Rose Janet Ayugi-Masinde Contracts II Course Outline

UNIVERSITY OF NAIROBI
SCHOOL OF LAW

GPR 108 CONTRACTS II

COURSE CONTENT

Vitiating factors, Contracts in Restraint of trade, Remedies, Discharge of

contract, quasi-contract; interaction of tort and contract, and conflict of
laws, Contracts I is a prerequisite.

POSSIBLE READING

1. Chitty on Contracts (2004), Volume I, General Principles Volume II,

Specific Contracts Thomson, Sweet and Maxwell, London.
2. Richards, Paul (2002) Law of Contract, Dorset Press, Dorchester
3. J.C. Smith. (1998). The Law of Contract: Fundamental Principles of
Law, 3rd ed. London, Sweet and Maxwell.
4. Trietel G. H. (2003). The Law of Contract Thomson, Sweet and
Maxwell.
5. Atiyah, P. S. (4995) An Introduction to the Law of Contract (5 th ed.)
Clarendon Law series, Oxford.
6. Beale, H. Bishop, W. et al (1990). Contract: Cases and Materials.
(2nd e.d) Buttersworth, London.
7. Smith, J.C.& Thomas J (1982). A Case book on Contract 7 th ed.
London, Sweet and Maxwell.
8. Hodgin, R.W. (1975) Law of Contract in East Africa. Kenya
Literature Bureau.

TOPIC ONE: VITIATING FACTORS/FAULTS IN CONTRACTS

Effects of faults in Contracts

Void mistake, illegal contracts
Voidable misrepresentation and capacity
Unenforceable absence of some requirement, e.g. written
evidence.

Vitiating Factors
1. Misrepresentation
2. Mistake
3. Duress
4. Undue influence
5. Illegal contracts

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TOPIC 2: DISCHARGE OF CONTRACTS

TOPIC 3: REMEDIES

TOPIC 1 : VITIATING FACTORS

A. DURESS

Introduction

Royal Bank of Scotland V Etridge (No.2) (2001) 4 All ER 499.

Threats to a person is obvious form of duress

Economic duress

The siboen and The sibotre (occidental worldwide Investment Corp

V Skibs A/S Avanti) 1976
Atlas Express Ltd V Kafco (Importers and Distributors) Ltd., 1989

Language of the courts Voluntariness, Consent and Overborne will

Truly unwilled action is not relevant. DPP for Northern Ireland V
Lynch (1975)
Real question is whether decision was made in unacceptable
circumstances, Dimskal shipping Co., S.A. V International
Transport Workers Federation, The Evia Luck (1991) 4 All ER 871
The test for the Existence of duress
Circumstances under which he decided to contract.
Whether other party had introduced an unacceptable element into
those circumstances. Enimont Overseas AG V Rojugotanker
Zadar, The Olib, (1991)2 Llyds Reg. 108
Illegitimacy of the threat, Universe Tankships Inc. of Monrovia V
International Transport Workers Federation and Laughton
(1983) 1 AC 366
Act is unlawful if criminal and or civil wrong e.g. branch of contract or
tort.
> In principle it is possible for duress to be based in a lawful threat.
CTN cash and carry Ltd V Gallaher, (1994) 4 All ER. 714.
> Lack of reasonable alternative.
Second requirement where threat is not a criminal
offence
Pao On V Lau Yiu Long (1980) AC 614,
Universe Tankships Inc of Monrovia V
International Transport workers Federation (1983)
AC 366. B & S Contracts and Design Ltd V Victor
green Publications Ltd. (1984) 1 CR 419

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reasonable alternative Vantage Navigation Corp.

V Suhail and Saud Bahwan Building materials,
The Alev (1989) 1 Llyd rep. 138
practical alternatives
What constitutes a reasonable alternative?
Criticism of the reasonable alternative test- an
alternative?
> Did the person make the threat out of malice or bad faith?
Why a two stage test when a legal wrong has been
threatened?
- Security of transactions
- Balancing of competing interests
- In criminal offence alternatives test inappropriate,
- Barton V Armstong (1976)
- Is the duress operative?
- To what degree did the threat induce the contract?,
Barton V Armstong
- Threat significant cause of the contract.
- The Evia luck (1992) 2 AC 152
Rescission
Right to rescind may be lost by affirmation
North Ocean shipping V Hyundai Construction Co. Ltd.,
(1978) 3 ALL ER. 1170

B. UNDUE INFLUENCE

Introduction
Overlap between duress and undue influence
Subtle difference based on relationship between the parties.
Royal Bank of Scotland V Eltridge (No.2) (2001) 4 ALL ER 449
Allcard v Skinner (1887) 36 Ch. D 15
Actual and presumed undue influence.
Barclays Bank PLC v OBrien (1963) 4 All ER 417
Modern context of use of undue influence (loan guarantee by wife to
husband)
The right to rescind may be lost by affirmation Allcard v Skinner
(1887)

Actual undue influence

Inappropriate exercise of influence arising out of the relationship.
Royal Bank of Scotland V Etridge (No.2) 2001 4 All ER 449
Bank of Credit and Commerce International S.A. V. Aboody
(1989) Fam. Law 435
Absence of malign intent to cause detriment irrelevant.

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Presumed Undue Influence

The types of presumptions (Type 2A and Type 2B)
Equity and the presumption of influence in special category of
relationships.
Presumed as a mater of law not just evidentially
second presumption that is, that influence was exercised is an
evidential presumption.
Second must relate to the transaction and can be rebutted.
2nd type: Relationship between the parties involved relevant influence
- relationship of trust and confidence fiduciary relationship.
Transaction must be one that calls for an explanation
Relationship between banker and customer Lloyds Bank Ltd V
Bundy (1974) 3 All ER. 757.
National Westminister Bank PLC V Morgan (1985) 1 All ER 821
Transaction readily explicable as normal commercial loan
No requirement of dominating influence Goldsworthy V Brickell
(1987) 1 All ER 853

Transactions calling for an explanation

Allcard V Skinner
Large gift
Manifest Disadvantage National Westminister V Morgan
Husband guarantees
Difficulty in generating presumption of undue influence in husband
and wife guarantee type of cases.
Royal Bank V Etridge
Rebutting the presumption of undue influence
Free, full informed choice Zamet V Hyman (1961) 3 All ER 933
Inche Noriah V Shaik Allie Bin Omar (1929) AR 127
Weight to be attached to independent advice Royal Bank of
Scotland V Etridge
Undue influence and third parties
Examples from husband and wife situation, but not limited to this.
Barclays Bank PLC V OBrien (1993) 4 All ER 417
Agency relationship
Constructive Notice

Put on inquiry
o transaction not to financial advantage of wife.
o Substantial risk in transactions.

Situations outside the husband and wife context and outside context
surety transactions. Massey V Midland Bank PLC (1995)

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Where couples not cohabiting

Where relationship between debtor and surety is non-commercial
Constructive notice CIBC Mortgages V Pitt (1993)
What can third parties do to prevent itself being fixed with
constructive notice?
Barclays Bank V OBrien
Confirmation by solicitor UCB Corporate Services Ltd V Williams
(2002)
appropriate advice
Exceptional circumstances Credit Lyonnais Bank Nederland NV-
V-Burch. (1997) 1 All ER 144.

Other relevant cases. Hodgins R. W. Law of Contract.

Hassanali Issa and Co. V Jeraj Produce Store !967 E.A. 55
H.C. Pater V Pankay 5 Thakora (1965) EA 629
Ottoman Bank V K. S. (1965) EA. 464.

C. MISTAKE

Introduction
Common mistake
Mutual mistake
Unilateral mistake

Are contractual obligations absolute or can a party escape liability?

Narrow meaning of word mistake in contract law.

Clarion Ltd V National Provident Institution (2000)

Law takes a predominantly objective of agreement
Controvincial Estates Plc V Merchant Investors Assurance Co. Ltd
(1983) Com LR 158

A. Agreement Mistakes
Mistakes as to identity(unilateral mistake) Shogun Finance Ltd
V Hudson (2003) All ER (D) 258
Identity or attributes? Cundy V Lindsay (1878)3 App. Cas. 459
Kings Norton Metal Co. V Edridge, Merret & Co. (1897) 14 TLR 98
Is the distinction between identity and attributes not genuine? Lewis V
Avery (1972) IQB 198 Shegun Finance Ltd V Hudson

> Parties dealing face to face

Phillips V Brooks Ltd. (1919) 2 ICB 243 Lake V Simmons (1927) AC. 487,
IngramV Little (1961) 1 QB 31
Should the law permit some division of loss between two
innocent parties? Lewis V Averay Shogun Finance V
Hudson
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> Mistake as to the terms or subject matter of a contract

(mutual mistake)

> Objective principles in relation to parties at cross purposes

Raffles V Wichelhaus (1864) 2 H & C 906 Scriven Bros V
Hindley & Co. (1913) 3 KB. 564. Smith V Hughes (1871) LR.
6. QB. 592

> Agreement mistake in equity

- equitable jurisdiction permits a more flexible approach. Malins V
Freemen
(1837) Steward V Kennedy (1890) 15 App. Co. 75.

Patel V Ali (1984) Ch. 283 where the court refused to grant specific
performance which is a discretienary remedy, on equitable grounds of
hardship to the dependant. The vendor of the house had, since the sale,
become disabled and heavily dependent for help on neighbours whom she
would lose if she had to move. Goolding J. refused to grant specific
performance, leaving the purchasers to their remedy in damages.

Court will not allow defendant to escape performance simply because

he made a mistake. Tamplin V James (1879) 15 Ch. D. 215
Rectification is a another equitable remedy. Joscelyne V Nissen
(1970) 2 QB 86 Riverside Properties Ltd., V Paul (1975) Ch. 133.
Commission for the New Towns V Cooper (GB) Ltd. (1995)
Oceanic Village V. Shirayama Shokusan Co. Ltd. (1999)

B Common Mistake

Performability Mistake or Initial impossibility.

Mistake as to existence of subject matter. Galloway V
Galloway (1914) Couturier V Hastie (1856) 5 HL Case 673

Assumption of risk of goods non-existent. McRae V Commonwealth

Disposals Commission (1951) 84 CLR 377 Barrow, lane & Ballard
Ltd V. Phillips & Co. Ltd. 1929 1 KB 574

Mistake as to quality of subject matter

Great peace shipping Ltd V Tsauliris salvage (International) Ltd
2003) QB. 679
Bell V Lever Bros 1932 AC. 161

Mistake as to the existence of some quality which makes the thing

without the quality essentially different. Associated Japanese Bank
(International) V Credit du Nord

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Strict view of mistake at common Law. Leaf V International

Galleries (1950) 2 KB 86 but see Associated Japanese Bank
(International) V Credit do Nord SA:
A doctrine of common mistake of common law
The scope of common mistake. Great Peace Shipping Ltd. V
Tsauliris Salvage (International) Ltd., (2002) EWCA AU. 1407
(2003) QB 679

Common Mistake in equity, William Sandall Plc V

Cambridgeshire County Council (1994)
Contracts merely liable for setting aside in equity? Solle V Butcher
(1950 1 KB 671 Bell V Lever Bros Great Peace Shipping

Further attempt to develop an equittable approach Grist V Bailey

(1967) Ch. 532
Documents signed by Mistake
LEstrange V Graucobs________(1934) KB 394

Non Est Factum not my deed. Thoroughgoods Case (1582)

Foster V Mackinnon (1869) LR. 4 CP. 704
Use of defence of non est factum strictly limited. Saunders V
Anglia Building Society (Gallie V Lee) 1971) AC 1004
Party cannot rely on the defence where she acted carelessly.
United Dominions Trust Ltd V Western (1976) QB 513
Where document radically different from what it was supposed to
be. Lloyds Bank PlC V Waterhouse (1990)

D. MISREPRESENTATION

Introduction

Operative misrepresentation
Who can one claim remedy for misrepresentation?
Misrepresentation can be innocent, fraudulent and negligent
Remedies are found in common law, equity and statute law (Trade
Description Act CAP)
No general duty to disclose relevant facts in pre-contract
negotiations
Misrepresentation must be false statement of fact not opinion or
intention.
Edginton v. Fitzmaurice (1885) 29 ch. D 459 statement of
opinion Bisset v. Wilkinson (1927) AC 177
Statement of person in better position to know the truth Smith v.
Land and House Property Corporation (1884) 28 ch. D 7

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Brown V. Raphael (1958)

Statement of expert Esso Petroleum Co. Ltd. Marden (1976)
No general duty to disclose Turner v. Green (1895)
Partial non-disclosure Motts Patent Brick and Tile Co. (1886)
Change of circumstances with V OFlanagan (1936) ch. 575
Change of intention Traill V Baring (1864)
Fiduciary or confidential relationships (covered under undue
influence) duty to disclose material facts
Misrepresentation by conduct Ray v. Sampers (1974) R V
Charles (1977)
When is misrepresentation operative?
Parties to the contract
Reliance Smith v Chadwick (1884)
Where reasonable person would have relied upon
misrepresentation County Natwest v. Barton (2002)
Where misrepresentation is not known about Horsfall v. Thomas
(1862)
Where representee relies upon his own investigations Attwood v.
small (1838)
Where opportunity to discover truth not taken. Redgrave v. Hurd
(1881)
Degree of reliance Edginton v. Fitzmaurice (1885)
Atlantic lines and Navigation Co. Inc. v. Hallam Ltd The
Way (1983)
Materiality

Types of misrepresentation

Fraudulent misrepresentation Derry v. Deek (1889) 14 App Case

337
Arkerhielm v. De Mark (1959) Ac 789
Jewson & Sons Ltd. v. Arcos Ltd (1933)
Damages for fraudulent misrepresentation
Negligent misstatements Hedley Byrne & Co. Ltd. v. Heller
& Partners Ltd (1964)
Innocent misrepresentation
Rescission Car and Finance Ltd v. Caldwell (1965)
Indemnity Whittington v. Seale Hayne (1990)
Trade Descriptions Act CAP 505 Laws of Kenya

E. ILLEGALITY

Introduction

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Illegal contracts divided on the basis on the legal consequences of

those contracts (e.g. void or illegal)

A. VOID CONTRACTS

Gaming or wagering contracts Gaming laws Ellesmere (Ear of v.

Wallace (1929) 2 ch. I

1. Contracts in Restraint of Trade

Prima facie void unless justified as being reasonable between the

parties and not inimical to the public interest
Examples of goodwill and employment agreements Schroeder
Music Publishing Co. Macaulay (1974) 3 All ER 616
Restraint may be reasonable and commercially necessary for
protection of legitimate interest Nordenfelt v. Maxin Nordenfelt
Guns and Ammunitions Co. Ltd.(1894) Ac 535
Sale of business Nordenfelt Vancouver Malt and Sake
Brewing Co. Ltd v. Vancouver Breweries Co. Ltd. (1934) Ac
181
Court willing to sever parts which might be too wide in area or
period Goldsoll v. Goldman (1915) 1 Ch 292
Restraints in a contract of employment

Protection of trade secrets and confidential information

Distinction between trade secret and confidential information Fss
Travel & Leisure Systems Ltd v. Johnson (1998) I RLR 382
Herbert Morris Ltd v. Saxelby (1916) AC 688
What constitutes a trade secrets? Forsters & Sons Ltd v.
Suggett (1918) 35 TLR 87
Faccanda Chicken Ltd v. Fowler (1987) Ch. 177 Peter Brooks
v. Olyslager Oms (UK) Ltd (1998) 1 PLR 590
Commercial Plastics Ltd v. Vincent (1965) 1 QB 623
Littlewoods organization Ltd v. Harris (1978) 1 ALL ER 1026
Kores Manufacturing Co. Ltd v. Kolok Manufacturing (Ltd)
(1958) Ch. 108
Clauses restraining soliciting of customers
Distinction between different categories of employees Fitch v.
Dewes (1921) 2AC 158
Marion White Ltd v. Francis (1972) 3 ALL ER 857
The scope of restraint clause and severance Fitch v.
Suggett Mason v. Provident Clothing & Supply Co. Ltd.
(1913) Ac. 724
Attwood v Lament (1920) 3 KB 571

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What are the requirements for severance? Goldsoll v. Goldman

Littlewoods Organisation v. Harris 1 ALL ER 1026
Restraints protecting other interests Eastham v. Newcastle
United Football Club Ltd. (1964) Ch 413
Schroeder Music Publishing co. Ltd v. Macaulay (1974) 13 ALL
ER 616
Silverstone Records v. Mountfield (1993) EMLR 152
Are the categories of restraint closed? Esso Petroleum Co. Ltd v.
Harpers Garage (Stouport) Ltd
Further regulation of Restraint of trade
A third party might be seriously affected by a restraint of trade but,
has, until recently, been entirely without remedy. Mogul
Steamship Co. Ltd v. McGreger, Gow & Co. Ltd. (1892)
In this case an association of shipowners took collective action to
keep the plaintiff out of the shipping trade. At that time, the House
of Lords was not even certain that the contract was in restraint of
trade. However they were clear that even if it was, the plaintiff
had no remedy
Restrictive Trade Practices, Monopolies and Price control Act CAP
504 Laws of Kenya

2. OTHER CONTRACTS VOID AT COMMON LAW ON GROUNDS OF

PUBLIC POLICY

Contracts to oust the jurisdiction of the courts Jones v.

Vernons Pools Ltd (1938( 2 ALL ER 626
Scott v. Avery (1855) 5 HL Cas 81
Baker v. Jones (1954) 1 WLR 1005
Hyman v. Hyman (1929) P1, 26 LGR 471
Contracts undermining the status of marriage Love v. Peers
(1768) 4 Burr 2225
Marriage brokerage Hermann v. Charles worth (1905) 2 KB 123

B ILLEGAL CONTRACTS

Distinction between void and illegal contracts

Contracts to commit an unlawful Act
Where purpose to commit, a crime, or a tort or a fraud it is illegal
and unforceable. Brown Jenkinson & Co. Ltd. v. Percy Dalfen
ltd (1957) 2 QB 621
A guilty person may be able to enforce the contract Shaw v.
Groom (1970)
Re Mohmound and Isphani(1921)
Contracts promoting sexual immorality Pearce v. Brooks
(1866) v. LR 1 Ex 213 Upfill v. Wright [1911] 1 KB 506
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Tanner v. Tanner (1975) 3 ALL ER 776

Contracts prejudicial to the interests of the state
Trading contracts at war time
Contracts prejudicial to the administration of justice R v.
Andrews (1973) QB 422
Contracts promoting corruption in Public life Parkison v. College
of Ambulance Ltd and Harrison (1925) 2 KB 1

EFFECTS OF IMPROPRIETY AND ILLEGALITY

Void Contracts
Doctrine of severance
Hermann v. Charles Worth (1905) 2 KB 123

Illegal Contracts
Re Mohmound and Ispahani Archbolds (Freightage) Ltd v.
Spangett Ltd (1961) 1 Q3 374
Ashmore, Benson, Pease & Co. Ltd v. AV Dawson Ltd (1973) 2
ALL ER 856
Some general principles
An illegal contract is unforceable by either party
Pearce v. Brooks
Mohammed v. Alaga & Co. (1999) 3 ALL ER 699
Money or property transferred is not recoverable
Parkinson v. College of Ambulance Ltd & Harrison
Belvoir Finance Co. Ltd. v. Stapleton (1971) 1 QB
210

Exceptions
Tinsley v. Milligan (1993) 3 ALL ER 65
Whenever parties are not equally guilty Kiriri Cotton Ltd v.
Dewani (1960) AC 192
Green v. Portsmouth Stadium Ltd (1953) 2QB 190
Bigos v. Bousted (1951) 1 All ER 92
Kearly v. Thomson (1890) 24 QBD 742

Related transactions between the parties

Fisher v. Bridges (1854) 18 JP 599 Strongman (1945) Ltd v.
Sincock (1955) 2 QB 525
Illegal performance of lawful contracts
Archbolds (Freightage) Ltd v. Spanglett Ltd
Marle v. Philip Trant & Sons Ltd (1954)1 QB 29
Proposals for reform

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TOPIC TWO: DISCHARGE OF CONTRACT

1. PERFORMANCE

Performance depends on the express ad implied terms of the contract

Sale of Goods Act CAP 31 implied Terms Sec 14-17 to title
description, merchantability
Parties may agree to end upon the occurrence of certain
circumstances. Financings Ltd. v. Baldock (1963) 2 QB 104 Where
hirer fails to pay the initial or any subsequent installments within 10
days
By new Agreements

Order of performance and independent obligation

Taylor v. Webb (1937) 2KB 283
Entire contracts Cutter v. Powell (1795) 6 Term Rep. 320
Quantum Meruit Sumpter v. Hedges (1898) 1 QB 673
Substantial performance Hoening v. Isaacs (1952) 2 ALL ER 176

2. BREACH

TERMINATION FOR BREACH

Hong Kong for Shipping Co. Ltd. v. Kawasaki Kisen Kaisha Ltd
(1962) 2 QB 26
Freeth v. Burr (1874) LR 9 CP 208
Alfred C Toepfer International Gmbtt v. Itex Itagrani Export SA
(1993) 1 Lloyd Rep. 360 Decro-wall International SA V
Practitioner Marketing Ltd (1971) 2 ALL ER 216
Photo production Ltd. v. Securior Transport Ltd ( 1980) 1 Ailer
556
The Mihalis Angelos (1971) 1 QB 164
Anticipatory breach Freeth v. Burr (1874) LR 94208
Hashamu v. Zenab (1960) AC 316
Communication of repudiation Vitol SA v. Norelf Ltd (1996) 3 ALL ER
193
Affirmation or termination Stocznia Gdanska SA V Latuian
Shipping (No.3) (2002) 2 ALL ER 768 Hochster v. De La Tour
(1853) 2 E & B 678
Frost v. Knight (1872) 7 Exch. 111
Intention not to perform Federal Commerce and Navigation Co.
Ltd. v. Molena Alpha Inc (1979) 1 ALL ER 307 Woodwar

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Investment Development Ltd. v. Wimpey Construction UK Ltd.

(1980) 1 ALL ER 571
Vaswani v. Italian motors (sales and services) ltd (1996_ 1 WLR
270
Keeping the contract alive Avery v. Bowden (1856) 6 E & B 953
Fercometal SARL v. MSC Meditterranean Shipping Cp. SA
(1988) The Simona (1989) AC 788 The Mihalis Angelos
Anticipayory breach and duty to mitigate White and Carter
(Councils ) Ltd v. McGregor (19662) AC 413
The Alaskan Trader (Clea shipping corpn v. Bulk oil
International Ltd) (1984)

3. DISCHARGE BY IMMPOSSIBILITY: THE DOCTRINE OF

FRUSTRATION

Introduction: Initial & subsequent impossibility

Amalgamated Investment & Property Co. Ltd. v. John Walker &
Sons Ltd (1976) 3 ALL ER 509
Development of the doctrine of frustration Paradine v. Jane (1647)
26 Sty 47
Taylor v. Caldwell (1863) 3 B & S 826
Scope of doctrine Krell v. Henry (1903) 2 KB 70
A narrow interpretation of frustration Herne Bay Steamboat Co. v.
Hutton (1903) 2 KB 683
Tsakiroglou & Co. Ltd v. Noblee Thorl GmbH 1 (1962)
Financial hardship no reason to allow reliance on frustration Davis
contractors Ltd v. Fareham UDC (1956) AC 696

Scope of the doctrine

Leases
National carriers Ltd. v. Panalpina (Northern) Ltd [1981] 1 ALL
ER 161

Illegality
Impossibility: destruction of subject matter Appleby v. Myers (1867)
LR 2 CP 651
Asfar v. Blundell (1896) 1 QB 123
Impossibility: Sale of Goods Act
Impossibility: death or illness whincup v. Hughes (1871) LR 6 CP 78
Robinson v. Davison (1871) LR 6 Exch 269
Notcutt v. Universal Equipment Co. (London) Ltd (1986) 3 ALL
ER 582

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Impossibility: due to unavailability Jackson v. Union Marine

Insurance Co. Ltd. (1874) LR 10 CP 125
Tamplin steamship co. Ltd Anglo-Mexican Petroleum Products
co. (1916) 1 KB 485
Impossibility: Not just financial hardship Davis contractors Ltd v.
Fareham UDC (1956) AC 696
Tsakiroglou & Co. Ltd v. Noble Thorl GmbH(1962)
Staffordshire Area Health Authority v. South Staffordshire
Water Works Co. (1978 (3 ALL ER 769
Effects of express provisions for frustrating event Taylor v.
Caldwell Jackson v. Union Marine Insurance Co. Ltd (1874) LR
10 CP 125
Frustration does not apply to forseeable events. Davis Contractors
Ltd. v. Fareham UDC (1956) AC 696
Frustration cannot be self induced Ocean Tramp Tankers Corp v.
V/O Sofracht, The Eugenia (1964) 2 QB 226
Paal Wilson Co. A/S v. Partenreederei Hannah Blumenthal, The
Hannah Blumenthal (1983) 1 ALL ER 34
Joseph Constantine Steamship line Ltd. v. Imperial Smelting
Corp Ltd. (1941) 2 ALL ER 165
Effects of the doctrine Hirji Mulji V Cheong Yue Steamship Co.
Ltd. (1926) AC 497 Chandler v. Webster (1904) 1 KB 493 Fibrosa
Spolka Akcyjna Fairbairn Lawson Combe Barbou
r Ltd, The Fibrosa case (1943) AC 32
The Law Reform (Frustrated Contracts) Act 1943
Main changes introduced by the Act.
Gamerco SA V. ICM/ Fair Warning (Agency) Ltd (1995) 1 WLR
1226 Cutter v. Powell (1795) 6 Term rep 320
BP Exploration co (Libya) Ltd v. Hunt (no.2) (1982) 1 ALL ER 925

TOPIC 3 REMEDIES
INTRODUCTION

1. Damages
Expectation loss Livingstone v. Rawyards Coal (1880) 5 App/ Cas
25

Measure of damages
Under Sale of Goods Act
Cost of cure Radford v. De froberville (1977) (WLR) 1262
Time of breach Johnson v. Agnew (1979) 1 ALL ER 883

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Suleman v. Shahshavari (1989) 2 ALL ER 460

Reliance Loss
(1971) 3 ALL ER 690
Anglia Television Ltd v Reed
C and P Haulage v. Middleton (1983) 1 WLR 1461
Pre-contract expenditure Anglia Television v. Reed (1972) 1 QB 60

Restitution

Enrichment by wrong
Rowland v. Divall (1923) 2 KB 500
Enrichment by substraction Wrotham Park Estate Co. v. Parkside
Homes Ltd (1974) 1 WLR 798

Damages for mental distress

Addis v.Gramophone co. Ltd (1909) AC 488
Watts v. Morrow (1991) 4 ALL ER 937
Farley v. Skinner (2001) Uktth 49
Perry v. Sidney Phillips & Sons(1982) 3 All ER 705
Watts v. Morrow (1991) 4 ALL ER 937
Heywood v. Wellers (1976) QB 446
Hayes v. James & Charles Dodd(1990) 2 ALL ER 815

Remoteness of Damage
Test for Remoteness Hadley v. Baxendale (1854) 9 Exch. 34
Victoria Laundry (Windsor) Ltd v. Newman Industries Ltd.
(1949) 1 ALL ER 997
Reasonable forseeability Heron II (Koufos v. (Zarnikow Ltd) (1960)
1 AC 350

Contract/Tort distinction and type of loss

H Parsons (Livestock) Ltd. v. Ottley & Co. Ltd. (1978) 1 ALL ER
525
Economic justification for remoteness rule
Need for an additional requirement?

Causation and Liability

Intervening acts and events Monarch steamship co Ltd. v. A/B
Karlshamns Olje Fabriker (1949) AC 196
London Joint Stock Bank v. MacMillan (1918) AC 777
Mitigation
British Westinghouse Electric and Manufacturing Co. Ltd. v.
Underground Electric Railways Co. of London (1912) AC 673

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Sotiros Shipping Inc v. Sameiet Solholt, The Solholt 1 Lloyds

Rep. 605
Reasonable steps to limit loss
James Finlay & Co. v. NU Kwik Hoo Tong HM (1029) 1 KB 400
Brace v. Calder (1895) 2 QB 253

Expenses Incurred
Banco de Portugal v. Waterlow & Sons Ltd(1932) AC 452
Benefit gained is taken into account British Westing house Electric
Taxation British Transport commission v. Gourley (1956) 2 WLR
41

Penalties and Liquidated damages

Dunlop pneumatic Tyre Co. Ltd. co. Ltd v. Garage and Motor
(1915) AC 79
Philips Hong Kong Ltd. v. A-G of Hong Kong (1993) 61 BLR 41

Avoidance of the rule on penalties

Alder v. Moore (1961) 1 ALL ER 1 Bridge v. Campbell Discount
Co. Ltd (1962) AC 600

2. Action for an agreed sum

White and Carter (Councils Ltd. v. McGregor

3. Specific Performance

Adequacy of damages Harnett v. Yielding (1805) 2 Sch. & Let. 549)

Beswick v. Beswick (1968) AC 58
Rainbow Estates Ltd. v. Tokenhold Ltd. (1998) 2 ALL ER 860
Cud v. Rutter (1720) 2 Eq. Cas Abr. 18
Harvela Investments Ltd. v. Royal Trust Co. of Canada (1985)
Ch. 103
Falcke v. Gray (1859) 4 Drew 651
Behnke v. Bede shipping Co. Ltd. (1927) 1 KB 649
Beswick v. Bewick (1968) AC 58

Supervision
Ryan v. Mutual Tontine Westminster Chambers Association
(1893) 1 C. 116

Personal Services
Hill v. C A Parsons & Co. Ltd. (1972) Ch. 305
Powell v. Brent London Borough Council (1988) 1 CR 176

Discretion of courts to award to specific performance

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Rose Janet Ayugi-Masinde Contracts II Course Outline

Hardship
Patel v. Ali (1984) 1 ALL ER 978

Consideration

Party Claiming specific performance

Walter v. Morgan (1861) 3 De. 9F & J 718

Mutuality
Price v. Strange (1977) 3 ALL ER 371

4. Injunctions

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