Term
| Is the test of ICLR objective or subjective? |
|
Definition
|
|
Term
| What is the general assumption w.r.t ICLR in agreements in social and family relations? |
|
Definition
| No ICLR - however, determining this distinction can be quite tricky |
|
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Term
| Which case can be used to show that ICLR is an essential ingredient in the formation of a contract? |
|
Definition
| Rose and Frank Co. v Crompton Bros [1925] |
|
|
Term
| Rose and Frank Co. v Crompton Bros [1925] |
|
Definition
TO CREATE A CONTRACT THERE MUST BE A COMMON INTENTION OF THE PARTIES TO ENTER IN TO LEGAL OBLIGATIONS (COMMUNICATED EXPRESSLY OR IMPLIEDLY)...
HOWEVER, IT IS ALSO POSSIBLE FOR PARTIES TO ENTER INTO AN AGREEMENT WITH THE INTENTION THAT IT DOES NOT GIVE RISE TO LEGAL RELATIONS
Cs & Ds signed an agreement which stated that the agreement entered into did not create legal relations
HELD - ICLR was rebutted, therefore, there was no ICLR and no contract could be enforced |
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Term
| General rule w.r.t ICLR in domestic agreements? |
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Definition
| No ICLR - however, determining this distinction can be quite tricky |
|
|
Term
| General rule w.r.t ICLR in commercial agreements? |
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Definition
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Term
| Which two cases can be used to show that determining when an agreement is domestic or not = tricky... |
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Definition
Edmunds v Lawson [2000]
Sadler v Reynolds [2005] |
|
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Term
|
Definition
| DETERMINING WHEN A CONTRACT IS DOMESTIC (AND THUS HAS NO ICLR) = TRICKY |
|
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Term
|
Definition
| DETERMINING WHEN A CONTRACT IS DOMESTIC (AND THUS HAS NO ICLR) = TRICKY |
|
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Term
| Well Barn Farming Ltd v Backhouse [2005] |
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Definition
THE COURTS WILL READILY IMPLY THAT AGREEMENTS IN A COMMERCIAL SETTING HAVE ICLR
a casual temporary agreement to cut back woodland in return for a license to occupy land was held to have ICLR |
|
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Term
| If a party to an agreement wants to assert that there is no ICLR, what happens?? |
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Definition
The onus is on the party to rebut the presumption that there is ICLR.
However, rebutting the presumption is hard to do |
|
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Term
| Which case can be used to show the presumption of ICLR in commercial agreements AND that rebutting this presumption is very difficult |
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Definition
| Bunn & Bunn v Rees & Parker [2002] |
|
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Term
| Bunn & Bunn v Rees & Parker [2002] |
|
Definition
THERE IS THE PRESUMPTION OF ICLR IN COMMERCIAL AGFREEMENTS. THIS PRESUMPTION IS HARD TO REBUT.
OBITER - 'rebutting the presumption is hard'
Ds signed a document, but later claimed that it was only a 'negotiating' document, and did not show ICLR
HELD - documents could be binding, even if there were some final details to be worked out. Ds were experienced people and knew the consequences of signing such a document. Onus was on the D to rebut the presumption,and they had failed to do so. OBITER - rebutting the presumption is HARD |
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Term
| Which case can be used to show the presumption that experienced business people should be aware of the consequences of signing documents? And also that documents can be binding even if there remained some finer details to be worked out? |
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Definition
| Bunn & BUnn v Rees & Parker [2002] |
|
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Term
| What words can be used to rebut the presumption of ICLR? |
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Definition
|
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Term
| What is an 'honourable pledge clause'? |
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Definition
| A clause which rebuts the presumption of ICLR - a clause which states that the contract shall not be subject to legal jurisdiction. |
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Term
| What case can be used as an example of where ICLR has successfully been rebutted in a commerical agreement? |
|
Definition
| Rose and Frank Co. v Compton Bros. [1925] |
|
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Term
| Rose and Frank Co. v Compton Bros. [1925] |
|
Definition
EXAMPLE OF A CASE IN WHICH THE ICLR PRESUMPTION IS REBUTTED
Use of the words - 'this agreement is not entered into, nor is this memorandum written, as a formal or legal agreement, and shall not be subject to legal jurisdiction in the law courts of the United States or England'
HELD - giving effect to the parties obligations under executed agreements |
|
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Term
| What are two flaws with the reasoning in Rose and Frank Co. v Compton Bros. [1925] |
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Definition
1) If, as the clause states, it has no legal force, then how could it be legally binding?
2) how did this clause not fall foul of the rule against ousting the jurisdiction of the courts? |
|
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Term
|
Definition
| AGREEING TO DO SOMETHING 'EX GRATIA' (BY FAVOUR) IS NOT SUFFICIENT TO REBUT THE ICLR PRESUMPTION |
|
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Term
| Baird Textile Holdings v Marks and Spencer plc [2001[ |
|
Definition
AN OBJECTIVE ASSESSMENT OF ALL THE EVIDENCE IS ENOUGH TO REBUT THE PRESUMPTION (THEREFORE, DOESN'T NECESSARILY REQUIRE EXPLICIT WORDS)
In this case, the evidence presented to the courts was held to show that the parties did not want a formal contract so as to retain a flexible relationship |
|
|
Term
| Licenses Insurance Coproration v Lawson [1896] |
|
Definition
IF A STATEMENT IS MADE IN JEST, OR IN ANGER, IT MAY BE PRESUMED THAT THERE IS NO ICLR
The D had made a statement in anger, which could have been regarded as creating a contract.
HELD - on an objective view, a person at the meeting would not reasonably have taken it to have been intended to form a legally binding contract |
|
|
Term
| What is the general rule w.r.t ICLR in advertisements |
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Definition
| Advertisments are presumed not to give rise to ICLR |
|
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Term
| Which case shows rebuts the general rule that advertisments have no ICLR? |
|
Definition
| Carlil v Carbolic Smoke Ball Co Ltd [1893] |
|
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Term
| Why/how does Carlil v Carbolic Smoke Ball Co Ltd [1893] rebut the general presumption that advertisments have no ICLR? |
|
Definition
| Because, through claiming to have deposited £1000 in a named bank, there was an implied ICLR |
|
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Term
| Bowerman v Association of British Travel Agents [1996] |
|
Definition
ANOTHER CASE IN WHICH AN ADVERT WAS HELD TO SHOW ICLR
HELD - the advert/document would reasonably be read by a member of the public as containing an offer of a promise which parties were entitled to rely on |
|
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Term
| Esso Petroleum Co. v Commissioners of Customs and Excise [1976] |
|
Definition
ANOTHER EXAMPLE OF AN ADVERT = ICLR
C's offered customers a free coin when they purchased 4 gallons of petrol.
HOL majority = yes, ICLR w.r.t transfer of the coins, on the basis that there was a large commercial advantage that the C's would derive from the promotion
HOL minority = no ICLR, because, amongst other things, the coins had a trivial value, and no customer was likely to perceive that a legal remedy could be relied upon if they were refused a coin.
However, THE TRIVIAL NATURE OF A TRANSACTION AND UNWILLINGNESS TO LITIGATE ARE NOT RELEVANT TESTS FOR ESTABLISHING ICLR |
|
|
Term
| Why was the majority ruling in 'Esso Petroleum Co. v Commissioners of Customs and Excise [1976]' unsatisfactory? |
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Definition
| Because, whilst on the part of Esso, ICLR could be gleaned, it is not possible to identify ICLR with the other contracting parties (the customers who purchased the petrol) |
|
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Term
| Are 'triviality of the transaction' and 'unwillingness to litigate' relevant factors that should be considered when trying to determine whether there is ICLR? |
|
Definition
|
|
Term
| What is a comfort letter? |
|
Definition
| A comfort letter is a document prepared by an accounting firm assuring the financial soundness or backing of a company |
|
|
Term
| What is the general rule w.r.t whether comfort letters give rise to ICLR? |
|
Definition
| They may give rise to ICLR, however, the specific terms of such documents may also successfully demonstrate a lack of ICLR (need not explicitly state it) - need to analyse words to see whether they produce any promises etc.. |
|
|
Term
| Kleinwort Benson Ltd v Malaysia Mining Corporation [1989] |
|
Definition
COMFORT LETTERS WILL BE VERY LITERALLY CONSTRUED IN ORDER TO DETERMINE WHETHER THEY SHOW ICLR
D's had stated in two comfort letters that it was their 'policy to ensure that a subsidiary company is always able to pay it's debts'
HELD - the comfort letters had no ICLR. They merely stated the D's policy at the present time, and made no promises for the future |
|
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Term
| Are there some circumstances in which regulatory provisions automatically oust ICLR, unless certain requirements are fulfilled? |
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Definition
| YES - e.g. s179 Trade Union and Labour Relations Act 1992 = collective agreements between TUs have no ICLR, unless the agreement is in writing and contains provisions to that effect |
|
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Term
| What do the words 'subject to contract' do to presumed ICLR in agreements? |
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Definition
| Subject to contract creates a strong inference that the parties do not intend to be bound until the execution of a formal contract (this effect has been judicially recognised) |
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Term
| What is an example of a case in which 'subject to contract' has been held to oust the ICLR presumption? |
|
Definition
| Eccles v Byrant and Pollock [1948] |
|
|
Term
| Eccles v Byrant and Pollock [1948] |
|
Definition
'SUBJECT TO CONTRACT' HAS BEEN JUDICIALLY RECOGNISED TO OUST THE ICLR PRESUMPTION
Parties agreed on the sale of a certain property 'subject to contract'.
The contract was subsequently drawn up, the purchaser signed, but the vendor decided to withdraw
HELD - there was no contract between the parties, the prior agreement was only subject to contract |
|
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Term
| Chillingworth v Esche [1924] |
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Definition
| IT WOULD REQUIRE A VERY STRONG AND EXCEPTIONAL CASE FOR THE ICLR OUSTING EFFECT OF 'SUBJECT TO CONTRACT' TO BE OVERRIDDEN |
|
|
Term
| Alpenstow v Regalian Properties plc [1985] |
|
Definition
CASE IN WHICH'SUBJECT TO CONTRACT' WAS USED ALONGSIDE A PRECISE TIMETABLE FOR SUBMITTING CONTRACTS
HELD - 'subject to contract' was incompatible with the precise timetable, therefore, ICLR existed. |
|
|
Term
| What is an example of a case in which 'subject to contract' was used, but there was still found to be ICLR? |
|
Definition
| Alpenstow v Regalian Properties plc [1985] |
|
|
Term
| Why is it assumed that there is no ICLR in domestic agreements? |
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Definition
| As the reasonable person would not expect that they could sue another party for failing to fulfill the promise |
|
|
Term
| What can be used as examples of cases in which a domestic agreement was held not to create any ICLR |
|
Definition
Balfour v Balfour [1919]
Jones v Padvatton [1969] |
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Term
|
Definition
PRESUMPTED NO ICLR BETWEEN HUSBAND AND WIFE WHO ARE LIVING IN AMITY
H & W were living in France
W had to travel home because she was ill
H agreed to pay £30 per month for her expenses
H&W seperated
W sought to enforce the maintenance money
HELD = no ICLR |
|
|
Term
| What are examples of cases in which a domestic agreement was held to create ICLR? |
|
Definition
Meritt v Meritt [1970]
Simpkins v Pays [1955]
Peck v Lateau [1973] |
|
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Term
|
Definition
EXAMPLE OF DOMESTIC AGREEMENT = ICLR
WHERE THE COUPLE IS ESTRANGED WHEN THE AGREEMENT IS MADE (OR IS ABOUT TO BECOME ESTRANGED)
H&W separated
H agreed to pay maintenance to wife and children
H stopped paying
W sued
HELD = ICLR, because couple were not living in amity |
|
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Term
| How is Meritt v Meritt [1970] distinguieshed from Balfour v Balfour [1919] |
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Definition
| Because in Meritt, the H&W were seperated and not living in amity. |
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Term
|
Definition
| PRESUMED NO ICLR BETWEEN A MOTHER AND A DAUGHTER |
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Term
|
Definition
MUTUALITY IN ARRANGEMENTS BETWEEN CHUMS IS SUFFICIENT TO SHOW ICLR IN A DOMESTIC AGREEMENT
Chums equally contributed on a weekly basis to a weekly competition, however, entry was submitted in the D's name
When they won, D tried to keep all the winnings
HELD - there was sufficient mutuality in the arrangements between the parties to demonstrate ICLR |
|
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Term
|
Definition
PREVIOUS CONDUCT OF THE PARTIES IS SUFFICIENT TO SHOW ICLR IN A DOMESTIC AGREEMENT
Bingo pals, who agreed to always share their winnings
This was complied with until one of the women won £11,000
HELD - due to previous conduct, there was sufficient evidence to show ICLR |
|
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Term
|
Definition
| Generally NO... even if the other contracting party does not know that the minor is a minor, or if the minor has lied abut their age |
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Term
| What statute/common law allows for a minor to have ICLR in certain circumstances? |
|
Definition
1) Minor's Contract Act 1987
2) Doyle v White City Stadium [1935] |
|
|
Term
| s3(3) Sale of Goods Act 1979 |
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Definition
| DEFINES 'NECESSARIES' - goods suitable to the condition in life of the minor or other person concerned and to his actual requirements at the time of the sale and delivery |
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Term
|
Definition
A MINOR CAN ONLY BE BOUND BY A CONTRACT TO PURCHASE NECESSARY ITEMS
D was a minor who was an undergrad at Cambridge
D went to a tailors (C) and ordered lots of fancy clothes
C sued D for payment
HELD - given that D = cambridge undergrad, the clothes were appropriate & could be necessary, HOWEVER, as the D already had sufficient clothing, it was held that the clothes were not necessary |
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Term
| Can a minor be bound by a contract of employment? (common law principle) |
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Definition
| YES - but only if the employment is for their benefit |
|
|
Term
| Which case confirmed that a minor can only be bound by an employment contract if the contract is for their benefit? |
|
Definition
| Doyle v White City Stadium [1935] |
|
|
Term
| Doyle v White City Stadium [1935] |
|
Definition
| A MINOR CAN ONLY BE BOUND BY AN EMPLOYMENT CONTRACT IF THE CONTRACT IS FOR THEIR BENEFIT |
|
|
Term
| Aylesbury Football Club v Watford Association Football Club [2000] |
|
Definition
A MINOR'S EMPLOYMENT CONTRACT WAS HELD TO BE NON-ENFORCEABLE BECAUSE THE CONTRACT WAS NOT FOR HIS BENEFIT.
This was found for a number of reasons:
1) Minor did not receive extra training as a result of the contract (vs other minors who didn't have contracts)
2) Minor did not receive a workable football players wage, because his contract was non-registerable with the FA
3) The payment of wages depended on the will of the employer
4) The contract was extremely onerous and restricted the minor's main interest which was the freedom to pursue his football career (dispute arose because minor wanted to play with another team) |
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|
Term
| Proform Sports Management v Proactive Sports Management Ltd [2007] |
|
Definition
A MINOR MAY ONLY ENTER INTO A CONTRACT IF IT IS FOR NECESSARIES, EMPLOYMENT, APPRENTICESHIP OR EDUCATION
Wayne Rooney signed a contract with an agent. The contract was held not to be for education, employment, apprenticeships, or necessaries... therefore, the contract was binding |
|
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Term
| Which case confirms that a minor may only enter into a contract if the contract is for - necessaries, employment, apprenticeships, or education |
|
Definition
| Proform Sports Management v Proactive Sports Management Ltd [2007] |
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Term
| Which case confirms that where a minor rescinds a voidable contract upon turning 18, monies paid by the minor are only refundable if there has been a total failure of consideration? |
|
Definition
|
|
Term
|
Definition
| IF A MINOR RESCINDS A CONTRACT UPON TURNING 18, MONIES PAID BY THE MINOR ARE NON-REFUNDABLE, UNLESS THERE HAS BEEN A TOTAL FAILURE OF CONSIDERATION |
|
|
Term
| Which statute governs the ICLR / capacity of minors to enter in to contracts? |
|
Definition
| Minor's Contracts Act 1987 |
|
|
Term
| Minor's Contracts Act 1987 |
|
Definition
| Governs the ability of minors to enter into legally binding contracts |
|
|
Term
| Is a contract entered into by a minor void? |
|
Definition
NO, it is not void (Minor's Contracts Act 1987).
It is VOIDABLE
Generally, the minor will not be bound by the contract - whilst the other party will be bound |
|
|
Term
| What are the four circumstances in which a minor can be bound by a contract? |
|
Definition
1) Contract for necessities
2) Contract for employment, apprenticeships and education
3) Contracts which are binding on the minor, unless the minor repudiates them before / within a reasonable time of turning 18 (voidable contracts)
4)Contracts which are ratified by the minor upon him reaching 18 |
|
|
Term
| If a voidable contract requires a minor to repudiate it upon/within a reasonable time of turning 18, and the minor fails to do so, what will happen? |
|
Definition
| The minor will be bound by the contract |
|
|
Term
| s3(1) Minor's Contracts Act 1987 |
|
Definition
If
a) a contract entered into by a minor is unenforceable
b) a contract entered into by a minor is repudiated by the minor upon reaching 18
A court may, if it is just and equitable to do so, require the minor to transfer to the plaintiff any property acquired by the minor under the contract |
|
|
Term
| Which parts of which statute govern when a mentally incapacitated person may enter into a contract? |
|
Definition
|
|
Term
| S2 Mental Capacity Act 2005 |
|
Definition
| A person lacks capacity if he is unable to make a decision for himself in relation to the matter at the time the contract is made, whether the impairement is temporary or permanent |
|
|
Term
| s3(1) Mental Capacity Act 2005 |
|
Definition
A person is unable to make a decision in relation to the matter if he is unable to:
a) understand the information relevant to the decision
b) to retain that information
c) to use or weight that information as part of the process of making a decision
d) to communicate his decision (whether by talking, using sign language or other means) |
|
|
Term
| s3(4) Mental Capacity Act |
|
Definition
the 'information' required in s3(1) relates to the reasonably foreseeable consequences of
a) deciding one way or another
b) failing to make a decision |
|
|
Term
| s15 Mental Capacity Act 2005 |
|
Definition
| Creates a 'Court of Protection', and gives it the power to make declarations as to a person's capacity and ability to contract in specified situations |
|
|
Term
| s7 Mental Capacity Act 2005 |
|
Definition
| A mentally impaired person still remains liable to pay a reasonable price for 'necessaries' |
|
|
Term
| s7(2) Mental Capacity Act |
|
Definition
DEFINES 'NECESSARIES' FOR MENTALLY INCAPACITATED PERSONS
Goods or services suitable to a person's condition of life and to his actual requirements at the time when the goods or services are supplied. |
|
|
Term
| Which statutory provision defines 'necessaries' for minors? |
|
Definition
| s3(3) Sale of Goods Act 1979 - goods suitable to the condition in life of the minor or other person concerned and to his actual requirements at the time of the sale and delivery |
|
|
Term
| Which statutory provision defines 'necessaries' for mentally impaired persons? |
|
Definition
| s7(2) Mental Capacity Act 2005 - Goods or services suitable to a person's condition of life and to his actual requirements at the time when the goods or services are supplied. |
|
|
Term
| What happens if a person claims a mental incapacity which is not covered / contained within the Mental Capacity Act 2005? |
|
Definition
The claimant must establish that:
a) he did not understand what he was doing
and,
b)show that the other person knew that the claimant did not understand what he was doing |
|
|
Term
| If a person forms a contract when he lacks capacity to do so, what happens to the contract? |
|
Definition
| It is voidable - subject to the usual requirements of necessity |
|
|
Term
| Which cases confirm the test that must be met in order for a person to successfully claim he was mentally impaired, in a manner which is not covered by the Mental Capacity Act 2005 |
|
Definition
Imperial Loan Co v Stone [1982]
confirmed in...
Hart v O'Connor [1985] |
|
|
Term
Imperial Loan Co v Stone [1982]
confirmed in...
Hart v O'Connor [1985] |
|
Definition
In order for a person to successfully claim that he was impaired in a manner which is not covered by the Mental Capacity Act 2005, he must:
a) show that he did not understand what he was doing
and,
b) show that the other person knew that the claimant did not understand what he was doing |
|
|
Term
| Which cases show that intoxicated persons, to the extent that they do not know what they are doing, are mentally impaired |
|
Definition
Gore v Gibson [1843]
Mathews v Baxter [1873] |
|
|
Term
Gore v Gibson [1843]
Mathews v Baxter [1873] |
|
Definition
| DRUNK PEOPLE ARE MENTALLY IMPAIRED |
|
|
Term
| Can a person who is intoxicated by substances other than alcohol claim incapacity? |
|
Definition
| Logically, the answer should be yes - not confirmed by any cases |
|
|
Term
| What is an incorporated company? |
|
Definition
| A company which is compiled of shares, and has stockholders, and a board of directors acting on behalf of shareholders |
|
|
Term
| Generally, does an incorporated company have the requisite ICLR? |
|
Definition
|
|
Term
| Which case can be used to highlight the historical position w.r.t ICLR of incorporated companies? |
|
Definition
| Ashbury Railway Carriage and Iron Co. v Riche [1875] |
|
|
Term
| What was the 'historical/old' position on the ICLR of incorporated companies? |
|
Definition
| An incorporated company had no ICLR if it was acting ultra vires w.r.t to powers conferred to it by the company's constitution |
|
|
Term
| Ashbury Railway Carriage and Iron Co. v Riche [1875] |
|
Definition
OLD POSITION - AN INCORPORATED COMPANY LACKED ICLR IF IT WAS ACTING ULTRA VIRES
Directors made contract to build a railway in Belgium
Directors did not have the power to do this
HELD - no contract |
|
|
Term
| What was the problem with the rule laid out in Ashbury Railway Carriage and Iron Co. v Riche [1875] |
|
Definition
| It caused hardship to innocent third parties who were acting in good faith, and had no possibility of knowing that the company lacked ICLR because it was acting ultra vires |
|
|
Term
| What was done to overcome the problem with the rule laid out in Ashbury Railway Carriage and Iron Co. v Riche [1875] |
|
Definition
| s39(1) of the Companies Act 2006, which held that - where a company forms a contract which lacks ICLR, as a consequence of the directors acting ultra vires the company's constitution, the contract will still be enforceable |
|
|
Term
| s39(1) Companies Act 2006 |
|
Definition
Company's consitution will no longer be a relevant consideration in deciding whether a decision of the directors has the requisite ICLR
where a company forms a contract which lacks ICLR, as a consequence of the directors acting ultra vires the company's constitution, the contract will still be enforceable |
|
|
Term
| What is the consequence of s39(1) Companies Act 2001? |
|
Definition
| Innocent third parties acting in good faith are protected even if the company they contract with is acting ultra vires |
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