Commercial Law Exam Notes

Topics: Contract, Contract law, Misrepresentation Pages: 19 (8035 words) Published: October 15, 2014

Case Notes
Question 1
Taylor v Provan (1864) 2 M 1226
Provan went to Taylor’s farm and offered to buy 31 cattle at £14 per head, but Taylor refused to accept less than £15. After trying unsuccessfully to purchase cattle elsewhere, Provan returned to Taylor’s farm the worse for drink and offered £15 per head, which was accepted by Taylor. Taylor later brought an action against Provan for the price of the cattle, and Provan claimed that he had been incapable, through intoxication, of entering into the contract. Held: There was no evidence to suggest that Provan was totally incapacitated through drink, to the extent that he was unable to understand what he was doing. The contract was valid. J Loudon & Co v Elder’s Curator Bonis 1923 SLT 226 (OH)

Elder, a Dundee merchant, ordered goods from Loudon on March 23 and 28. On March 31, before any of the goods were delivered, Elder was certified insane and on April 1 Loudon were informed that the contracts were cancelled. The company sued Elder’s curator bonis for damages for breach of contract. Elder was proved to have been insane at the time the orders were given. Held: There was no liability for breach of contract as the orders were null and void. Muirhead & Turnbull v Dickson (1905) 13 SLT 151

Muirhead & Turnbull supplied a piano to Dickson at a price of £26 to be paid at 15s per month. Dickson fell behind with the payments and the pursuers wished to take back the piano.They did so on the basis that either there was no contract between the parties, because there was no consensus, or that the contract was one of hire purchase, so that in either case the ownership of the piano remained with Muirhead & Turnbull. Dickson claimed that the contract was one of sale by instalments, so that ownership of the piano had passed to Dickson. Held: Muirhead and Turnbull had intended to make a contract of hire-purchase and Dickson had intended to make a contract of purchase paid by instalments, but on the evidence Dickson was justified in his understanding of the contract. The pursuer’s action for redelivery of the piano failed, the correct remedy being for the unpaid instalments. Question 2

Carlill v Carbolic Smokeball Co [1893] 1 QB 256
Defendants were proprietors of a medical preparation called “The Carbolic Smoke Ball”. They advertised in a number of newspapers that they would pay £100 to anyone who contracted influenza after using the ball three times a day for two weeks. Mrs Carlill used the ball as advertised and caught flu. She sued for the £100 promised by the advertisement. Various defences were raised; in particular it was claimed that the advertisement was not intended to constitute an offer, since it would amount to an attempt to contract with the whole world, which was impossible. Held: There was a binding contract. The advertisement was an offer to the whole world, which was accepted by those who fulfilled the conditions. Mrs Carlill had fulfilled the conditions, and was thus entitled to be paid the £100. Wolf & Wolf v Forfar Potato Co 1984 SLT 100

The defenders sent a telex dated 29/11/77 to the pursuers in Amsterdam, offering to sell a specific quantity of potatoes, the offer to remain open until 17.00 hours the following day. The pursuers replied by telex stating that they accepted the offer, then varying certain of its terms. After a telephone conversation with the defenders, the pursuers sent a further telex, still within the time limit, accepting the defender’s original offer, though requesting that additional points be given consideration. The defenders did not supply the potatoes and were sued for damages. Held: The defenders could not be liable for breach of contract as there was no contract. The terms of the pursuer’s original “acceptance” did not meet the terms of the offer and therefore constituted a counter-offer. This had the effect of making the original offer lapse. The time limit, which was part of that orginal offer, lapsed at the same time....
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