Contract

2859 Words Aug 30th, 2011 12 Pages
Q&A 2
Certainty of terms and intention
Introduction
Contractual certainty
If businessmen are often not overly-concerned with the niceties of offer and acceptance it follows that their contracts may not be all-embracing and complete in every respect. The parties may have reached an agreement in principle and then prefer to rely on experience from previous dealings, business practice and goodwill. The law’s overall policy is to uphold bargains wherever possible and although businessmen tend to record their agreements in ‘crude and summary fashion’ the law should not be ‘too astute or subtle in finding defects’ (Hillas & Co. Ltd v Arcos Ltd (1932) 147 LT 503, 514, per Lord Wright). However, the parties must fix the boundaries of their own
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v J R Crompton & Bros Ltd [1923] 2 KB 261; Jones v Vernons Pools Ltd [1936] 2 All ER 626). The litigation in Kleinwort Benson Ltd v Malaysia Mining Corporation Berhad [1989] 1 WLR 379, is important. The first instance decision applied the presumption of intention ([1988] 1 WLR 799) but the Court of Appeal’s reasoning appears to allow a circumvention of the presumption rather than its rebuttal. Conversely, many social and domestic agreements lack sufficient intent to make them legally binding (see Balfour v Balfour [1919] 2 KB 571) but a husband and wife, for example, can make a binding contract (see Pearce v Merriman [1904] 1 KB 80; Merritt v Merritt [1970] 1 WLR 1211). Similarly, other domestic arrangements can involve difficulties of intention (see Jones v Padavatton [1969] 1 WLR 328; Simpkins v Pays [1955] 1 WLR 975; Parker v Clark [1960] 1 WLR 286). Recently the Court of Appeal implicitly questioned whether the presumptions regarding commercial and domestic agreements represented the correct starting point, preferring to concentrate on the ‘seriousness’ of any promise as the primary indicator of intent (see Edmonds v Lawson [2000] QB 501). Clearly an interesting parallel can be drawn with the earlier decision in Kleinwort Benson (see above). Finally, a statement inducing a contract may be a ‘mere puff’ and the test is one of intention (see Weeks v Tybald (1605) Noy 11;
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