Category Archives: Contract

Addis v Gramophone Co Ltd [1909] UKHL 1

ON 26 JULY 1909, the House of Lords delivered Addis v Gramophone Co Ltd [1909] UKHL 1, [1909] AC 488.

http://www.bailii.org/uk/cases/UKHL/1909/1.html

The decision is notable for establishing the general principle that damages for breach of contract do not cover injured feelings, mental anxiety, distress, anguish or frustration.

In cases of wrongful or unfair dismissal, damages are limited to lost earnings during the period of notice and are not to compensate the manner of dismissal; loss of reputation; difficulty of finding other employment; or injured feelings, mental anxiety, distress, anguish or frustration.

Damages for breach of contract are compensatory and the court may not award exemplary damages.

Lawyers 1300 00 2088

Balmain New Ferry Co Ltd v Robertson [1906] HCA 83

ON 18 DECEMBER 1906, the High Court of Australia delivered Balmain New Ferry Co Ltd v Robertson [1906] HCA 83; (1906) 4 CLR 379 (18 December 1906).

http://www.austlii.edu.au/au/cases/cth/HCA/1906/83.html

A party who wishes to rely on a contractual term is required to show that it did all that was reasonable to bring term to the other party’s attention.

The plaintiff was not considered to have been falsely imprisoned by the ferry terminal’s turnstiles as he was considered to be free to leave the premises by water.

Lawyers

1300 00 2088

1894 | Sale of Goods Act

ON THIS DAY in 1894, the Parliament of the United Kingdom enacted the Sale of Goods Act 1893. New South Wales enacted its own Act in 1923.

Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1

ON 7 DECEMBER 1892, the England and Wales Court of Appeal delivered Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1; [1893] 1 QB 256.

Carbolic Smoke Ball Company was the manufacturer of the Carbolic Smoke Ball which they claimed could prevent “influenza, colds, or any disease caused by taking cold…”.

Carbolic promoted the product with the following advertisement:

“100 pounds reward will be paid by the Carbolic Smoke Ball Company to any person who contracts the increasing epidemic influenza, colds, or any disease caused by taking cold, after having used the ball three times daily for two weeks according to the printed directions supplied with each ball. 1,000 pounds is deposited with the Alliance Bank, Regent Street, showing our sincerity in the matter”.

On the strength of the advertisement, Carlill purchased the smoke ball, used it as directed but nevertheless caught the flue. She claimed the 100 pounds which Carlill refused to pay on the basis that there was no binding contract because the advertisement was a “mere puff” that meant nothing.

The Court of Appeal held that there was a binding contract.

Per Lindley LJ ((1893) 1 Q.B. 256, at p. 262): “…the person who makes the offer shows by his language and from the nature of the transaction that he does not expect and does not require notice of the acceptance, apart from notice of the performance.”

Lawyers

Sydney, Australia

1300 00 2088

Hadley v Baxendale [1854] EWHC Exch J70

ON 23 FEBRUARY 1854, the Court of Exchequer Chamber delivered Hadley v Baxendale [1854] EWHC Exch J70
(1854) 9 Ex Ch 341; 156 ER 145 (23 February 1854).

http://www.bailii.org/ew/cases/EWHC/Exch/1854/J70.html

The decision lays down the rule for assessing damages for breach of contract. There are two limbs: (1) losses which “may fairly and reasonably be considered either arising naturally, i.e., according to the usual course of things, from such breach of contract itself”; or (2) losses which “may reasonably be supposed to have been in the contemplation of the parties, at the time they made the contract, as the probable result of the breach of it”.

Per Alderson B:

“Now we think the proper rule is such as the present is this: Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it. Now, if the special circumstances under which the contract was actually made where communicated by the plaintiffs to the defendants, and thus known to both parties, the damages resulting from the breach of such a contract, which they would reasonably contemplate, would be the amount of injury which would ordinarily follow from a breach of contract under these special circumstances so known and communicated. But, on the other hand, if these special circumstances were wholly unknown to the party breaking the contract, he, at the most, could only be supposed to have had in his contemplation the amount of injury which would arise generally, and in the great multitude of cases not affected by any special circumstances, from such a breach of contract. For such loss would neither have flowed naturally from the breach of this contract in the great multitude of such cases occurring under ordinary circumstances, nor were the special circumstances, which, perhaps, would have made it a reasonable and natural consequence of such breach of contract, communicated to or known by the defendants. The Judge ought, therefore, to have told the jury, that, upon the fats then before them, they ought not to take the loss of profits into consideration at all in estimating the damages. There must therefore be a new trial in this case.”

Lawyers

Sydney, Australia

1300 00 2088

Statute of Frauds 1677

ON 16 APRIL 1677, the English Parliament enacted the Statute of Frauds 1677.

This Act required certain dealings with real property, sale of goods, estates, trusts and marriage be reduced to writing and signed in order to avoid fraud or perjury.

The provisions of the Act have since been incorporated into many pieces of legislation around the common law world.