Contract Law Lecture 3 Approaches to Analysing Contractual Agreements Agreements · All contracts are agreements. · Not all agreements are contracts. o Example: ante-nuptial agreements · Contractual agreement usually requires a party to agree to do something in return for another party agreeing to do something, and vice versa. · Meeting of minds- Consensus ad idem- is required. The Objective Test · What was agreed? . Is there really a meeting of minds? · Is what was said/written the same as what was meant? Tamplin v James [1880] 15 ChD 215 . Defendant attended an auction to buy an inn which was put on sale as 'Lot 1'. . The auctioneer explained the particulars of sale and the plan, which showed the extent of the property. . 'Lot 1' was not sold at the auction eventually. · Immediately after the auction, the defendant made an offer for the property, which was accepted. . Later, it turned out that the defendant made the offer under the mistaken belief that 'Lot 1' included two adjacent plots of land. . Defendant then refused to go ahead with the contract. . The court held that the defendant was bound by his contract to buy 'Lot 1', and he was not entitled to the adjacent plots. The Courts' Approach · The courts adopt an objective approach. · VTB Capital Plc v Nutritek Int'l Corpn [2013] UKSC 5, per Lord Neuberger- Objectivity is one of the most fundamental principles on which contractual liabilities and rights are based. · Emphasis is placed on the outward impression and not on the subjective meaning. . The Hannah Blumenthal [1983] 1 AC 854- The H of L refused to condone a purely subjective approach and held that it was necessary for the buyers and sellers to so conduct themselves as to enable an assumption that the contract was to be abandoned. . The question for the courts is what the reasonable person would have concluded from the facts and events. . Should it be the reasonable person in the shoes of the party making the observation? This can pose huge problems. . Example, the reasonable person from the view of the observing party may have peculiar knowledge, should that count? Or should it be the view of the detached reasonable person? Objective Views
Contract Law Lecture 3 · Examines external factors · Considers the reasonable intention · Evaluates reasonable view Subjective Views . Examines the mind of the party · Considers party's intention · Evaluates party's understanding Types of Objectivity · Promisee objectivity: Here, the reasonable person stands in the shoes of the promisee and views the events from that perspective. · Promisor objectivity: Here, the reasonable person stands in the shoes of the promisor and views the events from that perspective. · Detached objectivity: Here, the reasonable person stands in a neutral position and just observes the events. Who's View? · RTS Flexible Systems v Molkerei Alois Muller GmbH [2010] UKSC 14 . Tamplin v James [1880] 15 ChD