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Contract - Coggle Diagram

- - - - the word "delivery" is interpreted very liberally as seen in
        Evans v Grey (1882). It seems that the promisor doesn't even have to sign the document. A solemn verbal declaration that “I deliver this as my act and deed” traditionally sufficed.
      - Benefits:
        
        Liability is restricted to parties named in the deed.
        
        Extrinsic evidence is only admissible if the deed is ambiguous (Romaine Estate v Romaine).
        
        Novel seals (e.g., soot marks or fingerprints) may be valid if the maker’s intention is clear.
        
        Friedmann Equity Developments Inc. v Final Note Ltd (2000)
        
        The Supreme Court of Canada upheld the "sealed contract rule", finding it still useful. The rule limits liability to those named in the deed and restricts the use of extrinsic evidence unless the deed is ambiguous, as reaffirmed in Romaine Estate v Romaine.
        
        used mostly in family or partnership transaxtions
        Drimmie v Davies 1899
        
        Facts: two partners exchanged promises and recorded these promises in a deed under seal.
        
        Held: The Irish Court of Appeal held that adopting this form made it unnecessary to decide if consideration was present.
      - The distinction between customary practices and mandatory legal requirements is unclear.
        
        For land transactions, a deed is required to create or transfer a legal interest, as per the Land and Conveyancing Law Reform Act 2009 (ss. 62-63).
        
        Many deed-related rules, including sealing requirements, are outdated, and s.64 of the Act reforms them based on a 1998 Law Reform Commission report.
        
        Sealing and authority to deliver a deed are abolished, aligning with common business practices where deeds are not executed under seal.
        
        Instead, enforceability relies on the doctrine of consideration, requiring value exchange for a promise to be binding.
      - Consideration as a requirement
        
        In the absence of a deed, a promise must be supported by consideration to be enforceable.
        
        Sir Frederick Pollock defined consideration as "the price a promisee pays in return for a promise."
        
        This involves an act, forbearance, or promise by one party at the request of the other.
        
        "“An act or forbearance of the one party, or the promise thereof, is the price for which the promise of the other is bought, and the promise thus given for value is enforceable.”"
        
        Lord Wright commented on this indicating that this definition stresses that the act or forbearance must first be of value, something which in a materialistic sense can be given a price by the courts.
        
        "“[I]t is done or suffered by the one party at the request of the other*: it is a matter of mutuality, not a motive or emotion of affection, benevolence bounty or charity which from their nature must be personal to the promisor … the test of contractual intention is thus external, objective, realistic.”
        
        Estoppel
        
        Even if a document is not properly sealed, estoppel may prevent a party from denying its enforceability if it was represented as being under seal.
        
        McDonnell v Ring (2016) Irish
        
        The Court of Appeal upheld a loan guarantee despite a challenge based on lack of consideration.
        
        Mahon J. ruled that contracts under seal do not require consideration. While no physical seal was present, the guarantee stated it was “Signed, Sealed and Delivered.” The appellant was estopped from denying its validity, as he had signed and accepted the document.
        
        "Where a contract is executed “under seal” it is not necessary to establish the existence of consideration."
      - Ambiguity in the Consideration Doctrine
        
        Consideration is sometimes unclear, especially in unilateral contracts where reliance on a promise can make it binding.
        
        If the promise involves a request for action, it is enforceable (Carlill v Carbolic Smoke Ball Co).
        
        Courts may also infer an implied request from the promisor, making a promise binding upon executed consideration (Commodity Broking Co v Meehan)
        
        Charitable Donations
        
        Promises to make charitable donations are generally not enforceable unless there is a clear exchange or request for something in return.
        
        Brentford General Hospital Foundation v Canada Trust Co (2003)
        
        (Canadian cases) applied the judgement from Dalhousie College v Boutilier Estate (1934) and these cases suggest that a court will be unwilling to infer a contract in the absence of some request being made by the donee
        
        Facts: Brentford Hospital fundraised after government funding cuts, and philanthropist Mrs. Marquis pledged $1 million. The hospital proposed naming a critical care unit after her and her husband, but there was no formal agreement. She donated $200,000 before passing away, and her estate was not liable for the remaining amount.
        
        Held: The court ruled there was no consideration since the donation was not contingent on the naming of the unit, and no implied request or understanding existed to establish a binding contract.
        
        Legislative Intervention
        The Consumer Rights Bill 2022 (s.46) may allow consumers to transfer goods as gifts, enabling the donee to enforce rights under the original sales contract.
        
        Comparison with Other Legal Systems
        
        For many other legal systems the question whether a promise is enforceable is answered by the test of whether there was a deliberate and voluntary undertaking by the promisor.
        
        e.g. Scotland
        
        Criticism: The doctrine of consideration has been criticized for being conceptually uncertain and historically inconsistent. Critics argue that it creates unnecessary complexity and exceptions.
        
        if other legal systems can function without the consideration requirement the common law should be revised
      - Practical Examples:
        
        Gifts vs. Contracts:
        
        A promise to give a car as a gift is not enforceable unless the car is delivered. However, if the promise is conditional on an act (e.g., paying €500), it becomes a binding contract.
        
        Difference between motive and exchange
        Taylor v Dickens (1998) UK
        
        Facts: An elderly lady promised that she would leave her house to the plaintiff who was her part-time gardener. The plaintiff later indicated that he would not take payment for his gardening services.
        
        Held: It was held that there was no contract, the court observing that there “was no offer, no acceptance, no exchange of promises, no mutually binding obligations”.
      - Judicial Interpretation
        
        Courts often emphasize the need for mutuality and value in determining whether consideration exists.
        
        O'Keeffe v Ryanair Holdings Plc (2003) Irish
        
        upholds the view that where one party bargains for a promise which is given and it is evident that the promise is of value to the promisee, in most cases the law will also regard the promised exchange as creating a contract in the absence of some compelling policy to the contrary
        
        O'Neill v Murphy (1936) Irish
        
        it was held that parish building undertaken as part of an exchange in which the consideration moving from the parish was the saying of prayers for the benefit of the builder and his family, was held not to be a good and valuable consideration in the eyes of the law.
        
        In Irish law, for a promise to be contractually enforceable, there must be mutuality, as emphasized by Lord Wright. A promise cannot be enforced solely because the promisee would have acted differently if the promise had not been made
    - - Adequacy
        
        The courts do not assess whether the consideration provided is of equal value to what is received. Even if the consideration is minimal (e.g., a peppercorn or €1), it is sufficient as long as it has some value.
        
        Manner L.C in Grogan v Cooke stated that: “If there be a fair and bona fide consideration the Court will not enter minutely into it, and see that it is full and ample.”
        Ellis J. In Kennedy v Kennedy (a case in which there was no allegation of improper pressure or disparity of intellect on either side) “once there is consideration its adequacy in this sort of case is irrelevant to its validity and enforceability”.
        
        The 1996 sale of Irish Steel Ltd Irish Steel Ltd was sold to a foreign consortium for £1. The transaction included several collateral undertakings that balanced the overall bargain. The court upheld the transaction, emphasizing that the nominal consideration of £1 was sufficient. The presence of collateral undertakings ensured the overall fairness of the bargain. This demonstrates the basic contract law principle that consideration need not be substantial, as long as the overall bargain is balanced.
        
        However, courts scrutinize transactions with significant disparity for fraud or unconscionability, particularly when one party is mentally incapable.
        
        Contracts with Mentally Incapable People
        Hassard v Smith (1872) UK
        
        Vice Chancellor Chatterton indicated that to satisfy this test the consideration paid must be an ample or fair price. (the test of whether the transaction is fair and bona fide)
        
        Noonan (A Ward of Court) v O'Connell (1987) Irish
        
        Facts: Farmland was transferred for 50 pence while the plaintiff suffered from senile dementia.
        
        Held: The court found a gross power imbalance, ruling the transaction a voluntary transfer rather than a valid sale, as nominal consideration (50 pence) was anachronistic. there was gross inequality in the position of plaintiff and defendant, and that the transaction had not been clearly explained to the plaintiff (the weaker party)
        
        Lynch J.: “On its face it is a purely voluntary transfer and of course the reference to fifty pence consideration is a complete anachronism and does not constitute any consideration.”
      - Sufficiency
        
        While consideration need not be adequate, it must be sufficient. This means it must have some legal value and not violate public policy
        
        O'Neill v Murphy (1936) Northern Ireland
        
        The court held that prayers offered for a builder’s intentions did not constitute sufficient consideration.
        
        Andrews L.J.: “while it is clear that the courts will not interfere with the exercise of free will and judgement of the parties by enquiry into the adequacy of consideration, it is necessary that it should be sufficient in law. Thus, neither a mere voluntary courtesy nor some act already executed will suffice”
        
        Rothmans v Attorney-General (1991) New Zealand
        
        A promise by the government not to legislate on tobacco advertising was unenforceable because the government cannot bind Parliament’s legislative function
        
        Public Policy
        
        Consideration must not conflict with public policy. For example, performing a pre-existing duty (e.g., a fireman’s duty to save property) does not constitute valid consideration unless the act goes beyond the duty.
        
        Glasbrook Bros Ltd v Glamorgan County Council (1925) UK
        
        Facts: The appellants sought police protection of their coal mine and its equipment during the currency of a strike.
        
        Held: The House of Lords held that police protection provided at the request of a mine owner was valid consideration.
        
        Harris v Sheffield United Football Club (1987) UK
        
        Facts: A professional football club was charged for the internal and external policing of its stadium by South Yorkshire Police.
        The club argued that, given the violent climate of the 1980s, policing was a public duty to protect people and property, making the costs unrecoverable.
        
        Held: The Court of Appeal rejected the club’s argument. The stadium was private property, and the match was a privately organized event. Policing these events strained police resources, often requiring off-duty officers. The court classified these as special police services, making the club liable for overtime payments and related expenses.
        
        Policing services can be classified into two categories:
        (1) services provided to prevent crime and protect life and property (general duty), and
        (2) special police services provided at the request of private entities (chargeable).
        
        Leeds United Football Club v West Yorkshire Police (2013) UK
        
        The Court of Appeal held that policing services for football matches on private land are generally special services, except when dealing with actual or imminent violence. Policing in the "extended footprint" (public areas around the stadium) is part of the police’s general duty and not chargeable.
        
        Consideration in Statutory Compliance
        
        Compliance with statutory obligations can constitute consideration if it involves strict adherence to specific conditions.
        
        McKerring v Minister for Agriculture (1989) Irish
        
        Facts: McKerring, a farmer, was denied compensation under Ireland’s TB Eradication Scheme
        
        Outcome: The court ruled that his compliance with all scheme conditions met the requirement for consideration, entitling him to the payment
        
        O'Hanlon J: “[I]t appears to me that there is sufficient consideration involved in strict compliance with all the conditions, even though some of them may be a matter of legal obligation as well.”
        
        Performance of Existing Duties
        
        Performing a duty already owed to the promisor may constitute consideration, but the limits of this principle are not fully established.
        
        older cases suggest that performing an existing contractual duty does not constitute consideration unless the initial contract is discharged.
        
        Stilk v Myrick (1809)
        
        Facts: P and 10 other sailors signed on to sail from London to the Baltic and back. 2 men deserted, so the captain promised that if the crew shared the work of the deserters, they would also share their wages. When they got back to London, the captain refused to pay the extra wages
        
        Outcome: By sailing the ship home, P was only performing his obligations under the original contract therefore he had not provided any consideration for the promise to pay him more
        
        Hartley v Ponsonby (1857)
        
        Facts: Many crew members deserted, leaving the ship under-crewed. The captain promised the remaining crew additional pay
        
        Held: The court ruled in favor of the sailors, as working with a reduced crew was above their original duty, constituting good consideration
        
        Farrington v Donoghue (1866) Irish
        
        supports this view
        
        More recently, however, it has been suggested that generally a promise to perform an existing duty is sufficient consideration for a promise
        
        Williams v Williams (1957) UK
        
        Facts: The husband promised to pay £1 10s. per week to his wife if she maintained herself while living apart from him.
        
        Held: The Court of Appeal majority found sufficient consideration, as the husband was no longer required to maintain her and she could have returned or sought maintenance if he refused her offer.
        
        Denning L.J., while agreeing with the outcome, stated obiter that a promise to perform an existing duty could still constitute valid consideration, provided it didn’t contravene public interest.
        
        ..."Nevertheless, a promise to perform an existing duty is, I think, sufficient consideration to support a promise, so long as there is nothing in the transaction which is contrary to the public interest.”"
        
        McHugh v Kildare County Council (2006) Irish
        
        Facts: The plaintiff agreed to transfer 20% of his land to the defendant if the council rezoned the remainder. The plaintiff later tried to back out, claiming there was no consideration because the council had an existing duty to consider rezoning applications.
        
        Held: Gilligan J. rejected this argument, citing Denning L.J.'s statement from Ward v Byham, which aligned with his earlier view in Williams v Williams that a promise to perform an existing duty could still provide valid consideration.
        
        Ward v Byham (1956)
        
        Facts: A father promised to pay the mother to ensure their child was "well looked after" and happy, which she did
        
        Outcome: The court found that her efforts went beyond legal duties as a mother, constituting good consideration for the father’s promise
        
        North Ocean Shipping v Hyundai (1978) UK
        
        Mocatta J. clarified that performance of a statutory duty can be considered valid consideration for a promise, but a contractual duty cannot.
        
        For example, under Irish law, a mother of an illegitimate child has a statutory duty to support her child, and if the father promises to pay a fixed amount weekly, she can enforce that promise as consideration, despite her existing duty. However, if the duty is contractual, it does not provide valid consideration. In North Ocean Shipping, Mocatta J. ruled that the promise for an increased price was enforceable because additional consideration was provided. Without this, discharging an existing contractual duty is insufficient consideration.
        
        Rationalization of Existing Duty Doctrine
        
        The Court of Appeal in Williams v Roffey Brothers Ltd adopted a pragmatic approach, holding that a promise to perform an existing contractual duty can be enforceable if it provides a practical benefit to the promisor.
        
        Williams v Roffey Brothers Ltd (1990) UK
        
        Facts: D building contractor entered a contract to refurbish a block of 27 flats. The carpentry work was subcontracted to P for 20k. P was paid on account. P had only completed 9 flats, had been paid 16K and was in financial difficulties. It would be impossible for him to complete the work for the remaining 4K. Both parties agreed that P would be paid an extra 10K. Had P stopped working, D would have been subject to a penalty under the main contract. P finished 8 more flats, was only paid for 2, and brought an action against D, who argued there was no consideration for the promise to pay the extra 10K
        
        Held: The Court of Appeal held that the subcontractor’s promise to complete work on time provided a practical benefit to the contractor (avoiding penalties for delay), which constituted sufficient consideration for the promise of additional payment.
        
        In the leading judgment Glidewell L.J. stated that the law supported the following propositions:
        “(i) if A has entered into a contract with B to do work for, or to supply goods or services to, B in return for payment by B and
        (ii) at some stage before A has completely performed his obligations under the contract B has reason to doubt whether A will, or will be able to, complete his side of the bargain and
        (iii) B thereupon promises A an additional payment in return for A’s promise to perform his contractual obligations on time and
        (iv) as a result of giving his promise B obtains in practice a benefit, or obviates a disbenefit, and
        (v) B’s promise is not given as a result of economic duress or fraud on the part of A, then
        (vi) the benefit to B is capable of being consideration for B’s promise, so that the promise will be legally binding.”
        
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        Re Selectmove (1995) UK
        
        The Court of Appeal held that part-payment of a liquidated debt does not constitute consideration for a promise to forego the remaining amount.
        
        Limitations on the Principle
        
        applies only to cases involving the provision of services in exchange for additional payment. It does not extend to part-payment of debts.
        
        Performance of a duty owed to someone other than the promisor
        
        Performing a duty owed to someone other than the promisor can constitute consideration for a promise made by a third party.
        
        Scotson v Pegg (1861) Privy Council
        Facts:
        
        P contracted with X to deliver coal to X or to the order of X
        
        X agreed to sell the coal to D and told P to deliver it to D
        
        D agreed with P that if P delivered the coal to him, D would unload it
        
        D then refused to unload it
        
        Outcome:
        
        Court held that P had provided consideration for D's promise to unload coal
        
        Benefit to D - having the coal delivered
        
        Detriment to P - P couldn't breach their obligation to X, and by delivering the coal to D, they fulfilled a contractual duty but also entered a new contract with D
        
        Established that a promise to perform a duty owed to a third party can support a promise made by another party.
        
        Simply put, if A owes a contractual duty to marry B and a third party (the father of B perhaps) promises to pay A €10,000 after the ceremony, A can enforce this promise.
        
        In Ireland, the cause of action for breach of promise to marry was abolished by the Family Law Act 1981
        
        Saunders v Cramer serving as Irish authority for this rule
        
        However, several mid-19th century Irish cases indicated that if a promise was written and satisfied the Statute of Frauds 1695, the issue of consideration for a third-party promise through marriage was not raised.
        
        Shadwell v Shadwell (1860) UK
        
        the plaintiff’s uncle promised to provide £150 annually to his nephew upon marriage.
        
        Held: The court ruled in favor of enforcing the promise, with Earle C.J. justifying it by suggesting the uncle might benefit from the marriage. However, Byles J., in dissent, argued that there was no evidence of any tangible benefit to the uncle, offering a clearer view that consideration should involve a tangible exchange, rather than psychological gratification.
        
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        Unethical promises
        
        A promise will not be enforceable if it involves actions that are socially or ethically unacceptable, whether in family arrangements or commercial dealings.
        
        Borrelli v Tring (2010)
        
        a settlement agreement was held not to be binding on liquidators who were being obstructed by the promisee who was not acting bona fide: “all he was offering to do was to cease acting in bad faith and to do what he should have done in the first place.” Situations of this kind almost invariably shade into areas of undue influence, unconscionability or duress.
  - - - Executory and Executed Consideration
        
        executory consideration (promises to perform in the future)
        
        If A agrees to buy six tons of coal from B in six months at €100 per ton, a contract is formed at the moment of the exchange of promises.
        
        executed consideration (a promise is given in return for an act)
        
        If A pays for the coal, the consideration becomes executed, and A can sue B if B fails to deliver.
        
        Key Point: In bilateral contracts, the exchange of promises itself constitutes consideration, even if no performance has occurred.
        
        Professor Atiyah
        
        Professor Atiyah argued that bilateral executory contracts (where only promises are exchanged, and no performance has occurred) should not be treated with the same weight as executed exchanges (where performance has occurred).
        
        This was rejected in...
        Centrovincial Estates Plc v Merchant Investors Assurance Co Ltd
        
        Facts: A lessee (tenant) of a building was informed by the lessor (landlord) that, following a rent review clause, the rent for the future would be reduced. The lessor requested the lessee’s acceptance of the rent reduction. The lessee promptly accepted the offer. Later, the lessor discovered that the rent review was incorrectly carried out and attempted to retract the offer. The lessor argued that an offer can be withdrawn if the offeree has not suffered a detriment, claiming that neither party had acted upon the offer.
        
        Held: The Court of Appeal ruled in favor of the lessee, holding that the offer, once validly accepted, could not be withdrawn, except in cases of operative mistake. Slade L.J. clarified that the lessee had provided consideration by giving the requested promise of acceptance. It was deemed irrelevant whether the lessee had changed his position beyond providing the promise. The ruling reaffirmed that a validly accepted offer forms a binding contract, even if no immediate action follows the agreement.
        
        Key Point: A promise in response to an offer is valid consideration, even if no further action has been taken.
    - - Roscorla v Thomas
        
        Facts: Roscorla purchased a horse from Thomas, with Thomas later making a warranty that the horse was “free from vice”. Upon delivery, the horse was found to be vicious in behavior. Roscorla sued Thomas for breach of promise.
        
        Facts: The court found in favor of Thomas, citing that past conduct (the sale of the horse) was not sufficient consideration to support the subsequent promise
        
        Lord Denman CJ - “it may be taken as a general rule, subject to exceptions not applicable to this case, that the promise must be coextensive with the consideration… a consideration past and executed will support no other promise than such as would be implied by law.”
        
        Exception
        Smith v Morrison Irish
        
        the Irish court distinguished Roscorla where the warranty was given contemporaneously with the sale. In such cases, the consideration is not past.
      - Evidence and Past Consideration
        
        Guidance from Wording
        
        The wording of a promise can indicate whether consideration is past or executory.
        
        The use of past tense often suggests past consideration.
        
        Parol Evidence
        
        Courts may admit oral evidence to clarify whether consideration is past or executory.
        
        Re McArdle
        
        Facts: The occupants of a house carried out some improvements, valued at £488. Once the work had been finished, the owners signed a document that said “in consideration of your carrying out certain alterations and improvements, we hereby agree to repay to you the sum of £488.”
        
        Held: The court held that since all the work had been completed before the promise to pay for it was made, the consideration was in the past and therefore not valid
        
        K v K
        
        Facts: a complex family property dispute arose from years of effort in managing a family business and providing financial, practical, and emotional support, with the expectation of future compensation.
        
        Held: McDonald J. rejected the argument that the consideration was past, affirming that contributions made were not merely historical but carried legal significance.
      - Illusory Consideration
        
        Provincial Bank of Ireland v Donnell Northern Ireland
        
        Facts: A bank sued the defendant based on a deed (not under seal) in which she agreed to provide security for her husband’s overdraft in consideration of “advances heretofore made or that might hereafter be made.”
        
        Held: The action failed because the consideration was either past (advances already made) or illusory (future advances at the bank’s discretion). The advances made earlier were considered past consideration, which is not legally valid, while the advances that "might hereafter be made" left the bank with total discretion, making the promise unenforceable. The court held that such a promise should have been recorded in a deed under seal to be enforceable.
      - Exception to Past Consideration
        
        The past act can support a subsequent promise if
        
        a) the act was performed at the request of the defendant and
        b) it was assumed at the time that the services would ultimately be paid for
        
        Lampleigh v Braithwait
        
        Facts: Thomas Brathwait (the defendant) killed a man and subsequently requested Anthony Lampleigh (the plaintiff) to secure a royal pardon for him. Lampleigh undertook significant efforts and expenses to fulfill this request, traveling to various locations to meet with the King or his representatives. After Lampleigh’s successful efforts, Brathwait promised to pay him £100 as a reward. When Brathwait failed to honor his promise, Lampleigh sued for the payment.
        
        Outcome: The Court of the King’s Bench held that Lampleigh’s past services, performed at Brathwait’s request, constituted sufficient consideration to validate the contract. This decision established that consideration can be established by actions taken in response to a prior request, even if the promise comes later.
        
        Bradford v Roulston
        
        Facts: The plaintiff signed a bill of sale at the defendant’s request. The defendant later promised to pay
        
        Held: The court enforced the promise because the act was done at the defendant’s request and was not intended to be gratuitous.
        
        Pao On v Lau Yiu Long
        
        Lord Scarman: “The act must have been done at the promisor’s request, the parties must have understood that the act was to be remunerated either by a payment or the conferment of some other benefit, and payment, or the conferment of a benefit, must have been legally enforceable had it been promised in advance.”
  - - - Price v Easton
        
        Facts: A builder owed money to Price and arranged with Easton that if the builder completed work for Easton, Easton would pay Price the debt. The builder did the work, but Easton failed to pay Price
        
        Outcome: The court ruled that Price could not enforce Easton’s promise since he was not a party to the contract (privity of contract). Only the builder could potentially enforce the agreement
      - McCoubray v Thompson
        
        Facts: A landowner agreed to transfer his property in equal shares to two parties, P and D. D wanted the entire property, and P agreed to this provided he was paid a sum of money. The landowner agreed to transfer the property to D upon receipt of the payment. However, D later refused to pay, and P sued the landowner to enforce the agreement.
        
        Outcome: The court rejected P’s action, ruling that the agreement was invalid because no consideration moved from P to the landowner. In other words, P did not provide any benefit or detriment to induce the landowner to enter into the agreement.
      - Barry v Barry
        
        Facts: the defendant was to inherit the family farm under his father’s will if he personally paid legacies to family members, including the plaintiff, his younger brother. If he refused, the legacy would be payable from the land. The defendant promised personal liability and was allowed to use the farm, but later defaulted. The plaintiff sued, arguing the defendant was personally bound by his promise.
        
        Held: The court ruled that consideration had moved from the promisee, as the plaintiff had forborne his right to claim the legacy from the property at the defendant’s implied request, making the promise enforceable.
    - - In the above example, Y has given good consideration for X's promise to paint the house by promising to pay £1,000, even though X will not benefit from the payment.
  - - - Taylor v Smyth
        
        Facts: The case involved a settlement agreement between parties in litigation.
        
        Held: Lardner J. held that a compromise agreement constitutes a new, independent contract with valid consideration. The original claims are superseded by the compromise.
        
        “[I]t is also well established that where proceedings between parties are settled by an agreement to compromise, the agreement to compromise constitutes a new and independent contract between the parties made for good consideration and the original rights of the parties and causes of action become superceded by the compromise agreement.”
        
        Challenge to Compromise Agreements
        
        If the original claim was weak or invalid, the promisor may argue that the compromise lacks consideration. However, courts generally uphold compromises unless the claim was known to be invalid by both parties.
      - Validity of Compromises and Knowledge of Invalid Claims
        O'Donnell v O'Sullivan Irish
        
        Facts: The parties agreed to compromise a claim for £137, with the defendant paying £75. During the trial, it was revealed that the original debt was a gambling debt, which is unenforceable under law.
        
        Held: Palles C.B. held that the compromise was invalid because both parties knew the original claim was unenforceable. Chief Justice Baron stated that a compromise requires a reasonable and bona fide claim to constitute valid consideration.
        
        “[i]t is settled law that unless there is a reasonable claim which is bona fide intended to be pursued the settlement of that claim cannot be good consideration for a compromise”.
        
        Conditions for Valid Compromises
        
        For a compromise to be valid, it must satisfy three conditions:
        
        Reasonable Claim: The initial claim must not be vexatious or frivolous, it must be reasonable
        
        Honest Belief: The plaintiff must genuinely believe in the claim’s success.
        
        No Suppression of Facts: The party defending the compromise must not withhold facts that would undermine the claim.
        
        Leonard v Leonard
        
        Facts: Two half-brothers disputed entitlement to an estate. The plaintiff compromised his claim based on advice that it might not succeed. However, the defendant had withheld information that would have strengthened the plaintiff’s claim.
        
        Held: The compromise was invalid because the defendant exploited the plaintiff’s ignorance of key facts.
  - - - Cornoy v Fitzpatrick
        
        Facts: The plaintiff refrained from making an offer to purchase property because the defendant promised to negotiate on their behalf.
        
        Held: The plaintiff succeeded because the defendant’s promise to negotiate provided consideration for the plaintiff’s forbearance.
      - Hamer v Sidway US
        
        Facts: An uncle promised his nephew $5,000 if he refrained from drinking, smoking, swearing, and gambling until age 21. The nephew complied.
        
        Held: The nephew’s forbearance constituted valid consideration, and the promise was enforceable.
      - Forbearance in Employment Context
        
        Example: If an employer promises €10,000 to an employee who agrees to stay for an additional six weeks, the employee’s forbearance from leaving constitutes valid consideration.
        
        Key Point: Forbearance to act (e.g., not quitting a job) can be sufficient consideration for a promise.
      - Forbearance from Legal Action
        
        forbearance not to enforce a legal remedy (e.g. refraining from suing)
        
        the most common act of forbearance to come before the courts
        Cook v Wright UK
        
        Facts: Parish trustees threatened legal action unless the defendant signed promissory notes for unpaid rates. The defendant argued he was not the owner and thus not liable.
        
        Held: The trustees’ forbearance from suing constituted valid consideration. The defendant’s argument failed because the trustees had a reasonable belief in their claim.
        
        Key Point: Forbearance from pursuing a legal remedy can be valid consideration, even if the claim might not succeed.
      - Statute of Frauds and Consideration
        
        If a promise must be in writing under the Statute of Frauds 1695, the consideration must also be stated in the memorandum, either explicitly or implicitly.
        
        Hibernian Gas Co v Parry Irish
        
        Facts: A hotel business went into receivership, and one of its creditors was Hibernian Gas Co., which was owed £32 for gas supplied. The receiver signed a document promising to pay all sums due in six months. The consideration for this promise was not explicitly stated in the document, which was required for a contract of guarantee.
        
        Held: The court found implied consideration in the form of forbearance to sue and continued supply of gas, making the promise enforceable.
      - Judicial Interpretations and Applications
        
        Contextual Consideration
        
        Courts may infer consideration from the context of a promise, even if it appears gratuitous.
        
        Blandford & Houdret Ltd v Bray Travel Holdings Ltd & Hopkins Irish
        
        Facts: The plaintiff sought to enforce a guarantee given by the second defendant, in which the second defendant promised to pay the debts of the first defendant that were already due. The guarantee document did not specify any consideration given by the plaintiff. Gannon J. noted that, on its face, the consideration appeared to be past, which would normally make the promise unenforceable..
        
        Held: The court found valid consideration by examining the context of the agreement. It was established that the plaintiff implicitly promised to forbear (i.e., agreed not to withhold future services from the first defendant), even though they had the right to do so under the contract due to non-payment. This implied forbearance was deemed fresh consideration, making the guarantee legally enforceable despite initially appearing to lack valid consideration.
        
        New Forms of Forbearance
        
        Courts have recognized novel forms of forbearance, such as surrendering privacy rights in exchange for benefits.
        
        O'Keeffe v Ryanair Holdings Plc Irish
        
        Facts: Ryanair promised the plaintiff “free flights for life” in exchange for her participation in media events as the “one millionth passenger.”
        
        Held: The plaintiff’s surrender of privacy and participation in publicity constituted valid consideration for Ryanair’s promise.
        
        Deigital and Data-Driven Transactions
        
        Modern transactions often involve the exchange of personal data or digital content, which courts may recognize as valid consideration.
        
        Example: The Consumer Rights Bill 2022 seeks to clarify the legal status of contracts involving the exchange of personal data for goods or services.
        
        Privacy and Self-Expression
        
        The surrender of privacy rights (e.g., in media events or digital platforms) is increasingly recognized as valuable consideration in contractual agreements.
        
        Techform Products v Wolda
        
        Facts: An employee signed an agreement assigning intellectual property rights to his employer under protest.
        
        Held: The employer’s implied promise to retain the employee for a reasonable period constituted valid consideration.
        
        Forbearance in Debt Agreements
        
        Creditors’ forbearance to sue debtors can serve as consideration for promises made by debtors (e.g., providing security for debts).
        
        Re Montgomery
        
        Facts: The defendant’s father had incurred trading debts while running the family business. The creditor sought payment and the defendant promised to settle these debts. The case focused on whether forbearance (the creditor delaying enforcement of the debt) counted as valid consideration for the defendant’s promise.
        
        Held: The court ruled that forbearance was valid consideration, as the creditor refrained from taking immediate action to recover the debt based on the defendant’s promise. The case highlights the controversy around forbearance as consideration, especially when courts suggest that mere reliance on a promise can be enough to enforce it. This challenges the traditional "bargain theory" of consideration, which requires an exchange of value, rather than just reliance.
        
        Reliance on Promises
        
        In some cases, courts enforce promises based on the promisee’s reliance, even if traditional consideration is lacking.
        
        Fullerton v Bank of Ireland
        
        applied the judgement in Alliance Bank v Broom
        
        Facts: The Bank of Ireland informed Colonel Stevenson that his account was overdrawn. In response, Stevenson promised to provide title deeds to property as security for the overdraft. The key issue was whether there was valid consideration for this promise.
        
        Held: The House of Lords ruled that the bank’s forbearance—its decision not to immediately demand repayment—was sufficient consideration to support Stevenson’s promise. The court emphasized that, even though the bank did not explicitly agree to delay legal action for a fixed period, its restraint in practice was enough to create a binding agreement. This case demonstrates how forbearance, even without a formal agreement, can be recognized as valid consideration, blurring the line between mutual agreement (consensus) and the cause-and-effect nature of consideration (causation).
        
        Charleton J.: “beneath the surface may be something which the parties wish to happen and which they have pursued through fair negotiation”
        
        This test was applied in
        McDonnell v Ring
        
        Facts: A company director provided a personal guarantee near the expiry of a loan agreement. The lender applied pressure to repay the loan, but the director and fellow directors were unable or unwilling to respond.
        
        Held: The Court of Appeal ruled that forbearance to sue, even for a small amount, still constituted valid consideration. The fact that the guarantor took on significant personal liability did not change the legal validity of the forbearance. Mahon J. emphasized that the guarantor benefited from this forbearance in his role as a director and shareholder, reinforcing the principle that delay in enforcing a debt can be sufficient consideration for a guarantee.
        
        Commodity Broking Co v Meehan
        
        Facts: The defendant, who owned all shares in P. Ltd, allowed the company to accumulate a £36,000 debt with the plaintiffs. When asked to provide a personal guarantee, he refused but instead promised to pay £1,000 per month. He later failed to honor this promise and defended the lawsuit by claiming lack of consideration.
        
        Barron J., citing Alliance Bank Ltd v Broom, ruled that forbearance from suing can constitute valid consideration, even without an explicit agreement. However, in this case, the plaintiff company had not actually exercised forbearance, as it never intended to sue P. Ltd due to its insolvency. Since the creditor did not give up a real legal right, there was no valid consideration, and the defendant’s promise was unenforceable.
        
        If someone makes a promise and, as a result, the other person actually refrains from taking legal action (forbearance), the court may assume that the person who refrained implicitly agreed to do so in exchange for the promise. This implicit agreement counts as valid consideration, making the promise enforceable.
        
        2 more items...
        
        Controversies and Criticisms
        
        Challenges to the Bargain Theory
        
        The traditional "bargain theory" of consideration has been criticized, particularly in cases where reliance on a promise is the primary basis for enforcement.
        
        Some cases challenge the traditional doctrine of consideration.
        
        Professor Atiyah argues that courts sometimes enforce promises without a clear exchange, particularly when the promisee has relied on the promise.
        
        Common in engaged couples, where reliance on promises (e.g., buying furniture, renting a home) justifies enforcement.
        
        Cases like Shadwell v Shadwell and Saunders v Cramer
        
        In Moore v Kelly, Ronan L.J. noted that in honest family transactions, even minimal consideration can suffice.
        
        “[i]f there is an honest family transaction a slight legal consideration is sufficient to take the case out of the category of voluntary deeds”.
  - - - Pinnel's case (1602)
        
        Facts: Cole owed Pinnel £8 10s, due on 11th of November. He paid £5 2s on 1st of October. Pinnel sued for the balance
        
        Outcome: Pinnel succeeded due to a flaw in the pleadings, but court made it clear that otherwise Cole would have won, because part payment made on an ealier date
      - Another problem which arises in this area is where a part payment is made in satisfaction of the whole amount. Has consideration been given? The rule in Pinnel's Case states that payment of a lesser sum is no satisfaction of the debt
      - Foakes v Beer (1884) 9 App Cas 605
        
        Facts: The debtor owed the creditor £2,090 19s, as a result of a previous judgment. The parties entered into an agreement on December 21, 1876, where Foakes would pay £500 immediately and £150 every six months until the debt was fully repaid, in exchange for Beer’s promise not to take any legal action against him
        
        Outcome: The House of Lords held that the promise not to enforce the judgment was not binding as Foakes had not provided any consideration. The court approved the rule in Pinnel’s Case (1602) 5 Co Rep 117, which states that part payment of a debt cannot be satisfaction of the whole.
        
        Courts in England and Ireland are bound by the doctrine of stare decisis (precedent) and have been reluctant to overturn Foakes v Beer.
        
        This has led to decisions that are often seen as illogical or out of step with modern commercial practices.
      - Although this is known as the rule in Pinnel's Case, Pinnel's Case itself is actually an example of an exception to the rule. Payment of a lesser sum will discharge the debt where a new element is introduced at the request of the creditor. The new element might be payment at an earlier time, in a different place, or payment accompanied by a chattel. If the debtor does something different, at the request of the creditor, when he pays a lesser sum, the full debt will be satisfied.
        A creditor may accept anything in satisfaction of his debt except a lesser amount of money. He might take a horse, a canary or a tomtit if he chose, and that was accord and satisfaction; but, by a most extraordinary peculiarity of the English Common Law, he could not take 19s 6d in the pound. Payment by negotiable instrument (eg. promissory notes or bills of exchanges) constitutes doing something different.
        
        However, payment by cheque does not constitute payment by a different means
        
        D & C Builders v Rees [1966] 2 QB 617
        
        Facts: D owed P £482. D, knowing P was in serious financial difficulties, offered £300, and said if this were not accepted, P would get nothing.
        
        P Agreed, D paid £300 by cheque and P sued for the balance
        
        Outcome: Payment by cheque is the same as payment in cash therefore the exception to the Rule in Pinnel's Case did not apply
        
        P was entitled to the balance
        
        Bills of Exchange and promissory notes are documents of title
        
        Title passes the moment the instrument is handed over
        
        With a cheque, title passes only when the cheque is cashed
        
        Another important exception to the rule in Pinnel's Case occurs in the area of promissory estoppel
        
        Although this rule was not applied by the House of Lords until 1884 it has been accepted and (reluctantly) acted upon by the courts for centuries.
        
        Drogheda Corp v Fairtlough
        
        Facts: In 1820, a 99-year lease was granted to a local clergyman. In 1837, the Corporation agreed to reduce the rent, but before the change was formalized, the clergyman died. Despite this, the Corporation executed a new lease in 1842, reducing rent from £11 9s. 8d. to £5 6s. per year.
        The tenant paid the reduced rent until 1854, when the Corporation sued for arrears at the original higher rate.
        
        Held: The action succeeded. Lefroy C.J. ruled that paying a lesser sum under a parol agreement (oral contract) is not valid satisfaction of a larger debt unless there is some collateral advantage—which was absent in this case.
      - In O'Neill v Murphy the rule in Pinnel’s case was described by Andrews L.J. as a landmark “too firmly fixed in our law to be shaken”.
      - Compostition with Creditors
        
        if a debtor has more than one creditor and they all agree to accept a lesser sum, they're bound by their promise
        
        to allow one of them to sue for the balance would be a fraud on the other creditors
        
        ---> This is another exception to the rule in Pinnel's Case - that payment of a lesser sum is no satisfaction for the debt. It occurs where a debtor is in financial difficulties and comes to an arrangement with a number of creditors. If all the creditors agree to accept a lesser sum, then they are bound by their promise.
        
        there must be more than one creditor
        
        otherwise the rule in Pinnel's Case applies.
        
        also, this only applies where the creditors agree together to accept a lesser sum
        
        if the debtor makes individual agreements with a number of creditors, composition with creditors does not apply.
        
        it may not be possible to reconcile this exception with the rule, but it makes good business sense
        
        all creditors get some of the debt owed, rather than allowing one creditor to scoop the pool
        
        the rationale behind this exception is that if one creditor who had agreed to the settlement later sued for the balance, it would be a fraud on all the other creditors.
        
        this may also arise where a third party becomes involved and pays off part of the creditor's debt
        X owes A €500
        Y promises to pay A €300 if A will discharge X's debt
        A agrees, Y pays, and A sues X for the outstanding €200
        --> the courts will not allow A to sue for the balance because it would constitute a fraud on Y, the third party
        
        Welby v Drake (1825) 1 C & P 557
        
        Facts: D owed P £18
        
        D's father made an agreement with P, promising to pay £9 if P promised not to sue for the balance
        
        The father paid and P sued the son for the balance
        
        Outcome: P was not entitled to recover the balance because to allow him to do so would be fraud on the father
        
        Morans v Armstrong
        
        Facts: a partner in a firm agreed to accept 6s. 8d. in the pound (a partial payment) on the sums owed to the firm. However, when the payment was tendered, it was refused.
        
        Held: Despite this, the action to recover the full amount owed was unsuccessful, as the composition agreement was binding.
        
        Lawder v Peyton
        
        Facts: the administrator of a creditor's estate sought to recover the full debt of £534 from the defendant. However, £268 of this debt had already been paid by a third party on the defendant's behalf. The court ruled that allowing the creditor to recover the entire amount after partial payment would amount to fraud against the defendant.
        
        Held: While the case, like Morans v Armstrong, aims to prevent fraud, it is argued that the third parties who made the payments might actually be the ones defrauded, rather than the defendant. This reasoning has been used to justify similar legal rulings in English law.
- - - - Statements may lack contractual effect for several reasons
        
        they might be made during preliminary negotiations and could be inconsistent if all were binding
        
        some statements, like sales hype or “puffery,” are not meant to be relied upon seriously
        
        contractual interpretation may exclude certain statements if they conflict with existing terms, such as exclusion clauses, or are too vague
      - Courts interpret good faith obligations within a commercial context, generally requiring fair dealing and consistency with the contract’s purpose.
        
        Express obligations to act in good faith in commercial contracts may support claims of fiduciary or relational duties, such as the duty to disclose relevant matters (Horn v Commercial Acceptances Ltd UK)
        
        However, bad faith requires more than dishonesty; a breach generally arises only if the accused party knew they were acting dishonestly.
        
        Courts remain reluctant to enforce promises to negotiate in good faith (Barbudev v Eurocom Cable Management Bulgaria UK).
        
        In Australia, good faith is linked to honest conduct, but failure to reach an agreement, absent a contractual obligation, is not considered a breach.
  - - - Modern Approach to Warranties
        
        Key Test: Courts focus on whether the representee (buyer) relied on the statement when entering the contract, rather than the representor’s (seller’s) intent.
        
        Bank of Ireland v Smith
        
        Kenny J. summarized the modern approach: A representation made during a sale is presumed to be a warranty unless the representor can show they were innocent of fault.
        
        However, the test is not entirely new it seems
        Cobden v Bagnell
        
        Facts: a father stated an honest belief that his daughter was entitled to an estate under a complicated settlement
        
        Held: He was held not liable because the statement was found to be a reasonable but mistaken interpretation of the effect of the instrument.
    - - Scales v Scanlan
        
        Facts: The court had to determine whether a statement made during negotiations was a warranty.
        
        Held: Lefroy B. held that no specific words (e.g., "warrant") are needed to create a warranty. Any affirmation of fact relied upon by the other party can constitute a warranty.
        
        --> The focus is on whether the statement was intended to be relied upon and whether it influenced the decision to enter the contract.
        
        Followed in Carey v Independent Newspaper Ltd Irish
        
        Facts: the plaintiff was promised that she could work from home for part of her working day, a relevant consideration due to child-minding responsibilities. But for this statement she would not have taken up the defendant’s offer.
        
        Held: Gilligan J. held that the statement was a warranty because it was a key factor in the plaintiff’s decision to enter the contract.
        
        --> The significance of the statement to the contract is crucial in determining whether it is a warranty.
    - - Affirmations
        
        Statements that express a belief or opinion without assuming responsibility for their accuracy.
        
        Example: A seller says, "I believe this car is a 1948 model," but advises the buyer to verify this.
        
        Oscar Chess Ltd v Williams* UK
        
        Facts: The seller (a private individual) sold a car, stating it was a 1948 model. In reality, it was a 1939 model.
        
        Held: The court held the statement was a mere affirmation, not a warranty, because the seller lacked professional expertise and advised the buyer to verify the details.
        
        More importantly, the courts set out a number of considerations that should be made when assessing whether a statement is a warranty
        
        (1) Where an assumption is fundamental to a contract, it does not mean that it is a term of the contract
        
        (2) The term warranty means a binding promise as well as a subsidiary, non-essential, term of a contract
        
        (3) A warranty must be distinguished from an innocent misrepresentation
        
        (4) Whether a warranty is intended must, judged objectively, be based on the parties’ words and behaviour
        
        (5) Where one party makes a statement, which should be within his own knowledge, but not the knowledge of the other, it is easy to infer a warranty. If the party states that it is not within his knowledge and is information passed from another, a warranty is less easily inferred
        
        (6) An oral representation repeated in writing suggests a warranty, but the issue is not conclusive. Neither is the fact that it is not stated in writing.
        
        Hummingbird Motors v Hobbs UK
        
        Facts: The seller declared the odometer reading was correct "to the best of his knowledge and belief." The car had significantly higher mileage.
        
        Held: The Court of Appeal held there was no warranty because the buyer (a motor dealer) had the means to verify the mileage, and the seller did not assume responsibility for the statement.
        
        --> The context and relationship between the parties determine whether a statement is a warranty or affirmation.
        
        Irish courts have been less troubled by the affirmation/warranty distinction
        McGuiness v Hunter Irish
        
        Facts: the defendant, who owned a horse, told the plaintiff that “the horse is all right and I know nothing wrong about him”. The plaintiff purchased the horse which soon afterwards died. Counsel for the plaintiff conceded that the words “is all right” amounted to a promissory statement and that if they had not been uttered the remainder of the statement would only amount to an affirmation.
        
        Held: The statement was held to be a warranty.
        
        Shawel v Reade Irish
        
        Facts: the owner of a horse informed the plaintiff’s agent, who was about to inspect the animal, that “you need not look for anything; the horse is perfectly sound. If there was anything the matter with the horse I should tell you”. The agent broke off his inspection, the horse was purchased and later turned out to suffer from an eye defect that made it unsuitable for the purchaser’s purpose.
        
        Held: The Court of Appeal held the statement to be merely an affirmation; the House of Lords unanimously reversed this decision.
  - - - Rainy Sky SA v Kookmin Bank UK
        
        Facts: The case involved the interpretation of a shipbuilding contract. The parties disputed the meaning of a clause.
        
        Held: Lord Clarke emphasized that courts should consider the language used and the background knowledge available to the parties at the time of the contract.
        
        --> If there are two possible interpretations, the court should prefer the one that aligns with business common sense.
        
        Lord Clarke approved the following observation from Lord Reid in Schuler AG v Wickman Tools
        
        “The fact that a particular construction leads to a very unreasonable result must be a relevant consideration. The more unreasonable the result, the more unlikely it is that the parties can have intended it, and if they do intend it the more necessary it is that they shall make that intention abundantly clear.”
      - Lord Hoffmann's Principles in Investors Compensation Scheme v West Bromwich Building Society
        
        Lord Hoffmann laid down a basic principles and 5 rules for contractual interpretation
        
        --> Lord Hoffmann’s approach emphasizes objective interpretation based on the context and commercial common sense, rather than a literal or technical reading of the contract.
        
        Objective Meaning
        
        The court must ascertain the meaning the document would convey to a reasonable person with all the background knowledge available to the parties at the time of the contract.
        
        Factual Matrix
        
        The background (or "matrix of fact") includes anything that would affect how the language of the document would be understood by a reasonable person.
        
        Exclusion of Negotiations and Subjective Intent:
        
        The previous negotiations and declarations of subjective intent are excluded from the admissible background, except in cases of rectification.
        
        Meaning of Words vs. Meaning of Document:
        
        The meaning of the document is not the same as the meaning of the words. The court must consider what the parties intended to convey by the words used, in light of the background.
        
        Natural and Ordinary Meaning:
        
        Words should generally be given their natural and ordinary meaning, but if the background suggests a linguistic mistake, the court can conclude that the parties used the wrong words or syntax.
        
        Judicial practice continues to rely on both the pre-West Bromwich and post-West Bromwich lines of authority in respect of how judges are to approach matters of contractual interpretation
        
        However, a close analysis of English and Irish case law suggest that there is a strong level of continuity of approach
        
        Hickey v HSE Irish
        
        Finlay C.J endorsed the Hoffman principles applying them to intepret a contract
        
        Marathon Petroleum (Ireland) Ltd v Bord Gais Éireann Irish
        
        Facts: The case involved the interpretation of an ambiguous clause in a contract.
        
        Findings: Finlay C.J. rejected a literal approach to the interpretation of words used, stating that the court should seek the real intention of the parties based on the entire agreement.
        
        “… my obligation is to seek in the terms of the entire agreement evidence of the real intention of the parties and that if I can find it, that should prevail over the ordinary meaning of the words.”
        
        --> The court should prioritize the intention of the parties over the ordinary meaning of words if the context supports it.
        
        Error Correction by Interpretation
        
        Hoffmann's rules 4 and 5
        
        suggest a court will not be required to impose a result that the parties cannot have intended
        
        The Seashell of Lisson Grove Ltd v Aviva Insurance Co UK
        
        Facts: concerned an express clause that was designed to modify the common law rule, which generally allows an insurer to void the contract for any breach of warranty.
        
        Held: The court found that the clause was intended to restrict this rule by permitting avoidance only when the breach actually caused the loss.
        
        Lord Hoffmann's approach consolidates two key exclusionary rules in contract interpretation
        
        The factual matrix does not include post-contractual conduct
        
        pre-contractual negotiations and subjective intent are inadmissible, except in cases of rectification.
        
        Chartbrook Ltd v Permission Homes Ltd UK
        
        Lord Hoffmann reaffirmed it but acknowledged potential exceptions, particularly when background facts were known to both parties or in cases of rectification or estoppel.
        
        Courts are Reluctant to Assume Errors in Contractual Language
        
        ING Bank NV v Ros Roca Sa UK
        
        the English Court of Appeal acknowledged that while all interpretations had syntactical difficulties, the intended meaning was clear. The trial judge had reinterpreted clauses based on unforeseen consequences, which was outside the Hoffmann framework—corrections must be evident.
        
        Dublin Port Company v Automation Ltd
        
        Facts: Involved a complex property transaction, where multiple deeds renouncing lease rights were executed
        
        Held: Based on objective evidence, the judge found that only one property was relevant. He took a broad approach to correcting errors, emphasizing that numerous inconsistencies did not prevent the court from making necessary corrections, even if extensive redrafting was required.
      - Interpretation of Specific Phrases
        
        e.g. "Gross Negligence"
        
        The phrase has been subject to differing judicial views, with courts interpreting it based on the context of the contract.
        
        The words "qualified electrician" were considered under the Hoffmann approach in
        Strothers (M&E) Ltd v Leeway Strothers Ltd Northern Ireland
        
        background and context
  - - - Key Points
        
        Control Over Language
        
        The parties have control over the language they use in a contract. Therefore, the natural meaning of the words should be the starting point for interpretation.
        
        Grammar and Syntax
        
        Poor drafting may justify departing from the natural meaning, but courts should not search for drafting errors to justify such departures.
        
        Commercial Common Sense
        
        Commercial common sense is relevant only to the extent it reflects how the parties perceived the terms at the time of contracting, not with the benefit of hindsight.
        
        A bad or imprudent bargain does not justify departing from the natural meaning of the words.
        
        Purpose of Interpretation
        
        The court’s role is to identify what the parties agreed, not what the court thinks they should have agreed.
      - Correction of Mistakes
        
        Courts may correct obvious typographical errors or omissions in contracts
        
        For example...
        
        Quick Draw LLP v Live Events UK
        .- A missing “not” in a pledge clause was corrected as a typographical error.
        
        Moorview Developments Ltd v First Active Plc Irish
        
        Names of parties were corrected in deeds due to typographical errors.
    - - Later English cases have continued to stress the unreliability of "business common sense"
        Wood v Sureterm Direct Ltd UK
        
        Clarke LJ cautioned against relying too heavily on business common sense, as it can vary depending on the standpoint of the parties.
        
        Key Points
        
        Compromises in Negotiations
        
        What may appear to lack business common sense from one perspective might be the result of a necessary compromise to reach an agreement.
        
        Unknown Negotiations
        
        Courts should not consider negotiations that were unknown to the parties or occurred after the contract was concluded
        
        courts are generally strict about interpreting contracts based on their actual wording and do not allow significant deviations from the agreed terms
        
        Example
        Kason Kek-Gardner Ltd v Process Components Ltd UK
        
        A trial judge erred by using negotiations that were unknown to the parties and made post-contract as an aid to interpretation.
        
        courts are generally strict about interpreting contracts based on their actual wording and do not allow significant deviations from the agreed terms
        
        Preference for Plain Meaning
        
        Courts prefer a plain meaning approach that produces a clear and mechanical outcome, especially in commercial contracts.
    - - Hood v Capita Insurance Services Ltd UK
        
        Lord Neuberger rejected the idea of a one-size-fits-all approach to contractual interpretation.
        
        Key Points
        
        Textualism and Contextualism
        
        These are not conflicting approaches but tools to ascertain the objective meaning of the contract.
        
        The balance between the two depends on the nature of the contract:
        
        Complex, professionally drafted contracts: Emphasis on textual analysis.
        
        Informal or brief contracts: Greater emphasis on the factual matrix. (contextual)
        
        Iterative Process
        
        The court checks each suggested interpretation against the contract’s provisions and its commercial consequences.
      - There will be cases where no "factual matrix" is available.
        Primus International Holdings Company v Triumph Controls UK Ltd
        
        Even where the parties rely on the words of the agreement, earlier judicial decisions may provide guidance on the ordinary legal meaning of those words but ultimately, all words must be examined within the specific context of the contract..
      - Illustrations and Worked Examples
        
        Contracts may include illustrations or worked examples to explain complex formulas or clauses. These are interpreted using ordinary principles of contractual interpretation.
      - Comfort Letters
        
        Generally admissible unless they are commercially worthless in context.
  - - - Definition
        
        The parol evidence rule is a controversial rule of evidence that prevents parties from introducing oral or extrinsic evidence to contradict, vary, add to, or subtract from the terms of a written contract.
      - Purpose
        
        The rule aims to ensure that the written document represents the final and complete agreement between the parties, thereby reducing litigation and promoting certainty.
      - Historical Context
        
        The rule originated in 16th-century England to streamline civil trials by focusing juries on written documents rather than oral testimony.
        
        However, its effectiveness in shortening litigation has been questioned, as courts often hear evidence before deciding its admissibility.
    - - Absolute Nature of the Rule
        
        As stated in Bank of Australasia v Palmer, parol evidence cannot be used to alter the terms of a written contract.
        
        “parol testimony cannot be received to contradict, vary, add to or subtract from the terms of a written contract or the terms in which the parties have deliberately agreed to record any part of their contract”
        
        The rule is harsh because it excludes all extrinsic evidence not incorporated into the written document, potentially leading to injustice.
      - Exception to the rule
        
        The rule is not absolute and has several exceptions, which allow parol evidence in specific circumstances.
        
        To Establish the Limits of the Contract
        
        No Contract or Separate Contracts
        
        Parol evidence is admissible to show that no contract exists (Pym v Campbell) or that there are two distinct contracts (one written and one oral).
        
        Pym v Campbell
        
        Facts: the defendant, Campbell, agreed in writing to purchase a share of benefits from an invention by the plaintiff, Pym. However, Campbell made the agreement conditional on approval of the invention by two engineers. When one engineer disapproved, Campbell refused to proceed with payment. Pym sued for breach of the agreemen
        
        Held: At trial, Campbell was permitted to present evidence that the agreement was conditional on the engineers' approval. the court found in Campbell's favor, ruling that the condition had not been fulfilled. Since the third party had not approved the invention, the contract was deemed not binding
        
        Carrigy v Brock Irish
        
        Facts: a deed of assignment omitted Brock’s obligation to pay a sum of money to Carrigy, though this promise was recorded in a separate memorandum of agreement. When Carrigy sought to enforce the payment, Brock invoked the parol evidence rule to exclude the memorandum.
        
        Held: The defense failed because the court, per Pigot C.B., held that Carrigy was enforcing a separate agreement—what would now be called a collateral contract—rather than trying to alter the deed of assignment. Pigot C.B. dismissed Brock’s reliance on the parol evidence rule as “a solecism of language.”
        
        Haryanto v E.D & F. Man Sugar Ltd UK
        
        Facts: the defendant argued that certain documents outlining contractual terms were not enforceable, claiming they merely set out terms that would apply if a contract was later finalized.
        
        Held: The Court of Appeal rejected this argument, holding that documents that appear to be contracts are presumed to be contracts if the evidence indicates an intention to be bound.
        
        To Explain the Circumstances Surrounding an Agreement
        
        Clarifying Ambiguities
        
        Parol evidence can be used to explain the context or purpose of a contract.
        
        Harries v Hardy Irish
        
        Facts: A ship-repairer sued B and C, registered vessel owners, for repair costs.
        
        Held: The court admitted parol evidence showing that the bills of sale were mortgages, meaning B and C were not liable as they were mortgagees, not owners.
        
        Revenue Commissioners v Moroney Irish
        
        Facts: a transaction appeared to be a sale
        
        Held: Parol evidence was admitted to show that it was actually a transfer by way of gift.
        
        Ulster Bank v Synnott Irish
        
        Facts: defendant pledged stock certificates as security with the phrase “against acceptances made,” which was ambiguous.
        
        Held: Parol evidence clarified that the security covered both past and future acceptances.
        
        Grahame v Grahame UK
        
        Facts: A guarantee was executed, but its purpose was unclear
        
        Held: Parol evidence was admitted to determine the intent behind the guarantee, placing the court in the position of the original parties.
        
        Casey v Irish Intercontinental Bank
        
        Facts: A later written “subject to contract” memorandum conflicted with an earlier oral agreement.
        
        Held: The Supreme Court held that parol evidence could show the memorandum was a variation of the oral agreement, allowing it to override the earlier agreement. However, this was later criticized.
        
        Boyle and Boyle v Lee and Goyns
        
        Facts: The Casey decision was challenged.
        
        Held: A Supreme Court majority held that Casey should not be followed, limiting its effect by distinguishing it on its specific facts.
        
        To Explain the Subject Matter of the Contract
        
        Ambiguity in Terms
        
        Parol evidence is admissible to clarify ambiguous terms or the subject matter of a contract.
        
        Chambers v Kelly Irish
        
        Facts: A contract for the sale of oak trees included the phrase “all other trees.” The vendor argued that a specific part of the land had been designated as the "oak plantation," and only certain trees were included in the sale.
        
        Held: The court accepted this interpretation, holding that “all other trees” was limited to larch trees as per the oral agreement, even though a literal reading suggested otherwise.
        
        Ulster Bank v Synnott Irish
        
        Facts: The case questioned whether parol evidence could be admitted only if a contract was ambiguous.
        
        Held: Chatterton V.-C. categorically rejected this restrictive view, affirming that parol evidence could be admissible even when a contract appeared clear.
        
        Oates v Romano Irish
        
        Facts: A hairdresser’s employment contract restricted him from working in a “like business.” The plaintiff argued this term meant only high-end salons.
        
        Held: The Circuit Court ruled that parol evidence was inadmissible because the contract was unambiguous on its face. However, this decision has been criticized as incorrect.
        
        Prenn v Simmonds UK
        
        Facts: The case dealt with contract interpretation and the role of factual context.
        
        Held: Lord Wilberforce emphasized that contracts should not be interpreted in isolation but within their factual context. Courts may consider external evidence when clauses appear inconsistent.
        
        Investors Compensation Scheme Ltd v West Bromwich Building Society UK
        
        Facts: Mortgage investors disputed whether they had assigned all their rights to a compensation fund. One clause suggested only a partial assignment.
        
        Held: The House of Lords held that an explanatory note, intended to clarify the legal document for laypersons, was relevant in determining the contract’s meaning. Lord Hoffmann emphasized that contract interpretation should align with common-sense principles rather than rigid exclusionary rules.
        
        Mistake
        
        Rectification of Mistakes
        
        If a written contract contains a mistake, parol evidence can be admitted to seek rectification of the document.
        
        In Macklin & McDonald v Greacen & Co, the court allowed parol evidence to rectify a mistake in the written contract.
        
        The Consideration
        
        Proving Consideration
        
        if a contract is silent on the consideration (e.g., the price to be paid), parol evidence is admissible to prove the agreed consideration.
        
        Waiver of Consideration
        
        Parol evidence can also be used to show that one party waived the right to payment or any other term.
        
        In Greenham v Gray, evidence of a waiver of part of the price was admitted
        
        Custom
        
        Trade Customs and Practices
        
        Parol evidence is admissible to prove trade customs or practices recognized by the parties.
        
        Wilson Strain Ltd v Pinkerton
        
        Facts: A bread roundsman who sold bread on credit sought to introduce evidence of an industry practice in Belfast where employers, not roundsmen, assumed outstanding debts when an employee left.
        
        Held:The court accepted this evidence, influenced by the unreasonableness of holding the roundsman personally liable, and ruled in his favor.
        
        Limitation
        
        If the contract explicitly provides a different rule, the custom cannot override the written terms (Malcolmson v Morton).
        
        Silent Contracts
        
        If the contract is silent on a particular issue, trade customs can be admitted to fill the gap.
        
        Page v Myer
        
        a custom peculiar to the grain trade was held admissible because the express terms of the contract did not cover the point in question.
        
        Knowledge of Custom
        
        In exceptional cases, it is not necessary for both parties to know of the custom (King v Hinde).
        
        Where the Written Document is Not the Entire Contract
        
        Wedderburn's Argument:
        
        The parol evidence rule is essentially a presumption that a written document represents the entire contract. However, if the document is not intended to be the entire contract, parol evidence can supplement it.
        
        Howden v Ulster Bank Irish
        
        Facts: The plaintiffs ordered a ship from a shipyard that went bankrupt before completion. They sued to recover the vessel from the trustee in bankruptcy, who argued it was part of the bankrupt's assets. The key issue was whether the property in the ship had passed to the plaintiffs upon partial payment or remained with the defendants, as stated in a memorandum of agreement.
        
        Held: Wilson J. ruled in favor of the plaintiffs, allowing parol evidence to clarify the situation, noting that written agreements do not exclude verbal transactions unless the writing fully encapsulates the transaction itself.
        
        Partially Oral Contracts
        
        Clayton Love v B + I Transport Irish
        
        parol evidence of a telephone conversation was admitted to supplement a written contract, forming a partly written and partly oral agreement.
        
        Contradictions Between Written and Oral Terns
        
        If there is a contradiction between a written contract and an oral promise, courts generally enforce the written terms.
        
        Exception: In cases involving standard form contracts, oral promises may take precedence over printed terms (Evans v Merzario).
        
        BCT Software Solutions Ltd v Arnold Laver
        
        the court upheld an oral agreement that contradicted the standard terms of a software license.
        
        Collatteral Contracts
        
        Part-Written Part-Oral Contracts
        
        These are treated as a single contract, but some judges argue that two separate contracts can exist to circumvent the strict application of the parol evidence rule (which prevents extrinsic evidence from altering the terms of a written contract).
        
        Murphy J in Cotter v Minister for Agriculture
        
        observed that where a collateral agreement is established "it is hardly an exception at all” to the parol evidence rule
        
        Webster v Higgin (UK)
        
        Facts: The plaintiff inspected a vehicle owned by the defendants and was told by one of their employees, “if you buy the Hillman we will guarantee that it’s in good condition and that you will have no trouble with it”. An exclusion clause attempted to nullify this promise by excluding all warranties.
        
        Held: Lord Greene M.R. held that this promise was a collateral warranty which was not covered by the exclusion clause in the contract document
        
        this was approved in Fitzpatrick v Harty & Ballsbridge International Bloodstock Sales Ltd (Irish)
        
        Facts: The case concerned an action for the price of a horse purchased by the first defendant at a sale. The condition of sale limited the buyer’s right to claim damages or rescind the contract should the horse turn out to be unsound. The defendant refused to pay the price when a veterinary surgeon found the horse to be unsound.
        
        Held: O'Hanlon J. held that the conditions of sale applied “unless there were some collateral contract made outside the terms of the conditions of sale”.
        
        Consideration for Collatteral Contracts
        
        A collateral contract must be supported by consideration.
        
        In Webster v Higgin the consideration for the collateral warranty was the plaintiff entering into the main purchase contract.
        
        Landlord-Tenant Example:
        
        A landlord’s promise to repair drains in exchange for the tenant signing a lease (which is silent on repairs) creates a collateral contract. The tenant’s signing of the lease provides consideration for the landlord’s promise.
        
        Aib v Galvin Developments (Killarney) Ltd (Ireland)
        
        Facts: A bank sought to enforce a loan agreement and personal guarantees against developers who defaulted.The signed guarantee was inconsistent with the Heads of Agreement, which indicated that the guarantee would only cover the Galvins’ 50% interest in the property.
        
        Held: Finlay Geoghegan J held that the Heads of Agreement constituted a collateral contract that altered the relationship between the parties. The bank’s representation of limited recourse (50%) was a fundamental term that induced the Galvins to proceed.
        
        This is in contrast with Ulster Bank Ireland Ltd v Deane (Irish)
        
        Facts: The defendants argued that a loan was repayable only upon the sale of a specific property, but there was no written evidence (e.g., side letter or Heads of Agreement) to support a collateral contract.
        
        Held: McGovern J Refused to admit oral evidence to breach the parol evidence rule.
        
        Practical Implications of Collateral Contracts
        
        Enforcement
        
        It usually makes no difference whether a promise is enforced as a collateral warranty (part of the main contract) or as a separate collateral contract.
        
        Exceptions
        
        Pleading a separate collateral contract may be necessary if the main contract contains an exclusion clause or jurisdiction clause.
        
        Michelstown Co-operative Society Ltd v Société des Produits Nestlé SA (Irish)
        
        A written licensing agreement governed by Swiss law was not actionable in Irish courts.
        
        However, an oral collateral contract (for exclusive distributorship rights) was actionable in Ireland, allowing the plaintiff to sue locally.
      - Judicial Interpretation and Modern Trends
        
        Contextual Interpretation
        
        Courts increasingly consider the factual matrix or context in which a contract was formed.
        
        Example: In Prenn v Simmonds, Lord Wilberforce emphasized that contracts should be interpreted in light of their surrounding circumstances.
        
        Contra Proferentem Rule
        
        This rule states that ambiguous clauses should be interpreted against the party who drafted them.
        
        works most reliably in respect of one-sided or exempting provisions in a contract
        
        Sinochem International Oil London Co v Mobile Sales and Supply Corp UK
        
        Mance L.J in interpreting a payments clause described the contra proferentem rule as "a rule of last resort"
        
        Recent cases suggest that the contra proferentem rule should only apply in cases of genuine ambiguity not as a general approach
        
        ICDL GCC Foundation FZ-LLC v European Computer Driving Licence Foundation
        
        “[T]he principle of interpretation contra proferentem, may usefully be applied not just to exemption clauses but to a contract in general, but normally only as a last resort in the case of ambiguity, and not as a general approach. As has been observed, the purpose of the principle is to resolve ambiguity not to create it
        
        In McGeown v Direct Travel Insurance
        
        Auld L.J. warned against applying the contra proferentem rule too early, as it could create ambiguity where none exists.
        
        Similarly, in Belfast Fashions v Wellworth Properties Ltd,
        
        the court moved away from using contra proferentem to interpret rent review clauses.
        
        --> This reflects a broader trend in the UK courts towards marginalizing the contra proferentem rule in contract interpretation.
- - - - Auction Sales
        
        s.58(2) of the Sale of Goods Act 1893
        
        a sale by auction is complete when the auctioneer announces its completion, normally by the fall of the hammer
        
        it is the bidder who makes the offer and the offer is accepted or rejected by the auctioneer
        
        Harris v Nickerson (1873)
        
        Facts: the defendant, an auctioneer, advertised in newspapers that certain items, including office furniture, would be auctioned. The plaintiff traveled to attend the auction with the intention of purchasing the office furniture. However, the defendant withdrew the furniture from the sale. The plaintiff sued for breach of contract, seeking compensation for his time and travel expenses.
        
        Held: The court held that the advertisement was merely a declaration of intent and did not constitute a binding offer. Therefore, withdrawing the items did not result in a breach of contract, and the plaintiff was not entitled to damages
        
        --> The auctioneer who announces that a sale will take place at a certain time does not make an offer to sell goods which will be accepted by arriving at the saleroom. The auctioneer then cannot be liable in contract if the sale does not take place
        
        --> however, an announcement by the auctioneer that a sale will take place "without reserve" may give rise to liability if bidding commences but the auctioneer refuses to sell to the highest bidder
        
        when an auctioneer announces a sale “without reserve,” it serves as both an invitation for bids and a binding offer to sell to the highest bidder
        
        if the auctioneer refuses to complete the sale after bidding begins, they may be liable for damages
        
        however, if the refusal is due to the owner's change of mind, the auctioneer can seek indemnification
        
        additionally, a “without reserve” auction prohibits bidding by or on behalf of the owner.
        
        Tkachuk Farms Ltd v Le Blanck Auction Service Ltd (2007)
        
        Facts: the owner of farm equipment contracted with an auctioneer on terms that the sale would take place without reserve but the owner was promised a guaranteed sum. The sale did not go well with total sums raised falling below the guaranteed price.
        
        Held: Both under the basic principles of contract law and the terms of the contract, bidding by the owner’s nephew, in breach of contract, was held to entitle the auctioneer to rescind the contract, thereby avoiding an obligation to pay the shortfall between the sum raised ($387,000) and the guaranteed price ($577,500).
        
        Tully v Irish Land Commission (1961)
        
        The court addressed the nature of auctions conducted "without reserve." Justice Kenny held that initiating such an auction constitutes a unilateral offer by the auctioneer to sell to the highest bona fide bidder. Consequently, if the auctioneer refuses to complete the sale after a valid bid, they may be liable for breach of contract
        
        Recovering damages
        
        Warlow v Harrison (1859)
        
        indicates that the correct approach to be adopted is to measure the difference between the highest bona fide bid, made presumably by the plaintiffs, and the price at which the hammer falls.
        
        --> Not always possible (e.g. when the goods are withdrawn)
        Ulbrick v Laidlaw (1924)
        
        other cases like this lend support for the view that damages will tend to be nominal
        
        1 more item...
        
        Online auctions
        
        operate differently, with contracts governed by platform terms (e.g. eBay) rather than traditional auction laws
        
        the rules may exclude certain kinds of goods (e.g. narcotics, firearms)
        
        or deny the bidder a right to withdraw a bid
        
        The Consumer Rights Directive 2011 (EU Directive) classifies online auctions as distance contracts, distinct from public auctions
        
        Australian case law holds that an online auction does create direct contractual relations between the seller and a successful bidder on the auction site terms
        Smyth v Thomas (2007)
        
        Facts: the defendant listed an aircraft on eBay with a starting bid of $150,000. The plaintiff placed the sole bid of $150,000 and was notified by eBay that he had "won" the auction. However, the defendant refused to complete the sale, arguing that a contract had not been formed.
        
        Held: The court held that a binding contract was indeed formed upon the auction's conclusion, as the eBay terms and conditions indicated that acceptance occurred when the auction ended with a winning bid. The court emphasized that the online auction process, governed by eBay's rules, created contractual obligations between the parties.
      - Display of Goods
        
        Minister for Industry and Commerce v Pim (1966)
        
        Facts: a coat was displayed in a shop window with a notice declaring the cash price and indicating that credit terms were available. It was an offence to offer for sale goods on credit terms without specifically setting out those terms and the shopkeeper was prosecuted.
        
        Held: the prosecution failed. It was held that to display goods with a price tag is not to offer them for sale. This display constitutes an invitation to treat
        
        --> This rule is said to protect shopkeepers who would otherwise be obliged to sell goods to anyone who saw them in the window and came into the shop demanding that they can be purchased
        
        there are however exceptions, since it's only a prima facie rule
        Lefkowitz v Gt. Minneapolis Surplus Store (1957) USA
        
        Facts: the defendant advertised fur items for $1 on a "first come, first served" basis. The plaintiff arrived first and attempted to purchase the items, but the store refused, stating the offer was only for women.
        
        Held: The court held that the advertisement constituted a clear, definite offer, and the plaintiff's arrival and willingness to pay constituted acceptance, forming a binding contract. The store's refusal to sell breached this contract
        
        Pharmaceutical Society v Boots Cash Chemists (1953) UK
        
        the Court of Appeal held that when a shopper takes goods from a shelf he does not accept an offer made by the storekeeper when he displays the goods.
        
        The acts of appropriation and approaching the cash desk constitute an offer by the prospective purchaser which is accepted by the cashier.
      - Advertising
        
        In most cases an advertisement is considered to be an invitation to treat
        
        many cases involving advertisements are not contract disputes but criminal prosecutions for misleading advertising
        
        some laws, like in Minister for Industry and Commerce v Pim, criminalize “exposing for sale,” which includes displaying goods.
        
        similarly, the Registration of Potato Growers and Packers Act 1984 defines “sell” broadly to include agreeing to sell, displaying for sale, inviting offers, and making offers
        
        C.A. Norgren Co v Technomarketing (1983) UK
        
        Walton J. refused to issue a committal order against a defendant for allegedly breaching a court undertaking not to sell or distribute copyrighted items. The defendant had distributed a price list and brochure featuring the item, but Walton J. ruled that advertising materials generally constitute an invitation to treat, not an offer, and thus did not breach the undertaking.
        
        However, in Ireland
        
        consumer protection legislation prohibit false or misleading price statements, making offenders liable under civil and criminal law (Consumer Protection Act 2007, Part 3)
        
        unilateral contract
        
        an offer where the offeror promises to do something (e.g. to pay a sum of money) should the offeree decide to undertake a specified act but without the offeree binding itself to do the act.
        
        If the offeree decides to undertake the specified act, a contract is formed --> only one party (the offeror) is bound
        
        An advertisement will be considered an offer if the court is convinced that it is seriously intended to be binding
        
        bilateral contract
        
        the offeror undertakes to do a specified act or acts (or refrain from so doing) if the offeree is also willing to undertake to do a specified act or acts (or to refrain from so doing) --> both parties are bound
        
        an example of a unilateral contract in which an advertisement was declared to be an offer.
        Carlill v Carbolic Smoke Ball (1893) UK
        
        Facts: The defendants manufactured a proprietary medicine that was advertised to be so efficient that should anyone catch influenza after purchasing and using it they would be entitled to £100. As a mark of the manufacturer’s sincerity, the advertisement continued, £1,000 was deposited with a bank to meet any claims. Mrs Carlill read the advertisement, used the medicine but caught influenza nevertheless.
        
        Held: The advertisement was held to be an offer and Mrs Carlill entitled to £100.
        
        Bowerman v Association of British Travel Agents Ltd (1995) UK
        
        Facts: A notice in ABTA holiday tour offices stated that customers would be reimbursed if a travel company became insolvent
        
        Held: It was ruled an offer. Booking a holiday with an ABTA member was considered acceptance. While some judges saw the notice as informational, the majority found its promise clear enough to be binding, akin to Carlill
        
        Kennedy v London Express Newspapers (1931) Irish
        
        Facts: The Daily Express offered free accident insurance to registered readers in 1929, renewing the offer in 1930 without requiring re-registration. When a registered reader, Mrs. Kennedy, died in an accident, her husband sought the insurance payout. The newspaper argued that a condition—reading the newspaper daily—was not met.
        
        Held: The court held that a contract was formed in Ireland, with acceptance occurring when Mrs. Kennedy placed an order with a local newsagent. However, the case remained somewhat inconclusive.
        
        Wilson v Belfast Corp (1921) Irish
        
        A newspaper report stating that council employees enlisting in WWI would receive half wages was not considered an offer, as it was not an official communication from the employer
        
        Billings v Arnott (1945) Irish
        
        an advertisement of similar terms as in Wilson was held to be an offer which was accepted by an employee when he listed
        
        Tansey v The College of Occupational Therapists Ltd (1986) Irish
        
        Facts: A student, Ms. Tansey, tried to follow the decision in Carlill and argued that an enrollment manual promising two exam re-sits formed a contract. She argued that when she offered to enroll as a student in the college, a contract was formed. She argues that her offer was accepted by the defendant when its agents handed her a copy of the defendant's manual.
        
        Held: The court rejected her claim, ruling that the manual was informational, not an offer, and that she could not rely on the decision in Carlill because she had not been aware of any contractual promise upon enrollment.
        
        Lady Manor Ltd v Fat Cat Café Bars (No 2) (2001) UK
        
        An estate agent who provided property details via a cold call could not claim a contractual right to a fee, as the information alone did not constitute an offer.
      - Tenders
        
        when a manufacturer or a local authority issues advertisements soliciting tenders (whether it be to supply goods or build a school for example) the advertisement is an invitation to treat
        
        The tender setting out the terms upon which the supplier or builder is prepared to contract constitutes an offer
        
        There is no obligation upon the offeree to accept any of the tenders unless he has promised in the statement inviting tenders to accept the lowest figure
        
        if the invitation states that the highest (or lowest) bid will be accepted, it constitutes a definite promise to accept the highest (or lowest) bid.
        
        --> in these instances the situation is amenable to the collateral contract analysis that is found in auction sales "without reserve"
        Harvela Investments Ltd v Royal Trust Co of Canada and Outerbridge (1986) (UK)
        "sealed bid" case illustrates that there can be a substantial remedy in appropriate circumstances.
        
        Facts: the first defendant invited sealed bids for shares, promising to sell to the highest bidder. The second defendant submitted a lower bid than the plaintiff but included a referential clause, agreeing to pay $101,000 more than any higher bid. The first defendant accepted this bid, but the plaintiff successfully challenged the sale in the House of Lords.
        
        Held: Lord Diplock ruled that the first defendant’s promise to sell to the highest bidder created a unilateral contract, obligating them to accept the highest fixed bid. The referential bid was deemed invalid, as the process required fixed bids rather than an auction-style approach.
        
        The decision in Harvela was based on the nature of sealed bidding and the interpretation of the call for bids. A broader principle was established in
        M.J.B Enterprises Ltd v Defence Construction (1951) Ltd (1999) Canada
        
        Facts: The defendant’s invitation to tender included a privilege clause stating that "the lowest or any tender may not be accepted." The plaintiff submitted the lowest bid, but the defendant awarded the contract to another bidder whose tender contained non-compliant terms.
        
        Held: The court held that the invitation to tender was an offer, accepted by submitting a bid, and that the defendant was obligated to consider only compliant bids.
        
        This decision moves tender law beyond the general rule that an offeree can freely accept or reject offers. However, the court stopped short of implying that the lowest compliant bid must always be accepted.
        
        Blackpool and Fylde Aero Club v Blackpool Borough Council (1990) UK
        
        the contract is not required to be awarded to a dissapointed or outraged bidder
        
        Agreement on Price in Sale of Land Cases
        
        General Principles of Contract Formation
        
        The UK Supreme Court case RTS Flexible Systems Ltd v Molkerei Alois Müller GmbH (2010) confirms that contract formation depends on objective intent.
        
        Courts assess what each party has said and written, rather than their subjective beliefs.
        
        Even if one party later claims that no contract was agreed, courts may find a contract if price is agreed, work has begun, and key terms are established.
        
        Lord Clarke in RTS deemed the "no contract" argument unconvincing under such circumstances.
        
        Contracts for Sale of Land: Presumption Against Binding Agreement on Price Alone
        
        While general contract rules apply to all negotiations, land sale contracts often involve prolonged and complex negotiations.
        
        Courts recognize a presumption that mere agreement on price does not automatically create a binding contract.
        
        Bigg v Boyd-Gibbins Ltd (1971) (UK) suggests that practical considerations, such as the complexity of conveyancing and the duration of negotiations, are relevant.
        
        Harvey v Facey (1893) UK
        
        Facts: The appellant asked: “Will you sell us Bumper Hall Pen? Telegram lowest cash price.” The respondent replied: “Lowest cash price for Bumper Hall Pen £900.” The appellant then stated they would pay that price.
        
        Held: The Privy Council held that no contract existed because the response was a statement of the minimum price rather than an offer to sell. This case establishes that price quotation alone does not imply an intention to form a contract.
        
        Even agreement on the price will not in itself form a contract, especially when further terms are required
        McGill Construction v McKeon (2004) Irish
        
        Facts: Agreement on a €3.6 million price for development land was reached. However, other terms — such as the disposal of a show house, deposit, and closing date — were still unresolved. The key issue was that share transfer mechanisms needed to resolve taxation issues, which could take time.
        
        Held: No concluded contract existed due to these unresolved material terms.
        
        However, if correspondence is clear and unambiguous, courts may find a contract exists, subject to enforceability under
        
        Statute of Frauds (Ireland) 1695
        
        Section 51 of the Land and Conveyancing Law Reform Act 2009
        
        Harvey v Facey failed because the seller never indicated an intent to sell, only a willingness to consider selling.
        Boyers & Co v Duke (1905) Irish
        
        Facts: The plaintiff asked for the lowest price for 3,000 yards of canvas. The defendant quoted 4⅝ d. per yard. The plaintiff then attempted to “accept” the offer.
        
        Held: No contract existed because the price quote was only an invitation to negotiate, not a formal offer. The plaintiff’s acceptance letter itself showed awareness of ongoing negotiations, as they included commercial referees.
  - - - Grant v Bragg 2009 UK
        
        The English Court of Appeal had to examine a chain of six emails. In the second of the emails the statement, “I am not ready to transfer” was held to be a rejection of the buyer’s offer.
    - - The Fact of Acceptance
        
        Acceptance by the performance of a requested action if the offer is a unilateral contract
        Billings v Arnott (1945) Irish
        
        the offer to pay half of any employee’s wages who joined the defence forces was accepted by Billings when he performed the action requested.
        
        in commercial life offers are often accepted by performance
        
        however, objective conduct suggesting consent does not always create a binding contract.
        
        If B knows that A, despite appearing to agree, has no intention to contract, A is not bound (as seen in Airways Corp of New Zealand v Geyserland Airways Ltd)
        
        Recent case law supports that if one party knows the other does not intend to create legal relations, the objective theory of contracting does not apply.
        
        Acceptance by Conduct
        
        A person may be bound by their conduct if a reasonable person would interpret it as an intention to be bound.
        
        Subjective intent is generally irrelevant in determining whether a contract exists or if it can be amended due to mistake.
        
        Acceptance often occurs when the offeree acts in accordance with the offer’s stipulated manner.
        
        Howard Marine Dredging v A. Odgen (1978)
        
        Saunders v Cramer (1842)
        
        In these circumstances a distinction must be drawn between acceptances which take place in the context of a unilateral offer, or an offer which is bilateral in form
        Brennan v Lockyer (1932) Irish
        
        Facts: A contract dispute arose over whether acceptance occurred when a union enrollment certificate was posted in London or when it was received in Dublin.
        
        Held: The court distinguished between offers requiring a promise (which must be communicated) and those requiring an act (where no further communication is needed).
        
        Reaffirmed in ...
        Hamilton v Judge (2009) UK
        
        Facts: The negotiation of a contract for the purchase of commercial property was followed by the return of a draft contract by the purchaser’s solicitor to the vendor’s solicitor.
        
        Held: Deeny J. reaffirmed that an offer can be accepted by conduct. He ruled that a purchaser tacitly accepted an offer by remaining silent while the vendor auctioned goods, treating the return of a draft contract as an offer.
        
        Courts are less willing to infer acceptance by conduct in bilateral contracts, as ongoing negotiations suggest no final agreement.
        Anglia Television v Cayton (1989) UK
        
        Facts: A dispute arose over broadcasting rights for the Bruno v Tyson fight. Alleged acceptance (accepting payments) was ambiguous and could relate to other agreements.
        
        Held: There was no contract, as before an offer could be accepted by conduct there must be some unequivocal offer which exists in a form capable of being accepted.
        
        However, if an offeree relies on an offer to their detriment, courts are more likely to infer a contract. --> McEvoy v Moore (1902) Irish
        
        ACT Construction Ltd v E Clarke & Sons (Coaches) Ltd (2002) UK
        
        Undertaking requested building work creates an obligation to pay a reasonable sum, even if no formal contract exists.
        
        Parkgrange Investments Ltd v Shandon Park Mills Ltd (1991)
        
        Carroll J. ruled that no contract existed despite the offeree signing a draft agreement, as the signature was only for obtaining a tax clearance certificate, not an acceptance of the offer.
        
        The court emphasized that whether acceptance must follow a specific process depends on the parties’ intent and objective behavior, with commercial considerations also playing a role. (recent case law)
        
        Conduct indicating contractual belief
        
        If parties act as though a contract exists, courts may recognize it despite formal offer-acceptance issues.
        
        Western Electric Ltd v Welsh Development Agency (1983) UK
        
        Facts: the plaintiff failed to reply to the defendant’s letter containing an offer and prescribed form of acceptance but instead began to perform under the terms of the offer.
        
        Held: The court held that, by its conduct, the plaintiff was offering to contract on the terms of the earlier letter written by the defendant. The defendant, in turn, by its acquiescence, was held to have accepted this offer.
        
        1 more item...
        
        Counter-offers
        
        If a valid acceptance exists then the acceptor must be prepared to accept the terms proposed.
        
        an acceptance typically cannot introduce new conditions
        
        if a response to an offer includes terms that were not previously agreed upon, it is not a true acceptance but rather a counteroffer
        
        in contract negotiations, a counteroffer effectively rejects the original offer and puts forward a new proposal that the other party must accept or reject
        
        Swan v Miller (1919) Irish
        
        Facts: the defendants offered to sell their interest in a lease for £4,750. The plaintiffs replied that they would pay £4,450.
        
        Held: This response to the defendants’ offer was a counter-offer and, as such, was not itself capable of producing a binding contract.
        
        A counter-offer acts as a rejection of the original offer, meaning the initial offer cannot be accepted later if the counter-offer is refused.
        Wheeler v Jeffrey (1921) Irish
        
        Facts: the parties were negotiating a contract. on June 10, the plaintiffs wrote "we agree to carry on your agency as from 1st July next”. On June 12, the defendants wrote indicating their acceptance. The issue was whether a contract was formed on June 10 or 12.
        
        Held: The contract was only formed when the defendants explicitly accepted this new term on June 12. The mention of a commencement date added a new term to the negotiations.
        
        Courts are sensitive to commercial practices and aim to keep offers open when an offeree's response seeks clarification or additional information, rather than treating it as a counter-offer.
        Lynch v The Governors, etc. of St. Vincent's Hospital (1987) Irish
        
        If the offeree, however, is presented with a written offer and the offeree adds in additional material which has been negotiated, but omitted from the document, and the offeree then signs that document, as requested, it is a valid acceptance
        
        If, however, the offeree adds new terms which have not been settled by negotiations, then case of Gt. Northern Railway Co v Witham (1873) UK is still operative and the offeree’s response will be a counter-offer.
        
        it is difficult to tell when an offer or a counter-offer has been made when there are back and forth printed forms sent by the parties
        Butler Machine Tool Co v Ex-Cell-O Corp (1979) UK
        
        Facts: the sellers quoted a price of £75,000 for a machine tool, with a price variation clause. The buyers responded with an order on their own terms, rejecting the price variation. The sellers did not reject this but acknowledged the order with a portion of the buyers’ form, effectively accepting the counter-offer.
        
        Held: The Court of Appeal ruled in favor of the buyers, treating the sellers’ quotation as an offer and the buyers' response as a counter-offer, which was accepted when the sellers returned the acknowledgment slip. The sellers’ letter restating their terms was disregarded
        
        Lord Denning M.R: there are no hard and fast results in "battle of the forms" cases
        
        Chichester Joinery v John Mowlem (1987) UK
        
        Facts: Mowlem set out terms for a sub-contracting offer, stating that acceptance would be on its terms. Chichester Joinery responded with a counter-offer, agreeing "subject to the conditions overleaf," which rejected Mowlem's original terms. No contract was formed at that point.
        
        Held: However, when Chichester Joinery delivered goods matching Mowlem's needs and Mowlem accepted them, the court held that this constituted acceptance of Chichester Joinery's terms, despite the previous uncertainty from the "battle of the forms."
      - Communication of acceptance
        
        Once it is established that the offeree intends to accept the offer he generally has to go further and communicate his acceptance to the offeror
        
        The offeror may set the rules for how the acceptance may be communicated
        
        The offeror may also dispense with, or "waive" the need for communication
        
        Commerce Commission v Telecom Mobile Ltd (2006) NZ
        
        Facts: Telecom (Telco) sought to sell mobile phones through a call center. Interested customers were credit-checked, and if approved, a phone and contract were mailed with a notice that opening the box constituted acceptance of Telco's terms. The defendants argued that the contract was formed in the call center, exempting them from consumer protection laws.
        
        Held: The New Zealand Court of Appeal ruled that the contract was formed when the customer opened the package, not in the call center, and criticized applying the Brinkibon decision too literally, as it could undermine consumer credit protections.
        
        However, while the offeror can choose not to require the offeree to formally communicate acceptance, they cannot force the offeree to respond in a certain way.
        
        Specifically, the offeror cannot stipulate that the offeree’s failure to reject the offer automatically counts as acceptance.
        
        Russell & Baird v Hoban (1922) Irish
        
        Facts: The plaintiffs sent a note to the defendant offering to supply oatmeal, stating that if the note was kept for more than three days, it would be considered accepted.
        
        Held: The Court of Appeal ruled that no contract was formed because the defendant did not respond. Ronan L.J. stated that one party cannot impose conditions requiring the other to accept by silence, emphasizing that the note was an offer that needed formal acceptance.
        
        Inertia-selling
        
        posting unsolicited goods to members of the public and obliging them to return them within a certain period of time, or, in default, pay the price
        --> outside established principles of law
        --> s.47 of the Sale of Goods and Supply of Services Act 1980 deems such a delivery a gift in certain cases
        
        Effective acceptance
        
        the offeror is bound when he (or his agent) learns from the offeree of his acceptance --> contract forms
        
        Acceptance by instantaneous communication
        
        Entores Ltd v Miles Far East Corp (1955)UK
        
        Facts: An offer sent by telex from the plaintiff’s offices in London to the defendant in Amsterdam was accepted by telex. The only problem concerned where the contract came into existence.
        
        Held: The Court of Appeal held the contract was concluded in London when notice of acceptance was received there.
        
        the rule: the general postal rule doesn't apply in a form of instantaneous communication. instead, acceptance occurs when and where the message of acceptance is received.
        
        Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelgesellschaft GmbH (1983) UK
        
        The House of Lords upheld the Entores decision but acknowledged that the general rule on communication by telex may not always apply in cases where communication is delayed or involves agents with limited authority. In such cases, the resolution should be based on the intentions of the parties, business practices, and where the risks should lie.
        
        Acceptance by post
        
        Postal Rule
        
        indicates that a contract is concluded when the offeree posts the letter of acceptance
        
        The general rule (contract forms when offeror learns of acceptance) does not apply where the parties intend that acceptance is to be communicated by post
        
        developed in England in 1818
        
        in Germany, for example, this is not accepted as there acceptance is effective when brought to the place of business of the offeror
        
        Postal Rule in Ireland
        
        follows the English rule
        
        Sanderson v Cunningham (1919)
        
        Facts: In this case, the plaintiff made an offer for an insurance policy through a Dublin broker. The defendant company in London issued the policy and sent it to the plaintiff's agent. The plaintiff signed the policy in agreement. However, to sue the defendant in Ireland, the contract needed to be concluded there.
        
        Held: The Court of Appeal in Ireland ruled that the contract was concluded when the policy was posted in London, not when the plaintiff signed it. Therefore, the claim failed.
        
        Dooley v Egan (1938) Irish
        
        Facts: the defendants in Cork inquired about a medical cabinet from the plaintiff, who responded from Dublin on June 22 with a "quotation" for immediate acceptance. The defendants ordered two cabinets instead of one on June 24. The plaintiff agreed to this on June 26, accepting the order.
        
        Held: Meredith J. ruled that the plaintiff's June 22 letter was an offer, and the defendants' response was a counter-offer, not an acceptance. The contract was formed when the plaintiff accepted the counter-offer in Dublin on June 26.
        
        Has been criticized for leading to injustice
        Household Fire Insurance v Grant (1879) UK
        
        Facts: Grant offered to take an insurance policy, and the company sent an acceptance letter. However, the letter never reached Grant.
        
        Held: Despite this, Grant was still held liable to pay the premiums.
        
        2 more items...
  - - - Revocation in Bilateral Contracts
        in bilateral contracts (contracts to which both parties are bound) acceptance has 2 elements
        a) the intention to accept
        b) communication of acceptance
        
        The Navan Union v McLoughlin (1855)
        
        Facts: the defendant submitted a tender to the plaintiffs, who were a poor law authority (the Navan Union). The guardians of the authority met privately and agreed to accept McLoughlin’s tender. However, before they could communicate the acceptance to him, McLoughlin revoked his offer.
        
        Held: The court ruled that McLoughlin was entitled to withdraw his offer because the plaintiffs had not validly accepted it before the revocation. In other words, the plaintiffs' internal agreement to accept the offer was not sufficient to form a binding contract until the acceptance was properly communicated to McLoughlin. Therefore, the offer could still be revoked before the plaintiffs’ acceptance reached him.
        
        For revocation to be effective, the offeror need only show that, at the time of purported acceptance, the offeree knows that the subject matter is no longer available to the offeree.
        
        Dickinson v Dodds (1876) UK
        
        Facts: Dodds offered to sell his house to Dickinson, with the offer remaining open until Friday, June 12th, 9:00 a.m. However, on Thursday, Dickinson was informed by Barry, who was not authorized to communicate on Dodds' behalf, that the house might have already been sold to someone else. Despite this, Dickinson handed Dodds an acceptance letter before the deadline.
        
        Held: The Court of Appeal ruled that because Dickinson had notice of the house being sold, even though Barry was not the offeror or an agent, the offer was no longer available for acceptance. As a result, Dickinson could not obtain the property or claim damages.
        
        Had Dickinson given consideration to keep the offer open, the promise would have been binding, and the offer could not have been revoked. In the U.S., a similar situation is termed a “firm offer”, which cannot be revoked.
        
        the postal rule does not apply to letters revoking an offer. That letter only becomes effective when it arrives.
        
        established in Byrne v Van Tienhoven (1880)
        
        Actual knowledge seems to be the critical factor in these revocation cases.
        Himmelman v Pare Estate (2001)
        
        Facts: the issue was whether a counter-offer, made in writing, had to be revoked in writing. The defendants in a telephone conversation indicated to the plaintiffs that the counter-offer had been withdrawn. Later the same day the plaintiff, by fax, purported to accept the counter-offer.
        
        Held: The Nova Scotia Supreme Court held that the counter-offer could be revoked orally or in writing at any time prior to acceptance.
        
        Walker v Glass (1979) Northern Ireland
        
        Facts: Walker wanted to buy an estate from Glass and persuaded him to consider selling. An offer was made, stating that it was open for acceptance until March 13, 1979, with a deposit of £40,000 required. Walker notified Glass of his intention to buy on March 1 but didn't pay the deposit until March 12. Before this, Glass revoked the offer. Walker argued that his intention to buy on March 1 effectively accepted the offer, "freezing" the deal once he communicated it.
        
        Held: Lord Lowry C.J. disagreed, stating that the prescribed mode of acceptance, including paying the deposit, had to be followed, and failure to do so meant the offer could be revoked before acceptance.
      - Revocation in Unilateral Contracts
        
        Generally, an offeror can revoke the offer before the offeree has started performing.
        
        However, once the offeree begins the performance, revocation becomes complicated.
        
        Daulia Ltd v Four Millbank Nominees (1978) UK
        
        the English Court of Appeal ruled that an offeror has an implied obligation not to make it impossible for the offeree to complete the performance and cannot withdraw the offer once the offeree has started performing the required act. This prevents unfairness if the offeree has already begun fulfilling the contract's terms.
        
        Academic Commentary:
        Buckley L.J: ..."the [offeror] could not withdraw … once [the offeree] … embarked on those acts”
        
        English authority on this point is fairly recent, but the Australian courts, since Abbott v Lance (1860) have held the offer irrevocable once performance has commenced
        
        Pavey and Matthews Pty Ltd v Paul (1987)* Australia
        
        confirmed this
        
        In Irish law, the point still remains open
    - - Dany Lions Ltd v Bristol Cars (2013) UK
        
        Facts: an ambiguous response was interpreted as a request for information rather than a counter-offer.
        
        Similarly, in Maconchy v Trawer (1894) Irish, the House of Lords held that an offeree may waive a term they added, recognizing that the added term was of importance only to the offeree. This approach helps maintain the possibility of acceptance in ambiguous situations.
    - - In most cases, acceptance must happen within a reasonable time.
        
        Factors like the commodity in question can affect the timing, with perishable goods or volatile commodities needing quicker acceptance than something like land.
        
        Commane v Walsh (1983) Irish
        
        O'Hanlon J. stated that that an offer was open for acceptance until it was withdrawn or until it would be unreasonable to hold the offeror to it any longer because of the length of time which had elapsed without acceptance..
        
        Ramsgate Hotel Co v Montefiore (1866) UK
        
        The judge (O’Hanlon J.) ruled that because both parties were relaxed about finalizing the land sale and knew it would take a long time, an offer to transfer part of the land was still valid even after four months.
        
        However, courts require clear evidence that the offeror was willing to accept such delays, even in land transactions.
        Parkgrange Investments Ltd v Shandon Park Mills Ltd (1991) Irish
        
        Carrol J: “[A] purchaser who does not accept a contract as proferred runs the risk that his counter offer will not be accepted. A purchaser who ignores a time limit for accepting an offer runs the risk that it will lapse.”
      - the exceptional case of Earn v Kohut (2002) Manitoba
        
        Facts: the defendant offered to settle a civil action after shooting the plaintiff, with the offer being made just before his sentencing for related criminal charges. The plaintiff accepted the offer two-and-a-half years later, after the limitation period for the tort claim had expired.
        
        Held: Despite the lengthy delay, Beard J. ruled that the acceptance was still within a reasonable time. This was due to the context: the defendant had expressed remorse and a willingness to compensate through counsel, and payment could only be made after the defendant was released from prison, which occurred shortly before the plaintiff's acceptance.
    - - There is one recent Australian case which is destined to be followed in later judgments.
        Smith v Woods (2014)
        
        Facts: the parties entered into mediation to resolve a dispute. Woods made a counter-offer through his solicitor, which was left with the offeror’s clients for consideration. On March 13, the offeror’s clients accepted the counter-offer, and both parties agreed to finalize the settlement. However, Woods died on the same day.
        
        Held: The Supreme Court of Victoria ruled that Woods' death did not automatically revoke the counter-offer. The court held that offers do not automatically terminate upon the death of the offeror, unless the offeree knows of the death. Since the offer was not personal (the offer was not something Woods needed to personally fulfill) and could benefit the estate, the settlement could proceed.
      - With the exception of Re Whelan there are no Irish cases which discuss whether an offeror’s death before acceptance can make it impossible to accept the offer, so as to hold the estate of the deceased liable
        
        even the English cases are unclear on this question
        
        Re Whelan (1897)
        
        it was held that if a surety dies and the bank becomes aware of the death—whether formally or informally—the bank can no longer continue advancing funds supported by the surety. The knowledge of the death terminates the standing offer.
        
        However, if the contract specifies a particular type of notice to be given, and that notice isn't provided, the death and knowledge of it may not terminate the offer, as seen in Coulthart v Clementson (1879) UK
        
        Additionally, death can also terminate a contractual obligation through the doctrine of frustration
  - - - E.S.B. v Newman (1933) Irish
        
        Facts: the plaintiffs supplied electricity to Mrs. Waddington at four premises, and the defendant, who had agreed to indemnify her, was sued for the total sum across all four accounts. The defendant argued the indemnity covered only one premise.
        
        Held: Judge Davitt found the term "accounts" ambiguous but upheld the contract, allowing parol evidence to clarify that the indemnity applied to just one premise. Courts generally avoid interpretations that negate payment obligations.
    - - Spreadex Ltd v Cochrane (2012) UK
        
        Facts: An online betting company sought to hold an account holder liable for losses of around £100,000 incurred by his girlfriend’s son, who gained access to the account. The company's standard terms included a clause imposing liability for unauthorized trading.
        
        Held: The court ruled that the liability clause was unenforceable because other terms made the contract illusory (e.g., a clause allowing the company absolute discretion to refuse bets). The contract lacked mutual obligation.
      - MacRobertson Miller Airlines v Commissioners of State Taxation (1975) (Australia)
        
        Facts: An airline company promised to fly passengers from X to Y but reserved the right to cancel flights, tickets, or bookings at its discretion.
        
        Held: The High Court of Australia held that the promise was illusory because the airline had given itself the discretion to perform or not, meaning there was no real contractual obligation.
      - Provincial Bank of Ireland v Donnell (1932) Irish
        
        Facts: A guarantor promised to secure her husband’s bank account in consideration of “advances … that might hereafter be made.” However, the bank retained absolute discretion over whether to make any advances.
        
        Held: The court held the promise to be illusory because the bank was under no obligation to provide future advances, making the guarantee effectively meaningless.
      - O'Mullane v Riordan (1978) Irish
        
        Facts: A purchaser agreed to pay £1,500 per acre for land or such larger sum as he later stipulated.
        
        Held: The court ruled the promise was not illusory. The purchaser had a minimum payment obligation of £1,500 per acre, even though he could increase the amount at his discretion.
      - Rooney v Byrne (1933) Irish
        
        Facts: A buyer agreed to purchase a house “subject to getting an advance on the property.” The seller argued that this gave the buyer complete discretion to withdraw.
        
        Held: The court held that the clause did not allow the buyer to unreasonably refuse to apply for or accept a loan. The buyer was obliged to make reasonable efforts to secure financing.
    - - Lombard Tricity Finance Ltd v Paton (1989) UK
        
        The English CA upheld the validity of a credit agreement that permitted the credit supplier to vary the interest rate upon notifying the borrower. The court found the clause lawful because it was an express term drafted in clear language.
        
        in Ireland
        
        Similar clauses are frequently used in Irish commercial contracts.
        
        For example, leasing agreements often allow lessors to adjust rental rates in response to adverse changes in interest rates, capital allowances, or other factors.
      - Enforceability of Promises Lacking Substance
        
        When a promise lacks substance, courts may take one of two approaches
        
        Allow Recovery for Performance
        
        If a party performs their obligation under a vague promise, the court may permit them to recover the promised remuneration to prevent unjust enrichment.
        
        For example, if a supplier delivers coal after being told, “I may pay you €500,” they can recover the €500.
        
        Preparatory or Preliminary Acts
        
        Courts may also allow recovery for preparatory or preliminary acts even if essential terms of the contract are not agreed upon.
        
        Peregrine Systems v Steria Ltd (2005) UK
        
        the programmer was paid for development work even though the final product was not completed, as the promise was to perform £200,000 worth of work, not necessarily to deliver a finished product.
        
        Severance of Illusory Promises:
        
        Courts may sever (remove) vague or illusory promises from the contract and enforce the remaining terms.
        
        However, in Mackie v Wilde and Longin (1998)
        
        the Irish Supreme Court refused to sever a vague promise about issuing “a few” day tickets, deeming it fatal to the entire agreement. The court did not explain why severance was inappropriate in this case.
    - - Forms of Uncertainty
        Contracts can be vague or uncertain in various ways.
        
        Central Meat Products v Carney (1944) Irish
        
        Facts: The plaintiff sought to prevent the defendant from selling cattle to third parties, claiming that they had an agreement stating that all cattle the defendant acquired for canning purposes would be sold to the plaintiff.
        
        Held: Overend J. held that no enforceable contract existed because there was no clear acceptance and key terms—such as price variation and insurance arrangements—were not agreed upon. The agreement was too vague to be legally binding.
        
        Interpretation of vague terms
        Wells v Devani (2019) UK
        
        Facts: The case involved a dispute over an estate agent’s commission. The agent claimed that an oral agreement entitled him to commission once a property sale was completed, while the other party argued that the contract was too vague to be enforceable.
        
        Held: the UK Supreme Court outlined two principles for interpreting vague terms
        
        Test of Intention
        
        The intention of the parties is determined by the words used in the contract. If the words fail to convey a definite meaning, the court must conclude that no contract exists.
        
        Rarity of Such Cases
        
        Situations where a contract is too vague to enforce are uncommon.
        
        "such a position is not often found" - Lord Kitchin
      - Clarifying Vague or Silent Terms
        
        Objective Intention of Parites
        
        When a contract lacks clarity or is silent on essential terms, courts use various techniques to determine the parties' objective intention.
        
        Reference to Prior Performance
        
        If the contract has been performed adequately in the past, vague clauses may be clarified by referencing prior dealings.
        
        Hillas & Co Ltd v Arcos Ltd (1932)
        
        Facts: A contract included an option for the sale of timber described as “100,000 standards,” which was vague.
        
        Held: The court clarified the term by referring to the detailed description of the goods in the contract for the previous season. The prior course of dealing provided sufficient clarity to enforce the clause.
        
        No Prior Course of Dealing
        
        If there is no prior course of dealing or the clause refers to undefined criteria, the clause may be unenforceable.
        
        G Scammell and Nephew Ltd v HC and JG Ouston (1941)
        
        Facts: The contract referred to a “hire-purchase agreement” without specifying its terms.
        
        Held: The court held the clause was too vague to enforce because there was no prior course of dealing or industry standard to clarify its meaning.
        
        Implied Terms
        
        Courts may imply terms to fill gaps in contracts, particularly where the contract is silent but the parties’ intention can be inferred.
        
        This is based on the standard of reasonableness and the presumed intention of the parties.
    - - Pagnan Principle
        
        Courts in England, Australia, and New Zealand have held that the existence of unresolved terms does not necessarily prevent a contract from being enforceable.
        
        This principle was examined in An Cumann Peile Boitheimeach Teoranta v Albion Properties Ltd (2008) Irish
        
        Facts: The case involved a complex and prolonged negotiation over a development project that lasted more than four years. When the negotiations failed, the defendant argued that a concluded agreement still existed, claiming that unresolved issues (such as wayleaves, easements, and leases) were minor and did not prevent contract formation.
        
        Held: Edwards J. ruled that unresolved issues were not minor and prevented the formation of a concluded agreement. The contract was void for uncertainty.
      - Joint Venture
        
        If a joint venture fails to materialize, courts will not impose an arrangement that the parties did not intend.
        
        In Sweeney v Lagan Developments Ltd (2007), the court declined to substitute an unintended arrangement for an inchoate (incomplete) joint venture.
      - Essential vs Non-Essential Terms
        
        Fundamental Distinction
        
        Courts distinguish between essential terms (necessary for a binding contract) and non-essential terms (incidental or secondary).
        
        The English Court of Appeal in Pagnan emphasized this distinction:
        
        Pagnan Sp.A. v Feed Products Ltd (1987) UK
        
        Facts: The parties agreed on essential terms (price, identity, quality of goods, and shipment terms) but continued negotiating non-essential terms (loading rate, demurrage, and despatch charges).
        
        Held: The court held that the agreement on essential terms created a binding contract, even though some non-essential terms remained unresolved. The parties intended to be bound immediately, and the unresolved terms did not render the contract uncertain or unworkable.
        
        Intention to Be Bound
        
        The enforceability of a contract depends on whether the parties intended to be bound immediately or only after resolving all terms.
        
        Love and Stewart v Instone (1917)
        
        Facts: The parties agreed on the sale of timber but left the shipping route unresolved.
        
        Held: The court held that the parties did not intend to be bound until the shipping route was agreed, as it was an essential term in this context.
        
        Casual or As-Required Contracts
        
        Even contracts with flexible terms (e.g., casual employment) may be enforceable if they contain sufficient promissory content.
        
        Carmichael v National Power Plc (1998)
        
        Facts: The claimants worked on a casual basis and argued there was no binding employment contract.
        
        Held: The court held that the mutual obligations (e.g., the employer’s promise to offer work and the employees’ promise to accept it) created a legally enforceable contract.
    - - May & Butcher v The King (1929) UK
        
        Facts: The parties agreed to sell goods but left the price to be agreed in the future.
        
        Held: The House of Lords held that the agreement was unenforceable because it lacked certainty on an essential term (price).
        
        Lord Dunedin stated that a contract must settle everything necessary and leave nothing to be agreed later.
        
        “[T]o be a good contract there must be a concluded bargain, and a concluded contract is one which settles everything that is necessary to be settled and leaves nothing to be settled by agreement between the parties.”
      - If parties in a sale of goods contract do not agree on a price and have not agreed to negotiate it later, s.8(2) of the Sale of Goods Act 1893 requires payment of a reasonable price.
        
        However, if the contract is executory (to be performed in the future), enforcing this obligation can be difficult.
        
        For contracts outside the 1893 Act (e.g., building contracts or land sales), failing to agree on a price may render the contract unenforceable
        
        Courtney & Fairbairn v Tolaini Brothers (Hotels) (1975) UK
        
        Facts: A builder provided finance to a developer in exchange for a promise to negotiate a construction contract at a fair and reasonable price.
        
        Held: The Court of Appeal held that an agreement to negotiate in the future is unenforceable because it is too uncertain. The theory of "contract to make a contract" was rejected because damages for breach of such an agreement are impossible to quantify.
        
        Mannpar Enterprises Ltd v Canada (1997) British Columbia
        
        Facts: The case involved a mining renewal clause that allowed renewal of the agreement for another five years, but only “subject to satisfactory performance and renegotiation of the royalty rate and annual surface rental.” When a dispute arose, one party argued that the renewal clause created a binding obligation.
        
        Held: The British Columbia Court ruled that the clause was merely an agreement to negotiate and was void for uncertainty. The court refused to imply a duty to negotiate in good faith, holding that the wording was too vague to create an enforceable contract.
        
        Walford v Miles (1992) UK
        
        Facts: The parties agreed to negotiate in good faith for the sale of a business.
        
        Held: The House of Lords held that a duty to negotiate in good faith is unenforceable because it is inherently inconsistent with the freedom to withdraw from negotiations at any time.
    - - Triatic Ltd v Cork County Council (2006)
        
        Facts: the plaintiff sought to develop State-owned lands controlled by the defendant. The defendant agreed to "deal exclusively" with the plaintiff regarding a development plan for an initial six-month period, later extended to 12 months. However, the plaintiff's proposals were unacceptable and incomplete, and after 30 months, the defendant decided to publicly advertise for other proposals.
        
        Held: Laffoy J., following Walford v Miles, held that a valid “lock-out” agreement existed, meaning the defendant was obligated to negotiate only with the plaintiff during the agreed period. However, this did not mean the defendant was required to negotiate until a final agreement was reached. Once the negotiation period expired, further discussions were non-binding.
        Laffoy J. did not rule on whether the defendant could have terminated negotiations early under justifiable circumstances (e.g., the plaintiff’s insolvency or clear failure of negotiations). However, the court found that the defendant had acted in good faith both in the negotiations and in the decision to re-advertise the development opportunity.
        
        One way to address incomplete agreements is to include a mechanism for resolving disputes, such as arbitration or valuation clauses.
        
        However, in May & Butcher v The King, the court ruled that an arbitration clause cannot fix a failure to agree on price when price was meant to be mutually determined by the parties.
        
        Section 8(1) of the Sale of Goods Act 1893 allows courts to impose a reasonable price in sale of goods cases, but only when the parties intended to reach an agreement.
        
        The Consumer Rights Bill 2022 takes a more interventionist approach for service contracts, implying a reasonable price if no price is agreed.
        
        Courts may imply terms to fill gaps in contracts, particularly where the parties’ intention can be inferred.
        
        Sudbrooke Trading Estate v Eggleton (1983) UK
        
        Facts: A lease gave the lessees an option to purchase the property at a price to be determined by valuers. The lessor refused to appoint a valuer.
        
        Held: The House of Lords held that the price could be determined by the court as a “fair price,” and the contract was enforceable.
- - - - Balfour v Balfour UK
        
        Facts: A husband promised his wife an allowance while he was working abroad. Later, the couple separated, and the wife sought to enforce the agreement
        
        Outcome: The court held that there was no intention to create legal relations, as the arrangement was domestic
        
        --> there is a rebuttable presumption against an intention to create legally enforceable agreement when the agreement is domestic in nature
        
        it is important to remember that this is merely a presumption, and may be rebutted if there is evidence to the contrary
        
        McCarron v McCarron Irish
        
        Facts: The plaintiff worked long hours for 16 years without pay, based on promises that he would be compensated.
        
        Findings: The Supreme Court granted specific performance, recognizing the promise as legally binding due to detrimental reliance.
        
        Merritt v Merritt UK
        
        Facts: Mr. and Mrs. Merritt had separated, and Mr. Merritt signed a written agreement promising to transfer the family home to Mrs. Merritt after she paid off the mortgage. Mrs. Merritt fulfilled her part, but Mr. Merritt later contested the agreement, claiming it lacked the intention to create legal relations as it was a domestic arrangement.
        
        Outcome: Mr. Merritt's appeal failed because the court held that when spouses are separated or in the process of separating, there is no presumption against an intention to create legal relations. The agreement between the Merritts was deemed sufficiently clear and enforceable, and Mrs. Merritt’s action of paying off the mortgage constituted adequate consideration. As a result, she was entitled to the matrimonial home in full
        
        Courtney v Courtney
        
        an agreement made between a husband and wife who had decided to solve their matrimonial differences by living apart was upheld as legally binding.
        
        where the parties have not been living together amicably, any agreement made between them falls outside Balfour v Balfour
      - when it comes to agreements between parent and child, there is also the presumption that there is not intention to create legal relations
        
        the degree of closeness within the family relationship may be extremely relevant
        
        e.g. parent and child, uncle and nephew
        
        also the extent to which the promisee has acted in reliance
        
        Jones v Padavatton [1969]
        
        Facts: This case involved a financial arrangement between a mother and daughter. The mother initially agreed to support her daughter financially if she pursued Bar studies in England. Later, the mother proposed buying a house for the daughter to live in and partially rent out instead of providing monthly payments. Disputes arose, and the mother sought possession of the house.
        
        Outcome: The court ruled the arrangement was a non-binding family agreement and did not create legal obligations, allowing the mother’s appeal for possession of the house
        
        Salmon L.J indicated that the test for determining the enforceability of a family arrangement was objective; would a reasonable person, when the court looks at this agreement and its surrounding circumstances, have intended to create a legally binding agreement?
        
        Hynes v Hynes
        
        Facts: A business transfer agreement between brothers.
        
        Findings: The court upheld the agreement, indicating that sibling agreements can be legally binding if objectively reasonable.
        
        Hardwick v Johnson [1978] 1 WLR 683
        
        Facts: Mrs. Hardwick purchased a house for her son and daughter-in-law, agreeing they would pay weekly toward the purchase price. After minimal payments, the couple stopped entirely, and later, Mr. Johnson left the Mrs. for another woman. Mrs. Hardwick sought possession of the house
        
        Outcome: The court ruled the arrangement was a joint contractual license rather than a tenancy. Informal family agreements like this often lack clear legal consequences, so courts assess the relationship's nature. Mrs. Hardwick could only revoke the license under justifiable circumstances, preserving Mrs. Johnson's right to remain
        
        Judge: “I cannot, for my part, think that anybody would impute to these parties an intention that if the marriage broke down as soon as it did and the husband went off with another woman the wife would be liable to be ejected from the home together with the child of the marriage.”
        
        Parker v Clark [1969] 1 All ER 93
        
        Facts: An elderly couple, the Clarks, invited their niece Mrs. Parker and her husband to move in with them, promising in writing to leave the house to Mrs. Parker and others after their death. The Parkers sold their own home and moved in but were later told to leave.
        
        Outcome: The court held that there was an intention to create legal relations due to the specificity of the agreement (the writing requirement under s 40(1) Law of Property Act 1925), showing that the presumption can be rebutted with clear evidence
        
        Rogers v Smith
        
        Facts: A mother promised her son that his financial support for her would be reimbursed after her death.
        
        Findings: The Supreme Court ruled the promise was not legally binding due to vagueness and lack of detrimental reliance.
        
        --> illustrates that when a family arrangement is made the terms agreed are often ambiguous
      - Leahy v Rawson
        
        O'Sullivan J said that the presumption against intention to create legally binding arrangements “appears to apply only to the closest family kinships such as parent and child and spouses. Where it applies there is only a presumption of fact which can be rebutted but the onus is on the claimant to rebut”.
      - Mackay v Jones
        
        Facts: A 14-year-old boy was promised inheritance of a farm if he moved in with his uncle and worked on the farm. Upon the uncle’s death, the farm was left to a third party.
        
        Findings: The court refused to recognize the promise as legally binding. It was characterized as an expectation rather than a binding agreement.
      - Shortall v White
        
        Facts: Addressed whether cohabiting partners are covered under Balfour v Balfour.
        
        Findings: The court held that the presumption against legal intent applies until the relationship breaks down.
      - Ashton v Pratt
        
        Facts: A billionaire promised financial support to his mistress in return for exclusivity.
        
        Findings: The court found no contractual intent, citing the vague nature of the promises and lack of documentation.
    - - exception: the parties may expressly state in their agreement that it is not to have any legal effect whatsoever
        Rose & Frank v Compton [1925] UK
        
        Facts: The parties entered a sole office agreement for selling paper goods in the USA, which included a clause stating it was an "honourable pledge" and not a formal legal contract. Despite this, after the plaintiff placed orders that the defendant initially accepted, the defendant terminated the agreement and failed to deliver the goods. the plaintiff sued for breach of contract, while the defendant argued there was no legal intent behind the agreement.
        
        Outcome: The House of Lords held that the agreement was not legally binding
        
        Judge:“This arrangement is not entered into, nor is this memorandum written, as a formal or legal agreement, and shall not be subject to legal jurisdiction in the Law Courts ... but it is only a definite expression and record of the purpose and intention of the three parties concerned, to which they each honourably pledge themselves"
      - Edwards v Skyways UK
        
        Facts: An employer promised an employee an ex gratia payment if made redundant, then tried to avoid the payment
        
        Outcome: The court held that even an "ex gratia" payment in a commercial context implies legal intent, setting a high bar for rebutting this presumption
        
        his employer could not adequately prove that they had not intended their promise to become a contractual term
        
        the onus of proving that a commercial agreement is not legally binding rests on the person who alleges that it has no legal effect
        
        this is a heavy burden to discharge
        
        Absence of Legal Intent in Commercial Agreements
        
        Cadbury Ireland Ltd v Kerry Co-operative Creameries Ltd Irish
        
        Facts: The defendant acquired a small creamery that had previously supplied milk to the plaintiff and allegedly agreed to continue supplying milk. However, the clause specifying this obligation was vague, and the parties negotiated separate contracts for supply after the agreement was signed.
        
        Finding: The court held the agreement was unenforceable, as the clause lacked specificity and was merely an expression of future intent rather than a binding contractual obligation.
        
        Cunard Steamship Co v Revenue Commissioners Irish
        
        a booking arrangement was denied the status of a contract because it was intended that a subsequent contract would be made.
        
        Discretionary Payments in Employment Contracts
        
        The legal issue concerns whether discretionary payments or severance packages in employment contracts create contractual entitlements
        
        Courts generally affirm legal intent, either through express terms or implied obligations.
        
        Employers cannot unilaterally alter terms without sufficient notice (Finnegan v JE Davy Irish).
        
        Labeling payments as "discretionary" does not automatically remove legal consequences, as courts apply objective criteria to determine intent, placing the burden on the employer to prove otherwise.
        
        Even clauses which seek to carve out for the employer a discretion to cap the bonus will be restrictively interpreted.
        
        Khatri v Cooperatieve Centrale UK
        
        Facts: An employee claimed entitlement to a discretionary bonus.
        
        Findings: The court held that even where an employee’s contract says that he is entitled to a bonus on a purely discretionary basis that does not mean the employer is entirely free to decide whether to pay a bonus or not. The employer must act in a rational and fair manner.
        
        Attrill v Dresdner Kleinwort Ltd UK
        
        Facts: Employees were promised bonuses, and many employees remained in employment on the strength of that promise, but the employer later sought to reduce them.
        
        Findings: The court held the promise was binding, and the employer could not unilaterally reduce payments.
        
        Equality and Human Rights Commission v Earle Irish
        
        Facts: Government funding cuts led to the withholding of bonuses.
        
        Findings: The court held that withholding bonuses was justified if not arbitrary or capricious.
      - additional considerations which may affect whether parties should be taken to have intended to create legal relations
        
        whether the agreement is very vague or informal
        
        may lack legal enforcability
        
        where the terms of a promise leave its performance entirely to the discretion of the promisor
        
        Taylor v Brewer
        
        Facts: a promise was made to pay individuals for assisting in the distribution of lottery tickets, but the exact terms of payment were not specified. The payment was to be given "as deemed appropriate" by the organizers, leaving the amount and conditions entirely at the discretion of one party
        
        Outcome: The court held that this arrangement was too vague and lacked certainty to be legally enforceable. Since the payment terms were left entirely to the discretion of one party, there was no binding contract. This case established that agreements lacking clear and definite terms, particularly where performance is at the promisor's discretion, cannot form a legally binding contract
        
        “... any service to be rendered by him should be taken into consideration, and such remuneration be made as should be deemed right”
        
        whether the promise was made in jest or in anger
        
        Licenses Insurance Corp v Lawson (1896) 12 TLR 501
        
        Facts: an insurance company's director made a statement promising a financial benefit if the company’s stock reached a certain level. However, the statement was made in a casual, informal setting and appeared to be more of an offhand remark than a formal promise.
        
        Outcome: The court found that the statement was made without serious intent to create a legally binding obligation, as it was more of a casual remark or jest. This case demonstrates that statements made without serious intent, such as in jest, do not constitute legally enforceable promises.
      - RTS Flexible Systems Ltd v Molkerei Alois Müller GmbH UK
        
        Facts: The parties entered into a letter of intent to allow negotiations for a more detailed agreement. The letter expired, but work on the project commenced without a finalised contract.
        The dispute arose over whether a binding contract existed despite the absence of a fully executed agreement.
        
        Held: Lord Clarke held that the existence of a binding contract depends on objective assessment of the parties' communications (words or conduct), not their subjective intentions. Even if some terms were not finalised, the court could still find a binding agreement if the parties intended to be legally bound.
        
        --> The case reaffirmed that objective intent is key in determining contractual relationships, not the parties' subjective state of mind. Incomplete terms do not necessarily prevent a binding contract if the parties intended to be legally bound.
        
        Objective Test in Documentary Agreements
        
        The objective test is particularly important in written commercial agreements. The court interprets the document as a "reasonable addressee" would understand it.
        
        Irish courts have not yet considered the Belize Telecom line of authority, but it is likely to be influential.
      - Lottery or Gambling Arrangements
        
        Informal arrangements can be binding if there is an intention to share risks and rewards.
        
        Simpkins v Pays UK
        
        Facts: Three individuals (grandmother, granddaughter, and a boarder) regularly entered competitions together. One entry won £750, but the boarder was excluded from the winnings.
        
        Findings: The court held that the arrangement was a syndicate with shared risks and profits, creating a binding contract.
        
        Horan v O´Reilly and Ors Irish
        
        Facts: A lottery syndicate member claimed a share of winnings despite not contributing regularly.
        
        Findings: The Supreme Court held that the original contract required weekly contributions, and the member was no longer part of the syndicate when the winning ticket was purchased.
        
        Wash v Walsh Irish
        
        Facts: A dispute over a lottery ticket investment joint venture.
        
        Findings: The court addressed issues of title, constructive trusts, and unjust enrichment.
- - - - Munster & Leinster Bank v Croker
        
        Black J. upheld the view that estoppel cannot operate on statements of intention.
      - Equitable Intervention
        
        In Jorden v Money, the promisee relied on the promisor's statement that she would not recover a debt, leading him to take on family commitments. The promisee sought a declaration that the debt was irrecoverable but failed because estoppel only applies to statements of fact, not law. Lord St. Leonards dissented, arguing that equity should intervene in such cases, but his view was not adopted by the majority.
        
        Exclusionary Estoppel
        
        when this traditional approach is applied
        
        prevents the promisor from introducing facts that contradict their earlier representation.
        
        Estoppel can be used as a defense or in an ancillary way if the representee has an independent cause of action. However, it rarely creates a new cause of action, except in exceptional cases like tenancy by estoppel (e.g., Ramsden v Dyson).
        
        Estoppel in Litigation
        
        However, there are instances where an estoppel by representation has been used to overcome some formidable obstacles to a plaintiff’s success in litigation
        
        McNeill v Miller Irish
        
        Facts: The plaintiff left his car with the defendants for repair, relying on their representation that the car was insured. The car was destroyed by fire, and it turned out there was no insurance coverage.
        
        Held: The defendants were estopped from denying that the car was insured. Wright J. held that estoppel applied despite the absence of a contract to insure.
        
        Nevertheless, it is clear that the line of equitable authority commencing with Hughes v Metropolitan Railway Co threatens this limited view of the estoppel doctrine
        
        Facts: a landlord, Mr. Hughes, leased a property to the Metropolitan Railway Company. The lease required the Railway Company to complete repairs within six months of receiving notice. Hughes issued such a notice, but during this period, the parties entered negotiations for the potential sale of the property. This led the Railway Company to believe that the repair deadline might be suspended. When negotiations failed, Hughes sought to enforce the original deadline, claiming a breach of contract.
        
        Held: The court ruled that Hughes had implicitly led the Railway Company to believe the deadline was suspended, and enforcing it would be unfair.
        
        This principle challenges the traditional view of estoppel, suggesting that promises (not just statements of fact) may be enforceable if seriously meant and acted upon.
        
        The movement towards making a non-bargain promise enforceable began after the judgment in Central London Property Trust v High Trees House
        
        Facts: During World War II, the landlord agreed to reduce the rent for a block of flats due to wartime conditions. After the war, the landlord sought to recover the full rent.
        
        Held: Denning J. held that the landlord was estopped from going back on the promise to reduce the rent for the duration of the war, even though the promise was not supported by consideration. This case established the principle of promissory estoppel in English law.
        
        2 more items...
    - - Limitations on Promissory Estoppel
        
        i. Suspension of Legal Rights
        
        English courts have limited the High Trees case by ruling that promissory estoppel only suspends, rather than permanently extinguishes, legal rights.
        
        A party making a promise not to enforce a right can later withdraw that promise, provided they give reasonable notice.
        
        Ajayi v R.T. Briscoe
        
        This ensures that legal rights are not lost forever but are only temporarily set aside.
        
        Ajayi v. R.T. Briscoe (Nigeria) Ltd
        
        Facts: the appellant was allowed to defer hire-purchase payments due to mechanical issues with lorries. When the respondent later demanded payment, the appellant claimed promissory estoppel.
        
        Held: The court held that estoppel only applies if the promisee relies on the promise and alters their position. Since the appellant did not sufficiently change their position, the defense failed, and the respondent was entitled to resume its original rights with reasonable notice.
        
        Doran v. Thompson Ltd Irish
        
        Facts: the plaintiff was injured at work and engaged in discussions with the defendant’s insurer but did not file a claim within the legal time limit (Statute of Limitations).
        
        Held: The court ruled that for estoppel to apply, there must be a clear promise or conduct leading the plaintiff to believe liability would be admitted. Since no such assurance was given, the claim was statute-barred.
        
        The suspensory nature of promissory estoppel has been reiterated by the Court of Appeal in Tyrell v Wright
        
        Facts: The plaintiff sought possession of property, but the defendant argued that assurances had been given allowing him to seek planning permission and develop the property.
        
        Held: The Court of Appeal held that no clear and unambiguous promise had been made (*Doran test), and promissory estoppel did not apply. The court reiterated that promissory estoppel is temporary.
        
        Sometimes, however, the estoppel may have permanent effect
        Healy v Ulster Bank
        
        Faherty J. held that representations made by a Bank to a debtor which induced the debtor into a course of detrimental inaction was, from the debtor’s view, irreversible.
        
        the suspension of legal rights was the usual judicial response, but a permanent estoppel may be merited on the facts of a given case
        
        ii. Pre-existing Legal Relationship
        
        Estoppel generally requires a pre-existing legal relationship between the parties
        
        Combe v Combe (1951) UK
        
        Facts: a husband promised to pay his ex-wife £100 per year, but he never did. The wife sued, claiming promissory estoppel because she didn’t apply for court-ordered maintenance, relying on his promise.
        
        Held: The court ruled against her, stating that promissory estoppel can only be used as a defense ("a shield"), not as a way to start a lawsuit ("a sword"). Since the wife didn’t provide consideration (she didn’t give up her legal right at the husband's request), the promise was not legally enforceable.
        
        Good example of classical promissory estoppel situation
        Odyssey Pavillion LLP v Marcus Ward Ltd NI
        
        Facts: Sheridan, the driving force behind the Odyssey Millennium project in Belfast, leased units in 1999, including one to Marcus Ward Ltd, a company within the Sheridan Group. The lease contained standard rental provisions, but Curistan, who controlled both the landlord and tenant companies, implemented a policy that rent would not be charged or collected from Marcus Ward Ltd until the company was acquired by a third party. In 2009, amid financial difficulties, Sheridan assigned all rental arrears, including those from Marcus Ward Ltd, to another party.
        
        Held: Girvan L.J. held that although Curistan’s internal reasoning could not alter Sheridan’s contractual rights, there was a clear promise or representation that rent would not be collected. He rejected the argument that such a promise required the same level of certainty as a contractual obligation supported by consideration. Instead, the focus was on Sheridan’s conduct and its effect on Marcus Ward Ltd. The court reaffirmed that promissory estoppel requires an existing legal relationship at the time of the promise. As Marcus Ward Ltd had significantly relied on this representation in its business operations, the court found the estoppel binding. Since the representation was made in 2000 and reinforced by Sheridan’s actions, it could only be withdrawn when the third-party acquisition occurred. Therefore, neither Sheridan nor its assignee could claim the rental arrears.
        
        iii. Detrimental Reliance
        
        Some courts require the promisee to show that they acted to their detriment in reliance on the promise
        
        Not considered by the UK SC for example
        
        Lord Denning rejected this as an essential requirement, e.g. Brikom Investments Ltd v Carr
        
        However, there are cases in which the courts have emphasised that if promissory estoppel is to apply there must be evidence that the promise has caused the person pleading estoppel to act in a certain way
        The Scaptrade
        
        Facts: the vessel was time chartered under the Shelltime 3 form. When the charterers failed to pay hire due on a Sunday, the owners waited until the following Thursday before withdrawing the vessel. The charterers argued that the four-day delay amounted to a waiver, that previous acceptance of late payments created an estoppel, and that withdrawal was a forfeiture warranting equitable relief.
        
        Held: The House of Lords held that there was no jurisdiction to grant relief from forfeiture in such commercial contracts, emphasizing the need for certainty and swift action in commercial transactions.
        
        Lowe v Lombank Ltd
        
        Diplock J. held that for an estoppel to apply the representation made must be intended to be acted upon and in fact acted upon by the representee to his detriment
        
        Murphy J adopted this as a correct statement of the law in Ireland in McCambridge v Winters
        
        North Down Hotels Ltd v Province-Wide Filling Stations Ltd Northern Ireland
        
        Facts: the tenant sought to exercise an invalid option clause by appointing a valuer and preparing for arbitration. The tenant argued that the landlord should be estopped from denying the validity of the option.
        
        Held: Carswell L.J. held that detriment is an essential requirement under Hughes v Metropolitan Railway. He found that the tenant had not suffered detriment because merely incurring expenditure did not amount to altering its position. The decision has been criticized as taking an artificial view of detriment, with an alternative interpretation being that the tenant’s reliance was insufficient to make it inequitable to allow the landlord to deny the representation.
        
        iv. No Independent Cause of Action
        
        Estoppel cannot create a new cause of action but can be used defensively or in an ancillary manner
        
        Combe v Combe
        
        Chartered Trust Ireland Ltd v Healy
        
        Facts: the plaintiff purchased a motor vehicle under a contract of sale that was later found to be void. The plaintiff sought damages, arguing that estoppel should prevent the defendant from denying the contract’s validity.
        
        Held: Barron J. applied the "shield and sword" metaphor, ruling that estoppel could not create a cause of action where none existed. Since the contract was void, estoppel could not be used to enforce it. However, the judgment acknowledged that estoppel could still be used defensively to defeat a claim or, in exceptional circumstances, in an ancillary manner where a plaintiff had been led to believe that a particular defense would not be asserted.
      - Clear and Unambiguous Statements
        
        Estoppel requires a clear and unambiguous statement of fact or intention. Vague statements cannot ground an estoppel
        
        Woodhouse Ltd v Nigerian Produce Ltd
        
        Facts: the buyer and seller agreed that payment for cocoa would be made in Nigerian pounds. At the buyer’s request, the seller accepted payment in pounds sterling instead. When the pound sterling was later devalued, the buyer attempted to pay at the old exchange rate, reducing the amount payable. The seller disputed this.
        
        Held: The House of Lords ruled that for promissory estoppel to apply, there must be a clear and unequivocal representation. Since the agreement was ambiguous regarding exchange rates, the buyer could not rely on estoppel to enforce payment at the old rate.
      - Promissory Estoppel in Different Jurisdictions
        
        US
        Clearest and most rational statement on the application of promissory estoppel to contemporary commercial conditions
        
        S. 90(1) of the US Restatement of Contracts (2nd)
        
        A promise that induces action or forbearance is binding if injustice can only be avoided by enforcing the promise. The remedy is flexible and based on the promisee's reliance loss rather than the benefit promised.
        
        Grouse v Group Health Plan, Inc USA (Minnesota)
        
        Facts: the plaintiff relied upon a promise of a job offer by giving notice to his employer and turning down another job offer. He was then injured when the offer was withdrawn following a reference given to the defendant.
        
        Held: The loss suffered, rather than the benefit anticipated, was the basis of assessment
        
        Australia
        
        Has followed the general approach adopted by the English judiciary
        
        In Reed v Sheehan and Legione v Hateley approval of the limited doctrine of promissory estoppel, enunciated in the Privy Council in Ajayi v R.T. Briscoe (Nigeria) Ltd was given by the Federal Court of Australia and the High Court of Australia respectively
        
        in Legione however, the members of the High Court of Australia refused to decide whether promissory estoppel should be limited to cases where there is a pre-existing legal relationship
        
        Waltons Stores (Interstate) v Maher
        
        Facts: The plaintiffs undertook construction work in reliance on the defendants’ implied promise to proceed with a lease. The defendants withdrew from the transaction after significant work had been completed.
        
        Held: The High Court of Australia held that promissory estoppel could create a cause of action, even in the absence of a pre-existing legal relationship. The defendants’ unconscionable conduct in allowing the plaintiffs to incur expenses justified the application of promissory estoppel.
        
        the court emphasized unconscionable conduct rather than detrimental reliance
        
        HC of Australia has abolished the distinction between proprietary and promissory estoppel
        
        Giumelli v Giumelli
        
        Facts: The case involved a promise to transfer property.
        
        Held: The High Court of Australia held that promissory estoppel could give rise to a cause of action, effectively blurring the distinction between promissory and proprietary estoppel.
      - Irish Law still remains rooted in the orthodox view of promissory estoppel
        
        The Barge Inn Ltd v Quinn Hospitality Ireland Operations 3 Ltd
        
        Finlay Geoghegan J. outlined six key ingredients for promissory estoppel in Irish law:
        
        a) the pre-existing legal relationship between the parties
        b) an unambiguous representation
        c) reliance by the promisee (and possible detriment)
        d) some element of unfairness and unconscionability
        e) that the estoppel is being used not as a cause of action, but as a defence; and
        f) that the remedy is a matter for the Court.
    - - Distinction from Promissory Estoppel
        
        Promissory Estoppel: Creates a personal right against the representor.
        
        Proprietary Estoppel: Creates rights in property, often enforced through a constructive trust.
        
        In the matter of JR Irish
        
        Costello J. maintained the distinction between the two, but acknowledged that the underlying principles of unconscionability are the same.
        
        Implications: The distinction affects the remedies available, with proprietary estoppel allowing for more substantial relief, such as the creation of property rights.
      - Gillett v Holt UK
        
        Facts: The plaintiffs relied on repeated assurances from the defendant that they would inherit the farm, dedicating their lives to working for him.
        
        Held: The Court of Appeal based its decision on
        
        Detrimental Reliance: The court emphasized that detriment need not be financial; it can include substantial personal sacrifices.
        
        Unconscionability: The court focused on whether it would be unconscionable for the defendant to go back on his promise.
        
        Significance: This case broadened the scope of proprietary estoppel, emphasizing unconscionability over strict financial detriment.
      - In Rural Ireland
        
        Proprietary estoppel cases in recent years have become increasingly frequent
        
        cases often involve
        
        returning emigrants
        
        youngest siblings who stay to care for aging parents
        
        family members who take over family farms
        
        romantic relationships where property rights are promised
        
        Key Principle: The court focuses on whether it is equitable to enforce the promise, even if there is no clear oral representation.
        
        Remedies: Courts aim to develop the minimum equity necessary to do justice, often balancing expectations against detriment.
      - HSBC Bank Ltd v Robinson & Robinson
        
        Key Issue: The role of unconscionability in proprietary estoppel.
        
        McBride J.'s View: The essence of equitable estoppel is to prevent unconscionable behavior.
        
        Lewison L.J. in Davies v Davies (as applied by McCloskey L.J. in Graham v Graham
        
        key principles for equitable estoppel
        
        Assurance of sufficient clarity.
        
        Reliance on the assurance.
        
        Detriment in consequence of reliance.
        
        Proportionality between the remedy and the detriment.