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    Contract Law

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    Ninad Sharma
    The document discusses the legal requirements of certainty and intention to create legal relations for the formation of valid contracts. It summarizes that agreements will not be enforced unless the parties intended to create contractual obligations, and there is a presumption of non-intent in domestic arrangements. It also discusses that terms must be sufficiently certain and parties cannot leave essential terms open for future negotiations. The document provides case examples on these requirements.

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    Contract Law

    Uploaded by

    Ninad Sharma
    32 views14 pages
    The document discusses the legal requirements of certainty and intention to create legal relations for the formation of valid contracts. It summarizes that agreements will not be enforced unless the parties intended to create contractual obligations, and there is a presumption of non-intent in domestic arrangements. It also discusses that terms must be sufficiently certain and parties cannot leave essential terms open for future negotiations. The document provides case examples on these requirements.

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    The document discusses the legal requirements of certainty and intention to create legal relations for the formation of valid contracts. It summarizes that agreements will not be enforced unless the parties intended to create contractual obligations, and there is a presumption of non-intent in domestic arrangements. It also discusses that terms must be sufficiently certain and parties cannot leave essential terms open for future negotiations. The document provides case examples on these requirements.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    32 views14 pages

    Contract Law

    Uploaded by

    Ninad Sharma
    The document discusses the legal requirements of certainty and intention to create legal relations for the formation of valid contracts. It summarizes that agreements will not be enforced unless the parties intended to create contractual obligations, and there is a presumption of non-intent in domestic arrangements. It also discusses that terms must be sufficiently certain and parties cannot leave essential terms open for future negotiations. The document provides case examples on these requirements.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 14

    Contract Law I

    Certainty and Intention to Create


    Legal Relations
    Prof. Christina Perry
    Q3, 2012 Exam (to discuss)
    Gertrude places the following notice on a community listings website on
    Sunday:
    “For sale. Flat-screen 32” RG television. Two years old, excellent condition.
    £400 or nearest offer. Will consider all offers. Contact Gertrude,
    07445613472, [email protected], 45 Wallingford Close SW22 5EL.”
    Tom telephones Gertrude on Sunday evening and leaves a message on her
    answering machine saying that he will pay £350 for the television. On
    Tuesday, he leaves another message saying that he will pay £450 for the
    television.
    Olga emails Gertrude on Monday saying that she is willing to pay £400 for the
    television but would like to look at it first, and asking for Gertrude to let her
    know a good time to come and look at the television. Due to a fault with
    Gertrude’s broadband, she does not receive the email until Thursday.
    Arianna visits Gertrude at home on Wednesday and gives her £400 for the
    television. Arianna takes the television away with her. On Wednesday
    evening, Gertrude removes the notice from the website.
    Advise the parties.
    IRAC – Problem questions
    • Issue
    – What are the legal issue(s) relevant to the
    problem?
    • Rule
    – What are the relevant legal rules and where
    can they be found? Statutes, cases?
    • Application
    – Apply the relevant rules to the problem
    question
    • Conclusion
    Intention to create legal relations
    • Agreements will not be enforced unless
    the parties intended to create contractual
    relations
    – Balfour v. Balfour [1919] 2 KB 571
    – Edmonds v. Lawson [2000] QB 501
    Social/domestic arrangements
    • In the case of agreements entered into in
    a domestic context the presumption is that
    the parties did not intend to create legal
    relations
    – Balfour v. Balfour
    – Jones v. Padavatton [1969] 1 WLR 328
    – Parker v. Clark [1960] 1 WLR 286
    Intention and reasonable
    expectation
    • Test is an objective test
    • If a reasonable person would consider that
    there was an intention to contract, then the
    person making the promise would be
    bound
    – Carlill v. Carbolic Smoke Ball Co.
    – Edmonds v. Lawson
    Commercial agreements
    • General presumption that there is an
    intention to contract in commercial
    agreements
    – Esso Petroleum v. Customs & Excise [1976] 1
    WLR 1
    – Rose & Frank Co. v. J.R. Crompton & Bros
    [1925] AC 445
    – Kleinwort Benson Ltd. v. Malaysia Mining
    Corp. Bhd [1989] 1 WLR 379
    Certainty
    • In order to constitute a valid contract the
    parties must so express themselves that
    their meaning can be determined with a
    reasonable degree of certainty
    • It is plain that unless this can be done it
    would be impossible to hold that the
    contracting parties had the same
    intentions
    • What happens when parties want to build
    uncertainty/flexibility into the contract?
    Certainty
    • May & Butcher v. R [1945] 2 KB 17
    – “The whole of the old tentage which may
    become available…” “price to be agreed upon
    from time to time”: Held: no valid contract
    • Hillas v Arcos (1932) 147 LT 503
    – Option to purchase “100,000 standards of fair
    specification” Held: valid contract
    • Foley v Classique Coaches [1934] 2 KB 1
    – Petrol supply contract. Price “to be agreed by
    the parties in writing and from time to time.”
    Held: binding agreement- imply that price to
    be reasonable and arbitrate
    Ambiguity, vagueness,
    incompleteness
    • Scammell v. Ouston [1941] AC 251
    – Car on Hire Purchase conditions
    • Nicolene v. Simmonds [1953] QB 543
    – Severance of problematic term
    • Winn v. Bull Chancery Division (1877) 7
    Ch.D 29, 26 WR 230
    • Raffles v. Wichelhaus (1864) 2 Hurl & C
    906, 159 ER 375
    Agreements to negotiate
    • Walford v Miles [1992] 2 AC 128
    • Agreements to agree are unenforceable (where
    no performance):
    • Lock-out agreement is not enforceable in
    context of negotiations for sale of business
    • Lord Ackner: indefinite length was real problem-
    could not be saved by implied duty to negotiate
    in good faith.-adversarial nature…
    • Petromec Inc. v. Petroleo Brasileiro SA Petrobas
    (no.3) [2005] EWCA CIv 891
    A modern approach?
    • Bear Stearns Bank v Forum [2007] EWHC
    1576 Andrew Smith J cites with approval Loyd
    LJ in Pagnan v Feed Products [1987] 2 Ll Rep
    601 at 609
    • “there is no legal obstacle which stands in the
    way of the parties agreeing to be bound now
    while deferring important matters to be agreed
    later”
    • “Parties are masters of their own contractual
    fate” Bingham J in Pagnan at first instance
    Implied terms
    • There needs to be agreement on all
    important terms of the contract for it to be
    certain enough to be enforceable
    • If parties still need to agree on important
    matters, there is an assumption that the
    parties are still in the middle of
    negotiations and do not intend to be
    legally bound
    • British Steel Corp. v. Cleveland Bridge &
    Engineering Co. Ltd. [1984] 1 All ER 504
    Performance & price determination
    • Generally, even if the only agreement
    between the parties is that of agreeing a
    price, the courts will usually enforce that
    agreement once performance has begun
    – Foley v. Classique Coaches
    – Sudbrook Trading Estate Ltd. v. Eggleton
    [1983] 1 AC 444

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