Law for Surveyors Lecture Notes PDF

**[Date: 30/09/2024]** **[Law for Surveyors (LAW7LFS)]** **[Module Overview ]** **Academic referencing and law assignment writing support** - Example of a reference to a law report case **Assessments** - Computer Marked Assessment (CMA): Opens 4^th^ November 2024 and Closes 13^th^ Nove...

**[Date: 30/09/2024]** **[Law for Surveyors (LAW7LFS)]** **[Module Overview ]** **Academic referencing and law assignment writing support** - Example of a reference to a law report case **Assessments** - Computer Marked Assessment (CMA): Opens 4^th^ November 2024 and Closes 13^th^ November 2024 - Writing Assignment 1: Submission due 9 December 2024, 10:00 AM (UK time) - Computer Marked Assessment (CMA): Opens 11^th^ February 2025 and Closes 19^th^ February 2025 **[Lecture 1]** **What is the English Legal System?** - Prior judgement - Responsibility - Common Law system, criminal and civil court - Parliament - Court system **How did the English legal system and common law develop?** What is English "common law"? Emergence of the common law in the twelfth century Limited remedies available Problems develop -- Rigidity of the common law **[The development of equity]** "Equity" -- What do you think of when you hear the word equity? Equity -- fairness/ equality Equitable Remedies Equitable maxims Judicature Acts -- procedural fusion and supremacy of equity **[Common Law Countries -- Shared Characteristics]** Worldwide development of the common law Adversarial Similar law, court structures and procedure Two-way persuasive traffic Judicial Committee of the Privy Council ** Important side note -- For the purposes of your learning and Law assignments only refer to cases decided in the courts of England and Wales.** - **Do not refer to decisions made in other courts internationally.** **Case Law (Precedent)** - Higher courts bind the lower court **The System of binding precedent** (stare decisis - "to stand by previous decisions") **The ratio decidendi** -- the legal principle that is binding, impliedly treated by the judge as a necessary step in reaching his or her conclusion. **Obiter dictum** -- statements of law perhaps that are not necessary for the decision in the case e.g. judges may make a statement of law but based on the case they are hearing they may not need to go as far as to confirm any specific principle in their judgement. They'll do that if they need to. But may indicate the courts thinking on a certain area of the law and that can be helpful for judges, as the common law continues to develop. Importance of Law reporting Court hierarchy -- Predictability of outcome - Much of the substantive law in the English legal system is the common law even to this day. - Case law of those precedence - For **instance, the bulk of the law of tort** e.g. the likes of trespass and negligence - The law of contract and crimes such as murder and assault are all developments of the common law. The element of a case forming binding precedent is 1\. A statement of Law; 2\. Which forms part of the ratio 3\. In a court whose decisions are binding **Court Structure** **Court Structure** **Only the high courts bind the lower courts.** - Only the high courts can set precedence. - **UK supreme court** A collage of several images of buildings Description automatically generated **UK (Tribunal System)** - It is a court - Slightly more informal e.g. wear business attire, sit around tables - A case might be appealed and go to higher court for e.g. a breach of natural justice, procedural irregularities  Focus is on case law and precedent. - **Precedent:** passed court decisions - Case law is built up on **precedents, i.e. a previous decision of a court which may in certain circumstances be binding on another court in deciding a similar case.** Precedents can be found in the law reports and the doctrine of precedent depends on an accurate record being kept of previous decisions. - Precedence -- cited to the court as persuasive authority. - The doctrine of precedent declares that cases must be decided in the same way when their material facts are the same. **The topic covers:** - **the classification of law** - **the sources of law** - **how case law is made** - **the doctrine of binding precedent** - **the court hierarchy.** **By completing the activities this week, you should be able to:** - **explain the classification of law;** - **identify the sources of law;** - **discuss how case law is made;** - **explain the doctrine of binding precedent;** - **understand the court hierarchy and its relevance to precedent;** - **identify the types of case dealt with by each court.** **[Activity 1.2 ]** **[Watch: Introduction to Case Law and Precedent]** English law also currently applies to Wales. **There are four main sources of law. These are:** Case law -- in other words, the law made by judges; Acts of Parliament, which are also referred to as statutes; delegated legislation, which is subordinate legislation (this is where Parliament delegates its law-making powers to another body); and European law. **Case Law** - Reasons why a legal system may follow previous case decision: - Respect for a previous colleague's opinion. - It would create unnecessary delay and expense if points of law which had been previously decided were reargued. - It would make it very difficult for lawyers to be able to predict the outcome of cases. - One of the elements of the rule of law is that parties should be able to predict the law which would be applied to a case if a case were to come to court. Doctrine of binding precedent - The English system goes one stage further and actually says that in certain circumstances the courts are bound to follow previous decisions. Closer examination of the doctrine of binding precedent discloses that it contains two elements, namely: Which part of the decision is capable of being binding? And if it is actually binding, on whom is it binding? Any court exercising civil jurisdiction can dispense both common law and equity. By way of background, equity developed alongside the common law to mitigate the harshness of the common law. **An example of where equity intervened is in the area of remedies**. The only common law remedy is damages, but damages may not always be suitable. Equity has therefore developed other remedies such as injunctions, specific performance and rescission which may be more appropriate **[Watch: *The Origins of English Law*]** The common law, or judge-made law, can be divided into common law and equity**. The difference between these two types of judge-made law is their origin.** The term 'common law' was used to describe the law held in common between all the circuits. **Problems with common law:** There was only one remedy, or solution, which the courts could offer someone who had been wronged. That remedy was damages -- in other words, the payment of money. Money, however, is not an adequate compensation for all situations. For example, if I trespassed each day on your land, you are unlikely to be satisfied with damages. You would rather I was stopped trespassing. In order to start proceedings, for example, you had to issue a writ, which is a formal document which you had to present to court. Unfortunately, the writs were standard documents which only covered a narrow range of claims. This made it difficult to initiate actions. Eventually, the Chancellor heard cases in the Court of Chancery. The Lord Chancellor was known as the keeper of the King's conscience and the court was primarily concerned with achieving a fair and equitable outcome. **This is where the name 'equity' comes in.** The Court of Chancery could also offer alternative remedies. For example, **the court could order people to carry out an obligation (known as specific performance) or refrain from carrying out an offending action (known as an injunction).** Often, these remedies were more appropriate than those offered by the common-law courts. Consider the trespassing example again. The Court of Chancery could issue an order to stop trespassing. This is more appropriate than offering an owner of land monetary compensation e.g. money the King asked the Attorney-General to intervene. The Attorney-General concluded that, where any conflict between the common-law courts and equity administered by the Court of Chancery arose, then equity would prevail. In the 1870s, the court structure was reorganised so common law and equity could be administered by a single court. Although the courts have now amalgamated, there is still separate references to common law and equity. You'll come across references to equity throughout your studies. This will include references to equitable remedies but also equitable maxims and doctrines. **Equitable maxims are basically rules of conduct.** One maxim you may come across is, 'He who comes to equity must come with clean hands'. In other words, a person who wishes to bring a case in court must show that he has acted reasonably and fairly himself. One of the equitable doctrines or principles you will come **across is estoppel -- promissory estoppel in contract law and proprietary estoppel in land law. Estoppel basically means that a person must keep their promise, if another person relies upon that promise and acts to their detriment.** **What is a civil case?** Civil cases are **non-criminal legal cases** brought by individuals or companies to request justice when they believe they have been unfairly treated or they are involved in a dispute, and they want the courts to decide on an outcome. **[Activity 1.3]** **[Watch: The lawmaking process: Case law and precedent]** **Slide 2:** **Introduction** This presentation covers: - The classification and sources of law - Case law and how it is made **Slide 3: Classification of English Law** **The different classifications of law** **Main classifications:** - **Common law** refers to the law which has developed over many years by the courts via cases they have heard. - **Statute law** covers the law which has been made by Parliament via legislation. - **Private law** is concerned with the legal relationships of ordinary persons, corporate bodies etc. in everyday transactions. This includes the law of tort, family law, trusts, law of property and commercial law. - **Public law** is concerned with the constitution and function of the many different kinds of government organisations, including local authorities. It is also concerned with crime. - **Criminal law** is concerned with legal rules which provide that certain forms of conduct will be punished. - **Civil law** includes the whole of private law and all divisions of public law except criminal law. **Slide 5: Case Law** Case law provides the bulk of law, although Parliament is becoming more active in making new laws. Case law is built up on precedents, which are the previous decisions of the courts that may in certain circumstances be binding on another court in deciding a similar case. Judicial precedents may be divided into two kinds: binding precedents, and persuasive precedents. **Slide 6: Binding precedent** The doctrine of binding precedent depends on the following: the ratio decidendi; court hierarchy; and law reporting. **Slide 7: Ratio decidendi** The doctrine of precedent declares that cases must be decided in the same way when the material facts are the same. The doctrine of precedent declares that cases must be decided in the same way when the material facts are the same. When reading a judgment, it is important to distinguish between the ratio decidendi (that is, reason for the decision) and obiter dicta (that is, the matters by the way). The ratio can be defined as the principle of law used by the judge to arrive at his decision and his reasons for doing so. ***Slide 8: Obiter dicta*** Strictly speaking, *obiter dicta* are never binding on another court, but they may be persuasive. Especially the dicta of cases heard in the House of Lords/ Supreme Court. *Obiter dicta comments may form the ratio of a later case.* Do not have binding force. **Slide 9: Court hierarchy** As to which precedents are binding depends on the level of the court in which the decision was reached. All courts at the level of the High Court and above bind all lower courts and (to some extent) also bind themselves. **Slide 10: Supreme Court** However, the Supreme Court is not bound by its previous decisions if that decision was made per incuriam, namely, where an important case or statute was not brought to the attention of the court when the previous decision was made, **or it invokes the 1966 Practice Statement.** The court is not bound by its previous decision if that decision was made *per incuriam i.e. where an important case or statute was not brought to the attention of the court when the previous decision was made.* **Slide 11: Court of Appeal** In certain circumstances, the Court of Appeal (Civil Division) does not have to follow its previous decisions. Unless the following exceptions apply: A screenshot of a white text Description automatically generated The Court of Appeal (Criminal Division) may deviate from its previous decisions more easily than the Civil Division where the liberty of the accused is at stake.  **Slide 12: Lower Courts.** The slide sets out the courts sitting below the appeal courts, and explains how precedent affects these courts. A screenshot of a court Description automatically generated **Slide 13: Ways of avoiding the rule of binding precedent** A judge is said to follow an earlier decision if he decides that the facts of the two cases are so similar that the same principle of law should apply to both cases. However, a court may refuse to follow a binding precedent for certain reasons (summary from slide subtitles): by distinguishing the case before it from the previous case on the facts; by declaring the previous decision to be per incuriam; because the previous decision has been overruled by statute; because of changed circumstances; because the previous decision is one of several conflicting decisions at the same level. However, a court may refuse to follow a binding precedent for certain reasons (exact notes from slide):  When a decision is overruled on appeal, it is said to be reversed. When the appellate court decides to differ from the decision reached in the lower court (which followed a previously decided case), it is said to overrule the case which formed the basis of that precedent. Precedent is dependent on a system of law reporting. Since 1865, law reports have been published under the Incorporated Council of Law Reporting for England and Wales. They are known as the Law Reports. Private reports still exist, such as the All England Law Reports. The system of judicial precedent has both advantages and disadvantages. **Slide 14: Overruling** A white background with black text Description automatically generated **The meaning of *stare decisis*, *ratio decidendi *and *obiter dicta *and the difference between the latter two.** - ***stare decisis -** the legal principle of determining points in litigation according to precedent.* - ***ratio decidendi -*** The ratio can be defined as the principle of law used by the judge to arrive at his decision and his reasons for doing so. **Reasons for the decision.** - ***obiter dicta -** Strictly speaking, obiter dicta are never binding on another court, but they may be persuasive. **Matters by the way**.* - ***Estoppel -*** Estoppel is a judicial device in common law legal systems whereby a court may prevent or \"estop\" a person from making assertions or from going back on their word. **Difference between *ratio decidendi and obiter dicta -  *** When reading a judgment, it is important to distinguish between the ratio decidendi (that is, reason for the decision) and obiter dicta (that is, the matters by the way). **[Research Legal Case ]** Donoghue v Stevenson \[1932\]. From your research into Donoghue v Stevenson, explain what you consider the ratio decidendi of this case is? - I believe that the ratio decidendi of this case was the neighbour principle. The rule that you must love your neighbour became in law that you must not injure your neighbour. Given that manufacturers have a duty of care to consumers they must act with the duty of care -- introducing a decision for the neighbour principle to rule against Stevenson. - The ratio decidendi of Donoghue v Stevenson \[1932\] is the establishment of the "duty of care" principle. The House of Lords ruled that a manufacturer owes a duty of care to the ultimate consumer of their product. This case laid the foundation for modern negligence law, famously articulated by Lord Atkin through the "neighbour principle." References: *Donoghue v Stevenson* \[1932\] UKHL 100. Central London Property Trust v High Trees House Ltd \[1947\]. 1. From your research into *Central London Property Trust v High Trees House Ltd*, what were the *obiter dicta* comments made by Lord Denning? Why are these comments not part of the *ratio decidendi*? The Obiter Dicta comments made by Lord Denning was that the agreement made by CLPT could not be taken back under the promissory estoppel principle. In such cases, the courts had said that the promise had to be honoured. In each case, the court held the promise to be binding on the party making it, even though under the old common law it might be difficult to find any consideration for it. However, the ratio decidendi was to allow CLPT to claim for full rent for the last 2 quarters because the conditions under which the agreement was established were ceased, so the agreement was no longer bound. Rent was therefore payable at the full rate for the last two quarters of 1945. References: *Central London Property Trust v High Trees House Ltd* \[1947\] KB 130. **Advantages of the judicial precedent**\ \ Efficiency - where courts follow established decision from previous cases it saves time and resources on resettling issues that have already been resolved\ Fairness - by courts following a precedent it means that there is a consistent ruling, and makes the public confidence in the judiciary greater\ Predictability - by following previous decisions this allows for individuals and ensembles the ability to be able understand their own legal rights and obligations.\ \ **Disadvantages**\ \ Complexity - large volume of decisions and precedent to sift thorough to find relevant cases which can take extended time and can be somewhat confusing\ Inaccessible - for people that are not trained in law the long detailed judgements and precedents can be somewhat difficult to understand and locate. Meaning that for the common man they would need professional assistance causing it to become inaccessible **[Activity 1.4 Court hierarchy and tribunals]** **By completing this activity, you should be able to:** - explain the jurisdiction of each court; - distinguish between courts of first instance and appellate courts; - explain the difference between courts of first instance and appellate courts; - explain the jurisdiction of tribunals; - distinguish between First-tier Tribunals and Upper Tribunals. - **Structure of the Courts & Tribunals system (Courts and Tribunals Judiciary 2023b)** Our courts system has evolved and developed over 1,000 years. This has led to a complicated and, in places, confusing structure. Different types of case are dealt with in specific courts, and have different routes into the Court of Appeal: Court structure: - All **criminal** cases will start in the **Magistrates' court**, but **more serious criminal matters are sent to the Crown Court.** **Appeals from the Crown Court will go to the Court of Appeal Criminal Division** and potentially the UK Supreme Court. - **Civil** cases will usually **start in the County Court**. Again, **appeals will go to the High Court and then to the Court of Appeal** -- although to different divisions of those courts.  - The** tribunals** system has its own structure for dealing with cases and appeals, but **decisions from different chambers of the Upper Tribunal, and the Employment Appeals Tribunal, may also go to the Court of Appeal.** The courts structure covers England and Wales; the tribunals system covers England, Wales and, in some cases, Northern Ireland and Scotland. **Reference list:** Courts and Tribunals Judiciary (2023a) 'Structure of courts and tribunal system' \[online\]. Available at: [www.judiciary.uk/structure-of-courts-and-tribunals-system/](https://www.judiciary.uk/structure-of-courts-and-tribunals-system/) \[accessed 17 November 2023\]. **Structure of Courts and Tribunals System**  UK Supreme court - The Constitutional Reform Act 2005 made provision for the creation of a Supreme Court for the United Kingdom. - The creation of a Supreme Court means that the most senior judges are now entirely separate from the Parliamentary process. - It is important to be aware that the Supreme Court is a United Kingdom body, legally separate from the England and Wales courts, as it is also the Supreme Court of both Scotland and Northern Ireland. As such, it falls outside of the remit of the Lord/Lady Chief Justice of England and Wales in their role as head of the judiciary of England and Wales. Court of Appeal - The Court of Appeal is the highest court within the Senior Courts of England and Wales, and deals only with appeals from other courts or tribunals. - It is divided into two Divisions, Criminal and Civil, and is based at the Royal Courts of Justice in London. The judges of the Court of Appeal are the Lord/Lady Chief Justice, the Master of the Rolls, the President of the King's Bench Division, the President of the Family Division, the Chancellor of the High Court and the Lord and Lady Justices. High Court - The High Court of Justice in London, together with the Court of Appeal and the Crown Court, are the Senior Courts of England and Wales. - It deals at first instance with all high value and high importance civil law (non-criminal) cases, and also has a supervisory jurisdiction over all subordinate courts and tribunals, with a few statutory exceptions. - The High Court consists of 3 divisions: the King's Bench Division, the Family Division, and the Chancery Division. **Reference list:** Courts and Tribunals Judiciary (2023b) 'Structure of the courts and tribunal system' \[diagram\]. Available at: [www.judiciary.uk/about-the-judiciary/our-justice-system/court-structure/](https://www.judiciary.uk/about-the-judiciary/our-justice-system/court-structure/) \[accessed 17 November 2023\]. Questions: Is it a criminal or civil matter?  Small claims track - if the amount in dispute was less than £10,000. **Activity 1.6: Week 1 knowledge check Quiz** **1. The Practice Statement, allowing the House of Lords (now the Supreme Court) to depart from its own previous decisions, was issued in:** 1966 **2. Consider the following situation and decide if it was a civil or criminal matter and which court would have dealt with it?** Harry and Wendy were married for seven years and have recently divorced. Harry and Wendy's divorce was a civil matter, and as it was a divorce it would have been dealt with in the County Court. **3. Match the words to the description?** By the way --Obiter dicta To stand by the decision -- Stare decisis Influential but not binding -- Persuasive precedent A decision made in error of the law -- Per incuriam The reason for the decision -- Ratio decidendi Where the facts of the case differ from those in the binding precedent -- Distinguishing Departing from an existing precedent --Overruling       4\. **Which of the following cases are original precedent?** *Donoghue v Stevenson* (1932) 5\. An *obiter dicta* does not have be followed in all future cases containing the same material facts by all courts lower in the hierarchy 6\. **The three divisions of the high court are:** King's Bench Division Chancery Division Family Division 7\. **Is it true or false that where a case is distinguished the previous precedent is no longer considered good?** False 8\. **Is it true or false that the Supreme Court took over the appellate functions of the House of Lords in October 2009?** True -- the supreme court replaced the Appellate Committee of the House of Lords as the highest court in the UK in October 2009. 9\. **Is it true or false that 'leapfrogging' occurs when there is an appeal from the County Court to the Court of Appeal (Civil Division)?** False Leapfrogging - occurs when there is an appeal from the High Court to the Supreme Court with leave and the consent of both parties. This can only occur when it is an important point of law. Notes: landlord and tenant act 1954 [Week 2 07/10/2024] [Lecture 2 ] [Week 2: Legislation, sovereignty of Parliament and statutory interpretation] Topic covers: - Legislation is the most important source of law. - Looking at examples of legislation and the process by which a bill becomes an Act of Parliament. The topic covers: - statute law - Acts of Parliament - sovereignty of Parliament - delegated legislation - statutory interpretation. By completing the activities this week, you should be able to: - identify statute law; - explain how a bill becomes an Act of Parliament; - understand what is meant by 'sovereignty of Parliament'; - identify and describe the various forms of delegated legislation; - discuss why judges are asked to interpret statutes; - compare and contrast the approaches and aids to statutory interpretation. Parliament is the supreme lawmaking power- this is sometimes referred to as the **'sovereignty of Parliament'.** **Statutory interpretation** - For various reasons, judges are often called upon to interpret the meaning of statutes. A brief history of parliament Magna carta -- peace treaty in 1215 Parliament has authority for taxation  1900 -- reform act Expansion of rights 1928 -- women's right to vote (Equal franchise act 1928) 2005 -- The supreme court separated from the house of lords What is the ''separation of powers''? A collage of different buildings Description automatically generated Where does our law come from? What is a ''bill''?  Bills can be introduced by the government, individual MP's, private individuals or organisations The progress of a bill (House of commons) A diagram of a bill Description automatically generated Statutory interpretation  [Activity 2.1: Introduction to legislation, sovereignty of Parliament and statutory interpretation](https://learn.ucem.ac.uk/mod/page/view.php?id=416934) - **Legislation is the law made by Parliament and it is the most important source of law nowadays** - Parliament passes Acts of Parliament. These are also referred to as **statutes.** For example, during this module you will come across the **Occupier's Liability Acts of 1957 and 1984 and the Law of Property Act 1925. These are examples of Acts of Parliament**, in other words, legislation. - Parliament does not have sufficient time to make all of the legislation. It therefore delegates this function by means of delegated legislation, such as by-laws, statutory instruments and compulsory purchase orders. It does this by passing an Act which sets out the framework -- this is often referred to as an **'enabling Act'** -- and then delegates the detail to some third party. - Court interprets the legislations - Parliament is the supreme law-making power. This means that it can legislate on anything and no one Parliament binds another. - By virtue of the European Communities Act 1972 the UK joined the European Union. One crucial effect of this Act was that EU law became part of English law. **EU law asserts that EU law prevails over national law** - understand the legislative process; - explain the difference between a bill and an Act; - identify examples of delegated legislation; - explain the meaning of the 'sovereignty of Parliament'. '[The lawmaking process: statute law](https://learn.ucem.ac.uk/mod/resource/view.php?id=416936)' Slide 2: Within the UK there are two parliaments and two assemblies. For our purpose we are looking at the Westminster Parliament. The Westminster Parliament consists of two chambers: - the House of Commons - The House of Lords. Slide 3: The passage of a Bill: An Act of Parliament begins its life as a Bill, which is a draft of the proposed Act. Bills can be: - Private Members' Bills; - Public Bills; or - Private Bills. Public and Private Members' Bills follow the same procedure in Parliament. They may be introduced in either House, though a money Bill must be introduced into the House of Commons by a Minister and not a Private Member. The Bill then passes through various stages in both Houses and once it has passed through these it will then receive the Royal Assent. The Bill is then referred to as an Act. Slide 4: Parliament supremacy  Parliament is legislatively supreme. Nobody can stop Parliament from legislating about anything it chooses to legislate about and nobody (apart from Parliament itself) can quash legislation which Parliament has passed. Slide 5: Delegated legislation Modern statutes may require more detailed work to implement and operated them. In such cases, the Act is drafted so as to provide a broad framework and the Ministers then fill in the details by means of delegated legislation. Examples of delegated legislation: Statutory instruments, orders in council, bye-laws of local authorities and rules of the Supreme, senior and county courts. Delegated legislation has a number of advantages and disadvantages. Ultra Vires - Delegated legislation can be **quashed by the courts if those making it acted ultra vires i.e. exceeded the powers parliament delegated to them** Slide 6: Statutory interpretation Although the courts are bound to accept the validity of statutes, judges are frequently called upon to settle disputes concerning the meaning of words or clauses in statutes. Judges may get some guidance from a number of internal aids within the Act itself, such as: - Interpretation Act 1978 - the interpretation section of the Act; and - the preamble of the Act. **Slide 7:** General rules of interpretation - **The mischief rule** - Under the mischief rule, the judge will look at the Act to see what its purpose was and what mischief the common law is designed to prevent. For e.g. where a statute has been passed to remedy a weakness in the law, the interpretation which will correct that weakness is the one to be adopted. - **The literal rule** - According to the literal rule, the judge will look at the wording of the Act, which must be construed according to its literal and grammatical meaning. e.g. see Whiteley v Chappell(1868) - **The golden rue** - The golden rule is to some extent an extension of the literal rule. The words of the Act will be construed, as far as possible, according to their ordinary plain and natural meaning, unless this leads to an absurd result. With the purposive approach, the statute is interpreted in the light of the general purposes behind it and the intentions of Parliament. See Re Sigsworth(1935) - **The ejusdem generis rule** - The courts will also take into account a number of other rules. The *ejusdem* *generis* rule is taken into account where general words follow specific words. The general words are construed as being limited to persons or things within the class outlined in the specific words. e.g. reference to 'dogs, cats and other animals' would be construed as dogs, cats and other domestic animals. See Lane v London Electricity Board - **The expressio unius exclusio alterius rule** - is taken into account where specific words are used and are not followed by general words -- the Act only applies to the instances mentioned. For e.g. if the acts says that certain defined status are repealed, then there is a presumption that the other relevant status not mentioned are not repealed. See R v Immigration Appeals Adjudicator, ex parte Crew - **Noscitur a sociis** - is where words of doubtful meaning may be better understood from the nature of the words and phrases within which they are associated. **Slide 14:** Purposive Interpretation - Interpreting a statue in the light of the general purpose behind it and the intention of parliament. See Knowles v Liverpool City Council **Slide 15: Hansard** - Hansard is the official record of debates in parliament. - See Pepper v Hart Reference to Hansard should be allowed where: A close up of black text Description automatically generated The courts will often use external aids to assist in interpreting. These can be: pre-Parliamentary materials; Hansard; post-Parliamentary principles; dictionaries; and the Interpretation Act 1978. Slide 16: Interpretation presumptions The courts recognise a number of principles of interpretation which they call presumptions. For example, a statute is presumed not to alter the existing law unless it expressly states that it does. - Against injustice - Against absurdity - Ac act which presumes - Etc.....  References A screenshot of a computer Description automatically generated Using [legislation.gov.uk](http://legislation.gov.uk/) Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 [Law of Property (Miscellaneous Provisions) Act 1989 (legislation.gov.uk)](https://www.legislation.gov.uk/ukpga/1989/34/section/2) (1)A contract for the sale or other disposition of an interest in land can only be made in writing and only by incorporating all the terms which the parties have expressly agreed in one document or, where contracts are exchanged, in each. (2)The terms may be incorporated in a document either by being set out in it or by reference to some other document. (3)The document incorporating the terms or, where contracts are exchanged, one of the documents incorporating them (but not necessarily the same one) must be signed by or on behalf of each party to the contract. Section 1 of the Fatal Accidents Act 1976 [Fatal Accidents Act 1976 (legislation.gov.uk)](https://www.legislation.gov.uk/ukpga/1976/30/section/1) **Right of action for wrongful act causing death.** ( 1 )If death is caused by any wrongful act, neglect or default which is such as would (if death had not ensued) have entitled the person injured to maintain an action and recover damages in respect thereof, the person who would have been liable if death had not ensued shall be liable to an action for damages, notwithstanding the death of the person injured. (2)Subject to section 1A(2) below, every such action shall be for the benefit of the dependants of the person ("the deceased") whose death has been so caused. (3)In this Act " dependant " means--- (a)the wife or husband or former wife or husband of the deceased; **\[[F2](https://www.legislation.gov.uk/ukpga/1976/30/section/1#commentary-key-e96919a2bbd2a34d460e2c8a6cd1efac)**(aa)the civil partner or former civil partner of the deceased;**\]** The 'Sovereignty of Parliament' means that parliament has the power to make laws in the UK, they have the supreme authority. The acts of parliament which are passed can be refereed to as statutes, nobody can revoke legislation which parliament has passed and stop parliament from legislating about anything they choose apart from parliament itself. **[Activity 2.3: Statutory interpretation]** By completing this activity, you should be able to: - explain what statutory interpretation is; - understand why judges might need to interpret statutes; - identify the names of the different rules of statutory interpretation. '[Statutory interpretation](https://www.claims.co.uk/knowledge-base/legal-system/statutory-interpretation)' [Statutory Interpretation - claims.co.uk ™](https://www.claims.co.uk/knowledge-base/legal-system/statutory-interpretation) References: Laver N (no date) 'Statutory interpretation' \[online\]. Available at: [www.claims.co.uk/knowledge-base/legal-system/statutory-interpretation](https://www.claims.co.uk/knowledge-base/legal-system/statutory-interpretation) \[accessed 17 November 2023\]. An introduction to statutory interpretation? - Statutes of law, also known as legislation, are the written laws of the United Kingdom. - Interpreting the meaning of legislation is not always straightforward and, in some cases, the judges are called upon to interpret the legislation in accordance with existing law and rules of 'statutory interpretation'. What is Statutory Interpretation? - Typical problems include a failure within legislation to cover a specific point; ambiguity as to its meaning; drafting errors; new legal developments; and changes in the use of language. Some statutes date back to the 18th century and use words which now have a very different meaning today. - Statutory interpretation may be required where complexity and uncertainty arises as to how the law applies in a given situation. Need for statutory interpretation - Interpreting the meaning of legislation is not always straightforward and, in some cases, the judges are called upon to interpret the legislation in accordance with existing law and rules of 'statutory interpretation'. - Statutory interpretation may be required where complexity and uncertainty arises as to how the law applies in a given situation. - it provides judges with the ability to interpret legislation in the best way possible to achieve the result as intended by Parliament when it was enacted. What are the rules for Statutory interpretation? - Statutory interpretation is effectively a matter for the courts. - Under the Interpretation Act 1978, the meaning of various words are helpfully set out, including 'words importing the masculine gender shall include females. - Over time, a number of rules of statutory interpretation have been developed, providing an important framework for interpretation. These are known as: - The Literal Rule - The Golden Rule - The Mischief Rule. - Under the literal rule, the words in a statute are given their ordinary and natural meaning. They will be read literally and do not need to be analysed further for different meanings. - Under the literal rule, the words in a statute are given their ordinary and natural meaning. They will be read literally and do not need to be analysed further for different meanings, disregarding the plain words of the legislation. - An example of a plain reading resulting in a harsh result is the Berriman case (1946) where a railway worker was killed while doing some 'oiling' on a railway line as a result of there being no 'look out' point. The judge would not grant Mrs Berriman compensation for her husband's death as the relevant Act only stated that look out points had to be issued for workers 'relaying' or 'repairing' the line. Oiling did not come within either of the two categories. This result was clearly harsh and unjust. - To overcome such outcomes, the Golden Rule was introduced to modify the literal rule. **The golden rule** - used to prevent inconsistency and absurdity when interpreting an Act literally. It can be applied narrowly or widely. - The golden rule is used to prevent inconsistency and absurdity when interpreting an Act literally. It can be applied narrowly or widely. Under the narrow approach, the court "can only choose between the possible meanings of a word...", ie. if one meaning is apparent that meaning must be adopted. In Adler v George (1964), the defendant was charged under the Official Secrets Act 1920, with obstruction "in the vicinity" of a prohibited area. Although the defendant had carried out the obstruction inside the area, the court did not restrict itself to the literal wording of the Act and found him guilty. - Under the wider approach, the courts can modify the words in order to avoid a problem, for instance, where there is an obvious and clear meaning but this meaning would lead to an absurd result. For instance, in Re Sigsworth (1935) the defendant had murdered his mother. Under the relevant Act of Parliament, the next of kin would inherit the deceased's estate. Whilst this was clear, the literal rule would produce an unjust result. The golden rule was applied, so that the next of kin would not inherit the estate where they had killed the deceased. **The mischief rule** - **Used where there is ambiguity.** - **only applied to determine the mischief and defect that the statute was intended to remedy.** - Sometimes, statutes can be defined more broadly by the courts to deal with unforeseen loopholes or ambiguity within the legislation, which may prevent parliament's original intention being honoured. This application is known as the mischief rule, and will be used where there is ambiguity. - The mischief rule was laid down in the landmark Heydon's Case in 1584 where the court said four issues need to be considered when interpreting statutes. These were to: examine the common law prior to the Act, locate the mischief or defeat in the common law, identify the remedy Parliament meant to propose to eliminate the mischief, and finally, to give effect to that remedy. - The mischief rule is narrower than the golden rule and only applied to determine the mischief and defect that the statute was intended to remedy. **The judges' discretion** - Judges have the discretion to apply any of these rules of statutory interpretation as they deem appropriate. - it provides judges with the ability to interpret legislation in the best way possible to achieve the result as intended by Parliament when it was enacted. - These rules of statutory interpretation provide a coherent and proven framework for the courts to follow to achieve the best possible outcome of a case in accordance with legislation. - In exercising their discretion, judges can use both intrinsic and extrinsic aids, such as Hansard and other statutes, Law Commission reports, and Royal Commission reports for the purposes of interpreting legislation. This reduces the risk of statutes being interpreted in a way that contradicts other legislation. **Activity 2.4: Week 2 knowledge check** 1\. Match the case to the rule? *Whitely v Chappel* (1868) -- Literal rule *Re Sigsworth* (1935) -- golden rule  *Smith v Hughes* (1871) -- mischief rule *Pickstone v Freemans plc* (1989) -- purposive approach 2\. What is the difference between extrinsic and intrinsic aids? Extrinsic aids lie outside the statute while intrinsic aids are contained in the statute. 3\. What is a statute? An Act of Parliament 4\. Which of the following statements is true? The House of Lords: Can block legislation up to a point 5\. In the event of a conflict between common law and legislation: Legislation always takes precedence 6\. Which method of interpretation uses the plain and simple meaning of the words? The literal rule 7\. Which of the following is correct? The purposive approach seeks to look at the purpose of the legislation before interpreting the words 8\. The use of Hansard is now allowed when interpreting statutes? True 9\. No Parliament can pass laws that a future parliament cannot change? True 10\. The *ejusdem generis* rule provides: that when specific words are followed by general words the general words must be read in the light of the specific words. [Week 3 14/10/2024] [Lecture 3: Formation of a valid contract: Form, offer, acceptance and intention] [Week 3 Overview: ]  [Requirements of a contract:] - An agreement (offer and acceptance) - Consideration - Certainty - Intention - Capacity - Form A close-up of a white background Description automatically generated **Bilateral contracts:** All parties assume an obligation under the contract **Unilateral contracts:** Only one party assumes an obligation under the contract  Offeror -- person making the offer Offeree -- person receiving the offer A screenshot of a white card Description automatically generated Carlill v Carbolic smoke ball company [Invitation to treat -] One party invites another to make an offer - Preliminary stage in the negotiation - Advertisement - Shopping - Tenders One party invites another to make an offer Partridge v Crittenden Fisher v Bell Pharmaceutical society of Great Britain v Boots cash chemist (southern) Ltd - Display of goods on the shelves is the **invitation to treat** - Going up to the cashier with your goods, presenting your money to buy is the **offer** Tenders  Spencer v Harding A close-up of a document Description automatically generated A referential tender (bid) is a tender offering to top anyone else's bid by a specified amount  A close up of a paper Description automatically generated Without reserve With reserve [How long does an offer last -- death?]  [Related to assignment -- acceptance ] - **Acceptance maybe Inferred by conduct -- relates to assignment** - Case: Brogden v Metropolitan Rail Co can use in assignment it is related A white paper with black text Description automatically generated [Acceptance -- methods of communication -- the postal rule ] Adams v Lindsell **Acceptance -- methods of communication- email** A screenshot of a computer Description automatically generated [Intention to create legal relations]  **Activity 3.1: Introduction to form, offer, acceptance and intention** [Why do we need contract law?] - A market economy will only work effectively if businesses can rely on promises that have been made to and by them. - **A contract is a legally binding agreement which the courts will enforce.** - Contract law is extremely important in today's society. Some contracts have to be in writing to be enforceable, others can be unwritten. - A contract requires an offer which has to be accepted. - This week, we will also look at what constitutes an offer, how long an offer lasts and how one can distinguish an offer from an invitation to treat. - **An invitation to treat is an invitation to make an offer.** - We will then also look at what constitutes acceptance and the rules that apply to the communication of acceptance. - It must be shown that an offer was made by one party (the offeror) - Which was accepted by the other party (the offeree) The topic covers: - definition of a contract - form - definition of an offer - distinction between an offer and an invitation to treat - termination of an offer - acceptance of an offer - communication of acceptance, including the postal rules - intention to create legal relations. By completing the activities this week, you should be able to: - define a contract; - list those contracts which must be in writing; - distinguish an offer from an invitation to treat; - explain the ways in which an offer can be terminated; - define acceptance; - apply the rules on communication of acceptance; - explain the rebuttable presumptions relating to the intention to create legal relations. **Activity 3.2: Offer and acceptance fundamentals** A white background with black text Description automatically generated **Slide 3** The basic requirements of a contract contain: - an agreement, e.g. offer + acceptance = a contract - intention - certainty - capacity - consideration - formalities **Slide 4** What is a contract? A contract is a legally binding agreement which the court will enforce. **Slide 5** Type of contract (1) -- Unilateral Contract: - one party assumes an obligation under the contract. - For e.g. reward cases where John makes a promise to Andrew in return for an action to be carried out by Andrew, but Andrew does not promise to carry out that action. Bilateral contract: - Each party takes on an obligation, usually by promising the other something. - For example, John makes a promise to the other party, Andrew and Andrew, in return makes a promise to John **Slide 6** Type of contract (2) -- **Simple contract** - Simple contract are those contracts which do not need to be made in writing, to be deemed a binding contract. **Speciality contract** - Speciality contracts are those contracts which are contained in a deed. Some contracts require certain formalities to be followed to make them enforceable. These fall into three groups: those which must be made by deed; those which must be in writing; and those which have to be evidenced in writing. The general aim of these requirements is to reduce the risk of fraud. **Slide 7: offer** **Offer** - An offer is a firm and definite promise made by the offeror coupled with a readiness or intention that they intend to be bound by the terms if accepted by the offeree. - An offer may be express or implied by conduct. - An offer can be made to a specific person, group of people or to the world at large, as in Carlill V Carbolic Smoke Ball Co. **Offeror** - The person making the offer **Offeree** - The person to whom the offer is made to **Slide 8: Invitation to treat** - An offer must be distinguished from an invitation to treat. - An invitation to make an offer - The display of goods in a shop is an invitation to treat. The offer is made by the customer when they make a firm proposal to but the goods. The shopkeeper is entitled to accept or refuse the offer. - **See Fisher v Bell and Pharmaceutical Society of Great Britain v Boots cash Chemist (Southern) Ltd.** - An auctioneer's advertisement of an auction is not an offer. At an auction the auctioneers invites offers and the offer is made by the person who bids for a particular lot. The contract is concluded when the auctioneer accepts the highest bid by the fall of the hammer. Where an auction is held 'without reserve', the auctioneer must sell to the highest bidder and cannot withdraw the goods because the bid is unrealistically low. - **Tenders are invitations to treat** unless the invitation to tender makes it clear that the lowest tender (or the highest in the case of tenders to buy) will be accepted. **Slide 9: Advertisements -- offers or invitations to treat?** - In the case of a unilateral contract, an advertisement will be an offer. - In the case of a bilateral contract, an advertisement will be an invitation to treat. - Advertisements can be offers or invitations to treat. - This will depend on the intention of the advertiser. - If the circumstances indicate an intention on the part of the advertiser to be legally bound by the advertised proposal as soon as it is accepted and without the need for further bargaining, then the proposal amounts to an offer. - Compare Carlill v Carbolic Smoke Ball Co. with partridge v Crittenden. **Slide 10: How long does an offer last? (1)** **Specified time** - Where the offeror states that the offer will remain open for a specified of time, it lapses when that time is up (although it can be revoked (e.g. withdrawn) before that). **Reasonable length of time** - If no time is specified, it will lapse after a reasonable time. As to what is reasonable will depend on the circumstances of the case. See Ramsgate Victoris Hotel Ltd v Monteflore. **Rejection** - This is when the offeree rejects the offer. **Counter-offer** - A counter-offer terminates the original offer -- Hyde V Wrench - A counter offer must be distinguished from a request for further information, which does not terminate the original offer. See Stevenson, Jacques & Co. v Mclean. **Slide 11: How long does an offer last? (2)** **Death of the offeror** - If the offeree knows that the offeror has dies, the offer will lapse. - However, if the offeree does not know, then it probably will not. - Where an offer requires personal performance by the offeror (appearing in a firm, writing a book, etc.), it will usually lapse on the offeror's death. **Death of the offeree** - It seems probable that the offer lapses and cannot be accepted after the offeree's death by the offeree's personal representatives. **Slide 12: withdrawal (REVOCATION)**  If the offer is withdrawn then the offeror or a reliable third party must notify the offeree. An offer for a unilateral contract cannot be revoked once the offeree has commenced performance, even if the performance has not been completed. Some offers are made subject to certain conditions and if such conditions are not in place, the offer may lapse. **Slide 13: Keeping the offer open** A white background with black text Description automatically generated Even if the offeror indicates they will keep the offer open for a specified period of time, they still have the right to withdraw the offer at any moment before acceptance even though the time limit has not expired. **Slide 14: acceptance -- definitions** **Acceptance** -- the unconditional agreement to all the terms of the offer. **Method** - Acceptance can be oral, written or by conduct. As to acceptance by conduct, see Brogden V Metropolitan Rail Co.  **Silence** **Slide 15: battle of forms**  The general rule in such cases is that the 'last shot' wins! Each new form issued is treated as a counter-offer. See Butler Machine Tool Ltd v Ex-cell-o corp. (England) Ltd **Slide 16: Communication of acceptance** An acceptance does not usually take effect until it is communicated to the offeror. A white background with black text Description automatically generated Unilateral contract do not usually require acceptance to be communicated to the offeror. **Slide 17: The postal rule**  However, the 'postal rule' is an exception to this rule and acceptance takes place when the letter is posted (provided it is properly stamped and addressed and use of the post is reasonable). **Slide 18: Ignorance of the offer** - The general rule is that a person cannot accept an offer of which they are unaware. **Reference** A screenshot of a computer Description automatically generated  **Email and acceptance:** - In *Entores v Miles Far East Corporation,* emails can be treated as similar to telex messages. The ordinary rules of offer and acceptance apply, and the contract will be formed when the acceptance is received.  Reference: *Entores Ltd v Miles Far East Corporation* \[1955\] EWCA Civ 3. - In Brinkibon v Stahag Stahl, the court held that an email sent at 18.00 was an effective acceptance as it was sent within working hours and was available to read at the point of receipt even though the recipient had gone home at 17.45 out of office hours. Reference: *Thomas v BPE Solicitors* \[2010\] EWHC 306 (Ch). Examples of invitations to treat include: 1. Advertisements for bilateral contracts  2. Display of goods in shop windows/on the shelves  3. The request for tenders  4. The request for bids at an auction.  **Activity 3.3: Intention to create legal relations** - If the parties make an agreement without the intention of being legally bound the courts will not regard the agreement as a contract. - The courts assess the intention of the parties objectively. - For the purpose of establishing whether there is intention to create legal relations contracts can be divided into social and domestic agreements and commercial agreements.  **Formation of a contract: Intention to create legal relations** - There is only a legally binding contract if both parties intend to create legal relations. - There is a rebuttable presumption that parties do intend to create legal relations when they enter into a commercial agreement; - Conversely, there is a rebuttable presumption that parties do not intend to create legal relations when they enter into a domestic or social agreement. **Business and commercial agreements** - There is a rebuttable presumption that parties do intend to create legal relations when they enter into business and commercial agreements. - This presumption is rebuttable by an express provision that the parties do not have this intention. - In Rose and Frank Co. v JR Crompton & Bros Ltd, an agency agreement expressly stated to be 'binding in honour only' was held not to be legally binding. **Social, domestic and family agreements** - There is a rebuttable presumption that parties do not intend to create legal relations when they enter into a social, domestic or family agreement. - The presumption can be rebutted so that the agreement will be held to be legally binding. - In Simpkins v Pays, an agreement between three members of the same household (grandmother, granddaughter and lodger) that they would share any winnings deriving from their joint entry of a weekly newspaper competition was held to be legally binding. **References** Rose and Frank Co. v JR Crompton & Bros Ltd \[1924\] UKHL 2. Simpkins v Pays \[1955\] 1 WLR 975. **'The law of contract' (de Silva 2021), in [*Galbraith's Construction and Land Management Law for Students*](https://www.vlebooks.com/Product/Index/2056324).** Reference: de Silva C (2021) 'The law of contract', in de Silva C and Charlson J (eds) Galbraith's Construction and Land Management Law for Students (7th edn) \[e-book\], Abingdon: Routledge, 77--119. Available at: www.vlebooks.com/Product/Index/2056324 \[accessed 17 November 2023\]. (Available via VLeBooks, which can be accessed through OpenAthens.) Social and domestic agreements: ( relates to family a lot of the time) - Where the parties are presumed not to intend to create a contract. Commercial agreements: - Commercial arrangements where the parties are presumed to have intended to create a contract Different presumptions which apply: In Jones v Padavatton (1969), the details of the arrangements with regard to a house were so sketchy that it was impossible to believe that the parties could have intended to make a legally binding agreement. In other cases, it seems that as the family relationships become less close, so the strength of the presumption diminishes. There seemed to be little difficulty in establishing the appropriate intention in Simpkins v Pays (1955), where three people living together regularly participated in a competition in a newspaper. When one of them was ultimately the winner, she was obliged to share her winnings with the other two. How they can be rebutted: **Rebut -- claim or prove that is false** The problem facing the courts arises where one party to an arrangement is seeking to rebut the normal presumption. **In family arrangements a person may want to prove that a legally binding agreement was indeed intended**. He or she must then satisfy the court that this was so. Many of these cases turn on problems between husband and wife on the breakdown of marriage. **In one case, Merritt v Merritt (1970),** relations between the parties were so strained that they met in the neutral territory of a car park to discuss the disposal of their matrimonial home. Once they had arrived at a decision, the **wife insisted that the husband should jot down the main points on a piece of paper.** The court found here that the parties did intend to create a legally binding contract, influenced no doubt by the rather **formal steps that the wife had insisted on, and also by the fact that the relationship between the parties was breaking down**, so that they were no longer closely bound in a family or domestic situation. - Where one party seeks to rebut the presumption, the court may also be influenced by the degree of certainty and detail with which the parties made their arrangements. In a commercial situation, it is considerably more difficult to rebut the presumption that a contract was intended. The courts will require convincing evidence that the parties intended otherwise. In Rose and **Frank Co. v Crompton Bros (1925),** the parties indicated in a written document that their arrangement was a 'gentleman's agreement, binding in honour only'. In the face of such convincing evidence the court was obliged to find that there was no contract. - parties have made their intentions sufficiently clear, Extra information to help with assignment: As a general rule, English contract law does not require contracts to be made in any particular form. In practice many contracts are oral, which often leads people to assume that it would be difficult to sue to enforce such a contract. Certainly, there may be problems of proof but in the end it may be a matter of judging which party the court can more reliably believe. Where a contract is put into writing to provide the necessary proof, the writing can in turn prove to be problematical. There may be a dispute about its precise meaning, or it may fail to spell out the entire contract between the parties. A good example of written contracts is to be found in the construction industry's use of standard form contracts (see Chapter 8). Was there the intentions to create legal relations? There is only a legally binding contract if both parties intend to create legal relations. Scenario 1 Michael and Nicole are married and make an agreement that Michael will pay her some money. Michael goes back on his word. Would it make any if they were married? In the case of family agreements, there is a presumption that the parties do not intend to create legal relations. This is only a presumption which can be rebutted on evidence. In the case of a husband and wife living together in amity when the agreement was made, then it is presumed that they did not intend to create legal relations (Balfour v. Balfour 1919. The agreement will therefore be unenforceable. If however, they were separated at the time the agreement was made this would rebut the presumption and the agreement would therefore be enforceable, as family relationships become less close if they were separated, so the strength of presumption diminishes. Scenario 2  Answer This agreement would be classes as a social agreement. The presumption in social agreements is that the parties do not intend to create legal relations. The presumption can however be rebutted. Peck v Lau (1973) Wilson v Burnett (2007) Scenario 3 A close up of a white background Description automatically generated This would be classed as a Commercial agreement. Edwards v Skyways Ltd (1964)  **Activity 3.4: Has a contract been formed?** A text on a white background Description automatically generated Has a contract been made from the slides? Answer  A screenshot of a phone Description automatically generated Answer The advertisement is an Invitation to treat, not an offer (Partridge v. Crittenden 1968). Neville makes an offer which is accepted, but there is no valid contract as it does not comply with s.2 law of property (Miscellaneous provisions) Act 1989. A contract for the sale of land made after 27 September 1989 must be in writing, contain all the terms that parties have expressly agreed and be signed by or on behalf of each party to the contract.  Answer The auctioneer request for bids is an invitation to treat. Gina bidding £600 for a regency verge cottage clock is the offer. A contract has not been formed because they had to be evacuated because of a bomb scare before the auctioneer brought down the hammer. (Payne v. Cave 1789) A screenshot of a phone Description automatically generated **Silence** does not amount to acceptance (Felthouse v. Bindley 1862) There is no contract between Jane and Darren  No a contract has not been formed. An offer may be withdrawn at any time up until acceptance, even if the offeror promised to keep it open for a specified time (Routledge v. Grant 1828) A text on a white background Description automatically generated If Raymond had paid Trevor to keep the offer open for a week, Trevor could not have withdrawn his offer until the week was up. **Activity 3.5: Week 3 knowledge check** **1.** **Match the case to the legal principle:** *Hyde v Wrench* (1840) -- \[A counter‑offer destroys the original offer\] *Adams v Lindsell* (1818) -- \[The postal rule\] *Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd* (1953) -- \[Goods on display in a shop window are an invitation to treat\] *Felthouse v Bindley* (1862) -- \[Silence cannot amount to acceptance\] *Payne v Cave* (1789) -- \[An offer may be withdrawn at any time before acceptance\] *Carlill v Carbolic Smoke Ball Co.* (1893) -- \[A newspaper advert is an offer\] *Harvey v Facey* (1893) -- \[An offer requires an intention to be bound\] *Partridge v Crittenden* (1968) -- \[A newspaper advert is generally an invitation to treat\] *Dickinson v Dodds* (1876) -- \[The revocation of an offer must be communicated to the offeree but this can be via a reliable third party\] *Errington v Errington* (1951) -- \[An offer to enter into a unilateral contract cannot be revoked once the offeree has commenced performance\] **2.** **Match the case to the facts:** *Merritt v Merritt* (1970) -- \[A husband and wife were separated and he agreed to pay her money\] *Balfour v Balfour *(1919) -- \[A husband agreed to send money home to his wife\] *Jones v Padavatton* (1969) -- \[A mother bought a house for her daughter to live in whilst studying\] *Jones v Vernon's Pools Ltd* (1938) -- \[The agreement contained a 'binding in honour only' clause\] *Parker v Clark* (1960) -- \[Nephew agreed to give up his own house to look after his uncle\] *Esso Petroleum Co. Ltd v Commissioners of Customs & Excise* (1976) -- \[D offered free World Cup coins with the sale of petrol\] 3. Correct statements: - An offer requires an intention to be bound, - A counter-offer destroys the original offer 4\. Which of the following are correct in relation to withdrawing an offer? - An offer can be withdrawn at any time prior to acceptance, - An offer cannot be withdrawn if the offeree has paid the offeror to keep it open for a certain period of time 5\. Which case held that a counter-offer destroyed the original offer? - Hyde v Wrench (1840) 6\. When does a contract become legally binding? - Once the offer has been accepted 7\. can a machine make an offer? Yes Yes. Thornton v. Shoe Lane Parking Ltd (1971) held that a machine can make an offer which was accepted by putting money into the machine. 8\. Which of the following is true in relation to unilateral contracts? - Only one party makes a promise - The offeree need not communicate their intention to accept the offer - Acceptance requires full performance of the contract - The offeror may not withdraw the offer once performance has started 9\. In which of the following is it presumed that the parties intend to create legal relations? - Commercial and business agreements 10\. Sam promised to pay £50 to anyone who would tidy his garden. Which of the following people who complied with the terms of the offer would Sam have to pay? - His gardener - His next-door neighbour 11\. Is it true or false that an acceptance by email sent and received within working hours takes effect when it is received? Yes [Week 4 21/10/2024 ] [Lecture 4: Formation of a valid contract: Consideration and privity] - In English law, an agreement is not usually binding unless it is supported by consideration. - Some contracts will only be enforceable if they are supported by consideration. - consideration can be defined in terms of give and take. E.g. if you went into a shop to purchase some goods, you would give the money in return for the goods. The shopkeeper would receive the money and give you the goods. - We will also look at the exceptions to that rule and the effect of the Contracts (Rights of Third Parties) Act 1999. - Many of the problems associated with consideration arise when one party to a contract seeks to modify it. - the meaning of consideration - the difference between executory and executed consideration - past consideration - sufficiency of consideration - the rule of privity - the impact of the Contract (Right of Third Parties) Act 1999 - the common law exceptions to the privity rule. - rules and principles which apply to consideration - We will then move on to look at privity. By completing the activities this week, you should be able to: - define consideration; - explain the difference between executory and executed consideration; - identify past consideration; - identify sufficiency of consideration; - explain the privity rule; - discuss the impact of the Contract (Rights of Third Parties) Act 1999; - list the exceptions to the privity rule. - This simply means that each party must give something in return for what is gained from the other party. So if you wish to enforce another's promise, you must prove that you have something in return for that promise. By completing this activity, you should be able to: - define consideration; - explain the difference between 'executory' and 'executed' consideration; - identify past consideration; - understand that consideration must be sufficient but need not be adequate; - identify ways that promises can be binding even in the absence of consideration. **'Formation of a valid contract: Consideration'** **Slide 1** **Introduction** **Slide 2** **Contractual requirement of consideration --** which means that each party must give something in return for what is gained from the other party. **Rules which apply to consideration:** - **it must not be past** - **it must be sufficient** - **it must be of economic value** - **it can be something exist through the performance of an existing contractual duty** **Slide 3** An agreement is not usually binding unless it is supported by consideration. However, if a promise is put into a document called a deed (that is, a formal 'contract'), then it will be binding without the need for consideration. Consideration - is usually described as being something which represents either some benefit to the person making a promise (promisor) or some detriment to the person to whom the promise is made (promisee), or both. Consideration need not benefit the promisor. The courts have also defined consideration as 'the price of the promise'  **slide 4: Types of consideration** Consideration can be executory or executed. **Executory consideration** - is where something is to be done in the future after the contract has been formed. e.g. A close-up of a message Description automatically generated **Executed consideration** - is where at the time of the formation of the contract the consideration has already been performed. e.g.  **slide 5: Past consideration** Consideration must not be past -- it must be given in return for the promise or act of the other. But there are two exceptions to this rule: where the past consideration was provided at the promisor's request - Lampleigh v. Braithwhite (1615); and it was understood that payment would be made -- Re Casey's Patients (1892). If one party has completed performance before the other offered consideration, the consideration is said to be in the past. - The general rule is that past consideration is no consideration -- See Re McArdle (1951). **slide 6: Sufficiency of consideration (1)** Consideration must be sufficient but need not be adequate. It must have some 'economic' value, even if this is negligible. In Thomas v. Thomas (1842) the payment of £1 per annum for the right to occupy a house was held to be valuable consideration. **slide 7: Sufficiency of consideration (2)** - In theory, performance of an existing duty should not by itself amount to consideration.  Collins v. Godefroy (1831) - Where a promisee goes beyond his public duty, this may amount to consideration. A white text with black text Description automatically generated Ward v. Byham (1956) **slide 8: Sufficiency of consideration (3)** Following **Williams v. Roffey Bros & Nicholls (contractors0 Ltd (1989),** it now seems that performance of an existing contractual duty can, in the absence of duress, amount to consideration if it confers a practical benefit on the other party.  **Stilk v. Myrick (1809)** **Hartley v. Ponsonby (1957) --** claimant was able to enforce the promise to pay the extra wages **slide 9: Sufficiency of consideration (4)** In some cases where two parties make a contract to provide a benefit to someone who is not a party to the contract, known as a third party (X), and one of them then makes a further promise to X to provide that benefit, that further promise can be good consideration for a promise made by X in return. A white text with black text Description automatically generated **Scotson v. Pegg (1861)** **slide 10: Promissory estoppel** However, under the doctrine of promissory estoppel developed by **Lord Denning in Central London Property Trust Ltd v. High Trees, a promise may be binding even if there is no consideration.** Estoppel - is a procedure by which a court estops (or prevents) a person from saying something which they would otherwise be allowed to say.  **slide 11: Conditions for promissory estoppel to apply** - Certain conditions must be fulfilled before promissory estoppel can apply. It is an equitable doctrine and therefore at the court's discretion. A graphic shows the progression of 'testing' for promissory estoppel. **Conditions for promissory estoppel to apply** - The promise has been relied on - It would be unfair to go back on the promise - The promise must be clear and understood - There must be a pre-existing contractual relationship **Read: The need for consideration** **Link: [*Galbraith's Construction and Land Management Law for Students*](https://www.vlebooks.com/Product/Index/2056324).** **read pages 82 to 86, 'Consideration' (stop at 'Part payment of a debt') of Chapter 6, 'The law of contract' (de Silva 2021):** - Once agreement is reached it cannot be altered by one of the parties without the consent of the other. - If any alterations or variations to the agreement are to take place, then the relevant rules of consideration should also be borne in mind. - The former are terms, where a breach gives rise to a right to claim for damages for breach of contract. The latter are representations, where rights may be available if the statement made was untrue and in some way induced the contract. - It is important to remember that consideration will not always be money. - **If I sell you my car for £3,000 my consideration is giving you the car and your consideration is giving me the £3,000. If we make that agreement and provide for the exchange to take place at the end of the month then our agreement is still a binding contract now because our exchange now is an exchange of promises.** - **for example, where asking an accountant to deal with financial affairs or getting into a taxi. Once the service is performed any subsequent promise to pay in such a case is enforceable because by asking for the service there is an implied promise to pay a reasonable amount.** - the law does not insist that the two sides of the bargain must be equal. This is often expressed as a rule that consideration need not be adequate. See Thomas v. Thomas (1842) - This may be so even where the consideration consists of something intrinsically worthless. This point is illustrated in Chappell & Co. v Nestlé & Co. (1960), where the chocolate company was running a promotional scheme. In return for three chocolate wrappers and a postal order for 1/6d (7½p) the chocolate company would send the customer a pop record. Chappell's were entitled to receive royalties on the selling price of all sales of the record. The question arose here whether the record was sold for 1/6d or whether the wrappers formed part of the consideration. - Parties to consideration see Tweddle v Atkinson (1861), a young couple were about to be married and their respective fathers promised each other that each would pay a sum of money to the son. Indeed, their agreement said that the son could sue on the agreement should either fail to pay. One father did not pay. The son attempted to sue him but failed as he was not a party to the contract and, additionally, had provided no consideration for the promise. It should be noted that the above difficulty of contracts not being enforceable by third parties is connected to the notion of privity of contract. - Problems can arise in finding valid consideration where one party seeks to perform a contract by doing something less than contractually obliged. Take the example of A, who owes £100 under a contract to B which is due for payment now. A may be in financial difficulties, so much so that B agrees to accept £75 in full settlement. What consideration has A given for B's promise to forego £25? The courts would say that the £25 was still due and B could sue to recover it despite this promise. Thus, part payment of a debt does not discharge the full debt; this rule was approved by the House of Lords in Foakes v Beer (1884). **Reference list** **de Silva C (2021) 'The law of contract', in de Silva C and Charlson J (eds) *Galbraith's Construction and Land Management Law for Students* (7th edn) \[e-book\], Abingdon: Routledge, 77--119. Available at: [www.vlebooks.com/Product/Index/2056324](https://www.vlebooks.com/Product/Index/2056324) \[accessed 17 November 2023\]. (Available via VLeBooks, which can be accessed through OpenAthens.)** **Activity 'is there consideration'** **1.** Answer: No, the consideration is past. He had already done the gardening before you made your promise to pay him, so the consideration is in the past (Re McArdle (1951)). 2. Answer: Yes, consideration need not be adequate but must have some value, however small (Chappell & Co Ltd. V. Nestle Co. Ltd (1959)). 3. Answer: The club's promise was binding. There was consideration as the police force has provided extra policing resources. Therefore, the club had to pay (Harris v. Sheffield United Football Club (1987)). ***Discuss: Williams v Roffey Bros & Nicholls (Contractors) Ltd *** **Court: Court of Appeal (Civil Division)** ***decision in this case?*** - *a promise to make bonus payments was enforceable when the promisor obtained a benefit or obviated a disbenefit where the promise had not been obtained by fraud or duress. On the facts R had obtained a benefit and so there was consideration to support the agreement to make bonus payments to W.* - *a promise to make bonus payments was enforceable as there was a valid consideration, which represents either some benefit to the person making a promise (promisor) or some detriment to the person to whom the promise is made (promisee), or both. To help ensure the work would meet their original deadline with Nicholls (contractors) Ltd.* **Would the decision have been the same in the event of duress?** - However, the decision would have been different if duress had been involved. Duress undermines the validity of any agreement, including contract variations. If a party is coerced into agreeing to a variation, the agreement could be voided, and any consideration derived from it would be invalid. In such a case, even if the defendant gained a practical benefit, the presence of duress would make the promise unenforceable, as the agreement was not freely made. **Did the defendant receive a benefit?** - Roffey Bros still received a practical benefit, which constituted valid consideration, as the new offer of extra payment for the work ensured they would meet their original deadline with Nicholls (Contractors) Ltd. **Reference list:** ***Williams v Roffey Bros & Nicholls (Contractors) Ltd *\[1989\] EWCA Civ 5.** **Activity 4.2: Week 4 knowledge check -- consideration quiz** **1.** Lampleigh v Braithwaite -- \[A man seeking a pardon from the king\] Tweddle v Atkinson -- \[A couple getting married\] Collins v Godefroy -- \[Witness was subpoenaed to appear in court\] Roscorla v Thomas -- \[Promise made about the condition of the horse\] Thomas v Thomas -- \[Promise to pay £1 pa and keep the house in good repair\] Stilk v Myrick -- \[A ship where 2 crew deserted\] Hartley v Ponsonby -- \[A ship where 36 crew deserted\] **2.** Re McArdle -- \[Consideration must not be past\] Ward v Byham -- \[Going beyond a statutory duty is valid consideration\] Williams v Roffey Bros -- \[Obviating a disbenefit or conferring a practical benefit may constitute valid consideration\] Tweddle v Atkinson -- \[Consideration must move from the promise\] Chappell v Nestle -- \[Consideration must be sufficient but need not be adequate\] Scotson v Pegg -- \[An existing duty owed to a third party is valid consideration\] **3. Which of the following are rules of consideration?** - Consideration must not be past - Consideration must move from the promisee, - Consideration must be sufficient but need not be adequate, - An existing contractual duty owed to the promisor is not valid, - An existing public duty is not valid **4. A agrees to buy B's iPad for 20p. Is this a valid contract?** Yes - 20p is sufficient. It need not be adequate consideration **5. In relation to *Williams v Roffey Bros, *which of the following statements are true?** - The contractor had to pay the extra money, - There was consideration to support the promise to pay the extra sum, - There was no evidence of duress **6. What is executory consideration?\ **A promise to do something in the future **7. Jim contracts with Jane to paint the interior of her flat for £200. Before the job is finished he asks for another £100. Would he be entitled to the extra payment if:** Jane asked him also to paint the exterior of the flat **Activity 4.3: Privity** Introduction and aims In this activity, you will learn about privity of contract. By completing this activity, you should be able to: - explain the privity rule; - discuss the impact of the Contract (Rights of Third) Parties Act 1999; - list the exceptions to the privity rule. **'Formation of a valid contract: Privity of contract'** **Slide1** **Introduction** **Slide 2** A close-up of a text Description automatically generated - Traditional view that third parties could not sue or be sued under a contract unless they were a party to it. **Slide 3: Privity of contract** The privity rule - provides that only the parties to a contract can acquire rights and obligations under it. - Is a rule of English law that only those persons who are parties to the formation of a contract can sue or be sued on that contract. E.g. Karl makes a contract with Jane, the only persons who can sue and be sued on that contract are Karl and Jane. - Even if the contract is made for the benefit of a third party, that party still has no rights under it. E.g. **Slide 4: Contracts (Rights of Third Parties) Act 1999** There are exceptions to this rule. The Contracts (Rights of Third Parties) Act 1999 allows third parties who were not a party to the contract to enforce contractual terms where: the contract expressly provides that they may do so; or the contract purports to confer a benefit upon them, unless the parties did not intend it to be enforceable. Section 1(1) of the **Third Parties Act** A screenshot of a white text Description automatically generated **Slide 5:** **Common law exceptions.** **There are exceptions to the privity rule relating to:** - Agency - Assignment - Collateral contracts - Damages on behalf of another **Slide 6: Agency** - Agent - Principle  **Slide 7: Assignment** A white background with black text Description automatically generated e.g. cashflow problems sells the debts owed... buys the debts at less than its value and makes profit when it collects from the creditor. **Slide 8: Collateral contracts** - A person who is not party to the main contract may be able to sue on a collateral contract. - **Shanklin Pier Ltd V. Detel Products Ltd (1951)**  **Slide 9: Damages on behalf of another** A close up of a text Description automatically generated **Jackson v. Horizon Holidays Ltd (1974)**  **Woodar Investment Development Ltd v. Wimpey Construction UK Ltd (1980)** A text on a white background Description automatically generated  **Slide 10: Exceptions in equity** **Constructive trust** A white background with black text Description automatically generated **Constructive trust -** Contracting party specifies that the benefit of the contract is held by him or her in trust for a third party **Restrictive covenants**  **Provided certain conditions are met, restrictive covenants are agreements not to do relating to land are binding on the succession in title to the original covenantor.** **The privity rule** The doctrine of privity states that only the parties to a contract could incur rights and obligations under it. This means that third parties (i.e. those who are not a party to the contract) could neither sue nor be sued under a contract. Even where the contract was made for the benefit of a third party, that party still has no rights under it. '[Privity of contract](https://learn.ucem.ac.uk/mod/book/view.php?id=416969)', UCEM (2017), Formation of a valid contract, MB10286v1 \[online\], Reading: University College of Estate Management. Available at: https://learn.ucem.ac.uk/course/view.php?id=3535 \[accessed 21 October 2024\]. **Privity rule** - It is a rule of English law that only those persons who are parties to the formation of a contract can sue or be sued on that contract. - The doctrine of privity of contract has implications for contracts made in any context, but one context in which the doctrine has great significance is that of building contracts and subcontracts. - **impact of the Contract (Rights of Third Parties) Act 1999 ** **The exceptions to the rule. ** - Agency - If an agent is authorised by his principal to make a contract on his behalf with a third party, then the principal can sue the third party on that contract even though the principal did not personally make that contract. - Land law - Provided certain conditions exist (which it is not necessary to consider at this stage), contractual terms in leases (which are called leasehold covenants) are binding upon the successors in title to the original landlord and tenant. - Contracts (Rights of Third Parties) Act 1999 -- Section 1(1) states that a third party may enforce a term of the contract if: the contract expressly provides that he may, or the contract attempts to confer a benefit on him. Section 1(2) states that the third party will not have such rights if the parties make it clear that a third party is not to have such rights. The third party must be expressly identified in the contract: by name: e.g. Fred Bloggs as a member of a class: e.g. all employees as answering to a particular description: e.g. a subsequent purchaser of the building. - Assignment of contractual rights and obligations -- A contractual right can, in general, be transferred to another by assignment. For example, if X lends £500 to Y, X (the assignor) can transfer (assign) to a third party, Z (the assignee), his contractual right to be repaid the £500 by Y (the debtor). Contractual rights can be validly assigned if the requirements of s.136 Law of Property Act 1925 are complied with: - the assignment must be in writing and signed by the assignor; and - the debtor must receive written notice that the right has been assigned. Contractual **obligations** cannot be assigned, but a similar result can be achieved by **novation**. This consists of all three parties (the two original contracting parties and the person who is to become liable) agreeing to enter into a new contract in substitution for the existing contract. The novation must be supported by consideration. - Collateral contracts - A person who is not a party to the formation of the main contract may be liable or be able to sue on a collateral contract. Since a collateral contract is a distinct contract from the main contract, it can be enforced only if the party seeking to enforce it has furnished consideration. For example, in the case of Shanklin Pier Ltd v Detel Products Ltd (1951), the plaintiffs, the owners of a pier, made an agreement with contractors whereby the latter agreed to paint the pier with two coats of paint. - Restrictions on the use of chattels -- In de Mattos v Gibson (1858), Knight-Bruce LJ formulated the following principle: "If X, the owner of a chattel, makes a contract with Y whereby X allows Y to use the chattel for a particular purpose, and while the contract is still in force X sells the chattel to a third party, Z, then Z will be prevented by the court from interfering with Y's right to use the chattel for the intended purpose, provided that Z purchases the chattel from X with knowledge of the terms of the contract between X and Y." *Port Line Ltd v Ben Line Steamers Ltd* (1958). In this case, Diplock J laid down a much narrower rule than the one stated in *de Mattos v Gibson*. This rule requires clarification by the Supreme Court. - Enforcement by a party to the contract Several decisions indicate that a party to a contract may be able to obtain a remedy for breach of a contract which is intended to benefit a non-party, and then indirectly enforce the contract for the benefit of that non-party. *Jackson v Horizon Holidays Ltd* (1975). In Woodar Investments Development Ltd v Wimpey Construction (UK) Ltd (1980), Lord Wilberforce suggested that there may be contracts which call for special treatment (which may be called 'group' contracts), where the party who makes the 'group' contract is entitled to recover damages representing not only his own loss but also loss suffered by other members of the 'group'. *St Martin's Corporation Ltd v Sir Robert McAlpine & Sons Ltd* (1993). *Darlington Borough Council v Wiltshier Northern Ltd* (1994). A further decision in which a party to a contract was able indirectly to enforce a contract for the benefit of a non-party is *Beswick v Beswick* (1968). **Reference list:** UCEM (2017), Formation of a valid contract, MB10286v1 \[online\], Reading: University College of Estate Management. Available at: https://learn.ucem.ac.uk/course/view.php?id=3535 \[accessed 21 October 2024\]. **Bryston plc and Twiston Carpets** **Activity 4.4: Week 4 knowledge check -- privity** 1\. The Contracts (Rights of Third Parties) Act 1999 applies to contracts made after: 11 May 2000 2\. Privity of contract means that: Only persons who are parties to a contract may sue or be sued on the contract 3\. Which case demonstrates that the rule of privity of contract can be avoided by finding a collateral contract between the third party and the promisor? Shanklin Pier Ltd v Detel Products (1951) 4\. Which of the following are common law exceptions to the privity rule? - Damages on behalf of another - Agency - Assignment - Collateral contracts **Activity 4.5: CMA practice** **2.** in text citation *Donoghue v Stevenson* *4.* Select the ONE option that correctly shows how to format a short quotation.  According to Denning (1983: 253), the 'light was let in' in 1977 when the Rules of the Supreme Court (Amendment No3) came into force. 5\. Common law is made by judges and is called common law because it supports consistency across the country 6. Answer: Master of the Rolls is the head of the Appeal Court 7\. Answer: Manufacturers have a duty of care to anyone who uses their products for the intended purpose, even though their contract is only with those who directly purchase their products 9\. Answer: The Parliament Acts affect the legislative role of the House of Lords, preventing them from vetoing legislation 10\. Answer: Non-Cabinet Members of the House of Commons can only propose new laws as a Private Members Bill. This is because Public Bills are usually proposed by a Minister of State 11\. Answer: A Green Paper is often vague and contains broad policy ideas. It is used as a consultation document 15\. Acceptance requires unconditional agreement to all the terms in the offer. Conditions attached to 'acceptance' may be a counter-offer rather than acceptance 16\. Answer: Simpkins v Pays is a leading intention case and states that domestic agreements can be legally enforceable 17.Answer: Ian's text, even if received, is not a legally valid offer, neither can he use Damien's silence as acceptance 18\. Answer: Consideration must be sufficient. This means that there must be some financial value attached to the consideration 19\. Performing only those duties legally required is not additional consideration (*Collins v Godefroy*) 20\. promissory estoppel will apply: - The promise has been relied on - It would be unfair to go back on the promise - The promise must be clear and understood