Business Law and EthicsContract Law

• Offer and Acceptance:
• Example: In Carlill v Carbolic Smoke Ball Co., a unilateral offer was made via advertisement.

• Action: When making an offer, explicitly detail the terms to avoid ambiguity. Ensure that acceptance is clear and communicated.

• Consideration:

• Example: The doctrine of consideration was exemplified in Currie v Misa, establishing a requirement of some value exchange in contracts.

• Action: Ensure there is a clear exchange of value; whether goods, services, or another form of consideration, it must be identifiable.

• Intention to Create Legal Relations:

• Example: Agreements among family members, as seen in Balfour v Balfour, generally lack intention to create legal relations.
• Action: For enforceable agreements, especially in informal contexts, explicitly state the legal intent.

• Express and Implied Terms:
• Example: In Liverpool City Council v Irwin, the courts implied terms to give business efficacy.

• Action: Clearly state all important terms in the contract. Where applicable, consider if terms need to be implied for the contract’s effective operation.

• Conditions and Warranties:

• Example: The differentiation between conditions and warranties was crucial in Poussard v Spiers and Bettini v Gye.
• Action: Clarify if the term is a condition or warranty to understand the contractual remedies available in case of a breach.

• Complete and Partial Performance:
• Example: The case of Cutter v Powell demonstrated the harshness of complete performance requirements under common law.

• Action: Draft contracts with explicit provisions for partial performance where full performance may be impractical or impossible.

• Breach of Contract:

• Example: Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd introduced the concept of “innominate terms”.
• Action: Assess whether the breach deprives the injured party of substantially the entire benefit. Consider drafting “innominate terms” carefully to address potential ambiguities.

• Damages:
• Example: Hadley v Baxendale provides a foundational principle for understanding the remoteness of damages.

• Action: Calculate potential damages considering the foreseeability test to manage risk effectively. Make clear any damages caps or exclusions in the contract.

• Specific Performance and Injunctions:

• Example: Specific performance was discussed in Beswick v Beswick.
• Action: When seeking specific performance, ensure the subject matter is unique, and monetary compensation is insufficient.

• Misrepresentation:
• Example: The difference between fraudulent, negligent, and innocent misrepresentation is illustrated by cases such as Derry v Peek and Hedley Byrne & Co Ltd v Heller & Partners Ltd.

• Action: Ensure all statements made during negotiations are accurate and substantiated.

• Mistake:

• Example: Smith v Hughes distinguishes between common and unilateral mistakes.

• Action: Clarify assumptions explicitly to prevent misunderstandings and disputes arising from mistakes.

• Duress and Undue Influence:

• Example: In Atlas Express Ltd v Kafco, economic duress was recognized.
• Action: Avoid any undue pressure tactics during contract formation to ensure enforceability.

• Minors:
• Example: Contracts with minors, as examined in Nash v Inman, are generally voidable.

• Action: Verify the age and capacity of parties before entering into agreements.

• Mental Incapacity:

• Example: The ruling in Imperial Loan Co Ltd v Stone emphasizes the need for a party to be able to understand the contract’s nature and effect.
• Action: Assess the mental capacity of the contracting parties to ensure valid formation.

• Doctrine of Privity:
• Example: Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd reinforces the privity rule.
• Action: Incorporate third-party rights through express terms, considering the Contracts (Rights of Third Parties) Act 1999.

• Agreement and Discharge:
• Example: The implications of mutual discharge agreements as observed in Hochster v De La Tour.
• Action: Clearly outline terms for termination and mutual discharge mechanisms within the contract.

Business Law and EthicsContract Law