Anticipatory breach. Page 175

This is when before performance is due a party renounces the contract or makes himself unable to perform it.

 

Bodies dropping from passenger planes

It is raining bodies over London – human bodies. People climb up inside the wheel shafts of aeroplanes when they take off from poor countries if these planes are flying to the UK. Sometimes these illegal immigrants cannot hold on after hours in the freezing cold. They then fall to earth. The often fall to eath at Mortlake – so right into the graveyard, convenient. 

I of course feel sorry for these poor blighters. I do not want them to die.

Performance and breach. Page 170

Ways to end a contract.

Discharge

Agreement of the parties to end the contract. They enter into a new contract to end the old one.

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Breach – non-performance of one party ends the contract.

Frustration – a supervening event renders the contract impossible to perform.

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Extremely poor performance may be considered breach.

A party can make it impossible to perform a contract by taking on a new duty.

A party might breach the contract by giving up control of the place of performance. A paety might breach the contract by getting rid of equipment that is essentual to perform the contract.

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THE PRINCIPLE OF SUBSTANTIAL PERFORMANCE.

Breach

Frustration.

Generally there must be performance of an entire obligation to get payment.

Cutter v Powell 1795. Cutter was hired to sail a ship somewhere and back. Cutter died on the way back. His wdow tried to get part of the wages. The court found that she could not get anything becuase the WHOLE obligation had not been performed – only most of it,

Nowadays a court would say that such a voyage would be a series of several entire obligations. The widow would get some of the money.

Hoenig v Isaacs 1952. A party was in breach but substantially performed his obligations. He got SOME of his money,.

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WHEN A BREACH OF CONTRACT OCCURS.

If a party refuses to perform or commits an act that makes performance impossible then plainly a breach has occurred.

In other cases there is inadquate performance or partial performance. It is hard to tell if repudiatory breach has occurred.

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STANDARD OF PERFORMANCE.

There are two standards of performance: strict liability and ressonable care. The contract will say which one is to be sued. Usually it is reasonable care.

Strict liability – either the performance measures up or it does not. There is a tiny de minimis margin. Beyond that is breach.

Barrel saves had to be 8/16ths of an inch thick. Some were 9/16ths of an inch and this was held to be breach. Arcos v Ronaasen 1937.

Even if the defendant is not at fault that is that – breach.

Sale of Goods Act – standard of eprformance for a seller is strict.

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REASONABLE CARE AND SKILL.

Who is at fault matters. If something goes wrong and it is NOT the fault of a party to the contract then this is NOT breach.

Supply of Goods abd Services Act 1982 – reasonable skill and care must be used in the provision of a service,

Not all breaches gives the right to terminate. Only a breach of a condition or an important internimediate (innominate) term gives the right to rescind. A breach of a warranty does NOT give the right to rescind.

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WHAT OCCURS UPON A BREACH.

This depends on severity of the breach and the decision of the innocent party.

A breach does not automatically end a contract. The wroned party must CHOOSE to end the contract for this to happen/. Deecro Wall SA v International Practitioners in Marketing. 1971

Rescission for breach ends futute obligations not ones that have already been discharged.

Rescission for misrep ends past and future obligations.

A pARTY in breach cannot sue

Vita SA v Norelf Ldt 1996. Party that wishes to rescind must tell the other part.

Rights acquired by what has already been done in the contract remain valid. Heyman v Darwins Ltd 1942.

If a wronged party decides not to rescind then she remains bound to carry on her own obligations. Having affirmed a contract despite the breach one may not later rescind.

Stoczina Gdanks SA v Latvian Shipping and Co 1997.

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Restraint of trade . Page 160

A contract may say that someone is not allowed to trade in a set area or for a fixed time period. This may be legal or not.

In an employment context – the boss says that the employee is not allowed to work for others on the side. For a period of time after the employee leaves the service of the boss he is not allowed to work in this trade for a specified time or not allowed to work within in a geographic area.

 

A business is sold. The buyer gets an undertaking from the vendor not to set up a similar business for a set time or within certain distance.

An employer may have a legit interest to protect. An employee may have contacts with clients and have inside info.

Buying a business – one is buying clients and goodwill.

 

Restraints of trade can work against the public interesta dn thus be unlawful.

Courts only enforce reasonable restraints of trade.

A court may severa  restrain of trade and lave the rest of the contract standing.

Anti-competitive practices are forbidden. European COmmunity treaty articles 81 and 82 forbid this. Competition Act 1998 forbids this.

 

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EMPLOYMENT CONTRACTS.

 

If a exclusivitl clauses prevents someone from workign altogether then this is too much,

Test of reasonableness – is it reasonable between the parties? Is it against the public interest?

If something is reasonable between the parties a corut will normally find that it is in the poublic ineters. Wyatt v Kreglinger and Fernau 1933

 

Morris Ltd v Saxelby 1916. A man has the right to use his skills.

 

resttraint must be reasonable with regard tos ubject matter, area and time. Mason v Provident Clothing and Suppyl Company ltd 1913.

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SALE OF A BUSINESS.

Nordenfelt v Maxim Nordenfelt 1894. This restraint of trade is legitimate. The purchase price of a company reflect the fact that retraint of tarde is part of the deal. A worldwide restrcition was reasonable because of there being so few practitioners of this skill.

 

Restraint of trade i purchasing a business is norally upheld by a court.

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OTHER AGREEMENTS.

Solus agreements – meaning one can only buy from one supplier.

Esso Pretoleum Co Ltd v Harpers Garage Stourport Ltd 1968. Harper agreed to biy petrol only from Esso for 5 years for one garage and 21 years for another. Esso advanced a loan as part of the deal.

House of Lords found that the 5 year exclusive dealing agreement was protecting a legit interest. 21 years was not – too long.

Exclusive service agreement. Schroeder Music Pblishing v Macaulay 1974. Maclauay agreed to write songs only for the company for 5 years. The company was not pblioged to to anything with the songs but would own the rights. This restarint of trade was unreasonable.  The claimants could terminate the contract early but Macaulay could not.

Court fiund this was unreasonable. The legit interest was protected and the contract went way beyonf what was needed to do this.

 

Protected: A visit to an old haunt.

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A dream about the great-grandmother.

I had a dream about  a great-grandmother last night. I shall call this 80 year old Helena. I saw a newspaper article about her saying that she had died. I started. I was agahst. The old lady was dead. I felt melancholy. I wept. I went to her corpse. Her thin body was even thinner than usual. She lay on the bed in her little room wearing a mawkish beige dress that did not suit her at all. Her dead body had yellowed slightly. Her left arm was out beside her – pointing away from her torso at right angles to it. I touched her bare arm. It was cold and lifeless as one would expect. I felt the bereavement very hard. 

As wakefulness approached I remembered that this was only a dream and that she is still alive.

ILLEGALITY. Page 150

Illegality can render a contract impossible to perform. Sometimes illegality has no effect.

A contract to commit a crime such as robbery is void ab initio.

A contract that promotes immorality is probably void.

A contract which is not in accordance with protocol set out by statute is probably void.

A contract performed illegally might be void.

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TYPES OF ILLEGALITY

Common law illegality  – contract killing.

Statutory illegality – selling things without the right licence.

Some contracts are legal as formed such as to deliver pizza but become illegal as performed if someone speeds on the bike when delivering it.

Reasons for illegality

– to deter illegal condyuct.

– to punish malefactors.

– to uphold the dignity of the court.

– for public policy. It would be wrong for the law to uphold a contact that is against the law. It would go against public policy.

Sometimes a party can recover a benefit from an illegally performed contract such as the speeding motorbike pizza delivery man – pizzas would be given to the purchaser

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CONTRACTS THAT ARE ILLEGAL AS FORMED.

such a contract is void. Re Mahmoud and Isphahani 1921.

Can the innocent party recover a benefit? Sometimes.

Lord Atkin in the above case did NOT allow the plaintiff to recover a benefit since the contract was expressly forbidden by statute.

Mohammed v Alaga and Co (A firm) 2000. The contract to bring refugess in was illegal. Money could be recovered on a quantum meruit basis for translation services.

Translation services are legal.

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St John Shipping Corp v Joseph rank Ltd 1951. The contracr was legal as formed but illegal as PERFORMED.

Carrying goods by sea as legal. The ship was overloaded so the contract was performed illegally.

Ship master was fined for the offence. A court found that the plaintiff was allowed to recover the carrying fee. Devlin J said contract entered into with the intention of breaking the law are void. That is different from contracts carried out in a way that breaks and express or implied law.

Devlin J ”does the statue mean to prohibit contracts at all?”

Statues may say that a certain mode of performance is illegal.

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COMMON LAW ILLEGALITY

Alexander v Rayson 1936, Beresford v Royal eXchange assureance 1938. Contracts to commit crime are void,

 

Pearce v Brooks – 1866. contract to hire a carriage to work as a aporzzy was void. It would be immoral.

 

Contracts that offend public policy MIGHT be illegal. The trouble is what is the policy and does the contract offend it?

Franco v Bolton 1797. Payment by a man to a woman to be his mistress was immoral and the contract was void.

 

Contracts to exclude the jurisdiction of a court are probably illegal.

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THE EFFECTS OF ILLEGALITY

THE CASE LAW.

If a contract has an illegal term it can be served and the rest of the contract continued with.

An innocdnt party to an illegal contract imight get a remedy. Strong Ltd v Sinnock 1955. The plaintiff was unable to sue but got money for work done back due to the breach of a collateral warranty.

Shelley v Paddock 1980. The plaintiff got money back for misrep. The contract was illegal so could not be sued on.

 

curts seldom allow the reovery of a benefit from an illegal contract. Holma v Johnson 1775.

in pari delicto – equally guilty.

Courts may prevent unjust renrichment and thus when there is an illegal contract still give something to an innocent party.

Kiriri Cotton Co Ltd v Dewani 1960. Innocent party got money back – he did not know the contract was illegal.

Taylor v Bowers 1876. He got money back – he found out the contract was illegal and withdrew immediately.

Tinsley v Milligan 1994 – a benefit could be claimed because it did not rely on the illegal partt of the contract.

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REFORM OF THE LAW.

tHE lAW commission in 1999 recommended that courts be allowed to decide whether or not to enforce an illegal transaction – look at trhe merits of the case. This would be permitted only where the transaction was not expressly forbidden by statute.

 

 

Trusts. page 143

A and B make a contract. A grants a promise to B. B then owns the promise and holds it on trust for C.

B may recover the whole loss suffered by C if A fails to perform.

Lloyds v Harper 1880.

Trusteeship of promises can defeat privity.

Re Schebsman 1944. A company promsied an annuity to be paid to a retiring employee’s widow and daughter. After the man died the company stopped paying. The court found that the widow could not enforce the promise.

There must be a positive intention to create a trust.

Third Parties (Rights against Insurers). 1930.

Consumer Credit Act 1974.

Law of Property Act 1925. These pieces of legislation can overcome privity,.

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LIABILITY IMPOSED ON THIRD PARTIES.

It is possible to impose a restrictive covenant on a third party.

 

Rights conferred on third parties at common law. Page 139

Devices have been created to circumvent the doctrine of privity.

ENFORCEMENT BY THE PROMISEE.

The estate of a promisee is able to enforce a promise cf Beswick v Beswick.

If a benefit is conferred upon a third party the promisee OR the third party can enforce the promise.

Supposing the promisee refuses to take action to obtain the rights of the third party. Normally a breach of contract would result in damages to put the parties in the position in which they would have been had the contract been discharged. But in this case the promisee stood to gain nothing so in a sense there can be no damages.

Another view is thts the promisee had an interest in the third party obtaining the benefit.

In Beswick v Beswick and order was made for specific performance and not damages/

Radford v deFroberville 1977. House of Lords awarded damages to Radford as well as requiring the defendant to give the benfit to the third party.

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MULTIPLE BOOKINGS.

Jackson v Horizon Holidays 1975. Lord Denning granted damages to the claimant on behalf of his family.

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SELLERS’ CONTRACTS WITH CARRIERS TO TAKE BUYERS’ GOOD FOR DELIVERY

 

The Albazero 1977. lORD Diplock said that a party had a limited ability to obtain damages on behalf of another.

A seller can obtain damages on behalf of the buyer where there the goods were damaged by the carrier.

 

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CONTRACTS WHERE THE SUBJECT MATTER WILL BE OBTAINED BY ANOTHER PARTY.

 

A and B make a contract. tHE Subject matter of it belonging to A will later be acquired by C. B is able to enforce C’s rights. If C has a course open to him that enables him to enforce his rights then C must do it himself – in that case B cannot enforce the rights of C.

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AN ORDER FOR THE PROMISOR TO PERFORM.

A court can order a party to carry out specific performance.

A court can enforce a promise for a party NOT to do something. Snelling v John G Snelling. 1973.

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AGENCY.

A uses B to negotiate with C. This creates privity between A and C. B disappears from the contract. Shanklin Pier Ltd v Detel Products Ltd 1951.

C can enforce the contract.

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EXEMPTIONS AND LIMITATIONS OF LIABILITY.

B canot confer an exemption benefit or limitation benfit on C. take the case of A and B and goods are being carried by C a subcontractor working for C. A can sue C despite B attempting to confer limitation or exclusion of liability on C. A would use tort.

 

Sometimes exclusion clauses work if C is held to be an agent of B.  The Eurymedon case decided by the Privy Council.

 

Lord Goff dealt with such a case in The Mahkutai in 1996.

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Was Thatcher right or wrong about trading with South Africa?

It is frightfully difficult to find anyone who will now say that apartheid was a good thing. Some people will say it was not as bad as it was made out to be or that the apartheid government was more efficient than the post 1994 goverment. But to find someone who says that apartheid was per se moral would be a challenge to say the least.

Apartheid was abolished fully in 1994. Nelson Mandela, the erstwhile prisoner, became president. Apartheid had been gradually dismantled over the previous decade.

What caused it to be brought to an end? 

1. Armed action by Umkhonto we Sizwe, the Angloan Army, the Cuban Army etc…

2. The trade embargo observed by almost every African country, most Asian countries, the Communist Bloc, most Latin American countries and by some individuals in Western countries.

3. The moral isolation arising from the ban on playing sports with South Africa, on culural and academic exchanges.

4. Constant criticism from abroad – protests outside South African embassies and so on.

5. Diplomatic action such as persuasion by Margaret Thatcher and Ronald Reagon that reform was inevitable and imperative.

6. The sense that apartheid was living on borrowed time. The notion that the forces of history were against apartheid and similar systems had been ended in Zimbabwe and the southern states of the USA.

______________________________

It is debatable how relatively important these factors were in causing apartheid to be dissolved. It is probable that no single factor was decisive.

Had there not been military action against apartheid South Africa would apartheid still exist much longer? That is an imponderable but I suspect that it would not have achieved much more longevity than it did even if such armed action had been absent.

If there had been no sanctions on the Republic of South Africa would apartheid have survived significantly longer? I suspect that it would.

I can think of many examples of embargoes where such an action has been only semi-effective or sometimes wholly ineffective. In the case of 1930s Italy, Iran today, Saddam’s Iraq, Cuba for the past 55 odd years, Israel, Myanmar and so on – sanctions do not work that well.

Of course it depends how universally such sanctions are observed. 

South Africa could carry on because the countries that mattered continued to trade with her. The United States, the UK, Japan, Portugal, West Germany and so on carried on trading with her. I presume many more countries did judging by the fact that their nationals could travel freely to South Africa – I speak of France, Italy, the Netherlands, Austria, Switzerland, Israel, Malta, Greece and Australia. 

Some minor African countries traded with South Africa as they had little choice. Lesotho is completely surrounded by South African territory so she had commerce with South Africa as her very survival depended upon it. Swaziland had only one other neighbour – the war ravaged communist Mozambique who was not much of a trading partner. Botswana had done almost all her trade with South Africa or via South Africa. Botswana’s transport links with other African countries were poor. Botswana had little other option. Mozambique was persuaded to sign a ceasefire with South Africa in return for Pretoria withdrawing support for Renamo – the anti-communist resistance movement in Mozambique. Mozambique then started to trade with South Africa. 

Given that many countries did business with South Africa there was little sense in others refusing to do so. In fact the embargo weakened through the 1980s partly as people saw that others were not enforcing it and partly as a reward for reform.

Neil Hamilton argued that an ethical foreign policy can only be ethical if it is consistent. Apartheid South Africa was not as ugly as many regimes north of the Limpopo.

Robert Mugabe sent his North Korean trained Fifth Brigade into Matabeleland in 1984. They slaughtered something 4 000 civilians. I do not know of anyone calling for sanctions on Zimbabwe at that stage/ 

The apartheid regime committed massacres such as at Sharpeville and Soweto.

Apartheid hath slain its thousands but anti-Apartheid hath slain its tens of thousands.

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One could argue that constructive engagement did more to facilitate change than refusal to engage. Thatcher could persuade Pretoria because the government their would listen to her. She was one of the few people in the world they trusted. Refusing to talk seldom brings dividends.

If every country in the world had refused to trade with South Africa then it is likely that apartheid would have been brought down in a short time. 

I find it hard to make up my mind on the issue.