Common Law vs Civil Law: Key Legal Concepts Explained (PDF)

3 Basic legal systems of law Common Law Civil Law Religious law o A question: are there Christian roots in Civil Law and Common Law? Origines : Common Law o Spread through conquest and colonization Civil Law o Filtered through the French Civil Code and s...

3 Basic legal systems of law Common Law Civil Law Religious law o A question: are there Christian roots in Civil Law and Common Law? Origines : Common Law o Spread through conquest and colonization Civil Law o Filtered through the French Civil Code and spread primarily because of the voluntary adoption Common Law de nitions - Justice Kenyon in R v Rusby (1800) (UK): o "The common law, though not to be found in the written records of the realm, yet has been long well known. It is coeval with civilized society itself, and was formed from time to time by the wisdom of man.“ - Chief Justice Hannah of the Supreme Court of Arkansas in Mason v State (2005): o "The common law is judicially created law that is developed on a case by case basis Pointed positif : Common law has been referred to as the "... common sense of the community, crystallized and formulated by our ancestors". Because it is not written by elected politicians but, rather, by judges, it is also referred to as unwritten law or lex non scripta. The common law has been and is built up like pearls in an oyster, slowly and always in response to some small personal aggravation, in nitesimal layerafter in nitesimal layer. It is built up upon the adjudications of courts: Civil Law vs Common Law What the di erence? - Sources of law & codi cation Civil 1. Constitution 2. International Law 3. Legislation – statutes (a code-based system) and subsidiary legislation 4. Custom Common 1. Constitution (not in the UK) 2. Legislation – Statutes and subsidiary legislation 3. Judicial precedent – common law and equity 4. Custom 5. International Law - Stare decisis / Precedent Civil Little emphasis on precedent. Interpretation to a great extent is situation- dependent Common Binding judicial decisions – decisions of the highest court may be only overturned by the same court or through legislation - Case law civil : Little emphasis on case law. Judges have no power to change or adjust an unjust law. Common law : 1  ff fi fi fi fi  Case law as a basis for common law. The law is established case by case as judges make rulings. Current judges read the decisions of the past and base their decisions on what was decided before. Lawyers read the decisions of the past and base their arguments on those past decisions. - Scope : Civil : Law grants rights, determines their scope and sanctions for non-compliance. Limited freedom, responsibility, liability. Need permission for most actions. Common : Everything permitted what is not prohibited by law. Freedom, responsibility and liability. No need for permission for anything - Role of judges; Civil : Judges have no power to change or adjust an unjust law. Chief investigator: the judge’s role is to establish the facts of the case Common Current judges read the decisions of the past and base their decisions on what was decided before. Lawyers read the decisions of the past and base their arguments on those past decisions. Most judges rarely inquire extensively into matters before them, instead relying on arguments presented by the parties - Jury opinion : Civil : More an exception than a rule. Sometimes in criminal cases. Judges ensure law prevails over passion. Common Juries are comprised only of laypersons, only rarely lawyers, and are rarely employed to decide non-criminal matters outside the US. Their function is to weigh evidence presented to them, and to nd facts. -Type of argument & role of lawyers Civil : Inquisitorial. Judges, not lawyers, ask questions and demand evidence. Lawyers present arguments based on the evidence the court nds. Common : dversarial. Lawyers ask questions of witnesses, demand production of evidence, and present cases based on the evidence they have gathered. - Evidence taking Civil : Evidence demands are within the sovereign inquisitorial function of the court — not within the lawyers’ role. As such, “discovery” by foreign attorneys is dimly viewed, and can even lead to criminal sanctions where the court’s role is usurpated. Common : Widely understood to be a necessary part of the litigants’ e ective pursuit or defense of a claim. Litigants are given wide latitude in US jurisdictions, but more limited outside the US. In very simplistic terms, Common Law boils down to two main principles Do all you have agreed to do. Do not harm another. Signi cant di erences between Civil Law and Common Law Mentalities Legal reasoning Styles of argumentation Organisation and methodology of law Legal education Judicial process Disdain for a di erent system of law ‘‘The life of the law has not been logic: it has been experience. Oliver Wendell Holmes, Jr., THE COMMON LAW, 1881, p. 5 2 fi ff ff fi ff fi  Perceived advantages of Common Law - adapt to varying conditions of the society Requirement and habits of the age to avoid inconstistes and injustice - must grow with the développement of the nationa - must face and deal with changing and novel circumstances Yet… can we speak about today’s convergence of di erent law systems? Governmental intervention Constitutional review of legislation Supranational legal norms Globalisation leads to convergence of systems Blurring of civil and common law as a result Why to study Common Law? Population o UK: 55M o US: 325M o Australia: 24M o India: 1.3B Trading powers (2014) Choice of law in International contracts (ICC) ICC 2020 : English law : 13% 122 Us law 104 Swiss 66 Braizialn 42 International Arbitration: Seat (ICC) ICC: “top” 10 seats of arbitration in 2014, 2019 and 2023: 2014 2019 2023 o Paris 93 106 (15.9%) 96 (14.3%) o London 86 114 (17.1%) 85 (12.7%) o Geneva London as an attractive venue for litigation The top two factors: o reputation/experience of judges; and o the combination of choice of court clauses with choice of law clauses in favour of English law. Other important factors: o e cient remedies; o procedural e ectiveness; o neutrality of the forum; o market practice; o English language; o e ective UK-based counsel; 0Beginnings of the Civil Law Roman law: o Civil Law o Jus Civile Twelve Tables (around 450 BC) o Beginning of jus scripta o Bronze tablets Table 1 Procedure: for courts and trials Table 2 Trials continued & Theft Table 3 Debt 3 ffi ff ff ff  Table 4 Rights of fathers (pater familias) over the family Table 5 Legal guardianship and inheritance laws Table 6 Acquisition and possession Table 7 Land rights & crimes Table 8 Torts and delicts (Laws of injury) Table 9 Public law Table 10 Sacred law Table 11 Supplement I – Marriage Table 12 Supplement II – Binding into Law Beginnings of the Civil Law Corpus Juris Civilis (AD 529) Emperor Justinian I (the s.c. Justinian Code) Re-discovery of the Justinian Code in the Middle Ages in the Universities across Europe (Bologna, Sorbonne) Law developed as a scholarly activity by professors Rule of law rather abstract Today still remains an academic activity: lectures, treatises Before Common Law: Anglo-Saxon era Generally the period from 550 to 1066 Organised in small kingdoms ‘’Law’’ during this time was written (codes) o In uenced by Roman law o Created by local ‘kings’ Country courts were principally responsible for the administration of kingdoms Hundreds of courts o Below county courts o Probably had administrative and judicial role Common Law: how it all started Developed by Normans William the Conqueror, Duke of Normandy, 1066 battle of Hastings "The ferocious Saxons trampled on the laws of Rome. The proceedings of civil and criminal jurisdiction, the titles of honour, the forms of o ce, the ranks oy society, and even the domestic right of marriage, testament and inheritance were nally suppressed, and the indiscriminate crowd of noble and plebian slaves was governed by the traditional customs, which had been coarsely framed for the shepherds and pirates of Germany.“ o Edward Gibbon, The Collected Works (late 18th century) Why “COMMON” law: o The rst legal system that became common to the whole country (England and Wales) in 1066 – after the Norman Conquest o Prior to the Norman Conquest there were many di erent rules of law found all over the country – custom law o William the Conqueror decided to set up a central system of government that would include the justice system English legal terminology Impact of ‘Norman’ French on legal English, through the William the Conqueror’s conquest, e.g.: o government and administration government, govern, administer, crown, state, empire, realm, reign, royal, authority, sovereign, majesty, tyrant, usurp, oppress, court, council, parliament, assembly, statute, treaty, alliance, record, repeal, adjourn, tax, subsidy, revenue, traitor, treason, exile, public, liberty. o The word o ce and the titles of many o ces are likewise French: chancellor, treasurer, chamberlain, marshal, governor, councillor, minister, viscount, mayor, constable, coroner. o Except for the words king and queen, lord, lady, and earl, most designations of rank are French 4 fl fi ffi fi ffi ffi ff  baron, nobility, prince, princess, duke, duchess, count, countess, marquis, baron, squire, page, and titles of respect like sir, madam, mistress. o economic organisation of society: manor, homage, vassal, peasant, slave, servant. o Legal Vocabulary: justice, equity, suit, plainti , judgement, judge, advocate, attorney (atorné ("one appointed")), grand jury and petit jury , bill, petition, complaint, summons, jury, juror, verdict, prison, punishment, gaol; voir dire = say the truth, inquire – ask, beseech, reason, cause, response, plainti , testament Property: o estate, tenement, patrimony, heritage, heir, and bounds Crimes: o perjury, adultery, assault, trespass, frauds. William I’s legacy: o By 1080s Normans establish well organised counties which ‘’administer local law’’ and establish ‘’local courts’’ o The Curia Regis– ‘’King’s Court’’ – used by William I to govern the country and as a court for deciding disputes. The King was basically the law when he wanted to be o Local courts – held over from the Anglo-Saxon system County courts presided over by a Sheri Hundred courts: dealt with very local matters, overseen by heads of families o Feudal courts – dealt with all disputes within the manor, overseen by feudal lord o Ecclesiastical courts – Catholic Church courts Early 12th century: o Henry I started sending his judges to preside over local disputes o First signs of centralization and procedural consistency Henry II Plantagenet, King of England (1154-1189), ‘Father of Common Law’ o Takes throne after a generation of civil war o Keen to regain control o Institutionalised common law o Established the Royal Courts Henry II’s legacy: o King’s Bench as a permanent court in Westminster o Court system ‘common’ to the country o Panel of regularly travelling justices They presided over local issues Decided local cases based on principles used in the Westminster court o Began integrating local courts into a nationwide system through the issuance of writs and other procedural reforms o Concerned more with procedure than with substantive law or rules o Discontinued the practice of trial by ordeal and battle 1215: Magna Carta o Reasons for creation – disagreements between the Pope Innocent II, King John and the barons regarding the King’s rights Guarantee of the freedom of the English Church No over-taxation No freeman would be punished without a proper trial o The original source for the trial by jury and habeas corpus o Important signi cance for later constitutional developments, incl., most importantly, the Crown and the Parliament XIV-XV centuries: o All taxation without consent of the Parliament is illegal o The consent of the both Houses of the Parliament is required for the passage of legislation o The Commons has the right to inquire into and to amend the abuses of the Crown’s administration 5 fi ff ff ff o Drafted in Latin Statute of Westminster 1275 o codi ed the existing law in England in 51 chapters, e,g., 1. The Peace of the Church and the Realm shall be maintained. Religious Houses shall not be overcharged. 9. All Men shall be ready to pursue Felons. 12. The Punishment of Felons refusing lawful Trial. 50. Saving for the Crown o Drafted in Norman French 1362: the Parliament changed the o cial language of the courts from Latin and Old Norman French to English, so that all the parties could understand the arguments o codi ed the existing law in England in 51 chapters, e,g. 1534: Henry VIII establishes the Church of England 1689: Bill of Rights o Rights of the Parliament o A document which governs constitutional relationship between the Parliament and the. Crown 1765-1769: Sir William Blackstone, Commentaries on the Laws of England o The Rights of Persons o The Rights of Things o Of Private Wrongs o Of Public Wrongs Me, I and myself The main source of law classical common law was the King: o He and his council were legislative, executive and judiciary o When we talk about ‘parliament’ during the early development of common law, we are talking about the King’s Council o When we talk about a high court at this time, we talk about the same Council Me, I and myself vs independent judiciary 17th century: tension between the Stuarts and their judiciary Francis Bacon: o “Judges ought to remember that their o ce is jus dicere and not jus dare; to interpret law, and not to make law, or give law. Else it will be like the authority claimed by the church of Rome, which under the pretext of exposition of Scripture, doth not stick to add or alter; and to pronounce that which do not nd; and by shew of antiquity to introduce novelty“ and further: judges should be “lions, but yet lions under the throne.” “It is a happy thing in a state … when kings and states do often consult with judges; and again, when judges do often consult with the king and state: the one, when there is matter of law intervenient in business of state; the other, when there is some consideration of state intervenient in matter of law.” o Of Judicature, Francis Bacon (1612) The Royal Courts o Privy Council – King’s closest advisers o Court of Assizes – the King’s travelling judges, mostly dealt with criminal matters o Court of Exchequer (Chancery) (Treasury + issuer of writs) o Court of Common Pleas – dealt with private actions based on common law and ‘statutes’ o ‘’King’s Bench’’ – dealt mainly with criminal matters and matters concerning the King The local courts Writs Permission from the King to use his courts: o Circumstances that entitled the hearing before the common law court o Fixed the jurisdiction of the early royal courts o If a raised issue did not fall within the prede ned circumstances, there was a high probability that the redress in courts was not possible o 3 groups of actions based on the remedy: Real (recovery of the thing (property title) 6 fi fi ffi ffi fi fi  Personal (recovery of damages) Mixed: recovery both of the thing and damages The UK is a unitary state. YET: There is NO single uni ed legal system throughout the UK: (1) England and Wales (2) Scotland (3) Northern Ireland. Exceptions: o immigration law: the Asylum and Immigration Tribunal's jurisdiction covers the whole UK o employment law: Employment Tribunals for England, Wales, and Scotland but not Northern Ireland; o military law: the Military Court Service has jurisdiction over all members of the UK armed forces. The evolution of modern Common Law Key factors in the creation of modern Common Law: o The gradual irrelevance of manor courts and end of feudalism o The development and distribution of printed word o Formalised education of legal practitioners o Stare decisis was not o cially recognised in England until end of 18th century. It became more prevalent as Court records became more detailed The court system became more organised Commonly used decisions became accepted as being ‘’grounded in the law’’ UK Government struucture The Parliament House of Commons - The Parliament The King’s role in the Parliament Assenting to Bills passed by Parliament Giving audiences to Ministers Summoning new Parliaments and appointing the date of its rst meeting Opening and closing each session of Parliament 1) Equity 2) Precedent 3) Jury trial Key concepts Equity The major de ciencies of common law were: o Incomplete or no remedies o Inadequate relief o Inadequate or defective procedure 1348: the King completely assigned his equity decisions to the Chancellor As Chancellor’s powers grew, petitions went directly to him and not the King Chancellor could provide a remedy which was not in the common law o Chancellor applied ‘’rules of equity and good conscience’’ ‘’Equity’’: o Justice and fairness o Body of rules administered by courts of equity o Stockholder’s proportionate share, or share in a limited company Equity is o a legal system of obtaining a fair result when existing laws do not provide a solution o A set of legal principles that supplement strict rules of law where their application would operate harshly When was equity used: 7 fi fi ffi fi o Person could not get remedy in court (either because he was poor (writs cost money) or his adversary was too powerful o Petition would plead ‘’for the love of God’’ o In equity a judge will consider what ought to have been done and not what was actually done ‘He who comes to equity must come with clean hands’, i.e., an equitable remedy is at the discretion of the court “Courts of equity make their decrees so as to arrive at the justice of the case without violating the rules of law.” o Lloyd Kenyon, Clayton v. Adams (1796), 6 T. R. 605. ‘’ Equity is no part of the law, but a moral virtue, which quali es, moderates, and reforms the rigour, hardness and edge of the law, and is a universal truth. It does also assist the law, where it is defective and weak in the constitution (which is the life of the law), and defends the law from crafty evasions, delusions and mere subtleties, invented and contrived to evade and elude the common law, whereby such as have undoubted right are made remediless. And thus is the o ce of equity to protect and support the common law from shifts and contrivances against the justice of the law. Equity, therefore, does not destroy the law, nor create it, but assists it.’’ Lord Cowper in Dudley v Dudley (1705) Prec Ch 241 ‘’The equity of this court varies like the Chancellor’s foot’’ o Lord Eldon, Gee v Prichard (1818) Earl of Oxford’s case (1615) 21 ER 485 o Dicta: In cases of con ict between common law and equity, equity was to prevail Judicature Act 1873, S. 25: o If a con ict appears between common law and equity, the latter will prevail =} common law and equity are administered alongside each other Supreme Court Act 1981 (England) o Section 49 Concurrent administration of law and equity (1) Subject to the provisions of this or any other Act, every court exercising jurisdiction in England and Wales in any civil cause or matter shall continue to administer law and equity on the basis that, wherever there is any con ict or variance between the rules of equity and the rules of the common law with reference to the same matter, the rules of equity shall prevail. US Constitution Article III, Section 2 : ‘The judicial power shall extend to all cases, in law and equity …’ Australia Supreme Court Act 1986 Part 3 — Concurrent Administration of Law and Equity 29 Law and equity to be concurrently administered o (1) …. every court exercising jurisdiction in Victoria in any civil proceeding must continue to administer law and equity on the basis that, if there is a con ict or variance between the rules of equity and the rules of the. common law concerning the same matter, the rules of equity prevail’. Some principles of equity Equity acts in personam Equity acts on the conscience Equity helps the vigilant Equity looks at the intent, not at the form He who seeks equity must do equity He who comes to equity must come with clean hands Equality is equity Equity looks on that as done which ought to be done Modern fusion theory of common law and equity: ‘’Over 100 years have passed since the Supreme Court of Judicature Act 1873. During that time the streams of law and Equity have own together and combined so as to be indistinguishable the one from another. We no longer have to ask ourselves what we should do now so as to ensure fair dealing between the parties… the question must be asked in each case as it arises for decision, and then, from case to case we shall build up a series of precedents to guide those who come after us.’’ o Lord Denning MR, Federal Commerce and Navigation Ltd v. Molena Alpha “It is the rst principle upon which all courts of equity proceed, that if parties, who have entered into de nite and distinct terms involving certain legal results, afterwards by their own act or with their own consent enter 8 fl fl fi fl fl fl ffi fi fi  upon a course of negotiation which has the e ect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced, or will be kept in suspense, or held in abeyance, the person who otherwisemight have enforced those rights will not be allowed to enforce them when it would be inequitable having regard to the dealings which have taken place between the parties.“ o D & C Builders Ltd v Rees EWCA Civ 3, Lord Denning The Merchant of VeniceAct 4 Scene 1 https://www.youtube.com/watch?v=Ox8BWkkVcaw Precedent De nition: ‘’A court decision that is cited as an example or analogy to resolve similar questions of law in later cases’’ Grounded in stare decisis o ‘’stand by what has previously been decided in a similar case’’ o „The practice of the Court forms the law of the Court.“ o Lloyd Kenyon, Wilson v. Rastall (1792), 4 T. R. 757. o “Whatever might have been my opinion, had this been a new case, I must hold myself bound by decided cases.“ Judicial hierarchy: o Higher courts’ decisions are binding on the lower courts o Not vice versa Work of the judge to determine: o What pronouncements of earlier decisions are relevant to the present case o What parts of the earlier decisions are binding o “The use of cases is to establish principles; if the cases decide di erent from the principles, I must follow the principles, not the decisions.“ Lloyd Kenyon, Duke of Leeds v. New Radnor (1788), 2 Brown's Rep. (by Belt), 339. Flexibility of the doctrine of precedent: o Through judicial principles of overruling, distinguishing and departing Jury History: o XI-XII century: local use o 1215 Magna Carta: the right to a jury was o cially recognised Clause 39 of the Great Charter of June 1215 re ected a privilege negotiated by the barons to ensure that their disputes with the King — mainly over land — would be settled after advice from men of their own rank and status. No free man shall be seized or imprisoned, or stripped of his rights or possessions, or outlawed or exiled, or deprived of his standing in any way, nor will we proceed with force against him, or send others to do so, except by the lawful judgment of his equals or by the law of the land. o Juries were constituted by ‘’peers’’ o Juries were asked to judge behaviour based on a local custom Di erent developments of the institute across jurisdictions o US: regular use to date o UK: only serious criminal o ences Two main principles for jury members to consider evidence and reach a verdict: o The presumption of innocence: everyone who stands trial is innocent until proved guilty. (see also the UN Universal Declaration of Human Rights and ECHR). o The case against the defendant must be proved beyond reasonable doubt. The jury must be convinced that there is no alternative explanation of the evidence that would exonerate the defendant. The Fifth Amendment to the US Constitution (rights in criminal and civil proceedings) 1. Le 5e amendement – Garanties fondamentales en matière pénale et de propriété : 9 ff fi ff ffi ff fl ff  Protection contre les poursuites sans mise en accusation par un Grand Jury (sauf armée guerre). Interdiction de la double incrimination : une personne ne peut être jugée deux fois pour la même infraction. Droit au silence : nul ne peut être contraint de témoigner contre lui-même. Protection des droits fondamentaux (vie, liberté, propriété) par le principe du “due process of law”. Indemnisation obligatoire si l’État prend une propriété privée pour un usage public (“takings clause”). 2. Le 6e amendement – Droits des personnes accusées au pénal : Droit à un procès rapide et public. Droit à un jury impartial dans le lieu où le crime a été commis. Droit d’être informé des charges, de confronter les témoins à charge, d’obtenir des témoins à décharge, et d’avoir l’assistance d’un avocat. 3. Le 7e amendement – Procès civil devant les juridictions fédérales : Droit à un procès par jury en matière civile si le litige dépasse 20 dollars. Les faits tranchés par un jury ne peuvent pas être réexaminés sauf selon les règles de la common law. Common Law vs Civil Law: appraise the di erence in approaches Flannery v Halifax Estate Agencies Limited, 1 WLR 377; 1 (Court of Appeal) Cour de cassation/ chambre civile 3 / Audience publique du jeudi 29 octobre 2015 / N° de pourvoi: 14-15455 14-18872 Article 455 CPC Le jugement doit exposer succinctement les prétentions respectives des parties et leurs moyens. Cet exposé peut revêtir la forme d'un visa des conclusions des parties avec l'indication de leur date. Le jugement doit être motivé. Il énonce la décision sous forme de dispositif. Article 458 CPC 1. Article 458 du Code de procédure civile : Certaines mentions formelles dans les décisions juridictionnelles (comme le nom des juges, la motivation, etc.) sont obligatoires à peine de nullité, conformément aux articles 447, 451, 454, 455 al.1 et 456 CPC. 2. Une tradition de concision ancienne et controversée : La Cour de cassation a toujours eu un style de motivation très bref. Depuis 1860, elle est revenue à une forme laconique, après une période plus explicative. Le débat sur cette concision est récent (depuis environ 40 ans) mais très vif, impliquant magistrats et universitaires. 3. Les critiques principales (Tunc & Tou ait) : La motivation concise méconnaît le devoir moral et parfois politique des juges d’expliquer leur décision. L’usage de formules vagues crée de l’insécurité juridique et de l’ambiguïté sur la règle de droit appliquée. Elle favorise l’immobilisme en répétant mécaniquement des principes sans en justi er la pertinence. L’absence de justi cation permet de présenter comme évidentes des solutions contestables, et même parfois contradictoires selon les a aires. En n, une motivation abstraite ignore les réalités humaines et sociales, et déconnecte le droit de la vie. 4. Enjeu actuel : La ré exion sur la motivation des arrêts oppose tradition et évolution vers plus de transparence et de dialogue avec la société. Sources of Law. : PRIMARY SOURCES UK Legislation : - EU Law - ECtHR - Decisions - Legal Encyclo paedias - Secondary Legislation - Parliamentary and Non-Parliamentary - Documents - Statutory 10 fl fi fi ff ff ff fi - Instruments (Sis) - Codes Orders Regulation - Rules SECONDARY SOURCES - Law - Commission reports - Law Journals - Textbooks Custom To be legally enforceable, a custom must meet several conditions. It must be: 1. Reasonable 3. Clear and certain 2. Speci c to a particular geographical region 5. Uninterrupted 6. Exercised in a peaceful manner, and with the permission of someone else 7. Consistent with other local customs 8. In conformity with existing statutes A custom, in the eyes of the law, is an established practice that has acquired the force of law through long and consistent usage. It is binding for the specific people, places, or things it applies to, even though it is unwritten law (jus non scriptum). Key elements of a valid custom: It originates from the people, not from written legislation. It must be a reasonable and beneficial practice. It must be repeated and consistent over a long period of time, specifically “time out of mind” (i.e., so long that no one remembers a time when it wasn’t practiced). It gains legal force through continuous and uniform repetition. In short, custom is a reasonable act, multiplied, reiterated, and maintained by the people, which ultimately acquires the authority of law through social acceptance and historical continuity. o Case of Tanistry (1608) Dav 28; 80 ER 516. For the English translation, see A Report of the Cases and Matters in Law, Resolved and Adjudged in the King’s Courts in Ireland (1762) 78 , at 87 ‘’ First, The Common Law does determine what of these Customs are good and reasonable, and what are unreasonable and void. Secondly, The Common Law gives to those Customs, that it adjudges reasonable, the Force and E cacy of their Obligation. Thirdly, The Common Law determines what is that Continuance of Time that is su cient to make such a Custom. Fourthly, The Common Law does interpose and authoritatively decide the Exposition, Limits and Extension of such Customs.’’ o Sir Matthew Hale, The History of the Common Law of England ( rst published 1713, Charles Gray ed, 1971), at 18. Sources of Law: Case Law - Structure of judgments - Source of publication: 1 Weekly Law Reports - Names of the parties - Names of judges - Date of the hearing - Catch phrases/ catch words: Summary of main legal issues written by the editor of the law report - Headnote: Compiled by the editor of the law report. Summary of facts and summary of decisionsSources of Law: Case Law - Structure of judgments (cont.) - List of cases referred during hearing - Statement of the nature of the proceedings Summary of procedural historySources of Law: Case Law Structure of judgments (cont.) 11 fi ffi ffi fi  - Names of barristers - Start of the judgment together with thename of the judge who gave it. Other judges normally add “I agree” or “I disagree”Sources of Law: Case Law Order/s of the Court - Names of solicitors - Names of the ReporterWhere is the law in judgments Ratio decidendi - the principle or principles of law on which the court reaches its decision Obiter - statements that are not crucial, or which refer to hypothetical facts or to unrelated law issuesCourt structure of Her Majesty’s Courts Service - THE SUPREME COURT (until 2008 - the House of Lords) - COURT OF APPEAL - Criminal Division Civil Division - Criminal Division Civil Division - HIGH COURT - King’s Bench Division Family Division Chancery Division - Administrative Court Divisional Court Divisional Court - Crown Court - County Courts - Magistrates’ Courts - Tribunals More on courts Inferior courts: o Magistrates’ courts - deal appr. with 95% of criminal cases The Crown court: o deals with more serious crimes, where the defendant, if he pleads not guilty, will be tried by a judge and jury Jury: in England and Wales juries (12 members) are used for all serious criminal o ences The county courts Hear civil cases, based on contract or tort o Personal injury claims o Bankruptcy o Some family proceedings 2The High Court Hears civil cases Hears appeals from lower courts and tribunals Judges are former solicitors or barristers with at least 10 years’ experience in the High Court or 2 years’ experience as a circuit judge o Appointments are made by the Queen on the advise ofthe Lord Chancellor - The King’s Bench Division (KBD) is headed by the Lord Chief Justice The Court of Appeal Consists of 37 Lords and Ladies Justices of Appeal Usually sitting in panels of three Judges are chosen from among the High Court judges with at least 2 years’ experience or advocates with 10 years experience Hear appeals on questions of law Does not determine disputed issues of fact – hence, no jury is required Decisions are taken by majority If the appeal is accepted, the original decision may be o reversed o a rmed/amended, or o a new trial may be ordered. The Supreme Court Formerly – the ‘’Appellate Committee of the House of Lords’’ (or simply the ‘’House of Lords’’) Hears appeals on points of law of public importance 12 Justices (currently – 10 Lords and 2 Ladies) 12 ffi ff  Generally appointed from among the most respected judges of the Court of Appeal with at least 2 years’ of high judicial o ce or 15 years’ experience as a quali ed practitioner Decisions are taken by majority Sits in panel of ve and occasionally of seven. Seven if: o If the Court is being asked to depart or may decide to depart from a previous decision o A case of high constitutional importance o A case of great public importance o A case where a con ict between decisions in the House of Lords, Judicial Committee of the Privy Council and/or the Supreme Court has to be reconciled o A case raising an important point in relation to the ECHR Cases of great public importance of supreme cort o R (Miller) v Secretary of State for Exiting the European Union UKSC o Outcome: the Supreme Court ruled in favour of giving MPs a say over triggering Article 50 - the legal mechanism taking the UK out of the EU. o R (on the application of Miller) (Appellant) v The Prime Minister (Respondent) Cherry and others (Respondents) v Advocate General for Scotland (Appellant) (Scotland) o Outcome: the Supreme Court ruled that Boris Johnson's decision to suspend Parliament was unlawful. The Privy Council There since the XI century The nal court of appeal for the UK Oversees Territories and Crown Dependencies and for a number of Commonwealth countries which decided to keep this method of appeal after their independence o (e.g., Antigua and Barbuda, Bahamas, Belize, Jamaica, et al.) Also domestic jurisdiction, principally for nal appeals in matters relating to professional discipline for medical practitioners/ dentists/ opticians etc. Supra-national courts ECtHR International courts and tribunals CJEU (till 2020) 22Court procedure A Claim Form (incl. the Particulars of Claim) A Claim Form (incl. the Particulars of Claim) The legal profession Court sta started o as close advisors to the King o Knights or clergy appointed by the Kings Over a few generations (by the mid-1200s) judges were appointed based upon their experience as clerks for earlier judges During the same period of time a quasi-professional class of advocates started appearing in courts on behalf of parties Early common law required the litigants to tell their stories to the court o Court language was Latin/old Norman French o ‘Advocates’ were storytellers/translators o Common law was deliberative process, discourse played key role The English legal professions Classical division as of 14th century: o Barristers Represent clients in higher courts Traditionally, could not be contacted directly by the members of the public Barristers are quali ed when they are called to the Bar by their Inns of Court The Bar Council is the regulatory body for barristers Inns: the Inner Temple, Middle Temple, Lincoln’s Inn, Gray’s Inn o Solicitors Advise clients on legal matters 13 fi ff ffi fi fi ff fl fi fi  The ‘Law Society’ is a body which regulates the profession of solicitors The Inns Gray’s Inn Lincoln’s Inn King’s Counsel (KC): o = or Senior Counsel o Recognition in the profession o Selection is made by the Commission for Judicial Appointments o Status is conferred by a Crown and recognised by courts o When professional become KC, it is said that they ‘take silk’, as their gowns are made of silk o Being a KC is often considered a rst step to becoming a judge ‘’ First, The Common Law does determine what of these Customs are good and reasonable, and what are unreasonable and void. Secondly, The Common Law gives to those Customs, that it adjudges reasonable, the Force and E cacy of their Obligation. Thirdly, The Common Law determines what is that Continuance of Time that is su cient to make such a Custom. Fourthly, The Common Law does interpose and authoritatively decide the Exposition, Limits and Extension of such Customs.’’ o Sir Matthew Hale, The History of the Common Law of England ( rst published 1713, Charles Gray ed, 1971), at 18. Literature and sources Case law, case law, case law! Acts: o Sale of Goods Act 1979 o Supply of Goods and Services Act 1982 o Law of Property Act 1925 o Unfair Contract Terms Act 1977 o Misrepresentation Act 1967 o Contracts (Rights of Third Parties) Act 1999 o Consumer Rights Act 2015 o etc Formation of a contract o O er, acceptance, consideration, contractual intention, form Contents of a contract o Express and implied terms The end of a contract o Expiration, termination, vitiation and frustration Damages and remedies Functions of Contract To establish the value of the exchange To establish the parties’ respective responsibilities and the expected standard of performance To enable advance allocation of risks between the parties To provide what is to happen if things go wrong English law of contracts English contract law is primarily concerned with contracts as sources of obligations. The fundamental principle is that a person who makes a promise should keep it. However, English law historically does not enforce promises unless certain formal conditions are met: The promise must be made under seal, or The promisee must give consideration—something of value—in return. When a valid contract is formed, each promise creates a legal obligation for the promisor (obligor) toward the promisee (obligee). If the promisor fails to perform, two main remedies are available: Damages (monetary compensation) for losses caused by the breach (common law remedy). Speci c performance or injunction in exceptional cases, where the court can compel actual performance (equitable remedies). 14 ff ffi ffi fi fi fi  Historically, speci c performance was only available in courts of equity, but courts of common law could still enforce payment obligations by ordering the payment of money. Summary: Formation of Contracts – Objective Approach According to the ruling in Storer v Manchester City Council (1974), English contract law follows an objective approach to contract formation: Courts do not investigate a person’s internal intentions. What matters is the external expression—what the person said or did. If, based on outward appearances (e.g. written communications), there is a concluded agreement, then a contract is formed. A person cannot deny the existence of a contract by claiming a di erent internal intention if their words or actions indicate otherwise. As Lord Denning famously put it: “A contract is formed when there is, to all outward appearances, a contract.” compare : English law privileges predictability Civil law privileges justice De nition: Contract A Restatement: ‘’A contract is an agreement that is legally binding because – (a) it is supported by consideration or made by deed (see s. 8) (b) it is certain and complete (see s.9); (c) it is made with the intention to create legal relations (see s.10); and (d) It complies with any formal requirement needed for the agreement to be legally binding (see s.11(2)(a)).‘’ Sale of Goods Act 1979 Article 1101 CC France (2016): Le contrat est un accord de volontés entre deuxou plusieurs personnes destiné à créer, modi er,transmettre ou éteindre des obligations. Article 1128 CC France (2016): o Sont nécessaires à la validité d'un contrat : 1° Le consentement des parties ; 2° Leur capacité de contracter ; 3° Un contenu licite et certain. ex-article 1108 CC France (pre-2016): o Quatre conditions sont essentielles pour la validité d'une convention : Le consentement de la partie qui s'oblige ; Sa capacité de contracter ; Un objet certain qui forme la matière de l'engagement ; Une cause licite dans l'obligation. Structure of the ensuing lecture: I. Formation of a Contract II. Contents of a Contract III. The end of a Contract Formation of Contract Three basic essentials to the creation of a contract: 1. Agreement (o er & acceptance) 2. Consideration 3. Contractual intention 4. Capacity to contract 1. Agreement: o er and acceptance Mandatory elements: 15 fi ff ff fi ff fi  To compare: O re : - Art. 1114 French Civil Code: = L'o re, faite à personne déterminée ou indéterminée, comprend les éléments essentiels du exprime la volonté de intention son auteur d'être lié en cas d'acceptation à défaut, il y a seulement invitation à entrer en négociation. o O er ‘’An expression, by words or conduct, of a willingness to be bound by speci ed terms’’ (see A Restatement, S. 7(3)) Addressed to a single person, to a speci ed group of persons, or to the world at large Di erent from an ‘’invitation to treat’’ (see contrat envisagé et A Restatement, 7(4)). The main test - Can be revoked at any time up until acceptance. A Hallmarks of a valid o er: o negotiations must be nished o the o er must be speci c enough o the o er must be known to the o eree Mandatory elements: o Acceptance ‘’An expression, by words or conduct, of assent to the terms o ered’’ (see A Restatement, S. 7(6)) Unquali ed acceptance only, exactly matching the o er and accepting all terms (i.e., unquali ed acceptance): otherwise there will be a counter o er Has no legal e ect until it is communicated to the o eror. An o eror cannot stipulate that the o eree's silence amounts to acceptance To compare: Art. 1118 French Civil Code: L'acceptation est la manifestation de volonté de son auteur d'être lié dans les termes de l'o re.Tant que l'acceptation n'est pas parvenue à l'o rant, elle peut être librement rétractée, pourvu que larétractation parvienne à l'o rant avant l'acceptation. L'acceptation non conforme à l'o re est dépourvue d'e et, sauf à constituer une o re nouvelle. An o er once accepted creates an agreement O er Termination of an o er o Revocation o Rejection o Lapse of time o Death of the o eror Acceptance Acceptance by conduct Communication of acceptance Prescribed mode of acceptance o “acceptance notoriously cannot, in ordinary circumstances, be inferred from silence” Battle of forms Butler Machine Tool Co. Ltd. v Ex-Cell-O Corporation (England) Ltd., EWCA Civ 9 , o LAWTON L.J.: In modern commercial transactions, it is common for businesses to send quotations and orders containing their own standard terms, often in small print. This often results in what is known as a “battle of forms”, where each party tries to impose its own contractual terms. The solution to this con ict should not rely on guessing the internal intentions of the parties, as suggested by Thesiger J. Instead, Lawton L.J. argues that the “battle must be conducted according to set rules”, much like in classical warfare where convention and structure determine the outcome. The court should adopt a formal, rule-based approach, focusing on which party’s terms were accepted last before performance—not on subjective assumptions. This re ects the “last shot rule” often used in contract law: the terms included in the nal document exchanged and accepted before performance begins generally prevail. 16 ff ff ff ff ff ff ff fl ff ff fi ff ff ff ff ff fi fi ff ff ff ff fl fi ff ff ff ff ff fi ff fi ff fi  O er or Invitation to Treat? An o er once accepted creates an agreement An invitation to treat is an invitation to enter negotiations. An invitation to treat is a prior indication of a willingness to negotiate. A Statement, S. 7(4): o An o er is di erent from invitation to treat which is an expression, by words or conduct, of a willingness to negotiate. The “acceptance” of an invitation to treat does NOT create an agreement o i.e., this is the intention that matters It is not always easy to distinguish between an o er and an invitation to treat A Statement, S. 7(5): o The following are usually invitations to treat and not o ers: (a) the display of goods for sale; (b) an advertisement of goods for sale; (c) an invitation to tender. When does acceptance take place? Harvey v Facey UKPC 1, AC 552 Here is an English summary of the case Harvey v Facey UKPC 1: Facts: Mr. Harvey wanted to purchase a property called Bumper Hall Pen. He sent a telegram to Mr. Facey asking: “Will you sell us Bumper Hall Pen? Telegraph lowest cash price – answer paid.” Mr. Facey replied: “Lowest price for Bumper Hall Pen £900.” Mr. Harvey responded: “We agree to buy Bumper Hall Pen for £900. Please send title deeds.” Mr. Facey refused to sell, and Mr. Harvey sued, claiming a contract had been formed. Legal Issue: Was there a binding contract? When does acceptance occur in the formation of a contract? Procedural History: Trial court: Dismissed Harvey’s claim. Court of Appeal (Jamaica): Reversed and held there was a contract. Privy Council (UK): Allowed the appeal – no contract existed. Decision and Reasoning: The first telegram from Harvey asked two questions: willingness to sell and the lowest price. Facey’s reply answered only the second question (price), without expressing any willingness to sell. Harvey’s next telegram was not an acceptance, but rather a new offer to buy at £900. For a contract to be formed, Facey would have had to accept that new offer—which he did not. Simply stating the lowest acceptable price is not the same as making an offer to sell. Therefore, no binding agreement was formed. Legal Principle: A statement of price alone is not an offer, but rather an invitation to treat. A contract requires a clear offer and an unequivocal acceptance. A display of goods for sale Fisher v Bell QB 394 Facts: A shopkeeper (the defendant) displayed a flick knife in his shop window with a price tag of 4 shillings. He was charged under section 1(1) of the Restriction of Offensive Weapons Act 1959, which made it a criminal offence to “offer for sale” certain types of prohibited knives (like flick knives). Legal Issue: Did the display of the knife in the shop window constitute an “offer for sale” under the meaning of the statute, or was it merely an invitation to treat? Decision (Court of Appeal): The court held that the display was not an offer, but rather an invitation to treat, in line with traditional contract law principles. 17 ff ff ff ff ff ff  While an ordinary person might think the knife was offered for sale, in legal terms, the shopkeeper was simply inviting customers to make offers. Therefore, he was not guilty under the Act as it was worded at the time. Key Legal Principle: Displaying goods in a shop window is not an offer, but an invitation to treat. Statutes must be interpreted in line with general contract law principles, unless Parliament clearly states otherwise. Further Developments: The 1959 Act was amended in 1961 to include “exposes or has in possession for the purpose of sale or hire”, closing the legal loophole revealed by this case. Today, a similar shopkeeper could be successfully prosecuted under the updated law. A displays of goods on a shelf in a self-service store Here is an English summary of the case Pharmaceutical Society of Great Britain v Boots Cash Chemists 1 QB 401: Facts: The defendant operated a self-service pharmacy selling non-prescription medicines, some of which were on the Poisons List under the Pharmacy and Poisons Act 1933. These items were displayed on open shelves, and customers could place them in their baskets and bring them to the cash desk, where a registered pharmacist was present. The claimant argued that this setup violated section 18(1) of the Act, which required the presence and supervision of a pharmacist at the time of sale. Legal Issue: At what point is a sale concluded in a self-service store? Is the customer bound to purchase the item upon placing it in the basket? Court of Appeal Decision: The display of goods is not an o er, but an invitation to treat. When a customer places an item in their basket, they are making an o er to buy. The contract is only formed at the cash desk, where the pharmacist can accept or reject the o er. Since the pharmacist was present at the till, the legal requirement was satis ed. Key Principles: The moment of contract formation in self-service stores occurs at the point of payment, not at the shelf. Customers remain free to change their mind before paying, which shows that no binding o er or acceptance occurs until the checkout. The court emphasized common sense and continuity with traditional shop transactions Advertisement Generally these are Invitations to Treat. NOT o ers If an advert in the paper were an o er, the person who placed it would be required to contract with anyone/ everyone who would like to avail himself of it Yet, advertisements MAY be o ers - most often, in case in UNILATERAL contracts Carlill v Carbolic Smoke Ball Co 1 QB 256 Court of Appeal 1Carlill v Carbolic Smoke Ball Co Facts / O er in question: The Carbolic Smoke Ball Company published an advertisement promising: “£100 reward will be paid to any person who contracts in uenza after using the smoke ball three times daily for two weeks according to the instructions.” They added that “£1000 has been deposited with a bank to show our sincerity.” Legal Issues: Was this just advertising hype (“a pu ”) or a binding contractual o er? Did it constitute a unilateral contract? Was there consideration? Decision: The Court of Appeal held that this was a valid o er capable of acceptance by anyone who met the conditions. Using the smoke ball as directed was su cient consideration, since the company gained an advantage: increased use and publicity Lord Lindley: Dismissed the idea that it was a “mere pu.” Found a binding contract with all necessary elements (o er, acceptance, consideration, intention). Lord Bowen: 18 ff ff ff ff ff ff ff ffi ff ff ff fl ff ff fi ff  Emphasized how the public would interpret the advertisement. It was clearly intended to be taken seriously and encourage use of the product. If someone used the product as directed and still got sick, they were entitled to the reward. Key Legal Principle: A unilateral o er made to the world at large can form a binding contract when someone performs the requested act, provided the intention to be bound is clear and consideration is present. Want this added to a comparative contract case list? o A promise: ‘’if a person chooses to make extravagant promises of this kind he probably does so because it pays him to make them, and, if he has made them, the extravagance of the promises is no reason in law why he should not be bound by them.’’ o Consideration: ‘’Inconvenience sustained by one party at the request of the other is enough to create a consideration.’’ An advertisement of goods for sale Partridge v Crittenden (1968) 2 All ER 421 Facts: The defendant placed an advert in a magazine o ering Bramble nch cocks and hens for sale at 25 shillings each. Under S.6 of the Protection of Birds Act 1954, it is an o ence to o er live wild birds for sale. Issue: The court had to determine whether the advert was an o er for sale (making the defendant guilty) or an invitation to treat (leading to acquittal). Decision: The defendant’s conviction was quashed. The advert was deemed an invitation to treat, not an o er. The court applied the literal rule of statutory interpretation. Rewards are often o ers Acceptance in ignorance of an o er While some legal systems de ne the promise of reward as a unilateral act, and others - particularly under the common law - characterize the reward as a contract. o See France: Article 1101 CC: “Le contrat est un accord de volontés entre deux ou plusieurs personnes destiné à créer, modi er, transmettre ou éteindre des obligations.” Article 1124 CC: “La promesse unilatérale est le contrat par lequel une partie, le promettant, accorde à l'autre, le béné ciaire, le droit d'opter pour la conclusion d'un contrat dont les éléments essentiels sont déterminés, et pour la formation duquel ne manque que le consentement du béné ciaire. La révocation de la promesse pendant le temps laissé au béné ciaire pour opter n'empêche pas la formation du contrat promis. Le contrat conclu en violation de la promesse unilatérale avec un tiers qui en connaissait l'existence est nul. ” Rewards are often o ers Acceptance in ignorance of an o er Gibbons v Proctor (1891) 64 LT 594, Queen’s Bench Division Facts: A £25 reward was o ered for information leading to the arrest of a criminal, with the condition that the information must be given to the Superintendent. A police o cer unknowingly provided useful information but only became aware of the reward o er after the information was passed. Questions: The court had to decide whether the advert was an o er or an invitation to treat, and whether someone unaware of the o er could accept it by ful lling the conditions. Decision: The advertisement was treated as an o er, as the intention to be bound was inferred from the lack of further bargaining. The o cer was entitled to claim the reward after ful lling the conditions, even though he was unaware of the o er at the time. Consideration The requirement of consideration means that each party must receive or be promised something in return for giving or promising something. Consideration is a bene t to the promisor or a detriment to the promisee. “Consideration is to contact law as Elvis is to rock and roll: the King.” A Restatement, S. 8 Consideration: ‘’ (1) To be legally binding, an agreement, unless made by deed, must be supported by consideration. (2) ‘Consideration’ means that, in exchange for a promise by one party, a counter-promise or performance is given by the other party.‘’ The US Restatement (Second) of Contracts of 1981 o §17. REQUIREMENT OF A BARGAIN 19 ff fi ff fi ff ff ff fi ff ff ffi fi ff ff fi ff fi ff ffi ff ff ff ff fi fi ff fi  “(1) Except as stated in Subsection (2), the formation of a contract requires a bargain in which there is a manifestation of mutual assent to the exchange and a consideration.‘’ o §71. REQUIREMENT OF EXCHANGE; TYPES OF EXCHANGE “(1) To constitute consideration, a performance or a return promise must be bargained for. (2) A performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise. (3) The performance may consist of (a) an act other than a promise, or (b) a forbearance, or (c) the creation, modi cation, or destruction of a legal relation. (4) The performance or return promise may be given to the promisor or to some other person. It may be given by the promisee or by some other person.”9Formation of contract: consideration Consideration De nition by Sir Frederick Pollock "An act or forbearance of one party, or the promise thereof, is the price for which the promise of the other is bought and the promise thus given for value is enforceable.“ Pollock on Contracts, 8th ed., p. 175 Consideration - “the price paid for the promise” “Something of value” must be given by the promisee in exchange for the promise Places a limit on the enforceability of contracts which would otherwise be valid and binding Su ciency /adequacy of consideration Compare: Chappell & Co Ltd v Nestle Co Ltd, UKHL 1 (18 June 1959) Facts: Nestlé o ered records in exchange for three chocolate wrappers and 1s. 6d. The question arose whether the wrappers were part of the consideration for the sale of the records or merely a condition for the purchase. Lord Reid’s Opinion: The o er aimed to increase chocolate sales, with the wrappers playing a crucial role in promoting sales. Even if some wrappers came from chocolate that would have been bought anyway, the wrappers served as valuable consideration in the contract, bene ting Nestlé both directly and indirectly through advertising. Lord Somervell’s Opinion: The wrappers were part of the consideration in the contract. Despite their apparent lack of value to Nestlé, they were stipulated as part of the deal, similar to a ticket granting access to goods in a cooperative store. Decision: The appeal was allowed. The wrappers were part of the consideration for the sale of the records, and Nestlé’s operations infringed on the Appellants’ copyright. - Ward v Byham 1 WLR 496 Court of Appeal Facts: An unmarried couple had a child, and after separating, the father sent the child to live with a neighbour and paid £1 per week. Later, the mother wanted the child to live with her and the father agreed to pay her £1 per week, provided she ensured the child was happy and well looked after. After the mother remarried, the father stopped the payments, and the mother sued to enforce the contract. The father argued that she had an existing legal duty to care for the child, so there was no valid consideration for his promise. Question: Was there a valid contract, and did the mother provide su cient consideration? Judgment: The court found that the mother had provided consideration beyond her existing legal duty by ensuring the child was happy and well cared for, which was part of the agreement. Denning LJ emphasized that a promise to perform an existing duty could be valid consideration if it bene ted the promisor, in this case, the father. The court ruled that there was a binding contract and the father was obliged to make the payments. Related Case Law: The case referenced the principle in Williams v Ro ey Bros where a pre-existing duty could still constitute valid consideration if the promisor gains a practical bene t, such as timely performance. The case also touched on the idea that courts should be more inclined to nd consideration when the parties’ bargaining positions are not unequal. 20 ffi ff fi fi ff fi ffi ff fi fi fi  Williams v Ro ey Bros “exception”: there should be factual bene t to promisor of performing existing contractual dutiesWilliams v Ro ey Bros 1 QB 1 establishes an exception to the rule that performing an existing contractual duty does not constitute valid consideration. The case ruled that if a party (B) promises an additional payment to the other party (A), who is already bound by an existing contractual duty, the promise may still be enforceable if it provides a practical bene t to the promisor (B), such as ensuring timely completion of work. Key Points: Factual Bene t: There must be a practical bene t to the promisor, even if the obligation is already part of the contract. Russell LJ’s Proposition: Courts should be more exible in recognizing consideration, especially when there is no signi cant imbalance in bargaining power. The promise can be enforceable if it results in a bene t to the promisor or avoids a disadvantage. Conditions for Enforceability: 1. A contract exists where A is to perform work for B. 2. B doubts A’s ability to complete the work. 3. B promises an additional payment for timely completion. 4. The promise results in a bene t to B. 5. The promise is not made under duress or fraud. This case illustrates how the law should focus on the practical bene ts of agreements, re ecting the parties’ intentions, even if one party is performing an existing duty. Balfour v Balfour 2 KB 571 o Merritt v Merritt 1 WLR 1211 Court of Appeal o Simpkins v Pays 1 WLR 975 Simpkins v Pays 1 WLR 975: In this case, Ms. Simpkins, a woman living with her granddaughter, entered into an informal agreement with a husband and wife, where Ms. Simpkins would submit weekly newspaper competition entries in exchange for sharing any potential prize. The husband agreed to pay £40 per month to his wife to help with the mortgage. When a prize of £750 was won from a coupon submitted by Ms. Simpkins, the wife claimed one-third of it. Ms. Pays, however, refused to share the prize. Ms. Simpkins sued for her share based on the agreement. The case dealt with the intention to create legal relations in domestic agreements, speci cally in informal agreements about shared prizes. Balfour v Balfour 2 KB 571 : Balfour v Balfour 2 KB 571: In this case, the Court of Appeal held that a domestic agreement between a husband and wife, where the husband promised to pay his wife an allowance while he worked abroad, was not legally binding. The court found that the agreement was a purely social and domestic arrangement, and the presumption was that there was no intention to create legal relations. The case distinguished itself from others where spouses are separated, as a written agreement or separation generally implies an intention to be bound by the terms. The court concluded that the arrangement was temporary and not intended to have contractual force. o Merritt v Merritt 1 WLR 1211 Court of Appeal “It is altogether di erent when the parties are not living in amity bur are separated, or about to separate. Then they bargain keenly. They do not rely on honourable understandings. They want everything cut and dried. It may safely be presumed that they intend to create legal relations.” Formation of contract: certainty ‘’contract to enter into a contract’’? See A Restatement, S. 9: o ‘’(1) For an agreement to be legally binding, it must be certain and complete.‘’ Case law: o ‘’ 'If the law does not recognise a contract to enter into a contract (when there is a fundamental term yet to be agreed) it seems to me it cannot recognise a contract to negotiate. The reason is because it is too uncertainto have any binding force... It seems to me that a contract to negotiate, like a contract to enter into a contract, is not a contract known to the law... I think we must apply thegeneral principle that when there is a fundamental matter left undecided and to be the subject of negotiation, there is no contact.’ 21 ff fi fi ff fi fi fi fl fi fi fi ff fi fl = ’Courtney v Fairbairn Ltd v Tolaini Bros (Hotels) Ltd 1 All ER 716 at 720, 1 WLR 297 at 301-302, by Lord Denning Formation of contract: certainty Leading modern case: Walford v Miles 2 AC 128 Walford v Miles 2 AC 128: In this case, the House of Lords held that an agreement to negotiate in good faith is unenforceable because it lacks the necessary certainty. Lord Ackner stated that such an agreement is inconsistent with the nature of negotiations, where each party is entitled to act in their own interest and withdraw at any time without a “proper reason.” The court emphasized that a duty to negotiate in good faith is unworkable and incompatible with the adversarial nature of negotiations. Therefore, a bare agreement to negotiate has no legal content. Compare the dicta on the previous slide in Walford v Miles 2 AC 128 with Code Civil (France) ‘’ Art. 1104. Les contrats doivent être négociés, formés et exécutés de bonne foi. Cette disposition est d'ordre public.’’ ‘’Art. 1112. L'initiative, le déroulement et la rupture des négociations précontractuelles sont libres. Ils doivent impérativement satisfaire aux exigences de la bonne foi. En cas de faute commise dans les négociations, la réparation du préjudice qui en résulte ne peut avoir pour objet de compenser la perte des avantages attendus du contrat non conclu.’’ Compare: Cour de cassation // Audience publique du 18.09. 2012 // N° de pourvoi: 11-19629 LA COUR DE CASSATION, CHAMBRE COMMERCIALE, a rendu l’arrêt suivant : Faits : La société Sagem Défense Sécurité avait signé avec Paul Boyé Technologies un contrat de sous- traitance dans le cadre d’un marché public de dé nition d’une tenue de combat, attribué par la Délégation Générale de l’Armement (DGA). Lors d’un second marché de réalisation de ces tenues (2003–2004), Sagem a négocié avec Boyé, puis lui a nalement refusé la sous-traitance, l’informant de sa non-retenue le 24 novembre 2004. Boyé a assigné Sagem en responsabilité délictuelle pour rupture fautive des pourparlers. Procédure : La cour d’appel condamne Sagem à 10 millions d’euros de dommages-intérêts, retenant une rupture abusive des négociations, ayant causé la perte d’une chance sérieuse pour Boyé d’être désignée comme sous-traitant. Problème juridique : Une société peut-elle être tenue pour responsable d’une rupture de pourparlers dans le cadre de négociations commerciales, en l’absence d’obligation de contracter ou d’appel d’o res ? Solution (Cassation) : La Cour de cassation casse l’arrêt d’appel, considérant que : ◦ 1. Une entreprise est libre de négocier avec plusieurs partenaires et n’a aucune obligation d’informer les autres de négociations parallèles, ni de recourir à un appel d’o res. ◦ 2. La liberté contractuelle permet à une société de renoncer à contracter, même après avoir obtenu une o re plus avantageuse. ◦ 3. Le fait d’avoir poussé un partenaire à baisser ses prix pendant les pourparlers ne constitue pas en soi une faute, surtout en l’absence de contrat conclu. Fondement juridique : Article 1382 du Code civil (ancien), désormais article 1240 du Code civil : responsabilité délictuelle fondée sur la faute Compare: Interfoto Picture Library v Stilletto QB 433 Interfoto Picture Library v Stilletto QB 433: Facts: The claimant, a photo library, lent transparencies to the defendant, an advertising company. The delivery note stated that a £5 +VAT holding fee would apply per photo per day if the transparencies were kept beyond 14 days. The defendant allegedly did not read the note and failed to return the photos for 6 weeks, leading to a claim for £23,783 in holding fees. Court Decision: The court upheld that a contract existed between the parties but ruled that the clause about the holding fee was not validly incorporated into the contract. The court emphasized that when a term is particularly onerous, the party seeking to rely on it must take extra steps to bring it to the other party’s attention. Thus, the court disagreed with the rst instance decision, nding the clause unenforceable due to inadequate notice. 22 ff fi fi fi fi ff ff  Compare: Interfoto Picture Library v Stilletto QB 433 Bingham LJ: Dans la plupart des systèmes de droit civil, la formation et l’exécution des contrats sont gouvernées par un principe général de bonne foi, qui impose aux parties un comportement loyal, transparent et équitable (« jouer franc jeu », « mettre ses cartes sur la table »). Ce principe ne se limite pas à l’interdiction de la tromperie, mais exige une véritable coopération loyale entre les cocontractants. À l’inverse, le droit anglais ne reconnaît pas un principe général de bonne foi, mais préfère apporter des réponses ponctuelles aux injustices contractuelles, via des mécanismes comme : L’intervention de l’équité pour sanctionner les clauses abusives, L’obligation de porter à la connaissance de l’autre partie toute condition inhabituelle d’un contrat. Malgré l’absence de principe explicite, les solutions anglaises, dans certaines situations (notamment lors de la formation du contrat), convergent parfois avec l’esprit de la bonne foi civile, en s’interrogeant sur : La nature de la transaction, Le pro l des parties, Le niveau d’information donné sur les clauses contestées, Et le caractère équitable de l’engagement contractuel dans son ensemble “The crucial question in the case is whether the plainti s can be said fairly and reasonably to have brought Condition 2 to the notice of the defendants. … In my opinion the plainti s did not do so. They delivered 47 transparencies, which was a number the defendants had not speci cally asked for. Condition 2 contained a daily rate per transparency after the initial period of 14 days many times greater than was usual or (so far as the evidence shows) heard of. … The result would be that a venial period of delay, as here, would lead to an inordinate liability. The defendants are not to be relieved of that liability because they did not read the condition, although doubtless they did not; but in my judgment they are to be relieved because the plainti s did not do what was necessary to draw this unreasonable and extortionate clause fairly to their attention. …” Capacity to contract Minors Persons lacking mental capacity Drunken persons Corporate (in)capacity E.g., Sale of Goods Act 1979: 3 Capacity to buy and sell. (1) Capacity to buy and sell is regulated by the general law concerning capacity to contract and to transfer and acquire property. (2) Where necessaries are sold and delivered to a minor or to a person who by reason of mental incapacity or drunkenness is incompetent to contract, he must pay a reasonable price for them. (3) In subsection (2) above “necessaries” means goods suitable to the condition in life of the minor or other. person concerned and to his actual requirements at the time of the sale and delivery.” Formation of contract: Form See A Restatement, S. 11 The general rule is that there is no requirements a to form. The contract may be concluded o In writing o Orally o By conduct o By combination of the above I.e., the contracts may be informal o This is the case for most of contracts in our everyday life! We do shopping/order food at the restaurant/etc. and we conclude contracts, without the need for putting them in writing and signing them. o Yet, such contracts are as valid and binding as contracts made in writing. o An informal exchange of promises can still be as binding and legally valid as a written contract. 23 fi ff fi ff ff  There are statutory exceptions to the rule of free form of a contract: i. a lease for more than 3 years must be made by deed: i. Law of Property Act 1925, ss 52, 54(2); ii. most contracts for the sale or disposition of an interest in land must be "made in writing": i. Law of Property (Miscellaneous Provisions) Act 1989, s 2; iii. contracts of guarantee are required to be evidenced in writing: i. Statute of Frauds, s 4. Rock Advertising Ltd v MWB Business Exchange Centres Ltd UKSC 24 Rock Advertising Ltd v MWB Business Exchange Centres Ltd UKSC 24 Facts: Rock Advertising Ltd entered into a 12-month licence agreement with MWB for o ce space. The licence included a clause stating that any variations must be in writing and signed by both parties. Rock Advertising accumulated arrears and claimed an oral agreement was made to vary the payment schedule. Issue: Can a contract be modi ed orally despite a written clause requiring written amendments? Was the oral variation valid? Court History: The High Court ruled the oral variation was valid, as the parties had agreed on the change. The Court of Appeal sided with party autonomy and upheld the oral variation. Supreme Court Decision: The Supreme Court overturned the Court of Appeal, ruling that the oral variation was not valid. It emphasized that contractual clauses requiring written variations must be respected, supporting the rst instance court’s ruling. Reasoning: The Supreme Court held that the law should enforce the requirement for speci ed formalities in contracts, and there was no con ict with party autonomy. Written clauses like “No Oral Modi cation” serve legitimate commercial purposes and prevent abuse or misunderstandings. Contracts concluded by email Golden Ocean Group Limited v Salgaocar Mining Industries PVT Golden Ocean Group Limited v Salgaocar Mining Industries PVT Ltd EWCA Civ. 265, 1 WLR 3674 Facts: In 2008, Golden Ocean o ered Salgaocar a charter agreement for a vessel, with an option to purchase at the end. Salgaocar nominated its related company, Trustworth, to enter the charter agreement, stating that the charter was fully guaranteed by Salgaocar. The negotiations were conducted via email, which was common in the industry. Golden Ocean later claimed the charter was repudiated by Trustworth, asserting Salgaocar’s guarantee. Salgaocar argued that the guarantee was unenforceable under the Statute of Frauds 1667, which requires certain contracts to be in writing and signed. Issues: Did the chain of emails constitute an enforceable guarantee? Can a contract requiring writing and signatures be formed by email? Decision: Yes, the court held that the chain of emails constituted an enforceable guarantee. It ruled that contracts could be concluded by email, even when the agreement required written documentation under the Statute of Frauds. Berezovsky v Abramovich EWHC 2463 Facts: This case involved a multi-billion dollar dispute between Boris Berezovsky and Roman Abramovich, focusing on four oral agreements related to signi cant assets, particularly regarding a Russian oil company. Berezovsky claimed there were oral agreements, but there were no contemporaneous notes or documents to con rm these agreements. The case hinged on the credibility of Berezovsky’s and Abramovich’s testimonies. Issues: Did the lack of written records support the claim that the agreements existed? How did the absence of written documentation a ect the burden of proof? Decision: 24 fi fi ff fi fl fi ff ffi fi fi  The court found the absence of written records highly surprising and signi cant. It concluded that the lack of written documentation undermined Berezovsky’s case and supported Abramovich’s claim that the agreements were unlikely to have been made as alleged, especially given the complexity of the agreements. The case emphasized that oral agreements, particularly those involving substantial nancial and business interests, are less likely to be credible without written evidence. Express terms See A Restatement, S. 13 Express terms: o ones that the parties have set out in their agreement o A general presumption: where there is a written contract, there are no terms other than the written terms (see A Restatement, S. 13(2)) o The "parol evidence" rule provides that evidence cannot be admitted to add to, vary or contradict a written document. Therefore, where a contract has been put in writing, there is a presumption that the writing was intended to include all the terms of the contract, and neither party can rely on extrinsic evidence of terms alleged to have been agreed which are not contained in the document. Implied terms See A Restatement, S. 15 Implied terms: o Terms intended by the parties impliedly, by operation of law, by custom or usage. By law: o S.14(2) of the Sales of Goods Act 1979: the term implied into every contract that goods sold will be of a satisfactory quality. By custom /trade usage: o custom can be implied into a contract if the term is su ciently notorious “o cious bystander” test “business e cacy (necessity)” test Implied terms BP Re nery (Westernport) Pty Ltd v President, Councillors and Ratepayers of the Shire of Hastings (1977) 52 ALJR 20, 26, Lord Simon: “[F]or a term to be implied, the following conditions (which may overlap) must be satis ed: (1) it must be reasonable and equitable; (2) it must be necessary to give business e cacy to the contract, so that no term will be implied if the contract is e ective without it; (3) it must be so obvious that ‘it goes without saying’; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract.” o The “cardinal rule”: an implied term must not contradict any express term of the agreement. ‘’it is a cardinal rule that no term can be implied into a contract if it contradicts an express term, it would seem logically to follow that, until the express terms of a contract have been construed, it is, at least normally, not sensibly possible to decide whether a further term should be implied.’’ o Marks & Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Limited and another UKSC 72, para. 28, by Lord Neuberger 15Contents of a contract: Implied terms & Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Limited and another UKSC 72 : Marks & Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Limited and another UKSC 72 Facts: Marks & Spencer was the tenant under a lease agreement with BNP Paribas as the landlord. The lease included a break clause, which allowed the tenant to terminate the lease under speci c conditions, including the absence of rental arrears. Marks & Spencer exercised this break right on 24 January 2012 after paying the full quarter’s rent due on 25 December 2011. The lease did not expressly provide for the refund of apportioned rent if the lease was terminated before the end of the rental period. Marks & Spencer argued that an implied term should exist in the lease, obliging the landlord to refund the apportioned rent for the period after the lease termination. Issue: 25 ffi fi ffi ff ffi ffi fi fi fi fi  Can Marks & Spencer recover the apportioned rent for the period after the lease termination, despite the lack of an express provision in the lease? Procedural History: The High Court ruled in favor of the tenant, stating that Marks & Spencer was entitled to a refund. The Court of Appeal allowed the landlord’s appeal, rejecting the tenant’s claim. The case was then taken to the Supreme Court. Decision: The Supreme Court ruled that the tenant could not recover the apportioned rent. It emphasized that a term will only be implied into a contract if it satis es the test of business necessity or is so obvious that it goes without saying. The Court explained that the express terms of a contract must be interpreted rst before considering whether an implied term should be added. In this case, the express terms did not support the tenant’s claim for a refund. Furthermore, the C