Commercial :Law - some questions

Commercial Law (Semester 1 2012)

Lecture Outline

1. Introduction to Legal Rules

2. Formation of Contract

3. Vitiating Factors

4. Vitiating & Terms of Contract

5. Terms of Contract (2)

6. Discharge

7. Remedies

8. Negligence

9. Revision





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Course Outline

Part 1 – Introduction to Legal Rules

Part 2 – Introduction to Contract

Part 3 – Tort

Introduction to Legal Rules

Moral Rules

Rules of Nature

Religious Rules

Legal Rules

Conclusion : Rules determine how we do things and explains why we do things;It also helps us ensure things are done in a particular wayIt 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 TreatDifferentiated by intention;Intention in a ITT is to solicit for a offerIntention in an offer is to be bound Examples of ITTAdvertisementsCase : Partridge v Crittenden (1968) Shop displayCase : Fisher v BellSelf service storesCase : Pharmaceutical Society of GB v cash Boots Chemist (1952)Provision of informationCase : Harvey v Facey

Lapse of offer:

Can be withdrawn anytime before acceptanceCase :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 offerCase : R v Clarke

Cross offers do not constitute an agreementCase :Tinn v Hofmann (1873)

Acceptance must be unqualified

Communication of acceptance -Must be communicated unless:-

Waiver-Silence (agreed)

Postal rule appliesCase : 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 promiseHe has to be a party to the contractContract (Third Party Rights) ActCase : Tweedle v Atkinson (1861)

Consideration – sufficient not adequateContract rules not concerned with the adequacy of the bargain;

Consideration must be sufficient

Insufficient Consideration eg

Moral obligationCase : Eastwood v Kenyon (1840)

Vague promisesCase: White v Bluett (1853)

Existing public dutyCase:Glassbrook Brothers v Glamorgan CC(1925)

Existing private dutyCase: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 LondonProperties (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.

Posted by SK Yeo at 11:23 PM 4 comments

Eco Fin - Commercial Law (Sem 2 - 2011)

Eco Fin – Commercial Law

17th August – Introduction

24th August – Formation1

31st August - Terms

7th September – Terms/ Vitiating Factors

14th September – Vitiating Factors

21st September - Discharge

28th September - Remedies

5th October - Negligence/Revision

Law of Investments (Sem 2 2011)

Law of Investement

2nd August - Managed Investment Schemes

16th August - Securities

23rd August - Investment in Equities

6th September - Investments in Real Estate

13th September - Consequences of Death & Relationship Breakdown

20th September - Structures of Holding Investments

27th September - Insolvency

4th October - Revision

Tort - Negligence

Part 3 - Tort
Introduction
Tort is a civil wrong actionable for damages
Classified into Intentional Tort, Strict Liability or Negligent Tort

Intentional Tort
Tort done intentionally
Trespass to person
Trespass to goods
Trespass to property

NEGLIGENCE

Is a Tort
Need to prove 3 elements:-
Duty of Care
Breach of Duty
Causation

Duty of care
Is determined primarily by the “Neighborhood test”
Case : Donoghue v Stevenson (1932)
Some special cases:
Negligent statements
Nervous shock

Negligent Statements
Need for special relationship
Reasonable reliance – factors
-Paid advice
-Business of giving advice
-Disclaimer
Cases :
Hedley Byrne v Heller & Partners
Esso Petroleum v Marden
Caparo Industries v Dickman

Nervous Shock
Must be a recognizable psychiatric illness
Conditions for claim:-
Witnessed the accident or immediate aftermath
Own unaided senses
Close relationship
Cases:
McLoughlin v Obrien
Alcock v CC South Yorkshire

Breach of Duty
Reasonableness
Level of Skill (Wells v Copper)
Likelihood (Bolton v Stone)
Seriousness (Paris v Stepney BC)
Cost (Latimer v AEC)
Res Ipsa Loquitor

Causation
In Fact – “But For Test”
Barnet v Chelsea & Kensington Hospital
In Law – “Remoteness”
The Wagon Mound

Damages in Tort
Special Damages
Medical Expenses
Personal Belongings
Loss of Income

General Damages
Pain
Future Loss
Loss of Amenities
Future Medical


Conclusion - Negligence
You need to understand the elements required for the tort to be established
You need to analyze the element of fault

Remedies in Contract

Remedies
In this part we try and understand the various remedies that the aggrieved party to a contract can seek from the courts

Remedies in Contract
Damages
Injunction
Specific Performance

Damages
Monetary compensation
Compensatory Principle
Restitio in Integrum – put parties in the position had the contract not been breached
Johnson v Agnew (1979)
Requires proof of causation
Remoteness
Mitigation
Assessment

Causation
Question of fact
Whether the breach caused the damage

Remoteness
Test in Hadley v Baxendale (1854)
Normal Loss (usual course)
Abnormal loss (contemplated)

Mitigation
Duty to minimise the loss
Duty is to take reasonable steps
British Westinghouse v London Underground Electric Railway(1912)

Assessment
Liquidated claims
Unliquidated claims
Loss of enjoyment (Jarvis v Swan Tours)
Penalty clauses

Specific Performance
Equitable remedy
Discretionary
Not given if damages is adequate

Injunction
Equitable remedy
Prevents an action
Interlocutory
Permanent

Conclusion - Remedies
In this part you would have to understand the consequences of the breach – what parties are entitled to upon a breach and how these remedies can be awarded

Discharge

Discharge of Contract
In this part of the lecture we determine when the obligations created in the contract ends

Discharge of Contract
Obligation arises upon formation
The obligation is discharged upon the occurrence of a factor

Performance
Obligation is discharged upon performance of the obligation
By performance we mean precise performance (Cutter v Powell)

Exception to precise performance
De minimis Rule
Prevented Performance
Divisible Contract
Acceptance of partial performance
Substantial Performance

Breach
Where a party fails to perform his obligations, his primary obligation is discharged
There are 2 categories of breaches – actual or anticipatory

Agreement
Existing
Subsequent

Frustration
Discharges parties obligations immediately
Need to prove :-
Supervening event
No fault of parties
Radical Change in Circumstances
Davis Contractors v Fareham UDC (1956)

Radical Change
Destruction of subject matter
Non occurrence of event
Government interference
Personal Incapacity

Effect of Frustration
Common Law position – Fibrosa Spolka (1943)
Frustrated Contract Act

Conclusion
Obligation in a contract (primary) continues until discharged
Secondary obligations may arise as a result of breach ie. pay damages