MTATIRO MWITA V. MWITA MARIANYA(1968) H.C.D. n. 82.

FACTS

Plaintiff received one bullock from defendant in exchange for some finger millet. The bullock
died two months later of unknown causes. Both parties belong to the Kuria tribe, and this type
of contract is well known in tribal custom. The custom is that if an animal so exchange for
millet dies within one year, the meat and skin may be returned to the other party who is then
obliged to replace the animal. Plaintiff followed this procedure and then brought this suit for
another bullock. The primary court failed to follow the customary rule and decided for the
defendant citing Tarime. District Court Civil Appeal No. 4 of 1966, in which district court refused
to follow the custom.

HELD

(1) “If persons of the same tribe enter into an agreement well known to tribal custom under
which the terms are prescribed, these persons must, in the absence of evidence to the contrary,
be understood to be contracting in accordance with these terms.”

(2) Relevant customary law must be applied if it is”……applicable and is not repugnant to justice
or morality or inconsistent with any written law.” The rule in question here is a simple one; it
does not take account of the fact that death may be due to the fault of the person receiving
the animal But this is not to say that it is repugnant to justice or morality, and it certainly is
not inconsistent with any written law. No evidence was presented to indicate that plaintiff was
in any way at fault in the death of the bullock. Decision for plaintiff. The Court stated, obiter; If
it were proved that the animal had died due to the neglect of the person receiving it, “….. the
Court, while upholding the rule, could find that the facts did not fall within its purview, as good
faith and the customary standards of animal husbandry must be implied as the basis of the
agreement.”

FADHILI V. LENGIPENGI(1971)H.C.D. n. 31.

FACTS

The appellant successfully sued for domestic animals and the offspring entrusted to the respondent by
the deceased appellant‟s mother. The District Court allowed the appeal of the respondent on the
grounds that:
(1) the appellant sued only after his mother‟s death and not during her lifetime. The suit must have
been based on “retold history from the neighbours.” And anyway the respondent had reported the
death of all the animals to the deceased when she was still alive.

(2) The claim could not be sustained “without documentary evidence and without eye witnesses to say
that the goats and sheep did not die and that the appellant did not report.”

HELD

(1) “With due respect to the learned District Magistrate, his reasoning is bad at law. The court which
heard the witnesses found that the respondent had received the stock from the appellant‟s deceased
mother and had kept it till her death. If the animals had died while in the appellant‟s custody, the trial
court found it improbable that the deceased had been informed. After all it is easy to allege things in
respect of deceased persons since these persons cannot be called to refute them.”

(2) “In African custom business is transacted without documents. Writing as such is an innovation which
is only familiar to the sophisticated young who have had an opportunity to receive coaching in the ways
of the Whiteman. The appellant cannot be blamed for not acting during his mother‟s life, either. The
reason is simply that the animals then belonged to her and any claim by the appellant would not have
been entertained in a court of law. The appellant had capacity to sue for the animals after inheriting the
from his mother.

(3) Appeal allowed.

GAUDENSIA SAMWEL V. MECHOR MARCEL(1967) H.C.D. n. 333.

FACTS

Plaintiff sued defendant of an account for goods sold to defendant’s father. Defendants last cash
payments had been in 1960, at which time she had also signed a written acknowledgment of
liability. The present action was filed in Bukoba Primary Court in August 1965.

HELD

(1) Under section 14 of the Magistrate Courts Act, it is doubtful that the Primary Court had
jurisdiction to deal with this action. However, “since neither party had raised this question …. I
do not propose myself to raise it, especially as the facts … are quite clear and in my view any
court would have perhaps dealt with the matter in the way it was dealt with by the primary
court.”

(2) The period of limitation in cases like this is 3 years from the date of the accrual of the
cause of action. However, section 2 of the Primary Courts Customary Law (Limitation of
Proceedings) Rules, G. N. 311 of 1964, provides for a period of 3 years from the accrual of the
cause of action or from the day the Rules came into operation, “chic hover is later.” Since the
plaint was filed in Primary Court, these rules apply, and the claim is therefore not time-barred.

Defendant’s appeal dismissed.

EDWARD KALEMELA V. MUYEBE RWENJENGE(1968) H.C.D. n. 80.

FACTS

In an action in a primary court for recovery of a loan of Shs. 250/- evidenced by a document,
defendant acknowledged the debt and judgment was entered by consent. Defendant later
appealed on the ground that the loan was conditional on the performance of work, which work
had not been done. The district court magistrate took further evidence, upon which he set aside
the judgment of the primary court.

HELD

( 1) A judgment entered into by consent should not be upset by another court, and the district
court was wrong in taking further evidence.

(2) The primary court had no jurisdiction to hear the case, as the law applicable was not
customary law or Islamic law, nor was this an action for the recovery of a civil debt by the
Government. [Citing Magistrates’ Courts Act, s. 14(1).] Consequently, the whole proceeding was a
nullity.
EPHRAIM OBONGO V. NAFTAEL OKEYO(1968) H.C.D. n. 288.

FACTS

Defendant, a lorry owner, used to collect cassava from plaintiff for selling. On one occasion, his
lorry – driver and turn boy went to plaintiff to collect some bags of cassava; plaintiff refused to
deliver the goods, demanding that they first produce some empty cassava bags which they had
evidently taken another day, or some money. They returned to defendant’s wife, who gave them
24 bags and Shs. 190/-, and sent a not promising that everything would be taken care of when
her husband returned from a journey. Plaintiff received no more money, and sued in Primary
Court for the value of the cassava he had given them, and for some other empty bags not
returned, less the money and bags received. It was not disputed that the suit involved less than
Shs. 2000/-, the jurisdictional maximum for suits in Primary Court. The court held that the claim
should be against the wife and dismissed the suit; the District court, on appeal, gave judgment
against defendant. On appeal to the High Court, defendant argued that the Primary Courts’
jurisdiction was limited to civil proceedings turning upon customary or Islamic Law, or civil
proceedings to recover in the words of the Magistrates Courts Act, section 14(1) (a)(ii) --- “civil
debts, rent or interest due to the Republic”, or to the government or any municipal, town or
district council. He argued that plaintiff ’s was a claim in contract which had to be brought in
District Court. Plaintiff replied that the words of the Act should be read “disjunctively,” giving the
Primary Courts jurisdiction in all cases of “civil debt” where the amount involved is within the
jurisdiction limit.

HELD

(1) The present case involves an issue of privity of contract, “a rather subtle and technical point
which perhaps Primary Courts could not deal with. This may have been a reason for excluding
civil suits based on principles of contract from the jurisdiction of the Primary Court,” if that is in
fact the effect of the Act. On the latter question, however, the Court made no further finding.

(2)However, “(i)t has not been established to my satisfaction that a claim of this nature could
not have been brought under customary law.” It is a simple case of a claim for goods delivered,
“not … for breach of contract as such.” Also, despite the difficulty of determining whether the
wife, the lorry-driver and the turn boy were acting “in the course of their employment” for
defendant, “In suits between Africans living within a local community and doing business amongst
themselves on a basis of trust, I consider it would not be in the interests of justice to import
technical notions of privity of contract and other such notions, unless clearly required by the law
to do so.”
(3)_ There being no apparent reason why such a case could not be settled under customary law,
there is no reason not to accept the District Court’s finding, supported by the evidence, that
plaintiff had dealt with servants of defendant whom defendant had probably authorized to act
as they did.

District Court judgment for plaintiff upheld, with a minor variance as to amount.

WALIMU JILALA V. JOHN MONGO(1968)H.C.D. n. 81.

FACTS

Plaintiff sued defendant in Primary Court and sought damages of Shs. 5240/- The claim arose out
of a contract by which defendant agreed to transport bags of millet for plaintiff. Judgment was
for plaintiff, and defendant appealed, first to the District Court, and then to the High Court.

HELD

(1) Primary Court has no jurisdiction to try civil cases unless customary law or Islamic law is
applicable or the proceedings are for the recovery of civil debts or interest due to the Republic,
Government or any municipal, town or district council.

(2) The Magistrates’ Courts Act, section 14(i),(ii) provides that a Primary Court Magistrate has
jurisdiction in respect of civil suits no exceeding shs. 2000/-. This section does not confer the
power to hear civil suits other than those mentioned above, but merely places a monetary limit
on the jurisdiction of the court in those cases in which it has jurisdiction to hear the subject
matter of the suit.

(3) Plaintiff (respondent) argued that costs should not be allowed because it is the practice of
Primary Courts to hear cases involving private civil debts even though they have no jurisdiction
to do so.The Court is aware of this practice. Taking all these factors into consideration, appellant
should be awarded costs of Shs. 400/- as costs in the appeal.

Appeal allowed.
JOSEPH CONSTANTINE V. LOSILALE NDASKOI(1968)H.C.D. n. 381.

FACTS

Plaintiff agreed to build a house for defendant and, in return, defendant was to give plaintiff a
piece of land. Both are Waarusha. Plaintiff entered the land and carried out a number of
improvements. He failed to build the house for the defendant. Defendant forcibly ejected
plaintiff from the land. Plaintiff, in an action brought initially in the High Court, claimed
compensation for unexhausted improvements, including permanent trees and some houses and
produce, under Arusha law. In earlier proceedings, defendant had claimed title to the land on
the basis of Arusha Law.

HELD

(1) The dispute is governed by Arusha law, because (i) plaintiff based his claim upon it and not
upon the Law of Contract Ordinance; (ii) both parties had accepted that the agreement was
governed by customary law; and (iii) defendant’s claim for title of the land had been governed
by customary law, and it would now be illogical to decide the question of unexhausted
improvements on a different basis.

(2) Since the agreement was governed by customary law, the Law of Contract Ordinance was
excluded by section 1 (3) of that Ordinance, as amended in the Magistrates Courts Act 1963,
Sixth Schedule.

(3) By section 57(1) of the Magistrates Courts Act, no proceedings relating to immovable
property under customary law could be instituted in any court other than a Primary Court
without the leave of the High Court. “Immovable property” in that section must be defined to
include permanent trees and houses, but to exclude crops and “food plants.” Since most of this
claim related to permanent trees and houses, it was necessary to obtain leave from the High
Court.

(4) Since it is undesirable to devide the claim, the entire proceedings are referred to the Primary
Court.
ZEPHRIN MGABONA V. JONES KALUMUNA(1970) H.C.D. n. 12.

FACTS

The objector appealed a second time against attachment of his property in execution of civil
proceeding made under rule 17 of the Magistrates’ Courts (Civil Procedure in Primary Courts)
Rules, 1964. The appellant, the objector in the proceedings in the lower courts, asserted that his
property had been improperly seized by the court, in execution of a decree which the primary
court had given in favour of the respondent Jones against the appellant’s nephew, Martin s/o
Andrea. The decree had been made in Kamachumu Civil Case No. 281/67 in which Jones, the
present respondent, had sued Martin Andrea to recover a loan of Shs. 1515/-. By consent,
judgment was given in favour of the present respondent Jones and it was in execution of this
judgment debt that the property was seized which the present appellant/applicant Zephrin in
now claiming rightful belongs to him. The primary curt heard Zephrin’s objection but decided
that the property really belonged not to him but to the judgment debtor Martin. This decision
was upheld by the district court on appeal but the district court noted in its judgment as
follows:- “Although the primary court had no jurisdiction to try a case of such a debt of 1515/-,
under s. 18 of Cap. 537 no revision can be entertained at this stage since the case was decided
on 17.11.67 – now over 12 months. While I decline to distort the status quo, I shall deal with
the matter in the form this application has been presented.”

HELD

(1) It appears to be correct, as the appellant Zephrin urges in his petition of appeal, that the
primary court had no jurisdiction to hear the civil case No. 281/67 which was a claim for
recovery of a loan of Shs. 1515/-. Section 14(1) of the Magistrates’ Courts Act, Cap. 537 sets out
the jurisdiction of the primary courts. As was held by Mustafa, J. in the case of ENDWARD
KALEMELA vs Muyebe Rwenjege, P.C. Civil Appeal No. 105 of 1967, the primary court was given
jurisdiction under section 14(1) (ix) and (ii) in all proceedings of civil nature where the law
applicable is customary law or Islamic law or for the recovery of civil debts, rent or interest due
to the Republic, the Government or any municipal, town or district council, but was given no
jurisdiction to entertain claims like a loan between private individuals. Since the decision in the
last quoted case, section 14 of the Magistrates’ Courts Act has been amended by the Written
Laws (Miscellaneous Amendment) Act No. 50 of 1968. The amendment adds a new sub-
paragraph (iii) to subsection (1) of section 14, giving additional jurisdiction to the primary courts
in civil proceedings – “(iii) for the recovery of any civil debt arising out of contract, if the value
of the subject matter of the suit does not exceed one thousand shillings, and any proceedings by
way of counter-claim or set-off therein of the same nature and not exceeding such value.” “It
would seem that the Written Laws (Miscellaneous Amendment) Act No. 50 of 1968 has not
affected the position as explained by Mustafa, J., namely, that a primary court has no jurisdiction
to entertain claims like a loan between private individuals, unless such a loan arises out of
contract and does not exceed Shs. 1,000/-. However, the decision in Kamachumu Civil Case No.
281 of 1967 was by consent. No application to set it aside was made. The district court was
therefore justified in holding that it could not after 12 months revise the matter and therefore
was right to uphold the primary court’s decision which dismissed the respondent Zephrin’s
objection to the execution proceedings.”

(2) “Appeal dismissed.

FELALON (FATHER) V. KALINGA(1970) H.C.D. n. 259.

FACTS

These proceedings originated in the Primary Court of Kilolo. The contract was the basis of the
claim for the sum of Shs. 1,350/- which concerned payment for bricks made by the plaintiff for
the use of the mission at Kilolo. The judgment was given in the Primary Court in favour of the
plaintiff in the sum of Shs. 200/- only. Thereafter the dissatisfied plaintiff appealed to the District
Court of Iringa which allowed the appeal and “somewhat surprisingly gave judgment for the
appellant in the full sum claimed,” though there seemed to be the very slightest evidence to
support such a finding. Therefrom the matter was considered by the High Court in its Revisional
capacity.
HELD

(1) “In so far as the parties of the case are concerned it would appear that the Mission would
have been the proper party to have been the defendant and not one of the Fathers of the
Mission, who himself could hardly have been personally responsible for the sum claimed.”

(2) “…… It is quite clear that the whole of the proceedings in the Primary Court were not
maintainable there. I have already noted that the claim was in contract in the sum of Shs.
1,350/-. Section 14 of the Magistrates’ Courts Act (Cap. 537) as amended by the first schedule of
the Written Laws, (Miscellaneous Amendments) Act, 1968, provides jurisdiction of Primary Courts
in matters of contract up to a maximum of Shs. 1,000/- and it is consequently apparent that
the Primary Court lacked jurisdiction to try this action, which should have been filed in a Court
of superior jurisdiction. The proceedings in this case are consequently in excess of jurisdiction and
are ultra vires the powers of the trial Court. The proceedings in the Primary Court of Kilolo are
void and must be and are hereby ordered to be quashed.”

(3) “As a consequence of such order, the appeal to the District Court also had no validity, there
being no original proceedings which can support an appeal to a higher Court.”

(4) “As a result of this Order the matter is remitted to the Primary Court where it shall be
explained to the original parties- should the plaintiff desire to institute fresh proceeding , they
should be filed in a Court of competent jurisdiction, where the matter can be tried de novo.”

NICOLENE LTD V SIMMONDS[1953] 1 QB 543

FACT

Nicolene Ltd ordered 3,000 tonnes of steel bars from Simmonds. The two parties had never done
business before. The written agreement between the parties provided that the ‘usual conditions of
acceptance’ applied. There were no ‘usual conditions of acceptance’. After Simmonds failed to perform
delivery of the ordered steel bars, Nicolene sued for breach of contract. Simmonds argued that there
was no agreement, because the contract was vague and uncertain, because there were not any ‘usual
conditions of acceptance’ on which the contract could be formed.

ISSUES

Did the inclusion of the phrase that the contract was to be on the ‘usual conditions of acceptance’
render the contract unenforceable? Whether or not the agreement was void because its terms were too
uncertain to be capable of being upheld by a court.

HELD

The contract did not fail for uncertainty or vagueness. The phrase ‘usual conditions of acceptance’ was a
meaningless phrase because there were no usual conditions of acceptance but could be severed from
the rest of the agreement. The essential terms of the agreement itself were identifiable and could be
upheld by the court. In situations like this the courts should try and give effect to the parties’ intentions
and the terms of the agreement are to be upheld if they can be found and given effect to. For a contract
to fail for uncertainty the meaningless or vague phrase must relate to a significant aspect of the
agreement itself, without which there could not be a proper agreement that could be upheld by the
courts.

GREAT NORTHERN RAILWAY CO V WITHAM (1873)L.R.9

FACTS

The plaintiff railway company called for tenders for the supply of goods over a period of time. The
defendant tendered to supply certain goods for certain prices during a stated period. The plaintiff stated
to defendant that they “accepted” the tender. The defendant replied that their specifications would
receive his best attention. The plaintiff gave several orders, which were filled, but the defendant then
refused to supply any more.

ESSO PETROLEUM LTD V COMMISSIONERS OF CUSTOMS AND EXCISE [1976] 1 WLR

FACTS
Esso, a petrol company, by which customers would receive one free World Cup coin for every four
gallons of petrol purchased. The World Cup coins were manufactured coins with the head of a 1970
World Cup English footballer on one side and the word ‘Esso’ on another for a sales promotion. Esso ran
advertisements The Customs and Excise Commissioners claimed that the coins were liable to purchase
tax as goods “produced in quantity for general sale,” under the Purchase Tax Act 1963, Sch 1, Group 25.
Esso claimed that the coins were free gifts and, thus, there was no sale with the intention to create legal
relations and produce a legal effect.

ISSUE

The question arose as to whether, the distribution of the coins were goods “for general sale,” and thus
sold per a legal obligation by Esso to supply the coins under a contractual relationship with customers.

HELD

Firstly, the Court held that there was an intention to create a legal obligation by Esso to supply the coins.
The transaction took place in a business setting, and was itself a legal offer beyond a mere ‘puff’ (p 5)
that rendered Esso commercial advantages, and was accepted by the customers. Secondly, the Court
held that, for a contract of sale, there must be a transfer of the goods for monetary consideration. The
Court held that, despite the intention to create a legal obligation, there was no consideration for the
transfer of the coins as the coins were transferred under a separate contract for sale of the petrol.
Accordingly, the Court held that there was no contract of sale by Esso, there was a contract to produce
the coins as goods “for general sale.”

PHARMACEUTICAL SOCIETY OF GREAT BRITAIN V BOOTS [1953] 1 QB 401

FACTS

Boots introduced the then new self service system into their shops whereby customers would pick up
goods from the shelf put them in their basket and then take them to the cash till to pay. The
Pharmaceutical Society of Great Britain brought an action to determine the legality of the system with
regard to the sale of pharmaceutical products which were required by law to be sold in the presence of
a pharmacist. The court thus needed to determine where the contract came into existence.
ISSUE

The question was whether the contract of sale was concluded when the customer selected the product
from the shelves.

HELD

Goods on the shelf constitute an invitation to treat not an offer. A customer takes the goods to the till
and makes an offer to purchase. The shop assistant then chooses whether to accept the offer. The
contract is therefore concluded at the till in the presence of a pharmacist.

CARLILL V CARBOLIC SMOKE BALL Co [1893] 1 QB 256

FACTS

A Newspaper advert placed by the defendant stated:-

£100 reward will be paid by the Carbolic Smoke Ball Company to any person who contracts influenza
after having used the ball three times daily for two weeks according to the printed directions supplied
with each ball...

£1000 is deposited with the Alliance Bank, shewing our sincerity in the matter."

Mrs Carlill purchased some smoke balls and used them according to the directions and caught the flu.
She sought to claim the stated £100 reward.

The defendant raised the following arguments to demonstrate the advertisement was a mere invitation
to treat rather than an offer:
1. The advert was a sales puff and lacked intent to be an offer.

2. It is not possible to make an offer to the world.

3. There was no notification of acceptance.

4. The wording was too vague to constitute an offer since there was no stated time limit as to catching
the flu.

5. There was no consideration provided since the 'offer' did not specify that the user of the balls must
have purchased them.

HELD

The Court of Appeal held that Mrs Carlill was entitled to the reward as the advert constituted an offer of
a unilateral contract which she had accepted by performing the conditions stated in the offer. The court
rejected all the arguments put forward by the defendants for the following reasons:

(a) The statement referring to the deposit of £1,000 demonstrated intent and therefore it was not a
mere sales puff.

(b) It is quite possible to make an offer to the world.

(c) In unilateral contracts there is no requirement that the offeree communicates an intention to accept,
since acceptance is through full performance.

(c) Whilst there may be some ambiguity in the wording this was capable of being resolved by applying a
reasonable time limit or confining it to only those who caught flu whilst still using the balls.

(d) The defendants would have value in people using the balls even if they had not been purchased by
them directly.

FISHER V BELL [1961] QB 394.

The defendant shopkeeper displayed in his shop window a flick knife accompanied by a price ticket
displayed just behind it. He was charged with offering for sale a flick knife, contrary to s. 1 (1) of the
Restriction of Offensive Weapons Act 1959.

ISSUE

The issue was whether the display of the knife constituted an offer for sale (in which case the defendant
was guilty) or an invitation to treat (in which case he was not).

HELD

The court held that in accordance with the general principles of contract law, the display of the knife
was not an offer of sale but merely an invitation to treat, and as such the defendant had not offered the
knife for sale within the meaning of s1(1) of the Act. Although it was acknowledged that in ordinary
language a layman might consider the knife to be offered for sale, in legal terms its position in the
window was inviting customers to offer to buy it. The statute must be construed in accordance with the
legal meaning, as

“…any statute must be looked at in light of the general law of the country, for Parliament must be taken
to know the general law” (per Lord Parker C.J. at para. 4).

It is well established in contract law that the display of an item in a shop window is an invitation to
potential customers to treat. The defendant was therefore not guilty of the offence with which he had
been charged.

R v CLARKE (1927), 40 CLR 227

FACTS
Crown offered a reward for information that would lead to the conviction of the murderer. Clarke was
aware of this reward. Clarke was under suspicion of the murder by crown, and to reduce his own
sentence, gave the information leading to the arrest of the murderers. Without that evidence there
would have been no case. Clarke admitted that he had no intention (at the time he gave the
information) to earn the reward. Crown refuses to pay reward.

ISSUE

Was there a contract between Clarke and the Crown and how would one determine this contract?

DECISION

Appeal allowed

REASONS

The court, despite objection on public policy grounds that not finding a contract would dissuade other
individuals from coming forward with evidence for rewards in the future, held that Clarke could not
accept an offer he didn't know about citing Fitch v Snedaker and that forgetting about the reward was as
good as ignorance. Further, Clarke had no expectation interest when he gave information to fulfill
conditions of contract. The court ruled further than not only was a contract not formed, but Clarke had
not fulfilled the terms of the contract as the reward stated a reward for "such information as shall lead
to the arrest and conviction of the persons" and the arrests took place before the information was
given.

One cannot accept an offer one doesn't know exists, or that one has forgotten exists.

One needs an expectation or reliance interest in the reward in order for that reward to be recoverable.
POWELL v LEE (1908) 99 LT 284

FACTS

Powell applied for a job as headmaster and the school managers decided to appoint him. One of them,
acting without authority, told Powell he had been accepted. Later the managers decided to appoint
someone else. Then Powell brought an action alleging that by breach of a contract to employ him he had
suffered damages in loss of salary.

HELD

The county court judge held that there was no contract as there had been no authorised communication
of intention to contract on the part of the body, that is, the managers, alleged to be a party to the
contract. This decision was upheld by the King's Bench Division

FELTHOUSE v BINDLEY[1862] EWHC CP J35

FACTS

The complainant, Paul Felthouse, had a conversation with his nephew, John Felthouse, about buying his
horse. After their discussion, the uncle replied by letter stating that if he didn’t hear anymore from his
nephew concerning the horse, he would consider acceptance of the order done and he would own the
horse. His nephew did not reply to this letter and was busy at auctions. The defendant, Mr Bindley, ran
the auctions and the nephew advised him not to sell the horse. However, by accident he ended up
selling the horse to someone else.

ISSUE

Paul Felthouse sued Mr Bindley in the tort of conversion, with it necessary to show that the horse was
his property, in order to prove there was a valid contract. Mr Bindley argued there was no valid contract
for the horse, since the nephew had not communicated his acceptance of the complainant’s offer. The
issue in this case was whether silence or a failure to reject an offer amount to acceptance.
HELD

It was held that there was no contract for the horse between the complainant and his nephew. There
had not been an acceptance of the offer; silence did not amount to acceptance and an obligation cannot
be imposed by another. Any acceptance of an offer must be communicated clearly. Although the
nephew had intended to sell the horse to the complainant and showed this interest, there was no
contract of sale. Thus, the nephew’s failure to respond to the complainant did not amount to an
acceptance of his offer.

FOLEY V CLASSIQUE COACHES LTD(1943) 2 KB 1

FACTS

Foley owned some land and a petrol station. He sold part of the land adjoining the station to Classique
Coaches Ltd, a coach company. One of the conditions of the agreement was that the company purchase
all of their fuel for the coaches from Foley’s filling station as long as it could be provided by him. The
agreement also contained an arbitration clause. It did not, however, provide a price for the agreement.
Classique complied with the terms of this agreement for three years until one of their lawyers advised
them that as a price had not been indicated, it was unlikely in his opinion that there was a binding
agreement. After this, Classique stopped buying fuel from Foley, who sued them for breach of contract.

ISSUE

Whether or not the agreement was void for uncertainty because a price had not been mentioned in the
agreement.

HELD
The agreement was not void for uncertainty simply because the price for the fuel had not been
mentioned in the agreement. Classique had performed their agreement for several years, and this
obligation could not simply be repudiated. Where the parties had acted as though an agreement had
been created and performed their obligations in this way, there was instead an implied term that the
price of the fuel to be purchased under the agreement was to be reasonable. Furthermore, if agreement
could not be reached on what was a reasonable or fair price, the agreement contained an arbitration
clause specifically designed to resolve disputes of this nature. Classique coaches were therefore in
breach of contract by failing to purchase fuel from Foley, as required by the agreement.

PAYNE V. CAVE (1789) 3 TR 148

FACTS

Mr Cave was made the highest bid for a good in an auction. But then, Mr Cave changed his mind and he
withdrew his bid before the auctioneer brought down his hammer.

It was held that Mr. Cave, the defendant, was not bound to purchase the goods. His bid amounted to an
offer which he was entitled to withdraw at any time before the auctioneer signified acceptance by
knocking down the hammer. Note: The common law rule laid down in this case has now been codified in
many countries in variations of the Sale of Goods Act, e.g. UK 1979 s57(2).

HELD

The court held that Mr Cave was entitled to withdraw his offer at any time before the auctioneer
accepted it. The auctioneer's request for bids was an invitation to treat, and each bid constituted an
offer which could be withdrawn at any time until it's accepted, and finally, the fall of the auctioneer's
hammer constituted acceptance of the highest bid.

Significance

Barry v Davies[1] qualified Payne by ruling that if the auction is advertised as being "without a reserve
price", then the auctioneer is bound to sell to the highest bona fide bidder (and not the seller himself, as
attempted in Warlow v Harrison). Also, the Sale of Goods Act 1979, s 57 states that if an auction is held
without any reserve, then the auctioneer must accept the highest bid (this was subsequently applied in
Barry v Davies).

VICTORIA HOTEL V MONTEFIORE (1866) LR 1 Ex 109

FACTS

The defendant, Mr Montefiore, wanted to purchase shares in the complainant’s hotel. He put in his offer
to the complainant and paid a deposit to his bank account to buy them in June. This was for a certain
price. He did not hear anything until six months later, when the offer was accepted and he received a
letter of acceptance from the complainant. By this time, the value of shares had dropped and the
defendant was no longer interested. Mr Montefiore had not withdrawn his offer, but he did not go
through with the sale.

ISSUES

The complainant brought an action for specific performance of the contract against the defendant. The
issue was whether there was a contract between the parties after the acceptance of the original offer six
months after it was made.

HELD

The court held that the Ramsgate Victoria Hotel’s action for specific performance was unsuccessful. The
offer that the defendant had made back in June was no longer valid to form a contract. A reasonable
period of time had passed and the offer had lapsed. The court stated that what would be classed as
reasonable time for an offer to lapse would depend on the subject matter. In this case, it was decided
that six months was the reasonable time before automatic expiration of the offer for shares. Yet, for
other property, this would be decided by the court in the individual cases.
LORING V CITY OF BOSTON (1844)7Metcalf409.

FACTS

The mayor and the aldermen of the city passed a resolution to widen a city street and gave notice to the
owners, tenants, and occupants of the land taken to remove all buildings and obstructions thereon.
About 18 months later, the lessee gave notice to the mayor and the aldermen that he intended to build
upon his property. An order of notice was passed, and a copy was served on the lessee, declaring the
city's intention to widen the street and to take the land in question. No compensation was ever paid to
the lessee. The trial court directed a verdict in favor of respondents on the ground that the assignees'
claim was time-barred. The assignees in insolvency filed exceptions to a directed verdict.

ISSUE

May a lessee challenge a road widening after expiration of a state limitations period?

HELD

No

CONCLUSION

On appeal, the court overruled the assignees' exceptions. The court determined that the resolution
initially passed by the mayor and aldermen for the taking of the street began the one-year period of
limitation under Mass. Rev. Stat. ch. 24, § 55 as that was the act that created the public right or
easement over the land. The court held that the first laying out was not waived by the city because,
once a way was laid out, it continued to be so until discontinued according to law.

ROUTLEDGE V GRANT(1828)4Bing653

FACTS
The defendant contacted the claimant in writing, offering to purchase the lease of the claimant’s home.
The offer stated that it would remain open to the claimant for a period of six weeks. However, during
this period, before the claimant had accepted, the defendant changed his mind about the purchase and
wrote to the claimant once again purporting to withdraw the offer. After receiving this second letter, still
within six weeks from the first, the claimant accepted the defendant’s offer.

ISSUE

The issue was whether the defendant was contractually bound by his original letter to keep the offer
open for six weeks, and by extension whether he was therefore bound by the claimant’s acceptance
within that period.

HELD

The court held that the original letter did not bind the defendant to keep the offer open for a full six
weeks, and as such it had been validly withdrawn by the defendant, and the claimant’s purported
acceptance was ineffective. The underlying reason for this was that it is a fundamental principle of
contract law that one party cannot be bound whilst the other is not. In the words of Best CJ:

“… If a party make an offer and fix a period within which it is to be accepted or rejected by the person to
whom it is made, though the latter may at any time within the stipulated period accept the offer, still
the former may also at any time before it is accepted retract it; for to be valid, the contract must be
mutual: both or neither of the parties must be bound by it…” (p. 4).

BYRNE & CO v LEON VAN TIENHOVEN & CO [1880] 5 CPD 344

FACTS
The defendants wrote a letter, on October 1, to the plaintiffs offering the sale of 1000 boxes of tin
plates. The defendant was based in Cardiff and the plaintiff was based in New York, and letters took
around 10-11 days to be delivered. The plaintiffs received this letter on October 11 and accepted it on
the same day by telegram, as well as by letter on October 15. However, on October 8, the defendant
sent a letter to the plaintiffs which withdrew their offer and this arrived with the plaintiff on October 20.
The plaintiffs claimed for damages for the non-delivery of the tin plates.

ISSUE

The court was required to establish whether the withdrawal of the offer for the sale of goods was
acceptable. The court would have to consider whether the contract had been agreed by the acceptance
by the plaintiffs of the letter of October 1, or whether the defendants had successfully withdrawn their
offer by issuing the withdrawal by letter on October 8.

HELD

The court held that the withdrawal of the offer was ineffective as a contract had been constructed
between the parties on October 11 when the plaintiffs accepted the offer in a letter dated October 1. On
this basis, it was held that an offer for the sale of goods cannot be withdrawn by simply posting a
secondary letter which does not arrive until after the first letter had been responded to and accepted.
The court gave judgment for the plaintiff and awarded that the defendant paid their costs.

LUXOR(Eastbourne)LTD V COOPER[1941]1K.B.290.

FACTS

The plaintiff had an agreement to provide prospective purchasers for the sale of two cinemas on behalf
of the defendants for which he was due to receive £10,000 commission. Having provided prospective
purchasers, the defendants refused to complete the contract on the basis that the agreement was made
with unauthorised persons of the company and hence it was ultra vires (beyond the director’s and the
company’s powers). The Court considered that whilst it was possible for the agreement to be ratified,
this was prevented by the fact that all the directors had a personal interest in the transaction, nullifying
any attempt at ratification.

ISSUES

whether there is an implied term in the contract that the agent should receive remuneration where the
principal chooses not to proceed with the contract.

The law of restitution operates where the principal derives a benefit from the contract and prevent the
principal from receiving unjust enrichment under a contract where the agent’s fee is not stipulated.
Under the law of restitution, the agent is entitled to be paid a reasonable sum for the work completed,
which is referred to as a quantum meruit payment.This figure is to be calculated at the point the
principal receives the benefit and thus will not incorporate future profits the principal receives

HELD

The Court held that there was no agreement of agency as the agent had not been asked to find a
purchaser for the cinema albeit that he was promised a reward if he did. This argument relates to the
agent approaching the principal as opposed to the principal requesting the services of the agent.
Moreover, the agreement was stated to be subject to contract, removing the right to commission where
the contract did not proceed. The House of Lords concluded that there could be no implied term on the
basis that it imposed a negative commitment, in which it would not be possible to define precise terms.
The Court assessed the quantum meruit argument but concluded that this is not available where the
principal employs an agent and subsequently revokes the agreement on the basis that the agent is only
due to be paid on completion thereby finding that there was no implied term for remuneration until the
contract had been completed. This was irrespective of the contract not being pursued by the principal.

DAHLIA v FOUR MILLBANK NOMINEES [1978] Ch 231

FACTS
The claimant wished to purchase some property from the defendant. The terms had been agreed but no
written contract had been completed. The defendant promised the claimant that if he arranged for a
bankers draft for the deposit to be delivered to the defendant before 10.00 am on the 22nd December
he would complete the written contract. The claimant duly complied with the request but the defendant
refused to complete. The claimant brought an action stating that unilateral contract existed and the
defendant was thus bound by that contract to complete the written contract for the sale of the
property.

HELD

A unilateral contract did exist.

Goff LJ stated obiter on the issue of revocation of a unilateral offer:-

"Whilst I think the true view of a unilateral contract must in general be that the offeror is entitled to
require full performance of the condition which he has imposed and short of that he is not bound, that
must be subject to one important qualification, which stems from the fact that there must be an implied
obligation on the part of the offeror not to prevent the condition becoming satisfied, which obligation it
seems to me must arise as soon as the offeree starts to perform. Until then the offeror can revoke the
whole thing, but once the offeree has embarked on performance it is too late for the offeror to revoke
his offer."

BALFOUR V. BALFOUR [1919] 2 KB 571

FACTS

A husband worked overseas and agreed to send maintenance payments to his wife. At the time of the
agreement the couple were happily married. The relationship later soured and the husband stopped
making the payments. The wife sought to enforce the agreement.

HELD
The agreement was a purely social and domestic agreement and therefore it was presumed that the
parties did not intend to be legally bound.

ROSE & FRANK Co V. CROMPTON & BROS LTD

FACTS

An American company and English company entered into a sole agency agreement in 1913 for the sale
of paper goods in the USA. The written agreement contained a clause stipulating that it was not a formal
or legal agreement, and an “honourable pledge” between business partners. Subsequently, the
American company placed orders for paper which were accepted by the British company. Before the
orders were fulfilled, the British company terminated the agency agreement and refused to send the
goods, claiming that the 1913 agreement was not legally binding and that, consequently, the orders did
not create legal obligations.

ISSUE

The questions arose as to (1) whether the sole agency agreement of 1913 constituted a legally binding
contract, and (2) whether the orders constituted enforceable contracts of sale.

HELD

Firstly, as to the 1913 agreement, the Court gave overriding weight to the provision in the agreement
that expressly provides that it is to be solely an “honourable pledge”, as demonstrating that the parties
did not intend the arrangement as a legally-binding contract. The Court explained that the argument
that clauses restricting the legal enforceability of a contract apply solely when the document is
otherwise unquestionably of legal force. In this case, the document and circumstances did not intend to
create any legal interest, and the clause expressly precluding the agreement’s legal enforceability
applies. Secondly, the Court held that the fact that the arrangement does not constitute a legal contract
does not preclude the orders and acceptances from constituting legally-binding contracts. The lack of
enforceability of an express legal arrangement under an agency agreement does not preclude the legal
transactions. The orders constituted mutual offers and acceptances with each transaction having
ordinary legal significance.
OSCAR CHESS LTD V. WILLIAMS[1957]1W.L.R.370.

FACTS

The defendants sold a Morris car to the claimants, who were motor traders, for £290. The defendants
provided a copy of the vehicles first registration indicating that the car was first registered in 1948. Some
eight months later the claimants became aware that the car had actually been registered in 1939 and
was therefore only worth £175. The defendant honestly believed that the car was a 1948 model. The
claimants claimed damages for breach of contract.

ISSUE

The issue in this context was whether the statements given by the defendants constituted a warranty as
to the age of the car.

HELD

The Court of Appeal found that the defendants’ comments did not constitute a warranty. More
importantly, the court set out a number of considerations that should be made when assessing whether
a statement is a warranty.

(1) Where an assumption is fundamental to a contract, it does not mean that it is a term of the contract.

(2) The term warranty means a binding promise as well as a subsidiary, non-essential, term of a contract.

(3) A warranty must be distinguished from an innocent misrepresentation.

(4) Whether a warranty is intended must, judged objectively, be based on the parties’ words and
behaviour.
(5) Where one party makes a statement, which should be within his own knowledge, but not the
knowledge of the other, it is easy to infer a warranty. If the party states that it is not within his
knowledge and is information passed from another, a warranty is less easily inferred.

(6) An oral representation repeated in writing suggests a warranty, but the issue is not conclusive.
Neither is the fact that it is not stated in writing.

PARKER V. CLARK[1960]1W.L.R.286.

FACTS

The Clarks were an elderly married couple. Mrs Parker was Mrs Clark’s niece, and Mr Clark suggested
she and her husband move into their home with them. Mr Parker supported the idea but expressed
concern that it would mean their selling their own house. Mr Clark wrote to Mr Parker stating the Clarks
would bequeath their home to Mrs Parker, her sister and her daughter on their death. The Parkers sold
their home and moved in with the Clarks. The Clarks told the Parkers the arrangement was not working,
and they would have to move out. The Parkers brought an action for breach of contract.

ISSUE

The Parkers argued the agreement was contractual in nature, and was intended to be legally binding. In
reliance on it being a legally binding agreement, the Parkers sold their home and shared the running
costs of the Clarks’ home. They contended the Clarks were in breach of this agreement by wrongfully
giving them notice to quit. The Clarks denied the existence of any agreement. Even if there had been an
agreement, it was insufficient to satisfy s40(1) Law of Property Act 1925 because it was not in writing.
They also claimed the terms of the purported agreement were too vague to form a valid contract.

HELD

The Parkers were successful in their claim. The language used in the letters and the surrounding
circumstances indicated that both parties intended the agreement to have legal force. Mr Clark’s letter
was sufficient to satisfy s40(1) Law of Property Act 1925 and amounted to a contractual offer. The
Parkers were entitled to damages for the loss of the prospect of inheritance and the loss of the value of
the benefit of living in the house.

ESSO PETROLEUM LTD V. COMMISSIONERS OF CUSTOMS AND EXCISE[1976] 1 WLR

FACTS

Esso, a petrol company, by which customers would receive one free World Cup coin for every four
gallons of petrol purchased. The World Cup coins were manufactured coins with the head of a 1970
World Cup English footballer on one side and the word ‘Esso’ on another for a sales promotion. Esso ran
advertisements The Customs and Excise Commissioners claimed that the coins were liable to purchase
tax as goods “produced in quantity for general sale,” under the Purchase Tax Act 1963, Sch 1, Group 25.
Esso claimed that the coins were free gifts and, thus, there was no sale with the intention to create legal
relations and produce a legal effect.

ISSUE

The question arose as to whether, the distribution of the coins were goods “for general sale,” and thus
sold per a legal obligation by Esso to supply the coins under a contractual relationship with customers.

HELD

Firstly, the Court held that there was an intention to create a legal obligation by Esso to supply the coins.
The transaction took place in a business setting, and was itself a legal offer beyond a mere ‘puff’ (p 5)
that rendered Esso commercial advantages, and was accepted by the customers. Secondly, the Court
held that, for a contract of sale, there must be a transfer of the goods for monetary consideration. The
Court held that, despite the intention to create a legal obligation, there was no consideration for the
transfer of the coins as the coins were transferred under a separate contract for sale of the petrol.
Accordingly, the Court held that there was no contract of sale by Esso, there was a contract to produce
the coins as goods “for general sale.”
JONES V. PAVALTON[1969] 1 WLR 328

FACTS

A mother promised to pay her daughter $200 per month if she gave up her job in the US and went to
London to study for the bar. The daughter was reluctant to do so at first as she had a well paid job with
the Indian embassy in Washington and was quite happy and settled, however, the mother persuaded
her that it would be in her interest to do so. The mother's idea was that the daughter could then join her
in Trinidad as a lawyer. This initial agreement wasn't working out as the daughter believed the $200 was
US dollars whereas the mother meant Trinidad dollars which was about less than half what she was
expecting. This meant the daughter could only afford to rent one room for her and her son to live in. The
Mother then agreed to purchase a house for the daughter to live in. She purchased a large house so that
the daughter could rent out other rooms and use the income as her maintenance. The daughter then
married and did not complete her studies. The mother sought possession of the house. The question for
the court was whether there existed a legally binding agreement between the mother and daughter or
whether the agreement was merely a family agreement not intended to be binding.

HELD

The agreement was purely a domestic agreement which raises a presumption that the parties do not
intend to be legally bound by the agreement. There was no evidence to rebut this presumption.

ABDALLAH SHAMTE V. MSAADAH[1972]HCD9.

FACTS

The appellant and respondent, African Moslems, were married according to Islamic Law. The marriage
ended by divorce by talk 18 years after solemnization. After the divorce the respondent filed a suit in
the Primary Court claiming Shs. 3,300/= as representing her contribution to the costs of erecting two
houses and a but during the subsistence of the marriage. The respondent’s case was that shortly after
their marriage the appellant who was then working as a house-boy for a certain expatriate found her a
job as a yaya with the same employer. It was agreed between them that the appellant was to take her
wages as her contribution to the building of some houses. It was part of the agreement that one of the
houses would eventually be given to her. On the basis of the agreement the appellant received her
wages for the whole period of her employment and built two houses. When the expatriate left they
went to live in Bagamoyo where the respondent’s relatives gave them a piece of land on which they
cultivated rice. They used the proceeds of the sale of the rice to build yet a third house. When the
marriage broke up the appellant refused to give her any of the houses. The appellant disputed the
claim. He admitted that the respondent was employed as she alleged but denied receiving her wages
and that there was any partnership or arrangement between them. The primary court magistrate
concurred with the assessors that there was not sufficient evidence for a finding of partnership and held
that the respondent could not simply allege partnership by virtue of being the appellant’s wife. On
appeal to the district court the magistrate set aside the decision and awarded the respondent the
amount claimed. He disagreed with the findings of the assessors and held that the respondent’s story
was consistent and held that the respondent’s story was consistent and was sufficient to support her
claim. In making his order he relied on the English case of Balfour v. Balfour [1919] K. B. 521. He stated
that that case established the principle that contracts between husband and wife were enforceable if
they were intended to have legal consequences. In the High Court counsel for -10 – The appellant
conceded that the respondent did contribute but argued that since this was an appeal from a primary
court the law to be applied was either Moslem law or customary law. He submitted that the district
magistrate was wrong to apply English law.

HELD

(1) “I agree … that the proper law applicable to the case was customary law or Islamic law and that it
was wrong for the District Magistrate to import the principle of English law.”

(2) “I am of the view however that the District Magistrate’s conclusions were fully justified on the basis
of customary law and/or Islamic law. That Islamic laws as well as Customary Law are equally applicable
to Africans converted to Islam is fully established by the decisions in Hussein Mbwana v. Amiri
Chongwe (Tanzania High court Civil Appeal No. 1 of 1969) and Re. Kusudwa [1965] E. A. 248. In the
latter case Sir Ralph Windham C. J. stated as follows:- “The fact that a tribe may have been converted to
Islam does not necessarily mean that its customs, particularly those relating to land tenure are thereby
changed.” In the former case Spry J. (as he then was) made the following observations: - “It has
sometimes been argued that Islamic law is to be regarded as applying to Africans as part of their
customary law. In my view this is not a sound proposition. Customary law is the body of customs which
b usage has acquired the force of law. As such it is constantly changing with changing ways of life. It
cannot therefore, in my view include a complete and fully developed system of Religious law. Some
elements of Religious law may, of course, be absorbed into the customary law but they are then to be
judged and are subject to change as part of the customary law and they lose the attributes of the
Religious law from which they were derived. I hold therefore that there are two systems or law which
may apply in an African Muslim Community, Religious law in matters personal, such as marriage, and
customary law which may apply in all spheres of life.”

(3) “The District Magistrate was therefore not strictly correct when he held, in effect, that Islamic law
was exclusively to be applied to the case before him. There can be no doubt that a contract such as the
one under consideration is enforceable under Customary law. Even under Islamic law a Muslim wife is
not obliged to provide anything for household expenses, a Muslim wife’s wages are her personal
property and there is nothing, in principle, to invalidate or to prevent the enforcement of an
arrangement such as the present one under Islamic law.”

(4) “The District Magistrate was fully justified in his finding on the fact. The reasons given by the
Primary Court for dismissing the respondent’s claim were unsound.”

(5) Appeal dismissed.

BLACKPOOL AND FYLDE AERO CLUB LTD V. BLACKPOOL BOROUGH COUNCIL[1990]3AllE.R.25

FACTS

The defendants were a local authority that managed the local airport as its owners. They had granted
the plaintiffs, who were a flight club, a concession to operate casual flights out of the airport. The
concession came up for renewal and the tender invitation was released to the plaintiff and six other
companies. The tender had a clause stating that tenders would not be considered if they missed the
time and date deadline stipulated. The town’s clerk failed to empty the letterbox on time and as such,
the plaintiff’s tender missed the deadline and the defendant accepted a lower proposal. The plaintiffs
brought an action for damages against the defendant for negligence and for breaching their contract. At
an initial hearing, the judge held that the request for tenders by the defendant required them to
consider all the tenders received and on this basis, they were liable to the plaintiff. The defendants
appealed this decision.
ISSUE

The issue for the court was whether the invitation to submit a bid for tender could be considered to
establish the intent to create a contract between the parties. It is important to note that contracts were
not to be readily implied by the courts which made this deliberation particularly important.

HELD

The court dismissed the defendant’s appeal. They found that the invitation to submit a tender was
usually no more than an offer to receive bids but in this circumstance, examining the behaviour of the
parties created clear intention to create a contract and therefore the failure to consider the plaintiff’s
application made them liable.

NASH V. INMAN[1908] 2 KB 1

FACTS

A tailor supplied 13 waistcoats and other things of that kind to an undergraduate student when the
latter was a minor. Student refused to pay for the goods supplied and tailor brought this suit against him
for recovery of price of those goods.

ISSUES

(a)Whether the goods so supplied fall into the category of necessary?

(b)If the answer is No, whether the contract was enforceable at law?

(c)On whom does the onus to prove or disprove the necessity of goods so supplied fall?
HELD

“Necessaries means goods or services suitable to the condition in life of minor, or any other person
incapable of forming contract for himself, and as to his actual requirements at the time of sale and
delivery”. This means that not only the goods need to be suitable and necessary to the condition in life
of a minor (here) but also be needed by minor in actuality, i.e. he must not be already having sufficient
supply of such goods. The onus to prove that the thing contracted for was a necessity lies on plaintiff,
however difficult it may be to prove that it was needed by minor in actuality.

In English Law, incompetent person is to compensate the supplier of necessities to him by paying a
reasonable price for such necessities. However, if the necessities so supplied are services instead of
goods, then action for recovery lies against the estate of such person and not against him.

Fletcher-Moulton LJ:

“An infant, like a lunatic, is incapable of making a contract of purchase in the strict sense of the words;
but if a man satisfies the needs of the infant or lunatic by supplying to him necessaries, the law will
imply an obligation to repay him for the services so rendered, and will enforce that obligation against
the estate of the infant or lunatic.”

Buckley LJ:

“an infant may contract for the supply at a reasonable price of articles reasonably necessary for his
support in his station in life if he has not already a sufficient supply. To render an infant’s contract for
necessaries an enforceable contract two conditions must be satisfied, namely,

(1.) the contract must be for goods reasonably necessary for his support in his station in life, and

(2.) he must not have already a sufficient supply of these necessaries.”

FACTS

The appellants appealed from a judgment and decree of the High Court decreeing specific
performance of a contract for the sale of land, the contract having been affected by correspondence.
Their defence in the High Court was that the contract documents wer e in fact bogus and had been
made in pursuance of a conspiracy between the respondents and themselves to fabricate false evidence
for the purpose of proceedings which the respondents had said that they intended to bring against a
third party. On appeal the appellants applied to admit fresh evidence in support of their defence. The
court considered the affidavits in support of the application and concluded that the appellants had
failed to establish that the evidence sought to be adduced could not with reasonable diligence have
been made available at the trial, and dismissed the application. The appellant’s counsel thereupon
withdrew all the grounds of appeal, except one, which alleged that there had never been a complete or
finally concluded agreement of which specific performance could have been decreed. It was argued;

( a ) that the use of the words “. . . Please contact our Mombasa office for preparation of formal
documents . . .” in the telegram accepting the appellant’s offer indicated that it was not a final
acceptance and

(b) that the expression “. . . payment to be effected within seven months . . .” in the appellant’s offer
indicated further that no concluded agreement had been reached, as it left both the date of completion
and the method of payment open.

HELD

(i) except on grounds of fraud or surprise, the general rule is that an appellate court will not admit fresh
evidence, unless it was not available to the party seeking to use it at the trial, or that reasonable
diligence would not have made it so available.

(ii) f a contract depends on a series of letters or other documents, and it appears from them that the
drawing. up of a formal instrument is contemplated, it is a question of construction whether the letters
or other documents constitute a binding agreement or whether there is no binding agreement until the
instrument has been drawn up; the whole of the correspondence or documents must be considered,
and a document which, taken alone, appears to be an absolute acceptance of a previous offer does not
make the contract binding if, in fact, it does not extend to all the terms under negotiation, including
matters appearing from oral communications.
(iii) the correspondence, in the present case, amounted to a complete offer and acceptance and the fact
that the respondents desired it to be put into more formal legal shape did not make the contract
conditional or relieve either party from liability under it.

(iv) even if the completion date was unspecified or uncertain, this would not render the contract
unenforceable.

Appeal dismissed.

AL-JAH NOMAN MOHAMMED QADASI V. GANEM AHMED MUGAHID QADASI[1963] 1 EA 142

FACTS

The appellant and the respondent had for many years prior to May 29, 1949, been running, under an
agreement known as a “zam”, a bakery which they had purchased many years earlier, and on that
date they renewed the agreement in writing. it was agreed that a “zam” is the name given in Aden to
a type of agreement in present use there whereby two persons agree to share a business turn and turn
about. The renewed agreement provided, inter alia months, tha , that each party would run the bakery
for a period of six t each was bound to take over his turn on the day it was due and that if he refused
to do so, the other would have the right to claim damages or compensation. The agreement also
provided that in the event of either party refusing to hand over the bakery on completion of his turn,
he would be liable to pay the other party a sum of Rs. 20/- per day until the bakery was handed
over. On April 13, 1961, the appellant filed a suit in the Supreme Court of Aden claiming that the
respondent’s zam had expired on January 4, 1961, and that the respondent had refused delivery to
the appellant for his turn, and the appellant claimed a declaration that he was entitled to six months’
zam and a decree for specific performance and compensation at the rate provided in the agreement.
In his defence the respondent alleged that the appellant was “given” the zam as being the son-in-law
and servant of the respondent and that he had broken the agreement by failing to run the bakery for
about five months, necessitating expenditure on repairs and replacements, and that, therefore, he had
informed the appellant that he “would not like to continue the zam”. He also denied the claim for
specific performance, alleging that there was no consideration for the zam agreement and that the
appellant was himself in breach of the agreement and was guilty of laches. The Supreme Court held
that there was no consideration to support the agreement in question and dismissed the suit on that
ground. Thereupon the appellant appealed and the respondent filed a cross-appeal contending that the
decision of theSupreme Court should be affirmed on other grounds.

HELD

(i) the agreement of May 29, 1949, contained reciprocal promises in that each party undertook to run
the business in turn for periods of six months and thereafter to hand it over to the other.

(ii) these promises had value in the eyes of the law for each party had an interest, with financial
implications, in having the business continuously operated in order that customers would be retained
and the goodwill thereby maintained; consequently.

(iii) there was accordingly consideration sufficient to support the agreement.

Appeal allowed. Case remitted to Supreme Court for consideration of other issues.

THOMAS V. THOMAS 1842) 2 QB 851; 114 ER 330.

FACTS

Before he died, Mr Thomas said he wished for his wife to have the house they lived in for the rest of her
life. However, this was not written into his will. After he died, his executors, ‘in consideration of such
promise’, agreed with Mrs Thomas that she would pay a peppercorn rent of £1 per year in return for
being allowed to live in the house. They later tied to dispossess her.

ISSUES

A valid contract must be supported by consideration. That is, the promisee must promise to do
something in return for the promise of the other party. It was argued that there was no contract
because Mrs Thomas, the promise, provided inadequate consideration as the rent was nothing like a
commercial rent for the property. Mrs Thomas argued that her promise to pay rent and keep the house
in repair was good consideration.

HELD

The executors statement did not create a contract as it only expressed their motive for entering into the
agreement. However, the £1 rent was recognized as good consideration. Patteson J said (at 859):

Motive is not the same thing as consideration. Consideration means something which is of some value in
the eye of the law, moving from the plaintiff:

Without consideration the transaction was merely a voluntary gift. However, by agreeing to pay rent in
return for being allowed to stay in the property, Mrs Thomas had provided consideration, even though it
was not economically adequate or anything like a commercial rent for the building. Therefore, the
contract was enforceable.

CURRIE V. MISA (1874) LR 10 Ex 153.

FACTS

Lizardi & Co. sold a number of bills of exchange to Mr. Misa, drawn from a banking firm owned by Mr.
Currie, and were to be paid on the next day. However, Lizardi was in substantial debt to Mr. Currie’s
bank and was being pressed for payment. A few days later, upon paying in cheques, Mr. Mirsa learned
of Lizardi’s stopped payments and outstanding debts, instructing his bankers not to honour the cheque.
The question arose as to whether the cheque was payable, particularly as to whether the sale of an
existing debt formed sufficient consideration for a negotiable security, so as to render the creditor to
whom it was paid, Mr. Currie, a holder for the value of the cheque.

ISSUE

The question arose as to whether the existing debt constituted sufficient consideration for the security
so as to constitute a legally-enforceable contract for the creditor.
HELD

The Court held that consideration must “consist either in some right, interest, profit, or benefit accruing
to the one party, or some forbearance, detriment, loss, or responsibility, given, suffered, or undertaken
by the other.” (p 162). Thus, there can be no legal contract unless there is consideration in the form of a
benefit gained, or detriment suffered arrangement by the parties. On the facts, the Court held that the
title of a creditor to a negotiable security on account of a pre-existing debt and transferred to him, bona
fide, without any notice of infirmity of title by the debtor is indefeasible. The pre-existing debt did not in
and of itself form a sufficient consideration for the negotiable security. Accordingly, there was an
absence of any consideration or the making or payment of the cheque by Mr. Misa.

DUNLOP PNEUMATIC TYRE CO LTD V. SELFRIDGE LTD[1915] AC 847.

FACTS

Dunlop was a tire manufacturer who agreed with their dealer to not sell the tires below a recommended
retail price (RRP). As part of the agreement, Dunlop also required their dealers to gain the same
agreement with their retailers, who in this instance was Selfridge. The agreement held that if tires were
sold below the RRP, they would be required to pay £5 per tire in damages to Dunlop. This was agreed
between the dealer and Selfridges, which effectively made Dunlop a third-party to that agreement.
Sometime after this, Selfridge sold the tires below the agreed price and Dunlop sued for damages and an
injunction to prevent them from continuing this activity. At the initial trial, the decision was given to
Dunlop. This was appealed by Selfridge and the decision was reversed. Dunlop appealed.

ISSUE

Selfridge argued that Dunlop could not enforce the contract as Dunlop was not part of the agreement
between the dealer and Selfridges. On this basis, the question for the court was whether Dunlop had the
right to access damages without a contractual relationship.
HELD

The court held in a unanimous decision that Dunlop could not claim for damages in the circumstances.
The court found that firstly, only a party to a contract can claim upon it. Secondly, Dunlop had not given
any consideration to Selfridge and therefore there could be no binding contract between the parties.
Lastly, Dunlop was not listed as an agent within the contract and could therefore not be included as a
valid third-party who had rights to claim on the contract.

LAMPLEIGH V. BRAITHWAITE[1615] EWHC KB J17

FACTS

The defendant had killed a man and was due to be hung for murder. He asked the claimant to do
everything in his power to obtain a pardon from the King. The claimant went to great efforts and
managed to get the pardon requested. The defendant then promised to pay him £100 for his efforts but
never paid up.

HELD

The court found in favour of the plaintiff. The promise was indeed given after the plaintiff had acted.
However, the plaintiff had acted upon a request made by the defendant. The court considered that the
original request by the defendant contained an implied promise to pay the plaintiff for his efforts.
Bowen LJ said:

‘A mere voluntary courtesie will not have a consideration to uphold an assumpsit. But if that courtiesie
were moved by a suit or request of the party that gives the assumpsit, it will bind’.

Consequently, the court held that if A does something for B at their request and afterward B promises to
pay A for their trouble, then that promise is good consideration. The later promise was considered to be
part of the same single transaction and was, therefore, enforceable.
DUTTON V. POOLE(1678) 2 Lev 210.

FACTS

A son made a contract with his father for his father to not cut down an oak woodland. As consideration
for this, the son would make a payment to his sister of £1000 once she had married. The money gained
from the woodland would have been paid to the sister. The father died before the sister was married
and the son subsequently refused to pay his sister the money as was previously agreed, at the time of
her marriage. The sister sued her brother for the amount that was originally promised between the
father and son.

ISSUE

The concept of privity of contract had not been fully established at this stage and therefore this decision
had significant importance to the broader subject. The court had to understand whether the daughter
could be considered to be privy to the contract between the father and son regarding the payment.
Within this, it was vital for the court to establish whether the daughter had given consideration for the
promise that was made by the son, to his father, to pay the daughter the sum of money upon her
marriage.

HELD

The court found in favour for the sister on the basis that the relationship between the father and the
daughter had made the sister a party to the agreement, even if she was not included at the time the
contract was agreed. The relationship between father and daughter was found to extend the
consideration that the father gave in the promise to the children. (Scroggs CJ)
TWEDDLE V. ATKINSON [1861] EWHC QB J57

FACTS

A couple were getting married. The father of the bride entered an agreement with the father of the
groom that they would each pay the couple a sum of money. The father of the bride died without having
paid. The father of the son also died so was unable to sue on the agreement. The groom made a claim
against the executor of the will.

HELD

The claim failed: The groom was not a party to the agreement and the consideration did not move from
him. Therefore he was not entitled to enforce the contract.

TARLOK SINGH NAYAR & ANOTHER V. STERLING GENERAL INSURANCE COMPANY [1966] 1 EA 144.

FACTS

The defendant insurer issued a comprehensive motor insurance policy to the first plaintiff (called “the
insured”) by which it agreed to “indemnify the Insured . . . against all sums which the Insured shall
become legally liable to pay . . .” and also, for a further consideration, agreed to “indemnify any
Authorised Driver . . .”. The insured lent the car to the second plaintiff, who was driving it as an
authorised driver under the policy, when it was involved in an accident in which a passenger was
injured. The passenger recovered damages and costs from the second plaintiff, the insurers having
taken over his defence. The insured and the second plaintiff sued the insurers claiming a declaration
that the insurers were bound to indemnify them in respect of all liability they were or may be under
to the passenger. The insurers defence was based on the absence of any legal liability incurred by the
insured and on the want of privity of the second plaintiff with the insurers under the policy. The
plaintiffs attemp ted to found an estoppel on the fact that the insurers conducted the second plaintiff’s
defence against the claims of the injured passenger. The insured gave evidence that he could have
saved part of the premium by insuring the car for his personal use onl y.

HELD

(i) the insured, having entered into the contract of insurance on his own behalf and on behalf of the
authorised driver, could sue on it either as a party or as a trustee for the authorised driver;

Williams v. Baltic Insurance Association , [1924] 2 K.B. 282: All E.R. Rep. 368 followed.

Vandepitte v. Preferred Accident Insurance Corporation , [1933] A.C. 70 distinguished.

(ii) the second plaintiff, being a stranger to the contract, could not himself sue on it, although he
could sue through the insured as his trustee or direct if the trustee refused, but this point did not arise
because the insured/trustee was the first plaintiff;

Kshirodebihari Datta v. Mangobinda Panda (iii) (1934), 61 Cal. 841 disapproved.

(iii) the insurers’ conduct in taking over the second plaintiff’s defence amounted to an admission on a
point of law and could not found an estoppel in the present action.

Declaration as prayed. Judgment for the plaintiffs as prayed.