Paul Jensen

FRICS, FCIArb, Barrister

Diploma in Arbitration

Module 2, Tutorial 1

TUTOR

The British Constitution

English Law

1. The Legislative Supremacy of Parliament

2. The Rule of Law

3. The Separation of Powers

1 Legislative Supremacy of Parliament

► Parliament can pass any legislation it wishes

and

► Only Parliament can repeal legislation which it has

passed

2 The Rule of Law (1)

Public Law

► Constitutional Law

eg. Elections and Parliament

► Administrative Law

eg. Local Councils and Ministers

► Criminal Law

All crimes are an offence against the state

Remedies:- Punishment

2 The Rule of Law (2)

Private Law – Civil

Disputes between individuals or Parties

Eg. Contract

Tort

Property

Family

Company

Employment

Remedies:- Compensation and other equitable remedies

3 The Separation of Powers

Legislative Making the Law

Executive Administering the Law by government

agencies

Judicial Power Interpreting and applying the Law

Source of Law (1)

The Common Law

The Kings Court applied local laws and customs.

12th Century these became uniform or ‘common’ hence

the Common Law, but some customs remain.

Common Law

Inflexible

Technical

Only remedy was damages

Sources of Law (2)

Equity

Petitions to the King – passed to the Lord Chancellor

► Not bound by Common Law but used fairness

► New remedies

Relief upon foreclosure of mortgages

Injunctions

Specific performance

Rescission

Rectification

Equity Must Prevail

Earl of Oxford’s Case (1615)

Judicature Act (1873)

Sources of Law (3)

Parliamentary Law

Sovereign over all other forms of Law

1. Acts of Parliament

2. Delegated Legislation

► Orders in Council – Ministers

► Statutory Instruments – Law Making by Ministers

and government departments

eg. Road Traffic Regulations

Byelaws – by Local Authorities and Public Corporations

eg. Building Regulations

Railways

The Doctrine of Binding Precedent

Consistency v Rigidity

All Courts bind all lower Courts

The Court of Appeal and The Supreme Court (formally

the House of Lords) bind themselves but subject to

exceptions.

NOTE: All Courts and Parliament now subject to

European Law

ADR

Mediation

Not binding unless by agreement

Arbitration

Governed by the Arbitration Act 1996

► Binding subject to a limited right of appeal on law only

► Agreement to arbitrate is enforceable

► Private

ADR

Adjudication

Governed by:

► HGCR Act 1996

And

► ‘Construction’ Act 2009

► Temporarily Binding

(1) Formation of Contracts

Law of Contract

A contract is a legally binding agreement between two or

more parties whereby benefits are conferred by one party

in exchange for some rights, benefits of forbearance by

the other or others.

Elements

► Agreement (the minds must be ad idem)

► Intention to be legally bound (will be inferred in

commercial agreements)

► Consideration (not necessarily adequate)

Test of Agreement

An unambiguous offer

And

An unequivocal acceptance

NOTE

‘Subject to Contract’

Means no Contract

Chillingworth v Esche (19524) CA

Acceptance

Mode

May be written or oral unless method specified

Time

Must be within stipulated time or a reasonable time

Post

Takes effect at time of posting – even if delayed or lost

(NB Normal Business System)

Adams v Lindsell (1818)

By Silence

Ineffective

Felthouse v Brindley (1862)

Revocation of Offer

Mode

By any mode

Time

Effective only when reaches offeree

Anytime before acceptance

NB: Posting is acceptance

Byrne v Van Tienhoven (1880)

Counter Offer

Destroys the original offer

Hyde v Wrench (1840)

Acceptance by Conduct

Ress Hough Ltd – v Redland

Reinforced Plastics Ltd (1984)

And

Chichester Joinery Ltd v John

Mowlem and Co Plc (1987)

Contrast:

British Steel Corpm – v Cleveland Bridge and

Engineering Co. Ltd (1984)

Letter of Intent

Terms disputed

Privity of Contract

Tweddle v Atkinson (1861)

Only the parties to a Contract may sue or be sued on it

But:

Contracts (Rights of Third Parties) Act 1999

A stranger may sue if:

► The contract says so

► A benefit is conferred

Rights usually expressly excluded

(2) Terms

Law of Contract

Terms may be:

Express ie. Agreed

Implied by: -

1) Statute.eg>

► Sales of Goods Act 1979

► Fit for purpose

► Satisfactory quality

► Supply of Goods and Services Act 1982

► Supplier of a service to use reasonable skill and

care.

But

► Design Liability of a Builder is strict

2) By the Courts

► Business efficacy (fact)

► General riles (Law)

3) By Customer

Classification of Terms

Conditions

► Termination and/or Damages

Warranties – Damages

Innominate Terms

► Remedy according to the extent of the breach

Hong Kong Fir Shipping Co. Ltd v Kawasaki Kisen

Kaisha Ltd (1962)

(3) Mistake

Law of Contract

Common mistake – Void

Contractual assumption of an Untrue Fact

Eg: Non-existence of the subject matter

Couturier v Hastie (1856)

(Corn on ship already sold)

► Impossibility of Performance

Mutual and Unilateral Mistake – Void

Eg. 2 ships called Peerless

Raffles v Wichelhause (1864)

(4) Damages

Law of Contract

Damages – Measure

“The rule of common law is that where a party sustains a

loss by reason of breach of Contract he is, so far as

money can do it, to be placed in the same situation with

respect to damages as if the contract had been

performed”

Robinson v Harmann (1880)

Modified to as good a situation in

British Westinghouse Electric and Manufacturing Co. Ltd

v Underground Electric Railways co. London Ltd (1912)

But – reasonableness

Forsyth v Ruxley Electronics Ltd Hl (1995)

Liquidated Damages

If genuine pre-estimate and not unconscionable in

amount

► Parties bound

► Exhaustive Remedy

Dunlop Pneumatic Tyre Co. Ltd v New Garages and

Motor Co. Ltd (1915)

Actual loss irrelevant, even if in the event no loss is

suffered at all

Damages – Building Contract Cancellation

Wraight Ltd v P.H and T (Holdings) Ltd (1968)

Entitlement:

Contract sum less savings made because of

disappearance of obligations

Specific Performance

Given

When damages inadequate

eg: Sale of Land or Unique Goods

Not Given

If impracticable or impossible for Court to supervise

eg: Personal performance such as singing or Building

Work

Limitation Act 1980

Time Limits

Proceedings must be started:

Simple Contract – 6 yeards

Deed – 12 years

From the breach

(5) Discharge

Law of Contract

1 – Performance

Must be complete

Cutter v Powell (1795)

But Doctrine of substantial performance

Dakin and Co v Lee (1916)

And Tender of Performance is the equivalent of

performance

Startup v McDonald (1843)

2 – By Agreement

ie. Accord and Satisfaction

Release by each party is consideration for the release by

the other

New contract on same subject matter discharges original

Contract. (Novation)

3 – Breach of a Condition

Injured party can elect to treat Contract as at an end, and

entitlement to damages.

Anticipatory Breach

If: Manifests an intention by words of conduct to

break contract

May: Accept breach and sue forthwith

4 – Frustration

Unforeseen event rendering further performance

impracticable or impossible.

eg Taylor v Caldwell (1863) (Fire)

eg Personal incapacity

Condor v The Baron Knights (1966)

4 – Frustration

Unforeseen event rendering further performance

impracticable or impossible.

eg Taylor v Caldwell (1863) (Fire)

eg Personal incapacity

Condor v The Baron Knights (1966)

eg Non occurrence of a specified event. Coronation of

Edward VII deferred from May to October 1902

Cases:

Krell v Henry (1903)

Herne Bay Steamboat Company v Hutton (1903)

Remedies:

Law Reform (Frustrated Contracts) Act 1943