Contract -> Frustration

After making the contract an unforeseen event occurs beyond the control of either party making performance of the contract (1) illegal (2) impossible or (3) radically different from what was originally contemplated by both parties.

1. Impossibility: events where performance of the contract has become impossible. Physically destruction of subject matter as in Taylor v Caldwell destruction of the concert hall made performance impossible.

Death of one of the parties to a contract (Stubbs v Holywell Railway) will frustrate a contract. Unless performance of the contract need not be performed by any particular person thereby not preventing actual performance.

Temporary Impossiblity may frustrate a contract where eventual performance would be radically different from that originally envisaged. Pioneer Shipping v BTP Tioxide where a charter body was contracted to make 6 voyages within 9 months but this was halved due to a strike at the port therefore although performance was possible it just wasn’t what they originally contracted for.

Sometimes performance may not be impossible as such as the thing still exists but for reasons beyond either parties control it may not be used as they intended. Bank Line v Arthur Capel a ship requisitioned thereby unable to charter on the day.

Also the case that an illness will frustrate a contract. Robinson v Davison wife contracted to play the piano fell ill on day of performance.

Or the unavailability of agreed terms may also frustrate a contract Nickoll & Knight v Ashton, Etridge – unavailability of the specified ship named in the contract frustrates a contract.

2. Illegality although performance is physically possible the contract is frustrate as since the time of the contract there has been a change in the law making further performance illegal. The Fibrosa case in which war broke out as Germany invaded Poland (WWII), it became illegal to trade with the enemy if war is declared before time of performance. Unless it has already illegal at the time of the contract in which case the doctrine of frustration will not apply.

3. Frustration of common purpose of both parties: performance is still possible but would be radically different performance from originally envisaged by both parties. An intervening event has destroyed all purpose of the contract thereby frustrating the contract. But only if the contract “wholly devoid of purpose”. Krell v Henry subject of the contract was a view of the coronation of King Edward VII. Since the king fell ill the purpose was destroyed.

Herne Bay Steam Boat v Hutton: the hire of a boat to observe the kings review of the navy and a cruise of the fleet. The review was cancelled due to the king’s illness… but it was still possible to cruise around the fleet.

Self induced frustration; a party cant plead frustration if he’s responsible for the frustrating event (Maritime v Ocean Trawlers). Although there’s doubt whether a negligent act may amount to self induced frustration. Commercially the answer is yes (The Super Servant II) but in a personal capacity the situation is still unresolved (Joseph Constantine).

Event must not be foreseeable by either party (Davis Contractors v Fareham UDC) otherwise they could have prevented it by taking out insurance or something.

Effect of Frustration

Parties are discharged from performance of ay future obligations. Any monies paid could be recovered if there’s a total failure of consideration (Fibrosa).

Under the Law Reform (Frustrated Contract) Act 1943 any money paid or payable before the frustrating even ceased to be payable but is recoverable by payee subject to 2 things:

1. Any advance payment used in performance of contract maybe kept in full or part (Gamerco v Fair Warning).
2. Where a party has obtained a valuable benefit before the frustrating event, the other party may recover from him a sum not exceeding the value of the benefit (BP Exploration (Libya) v Hunt).

GENERAL ANSWER STRUCTURE

• Has the event sufficiently radically changed to frustrate the contract?
• What is the common objective of the contract and how has it been affected.
• Was the event reasonably foreseeable.
• Has either side received a benefit?
• Can the other party claim for expenditure?

Contract -> Answer Undue Influence

The CoA defined undue influence in Allcard v Skinner as “some unfair and improper conduct, some coercion from outside, some over reaching, some form of cheating generally, though not always some personal advantage gained”.

Allcard v Skinner suggests in every professional relationship involves parties dealing with each other on some unequal footing. There must be evidence of victimisation or improper conduct leading to some personal advantage being gained.

Relationship between bank & debtor

In Lloyds Bank v Bundy the HoL stated ‘there must be evidence that the bank overstepped the boundaries of a normal confidential relationship before undue influence can be presumed’ also that the transaction was ‘wrongful’ (RBS v Etridge). So has the bank overstepped its boundary to a normal bank and customer relationship.

Wife Undue Influence

Current law suggests banks must take reasonable steps when dealing with wives acting as surety for a husbands business (Etridge No.2). Failure to do so mean the banks fainted by undue influence of the debtor, leaving it with little chance of enforcing the security against the wife.

We must ask whether the bank was ‘put on enquiry’ in considering the nature of the transaction. Drawing an analogy with Goode Durrant v Biddulph was the wife risk/benefit ratio grossly disproportionate to that of the debtor?

However if on the face of it the transaction is not suspicious the bank need only act as a reasonable prudent one, and need not show suspicion (Woolwich v Gomm).

If wife successfully argues the bank was put on enquiry then the bank will need to show it followed procedures laid down in Etridge (No.2); the bank should have persuaded the wife to seek an independent advisor to explain the nature of the transaction & possible liability. As well as discussing with her directly if she wished to proceed (Aboody). In not doing so they falls short of the standards expected in Northern Rock BS v Archer.

Guidelines under Etridge (No.2) clearly state it is the independent legal advisor who will confirm to the bank that the proper advice has been given to the surety.

If the bank fails to comply with Etridge No.2 the wife will still need to establish that her husband/debtor acted wrongfully towards her.

If there’s a manifest disadvantage the bank has a duty to ensure wife receive independent advice (Natwest v Morgan).

Remedies

If successful the primary remedy is rescission subject to the lapse of time, affirmation and restitutio in integrum. Damages NOT available for undue influence, unless bank has broken a duty of care towards wife damages available in negligence. Advice would be to act sooner rather than later and notify the bank of their intention to avoid contract.

Contract -> Undue Influence

A person who has been induced to enter into a transaction by the undue influence of another is entitled to set that transaction aside as against the wrongdoer.

UI is either ‘actual’ or ‘presumed’ - as classified by the HoL in Barclays Bank v O'Brien put forward by SA v Aboody.

Actual (Class 1) Where proof of the unfair pressure was required. The person alleging UI must also suffer a manifest disadvantage (Barclays Bank v Coleman). Royal Bank of Scotland v Etridge (No 2): The Etridge principle applied to banks seeking to enforce surety: The bank should take steps to check directly with the wife the name of the solicitor who acts for her. The communication must be direct with the wife. The bank should give the solicitor the necessary financial information. If the bank suspects the wife is being misled by her husband, it should inform the solicitor. It should always get written confirmation from the solicitor.

Presumed (Class 2) Where the relationship meant the party accused of unfair pressure had to disprove it. Class 2A: Nature of relationship means UI is automatically presumed, unless it can be shown that the person alleging it had legal advice (Allcard v Sknnner). Parent & child (Wright v Vanderplank); Solicitor & client (Wright v Carter); Doctor & patient (Mitchell v Homfray); Trustee & beneficiary (Ellis v Barker); Religious adviser & disciple (Roche v Sherrington). Class 2B: if the claimant can show the relationship was one of trust and confidence then it is for the other party to disprove the UI (O’Brien). Bank and customer (Lloyds Bank v Bundy).

With both Class 2A&B the transaction must be to the ‘disadvantage of the party claiming UI’ (National Westminster Bank v Morgan).

If wives can show a relationship of trust and confidence in their husbands (qualify under Class 2B) presumed UI. Therefore a creditor (bank) can be put on notice if:

1. the contract is not prima facia to the wife’s advantage.
2. there is a risk the husband has committed a wrong in getting the wife to stand as surety.

Therefore the creditor can’t enforce the surety unless he takes ‘reasonable steps to satisfy himself that the surety entered into the obligation freely and in full knowledge of the true facts’ which involves (O’Brien).

• Personal interview without debtor present.
• Explaining full extent of liability and risks involved in standing surety.
• Encourage them to seem independent legal advice.

Although the creditor needs not enquire about the nature of the legal advice (Massey v Midland Bank) and may presume the solicitor will act honestly/competently (Banco v Mann & Others). The bank need only act as a reasonable, prudent one would, need not show suspicion (Wollwich v Gomm).

Tort -> Occupiers Liability

The Occupiers Liability Act 1957 applies not only to land and buildings but also to fixed and moveable structures, including any vessel, vehicle or aircraft.

Occupier: any person who has a sufficient degree of control over premises (Wheat v Lacon - landlord and tenant of pub both owed duty of care to guest injured on stairs. However, no breach on the facts).

Visitors – under s.1(2) the occupier owes a duty of care to all lawful visitors. Express or implied permission defined as a lawful visitor i.e. invitees, licensees, people entering under a contract, people with a legal right to enter. Trespassers do not fall within this scope.

Note: a person may be a visitor in one part of premises and not another (Campbell v Shelbourne Hotel).

s.2(2) states that an occupier has a duty of care to ensure that in all circumstance visitors will be reasonably safe in using the premises for the purpose for which he is invited or permitted to be there for. (Simms v Leigh RFC - P injured by hitting concrete wall surrounding rugby field. D not liable as injury foreseeable but so improbable that it was not necessary to guard against it).

Children - An occupier must be prepared for children to be less careful than adults (s.2(3)(a)). Therefore, if an occupier admits children to the premises the child visitor must be reasonably safe.

• Occupiers must not lead children into temptation (the allurement principle (Glasgow Corp v Taylor - 7 year old died after eating poisonous berries in park. D knew of the berries but took no precautions against children).
• However occupiers are reasonably entitled to assume small children are accompanied by an adult (Phipps v Rochester Corp).

Experts – s.2(3)(b) occupiers can expect experts who come on his property to guard against inherent risks. Occupiers may assume professional visitors will guard against risks that are within their professional knowledge (Roles v Nathan). However occupier still owes a duty to professional visitors as seen in Salmon v Seafarer.

An employer may still be liable for failing to provide safe system of work (General Cleaning v Christmas).

Independent Contractors – s.2 (4) states there’s no liability for ‘faulty execution of any work or construction, maintenance or repair by an independent contractor…’ providing

• It was reasonable to entrust the work (Haseldine v Daw).
• A competent contractor was hired.
• If necessary the occupier checked work was carried out properly (Woodward v Mayor of Hastings).

Three key points:

• The standard of care is the same as for negligence as there’s no need to guard against the unforeseeable (Bolton v Stone).
• Duty only exists while the visitor carries out authorised activities.
• The visitor must be kept safe, not premises.

Avoiding liability

Warning Signs: s.2 (4) warning relieves liability if ‘in all circumstances it was enough to enable the visitor to be reasonably safe’. However what is sufficient warning is a question of fact in each case, as in others but in certain circumstances a warning maybe insufficient and a barrier maybe needed (Rae v Mars (UK)).

• If the danger is obvious to all, the occupier can assume the visitor will take care (Staples v West Dorset D.C).

Exclusions: s.2 (1) exclusions are allowed ‘by agreement or otherwise’, so can exclude by a term of the contract or by a communicating notice (Ashdown v Samuel Williams).

• Excluding liability to person entering by a legal right is not possible nor is excluding liability when bound by a contract to admit strangers to a contract.

Defences

Contributory Negligence: It applies to cases where plaintiffs have, through their own negligence, contributed to cause the damages they incurred as a result of defendants negligence.

Volenti: latin for “to a willing person, no injury is done”, this doctrine holds that a person who knowingly and willingly puts himself in a dangerous situation cannot sue for any resulting injuries s2 (5).

• If risk is fully understood (Simms v Leigh RFC).
• Mere knowledge of a risk is insufficient to raise defence (White v Blackmore).
• Where claimant has no choice then there is no consent (Burnett v British Waterways).
• Express warnings of claimant entering at own risks are probably caught by Unfair Contract Terms Act.

Occupiers Liability to Trespassers

Occupiers Liability Act 1984 applies mainly to trespassers.

Traditionally no duties were owed to trespassers except when intentional or recklessly inflicted harm.

Section 1(3) provides that a duty will be owed by the occupier if:

(a) he is aware of the danger or has reasonable grounds to believe that it exists;
(b) he knows or has reasonable grounds to believe that the other is in the vicinity of the danger concerned or that he may come into the vicinity of the danger; and
(c) the risk is one against which, in all the circumstances of the case, he may reasonably be expected to offer the other some protection.

The duty is to take such care as is reasonable in all the circumstances of the case to see that the non-visitor does not suffer injury on the premises by reason of the danger concerned (s1(4)).

Revill v Newbury - D liable for shooting trespassing burglar through door. A duty of care is owed to trespassers engaged in criminal activities. D used greater violence than was justified in lawful self-defence.

The duty can be discharged by taking steps to warn of the danger concerned, or to discourage persons from incurring the risk (s1(5)) (Westwood v Post Office).

Public -> JR Answer Structure No 2

Ultra Vires (illegal)

Public bodies may only validly exercise their powers within the limits conferred onto them by statute or common law. Decisions outside their scope may be held to be ultra vires (AG v Fulham Corp).

Error in law: an authority which is entrusted with a discretion must direct itself properly on the law, otherwise its decisions could be held to be invalid (R v Home Sec exp Venables – increasing the ‘tariff period’ Home Sec misdirected himself in law as his decision was based on irrelevant material (a public poll) and he disregarded relevant material.

A minister may commit an error in law if he acts without cause (based on evidence) or acts in a way that he reasonably would not do (Education Sec v Tameside Council).

Exercise of a power for an improper purpose with i.e. intending malice or personal dishonesty, can be held to be invalid (MC of Sydney v Cambell) – the council had a power to buy additional land to extend streets NOT to make profit.

Powers are not lawfully exercised if the decision maker takes into account irrelevant materialR v Home Sec exp Venables). and disregards relevant accounts (

Unauthorised delegation; a body to which the exercise of discretion has been entrusted by statute may not delegate the exercise of that discretion to another person or body (Barnard).

Discretion must not be fettered: public bodies often exercise discretion in deciding to grant a benefit or impose a penalty. In law the bodies must consider each case on its merits including exceptional circumstances and taking into account relevant standards, policy and precedent. But must be careful not to adopt a policy that would unreasonably refuse an application (British Oxygen Co v Board of Trade).

Irrationality/Unreasonableness.

A decision maybe set aside for unreasonableness. Using Lord Greene MR ‘Wednesbury test’ for unreasonableness, which states: “The authority has come to a conclusion so unreasonable that no reasonable authority could have come to”.

Or the decision is lawful but imposes conditions that are unreasonable (R v Hillington). With the introduction of the European Convention of Human Rights, restrictions on a decision must be necessary and proportionate to be justifiable. The greater the interference with HR the greater the justification required to demonstrate the decision was reasonable.

Tort -> The Rule in Ryland v Fletcher

Blackburn J: the person who, for purposes of his own, brings on his land, and collects and keeps there anything likely to do mischief if it escapes, must keep it in at his peril, and, if he does not do so, he is prima facie answerable for all the damage which is the natural consequence of its escape.

Ingredients of rule A bringing on to land and accumulating: No liability for things naturally present (Giles v Walker) Or for natural accumulations (Ellison v Ministery of Defence) Escape need not be by thing brought onto land (Miles v Forest Rock Granite) A thing likely to do mischief if it escapes: Escape need no be probable (Musgrove v Pandelis) Nor the thing dangerious in itself (Shiffman v Order of St John) Escape causes foreseeable harm (Hale v Jennings) A non-natural use of the land: Domestic use is usually natural (Sokachi v Sas) Unusual volume or quantity suggests non-natural use - The Charing Cross case. Thing escapes and causes damage: Either from land in defendants control to that not in his/her control (Read v Lyons) or from circumstances within defendants control to ones not in his/her control (British Celanese v A H Hunt) Damage is foreseeable (Cambridge Water v Eastern Counties Leather).

Parties to an action Potential defendants: if Read v Lyons is followed will be owners or occupiers of land thing escaped from. if British Celanese v Hunt is taken will be people in control of circumstances escape happed from. Potential Claimants If Read v Lyons is followed then owners/occupiers of land thing escaped to. if British Celanese then claimant does not need a proprietary interest in land.

Problems with Rule Number of defences Requirements of foreseeability. Read v Lyons Non-Natural Use No Real Strict liability for dangers

Defences Consent (Peters v Prince of Wales Theatre) Common benefit (Dunne v North West Gas Board). Act of stranger (Perry V Dendricks Transport). Act of God (Nicholls v Marsland) Statutory Authority (Green v Chelsea Waterworks) Contributory negligence (Eastern Telegraph v Cape Town Tramways).

Recoverable Loss and Remoteness of Damage

• According to MacMillian, recovery is only possible for damage to land occupied by the claimant or his chattels on that land.
• Lawton suggests claimants for PI are also possible (Hale v Jennings (1938)).
• All damage must be proven as tort not actionable per se.
• No liability for mere interference with enjoyment of land (Eastern & SA Telegraph Co v Cape Town Tramways Co (1902)).
• Defendant must know or ought to reasonably foresee damage of the relevant kind might be a consequence of the escape (Cambridge Water).
  

Defences

• Common benefit: no liability if source of danger is kept for both defendant and claimants benefit (Dunne v North West Gas Board (1964)).
• Act of a stranger: if a stranger over whom defendant exercises no control causes the escape then no liability (Perry v Kendricks Transport Ltd (1956)).
• Statutory authority: if the escape is a direct result of carrying out the duty (Green v Chelsea Waterworks Co (1894)).
• Contributory negligence: damages reduced if claimant is partly at fault for the escape (Eastern Telegraph v Cape Town Tramways (1902)).

Read v Lyons [1947]

• HL held the rule of Ryland v Fletcher did not apply as an escape under this rule means ‘an escape from a place where the defendant has occupation or control over land to a place which is outside his occupation or control.

Tort -> Nuisance

Definition: as ‘continuous, unlawful and indirect interference with a person’s enjoyment of land or some right over, or in connection with it’. State of Land; An occupier must take such steps as are reasonable to prevent or minimise dangers to adjoining land from natural hazards on his land (Leakey v National Trust).

Ingredients of Unreasonable use of land: Locality; It was stated in Sturges v Bridgman ‘what may be a nuisance in a residential area need not be in an industrial area’. Nuisance must be continuous (Bolton v Stone) over a period of time with the claimant's use or enjoyment of land. The utility of the defendant's conduct; It will be unlikely for an activity to amount to a nuisance if it is useful for the community as a whole (Harrison v Southwark Water). Sensitivity of the claimant: The standard of tolerance is that of the 'normal' neighbour. Therefore, abnormally sensitive plaintiffs are unlikely to succeed in their claims for private nuisance. (Robinson v Kilvert). Malicious behaviour on part of the defendant maybe regarded as evidence of unreasonableness (Christie v Davey).

Interference with use/enjoyment of land The claimant must usually prove damage, physical damage to the land itself or property; or injury to health, which prevents a person enjoying the use of their land (Halsey v Esso Petroleum - disturbing neighbours' sleep by noise and vibrations and damage to clothes from acid smuts). HoL in Hunter v Canary Wharf stated interference with TV reception does not amount to nuisance as it is not interference with use or enjoyment of land. The general principle is that at common law anyone may build whatever he likes upon his land. If the effect is to interfere with the light, air or view of his neighbour, that is his misfortune.

Defences Prescription: If the nuisance has been continued for 20 years without interruption the defendant will not liable for a nuisance (Sturges v Bridgeman). Statutory authority: If it can be shown that the activities complained about were authorised (expressly or impliedly) by a statute (Allen v Gulf Oil) Coming to the nuisance: It is no defence to prove that the claimant came to the nuisance: (Miller v Jackson: the cricket ball case)