Commercial Law - Slides - Lecture 1 & 2

Commercial Law 2011 - L1
Course Outline
Part 1 – Introduction to Legal Rules
Part 2 – Introduction to Contract
Part 3 – Tort
Part 4 – Agency
Part 5 – Business entities
Introduction to Legal Rules
Moral Rules
Rules of Nature
Religious Rules
Legal Rules
Moral Rules
Smoking?
Drugs?
Hand phones in the Cinemas?
Pre marital sex?
Abortion?
Homosexuality?
Adultery?
Rules of Nature
Gravity
Temperature
Biological
Religious Rules
Pray 5 times a day
Make offerings
Bible
Koran
Legal Rules
Drugs
Abortion
Murder
Promissory Estoppel
Creator of rules
Moral
Religious
Nature
Legal
MAN or GOD ?
Conclusion
Rules determine how we do things and explains why we do things;
It also helps us ensure things are done in a particular way
It is legal rules that we so often refer to as law
Sources of Law
In this part of the lecture we determine who makes legal rules
Sources of Law
Parliament
Common law
Parliament
Democratically elected
Makes rules according to the will of people
Unshakable
“What parliament does no body on earth can undo”
Common Law
Decision of the Courts
System called “Binding Precedent”
Judges decisions through a court hierarchy
Doctrine of Precedent
Judge in a higher court binds Judge in a lower court
Ratio Decidendi – reason for the decision
Obiter Dicta – statements made by the way
Rules of Interpretation
Literal rule
Golden rule
Mischief rule
Ejusdem Generis rule
Role of Judges
Decide on facts
Interpret rules
Make rules?
Conclusion
Legal rules are made by parliament and by the courts through a complex system of interpretation and application
Part 2 - Contract
A rule to facilitate commercial transactions;
To ensure parties deliver their promises;
Overview
Formation
Vitiating factors
Terms
Discharge
Remedies
Formation
Tells us whether there is a contract between parties;
Requires 3 basic elements –
- Agreement
- Consideration
- Intention to create legal relationship
Agreement
Determines if parties minds met
Whether there was a “consensus ad idem”
Derived by determining that an offer was accepted
What is an offer?
Willingness of the offeror to be bound;
His intention is crucial
Offer could be :-
- Unilateral (to the whole world)
Case : Carlil v Carbolic Smoke Ball Company (1892)
- Bilateral (to a specific party)
Offer differentiated from Invitation to Treat
Differentiated by intention;
Intention in a ITT is to solicit for a offer
Intention in an offer is to be bound
Examples of ITT
Advertisements
Case : Partridge v Crittenden (1968)
Shop display
Case : Fisher v Bell
Self service stores
Case : Pharmaceutical Society of GB v cash Boots Chemist (1952)
Provision of information
Case : Harvey v Facey
Lapse of offer
Can be withdrawn anytime before acceptance
Case :Byrne v Van Tienhoven (1880)
Dickinson v Dodds (1879)
Upon rejection
Upon lapse of prescribed time
Upon lapse of reasonable time
Death of offeror
Acceptance
Person accepting must be aware of offer
Case : R v Clarke
Cross offers do not constitute an agreement
Case :Tinn v Hofmann (1873)
- Acceptance must be unqualified
Communication of acceptance
Must be communicated unless:-
-Waiver
-Silence (agreed)
-Postal rule applies
Case : Adams v Lindsell (1818)
Entores v Miles Far East Corporation (1995)
Consider : Electonic Transaction Act
Consideration
Is the price of the promise
Contract operates on a quid pro quo basis
Consideration - time
Executory – promised but not performed (valid)
Executed – promised and performed (valid)
Past – promised after contract (invalid)
Case: Roscola v Thomas (1842)
Pau On v Lau Yiu Long (1980)
Consideration – must move from promisee
This rule stipulates consideration must move from the party wishing to enforce the promise
He has to be a party to the contract
Contract (Third Party Rights) Act
Case : Tweedle v Atkinson (1861)
Consideration – sufficient not adequate
Contract rules not concerned with the adequacy of the bargain;
Consideration must be sufficient
Insufficient Consideration
Moral obligation
Case : Eastwood v Kenyon (1840)
Vague promises
Case: White v Bluett (1853)
Existing public duty
Case:Glassbrook Brothers v Glamorgan CC
(1925)
Existing private duty
Case:Stilk v Myrick (1809)
Williams v Roffey Brothers (1991)
Consideration – Rule in Foakes v Beer
Payment of lesser sum in satisfaction of greater sum (invalid consideration)
Case : Foakes v Beer (1884)
Exception – Promissory estoppel
Case :High Trees v Central London
Properties (1947)
Intention to create legal relationship
Distinguishes legal contract from informal social domestic contract
The test is the intention of parties
Presumption
Social Domestic ( no ITC)
Case :Merrit v Merrit (1970)
Commercial (always ITC)
Case : Edwards v Skyways (1964)
Conclusion- Formation
In this part of the lectures we have seen how a contract is formed.
A contract improperly formed is not enforceable.