International Galleries: A painting was falsely claimed to be by a famous artist. The buyer sued five years later. An unreasonable delay in seeking rescission after discovering the misrepresentation bars the claim.

  • Doyle v Olby: A business sale was fraudulently misrepresented; damages compensated the claimant for all losses—direct and consequential—directly resulting from the fraud.

Further Misrepresentation Points

  • Rescission: Setting aside the contract, restoring parties to pre-contract positions. It can be lost through affirmation, delay, impossibility, or rights of third parties.
  • Damages: Financial compensation for injury.
  • Fraudulent Misrepresentation: All direct losses recoverable.
  • Negligent Misrepresentation: Measured as if fraudulent.
  • Innocent Misrepresentation: Damages may be awarded in lieu of rescission.

Duress and Undue Influence

  • Universal Tankships v. International Transport Workers Federation: Unlawful threats and a lack of reasonable alternatives made a contract variation voidable. Economic duress occurred.
  • DSND Subsea Ltd v. Petroleum Geo-Services: A threat to send an empty trailer, exploiting financial pressure, exerted illegitimate pressure, making a contract variation voidable.
  • The Atlantic Baron: Payment made under duress can be voidable. Unions aren't liable for action related solely to employment terms.
  • Kolmar Group AG v Traxpo Enterprises Pvt Ltd: Exploiting another party's urgent need and lack of alternatives when threatening to breach a contract is illegitimate duress.
  • CTN Cash and Carry Ltd v Gallaher Ltd: Lawful pressure is not necessarily duress, especially when the pressure is exerted in good faith.
  • Pakistan International Airlines Corp v Times Travel (UK): Lawful pressure, conducted in good faith, is not duress.
  • Huyton SA v Peter Cremer GmbH & Co: A seller's error, not duress, influenced a settlement, as the buyer could cancel for a repudiatory breach.
  • Pao On v Lau Yiu Long: Commercial pressure alone does not constitute duress or undue influence. Illegitimate coercion is needed.
  • North Ocean Shipping Co v Hyundai Construction Co (The Atlantic Baron): Delayed action affirms the contract, barring rescission for economic duress.
  • Allcard v Skinner: A gift made under undue influence can be set aside, but undue delay may bar the claim.
  • Lloyds Bank Ltd v Bundy: A presumption of undue influence arose in a relationship of trust and reliance, which the bank failed to rebut.
  • R v Attorney General of England and Wales: Threats of lawful actions aren't duress unless they force unlawful actions. No undue influence or lack of consideration for the contract.
  • Goodchild v Bradbury: Gift from an elderly donor was set aside due to a presumption of undue influence, as the transaction was unusual. Lack of independent legal advice strengthened the presumption.
  • Barclays Bank Plc v O'Brien: The wife’s consent was invalidated due to undue influence and misrepresentation by the husband, as the bank had constructive knowledge of the situation.

Consideration

  • Consideration: Something of value exchanged for a promise, turning a gratuitous promise into a legally binding obligation, not necessarily fair (adequate).
  • Sufficient but Not Adequate: Consideration must have some value, but the court won't assess its fairness.
  • Past Consideration is Insufficient: Promises made after a service is performed are generally unenforceable.
  • Pao On v Lau Yiu Long: Exceptions to the past consideration rule. The prior request for the act and an implied promise of remuneration are prerequisites for valid past consideration.
  • Consideration Must Move From the Promisee: The promisee must provide consideration, not a third party, although the benefit to the promisor isn't essential.
  • Performance of Pre-existing Duty: Performing a pre-existing duty isn't valid consideration.

Modification Promises and Promissory Estoppel

  • Modification Promises:
    • Promises to Pay More: Performing the existing duty isn't consideration. Fresh consideration is needed except for "practical benefit."
  • Stilk v Myrick: Sailors promised more pay but not enforceable; their existing duty was sufficient.
  • Hartley v Ponsonby: Sailors took over a much more dangerous task; their new obligation was enforceable.
  • Williams v Roffey Bros: The court found new consideration in a contractor's promise for practical benefits.
  • Williams v Roffey Criteria: A pre existing contract, doubt about completion, additional payment, practical benefit for promisor, absence of duress, valid consideration.
  • Promises to Accept Less: Part payment isn't consideration.
  • Foakes v Beer: Part payment of a debt wasn't sufficient consideration.
  • Practical Benefit: An unclear exception to part payment, potentially allowing it if practical benefit is gained.
  • Promissory Estoppel: Prevents a party from going back on a promise. Parties' reliance and inequity are essential components.
  • Central London Property Trust v High Trees House: Promissory estoppel allows suspension, not extinguishment, of existing rights.

Contractual Interpretation

  • Objective Intention: Courts focus on the reasonable meaning of a contract's terms to parties. Literal interpretation now considered less relevant; instead, surrounding circumstances (context and purpose) are paramount.
  • Lord Hoffmann's Five Principles: These principles guide the contextual approach to contract language.
  • Commercial Common Sense: Contracts should generally be interpreted with commercial logic and good faith, as per the circumstances of the parties' interaction.

Exemption Clauses

  • Incorporation: Exemption clause is valid in various ways: signed contracts, notice at the time of contracting, or prior conduct/custom.
  • Construction: Ambiguity is interpreted against the party seeking to rely on the clause (contra proferentem). Clear language required to exclude liability for negligence.
  • UCTA 1977 and CRA 2015: Important legislation regulating specific exemption clause limitations.
  • ITCLR: Agreements that the parties intended to be legally binding and enforceable.
  • Objective Test: Courts consider actions, words, and overall context, not subjective intentions to assess ITCLR.
  • Presumptions: Domestic or social agreements presumed to lack ITCLR; commercial agreements presumed to have ITCLR. Presumptions can be rebutted with evidence.
  • Rebutting Factors: Parties' relationship, agreement's subject matter/impact (value), surrounding circumstances (language, conduct).
  • Cases Illustrated: Cases like Balfour v Balfour, Merritt v Merritt, and Jones v Padavatton illustrate presumption and rebuttal.
  • Specific Cases: Examine ITCLR application in Lens v Devonshire Club, Snelling v John Snelling Ltd, Parker v Clark, Simpkins v Pays, Edwards v Skyways, Rose and Frank Co v JR Crompton and Bros Ltd, Blue v Ashley, and Saddler v Reynolds for further details.

Offer, Acceptance, and Contract Formation

  • Offer: A clear expression of intent to be legally bound on specific terms, capable of acceptance.
  • Acceptance: Unqualified agreement to the terms of an offer; requires matching the offer without conditions.
  • Communication: Acceptance must be communicated to be valid. Exceptions: prescribed mode, authorized third party, postal rule.
  • Revocation: Offer can be revoked before acceptance but conditions apply.
  • Counter Offer: Modifies the terms of an offer, thus rejecting the original.
  • Cases Illustrated: Cases like Harvey v Facey, Hyde v Wrench, Stevenson, Jacques v McLean, and Butler Machine Tool Co Ltd. v Ex-Cell-O Corp (England) Ltd. are examples of offer and acceptance concepts.
  • Distinguishing ITT: Invitations to treat are expressions of willingness to receive offers.
  • Postal Rule: Acceptance is valid upon posting.
  • Case Examples for ITT: Gibson v Manchester City Council, Partridge v Crittenden, Fisher v Bell, and Pharmaceutical Society of GB v Boots clarify different situations.
  • Case Examples for Acceptance: Manchester Diocesan Council for Education v Commercial & General Investments Ltd, Powell v Lee, Felthouse v Bindley, distinguish various instances.

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This quiz covers landmark cases related to misrepresentation in law. You will explore various scenarios including Dimmock v Hallett and Horsfall v Thomas, emphasizing the importance of truthful representation in sales and agreements. Test your knowledge on the nuances of legal misrepresentation principles.

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