· 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 agreeing to do something, and vice versa. · Meeting of minds- Consensus ad idem- is required. · What was agreed? . Is there really a meeting of minds? · Is what was said/written the same as what was meant? . 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 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? . 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.
· 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 [1871] LR 6 QB 597 . Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 . Arnold v Britton [2015] UKSC 36