LECTURE 3 - CONTRACT LAW, APPROACHES TO ANALYSING CONTRACTUAL AGREEMENTS - 08/10/19 Agreements: - All contracts are agreements - Not all agreements are contracts - Contractual agreement usually requires a party to agree to do something in return for another party to agree to do something in return for another part 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 what was meant? Tamplin v James (1880) - D 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, D made the offer under the mistaken belief that 'Lot 1' included two adjacent lots of land - D refused to go ahead with the contract - Court held that D was bound by his contract to buy 'Lot 1', and he was not entitled to the adjacent lots. The Courts Approach - The court adopts this approach - VTB Capital PLC v Nutritek Int'l Corpn (2013) 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 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 if the detached reasonable person? o From the view of Andy, knows that people as old as Bill like cats (peculiar knowledge) o From the view of Bill, he knows he needs hats in the winter
o Detached reasonable person doesn't have this knowledge] Types of objectivity: - Promisee objectivity: Here, the reasonable person stands in the shoes of the promise and views the events from that perspective. - Promisor objectivity: Here, the reasonable man stands in the shoes of the promisor and views the events from that perspective - Detached objectivity: Here, the reasonable person stands in the neutral position and just observes the events. Whose View? · RTS Flexible Systems v Molkerei Alois Muller GmbH [2010] UKSC 14 . Tamplin v James [1880] 15 ChD 215 · Upton-on-Severn Rural District Council v Powell [1942] 1 All ER 220 . Trentham Ltd v Archital Luxfer Ltd [1993] I Lloyd's Rep 25 · Smith v Hughes [18tt1] LR 6 QB 59tt · Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 · Arnold v Britton [2015] UKSC 36 Subjective/Objective Views - Subjective o Examines