Cases of Law of Contract:
1.1 Pharmaceutical Society of Great Britain v Boots Cash Chemists [1953]
The defendant’s branch at Edgeware was adapted to a self-service system whereby
customers selected goods from the shelves and took them to a cash desk to pay the price.
One section of the shelves was set out with drugs included in the poisons list referred to in s.17 of the Pharmacy and Poisons Act 1933, though they were not dangerous drugs and did not require a doctor’s prescription. Section 18 of that Act required the sale of such
drugs to take place in the presence of a pharmacist. All sales of drugs on the poisons list were supervised at the cash desk by a pharmacist. The Society, which had a duty to
enforce the Act, brought an action against Boots on the basis that the display of the drugs constituted an offer, which the customer accepted when he selected goods from the
shelves. The sale was thus completed without supervision.
Held: The display of drugs on the shelves was not an offer but an invitation to treat. The contract was made when the assistant at the cash desk accepted the customer’s offer to
buy what had been chosen. The presence of the pharmacist at the cash desk fulfilled the
requirements for supervision under the Act.
1.2 Harvey v Facey [1893]
Harvey sent a telegram to Facey: “Will you sell Bumper Hall Pen, telegraph lowest cash price.” Facey replied with a telegram: “Lowest cash price Bumper Hall Pen £900.” Harvey purported to accept this offer but Facey did not respond. Harvey sued.
Held: There was no contract. Facey’s telegram was not an offer but a reply to an inqu iry.
1.3 Carlill v Carbolic Smokeball Co [1893]
Defendants were proprietors of a medical preparation called “The Carbolic Smoke Ball”.
They advertised in a number of newspapers that they would pay £100 to anyone who
contracted influenza after using the ball three times a day for two weeks. Mrs Carlill used the ball as advertised and caught flu. She sued for the £100 promised by the
advertisement. V arious defences were raised; in particular it was claimed that the
advertisement was not intended to constitute an offer, since it would amount to an attempt to contract with the whole world, which was impossible.
Held: There was a binding contract. The advertisement was an offer to the whole world, which was accepted by those who fulfilled the conditions. Mrs Carlill had fulfilled the
conditions, and was thus entitled to be paid the £100.
1.4 Wolf & Wolf v Forfar Potato Co (1984)
The defenders sent a telex dated 29/11/77 to the pursuers in Amsterdam, offering to sell
a specific quantity of potatoes, the offer to remain open until 17.00 hours the following
day. The pursuers replied by telex stating that they accepted the offer, then varying certain of its terms.
After a telephone conversation with the defenders, the pursuers sent a further telex, still within the time limit, accepting the defender’s original offer, though requesting that additional points be given consideration. The defenders did not supply the potatoes
and were sued for damages.
Held: The defenders could not be liable for breach of contract as there was no contract.
The terms of the pursuer’s original “acceptance” did not meet the terms of the offer and
therefore constituted a counter-offer. This had the effect of making the original offer
lapse. The time limit, which was part of that orginal offer, lapsed at the same time.
1.5 Butler Machine T ool Co Ltd v Ex-Cell-O Corporation (England) Ltd (1979)
Butler offered to supply a machine to Ex-Cell-O, the offer stating that supply was to be
on Butler’s standard terms and conditions. The terms and conditions were printed on the
back of the form and included, inter alia, a clause allowing Butler to vary the price to that prevailing on
the date of delivery. The form also stated that Butler’s terms and conditions were to prevail over those of the buyer.
Ex-Cell-O placed an order for the machine on its own standard order form, which had a
tear-off acknowledgement slip which acknowledged acceptance of the order on the
buyer’s terms and conditions. Butler signed and return ed this slip. When the machine was delivered, Butler tried to claim an extra £2,900 under the variation clause in its standard
terms.
Held: Butler could not alter the contract price. The conditions on the order form
amounted to a counter-offer which rejected Butler’s original offer. The counter-offer had
been accepted by Butler when the acknowledgement was returned.
1.6 Jacobsen Sons & Co v Underwood & Son Ltd (1894)
On March 2 Underwood offered to buy straw from Jacobsen, the offer stating that it was
to remain open until 6 March. On 6 March, Jacobsen wrote and posted an acceptance of
the offer, but this was not delivered to Underwood until March 7. Underwood claimed
there was no contract because the acceptance had not reached them until after the stated
date and they refused to accept the straw when Jacobsen tried to deliver it.
Held: Because the acceptance was concluded at the time it was posted, the offer had been accepted in time and there was a contract
1.7 Thomson v James (1855)
On November 26, 1853, James posted an offer to Thomson to purchase the estate of
Renniston for £6,400. On December 1 Thomson posted a letter of acceptance, but on the
same day James had posted a letter withdrawing the offer. Both letters were delivered on
December 2.
Held: A binding contract had been formed. Lord President McNeill said: “..A simple
unconditional offer may be recalled at any time before acceptance, and it may be so
recalled by a letter transmitted by post, but I hold that the mere posting of a letter of recall does not make that letter effectual as as a recall so as from the moment I am
of the opinion that the act of acceptance was completed by the putting of the letter into
the post office; and that a letter of recall, which did not arrive until after that act, cannot
be held to have interrupted the completion of the contract.”
2.1 Ferguson v Littlewoods Pools Ltd 1996
Members of a football pools syndicate thought that they had won a £2.5 million jackpot on
the Littlewoods pools, but then discovered that the Littlewoods collector had never passed their coupon on to the company and had stolen their stake-money. Littlewoods refused to make a pay-out. The collector was convicted of theft. The syndicate members raised an action against Littlewoods, but it was dismissed as irrelevant by Lord Coulsfield on 28 March 1996. The primary ground of dismissal was the doctrine of sponsiones ludicrae, i.e. that a debt arising from a gambling transaction such as a football pool is unenforceable in the courts.
The syndicate members reclaimed, and the appeal was due to be heard by a Court of Five Judges in December 1996. However a settlement was announced on 3 December. Although details remained confidential, it appeared that the syndicate members had exhausted their funds, and that Littlewoods had made no payment to them.
2.2 Krupp v John Menzies Ltd 1907
An agreement drawn up between Menzies, as owners of a hotel, and Mrs Krupp, as
manageress of the hotel, stated that Mrs Krupp was to receive one fifth of the profits of
the business in addition to her salary. After five years she brought an action for payment
of the share of the profits. Menzies claimed that the verbal agreement between the parties
had been that Mrs Krupp was to receive one twentieth of the net profits and that the use
of the words “one-fifth” was the result of an error by a clerk who had been given a style
agreement in which the share of profits was given as “one tenth” and told that Mrs Krupp
was to receive half that amount. It was held that Menzies should be allowed to bring
parole evidence to prove their averments so that the clerical error could be rectified.
2.3 Esso Petroleum v Mardon (1976)
The parties were negotiating the lease of a petrol station. In the course of the negotiations, one of Esso’s employees, with 40 years experience of the trade, negligently
misrepresented the likely sale of petrol from the station as 200,000 gallons per year.
Mardon relied on this in entering the contract, which proved financially disastrous for him, with petrol sales reaching only 78,000 gallons in the first 15 months. Mardon claimed
damages for negligent misrepresentation, while Esso argued that the statement had only
been the expression of an opinion.
Held: Esso had the necessary knowledge and skill to make such a statement, and had a
duty of care to ensure the statement was reasonably correct. They were liable.
3.1 Wade v Waldon (1909)
Wade, a music hall comedian, contracted with Waldon to appear at the Glasgow Pavilion
and Palace Theatres for a week. The contract stated that all performers must give 14 days
notice prior to the engagement beginning and must accompany this with advertising
matter. Wade noticed that his name did not appear in the theatre’s advertisments a wekk
before his performance was due, but, when he queried this, he was told that his failure to
send notice and publicity was a breach of contract and that he would not be allowed to
perform. He sued for breach of contract.
Held: Wade’s breach of contract was not material enough to justify Waldon in rescin ding
the contract. Waldon was therefore liable to Wade for damages for breach of contract.
3.2Hadley v Baxendale (1845)
The plaintiff was a miller in Gloucester. The driving shaft of the mill was broken and the defendant was engaged to carry it to the makers in Greenwich so they could use it as a pattern to make a new one. The carriers delayed delivery of the shaft beyond a reasonable time, so that the mill was idle for longer than necessary. The plaintiff sued in respect of lost profits during the period of delay.
Held: The plaintiff could only succeed if he could prove that it was in the normal course of things that the mill would be unable to work because of the broken shaft or, alternatively, that he had fully informed the carrier as to the special circumstances so that the defendant was aware of the possible losses. As the defendant had not been informed, and the mill might well have had a spare shaft, the loss was too remote and could not be recovered.
4.1 T aylor v Caldwell (1863)
defendantTaylor contracted to let a music hall from Caldwell for four concerts in the summer of
1861. Six days before the first concert was to be performed the hall caught fire and was
totally destroyed. Taylor sued for damages for breach of contract as the hall could not be
used.
Held: Caldwell was not liable in damages as the contract was frustrated by the fire.
4.2James B Fraser & Co Ltd v Denny, Mott & Dickson Ltd 1944
Fraser entered into an agreement with the defenders under which Fraser was to buy all the red and white pine it required from DMD Ltd and DMD Ltd was to occupy Fraser’s timber yard. The agreement was expressed to be terminable by either party on giving notice and, in the event of termination, DMD Ltd was to be given the option to purchase the yard. Wartime regulations made it impossible for DMD to supply Fraser with the required wood, and DMD gave notice that it was terminating the agreement and intended to exercise the option to purchase.
Held: The option had lapsed. The agreement had been terminated by because of the impossibility of trading (Frustration) and the option could be exercised only if termination was by notice.
4.3Krell v Henry (1903)
The plaintiff offered to rent out his rooms overlooking a street where processions to the royal coronation were going to take place. The defendant offered to pay £75 to rent the rooms in order to watch the processions. The defendant put down £25. The king got sick and the processions didn’t hap
pen. The defendant refused to pay. The plaintiff sued for the remaining £50 and the defendant countersued for the £25 deposit.
The trial court dismissed the plaintiff’s complaint and gave judgment for the defendant on his counterclaim.

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