Casebook on Contract Law

If you’re serious about exam success,

it’s time to Concentrate!

This high quality revision and study guide with clear, succinct coverage of all the key

topics will help you to quickly grasp the fundamental principles of contract law and feel

confident for the exam.

Contract Law Concentrate, Jill Poole

Concentrate

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Key cases and legal principles are clearly

presented for easy reference

❯ Key Facts lists help you remember the essential

points of a topic

❯

Sample questions with outline answers provide

guidance on how to structure a good answer

❯ Looking for extra marks? tips give you advice on

how to impress examiners

❯ Practical examples relate

contract law to

real life

❯ A glossary of

key terms

provides

useful

definitions

Concentrate

Each guide in the series

shows you what to expect in your

exam, what examiners are looking

for, and how to achieve

extra marks.

• Written by experts

• Developed with students

• Designed for success

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Additional online resources accompany Contract Law Concentrate so you can:

• check your knowledge of key cases with interactive flashcards;

• test your understanding of terms and concepts with the interactive glossary; and

• understand your marks with guidance on answering essay and problem questions.

Poole_advert.indd 1 10/02/2016 15:56

Casebook on

Contract Law

13th edition

Jill Poole

LLB, LLM, FHEA, FRSA, FCI Arb, Barrister

50th Anniversary Professor of Commercial Law and Head of Aston Law

Deputy Dean, Aston Business School,

Aston University

Great Clarendon Street, Oxford, OX2 6DP,

United Kingdom

Oxford University Press is a department of the University of Oxford.

It furthers the University’s objective of excellence in research, scholarship,

and education by publishing worldwide. Oxford is a registered trade mark of

Oxford University Press in the UK and in certain other countries

© Jill Poole 2016

The moral rights of the author have been asserted

Tenth edition 2010

Eleventh edition 2012

Twelfth edition 2014

Impression: 1

All rights reserved. No part of this publication may be reproduced, stored in

a retrieval system, or transmitted, in any form or by any means, without the

prior permission in writing of Oxford University Press, or as expressly permitted

by law, by licence or under terms agreed with the appropriate reprographics

rights organization. Enquiries concerning reproduction outside the scope of the

above should be sent to the Rights Department, Oxford University Press, at the

address above

You must not circulate this work in any other form

and you must impose this same condition on any acquirer

Public sector information reproduced under Open Government Licence v3.0

(http://www.nationalarchives.gov.uk/doc/open-government-licence/open-government-licence.htm)

Published in the United States of America by Oxford University Press

198 Madison Avenue, New York, NY 10016, United States of America

British Library Cataloguing in Publication Data

Data available

Library of Congress Control Number: 2016936821

ISBN 978–0–19–873281–5

Printed in Italy by

L.E.G.O. S.p.A.

Links to third party websites are provided by Oxford in good faith and

for information only. Oxford disclaims any responsibility for the materials

contained in any third party website referenced in this work.

In special memory of Professor Jill Poole, who tragically passed away prior to

the publication of this Casebook.

Jill was a loving mother, devoted daughter and sister, inspiring teacher, mentor,

champion, and friend to many throughout legal education and the legal profession.

She was dedicated to helping people to learn by sharing her knowledge and

love of the law and gave so much to her students and readers.

She will be sorely missed but forever in our hearts.

Case extracts

Extracts from case reports and legislation are

highlighted for easy identification.

Case summaries

Brief synopses of cases and the ratio decidendi

(reasons upon which a case is decided) are pro￾vided, so you can easily pick out the salient facts

and details in order to contextualize the extracts.

Notes

Extracts are followed by notes explaining the

key points of the extracts in more detail. They

might highlight the significance of the judgment

or particular points made, explain how the deci￾sion relates to earlier case law, or provide details

of further reading and academic analysis of the

point of law under consideration.

Questions

Many extracts are followed by questions con￾cerning the impact and significance of the deci￾sions. Taking some time to consider the questions

will help you to develop a fuller understanding of

the specific issues, as well as the wider context in

which each decision was made.

Guide to using the book

Casebook on Contract Law includes a range of features to help you to establish a well-rounded

appreciation of the subject. The progression of case law through each chapter provides a logical

account of the development of the legal principles. You will be able to see for yourself the reasoning

behind the legal principles rather than simply accepting them as a given end result.

This guide shows you how to utilize your casebook fully to get the most out of your studies.

Guide to using the Online Resource Centre

Casebook on Contract Law is accompanied by an

Online Resource Centre providing students with

ready-to-use learning resources:

www.oxfordtextbooks.co.uk/orc/poole/

Updates

This valuable resource allows you to access

changes and developments in the law that have

occurred since publication of the book. They

allow you to keep up to date, while continuing to

benefit from insightful analysis.

Guidance on how to read cases

This resource supports the advice given in

Chapter 1 (‘Guidance on reading cases’), and is

designed to give you confidence in reading and

understanding case reports and to help you to

study more effectively.

Exercises on reading cases

These exercises allow you to apply the advice

given on how to read cases, and practise this

important skill in preparation for your contract

law study and assessments.

Guidance on answering questions

This advice on how to answer problem questions

will stand you in good stead when you start your

contract law course. It covers fundamental issues

such as the organization of answers, the use of

facts, and making statements about the law.

Self-test questions and answers

You can download a series of questions on each

topic to test your knowledge and understanding,

and then you can download the sample answers

for reference.

Guide to using the Online Resource Centre

viii

Outline contents

Preface  xvii

Acknowledgements  xxii

Table of cases  xxiii

Table of statutes  xlii

Table of statutory instruments  xlvii

1 Guidance on reading cases  1

2 Agreement  17

3 Agreement problems  64

4 Enforceability of promises: Consideration and promissory estoppel  125

5 Intention to be legally bound and capacity to contract  177

6 Content of the contract and principles of interpretation  200

7 Exemption clauses and unfair contract terms  272

8 Breach of contract  329

9 Damages for breach of contract  380

10 Remedies providing for specific relief and restitutionary remedies  473

11 Privity of contract and third party rights  499

12 Discharge by frustration: Subsequent impossibility  551

13 Common mistake: Initial impossibility  580

14 Misrepresentation  611

15 Duress, undue influence, and unconscionability  678

16 Illegality  737

Index  781

Detailed contents

Preface  xvii

Acknowledgements  xxii

Table of cases  xxiii

Table of statutes  xlii

Table of statutory instruments  xlvii

1 Guidance on reading cases  1

SECTION 1 A guiding principle  1

SECTION 2 Useful notes  1

SECTION 3 The basics of reading a case  1

A) Decide which case(s) to read  1

B) Use the citation to find the report of the case  2

C) Note the full case name and court  2

D) Consider the presentation of case reports  2

SECTION 4 Reading a case in practice  4

A) Catchwords  4

B) Facts  4

C) Decision  4

D) Note the facts  5

E) Decision at first instance  5

F) Decision of the Court of Appeal  5

G) Judgments  6

H) Notes on the decision and the judgments  12

I) General notes on the legal principles in the case  13

SECTION 5 Exercise  15

2 Agreement  17

SECTION 1 Subjectivity versus objectivity  17

A) Objectivity prevails  17

B) Subjectivity has some relevance  17

SECTION 2 The criteria to determine agreement  18

SECTION 3 Offer distinguished from invitation to treat  21

A) Advertisements  22

B) Display of goods  23

C) Tenders  26

D) Auction sales  30

Detailed contents

xi

SECTION 4 Acceptance  33

A) The mirror image rule  33

B) Offeror prescribes the method of acceptance  39

C) Acceptance must be made in response to the offer  40

D) Communication of the acceptance to the offeror  42

SECTION 5 Revocation of an offer  55

A) Communication of the revocation  55

B) Revocation of a unilateral offer  58

C) Communication of revocation of unilateral offers  63

3 Agreement problems  64

SECTION 1 Certainty  64

A) Vagueness  64

B) Severing a meaningless clause  67

C) Incompleteness  68

D) Conclusion of ‘no contract’ and payment for performance  77

SECTION 2 Agreement mistakes  83

A) Mutual mistake  84

B) Unilateral mistake  86

C) Unilateral mistake as to identity  90

SECTION 3 Document mistakes  110

A) Rectification  110

B) The plea of non est factum 122

4 Enforceability of promises: Consideration and promissory estoppel  125

SECTION 1 Consideration  125

A) What is consideration?  125

B) Consideration distinguished from a condition imposed on recipients of gifts  125

C) Consideration must be sufficient, but need not be adequate  127

D) Part payment of a debt  147

SECTION 2 Promissory estoppel  154

A) Origins of the doctrine  155

B) When will the doctrine operate and in what way?  157

C) How far can the doctrine be extended?  169

5 Intention to be legally bound and capacity to contract  177

SECTION 1 Intention to be legally bound  177

A) Domestic and social agreements  177

B) Commercial agreements  181

C) A different approach?  191

SECTION 2 Capacity to contract: Minors’ contracts  196

A) Contracts for necessaries  196

B) Beneficial contracts of service  197

C) Contracts involving continuing obligations and the ability to repudiate

during minority  198

D) Restitution by the minor  199

Detailed contents

xii

6 Content of the contract and principles of interpretation  200

SECTION 1 Pre-contractual statements: Terms or mere representations?  200

A) Accepting responsibility or advising on verification  200

B) Importance attached test  202

C) Special knowledge of the statement maker  203

SECTION 2 Written contracts  208

A) The parol evidence rule  209

B) The effect of signature  214

SECTION 3 Oral contracts: Incorporation of written terms  218

A) Reasonable notice  218

B) Course of dealing  229

C) Common understanding of the parties  231

SECTION 4 Implied terms  233

A) Terms implied at common law by the courts  233

B) Terms implied by statute: B2B (business to business contracts) which are outside

the CRA 2015  254

C) Terms implied by statute: B2C (trader and consumer) contracts within the CRA 2015  256

SECTION 5 Interpretation  257

A) West Bromwich: Contextual interpretation in accordance with principles

of commercial common sense  258

B) Linguistic mistakes and language having more than one potential meaning  260

C) The primacy of the natural meaning of the words used: Arnold v Britton 263

D) Admissibility of pre-contractual negotiations  265

7 Exemption clauses and unfair contract terms  272

SECTION 1 The general approach to exemption clauses  272

SECTION 2 Requirements that must be satisfied before an exemption

clause can be relied upon  273

SECTION 3 Construction: On its natural and ordinary meaning,

the clause covered what happened  273

A) Contra proferentem 274

B) Liability for negligence  275

C) Limitation clauses  281

D) Inconsistent terms  282

E) Fundamental breach  283

SECTION 4 Clause in a B2B contract must not be rendered unenforceable

by the Unfair Contract Terms Act 1977  288

A) Scope of UCTA 1977  288

B) Basic scheme of UCTA 1977  296

C) Negligence liability (s. 2)  296

D) Contractual liability  297

E) The reasonableness requirement  300

SECTION 5 Clause in a B2C contract must not be rendered unenforceable

by Part 2 of the Consumer Rights Act 2015  314

A) Background to, and the general scope of, the Act  314

B) When does the Act apply?  314

Detailed contents

xiii

C) The assessment for fairness and terms and notices which are excluded

from that assessment  316

D) Case law explaining the operation of the Unfair Terms in Consumer

Contracts Regulations  319

8 Breach of contract  329

SECTION 1 Absolute and qualified contractual obligations  329

SECTION 2 Consequences of breach  330

A) Termination for repudiatory breach  331

B) The meaning of ‘termination’  333

C) Affirmation  334

SECTION 3 Identifying repudiatory breach and the classification of terms  336

A) Is the term a condition?  337

B) More flexibility at a price: Innominate or intermediate terms  345

C) The timing of the test for repudiatory breach and the multi-factorial assessment  352

SECTION 4 Entire obligations  354

A) Avoiding the ‘entire obligation rule’  355

SECTION 5 Anticipatory breach  359

A) What will constitute renunciation?  359

B) The election  361

C) Affirmation  362

D) Termination  378

9 Damages for breach of contract  380

SECTION 1 The aim of contractual damages  380

SECTION 2 Expectation loss  381

A) Measurement: Difference in value  381

B) Measurement: Cost of cure  382

SECTION 3 Wasted expenditure  388

A) Where expectation of profit is too speculative  389

B) Limitation on recovery of wasted expenditure damages  391

C) Burden of proof in wasted expenditure claims  397

SECTION 4 Time for assessment of loss and recovery for actual loss  400

SECTION 5 Causation and contributory negligence  412

A) Causation  412

B) Contributory negligence  413

SECTION 6 Remoteness of damage  416

A) Normal and abnormal loss  417

B) A new approach to remoteness in contract?  426

SECTION 7 Mitigation  434

A) Reasonable steps  435

B) What if the reasonable steps increase the loss?  436

C) Avoided loss and accounting for benefits  436

Detailed contents

xiv

SECTION 8 Non-pecuniary loss  437

A) Damages for disappointment and distress  437

B) Damages for loss of reputation  453

SECTION 9 Agreed damages clauses  456

A) Liquidated damages and penalty clauses  456

10 Remedies providing for specific relief and restitutionary remedies  473

SECTION 1 Claiming an agreed sum  473

SECTION 2 Specific performance and injunctions  473

A) If damages are an adequate remedy, specific performance is not available  474

B) Supervision  474

C) Contracts for personal services  478

SECTION 3 Restitutionary remedies  480

A) Enrichment by subtraction  480

B) The account of profits and Wrotham Park damages  482

11 Privity of contract and third party rights  499

SECTION 1 Origins of the privity doctrine and its relationship with consideration  499

SECTION 2 Reform of the privity doctrine and the Contracts (Rights of Third Parties)

Act 1999  501

A) Case law interpretation of the Contracts (Rights of Third Parties) Act 1999,

s. 1(1)(b) and (2)  503

B) Section 1(3)  508

SECTION 3 Agency  509

A) Can a third party rely on the protection of an exemption clause?  510

B) The technicalities  512

SECTION 4 The collateral contract  517

SECTION 5 Trusts of contractual obligations  518

SECTION 6 Action by the contracting party as a means of avoiding privity  519

A) Specific performance  520

B) Promisee’s action for damages  522

SECTION 7 Privity and burdens  544

A) Exemption clauses and bailment  544

B) Restrictions on the use of chattels  547

12 Discharge by frustration: Subsequent impossibility  551

SECTION 1 The frustration doctrine: Discharge for subsequent impossibility  551

SECTION 2 The contractual allocation of risk  551

A) Assuming the risk  551

B) Event occurs as a result of the fault of one of the parties  551

SECTION 3 The theoretical basis for the doctrine of frustration  555

A) The implied term theory  555

B) The construction theory and events foreseen  556