CONTRACT LAW

1. Pharmaceutical Society of Great Britain v Boots Cash Chemist Ltd [1953] 1 QB 401
2. Fisher v Bell [1961] 1 QB 394
3. Harris v Nickerson (1873) LR 8 QB 286
4. Williams v Carwardine [1833] EWHC KB J44
5. Entores Ltd v Miles Far East Corporation [1955] 2 QB 327
6. Re Tan Soh Sim (1951) MLJ 21
7. Thomas v Thomas [1842] 114 ER 330
8. Jones v Padavatton [1969] 1 WLR 328
9. Datuk Jaginder Singh and Ors v Tara Rajaratnam [1983]
10. Letchemy Arumugan v Annamalay (1982) 2 M.L.J. 198
11. Couturier v Hastie (1856) 5 HLC 673
12. Hj Nik Ishak b Hj Nik Daud v Nik Zainab bt Nik Jaafar [1975] 2 MLJ 82
13. Taylor v Caldwell (1863) 3 B & S 826
14. Smith Construction Co Ltd v Phit Kirivata [1955] MLJ 8

Offer and acceptance

1. Pharmaceutical Society of Great Britain v Boots Cash Chemist Ltd [1953] 1 QB 401
Facts :
On April 13, 1951, two customers took drugs from a shelf in pharmacy, put it in their
basket and paid at the cash register at the exit. The pharmacist station was near the
poisons section so they were able to oversee all transactions but the pharmacist took no
part in the transaction. The Pharmaceutical Society, as the organization responsible for
enforcing provisions of the Pharmacy and Poisons Act, 1933, brought this action as a test
case against this type of retailing. At the lower court they found this type of retailing was
not in contravention of the Act and the Society appealed.
Boots Cash Chemists introduced a new method of purchasing drugs from their store- the
drugs would be on display, shoppers would pick them from the shelves, and pay for them
at the till. The Pharmaceutical Society of Great Britain objected to this method, claiming
that S.18(1) of the Pharmacy and Poisons Act 1933 mandated the presence of a
pharmacist during the sale of a product listed under the Act's schedule of poisons.
The Society alleged that the display of goods constituted an offer and a customer, upon
choosing a product/drug, had accepted the offer. Due to lack of supervision of a
pharmacist, the Boots Cash Chemists had, according to the Pharmaceutical Society,
violated the terms of the Pharmacy and Poisons Act of 1933. Matter was taken to court.
 Ratio
Goods on a display are invitation not an offer; the customer makes an offer when they
take the goods to the register.
The cashier is under the shopkeeper's authority to make acceptance; hence a contract has
not been made until the cashier accepts the purchase.

2. Fisher v Bell [1961] 1 QB 394

Facts
The defendant shopkeeper displayed in his shop window a flick knife accompanied by a
price ticket displayed just behind it. He was charged with offering for sale a flick knife,
contrary to s. 1 (1) of the Restriction of Offensive Weapons Act 1959.
Issue
The issue was whether the display of the knife constituted an offer for sale (in which case
the defendant was guilty) or an invitation to treat (in which case he was not).
Held
The court held that in accordance with the general principles of contract law, the display
of the knife was not an offer of sale but merely an invitation to treat, and as such the
defendant had not offered the knife for sale. Although it was acknowledged that in
ordinary language a layman might consider the knife to be offered for sale, in legal terms
its position in the window was inviting customers to offer to buy it.
It is well established in contract law that the display of an item in a shop window is an
invitation to potential customers to treat. The defendant was therefore not guilty of the
offence with which he had been charged.

3. Harris v Nickerson (1873) LR 8 QB 286

Facts
The defendant was an auctioneer who had advertised in the London papers that certain
brewing materials, plant, and office furniture would be sold by him by auction at Bury St.
Edmunds over a period of three specified days. The plaintiff was a commission broker in
London, who attended the sale on the final day (on which it had been advertised that the
office furniture, which he had commission to purchase, would be sold). However, on that
day, all the lots of furniture were withdrawn by the defendant.
The claimant sought to recover his expenses and the time which he had wasted in
attending the auction from the defendant, arguing that the withdrawal of the lots was a
breach of contract which had been formed by the offer made by the defendant in the
advertisement, and accepted by the claimant in attending the auction.
 Issue
The issue was whether the advertisement placed by the defendant was a legally binding
offer of sale, which had been accepted by the claimant’s attendance at the auction,
forming a completed contract.

Held
The court held, dismissing the claimant’s case, that the advertisement was merely a
declaration to inform potential purchasers that the sale was taking place. It was not an
offer to contract with anyone who might act upon it by attending the auction, nor was it a
warranty that all the articles advertised would be put or sale. As such, it did not legally
bind the defendant to auction the items in question on any particular day.

4. Williams v Carwardine [1833] EWHC KB J44

Walter Carwardine was murdered between when he was last seen on March 24th 1831,
and when his body was found on April 12, 1831. He was seen on the night that he was
supposedly murdered with Mary Anne Williams who was questioned but gave no
information to the magistrates of worth. William, Walter's brother, posted a handbill for
information as should lead to the discovery of the murderer with a reward of £20.
Williams was beaten by her husband and believing she was going to die made a statement
which led to the conviction of her husband for Walter's death.

Issue
Has the plaintiff formed a contract with the defendant in spite of the fact that she was not
motivated by the reward when the information was given?

Reasons
The court held that Williams had clearly performed the terms of the offer (giving
information that lead to the conviction of the murderer) and the handbill, which she must
have known of given that it was posted all over Hereford, promised to give money for
that information. As a result, a contract was formed with any person who performed the
condition, without considering the motivations of the individual.
 Acceptance

5. Entores Ltd v Miles Far East Corporation [1955] 2 QB 327

Facts
The complainants, Entores, were a company that was based in London. They had sent an
offer to purchase 100 tons of copper cathodes to the defendants, Miles Far East Corp.
Their company was based in Amsterdam and this offer was communicated by Telex, a
form of instantaneous communication. The Dutch company sent an acceptance of this
offer by Telex to the complainants. When the contract was not fulfilled, the complainants
tried to sue the defendants for damages.

Issues
In order to decide whether the action for damages should arise in English or Dutch law,
the court had to decide the moment of acceptance of the contract. If it was when the
contract acceptance was sent, damages would be dealt with under Dutch law. If
acceptance was when it was received, then it would be under English law.
Held
The court held that the contract and damages were to be decided by English law. It was
stated that the postal rule did not apply for instantaneous communications. Since Telex
was a form of instant messaging, the normal postal rule of acceptance would not apply
and instead, acceptance would be when the message by Telex was received. Thus, the
contract was created in London. This general principle on acceptance was held to apply
to all forms of instantaneous communication methods. Acceptance via these forms of
communication had to be clear before any contract is created.

Consideration

6. Re Tan Soh Sim (1951) MLJ 21

 In the case of Tan Soh Sim, deceased; Chan Lam Keong & Ors v Tan Saw Keow & Ors
(1951), the court held that the validity of consideration depended on natural love and
affection between near relations, relationship and nearness depended on the mores of the
group to which the parties belong and the circumstances of the particular family.

7. Thomas v Thomas [1842] 114 ER 330

 Consideration need only be legally not economically adequate.
Facts:
Before he died, Mr Thomas said he wished for his wife to have the house they lived in for
the rest of her life. However, this was not written into his will. After he died, his
executors, ‘in consideration of such promise’, agreed with Mrs Thomas that she would
pay a peppercorn rent of £1 per year in return for being allowed to live in the house.
They later tied to dispossess her.

Issues:
A valid contract must be supported by consideration. That is, the promisee must promise
to do something in return for the promise of the other party. It was argued that there was
no contract because Mrs Thomas, the promise, provided inadequate consideration as the
rent was nothing like a commercial rent for the property. Mrs Thomas argued that her
promise to pay rent and keep the house in repair was good consideration.

Held:
The executors statement did not create a contract as it only expressed their motive for
entering into the agreement. However, the £1 rent was recognized as good consideration.
Patteson J said (at 859):

Motive is not the same thing as consideration. Consideration means something which is
of some value in the eye of the law, moving from the plaintiff:
Without consideration the transaction was merely a voluntary gift. However, by agreeing
to pay rent in return for being allowed to stay in the property, Mrs Thomas had provided
consideration, even though it was not economically adequate or anything like a
commercial rent for the building. Therefore, the contract was enforceable.

Intention to Create Legal Intention

8. Jones v Padavatton [1969] 1 WLR 328

Facts

A mother and daughter came to an arrangement whereby the mother agreed to maintain
her daughter if she agreed to study for the bar. The daughter commenced her studies and
the mother paid her an allowance. The arrangement was later altered and the mother
agreed to provide a house in which her daughter could reside whilst she studied. Mother
and daughter fell into dispute as to the occupancy of the house, and the mother sought
 possession. It was held the daughter was entitled to remain in possession and the mother
appealed.

Issues

The daughter argued the agreement between herself and her mother amounted to a legally
binding contract and, as such, she should be entitled to remain in occupation of the house.
She claimed there had been an intention to create legal relations and she had provided
consideration for her mother’s maintenance by studying for the bar. The mother argued
there was merely an informal family arrangement, there had been no intention to create
legal relations and she was, therefore, entitled to recover possession of the house. Even if
there was an enforceable contract, she asserted the terms of the arrangement were too
vague for the court to enforce.

Held

The mother’s appeal was successful and she was awarded possession. There is a
presumption that family arrangements are based on mutual trust, family ties and
affection, and that there is no intention to create legally binding contracts capable of
enforcement in the courts. This presumption can be rebutted, but the lack of formality
regarding the agreement between mother and daughter strongly indicated there was no
such intention and the daughter had no defence to her mother’s claim for the house.

Free consent: Voidable and Voidable Contract

9. Datuk Jaginder Singh and Ors v Tara Rajaratnam [1983]

10. Letchemy Arumugan v Annamalay (1982) 2 M.L.J. 198

Contract -- Sale of land -- Fraudulent misrepresentation -- Rescission -- Claim for damages and interest
--Defendant counter-claiming for specific performance and damages -- Contracts Act 1950 (Revised 1974), ss16
& 17 -- Specific Relief Act, 1950 (Revised 1974), ss 27 & 37 -- Evidence Act, 1950, s 111 -- National Land  Code,
417 

In this action the plaintiff, an illiterate Indian woman rubber tapper, claimed against the defendant a declarationand
rescission of an agreement of sale dated January 7, 1977 and other documents executed by her, on theground of
false or fraudulent misrepresentation on the defendant's part relating to her land Lot 736, District of Port Dickson.
She also claimed damages and interest. The defendant, a housing developer, denied the claimand counter-claimed
for specific performance and damages. The parties listed six issues for determination by the court.
1982 2 MLJ 198 at 199

The plaintiff sought to prove that the defendant with the aid of his advocate and solicitor had taken
unfair advantage of her ignorance. The defendant had fraudulently misrepresented to her that she had to sign
somedocuments, which were in the English language, for the loan she took from him and for the discharge
of charge. She executed these documents not knowing she was in fact signing a sale agreement relating to
her land and three other agreements for the purchase of 3 sub-lots in her own land. The defendant,
however,contended that the documents in question were properly witnessed by his solicitor who had explained
them tothe plaintiff.

Held,
allowing the claim and dismissing the counterclaim:
(1) the plaintiff had proved fraudulent misrepresentation, the truth of which the defendant did notbelieve in.
The six issues must be answered in favour of the plaintiff;
(2) the agreement of January 7, 1977 relating to the sale of the land and the 3 agreements to the 3sub-lots must
be rescinded;
(3) the plaintiff is entitled to damages for her losses arising out of the fraudulent misrepresentation bythe
defendant;
(4) the defendant must not benefit from his fraudulent misrepresentation, and specific performanceand
damages claimed by him must be refused.Observations on the duty of an advocate and solicitor in a transaction.

11. Couturier v Hastie (1856) 5 HLC 673 (mistake)

The plaintiff merchants shipped a cargo of Indian corn and sent the bill of lading to their
London agent, who employed the defendant to sell the cargo. On 15 May 1848, the
defendant sold the cargo to Challender on credit. The vessel had sailed on 23 February
but the cargo became so heated and fermented that it was unfit to be carried further and
sold. On May 23 Challender gave the plaintiff notice that he repudiated the contract on
the ground that at the time of the sale to him the cargo did not exist. The plaintiffs
brought an action against the defendant (who was a del credere agent, ie, guaranteed the
performance of the contract) to recover the purchase price.
Martin B ruled that the contract imported that, at the time of sale, the corn was in
existence as such and capable of delivery, and that, as it had been sold, the plaintiffs
could not recover. This judgment was affirmed by the House of Lords.
12. Hj Nik Ishak b Hj Nik Daud v Nik Zainab bt Nik Jaafar [1975] 2 MLJ 82
13. Taylor v Caldwell (1863) 3 B & S 826

The case centred on a musical hall which the claimant agreed to hire from the defendant.
The hall was to be used for 'grand concerts' and fetes. However before the performance
that the music hall was to be used for; there was a fire and the hall was destroyed. Neither
party was at fault for this destruction. The claimant sued for breach of contract. The legal
issue is whether because the hall that the claimants had contracted to use could no longer
be used, this excuses the rights and liabilities of the parties'obligations under the
agreement? Under the doctrine of absolute obligations the defendants would be liable to
the claimants because under the agreement they would no longer be able to perform their
obligations which had been contracted for; namely the use of a music hall for four
days[3]. In the case, Justice Blackburn notes[4] the harshness of this obligation and
therefore, it was held that the defendant was released from their obligations under the
doctrine of frustration. The reasoning behind this is that this was the most just solution
and the one that made the most sense in terms of contract law. If the parties were forced
to continue their obligations under the contract even though the music hall was on longer
in use then this performance would be very different from the ones that the parties had
originally contracted to undertake. The burnt down musical hall renders the contract
undoable under the current terms[5].

14. Smith Construction Co Ltd v Phit Kirivata [1955] MLJ 8

Mark Smith Construction Company, Inc., petitioner (Smith Company) brought this action
in Fulton Superior Court when its bid to construct the Fulton Industrial Fire Station was
rejected by the Fulton County Board of Commissioners, defendant (the County), on the
recommendation of the architect. Smith Company sought a temporary restraining order to
enjoin the county from contracting with others for construction of the station, and a writ
of mandamus compelling the Fulton County Board of Commissioners to give Smith
Company a hearing on the matter of its responsibility to contract for construction of the
station.

The trial court entered the following findings of fact:

"1. Defendant advertised for bids for the construction of the Fulton Industrial Fire Station
project (hereinafter the `Station') pursuant to the requirements of Code Ann. § 23-1702.
(text below)

"2. Petitioner and others submitted bids for the construction of the Station.

"3. The base bid of the petitioner was the lowest submitted to the defendant for the
construction of the Station.
"4. After bids were opened, Herbert C. Millkey, Jr., architect for the Station, contacted
references listed by the petitioner on its contractor's qualification statement and received
strongly unfavorable reports from said references.

"5. Based upon his investigation, Millkey notified the defendant that he could not
recommend the petitioner as a general contractor for the Station. ...

"8. Based upon the recommendation of its architect and the history of performance of the
petitioner and a company with whom an officer of the petitioner was previously
associated, the defendant decided that it would not enter a contract with the petitioner for
construction of the Station and that it would enter a contract with another bidder."

*695 Thereafter, the trial court concluded that the execution of a contract between the
county and another bidder would not violate Code Ann. § 23-1702, the applicable statute
governing the requirements for bidding contracts for public works by a county; that
Smith Company has an adequate remedy at law; and that the county was not required to
conduct a hearing in connection with its decision to award the contract to another bidder.

1. Ordinarily, the denial of a temporary restraining order is not an appealable judgment.

Shelton v. Peppers, 237 Ga. 101 (227 SE2d 29) (1976); George v. George, 231 Ga. 296
(201 SE2d 418) (1973). In this case, however, Smith Company also demanded
interlocutory and permanent injunctive relief, a full hearing was conducted with both
sides participating, and the trial court found as a conclusion of law that Smith Company
had an adequate remedy at law and no injunction should issue against the county. The
trial court ruled against Smith Company as to the writ of mandamus, and found that the
execution of a contract with another bidder would not violate Code Ann. § 23-1702.
Under these circumstances, the ruling of the trial court is equivalent to an order refusing
an application for interlocutory or final injunction, properly appealable under Code Ann.
§ 6-701 (a) (3). 42 AmJur2d § 347, p. 1152; see Swinson v. City of Dublin, 178 Ga. 323
(173 SE 93) (1934).

2. Smith Company enumerates as error the refusal of the trial court to enjoin the county
from contracting with others for construction of the station. The discretion of the trial
court in granting or denying interlocutory injunctive relief will not be interfered with in
the absence of a showing of manifest abuse. Pennsylvania Poorboy, Inc. v. Robbins
Restaurant, 238 Ga. 539 (233 SE2d 791) (1977). In view of the availability of an
adequate remedy at law (money damages) and the hardship which a delay in construction
of the fire station would impose on the general public, we cannot say that the trial court
abused its discretion in this case. See Hilton Const. Co. v. Rockdale County Bd. of Ed.,
245 Ga. 533 (5) (266 SE2d 157) (1980), where the same issue (injunctive relief versus
money damages) was left to the determination of the trial court on remand.

Smith Company does not enumerate as error the conclusion of the trial court that the
execution of a contract between the county and another bidder would not violate Code
Ann. § 23-1702,[1] but we point out that this case is distinguishable from Hilton Const.
Co., supra, where the board rejected the lowest bid without any investigation into the
qualifications of the low bidder.

*696 3. Even if Smith Company was entitled to a hearing in this case before the awarding
of the contract to the second bidder, a writ of mandamus will not lie to compel it where
the contract has already been awarded to another. Hilton Const. Co., supra, 245 Ga. 533
(4).

Judgment affirmed. All the Justices concur.