Sourcebook on Contract Law
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Published By Routledge-Cavendish
upon a promise which was initially expressed to be made without an intention to be bound, there are strong reasons for holding the promise which induces reliance to be enforceable. Thus, in domestic arrangements, the fact that the promisee has acted to his or her detriment in the belief that the promise of the other party will be fulfilled will often provide a reason for enforcing the promise of that other. In Merritt v Merritt, a husband and wife married in 1941 and built a house as a matrimonial home. Subsequently, the marriage was dissolved when the husband went to live with another woman. In 1966, the husband agreed to pay the wife £40 per month if she would agree to pay the £180 debt still owed to a building society in respect of the former matrimonial home. The wife agreed to this, provided the husband agreed to sign a document which stated that, in consideration of the wife paying all charges in connection with the house, he would agree to transfer the house into her sole ownership. The wife kept her side of the bargain and subsequently obtained an order that the house belonged to her. This was granted and the husband was ordered to join in the necessary conveyance: Merritt v Merritt [1970] 1 WLR 1211, CA, p 1213
bore advertising material for their chocolate and were made available to the public at a price of 1s6d plus three wrappers from Nestlé chocolate bars. The wrappers, when received, were thrown away. It was held that there had been a sale by retail, but that a sale by retail, for the purposes of s 8 of the Copyright Act 1956, required a consideration which consisted only of money. In this case, part of the consideration was to be found in the acquisition and delivery of the chocolate bar wrappers. Accordingly, Nestlé’s operations were not covered by s 8, with the result that there was a breach of copyright: Chappell and Co Ltd v Nestlé Co Ltd [1960] AC 87, HL, p 108
As regards written and signed contracts, the usual view is that the Divisional Court’s decision in L’Estrange v Graucob Ltd is conclusive. If so, the rule is that a person is bound by any contract to which they have appended their signature. The effect of signature (in the absence of fraud, duress, misrepresentation or a possible plea of non est factum) is seen as indicating assent to the terms proposed in the contract. In this case, the buyer of cigarette vending machine for use in a seaside café had signed a sales agreement (printed on brown paper!) in the presence of the representative of the seller. The machine did not work satisfactorily, and the buyer (Mrs L’Estrange) claimed damages for (inter alia) breach of an implied warranty that the machine was not fit for the purpose for which it was sold. The principal defence of the seller was that the sales agreement contained a clause expressly providing for the exclusion of all implied warranties. The buyer agreed that she had not read the agreement, and knew nothing of its content. Moreover, the clause excluding warranties could not easily be read, owing to the smallness of the print. The Divisional Court (Scrutton and Maugham LJJ) found in favour of the seller. In the words of Scrutton LJ (at p 404): ‘In this case, the plaintiff has signed a document headed “Sales Agreement”, which she admits had to do with an intended purchase and which contained a clause excluding all conditions and warranties. That being so, the plaintiff, having put her signature to the document and not having been induced to do so by any fraud or misrepresentation, cannot be heard to say that she is not bound by the terms of the document because she has not read them.’ The decision is often cited as an extreme instance of the courts’ refusal to countenance any solution which limits parties’ freedom to contract, however unjust the results. It has been argued that the decision flies in the face of a
clause whereby it was a condition of acceptance that goods would be charged at prices ruling at the date of delivery. The defendant buyers replied on 27 May 1969, giving an order with differences from the sellers’ quotation and with their own terms and conditions, which had no price variation clause. The order had a tear-off acknowledgment for signature and return which accepted the order ‘on the terms and conditions thereon’. On 5 June 1969, the sellers, after acknowledging receipt of the order on 4 June, returned the acknowledgment form duly completed with a covering letter stating that delivery was to be ‘in accordance with our revised quotation of 23 May for delivery in ... March/April 1970’. The machine was ready by about September 1970, but the buyers could not accept delivery until November 1970. The sellers invoked the price increase clause and claimed £2,892 for the increase due to the rise in costs between 27 May 1969 and 1 April 1970, when the machine should have been delivered. Thesiger J gave judgment for the sellers for £2,892 and interest. The buyers appealed. The Court of Appeal unanimously reversed the first instance decision, all three judges feeling that the conclusive act was the sellers’ return of the tear-off acknowledgment slip. However, the reasons given by the judges for arriving at their decision differed. Bridge LJ and Lawton LJ broadly applied the standard model of ‘offer – counter-offer – acceptance’ to this ‘battle of the forms’, although both of them were clearly aware of the difficulties that this would cause. Lord Denning’s approach, not untypically, ranged much more widely. Unlike the other two judges, who can be seen to adopt a broadly ‘last shot’ theory (that is, that the ‘battle’ is won by the person who submits their terms last), Lord Denning was prepared to countenance a number of other possibilities. The following passages serve to indicate these divergences in approach: Butler Machine Tool Co Ltd v Ex-Cell-O Corpn (England) Ltd [1979] 1 WLR 401, CA, p 402
