FE1 CONTRACT LAW NIGHT BEFORE NOTES - March 2018
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FE1 CONTRACT LAW
NIGHT BEFORE NOTES
March 2018
General Points
Your contract paper is often one of the most formalised structures of any of the FE1 exams. You will have
questions 1-4 being broad based problem questions, often spanning several topics (or at least different areas
in two distinct contractual scenarios portrayed in different paragraphs of the question) and then questions 5-8
being essay-style questions. The problem questions tend to be more predictable than the essay questions and,
in the main, easier to acquired marks in. The essays tend to be less predictable and often focus on very
specific aspects (sometimes niche) areas of contract law. Having said that, there will generally be some
straightforward questions and the examiner is often quite fair in asking one essay question as an ‘answer a or
b’ option – effectively giving you greater choice. However, watch out carefully for the other questions where
you must answer ‘a’ and ‘b’!
Your study cannot be too limited, as practically the scoping of the paper means that all areas are examinable
or could be considered under part of a problem question or in an essay question – but there are certain areas
that are of far more regular appearance and focus than others. For example, I would always recommend study
of Offer, Acceptance, Consideration/Estoppel, Contractual Terms, Exclusion Clauses, Consumer Contracts,
Mistake, Misrepresentation, Discharge and Damages – but whilst important, would also never suggest that is
all that is needed!
The recent October paper was relatively straightforward. There were the usual contenders – offer (requests
for information/quotations and unilateral offers); consideration (past consideration and the rule in Pinnel’s
case); exemption clauses; consumer contracts and misrepresentation in the problem questions while,
damages, formal and evidentiary requirements, EU harmonisation initiatives, interpretation of contracts and
implied terms featured in the essay questions. While I would not expect identical questions to reappear in
March, you should not work on an assumption that they will not reappear in some format on the March paper.
With this in mind and a good, case-law supported answer always being the key for contract law analysis,
please see below a few abbreviated notes on core areas for attention and review:
© City Colleges 1
www.citycolleges.ie 1850252740 info@citycolleges.ieOffer and Acceptance
• Distinction between Offer and Invitation to Treat (ITT)
o Offer must be “clear and unambiguous”
o Offer is a clear and unambiguous statement of the terms upon which the offeror is willing to
contract, should the person to whom the offer is directed decide to accept
o Clifton v Palumbo (“prepared to offer”: not sufficiently definite/detailed to be an offer)
o Gibson v Manchester City Council (“may be prepared to sell”: not sufficiently definite to be an
offer)
o Advertisements:
o Grainger & Sons v Gough (Wine price list: advertisements generally an ITT)
o Partridge v Crittendon (Advert re protected birds: advertisements generally an ITT)
o CA Norgren Co v Technomarketing (Price list of copyrighted item: an ITT)
o Leonard v Pepsi Co (Points for Harrier jet: humorous/no reasonable person would think it an
offer)
o Carlill v Carbolic Smokeball Company (Lodgement of £1000: offer serious/possibility of
unilateral offer)
o Kennedy v London Express newspapers (Registrants entitled to insurance: conceded that it
was a unilateral offer)
o Wilson v Belfast Corporation (Unauthorised advert that Council to pay ½ salary to enlistees:
not an offer)
o Billings v Arnott (Advert to pay ½ salary to enlistees: unilateral offer)
o Lefkowitz v Great Minneapolis Surplus Store (Discount sale “first come, first served”: clear,
definite, explicit unilateral offer)
o Display of Goods:
o Fisher v Bell (Display of flick knife: display generally an ITT)
o Minister for Industry & Commerce v Pim (Display of coat w/o credit terms being set out:
display generally an ITT)
o Pharmaceutical Society of Great Britain v Boots Cash Chemist (Display of goods an ITT/offer
to purchase when brought to cashier)
o Auctions:
o Harris v Nickerson (Advert re auctions generally an ITT)
o Warlow v Harrison (Advert re sale by auction an ITT / advert re T&Cs of auction, i.e. “without
reserve,” a unilateral offer)
o Tully v Irish Land Commission (Irish courts: advert re sale by auction an ITT / advert re T&Cs
of auction, i.e. “without reserve,” a unilateral offer)
o Barry v Davies (Cannot reject highest bidder / bidder entitled to recover damages from
auctioneer)
o Tenders:
o Similar approach vis-à-vis tenders
o Spencer v Harding (Advert re tenders generally an ITT / no obligation to sell to highest bidder
w/o specific undertaking)
o Harvela Investments v Royal Trust Co of Canada (undertaking to accept highest bidder /
cannot accept referential bid)
o Howberry Lane v Telecom Eireann (privilege clause / may accept referential bid / no
obligation to accept highest bidder)
o Smart Telecom v RTE (Referential bid only valid where expressly permitted)
o MJB Enterprises v Defence Construction (Canada: privilege clause / no obligation to accept
lowest bid / implied condition that only compliant bids accepted)
o Quotations, Requests for proposals/information
o Harvey v Facey (“lowest cash price”: quotation generally an ITT)
o Boyers v Duke (“lowest quotation”: quotation generally an ITT)
© City Colleges 2
www.citycolleges.ie 1850252740 info@citycolleges.ieo Dooley v Egan (quotation for immediate acceptance only: a unilateral offer)
• Terminating an Offer
o Revoking an offer:
o Paye v Cave (revoke any time before acceptance / revocation must be communicated)
o Routledge v Grant (offer open for 6 weeks: revoke any time before acceptance where no
consideration)
o Walker v Glass (offer open until certain date, deposit required: revoke any time before
deposit paid where no consideration)
o Dickinson v Dodds (Offer open until certain date: entitled to revoke before acceptance where
no consideration / revocation must be communicated / third party communication sufficient)
o Revoking a unilateral offer:
o Daulia v Four Millbank Nominees (obiter: revocation not possible once performance
commences)
o Errington v Errington (mortgage on house: revocation not possible once performance
commences)
o The Brimnes / Byrne –v- Van Tienhoven (revocation by post only effective once received)
o Rejection of an offer / counter offer:
o Hyde v Wrench (offer to sell for £1000, counteroffer of £950: counter offer amounts to a
rejection)
o Stevenson, Jacques and Co v McLean (mere enquiry: not a counter offer / did not reject
original offer)
o Rejection of an offer / delay or lapse of time:
o Parkgrange Investments v Shandon Park (offer may lapse if not accepted by time limit)
o Commane v Walsh (sale of land dependent on earlier transaction)
o Ramsgate Victoria Hotel v Montefiore (offer to buy shares: not accepted within reasonable
time)
o Dooley v Egan (“immediate acceptance only”)
o Lynch v Governors of St Vincent’s Hospital (offer of new employment contract)
o Earn v Kohut (Offer to settle claim open 2 ½ years later)
o Death of an offeror/offeree:
o See Re Whelan deceased; Coulthart v Clementson; Re Irvine; Reynolds v Atherton
o Failure of a precondition:
o See Financings Ltd v Stimson
• Acceptance
o Must be a final and unequivocal expression of agreement to terms of an offer. Must not vary
terms, or will amount to a counter-offer.
o Intention to accept:
o See Brennan v Lockyer; Parkgrange Investments v Shandon Park Mills
o Counter offers:
o Tansey v College of Occupational Therapists (“communication … which contains conditions
not previously agreed”)
o Swan v Miller (Offer to sell for £4750, offer to buy for £4450: counter offer)
o Tinn v Hoffman (Offer to sell 1200 tonnes, order for 800 tonnes: counter offer)
o Hyde v Wrench (effect to render original offer incapable of acceptance)
o Wheeler v Jeffrey (Letter indicating commencement date: counter offer)
o Covington Marine Corp v Xiamen Shipbuilding (objective test)
© City Colleges 3
www.citycolleges.ie 1850252740 info@citycolleges.ieo Battle of the forms:
o Butler Machine Tool Co v Ex-Cell-O Corp (Exchange of standard T&Cs: buyer’s order was offer
/ return of buyer’s slip acceptance / analyse each communication)
o Chichester Joinery v John Mowlam (even where standard forms do not correspond,
acceptance may be inferred from conduct)
o British Road Services v Crutchley (Plaintiff accepted noted stamped by Defendant:
Defendant’s terms)
o Buchanan v Brook Walker (Defendant entitled to presume that Plaintiff had read the conract)
o G Percy Trentham v Archital Luxfer (Defendant accepted contract by conduct)
o Implied acceptance and acceptance through conduct:
o Brogden –v- Metropolitan Railway Co. (Tacit communication of assent by acting in
accordance with agreement)
o Anglia Television v Cayton (Need (i) clear and unambiguous offer; (ii) conduct by way of
acceptance applicable exclusively to offer)
o Western Electric Ltd v Welsh Development Agency (acceptance by going into occupation)
o Silence not acceptance:
o Felthouse v Bindley (“if I hear no more”: silence not acceptance)
o Russell & Baird v Hoban (“if sale note be retained beyond 3 days”: lack of response not
acceptance)
o Re Selectmove (parties may agree that silence is acceptance)
o Rust v Abbey Life Assurance (past dealings give rise to legitimate expectation that silence will
suffice)
o Western Electric Ltd v Welsh Development Agency (Implied contract for services / service
cannot be returned)
o Communication of acceptance:
o Embourg v Tyler (acceptance must be communicated to be effective)
o Entores v Miles Far East (acceptance ineffective until it is received)
o Carlill v Carbolic Smoke Ball (for unilateral offer acceptance through performance)
o Means of communication prescribed by offeror:
o Tinn v Hoffman (“reply by return of post”: equally speedy method sufficient unless offeror
precluded other methods
o Staunton v Minister for Health (verbal acceptance sufficient notwithstanding that offeror
specified signature of contract)
o Acceptance by telephone, telex etc:
o Where the method of communication is instantaneous, the receipt rule applies.
o Entores v Miles Far East (acceptance ineffective until it is received)
o Parkgrange Investments v Shandon Park Mills (rule adopted in Ireland)
o Brinkibon v Stahag Stahl and Stahlwarenhandelgesellschaft (cases must be resolved by
reference to intentions of the parties, sound business practice and judgment as to where the
risks lie)
o Tenax Steamship v The Brimnes (Telex within office hours, communicated when received by
machine, need not be read or understood)
o Mondial Shipping & Chartering v Astarte Shipping (Telex outside office hours, not
communicated until the open of business the next working day)
o Acceptance by Post
o The postal rule applies for letters of acceptance posted, effective when sent.
o Adams v Lindsell (acceptance effective when letter posted)
o Household Fire Insurance v Grant (contract complete upon posting acceptance)
© City Colleges 4
www.citycolleges.ie 1850252740 info@citycolleges.ieo Kelly v Cruise Catering (exceptions where rule might cause injustice or clear intention to
exclude it)
o Exceptions: Holwell Securities v Hughes, Nunin Holdings v Tullamrine Estates Property
(prescribed method of acceptance – receipt required); Entores Ltd v Miles Far East
Corporation (instantaneous communications); Holwell Securities v Hughes (manifest
absurdity); Apicella v Scala (public policy)
o Acceptance by email and the Electronic Commerce Act 2000
o Debate as to whether postal rule or receipt rule applies to email
o See Thomas v BPE Solicitors; Chwee Kin Keong v Digilandmall.com; Greenclose v National
Westminster Bank
o Brinkibon (consider intentions of the parties, sound business practice, where the risk lies);
Tenax Steamship Co v The Brimines (during work hours); Mondial Shipping (inside work
hours)
o Electronic Commerce Act and Regulations (only apply to business to business, and business to
consumer contracts)
Consideration
• Something of tangible value that is given or forborne in exchange for a promise –
o Thomas –v- Thomas (lease for £1 per year);
o Chappell v Nestle (wrappers were good consideration).
• Need not be adequate, but must be sufficient
o Must be of a type recognised by law - O’Neill v Murphy; Pando v Fernandez (prayers not
sufficient consideration)
o Performance of a duty imposed by the general law not sufficient unless something over and
above that public duty – Collins v Godefroy; England v Davidson; Glasbrook Bros v-Glamorgan
County Council;, Harris v Sheffield United , McKerring v Minister for Agriculture
o Performance of existing contractual duty not sufficient – Stilk v Myrick , North Ocean
Shipping v Hyundai; Hartley v Ponsonby; Williams v Williams (outlier); McHugh v Kildare
County Council
o Performing a duty owed to someone other than the promisor may be sufficient – Shadwell v
Shadwell; The Eurymedon
o Part payment of a debt is insufficient – The Rule in Pinnel’s Case , Foakes v Beer; Barge Inn v
Quinn. Confusion / criticism / unique nature thrown up by Williams –v –Roffey Bros &
Nicholls (Contractors) Ltd; Re Selectmove; MWB Business Exchange Centres Ltd v Rock
Advertising Ltd
o Forebearance may be sufficient consideration – Hamer v Sidway; O’Keeffe –v- Ryanair
Holdings
o Must not be “past” consideration - Roscorla –v- Thomas; Re McArdle; Reaffirmed in
Provincial Bank of Ireland v O’Donnell and Law Society v O’Malley. Exceptions – if implicit at
the time that it was to be paid for, then may be sufficient (Lampleigh –v- Braithwait;
Bradford –v- Roulston; Pao On –v- Lau Yiu Long)
o Consideration must move from promisee (not third party) – Tweddle –v- Atkinson ,
McCoubray –v- Thompson; Dunlop Pneumatic Tyre v Selfridge. Exception where promise
made to two or more people – McEvoy v Belfast Banking Corporation
▪ Estoppel – may be possible to enforce in absence of consideration
o Equitable estoppel may step in where there is insufficient consideration (e.g. past
consideration)
o Main (i) unambiguous representation as to future intention; (ii) reliance by promisee; and (iii)
some element of detriment/unconscionability if promisor goes back on promise
o Estoppel may only be used as defence (‘as a shield, not as a sword’) - Combe –v- Combe
© City Colleges 5
www.citycolleges.ie 1850252740 info@citycolleges.ieo Principles established and illustrated in leading case law: Hughes –v- Metropolitan Railway;
Tool Metal Manufacturing –v- Tungsten Electric Co. Ltd; Central London Property Limited –v-
High Trees – more recently in Kenny –v- Kelly , Revenue Commissioners –v- Moroney
o Only applies to voluntary promises (i.e. not under duress) – D&C Builders v Rees;
o Does not generally apply to cases governed by Pinnel’s case: D&C Builders v Rees; Zurich Bank
v McConnon
Intention to Create Legal Relations
• Final core requirement – would ordinary reasonable man have believed there was an intention to
create legal relations – Edmonds –v- Lawson
• Two main categories and presumptions – family, domestic or social (no intention) & commercial
(intention exists). Both rebuttable on their facts
• Family, Domestic or Social
o Presumption that no intention between husband and wife ( Balfour –v- Balfour) unless
separating (Courtney –v- Courtney; Merritt v Merritt)
o Presumption that no intention in relation to other family relationships e.g. parent and child
(Rogers –v- Smith; Jones –v- Padavatton); uncle and nephew (Mackey –v- Jones);
o Irish courts may have limited presumption to spouses and parent/child relationships (Leahy –
v- Rawson)
o Possible to rebut presumption - evidence that legal relations intended, degree of closeness;
extent of reliance etc.
• Commercial Arrangements
o Presumption that intention is present, unless rebutted by clear evidence: Esso Petroleum –v-
Commissioner for Customs & Excise , Cadbury –v- Kerry Co-Op & Dairy Disposal Co. Ltd
o Honour clause may exclude presumption – Rose & Frank Co. v Crompton
o Agreements to negotiate attract presumption but lack certainty – Pagnan v Feed Products;
Walford v Miles; Cadbury v Kerry Co-op & Dairy Disposal. Lock-out agreements may be a way
around it. Different approach evident in other jurisdictions (Coal Cliff Colleries v Sijehama;
Con Killergis v Calshonie etc.)
o Letters of comfort – effect depends on wording of letter as to whether intention exists:
Kleinwort Benson –v- Malaysia Mining Corporation; Banque Brussels Lambert v Australian
National Industries;
o Letters of intent indicating that there is an intention to enter contractual relations in due
course
o Subject to contract clauses (current arrangements conditional on final contract being
concluded) – Thompson v The King; Mulhall v Haren
o Lottery syndicates – Simpkins –v- Pays / Religious Arrangements – Zevevic –v- Russian
Orthodox Christ the Saviour Cathedral / Agreements with Government / Educational
Agreements – Edmonds v Lawson.
• Collective Agreements
o English courts take approach that there is no intention to create legal relations (Ford –v-
A.E.U.W.)
o Irish courts lean towards view that there is intention (Ardmore Studios –v- Lynch; Goulding
Chemicals v Bolger; O’Rourke –v- Talbot).
o The uncertainty of terms may cause difficulty in enforcement.
o Note also the Industrial Relations Act 1946.
Formal Requirements & Capacity & Privity
• S.2, Statute of Frauds (Ireland) Act 1695
o Certain contracts must be evidenced in writing, otherwise they are unenforceable (not void)
o Main examples include contracts for sale of land and contracts for sale of goods over €12
© City Colleges 6
www.citycolleges.ie 1850252740 info@citycolleges.ieo Sale of Land - Guardian Builders –v- Sleecon (indirect connections with land need not be
evidenced in writing)
o Contracts for sale of goods – see s.4 Sale of Goods Act 1893: contract enforceable where
there is a memo; part acceptance of goods; buyer has given something in earnest or part
payment.
o Memo may be contract, letters, emails, cheques etc. (Tradax v Irish Grain Board; Maloney v
O’Connor; Doherty v Gallagher);
o Memo must contain 3 P’s (parties, property, price) and other term the parties consider
essential (Godley v Power) - distinction between inadequacy of memo and uncertainty of
terms (Supermacs Ireland and McDonagh v Katesan and Sweeney);
o Memo must be signed by party to be charged – headed note paper may be sufficient (Casey
–v- Irish Intercontinental Bank)
o Joinder of documents possible - Kelly –v- Ross and Ross ; Maloney v O’Connor
• Subject to Contract
o May invalidate a document constituting a valid memorandum
o Kelly –v- Park Hall School , Irish Intercontinental Bank –v- Casey , Mulhall –v- Haren , Boyle –
v- Lee (most recent SC decision, reaffirming the orthodox view), Jodifern –v- Fitzgerald
• Part Performance
o Significant exception – equity will not allow a party to rely on Statute where to do so would
allow the party to gain unfair advantage Lowry –v- Reid;
o Mackie –v- Wilde (concluded contract; showed intention to perform; performance induced
or acquiesced in; unconscionable to allow reliance on Statute); Steadman –v –Steadman;
Hope v Lord Cloncurry;
o A number of different acts may constitute part performance - WP McCarter v Roughan;
Rawlinson v Ames; Kingswood Estate –v- Anderson
o Statute may not be used as an engine of fraud (Doherty v Gallagher) and waiver of terms
(Healy v Healy)
• Capacity
o Minors – Contracts that are binding i.e. contracts for necessaries and beneficial services
o Contracts for necessary goods: Ryder v Wombwell; Chapple –v- Cooper , Skrine –v- Gordon,
Nash –v- Inman; Prokopetz v Richardsons Marina; First Charter v Musclow; Soon v Wilson;
o Contracts or necessary services: Chapple v Cooper; Helps v Clayton; Fawcett v Smethurst;
o Contracts for beneficial services: Doyle –v- White City Stadium; De Francesco –v- Barnum ,
Shears v Mendeloff; Chaplin v Leslie Frewen; Proform Sports Management v Proactive Sports
Management;
• Privity
o Common law rule that a person who is not a party to a contract cannot enforce the terms of
htat contract, nor can those terms be enforced against that person.
o Tweddle –v- Atkinson , McCoubray –v- Thompson , Dunlop v Selfridge, Murphy –v- Bower ,
Mackey –v- Jones
o Exceptions to principle – Agency (Midlands Silicones v Scruttons; The Eurymedon; Hearn v
Matchroom Boxing v Collins); Contractual trusts(Tomlinson –v- Gill , Drimmie –v- Davies – an
intention to create a trust seems to be necessary per Cadbury Ireland –v- Kerry Co-Op
Creameries Ltd); Tort (Wall v Hegarty; Ward v McMaster; Woodar v Wimpey; Panatown v
Alfred McAlpine Construction); Covenants running with the land (Tulk v Moxhay; London Co
Co v Allen); Collateral contracts (Shanklin Pier v Detel Products)
o Statutory intervention (Road Traffic Act 1961; Package Holidays Act 1995; Mararied
Women’s Status Act 1957 and Jackson v Horizon Holidays)
Contractual Terms
• Express Terms
© City Colleges 7
www.citycolleges.ie 1850252740 info@citycolleges.ieo Sales puff (no legal effect), mere representations (no contractual effect), warranties
(contractual term) - objective test to determine (Oscar Chess v Williams)
o Key factors – what stage of the transaction (Routledge v McKay; Schawel v Reade); is it
included in written contract (Routledge v McKay); special knowledge or skill of
representor (Oscar Chess v Williams; Dick Bentley v Harold Smith Motors; Hummingbird
Motors v Hobbs; Bank of Ireland v Smith); importance of statement (Carey v Irish
Independent Newspapers); indication that statement could be relied on (Schawel v
Reade); specificity of statement;
• Parol Evidence Rule –
o Not capable of contradicting, varying, adding or subtracting from the terms of a written
contract (Bank of Australasia –v- Palmer; Macklin & McDonald –v- Gregan).
o Exceptions – agreement part written/part oral (Howden Bros v Ulster Bank; Clayton Love
v B&I); custom and practice (Wilson Strain v Pinkerton; Page v Myer); interpretation
(Chambers v Kelly; Revenue Commissioners v Moroney); oral/collateral contract (City and
Westminster Properties v Mudd); equitable relief sought; consideration (Black v Grealy);
document not a contract (Pym v Campbell); oral promise contradicts standard contract
(Evans v Merzario; BCT Software Solutions v Arnold Laver)
• Implied Terms –
o Terms implied in fact (presumed intention of parties) and terms implied in law
o Custom and practice test (notorious; certain; reasonable; clear and convincing evidence;
consistent with express terms) – O’Reilly v Irish Press; O’Connail v Gaelic Echo; Les
Affréteurs Réunis Société Anonyme v Walford
o Business efficacy test (necessary to make contract work) – The Moorcock; Butler v
McAlpine; Karim Aga Khan; Tett v Phoenix Property; Murphy Buckley & Keogh v Pye;
Ward v Spivack
o Officious Bystander Test – Shirlaw v Southern Foundries; Kavanagh v Gilbert; Carna
Foods v Eagle Star Insurance; Tradax Ireland v Irish Grain Board; Horan v O’Reilly; Dakota
Packaging v Wyeth Medica
o Terms implied by the common law (Liverpool City Council v Irwin; Siney v Dublin
Corporation; Hivac v Park Royal Scientific Instruments; Carvill v Irish Industrial Bank; Yam
Seng v ITC; Boots v Hansard); terms implied by Statute (Sale of Goods legislation;
Employment legislation); terms implied by the Constitution (Glover v BLN; Meskell v CIE;
G v An Bord Uchtála)
o A compelling case is not sufficient to warrant the implication of a term - Flynn &
Benray v Breccia & McAteer [2017] IECA 74. (This case is also authority for the
proposition that that there is no general principle of good faith and fair dealing in Irish
contract law.)
• Relative importance of terms –
o Conditions (damages/repudiation), warranties (damages) and innominate terms
(depends on how serious the breach is;
o Hong Kong Fir Shipping Co. –v- Kawasaki, The Hansa Nord Questions (does contract
expressly/impliedly confer right of termination; does statute/stare decisis point in
direction of condition or warranty; has breach gone to root of contract); Federal
Commerce & Navigation v Molena Alpha; Laird Bros v Dublin Steampacket; Irish
Telephone Rentals v Irish Civil Service Building Society)
Exemption Clauses
• Effect of Exemption, Exclusion and Limitation clauses – (Roche v Cork, Blackrock and Passage
Railway; Leonard v Great Northern Railway)
• Incorporation
© City Colleges 8
www.citycolleges.ie 1850252740 info@citycolleges.ieo Was notice given before contract concluded - Olley –v- Marlborough Court Ltd , Sproule
v Triumph Cycle; Thornton –v- Shoe Lane Parking ,
o Was the notice adequate – Parker v SE Railway; Ryan v Great Southern and Western
Railway; Early v Great Southern Railway Company; Interfoto Picture Library v Stilletto
Visual Programmes (particularly onerous term) endorsed by Carroll v An Post National
Lottery; Western Meats v National Ice and Cold Storage (businessman offering a
specialist service but accepting no responsibility); James Elliott Construction v Irish
Asphalt (notice to accounts department to correct payment errors not adequate)
o Bound by signature regardless of whether there was notice or notice was adequate –
Duff v Great Northern Railway; L’Estrange –v- Graucob , Tilden Rent-o-Car v
Clendenning (different treatment of signature on standard contract); James Elliott
Construction v Irish Asphalt (signature on delivery docket did not count as docket was
not a contractual document);
o Course of dealing may give rise to notice - Spurling –v- Bradshaw; Hollier v Rambler
Motors; James Elliott Construction v Irish Asphalt (despite extensive course of dealing,
only 3 notes set out T&Cs)
• Interpretation
o Narrow construction / interpretation – contra proferentem (Walls, Son & Wells v Pratt
and Haynes; Andrews v Singer); does it extend to tortious liability (Ronan v Midland
Railway Company; Canada Steamship Line v The King; White v Warwick); it will not be
permitted to defeat main purpose of the contract (Glynn v Margetson); limitation
clauses tend to be more acceptable than exclusion/exemption clauses (Ailsa Craig
Fishing v Malvern Fishing; Westcoast Transmission v Cullen Detroit Diesel Allison)
o Axa Sun Life Services Plc v Campbell Martin Ltd, 2015 UK Court of Appeal. Restrictive
approach adopted by the Courts in construing such clauses, particularly in determining
whether they exclude liability for pre-contractual misrepresentations. In business-to-
business context likely such a clause regarded as ‘fair and reasonable’ – satisfies
requirements under section 46(1) of the Irish Sale of Goods and Supply of Services Act
1980.
• Enforceablilty – fundamental breach and consumer legislation
o English position seems to be that an exemption clause may apply to fundamental
breaches (Suisse Atlantique v Rodderdamsche; Harbutts Plasticine v Wayne Tank
Corporation; Photo Production v Securicor Transport)
o Irish position less clear but seems to be that exemption clauses cannot apply to
fundamental breaches (Clayton Love v B&I Steampacket; Western Meats v National Ice
and Cold Storage; Fitzpatrick & Harty v Ballsbridge International Bloodstock Sales;
Regan v The Irish Automobile Club;)
o The Sale of Goods and Supply of Services Act contains important provisions regarding
the validity of exemption clauses in contracts for the sale of goods and supply of
services. The Unfair Terms in Consumer Contracts regulations contains relevant
provisions in relation to consumer contracts.
• Other bars – misrepresentation; collateral undertakings and unconscionable bargains.
Consumer Protection
• Sale of Goods Act 1893, Sale of Goods and Supply of Services Act 1980 –
• Implied Conditions (and Warranties) in Contracts for Sale of Goods:
o Section 12 – implied condition re title and warranties re free from encumbrances / quiet
possession;
o Section 13 – implied condition re correspondence with description (Moore & Co. v Landauer ,
Fogarty v Dickson; O’Connor v Donnelly; Oscar Chess v Williams (description v quality));
© City Colleges 9
www.citycolleges.ie 1850252740 info@citycolleges.ieo Section 14 – where goods are sold in the course of business, implied conditions re
merchantable quality (Bernstein –v- Pamson Motors , Rogers –v- Parish , Lutton v Saville
Tractors) and re reasonably fit for purpose, where buyer specifies particular use, (Wallis –v-
Russell; Stokes and McKiernan v Lixnaw Co-op); buyer must rely on seller’s skill (Draper v
Rubenstein);
o Section 15 – implied conditions re correspondence with sample, re reasonable opportunity
of comparing and re goods being free from defect rendering them unmerchantable;
• Implied Terms (not specified as conditions or warranties) in Contracts for Supply of Services:
o Section 39 – supplier has necessary skill; due skill, care and diligence will be used; materials
will be sound and reasonably fit for purpose; goods will be of merchantable quality
• Exclusion clauses:
o Contracts for the sale of goods (s.55):
o any attempt to exclude s.12 void;
o cannot exclude s.13, s.14, s.15 in consumer contract; exclusion in non-consumer contract
must be fair and reasonable;
o Fair and reasonable test set out in Schedule (George Mitchell (Chesterhall) v Finney Lock
Seeds)
o Contracts for supply of services (s.40):
o Possible in consumer and non-consumer contracts with express agreement of parties; course
of dealing; or common in relevant trade and fact known to both parties;
o In a consumer contract exclusion must be fair and reasonable, and consumer must have been
made aware of the exclusion.
o Unfair terms in consumer contracts:
o Regulations apply to consumer contracts, where they are standard form contracts
o Clause will be unfair (and not binding) if there is an absence of good faith and causes a
significant imbalance in the parties’ rights and obligations
o Schedule 3 lists examples
• Consumer Rights Regulations 2013:
o Replaces previous directives on distance selling and doorstep sales
o Certain information requirements regarding on-premises, off-premises and distance
contracts
o 14 days to cancel contracts for the sale of goods/supply of services where it is an off-
premises or distance contract
• Contracts of Adhesion Regulations 2011:
o Requirements including requirement service providers give users 1 month’s notice of any
modification and user’s right to withdraw without penalty.
• Alternative Dispute Resolution Initiatives:
o Alternative Dispute Resolution (ADR) Regulations 2015: aim to ensure that consumers have
access to ADR for resolving contractual disputes with traders established in the EU;
Competition and Consumer Protection Commission must keep a list of ADR entities
o Online Dispute Resolution (ODR) Regulations: traders established in the EU that sell
goods/services online must provide a link on their websites to the European Commission’s
online dispute resolution platform
Misrepresentation
• Key elements:
o Representation – oral, written or conduct (Spice Girls v Aprilia); silence not actionable unless
it is an active misrepresentation (Walters v Morgan; Gil McDowell);
© City Colleges 10
www.citycolleges.ie 1850252740 info@citycolleges.ieo Representation must be false – includes half truths (Dimmock v Hallett) and changes in
circumstances (With v O’Flanagan; Spice Girls v Aprilia);
o Representation must be a statement of fact – not statement of intention (Wales v Wadham)
or statement of opinion, unless representor has specialist knowledge (Esso Petroleum v
Marsden; Bissett v Wilkinson; Hummingbird Motors v Hobbs); and
o Representation must induce other party into contract – representee must rely on it (Smith v
Chadwick; Edgington v Fitzmaurice); offer to verify it will not cure it (Redgrave v Hurd);
independent inspection suggests no reliance (Attwood v Small; Intrum Justitia BV v Legal and
Trade Financial Services);
o Misrepresentation renders contract voidable
• May be classified as fraudulent, innocent or negligent
o Fraudulent – Derry –v- Peek
o Negligent – Hedley Byrne –v- Heller; Thomas Witter v TBP Industries
o Innocent – O’Brien v Kearney
• Key remedy is that of rescission – remember always that equitable remedy
o Damages only available for fraudulent or negligent misrepresentation (calculated using tort
measure i.e. put the parties in the position they were in before the tort occurred)
o Equitable remedy of rescission (unpicks contract from the start) – not entitled to it as of right
and court may take equitable factors into account
o Consider whether contract affirmed - Re: Hop and Malt Exchange
o Doctrine in Seddon –v- North Eastern Salt – right to rescission lost once executed (unless
there is fraud) and special provision in Sale of Goods and Supply of Services Act 1980
(William Sindall v Cambridgeshire Co Co)
o Consider where too long a delay in bringing claim – Leaf –v- International Galleries; O’Kelly v
Glenny;
o Consider whether there are any third party rights (White v Garden; s.23(1) of the Sale of
Goods Act);
o Consider whether restitutio in integram remains possible, If not – rescission may be refused
(Vigers v Pike)
• Special Position of Contracts made in uberrimae fides and notion of materiality to same
o Rozanes –v –Bowen (person seeking insurance has all relevant facts)
o Chariot Inns Ltd –v- Assicurazioni SPA (objective test of prudent insurer for materiality)
o Aro Road & Land Vehicles –v- Insurance Corporation of Ireland (lower standard for over the
counter contracts; insured should not have to seek out insurer)
o Kelleher –v- Irish Life Assurance Company (form asked for some information, implied that
other information not required)
o Keating –v- New Ireland Assurance (disclosure of facts known to insured)
Test has evolved to that of the ‘reasonable proposer’ from the ‘prudent insurer. Proposer in full
disclosure is just expected to be honest, not omniscient. ‘Basis of contract’ clauses will be
interpreted harshly and strictly in a contra-proferentem manner
• Continuing misrepresentations can be acted upon by the ultimate contracting party
o Cramaso LLP v Ogilvie-Grant [2014] UKSC 9, the UK Supreme Court held that a contracting
entity would be entitled to sue for rescission and damages even though the negligent
misrepresentation was not actually made to it in circumstances where the representation is
made and the person is addressed becomes the agent of the person by whom the contract is
concluded.
Mistake
• Key elements:
© City Colleges 11
www.citycolleges.ie 1850252740 info@citycolleges.ieo Must be one of fact and not of law – ignorance of the law is no defence - O’Loghlen v-
O’Callaghan, Cooper –v- Phibbs (may be mistake as tot private law – distinction abolished in
England in Kleinworth Benson –v- Lincoln City Council)
• May be classified as common, mutual or unilateral mistake:
• Common Mistake (both parties make same mistake, not at cross purposes):
o Mistake as to existence of subject matter (res extincta) – Courturier –v- Hastie; Strickland –v-
Turner; Pritchard v Merchants and Tradesmen’s Mutual Life Assurance; Galloway –v-
Galloway; s.7, Sale of Goods Act 1893; McRae v Commonwealth Disposals Commission;
o Mistake as to underlying assumption – must be fundamental to the contract (Bell –v- Lever
Bros; Solle v Butcher; Leaf –v- International Galleries; John Walker v Amalgamated
Investments; Great Peace Shipping v Tsavliris Salvage (International); Western Potato Co-op v
Durnan; Associated Japanes Bank v Credit du Nord); even if not void at common law, may be
voidable in equity (Solle v Butcher; Cooper v Phibbs; Grist v Bailey; Great Peace Shipping
(move away by English Courts); O’Neill v Ryan (principle still good in Ireland));
• Mutual Mistake (parties make different mistake, cross purposes)
o Objective test as to whether contract, in fact, exists – Smith –v- Hughes; Wood –v- Scarth;
Clayton Love v B&I Steampacket; Raffles –v- Wichelhaus; Scriven Bros v Hindley; Mespil –v-
Capaldi
• Unilateral Mistake (one party is aware of other party’s mistake, cross purposes)
o If one party does not know of other party’s mistake, contract is formed (Wood v Scarth;
Slattery v Friends First)
o If one party is aware of mistake, contract is not formed (Webster –v- Cecil; Hartog –v- Colin
and Shields (standard of reasonable man); Chwee Kin Keong v Digilandmall.com (snapping
up); mistake must relate to terms rather than motives)
o Special case of mistaken identity (possible to take an action for fraudulent misrepresentation
(voidable, title passes) or mistake (void, no title passes)) - Cundy –v- Lindsay ; Phillips –v-
Brooks Ltd (for mistake, must establish that want to deal with specific person and nobody
else); Ingram –v- Little; Lewis –v- Avery (where person present, presumption of intention to
delay with that person i.e. voidable for misrepresentation); Shogun Finance v Hudson;
• Non est factum (contract void) – Bank of Ireland v McManamy; Saunders v Anglia Building Society
(must be mistake as nature of document rather than legal effect; must have taken all reasonable
precautions to ascertain); United Dominions Trust v Western BS Romany; Ted Castle v McCrystal
(radical/fundamental difference with what he thought document was; mistake re document rather
than legal effect; lack of negligence); ACC Bank v Kelly; Danske Bank v Walsh;
• Remedies may vary – damages, should be considered – though only if a warranty, or fraudulent /
negligent misrepresentation was made – must also consider rectification
o Declaration that contract is void (common, mutual mistake)
o Rescission (common, mutual, unilateral) – equitable remedy
o Rectification (equitable remedy allowing correction) – Nolan –v-Graves and Hamilton , Irish
Life v Dublin Land Securities; Lucy –v- Laurel Construction; Swainland Builders v Freehold
Propertes (amend document not transaction); Hennigan v Roadstone Wood; Slattery v
Friends First
o Not necessarily a defence to claim for specific performance
Duress
• Duress involves protection against forcing into contract through threats – whether of personal
harm, or other grounds as the doctrine has developed
o Barton –v- Armstrong (threats of violence); Lessee of Blackwood v Gregg (abduction); threat
to invoke legal process (Griffith –v- Griffith; Kaufman v Gerson); economic duress (Stott v
Merit; D&C Builders –v- Rees; North Ocean Shipping v Hyundai Construction; Smelter
© City Colleges 12
www.citycolleges.ie 1850252740 info@citycolleges.ieCorporation of Ireland v O’Driscoll; The Universe Sentinel (pressure must be
illegitimate/unreasonable; lack of alternative course of action); Atlas Express v Kafco;
Walmsley v Christchurch; ACC Bank v Dillon (consent must be wrongfully obtained); Alec Lobb
(Garages) v Total Oil (coercion by third party).
o Contract voidable – remedy: rescission
Undue Influence
• Protection of one party where the other party exercises a position of power over them
• Actual Undue Influence (evidence that undue influence was in fact exerted)
o O’Flanagan –v- Ray-Ger Limited
• Presumed Undue Influence (special relationship where undue influence is presumed – possible to
rebut presumption)
o First category - automatic presumption based on confidential relationship (Lawless v
Mansfield (solicitor/client); Mulhallen v Marum (guardian/ward); White v Meade, Allcard v
Skinner (religious order/devotee); McMackin v Hibernian Bank (parent/child));
o Second category – complainant establishes that there is a relationship similar in nature to
same (R v Hutton; RBS v Etridge; Armstrong v Armstrong (siblings); Tolhurst v Smith
(members of pop group); McGonigle v Black (uncle/nephew - placing of trust is key); Gregg v
Kidd (siblings); Lloyd’s Bank v Bundy (bank/customer); Credit Lyonnais Bank Nederland v
Burch (employer/employee);
o Special position and case-law regarding married couples. Not falling into first category above,
but variety of case-law on point (new developments now with Irish courts following Etridge
more recently) – Barclays Bank –v- O’Brien (leading English case – set out steps to be taken);
Bank of Ireland –v- Smyth (leading Irish case adopts O’Brien); Bank of Nova Scotia –v- Hogan;
Royal British Bank –v- Etridge (modified law in England– bank on notice any time wife
guarantees husband’s debts); Ulster Bank v Fitzgerald; Ulster Bank v Roche (seemed to adopt
Etridge but did not set out steps to be taken); GE Capital Woodchester Home Loans v Reade)
o Possible to rebut presumption – independent legal advice etc (McMackin v Hibernian Bank;
Inche Noriah v Shaik Allie Bin Omar; Provincial Bank v McKeever)
o Contract voidable – remedy of rescission
• Unconscionable Bargain (no threats, no undue influence, but unfair advantage)
four elements to be established (Boustaney –v- Piggott): Bargaining impairment (Grealish –v-
Murphy); Exploitation (Rae –v- Joyce); Manifestly Improvident (Rooney v Conway; Slator v
Nolan); Lack of Adequate Advice (Grealish v Murphy)
Illegal and Void Contracts
• Illegality:
o Illegality at common law –
o Contracts to commit a crime or tort (exchange controls – Namlooze Venootschap D Faam v
Dorset Manufacturing; Westpac Banking Corporation v Dempsey; benefitting from wrong –
Beresford v Royal Insurance Co; Gray v Barr;)
o Contracts promoting immorality – Pearce v Brooks; note that societal mores may change
(Armhouse Lee v Chappel)
o Contracts tending to prejudice the administration of justice, including maintenance and
champerty (discontinue criminal legal proceedings – Nolan v Sheils; Keir v Leeman; promise
not to instigate legal proceedings – Rourke v Mealy; maintenance – Re Trepca Mines (No. 2);
Martell v Consett Iron; Hill v Archbold; champerty – Fraser v Buckle; Personal Digital
Telephone Ltd v Minister for Public Enterprise
o contracts which breach foreign law (Stanhope v Hospitals Trust; Foster v Driscoll);
o contracts trading with enemies of the state (Furtado v Rogers; Ross v Shaw);
© City Colleges 13
www.citycolleges.ie 1850252740 info@citycolleges.ieo contracts to defraud Revenue e.g. employment situation (position in England - Tomlinson v
Dick Evans U Drive; position in Ireland re unfair dismissal/wrongful dismissal – Lewis v Squash
Ireland; Unfair Dismissals (Amendment) Act; Hayden v Sean Quinn Properties; Red Sail Ltd (In
Receivership); Hall v Woolsten Hall Leisure; Wheeler v Quality Deep;)
o contracts to corrupt public officials (Lord Mayor of Dublin v Hayes)
o Illegality under statute
o matter of construction – does statute intend to render contract illegal (Archbolds v
Spanglett; Hortensius v Durack)
• Consequences of Illegality
o Unlawful on its face – void ab initio and severance not available (Gray –v- Cathcart; Murphy
–v- Crean; Hayden –v- Sean Quinn Properties; Re Mahmoud and Hispani)
o Performed illegally – party who intends to perform contract illegally cannot sue on contract;
if party who performs contract lacks requisite intention, they may be able to sue (St John
Shipping v Joseph Rank); if other party is unaware of illegality, they may have remedies
(Marles –v- Philip Trant & Sons; Whitecross Potatoes v Coyle); where both parties intend to
perform the contract illegally, the contract will be illegal and unenforceable (Ashmore v
Dawson)
o Recovery of property passed under illegal contract – general rule no recovery (Collins –v-
Blanton; Poteliakhoff v Teakle; Brady v Flood; St John Shipping v Joseph Rank); some
exceptions – lack of culpability (Deutsche Ruckversicherung v Walbrook Insurance); rights
independent of illegal transaction (Euro-Diam v Bathurst; McIlvenna v Ferris and Green);
sometimes even rights originating in illegal transaction (Singh v Ali); repentance (Tribe v
Tribe)
• Void Contracts
o Distinct from illegal contracts, severance available as basis of public policy determining that
certain provisions should be deemed repugnant and potentially carved from the remainder
of a ‘saveable’ contract (Goodison v Goodison)
o Contracts ousting the jurisdiction of the courts (Lee –v- Showman’s Guild of GB , Scott –v-
Avery; Winterhur Swiss Insurance v ICI)
o Contracts subverting the sanctity of marriage (Lowe v Peers (agreements to marry/not
marry); Hermann v Charlesworth (matchmaker agreements); Marquess of Westmeath v
Marquess of Salisbury (future separations); MacMahon –v- MacMahon (distinction where
separation has already happened); Ennis –v- Butterly (contracts of cohabitation); Dalton v
Dalton, Gaffney v Gaffney (foreign divorces)
o Contracts in Restraint of Trade – must be reasonable and proportionate (Esso Petroleum –v-
Harper’s Garage; John Orr Ltd –v- Orr); must pursue legitimate interest (Vancouver Malt and
Sake Brewing Co v Vancouver Breweries) e.g. trade secrets (Forster & Sons v Suggett;
Faccenda Chicken v Fowler; Marshall (Thomas) Exports v Guinle) or connections/contacts
(Herbert Morris v Saxelby, Murgitroyd –v- Purdy;) must be proportionate in terms of
geography and location (Nordenfelt –v- Maxim Nordenfelt (can be worldwide); McEllistrem –
v- Ballymacelligott Co-Op (reasonableness of extent of restraint treated individually on its
merits); Office Angels v Rainer Thomas; Mulligan v Corr; Societa Esplosivi Industriali v
Ordnance Technologies;) must be in public interest (Fitch v Dewes);
• Severance (blue pencil test)
o Main distinction between illegal and void contracts, the latter may be saved by severing the
repugnant part out – the so-called ‘blue pencil’ test – leaving the rest enforceable (Attwood v
Lamont; John Orr Ltd –v- Orr; Skerry, Wynne & Skerry’s College v Moles; Cussen v O’Connor;
Mason v Provident Clothing and Supply Co – cannot rewrite contract)
Discharge of Contracts
© City Colleges 14
www.citycolleges.ie 1850252740 info@citycolleges.ie• Four ways in which a contract may be discharged: agreement; performance; frustration and
certain breaches of contract (i.e. repudiatory, fundamental, breach of condition)
• Agreement
o Must be mutual agreement, accord and satisfaction present.
• Performance
o Entire Contract – very harsh, but matter of construction whether formed or not (Nash –
v- Hartland , Cutter v Powell; Coughlan –v- Moroney; Re Moore v Landauer; Collen v
Marum)
o Substantial Performance – exception at equity (Boone v Eyre; Hoenig –v- Issacs , Bolton
–v- Mahadeva , Kincora Builders –v- Cronin)
o If voluntarily acceded to some level of part / incomplete performance, that can be
binding – Sumpter –v- Hedges
o Payment for part performance can also be due if contract is a divisible contract (Taylor
–v- Laird , Brown –v- Wood); if complete performance is prevented by the other party
(Planche –v- Colburn; Arterial Drainage v Rathangan River Drainage Board); if an
attempt has been made to perform (Startup v MacDonald)
• Breach
o Repudiatory (other party indicates intention not to perform contract) – Athlone Rural
DC –v- Campbell & Son; breach must be serious (Decro Wall International v Practitioners
in Marketing); breach must be deliberate (Nottingham BS v Eurodynamics; Woodar
Investment v Wimpey Construction; Continental Oil v Moynihan; Eminence Property
Developments Ltd v Heaney (reasonable person would have realised mistake); can bring
contract to an end immediately or wait until breach (Hochster v De La Tour; Leeson v
North British Oil);
o Fundamental – Union Eagle v Golden Achievement (would not be reasonable to expect
other party to continue with contract); Dundalk Shopping Centre Ltd –v- Roof Spray
Limited (seriousness and likelihood of recurrence); Leopardstown Club v Templeville
Developments and Philip Smyth
o Breach of Condition - Union Eagle v Golden Achievement (time was of the essence; no
prejudice need be caused); Sepia Ltd v M&P Hanlon (time can become of the essence
e.g. notice to complete)
o Consequences – innocent party may choose to discharge the contract (prospective
effect), may affirm the contract or may lose the right to treat the contract as discharged
where there is delay
• Frustration
o Doctrine has evolved to deal with scenarios where obligations can no longer be
performed as a result of circumstances outside the control of either party
o Traditional position - Paradine –v- Jane; Gamble –v- The Accident Insurance Company
o Doctrine developed - Taylor –v- Caldwell (somewhat a relaxation to avoid harsh results)
o Difference between impossibility and mere difficulty - Tsakirooglou v Noblee and Thorl;
Davis Contractors –v- Fareham UDC, Zuphen –v- Kelly; National Carriers Ltd v Panalpina
(Northern) Ltd (must be substantial re entirety of contract)
o Frustration of purpose – Krell –v- Henry ,Herne Bay Steam Boat –v- Hutton , National
Carriers Ltd –v- Panalpina
o Intervening illegality – Reilly v R; Rally Bros v Compania Naviera Soto y Aznar; Fibrosa
Spalk Akeyjna v Fairbarin Lawson Combe Barbour; Ross v Shaw; Ó Cruadhlaoich v
Minister for Finance
o Whether event of frustration was foreseeable or not/provided for in contract – Brown v
Mulligan , McGuill –v- Aer Lingus and United Airways , Ocean Tramp tankers Corp v V/O
Sovfracht, The Eugenia; Neville & Sons Ltd –v- Guardian Builders Ltd (risk obvious to
both parties but not provided for in contract); Jackson v Union Marine Insurance;
Metropolitan Water Board v Dick Kerr
© City Colleges 15
www.citycolleges.ie 1850252740 info@citycolleges.ieo Self-induced frustration shall not suffice to enable a discharge of contract - Constantine
Line v Imperial Smelting Co; Herman v SS Vicia; FC Shepherd v Jerrom (outlier)
o Effect of frustration – discharges parties from future obligations (Krell v Henry; Chandler
v Webster; Appelby v Myers (unfair results re entire contract); Fibrosa (exception where
no tangible benefit))
Remedies
• Damages
o Causation – injured party must prove that party in breach wholly/partially caused damage;
s.2 of the Civil Liability Act 1961 re reduction in damages where injured party is partially
responsible
o Remoteness – Hadley –v- Baxendale (damages flow naturally from breach, or damages in
contemplation parties to be probable result of breach); Victoria Laundry –v- Newman
Industries (that which flows naturally, plus that which is ‘reasonably foreseeable’ from the
knowledge of the party in breach, are damages capable of recovery); first limb - Wilson and
Dunville; Lee and Donoghue v Rowan; second limb - Waller –v- Great Western Railway ,
Victoria Laundry v Newman Industries; The Heron II , Kemp –v- Instasun Holidays Ltd;
Transfield Shipping v Mercator Shipping, The Achilleas (overrun or lost profits);
o Requirement on plaintiff to mitigate his loss – Brace –v- Calder , Cullen –v- Horgan; Payzu v
Saunders; Lennon –v- Talbot (Ireland) (courts will not impose unrealistic standards);
Beechwood Birmingham v Hoyer Group;
o Heads of loss: expectation loss – Afton v Film Studios of Ireland; Hawkins v Rogers; Blackpool
and Flyde Aero Club v Blackpool; as an alternative to expectation, reliance loss – Anglia
Television –v- Reed; Bowlay Logging v Domtar (breach averted loss); Hennigan v Roadstone
Wood (damages for misrepresentation and reliance loss); restitution loss - Hickey –v- Roches
Stores; consequential loss – Stoney v Foley; Leahy v Rawson (cost of cure); Ruxley Electronics
v Forsyth; loss of reputation – Malik v BCCI
o Estimating damages: nominal (O’Keeffe v Kilcullen; ESL Consulting Services v Verizon);
contemptuous (Grealey v Casey); General and special (Raticliffe v Evans); Punitive/exemplary
(Conway v INTO; Rookes v Barnard; Francis Shortt v Commissioner of An Garda Síochána);
speculative (Grafton Court v Wadson Sales); aggravated (Francis Shortt); compensatory
o Golden Strait Corporation v Nippon Yusen Kubishika Kaisha (damages reduced as charterers
would have exercised an option to cancel the contract in the event of war)
o Acre 1127 Ltd (In Liquidation) formerly known as Castle Galleries Limited (In Liquidation) v De
Montfort Fine Art Ltd (1), the Court found that proof of a settled intention not to perform an
agreement is material in the assessment of damages recoverable for repudiatory breach.
o Damages for intangible loss (“loss of chance”)
o McRae v Commonwealth Disposals Commission (no parameters to evaluate); Hawkins v
Rodgers (potential value discounted by probability); Hickey v Roches Stores (potential loss of
profit over 2 years)
o Damages for emotional distress and related situations
o Not recoverable in general (Hobbs –v- London South Western Railway; Phelan Holdings v Poe
Kiely Hogan; Kelly v Crowley) unless purpose of contract is to provide entertainment or
enjoyment (Jarvis –v- Swan Tours; Dinnegan and Dinnegan v Ryan; Murray v. Budds & ors)
o Penalty Clauses / Liquidated Damages / Acceleration Clauses
o Liquidated damages clause attempts to assess damages likely to be suffered and is
permissible, whereas penalty clause seeks to punish and is not permissible
o Test established in Dunlop Pneumatic Tyre –v- New Garage & Motor Co (amount
disproportionate to all possible consequences of breach; amount is the same regardless of
nature and extent of damage; clause requiring larger sum to be paid on failure to pay lesser
sum) – recently modified by Cavendish v El Makdessi; ParkingEye v Beavis (new test is
© City Colleges 16
www.citycolleges.ie 1850252740 info@citycolleges.iewhether the clause is a secondary obligation which imposes a detriment which is out of
proportion to the legitimate interest of the innocent party; legitimate interest can include
enforcing performance beyond being compensated for loss)
o Dunlop Pneumatic Tyre applied in Ford Motor v Armstrong; Jobson v Johnson; Schiesser
International v Gallagher; O’Donnell & Co. Ltd –v- Truck and Machinery Sales Ltd
o Acceleration clauses (default triggers requirement for immediate payment in full) –
Protector Loan v Grice; The Angelic Star; UDT v Patterson
Two lines of case law have emerged which provide exceptions to this general rule: (i) where there has
been a genuine pre-estimate of loss; and (ii) where there is commercial justification.
Focus of preparation on the foregoing listed would be to prepare same for an essay approach – with
parts thereof called out for a multi-part essay question. Scope of recovery for ‘disproportionate’
damages – even if within strict assessment scope of expectation loss has also been more a point of
consideration in recent problem questions.
• Other Remedies (several seen above on specific areas)
o Specific Performance - be alive to principles of restriction, not where damages are an
adequate remedy (Bagnell v Edwards; Sky Petroleum v VIP Petroleum (unique nature); Swift v
Swift (difficulty quantifying); Beswick v Beswick (nominal damages)); not for contracts of
personal service (Lumley v Wagner; Warren v Mendy); contracts not where contract requires
court supervision (Ryan v Mutual Tontine Association); not where it may be refused on
equitable grounds e.g. hardship (Denne v Light; Patel v Ali)
o Injunctive relief – prevent someone from doing something they contracted not to do rather
than force someone to do what they contracted to do (Lumley v Wagner, Page One Records v
Britton) and not where damages adequate (AB v CD)
o Restitution – where there has been complete failure of consideration
o Quantum Meruit – British Steele v Cleveland Engineering; Folens v Minister for Education;
Gilbert & Partners v Knight; Callinan v VHI; ERDC Group v Brunel University
o Rectification – where written document does not reflect prior agreement
o Rescission – available in a limited number of circumstances e.g. mistake and
misrepresentation
© City Colleges 17
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