Find the difference between a contract and an agreement.

A
contract is a legal agreement between two or more entities,
enforcing an obligigation to do something or to retrain from doing
certain things. But all legal agreements are not contracts.
Any agreement is to be considered legally binding and becomes a
contract when three becomes a contract when three conditions
are met. The condition are offer and Acceptance, intention to
create relation and consideration. If any of these conditions are
not met then contract is not legally binding and it cannot be
enforced on the other party.
An agreement refers to meeting of minds at a certain point.
Agreements may be form a business commercial or domestic
view. If the agreement is not legally binding it cannot be enforced
by law.
An agreement becomes a contract when it is made legally
binding and on meeting the three conditions
When partners enter into an agreement, terms and conditions are
agreed among themselves, where as in some specific contracts,
terms and conditions are implemented by law.
The remedies for breach of contract and of an agreement are
totally different.
Find the source of the law of contract.
It is actually a body of many laws emanating from many sources.
These sources of law include:1.) Common

law, it is also known as case law, this is law found

in the decisions of the courts rather than in statues judge
made law, whenever a court renders a legal decision that
decision becomes binding on the court and its inferior courts
when the same issues again in future, this decision made by
the courts is known as the doctrine of stare dec.. which
means standby precedents and do not is disturb settled
points.

Common law is fluid always changing with societal values and

expectations.
Statutory law, the legislative branch is responsible for creation of
law legislative possess the authority to modify, abolish or adopt
common law.

Administrative law, these are government units which administer

the affairs of the government. There are actual two types of
agencies, admistratvive and regulatory.
The administrative put into effect government programs, while
regulatory is to oversee and regulate, both receive their powers
from the legislative branch because legislative dont posses the
time or the expertise to write procure statutes, they often enact
a very general statute, which grants one or more administrative
agencies to make more precise laws .Administrative laws are
known as
regulations court
rules; just as
administrative
agencies need authority to fill in the gaps of legislation so do
courts to fill in the gaps left by legislatures, the court has adopted
court rules which also govern civil and criminal processor court
rulers may not conflict with legislative mandater, if a rule does,
the statute is controlled. Most court rules are drafted under the
direction of the highest court and becomes effective either by
vote of the court or after being presented to the state legislative
for ratification.
Constitutional law, it usually has a major impact on the legal
system and our society as a whole. No law may be passed or
enforced if they are in conflict with the constitution .
Find the significance importance of the law of contract
Contract law server as the foundation of our entire society. The
society depends upon free exchange in the marketplace at every
level and contract law makes the possible.
Exchanger in the market place always depend upon voluntary
agreement between individuals or rather legal persons, such
voluntary agreements could never work without contract law.
Contract law serves to make these agreements enforceable which
means that it allows one party to a contract to obtain money
damager from the other party upon showing the breach of a
contract.
Contract law has made
workable and practical.

What is contract?

there voluntary agreements become

Treitel .: defines a contract as an agreement giving

rise to
obligations which are enforced or recognized bylaw, the factor
that distinguishes contractual from other legal obligations is that
they are based on the agreement of the contracting part.
Pollock : defines a contract as a promise or a set of promises
which the law will enforce
Anson says that the law of contract may be defined as the breach
of the law which determines the circumstances which a promise
will be legally binding on the person making it.
Types of contracts.

Written contracts, the insists they must be written, must be

embodied in a formal document eg three purchase insurance
sell of land.

Contract
requiring written evidence, they
must be
evidenced by some note or memorandum, the memorandum
must describe the parties effectively and also describe the
subject matter, consideration and may also contain
signatures of the involved parties.

Simple contracts is an express or implied agreement creating

legal rights and obligations it needs not to have any special
form as it can be entirely oral, written, partially oral, written
or merely im. From conduct, it must be supported by a
valuable consideration otherwise it is void.

Terms used in contracts.

Binding- its one that the court will enforce if one of the
parties contract defaults, An agreement is not binding on the
parties unless the parties intended to create legal relations.

Void contracts :It does not have legal effect ie not a contract
such an agreement does not confer legal rights on the
party.

A contract is void under the following circumstances

Absence in one of the element of a contract

Where the contract lacks the necessary from eg should be in

written and is not.

Certain contract made by minors eg lending minors money

Illegal contact contrary to the constitution.

Vouelable contract : It is valid initially but may be brought to an

end/ Avioded at the option of one of the parties the right to avoid
is given to an innocent party.
Unenforceable contract :These are contracts that are
valid by
unenforceable at law because of absence of evidence of the
contract, this means only persons who have any rights or
obligations under a contract are those who are privy to the
contract. There are exceptions to this, trust relationship, Agency
relationship.
Essentials of a valid contract.

Must have an offer and acceptance

Must have intention to create legal relations

There must be consideration

The parties must have capacity to contract

It must be legally binding

Offer.
A contract comes into existence when a definite offer has been
unconditionally accepted, the party making the offer is called the
offer or, the party accepting it is the offence.
An offer is an intimation by words or conduct of a willingness to
enter into a legally binding contract specifying the terms of the
terms of the agreement which will be formed, should the offer be
accepted by the party to whom it is addressed.
Rules governing offer.
An offer may be made orally, writing or by conduct
Merely giving information does not constitute to an offer.
Harvey Vs Facey (1873) the plaintiff telegraphed will you sell
bumper hail pen? Telegraph the lowest price. The defendant
replied by stating lowest price is $ 900)
The plaintiff telegraphed stating we agree to buy bumper hall
pen at $ 900 started by you please send the title deed

The court held that the defendant was merely answering a

request for information and did not give an offer which could be
accepted.
May be made to a definite person or definite persons in which
care only the person /persons may accept /or to the whole world
at large where it may be accepted to nay person complying the
terms of the offer.
An offer is specific it directed to a person /or group or it can be
general if accepted b y anyone who comlies with the terms of the
offer carlil Vs Carbollive smoke ball company (1893)
In this case carbollice smoke ball company made a product
collect smoke ball it claimed to be a cure for influenza and a
number of other diseases, the company published advertisements
in the press
The product according
to the instructions set out in the
advertisement ($ 100 award will be paid to any person who
contracts the increasing influenza colds or any disease caused by
cold, after having used the ball 3 times daily for 2 weeks
according to the printed direction supplied with each ball.
A thousand pounds is deposited with Alliance bank showing our
sincerity in the matter
Mrs Carlill saw the advertisement, bought one of the balls and
used it in accordance with the instructions. She contracted the
flu and claimed the $ 100 from the company, the company
refused to pay her and she brought a claim to court, she
contended that the adv and her reliance to it was a contract
between her and the company and ought to pay, the company
argued that it was not a serious contract. The court of appeal
rejected the companys argument and held there was a fully
binding contract of $ 100 with Mrs Carcill among the reasons
given b y the 3 judges

The advert was a unilateral offer to the whole world.

That satisfying conditions for using

constituted acceptance of the offer.

That purchasing the smoke ball or using constituted good

consideration because it was a distinct deter.. incurred for
the benefit of the company and further, more people buying

the

smoke

ball

the smoke ball by replying on the advert was a clear benefit

to

That the company claim that it $ 1000 was deposited at the

alliance bank showed the senour intention to be legally
bound.

The offer must be communicated to the offered a person

cant accept an offer that be doesnt know exists.

Taylor Vs Laird (1856) in this case during a voyage the plantiff

gave a command of the defendants ship but helped t o work it
home and claimed payment for this, it was held that there was
no contract as he had not communicated his offer to do his work.

The offer must be firm Farina Vs Fickus (1900) A father

wrote to the man who was about to marry his daughter
stating that his daughter will derive a benefit under his will,
this letter was held to be an expression of intention and not
a firm offer capable of acceptance.

The offer may attach any condition to the offer but they
must have been communicated to the offered before they
bind him b y the acceptance of the offer. The offeree cannot
bind the other party without his consent eg writing to
someone saying if I dont hear from you within a week I will
consider the house is mine for a million shillings.

Terms of the offer must be certain Scammell (G) & Nephew

Ltd Vs Ouston (1941) Ouston (p) wrote to the
defendant
company (D) ordering a comer motor van, stating that the
order is given on the understand, that the balance of
purchase
price
can
be
on
h
ire
purchase
term.agreement between the partner. The trail
court and the court of Appeal decide that there was a
contract between the parties, and D appealed to the house
of Lords. It was held that there was no contract as the phrase
on hire purchase was too vogue the constitute a binding
agreement.

An offer must be distinguished from an invitation to tret

/bid .An invitation to treat is an invitation to person to make
an offer or to negotiate . The acceptance to an invitation to
treat will not create a contract.
a)

Display of goods

b)

Advertisements

c)

Tender

d)

Auction

Display of goods Ersher Vs Bell (1961) IQB A shopkeeper

displayed a thick knife in his shop window stating Ejector 4
cents He was charged for offering the knife for sale contrary to
sec (1) of the restruction of offensive weapons cents of 159.It
was held that the display of goods on a shop window with a
price ticket was merely on lit and not an offer for sale and hence
no offence had been committed.
Pharmaceutical society of great Britain Vs Boots cash
chemist (1953) 1 Q B 401, Boots was charge d with an offence
under the pharmacy and poisons in Part 1 of the poisons list. Take
place under the supervision of the registered pharmacists, boots
operated to self service and pharmacist at the cash desk was
authorised to prevent the removal of nay drug from the premises.
The fact or determines whether an offence was committed war
the point at which a sale in this self service store took place, the
court of Appeal held that boots had not committee no offence,
the display of gods on a supermarket shelves was merely an
invitation for customer to bill.
Advertisement, general pattridge Vs Crittendnden (1968). The
plaintiff had placed an advertisement in a periodical indicating
that he had certain wild birds for sale, it was an offence to offer
such birds for sale, the advertisement stated the price but gave
no details of delivery.
It was held that the advertisement was an invitation to trea and
not an offer to sell.
A unilateral contract is where one party binds itself to perform a
stated promise upon performance of the requested act condition
by the promise.
However the promise giver no committement to perform the act
or condition or rather is left to choose whether to perform or
not.
If a re ward is advertised, to the performance of a certain act,
the advertisement
will constitute a unilateral offer. The
acceptance of such an offer is the performance of that act and it
cannot be accepted by making a promise.

Where as the general rule is that an acceptance must be

communicated to the offer or the offer or may impliedly waive
this requirement and will be taken to done so if the offer is
unilateral un less there has been an express indication of the fact
that notification
is
required. In a unilateral contract the
requested act is both the acceptance and the consideration of
the promise. Since acceptance is the performance of the
stipulated act and performing this act might be a continuing act,
the general principle should be that the offer may be revoked
anything before the act is fully performed however in a unilateral
offer its impossible to revoke once the offence has started to
perform. Although the general role is that the revolation of an
offer
In the case of a unilateral offer to the whole world since its
impossible to identify the potential offences. Revocation is
sufficiently communicated using the same channel that was used
in communicating the offer.
Tenders
The request for tenders is a negotiating device common in the
world of major commercial contracts A company seeking to
purchase a major item or service, such as a piece of equipment or
some construction work will invite tender from those interested in
supplying the goods or services sought. Such an invitation maybe
published generally or in a trade journal, or
circulated to
companies likely to be interested. The invitation for tender is not
threaded as an offer, since
the company issuing it may have
criteria other than price which it wishes to take into account in
awarding the contract. Spencer Vr Harding (1870) LRS (P
561) D sent out a circular. We are instructed to offer certain
business stock ) to the wholesale trade for sale by tender ps
tender for the stock was the highest that D received , but D
refused
to accept it. Ps contention was that the circular
amounted to an offer and contained a promise to sell to the
highest bidder. The court held that there w as no tender.
The person requesting the tenders has the freedom to determine
which (If any) they will accept.
Exceptions where the request can also constitute an offer. There
are however situations where the request to submit tender can
also constitute an offer which, it accepted, will form a binding
contract contains a specific promise.

Express contractual promise to accept the most competitive bid in

Harvela Investments Ltd V Social Trust Co Canada Ltd sought a
single offer for the whole plot from each of two interested parties,
promising to accept the highest offer provided it met other
condititions stipulated both parties submitted bids complying with
the conditions, but while one merely stated a pure it war prepared
to pay, the other stated both a concrete sum and a referential bid.
The question for the house of Lords war when of the two bids was
the higher, thus constituting the acceptance necessary for the
formation of the agreement. The plantiff claimed that the second
dependants b id war not valid as it was not within the terms of
the original invitation to bid ( because it was not a single offer.
The plaintiff succeeded in their action and the house of Lords
restored the original decision in the plaintiffs favour.
Contractual obligation to consider tenders which confirm to the
bid conditions . In Blackpool and fylde Aero Club Ltd Vs Blackpool
Borough counal (1990).The defendant council owned an airport,
from when it permitted an air operator to run pleasure trips. The
concessions and on the expiry of the last concession, the council
invited the club and fix other parties to tender for the rights to
operate pleasure flights from the airport. A very clear procedure
for submitting bids was laid down b y the council, and it was
stated that tender received afternoon, 17 March 1983,would not
be considered. Only the plaintiff club and two others responded to
this invitation. The plantiffs tender was put in the town hall letter
box hour before the deadline, but due to an oversight, the letter b
ox was not cleared by council staff that day as it was supposed
to be. The council accepted that this was due to administrative.
The plaintiff tender was recorded as late and was therefore not
considered. The club contended that the council was contractual
beyond its sought damages from the council. The court of Appeal
held that the council was liable in damages to the club for breach
of contract.
Auctions
Where an auctioneer asks for bids, he is not making an offer to
sell the goods to the highest bidder .It was established in Payne
Vs Care (1989) that the auctioneer is merely inviting offers for
bidder, which he can other accept or reject. This rule is now
encapsulated in 57 (s0 of the sale of Goods Act 1979, which
starts. A sale by auction is complete when the auctioneer
announces its completion b y the fall of the hammer,orin other

customary manner; and until the announcement is made any

bidder may retract nor bid.
In the case of Harns Vs Nickerson (1873) the plaintiff failed to
recover damages for loss suffered in travelling to the advertised
place of an auction sale which was ultimately cancelled. His claim
was condemned as an attempt to make a mere declaration of
intention a binding contract.
Does an auction sale without reverse constitute a definite offer to
sell to the case of Waslow Vs Harrison (1859) the action in
this case failed both in the queens bench and in the court of
Exchequer chamber were of option that he would succeed if he
brought a fresh action pleding that the aunctioneer, by his
advertisement had implicity pledged himself to sell to the highest
bidder.
In Barry Vs Devies heathcore ball & Ltd [2007]. The court
had no doubt that an auctioneer who stated that an auction was
without reserve entered into a collateral.
The care concerned the sale of two machines at an auction
without reserve. The plaintiff was the only bidder for the two
machines, worth about $14,000 each. The auctionees withdrew
the machines from the sale on the basis that the bids (of $200 for
each machine)were too low. The plaintiff claimed damager
representing the cost to purchase the machines elsewhere less
the amount of his auction bid.
Termination of Offer
An offer comer to an end in the following ways
-

On death of either the offerer or offeree before acceptance

Duffs executors sale(1886) having been offered shares in

exchange for other duff died and his executors purported to
accept the offer, it was held that the offer duffs death.
By non acceptance within the time fixed for acceptance of within
a reasonable time where no time limit is prescription
Ramrgate Victoria hotel vs Montflore[1866] on 8thJune the
defendant made an offer to take shares into the hotel this was
accepted on 23rd November it was held that the 5month interval
was unreasonable and the offer had lapsed.

Revoked before acceptance Offord Vs bavier (1862) The defense

guaranteed to secure money advanced to a 3 rd party on discount
for to space of 12 calenda months. The court held that the offer
could be withdrawn within a specific period unless it had been
accepted upon. The renovation of an offer must generally be
communicated to the 3rd party revocation of an offer must be
communicated to the offence before acceptance, it might be
made to the offer or indirectly and it is of no effect until it Vs
actually brought to the notice of the offence .(Henthom Vs Fraser
(1872).
There was some offer to buy some houses which was handed to
the plaintiff by the defendants secretary. About midday the
following day, the secretary ported a withdrawal letter which did
not reach the plaintiffs had home until 5pm.
Meanwhile at3.50pm the plaintiff had ported an acceptance letter
which was received at 5pm when the offices where closed. The
secretary opened the letter the following day, the defendant
refused to accept the offer and the plaintiff sued for specific
performance when the defendant refused to sell the house, the
court of appeal emphasized that the postal rule applied to
acceptance, it was held that the revocation was not
communicated and therefore a contract existed.
Offer may be rejected by the offence communating his rejection
to the offer or. Rejection or refusal of the offer causes it to lapse.
The offence cannot change his mind later and accept unless the
offer or is willing to make a fresh offer.
An offer lapser when a counter offer is made. Hyde Vs Wrench
(1840) The defendant offered to sell the estate to the plaintiff
to $ 1000 on 8th June in reply the plaintiff made an offer of $950
which was refused on 27th June . Finally on 29th June the plaintiff
wrote he was prepared to pay $1000 it was held on contract
existed in his letter of 8th June the plaintiff and rejected the
original offer of $ 1000 and made a counter order of $ 950 no
loner able to a subsequent acceptance.
Where acceptance of the offer is not made in the special manner
required if any the offer will lapse.
Acceptance
An acceptance Is the final land unqualified expression of the
assent to the assent to the terms of the offer ie it must be

unconditional if an acceptance is subjected to condition this

amount to a counter offer which terminates the original offer.
Rules governing acceptance

Acceptance must be communicated and mere intention to

accept it is not sufficient.

This rule is subject to the following exceptions

Where the offeror expressly or impliedly waives

communication eg in a general offer which requires mere
conducts as acceptance.

Where the contract is made by post or post is envisaged

as the means of communication, here the acceptance is as
the means of communication, here the acceptance is
complete as soon as it is ported, provided the letter is swell
stamped and addresses .In such a case it does not matter
whether the letter is lost the past or never reaches the
offeror.

An acceptance of an must be absolute and unconditional

where the acceptor varies the terms of the offer which
amounts to a counter offer.

Acceptance must be communicated to the offerer in the

manner prescribed.

Acceptance must be mad within the time prescribed by the

offeror and if there is no time is specified, then within a
reasonable time.

Acceptance of an offer by sending of a letter N complete

once the latter is posted. This applies when the letter is
delayed in past or is lost entirely or does not reach the
offeror. Adams Vs Lindsell (1818) the plaintiffs were
woolen garment manufacturers while the defendants wrote
to the plaintiffs offering a quantity of wool with certain terms
and requiring an answer in the form of post.

The defendant misdirected their letter of offer and did not

reach the plaintiff until the evening of 5 th Sept. The plaintiff
posted the letter of acceptance on the same night which was
delivered to the defendant on 9th Sept. If the original offer
was properly addressed the reply was required on 7 thSept,
the defendant sold to a third party was required on 7 th
September, the defendant sold to a third party on 8 th Sept,

the court held there was a binding contract between the

parties because the offen was accepted immediately on
being received.

Acceptance once made cannot be revoked.

It is not permissible for the offeror to bind the other party to

a contract by stating the later silence shall be taken as
acceptance.

Agreement on acceptance can be inferred from conduct.

Brogden Vs Metropolotan Railways Co. (1877) Brogden had
suggested to the railway that they should enter into a formal
contract for the supply for coal. The company sent the terms of
agreement.
Brogden sent the name of an arbitrator to settle any
differences before writing approved.
The manager then ordered and received coal on the basis of
the arrangements in this .
It was held that by inserting the name of the arbitrator
brogden had rejected the offer and made a counter offer this
counter offer was accepted by the company by ordering and
taking the delivery of the coal upon the agreement, there was
therefore acceptance through conduct. Stexenson Jacq ues
& Co Vs Mclean (1880). The defendant had made an offer
to sell iron at Kshs.40 net cash per ton to the plaintiffs and
stated that be would hold the offer open until the following
Monday, the defendant sold the iron and informed the plaintiffs
of this by a telegram sent at 1:25pmbefore this arrived at
1:46pm the plaintiff sent an acceptance telegram to the
defendant at 1.34pmthe plaintiffs brought an action for non
delivery.
It was held that through the defendant was free to revoke his
offer before the close of the day on Monday any revocation
would
not have effect until it reached the plaintiff
consequently, the defendants offer was still open when the
plaintiff accepted it at 1.34pm on sending the telegram.
Acceptance must be made in response to the offer.
An offer is not accepted by doing the required act in ignorance
of the offers, if the offence responds in knowledge has motive
in doing so is irrelevant Vs Clarke (1927) A reward was

offered by a government of Western Australia for information

leading to the arrest and convictions of the persons who
committed the murder of two police officers Clarke are this
information after he had been arrested intension was to save
himself from an unfounded charges so that he had acted on
the faith of 1 in reliance upon, the offer. The jury said that the
plaintiff gave information to ease her conscience and not
But the judgement was upheld in the kings bench. Motive was
irrelevant, provided the act was done in knowledge of the
reward. Acceptance was then related to offer.
Gibbons Vs Pructor (1891) On 29th May, the defendant had
offered a reward of $ 25 to the person who gave information
leading to the conviction of the perpetrator of a particular
crime, to police superintendent. The plaintiff, a police officer,
had already communicated the required information to the
collegue named cappin, with inst ructions to forward it to
superintendent.
Coppin had communicated the information to its superior,
inspector lennon, who had passed it on the superintendent. The
information reached superintendent on 30th May.
It was held that the plaintiff was entitled to the reward.
Coppin and lennon were the plaintiffs agents for the purpose of
conveying the information .The terms of the offer required the
information to superintendent and at that time the plaintiff
knew that a reward had been offered.
Instantaneous methods of communicating acceptance where
an acceptance is instantaneous actual communication is
required an the portal rule does not apply.
Instantaneous acceptance can be by telephone ,telefax or
email
In Entores lts Vs m. far east corporation (1955). An
English company received a telex after from a Dutch company
and made a counter offer which the dutch company accepted
by telex. The English company needed to establish that the
contract was made within the jurisdiction, it was held since the
acceptance was made within the jurisdiction, it was held since
the acceptance was received in England the contract was
made within the jurisdiction in Brinkibon Ltd Vs stahag Stahl
(1983) the facts were for all practical purposes identical save
that the offer was made by telex in vienna and accepted by a

telex message fromLondon to Vienna the House of Lords held

that the contract was made in Vienna.
Does the postal apply to acceptance message sent by
electronic mail?
This may depend on precise method of transmitting and
whether for eg the parties communicate via common server,
whether the messages are sent to the recipient server or
whether they are stored before dispatch given these many
variable it is advisable to avoid postal rule and require actual
receipts.
CONSIDERATION
A promise is not as a general rule binding to a contract unless it
is supported by some consideration. The traditional approach is
to identify consideration as a determine to the promise and a
benefit to the promisor.
Currie Vs Misa [1875] a valuable consideration in the sense
of law may consist either in some right, interest, propt, benefit
accruing to one party or some forbearance detriment, loss,
responsibility, given, suffered or undertaken by the other party.
The second approach to consideration definers it as the price
requested by the promisors promise was bought. Dunlop
prematic Tyre Company Vs Selfridge & co. Ltd [1915] Act
or forbearance of one party or the promise thereof is the price
for which the promise of the other is bought and the promise
thus given for value is enjoyable.
Ruler governing consideration
There are 3 types of consideration

Executory this is a promise that confer a determent or

enjoys the profit at a future time.

Executed this is completely performed by one party once

the contract has been entered into.

Part this is executed before the contract is entered into

and it is generally not recognized to support a contract.

Collins
Vs
Godefry
[131]
The
claimed
was
to attend a court rearing to give evidence
on the defendants behalf and he later alleged that the
had promised to pay him 6 guinea for his trouble it

was held that he could not recover the since he was

already consider.
If a promise is ready under a legal obligation towards the promise
the consideration inadequate. If a person either does or promise
to do what they are legally bound to do in exchange of promises
suffer no legal detriment and confer no legal benefit so that this
doesnt constitute to sufficient consideration.
Williams Vs roffey Brother & Nicholls contractors Ltd [1990] The
defendants
were
building
contractors,
engaged
to
refus. 27 flats. The claimant was engaged to carry out
the carpentry work for $20,000.The defendants were operating
under a penalty .. in the main contract. I became apparent
that the daimant would have difficulty finishing the contract at
the price stated. It was therefore agreed in April 1980 that he
would be paid a bonus of $575 per flat completed after that sate.
By the end of May 198 the defendants had made only one further
payment of $1500 .. though a further eight flats had been
completed. The daimant cease work and the defendants
employed other carpenter to finish work. The daimant claimed
$10,847. The defendant argued that this was only payable after
completion of the work. The court held that there was sufficient
consideration to make the defendant promise enforceable.
Dunlop preumatic tyre Ltd V selfridge & Ltd [1915] Dunlop
made tyres. It did not want them sold cheaply but to man train a
standard retail price. It agreed with its dealers not to sell them
below its recommended retail price. It also bargained for dealers
to get the same undertaking from a purchaser. If retailer did sell
below the list price, they would have to pay $5 a tyre in liquidated
damages to Dunlop. When Selfridge sold the tyres at below the
agreed price Dunlop sued to enforce the contract by injuries and
claimed damages. At trial it was in favour of Dunlop, but in

..
If the promises is already under a public duty there is no
consideration. In Shil Vs Myrie [1809] the captain of a ship
promised the crew if they shared the work between them the
work of two sea men who deserted the wages of the deserter will
be shared between them, it was held the promise was not binding
because the sea men were given no consideration and were
contractually bound to do extra work to complete the voyage
The excephons to this rule,

i.

If a plaintiff performs more than his existing duty

Glassbrook brothers ltd Vs Glamorgan country council

[1925]
The police were offered $2200 to provide a special guard
for a coalmine during a strike. It was held that they could
recover the amount when the owner refused to pay
because the special guard went beyond ordinary police
duty to protect.
ii.

When the change circumstances destroy the original

contract thereby freeing the parties from the original
contract
Hartley Vs Ponsonby Ltd [1857] in this case a ship
crew was seriously depleted after a no. of desertions, the
captains promised extra pay to the remaining people if
they dangerous to put a sea ship so under manned the
sea men were not obliged to do this under there contract
of service. And they were free to enter another contract in
the remaining part of the voyage.

iii.

When a person contractually bound promises to perform the

some act for another person Shadwell Vs Shadwell
[1860] after his engagement to Elen Nicholl the plaintiff
received the following letter marriage to Nicholl and as I
and promised to help you in the starting I am happy to say
I will pay you $150 during my life and until your annual
income derived from your profession of chancery barrister
shall amount to 600 gainer. The plaintiff claimed arrears in
this yearly sums from the under executors alleging the
consideration to be his marriage to Ellen Nicholl. It was
held the promise was binding because it was supported
with sufficient consideration.

2. Consideration need not be adequate or equivalent to the

promise but it must be of some value. The court will not question
whether the valu is adequate and will not interfere with the
fairness of the bargain made by the parties.
White Vs bluetl[1853]bluett had given his father a
promissory note (to acknowledge debt) for money that his
father had lent him. His fathers executors sued him on the
note and he claimed in his defence that his father had
promised to discharge him for the obligation if he would stop
complaining about the distribution of his property among his

children. It was
held that bluett had not provided any
consideration for such a promise but his father he was under no
legal duty to retrain-from complaining and his forbearance
could not amount to consideration.
Hamer Vs Sidway [1891] an under promised his nephew
5000 dollars if the nephew would retrain from drinking lequior,
using tobacco, swearing and playing cards or billiards for
money until he should become 21years of age. The nephew
complied but the unders executors refused to make payment
sufficient consideration to claim. It was held that the
consideration by restricting his lawful freedom of action.
3. consideration must be legal e.g a promise given in
consideration of
an agreement to rob a bank would be void because the
consideation itself is illegal.
4. consideration must move from the promise, Tweddle Vs
Alkinson [1861] it was firmly established that a stranger to a
consideration cannot sue to a contract only parties to a contract
have obligation under it.

i.

Actions by beneficiaries under a trust

If the facts shows that the person entitled is a beneficiary
he may sue under the trust himself thou not under the
contract

ii.

The principal even if under closed may sue on a contract by

an agent

5. consideration must be possible the law will not enforce the

contract which is beyond the power of a human being.
6. consideration must no be passed any act craned out before a
promise is made cannot be a sufficient consideration to support
the promise because it is not carried out in exchange of the
promise Re mac Adle [1951] The testators widow had a life
interest in a property that was left upon trust for the testers 5
children. In 1943 improvements were craned out to the property
and paid for by one of the childrens wife in 1945 after this work

was completed the 5 children signed a document addressed to of

your carrying out of alteration and improvements to the proper
we the beneficiaries shall hereby agree that the executors shall
repay to you from the said estate, the sum of $488 in settlement
of the amount spent on the improvements. When the testators
window died the wife claimed this sum under the agreement held
that since the work had between completed before the
agreement of 1945 the consideration for it was passed and the
agreement was unenforceable.
Prior request device
There is a device which can be employed by the court to avoid
the literal nature of past consideration rule and to allow such
promises to be enforced. There must be aprior request to carry
out the act which carries with it a promise to pay or benefit the
performed of the act income way. Pao on V lau yin long [1980]
PART PAYMENT OF A DEBT
Where a creditor promises to accept a . Than is
due homa debtor and promises to not sue to the balance there is
a (debt contract). In pinnel care, the court of common pleas held
that in such circumstances the debtors must provide
consideration for the creditors promise to release him. Simply
paying a smaller sum than that owed will not be sufficient since
the debtor has done only what was legally obliged to do anyway.
Under the debt contract traditionally the factual benefit that
might accrue the creditor from securing some payment rather
than anything at all, was not considered sufficient and some
separate consideration for the promise to forego the balance if
accepted by the creditor since the court will not inquire in the
adequacy of the consideration.
Payment before the due date is a good consideration as is
payment by a different place as long as the change of venue is at
the creditors request foaker Vs Beer (1884). In August 1875
Julia Beer had obtained a high court judgment against doctor
foaker for $2090 it was agreed in writing that if doctor foaker paid
1500 immediately and $150 on two occasions each year she will
not take any proceedings whatever on the said judgment. As a
judgment debtor Dr foaker war unable to pay he interest that
had accrued on the judgment debt but the agreement had not
mentioned this Dr. Fakes paid the judgment debt in accordance

with the agreement but Julia brought an action claiming and

interest.
The question was that did it include Dr. foakes paying the interest,
it was held that Dr. Foakes had not provided any consideration for
Julius promise not taking any proceedings of the judgment so the
promise was enforceable.He had only done what he was legally
bound to do.
Hirachand Vs Temple [1911] temple had borrowed
money from the plaintiffs, money lender and had given a
promissory note. The plaintiff had pressed temple for payment
having no success they had informed his father the father sent a
draft for a smaller sum than that due on the promissory notes in
full satisfaction of the sons debt the plaintiff conked the draft but
brought on action on the note against temple seeking the balance
on the debt.
It was held that this action could not be maintained.
PROMISSORY ESTOPPEL
If a creditor promises to accept a smaller sum in fully settlement
intending the debtor to rely on that promise and the debtor relies
on it the debtor may have defense of promissory stopped when
sued by the creditor for the balance. The promise will in this way
be enforced despite the absence of consideration to support it.
Central London property trust V high trees house
(1947

Ltd

The plaintiff leased a block of flats to the defendants at a rent of

$2500 per annum shortly afterwards war broke out as a result of
which many of the flats tell vacant. Because of this, the plaintiff
agreed in January 1940 to reduce the rent by one half to 1,250
this reduced rent was paid by the defendants from 1940 to 1945
when the war ended and the fats were full once again. The
plaintiffs dammed rent at the original rate of $2500 per annum.
They tested their claim by using for the rent covering the last
quarter of 1945.
higher vs metropolitan railway co. (1877)
The plaintiff a landlord gave the defendants, his tenant .. months
notice to repair the premises, failure to do to do which would lead
to for future of the lease the notice war given in October . In
November the plaintiff opened negotiation with the defendant for

the vale of the plaintiffs interest in the premises. The negotiation

broke off on December 31st. In the mean time the defendant had
not carried out any repair work or per the October notice. When
six months lapred from the date of the notice , the plaintiff
daimed that the defendant leave was forfated and soughted to
have him ejected. The opening of the negotiations amounted to
promise on the plaintiffs part that as long as the negotiations
continued he would not enforce the terms of the notice; and it war
for this reason that the defendant had not carried out the
repairs.The six months wre to run only from the time when the
negotiations failed, and as such the plaintiff was not entitled to
eject the defendant.
Conditions in which promissory stopped will operate;
i.

There must be
a clear and unequivocal promise or
representation that existing legal rights will not be fully
enforced.
Woodhouse AC Israel Cowa Ltd Nigerian Produce
Marketing company [1972] a sale contract provided for
payment in Nigerian pounds in lagos. The buyer had asked
if the seller would be prepared to accept sterling in lagos
the seller replied n 30th September 1967.
The pound sterling was devalued that it was worth 15%
less than the Nigerian pound. The buyer agued that the
seller letter that they make payment insterlina in lagos for
the seller were stopped from going back it was held to find
a promissory stopped it had to be clear and unequivocal
(to be understood the way required) the seller
representation was not sufficiently precise to amount to
the venation of a contract or to find an stopped.

ii.

Promissory stopped can only be used as a defense and not

as a cause of action Combe Vs Combe [1951]
An exhurband promise to pay an ex wife $10 free of
income tax. However he failed to pay and six years later
the wife brought an action claiming the arrears she had
given no consideration for her husbands promise free she
had not applied to the divorce court for maintenance and
had not retrained from doing s at her husband request it
was held that the husbands promise was clear and
intended to be binding and acted upon and it was acted
upon by the wife. The court of appeal allowed the

husbands appeal and held that the wife had provided no

consideration for the husband promise and could not rely
on promissory stopped which did not give rise to a cause
of action.
iii.

The representation or promise made is birding and upon and

war infact acted upon W Y Alan & Co. Ltd Nasr Export &
Import Co. [1972]

iv.

It must inequitable to allow the promisor to go back to his

promise D&C Builder Ltd Vs Rees [1966] In 1964 July
the defendant Owen the plaintiff Builders $482. In Nov the
defendant had still not paid the plaintiff was in desperate
financial straits and it was alleged that the defendants
wife knew this when she offered to pay $300 in full
settlement, indicating that if this was not accepted the
plaintiff would get nothing the plaintiff said they had no
choice but to accept a cheque of $300 in completion of
the account. The plaintiff then claimed the balance Lord
dinning examined promissory stopped and held that it
could not apply in thus case since the promise was not
freely given it was not inequitable for the plaintiff to go
back on has promise.

v.

The doctrine merely suspends rights, it does not extinguish

them. Tool metal manufacturing Co. Tungsten
electric co. Ltd(1955)
In 1938 the tool manufacturing co. Ltd who owned certain
patents entered into a formal agreement with the
Tungsten electric Co. Ltd where by T.M.M.C gave T.E.C a
licence to deal in the products protected by the patent
until 1947, terminable by six months notice in writing on
either side, in consideration of T.E,C.Os paying a myalty of
10 per cent on the net value of all contract by T.M.M.C
clause 5 of the agreement material used by T.E.C.O
exceeded a quota of 50kilograms, TECO should pay to
T.M.M.C compensation equal to 30percent of the net value
of the excess contact material after the war tool metal
sought to reinstale their right to claim compensation .
The house of Lords held that tool metal right to claim
compensation had been suspended. This right could be

reinstated by giving reasonable nature of their intention to

enforce their right.
Baird textile holding Ltd Vs Mark & Spencer PLC
[2001]
The claimant B had supplied garments to the defendant
M&S for 30years, When M&s terminated the agreement
with effect from the end of the then current production
season. B brought an action against mand arguing that:
1.

The termination was in breach of a contract which

would be implied from the long standing relationship
between the parties that obliged M and S to continue to
place orders unless and until the contract was ended by
gluing reasonable notice and B contended that a notice
period

2.

M and S were stopped from giving less than three years

notice.
The court of appeal held that the alleged contract
obliging M and S to continue to place orders with B
failed for uncertainty. The court confirmed
that
stopped did not create the type of enforceable right
daimed by B it could not be used to found a cause of
action.

INTENTION TO CREATE LEGAL RELATIONSHIP

An agreement thou supported by consideration is not binding as a
contract if it was not made without any intention of creating legal
relations.
Intention to create legal relations is dependant upon the parts
intentions objectively judged. The traditional starting point for
determining this intention is the use of different presumptions.
Domestic & social agreement.
There is a presumption in the above agreements that there is no
intention to create legal relation.
1.

Between husband and wife Bal four Vs Balfour (1919) the

defendants husband held a post in leylon he and his wife

returned to England on leave on 1915, However when the

defendant returned to leylon in 1916, the plaintiff remained
on medical advice in England. Te plaintiff alleged that before
the defendant went back to leylon, they had entered an oral
agreement by which the defendant had promised to pay $30
a month inconsideration of not calling upon him for further
maintenance.
The parties later became estranged and the plaintiff so to
enforce the agreement it was held that since it was a domestic
agreement between husband & wife it was not an enforceable
contact.
Merit Vs Meritt (1970) after the husband had left wife he stated
that he would pay her $40 a month from which she had to pay the
outstanding mortgage on the house. He also signed a written note
which provided that when the mortgage payments had all been
he
would
transfer
the
.
.to transfer the house to her it was held that the written
agreement was intended to create legal relations between the
parties .
The presumption against such an intention did not apply when the
both were not leaving in amity but were separate or about to
separate.
2.

Between parent and child Jones Vs Padavalton (1909) in

August 1962, a daughter accepted her mother after to go to
England to study for the bar. The agreement was not put in
writing was that the mother should pay the fees and $200
maintenance per month. The mother had intended it to be in
western Indian dollars ($42) while the daughter thought it
was ($70) in us dollars. However she still accepted the
payment without objection.

In 1964 the mother orally agreed to buy a house where the

daughter could leave and it was agreed that the rent for letting
the other rooms were to pay for maintenance in place for the $42
per month. In 1967 the mother claimed possession of the house
and at the date of hearing her daughter had not competed her
studies for the bar, and she relied on this agreement as her
defense of her possession action.

It was held that the mother was entitled to the possession

because it was a family agreement and was not intended to be
legally binding it was for too vague uncertain to be considered
enforceable as a contract.
Perker Vs Clarke (1960)
Mrs, Parker was the niece of Mrs charke. An agreement was made
that the parker would sell their house and move in made that the
parkers would sell their house and more in with the Charker. This
share the bills and the charkes.
Mrs Charks wrote to the parker the expenses and confirm the
agreement.
Mr. charke changed his will leaving the house to the parkers later
the couples few out and the parkers were asked to leave. They
daimed damages for breach of contract it was held that the
exchanged of letter showed that the couples were serious and the
agreement was intended to be legally binding because.
1.

The parkers had sold their own home

2.

Mr. charke had charged her will

entitles to damager.

meaning they were

Simpkins Vs Pays (1955) The defendant a grant daughter and

the plaintiff a paying lodger shared a house. They all contribution
1
/3 of the stake in entering a competition in the defendant name
one week later a price of $750 was won but the defendant
refused to share the price and the plaintiff sued her for it was held
that the presence of the outside rebutted the presumption and
not intended to be legally binding.
Commercial agreements
There is a presumption of an intention to create legal intention in
a commercial agreement. A mere puff is not enforceable because
it is not interdict to be take literally and not promissory in nature.
Bower man Vs association of British Travel Agents ( 1996)
in this case, the diamantes had booked a school skiing holiday
through an ABTA how operators. Before the holiday the operator
became insolvent and ABTA reimbursed the holiday costs minus
$10 per person representing the insurance premium paid. The
deduction was on the basis that the sum was excluded from the
ABTA protection the nature
displayed by our operators. The court of appeal held that there

was a direct contractual relationship between ABTA and member

of the public who booked holidays with ABTA members. The notice
was a contractual after which was intended to be read, and which
would be reasonably read by a customer, as obliging ABTA to
reimburse the cost of any insurance.
Esso Petroleum Ltd Vs Commission of customer & Excise
(1976)
Esso supplied garages with world cup coins in 1970 instructing
the garages to give away one win with every your gallons of
petrol sold it was sought to subject these coins to a purchase tax
on the ground that they had been sold. On the facts it was held
that the coins were not supplied under a contract of sale. But the
house of lords divided on the issue of whether or not majority
Lord divided on the issue of whether or not there was an intention
to create legal relations. The majority Lord Simon, Lord
Wilberforce and lord fraser, held that there was an intention to
create legal relations they placed heavy reliance on the fact that
esso envisaged a bargain of some description between the garage
owner and the customer.
Letter of comfort.
Sometimes one party sender another a letter of comfort or letter
of intent. Whether the writer intends to be legally bound will
depend upon the circumstances particularly the wording of the
letter and what reliance the recipient reasonably placed upon it.
The letter may be intended .. and WinWord
Bensn Ltd Vs Malaysian Mining Corp [1989] M sent out a
letter of comfort in respect of a loan which was being made, by K,
to one of Ms subsidiaries (legally a separate company for the
default of which M could not be legally liable unless they
expressly under took legal liability) the letter of comfort stated
that it was Ms policy that the subsidiary is at all times in a
position to meet its liabilities in respect of the loan, It was held
that the words were simply a statement of the Company present
policy. They did not amount to a contractual undertaking. As this
was clearly a commercial agreement it wordings of the letter of
comfort does not amount to a promise.
Rose & Frank Co. JK Crompton & Brother Ltd [19257] an
English Company agreed to sell copy paper in the USE
through a new York firm. The marketing agreement was made in
writing for a period of three years. The document contain a clause

described or an Honourable Pledge clause Which provided that,

this agreement and shall not be subject to legal
. In the law courts either of the united states
or England.
The original agreement began in July 1913 but at the end of the
three years period it was extended to cost unit march 1920. In
1919 the English defendants terminated the agreement without
giving the appropriate notice as required by the agreement. They
also refused to execute orders received by them prior to their
termination of the agreement. The court of appeal found that
each order which the defendants were bound to fulfill the
claimants failed in respect of future rights however because the
parties had specifically declared that the document was not to
bring about legally binding consequences.
Jones Vs Vernons pools [1938] the diamonds sued to claim
money which they had alleged had been won in a football pool.
The words binding in honuor only It was held that the
statements were sufficient to overturn the presumption and the
diamantes failed n their action.
Edwards Vs Skywards [1964]. The diamantes was employed
by the defendants as an airline pilot the defendants informed him
that they were making him redundant and gave him three
months notice. By virtue of his contract he was a member of the
defendants contributory pension fund and entitled to one of two
options on leaving their service either withdrawing the sums he
had contributed to the funds or receiving a paid-up pension taking
effect when he was 50years of age. The diamantes professional
association acting on his behalf, agreed that if the diamantes
chore the first option the defendants would make him an excreta
payment amounting to the defendants contribution to the fund.
The daimant accepted the agreement. The defendants then paid
him his total contributions but refused to make the exgratis
payment the diamants sued for breach of contract and won the
judge stated that the words Exgratia did not negate a
contractual agreement but simply meant that the employer did
not admit to any pre-existing legal liability on their port. The
diamante accepted the agreement. The defendants then paid his
total contributions but refused to make the ex gratia payment.
The daimants sued for breach of control and won the judge stated
that
the words ex gratia did not negate a contractual
agreement but simply meant that the employer did not admit to
any pre-existing legal liability on their port. They ad not

discharged the burden of overturning the presumption that there

war an intention to create a legal.
Contractual Capacity
The general rule is that any person may enter into any kind of
conract however. However there are certain closer of persons to
whom the rule apply.
a.

Infants & minor

b.

Persons of unsound mind and drunkards

c.

Aliers or non-citizens

d.

Coporations & corporative societies

Infants & minor

In Kenya any one under the age of 18years a minors. Minors may
make contracts but they are not bound by them, this means that
even if the contract is legal and the minor is in breach he cannot
be sued on it. This law is based on two rules.
1.

The law protect the minor against his inexperience which

may enable an adult to take unfair advantage of him or
endure him into entering a contract eg inducing a minor to
buy something he cannot afford.

2.

The law not cause unnecessary hardship to adults who deal

fairly with minor. Under this principal certain contracts with
minor are valid other avoidable.

Binding contracts
These are contracts for the supply on necessaries these are item
that are regarded necessary to the particular standard of the
living of the minor. This includes food, basks clothing and other
items depending on the minor modern status in life although the
minor is liable for the necessaries sold and supplied to him the on
us lies on the plaintiff to prove.
i.

The minor actally needed the goods at the time of sell and
delivery

ii.

That he was adequately supplied with goods of that class

iii.

That the price charged for the goods is reasonable.

Nash Vs Inman 2KB

The plaintiff supplied to the defendant a Cambridge graduate to

the value of$145. The clothing included ii fancy waistcoats. The
defendant argued that he was a minor when the goods were
supplied and they were not necessaries. The defendancts father
gave evidence that he was amply supplied with clothes. It was
held that the onus of proving that they were suitable to the
condition in life of the minor ant that the defendant was not
already adequately supplied with such goods, was on the plaintiff
the plaintiff had failed to establish this.
NB If a minor borrow money to buy necessary he must repay the
placed in the position of the sell necessaries.
Beneficial contracts
The category includes
A minor is bound on an employment or aqures education services
or any beneficial experience in the
He is bound to pay a reasonable price, where the price is agreed.
Doyle Vs White city stadium [1937]
The plaintiff a minor applied to the British boxing board for a
licence as a boxer and agreed to be bound to the rules of the
board a few months later the rules were changed and intend of a
rule which stated that a boxers money was that in any case of
disqualification the boxes was only to receive certain expenses.
The plaintiff had agreed to box in return for $3000 (win, lose
&draw) but he was disqualified for falling, the board held some of
the $3000 and the boxes daimed for the whole sum it was held
that the contract as a whole was beneficial for the plaintiff and
therefore binding to him.
De. Francesco Vs Barnum [1890] A 14year old girl become
apprenticed by dead to the daimant for seven years in order o be
taught stage dancing. The deed provided that she was to be at
the total disposal of the daimant, she would not get paid unless
he employed her, which he was not bound to do nor was he
bound to maintain her. He agreed to pay her nine pence per right
and six pence per matinee for the first three years. After sthat the
pay rose to one shilling per night six pence per matinee.
She could not accept any professional engagement without his
daimant could also terminate her contract whenever he wished

without notice. Not surprisingly, the court held the contract to be

unduly harsh and therefore unenforceable.
Proform sport management
Management Ltd[2006]

Ltd

Vs

Proactive

Sport

Daimant football agent entered into a representation agreement

with Wayne rooney when he was 15 year old. In June 2002 the
player and his parents wrote to C stating that they would not
renew the agreement when it expired in December 2002 three
days after the expiry of the agreement the player entered into a
new representation agreement with the defendant interference
with and or the procuring of breach of contract . I applied for
summary judgement on the ground that as a matter of law there
was no liability the breach of a voidable contract with a minor.
The issue was
1.

Whether there can be liability for inducing the breach of a

voidable contract with a minor and

2.

Whether the contract in issue (a football agents

representation agreement) fell within the doss of contract
were enforceable against a minor.

The daimant had no real prospect of establishing that the

agreement was a contract for necessaries. The player was
entitled to avoid the contract and the defendant could not be
liable for inducing breach.
Voidable contracts
These are contract that dind both parties but the minor can
repudiate before he attains the age of . Within a
reasonable time there after the other party cannot repudiate
example,
1.

Contract concerning land, a lessee who is nder age is liable

for rent unless he repudiates. A minor who agrees to
purchase free hold he is bound unless he repudiater

The same principle applier where a minor lets or agrees to sell

land.
2.

Buyng stones in Companies a minor who agrees to subscribe

for shares in a company which are not fully paid is liable for
cause unless he repudiates. A mere plea is not ratified the
transaction does not release him of liability. If he repudiates

he ceases to be liable and cans have his name removed from

the companies register. If a company is being wound up
while the buyer is still a minor the liquidator can exercise
the minor rifgt for repudiation for him.
Steinberg Vs Scala [1923] the plaintiff when a minor applied
for shares in a Company and paid the amount due on allotment.
She paid the amount due on the 1 st call and did not receive any
dividend and attended no company meeting 18months later while
still a minor she repudiated the contract and requested the
money she had paid the Company. It was held that she was a
minor she was entitled to repudiate the contract. But as there was
no failure o consideration she could not recover the money paid
to the Company.
3.

Partnership

A minor can become a partner and to some extent he is bound to

the partnership agreement. He cans be used as a minor by
persons losses. But he is liable when he becomes of age he fail to
put an end to the partnership. He is not entitled to the share of
profit and asset until its liabilities have been discharged.
Void contracts
The following with minor are void
i.

Any agreements for repayments of money to lend and to be

lent.
Leshe vs Sheal [1914] sheil a minor by frequently
representing himself as of age, induced Leslie to lend him
$400, he refused to pay for it and leslie sued him. It was
held that the contract was absolutely void and shell was
not liable to repay the loan.

ii.

Contract for goods supplied other than necessaries.

iii.

Liability to tort (civil wrong)

The general rule is that minor are liable in test so as
adults are, conduct amounting to breach of contract may
also a tort. He can sometimes set the invalidity of the
contract as a defense to the tort daimant.
Jennings Vs Rundall [1799]

In this case a minor hired a house and by over-riding

injured it. It was held that he could not be liable in tort for
what was really a breach of contract .
iv.

Persons of unsound mind and drunkards

The law relating to contracts with patients representing a
compromise between two principles.

i.

Such a person should not be liable on his contract if he is

incapable of intelligence concepts

ii.

It might cause hardship to one contracting party to stultify

..
A mental patient is liable for necessaries extreme
drunkardness is a defence to a contract if it presents the
defendant from understanding the transaction and if the
diamante known this
The drunkard is liable if the ratifies the contract when he
becomes sober.
All other contract apart from the ones for necessaries are
voidable at the option of the mental patient or drunkard if
at the time the contract was made the other party was
aware of the condition of the mental patient or drunkard.
The mental patient or drunkard can repudiate the contract
within a reasonable time of the of the
disability otherwise it will be binding to them A contract
made by a mental patient during . Interval will be
binding on him.
Aliens / Non citizens
An aliens is under no disability and can sue and be sued.
However an energy aliens cannot sue, but if sued can
defend himself.

Corporations
Corporation fall into two broad type,
1.

Chartered corporations, at common law, incorporation could

take place only by royal charter chartered corporations have
the power to do with their property all that a private
individual can do and to enter all such contract as a private

individual might enter. If such a corporation makes any

contract which it is not authorized to make the contract is
valid, though the charter may be revoked.
2.

Statutory corporation the vast majority of corporations today

are created by, or under the authority of statute. Some
corporations are created by a special act of parliament
though most commercial corporations are created under the
provision of the companies act 1985. Copanies created
under CA 1985 may be public or private, limited by shares or
by guarantee.

The corporations can sue and be sued in their own names they
are liable to actions in tort. A corporation is also liable for torts
committed by its servants and agents. But is a servant of a
corporation commits a tort which is ultra vires (beyond the
power) then the corporations is not liable. Similarly, a corporation
is not liable for some torts of personal nature eg personal
defamation battery etc.
Trade Unions
The trade unions have capacity to sue in tort but actions against
them in tort are limited $23 of the trade union as cap. 223
provider that no action shall be brought against a trade union for
torts committed by its member of officials in respect of any act
done in contemplation or in furtherance of a trade dispute.
For example if a trade union calls a stroke it cannot be sued by an
employer for the tort of including a breach of contract.
A trade union can be sued for breach of contract. The members
and official of a trade union can be sued for action in tort
committed in their personal capacity.
Terms of a Contact
Terms of a contacts are its contents and this determine the extent
to which the parties are deemed to the agreement. According the
terms define the rights and obligations arising from the contract.
Contractual terms may be expressed or implies expressed terms
are statements are made by parties and by which they intend to
be bound.
Implied terms are implied by law either by provisions of a statute
or to give effect to the presumed intention of the parties. Each

term of a contract expressed or implied are either conditions or

warranties.
A distinction between a condition and a warranty are stated 10
$139(2) of the sales of good act and it states whether a
stipulations in a contract of sale is a condition in breach of which
will give rise of a right to treat a contact as repudiated or a
warranty the breach of which may give rise to a claim for
damages but not the right to . The goods and treat the of
the contract and a stipulation may be a conditions condition
breach of which entitles the innocent party to avoid the contract
and daim for damages.
Poussard Vs Spiers (1876)
An actress contracted to play in an opera in the beginning of its
run. Owing to illness she was unable to perform for the first week
of the opera. The producers had at the mean time, engaged a
substitute and refused the service of the ac tress.
It was held that the lapse of time amounted to breach of condition
which entitled the producers to repudiate the contract.
A warranty is a term of lesser importance and it doesnt go to the
root of the contract its breach entitles the innocent party to daim
for damages but gives no right to terminate the contract.
Bettini Vs cycle [1876] Bettini was engaged for the whole of
the season to sing at Gyes theatre and agreed to appear 6 days in
advance for the purpose of rehearsals. Due to illness, B arrived 3
days in advance. G terminated Bs contract on this aground it
was held that the rehear sale clause was co-lateral to the main
purpose of the contract and its breach could give rise to damage
and not repudiations of the contracts.
Parole Evidence Rule
It applies to contract that are written and prevents the parties
from saying extrinsic evidence, to add or to vary the writing. In
order to prevent this rule the parties will construct a contract to
be party written oral. So that it will only . Where the
writing is intended to contain the ..
The court may also hold that there are 2 contract, the written
where the parole evidence rule applies and the oral collateral
contract to which the rule doesnt apply.

J Evans & sons (Portsmouth) Ltd Vs Andrea Marzano

Ltd[1976]
The defendant ( carriers) shipped machinery for the plaintiff. This
used standard conditions used by the trade union. In 1967, the
defendants used trailers and agreed that the machinery would
always be carried below deck. The defendant then switched to
containers and assured that the plaintiff machinery will still be
stored below deck B there was change and the new standard
conditions stated hat the plain goods should be stored on the
deck. Later the plaintiff goods were washing off deck. The plaintiff
sued for the breach of contract successfully.
The court held that the defendants could not rely on written
contract only and allowed the plaintiff to adduce out evidence.
Exclusion clauses [Exception]
There are contractual stipulation intended to exclude the liability
of one of the parties in a contract or in tort. Where a standard
form of contract is used it is not unusual for the parties who drew
it up to take advantage of their dominant position by introducing
the clause.
In determining whether an exclusion clause is binding the
following rules are followed e.g existence of the clause must be
communicated to the other party.
The circumstances must show an intention to be bound.
The clause will be constructed most strongly against the party
seeking to take advantage of act.
Parkes Vs south Eastern Railway [1877] in this case the
plaintiff deposited his bag in the defendants darkroom and paid
2ds and received a ticket. On ticket, the words seek back were
printed and on the back a notice stated that the company will not
responsible for the luggage worth more than 10 pounds. A notice
containing the same condition was displayed in the darkroom. The
plaintiff bag was lost and claimed his value which was more than
10pound. He argued that he had taken the ticket without reading
it and thought that it was only a receipt for evidence that the
company had his bag it was held that the trials judge had
misdirected the jury since he had not asked them whether the
defendant had taken reasonable steps to give the plaintiff the
notice of the condition.

Chapelton Vs Barry Urban district [1940]

Deck chairs were stacked by a notice asking the public which
wished to use the deck chairs to get tickets and retain them for
inspection. The plaintiff paid for a tickets for chairs, but did not
read the back of them where the printed words purpoted to
exempt
the
council
from
liability.
The
plaintiff
was
.. object was that the hirer
might produce is to prove that he paid and to show him how long
he might use the chair.
Thompson Vs London, Midland &Scottish [1930]
The plaintiff who could not read gave her niece the money to buy
an exclusion ticket. On the face of he ticket was written,
Excursion, for conditions, see back. And on the back issued
subject to the condition and regulations in the campings time
table and notice and excursion and other bills. The condition
provided that excursion ticket holder show have no right of action
against the company in respect of any injury however caused. The
plaintiff stepped out of a train before it reached the platform and
was injured.
It was held by the court of appeal which was supporting the court
that the defendant had no wrong and land hanworth Mr. said
threat anyone who took the ticket was conscious that there were
some condition and it was obvious that the provided for the usual
fare. Having regarded to the condition of education in the country
it was irrelevant that the plaintiff could not read.
Olley Vs Nalborough court Ltd [1971]
The plaintiff booked in for a weeks stay at the defendants hotel.
A stranger gained access to her room and stole her mink coat.
There was a notice on the back of the bedroom door which stated
that. The properties will not hold themselves responsible for
cuticles lost or stole unless handed to the manageress for safe
custody.
The court of appeal held that notice wasnt incorporated into
contract between the proprietors and the guest. The contract was
made in the hall of the hotel before the plaintiff entered her
bedroom and before she had an opportunity to see the notice.
Thernton Vs shoe Lane Parking Ltd [1971]

The plaintiff went to park his car in the defendants automatic car
park. A notice at the entrance to the car park gave a notice that
all car were parked at owner at owners risk. When a car was
driven the machine dispensed a ticket, the plaintiff took the ticket
which stated on small print that it was issued subject to
conductions subject on the underlie (among other things) that the
defendant would not be liable for an injuries to customers which
accrued when the cars were in the premises. The plaintiff was
injured in the car park, the defendants relied on the exemption on
the ticket.
It was that the ticket came too late since the contract was
conclude when the motorist drove to the machine.
The ticket exemption was the only one wide enough exempt from
liability for personal injury but it couldnt be relied upon.
Effect of signatures
When a person puts his signature on a contractual document, he
is bound any exempting clauses held in it.
He cant rely
Lestrange Vs Graucop Ltd [1934]
The plaintiff bought an automatic cigarette vending machine from
the defendant. She signed an order form which contained the
following term in small print any expressed or implied condition
statement or warranty, statutory or otherwise not stated herein is
hereby excluded The D gave here a printed confirmation of this
order but when she was given the machine it didnt work
satisfactory. The P sort damager for breaches and the D relied on
the exemption . It was held that
the P had signed the written contract and was not induced by any
misrepresentation, she was bound by its terms it was wholly
immatenal that she had not read the contract of the document
she signed.
Curtis Vs chemical cleaning & Dyeing Co. [1951]
The P took her white .. wedding dress to the defendant
to be cleaned. The shop assist asked her to sign a receipt, which
infact contained a condition excluding the D liability for any
damage however arising. When the P asked why she had to sign
the assistant told her that the D would not accept liability to the
damage of the beads and sequin with which the dress was

twinned, the P sighed when the dress was returned it was stained
the D argued that the clause excluded their liability. It was held
that the D could not rely on the exemption clause because of the
assistants innocent misrepresentation which had mislead the P as
to the extent of the exemption and there by induced her to sign
the receipt.
Privity of Contract
The doctrine of probity of contract provider that only the parties
of a contract can enjoy the contract and burdens of the contract.
Consideration should more from the promise i.e A person cant
sue on a contract if consideration was provided by another even
where the contract was made for her benefit.
Tweddle Vs Alkonson
Jurtua Crompton said that consideration must more from the
party entitled to sue upon the contract it will be a monstrous
proportion to say that someone was a party to the contract for
purpose of suing upon it for his advantage and not a party to it for
the purpose of being sued
The doctrine of privities applies to present two persons from
encoring a contract
1.

Complete stranger

2.

3rd parties to beneficiary who has been identified and

intended by the parties to benefit from the contract.

Dunlop preumatic Tyress Vs Selfridge & co Ltd [1915]

In this case Dew & Company agreed with the P to buy the PS
tyrer in consideration for obtaining discount on the least tyrer for
trade buyer on the least price unless a similar undertaking was
given by the trade buyer that they would observe Ps least price D
ordered Dunlop tyrer from Dew and company and agreed with
Dew in return for receiving a discount that they wouldnt sell of
offer these tyres to any private customers at less than the least
price. However D did sell the tyres at below least price and P
sued them for breach of their undertaking. It was held that there
was no consideration moving from the plaintiff to the defendant
and therefore the contract was not enforceable by the plaintiff.