elements law

8/2/2019 Elements Law

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LLB Recent developments 2009

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Recent developments 2009

2650040 Elements of the law of contract

Current edition of the subject guide

The current edition of the subject guide is the 2004 edition.

The following developments should be noted

Chapter 1 Introduction and general principles

A number of new editions have appeared:

Brown, I. and A. Chandler Q&A Law of Contract 2009 and 2010.

(Oxford: Oxford University Press, 2009) seventh edition

[ISBN 0199559554].

Furmston, M.P. Cheshire, Fifoot and Furmstons Law of Contract.

(Oxford: Oxford University Press, 2007) fifteenth edition

[ISBN 0199287562].

McKendrick, E. Contract Law. (Basingstoke: Palgrave Macmillan,

2007) seventh edition [ISBN 0230018831].

McKendrick, E. Contract Law: Text, Cases and Materials.

(Oxford:Oxford University Press, 2008) third edition

[ISBN 0199208018].

McVea, H. and P. CumperExam Skills for Law Students.

(Oxford: Oxford University Press, 2006) second edition

[ISBN 0199283095].

Poole, J. Casebook on Contract Law. (Oxford: Oxford University

Press, 2008) ninth edition [ISBN 0199233527].

Note that Pooles Casebook on Contract Law (ninth edition) has a

useful companion web site, which provides news of recent

developments in the law of contract:

www.oup.com/uk/booksitesStone, R. The Modern Law of Contract. (London: Cavendish, 2007)

seventh edition [ISBN 041542528X].

Treitel, G.H. and E. Peel. The Law of Contract. (London: Sweet &

Maxwell, 2007) twelth edition [ISBN 042194840X].

Candidates may also find the following book useful:

McBride, N.J.Letters to a Law Student: A guide to studying law

at university. (Harlow: Pearson Longman, 2007)

[ISBN 9780582894259].


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Chapter 1 Introduction and general principles

Students will be aware that a monthlyElements of the law of

contract newsletter appears on the VLE. The newsletters cover topical

interests and many recent developments in legislation and the law are

discussed in them. An archive of past newsletters is also available on

the VLE. Many of the cases mentioned below are discussed in these

newsletters.

Chapter 2 Offer and acceptance

In:

Allianz Insurance Co-Egypt vAigaion Insurance Co SA [2008] EWCACiv 1455 andLeaflet Company Ltd vSecured Orchard Investments

Ltd [2008] EWCA Civ 1295

the Court of Appeal considered the process by which contracts had

been formed by exchanges of e-mails.

In: BusinessEnvironmentBow Lane Ltd vDeanwater Estates Ltd [2007]

EWCA Civ 622

the Court of Appeal considered the possibility of whether or not an

assurance amounted to a collateral contract. The Court reviewed the

decision inHeilbut Symons vBuckleton (1913) and considered that in

the case of sales or leases of land, the law relating to a collateral

contract should be applied with caution, if not suspicion. In the case

before them, the propositions set out inInntrepreneur Pub Co vEast

Crown Ltd (2000) had not been met and the correspondence did not

show an intention to create a collateral contract.

SoulsburyvSoulsbury[2007] EWCA Civ 969is a recent example of a case decided on the application ofCarlillv

Carbolic Smokeball Co [1893]andErringtonvErrington [1952].

This case is the subject of a newsletter on the VLE.

See also Chapter 4, below.

In:

Northstar Land Ltd vBrooks [2006] EWCA Civ 756the Court of Appeal rejected a claim that a promissory estoppel or an

agreement had arisen by conduct in the following circumstances. The

solicitors for the prospective purchaser of land contacted the solicitorfor the vendor of the land on the day fixed for completion and sought

an extension on the time given to complete the contract of sale. The

vendors solicitor said he would need to seek instructions from his

client and revert back to the purchasers solicitor. He never did. In the

circumstances, an agreement to extend the time did not arise when the

vendors solicitor did not revert back, nor was there such a clear,

unequivocal and unambiguous representation that was intended to

affect the relationship between the parties such that a promissory

estoppel arose.

In the case of:

Apple Corps Limited vApple Computer, Inc. [2004] EWHC 768


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Mann J considered the decisions inBrinkibon vStahag Stahl [1983] 2

AC 34 andEntores vMiles Far East Corporation [1955] 2 QB 327 in

determining where a contract had been formed. The contract, a trade

mark agreement between the well-known record company and the

equally well-known computer firm, had been completed in a telephone

conversation between a party in England and a party in the United

States. Mann J held that, in principle, it was possible for a contract to

be simultaneously formed in two or more places.

Debenhams Retail Plc vCustoms and Excise Commissioners [2004]EWHC 1540

was concerned with attempts by Debenhams to minimise the amount

of VAT payable on transactions in which their customers used credit

cards. To minimise the incidence of VAT, they attempted to introduce a

system whereby the customer who paid using certain credit cards

entered into two contracts one, for the purchase price with

Debenhams, the other, for the amount of the card handling fee, with

another company which was a wholly owned subsidiary of Debenhams.Notices within the store and at the point of sale notified customers of

this. At first instance it was held that customers had, in the

circumstances, entered into two contracts. An appeal from this decision

was allowed: the Court of Appeal held that in the circumstances only

one contract was entered into and that there was no separate contract

with the card handling company. Contracts could not be made by mere

assertion. The conclusion that there was only one contract was

supported by the single ticket price displayed on items, a single till slip

and the difficulty in identifying any consideration passing from the

card holding company to the customer.

Chapter 3 Consideration

In:

PittsvJones [2007] EWCA Civ 1301the Court of Appeal held that although a party was usually consciously

aware of the consideration he provided for the promise he was

accepting, it was not necessary that he be so aware of the consideration

provided. Where there was a clear chronological link between an offer

and a willingness to sign the document, there was a natural inference

that the two agreements were linked, even though the party who

signed the agreement was unaware that they were subjecting

themselves to a detriment and thus providing consideration.

In:

Evestorm Ltd vHoptonacre Homes Ltd [2007] EWCA Civ 1366the Court of Appeal declined an invitation to allow promissory estoppel

to be used as sword.

See also:

Northstar Land Ltd vBrooks [2006] EWCA Civ 756noted in Chapter 2 above.

In:

South Caribbean Trading Ltd (SCT) vTrafigura Beeher BV[2004]EWHC 2676


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Colman J (paras.10609 of the judgment) doubted the correctness of

the decision in Williams vRoffey Bros (1991). He noted that the

decision was inconsistent with the long-standing rule that

consideration must move from the promisee. He observed that

Glidewell J in Williams vRoffey Bros had used the reasoning employed

in a tripartite arrangement inPao On vLau Yiu Long (1980) to a

bipartite arrangement. He noted that the House of Lords had yet to

declare that Williams vRoffey Bros was wrongly decided.

The Privy Council, in:

Super Chem Products Ltd vAmerican Life and General Insurance CoLtd and others [2004] UKPC 2, [2004] 1 All ER (Comm) 713

held that the mere negotiation of one party with another after the

limitation period did not, without more, give rise to a waiver or an

estoppel. The insurers in this case had done nothing to create an

expectation that the time bar would not be relied upon.

Chapter 4 Other formative requirements: intention, certainty andcompleteness

In:

Schweppe vHarper [2008] EWCA Civ 442the Court of Appeal found that an agreement between the appellant

and the respondent that the appellant locate third party finance to pay

off the respondents debts was too uncertain to be a contract. The

concept of reasonable finance could not be determined with sufficient

certainty.

In:

SoulsburyvSoulsbury[2007] EWCA Civ 969the Court of Appeal found that there was an intention to create legal

relations between two former spouses when one agreed to forego

maintenance payments in return for a bequest in the others will.

In:

New Testament Church of God vStewart [2007] EWCA Civ 1004the Court of Appeal held that in ascertaining whether or not there was

sufficient intention to create a legally binding contract of employment,

considerations would vary from profession to profession. In the case of

a minister of religion, spiritual duties did not, in themselves, preclude

an intention to create legal relations between the minister and thereligious institution. The religious beliefs of the religious institution

might be of assistance in determining whether or not there was

sufficient intention: if there is a religious belief that there is no

enforceable contract between the minister and the institution, then

that is a factor in determining whether or not there is an intention to

create legal relations.

In:

West Bromwich Albion Football Club Ltd vEl-Safty[2006] EWCACiv 1299

the Court of Appeal declined to find that there was an express contract

between a football club (WBA) and an orthopaedic surgeon (E)

regarding the medical treatment of one of WBAs players, A. The


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circumstances were that WBA arranged medical insurance coverage for

its players, including A. A was injured and WBA arranged for him to

receive a consultation with E. E negligently advised surgery and as a

result of Es negligence, A was never able to play professional football

again. WBA sued E for damages in contract and tort for its financial

loss in not having the services of A. There was no express contract in

these circumstances between WBA and E, nor was it necessary to imply

a contract. In this instance, any contract would be between E and A.

There were no legal authorities to support WBAs claim of an implied

contract.

In:

SadlervReynolds [2005] EWHC 309the Court considered the issue of whether there was a contract to ghost

write a book. On the facts of the case, the situation was considered to

be somewhere between an obviously commercial and a social

agreement. The onus was placed upon the claimant to establish an

intention to create legal relations but the onus was not as heavy as inthe purely social relationship.

Chapter 5 The terms of contract

In:

Evans vKosmar [2007] EWCA Civ 1003the Court of Appeal considered when a duty to take care would be

implied into a contract for services. The case is considered in greater

detail on the VLE.

In:

Datech Electronic Holdings Ltd vUnited Parcels Service Ltd [2007]UKHL 23

the incorporation of terms into a delivery contract was considered. This

case is considered in greater detail on the VLE.

In:

RitchievLloyd [2007] UKHL 9the House of Lords was concerned with the correct operation of

s.35(6)(a) of the Sale of Goods Act 1979 and the right of a buyer to

reject defective goods. The seller repaired the goods but refused to tell

the buyer what was the matter with them. The buyer then rejected the

goods. In determining whether or not the buyer had such a right theHouse of Lords decided that the matter would be resolved on the basis

of terms that could be implied into the contract. The House of Lords

then established that there was a separate and collateral contract

relating to the inspection and repair and implied a term in that

contract that while the repair was continuing, the buyer could not

reject the goods and further implied an obligation to provide the buyer,

upon his request, with information as to the nature of the defect.

This case is considered in greater detail on the VLE.

Where a term was to be implied which departed significantly from the

express terms of a contract, cogent reasons were required as to why the

term should be implied on the ground that to do so was necessary togive the contract business efficacy. See:


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Yewbelle Ltd vLondon Green Developments Ltd [2007] EWCA Civ745 per Buxton L.J.

An insight was given into the practices of the travel industry in:

GowvTUI UK Ltd (t/a Crystal Holidays) [2006] 11 CL 160(Watford County Court).

A customer booked and paid for a holiday with a tour operator through

an agent. The accommodation provided to the customer was in the

hotels annexe as the customer had not paid a supplement. The

customer was unaware that the booking was subject to the tour

operators standard terms and conditions (which routinely provided the

annexe accommodation), nor did the travel agent bring these terms to

the customers attention. It was held that the industry practice was to

hold that there was no contract when the agent provisionally accepted

the customers offer and that the agents invoice was the contractual

document. Notice on the invoice of the terms and conditions was

sufficient to incorporate them into the contract as the customer had

stated that he knew the terms and conditions could be found in thebrochure or on the Internet.

In:

BramhillvEdwards [2004] EWCA Civ 403; [2004] 2 Lloyds Rep653

the Court of Appeal considered the issue of whether a term could be

implied, by operation of s.14(2) of the Sale of Goods Act 1979, that the

motor home sold by the contract was of satisfactory quality. The

difficulty arose because English law permitted such motor homes on

English roadways with a maximum external width of 100 inches. The

generous build of the American-made motor home in this case had anexternal width of 102 inches; the extra two inches meant that the

purchaser was liable to prosecution if he used the vehicle on English

roads and would encounter difficulties in insuring the caravan. The

Court of Appeal held that there was no term implied by reason of

s.14(2) and that there was no breach of s.14(2A). The authorities had

regularly turned a blind eye to over-width vehicles and insurability

would not be a problem. Had there been an implied term, there would

have been a defence under s.14(2C) as the vehicle had been bought as

seen. The purchasers should have been aware, in the circumstances,

that the vehicle was over width. Even if there had been a breach of the

implied term, there would be no damages because the purchasers were

unable to establish that the extra two inches made any difference inthe value of the vehicle.

In:

CrossleyvFaithful & Gould Holdings Ltd [2004] EWCA Civ 293;[2004] 4 All ER 447

the Court of Appeal declined to find that there was an implied term

within the contract of employment which provided that an employer

ought to take reasonable care of an employees economic well-being.

The introduction of such a term would be a major extension of the

existing law and would place an intolerable burden upon employers. In

the case before the Court, the claimant employee had lost long-termsickness benefits when he resigned his position with the defendant

employer. The employee, however, had decided to retire on his own


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initiative and possessed the ability to determine, on his own, his

entitlement to benefits under the scheme.

In:

Paragon Finance plc vPender [2005] EWCA Civ 760the Court applied the decision inParagon Finance vNash [2001] EWCA

Civ 1466 (that there was an implied term in fact that interest rates

were not to be set dishonestly, for an improper purpose, capriciously or

arbitrarily) to a term which allowed the finance company to vary

interest rates. On the facts of the case, there was no breach of the term

so implied.

Chapter 6 The regulation of the terms of the contract

The Law Commission has issued a report, Unfair Terms in Contracts,

Law Com No. 292, Cm 646, 2005 (www.lawcom.gov.uk). The report

considers the current legislation in this area (the Unfair Contract Terms

Act 1977 and the Unfair Terms in Consumer Contracts Regulations

1999) and makes a number of recommendations. These include therecommendations that the two pieces of legislation are unified into a

new legislative regime for the whole of the UK with largely no

reduction in consumer protection and that this regime should be

clearer and more accessible to the reader. The governments response

to the report was released in July 2006 and can be found at:

http://www.berr.gov.uk/whatwedo/consumers/buying-selling/sale-

supply/unfair-contracts/index.html

In:

Office of Fair Trading vAbbey National plc and others [2008] EWHC875 (Comm)

Andrew Smith J decided that contracts between banks and their

customers, in which terms provide that the bank charges the customer

when the customer requests or instructs a payment for which they do

not hold the necessary funds are not exempted from investigation by

the OFT under the Unfair Terms in Consumer Contracts Regulations

1999. The case is considered in greater detail on the VLE.

In:

Barclays Bank plc vKufner [2008] EWHC 2319 (Comm)it was decided that the Unfair Terms in Consumer Contracts

Regulations 1999 could apply to a bank guarantee where both theguarantor and the principal debtor were natural persons and entered

into their contracts as consumers and not in the course of their

business or profession.

In:

Trident Turboprop (Dublin) Ltd vFirst Flight Couriers Ltd [2008]EWHC 1686 (Comm)

it was decided that s.26(4)(a) of the Unfair Contract Terms Act 1977

did not require that the goods be delivered to another state and was

satisfied if the goods would be carried from one state to another.

In:

KeenvCommerzbank AG [2006] EWCA Civ 1536


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the Court of Appeal held that a term of an employment contract

relating to the payment of discretionary bonus amounts did not fall

within s.3 of the Unfair Contract Terms Act 1977.

In:

Re Cape plc [2006] EWHC 1316the Court held that a scheme of arrangement entered into under

s.425(1)[a] of the Companies Act 1985 was not a contract or notice

within s.2(1) of the Unfair Contract Terms Act 1977.

In:

Balmoral Group Ltd vBorealis (UK) Ltd [2006] EWHC 1900the Court found that contracts to supply first a Norwegian company

and then a Danish one were international supply contracts and thus

outside the ambit of the Unfair Contract Terms Act 1977.

In:

IFE Fund SA vGoldman Sachs International [2006] EWHC 2887

where a party had sent another party an information memorandum in

which the first party stated that they had not verified the accuracy or

the completeness of the information within the memorandum and did

not accept responsibility for reviewing the memorandum, these

statements went to the scope of the representations being made and

did not constitute exclusions of liability under either the

Misrepresentation Act 1967 or the Unfair Contract Terms Act 1977.

The decision was confirmed by the Court of Appeal, [2007] EWCA Civ

811, which also considered the relationship between negligent

misstatement at common law and the Misrepresentation Act 1967 (see

Chapter 9 below with regard to misrepresentation). The case isconsidered in greater detail on the VLE.

In:

Baybut vEccle Riggs Country Park Ltd [2006] All ER (D) 161 (Nov)the Court held that the Unfair Terms in Consumer Contracts

Regulations 1999 did not apply to terms implied at common law.

In:

Taylor vRive Droite Music Ltd [2005] EWCA Civ 1300the Court of Appeal observed that it was correct, in the circumstances

of the case, for the trial judge to phrase the implied term in the

contract to a prohibition forbidding positive acts. An implied termwhich prohibited negative acts would be onerous as it would require

positive action by a party. It was not possible to conclude that a

reasonable person would agree to be bound by a potentially onerous

term.

In a case:

Munkenbeck & Marshall vHarold [2005] EWHC 356in which the validity of certain contractual terms was challenged under

the Unfair Terms in Consumer Contracts Regulations, Judge Harvey

QC held that the terms were unfair (onerous and unusual) and not

enforceable despite the fact that they formed part of the profession-wide standard terms.


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In:

Bryen & Langley Ltd vBoston [2005] EWCA Civ 973the Court of Appeal found that the consumer could not complain about

the nature of the terms of the contract with abuilding contractor when

the consumers agent had asked the building contractor to tender on

the very terms now complained of by the consumer. There was no lackof openness, fair dealing or good faith in the manner in which the

contract was made and the claim under R5(1) of the Unfair Terms in

Consumer Contracts Regulations 1999 failed.

In:

Feldaroll Foundry Plc vHermes Leasing (London) Ltd [2004] EWCACiv 747

the Court of Appeal considered the meaning of deals as a consumer

for the purposes of the Unfair Contract Terms Act 1977. The Court of

Appeal was called upon to consider whether or not the definition

accepted inR&B Customs Brokers vUnited Dominions Trust (1988) hadbeen narrowed by the later decision in Stevenson vRogers (1999). The

Court found that it had not and that the two cases were not

inconsistent with each other. The cases interpreted different phrases in

different pieces of legislation.R&B Customs Brokers was concerned

with the meaning of deals as a consumer within the Unfair Terms Act

1977 while Stevenson vRogers was concerned with a seller in the

course of business within the Sale of Goods Act 1979. The purpose of

s.14(2) of the Sale of Goods Act 1979 was consumer protection; the

interpretation of s.12(1)(a) of the Unfair Terms in Consumer Contracts

Act 1977 inR&B Customs Brokers was in harmony with that position

because it sought to further the protection available to buyers (see

paras.1318 of the judgment).

Bairstow Eves London Central Ltd vSmith [2004] EWHC 263applied the decision of the House of Lords inDirector General of Fair

Trading vFirst National Bank [2001] UKHL 52; [2002] 1 AC 481. An

estate agency agreement provided that the agents commission was 3

per cent but that this was reduced to 1.5 per cent if the commission

was paid within ten days of completion. The Court held that this clause

was not within Reg. 6(2) of the Unfair Terms in Consumer Contracts

Regulations 1999 (those terms which define the core terms of the

contract its subject matter or the adequacy of price). Consequently,

the term could be scrutinised for fairness under Reg. 5. The Court held

that Reg. 6(2) should be given a restrictive interpretation; a more

liberal interpretation would erode the operation of the Regulations.

In:

Khatun & OrsvNewham LBC[2004] EWCA 55; [2004] 3 WLR 417the Court of Appeal upheld the High Courts decision that, in

circumstances where a local council was statutorily obliged to provide

accommodation, the Unfair Terms in Consumer Contracts Regulations

1999 applied to the terms on which the council let the accommodation.

The dominant purpose of the Directive which was transposed into

English law by the 1999 Regulations was consumer protection and

contracts pertaining to land fell within the scope of the Directive.


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In a case referred to the European Court of Justice dealing with a term

in the sale of a car parking space, the Court held that only a national

court could determine, for the purposes of Article 3(1) of the Unfair

Terms in Consumer Contracts Directive, whether a particular term was

unfair (Freiburger Kommunalbauten GmbH Baugesellschaft & Co KG v

Hofstetter (C237/02) [2004] 2 CMLR 13). The role of the Court of

Justice was to make general interpretative decisions to define the

nature of an unfair term; it was for a national court to decide whether

a particular term was unfair because only they could carry out the

factual investigation necessary to make such a particular

determination.

The European Court of Justice, in:

Commission of the European Communities vKingdom of Spain(2004) Case C-70/03

considered whether Spain had correctly transposed into national law

the Unfair Terms in Consumer Contracts Directive (Council Directive

93/13/EEC of 5 April 1993). Spain had implemented Article 5 of theDirective by providing that, where there was doubt as to the meaning

of a term, the interpretation most favourable to the consumer should

prevail. The failure to provide that this also occurred in collective

actions regarding the use of a term meant that a seller or provider

could prevent a term which might be regarded as unfair from being

prohibited. The Court found that there had been a failure to implement

Article 5. The Court further found that Article 6(2) had also been

improperly implemented. The Article sought to provide that consumers

did not lose the protection of the Directive by a choice of law clause

which provided that the governing law would be that of a non-Member

State. Spain had implemented the law by providing that it appliedirrespective of the law chosen by the parties to govern the contract,

under the terms and conditions provided for in Article 5 of the Rome

Convention on the law applicable to contractual obligations. By adding

the conditions of the Rome Convention, Spain had introduced a

restriction upon Article 6(2) of the Directive, which was incompatible

with the protection laid down in Article 6(2) which sought to

safeguard the consumer in his dealings.

Chapter 7 Contracts made by minors

In:

Proform Sports Management Ltd vProactive Sports Management Ltd[2006] EWHC 2903 (Ch)

the Court held that a football players representation agreement was

not analogous to a contract for necessaries or a contract of

employment for the general benefit of the minor and as such an

exception to the general rule that contracts entered into before an

individual has reached 18 years are not binding. In the circumstances

of this case, the contract was not binding upon the minor.

Chapter 8 Mistake

In:

Apvodedo NVvCollins [2008] EWHC 775 (Ch)the court considered the relevant authorities in relation to common

mistake. The case is considered in greater detail on the VLE.


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In:

GravesvGraves [2007] EWCA Civ 660the Court of Appeal dealt with a possible common mistake. The Court

considered the application ofAssociated Japanese BankvCredit du Nord

(1989) andBellvLever Bros (1931)to resolving the problem of a

common mistake. On the facts of the case, however, the Court heldthat there was an implied condition that if the particular benefit

ceased, the contract was at an end.

In:

SmithsonvHamilton [2007] EWHC 2900 (Ch)the Court found that, while there had been a mistake in the drafting of

a pension scheme, rectification was not available in the circumstances.

The mistake was also not within the scope of the decision in Bellv

Lever Brothers.

This case is considered in greater detail on the VLE.

In:

Kyle Bay Ltd (t/a Astons Nightclub) vUnderwriters [2006] EWHC607

the Court held that where one party alone had made a mistake as to

the basis upon which the contract would be concluded, but this

mistake had not been communicated to the other party, there was no

common intention such that there could be a rectification of the

contract. In addition, the mistake the parties laboured under had not

made performance of the contract impossible nor was the subject

matter essentially and radically different from what it was believed to

be (Bell vLever Bros applied). The decision was affirmed by the Courtof Appeal, [2007] EWCA Civ 57. The Court of Appeal applied the

decision inAssociated Japanese Banks vCredit du Nord (1989) and

found that the subject matter of the contract was not essentially and

radically different from what it was believed to be.

Rectification was denied in:

George Wimpey UK Ltd vVI Components Ltd [2005] EWCA Civ 77.In a sale of land between two commercial parties the contract was

based upon a complicated price formula. VIC had redrafted this

formula and omitted a price for enhancements. This formed the basis

of future negotiations and had the effect of costing Wimpey about

800,000. Wimpey brought proceedings claiming that there was aunilateral mistake and that VIC had acted unconscionably in seeking to

take advantage of the drafting error. The Court of Appeal noted that

VIC, unlike Wimpey, had no experience in the commercial sale of

properties. In the circumstances, Wimpey had made a mistake in not

seeing what was obvious but VIC had not shut its eyes to the obvious

or wilfully or recklessly omitted to do what a reasonable and honest

person would do. If ever a party was entitled to assume that its

opponent knew what it was doing, it was VIC in its negotiations with

one of the countrys largest construction and development enterprises...

the mistake made by Wimpey was a result of their own corporate

neglect for which VIC bore no legal... or moral responsibility [perSedley LJ]. In the circumstances, it was not inequitable to allow VIC to

resist the claim for rectification.


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In:

BrennanvBolt Burdon [2004] EWCA Civ 1017; [2004] 3 WLR1321

the Court of Appeal held that the contractual compromise of a legal

claim could be void as a result of a common mistake of law (Kleinwort

Benson LtdvLincoln City Council [1999] 2 AC 359). It was a questionof construction as to whether or not the mistake made the compromise

impossible (Great Peace Shipping Ltd vTsavliris Salvage Ltd (2002)).

Where there was a doubt as to the law concerned, there was no

mistake as to law sufficient to render the contract void.

In:

GMAC Commercial Credit Development Ltd vSandhu [2004] EWHC716

the Court held that a written guarantee, rendered meaningless by a

mistake, could be rectified.

Chapter 9 Misrepresentation

In:

Limit No2 Ltd vAxa Versicherung AG [2008] EWCA Civ 1231the Court of Appeal considered the nature of a representation. The

words would not normally write construction unless... was a

statement of intention which was a representation of existing fact. As a

representation of existing fact, it could not hold indefinitely.

In:

4 Eng LtdvHarper and Simpson [2008] EWHC 915 (Ch)the High Court expanded the heads of damages recoverable for afraudulent misrepresentation and allowed the claimant to recover

substantial damages for the loss of chance, representing the loss of

income profit and capital profit which would have arisen from an

alternate purchase. The case is covered in greater detail on the VLE.

In:

IFE Fund SA vGoldman Sachs International [2007] EWCA Civ 811the Court of Appeal considered, in obiter dicta, the relationship

between the Misrepresentation Act 1967 and negligent misstatement

underHedley Byrne vHeller (1964). Where the parties involved were

parties to a contract, the 1967 Act would apply and if it did not apply,

there was no room for the claimant to succeed on some other ground

of negligent misstatement at common law. The case is considered in

greater detail on the VLE.

In:

Crystal Palace FCvDowie [2007] EWHC 1392the Court of Queens Bench, in the context of a claim to rescind an

agreement for a fraudulent misrepresentation, considered the rights of

a third party significant. In the circumstances, relief would be limited

to that of a financial nature.

In:

Customs and Excise Commissioners vBarclays Bank Plc [2006]UKHL 28


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the House of Lords considered the decisions inHedley Byrne vHeller

(1964) andHenderson vMerrett Syndicates (1995) and held that the

presence or absence of a voluntary assumption of responsibility did not

provide the answer in all such cases.

In:

ConlonvSimms [2006] EWCA Civ 1749the Court found that where there was a duty to disclose, as between

prospective partners, and the failure to disclose was fraudulent, it was

akin to fraudulent concealment or fraudulent misrepresentation and

damages would be available.

In:

Six Continents Hotels Inc vEvent Hotels GmbH[2006] EWHC 2317the Court held that misrepresentations which were not fraudulent were

defeated by a contractual term barring claims or proceedings based on

discussions and agreements which occurred before the contract had

been entered into. Because the term did not cover fraudulentmisrepresentations, it did not fall foul of s.3 of the Misrepresentation

Act 1967.

In:

UCB Corporate Services Ltd vThomason [2005] EWCA Civ 225the Court of Appeal applied s.2(2) of the Misrepresentation Act 1967.

The Court considered that the world loss in the subsection included

financial loss and was capable of including detriment. Loss was thus

capable, in this instance, of including the lost chance of obtaining more

money if the injured party had been told the truth.

In:

Forest International Gaskets Limited vFosters Marketing Limited[2005] EWCA Civ 700

the Court of Appeal [at paras.1117] considered the possible measure

of damages recoverable under s.2(1) of the Misrepresentation Act

1967. Having noted the academic and judicial criticism ofRoyscot v

Rogerson (1991), the Court of Appeal stated that the decision had not

been overruled and that there was nothing to indicate that it had been.

In this case, the difference between a measure of damages based upon

negligence and a measure of damages based upon fraud amounted to

only 28,500. This amount was too small to justify granting permission

to appeal the case to the House of Lords to consider the issue of theappropriate measure of damages.

Chapter 10 Duress and undue influence

In:

HalpernvHalpern [2007] EWCA Civ 291the Court of Appeal was concerned with a number of issues

(frustration, mistake, applicable law and duress). The Court of Appeal

made two observations in relation to the duress issue: one was that

rescission for duress should be no different in principle than rescission

for other vitiating factors. A second was that the practical effect of

rescission would always depend upon the circumstances of a particular

case. If, in the present case, the defendants were able to establish that


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their consent had been procured by duress, it would be surprising if

the law could not provide a suitable remedy. This case is considered in

greater detail on the VLE.

The Queens Bench was concerned with the issue of undue influence

in:

Wadlow vSamuel (aka Seal) [2006] EWHC 1492.A management agreement between the claimant and the defendant

musician had been formed under undue influence. A settlement

agreement between the two parties had been reached and was based,

in part, upon the management agreement and allowed the claimant to

continue to receive payments of commission. The settlement

agreement had not been formed under undue influence.Royal Bank of

Scotland vEtridge (no 2) (2001) was applied to determine the

existence of undue influence; Yorkshire Bank vTinsley(see below) was

distinguished in that despite the voidability of the earlier management

agreement, the settlement agreement was not voidable. The Court of

Appeal affirmed this decision: [2007] EWCA Civ 155.

Yorkshire Bank PlcvTinsley[2004] EWCA Civ 816; [2004] 1 WLR2380; [2004] 3 All ER 463

was concerned with the voidability of a mortgage for undue influence.

The Bank had provided a mortgage to Ts husband in 1988 to purchase

business units. The mortgage was secured on the matrimonial home.

Three years later, the mortgage was replaced by another. In 1994, as a

part of divorce proceedings, the matrimonial home was exchanged for

a flat for T. The Bank insisted on taking a charge over the flat to secure

the husbands business debts. When the husband failed to discharge

the debt, the Bank sought a possession order against T. The Court held

that since the earlier mortgage had been voidable against the husband

and the Bank because of undue influence, the later mortgage replacing

this earlier mortgage would also be voidable. This conclusion was not

altered by the fact that there was no undue influence operative at the

time of the subsequent mortgage. If the subsequent replacement

mortgage had been made with a different lender, the different lender

could not be deemed to be aware of matters which the original lender

was (see paras. 2021 and 35 of the judgment).

In:

LeedervStevens [2005] EWCA Civ 50the Court found that presumed (evidential) undue influence wasestablished on the facts of the case. The Court stated, in response to

the argument that undue influence could not be established where the

party who signed the deed was aware of what they were doing, that

the test was not whether the party knew what she was doing but why

she did it.

Chapter 11 Privity of contract

In:

Prudential Assurance Co Ltd vAyres [2007] EWHC 775the High Court was concerned with the application of the Contracts

(Rights of Third Parties) Act 1999. The case is important as it providesa means to determine whether or not s.1(1)(b) of the 1999 Act can be

applied to a particular contract. If, on a true construction of the term, it


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purports to confer a benefit upon a third party, the third party can

enforce that term in their own right. The 1999 Act does not require

that the sole purpose of the term be to confer a benefit upon the third

party; in addition it is possible for a term to confer an enforceable

benefit upon a third party and some other party. This case is also

considered in greater detail on the VLE.

In:

Offer-Hoar vLarkstore Ltd [2006] EWCA Civ 1079the Court of Appeal was concerned with a case which appeared to

present a black hole, where loss arises as a result of a breach of

contract but no one is able to recover substantial damages from the

contract breaker. The potential black hole arose in the following

circumstances. S, the owner of a building site intended for residential

development, obtained a soil inspection report from T which stated

that the land was suitable for the proposed development. The report

contained no prohibition against assignment. The report had been

obtained to satisfy a condition of the planning permission for the site.The site was offered for sale with planning permission. S used Ts

report to satisfy the planning condition and sold the site to L. L used

Ts report without Ts permission. L never had a contract with T. When

L undertook the development work a landslide occurred which caused

substantial damage to the properties owned by the five claimants in the

action. Subsequently, a deed of assignment was entered into between S

and L whereby S assigned to L all of its rights in and under Ts report

together with any right to sue T in respect of breaches of its rights and

obligations. The issue of a black hole was present because when T

prepared its report, it was in breach of contract with S but any

damages would have been nominal (the landslide had yet to occur).When the landslide did occur, S no longer owned the land and would

not be able to recover more than nominal damages as it had not

suffered loss. L, who had suffered loss, had no contract with T. The

Court held, after considering the underlying rationale in the relevant

cases, that L was entitled to recover substantial damages from T as a

result of the assignment from S and its ownership of the site. The

assignment was a delayed consequence of the earlier sale of the land.

In:

Horn Linie GmbH & Co vPanamericana Formas e Impresos SA (TheHornbay) [2006] EWHC 373

the Court expressed some doubts about the application of the decisionin The Mahkutai (1996) with regard to a jurisdiction clause.

In:

AvraamidesvColwill [2006] EWCA Civ 1533the Court of Appeal was concerned with the application of s.1(3) of the

Contracts (Rights of Third Parties) Act 1999 to the following facts. B

purchased a business run by A and, by agreement, accepted its

outstanding liabilities. C was a dissatisfied customer of As and sued B

on the basis of the A/B contract, C alleging that the contract conferred

an enforceable benefit upon them. The Court held that s.1(3) of the

Act required the contract to expressly identify the third party by nameor class and that there had been no such identification here.


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The Contracts (Rights of Third Parties) Act 1999 was briefly considered

by the Court of Appeal in:

Laemthong International Lines Company Ltd vArtis and Others (TheLaemthong Glory) (No. 2) [2005] EWCA Civ 519.

In this case the owners of a vessel chartered it to the charterers by a

charter-party. The cargo of sugar was loaded and consigned to thereceivers. The cargo arrived before the bill of lading and the sugar was

delivered to the receivers in exchange for letters of indemnity (LOIs):

one LOI was issued by the charterers in favour of the owners and the

second LOI was issued by the receivers to the charterers. The owners

and the receivers had no direct contractual relationship and the owners

sought to enforce the LOI against the receivers by relying on the

Contracts (Rights of Third Parties) Act 1999. The Court upheld the

finding of Cooke J that the terms of the LOI conferred a benefit upon

the owners within the meaning of s.1(1)(b) of the 1999 Act. The Court

also rejected the argument of the receivers that the owners could not

jump the chain of contractual indemnity arrangements made by theLOIs and enforce the LOI given by the receivers. The receivers based

their argument on para.7.18 of the Law Commissions report on Privity

of Contract where the point is made that the reform is not intended to

cut across a chain of contractual arrangements so that parties must sue

their immediate contracting party and thus maintain the chain of

contracts. The Court of Appeal agreed with Cooke J that the letters of

indemnity had to be considered on their own terms and that they were

not within the examples of the commercial backgrounds provided by

the Law Commission in its report.

In:

Precis Plc vWilliam M Mercer Ltd [2005] EWCA Civthe Court of Appeal considered the application of the Contracts (Rights

of Third Parties) Act 1999 in the following situation. P had considered

making an offer for shares in SG. P and SG entered into a

confidentiality agreement to allow P to acquire further information

about SG. Pursuant to this agreement, SG provided P with an actuarial

report prepared by WM on the state of SGs pension fund. The report

contained a discrepancy as to the state of SGs pension fund deficit; the

discrepancy was attributable to the negligent computational error of

WM. Although the Court found that WM did not owe P a duty in

circumstances where there was no pre-existing relationship between

these two parties and the report had been drawn up for SG to reviewits contribution rate, it also found that had a duty been owed, WM

could have relied upon the terms of the confidentiality agreement

between SG and P by reason of the Contracts (Rights of Third Parties)

Act 1999. The attempt of SG and P to later vary this agreement to

prevent reliance by WM was of no effect because of s.2(1)(a) of the

1999 Act.

Chapter 12 Illegality

In:

Maccaba vLichtenstein [2006] BPIR 994the Court held that a contract legal in England was enforceable eventhough illegal in another jurisdiction.


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In:

Hill vSecretary of State for the Environment, Food and Rural Affairs[2005] EWHC 696.

Hill was an undischarged bankrupt who managed a company contrary

to the provisions of the Company Directors Disqualification Act 1986.

Hills company entered into contracts with the government body(DEFRA) to conduct foot and mouth disease cleaning and disinfections.

DEFRA refused to pay the sums promised for this work on the ground

that the contracts were tainted with illegality. Hart J held that the

company was entitled to be remunerated on a quantum meruit basis for

the work done. If the company could not sue on its contracts, the very

persons the legislation was designed to protect would be prejudiced.

In:

Wheeler vQualitydeep Ltd [2004] EWCA Civ 1085an employee with limited English had received payments from her

employer from which no deductions had been made for tax or nationalinsurance contributions. The employment tribunal had found that the

employee must have known that something was wrong. The Court of

Appeal held that in these circumstances, it was necessary to establish

not only that the employee was aware that something was wrong but

also that she had actively participated in the illegal performance of the

contract.

In:

VakantevAddey and Stanhope School [2004] EWCA Civ 1065;[2004] 4 All ER 1056

the Court of Appeal held that Vakante was unable to maintain a

complaint against the defendant for, inter alia, dismissal and detriment

on racial grounds. Vakante was a Croatian national who had applied

for asylum; while his application proceeded he was prohibited by law

from taking work. Despite this, he obtained a position with the

defendant as a graduate trainee teacher. He also made fraudulent

statements about his employment status in order to obtain state

benefits. The Court found that the employment appeals tribunal had

not erred in finding that Vakantes complaints of racial discrimination

were so bound up with his illegal conduct that to entertain the

complaints would be to condone his illegal conduct. Vakante was solely

responsible for his own illegal conduct which went to the base of his

employment situation. The employment situation was illegal frombeginning to end.

Chapter 13 Restraint of trade

In:

Beckett Investment Management Group Ltd vHall [2007] EWCA Civ613

the Court of Appeal held, in construing a restraint of trade covenant,

that the interests of the entire corporate group were to be considered

rather than simply the interests of only one member of the group.


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Chapter 14 Performance and breach

In:

Leofelis SA vLonsdale Sports Ltd [2008] EWCA Civ 640the Court of Appeal considered the effect of a letter which

simultaneously purported to both terminate an agreement and toeffectively keep it open without prejudice to the termination. In the

absence of an agreement from the other party, this was a legal

impossibility.

In:

ERG Raffinerie Mediterranee SpA vChevron USA(The Luxmar)[2007] EWCA Civ 494

the Court of Appeal considered the nature of a repudiatory breach of

contract.

In:

Diab vRegent Insurance Co Ltd [2006] UKPC 29the Privy Council was of the opinion that until the repudiation of a

contract by one party is accepted by the other party, the contract

continues and must be complied with in all its terms to facilitate a

claim under a contract of insurance. In particular, the time notification

requirements upon the insured continued even when the insurer had

repudiated the policy by denying the legitimacy of the putative claim.

In:

R (on the application of Supportways Community Services Ltd) vHampshire CC[2006] EWCA Civ 1035

the Court of Appeal declined to impose extra duties of review on apublic authority in performance of a contract because they were a

public authority. A claimant, suing a public authority for breach of

contract, could not invoke public law simply because he was

dissatisfied with the remedy provided to him by private law.

In:

GrayvMarlborough College [2006] EWCA Civ 1262the Court of Appeal was concerned with a claim brought by a father

that the decision of an independent fee-paying school to remove his

son from the school for unsatisfactory conduct was a breach of

contract. The Court held that in such cases there was a symmetry

between a contractually implied obligation of fairness in these cases

and that derived from statute or general public law (which could assist

in the determination of fairness or consultation with the parent). In

this case, however, there were no grounds to find that the parent had

not been fully and fairly consulted about his sons performance.

In:

London Borough of Waltham ForestvOmilaju [2004] EWCA Civ1493; [2005] 1 All ER 75

the Court of Appeal considered the possible breach of the implied duty

of trust and confidence upon an employer under a contract of

employment (MalikvBCCI(1998)). Where there have been a series ofbreaches of this term, the final breach, or the final straw did not have

to be characterised by unreasonable or blameworthy conduct. The


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final straw did, however, have to contribute, even if only slightly, to a

breach of the implied term of trust or confidence. Where an employer

had previously breached the implied term and an employee had

affirmed the contract and soldiered on, it was not for the employee to

subsequently rely on these acts to justify constructive dismissal unless

there is a later act which allows him to do so.

Chapter 15 Frustration

In:

CTI Group Inc vTransclear SA [2008] EWCA Civ 856the Court of Appeal considered the nature of frustration and decided

that a contract to sell cement was not frustrated where the contract

remained legally and physically possible but where third party

suppliers would not sell the necessary cement to the sellers. The case is


In:

Edwinton vTsavliris (The Sea Angel) [2007] EWCA Civthe Court of Appeal was concerned with the issue of whether or not a

charterparty had been frustrated. In reaching the decision that it had

not, the Court considered the correct approach to be taken in

determining whether or not a frustrating event had occurred.

Chapter 16 Damages

In:

Transfield Shipping Inc vMercator Shipping Inc (The Achilleas)[2008] UKHL 48

the House of Lords in allowing the appeal, considered the two limbs tothe test of remoteness of damage established by the decision inHadley

vBaxendale (1854). Lord Hoffman found that in the particular case, if

these parties, contracting against the background of market

expectations then existing, had reasonably contemplated the extent of

the liability they were undertaking, they would have considered the

loss of the following fixture a type or kind of loss which the charterer

was not assuming. Indeed, such a loss would have been completely

unquantifiable. The case is considered in greater detail on the VLE.

In:

Devenish Nutrition Ltd vSanofi-Aventis SA (France) [2008] EWCACiv 1086

the Court of Appeal considered the House of Lords decision inA-G v

Blake (2000) and held that their Lordships had established that the law

on remedies for interference with property, damages in lieu of an

injunction, damage for breach of fiduciary duty and breach of contract

should be coherent. The same remedies should be available even if the

cause of action was different.

In:

Sempra Metals Ltd vInland Revenue Commissioners [2007] UKHL34

the House of Lords resolved the difficulties regarding the payment ofinterest upon the late payment of a debt by holding that a court had a

common law jurisdiction to award interest, simple and compound, as


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damages on claims for the non-payment of debts as well as on other

claims for a breach of contract. These claims would be subject to the

usual principles governing claims for damages arising from a breach of

contract, such as remoteness or a failure to mitigate. This case is


In: Golden Strait Corporation vNippon Yusen Kubishika Kaisha [2007]

UKHL 12

the House of Lords was concerned with the assessment of damages for

the repudiation of a charterparty agreement. The case presented an

unusual issue: should the quantum of damages be assessed with

reference to the full term of the charter or only up to the point at

which the charterers would, in all likelihood, have cancelled the

charter under the war clause when the second Gulf War broke out?

The Law Lords were divided in their answers to this issue (3:2). The

majority held that the subsequent event should be taken into

consideration in the assessment of damages and that to do otherwisewould be to unjustly over-compensate the owners. This case is


In:

Aerospace Publishing vThames Water Utilities Ltd [2007] EWCACiv 3

the defendant water company was responsible for the damage and

destruction of a unique private archive owned by the claimants. The

issue before the court concerned the quantum of damages payable. The

Court of Appeal held that although the archive had an economic value,

its value to the claimants exceeded that of its commercial utility.Although some documents and photographs could not be replaced, the

correct measure of damages was the cost of reinstatement.

In:

ReichmanvBeveridge [2006] EWCA Civ 1659the Court of Appeal found that the landlord had no duty to mitigate his

loss where he sued in debt for arrears of rent which had come due.

This was not changed by the decision in White & Carter Councilsv

McGregor (1962).

In:

WWF World Wide Fund for Nature (formerly World Wildlife Fund) vWorld Wrestling [2007] EWCA Civ 286the Court of Appeal stated that in light of the decision in Experience

HendrixvPPX Enterprises (2003), it had to be regarded as settled that

where a covenantee claimed an injunction and damages against a

covenantor that a court might provide an injunction to restrain future

breaches of covenant and award damages for past breaches of

covenant, even where the covenantee could not establish actual

financial loss. The Court considered the decision inAttorney General v

Blake (2000) and Experience Hendrix LLCvPPX Enterprises Inc (2003)

and was not persuaded that the outcome of the latter case was support

for the proposition that the award in Wrotham Park Estate Co vParkside Homes (1974) was to be characterised as a gains-based

remedy.


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In a pair of cases:

Wiseman vVirgin Atlantic Airways Ltd [2006] EWHC 1566and

ArtisvMFI UK Ltd [2006] 11 CL 84Courts declined to allow non-pecuniary losses in cases with someconnection to contracts for pleasure or enjoyment.

CMC Group PlcvZhang [2006] EWCA Civ 408concerned a clause in a claim settlement agreement between the two

parties which stipulated that the payee would forfeit the entirety of his

settlement in the event that the payee brought any legal action or even

engaged in any derogatory or unfavourable communication with the

payor. The Court of Appeal held that this was a penalty within the

description given by Lord Dunedin inDunlop Tyre vNew Garage and

Motor Co (1915) because even a trivial breach resulted in the payment

of the entire sum.

Jackson vRoyal Bank of Scotland [2005] UKHL 3was concerned with the issue of remoteness of damage. The claimant

imported and sold goods to customers within the UK. The claimant

banked with the defendant. In breach of their obligation of confidence,

the defendant released the amount of profit realised by the claimant to

a principal customer of the claimant. The customer ceased doing

business with the claimant and the claimant accordingly sued the

defendant for damages arising from breach of contract. The House of

Lords held that damages were available for the loss of repeat business

with the principal customer and for the loss of opportunity to earn

profits from their trade with the principal customer. In circumstances

where no cut-off point for the trade with the principal customer was

established, the House of Lords held that the decision of the trial judge

to award damages on a reducing basis over a four-year period was not

too speculative and was as good an estimate on the effect of the breach

of contract upon the claimants damages as could be made in the

circumstances.

McAlpine Capital Projects Ltd vTilebox Ltd [2005] EWHC 281was concerned with the issue of whether a clause was a penalty clause

or liquidated damages. The test inDunlop Pneumatic Tyre vNew

Garage & Motor (1915) was applied. It was noted that the estimate did

not have to be the actual loss suffered. The court was predisposed to

enforce an agreed damages clause where the agreement was made in a

commercial context between two parties of equal bargaining power.

In two cases:

Eastwood vMagnox Electric Plc andMcCabevCornwall CC[2004]UKHL 35; [2004] 3 WLR 322; [2004] 3 All ER 991

the House of Lords followed the decision inJohnsonvUnisys Ltd

[2001] UKHL 13 in holding that the breach of the implied term of trust

and confidence in the employment relationship could not be used as

the foundation for a claim at common law because Parliament had

established a statutory code for unfair dismissal and the employees

remedy for unfair dismissal was dealt with in the statute.Exceptionally, however, an employee might suffer loss from the

employers failure to act properly in seeking dismissal. Financial loss


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flowing from suspension was such an instance, as was financial loss

caused by psychiatric or other illness caused by pre-dismissal unfair

conduct. In such cases, the employee had a common law claim which

preceded and was independent of his statute-based unfair dismissal

claim.

In: Dunnachie vKingston upon Hull City Council [2004] UKHL 36,

[2004] 3 WLR 310

the House of Lords found that the comments of Lord Hoffman in

Johnson vUnisys (2001) which suggested a denial of damages in

respect of the manner of dismissal were obiter dicta.

In:

Hamilton JonesvDavid & Snape (a firm) [2003] EWHC 3147 (Ch);[2004] 1 All ER 657

Neuberger J applied the principles developed inFarleyvSkinner

(2002)and allowed the claimant to recover damages for mentaldistress suffered when the defendant solicitors breached their duty to

her in not taking reasonable steps to prevent the claimants husband

from removing their children from the United Kingdom.

In:

Rolls-Royce Power Engineering Plc vRicardo Consulting Engineers Ltd[2003] EWHC 2871 (TCC); [2004] 2 All ER (Comm) 129

the Court considered the difficult issue of where one party could

recover damages in respect of loss suffered by another. The exception

inDunlop vLambert (1839) (and as developed in the subsequent case

law) was strictly applied: the third party had to be within thecontemplation of the contracting parties at the time the contract was

entered into. Further, applying the decision inPanatown vMcAlpine

(2000), for a trustee to recover damages on behalf of a beneficiary, it

had to be known to both parties at the time of contracting that one

party contracted as a trustee.

In:

Birse Construction Ltd vEastern Telegraph Co Ltd [2004] EWHC2512

the principles ofRuxley Electronics vForsyth (1995) were applied in a

situation in which a builder committed a number of defects in the

building of a college for the owner. The owner did not attempt tocorrect the defects as he was selling the building. In this sale, no

discount was given for these defects. In this circumstance, only

nominal damages were allowed as it was unreasonable to award the

cost of the cure since there was no intention to repair the defects and

no financial loss had been suffered on the sale of the building. In

addition, there was no loss of amenity as no effort had been made to

correct the defects.

Chapter 17 Equitable remedies

In:

LauritzenCool ABvLady Navigation Inc [2005] EWCA Civ 579


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the Court of Appeal found that there was no general rule that

injunctive relief would not be granted in respect of a contract for

services if the practical effect would be to compel performance.

Although the injunctive relief might compel performance, that would

be irrelevant as long as the relief did not decree performance. In this

instance, the contracts did not provide for very personal skills or

talents and were commercial agreements between independent

companies. The agreements did not specify named individuals.

In this unusual case:

Gryf-Lowczowski vHinchingbrooke Healthcare NHS Trust [2005]EWHC 2407

Gray J held that injunctive relief would be available at the instance of

the employee in a contract of employment in which the relationship of

mutual trust and confidence had broken down. If the provisions of the

discipline proceedings were not upheld, the employee, a highly trained

specialist, would never find work in the NHS.

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