Treitel The Law of Contract

2170 Pages·2015·17.84 MB·English

by  Edwin Peel

THE LAW OF CONTRACT
Fourteenth Edition
THE LAW OF CONTRACT
Fourteenth Edition
EDWIN PEEL, B.C.L., M.A.
Professor of Law
Clarendon Harris Fellow in Law, Keble College, Oxford
Barrister, One Essex Court
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© 2015 G.H. Treitel
Preface to the Fourteenth Edition
In the four years since the last edition the more significant changes in the law
have been the result of legislation rather than decisions of the courts. The most
significant of such developments have been the amendments made to the
Consumer Protection from Unfair Trading Regulations 2008 and the passing of
the Consumer Insurance (Disclosure and Representations) Act 2012, the
Insurance Act 2015 and the Consumer Rights Act 2015.
At the time of writing, neither of the two Acts of 2015 are yet in force. Most
of the changes to the law introduced by the Insurance Act 2015 will come into
force on 12 August 2016 and affect the duties of disclosure and liability for
misrepresentation of insureds. They are therefore anticipated in various parts of
Ch.9, which also includes the changes already made by the 2012 Act.
The timing of the Consumer Rights Act 2015 created a particular dilemma. It
only received royal assent a few weeks before this edition had to be submitted
for publication and it is understood that it will come into force in October 2015.
However, for several years at least, and certainly for the duration of this edition,
the courts are more likely to be required to consider contracts which were
entered into under the law as it currently stands. Given the extensive changes
introduced by the 2015 Act, in terms of where the law is to be found if not
always in terms of substance, it is covered by way of a separate chapter which
can be consulted if the 2015 Act is applicable. In other chapters, most notably
Ch.7, the current law is stated but the reader is alerted, where appropriate, to the
changes that will be introduced by the 2015 Act; so, for example, Ch.7 still
covers the Unfair Terms in Consumer Contracts Regulations 1999, but they will
be revoked and replaced by provisions in Part 2 of the Consumer Rights Act
2015. Once the date upon which the 2015 Act is in force is known, it is hoped
that, by reference to the date when the contract in hand has been entered, it will
be possible for the reader to locate the applicable law.
The amendments made to the Consumer Protection from Unfair Trading
Regulations 2008 have resulted in civil remedies for consumers who have been
the victims of certain “prohibited practices”, including “misleading action” and
“aggressive practice”. These changes are reflected in Chs 9 and 10.
If the more significant developments have taken place in Parliament, this is
not to say that the courts have been quiet. In the last edition, Ch.6 took into
account the decision of the Court of Appeal on the limits of “purposive”
interpretation in Rainy Sky SA v Kookmin Bank and it now assesses the reversal
of that decision by the Supreme Court. It must be a source of some regret that
the defence of illegality should have been considered by the Supreme Court on
three occasions (Allen v Hounga; Les Laboratoires Servier v Apotex Inc;and
Jetivia SA v Bilta (UK) Ltd) and yet it still was observed by Lord Neuberger, on
the last of these occasions, that “the proper approach to the defence of illegality
needs to be addressed by this court (certainly with a panel of seven and
conceivably with a panel of nine Justices) as soon as appropriately possible.”
The continued uncertainty in this “notoriously knotty territory” (Sir Robin Jacob
in ParkingEye Ltd v Somerfield Stores Ltd) is reflected in Ch.11. In Geys v
Société Générale a majority of the Supreme Court endorsed the view long held
in this book that a contract, including a contract of employment, is not
automatically terminated by a repudiatory breach (see Ch.18) and in Benedetti v
Sawiris the Court provided welcome clarification on the valuation of services
provided pursuant to a “failed” contract (see Ch.22).
In the Court of Appeal, the decisions in Makdessi v Cavendish Square
Holdings BV and ParkingEye Ltd v Beavis have invigorated the debate about the
scope of the rule against penalties, as has the decision of the High Court of
Australia in Andrews v ANZ Banking Group Ltd to return to its equitable origins
and reject the limitation of its application to sanctions imposed only for a breach
of contract by the payer. All three decisions are assessed in Ch.20 and the
appeals to the Supreme Court in Makdessi and ParkingEye represent the more
eagerly anticipated of the decisions which will need to be reflected in the next
edition. Mention might also be made of the decision of the Court of Appeal in
Daventry District Council v Daventry & District Housing Ltd. The observations
of the Lords Justices in that most unusual of cases, along with those of many
other judges, have called into question the suggested approach of Lord
Hoffmann in Chartbrook v Persimmon Homes Ltd to claims for rectification on
the basis of “common mistake”. This debate is considered in Ch.8.
At first instance, there have been several intriguing developments. Most
notable among them is the decision of Leggatt J. in Yam Seng Pte Ltd v
International Trade Corp Ltd to acknowledge the existence of a duty to perform
a contract in good faith, based on the methodology of terms implied in fact. That
has received something of a mixed reception, but it is a development which
looks like it is here to stay and it is assessed in Chs 1 and 6. In part prompted by
the decision in Yam Seng, Teare J. has also inflicted another blow on the
proposition that there is no enforceable obligation to negotiate in good faith in
Emirates Trading Agency LLC v Prime Mineral Exports Private Ltd (see Ch.2).
In The Glory Wealth the same judge directly challenges the proposition advanced
in this book that, in the assessment of damages, it should not be required of the
claimant to prove that he could have performed his future obligations after he
has terminated the contract on the basis of the defendant’s breach (see Chs 17
and 20). Teare J. based his conclusion on this issue on the decision of the House
of Lords in The Golden Victory, the scope and effect of which is also carefully
considered by Popplewell J. in Ageas (UK) Ltd v Kwik-Fit (GB) Ltd (see Ch.20).
Finally, a particular mention may be made of Credit Suisse International v
Stichting Vestia Groep and Andrew Smith J.’s assessment of the actions
potentially available to protect against corporate incapacity (see Ch.12).
I welcome the opportunity to place on record my thanks to the fellows and
staff of Keble College and the Oxford Law Faculty for providing the support and
infrastructure which made the work on this edition possible, not least the
provision of the IT services which are so essential when everything which is
decided in the courts is so readily available. I have continued to benefit from
invaluable discussions about the development of the law with my colleagues in
the faculty and at One Essex Court, in particular: Andrew Burrows; Adrian
Briggs; Andrew Dickinson; James Goudkamp; Laurence Rabinowitz; Adam
Rushworth; and Steven Elliott. I am also very grateful for the valuable insights
provided by supervising the research of Niranjan Venkatesan and Andrew
Dyson, and examining the thesis of Dr. Carmine Conte. Stefan Enchelmaier very
kindly provided guidance on the short section in Ch.11 which endeavours to give
an account of competition law in the context of restraint of trade. The Senior
Publishing Editor, Nicola Thurlow, once again has seen through the work on this
edition and was kind enough to extend the deadline for submission of the text to
the maximum extent possible. This was further assisted by the House Editor,
Alice Batley, who very kindly accommodated the restrictions on my time for
consideration of the proofs. This has allowed me to endeavour to state the law as
I understand it to be as at 30 April 2015.
As always, my greatest thanks go to my family: my wife Helen and children
Emily and Charlotte. In the latter stages of working on this edition, it was
necessary to sacrifice too many weekends and spring evenings for my liking, or
theirs, but I was offered only patience, support and encouragement in return.
This edition is dedicated to my father, who was always an inspiration. He sadly
died shortly before the work on this book was completed.
Edwin Peel
Oxford, 1 May 2015
The cover image is a painting of the vessel “The Peerless”. It is known that
the vessel shown was employed on the Indian route at the time of the events
which led to the decision in Raffles v Wichelhaus (see para.8–042), but it is not
known whether this is one of the vessels that was the subject of that case itself.
Given the issue before the court, this seems entirely apt.
TABLE OF CONTENTS
PAGE
Preface to the Fourteenth Edition v
Table of Cases xxix
Table of Statutes ccix
Table of Statutory Instruments ccxxvii
Table of European Legislation ccxxxi
PARA
1. INTRODUCTION
2. AGREEMENT
1. OFFER
(a) Offer Defined 2–002
(b) Offer Distinguished from Invitation to 2–006
Treat
(c) Where and When an offer Takes 2–015
Effect
2. ACCEPTANCE
(a) Acceptance Defined 2–016
(b) Communication of Acceptance
(i) General rule 2–024
(ii) Exceptional cases 2–025
(iii) Acceptance by post 2–029
(c) Prescribed Method of Acceptance 2–040
(d) Acceptance by Silence 2–043
(e) Acceptance in Ignorance of Offer 2–048
(f) Acceptance in Unilateral Contracts 2–051
3. TERMINATION OF OFFER
(a) Withdrawal 2–058
(b) Rejection 2–062
(c) Lapse of Time 2–064
(d) Occurrence of Condition 2–066