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Summary Contract Law Seminar 4
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Contract Law Seminar 4 answers.
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Seminar 4 contract law1) Denning J delivered a famous judgement holding in favour of the claimants’ argument on the
basis that the agreement to accept the lower rent was intended only to cover the period
where many of the flats were empty (Central London property trust Ltd V High trees House
Ltd 1947). Denning goes against the rule in Foakes V beer 1884 (permitted to go back on the
promise made to the defendant) and stated that any attempt by the claimants to recover
the full rent from 1940-1945 would not be successful. Denning’s approach was without legal
foundations. Denning did not allow the established meaning of the doctrine of estoppel (the
doctrine applied only to a representation of existing fact whereas, high trees was one of
intention instead) to cause of barrier to achieve justice. Denning went on to distinguish with
Jorden V Money 1854 arguing that times have changed and there is now a broader principle
by the doctrine of estoppel. Denning argued that the principle he put forward was the
‘natural result of a fusion of law and equity’. Denning extended the scope of estoppel and
suggested doctrine of estoppel was not restricted to representations of fact.
2) The likelihood of succeeding the claim for £500 from Dan Is low as the promise to accept a
lesser sum might be binding under the equitable principle of promissory estoppel.
3) A minor is not bound to a contract but the other person in the contract will be. Under the
s3(2) sale of goods act a minor is only obliged to pay a reasonable price. Employment of a
minor must be beneficial as well as necessary. If someone is incapacitated the state takes
control of their property and then any contract they enter into is deemed ineffective. Mental
Capacity act 2005 s2 (1) states that a mentally incapacitated person is unable to make a
decision for himself in relation to the matter. Common law shows that the other party must
have been aware that they were ‘insane’. Intoxication is the same rules as mental incapacity.
If a person recovers their senses then they can subsequently ratify the contract. This applies
to mental illness and intoxication.
4) In intention to create legal relationships a domestic agreement does not intend legal
consequences to flow from their arrangements, they are settled informally. In commercial
agreements there is an intention to create legal relations.
5) As it is a domestic agreement, intention to create legal relations are not present. Only if
Fiona is reliant on Graham paying the £100 will the case be brought to court.
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