Contract Cases

At a no-reserve auction, a collateral contract obliges the auctioneer to sell to the highest bona fide bidder; withdrawing a lot because the bid is too low breaches that contract and entitles the bidder to damages.

A company's promise to repay tax arrears by instalments failed as good consideration — the Court of Appeal held Williams v Roffey cannot extend to money obligations, leaving Foakes v Beer intact.

A carpenter's promise to complete existing work can constitute valid consideration where the other party gains a practical benefit — such as avoiding delay penalties — from the renegotiation.

A council's failure to consider a timely tender, due to its own staff's error, breached an implied contractual obligation arising from a selective, structured invitation to tender.

A referential bid in a sealed tender process is invalid — vendors who bind themselves to accept the highest offer create a unilateral contract requiring a fixed, self-contained sum.

Prolonged mutual silence and inactivity over five years cannot amount to acceptance of an implied offer to abandon arbitration proceedings or found a promissory estoppel.

Where acceptance is communicated by telex or other instantaneous means, the contract is formed when and where the acceptance is received by the offeror — not where it was sent.

A seller's return of a buyer's tear-off acknowledgment slip constituted acceptance of the buyer's counter-offer, meaning no price variation clause applied — establishing the 'last shot' rule in battle of forms disputes.

A payment of £1 is legally sufficient consideration to render an option to purchase land a binding, irrevocable offer. On exercise, specific performance lies for the contract of sale — not the option — making the adequacy of the option consideration irrelevant.

A telex withdrawal notice is received when it arrives at the recipient's premises during business hours, regardless of whether it is read. Payment by telex transfer is only complete when the bank debits and credits the relevant accounts.

Where an option clause requires 'notice in writing to' the defendant, merely posting a letter is insufficient — actual communication is needed, displacing the postal rule.

A seller who accepts a non-conforming letter of credit expressed in a different currency without objection, and draws upon it for successive shipments, waives the contractual right to insist on the original currency — or agrees a binding variation of the contract.

A written agreement between separated spouses to transfer the matrimonial home was held to be a binding contract, as the presumption against legal intent does not apply where parties are no longer living in amity.

A classified advertisement in a periodical is an invitation to treat, not an offer for sale — so placing an ad cannot constitute the criminal offence of 'offering for sale' under statute.

A creditor who accepts a lesser sum under financial duress is not bound by that agreement. Promissory estoppel cannot be invoked by a party who acted inequitably to extract the settlement.

A hire-purchaser who failed to prove any alteration of position in reliance on the owner's promise could not invoke promissory estoppel as a defence to outstanding instalments.

A promise to pay an 'ex gratia' sum in a commercial redundancy agreement was held legally binding — the phrase merely disclaimed prior liability, not future enforceability.

Displaying a flick knife in a shop window with a price ticket is an invitation to treat, not an offer for sale — so no criminal offence was committed under the Restriction of Offensive Weapons Act 1959.

Chocolate wrappers thrown away upon receipt were still held to form part of the consideration for a record sale — consideration need not be adequate, only legally sufficient.

A written promise to bequeath property if relatives sold their home and moved in was held legally binding — the couple's irreversible detrimental reliance rebutted the domestic presumption against legal intent.

A contract formed by telex is concluded at the place and time the offeror receives the acceptance — not when the offeree sends it. The postal rule does not apply to instantaneous communications.

A lodger and her landlady jointly entered a newspaper fashion competition for eight weeks. When their entry won £750, the court held the arrangement was a legally binding contract despite its domestic setting.

A voluntary suspension of compensation payments under a patent licence did not permanently extinguish the right to resume them — reasonable notice, given by counterclaim, was sufficient to revive strict legal rights.

Displaying goods on shelves in a self-service shop is an invitation to treat, not an offer. The contract is formed at the cash desk when the cashier accepts the customer's offer to buy.

A father's promise to convey a house upon full mortgage repayment created an irrevocable contractual licence, protecting the daughter-in-law's right to remain in possession as long as she continued making payments.

Promissory estoppel cannot substitute for consideration or create a new cause of action — it operates as a shield to prevent enforcement of strict legal rights, not as a sword to found a claim.

A wartime rent reduction promise was held binding by estoppel, establishing that a clear promise not to enforce legal rights suspends — but does not extinguish — those rights while the underlying conditions persist.

Where a party agreed to pay a balance on 'hire-purchase terms over 2 years' without specifying the precise conditions, the House of Lords held no binding contract existed due to the uncertainty of the terms.

A timber purchase option clause was held enforceable despite apparent vagueness — courts must construe commercial contracts fairly and broadly, giving effect to the parties' intentions through trade usage and implication.

Performing the act specified in a unilateral offer does not constitute acceptance unless the offeree acts in knowledge of, and in reliance upon, the offer.

When police provide services exceeding what they consider necessary to fulfil their public duty, that additional performance constitutes valid consideration for a private promise of payment.

An honourable pledge clause expressly excluding legal jurisdiction prevents a commercial arrangement from being a binding contract, yet individual accepted orders within that arrangement can still form separate enforceable contracts.

A husband's promise to pay his wife £30 monthly maintenance was held unenforceable — spouses living in amity are presumed to lack the intention to create legal relations.

A school board's internal resolution to appoint a headmaster was communicated by an unauthorised board member, not the board itself — no binding contract was formed.

A newspaper advertisement promising £100 to anyone who contracted influenza after using a smoke ball as directed was held to be a binding unilateral offer, not a mere puff.

Past consideration is valid where the prior act was performed at the promisor's express request and remuneration was always contemplated. The letter operated as an immediate equitable assignment of a one-third patent share.

Forbearance from exercising a legal right — such as refraining from drinking and gambling — constitutes valid consideration for a promise, regardless of whether the promisor actually receives any benefit.

Paying a sum already owed under a judgment cannot constitute good consideration for a creditor's promise to forgo interest, confirming the rule in Pinnel's Case.

A revocation of an offer posted before acceptance was communicated takes no legal effect until actually received by the offeree — the postal rule applies to acceptances only, not revocations.

A telegram asking whether different delivery terms might be available is a mere inquiry, not a counter-offer, leaving the original offer open for acceptance until revocation is actually communicated.

A letter of allotment was posted but never received by the defendant. The Court of Appeal held that acceptance is complete upon posting, binding both parties even if the letter is lost in the post.

A binding contract can be formed through the conduct of the parties, even without formal written acceptance — ordering and paying for goods at a draft contract price constitutes acceptance of a counter-offer.

Where a lessor enters into negotiations after serving a notice to repair, those negotiations suspend the notice period — equity will relieve against a forfeiture brought before the suspended period has properly run.

An offer to sell property can be revoked before acceptance without formal notice — knowledge of the offeror's inconsistent act through a reliable third party is sufficient to constitute revocation.

A pre-existing debt owed to a bank constitutes sufficient consideration, and the court established the foundational definition that consideration may be a benefit to one party or a detriment suffered by the other.

A public reward offer may be validly revoked through the same official channel in which it was made, and a claimant who acts after revocation has no rights under the offer — even if unaware of the withdrawal.

A seller's passive silence about a buyer's mistaken belief does not entitle the buyer to avoid the contract — caveat emptor applies where no warranty was given and no fraud was committed.

Silence cannot amount to acceptance of an offer — an offeror has no right to unilaterally impose silence as a binding mode of acceptance upon the offeree.

Performing an obligation already owed to a third party under a prior contract can constitute valid consideration for a separate promise made by a different party who benefits from that performance.

When a ship's crew was reduced from 36 to 19 hands, rendering the voyage dangerous, the remaining seamen were discharged from their original contract and could validly agree to extra wages as fresh consideration.

A son's promise to stop complaining about his father's distribution of property was held not to constitute valid consideration, as he had no legal right to complain in the first place.

A warranty given after a horse sale was unenforceable because the completed purchase could not provide valid consideration for a new promise made after the fact.

A counter-offer operates as a rejection of the original offer, extinguishing it entirely — the offeree cannot later revert to accepting the original terms once a counter-offer has been made.

Fulfilling the conditions of a public reward offer entitles the claimant to payment, even where their motive for performance was not to obtain the reward — only knowledge of the offer is required.

Attending court under a subpoena is a duty imposed by law, meaning compliance cannot constitute valid consideration for a promise to pay compensation for loss of time.

An offeror who grants a fixed period for acceptance may still revoke the offer at any time before acceptance occurs — granting time alone does not bind the offeror without consideration.

A wool dealer misdirected his offer letter, causing delay. The court held that posting an acceptance completes a contract immediately — the foundation of the postal rule.

Performing duties already owed under an existing contract cannot constitute valid consideration for a promise of extra pay — the captain's promise of additional wages to remaining crew after desertion was unenforceable.

An act performed at the promisor's express prior request can constitute valid consideration, even if the promise to pay comes later — past consideration is not bare where a prior request exists.

Payment of a lesser sum on the due date cannot in law satisfy a greater debt — but early payment, payment at a different place, or a non-monetary gift may constitute valid satisfaction.