studying for contract exam help

wanalulu

Studying for contract law exam, can anyone help on this question:
Q.4 Stephanie is a single mother who works from home. She is approached by a representative of a multinational company, Gold Diggers Ltd, and asked whether she would be interested in selling her home. The representative tells her that the land on which her home is built is needed as part of a plan to excavate for gold in the area, and that if she doesn’t sell now it is likely that her home will be compulsorily purchased at some point in the future. Stephanie agrees to sell her home, and the contract is finalised. However, Stephanie later changes her mind and decides she doesn’t want to move away from home. It also transpires that there were no plans to compulsorily purchase homes in the area, although the representative from Gold Diggers Ltd honestly believed that this would occur. Gold Diggers Ltd is seek specific performance of the contract. Advise Stephanie.
Thanks

dats_right

Without reverting to the textbooks, it seems to me that Gold Diggers may be facing difficulty in seeking specific performance of the contract on the basis that this remedy is equitable in nature and therefore the principles/maxims of equity apply, such as; 'he who comes to equity must come with clean hands, etc.'. But, I'm sure there will be plenty others who will be able to offer far more assistance than me and perhaps also be in a position to cite some relevant case law.

partyguinness

There is a presumption here that she received no legal advice and no searches were done. But that is reality and your question is theory based.

Legally she is screwed. The courts are not there to protect against bad commercial decisions which this seems to be. Under common law she is obliged to complete.

However as we are advising Stephanie, she must look to equity to seek redress for her bad or ill advised commercial decision. I believe she has a good chance as a court wold feel sorry for her and try to keep her in her house. To honest there are too many issues here to give a detailed answer.

I believe there was an Irish case from Cork..I think its the Smelter Corporation and O'Driscoll 1977(it involved a CPO situtaion also with Cork CC) Exact citation I dont have and cld nt be arsed getting...lol..but we cant make things too easy for you.

Tom Young

In terms of pure Contract Law - This is a Voiding or Vitiating Factor in relation to the contract and in terms of the problem I feel this is Duress with an element of Misrep. The best cases for Duress are:

1. Griffith v Griffith [1944] IR 35;
2. M.K. v McC [1982] ILRM 277;
3. Atlas Express v Kafco Ltd. [1989] 1 AER 641;
4. Smelter Corporation of Ireland v O'Driscoll [1977] IR 305; and
5. North Ocean Shipping C. v Hyundai Construction Company [1979] QB 705.

Of course the remedy to/for this arises in the context of equitable remedies, thus as someone posted above Smelter Corp is worth looking over.

Tom

Tom Young

It would be slightly disingenuous to give you an answer when in fact it is your own homework/tutorial exercise, but on or two case's will make it clear and in addition the Limited company or builders give a hint as to the nature of the advice i.e., that Specific Performance might be sought but that is not a hint or indeed the true nature of the problem.

BarryDoodles

Did Maddox do misrepresentation with us? i missed that tutorial nuim

drkpower

"it is likely that her home will be compulsorily purchased at some point in the future"

aside from asking the student to go through specific performance etc in general , this question is really asking for a discussion on misrepresentation as a voiding factor in a contract - the "it is likely" bit, i suspect, is the cue to discuss whether this is, in fact, is a misrepresentation or not (i doubt it would be, to be honest)

duress is not relevant here - but maybe lob it in as a sentence just as a CYA...!

Tom Young

drkpower wrote: »

"it is likely that her home will be compulsorily purchased at some point in the future"

aside from asking the student to go through specific performance etc in general , this question is really asking for a discussion on misrepresentation as a voiding factor in a contract - the "it is likely" bit, i suspect, is the cue to discuss whether this is, in fact, is a misrepresentation or not (i doubt it would be, to be honest)

duress is not relevant here - but maybe lob it in as a sentence just as a CYA...!

I think you'll find, if you look that vitiating and voiding aspects of contracts contain a number of different aspects. By misrepresenting the fact that the CPO would come, duress arises in that the misrepresentation occurs when the Gold Diggers Ltd. says CPO will follow. As you know (most likely) that is a state task. Digging for gold is unlikely to fall within in the ambit of a task which would require CPO and the same question does not mention this.

Tom

Tom Young

Smelter Corporation of Ireland Limited , Plaintiff v. Abina Mary O'Driscoll, Defendant
[1973 No. 1159 P.]
Supreme Court
29th July 1977
Sale of land - Contract - Specific performance - Discretionary remedy - Innocent misrepresentation - Inducement to contract - Decree refused.
The defendant contracted to sell her lands to the plaintiffs and, when she failed to complete the sale, the plaintiffs claimed in the High Court an order directing the specific performance of the contract by the defendant. The defendant had been reluctant to sell her lands and, during the course of the plaintiffs' efforts to persuade her to sell, an agent of the plaintiff had stated to her that, if she did not agree to sell her lands to the plaintiffs, the local authority would exercise its statutory powers so as to acquire her lands compulsorily. Although the agent believed his statement to be true, there was no foundation for it. The defendant made no effort to discover the intentions of the local authority and believed the statement to be true, though she was still reluctant to sell. Shortly before she agreed to sell her lands, the defendant's mistaken belief was reinforced when she was visited by a group of senior officials of the local authority and an agent of the plaintiffs and, during the ensuing discussion, another reference was made to compulsory purchase. The trial judge refused to decree the specific performance of the contract but ordered the defendant to repay to the plaintiffs all the moneys received by her under the contract. On appeal by the plaintiffs it was
Held by the Supreme Court (O'Higgins C.J., Kenny and Parke JJ.), in disallowing the appeal, 1, that the remedy sought by the plaintiffs was a discretionary one.
2. That, by reason of the plaintiffs' misrepresentation, the defendant had been under a fundamental misapprehension about the true facts, and that it would be unjust to grant a decree of specific performance in the circumstances.

at 308:

At paragraph 4 of the defence it is also contended with regard to the option that "the same was obtained from the defendant under duress and coercion whereby the plaintiffs caused or permitted a local authority to clearly give her to understand that if she did not sell the said lands or give an option over the same to the plaintiffs for the purpose of a smelter plant or base metal reduction plant, then the said lands would be acquired by compulsory acquisition by the said local authority and given to the plaintiffs for the stated purpose, and the defendant believed that this threat would be carried out to her damage and it was further represented to the defendant that she had a national and patriotic duty to permit employment on a large scale to be afforded by the plaintiffs at the said smelter plant or base metal reduction plant and it was in those circumstances and only on the understanding and pre-condition, express or implied, as hereinbefore indicated, that the defendant afforded such option to the plaintiffs."
To assess the validity of these two grounds of defence or of either of them, regard must be had to the evidence adduced at the trial before the learned High Court judge. Apart from the documents already referred to which relate to evidence of the option arrangements entered into between the parties, it appears that much happened before these arrangements became possible. The plaintiffs had engaged Mr. Ahern (the principal of Marsh & Co., auctioneers) to conduct negotiations on their behalf with local land owners including the defendant.

drkpower

Tom, i only see misrep as the ratio in the judgment. Your second quote only states that the Defence "contends" that duress applies but dont see it in the judgment.....?

Tom Young

To reply to your statement/question:

Per McDermott on Contract Law pg. 691, 14.15

'Duress of good occurs where this is a threat to the physical integrity of a person's good.'

O'Higgins CJ concluded that Specific Performance should not be granted against O'Driscoll: at 311:

'In these circumstances it appears to me that there was a fundamental unfairness in the transaction. The defendant agreed to sell believing that she had no real option, and the plaintiffs accepted her agreement to sell knowing that this was not so. In my view it would create a hardship and would by unjust to decree specific performance in this case'/

McDermott:

'The case is better viewed as one based on the discretionary nature of the remedy of specific performance rather than as a straightforward example of duress of goods.'

14.25 pg. 695

'[T]he pressure came not from the plaintiff but from some representative of the county council who, on the prompting of the plaintiff, visited O'Driscoll and mentioned the possibility of compulsory purchase of her land.'

See comments above by O'Higgins CJ for not granting Specific Performance as a remedy.

I've been back through the Judgment just now and in the ratio duress is not specifically mentioned, save for where I cited it in the context of the Defence statement (as you highlighted) but in reality it is extant.

Perhaps my post above should read - Misrep with an element of duress, as opposed to duress with an element of Misrep.:eek:

Tom

drkpower

i think we can agree on misrep with an element of duress then!

galway215

Hi all, Im Studying for contract law, could anyone help me with the following issues..
Penelope places an advertisement in the Advertiser stating that she wishes to let out commercial premises in the city centre. Anna, who is based in Dublin, sees the advertisement and enters negotiations for the lease. These negotiations take place by means of fax and telephone.

Penelope eventually sends a fax setting out all her terms. Anna replies by fax, agreeing to all the terms and stating that the premises must be redecorated at Penelope’s expense before she moves in. She ends with the words “there is no need to contact me”. Penelope replies by letter, saying that she will be happy to redecorate.

Due to a partial strike by postal workers, the letter does not reach Anna until five days after it was posted. In the meantime, Anna finds cheaper premises in Galway and sends a fax to Penelope telling her that she will not be leasing her property. Penelope believes that she has a contract with Anna and wishes to sue her for breaching it.

Advise Penelope.

Bit confused on the issues and also does the postal rule apply..
Any help would be greatly appreciated

Stirling

Don't have any books to hand so this could be, and more than likely is!, wildly inaccurate.

Long time since I was near Contract Law but the way I would see this is as follows:

1) At stake is a lease of commercial premises by Penelope
2) Terms are laid down by Penelope and faxed to Anna
3) These terms are agreed to by Anna but there is a possible variation of the terms as a consequence of the requirement to redecorate
4) Despite the statement "There is no need to contact me" - is it arguable that the requirement of redecoration inserted by Anna constitutes a variation of the terms such that there is no "mirroring of the terms" in the fax sent by Anna to Penelope thus requiring acceptance of this new term by Penelope.

A contract is concluded under the terms of the postal rule as I remember it when there is a clear and unambiguous acceptance of a clear and unambiguous offer. In this case I remember cases about the so called "Battle of the Forms" where there has been communication back and forth and where it is possible that there has not been a validly formed contract yet or where there has been a validly formed contract but this has been rendered incomplete as a consequence of a new term. I think that Truck and Machinery Sales v Marubeni relates to some of this "Battle of the Forms" stuff but 6 years since I was studying Contract so probably totally wrong.

It may be open to argue that the variation of the method of communication could cause problems aswell - why the sudden change from near instantaeous communication to letter? Almost certain there is a case on this aswell but quick look through McDermott will see you right on this point.

Finally as regards the idea of an acceptance matching an offer exactly there is the issue of whether the requirement to redecorate constitutes a term or a condition of the contract as formed/not yet formed and this would also be relevant.

Man its frightening how much of this stuff I've forgotten and how much I want a copy of McDermott next to me to feel better!

Dandelion6

the premises must be redecorated at Penelope’s expense before she moves in

That sounds to me like a new term, changing Anna's acceptance into a counter-offer. She says Penelope does not need to contact her, but that would be treating silence as acceptance which is not possible under the rule in Felthouse v Bindley. It may however mean that Penelope does not have to reply in the same method as the offer was made since Anna is clearly not insisting on an instantaneous method of reply??? So I would say the postal rule applies.

That's how I'd interpret it anyway, but keep in mind I'm only a student too and this is all off the top of my head...

galway215

Thanks for the reply.. I am still stuck on if there is a contract or not in the end?? Because they were using instantaeous communication via fax, will a letter of acceptance be valid?? Also is it a unilateral contract or not? The issues i have that i think arise are invitation to treat, counter offer, postal rule, revocation. and unilateral contract and intention to create legal relations??