Contract law cases: Household Fire and Carriage Accident Insurance Co. v Grant (1879)

In Household Fire and Carriage Accident Insurance Co. v Grant (1879), Mr. Grant offered to buy shares in Household Fire and Carriage Accident Insurance. The company accepted the offer and allotted him the respective shares and sent him a letter informing him of this. The letter was lost in the post and Mr. Grant was not notified of the acceptance. In the meantime, Mr. Grant’s dividends were credited to his account.

Household Fire and Carriage Accident Insurance subsequently went bankrupt and the liquidators requested that the Mr. Grant make the outstanding payments on his shares. Mr. Grant refused.

It was held that there was a valid contract in place. The post office is such a common agent that as soon as the letter of acceptance makes it to the post office, the contract is concluded. It is as good as a messenger putting the letter of acceptance in the hands of the offeror.

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Contract law cases: Adams v Lindsell (1818)

In Adams v Lindsell (1818), the defendant wrote to the plaintiff offering to sell wool. The defendant misdirected the letter and there was a delay in the letter reaching the plaintiff. The defendant thinking that the plaintiff was no longer interested sold the wool to someone else. The plaintiff sued for a breach of contact.

The plaintiff was successful. In instances of posting the acceptance, the acceptance is deemed to have taken place as soon as the letter is posted. This rule is known as the postal rule and it is an exception to the requirement that, acceptance must be communicated to the offeror, though it might place the offeror at a disadvantage.

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Land Law XXI – Fixtures and Chattels

S. 10 of the Agricultural Holdings Act 1986 sheds more light on a tenant’s right to remove fixtures and buildings.

(1) Subject to the provisions of this section—

(a) any engine, machinery, fencing or other fixture (of whatever description) affixed, whether for the purposes of agriculture or not, to an agricultural holding by the tenant, and

(b) any building erected by him on the holding,shall be removable by the tenant at any time during the continuance of the tenancy or before the expiry of two months from its termination, and shall remain his property so long as he may remove it by virtue of this subsection.

(2) Subsection (1) above shall not apply—

(a) to a fixture affixed or a building erected in pursuance of some obligation,

(b) to a fixture affixed or a building erected instead of some fixture or building belonging to the landlord,

(c) to a building in respect of which the tenant is entitled to compensation under this Act or otherwise, or

(d)  to a fixture affixed or a building erected before 1st January 1884.

(3) The right conferred by subsection (1) above shall not be exercisable in relation to a fixture or building unless the tenant—

(a) has paid all rent owing by him and has performed or satisfied all his other obligations to the landlord in respect of the holding, and

(b) has, at least one month before both the exercise of the right and the termination of the tenancy, given to the landlord notice in writing of his intention to remove the fixture or building.

(4) If, before the expiry of the notice mentioned in subsection (3) above, the landlord gives to the tenant a counter-notice in writing electing to purchase a fixture or building comprised in the notice, subsection (1) above shall cease to apply to that fixture or building, but the landlord shall be liable to pay to the tenant the fair value of that fixture or building to an incoming tenant of the holding.

(5) In the removal of a fixture or building by virtue of subsection (1) above, the tenant shall not do any avoidable damage to any other building or other part of the holding, and immediately after the removal shall make good all damage so done that is occasioned by the removal.

(6) Any dispute between the landlord and the tenant with respect to the amount payable by the landlord under subsection (4) above in respect of any fixture or building shall be determined by arbitration under this Act.

((6A) Notwithstanding subsection (6) above, the landlord and tenant may instead refer for third party determination under this Act the dispute that has arisen with respect to the amount payable by the landlord under subsection (4).)

(7) This section shall apply to a fixture or building acquired by a tenant as it applies to a fixture or building affixed or erected by him.

(8) This section shall not be taken as prejudicing any right to remove a fixture that subsists otherwise than by virtue of this section.

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Land Law XX – Fixtures and Chattels

In Young v Dalgety (1987) the landlord entered into an agreement with the tenant to lease his property and as per the agreement, the tenant was to install the fittings for the lighting and to do the flooring. Both the fittings for the lightings and the flooring were firmly affixed to the property and when the rent was reviewed as per the provisions of the lease (rent review is done at specified intervals) the landlord argued that the fixtures were landlord fixtures or fixtures per se while the tenant claimed that they were tenant fixtures or chattels.

The matter was taken to court and it was decided that the lighting fixtures and the flooring were tenant fixtures and could be removed. In most instances’ fixtures attached to a property by tenants to conduct their trade or business as the tenant had asserted are to be regarded as tenant fixtures or chattels.

It is however also relevant to consider the extent of the damage, if any, the removal of the fixtures will cause to the property, and if the landlord is adequately compensated.

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Contract law cases: Thornton v Shoe Lane Parking Ltd. (1971)

In Thornton v Shoe Lane Parking Ltd. (1971) the defendant was injured in a carpark after he had purchased a ticket from the ticketing machine and had driven his vehicle into the parking area. There were signs posted on the walls after he had passed the barrier that the company was not liable for any personal injuries incurred while in the parking area.

It was held that tickets in ticketing machines and items in vending machines are in fact offers and therefore the contract comes into existence as soon as the offeree accepts the offer by providing consideration i.e. slotting in the coins. The exemption clauses or the clauses attempting to exempt liability for personal injury were not valid because the said clauses were brought to the attention of the offeree after the contract had come into existence.

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Land Law XIX – Fixtures and Chattels

In Palumberi v Palumberi (1986) two brothers had equal share in two self-contained flats which they held as tenants in common (an arrangement where two or more people hold an ownership interest in a property). One brother agreed to sell his share to the other and prior to the property changing hands the brother who had sold his shares striped the property, and removed among other things, a stove and the carpets. The question before the courts was whether the items that had been removed were fixtures or chattels.

As per the rule in Holland v Hodgson (1872) whether an item is to be regarded as a fixture or a chattel depends on the facts of each case. It was held that the stove and the carpets were fixtures but all other items were chattels.

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Contract law cases: Carlill v Carbolic Smoke Ball Co. (1893)

In Carlill v Carbolic Smoke Ball Co. (1893), the defendant placed an advert in the newspaper stating that the Smoke Ball Co. would pay anyone £100 if they caught influenza after using their smoke balls in the prescribed manner for two weeks. In order to show their sincerity, the Smoke Ball Co. had deposited £1000 in their bank account.

The plaintiff used the smoke balls in the prescribed manner and after two weeks, she caught influenza. The plaintiff sued.

The defendant argued that is was not possible to make an offer to the world at large. It was held that it is in fact quite possible to make an offer to the world at large.

An offer is an expression of a willingness to enter into a contract in accordance with the specified terms, and the Smoke Ball Co. depositing £1000 in their bank account indicated their willingness to be bound by the terms. Mrs. Carlill in purchasing the smoke balls and using them in the manner that had been prescribed had accepted the offer.

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Land Law XVIII – Fixtures and Chattels

In Mancetter Developments Ltd v Garmanson Ltd (1986) the director of a tenant company was held accountable when the company removed industrial machinery from a leased premises without making good on the damage that was done.

In this instance the damage was holes in the walls that were drilled for the installation of pipes and fittings and the court reaffirmed the decision in Spyer v Phillipson (1931).

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Orange Trumpet

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Contract law cases: Gibson v Manchester City Council (1979)

In Gibson v Manchester City Council (1979) the Manchester City Council advertised details of a scheme for tenants to buy their council houses. The plaintiff wrote to the council and the council accordingly replied with a price and certain terms. The house was then taken off the list of tenant-occupied houses maintained by the council and put on the house purchase list. A local election ensued and the new council reversed the policies of the former council and the sale did not go through. Gibson sued.

The Court of Appeal held that despite the fact that all the formalities had not been concluded, there was a clear intention to contract based on the transaction or what had transpired as a whole and found in favor of the plaintiff.

The council appealed. The House of Lords held that the fact that the council stated the price of the house and some other terms did not mean that there was an offer. It was merely a step in the negotiation process and the negotiations had not yet ripened into a contract.

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