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Significant Contract Law Cases

Pharmaceutical Society of Great Britain v Boots Cash Chemists (1953)

Confirmed that goods on display in a shop are invitations to treat, not offers.

Boots allowed customers to select medicines before payment. The court ruled the contract was formed at the checkout.

Chappell & Co Ltd v Nestle Co Ltd (1960)

Confirmed that consideration does not need to be adequate but must have some value.

Nestle offered records in exchange for chocolate wrappers, and the court ruled the wrappers counted as valid consideration.

Merritt v Merritt (1970)

Confirmed that agreements between spouses can be legally binding if they intend to create legal relations.

A husband promised to transfer a house to his wife, and the court upheld the agreement as legally binding.

British Steel Corporation v Cleveland Bridge & Engineering Co Ltd (1984)

Confirmed that work done in anticipation of a contract can give rise to quantum meruit (reasonable payment) claims.

A company manufactured steel before a formal contract was signed and was still entitled to payment.

LEstrange v F Graucob Ltd (1934)

Confirmed that signing a contract binds a party to its terms, even if they have not read them.

A buyer was held to an exclusion clause in a contract she had signed without reading.

Byrne v Van Tienhoven (1880)

A business or individual cannot revoke an offer once the acceptance has been sent.

A business changed its mind about a deal, but the court ruled that the contract was binding once the offer was accepted.

Jones v Padavatton (1969)

Family agreements are generally not enforceable unless clear intention to be legally bound exists.

A mother agreed to support her daughter if she studied law but later withdrew support. The court ruled no enforceable contract existed.

Hadley v Baxendale (1854)

Established that only foreseeable losses are recoverable as damages for breach of contract.

A mill sought damages for lost profits due to a late delivery, but the court ruled the losses were too remote.

Anglia Television Ltd v Reed (1972)

A party can claim reliance damages for wasted expenses caused by breach.

A TV production company claimed costs after an actor pulled out, and the court awarded expenses incurred before the contract was made.

Entores Ltd v Miles Far East Corporation (1955)

Acceptance of an offer via instantaneous communication (telex) occurs when received, not when sent.

A contract was formed when a telex acceptance was received in London, not when sent from the Netherlands.

Balfour v Balfour (1919)

Domestic agreements are presumed not to create legal obligations.

A husband's promise to pay his wife maintenance was ruled to be a social agreement, not a contract.

Esso Petroleum Co Ltd v Mardon (1976)

Misrepresentation in business dealings can lead to damages, even if the contract is upheld.

A sole trader entered a petrol station agreement based on false sales forecasts. The court awarded damages for misrepresentation.

Shogun Finance Ltd v Hudson (2003)

Businesses must verify the identity of contractual parties to avoid fraud.

A fraudster bought a car using stolen identity documents, and the trader was unable to recover the vehicle.

Thornton v Shoe Lane Parking (1971)

Unusual contract terms must be brought to the customers attention before the contract is formed.

A parking ticket contained an exclusion clause, but the court ruled it was invalid because it was only seen after payment.

Thomas v Thomas (1842)

Confirmed that even nominal consideration (a small or symbolic amount) is sufficient to create a contract.

A widow was promised a house for £1 a year, and the court upheld the agreement.

Parker v Clark (1960)

Confirmed that some family agreements can be legally binding when they involve financial or housing arrangements.

An elderly couple promised part of their home to relatives in exchange for care, and the court upheld the contract.

Victoria Laundry Ltd v Newman Industries Ltd (1949)

Confirmed that a business can only recover lost profits if they were foreseeable at the time of contracting.

A delayed boiler delivery resulted in lost contracts, but the court limited the damages to foreseeable losses.

Co-operative Insurance Society Ltd v Argyll Stores (1997)

Confirmed that courts are reluctant to grant specific performance for contracts requiring ongoing supervision.

A supermarket was ordered to stay open but appealed successfully, as enforcing such an order was impractical.

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