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Contract Case Summary

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The Court stated that in cases such as this: it is necessary, that it should be made to appear that the statement or announcement which is relied on as a promise [here the subsidy statement] was really offered as consideration for the doing of the act, and that the act [buying and using the wool as directed] was really done in consideration of a potential promise inherent in the statement or announcement. ‘ There must BEA relationship of quid pro quo between the statement and the Act.

Here there was no promise offered in consideration of doing an act.

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Buying the wool was rely a condition precedent to entitlement to the subsidy. It was not intended as the consideration tort a promise to pay the subsidy. In this respect the Court also noted that there was no offer or request or invitation to purchase wool or anything else suggesting that ‘payment of subsidy and the purchase of wool were regarded as related in such a way that the one was a consideration for the other.

‘ The Court also concluded that there was no intention on the part of the government to create legal relations; it was instead a government scheme to promote industry.

In this respect the Court noted that ‘It is of the essence of contract that there is a voluntary assumption off legally enforceable duty. It is necessary that what is alleged to be an offer should have been intended to give rise, on the doing Of the act, to an obligation. Souls v Bigot’s Executor and Trustee Co Ltd Plaintiff grants a company the ability to quarry stone from his proper in exchange for royalties. Agreement signed by Plaintiff and his wife, although wife not mentioned in agreement title.

Agreement authorized company to pay royalties to him and his wife as joint tenants. Plaintiff died, executor wanted to now whether the company has a contractual obligation to the wife Rules Fifth wife was a party to the contract, and specified as a joint-promises, the consideration of her husband would have applied to her as well, Chapel Co Ltd v Nestle Co Ltd [1960] AC 87 Facts Nestle ran a sales promotion whereby if persons sent in 3 chocolate bar wrappers and a postal order for 1 shilling id they would be sent a record.

Chapel owned the copyright in one of the records offered and disputed the right of Nestle to offer the records and sought an injunction to prevent the sales of the records which normally retailed at 6 shillings Deed. Under 5. 8 of the Copyright Act 1956 retailers ever protected from breach of copyright if they gave notice to the copyright holders Of the ordinary retail selling price and paid them 6. 25% of this. Nestle gave notice stating the ordinary selling price was the I shilling id and three chocolate bar wrappers.

The question for the court was whether the chocolate bar wrappers formed part of the consideration. If they did it was impossible to ascertain the value they represented and therefore Nestle would not have complied with their obligation to give notice of the ordinary retail selling price. If the wrappers were a mere token or condition of sale rather than constituting consideration, then the notice would be valid and Nestle could sell the records.

Rules The wrappers did form part of the consideration as the object was to increase sales and therefore provided value. The fact that the wrappers were simply to be thrown away did not detract from this. Therefore Chapel were granted the injunction and Nestle could not sell the records as they had not complied with the notice requirements under 5. 8. In Re Case’s patents: Stewart v Casey (1892) In July 1887, the plaintiff and a partner registered two patents for ways of tiring volatile or inflammable liquids.

They then made arrangements with the defendant to take commercial advantage of the patents On 29 January 1889, after the defendant had done various work on the ideas, the plaintiff and his partner wrote to the defendant: ‘We now have pleasure in stating that in consideration of your services as the practical manager in working both our patents we hereby agree to give you one third share Of the patents above- mentioned, the same to take effect from this date. ‘ The plaintiffs partner died in September 1889.

In December 1889, the defendant made an entry in the Patents Register stating his claim to one third ownership in the two patents. This was an action to have that entry removed. Rules The Court of Appeal held that the entry must remain on the register as the defendant had a good claim to one third of the patents. One of the plaintiffs unsuccessful arguments was that the defendant could not enforce the letter of 29 January 1889 because his only consideration was work which he had already done at the time of the letter.

Per Bowen L]: the fact of a past service raises an implication that at the time it was rendered was to be paid for, and, it It was service which was to be paid for, when you get in the subsequent document a promise to pay, that promise may be treated either as an admission which evidences or as a positive bargain which fixes the amount of that reasonable remuneration on the faith of which the service was originally rendered. Dutton v Dutton 1892 18 OVAL 114 Supreme Court of Victoria Mr. D promised Mrs. D that he would pay EH-O per month as part of a maintenance agreement in return for her promise to conduct herself vivid sobriety and in a respectable, orderly and virtuous manner and provided she did no act that would subject him or her to hate contempt or ridicule. The question arose as to whether this agreement Vass legally binding. Was there consideration for Mr. Dungeon’s promise to pay the allowance?

Rules Highlighting CA (for the majority) That this was not just a promise to do what one was already bound to do – it was a promise Which involved surrendering a degree Of liberty – it therefore a good consideration. Hood J (dissenting) It was argued that the promise was enforceable, because it would help maintain Mr. Ad’s public image. The judge, however. Found that the consideration was illusory . It was too vague. Was it that Mrs. D should not drink, or just that she would not do it in public? To be good consideration one must be able to enforce the promise. How could that be done here?

This sort of illusory consideration is just like the promise made by the father to the son, to reward the son if he would promise “not to carry on boring him” – White v Bluest (1853) The judge also suggested that if the wife had merely acted in a sober way, then that might have constituted a good consideration, using the unilateral contract analysis. Yet to promise to do the same might not – doesn’t this seem rather odd? Placer Development Ltd v Commonwealth (1969) 121 CLC 353 Placer Development arranged to form a company which would, as part of its operations import and export timber.

The Commonwealth provided that it would pay a subsidy on any timber on which import duty had been paid and not remitted on export “of an amount or ATA rate to be determined by the Commonwealth from time to time”. Rules Kitty J The principle established in Loft’s v Roberts is that a promise – combined With a discretion as to whether it will be carried out – amounts to no (enforceable] promise (or no contract) at all. A promise Of a subsidy is meaningless if there is no specification of the amount. There is no implication that a reasonable subsidy should be paid, for there is no standard by which to judge such a thing.

If the Government promises to pay such a subsidy as it thinks fit, then there is no contract. Taylor and Owen J A promise to pay an unspecified amount is not enforceable. There is no criteria by which the court could fix the amount. Enemies] (dissenting) Either there is an illusory promise, or there is a promise subject to conditions (i) to fix an amount (ii) to pay that amount. Obviously there can be no obligation in advance of a determination, hut if one asks whether there is a duty to fix a busied, the answer must be yes.

It is hard to imagine the parties giving the agreement any other interpretation at the time, I do not regard a promise by the Commonwealth to fix an amount as being illusory. Winder J (dissenting) Ordinarily the court would have no difficulty, where an unspecified sum is to be paid, in inferring that a reasonable sum was intended. A quantum merit, requires such a judgment. In this case there is no course of business dealing which the court can use for comparison, therefore the court has no basis upon which to substitute its own judgment.

But because the court cannot make such judgment, it does not follow that the Commonwealth is released from the obligation to make such a judgment. Wigwag v Edwards (1973) 47 ALAS 586 The plaintiffs agreed to buy a house from the defendants for 515,000. Before settlement, the plaintiffs said they had found defects and were not going to proceed. In return for their promise to go ahead, the defendants gave an additional promise that any major faults within 5 years from purchase, would be put right. The plaintiffs later brought this action claiming damages for defects not put right by the defendants.

Rules Enemies] (dissenting) That the plaintiffs could enforce the defendants promise as it was given in consideration of the plaintiffs not pursuing their claim, and the promise had been breached. Incineration AC agreed with Enemies, HELD Walsh and Gibbs J (in separate judgments) They found for the defendant on the ground that the defendant had not repudiated the contract and had not been given the opportunity to rectify the faults complained of, Mason The general rule is that a promise to perform an existing duty is no consideration, at least when: I _ the promise is made by a party to a pre-existing contract: 2. T is made to the promises under that contract; and 3. T is an illusory consideration The first party’s new promise of performance generally provides no consideration for the benefit. An important qualification to this general principle is that a promise to do what the promissory is already bound to do is sufficient consideration When it is a bona fide compromise Of a disputed claim that the promissory has a cause of action under the contract.

But the law seeks to prevent a party gaining unfair advantage by threatening unscrupulously to Withhold performance under a contact by insisting that the claim be bona fide. What is meant by bona fide? It is not required that the promissory claim would have succeeded had it been litigated. Is it necessary that the claim not be vexatious or frivolous? Or is it sufficient that the claim be honest? There is little between the two tests, and in this case it is unnecessary to decide, as the facts satisfy the more stringent test.

The defendants were therefore contractually bound to correct the defects. In this case however, the plaintiff must fail, as the main defect complained of was not disclosed before this action was commenced. Glasswork arose Ltd v Glamour Council [1 925] AC 270 Glasswork promised to pay Council for special police protection during a strike after requesting police protection and being refused). The protection Glasswork received was more than the police thought necessary. Glasswork refused to pay and Council sued.

Rules Viscount Cave LLC (I) The public cannot be called upon to pay the police for performing their obligations and any promise to do so will be unenforceable (in this case there is an obligation to keep the peace, prevent crime, protect property etc) (2) But if individuals require services of a special kind, not within their obligations, then a promise to pay for these Will be enforced (this was the case here and legislation remitted the ‘lending’ of police for purposes of extra-service) ‘If in the judgment Of the police authorities, formed reasonably and in good faith, the garrison was necessary for the protection of life and property, then they were not entitled to make a charge for it, for that would be to exact a payment for the performance of a duty which they clearly owed to the appellants and their servants; but if they thought the garrison a superfluity and only acceded [Glasswork’s] request with a view to meeting his wishes, then in my opinion they were entitled to treat the garrison duty as special duty and to charge for it. 1. Performance of public duty is not good consideration 2.

But performance of more than required public duty is good consideration Powwow Pop [1959] IVR 197 Helga Pop left her husband and, in an effort to entice her back, her husband orally promised that if she returned he would put the title to the home in their joint names. Helga returned (for a few weeks only) and left after a dispute Was she entitled to enforce her husband’s promise to her? Helga was already under a duty to return to cohabit with him and consequently she has not suffered any detriment in exchange for his promise. Rules Hudson J Even if it could be said that Helga was under a duty to cohabit With the respondent there avgas no remedy in law which would compel her to do so.

Cite this Contract Case Summary

Contract Case Summary. (2018, Jun 27). Retrieved from https://graduateway.com/contract-case-summary/

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