Contract Law Case Analysis: Felthouse V Bindley, Holwell V Hughes, Byrne V Tienhoven

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7-Felthouse v Bindley (1862) 11 CBNS 869 (CCP)

Summary:
“For a contract to come into existence, the offeree had to communicate his acceptance of the relevant offer to the offeror.” •This means that for a contract to come into play it has to be a bilateral agreement. One party cannot decide to enter someone else in a contract. Also, the case implies that changes in a contract nullify prior acceptances- if the contract changes, you need to agree the terms again.

The Case:
F[elthouse] wanted to buy a horse from N[ephew].
They agreed on a price, however N later found out F thought they had agreed at £30 when he wanted 30 Guineas. •F wrote to N on Jan 2nd 1861 stating ‘if I hear no more about him, I consider the horse mine’ for a price that was in the middle of £30 and 30Guineas. •N did not reply to this letter.

N got B[indley] to auction his farm stock, but said to keep the horse aside as N considered the horse to be F’s. Still sold by accident. •N wrote to F (on the 27th Feb 1861) saying that he was very sorry and that the horse was sold. In this letter, N implied heavily that in his mind the horse belonged to F. N even offered compensation of another horse. •F’s lawyers say that by not replying, it fulfilled the term of ‘if I hear no more about this…the horse is mine’. This was then backed by the Letter of the 27th Feb. ‘It was not necessary that he should accept to the contract by writing: it is enough to show that he accepted it’

The Judgement:
Debate over the letter of 27th Feb: does it bind the horse to F? •Originally found in favour for the Plaintiff (F), to receive £30. •Deemed a non-suit by Judge Dowdeswell as ‘sufficient title or possession of the horse, to maintain the action, was not vested in the plaintiff at the time of the wrong’- ie the letter of 27th Feb was seen as non binding. •Dowdeswell: ‘at the time of the wrong no sufficient memorandum in writing, or possession of the horse, or payment, to satisfy the statute of frauds.’ •Judge Wiles stated that N had not told F directly he accepted the contract until after the sale by B on the 25th. The letter came on the 27th- after the sale. •Making B pay F damages would also break LEGAL PRECEDENT of Stockdale v. Dunlop , 6 M. & W. 224 where a Judge gave the verdict that the a third party is not tied to the terms of a contract of two other people. In Stockdale v Dunlop, a ships cargo was lost, the ship was insured for ‘profits of the cargo’. As the profits were never ‘made’ [as stuff was never sold] the insurer wasn’t bound by possible profits that the contract implied. •Applying that to this case: B wasn’t bound by a possible contract between F and N.

8-Holwell Securities Ltd v Hughes [1974] 1 WLR 155 (CA)

Summary:
Need to carefully and explicitly follow the terms of a contract. •If something needs to reach someone by a set day, it needs to actually reach there, not just ‘probably reach there’ •Even if you can reasonably expect it to reach there but it doesn’t, it’s your fault: You need to express due diligence in your methods to ensure it actually gets there. •This is precedent for an exception to the postal rule that states that ‘a contractual offer can be deemed to be accepted when it leaves the offeree and enters the postal system.’ BUT the wording in this contract was ‘reach’ by the due date, not ‘sent’.

The Case:
Terms set about on 19th October 1971, between plaintiff and the vendor: option to buy property. Accept within 6 Months. In writing to the vendor and pay vendors solicitor £4.5K •14-Apr-1972, Plaintiffs Solicitor sent letter by hand to Vendors solicitors + a cheque, so as to exercise the option. •Also sent, via franked mail, to the vendor himself, saying they want to exercise the option to buy. •By 20th April, the letter still not arrived to vendor. The defendant denied that the option had been exercised in accordance with the terms of the option agreement. •Plaintiff...
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