Introduction to Contract Law
- Contract: An agreement that is legally binding (and enforceable).
• Don't need a signature
• Can contain promises, based on mutual promises
• Must have a legal consequence
- Formal Contract: A written contract
• Have to be in writing in order to be enforceable
• Defined in the statue of frauds
- Simple Contract: A verbal contract
• E.g. ordering something when you are out for lunch
• E.g. take a cab, get on the bus
- Terms of the contract: What the parties have to do
- Breach of Contract: When one party does not fulfill obligations
• Elements to prove existence of a contract:
1. intention by the parties to create legal relations
• if you are family members, you must prove it is not legally binding
1. an offer (by the offeror) that is communicated
purchase or sale
2. acceptance (by the oferee) that is communicated
3. consideration – i.e. the bargaining component that is exchanged.
- Note: a contract should be “supported by consideration”.
- Consideration moves from the promisee to the promisor.
- Promisee: the person suing to enforce the promise of the other (i.e. the promisor), i.e. trying to
prove that consideration moved from them to the promisor.
- Thing of value, the subject matter of the agreement
Can’t be something that you are required to due by the government
Ex: pay your taxes
Can’t be something that happened in the past
Ex: dog runs away and the neighbor finds him down the street takes him in the house then the owner
makes an ad in the paper for a reward of 50 dollars he goes without knowing of the reward and
returns the dog, he gets home and sees the add and goes to the owner to get the reward, consideration
has to be based on the promise, so he doesn’t get the money, had the guy read the add first he would
have gotten the money, past consideration is no consideration, something you have already done is
not consideration, can have future and present
5. capacity to enter into the contract
- Some examples of not having capacity: mental capacity compromised by alcohol or drugs, being
mentally infirm, infants (i.e. under 18), someone who is bankrupt (for the most part).
6. legality – i.e. whatever you contract for has to be legal and legally enforceable.
- In contract law (as opposed to tort law), the parties attempt initially to create their own obligations.
- This can raise the question of if there was a ‘meeting of the minds’ by the parties, i.e. ‘consensus ad idem’.
Meeting of the minds
• Can affect 1-4 (above)
- Law is not concerned with the adequacy of consideration court does not sit down and say "was
that a good deal". Court does not worry about that. Only think if it is sufficient to pass law
- Thing given can be a detriment or a good thing • The principle of damages/remedies in contract law: to put the Π in the same position that he/she would
have been in had the contract been fulfilled.
- Sometimes this is hard to determine, so we try to determine the reasonable expectations from when
entered into the contract (Note: this comes from the case of Hadley v. Baxendale in 1854).
- Remedies in contract law are not always damages, i.e. they might be to uphold one’s end of the contract
with something other than money, i.e. specific performance to do something. This type of remedy is a
discretional remedy in the Equity Court system and it is not for personal service (e.g. in a case of
employment because don’t get along it would make no sense to force employer to employ an employee).
• Privity of contract: Only those involved as parties can incur liabilities or enforce a benefit of a contract.
- Stranger = a third party
* An example of a violation of this rule has to do with life insurance policies. These are acceptable as an
exception to this rule because of statute.
Contract as Promise, A Theory of Contractual Obligations – by: Charles Fried
- His theory is that contract is based on a promise
- Not discussing bargain theory
- Based on a promise, embracing free will moral agent
- Contract get's its authority by basing it on promise
- This article is looking for the underlying moral justification that contract law is built upon.
- He appreciates the struggle between individuals and groups and notes that there are forces that militate
against contract law in modern society. One example of this is minimum wage, i.e. we have a
social/collective pressure against the freedom to contract. The law protects people from entering into bad
contracts. Unions are another example because their existence means that things are defined by statutes.
- Protects us from landlords asking us to pay $1000 for rent if we don't pay rent for a couple of months, or
from them locking the door and throwing you out without your stuff
⋅ Legislation "fixes" contract
- There are two different schools of philosophy that conflict as possible views of contract law:
⋅ Deontological approach – intentions determine right/wrong
⋅ Categorical Imperative – in order to determine if something is right or wrong must will it as a
⋅ Never treat people as means to an end but as ends in themselves.
⋅ Focus on individual and free will
⋅ Teleological approach – consequences determine right/wrong
⋅ Greatest amount of good for greatest number of people
⋅ Collective perspective, which doesn't take individuals seriously
- If contract is viewed as a promise then it is according to a Kantian perspective. Otherwise, it is a utilitarian
- Efficient Breach: Breaching a contract because it is profitable to do so (i.e. even after paying for the
- Expectation damages- what they expected to receive if the other person breached the contract
- Another criticism of contract as a promise is “benefit reliance” because really just compensation models,
i.e. like in tort. He questions whether there is something more intuitive i.e. because the problem is the fact
that broke a promise, so just getting money doesn’t wholly help.
- "Benefit" - someone gave you something and they didn't pay you enough, so justice says they have to pay
you more - Business issue, transaction
- REALLY JUST A SPECIAL KIND OF TORT CASE
- Fried says "nope, it's not"
⋅ Says contract recognizes the autonomy of persons
⋅ In order to create a contract, we bind ourselves to another obligation
⋅ We freely give up some element by binding ourselves to future autonomy
⋅ If we didn't trust the other person to do what they say they would do, we wouldn't confidently
enter into that contract
⋅ We invite reliance, we invoke trust
⋅ We have to have the assumption initially that promises have some kind of force
- Not in our empirical interest to perform promises at a later date but contract law expects us to do that
⋅ Can't get out of obligation by simply saying it will cost money to do that
⋅ Either HAVE to pay or we get monetary damages
- We rely on promises because we KNOW they are binding (not the other way around)
- A promise in itself has moral purchase
⋅ That is what we invoke
- Contract is a liberal ideal which should separate the “right” (i.e. not to harm others, etc.) from the “good”
(i.e. self-fulfillment). Contract is about freedom to choose for self (i.e. the “good”), but the “right” comes in
- There is a criticism of “good” as promise, saying that it is really like Tort law because getting
compensation/damages. Fried answers that Contract is different because damages are only according to
expectations, i.e. where would be if contract had been fulfilled.
- Promise keeping is an institution based on trust, so a breach is extremely offensive because when we
commit to a future obligation based on trust, it is a moral obligation. Self-interest is not enough to keep a
promise, nor is punishment. The fact that it is a moral obligation is what should keep the contract.
⋅ Cannot measure things by intuitions
⋅ Feeling bad about breaking a promise is just socialization
- Can look at damages in 2 ways: expectation and reliance
⋅ Expectation: what did the parties expect when we look at ALL their contracts (verbal, what were
communications, written - what did they expect by looking at the document) did they get what
they were supposed to
e.g. person goes into an antique shop, buys something, decides he wants to return it so
calls the shop to return it
Can sue the person to recover the money they lost if they have to sell it to someone else
Based on the expectation of the clients
e.g. vendor polishes and delivers item, guy changes his mind
Would also have to be reimbursed for polish and deliver
If the person used the item for 6 months, might have to pay for use
Could still be subject to damages
Expectation is that you know what you are buying when you bought it
⋅ Reliance: would undermine Fried's position
If this was the standard, you would never have any enforcement for a specific
Doesn't matter how good the deal was (you buy something thinking it is an antique but
then it is not TOO BAD, you are out of luck, you already made a deal) - Fried’s main point: Tort is about wrong, i.e. it has a collective objective, i.e. Utilitarian, whereas Contract is
about enforcing obligations that people have decided for themselves. This is more individualistic, i.e.
- Contract is intuitive, reflects the free point of autonomous parties
Case: Carlill v. Carbolic Smoke Ball
- In 1892 the Def. (Carbolic Smoke Ball) company put an ad in the paper saying that ‘if you use our
product you won’t get the flu’. They also said that ‘if it was used as directed and you did get the flu’
then they would pay 100 pounds. Said "to ensure our sincerity, we have 1000 pounds on deposit at
- The Π used the product as directed and got the flu and sued for the promised 100 pounds.
• Defendant’s claim:
- The Def. claimed several reasons why they shouldn’t have to pay:
If we have to pay this money, you are turning us into an insurer like paying health insurance, and
everyone knows you must have a license to sell insurance so it must be against the law ridiculous
Even if we do accept this as a promise it has to be looked at like a bet (i.e. we bet that she wouldn’t
get sick) but gambling is illegal so the contract isn’t legal or legally enforceable.
If we have to pay then we are acting like insurance companies, but we don't have license to act as
They didn’t have a contract with the Π, i.e. they didn’t know her and the advertisement was for the
public at large.
They made no offer and there was no communicated acceptance by the Π.
How can you say we contracted with her, we don't know her
The ad was ‘mere puffery’, i.e. it was not supposed to have been taken seriously.
• Cannot argue this because in your advertisement they claimed they were being sincere by saying
"go to the bank and see the money in the account"
There was no consideration because the Def. contracted with the store, so can’t show consideration
movement from the promisee to the promisor. They claimed that consideration needed to be shown
as a benefit to the promisor or detriment to the promisee.
- The Def. lost
- The Court didn’t comment much about the insurance argument.
- Regarding the puffery it was decided that it was a bad argument because in the ad it even said that they
had put the money in the bank (and even named the bank)
- Regarding not knowing the Π the Court said that it didn’t care because the offer was to all people who
purchase the product and follow the conditions. By doing so, people automatically accept. Furthermore,
the nature of making this contract implies that there is no need to communicate acceptance, as
acceptance is found in the party’s performance of the conditions. This is a unilateral offer, i.e. one way
- Regarding the consideration argument, the Court said that there was in fact benefit to the promisor, i.e.
when people buy the product the company makes money, as well as detriment to the promisee when she
used the product, i.e. because she spent money. Based on this, there was in fact consideration.
• Court says, we will say you made an offer to the public at large • Then def says, she never communicated her acceptance of her offer we never heard of her
until she got sick
• If they really thought from the beginning that they would be absolved from contractual
obligation, then it looks like they did it on purpose so that they wouldn't have any obligation
- She needs to prove contractual obligation unilateral contract/offer, a one way communication,
implied that communication was not required from her
- Acceptance from a unilateral contract is by the performance of one's obligation
- The conditions of contract were satisfied. There was an offer, there was an acceptance, there was no
need for communication, and there was consideration.
- Consideration: detriment given, or benefit given she suffered a detriment based on their promise
- Used the product of directed (wasting her time), and is out of some money (she paid it)
- Case establishes that the "smoke ball" is irrelevant to your health
- Benefit for Smoke Ball - she purchased their product, so benefited them by acknowledging she thinks
the product works
Case: Pharmaceutical Society of GB v. Boots Cash Chemist
• Facts and Π Claim:
- Boots Chemists is the first self-serve drug store.
- The Π is trying to enforce the statute that regulates the sale of drugs and certain poisons.
- The Π alleges that Boots Chemists is breaching the contract of the statute, claiming that when the
merchant places an item on the shelf it is being offered, thus when a consumer picks it up the item it is
acceptance, and since there is no supervisions there it is a breach.
- Products the 2 people bought had a minute amount of poison (rubbing alcohol, ADVIL, etc)
- Can only buy these under the supervision of a pharmacist
- When people leave, they then sue and say that those products were purchased outside the supervision of
- Theory is when items are placed on the shelf in a self serve store, that the placing of the item on the
shelf is an offer, that the customer selects (accepts) when they carry the item contract
- Payment is just a performance of obligation that happens later
- Why is this a ridiculous argument?
- The Court rejects the Π claim, i.e. the Def., Boots Chemist won.
- Just picking something up doesn't commit you to buying it, thus offer and acceptance is really at the
cash register, where there is supervision.
- In truth, the goods on display only represent an “invitation to treat”, i.e. an invite to offer.
- Should really be an invitation to contract
- At cashier stage, they can say they need a pharmacist to approve it
- As well, there is a pharmacist on staff for those items that need.
Case: Williams v. Carwardine
- A guy was murdered. Carwardine, the Def. and brother of the dead, says that he will give 20 pounds to
anyone who brings forth information about the murder.
- A lady, the Π Williams, came forward saying that she was beaten by her husband and thought she was
going to die, so she had pangs of conscience and told on her husband for the murder. - The husband (i.e. the murderer) was convicted, so the Π asked for the 20 pounds, but the Def. didn’t
think she should get it because she gave the info based on her morals and not with the reward in mind.
• Original Trial:
- Judge asked WHY did you disclose that it was your husband that murdered this person?
• She said it was to clear her conscience
• She had a crisis of guilt
- The Judge says that she is entitled to the reward but asks the Jury to do a finding of fact for her motives.
- The Jury finds that she felt morally compelled and thus gave the information out of guilt, and not for the
reward. She did not confess with the promise to pay in mind, thus she shouldn’t get the money.
- Jury said she fulfilled all of the terms of the contract, but also felt she had a different motive for giving
up the information
- On appeal the Π recovered the money
- She performed the conditions required, she is entitled to the reward, her motives are NOT relevant
- She knew about the reward at the time her confession was given
• Rationale (Judge Patteson and others)
- We have to look at the act itself, not the motive. Because she had knowledge of the reward she is
entitled to it, even though she did act on the basis of her morals.
Case: R. v. Clarke
- The government offered a reward and a pardon for the person who gave information about a murder (i.e.
offered the pardon to entice part of the ‘gang’ who knew of the murder to turn others in).
- Clarke originally gave misleading information and then came back with proper information because he
wanted the pardon. He sued in order to get the reward money.
- Admits that at the time he gave the information was all he really wanted was a pardon, had seen the
errors of his ways and no longer wanted to live a life of crime
- Said "I forgot all about the reward, I was just obsessed with getting myself a pardon"
- Has to sue to get his reward money
• Original Trial:
- He got the money, i.e. because it didn’t matter that the reason he gave the information was for the
- Based on the reasoning in Williams v. Carwadine
- The original trail ruling was reversed and he did not get the reward money.
- Clarke didn’t perform the conditions for the reward, and only since he was scared of criminal liability he
gave the information to get the pardon.
- We know for sure that he wasn’t thinking about the reward because he said that he had forgotten about
it, which is the same as not knowing about it. Thus, without the knowledge of the reward money he is
not entitled to it.
Equity - Equity principles came about because common law principles got too rigid in application.
- The equity court system was governed by Chancellors, i.e. legal officials who applied equitable
principles, which would step in when common law yielded unfair results.
- Courts of Equity/Chancery are parallel, yet separate from the regular (common law) courts.
- E.g.) In common law if someone gets killed and leaves his/her estate to a 12 year old child the child
cannot take the title because they are a minor. In an equity court, someone else can become the trustee
and use the estate on the behalf of the child.
Courts of Chancery
- Over time the common law became somewhat rigid, positivistic
- Sometimes have cases that align with rules of common law but the results are unjust
- e.g. contract for purpose of real estate woman wanted to buy house, house burnt down 10 days
before she was going to buy it. Insurance company said we do not need to pay you any money because you
are in a binding agreement. Says I will sell the property to them and you will have to give them the insurance
proceeds. Insurance company says "we don't know those guys, so we don't have to pay". Common law isn't
- Courts of Chancery ruled on the principles of equity. When common law doesn't give us a just result
we can go to the courts of equity relied on Christian principles, what is fair, what is good for the
conscious. Asks not what was done, but what SHOULD have been done. Common law looks to the letter
of the law, common law looks to the spirit of the law
- Common law remedy: money, damages, in rem
- Equity in personam
- Trustee - lawful owner or property however property doesn't actually belong to them
Case: Dickinson v. Dodds
* Note: V.C. = Vice Chancellor, i.e. enforces rules of equity, which supercede common law, when common
law yields unjust results.
* Trustee: Holds property to benefit of another.
* Note: contracts for land have to be formal (i.e. in writing) because the Statute of Frauds (re: sale of
property) says that certain contracts are so important that they need to be in writing. Still, Courts can say
that equitable owner (i.e. husband holds land as trustee for wife as well).
- The Π (Dickinson) wants to buy the Def. (Dodds)’s land. Dodd’s gives a note saying that he hereby
agrees to sell the land for 800 pounds, etc. This constitutes an offer. In the post-script (P.S.) the Def.
writes that the offer will be kept open until Friday at 9 AM.
- The Π hears the that the Def. is talking about selling the same piece of land to another man, Allan, so on
Thursday evening the Π goes to the Def’s mother-in-law’s house (Mrs. Burgess) formally accepting the
offer (calls it a formal acceptance). Dodds is not there so Dickinson asks Mrs. Burgess to give the formal
acceptance to Dodds. She forgets, and just in case of that the Π gives his friend a copy of the formal
acceptance and the friend brings it to Dodds on Friday morning, but Dodds says that the land had
already been sold. The Π also takes a copy of the acceptance to Dodds (before 9 AM on Friday) and the
Def. tells him too that the land has been sold.
• Plaintiff’s Claim:
- Dickinson sues the Dodds based on the promise to keep the offer open until Friday 9 AM.
- The Π also wants to declare Allan as a trustee, in case he gets the land before the trial.
- Is the P.S. binding?
- This case is about consideration and “meeting of the minds”. • Defendant’s Claim:
- “Nudum Pactum” i.e. bare (gratuitous) promise, meaning that since the P.S. is not supported by
consideration, it is not binding.
- The P.S. is separate and different from the other part of the document. The first part does have
consideration, i.e. 800 pounds.
• Original Trial (Bacon V.C.):
- Note: This case takes place before V.C. because the Π wants remedy of specific performance, i.e. he
doesn’t want money (i.e. monetary damages), but rather wants what he was promised, i.e. the land.
- Bacon says that the P.S. is binding, thus the Def. loses.
- Bacon disagree with the Def.’s claim because logically can’t have consideration if an offer is open.
- The Π loses.
- Says the case is about revoking an offer
- Court says everything you did is consistent, your knowledge, that the place was now offered to someone
- How can you accept an offer that you know is already dead?
- Plaintiff was aware defendant might sell it to someone else
- Consensus ad idem meeting of the minds did they understand the mutual obligation, how can there
be an agreement when the party knows that the other party has already revoked the offer by selling the
place to someone else
**Problem with this there was a written promise saying the offer would be open until Friday,
HOWEVER the promise is not binding.
• There is no consideration for this promise
• Nadum Pactum - bare promise
• DEFENDANT WINS
- Since the promise to keep the offer open is not supported by consideration and because the offer can be
revoked at anytime before acceptance, the fact that the Π claimed to accept an offer that he knows is no
longer open, makes his acceptance no longer good.
- Clearly, the fact that the knowledge of the talk of another sale (i.e. to Allan) came from a third party
makes no difference, as long as the third party is regarded as being reliable (which here it is).
- Since the Π knew that the Def. was selling to Allan when the Π ran over to accept the original offer,
there obviously was no “consensus ad idem” i.e. ‘meeting of minds’ and thus the Π can not recover
because he knows that the offer no longer stands and because it was a gratuitous promise, i.e. without
Case: Hyde v. Wrench
- The Offeror offers to sell his farm for 1000. The Offeree offers 950. The Offeror said no to the 950.
Later, the Offeree tried to accept the original offer of 1000, but the original Offeror says that the offer no
• Ruling: - The Original Offeror (i.e. guy with the farm) does not have to sell it the Offeree, even at the original
offered price of 1000.
- This case establishes one thing in Contract law: When make an offer as an Offeror, if the Offeree
suggests different terms (i.e. a counteroffer) then it automatically revokes the original offer.
- Case stands for: if a person makes an offer, and the other person who goes to accept the offer says "ya
I'd go along with if it was 100$ less" that statement automatically revokes the original offer in law
- Anytime someone says another offer, their offer becomes a counter offer and the original offer is
- Proposing any change in terms is a revocation
Case: Brinkabon Ltd. V. Stahlundstanlwarenhandelsgesellschaft
o Rule of Instantaneous Communication: contract is made when and where acceptance is received
o Postal Acceptance Rule: If you conduct business through mail, acceptance (contract) occurs when placed
in the mailbox. As long as you can prove you mailed it, nothing else is your problem
- This rule is an exception to the elemental rule that acceptance occurs upon receipt. The exception exists
because when business is conducted in person acceptance is basically instantaneous, i.e. when one
person says that he/she accepts the other person hears the acceptance right away.
- We have new forums of communication (e.g. phone and fax) which bring up problems because where
the contract is made might effect which place’s law applies (e.g. if illegal in one place), etc.
- The Def. (steel sellers) in Vienna are negotiating by telex (i.e. a typewriter fax like machine) with the Π
in the UK. The telex provides almost instantaneous communication, but still may wait a day or so for
- The Π makes an offer from UK and the Def. finally makes a counteroffer from Vienna, saying that will
accept if make changes (i.e. the Def. proposes a new offer) on May 3, 1979. The Π accepts from UK on
May 4, but when this acceptance comes through to the Def. they decline it because it comes through
with a name that they don’t recognize (i.e. the Π’s line of credit).
- The Π brings a suit to get the Def. to follow through. They try to bring the suit in England. The statute
and regulation in England for bringing causes of action is that it must meet the following criteria: the
contract must be made within the UK jurisdiction, OR the breach of contract must have been made
within UK jurisdiction.
- The Π wants to sue in England, probably because familiar with the legal system, whereas Def. wouldn’t
be and thus would need an English lawyer and would also need to take the time and incur the expense of
traveling, staying at a hotel, etc. Most probably the Π wants the case in England with the hope that the
Def. will drop it and perform.
- Need to determine if telex is considered instantaneous (i.e. then acceptance and thus contract made when
received, i.e. in Vienna) or if can apply postal acceptance rule (i.e. then contract occurs when and where
post response, i.e. in England).
- Note: This case was not decided on the merits, i.e. no one argues if a contract exists etc., rather what we
deal with here is only when and where the contract was made.
• Π Claim: - The Π claims that telex is like a letter (i.e. not instantaneous) so should apply the exception rule and
should be able to sue in England.
- In order to sue a breach of conduct in England, have to show that the contract was made in England, and
that the breach of conduct occurred in England
- If you can meet either of those criteria, you can sue in England Plaintiff wants to sue in England
because they live there, plus it will cost less money than flying to Austria
- How do they prove that?
House of Lords because the telex is a document and transferred electronically, it is still a letter. Can use
the Postal Acceptance Rule. Court has to decide if a telex is a letter or is it subject to the rule of
instantaneous communication. We should go around making new things fit within the exception, stick
with simple rules. Telex is pretty much an instantaneous communication
- The Π loses, and the Court rules that telex is instantaneous and thus acceptance occurs when and where
received, i.e. so must sue in Vienna.
- Regarding a breach occurring, if there was indeed a breach of contract then it too occurred in Vienna
because the steel is in Vienna and it was in Vienna where the Def. decided not to perform.
o Since this case we have found that phones are also instantaneous and possibly e-mails as well.
o Contract would have been made in Austria, and any breach was in Austria, it's hard to make it look like
it happened anywhere else.
o Anticipatory breach: when someone says they aren't going to perform in the future you can either
treat the contract as ending there or wait until they actually breach it
Privy of Contract - can receive benefit of contract, but cannot have a contractual obligation
o A B C
o If A pays B and B doesn’t do it, A can sue B but C cannot sue B
- Consideration is the bargaining component, i.e. something of value that is exchanged.
- Can be seen as having value by the law, could be anything
- Benefit conferred (given) or detriment suffered.
- Consideration moves from promisee to promisor.
- Have to know about the consideration at the time the contract is made
- Courts will not measure adequacy of consideration, only look to sufficiency
⋅ They don't care how good a deal you make, just ask "is it a contract" "did you promise to
exchange something of some value"
- Promisee: The person suing to enforce the promise of the other (i.e. the promisor). The promisee is trying to
prove that consideration has moved from them to the promisor.
- Note: the movement of consideration has nothing to do with offeree/offeror because after offer and
acceptance this role is pretty much done.
- Past consideration (i.e. something already done) is NOT consideration.
⋅ E.g.) if you find a dog and return the dog to the owner and then you go home and find out that there had
been a reward offered (which you didn’t get), you can’t sue for the reward because your fulfillment of
the actions (i.e. returning the dog) were done before the promise (i.e. before your knowledge of it).
- Future consideration is consideration, e.g. regarding land you pay the purchase price and get the land at a
later date from when you make the deal.
- Courts won’t measure adequacy of consideration (i.e. if you got enough), but they will look at the
sufficiency of the consideration (i.e. is it something recognized at law as being of value and that parties
have agreed is of value). Note: This does not necessarily have to be money. - “Signed under seal” replaces consideration, by showing an intention to be legally bound.
⋅ E.g.) tenders under seal, i.e. when people tender an offer they seal to say that they will be bound to that
⋅ Dispenses with the need for consideration
⋅ Used to be red wax melted
⋅ Seal would mean you do not have to have consideration, replaces consideration
⋅ Not very commonly used today often we will see in a document "this agreement made under seal"
this is still binding
⋅ Displays an intention to create a legal document
- Consideration cannot be something that a party is already obliged to
⋅ E.g.) $50 to drive on the right side of the road.
⋅ E.g.) my promise to look after my own child.
Case: Dalhousie College v. Boutilier Estate
- Probate Court is the court that one goes to when someone dies and need to prove the contents of their will.
- A man made a pledge for a $5000 charitable donation to the University for improvements (i.e. for
buildings, teaching, etc.). He didn’t pay it right away because of financial trouble, and he ended up
dying without actually giving the donation.
- The University (Π) sued the estate but the estate didn’t want to pay, saying that they don’t have to since
there was no letter expressly outlining the terms of the contract. The Def. (estate) also said that the claim
was barred by statutory limitations period i.e. after something happens have certain amount of time to
sue. Here they claimed that too much time had elapsed.
- Case is about a charitable consideration
- Happened during the depression
• Original Trial (Probate Court):
- The trial Court found for the Π.
- They found that there was consideration, i.e. the college performed their pledge by making their
improvements based on the pledges that they had received.
- Court found there was consideration because by pledging, you considered others to do the same thing
- In light of the subscriptions by all the donors, the plaintiff undertook a number of projects
- Plaintiff actually started doing stuff based on all of the subscriptions (promises) to pay
• First Appeal (County Court):
- The Def. appealed and lost at county court.
- Held for the plaintiff
• Nova Scotia Court of Appeal and the Supreme Court Ruling:
- The N.S. Court of Appeal found “Nudum Pactum” therefore no consideration.
- Found for the defendant, there is no consideration for the promise
- The Supreme Court agreed and ruled against the University, who argued the Doctrine of mutual
promises, which means