CHI30 MER3 Chap 22

Chitty on Contracts 30th Ed.
Volume 1 - General Principles

Part 7 - Performance and Discharge
Chapter 22 - Discharge By Agreement
Section 1 - In General
Generally
22-001
The discharge of a contract by agreement is a subject of considerable artificiality and refinement. The
1
niceties of legal reasoning which appear in this branch of the law are not easy to justify, but are
attributable in the main to two causes. In the first place, the doctrine of consideration, which plays so
2
important a role in the formation of a binding contract, has also been applied to its discharge. Thus a
distinction has to be drawn between those contracts which have been wholly executed on one side (i.e.
where one party has performed all his obligations under the agreement) and those which are executory
on both sides (i.e. where both parties still have some obligations to perform). In the former case, the
party seeking to be discharged must prove either a release by deed or some consideration agreed by
3
the other party (“accord and satisfaction”) in place of his existing obligation or in addition to it. In the
latter case, consideration can usually be found in the mutual release by each party of his rights under
4
the contract. Secondly, the evidentiary requirements of the Statute of Frauds 1677 which required
5
certain important classes of contract to be evidenced by writing, were capable of producing even more
serious instances of injustice than those which the statute was designed to prevent. Within the limits
available to them, the judges endeavoured to circumvent the statute in order that it should not be made
a cloak for fraud. Thus, although the variation of the term of a contract required to be evidenced by
6 7
writing has to be proved by writing, the discharge of the entire agreement and the waiver of contractual
8
terms can be effected by parol. These distinctions have declined greatly in importance since the almost
9
total repeal of the Statute of Frauds by the Law Reform (Enforcement of Contracts) Act 1954 and a
10
modern court may be unwilling to draw a distinction unless it is strictly necessary for it to do so.
Discharge of Right of Action Arising from Breach
22-002
It will be convenient also to deal in this chapter with the discharge by agreement of a right of action
arising from a breach of contract.
1. Samuel v Wadlow [2007] EWCA Civ 155 at [35].
2. This was criticised by Sir Frederick Pollock, Principles of Contract, 13th edn (1950), p.150, as an unwarrantable extension.
3. See below, paras 22-003, 22-012; see also “Waiver”, below, paras 22-044 et seq.
4. See below, paras 22-025 et seq.
5. See above, paras 4-009 et seq.
6. See below, para.22-033.
9. See above, para.4-009.
10. Samuel v Wadlow [2007] EWCA Civ 155 at [34]-[46].
The icon indicates a paragraph or footnote that contains consolidated text from the supplement.
Section 2 - Release
Release By Deed
22-003
Where a contract has been executed by one party only, that is to say, where only one party has fully
performed his obligations under the contract and the other party has some obligations still outstanding,
11
the contract may be discharged at any time before breach by release by deed. Also, where one party
has committed a breach of the contract, it will be a defence for him to show that the other party has by
12
deed released the cause of action accruing from such breach. The employment of a deed dispenses
13
with the necessity for consideration.
Parol Release
22-004
A mere parol release, whether oral or in writing, without valuable consideration amounts to nudum
14 15
pactum and is normally insufficient to effect a discharge either at law or in equity. A parol release
16
given in return for valuable consideration amounts to accord and satisfaction.
Construction of Release
22-005
No particular form of words is necessary to constitute a valid release, and any words which show an
17
evident intention to renounce a claim or discharge the obligation are sufficient. The normal rules
18
relating to the construction of a written contract also apply to a release, and so a release in general
19
terms is to be construed according to the particular purpose for which it was made. In order to ascertain
the intention of the parties, the court will have regard to the terms of the contract as a whole:
“ … giving the words used their natural and ordinary meaning in the context of the agreement,
the parties' relationship and all the relevant facts surrounding the transaction so far as known to
20
the parties.”
The scope of a release drafted in general terms may be limited either by the existence of a dispute
between the parties or by the parties' knowledge, at the time of entry into the release, of the existence
of the claim. Where the parties have a particular dispute in mind when entering into the release, the
21
scope of the dispute “provides a limiting background context to the document”. Even where the parties
do not have a particular dispute in mind, the circumstances in which the release was given may suggest
22
that the release should only apply to a particular subject matter. The parties' knowledge of the existence
of the claim at the time of entry into the release is more equivocal. The fact that the existence of the
claim was unknown to both parties does not mean that such a claim falls outside the scope of the
release. Parties who enter into a release frequently want to achieve finality and so the:
“ … wording of a general release and the context in which it was given commonly make plain that
23
the parties intended that the release should not be confined to known claims.”
It would appear that a person will not be allowed to rely upon a release in general terms if he knew that
24
the other party had a claim and also knew that the other party was not aware that he had a claim. But
the construction of any individual release will necessarily depend upon its particular wording and
25
phraseology.
Covenants Not to Sue
22-006
26
A covenant not to sue without any limitation as to time is equivalent to a release. The reason for this
rule appears to be a desire to avoid the circuity of action which would otherwise arise if the covenantee
recovered precisely the same damage that he suffered by reason of the covenantor suing on the original
27
agreement. But, at common law, a covenant, or agreement for valuable consideration, not to sue for
28
a limited time was not equivalent to a release and did not bar the action on the contract. The covenant
was construed as giving the covenantee merely a right of action for its breach if the covenantor sued
before the expiry of the time so limited. It did not operate as a bar to the original action but gave an
29
action for damages. A court of equity, however, would grant an injunction to restrain the covenantor
30
from suing within that time, and the equitable rule now prevails so as to provide the covenantee with
31
a complete defence in that event.
Joint Contractors
22-007
The distinction between a release and a covenant not to sue can, however, be of importance in relation
to the liability of joint contractors. This topic has been dealt with in the chapter on joint obligations earlier
32
in this book.
Conditional Release
22-008
A release will be good although made subject to avoidance by the happening of a condition subsequent,
33
as, for example, by the non-fulfilment of a compromise.
Bills of Exchange
22-009
34
The release of a bill of exchange or promissory note need not be effected by deed nor is any
35
consideration required for such discharge. Section 62 of the Bills of Exchange Act 1882 provides
that where the holder of a bill at or after its maturity absolutely and unconditionally renounces his rights
against the acceptor the bill is discharged. The renunciation must be in writing, unless the bill is delivered
36
up to the acceptor.
Effect of Misrepresentation
22-010
37
A release obtained by misrepresentation will be set aside.
Pleading of Release
22-011
38
A defence alleging a release must be specifically pleaded.
11. Foster v Dawber (1851) 6 Exch. 839, 851. The need for a seal for the valid execution of an instrument as a deed by an individual
was abolished when s.1 of the Law of Property (Miscellaneous Provisions) Act 1989 came into force.
12. Tetley v Wanless (1867) L.R. 2 Ex. 275. See also Barker v St Quintin (1844) 12 M. & W. 441 (debt of record).
13. Preston v Christmas (1759) 2 Wils.K.B. 86.
14. Pinnel's Case (1602) 5 Co. Rep. 117a; Fitch v Sutton (1804) 5 East 230; Harris v Goodwyn (1841) 2 M. & G. 405; Foster v
Dawber (1851) 6 Exch. 839, 851; De Bussche v Alt (1878) 8 Ch D 286; Foakes v Beer (1884) 9 App. Cas. 605 (see above,
para.3-115). Bank of Credit and Commerce International SA (In Liquidation) v Ali [1999] I.C.R. 1068, 1078. If a receipt is given,
expressing that money has been received in satisfaction of all demands, it is open to the parties to contradict such a receipt:
Foster v Dawber (1851) 6 Exch. 839, 848. For exceptions to this rule, see above, paras 3-118-3-136; below, paras
22-016-22-018.
15. Byrn v Godfrey (1798) 4 Ves. 6; Tufnell v Constable (1836) 8 Sim. 69; Cross v Sprigg (1849) 6 Hare 552 (reversed on other
grounds: (1850) 2 Mac. & G. 113); Jorden v Money (1854) 5 H.L.C. 185; Luxmore v Clifton (1867) 17 L.T. 460. See also
Stackhouse v Barnston (1805) 10 Ves. 453, 466. It is doubtful whether earlier cases in equity culminating in Flower v Marten
(1837) 2 My. & Cr. 459, can now be considered good law. But see above, paras 3-085, 3-128 et seq.; below, paras
22-016-22-018, 22-044.
17. Co.Litt. 264; Com.Dig. Release (A.1); Bac.Abr. Release (A).
18. See Bank of Credit and Commerce International SA v Ali [2001] UKHL 8, [2002] 1 A.C. 251 at [8], [26] and above, paras 12-041
et seq., para.12-095.
19. Bank of Credit and Commerce International SA v Ali [2001] UKHL 8, [2002] 1 A.C. 251 at [8] and [26]. L. & S.W. Ry v Blackmore
(1870) L.R. 4 H.L. 610, 623; Solly v Forbes (1820) 2 B. & B. 38, 47; Morley v Frear (1830) 6 Bing. 547, 555.
20. Bank of Credit and Commerce International SA v Ali [2001] UKHL 8, [2002] 1 A.C. 251. In other words the courts will apply
the general rules of interpretation as re-stated by Lord Hoffmann in Investors Compensation Scheme Ltd v West Bromwich
Building Society [1998] 1 W.L.R. 896, 912-913 (on which see paras 12-043 et seq.), as qualified by Lord Hoffmann in Bank
of Credit and Commerce International SA v Ali [2001] UKHL 8, [2002] 1 A.C. 251 at [39].
21. Bank of Credit and Commerce International SA v Ali [2001] UKHL 8, [2002] 1 A.C. 251 at [41]. See also Directors of the London
and South Western Railway Co v Blackburn (1870) L.R. 4 H.L. 610 and Lyall v Edwards (1861) 6 H. & N. 337.
22. Bank of Credit and Commerce International SA v Ali [2001] UKHL 8, [2002] 1 A.C. 251 at [28]. On the facts of the case the
release was held to be confined to matters relating to the termination of the employment relationship and so did not encompass
a claim for stigma damages arising out of an alleged breach of an implied duty owed to the employees not to carry out a
dishonest or corrupt business. A further factor influencing their Lordships was the fact that the existence of such a claim, as
a matter of law, was unknown at the time of entry into the release (indeed, this factor was held to have been “crucial” by the
Court of Appeal in Mostcash Plc v Fluor Ltd [2002] EWCA Civ 975, [2002] B.L.R. 411 at [59]). See also Cole v Gibson (1750)
1 Ves. Sen. 503, Lindo v Lindo (1839) 1 Beav 496 and Grant v John Grant & Sons Pty Ltd (1954) 91 C.L.R. 112.
23.
Bank of Credit and Commerce International SA v Ali [2001] UKHL 8, [2002] 1 A.C. 251 at [27]; Mostcash Plc v Fluor Ltd
[2002] EWCA Civ 975, [2002] B.L.R. 411 Priory Caring Services Ltd v Capita Property Services Ltd [2010] EWCA Civ 226,
129 Con. L.R. 81. A party who wishes to ensure that a claim, the existence of which is unknown at the time of entry into the
release, is covered by the release should use clear words to this effect because the courts may be reluctant to conclude that
such was the intention of the parties in the absence of clear words to that effect (Bank of Credit and Commerce International
SA v Ali [2001] UKHL 8, [2002] 1 A.C. 251 at [10]).
24. The point did not arise for decision in the House of Lords in Bank of Credit and Commerce International SA v Ali [2001] UKHL
8, [2002] 1 A.C. 251 but Lord Nicholls (at [32]) and Lord Hoffmann (at [70]) were of the view that a person should not be allowed
to rely upon a release in general terms if he knew that the other party had a claim and knew that the other party was not aware
that he had a claim. Lord Bingham (at [20]) and Lord Clyde (at [87]) chose to express no view on the point. The majority of
the Court of Appeal also concluded that courts have an equitable jurisdiction to grant relief to the releasor if it would be
unconscionable for the releasee to rely on the words of a general release (Bank of Credit and Commerce International SA v
Ali [2000] I.C.R. 1410).
25. Co.Litt. 264B, 291b; Tynan v Bridges (1612) Cro. Jac. 301; Cutler v Goodwin (1721) 11 Mod. R. 344; Tetley v Wanless (1867)
L.R. 2 Ex. 275.
26. Hodges v Smith (1599) Cro. Eliz. 623; Clayton v Kynaston (1699) 12 Mod. R. 221, 222; Smith v Mapleback (1786) 1 T.R. 441,
446; Ford v Beech (1848) 11 Q.B. 852; Keyes v Elkins (1864) 5 B. & S. 240; Boosey v Wood (1865) 3 H. & C. 484.
27. Fowell v Forrest (1670) 2 Wms. Saund. 47 fn.1; Ford v Beech (1848) 11 Q.B. 852, 871.
28. It was a principle of law that a personal action, once suspended by the act of the parties, was for ever extinct. The courts would
not therefore construe the covenant or agreement as a legal suspension of the claimant's right to sue since this would have
the effect of precluding him from ever suing at all. See Williams, Joint Obligations, para.61; Ford v Beech (1848) 11 Q.B. 852,
867.
29. Deux v Jefferies (1594) Cro. Eliz. 352; Thimbleby v Barron (1838) 3 M. & W. 210; Ford v Beech (1848) 1 Q.B. 852; Webb v
Spicer (1849) 13 Q.B. 886, 898; Ray v Jones (1865) 19 C.B.(N.S.) 416. Contrast Foley v Fletcher (1858) 3 H. & N. 769; Bailey
v Bowen (1868) L.R. 3 Q.B. 133.
30. Beech v Ford (1848) 7 Hare 208.
31.
“Senior Courts Act 1981” (see above, para.1-197) s.49.
32. See above, paras 17-017-17-020.
33. Newington v Levy (1870) L.R. 6 C.P. 180; Hall v Levy (1875) L.R. 10 C.P. 154. See also Slater v Jones (1873) L.R. 8 Ex. 186,
192.
34. Bills of Exchange Act 1882 s.89.
35.
Chalmers and Guest on Bills of Exchange and Cheques, 17th edn, (2009), 8-061.
36. The rights of a holder in due course after such release are not affected if he takes without notice of the release: see s.62(2).
See Vol.II, para.34-139.
37. Wild v Williams (1840) 6 M. & W. 490; Hirschfeld v L.B. & S.C. Ry (1876) 2 QBD 1.
38. Although the CPR no longer contain any express reference to a release, it is advisable to continue to plead the defence
specifically. The new rules relating to the contents of the defence are set out in CPR Pt 16, 16.5.
Section 3 - Accord and Satisfaction
Definition
22-012
“Accord and satisfaction is the purchase of a release from an obligation whether arising under
contract or tort by means of any valuable consideration, not being the actual performance of the
obligation itself. The accord is the agreement by which the obligation is discharged. The satisfaction
39
is the consideration which makes the agreement operative.”
Thus, although a release not in the form of a deed is normally ineffective to discharge a contract which
40
is executory on one side only, it will operate as a discharge if the other party agrees to accept some
41
other or additional consideration in return for the right which he abandons. Whether there is a release
or a compromise depends upon the substance rather than the form of the transaction between the
42
parties.
Compromise
22-013
Where a claim is asserted by one party which is disputed by the other, they may agree to compromise
43
their dispute on terms mutually agreed between them. Once a valid compromise has been reached,
it is not open to the party against whom the claim is made to avoid the compromise on the ground that
the claim was in fact invalid, provided that the claim was made in good faith and was reasonably believed
44
to be valid by the party asserting it. Conversely, the claimant cannot avoid the compromise on the
ground that there was in fact no defence to the claim, provided that the other party bona fide and
reasonably believed that he had a good defence either as to liability or as to amount. In order to establish
45
a valid compromise, it must be shown that there has been an agreement (accord) which is complete
46 47
and certain in its terms, and that consideration (satisfaction) has been given or promised in return
for the promised or actual forbearance to pursue the claim. It is a good defence to an action for breach
48
of contract to show that the cause of action has been validly compromised.
Form of Accord
22-014
At common law, accord and satisfaction was no answer to a claim on a specialty, but the rule was
49
otherwise in equity and the latter now prevails. The accord need not be in writing even if the contract
which it is sought to discharge, or for the breach of which a claim is made, is required by law to be
50
made or evidenced in writing. An oral accord will suffice, unless the accord itself constitutes a contract
51 52
or transaction which is required to be made or evidenced in writing.
Executory Satisfaction
22-015
At one time, a number of cases appeared to establish the rule that satisfaction was of no effect unless
it was executed. While the satisfaction remained executory, that is to say, so long as the agreement to
give satisfaction remained unperformed, the original claim was not discharged, nor would any action
53
lie for breach of the accord. Even a tender of performance of the satisfaction agreed upon was adjudged
54
insufficient. Only executed satisfaction would suffice. This rule, however, was never completely
55 56
accepted and it is now established that satisfaction may be executory. The question is one of the
construction of the accord: whether it was intended that the promise itself or the performance of the
57
promise should discharge the original claim :
“The rational distinction seems to be, that if the promise be received in satisfaction, it is a good
satisfaction; but if the performance, not the promise, is intended to operate in satisfaction, there
58
will be no satisfaction without performance.”
In the modern law, therefore, a claimant may still insist upon the performance of some act by the other
party in satisfaction of his claim. In that case, there is no satisfaction until performance, and the other
59
party remains liable on the original claim until the satisfaction is executed. More often, however, the
claimant will agree to accept the other party's promise of performance in satisfaction of his claim. The
60
original claim is then discharged from the date of the agreement and cannot be revived. The claimant's
sole remedy, in the event that the other party fails to perform, is by action for breach of the substituted
61
agreement, and he has no right of resort to the original claim. If he wishes to preserve his right to
proceed with the original claim should the other party fail to perform, an express term should be
62
incorporated in the agreement to that effect.
Payment of Part of a Debt
22-016
63
Where there is a claim for a liquidated sum, the liability for which is not in dispute, the acceptance of
a smaller sum in satisfaction does not relieve the debtor for there is no consideration for the creditor's
64 65
abandonment of the balance. This rule, which is generally known as the rule in Pinnel's Case, is
nevertheless subject to a number of qualifications, the combined effect of which is substantially to
undermine the rule.
Payment in Different Form, at Earlier Time, in Different Place
22-017
A debt may be discharged by the acceptance of something different in nature from part payment of the
66
debt, for then there is accord and satisfaction. Even if the satisfaction accepted is much less in value
than the debt, it will constitute a good discharge, since the courts will not inquire into the adequacy of
67
consideration. Also payment by a debtor at an earlier time or in a different place from that required
68 69
by the original contract, if made at the request and for the benefit of the creditor, will effect a discharge.
Exceptions
22-018
70 71
Other important qualifications relate to part-payment by a third party, compositions with creditors
72
and the High Trees principle.
Joint Obligations
22-019
The effect of accord and satisfaction on joint obligations has been dealt with in the chapter on joint
73
obligations earlier in this book.
Bill of Exchange
22-020
74
No satisfaction is required for the discharge of a bill of exchange or promissory note. The holder may
75
renounce his rights in writing, or by delivery up of the bill to the acceptor.
Ineffective Accord
22-021
An accord may be vitiated by any circumstance that would render a contract void or voidable, for
76 77 78
example, by misrepresentation, mistake, or duress.
Evidence of Accord
22-022
79
The question whether there has been an accord and satisfaction is a question of fact. Thus, retention
and use by a creditor of a cheque sent by a debtor in full and final satisfaction of a larger claim does
80
not, as a matter of law, constitute an accord and satisfaction. The intention of the creditor in cashing
the cheque must be objectively ascertained. Cashing a cheque or retention of a cheque without rejection
81
is strong evidence of assent by the creditor but it is not conclusive evidence so that a creditor who,
at the moment of paying in the cheque or shortly thereafter makes clear that he is not assenting to the
82
conditions imposed by the debtor will not be held to have entered into an accord and satisfaction. The
construction of any correspondence which, it is alleged, evidences the accord is, however, a question
83
of law.
Pleading
22-023
84
Both the accord and the satisfaction should be specifically pleaded.
Judgment or Order
22-024
A compromise may by consent be made the subject of a judgment or order of the court. A consent
85
judgment will ordinarily extinguish by merger the contract of compromise, but a consent order will not
have this effect. It does not itself constitute a contract, but it is sufficient evidence of the contract of
compromise on which it is based, and such contract is no less a contract and subject to the incidents
86
of a contract because there is superadded the command of a judge. Where an action has been
commenced and a compromise has been reached on agreed terms, the usual form of order sought by
87
consent is a Tomlin order, which provides that all further proceedings in the action be stayed, except
88
for the purpose of carrying such terms into effect, with liberty to apply as to carrying such terms into
effect. The court will, if necessary, in appropriate cases enforce the terms of a compromise contained
89
in a Tomlin order by specific performance.
39. British Russian Gazette and Trade Outlook Ltd v Associated Newspapers Ltd [1933] 2 K.B. 616, 643; Bank of Credit and
Commerce International SA v Ali [1999] I.C.R. 1068, 1078.
40. See above, paras 3-078, 22-004.
41. Wilkinson v Byers (1834) 1 A. & E. 106; Steeds v Steeds (1889) 22 QBD 537.
42. Bank of Credit and Commerce International SA v Ali [1999] I.C.R. 1068, 1078, although it should be noted that, while Lightman
J. regarded the agreement between the parties as a compromise, the Court of Appeal ([2000] I.C.R. 1410, 1431) held that its
true purpose was “not to compromise identified claims but to release BCCI from unidentified claims”. In the House of Lords it
was accepted that the document was a release and not a compromise ([2001] UKHL 8, [2002] 1 A.C. 251 at [40]).
43.
See Foskett, The Law and Practice of Compromise, 7th edn (2010), 3-33-3-44.

48.
British Russian Gazette and Trade Outlook Ltd v Associated Newspapers Ltd [1933] 2 K.B. 616. See also Knowles v Roberts
(1888) 38 Ch D 263, 272. Alternatively, the defendant may apply by summons for an order staying the proceedings and the
court has jurisdiction to stay under the “Senior Courts Act 1981” (see above, para.1-197) s.19.
49.
“Senior Courts Act 1981” (see above, para.1-197) s.49; Steeds v Steeds (1889) 22 QBD 537.
50. Lavery v Turley (1860) 6 H. & N. 239. See also below, para.22-030.
51. e.g. a legal assignment: see above, para.19-006. See also Law of Property (Miscellaneous Provisions) Act 1989 s.2(1), above,
paras 4-052-4-088.
52. See above, para.4-009; Vol.II, Ch.44.
53. Peytoe's Case (1612) 9 Co. Rep. 77b; James v David (1793) 5 T.R. 141; Reeves v Hearne (1836) 1 M. & W. 323; Bayley v
Homan (1837) 3 Bing. N.C. 915; Griffith v Owen (1844) 13 M. & W. 58; Gifford v Whittaker (1844) 6 Q.B. 249; Woods v
Pickersgill (1859) 1 F. & F. 710; Edwards v Hancher (1875) 1 C.P.D. 111.
54. Gabriel v Dresser (1855) 15 C.B. 622.
55. Goring v Goring (1602) Yelv. 11; Good v Cheesman (1831) 2 B. & Ad. 328; Cartwright v Cooke (1832) 3 B. & Ad. 701; Ford
v Beech (1848) 11 Q.B. 852; Crowther v Farrer (1850) 15 Q.B. 677; Henderson v Stobart (1850) 5 Exch. 99; Elton Crop Dyeing
Co Ltd v Broadbent & Son Ltd (1919) 89 L.J.K.B. 186; Morris v Baron & Co [1918] A.C. 1, 35.
56. British Russian Gazette and Trade Outlook Ltd v Associated Newspapers Ltd [1933] 2 K.B. 616, 643-645; Jameson v Central
Electricity Generating Board [1998] Q.B. 323, 335.
57. [1933] 2 K.B. 616, 645, 655; Green v Rozen [1955] 1 W.L.R. 741.
58. Smith, Leading Cases, 13th edn, p.385.
59. British Russian Gazette and Trade Outlook Ltd v Associated Newspapers Ltd [1933] 2 K.B. 616, 652. But see the statements
of Greer L.J.; 655 (counterclaim).
60. [1933] 2 K.B. 616, 644; Morris v Baron & Co [1918] A.C. 1, 35.
61. British Russian Gazette and Trade Outlook Ltd v Associated Newspapers Ltd [1933] 2 K.B. 616, 644, 654. See also the cases
cited in fn.55, above, and Green v Rozen [1955] 1 W.L.R. 741.
62. For the effect of such a provision, see Smith v Shirley and Baylis (1875) 32 L.T. 234.
63. For the compromise of disputed claims, see above, para.3-046.
64. Richard and Bartlet's Case (1584) 1 Leon. 19; Pinnel's Case (1602) 5 Co. Rep. 117a; Cumber v Wane (1721) 1 Str. 426; Flitch
v Sutton (1804) 5 East 230; Down v Hatcher (1839) 10 A. & E. 121; McManus v Bark (1870) L.R. 5 Ex. 65; Foakes v Beer
(1884) 9 App. Cas. 605; Underwood v Underwood [1894] P. 204; Hookham v Mayle (1906) 22 T.L.R. 241; D. & C. Builders v
Rees [1966] 2 Q.B. 617; Tiney Engineering v Amods Knitting Machinery Unreported May 15, 1986 (C.A.T. No.440); Re
Selectmove [1995] 1 W.L.R. 474; Ferguson v Davies [1997] 1 All E.R. 315, although Evans L.J. at (326) expressed no view
on this issue. See above, para.3-115.
65. (1602) 5 Co. Rep. 117a.
68. cf. Vanbergen v St Edmund's Properties Ltd [1933] 2 K.B. 223.
69. Pinnel's Case (1602) 5 Co. Rep. 117a.
75. Bills of Exchange Act 1882 ss.62, 89; see Vol.II, para.34-139.
76. e.g. Hirschfield v L.B. & S.C. Ry (1876) 2 QBD 1; Gilbert v Endean (1878) 9 Ch D 259; Re Roberts [1905] 1 Ch. 704; Dietz v
Lennig Chemicals Ltd [1969] 1 A.C. 170; cf. Wales v Wadham [1977] 1 W.L.R. 199. See above, Ch.6.
77. An example of a compromise being set aside on the ground of mistake is provided by the decision of the Court of Appeal in
Magee v Pennine Insurance Co Ltd [1969] 2 Q.B. 507. However the Court of Appeal in Great Peace Shipping Ltd v Tsavliris
Salvage (International) Ltd [2002] EWCA Civ 1407; [2003] Q.B. 679 (on which see above, para.5-060), held that Magee was
no longer good law (see Great Peace at [136]-[140], [153] and [160]). A party seeking to set aside an agreement on the ground
of common mistake must therefore satisfy the more stringent requirements laid down by the House of Lords in Bell v Lever
Bros Ltd [1932] A.C. 161 (on which see para.5-028, above). This is likely to be an extremely difficult hurdle to overcome (see,
for example, Champion Investments Ltd v Ahmed [2004] All E.R. (D) 28 (Aug)). In the exceptional case in which it is overcome,
compromise may be vitiated by a mistake of law as well as a mistake of fact: Brennan v Bolt Burden (A Firm) [2004] EWCA
Civ 1017; [2005] Q.B. 303 at [17]. See above, para.5-055.
78. e.g. D. & C. Builders v Rees [1966] 2 Q.B. 617. See above, Ch.7.
79.
Stour Valley Builders v Stuart, The Independent, February 9, 1993 CA; cf. Pereira v Inspirations East Ltd (1992) C.A.T.
1048, discussed in more detail by Foskett, The Law and Practice of Compromise, 6th edn (2005), paras 3-33-3-44.
80. Day v McLea (1889) 22 QBD 610; Auriena Ltd v Haigh and Ringrose Ltd (1988) Const. L.J. 200; Stour Valley Builders v Stuart,
The Independent, February 9, 1993 CA; Ferguson v Davies [1997] 1 All E.R. 315; Inland Revenue Commissioners v Fry [2001]
S.T.C. 1715; cf. Hirachand Punamchand v Temple [1911] 2 K.B. 330.
81. Stour Valley Builders v Stuart, The Independent, February 9, 1993 CA; Bracken v Billinghurst [2003] EWHC 1333 (TCC),
[2003] All E.R. (D) 488 (Jul).
82. Day v McLea (1889) 22 QBD 610; Stour Valley Builders v Stuart, The Independent, February 9, 1993 CA; Inland Revenue
Commissioners v Fry [2001] S.T.C. 1715; Joinery Plus Ltd (In Administration) v Laing Ltd [2003] EWHC 3513 (TCC), (2003)
87 Con.L.R. 87 at [91]-[96].
83. Bunge SA v Kruse [1977] 1 Lloyd's Rep. 492; Kitchen Design and Advice Ltd v Lea Valley Water Co [1989] 2 Lloyd's Rep.
221; Ferguson v Davies [1997] 1 All E.R. 315.
84. Flockton v Hall (1849) 14 Q.B. 380, 386. Although the CPR do not expressly require the defence to be specifically pleaded,
it is advisable to continue to plead it specifically. The new rules relating to the contents of the defence are set out in CPR Pt
16 r.16.5.
86. Wentworth v Bullen (1829) 9 B. & C. 840, 850; Lievesley v Gilmore (1866) L.R. 1 C.P. 570.
87. Practice Note [1927] W.N. 290. See Chitty and Jacob's Queen's Bench Forms, 21st edn (1996, now with 8th Cumulative
Supplement), paras 1339, 1350; cf. McCallum v Country Residences Ltd [1965] 1 W.L.R. 657 (no consent).
88. Cristel v Cristel [1951] 2 K.B. 725.
89. Anders Utkilens Rederi A/S v O/Y Lovisa Stevedoring Co A/B [1985] 2 All E.R. 669.
Section 4 - Rescission
Rescission By Agreement
22-025
Where a contract is executory on both sides, that is to say, where neither party has performed the whole
90
of his obligations under it, it may be rescinded by mutual agreement, express or implied. A partially
executed contract can be rescinded by agreement provided that there are obligations on both sides
which remain unperformed. Similarly, a contract which has been fully performed by one party can be
rescinded provided that the other party returns the performance which he has received and in turn is
released from his own obligation to perform under the contract. The consideration for the discharge in
each case is found in the abandonment by each party of his right to performance or his right to damages,
91
as the case may be. A rescission of this nature must be distinguished from a repudiation by one party,
92
which the other party may elect to treat as a discharge of the obligation, and from the right to rescind
which is given to one party in cases of fraud, misrepresentation, duress and undue influence, and in
93
certain cases of mistake. It depends upon the consent of both parties, to be gathered from their words
or conduct and not upon the intimation by one of them that he does not intend to be bound by the
94
agreement.
Effect of Rescission
22-026
95
A contract which is rescinded by agreement is completely discharged and cannot be revived. The
parties will frequently make express provision for the restoration of money paid or for payment for
services performed or goods supplied under the contract prior to rescission. In the absence of such
provision (express or implied) it may be possible to bring a restitutionary claim provided that the contract
96
has been set aside. Money paid may be recoverable where the consideration for the payment has
97
wholly failed. It is more doubtful whether a claim can be brought in the case where goods have been
supplied or services provided prior to the rescission of the contract because, in the case where
performance has not been completed, the party in receipt of the performance may be able to contend
98
that it was not enriched by receipt of partial performance.
Abandonment
22-027
It is open to the court to infer that the parties have mutually agreed to abandon their contract where the
99
contract has been followed by a long period of delay or inactivity on both sides. The party seeking to
establish abandonment of a contract must show that the other party so conducted himself as to entitle
100
him to assume, and that he did assume, that the contract was agreed to be abandoned sub silentio.
Substituted Contract
22-028
A rescission of the contract will also be implied where the parties have effected such an alteration of
101
its terms as to substitute a new contract in its place. The question whether a rescission has been
effected is frequently one of considerable difficulty, for it is necessary to distinguish a rescission of the
102
contract from a variation which merely qualifies the existing rights and obligations. If a rescission is
103
effected the contract is extinguished; if only a variation, it continues to exist in an altered form. The
decision on this point will depend on the intention of the parties to be gathered from an examination of
104
the terms of the subsequent agreement and from all the surrounding circumstances. Rescission will
be presumed when the parties enter into a new agreement which is entirely inconsistent with the old,
105
or, if not entirely inconsistent with it, inconsistent with it to an extent that goes to the very root of it.
106
The change must be fundamental and:
“ … the question is whether the common intention of the parties was to ‘abrogate', ‘rescind,'
‘supersede' or ‘extinguish' the old contract by a ‘substitution' of a ‘completely new' or ‘self-subsisting'
107
agreement.”
It is not necessary to create a scintilla temporis between the old and the new agreement for there to
108
be a rescission and replacement; it can be achieved concurrently in the same document.
22-029
109
In Morris v Baron & Co a written contract was entered into for the sale of some cloth. A dispute arose
and legal proceedings were begun. The parties orally agreed that the action and counterclaim should
be withdrawn, that an extension should be given to the buyer for payment of a sum owed by him under
the contract and that he should have an option to purchase the goods remaining due to him instead of
being bound to take delivery. The House of Lords held that the original contract of sale was discharged
by the substituted agreement. Lord Dunedin commented:
“The difference between variation and rescission is a real one, and is tested, to my thinking, by
this: In the first case there are no such executory clauses in the second arrangement as would
enable you to sue upon that alone if the first did not exist; in the second you could sue on the
second arrangement alone, and the first contract is got rid of either by express words to that effect,
or because, the second dealing with the same subject-matter as the first but in a different way, it
110
is impossible that the two should be both performed.”
In order to extinguish the original contract, it is not necessary that the substituted agreement should
111
have been performed; an executory contract is sufficient. Nor is it necessary that it should amount
112
to an enforceable agreement.
Form of Rescission
22-030
The old rule of the common law was that a contract under seal could only be rescinded by a contract
113
under seal, but in equity a rescission not under seal provided a good defence to an action on the
deed. Since the Judicature Act 1873, the equitable rule prevails, so that now a deed can be rescinded
114
by a written or oral agreement. Even if the original contract is one which is required by law to be
115
made in writing, as in the case of a contract for the sale or other disposition of an interest in land, or
116
to be evidenced by writing as in the case of those contracts within the Statute of Frauds 1677, an
117
oral agreement is sufficient to effect its discharge. Nevertheless, the new agreement may itself be
118
unenforceable unless so evidenced. Thus in Morris v Baron & Co the original contract for the sale of
119
cloth was one which was then required by s.4 of the Sale of Goods Act 1893 to be evidenced in
writing. The subsequent oral agreement was sufficient to discharge the original contract, but was itself
unenforceable for want of writing. In the result, no action could be maintained on the original contract
120
since this had been extinguished, nor on the subsequent agreement since this was unenforceable.
Novation
22-031
Novation is a generic term which signifies:
“ … that there being a contract in existence, some new contract is substituted for it, either between
the same parties (for that might be) or between different parties; the consideration mutually being
121
the discharge of the old contract.”
In particular, however, it denotes the rescission of one contract and the substitution of another in which
122
the same acts are to be performed by different parties. A novation cannot be forced on a new party
without his agreement. So, for example, if there is a contract for the sale and purchase of a ship under
which it is agreed that the actual purchaser of the ship will be a company to be nominated by and
substituted for the buyer by novation, such substitution must be accepted by the company, either by
123
authorising the nomination or by ratifying it after it has been made.
90. Davis v Street (1823) 1 C. & P. 18; Foster v Dawber (1851) 6 Exch. 839, 851; Morris v Baron & Co [1918] A.C. 1; Rose &
Frank Co v J.R. Crompton & Bros Ltd [1925] A.C. 445.
91. Scarf v Jardine (1882) 7 App. Cas. 345, 351; Raggow v Scougall & Co (1915) 31 T.L.R. 564.
93. See above, Chs 5, 6 and 7.
94. Ogilvy and Mather Ltd v Silverado Blue Ltd [2007] EWHC 1285 (QB), [2007] All E.R. (D) 383 (May) at [21]; Intense Investments
Ltd v Development Ventures Ltd [2006] EWHC 1628 (TCC), [2006] All E.R. (D) 346 (Jun) at [117].
95. R. v Inhabitants of Gresham (1786) 1 Term Rep. 101. It is, of course, open to the parties to enter into a fresh agreement.
96. West v Downes (1778) 1 Doug. K.B. 23; Gompertz v Denton (1832) 1 C. & M. 207.
97. Towers v Barratt (1786) 1 Term Rep. 133; Davis v Street (1823) 1 C. & P. 18. See below, 29-054.
98. Lamburn v Cruden (1841) 2 Man. & G 253.
99. André & Cie SA v Marine Transocean Ltd (The Splendid Sun) [1981] Q.B. 64; Tracomin SA v Anton C. Nielsen A/S [1984] 2
Lloyd's Rep. 195; Excomm Ltd v Guan Guan Shipping (Pte) Ltd [1987] 1 Lloyd's Rep. 330 (above, paras 2-070, 2-076-2-077).
See also Tyers v Rosedale and Ferryhill Iron Co (1875) L.R. 10 Ex. 195.
100.
Paal Wilson & Co A/S v Partenreederei Hannah Blumenthal [1983] 1 A.C. 854, 924; Allied Marine Transport Ltd v Vale do
Rio Doce Navegacao SA (The Leonidas D.) [1985] 1 W.L.R. 925 (interpreting Pearle Mill Co v Ivy Tannery Co Ltd [1919] 1
K.B. 78); Collin v Duke of Westminster [1985] Q.B. 581; MSC Mediterranean Shipping Co SA v B.R.E. Metro-Ltd [1985] 2
Lloyd's Rep. 239; Cie. Française d'Importation et Distribution v Deutsche Continental Handelsgesellschaft [1985] 2 Lloyd's
Rep. 592; Gebr. van Weelde Scheepvaartkantor BV v Compania Naviera Sea Orient SA [1987] 2 Lloyd's Rep. 223; Food Corp
of India v Antclizo Shipping Corp [1988] 1 W.L.R. 603; Tankrederei Ahrenkeil GmbH v Frahuil SA [1988] 2 Lloyd's Rep. 486;
Thai-Europe Tapioca Service Ltd v Seine Navigation Co Inc [1989] 2 Lloyd's Rep. 506. Idealview v Bello [2010] EWCA Civ
721 at [19]-[21].
101. Thornhill v Neats (1860) 8 C.B.(N.S.) 831; Hunt v S.E. Ry (1875) 45 L.J.Q.B. 87; Williams Bros v Agius Ltd [1914] A.C. 510,
527; Raggow v Scougall & Co (1915) 31 T.L.R. 564; Morris v Baron & Co [1918] A.C. 1; British & Beningtons Ltd v N.W.
Cachar Tea Co Ltd [1923] A.C. 48, 69; Rose & Frank Co v J.R. Crompton & Bros Ltd [1925] A.C. 445.
102. British & Beningtons Ltd v N.W. Cachar Tea Co Ltd [1923] A.C. 48; Royal Exchange Assurance v Hope [1928] Ch. 179; and
see the cases cited in para.22-033 fn.130, below.
103. Compagnie Noga D'Importation et D'Exportation SA v Abacha [2003] EWCA Civ 1100; [2003] All E.R. (D) 400 (Jul) at [57].
104. United Dominions Trust (Jamaica) Ltd v Shoucair [1969] 1 A.C. 340; Compagnie Noga D'Importation et D'Exportation SA v
Abacha [2003] EWCA Civ 1100; [2003] All E.R. (D) 400 (Jul); Sookraj v Samaroo [2004] UKPC 50; Samuel v Wadlow [2007]
EWCA Civ 155.
105. British & Beningtons Ltd v N.W. Cachar Tea Co Ltd [1923] A.C. 48, 62.
106. [1923] A.C. 48.
107. [1923] A.C. 48, 67.
108. Compagnie Noga D'Importation et D'Exportation SA v Abacha [2003] EWCA Civ 1100; [2003] All E.R. (D) 400 (Jul) at [57].
109. [1918] A.C. 1.
110. [1918] A.C. 1, 25-26.
111. Taylor v Hilary (1835) 1 Cr. M. & R. 741.
112. Morris v Baron & Co [1918] A.C. 1; Rose & Frank Co v J.R. Crompton & Bros Ltd [1925] A.C. 445; cf. Firth v Midland Ry (1875)
L.R. 20 Eq. 100. See below, para.22-030.
113. Kaye v Waghorn (1809) 1 Taunt. 428; West v Blakeway (1841) 2 M. & G. 729.
114.
Berry v Berry [1929] 2 K.B. 316; “Senior Courts Act 1981” (see above, para.1-197) s.49.
115. Law of Property (Miscellaneous Provisions) Act 1989 s.2(1). See above, para.4-052.
116. ss.4 and 17, as amended by the Law Reform (Enforcement of Contracts) Act 1954. See above, para.4-009.
117. Law of Property (Miscellaneous Provisions) Act 1989 s.2(1) requires that a contract falling within its scope be “made in writing”
but does not regulate the discharge or unmaking of such a contract.
118. [1918] A.C. 1.
119. Re-enacting s.17 of the Statute of Frauds 1677; repealed by the Law Reform (Enforcement of Contracts) Act 1954. See above,
para.4-009.
120. See also Williams v Moss Empires [1915] 3 K.B. 242; United Dominions Trust (Jamaica) Ltd v Shoucair [1969] 1 A.C. 340.
121. Scarf v Jardine (1882) 7 App. Cas. 345, 351; The Tychy (No.2) [2001] 1 Lloyd's Rep. 10, 24.
122. Partnership Act 1890 s.7(3); Miller's Case (1877) 3 Ch D 391; Scarf v Jardine (1882) 7 App. Cas. 345; Re Head [1894] 2 Ch.
236; Re United Railways of Havana and Regla Warehouses Ltd [1960] Ch. 52, 84; Chatsworth Investments Ltd v Cussins
(Contractors) Ltd [1969] 1 W.L.R. 1; cf. Liversidge v Broadbent (1859) 4 H. & N. 603; Conquest's Case (1875) 1 Ch D 334.
See above, paras 19-086-19-088.
123. Damon Compania Naviera SA v Hapag-Lloyd International SA [1985] 1 W.L.R. 435; cf. Aktion Maritime Corp of Liberia v S.
Kasmas & Bros Ltd [1987] 1 Lloyd's Rep. 283, 311.
124
Section 5 - Variation
Variation
22-032
The parties to a contract may effect a variation of the contract by modifying or altering its terms by
125 126
mutual agreement. In Berry v Berry a husband and wife entered into a separation deed whereby
the husband covenanted to pay to the wife a certain sum each year for her support. His earnings proved
insufficient to meet this obligation, so they agreed in writing to vary the financial provisions. It was held
that this variation was valid and enforceable, and that it could be set up by the husband as a defence
to an action against him on the original deed. A mere unilateral notification by one party to the other,
127
in the absence of any agreement, cannot constitute a variation of a contract.
Form of Variation
22-033
As in the case of a rescission of a contract, the terms of a deed or written instrument may be varied by
128
a subsequent agreement, whether oral or written. This may be reconciled with the rule that extrinsic
evidence is not admissible to vary or qualify the terms of a written instrument, for that rule only relates
129
to the ascertainment of the original intention of the parties, and not to a subsequent variation. A
130
contract required by law to be made in or evidenced by writing can only be varied by writing, although,
131 132
as we have seen, it can be rescinded by parol. In Goss v Lord Nugent the plaintiff agreed in writing
to sell to the defendant certain plots of land. In an action by the plaintiff against the defendant for the
purchase-money, the defendant pleaded that the title to one of the plots was defective. To this plea the
plaintiff replied that the defendant had orally agreed to waive the defect and to accept the existing title.
133
The court held that, since the contract was one which was required by law to be evidenced by writing,
the oral variation was not admissible and the defendant was entitled to succeed on the ground that a
good title had not been made.
Variation or Recission?
22-034
Where the formal requirements apply to a variation but not to a rescission it is obviously important to
determine whether there has been a mere variation of terms or a rescission, and this question may not
134
be an easy one to answer. The effect of a subsequent agreement-whether it constitutes a variation
or a rescission-will depend upon the extent to which it alters the terms of the original contract. The test
135 136
suggested by Lord Dunedin in Morris v Baron & Co has already been referred to, and in the same
137
case Lord Haldane said that, for a rescission:
“ … there should have been made manifest the intention in any event of a complete extinction of
the first and formal contract, and not merely the desire of an alteration, however sweeping, in
terms which leave it still subsisting.”
138
If the changes do not go “to the very root of the contract” there is merely a variation.
Consideration
22-035
The agreement which varies the terms of an existing contract must be supported by consideration. In
many cases, consideration can be found in the mutual abandonment of existing rights or the conferment
139
of new benefits by each party on the other. For example, an alteration of the money of account in a
contract proposed or made by one party and accepted by the other is binding on both parties, since
140
either may benefit from the variation. Alternatively, consideration may be found in the assumption of
141
additional obligations or the incurring of liability to an increased detriment. The position is more difficult
in the case of an agreement whereby one party undertakes an additional obligation, but the other party
is merely bound to perform his existing obligations, or an agreement whereby one party undertakes an
additional obligation, but for the benefit of that party alone. There is a line of authority of respectable
antiquity which supports the view that in such a case the agreement will not be effective to vary the
142
contract because no consideration is present. But a more liberal approach has been adopted in some
recent cases and the courts have been prepared to find consideration and enforce the agreement where
143
it has conferred a practical benefit upon the promisor. A mere forbearance or concession afforded
by one party to the other for the latter's convenience and at his request does not constitute a variation,
144
although it may be effective as a waiver or in equity. Such a forbearance or concession need not be
supported by consideration, and can be made orally even when the contract is one which is required
145
to be made or evidenced in writing.
Variation and Collateral Agreement
22-036
A variation of an existing agreement should be distinguished from a collateral agreement (or collateral
146
warranty) concluded before the main agreement is entered into under which one party agrees not to
147
enforce a term of the main agreement or assumes obligations in addition to or at variance with those
148
contained in the main agreement. Such an agreement may not require to be evidenced by writing
149
even though the main agreement requires to be made or evidenced in writing. There seems to be
no reason why such a collateral agreement should not be held to exist even if entered into after the
150
conclusion of the main agreement, provided that there is present (and not merely past) consideration.
Variation and Elucidation
22-037
A variation should also be distinguished from the elucidation of a contract by the filling in of details
151
which were agreed before the written contract was signed or by the correction of mistakes which
152
occurred when the contract was reduced to writing.
Effect of Extra Works
22-038
Where, in a contract for the execution of specified works, it is provided that they shall be completed by
a certain day, and that liquidated damages shall be payable by the contractor for non-completion to
time, the general rule is that the employer will be unable to recover such liquidated damages if he orders
153
extra work to be done which necessarily delays completion of the works. However, the wording of
the contract may be such that the original contract period continues to apply to the completion of the
154
works even though additional work is ordered. Alternatively, the contract may provide that the agreed
date for completion shall be extended in the event that delay is caused by the additional work, in which
case liquidated damages will be payable from that extended date if the works are not then completed.
Unilateral Power of Variation
22-039
At common law a contract may validly give to one contracting party the power unilaterally to vary the
obligations of the parties to the contract. So, for example, in the case of a contract for the sale of goods,
155
it is “a perfectly good contract to say that the price is to be settled by the buyer”. However, the power
of one party unilaterally to vary the obligations of the parties may not be unlimited. The courts may
156
imply into the contract a term the effect of which is to curtail that power. In Nash and Staunton v
157
Paragon Finance Plc it was held that a lender's entitlement to vary interest rates was not completely
unfettered. The court implied a term into the agreement to the effect that the rates of interest would not
be set dishonestly, for an improper purpose, capriciously or arbitrarily, or in a way in which no reasonable
158
mortgagee, acting reasonably, would do. The legislature has also intervened to control clauses such
as those which purport to entitle a lender unilaterally and in its absolute discretion to vary the rate of
interest subject to notice to the debtor. Where such a provision is contained in a contract concluded
between a seller or supplier and a consumer and that contract has not been individually negotiated, it
159
may fall within the scope of the Unfair Terms in Consumer Contracts Regulations 1999. Thus a
contract term which enables the seller or supplier to alter the terms of the contract unilaterally without
160
a valid reason which is specified in the contract, or enables the seller or supplier to alter unilaterally
161
without a valid reason any characteristics of the product or service to be provided, or which provides
for the price of the goods to be determined at the time of delivery, or allows a seller of goods or supplier
of services to increase their price without in both cases giving the consumer the corresponding right to
cancel the contract if the final price is too high in relation to the price agreed when the contract was
162
concluded, may constitute an unfair term which will not be binding upon the consumer.
124. See generally Wilken and Villiers, The Law of Waiver, Variation and Estoppel, 2nd edn (2002), Ch. 2.
125. Robinson v Page (1826) 3 Russ. 114; Goss v Lord Nugent (1833) 5 B. & Ad. 58, 65; Stead v Dawber (1839) 10 A. & E. 57,
65; Dodd v Churton [1897] 1 Q.B. 562; Fenner v Blake [1900] 1 Q.B. 426; Royal Exchange Assurance v Hope [1928] Ch. 179.
See Dugdale and Yates (1976) 39 M.L.R. 680.
126. [1929] 2 K.B. 316.
127. Cowey v Liberian Operations Ltd [1966] 2 Lloyd's Rep. 45; T. Comedy (UK) Ltd v Easy Managed Transport Ltd [2007] EWHC
611 (Comm), [2007] 2 Lloyd's Rep 397 at [29].
128. Berry v Berry [1929] 2 K.B. 316. Statute may, of course, intervene to prescribe a particular form of variation (see, for example,
s.82 of the Consumer Credit Act 1974 concerning an agreement to vary or supplement a consumer credit or consumer hire
agreement: below, Vol.II, para.38-132).
129. Goss v Lord Nugent (1833) 5 B. & Ad. 58, 64; see above, paras 12-095 et seq.
130. Robinson v Page (1826) 3 Russ. 114; Stead v Dawber (1839) 10 A. & E. 57; Marshall v Lynn (1840) 6 M. & W. 109; Noble v
Ward (1867) L.R. 2 Ex. 135; Sanderson v Graves (1875) L.R. 10 Ex. 234; Plevins v Downing (1876) 1 C.P.D. 220; British and
Beningtons Ltd v N.W. Cachar Tea Co Ltd [1923] A.C. 48; United Dominions Trust (Jamaica) Ltd v Shoucair [1969] 1 A.C.
340; Richards v Creighton-Griffiths (Investments) Ltd (1972) 225 E.G. 2104; New Hart Builders Ltd v Brindley [1975] Ch. 342;
McCausland v Duncan Lawrie Ltd [1997] 1 W.L.R. 38.
132. (1833) 5 B. & Ad. 58.
133. Statute of Frauds 1677 s.4, re-enacted as s.40(1) of the Law of Property Act 1925, but subsequently repealed by s.2(8) of the
Law of Property (Miscellaneous Provisions) Act 1989.
134. In one modern case the distinction was stated to be “sterile”, “artificial” and one “of legal theory which might have little commercial
meaning for the parties”: Samuel v Wadlow [2007] EWCA Civ 155 at [39], [40] and [45].
135. [1918] A.C. 1, 5.
137. [1918] A.C. 1, 19.
138. British and Beningtons Ltd v N.W. Cachar Tea Co Ltd [1923] A.C. 48, 62, 68.
139. Re William Porter & Co Ltd [1937] 2 All E.R. 361.
140. Woodhouse A.C. Israel Cocoa Ltd SA v Nigerian Produce Marketing Co [1972] A.C. 741, 757; W.J. Alan & Co Ltd v El Nasr
Export and Import Co [1972] 2 Q.B. 189.
141. North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd [1979] Q.B. 705.
142. Stilk v Myrick (1809) 2 Camp. 317; Vanbergen v St Edmund's Properties Ltd [1933] 2 K.B. 233; Syros Shipping Co SA v Elaghill
Trading Co [1980] 2 Lloyd's Rep. 390; see above, paras 3-079-3-080. See also above, paras 3-115, 22-016-22-018 (payment
of part of debt).
143. Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 Q.B. 1; Anangel Atlas Compania Naviera SA v Ishikawajima-Harima
Heavy Industries Co Ltd (No.2) [1990] 2 Lloyd's Rep. 526; Simon Container Machinery Ltd v Emba Machinery AB [1998] 2
Lloyd's Rep. 429, 434-435.
144. See above, para.3-085; below, para.22-040.
146. See above, paras 12-004, 12-103.
147. City and Westminster Properties (1934) Ltd v Mudd [1959] Ch. 129.
148. Erskine v Adeane (1873) 8 Ch. App. 756; De Lassalle v Guildford [1901] 2 K.B. 215; Brikom Investments Ltd v Carr [1979]
Q.B. 467; Record v Bell [1991] 1 W.L.R. 853; see above, paras 3-079, 12-103.
149. Record v Bell [1991] 1 W.L.R. 853.
151. Hudson v Revett (1829) 5 Bing. 368; Rudd v Bowles [1912] 2 Ch. 60.
152. Bluck v Gompertz (1852) 7 Exch. 362; see above, para.5-107.
153. Holme v Guppy (1838) 3 M. & W. 387; Russell v Sada Bandeira (1862) 13 C.B.(N.S.) 149; Dodd v Churton [1897] 1 Q.B. 562;
Trollope & Colls Ltd v North West Metropolitan Regional Hospital Board [1973] 1 W.L.R. 601, 607; Astilleros Canarios SA v
Cape Hatteras Shipping Co Inc [1982] 1 Lloyd's Rep. 518. See generally Keating on Construction Contracts, 8th edn (2006),
para.9-019 and also Perini Pacific Ltd v Greater Vancouver Sewerage and Drainage District (1966) 57 D.L.R. (2d) 307.
154. Macintosh v Midland Counties Ry (1845) 14 M. & W. 548; Legge v Horlock (1848) 12 Q.B. 1015; Jones v St John's College,
Oxford (1870) L.R. 6 Q.B. 115; Tew v Newbold-on-Avon United District School Board (1884) 1 Cab. & E. 260.
155. May and Butcher v R. [1934] 2 K.B. 17, 21.
156. See, for example, Esso Petroleum v Addison [2003] EWHC 1730 (Comm); Mallone v BPB Industries Plc [2002] EWCA Civ
126, [2002] I.C.R. 1045 and Nash and Staunton v Paragon Finance Plc [2001] EWCA Civ 1466, [2002] 1 W.L.R. 685.
157. [2001] EWCA Civ 1466, [2002] 1 W.L.R. 685. The Court of Appeal declined to follow dicta of Staughton L.J. in Lombard Tricity
Finance Ltd v Paton [1989] 1 All E.R. 918, 923.
158. On the facts of the case it was held that the borrowers had no real prospect of successfully establishing a breach of the implied
term. The reason for the increase in interest rates was that the creditors were in financial difficulties and so had to increase
their interest rates in order to protect their own financial position. It could not be said that they had acted dishonestly, capriciously,
arbitrarily or wholly unreasonably in acting as they did. See also Paragon Finance Plc v Pender [2005] EWCA Civ 760, [2005]
All E.R. (D) 307 (Jun).
159. SI 1999/2083. See further above, Ch.15, where the scope of the Regulations and the definition of terms such as “seller or
supplier”, etc. is discussed in more detail.
160. See Sch.2 to the 1999 Regulations para.1(j), (set out at para.15-103) although note the restricted applicability of this provision
to the supply of financial services (para.2(b)).
161. See Sch.2 to the 1999 Regulations para.1(k).
162. See Sch.2 to the 1999 Regulations para.1(l), although note the restricted applicability of this provision to financial services
(para.2(c)) and that it does not apply to “price-indexation clauses, where lawful, provided that the method by which prices vary
is explicitly described” (para.2(d)).
163
Section 6 - Waiver
Waiver or Forbearance
22-040
Where one party voluntarily accedes to a request by the other that he should forbear to insist on the
mode of performance fixed by the contract, the court may hold that he has waived his right to require
164
that the contract be performed in this respect according to its original tenor. Waiver (in the sense of
165
“waiver by estoppel” rather than “waiver by election” ) may also be held to have occurred if, without
any request, one party represents to the other that he will forbear to enforce or rely on a term of the
contract to be performed or observed by the other party, and the other party acts in reliance on that
166
representation.
Form of Waiver
22-041
167
A waiver may be oral or written or inferred from conduct even though the provision waived is found
in a contract required to be made in or evidenced by writing. It has been noted that any variation of a
168
contract required to be made in or evidenced by writing must itself be made in or evidenced by writing.
If it is merely oral, it is of no effect. An oral forbearance or concession made by one party to the other
169
does not require to be so evidenced, even if made at the latter's request. Thus, what is ineffective
as a variation may possibly have effect as a waiver. The formal requirements, in relation to such a
contract, of rescission, variation and waiver were thus described by Goddard J. in Besseler Waechter
170
Glover & Co v South Derwent Coal Co :
“If the parties agree to rescind their original contract and to substitute for it a new one, the latter
must be evidenced by writing; so, too, if as a matter of contract the parties agree that the terms
of the original agreement shall be varied, the variation must be in writing. But if what happens is
a mere voluntary forbearance to insist on delivery or acceptance according to the strict terms of
the written contract, the original contract remains unaffected, and the obligation to deliver and
accept the full contract quantity still continues…. It does not appear to me to matter whether the
request comes from one side or the other, or whether it is a matter which is convenient to one
party or to both. What is of importance is whether it is a mere forbearance or a matter of contract.”
171
The distinction between variation and waiver is, however, a difficult one to apply in practice, particularly
since a waiver may be consensual and be just as far reaching in its effect as a variation of the agreement.
172
Fortunately, in respect of formal requirements, it has become much less important since the almost
173
total repeal of the Statute of Frauds by the Law Reform (Enforcement of Contracts) Act 1954.
Effect on Party Forbearing
22-042
The party who forbears will be bound by the waiver and cannot set up the original terms of the agreement.
If, by words or conduct, he has agreed or led the other party to believe that he will accept performance
at a later date than or in a different manner from that provided in the contract, he will not be able to
174
refuse that performance when tendered. However, in cases of postponement of performance, if
the period of postponement is specified in the waiver, then, if time was originally of the essence, it will
175
remain so in respect of the new date. If the period of postponement is not specified in the waiver, the
party forbearing is entitled, upon reasonable notice, to impose a new time-limit, which may then become
176
of the essence of the contract. Similarly, in other cases of forbearance, he may be entitled, upon
177
reasonable notice, to require the other party to comply with the original mode of performance, unless
178 179
in the meantime circumstances have so changed as to render it impossible or inequitable so to
do. He cannot treat the waiver as entirely without effect. If a seller of goods withholds delivery of the
goods at the purchaser's request (i.e. if the seller waives the obligation of the purchaser to accept the
goods within a certain time), he will still be under a duty to deliver within a reasonable time if so requested
180
by the purchaser.
Effect on Party to Whom Forbearance Is Extended
22-043
Where one party has induced the other party to accede to his request, the party seeking the forbearance
181
will not be permitted to repudiate the waiver and to rely on the letter of the agreement. Thus in Levey
182
& Co v Goldberg the defendant agreed in writing to buy from the plaintiffs certain pieces of cloth over
183
the value of £10 to be delivered within a certain period. At the oral request of the defendant, the
plaintiffs voluntarily withheld delivery during that period. The defendant subsequently refused to accept
delivery, and, when sued, contended that the plaintiffs themselves were in breach, as the oral agreement
was insufficient to vary the terms of a contract which was required by law to be evidenced by writing.
It was held that the forbearance by the plaintiffs at the request of the defendant did not constitute a
variation but a waiver, and the plaintiffs were entitled to maintain their action.
Consideration for Waiver
22-044
A waiver is also distinguishable from a variation of a contract in that there is no consideration for the
184
forbearance moving from the party to whom it is given. It may therefore be more satisfactory to regard
this form of waiver, that is “waiver by estoppel”, as analogous to, or even identical with, equitable
185
forbearance or “promissory” estoppel. Although consideration need not be proved, certain other
requirements must be satisfied for such an estoppel to be effective: first, it must be clear and unequivocal;
186
secondly, the other party must have altered his position in reliance on it, or at least acted on it.
Contracting Out of Waiver
22-045
It would appear that there is no general principle of law that parties to a contract cannot restrict the
187
operation of the doctrine of waiver by the terms of their contract. In State Securities Plc v Initial
188
Industry Ltd Jonathan Gaunt Q.C., sitting as a Deputy Judge of the High Court, stated:
“I can, however, see no reason in principle why the parties to an equipment lease … or other
commercial contract, should not be free to stipulate that a particular act, such as payment of a
rental instalment should not be taken to waive a right to terminate for an earlier breach. After all,
such a provision may be very convenient and operate to the benefit of both parties. The finance
company may want to encourage the lessee to correct the breach but not want him to fall behind
with his payments while he does so. It may be in the interests of the lessee that the finance
189
company should not have to take an early decision whether to terminate.”
However it cannot be assumed that the courts in all cases will give effect to a term of the contract which
purports to exclude or limit the operation of the doctrine of waiver; in some circumstances the term of
the contract may not suffice to deny effect to a clear and unequivocal representation made by one party
190
to the contract.
Waiver of Condition for Benefit of One Party
22-046
Where the terms of a contract include a provision which has been inserted solely for the benefit of one
party, he may, without the assent of the other party, waive compliance with that provision and enforce
191
the contract as if the provision had been omitted. He will not be permitted to do so where the
192
provision has been inserted for the benefit of both parties or where there is in reality no concluded
193
agreement.
Waiver of Breach
22-047
One party may waive his right to terminate a contract consequent upon a repudiation of the contract
194
by the other party. It is, however, important to distinguish between the case in which a party waives
his right to treat the contract as repudiated but does not abandon his right to claim damages for the
195
loss suffered as a result of the breach and the case where the innocent party waives not only his
196
right to terminate performance of the contract but also his claim for damages for the breach. The
197
former is an example of waiver by election, whereas the latter is more properly classified as a species
198
of waiver by estoppel.
163. See generally Wilken and Villiers, The Law of Waiver, Variation and Estoppel, 2nd edn (2002), Chs 3-5.
165. The distinction between these two types of waiver is discussed, below para.24-007. See also Motor Oil Hellas (Corinth)
Refineries SA v Shipping Corp of India [1990] 1 Lloyd's Rep. 391, 397-399.
166. See above, 3-081, 3-085.
167. Bruner v Moore [1904] 1 Ch. 305; Bremer Handelsgesellschaft mbH v Vanden Avenne-Izegem P.V.B.A. [1978] 2 Lloyd's Rep.
109.
169. Msas Global Logistics v Power Packaging Inc [2003] EWHC 1393 (Ch), [2003] All E.R. (D) 211 (Jun).
170. [1938] 1 K.B. 408, 416, 417; Msas Global Logistics v Power Packaging Inc [2003] EWHC 1393 (Ch), [2003] All E.R. (D) 211
(Jun).
171. See Besseler Waechter Glover & Co v South Derwent Coal Co [1938] 1 K.B. 408; Watson v Healy Lands [1965] N.Z.L.R. 511;
Dugdale and Yates (1976) 39 M.L.R. 680.
172. See Ch.4.
174.
Leather Cloth Co v Hieronimus (1875) L.R. 10 Q.B. 140; Bruner v Moore [1904] 1 Ch. 305; Panoutsos v Raymond Hadley
Corp of New York [1917] 2 K.B. 473; Hartley v Hymans [1920] 2 K.B. 475; Besseler Waechter Glover & Co v South Derwent
Coal Co [1938] 1 K.B. 408; Tankexpress A/S v Compagnie Financière Belge des Petroles SA [1949] A.C. 76; Plasticmoda
Societa per Azioni v Davidsons (Manchester) Ltd [1952] 1 Lloyd's Rep. 527; Enrico Furst & Co v W.E. Fischer [1960] 2 Lloyd's
Rep. 340; W.J. Alan & Co Ltd v El Nasr Export and Import Co [1972] 2 Q.B. 189, 213; Leofelis SA v Lonsdale Sports Ltd [2008]
EWCA Civ 640, [2008] All E.R. (D) 87 (Jul) at [60].
175. Luck v White (1973) 26 P. & C.R. 89; Buckland v Farmar & Moody [1979] 1 W.L.R. 221; Nichimen Corp v Gatoil Overseas Inc
[1987] 2 Lloyd's Rep. 46.
176. Hartley v Hymans [1920] 2 K.B. 475; Charles Rickards Ltd v Oppenhaim [1950] 1 K.B. 616; Jacobson van der Berg & Co (UK)
Ltd v Biba Ltd (1977) 121 S.J. 333; State Trading Corp of India Ltd v Compagnie Française d'Importation et de Distribution
[1983] 2 Lloyd's Rep. 679. See also Ficom SA v Sociedad Cadex Ltda [1980] 2 Lloyd's Rep. 118, 131.
177. Panoutsos v Raymond Hadley Corp of New York [1917] 2 K.B. 473.
178. Leather Cloth Co v Hieronimus (1875) L.R. 10 Q.B. 140.
179. Toepfer v Warinco A.G. [1978] 2 Lloyd's Rep. 569, 576. See also above, para.3-083.
180. Tyers v Rosedale Ferryhill Iron Co (1875) L.R. 10 Ex. 195.

181. Ogle v Earl Vane (1868) L.R. 3 Q.B. 272; Hickman v Haynes (1875) L.R. 10 C.P. 598.
182. [1922] 1 K.B. 688.
183. Statute of Frauds 1677 s.17 (re-enacted as s.4 of the Sale of Goods Act 1893) required such a contract to be evidenced by
writing. Both provisions have now been repealed by the Law Reform (Enforcement of Contracts) Act 1954.
184. W.J. Alan & Co Ltd v El Nasr Export and Import Co [1972] 2 Q.B. 189, 193. See also above, para.3-081.
186. Woodhouse A.C. Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] A.C. 741, 755, 758, 761, 762, 767-768,
781; W.J. Alan & Co Ltd v El Nasr Export & Import Ltd [1972] 2 Q.B. 189, 212-214, 215, 217; Finagrain SA v P. Kruse [1976]
2 Lloyd's Rep. 508, 534-535, 540, 546; Bremer Handelsgesellschaft mbH v Vanden Avenne-Izegem P.V.B.A. [1978] 2 Lloyd's
Rep. 109, 127; Bunge SA v Schleswig-Holsteinische Landwirtschaftliche Hauptgenossenschaft Eingetr GmbH [1978] 1 Lloyd's
Rep. 480, 490; Bremer Handelsgesellschaft mbH v C. Mackprang [1979] 1 Lloyd's Rep. 220, 225-226, 228, 230; Avimex SA
v Dewulf & Cie [1979] 2 Lloyd's Rep. 67-68; Bremer Handelsgesellschaft mbH v Westzucker [1981] 1 Lloyd's Rep. 207, 213;
Cremer v Granaria B.V. [1981] 2 Lloyd's Rep. 583, 587; Cerealmangimi SpA v Toepfer [1981] 3 All E.R. 533; Cook Industries
Inc v Meunerie Liegeois SA [1981] 1 Lloyd's Rep. 359, 368; Société Italo-Belge pour le Commerce et l'Industrie v Palm and
Vegetable Oils (Malaysia) Sdn Bhd [1981] 2 Lloyd's Rep. 695, 700-702; Bremer Handelsgesellschaft mbH v Finagrain Compagnie
Commerciale, etc. SA [1981] 2 Lloyd's Rep. 259, 263, 266; Bremer Handelsgesellschaft mbH v Raiffeisen Hauptgenossenschaft
E/G [1982] 1 Lloyd's Rep. 599; Bremer Handelsgesellschaft mbH v Deutsche Conti-Handelsgesellschaft mbH [1983] 2 Lloyd's
Rep. 45; Allied Marine Transport Ltd v Vale do Rio Doce Navegacao SA [1985] 1 W.L.R. 925; Motor Oil Hellas (Corinth)
Refineries SA v Shipping Corp of India [1990] 1 Lloyd's Rep. 391. cf. Scandinavian Trading Tanker Co AB v Flota Petrolera
Ecuatoriana [1983] 2 Q.B. 529, [1983] 2 A.C. 694. See above, para. 3-081; below, paras 24-007-24-009.
187. State Securities Plc v Initial Industry Ltd [2004] All E.R. (D) 317 (Jan).
188. [2004] All E.R. (D) 317 (Jan).
189. [2004] All E.R. (D) 317 (Jan) at [57].
190. I-Way Ltd v World Online Telecom Ltd [2002] EWCA Civ 413 (Court of Appeal refused to give summary judgment in a case
in which the court was asked, in effect, to enforce a term of the contract which provided that “no addition, amendment or
modification of this Agreement shall be effective unless it is in writing and signed by or on behalf of both parties”).
191.
Bennett v Fowler (1840) 2 Beav. 302; Hawksley v Outram [1892] 3 Ch. 359; Morrell v Studd and Millington [1913] 2 Ch.
648; F.E. Napier v Dexters Ltd (1926) 26 Ll. L. R. 62, 63-64, 184, 187-188; Irwin v Wilson [2011] EWHC 326 (Ch), [2011] All
E.R. (D) 244 (Feb). See also North v Loomes [1919] 1 Ch. 378 and Sale of Goods Act 1979 s.11(2). Once he has waived the
condition, either expressly or by conduct, he cannot then rely on it to deny his own liability: Barrett Bros (Taxis) Ltd v Davies
[1966] 1 W.L.R. 1334.
192. Lloyd v Novell [1895] 2 Ch. 744; Burgess v Cox [1951] Ch. 383; Heron Garage Properties Ltd v Moss [1974] 1 W.L.R. 148;
Gregory v Wallace [1998] I.R.L.R. 387; Wessex Reserve Forces and Cadets Association v White [2005] EWHC 983 (QB),
[2005] All E.R. (D) 310 (May).
193. Allsopp v Orchard [1923] 1 Ch. 323.
195. Motor Oil Hellas (Corinth) Refineries SA v Shipping Corp of India [1990] 1 Lloyd's Rep. 391, 397-398.
196.
This is sometimes known as “total waiver”; see Sale of Goods Act 1979 s.11(2); Benjamin's Sale of Goods, 8th edn (2010),
paras 12-036-12-038; Treitel, The Law of Contract, 12th edn by Peel, 2007), para.18-076 and below, para.24-007.
198. See below, para.24-007. There are important differences between the two types of waiver; see below, para.24-008 and Treitel
at paras 18-074-18-080.
Section 7 - Provision for Discharge in the Contract Itself
Express Provision
22-048
The parties may expressly provide in their contract that either or one of them is to have an option to
199
terminate the contract. This right of termination may be exercisable upon a breach of contract by the
200
other party (whether or not the breach would amount to a repudiation of the contract), or upon the
201
occurrence or non-occurrence of a specified event other than breach, or simply at the will of the party
upon whom the right is conferred. In principle, since the parties are free to incorporate whatever terms
they wish for the termination of their agreement, no question arises at common law whether the provision
202
is reasonable or whether it is reasonable for a party to enforce it, unless the situation is one in which
203
equity would grant relief against forfeiture. However, certain statutes restrict the efficacy of such
204
provisions, and in certain circumstances a term of this nature would have to be shown to be fair and
205
reasonable by virtue of the provisions of the Unfair Contract Terms Act 1977. Where such a provision
is contained in a contract concluded between a seller or supplier and a consumer and that contract has
not been individually negotiated, it may also fall within the scope of the Unfair Terms in Consumer
206
Contracts Regulations 1999. Thus, a contract term which authorises a seller or supplier to dissolve
a contract on a discretionary basis where the same facility is not granted to the consumer may constitute
207
an unfair term which will not be binding upon the consumer.
22-049
The fact that one party is contractually entitled to terminate the agreement in the event of a breach by
the other party does not preclude that party from treating the agreement as discharged by reason of
208
the other's repudiation or breach of condition, unless the agreement itself expressly or impliedly
209
provides that it can only be terminated by exercise of the contractual right. Whether the procedure
laid down for termination in the contract excludes, expressly or impliedly, the common law right to
terminate further performance of the contract in respect of a breach which falls within the scope of the
210
clause is a question of construction of the contract. When interpreting a clause in a contract which
lays down a procedure for termination of the contract, the court will have regard to the commercial
211
purpose which is served by the termination clause and interpret it in the light of that purpose. Strict
or precise compliance with the termination clause may no longer be a necessary pre-requisite to a valid
212
termination. It can be a matter of some practical importance whether termination has taken place
213
pursuant to a term of the contract or under the general law. A contractual right to terminate can be
214
exercised even if the breach is not repudiatory at common law. On the other hand, a contractual right
to terminate, of itself, says nothing about the remedial consequences of termination; that is to say, not
every termination pursuant to an express term of the contract will entitle the party terminating the contract
to loss of bargain damages. Thus, where a contracting party terminates further performance of the
contract pursuant to a term of the contract, and the breach which has caused it to exercise that power
is not a repudiatory breach, the party exercising the right to terminate may only be entitled to recover
damages in respect of the loss which it has suffered at the date of termination and not for loss of bargain
215 216
damages. Where, however, the breach is also repudiatory and that repudiatory breach has been
217 218
accepted, loss of bargain damages can be recovered by relying on the contractual right to do so
or by accepting the other party's repudiation of the contract. An example of a case in which the line
between the two became distinctly blurred is provided by Laing Management Ltd v Aegon Insurance
219
Co (UK) Ltd where Judge Lloyd Q.C. concluded that reliance on a contractual right to terminate did
not amount to an acceptance of a repudiatory breach and that therefore the contract remained alive
for the benefit of both parties. The finding that the contract remained alive, notwithstanding the reliance
on the express power to terminate, is a difficult one. A simpler analysis would have been to conclude
that reliance on the express term in the contract did operate to discharge both parties from their obligation
to perform under the contract but that the exercise of the right to terminate did not, of itself, entitle the
220
plaintiff to recover loss of bargain damages.
Burden of Proof
22-050
It is for the party seeking to terminate the contract to prove the existence of the facts which justify the
221
exercise of his contractual right to terminate.
Requirements as to Notice
22-051
222
Where the terms of the contract expressly or impliedly provide that the right of termination is to be
exercised only upon notice given to the other party, it is clear that notice must be given for the contract
223
to be terminated pursuant to that provision. Any notice must be sufficiently clear and unambiguous
224
in its terms to constitute a valid notice ; but it is a question of construction in each case whether the
notice must actually be communicated to the other party and whether it takes effect at the time of
225
dispatch or of receipt. The terms of the contract may further provide that notice can be given only
226
after the occurrence of a specified event ; or that a specified period of notice be given; or that the
notice is to be in a certain form (e.g. in writing); or that it should contain certain specified information;
or that it should be given within a certain period of time. Prima facie the validity of the notice depends
227
upon the precise observance of the specified conditions. However, a consideration of the relationship
of the notice requirements to the contract as a whole and regard to general considerations of law, may
228
show that a stipulated requirement, for example, that notice be given “without delay”, was intended
229
by the parties to be an intermediate term, the non-observance of which would not invalidate the notice
(unless the other party was seriously prejudiced thereby), but would give rise to a claim for damages
230
only.
Waiver of Defects in Notice
22-052
Where the requirements of notice have not been complied with, the party giving the notice may still be
231
entitled to rely on it if the other party has expressly or by conduct waived the defect in the notice.
Waiver of Right to Terminate
22-053
Conversely, if one party is contractually entitled to terminate the agreement on breach by the other, he
232
may be held to have waived his right to terminate.
Implied Provision
22-054
A contract which appears on its face to be perpetual and irrevocable may nevertheless be construed
233
in the sense that it can be determined upon reasonable notice. This topic has been dealt with in the
234
chapter on Implied Terms earlier in this book. An unlawful repudiation of the contract by one party
cannot be relied on by him as a lawful determination upon reasonable notice under an implied term in
235
the contract.
Determination of Contract
22-055
The parties may expressly provide that the contract shall ipso facto determine upon the happening of
236
a certain event. But such a provision is to be construed subject to the principle that no man can take
advantage of his own wrong, so that one party may not be allowed to rely on such a provision where
237
the occurrence of the event is attributable to his own act or default.
199. In Aktieselskabet Dampskibsselskabet Svendborg v Mobil North Sea Ltd [2001] 2 Lloyd's Rep. 127, 130 David Steel J. said
that he saw no reason to accord the word “terminated” in a termination clause anything other than “its ordinary meaning of
coming, or being brought, to an end, however that result may have occurred”. Thus he held that a repudiatory breach by either
party accepted by the other constituted a “termination” within the meaning of the clause.
200.
See below, para.24-001. A court may, however, interpret a clause entitling a party to terminate on the occurrence of any
“breach of contract as applying only to a breach of contract which is repudiatory in nature”: see Rice (t/a Garden Guardian) v
Great Yarmouth BC, The Times, July 26, 2000. In Rice the local authority purported to terminate the contract under a term of
the contract which stated that: “[I]f the contractor commits a breach of any of its obligations under the contract, the Council
may, without prejudice to any accrued rights or remedies under the Contract, terminate the Contractor's employment under
the Contract by notice in writing having immediate effect.” The Court of Appeal concluded that the notion that this term entitled
the council to terminate the contract at any time for any breach of any term flew in the face of commercial common sense (the
contract was one which was designed to run for four years). The clause only gave the Council the right to terminate the contract
on the occurrence of a repudiatory breach of contract and the Court of Appeal held that the trial judge had been entitled to
conclude on the facts that there had not been a repudiatory breach of contract so that the Council was not entitled to terminate
the contract. Rice was followed by Kitchin J. in Dominion Corporate Trustees Ltd v Debenham Properties Ltd [2010] EWHC
1193 (Ch), [2010] 23 E.G. 106. Given the “multitude” of obligations in the contract, “many of which” were of “minor importance”
and which could be broken “in many different ways”, Kitchin J. concluded (at [32]) that it flouted business commonsense to
conclude that any breach entitled the other party to terminate the contract. Dominion Corporate Trustees was, however,
distinguished by Newey J. in Looney v Trafigura Beheer BV [2011] EWHC 125 (Ch), [2011] All E.R. (D) 17 (Feb), where it was
held that the defendant's right to terminate the contract was not qualified by a requirement that the termination must be on
“proper and reasonable grounds” or in “proper and reasonable commercial circumstances”. It was held that the contract gave
to the defendant an unfettered right to terminate the contract provided it paid to the claimant the applicable early termination
fee. There is therefore a need for clearer drafting if one wishes to ensure a right to terminate in the event of a breach of a
long-term contract (for an example, albeit in the context of an ISDA Master Agreement, see BNP Paribas v Wockhardt EU
Operations (Swiss) AG [2009] EWHC 3116 (Comm), 132 Con. L.R. 177 at [42]). It may be possible to use the words “material
breach” (see National Power Plc v United Gas Co Ltd Unreported July 3, 1998, Coleman J.; Fortman Holdings Ltd v Modem
Holdings Ltd [2001] EWCA Civ 1235; Dalkia Utilities Services Plc v Celtech International Ltd [2006] EWHC 63 (Comm), [2006]
1 Lloyd's Rep. 599 at [90]-[102]) or “substantial breach” (see Crane Co v Wittenborg A/S Unreported, December 21, 1999 CA)
but that simply opens the problem of establishing the meaning of “material” or “substantial” and the court may conclude that
they are simply synonyms for a repudiatory breach. See further Thomas [2001] International Company and Commercial Law
Review 26.
201. See above, para.12-030 (conditions subsequent) and para.12-039 (force majeure clauses).
202. Financings Ltd v Baldock [1963] 2 Q.B. 104, 115; China National Foreign Trade Transportation Corp v Evlogia Shipping Co
SA [1979] 1 W.L.R. 1018.
203.
See, e.g. Stockloser v Johnson [1954] 1 Q.B. 476; Barton Thompson & Co Ltd v Stapling Machines Co [1966] Ch. 499;
Shiloh Spinners Ltd v Harding [1973] A.C. 691; Starside Properties Ltd v Mustapha [1974] 1 W.L.R. 816; B.I.C.C. Plc v Burndy
Corp [1985] Ch. 232; Transag Haulage Ltd v Leyland DAF Finance Plc [1994] B.C.C. 356; On Demand Information Plc v
Michael Gerson (Finance) Plc [2001] 1 W.L.R. 155 and below, para.26-146 et seq. Contrast Galbraith v Mitchenall Estates
Ltd [1965] 2 Q.B. 473; Mardorf Peach & Co Ltd v Attica Sea Carriers Corp of Liberia [1977] A.C. 850; Afovos Shipping Co SA
v R. Pagnan and Filli [1983] 1 W.L.R. 195; Scandinavian Trading Tanker Co AB v Flota Petrolera Ecuatoriana [1983] 2 A.C.
694; Sport Internationaal Bussum BV v Inter-Footwear Ltd [1984] 1 W.L.R. 776; Union Eagle Ltd v Golden Achievement Ltd
[1997] A.C. 514; Etzin v Reece [2002] All E.R. (D) 405 (July); More OG Romsdal Fylkesbatar AS v The Demise Charterers of
the Ship “Jotunheim” [2004] EWHC 671 (Comm), [2005] 1 Lloyd's Rep. 181; Celestial Aviation Trading 71 Ltd v Paramount
Airways Private Ltd [2010] EWHC 185 (Comm), [2010] 1 C.L.C. 165.
204. e.g. Law of Property Act 1925 s.146; Consumer Credit Act 1974 ss.76, 86, 87, 98; Housing Act 1996 ss.81 and 82.
205. s.3(2)(b)(ii); see above, para.14-073.
206. SI 1999/2083. See further above, Ch.15, where the scope of the Regulations and the definition of terms such as “seller or
supplier”, etc., is discussed in more detail.
207. See Sch.2 to the 1999 Regulations para.1(f), set out at para.15-099.
208. Leslie Shipping Co v Welstead [1921] 3 K.B. 420; The Mihalis Angelos [1971] 1 Q.B. 164; Lombard North Central Plc v
Butterworth [1987] Q.B. 587.
209.
Npower Direct Ltd v South of Scotland Power Ltd [2005] EWHC 2123 (Comm) at [177]. A court is unlikely to be satisfied
that a contracting party has given up a valuable right arising by operation of law (such as the right to recover loss of damages
under the general law or a right to terminate the contract at law), “unless the terms of the contract make it sufficiently clear
that that was intended”: Stocznia Gdynia SA v Gearbulk Holdings Ltd [2009] EWCA Civ 75, [2009] 1 Lloyd's Rep. 461 at [23],
relying on an observation of Lord Diplock in Gilbert-Ash (Northern) Ltd v Modern Engineering (Bristol) Ltd [1974] A.C. 689,
717.
210.
See, for example, Lockland Builders Ltd v Rickwood (1996) 77 Build. L.R. 38 where the contractually agreed procedure for
dealing with the consequences of a particular breach was held impliedly to have excluded the common law right to terminate
performance of the contract in respect of a breach which fell within the scope of the clause. However, the position would have
been otherwise if the party in breach had evinced a clear intention not to be bound by the terms of the contract; in such a case
the common law right to terminate and the right contained in the contract would have existed side by side (see Russell L.J. at
46 and Hirst L.J. at 50). A provision to the effect that the contractual right to terminate is “without prejudice to other rights and
remedies” will generally suffice to persuade a court that the common law right to terminate has not been excluded. The Court
of Appeal in Stocznia Gdynia SA v Gearbulk Holdings Ltd [2009] EWCA Civ 75, [2009] 1 Lloyd's Rep. 461 distinguished
Lockland Builders and held that the parties to the contract in Stocznia Gdynia had not intended to exclude the common law
right to terminate performance of the contract. The courts are likely to be slow to conclude that the parties did intend to give
up their common law rights unless there is evidence that such was the intention of the parties. See also Ram Media Ltd v
Ministry of Culture of the Hellenic Republic (Secretariat General of Sport) [2008] EWHC 1835 (QB), [2008] All E.R. (D) 06
(Aug), where it was not disputed (at [199]) that the passage in the text correctly summarised the law. The relationship between
a contractual right to terminate and the right to terminate at common law in respect of a repudiatory breach was further
considered by Ramsay J. in BSkyB Ltd v HP Enterprise Services UK Ltd [2010] EWHC 86 (TCC), [2010] B.L.R. 267. He stated
(at [1366]):
“ … in deciding whether by its conduct a party evinces an intention not to be bound by the terms
of the contract, the way in which parties agreed to treat breaches within the terms of their contract
must be a factor to take into account. In particular, if a breach of a term had to reach a degree of
seriousness before a contractual termination clause could be applied, it is unlikely that a breach
which was less serious would, by itself, amount to a repudiatory breach. Equally, the fact that for
a particular breach the contract provided that there should be a period of notice to remedy the
breach would indicate that the breach without the notice would not, in itself, amount to a repudiatory
breach”.
211. Ellis Tylin Ltd v Co-operative Retail Services Ltd [1999] B.L.R. 205, relying upon Mannai Investment Co Ltd v Eagle Star Life
Assurance Co Ltd [1997] A.C. 749 and Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1
W.L.R. 898.
212. As was previously thought to be the case in cases such as The Mihalis Angelos [1971] 1 Q.B. 164; Mardorf Peach & Co Ltd
v Attica Sea Carriers Corp of Liberia [1977] A.C. 850, 870; and Afovos Shipping Co v Pagnan [1983] 1 W.L.R. 195, 201.
213. Although it can occasionally be difficult to tell whether a party has purported to terminate.
214. See, for example, Financings Ltd v Baldock [1963] 2 Q.B. 104.
215.
See, for example, Financings Ltd v Baldock [1963] 2 Q.B. 104; Brady v St Margaret's Trust [1963] 2 Q.B. 494; Anglo-Auto
Finance Ltd v James [1963] 1 W.L.R. 1042; United Dominions Trust (Commercial) Ltd v Ennis [1968] 1 Q.B. 54. The decision
of the Court of Appeal in United Dominion Trust (Commercial) Ltd v Ennis was analysed closely by the Court of Appeal in
Stocznia Gdynia SA v Gearbulk Holdings Ltd [2009] EWCA Civ 75, [2009] 1 Lloyd's Rep. 461 at [26]-[35] and it was concluded
that the case was “difficult … to explain.” The Court of Appeal in Stocznia Gdynia stated (at [37]) that it was, “wrong to treat
the right to terminate in accordance with the terms of the contract as different in substance from the right to treat the contract
as discharged by reason of repudiation at common law.” But it is important to see this statement in its proper context (see E.
Peel, “Affirmation by Termination” (2009) 125 L.Q.R. 378, 380-381). On the facts of the case the Court of Appeal concluded
that the parties intended to equate the contractual right to terminate with the right to treat the contract as repudiated and gave
effect to that intention. But, where such was not the intention of the parties, a court is not obliged to equate the two rights; on
the contrary, a court should give effect to the parties' intention and conclude that the contractual right to terminate does differ
in substance from the right to treat the contract as repudiated under the general law. This separation of the right to terminate
and the right to claim loss of bargain damages has been rejected by the Supreme Court of Canada in Keneric Tractor Sales
Ltd v Langille (1987) 43 D.L.R. (4th) 171 and subjected to academic criticism, see Opeskin (1990) 106 L.Q.R. 293. An attempt
to stipulate for a wider right of recovery in the contract in such a case may be invalid as a penalty clause: Lombard North
Central Plc v Butterworth [1987] Q.B. 527.
216. This is so whether it is repudiatory under the general law or by virtue of the decision of the parties to treat the term which has
been broken as a condition of the contract: Lombard North Central Plc v Butterworth [1987] Q.B. 527. cf. Treitel [1987]
L.M.C.L.Q. 143.
217. A court may conclude that, having regard to the conduct of the parties, any repudiatory breach committed was not, in fact,
accepted so that the contract must be regarded as continuing: see United Dominions Trust (Commercial) Ltd v Ennis [1968]
1 Q.B. 54 and Laing Management Ltd v Aegon Insurance Co (UK) Ltd (1998) 86 Build. L.R. 70.
218. Yeoman Credit Ltd v Waragowski [1961] 1 W.L.R. 1124; Overstone Ltd v Shipway [1962] 1 W.L.R. 117; Lombard North Central
Plc v Butterworth [1987] Q.B. 527.
219. (1998) 86 Build. L.R. 70. For further discussion of the case, see Dalkia Utilities Services Plc v Celtech International Ltd [2006]
EWHC 63 (Comm), [2006] 1 Lloyd's Rep. 599 at [139]-[142]
220. See above, fn.215.
221. See Chandris v Isbrandtsen Moller Co Inc [1951] 1 K.B. 240, 245-246; P.J. Van der Zijden Wildhandel NV v Tucker & Cross
Ltd [1975] 2 Lloyd's Rep. 240 (force majeure clauses). See also above, para.14-137.
222.
See Mardorf Peach & Co Ltd v Attica Sea Carriers Corp of Liberia [1977] A.C. 850 (withdrawal of ship). See also Abingdon
Finance Co Ltd v Champion, Guardian, November 6, 1961 (seizure of goods let on hire purchase). Whether the terms of the
contract do require that notice be given depends upon the interpretation of the contract (see, for example, Geys v Societe
Generale London Branch [2011] EWCA Civ 307, [2011] I.R.L.R. 482 where it was held that the obligation of the employer was
to make payment in lieu of notice to the employee and that there was no further requirement that the employer communicate
its decision to terminate the contract to the employee).
223. Reliance Car Facilities Ltd v Roding Motors [1952] 2 Q.B. 844. Contrast Union Transport Finance Ltd v British Car Auctions
[1978] 2 All E.R. 385.
224. Allam & Co Ltd v Europa Poster Services Ltd [1968] 1 W.L.R. 638. See also May v Borup [1915] 1 K.B. 830; Addis v Burrows
[1948] 1 K.B. 444; Aegnoussiotis Shipping Corp of Monrovia v A/S Kristian Jebsens Rederi [1977] 1 Lloyd's Rep. 268. cf. P.
Phipps & Co (Northampton and Towcester) Breweries Ltd v Rogers [1925] 1 K.B. 14.
225. Scarf v Jardine (1882) 7 App. Cas. 345, 348; Re London and Northern Bank [1900] 1 Ch. 220; Tenax S.S. Co Ltd v The
Brimnes [1973] 1 W.L.R. 386; affirmed [1975] Q.B. 929; Bremer Handelsgesellschaft mbH v Vanden Avenne-Izegem P.V.B.A.
[1978] 2 Lloyd's Rep. 109.
226. Afovos Shipping Co SA v Pagnan & Filli [1983] 1 W.L.R. 195; Telfair Shipping Corp v Athos Shipping Co SA [1983] 1 Lloyd's
Rep. 127.
227. See Afovos Shipping Co SA v Pagnan & Filli [1983] 1 W.L.R. 195; Tradax Exports SA v Dorada Compania Naviera SA [1982]
2 Lloyd's Rep. 140; and the cases cited in fn.231, below. However the prima facie rule may have to give way on the facts of
the case when regard is had to the underlying commercial purpose of the termination clause: Ellis Tylin Ltd v Co-operative
Retail Services Ltd [1999] B.L.R. 205.
228. Bremer Handelsgesellschaft mbH v Vanden Avenne-Izegem P.V.B.A. [1978] 2 Lloyd's Rep. 109.
230. Bremer Handelsgesellschaft mbH v Vanden Avenne-Izegem P.V.B.A. [1978] 2 Lloyd's Rep. 109, 113. See also Bunge SA v
Kruse [1979] 1 Lloyd's Rep. 279; affirmed [1980] 2 Lloyd's Rep. 142.
231. Alfred C. Toepfer v P. Cremer [1975] 2 Lloyd's Rep. 118; Bremer Handelsgesellschaft mbH v Vanden Avenne-Izegem P.V.B.A.
[1978] 2 Lloyd's Rep. 109; Bremer Handelsgesellschaft mbH v C. Mackprang [1979] 1 Lloyd's Rep. 220; Bunge GmbH v Alfred
C. Toepfer [1979] 1 Lloyd's Rep. 554. Contrast (no waiver) V. Berg & Son Ltd v Vanden Avenne-Izegem P.V.B.A. [1977] 1
Lloyd's Rep. 499; Avimex SA v Dewulf Cie. [1979] 2 Lloyd's Rep. 56; Toepfer v Schwarze [1980] 1 Lloyd's Rep. 385; Bremer
Handelsgesellschaft mbH v C. Mackprang [1981] 1 Lloyd's Rep. 292; Tradax Export SA v Cook Industries Inc [1982] 1 Lloyd's
Rep. 385; Raiffeisen Hauptgenossenschaft v Louis Dreyfus & Co Ltd [1981] 1 Lloyd's Rep. 345; Bremer Handelsgesellschaft
mbH v Westzucker [1981] 1 Lloyd's Rep. 207; Cook Industries Inc v Meunerie Liegeois SA [1981] 1 Lloyd's Rep. 359; Bremer
Handelsgesellschaft mbH v Finagrain Compagnie Commerciale, etc., SA [1981] 2 Lloyd's Rep. 259; Bremer Handelsgesellschaft
mbH v Westzucker (No.2) [1981] 2 Lloyd's Rep. 130; Bunge SA v Compagnie Européenne des Cereales [1982] 1 Lloyd's Rep.
306; Bremer Handelsgesellschaft mbH v Bunge Corp [1983] 1 Lloyd's Rep. 476; Bremer Handelsgesellschaft mbH v
Deutsche-Conti Handelsgesellschaft mbH [1983] 2 Lloyd's Rep. 45.
232. Keith Prowse & Co v National Telephone Co [1894] 2 Ch. 147; Reynolds v General & Finance Facilities (1963) 107 S.J. 889.
Contrast (no waiver) Mardorf Peach & Co Ltd v Attica Sea Carriers Corp of Liberia [1977] A.C. 850; China National Foreign
Trade Transportation Corp v Evlogia Shipping Co SA of Panama [1979] 1 W.L.R. 1018; Bremer Handelsgesellschaft v
Deutsche-Conti Handelsgesellschaft [1983] 2 Lloyd's Rep. 45; Scandinavian Trading Tanker Co A.B. v Flota Petrolera
Ecuatoriana [1983] 2 Q.B. 529; affirmed [1983] 2 A.C. 694; Eximenco Handels A.G. v Partredereit Oro Chief [1983] 2 Lloyd's
Rep. 509.
233. Crediton Gas Co v Crediton U.D.C. [1928] Ch. 174, 178; Winter Garden Theatre (London) Ltd v Millenium Productions Ltd
[1948] A.C. 173; Martin Baker Aircraft Co Ltd v Canadian Flight Equipment Ltd [1955] 2 Q.B. 556; Re Spenborough U.D.C.'s
Agreement [1968] Ch. 139; Beverley Corp v Richard Hodgson & Sons Ltd (1972) 225 E.G. 799; Staffordshire AHA v South
Staffordshire Waterworks Co [1978] 1 W.L.R. 1387. Contrast Kirklees Metropolitan BC v Yorkshire Woollen District Transport
Co (1978) 77 L.G.R. 448. See also Carnegie (1969) 85 L.Q.R. 392.
235. Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 1 W.L.R. 361. See also Bridge v Campbell Discount Co
Ltd [1962] A.C. 600.
236. Jay's Furnishing Co v Brand & Co [1915] 1 K.B. 458; Continental Grain Export Corp v S.T.M. Grain Ltd [1979] 2 Lloyd's Rep.
460; Bremer Handelsgesellschaft mbH v Finagrain SA [1981] 2 Lloyd's Rep. 259. See also British Leyland UK Ltd v Ashraf
[1978] I.C.R. 979 (employment), subsequently overruled in Igbo v Johnson, Matthey Chemicals Ltd [1986] I.C.R. 505.
237.
Rede v Farr (1817) 6 M. & S. 121, 124; Doe d. Bryan v Bancks (1821) 4 B. & Ald. 401, 406; New Zealand Shipping Co v
Société des Ateliers et Chantiers de France [1919] A.C. 1, 6, 8, 9; Quesnel Forks Gold Mining Co Ltd v Ward [1920] A.C. 222;
Alghussein Establishment v Eton College [1988] 1 W.L.R. 587. cf. Cheall v Association of Professional Executive and Computer
Staff [1988] 2 A.C. 180; Thompson v Asda M.F.I. Group Plc [1988] Ch. 241; Micklefield v S.A.C. Technology Ltd [1990] 1
W.L.R. 1002; Richco International Ltd v Alfred C. Toepfer International GmbH [1991] 1 Lloyd's Rep. 136; see above, para.13-012;
BDW Trading Ltd v JM Rowe (Investments) Ltd [2011] EWCA Civ 548, [2011] All E.R. (D) 174 (May).

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Chitty on Contracts 30th Ed.

Volume 1 - General Principles

1. Samuel v Wadlow [2007] EWCA Civ 155 at [35].

4. See below, paras 22-025 et seq.

5. See above, paras 4-009 et seq.

6. See below, para.22-033.

7. See below, para.22-030.

8. See below, para.22-041.

9. See above, para.4-009.

10. Samuel v Wadlow [2007] EWCA Civ 155 at [34]-[46].

13. Preston v Christmas (1759) 2 Wils.K.B. 86.

16. See below, para.22-012.

17. Co.Litt. 264; Com.Dig. Release (A.1); Bac.Abr. Release (A).

30. Beech v Ford (1848) 7 Hare 208.

32. See above, paras 17-017-17-020.

34. Bills of Exchange Act 1882 s.89.

40. See above, paras 3-078, 22-004.

44. See above, para.3-052.

45. See above, para.2-112.

46. See above, para.2-139.

47. See below, para.22-015.

52. See above, para.4-009; Vol.II, Ch.44.

54. Gabriel v Dresser (1855) 15 C.B. 622.

58. Smith, Leading Cases, 13th edn, p.385.

63. For the compromise of disputed claims, see above, para.3-046.

65. (1602) 5 Co. Rep. 117a.

66. See above, para.3-122.

67. See above, para.3-009.

68. cf. Vanbergen v St Edmund's Properties Ltd [1933] 2 K.B. 223.

69. Pinnel's Case (1602) 5 Co. Rep. 117a.

70. See above, para.3-126.

71. See above, para.3-125.

72. See above, para.3-128.

73. See above, para.17-017.

74. See above, para.22-009.

85. See below, para.25-007.

88. Cristel v Cristel [1951] 2 K.B. 725.

92. See below, para.24-047.

93. See above, Chs 5, 6 and 7.

98. Lamburn v Cruden (1841) 2 Man. & G 253.

106. [1923] A.C. 48.

107. [1923] A.C. 48, 67.

109. [1918] A.C. 1.

110. [1918] A.C. 1, 25-26.

118. [1918] A.C. 1.

126. [1929] 2 K.B. 316.

131. See above, para.22-030.

132. (1833) 5 B. & Ad. 58.

135. [1918] A.C. 1, 5.

136. See above, para.22-029.

137. [1918] A.C. 1, 19.

139. Re William Porter & Co Ltd [1937] 2 All E.R. 361.

144. See above, para.3-085; below, para.22-040.

145. See below, para.22-041.

146. See above, paras 12-004, 12-103.

149. Record v Bell [1991] 1 W.L.R. 853.

150. See above, para.3-079.

152. Bluck v Gompertz (1852) 7 Exch. 362; see above, para.5-107.

155. May and Butcher v R. [1934] 2 K.B. 17, 21.