Acceptance Mega MindMap!

Law of Contract Special Study Paper 2011

Open publication - Free publishing

Oceanbulk Shipping v TMT Asia

A big boat, yesterday.

This case, decided recently in the Supreme Court, makes useful reading for Contract Law students.


The court can consider the objective facts of the parties pre-contractual negotiations when trying to work out the true intentions of the parties - but NOT those negotiations entered into on a "without prejudice" basis.


Until now, that is. It appears that "without prejudice" negotiations may now be admissible if it helps the judge work out the intentions of the parties in order to rule on exactly how the contract should be constructed.


It may help A2 students to think of such negotiations as representations, but ones that carry a rider effectively saying "don't rely on this". This allows the parties to speak freely when negotiating.


So is it a good idea to create an exception to the without prejudice rule? Is this fair, or not? What's the impact on certainty? Have a think! 


Oceanbulk is also a case where the Court took into account the (persuasive) decision of a lower Court - namely the Court of Appeal in Unilever v Proctor & Gamble [2000] 1 WLR 2436.


If this case seems dry to you, you might want to consider the damages at stake - between three and four hundred million dollars. Yikes!

Great article on dissenting judgments...

...from the Guardian here. Essential reading for all A level law students! 


AS students - we will be looking at dissenting judgments in the new year.

Promissory Estoppel

There's a podcast and article on this tricky topic for A2 Contract Law students here. It's very detailed but you may wish to give it a go!

Radmacher v Granatino - we want pre-nup!

The Supreme Court has today made a landmark ruling by a margin of 8 to 1. They have decided that pre-nuptial agreements between spouses will now have "decisive weight" when it comes to divorce. This is not quite as far as saying that "pre-nups" will be legally binding, but it's not far off. The Court will look at fairness on a case-by-case basis, but the old presumption that pre-nups are not worth the paper they are written on now appears to be dead and buried.

It has also saved German heiress Katrin Radmacher (above) an awful lot of money!

AS students: this is an example of judicial law-making. Should judges be deciding things like this, or should it be left to Parliament? It's also an example of a decision overruling the previous case law to create a new legal principle - you will look at the judicial precedent system in the new year. Thirdly, it is a really good example of the law changing with changing societal values and of law reform, as the Law Commission are currently looking into this matter and will report on it in 2012.

A2 students: this is also an example of changing contract law. The presumption of the Court is usually that social and domestic agreements are not legally binding - but it appears not any more where pre-nups are concerned. So - are the Court prioritising freedom to contract when they should be protecting the weaker party? Will the fairness requirement solve this, or is "fairness" too vague a concept to rely on if one party is almost pressured into accepting a pre-nup as a condition of marriage? These concerns are detailed further in this article.

You can read more on this here and here.

"I am not prepared to grant any relief"...

...so said Mr Justice Floyd in the High Court today, making a ruling that sees the owners of Liverpool FC, Gillett and Hicks, lose their battle to stop the sale of the club, clearing the way for it to be sold to the company that owns the Boston Red Sox, New England Sports Ventures.

As this is a matter of company law and also involves the interests of the bank to whom the owners owe serious amounts of wedge, the venue was the High Court, Chancery Division. You can read an account of the proceedings here, and watch a video.

Gillett and Hicks have been refused permission to appeal by the trial judge, but given the amount they stand to lose, I wouldn't be surprised if they make an application to the Court of Appeal for permission as a last throw of the dice.