Ratio Decidendi A n advertisement with element of reward is a public offer.

Case Carlill v Carbolic Smoke Ball Co [1893]

Facts An advert placed for 'smoke balls' to prevent influenza. offered to pay £100
if anyone contracted influenza after using the ball. Deposited £1,000 with the Al
liance Bank to show their sincerity in the matter. The plaintiff bought one of t
he balls but contracted influenza
Held she was entitled to recover as (a) The deposit of money showed an intention
to be bound, therefore the advert was an offer; (b) It was possible to make an
offer to the world at large, which is accepted by anyone who buys a smoke-ball;
(c) The offer of protection would cover the period of use; and (d) The buying an
d using of the smoke-ball amounted to acceptance. The court dismissed the case.
There cannot be assent without knowledge of the offer; and ignorance of the offe
r is the same thing whether it is due to never hearing of it or
Acceptance of R v Clarke The Government offered a offer has to be reward for inf
ormation [1927] communicated. leading to the arrest of certain murderers and a p
ardon to an accomplice who gave the
information. Clarke saw the forgetting it after hearing." proclamation. He gave
information which led to the conviction of the murderers. He admitted that his o
nly object in doing so was to clear himself of a charge of murder and that he ha
d no intention of claiming the reward at that time. He sued the Crown for the re
ward Revocation has to be communicated. Byrne V An offer made on 1st October Leo
n Van (In Cardiff). Claimant (in [1880] New York) received it on 11th & send acc
eptance at once. In the main time the defendant change his mind and sent a lette
r of revocation on 8th Oct. Revocation letter The revocation was not complete un
til it had been communicated to the offeree. This was on 15th October. In the ma
in time, however the offer had been accepted. As a result the revocation was ine
ffective & the contract did exist. The defendant was therefore liable under the
contract.
reached on 15th Oct. Revocation can Dickinson Dodds offered to sell his be v Dod
ds house to Dickinson, the offer communicated being open until 9am Friday. [1876
] by a reliable On Thursday, Dodds sold the source. house to Allan. Dickinson wa
s told of the sale by Berry, the estate agent, and he delivered an acceptance be
fore 9am Friday. Offer does not Errington A father bought a house on laps with d
eath mortgage for his son and v of offeree and Errington daughter-in-law and pro
mised remains valid if them that if they paid off the [1952] consideration is mo
rtgage, they could have the being made. house. They began to do this but before
they had finished paying, the father died. His As the Claimant knew that the def
endant was no longer in a position to sell the property to him the defendant had
drawn his offer validly. It was impossible, therefore, to say there was ever th
at existence of the same mind between the two parties which is essential in poin
t of law to the making of an agreement. The father's promise was a unilateral co
ntract - a promise of the house in return for their act of paying the installmen
ts. It could not be revoked by him once the couple entered on performance of the
act. The couple was entitled to continue paying the installments and claim the
house
widow claimed the house.
when the mortgage has been fully paid off.
A counter offer revokes the original offer.
Hyde v Wrench [1840]
.6 June W offered to sell his estate to H for £1000; H offered £950 27 June W reject
ed H's offer 29 June H offered £1000. W refused to sell and H sued for breach of c
ontract
Held that if the defendant's offer to sell for £1,000 had been unconditionally acc
epted, there would have been a binding contract; instead the plaintiff made an o
ffer of his own of £950, and thereby rejected the offer previously made by the def
endant. It was not afterwards competent for the plaintiff to revive the proposal
of the defendant, by tendering an acceptance of it; and that, therefore, there
existed no obligation of any sort between the parties.
Products on display are only an
Fisher v A shopkeeper displayed a The knife had not, in law, been Bell [1960] fl
ick knife with a price tag 'offered for sale. According to the in the window. Th
e law of contract the display of an
invitation to treat and not an offer.
Restriction of Offensive Weapons Act 1959 made it an offence to 'offer for sale'
a 'flick knife'. The shopkeeper was prosecuted in the magistrates' court Harvey
v Facey [1893] The plaintiff sent a telegram to the defendant to sell property.
Telegraph lowest cash price. The defendant reply was “lowest cash price is £900”. The
plaintiff telegraphed “we agree to buy ….. for £900 asked by you”.
article with a price on it in a shop window is merely an invitation to treat. It
is in no sense an offer for sale the acceptance of which constitutes a contract
. It was held that the defendant’s telegram was not an offer but simply an indicat
ion of minimum price the defendant would want.
An Offer must be distinguished from a mere supply of information
An Harris v Auction of sale of furniture advertisemen Nickerson was advertised i
n a t is only an newspaper London broker [1873] invitation to saw the advertisem
ent and
It was not an offer as it was not clear definite or unequivocal from the adverti
sement that the auctioneer wanted to sell the items
treat and not an offer.
travel to London to attend the sale the items had been withdrawn from the sale b
efore he arrived he claimed that his action of attending the auction amounted to
an acceptance of an offer as result he claimed that contract has been breeched
and sued for damages. Offeror asked for the offer to be accepted by registered p
ost the offeree accepted the by an ordinary letter which arrived promptly
of furniture to the broker the auctioneer had no intention to be bound to this b
roker it was a mere statement of intention.
Acceptance Yates is valid if buildings v sent in time R J Pulleyn by any more &
Sons unless [1975] exclusively specified. Silence does not amount
The offeror had suffered no disadvantage in a way that the offer had been accept
ed as the offeror did not put a condition specifying that the acceptance could o
nly be made by registered post the acceptance was valid.
Felthouse v F wrote to his nephew It was held that there was no Bindley offering
to buy the nephews contract the uncle had no right to
to acceptance.
[1863]
horse for £30.15 and adding impose upon the nephew to sell “if I hear no more about
his horse. The nephew had not him, I will consider the given any written proof.
horse mine. The nephew never replied. There was no contract as there had been no
authorised communication of intention to contract on the part of the body, that
is, the managers, alleged to be a party to the contract.
Acceptance must be communicat ed through authorized person.
Powell v The plaintiff applied for a Lee [1908] job as headmaster & the school m
anagers decided to appoint him. One of them, acting without authority, told the
plaintiff he had been accepted. Later the managers appointed someone else. The p
laintiff sued alleging that by breach of a contract to employ him
Postal Rule: Adams v Lindsell
2 Sept. The defendant A binding contract was made wrote to the plaintiff when th
e plaintiff posted the letter
A letter of acceptance once posted is deemed accepted.
(1818)
offering to sell goods of acceptance on 5 Sept, so the asking for a reply "in th
e defendant was in breach of course of post" contract. 5 Sept. The plaintiff rec
eived the letter and sent a letter of acceptance. The Postal Rule – If acceptance
by post has been requested or where it is an appropriate and reasonable means of
communication 9 Sept. The defendant between parties, acceptance is received the
plaintiff s complete as soon as the acceptance but on 8 acceptance is posted, S
ept even if the letter is delayed, had sold the goods to a destroyed or lost in
the post so that it never reaches the third party. offeror.
Consideratio n: Price paid by
Currie v
each party to Misa [1875] the contract for the other party’s promise. Consideratio
n need not be adequate (satisfactory) but must be valuable (beneficial). Perfor
mance of existing legal obligation does not amount to Thomas v Thomas [1842] A p
romise to convey a house to a widow on her promise to pay £1.00 rent p.a. and keep
the house in repair was binding
Collins v Godefory [1831]
A witness legally required to attend the court was promised payment if he would
attend the court and give evidence. He attended court and sued for the
He had not provided consideration as he was legally obliged to attend under the
summon (Written command to a person to appear in court.)
consideratio n. Performance of existing duty doest not amount to consideratio n.
Stilk v Myrick [1809]
promise Two out of eleven sailors deserted a ship. The captain promised to pay t
he remaining crew extra money if they sailed the ship back, but later refused to
pay Roffey had a contract to refurbish a block of flats sub-contracted the work
to Williams - work begun - Williams realized the fact that he underestimated th
e cost of the work and was in financial difficulties. As the sailors were alread
y bound by their contract to sail back and to meet such emergencies of the voyag
e, promising to sail back was not valid consideration. Thus the captain did not
have to pay the extra money. Held that where a party to an existing contract lat
er agrees to pay an extra "bonus" in order to ensure that the other party perfor
ms his obligations under the contract, then that agreement is binding if the par
ty agreeing to pay the bonus has thereby obtained
Contract Williams v holds if work Roffey is done in (1990) time and both parties
take practical benefit from it.
Roffey (to avoid foul of a some new practical advantage penalty clause in his ma
in or avoided a disadvantage. contract with the owner), agreed to pay Williams a
n extra payment per flat. William did not receive full payment – Work stopped Roff
ey argued that Williams was only doing what he was contractually bound to do and
so had not provided consideration. Performance beyond existing duty amounts to
consideratio n. Hartley v Ponsonby [1857] A high number of desertions from a mer
chant ship rendered the vessel unseeworthy, undermanned since extra pay was offe
r to the crew if they remain loyal The promise of extra money was recoverable by
seaman who remained loyal since they were now working in a dangerous situation
(they were doing more than required in there original contract)
Past Re McArdle consideratio [1951] n is no consideratio n.
A wife and her three grown-up children lived together in a house. The wife of on
e of the children did some decorating and later the children promised to pay her
£488 and they signed a document to this effect.
It was held that the promise was unenforceable as all the work had been done bef
ore the promise was made and was therefore past consideration
Privity of contract: Only parties to the contract can sue each other.
Tweddle v The claimant’s father and Son-in-law could not sue because Atkinson fath
er-in-law agreed with he had not provided each other to pay the consideration. [
1861] claimant £100 and £200 in consideration of his then intended marriage and afte
r the marriage had taken place they confirm their agreement in writing. £200 was n
ot paid and the
claimant sued father-in-law Performance Shadwell v of an Shadwell existing [1860
] contractual obligation is sufficient consideratio n to support a promise from
a third party. Pinnel’s Foakes v case: Beer [1884] A lesser sum is not a good cons
ideratio n for a
his The promise was binding, even though A was already obliged to marry B. A had
provided consideration for the uncle’s promise as he was initially under a duty t
o fiancée not to uncle, but by entering into the agreement with the uncle he had p
ut himself under an obligation to him too.
C promised his nephew, A, an allowance if he would marry his fiancée, B (In those
days an agreement to marry was legally binding).
Mrs Beer had obtained judgment for a debt of £ 2090/- against Dr Foakes with inter
est, who subsequently asked for time to pay. She agreed that she
The interest was recoverable. Payment & satisfaction of a smaller sum was not co
nsideration for the promise to accept this amount in satisfaction of a debt, int
erest and cost a greater sum.
higher sum.
would take no further action Dr., Foakes had not provided any in the matter prov
ided that consideration. Foakes paid £500 immediately and the rest by half-yearly
installments of £150. After receiving £ 2090/- she sued for £ 360/interest on the judg
ment debt which the defendant refused to pay. The Ps, a small building company,
had completed some work for Mr. Rees for which he owed the company £482. For month
s the company, which was in severe financial difficulties, pressed for payment.
Eventually, Mrs. Rees, who had become aware of the It was held that the company
was entitled to succeed. The judge was of the view that it was not unfair for th
e creditors to go back on their word and claim the balance as the debtor had act
ed unjustly by exerting improper pressure.
Payment by D&C cheque gives Buildings v no benefit Rees over and [1965] above pa
yment in cash ( a lesser sum is not a good consideratio
n for a higher sum).
company s problems, contacted the company and offered £300 in full settlement. She
added that if the company refused this offer they would get nothing. The compan
y reluctantly accepted a cheque for £300 "in completion of the account" and later
sued for the balance. It was held that they were entitled to recover this money
as their promise to accept only half was intended to apply during war conditions
. Ps were estopped from going back on their promise and could not claim the full
rent for 1940-45.
Doctrine of Central In 1937 the Ps granted a 99 promissory London year lease on
a block of flats is estoppel: Property in London to the Ds at an You cannot Trus
t Ltd. v annual rent of £2500. exploit the High Trees Because of the outbreak of s
ituation by House Ltd war in 1939, the Ds could going back not get enough tenant
s and [1947] against your in 1940 the Ps agreed in
own words
writing to reduce the rent to £1250. After the war in * Ps – Plaintiff , Ds – Defendan
t 1945 all the flats were occupied and the Ps sued to recover the arrears of ren
t as fixed by the 1937 agreement for the last two quarters of 1945. Combe v Comb
e [ 1951] A husband entered into a contract promising his wife to pay £ 100.00, fr
ee of income tax, after their divorce. The wife did not apply to the court for a
maintenance order, but when the husband failed to implement his promise she sue
d to enforce the agreement relying on his promise and the doctrine of The wife w
as not a in apposition to enforce the agreement as she lacked consideration on h
er part. The equitable doctrine did not create a new cause of action where none
existed before.
The doctrice of promissory estoppel does not create a new cause of action where
non existed before.
promissory estoppel. Agreements between spouses about to or already separated ar
e legally binding. Merritt v Merritt [1970] A husband separated from his wife wr
ote and signed a document stating that in consideration of the wife paying off t
he outstanding mortgage debt of £180 on their matrimonial home he would transfer t
he house into her sole ownership. The wife implemented her promise but husband d
id not. He alleged that his promise was a domestic relation not giving rise to a
legal relation. Husband promise was enforceable the agreement having been made
when the parties were not living together courteously. A legal relation is assum
ed where a husband deserts his wife and an agreement is concluded of the ownersh
ip of the matrimonial home occupied by the wife and children.
A statement of quality
Bannerman A buyer of hops asked by The court decided that the sulphur the seller
whether sulphur was a vital part of the contract. v white
based upon which a contract is made as far as buyer is concerned, considered a t
erm. An assertion made by person who is a layman for those goods being sold is n
ot considered a term.
[1977]
had been used in the Around which the whole deal treatment and added that if rev
olved it was a term. it had he will not buy. The seller assured him that sulphur
had not been used. Sulphur had been used.
Oscar Chess Ltd. v Williams [1957]
William on selling a car to the claimant company of car dealers asserted that it
was a 1948 model. The registration book appeared to confirm this statement but
it had been altered by some previous owner and the car was infect a 1939 model
The statement was in innocent misrepresentation but not a term of the contract.
The seller who was not a car dealer with experience knowledge did not intend to
be bound contractually by his statement concerning the age of the vehicle.
The
A wharf (dock) owner made The court implied a term into the
Moorcock an agreement to permit a case [1889] ship owner to unload his ship at t
he dock the ship was damaged when at low tied it was grounded at the bottom of t
he river on a hard ridge. Contract is termed void on breach of a condition. sopr
ano, Madame Poussard v A Poussard agreed to sign a Spiers series of opera for Sp
iers, [1876] she failed to appear on the opening night and was refused for her s
ervices for her subsequent nights she sued for the breach of contract.
agreement that the river bottom would be reasonably safe. Such implied terms are
based on the presumed but unexpressed intention of the parties.
The obligation to appear on the opening night was a condition and since madame P
oussard was in breach of this condition Spiers was entitled to treat the contrac
t has at an end.
Breach of a warranty does not
Bitteni v A tanner Bitteni who added The obligation to appear in the Gye [1876]
to sign in a series of rehearsal was a mere warranty and concerts and to attend
6 Bitteni breach could not be treated
make the contract void.
days of rehearsals beforehand failed to appear for the first 4 days of rehearsal
Gye in consequence refused Bitteni services for the balance of the rehearsal an
d performances Bitteni sued for the breach of contract.
as an end of the contract. Gye was accordingly in the breach of contract when he
refused Betteni services for the remainder of the contract.
A non Hansa Nord serious [1976] breach of an innominate term can only result in
claim for damages. An exclusion clause A notice in a hotel room This was ineffec
tive because the Olley v cannot be Marlboroug excluded liability for loss or con
tract for accommodation had
introduced into contract after it has been made. Only natural losses reasonably
foreseeable by a bystander can be claimed for.
h court [1949]
damage to guest property.
been made at the reception desk.
Hadley v A carrier was given a He was not liable for the loss of Baxendale mill-
shaft to deliver to a profit and the rule was formulated plant manufacturer as a
as follows: [1854] model for making a new The loss should be such as shaft the
carrier delayed in may fairly and reasonably be delivery and unknown to consider
ed either arising him the mill stood idle naturally, from the breach of during t
he period of delay. contract, or as may reasonably be supposed to have been in c
ontemplation of both parties at the time they made the contract. There are two t
ypes of loss for which damages may be recovered: General damage - normal loss.
Special damages loss. A company is a separate legal entity having its own assets
and liabilities. Salmon v Salmon & company Ltd. [1897] Salmon had been in the b
oot and leather business for some time together with other family members he sol
d the old business to his newly formed Ltd. company. Payment was in form of cash
shares and debentures when the company was eventually winded up it was agreed t
hat Salmon and the company was the same and he could not be the creditor of his
own so his debentures would not have any effect.
abnormal
House of lord held that since there was no fraud involved his debentures were va
lid the company was properly constituted and therefore it was a separate legal p
ersonality from Salmon.
A company
Lee v Lee’s An aerial crops spraying Although he was majority share
is a separate legal entity.
Air farming business in which Mr. Lee Ltd. [1960] was a majority shareholder and
was the sole working director was killed while piloting the air craft.
holder and the sole working director of the company he and the company separate
legal persons and therefore he could also be and employee of it for the purpose
of relevant statute with rights against it when killed in an accident in the cou
rse of his employment.
A sham company is also liable along with the related violator. Court is not free
to this regard the principle of
Jones v Lipman [1962]
L agreed to sell some land The company was sham and to J, L than changed his spe
cific performance extended not mind and in order to evade only to L but also to
the company. specific performance sold the land to a company of which he was a c
ontrolling member. Cape, an English registered It was unsuccessfully argued that
company was involved in the veil should be lifted between mining asbestos(a for
m of the companies so as to enabled the
Adams v Cape industries
Salomon v Salomon unless carefully watched.
[1990]
mineral) in south Africa and judgement to be enforced against marketing it world
wide to cape. various subsidiaries one of its marketing subsidiaries, CPC, a co
mpany incorporated and carrying on business in the U.S had a court judgment agai
nst it. The claimant, a well known store in Piccadilly, London bought an action
in the tort of passing off, against the defendant. The defendant carried on busi
ness as an importer of low price to goods from Hong Kong and China and then expo
rted to Europe. The defendant did not apply its name to the goods themselves The
re was no evidence that any costumer of the claimant store would buy the defenda
nts good thinking they were the claimants therefore the action failed.
Fortnum & Mason Ltd. v Fortnum Ltd. [1995]
Any contract Ashbury not Railways authorized Carriage v by the Riche objects [18
75] clause of a company is termed ultra virus. Failure of German substratum date
coffee may result in Co. [1882] winding up of company.
The objects clause of the The contract was ultra virus and company set out purpo
se of beyond the capacity of the the company as the making company. and selling
of railway carriages. The company entered into a contract to purchase a concessi
on for constructing a railway. There was a failure to carry The company would be
wound out the object of making up. coffee from dates by means of a German paten
t (although the company did manufacture it with a Swedish patent).
The articles in all
Hickman v The Co.’s articles included The proceedings were stayed. The Kent [1920]
a clause to the effect that all Company could enforce the
respects are enforceable by company against its members.
disputes between the arbitration company & its members member. were to be referr
ed to arbitration. A member brought court proceedings against the Co.
clause
against
a
An alteration Greenhalgh The issue was the removal of articles of v Alderne from
the articles of the association Cinemas members’ right of first can be made refus
al of any shares which [1950] in the best a member might wish to interest of tra
nsfer; the majority wish the to make the change in order company. to admit an ou
tsider to membership in the interest of the company.
The benefit to the company as whole held to be a benefit which any individual hy
pothetical member of the company could enjoy directly or through the company & n
ot merely a benefit to the majority of the members only.
An alteration Sidebottom The alteration was to expel The alteration was held val
id. of articles of b Kershaw a member who carried on a association leese & Co. b
usiness completely with
to expel a member in the best interest of the company can be made with compensat
io n.
[1920]
the company.
Company Aleen v has the Gold Reefs power to [1900] alter its AOA with a retrospe
ctive effect.
Z held fully paid & partly paid-up capital in the company. The Co.’s articles prov
ided for a lien (a right over another’s property to protect a debt charged on that
property.) for all debts & liabilities of any member upon all partly paid share
s held by the member. The
It was held that the Co. had the power to alter its articles by extending the li
en to fully paid shares. Alteration to the articles is only subject to the alter
ation by S9 CA 1985. Rights in the articles are limited as to their duration by
the articles which confer them.
Co. by special resolution altered its articles so that the lien was available on
fully paid-up shares as well. Claim can be made on breach of a service agreemen
t due to alteration of the articles. South Foundries ltd. v Shirlaw [1940] A man
aging director was appointed under contract with a company for ten years but, af
ter the articles had been changed empowering his removal as director, he was dis
missed. The court awarded them damages for wrongful dismissal since the alterati
on of the articles, although effective, constituted a breach of their contract o
f service; it was contrary to the agreement that he should serve for ten years,
which became impossible when he lost their directorship. The fact revealed that
the director with majority shareholders were raising share capital not with the
intension to favour all but, the reason was to dilute the minority voting contro
l. The directors were
Raising Clemens v Share Clemens Capital to Bros. ltd dilute a [1976] shareholder’
s voting right
P held 45% of the shares, d held 55%. D along with other directors decided to in
crease the nominal share capital. A general meeting was held for the issue. D
is an improper purpose & shall not be validated.
favoured, P showed miss using their power. deterrence 7 alleged that the purpose
of this was to dilute her voting control below to 25% & therefore deprive of he
r power to vote special resolution. Percival v Wright [1902] Some Shareholders a
sked Co.’s secretary for any party interested to buy their shares – Shareholders the
n sold shares to Chairman. Later it was revealed that at the time of negotiation
, directors were engaged with a party for sale of shares at a price which was co
nsidered to be high of the current deal. The shareholders wished to The director
owe a fiduciary duty to company but not to individual shareholders, so under no
duty does the director is liable to act for the best interest of an individual.
Co. could have sued the director if any would have done.
The directors owe no general duty to individual members.
return back. Directors cannot attain any benefit from there office by breaching
their fiduciary duties. Cook v Deeks [ 1916] Shares of the railway Co. (T) were
equally divided on its directors. The company got a contract. Three directors of
(T) were not willing the Co. to have the contract. They formed another company
(D) just because of getting a new contract. These directors later sold a plant b
y majority voting to D. Others directors sued. Regal (hasting) ltd. owed a cinem
a & wished to buy two more cinemas & later sell them all as going concern. But r
egal was not It was held that Directors could not retain benefits of the Co. (T)
to themselves. The director could not use their voting control to bring a loss
to the minority.
Director cannot make profit from there position as
Regal (hasting) ltd. v Gulliver [1942]
It was held that Directors used their special knowledge to gain hidden profits.
It was a breach of duty. They were accountable for the profit made.
directors regardless of their motives or consequence s to the company.
in financial position to buy the two cinemas. Some directors were not were not a
gree. Regal with some directors formed another company, real applied for majorit
y shares, managed amount, sold cinemas as going concerns, regal got more profit
portion where as co. got less. IDC v Cooley [1972] Colle was a director of IDC.
A company wanted to give a contract to Colle not to IDC. Colle because of having
interest in the contract, resigned & accepted the contract in his own capacity.
He was in a breach of fiduciary duty as he preferred to earn profit for his own
sake and acted against the best interest of the company. Fiduciary duty exited
even after his resign from the company.
Fiduciary duties survive even after the directors leave the company.
A director should not be allowed to contract with his own company.
Aberdeen Railway v Blaikie [1854]
Co. Contracted for chair from a claimant partnership. (of which the director was
a member). The director was interested at both sides but couldn’t bargain for the
company.
Company was entitled for avoiding the contract. No question should be raised for
fairness / unfairness of the contract.
A director is traded Produce Company made Marketing successfully for 9 years, pe
rsonally Consortium built up an overdraft, had a liable for Ltd. [ 1989] continu
ing loss – Liabilities debts & exceeded assets (between liabilities if 1980 – 87). I
n Feb. 87, he has directors recognizing committed expected liquidation carried w
rongful on trading. Suffered loss, trading. directors were sued. A Company Panor
ama Co.’s secretary of
The court required the directors to contribute for £ 75000/- in Co.’s assets, becaus
e being aware of the going concern problem, trading was carried on. Wrongful att
itude observed.
the The contract was binding, since
secretary ordered a hiring of cars was usual to the Developme defendant within h
is nt v Fidelis Limousine & stated that it office of company’s secretary. authorit
y can Furnishing was to be used in business, make but used personally. [1971] co
ntracts Secretary usually hired cars with third in the past. parties on behalf o
f his company.
End of Cases
Glossary of Legal terms:
Estoppel: Rule of evidence which prevents a person from relying on facts when, b
y deed, word or action, he has led another person to act to his detriment on tho
se facts. Estoppel is a defense, not a cause of action. Anyone who wishes to rel
y on the defense of estoppel to defend an action must request it. Mens rea: (Lat
in: guilty mind) Most crimes require proof of guilty intention before a person c
an be convicted. The prosecution must prove either that the accused knew his act
ion was illegal or that he was reckless or grossly negligent. Some offences (suc
h as drunken driving) are matters of strict liability, which means that the inte
ntion or state of mind of the person committing the offence is irrelevant. Obite
r dicta: (Latin: sayings by the way) Observations by a judge on law or facts not
specifically before the court or not necessary to decide an issue. Pari passu:
(Latin: with equal step) Often used in bankruptcy proceedings where creditors ar
e said to rank pari passu, which means the assets are distributed without prefer
ence between them. Plaintiff: Person who brings a case to court. (Also called th
e petitioner or applicant.) The person being sued is generally called the defend
ant or respondent.
Quantum meruit: (Latin: as much as he has deserved) Principle stating that a per
son should not be obliged to pay (nor another allowed to receive) more than the
value of the goods or services provided. Quorum: (Latin: of whom) Minimum number
of people necessarily present at a meeting for business to be validly conducted
. Without a quorum, decisions are invalid. Rescission: Abrogation or cancellatio
n of a contract, putting the parties in the same position they would have been i
n, had there been no contract. Rescission can occur because of some defect in th
e formation of the contract (such as misrepresentation, duress or undue influenc
e) or by agreement of the parties - for example where they reach a new agreement
. Sanction: To ratify, to approve or to punish. Stare decisis: (Latin: to stand
by decisions) Policy whereby, once a court has made a decision on a certain set
of facts, lower courts must apply that precedent in subsequent cases which embod
y the same facts. Subpoena: (Latin: under penalty) Court order requiring a witne
ss to attend at a certain time and place or suffer a penalty.
Ultra vires: (Latin: beyond the powers) an action which is invalid because it ex
ceeds the authority of the person or organisation which performs it. A company c
annot normally be bound by an act which it is not empowered to do by its memoran
dum of association. Sham: A person or thing pretending or pretended to be what h
e or she or it is not.
Fur more stuff join: