Tort IV – Duty of care III

In Bourhill v Young (1943) – the case concerns someone who’d witnessed a horrific accident. The plaintiff was a pregnant fishwife and as she got off the tram, a motorcyclist, the defendant, flashed past her and hit a car and as a result the motorcyclist died. The plaintiff did not witness the accident but heard the sound of the crash and minutes later witnessed the aftermath. The body had been removed from the scene of the accident, by the time the plaintiff got there, but there were pools of blood on the ground. The plaintiff went into shock and her baby was stillborn. The plaintiff brought an action against the defendant’s estate. It was held the defendant did not owe the plaintiff a duty of care. The defendant could not have foreseen that a pedestrian would be affected in the manner that the defendant was and to make the defendant liable would be to stretch the scope of liability too far.

In Home Office v Dorset Yacht Co Ltd (1970) a group of boys from a borstal school, a type of detention center for young delinquents, were doing some supervised work on an island. The boys were subsequently left unsupervised and 7 of them attempted to escape on board a stolen boat which later collided with the plaintiff’s yacht and the plaintiff sued for the damage to his yacht caused by the collision. The plaintiff was successful.

It was held that the officers or the home office who the officers were answerable to were liable for the damage because it was foreseeable, given their track record, that the boys would try and escape, and in doing so, try and commandeer a vehicle to help them escape. The officers should have exercised due care and diligence in carrying out their duties and their failure to do so or their omission had resulted in damage being caused to the plaintiff’s yacht.

In Anns v Merton London Borough Council (1978) the plaintiffs were tenants in a block of flats. The council was under an obligation to inspect the foundations of the flats to ensure that they were in accordance with the correct or prescribed depths prior to granting approval and the council failed to do so. As a result, there was structural damage to the flats and the plaintiffs sued. The court held that when considering if that there was a duty of care owed they must take into account 2 criteria: –

i) if there is close enough proximity between the plaintiffs and the defendants i.e. ought the defendants to have the plaintiff in contemplation at the time of carrying out the act or would the defendants at the time they were inspecting the flats know that a failure to carry out their duties in the prescribed manner would result in some form of damage to the plaintiff and if the answer is in the affirmative then

ii) whether there are any other considerations for example public policy reasons that ought to reduce the scope of the duty that is owed or the extent of the damages which is owed. If the answer is in the negative than there is a duty of care.

The twofold test in Anns v Merton London Borough Council (1978) was overruled in Murphy v Brentwood DC (1991) but by using the test it is possible to arrive at the same conclusion that the court arrived at in Bourhill v Young (1943).

Was there close enough proximity between the defendant and the plaintiff that the defendant ought to reasonably have the plaintiff in contemplation while riding his motorcycle? The answer would be in the affirmative in that a road user, especially a driver of a vehicle ought to have other road users in mind when driving his or her vehicle or riding his or her motorcycle.

Applying the second limb of the twofold test, are there any considerations that ought to limit the scope of the defendant’s liability? The answer would also be also in the affirmative because there is no telling the number of pedestrians or by standers that may have witnessed the accident or its aftermath and it is impossible to tell how witnessing the accident or its aftermath would affect them.

People don’t always react in the same manner and some may be able to set it aside and others may not and what if there were a 100 people who had witnessed the accident or its aftermath and they all suffered from shock? To extend the defendant’ s scope of liability would mean that the defendant would be open to a 100 law suits. Therefore, in certain instances the only viable option would be to limit the scope of the defendant’s liability.

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Tort – Volenti Non Fit Injuria I

Volenti non fit injuria (volenti) is a defense that is pleaded in claims of negligence. It means that the plaintiff’s injuries are the result of his own actions or when a person voluntarily puts himself in a position that would most likely result in some form of injury to himself or herself then the defendant is not liable for those injuries.

In Wooldridge v Sumner (1963) the plaintiff was a photographer who was standing too close to a racetrack and subsequently he was knocked over by a rider who had lost control of his horse. The plaintiff sued for negligence and the defendant pleaded volenti. The court dismissed the claim. Volenti is only a defense in instances of negligence. In this instance the defendant wasn’t negligent at all; he merely lost control of his horse, which is something that happens during races and can happen in the course of any race. In any racetrack there is seating that is available for the spectators and the plaintiff, if he had bought a ticket, than by virtue of entering into the contract, must restrict himself to the sitting area.

In cases where the relationship between the plaintiff and the defendant is an employer-employee relationship, the employer must take reasonable care not to put his employee in a situation where he’d likely incur some form of injury or other and having done so, he cannot claim or plead the defense of volenti.

In Smith v Baker (1891) the plaintiff was employed by the defendant to construct a railway. On the site there was a crane that was constantly operating, moving rocks and stones over the plaintiff’s head and the plaintiff had complained to the defendant on numerous occasions that there is a possibility that rocks or stones may drop down as they were being moved by the crane. The defendant acknowledged the fact and instructed the plaintiff to continue working and as a result the plaintiff was injured by a falling stone. The plaintiff sued and the defendant pleaded the defense of volenti. The court found in favor of the plaintiff.

Would it have been any different if the defendant had made safety hats available to all his workers? It would have. If the plaintiff had been issued with a safety hat and if he had removed it while he was working and was subsequently injured by a falling stone, he would have been contributorily negligent.

Volenti is a voluntary act that the plaintiff undertakes on his own accord or by his own volition. Here the plaintiff was instructed to work under the crane. Employers generally have a duty not to put their employees in situations where they would sustain or incur some form of physical injury and to provide them with the correct or appropriate safety equipment or gear.

In ICI Ltd v Shatwell (1965) the plaintiff and his brother were experienced shotfirers who were employed to work in the defendants quarry. The wire on one of the detonators was short and while another worker went off to find a longer wire the plaintiff detonated the explosives. Because the length of the wire was too short the plaintiff and his brother were unable to seek adequate shelter and as a result the brothers were injured. Both the plaintiff and his brother were aware of the relevant safety precautions but failed to take the appropriate measures. The plaintiff sued the defendants for negligence and the defendants relied on the defense of volenti. The plaintiff failed. The plaintiff was aware of the dangers and of the fact that the explosives were only to be detonated from a safe distance away. In addition to that there was also a duty imposed by statute that placed on them a duty to take the necessary precautions while detonating explosives.

In Nettleship v Weston (1971) the defendant was a learner driver who employed the plaintiff to help her fine-tune her driving skills. While they were on the road the defendant turned a bend and the plaintiff told the defendant to straighten the wheel. The defendant failed to do so and in order to avoid an accident the plaintiff pulled on the handbrake but despite that the car ran over a pavement and hit a lamppost and the plaintiff was injured in the accident that followed.

The plaintiff sued. The defendant pleaded volenti and argued that by entering into the car the plaintiff had voluntarily accepted the risk. The court rejected this argument and the plaintiff was successful. The court held that despite the fact that the defendant was a learner driver the duty imposed on her was the same duty that was imposed on any other driver. In this particular instance in order for the defendant to successfully plead volenti the plaintiff must have either impliedly or expressly waived his right to seek a legal remedy.

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Tort III – Duty of Care II

In Dulieu v White (1901) the plaintiff was sitting at the bar in a public house that belonged to her husband, she was pregnant at the time, when a horse and cart crashed into the establishment. The plaintiff suffered from severe shock that resulted from her being in the premises at the time the defendant crashed into it and she subsequently fell severely ill. She gave birth to a premature baby 9 days later and the child as he or she grew up did not display the level of intelligence that other children his or her age would display and the plaintiff argued that the child’s premature birth and the subsequent inability to cope was the result of the shock and the serious illness that she had suffered as a result of being in the public house at the time of the incident. The plaintiff sued.

The court held that the defendant had a duty of care not to frighten the plaintiff by his actions and if the resultant injury is not too remote than the plaintiff can claim. However, mere fright alone will not suffice and the fright has to be followed by some form of physical injury. The fright must also be the natural result or consequence of the defendant’s actions.

So there are three elements to claims involving nervous shock or psychiatric illnesses, which is in effect what the defendant is claiming for. They are as follows;-

i) the defendant owes the plaintiff a duty of care i.e. a duty not to frighten her or cause her some form of physical or mental harm

ii) the fright is followed by some form of physical or mental injury and

iii) the type of physical or mental injury would be the type of injury that is the natural result or consequence of the defendant’s actions or it is foreseeable that the injury would be the likely result of the defendant’s actions.

In Haynes v Harwood (1935) the defendant had left his horse drawn van unattended and someone had thrown a bottle at the horses which caused the horses to bolt down a busy street. The plaintiff, a policeman was on duty at the time and he saw the ensuing ruckus from his window. Having determined the cause of the commotion he then tried to stop the horses and was injured as a result. The plaintiff sued and the court held that he was entitled to be compensated for the injuries that he had suffered or incurred. The defendant should have taken reasonable care to ensure that his horse drawn van was secure.

The principle is still in application today and owners of vehicles still have a duty of care to ensure that their vehicles do not cause injuries to others. Let’s take the example of someone parking a car on a slope. If the driver forgets the brakes there is a possibility that the car may roll downhill and cause some type of injury or damage to someone and therefore the driver of a vehicle has a duty of care to ensure that the vehicle is secured before he or she moves away from it.

Is it possible for the defendant to argue that the plaintiff’s injuries were the result of actions that he had undertaken voluntarily i.e. volenti non fit injuria – when a person voluntarily puts himself in a position that would most likely result in some form of injury then the defendant is not liable for those injuries?

We have to look into the facts of the case. The plaintiff was a policeman who has a responsibility to keep the peace. From all accounts the incident took place in broad daylight or at a time when the policeman was most likely on duty and thus it was his responsibility to ensure that the peace was kept and no unwanted incidents occurred during his watch and therefore he was merely doing his duty.

It is also possible to argue that the policeman had gone over and above his duty by putting himself at risk and therefore should be in some form or manner rewarded for his actions as per Glasbrook Brothers v Glarmorgan County Council (1925).

In Hambrook v Stokes Brothers (1925) a mother suffered severe nervous shock that resulted in a chronic illness when she saw a lorry run downhill towards the bend where she had just left her children. She took instant fright and moments later another person approached her to tell her that one of her children was injured.

As it turned out the injury was slight but by that time the mother had gone into shock and the resultant illness that was brought on by initial shock eventually led to her death. Her husband sued and was successful. The court held that the defendants had a duty to ensure that their vehicle was secure.

The courts might be more willing to award claims for nervous shock or mental illness when the victim is a parent who has suffered an illness because he or she feared for the safety of his or her child. Such illnesses are both realistic and foreseeable.

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Tort II – Duty of Care I

The modern precept of the duty of care principle was enunciated by Lord Atkins in the landmark case of Donoghue v Stevenson (1932). In the case the plaintiff fell ill after consuming a bottle of ginger-beer purchased on her behalf, that was bottled in an opaque glass bottle and the type of bottle that was used in bottling the ginger-beer prevented the plaintiff from being able to see the contents of the bottle with any amount of clarity or certainty and therefore even if the plaintiff had taken all reasonable steps to ensure that the contents of the bottle were untainted or uncontaminated she would have been unable to do so without purchasing or acquiring the bottle.

Even if the plaintiff had purchased or acquired the bottle and had opened it, whether the contaminant would have been visible or would have been apparent was dependent on the type or nature of the contaminant and some contaminants may be plainly visible and others may not and some may be afloat at the top of the bottle while others may be submerged and found at the bottom of the bottle.

The plaintiff had consumed half the bottle of ginger-beer by pouring the contents of the bottle into a glass and once she’d consumed the first half of the bottle she continued by emptying the rest of the contents of the bottle into the glass and was shocked when she found the remains of a decomposing snail along with the rest of the contents of the bottle.

The plaintiff was struck by a bout of nausea and as result of consuming the ginger beer she suffered from shock and severe gastro-enteritis. The plaintiff sued. The plaintiff argued that the defendant by virtue of being the manufacturer of a consumable product that was made available to the public had a duty to ensure that the product that was manufactured was suitable for consumption. The plaintiff was successful.

The rule that you are to love thy neighbor becomes in law you must not injure your neighbor and in accordance with the principle, the neighbor or my neighbor is someone I can reasonably foresee to be affected by my actions or by my omissions i.e. anyone who is so closely and directly affected by my acts that I ought to reasonably to have them in contemplation as being so affected when I am directing my mind to the act.

In the case of Donoghue v Stevenson (1932) the defendant’s neighbors are those who would reasonably be affected by his actions or omissions i.e. those that purchase the items that he produces or manufacturers and therefore he must take steps to ensure that that any item that he produces of manufactures does not cause any injury to the consumers that purchase them.

The next question that comes to mind is does a producer or a manufacturer owe a duty of care to all his consumers? The answer in short is yes. A producer or a manufacturer does owe a duty of care to ensure that every item that makes its way into the hands of a consumer, who has obtained it by proper and legal means, will not cause any injury to the user or the consumer. This principle in law is known as the neighborhood principle.

The principle is an extension of the minority decision in the earlier case of Heaven v Pender (1883). The defendant in the case, the owner of a dry dock, supplied the platform for an independent contractor to paint the sides of a ship. While the plaintiff, who was employed by the independent contractor, was standing on the platform that was attached to the ship by ropes on either side and was painting the sides of the ship, one the ropes gave way and the plaintiff was injured.

Upon further inspection, it came to light that the rope was frayed and as a result had given way. The plaintiff sued on the grounds that that the defendant owed a duty of care to ensure that the equipment that he supplied was sound and suitable for the purpose for which the equipment was supplied. However, because there was no contract between the plaintiff and the defendant, the plaintiff brought an action against the defendant in tort.

According to the minority decision in the case whenever a person is in a position with regards to another, where failure to use ordinary care and skill would result in an injury to the other or would cause damage to a property, a duty would arise that would impose upon him the need to use ordinary skill and care. The majority in the case however found in favor of the defendant.

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Tort I – Negligence

The doctrine of privity of contract and the capacity of a party to enter into a contract can often stand in the way and prevent a party from bringing an action in contract. Let us say for example that a friend buys his or her friend a bottled drink which is contaminated and as a result the friend falls ill and has to incur medical costs in addition to taking days off work. The aggrieved party or the innocent party does not have an action in contract because he or she is not privy to the contract but he or she may have an action in negligence.

Without taking into account privity or capacity an innocent party may also want to commence an action in negligence if the facts allow it because the courts are more lenient when awarding damages in tort than they are in contract.

In order for an action to be successful in negligence the plaintiff must satisfy the following criteria: –

i) Duty: – the plaintiff must prove that the defendant owed him or her a duty of care

ii) Breach: – the defendant has breached the duty of care

iii) Causation: – the defendant’s breach has caused the plaintiff either some form of illness or monetary loss and

iv) Damages: – the damage can be quantified in monetary terms.

In Blyth v Birmingham Waterworks Co. (1856) (Court of Exchequer) the defendants were a body incorporated by statute to supply the town of Birmingham with water. According to s 84 of the statute the company should at the time of laying down any main pipe or any other main pipe on the street, fix at the time of laying down of the pipe a proper and sufficient fire-plug (a hydrant for a fire hose) in each street.

According to s 87, pipes were to be eighteen inches beneath the surface of the soil and according to s 89 the mains were at all times to be kept charged with water. The defendants derived no profit from the maintenance of the plugs distinct from the general profits of the whole business, but such maintenance was one of the conditions under which they were permitted to exercise the privileges given or granted by the Act.

On February 24, a large quantity of water escaped from the neck of the main and forced its way from the ground into the plaintiff’s house. The plaintiff sued for damages. The case was tried before a jury and the County Court Judge found in favor of the plaintiff. The defendants appealed.

Baron Anderson – “The defendants might have been liable for negligence, if, unintentionally, they omitted to do that which a reasonable person would have done, or did that which a person taking reasonable precautions would not have done” – verdict to be entered for the defendants.

Negligence is the act of doing something, which under the circumstances, a reasonable or a prudent man, guided by the considerations that normally regulate the conduct of human affairs, would not do or the act of not doing something, which under the circumstances, a reasonable and a prudent man, guided by the considerations that normally regulate the conduct of human affairs, would do.

Therefore, there are two types of negligent acts: –

(i) The act of doing something which a reasonable and prudent man would not do and

(ii) the act of refraining or abstaining or not doing something which a reasonable and prudent man would do (omission). Omission in most instances is a failure to do that which is required by law (either statutory or common law).

The reasonable and prudent man in negligence is the man on the Clapham Omnibus – Hall v Brooklands Auto Racing Club (1933) i.e. any person who does not belong to either extreme of the scale but rather a person who is subjected to the stresses and pressures that most people in a community or a society are subjected to.

In the example cited above (the contaminated drink), it is safe to say that a reasonable and prudent man, who is in the business of manufacturing consumable items would take reasonable steps to ensure that the product that he or she produces or in the case of a company, manufactures, would take the appropriate steps to ensure that the item that is produced or manufactured is fit for human consumption.

In today’s vibrant commercial world many of the laws with regards to food manufacture or the manufacture of food are regulated by statute for example the Food Safety Act 1990 and a breach of a duty that is imposed by the act and others like it would be a breach of a statutory duty and if the breach has caused the plaintiff some form of an illness or has caused the plaintiff to incur additional expenses than the plaintiff can commence or proceed with an action in negligence.

The defendant however is not liable if he or she has taken all the care and precaution that he or she is supposed to or is required to under common law or statute.

Hence once the plaintiff has established that there is a duty of care, the plaintiff must also establish that the defendant has breached the duty of care (he who asserts must prove) while the defendant must establish, in order to escape liability, that he or she has taken all the necessary steps to comply with the duty that is imposed upon him or her either by statute or by common law.

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Elements in a Contract XXXII – Capacity

When a dispute arising from a breach of contract is brought before the court, the court when deciding on the appropriate type of remedy to award will look into various factors including the capacity of the parties to contract.

Minors

Contracts entered into by minors are normally regarded as voidable contracts i.e. the terms of the contract continue to exist but the innocent party or the aggrieved party has a choice of whether to continue with the contract or otherwise. It may also depend on factors like if the minor has received something in return for the consideration that he or she has provided under the contract.

In Corpe v Overton (1833) a minor paid a certain amount of money towards a partnership that was to be formed in the future. He subsequently repudiated the contract and the court held that he was entitled to get his money back i.e. he was under no obligation to continue with the contract.

In Steinberg v Scala (Leeds) Ltd (1923) however, a minor paid some money towards acquiring some shares. She later made another payment and then decided to withdraw the payment and requested for the subsequent payment to be returned. The court rejected her request on the grounds that she received something in return for the sum that she had paid i.e. the shares.

In Nash v Inman (1908) the plaintiff supplied the defendant a student at Cambridge eleven waistcoats which he felt were suitable for the defendant’s station in life. The defendant failed to pay for the waistcoats and the plaintiff sued. The court held that the waistcoats were not a necessity because the defendant had an ample wardrobe and therefore his claim failed.

It stands to reason, from the above decision, that the only contracts that minors are allowed to enter into are contracts of necessity and this view has been reaffirmed by s3 (2) of the Sale of Goods Act 1979 – where necessaries are sold and delivered to a minor or to a person who by reason of mental incapacity or drunkenness is incompetent to contract, he must pay a reasonable price for them.

In Chapple v Cooper (1844) for example, an undertaker sued a window, who was a minor, for the outstanding payment that was due for her husband’s funeral services and the court found in favor of the plaintiff. Funeral services were deemed a necessity and though the widow was a minor she was still liable for the outstanding amount.

It’s easy to see that the reasoning behind s3 (2) has been around for some time and it is reasonable especially taking into consideration the fact that necessities include items like food and medical supplies and to insist otherwise might result in a situation where a minor might be turned away from obtaining essentials like food and medicines because he or she does not have the capacity, legally anyway, to enter into a contract. With the exception of the basics, what is considered a necessity is often a question of perception and it today’s world, education is also considered or regarded as a necessity.

Mental Disability

When it comes to contracts involving mentally disable persons the contract would generally be rendered void because the court seeks to protect the interests of such persons as per the Mental Health Act 1983. S 3(2) of the Sale of Goods Act 1979 makes some allowance for items of necessity but the later act or the Mental Health Act 1983 would normally prevail over the earlier act i.e. the Sale of Goods Act 1979.

Corporations

The rules with regards to corporations are fairly straightforward and companies cannot go beyond the scope of the powers granted to them under their memorandum of association (ultra vires).

In Ashbury Railway Carriage and Iron Company Ltd v Riche (1875) the company gave the plaintiff a loan to build a railway in Belgium. Subsequently the company refused the loan and the plaintiff sued. The company, in its defense pleaded that it was beyond its powers to grant the loan. The courts held that if a company pursues objectives that are beyond its articles of association than such contracts are void.

However, if the company directors decide to go beyond their powers in furtherance of acts that may be beneficial to the society and the community than that decision may not be deemed ultra vires. In Evans v Brunner Mond & Company (1921) the court held that the company’s decision to donate £100,000 for research and study purposes would be conducive for the company’s long term success in the chemical industry. It also enhances the company’s standing in the community and society and such donations or contributions may also be tax deductible, so at the end of the day the company may gain more than it contributes.

Intoxication

In instances where someone who is intoxicated enters into a contract S 3 (2) of the Sale of Goods Act 1979 will most likely apply.

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Elements in a Contract XXXI – Void

A contract is void when it is no longer possible to comply with the terms of the contract. Property belonging to mentally disable persons for example are brought under the jurisdiction of the courts and contracts entered into by anyone suffering from a mental disability is normally rendered void.

The law seeks to protect their rights and interests by making any contract that they may have entered into without fully understanding or comprehending the nature and the terms of the contract by declaring such contracts void (Mental Health Act 1983).

A contract may also be declared void if the contract is beyond or exceeds the authority of a company or is made ultra vires (beyond the scope of one’s legal authority). In Ashbury Railway Carriage and Iron Company Ltd v Riche (1875) the company gave the plaintiff a loan to build a railway in Belgium. Subsequently the company refused the loan and the plaintiff sued. The company, in its defense pleaded that it was beyond its powers to grant the loan. The courts held that if a company pursues objectives that are beyond its articles of association than such contracts are void.

The presence of vitiating factors also renders a contract void. Vitiating factors that render a contract void are as follow: –

i) Mistake

ii) Duress or coercion

iii) Undue influence

iv) Illegality

In Scott v Coulson (1903) the plaintiff and the defendant entered into a contract to insure the life of a third party, who at the time the contract was entered into, they believed was alive, but as it turned out the third party in question was deceased. The court held that the contract was void.

In Couturier v Hastie (1856) a cargo of corn was on board a ship sailing from the Mediterranean to London. During the journey, due to extensive heat, the crew discovered that the cargo was going bad and sold the corn at the nearest port. In the meantime, the seller and buyer who were not aware of the fact that the corn had been sold, entered into a contract under the assumption that the corn was still on board the ship. It was held that the contract was void because the subject of the contract did not exist.

In Hartog v Colin and Shields (1939) the defendants were in possession of hare skins which they intended to sell at a price per piece as dictated by custom but instead quoted the price as per pound. When the defendants realized their mistake, they tried to stop the sale and the plaintiffs sued. The court held that the contract was void.

A mistake however will only render a contract void if it is a shared mistake and the mistake goes to the core or the root of the contract.

In McRae v Commonwealth Disposals Commission (1951) (Australian) for example, the defendant sold the plaintiff a wrecked tanker that did not exist. The plaintiff only became aware of the fact that the tanker did not exist after he’d spent a great deal of time and money looking for it. The plaintiff sued and the defendant argued that the contract was void. The court rejected the defendant’s argument and held that the sale of the wreck included an implied warranty that the wreck did indeed exist and therefore the defendant was liable and was ordered to pay damages.

A contract is also rendered void when an innocent party is coerced or compelled into entering into a contract. In Walter v Morgan (1861) the defendant had acquired some land and the plaintiff compelled the defendant to sign a lease allowing the plaintiff to mine on the land. The defendant once he’d discovered the true value of the land refused to allow the plaintiff to mine on the land and the plaintiff brought an action against the defendant. The court rejected the plaintiff’s argument and found in favor of the defendant.

Contracts that are against the law or contravene the law are also rendered void. In Anderson Ltd v Daniel (1924) the seller sold the buyer artificial fertilizer. According to the law any invoice for the sale of artificial fertilizers must include details of the chemicals that were used in the manufacturing process. Because the seller had not complied with the legal requirements, the buyer refused to pay and the court found in favor of the buyer.

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Elements in a Contract XXX – Promissory Estoppel

Promissory estoppel (equitable estoppel) is an equitable doctrine and operates in accordance with equitable principles. According to the doctrine, when one party makes a promise to another party and the second party relies on the promise and acts to his or her detriment than that promise is a valid promise and is a promise that is enforceable at law.

In Hughes v Metropolitan Railway (1877) the tenant under a lease was obligated to keep the property in a good state of repair and the landlord having inspected the premises and found that the tenant hadn’t complied with the obligation gave the tenant 6 months to complete the repairs failing which the tenant would have to vacate.

Subsequently the tenant and the landlord entered into an agreement for the sale and purchase of the property and the tenant who was under the impression that the property was going to shift hands or that he was going to acquire the property failed to make the stipulated repairs because the repairs were not something he’d make if he owned the property.

Towards the end of the 6 month period the negotiations had broken down and the tenant did not make the necessary repairs and the landlord claimed that the lease had been forfeited because the tenant had not made the said repairs.

It was held that the 6 month period started from the time the negotiations had broken down. Where the landlord had by himself entered into negotiations with the tenant after he’d stipulated that a failure to make the repairs would result in the forfeiture of the lease, that stipulation is deemed to be held in abeyance or is suspended until the negotiations are complete and the tenant can rely on the implied promise that the landlord will not forfeit the lease until the 6 month period is complete or has run its course.

In Central London Property Trust Ltd v High Trees House Ltd (1947) the plaintiffs owned a block of flats and rented it out to the defendants in 1939. The defendants in turn sought to rent out each flat to make up the money that they were to pay the plaintiff. Subsequently the Second World War broke out and many of the flats remained unoccupied. The plaintiffs allowed the defendants to pay only half the annual amount that was due to them. In 1945 the flats were fully occupied and the plaintiff claimed the rent for the last 2 quarters. The Court of Appeal found in favor of the plaintiff and allowed them two recover the full rent for the last 2 quarters but qualified it by saying that should the plaintiff have tried to recover the full rent that was due to them between 1940 – 1945 they would not have been successful.

The question that comes to mind is, is this then an exception to the rule in Pinnel’s Case (1602) which says that in instances of debts, part payment will not amount to sufficient consideration?

Pinnel’s Case (1602) was reaffirmed in Foakes v. Beer (1884) where the defendant owed the plaintiff a certain amount of money and made an arrangement with the plaintiff to pay it off in installments but no mention was made of the interest. The defendant eventually paid off the full debt as promised but the plaintiff brought an action for the outstanding interest and the plaintiff was successful.

In would appear so. In addition to that we also have to keep in mind that when there is a conflict between equity and common law, equity will prevail.

Promissory estoppel however cannot be used to create a new right and neither can it be used to as an offensive tool because the equitable maxim that equity is used only as a shield and not a sword will apply. The party relying on promissory estoppel merely seeks to enforce an existing promise that he or she has acted on.

In Combe v Combe (1951) Mrs. Combe relied on her husband’s promise to make maintenance payments and brought an action against her husband for failing to adhere to the promise relying on the doctrine of promissory estoppel. The court held that there wasn’t a legal promise in place (domestic agreements are generally not considered or regarded to be legally binding agreements) and that promissory estoppel because of its equitable nature cannot be used to bring an action against someone.

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Elements in a Contract XXIX – Voidable Contracts

A contract is voidable when the terms of the contract continue to exist but the innocent party or the aggrieved party has a choice of either following through with the contract or otherwise. As a general rule contracts involving minors are voidable.

In Corpe v Overton (1833) a minor paid a certain amount of money towards a partnership that was to be formed in the future. He subsequently repudiated the contract and the court held that he was entitled to get his money back i.e. he was under no obligation to continue with the contract.

In Steinberg v Scala (Leeds) Ltd (1923) however, a minor paid some money towards acquiring some shares. She later made another payment and then decided to withdraw the payment and requested for the subsequent payment to be returned. The court rejected her request on the grounds that she received something in return for the sum that she had paid i.e. the shares.

Both the plaintiffs in Corpe v Overton (1833) and Steinberg v Scala (Leeds) Ltd (1923) at the time they entered into the contract were unaware of how things would pan out in the future. In the former however the plaintiff did not receive anything in return for the monies he had paid while in the latter the plaintiff did receive something in return for what she had paid.

When one of the parties in a contract has entered into a contract but suffers from a mental disability, is intoxicated, is illiterate or has little knowledge of the language the contract is in, the contract is voidable provided that the other party is aware of the condition of the party he or she is contracting with. If the other party is not aware than the general rule is that the parties would be bound by the terms of the contract.

In Thompson v London, Midland and Scottish Railway (1930), the plaintiff purchased a ticket from the railway company and thereafter boarded a train. On the ticket, which was obtained at the time of the purchase there was a clause (an exclusion clause) that stated that the Railway Co. will not be liable for any personal injury incurred during travel. The plaintiff was unable to read the clause because she was illiterate. The plaintiff was injured during her journey and brought an action against the Railway Co. who relied on the exclusion clause to escape liability. It was held that the clause was a valid term of the contract and the fact that the plaintiff could not read did not make a difference.

In L’Estrange v Graucob (1934) the plaintiff purchased a vending machine and signed a contract with the defendant company without reading the fine print on it which contained an exclusion clause. The vending machine proved defective and the plaintiff brought an action against the defendant company. It was held that regardless of the fact that the plaintiff had not read the fine print in the contract, as long as the party signs the contract then it will be deemed that the party has read the terms in the contract and is thereby bound by the said terms.

In Hart v O’Connor (1985) (Privy Council) a buyer entered into a contract with the seller for the sale of some land. At the time he entered into the contract the buyer was unaware that the seller suffered from a mental disability. The seller later tried to repudiate the contract but the court held that there was a valid contract in place.

In most instances and circumstances especially in contracts of sale and purchase the condition of the parties will become apparent at the time of negotiations for example if someone is drunk it would be fairly obvious and likewise if a person suffers from a mental illness it would be fairly apparent and therefore the rule that the contract is only voidable if one party is aware of the other party’s condition is one that is reasonable.

Admittedly the decision in Thompson v London, Midland and Scottish Railway (1930) may be deemed to be slightly unjust but it is an exception and it is difficult to make laws to cover all possibilities or eventualities. In most instances there is always going to be some exception that the law doesn’t cater for.

The rule also exists to prevent a plaintiff or a defendant from feigning that he or she lacked the capacity to enter into a contract. Say for example when a party to a contract has sufficient understanding of the language to comprehend the terms in the contract but later in an attempt to set aside the contract says that he or she does not understand the language.

In Barclays Bank v Schwartz (1995) the defendant tried to escape liability by arguing that he lacked the capacity to enter into contracts which left him owing £0.5 million by claiming that he did not have sufficient language skills to enter into the contracts. The court held that, if he had sufficient skills to realize he is entering into a contract then he is liable.

Copyright © 2017 by Dyarne Ward

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Elements in a Contract XXVIII – Privity of contract

The privity rule applies to third parties in a contract. Third parties in a contract are defined as persons who have not provided any consideration but stand to derive some benefit from the contract. In Beswick v Beswick (1968) the plaintiff’s husband sold a business to his nephew with the stipulation that an annual income be made to him and upon his death to his wife. The nephew failed to make the stipulated payments, following his uncle’s death, as agreed, and the plaintiff sued. Under normal circumstances the plaintiff would not be able to sue because she was not a privy to the contract but because she was also the executor of the deceased’s estate, she was able to bring the matter before the courts.

The Law Commission Report 1996 – Privity of Contract, highlighted some of the difficulties caused by the rule especially in insurance contracts and other contracts that sought to confer rights on third parties like construction contracts and in such instances the aggrieved party had to commence an action in tort as opposed to suing for a breach of contract to obtain a remedy.

Subsequently the Contracts (Rights of Third Parties Act) 1999 was enacted and it diminished the application or the scope of the privity rule. Section 1 (1) – Subject to the provisions of this Act, a person who is not a party to a contract (a “third party”) may in his own right enforce a term of the contract if –

(a) the contract expressly provides that he may, or

(b) subject to subsection (2), the term purports to confer a benefit on him

Section 1 (2) – Subsection (1) (b) does not apply if on a proper construction of the contract it appears that the parties did not intend the term to be enforceable by the third party.

It is however worth knowing the privity rule because a lot of the cases in contract law were decided prior to 1999 and at a time when the privity rule was very much alive. The basis of the rule is straightforward enough i.e. one cannot hope to obtain some form of benefit under a contract unless one has provided some form of consideration, which sometimes left parties who intended to confer benefits on their next of kin for example spouse or their children, out on a limb.

The Contracts (Rights of Third Parties Act) 1999 has however remedied any shortcomings that may result from strict application of the privity rule and it paves the way for more equitable outcomes.

In Tweddle v. Atkinson (1861) the parents of the bride and groom agreed to pay a certain sum of money to the groom upon his marriage to the bride. The bride’s father died before the payment could be made and the groom brought a claim against his estate. The court ruled that because consideration did not move from him, he was unable to claim i.e. he was a third party to the contract and therefore he was not entitled to claim.

In Scruttons Ltd v Midland Silicones Ltd (1962) the carriers (a shipping company) and the plaintiffs entered into a contract to transport drums of chemicals. The contract contained an exclusion clause which limited liability for any damage incurred to the amount of £179 per drum. While the stevedores were loading the drums onto the ship one of the drums incurred damage in excess of £179 and the plaintiffs sued for the full extent of the damage. The defendants (the stevedores) claimed that the damage should only be limited to £179 but the court found in favor of the plaintiff. Applying the privity rule it was held that the defendants could not limit their liability to the amount stated in the contract because they were not privy to the contract.

Despite the application of the rule prior to the enactment of the Contracts (Rights of Third Parties Act) 1999, the courts have displayed a willingness, depending on the facts of the case, to depart from the rule.

In Jackson v Horizon Holidays (1975) the plaintiff booked a holiday with his family aboard based on what had been advertised. When they arrived at their holiday destination they found that the living accommodations were nothing like the advertisement and the conditions were unsatisfactory. As a result, the plaintiff sued for compensation not only for himself but also for his wife and family. It was held that the plaintiff was not only entitled to recover for the disappointment that he’d suffered but he was also able to recover for the disappointed incurred by his wife and children, despite the fact that the wife and children were not privy to the contract.

Copyright © 2017 by Dyarne Ward

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