Contract Law Q&A 2003-2004 (Q & a Series)

294 Pages·2003·1.54 MB·English

by  Richard Stone

Q&A Series
Contract Law
FIFTH EDITION
Cavendish
Publishing
Limited
London • Sydney (cid:127) Portland, Oregon

Q&A Series
Contract Law
FIFTH EDITION
Richard Stone, LLB, LLM, Barrister
Professor of Law, University of Lincoln
Visiting Professor, University College Northampton
Cavendish
Publishing
Limited
London (cid:127) Sydney (cid:127) Portland, Oregon
Fifth edition first published in Great Britain 2003 by
Cavendish Publishing Limited, The Glass House,
Wharton Street, London WC1X 9PX, United Kingdom
Telephone: [phone] Facsimile: [phone]
Email: [e-mail]
Website: www.cavendishpublishing.com

Published in the United States by Cavendish Publishing
c/o International Specialized Book Services,
5804 NE Hassalo Street, Portland,
Oregon 97213-3644, USA

Published in Australia by Cavendish Publishing (Australia) Pty Ltd
3/303 Barrenjoey Road, Newport, NSW 2106, Australia

© Stone, Richard 2003
First edition 1992
Second edition 1995
Third edition 1998
Fourth edition 2001
Fifth edition 2003
All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, or transmitted, in any form or by any means, electronic, mechanical,
photocopying, recording, scanning or otherwise, without the prior permission in
writing of Cavendish Publishing Limited, or as expressly permitted by law, or under
the terms agreed with the appropriate reprographics rights organisation. Enquiries
concerning reproduction outside the scope of the above should be sent to the
Rights Department, Cavendish Publishing Limited, at the address above.
You must not circulate this book in any other binding or cover
and you must impose the same condition on any acquirer.

British Library Cataloguing in Publication Data
Stone, Richard, 1951–
Contract law—5th ed—(Q&A series)
1 Contracts—England 2 Contracts—Wales
I Title
346.4'2'02

Library of Congress Cataloguing in Publication Data
Data available

ISBN 1-85941-734-5
1 3 5 7 9 10 8 6 4 2
Printed and bound in Great Britain
PREFACE
Contract must be one of the most widely studied areas of English law. As
well as being one of the ‘core’ subjects for professional purposes, it is often
studied by those taking law options within a more general course, at degree
level or below. One reason for this is that contract law provides a good,
and in some cases essential, grounding for the study of many other legal
subjects, such as commercial law, company law, consumer law, employment
law and land law. Master contract, and you will have a firm basis for the
study of many other courses. It is also a typical ‘common law’ subject,
which means that its rules and principles have developed largely through
the decisions of the courts, rather than through statutory intervention. A
comparison between the size of the Table of Cases and that of the Table of
Statutes in this book illustrates the point.
This book was written with a view to helping all those studying contract. I
am pleased that previous editions seem to have been well received by
students. This edition contains five completely new questions and answers,
and has been fully revised throughout to take account of developments in the
law. The most important of these are the House of Lords decisions in Royal
Bank of Scotland v Etridge (No) (2001) and Farley v Skinner (2001), and the
Court of Appeal decision in Great Peace Shipping Ltd v Tsavliris Salvage
(International) Ltd (2002). The first of these has thoroughly reviewed the law
and procedures relating to undue influence. The second has restated the
approach to be adopted in relation to the recovery of non-pecuniary losses
resulting from a breach of contract. The third (the Great Peace case) has
resulted in a significant restriction on the remedies available where the parties
have contracted on the basis of a mistaken assumption. In the area of contract
formation, the Consumer Protection (Distance Selling) Regulations 2000 and
the European Directive on Electronic Commerce 2000 are both important,
and are fully considered. In this context, the developing area of contracting
over the internet is looked at in detail in Chapter 1.
The purpose of this book remains the same. It is not a substitute for
attending lectures, or reading textbooks or law reports. It is hoped that it
will prove a valuable supplement to those activities. Students often find
that, having attended lectures, or read the books, they have difficulty in
deciding what is relevant and irrelevant, what is important and less
important, what needs to be committed to memory, and what can be safely
regarded as background. This is a particular difficulty when students are
taught contract early in their legal studies, as is usually the case. One of the
objectives of this book is to help students who face such difficulties. The
answers to the questions contained in this book provide a distillation of the
essential points on the topics which they cover. They help to highlight the
most important elements, and indicate the fundamental rules and principles
which need to be learnt.
v
vi Preface
The second objective is to illustrate, by example, how to answer
questions on contract law. The answer plans are important here, as well as
the answers themselves. Each of the answers is around 1,500–1,700 words
long, which is probably an average length for a first year law degree essay.
Exam answers may well be a little shorter and less detailed, but the overall
approach should be the same. Note, however, that the answers given are
not, and are not intended to be, perfect. There is probably no such thing.
Nor are they the only way in which the questions given could be answered.
They are, however, examples of the kind of well structured answer which
will be likely to receive good marks. They will also help to answer, it is
hoped, some of the perennial student concerns, such as ‘how far should I
give the facts of cases?’, and ‘how many cases do I need to cite?’. It is not
easy to answer such questions in the abstract. The answers here give
concrete examples of how the material should be handled.
The questions themselves are frequently adaptations of questions used in
past examination papers, and are of the style used in many degree courses,
including the London External LLB. Non-degree courses will often adopt a
similar approach. The law is stated as it stood on 1 December 2002.
I hope that you find this book useful as a supplement to your study of
the law of contract. It will not remove the need to read the textbooks and
the cases, but it will help you to make better use of the information you
have acquired from these sources and, I hope, achieve success in your
examinations.
Richard Stone
Oadby, Leicester
1 December 2002
CONTENTS
Table of Cases ix
Table of Statutes xxiii
Table of Legislation xxv
1 Offer and Acceptance 1
2 Intention and Consideration 25
3 Privity 51
4 Capacity 67
5 Contents of the Contract 81
6 Exclusion Clauses 97
7 Mistake and Misrepresentation 117
8 Duress and Undue Influence 135
9 Illegality 157
10 Frustration 177
11 Performance and Breach 193
12 Remedies 209
13 Quasi-Contract and Restitution 225
14 Agency 235
15 Sale of Goods 251
Index 261
vii

TABLE OF CASES
A to Z Bazaars (Pty) Ltd v Minister of Agriculture
(1974) (4) SA 392(C) 23
Adams v Lindsell (1818) 1 B & Ald 681; 106 ER 250 1, 3, 4, 6, 8, 16, 22
Addis v Gramophone [1909] AC 488 222
Adler v Dickson [1955] 1 QB 158; [1954] 3 All ER 397 110
Aiken v Short (1856) 1 H & N 210 228
Ailsa Craig Fishing Co v Malvern Fishing Co
[1983] 1 WLR 964; 1 All ER 449 109
Aldridge v Johnson (1857) 7 E & B 885 255
Alec Lobb (Garages) Ltd v Total Oil (Great Britain) Ltd
[1985] 1 All ER 303 174
Alfred McAlpine Construction Ltd v Panatown Ltd
[2000] 3 WLR 946 58, 60, 61
Allcard v Skinner (1887) 36 Ch D 145 149
Aluminium Industrie Vaasen BV
v Romalpa Aluminium Ltd [1976] 1 WLR 676 255, 256
Andrews v Hopkinson [1957] 1 QB 229 243
Anglia Television v Reed [1972] 1 QB 60; [1971] 3 All ER 690 210, 212
Appleby v Myers (1867) LR 2 CP 651;
[1961–73] A11ER Rep 452 179, 181, 183, 184,
186, 187
Appleton v Campbell (1826) 2 C & P 347 160
Arcos Ltd v Ronaasen & Son [1933] AC 470 197, 202, 260
Armagas v Mundogas [1986] AC 717; 2 All ER 385 240, 245–47
Armhouse Lee Ltd v Chappell (1996) The Times, 7 August 161
Ashdown v Samuel Williams [1957] 1 QB 409; 1 All ER 35 111
Ashington Piggeries v Christopher Hill [1972] AC 441 203, 258, 260
Ashmore and Others v Corporation of Lloyd’s (No 2)
(1992) The Times, 17July 85
Associated Japanese Bank (International) v Credit du Nord SA
[1988] 3 All ER902; [1989] 1 WLR 255 125
Aswan v Lupdine [1987] 1 WLR 1;
[1986] 2 Lloyd’s Rep 347 260
Atkinson v Denby (1862) 7 H & N 934 165
Atlas Express Ltd v Kafco (Importers and Distributors) Ltd
[1989] QB 833; 1 All ER 641 40, 137, 141, 143, 146
Attorney General v Blake (2000) 31 SLR 43 209, 213
Attwood v Lamont [1920] 3 KB 571 168, 173
Attwood v Small (1838) 6 Cl & F 232;7 ER 684 90
ix